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Workmen of Davangere Cotton Mills Ltd. Vs. Industrial Tribunal, Bangalore and anr. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtKarnataka High Court
Decided On
Case NumberWrit Petition No. 1102 of 1968
Judge
Reported in[1974(28)FLR162]; ILR1973KAR11; (1973)ILLJ306Kant; (1973)1MysLJ262
ActsIndustrial Disputes Act, 1947 - Sections 25F, 33(2) and 33A
AppellantWorkmen of Davangere Cotton Mills Ltd.
Respondentindustrial Tribunal, Bangalore and anr.
Excerpt:
.....court. impugned order was quashed. - byra reddy is that payment in lieu of notice as well as the payment of retrenchment compensation are conditions precedent to a valid retrenchment under the section and that because no such payment was made before the time of the purported retrenchment but the workmen were asked to collect the same later from the managing agents' office which is about a mile away from the mills, the purported retrenchment was wholly invalid and inoperative. the section provides that no workman shall be retrenched until the condition in question has been satisfied. sundaraswamy, learned counsel for the respondent-management, contends that in both these cases the facts clearly made out a non-compliance with the provisions of s. 17. we have already pointed out that the..........retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice : provided that no such notice shall be necessary if the retrenchment is under an agreement which specifies a date for the termination of service; (b) the workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days' average pay for every completed year of continuous service or any part thereof in excess of six months; and (c) notice in the prescribed manner is served on the appropriate government or such authority as may be specified by the appropriate government by notification in the official gazette.' 6. the argument of mr. byra reddy is that payment in lieu of notice as well as the payment of.....
Judgment:

A. Narayana Pai, C.J.

1. This writ petition by the workmen of the Davangere Cotton Mills Limited, represented by the Davangere Cotton Mills Employees' Association is directed against an award dated 12th July, 1967, made by the Industrial Tribunal in Mysore at Bangalore, in Industrial Dispute No. 145 of 1966 referred to it by the State Government. The contesting respondent is the 2nd respondent, the management of the Davangere Cotton Mills Limited, represented by its secretary.

2. Though several points of dispute were considered by the Tribunal, the only two matters pressed before us for consideration by Mr. Byra Reddy, Advocate-General on behalf of the petitioner, are (1) the retrenchment of 77 workmen on 20th June, 1966 and (2) the dismissal for misconduct of six workmen after a disciplinary enquiry held by the management. On both these matters, the Tribunal has rejected the case of the workmen.

3. Regarding the retrenchment, the admitted facts are that consequent upon a change effected by the management in the pattern of production and end products of the mills, 77 workmen in the reeling department were found to be surplus and that the said 77 revelers were retrenched from service on 20th June, 1966. When the workmen presented themselves for work on the morning of the said day they were served with the notices stating that for the above reason they had become surplus and that, therefore, they were retrenched from service in accordance with S. 25F of the Industrial Disputes Act. The notice further stated that they would be paid one month's wages in lieu of notice as provided by the said section and they were directed to draw wages together with compensation and other statutory dues at the managing agents' office, Chitradurga Road, during working hours on the said day or any day thereafter. Each such notice was accompanied by a statement of calculation of retrenchment compensation payable to such worker giving full particulars at the foot of which was the text of receipt to be signed by workman concerned. Some of the workmen received all payments on the same day, viz., 20th June, 1966, and some later. It is admitted before us that all the 77 persons received payment within a period of about one month from the date of retrenchment. It is also found stated in paragraph 9 of the award of the Tribunal and not disputed before us, that 27 out of other 77 retrenched workmen accepted the retrenchment and the compensation, and filed affidavits before the Tribunal stating that they had no dispute with the management in that behalf. Though it was suggested that there might be some element of coercion behind those affidavits, the Tribunal did not accept the said suggestion because the affidavits had been sworn to before a Magistrate and the deponents were identified by a local pleader before the Magistrate.

4. The Tribunal found that the reasons stated by the management for the retrenchment were bona fide and justifiable in the circumstances of the case. That is a finding of fact which cannot be questioned before us, nor has it been questioned.

5. The only point that was strongly urged in this regard was that the retrenchment was demonstrably in contravention of the mandatory provisions of S. 25F of the Industrial Disputes Act. The said section reads as follows :

'25F. No workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until -

(a) the workman has been given one month's notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice :

Provided that no such notice shall be necessary if the retrenchment is under an agreement which specifies a date for the termination of service; (b) the workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days' average pay for every completed year of continuous service or any part thereof in excess of six months; and

(c) notice in the prescribed manner is served on the appropriate Government or such authority as may be specified by the appropriate Government by notification in the Official Gazette.'

6. The argument of Mr. Byra Reddy is that payment in lieu of notice as well as the payment of retrenchment compensation are conditions precedent to a valid retrenchment under the section and that because no such payment was made before the time of the purported retrenchment but the workmen were asked to collect the same later from the managing agents' office which is about a mile away from the mills, the purported retrenchment was wholly invalid and inoperative. He relies upon three rulings of the Supreme Court in support of this proposition, viz., State of Bombay v. Hospital Mazdoor Sabha, [1960 - I L.L.J. 251]; [1960] 17 F.J.R. 423, National Iron & Steel Co. Ltd. v. State of West Bengal, [1967 - II L.L.J. 23]; [1967] 31 F.J.R. 425, and Senior Superintendent, R. M. S., Cochin v. K. V. Gopinath, : (1972)ILLJ486SC .

7. Of these cases, the last mentioned case dealt directly with Rule 5 of the Central Civil Services (Temporary Service) Rules, 1965, which provided for the termination of services of temporary Government servants by one month's notice on either side and had a proviso appended thereto reading :

'Provided that the services of any such Government servant may be terminated forthwith by payment to him of a sum equivalent to the amount of his pay plus allowances for the period of the notice .....'

The Supreme Court was concerned in that case with the proviso and pointed out that actual payment was essential under the proviso because, by the very language thereof, termination forthwith has to be by payment to the Government servant of the sum mentioned in the proviso, and that, therefore, the only conclusion possible was that payment is the condition of the termination of service forthwith. The said ruling, in our opinion, which proceeds exclusively on the express language of the rule with which the Court was concerned there, may not be of much assistance in deciding a case under S. 25F of the Industrial Disputes Act.

8. The other two cases dealt directly with the said section of the Industrial Disputes Act.

9. In the case of State of Bombay v. Hospital Mazdoor Sabha, [1960 - I L.L.J. 251]; [1960] 17 F.J.R. 423, there was no payment made at all, but the Bombay High Court took the view that the provision for recovery of moneys due from employers under Chapter V contained in S. 251 (since repealed) would cover amounts due to the workmen by way of compensation under S. 25F(b). The Supreme Court disagreed with this view and observed (at page 427) :

'..... On a plain reading of S. 25F(b) it is clear that the requirement prescribed by it is a condition precedent for the retrenchment of the workman. The section provides that no workman shall be retrenched until the condition in question has been satisfied. It is difficult to accede to the argument that when the section imposes in mandatory terms a condition precedent, non-compliance with the said condition would not render the impugned retrenchment invalid.'

10. In the case of National Iron & Steel Co., Ltd. v. State of West Bengal, [1967 - II L.L.J. 23]; [1967] 31 F.J.R. 425, the notice to workman dated 15th November, 1958, stated that his service would be terminated with effect from 17th November, 1958 and that he would get one month's wages in lieu of notice and further asked him to collect his dues from the case office on 20th November, 1958, of thereafter, during working hours. The Court observed (at page 433) :

'... Manifestly, S. 25F had not been complied with, under which it is incumbent on the employer to pay the workman the wages for the period of the notice in lieu of the notice. That is to say, if he was asked to go forthwith, he had to be paid at the time when he was asked to go and could not be asked to collect his dues afterwards.'

11. Mr. Sundaraswamy, learned counsel for the respondent-management, contends that in both these cases the facts clearly made out a non-compliance with the provisions of S. 25F, the former by total omission to pay and the latter by postponement of the payment by at least three days. According to him, neither of these cases can be pressed into service to invalidate the retrenchment where payment is offered on the very day of the retrenchment and in circumstances indicating that the payment and retrenchment ware part of a single transaction. The circumstances of the case, according to him, attract the principle stated by the Supreme Court with reference to S. 33(2)(b) of the Industrial Disputes Act, in the case of Strawboard . v. Govind, [1962 - I L.L.J. 420]; [1962] 22 F.J.R. 236. According to S. 33(2)(b), during the pendency of any proceedings before an Industrial Tribunal, etc., under the Act in respect of an industrial dispute, an employer may, in accordance with the standing orders applicable to a workman concerned in such dispute, punish him by dismissal or otherwise for any misconduct 'provided that no such workman shall be discharged or dismissed unless he has been paid wages for one month and an application has been made by the employer to the statutory authority before which the proceeding is pending, for approval of the action taken by the employer'. In the case cited, the Tribunal refused to grant the approval on the sole ground that the application for approval had been made after the workman had already been dismissed. The Supreme Court disagreed with this view and made the following observation regarding the effect of the proviso to S. 33(2)(b) :

'... As we read the proviso, we are of opinion that it contemplates the three things mentioned therein, namely, (i) dismissal or discharge, (ii) payment of wages and (iii) making of an application for approval, to be simultaneous and to be part of the same transaction, so that the employer when he takes the action under S. 33(2) by dismissing or discharging an employee, should immediately pay him or offer to pay him wages for one month and also make an application to the Tribunal for approval at the same time. When, however, we say that the employer must take action simultaneously or immediately, we do not mean that literally, for when three things are to be done they cannot be done simultaneously but can only be done one after the other. What we mean is that the employer's conduct should show that the three things contemplated under the proviso, namely, (i) dismissal or discharge, (ii) payment of wages, and (iii) making of the application, are parts of the same transaction.'

12. Mr. Byra Reddy tries to distinguish this case as inapplicable to a case under S. 25F on the ground that this ruling dealt, not with the said section, but with S. 33(2), and that in the latter case the workman has the further protection of making an application under S. 33A to the Tribunal or authority concerned if he fells aggrieved by any contravention of S. 33(2) by the employer. So far as the second ground is concerned, it seems to us that it should not make any difference to the question of interpretation. A workman aggrieved by retrenchment also has a remedy, formerly through the intervention of a union and now also at his own instance. The nature of the remedy or the distinction between two remedies ought not to be, in our opinion, a factor furnishing a different canon of interpretation.

13. Now, so far as the language of S. 25F and of the proviso to S. 33(2) is concerned, there is scarcely any distinction possible. Though the former uses the word 'until' and the latter uses the word 'unless' the effect or the ultimate meaning conveyed is the same, viz., that both refer to the necessary conditions which should be complied with, before a particular result can be achieved.

14. We see, therefore, little reason or justification why the test for compliance or non-compliance formulated by the Supreme Court with reference to the proviso appended to S. 33(2) is not available as a test for determining compliance or non-compliance of S. 25F.

15. We consider that there is some support to this approach in the decision of the Supreme Court in the case of Bombay Union of Journalists v. State of Bombay, [1964 - I L.L.J. 351]; [1963] 26 F.J.R. 32, in which their Lordships dealt with clause (c) of S. 25F and the argument addressed before them that it is as much a condition precedent as clauses (a) and (b) of the same section. While observing that, prima facie, the argument appeared attractive the Court stated that a closer examination would disclose that clause (c) cannot receive the same construction as clauses (a) and (b). Pointing out that under clause (b) there is an option given to the employer either to give one month's notice or pay one month's wages in lieu of notice, the Court asked the question how would clause (c) operate in the latter case and answered it as follows (at p. 39) :

'... If it is held that the notice in prescribed manner has to be served by the employer on the appropriate Government before retrenching the employee in such a case, it would mean that even in a case where retrenchment is effected on payment of wages in lieu of notice it cannot be valid unless the requisite notice is served on the appropriate Government; and that does not appear to be logical or reasonable. Reading the latter part of clause (a) and clause (c) together, it seems to follow that in cases falling under the latter part of clause (a) the notice prescribed by clause (c) has to be given not before retrenchment, but after retrenchment; otherwise, the option given to the employer to bring about immediate retrenchment of the workman on paying him wages in lieu of notice would be rendered nugatory. Therefore, it seems that clause (c) cannot be held to be a condition precedent even though it has been included under S. 25F along with clauses (a) and (b) which prescribed conditions precedent.'

That a notice to the Government under S. 25F and a notice to the Tribunal or authority under the proviso to S. 33(2) are necessary conditions admits of no doubt. The last mentioned two decisions of the Supreme Court support the view that the sending of these notices at a point of time slightly subsequent to the termination of service does not amount to non-compliance with S. 25F or 33(2)(b), as the case may be, so as to invalidate an action taken by the employer thereunder - whether retrenchment, discharge or dismissal of an employee; at the same time, it cannot be wholly disconnected with the main matter in question. So, what is of importance is the existence of a connection between the conditions and the action so as to constitute all of them into a single transaction.

16. The question now is whether the retrenchment and the payment of wages in lieu of notice and of retrenchment compensation in this case can be regarded as constituting a single transaction or so disconnected with each other as to render the retrenchment itself invalid in law.

17. We have already pointed out that the retrenchment notice in this case, served on each of the 77 persons retrenched, states that one month's wages in lieu of notice as well as the retrenchment compensation will be paid to him on the same day at the office of the managing agents which is about a mile away. To show that it is not a single transaction, Mr. Byra Reddy's argument is that normally, wages would be paid at the factory premises and that even a tender requires actual show of money and not a mere oral offer. We should not, however, lose sight of the fact that the employer in this case is not an individual but a company which has necessarily to act through its officers and departmentalize its work for efficient working. Even in the case of an individual employer it may be necessary to have more than one person dealing with different aspects of his business or work in connection with his business. If, for example, one person sits at a table and gives the retrenchment notice to a workman and asks him to go to another person sitting a few yards away or in another room to receive money, can it be said that there is no retrenchment whatever because the money was paid some time later If the process is reversed and there is mere payment in the first instance and some time later another person gives a notice in writing explaining what that payment was meant to be can workmen say that it is not open to the employer to make a payment was meant to what he meant by it If the factory premises are sufficiently extensive and the distance between the place of work and the cash counter where payments are made is not a few feet but a furlong or even half a mile, can it be said that the idea of retrenchment stated in the notice and the fact that retrenchment alone is the explanation for the payment made and the connection thus existing between the two stand destroyed or may be said to be non-existent because of the distance between the two places

18. The only way, in our opinion, to avoid these incongruities and illogicalities is to apply the principle stated by the Supreme Court in the case of Strawboard ., [1962 - I L.L.J. 420]; [1962] 22 F.J.R. 236, viz., to see whether there is such nexus between various steps as to constitute them into a single transaction or whether the time lag or intervening circumstances are such as to make it difficult to postulate a nexus or connection.

19. In this case, as the notice itself was accompanied by a sheet containing detailed calculation giving all particulars and a preparation for payment on the same day, the reasonable inference is that the scheme was one and entire and had been worked out with one single intention of a retrenchment in compliance with the terms of S. 25F of the Industrial Disputes Act.

20. When such a view is clearly possible and when admittedly all the 77 retrenched workmen have received the notice pay and retrenchment compensation and as many as 57 out of them have actually filed affidavits stating that they have no dispute in regard thereto, we do not think that this is a case in which the petitioner can ask us to interfere under Art. 226 of the Constitution.

21. The second question of dismissal of the six workmen can be disposed of more briefly. The misconduct with which they were charged was, instigating workmen to go slow in their work. That the workmen did go slow and the production fell is a proved and undeniable factor. That an enquiry was regularly held after the workmen concerned had been served with charge-sheets and that the workmen had full opportunity of cross-examining the witnesses examined in support of the charge is admitted. From the award of the Tribunal it is seen that the only point pressed before it was that the charges were vague. The same was rejected by the Tribunal, and, in our opinion, rightly, because the charge and the circumstances were clearly understood by the workmen and none of them can say that they did not know what case they were called upon to meet. Before us, the only point pressed by Mr. Byra Reddy was that there was no evidence whatever in support of the charge. According to him, all that the witnesses say is that the dismissed workmen were seen talking to some workmen at the section concerned whereafter the workmen in the sections started going slow; but no witness is able to say what the subject of the talk was. Mr. Sundaraswamy, on the other side, points out that there is clear evidence to the effect that the dismissed workmen were seen instigating others to go slow in their work and that entire matter is one of assessing the probabilities. We have gone through the report of the enquiry officer and find from the discussion of the material contained therein that the position is not of total lack of evidence but one of assessing the material and drawing inferences from proved circumstances. We see no reason whatever to interfere with the similar opinion expressed in the award of the Tribunal.

22. The writ petition is dismissed.


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