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The Ex-employees' Union, Guntur Power and Light Ltd. Vs. the Guntur Power and Light Ltd. (05.09.1960 - APHC) - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtAndhra Pradesh High Court
Decided On
Case NumberA.A.O. No. 422 of 1959
Judge
Reported inAIR1961AP411; (1961)ILLJ30AP
ActsIndustrial Disputes Act, 1947 - Sections 25F and 25FF
AppellantThe Ex-employees' Union, Guntur Power and Light Ltd.
RespondentThe Guntur Power and Light Ltd.
Appellant AdvocateK. Krishnamurthy and ;A. Sanjeeva Rao, Advs.
Respondent AdvocateS. Ranganatham, Adv.
DispositionAppeal dismissed
Excerpt:
.....industrial disputes act, 1947 - defendant company taken over by state government - company issued notice to employees and terminated their services - challenged under sections 25f and 25ff - observed section 25ff enacted in september 1956 while notice issued in may 1956 - section cannot have retrospective effect - section 25ff applied when retrenchment was by same employer - retrenchment caused due to takeover not covered - held, respondent not liable to pay compensation. - - for the purpose of this enquiry, we shall proceed on the assumption that it is the industrial disputes act that is applicable to the present case, without deciding whether section 15 of the act comes into operation in cases like the instant one. or where the services of all workmen have been terminated by the..........2(oo) of the industrial disputes act. 'retrenchment' means the termination by the employer of the service of a workman for any reason whatsoever otherwise than as a punishment indicated by way of disciplinary action, but does not include -- (a) voluntary retirement of the workman; or (b) retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; or . (c) termination of the service of a workman on the ground of continued ill-health. 7. section 15 of the act on which reliance was placed by the special officer is in these words:- 'notwithstanding anything to the contrary in any contract or agreement or in any law for the time being in force, the following provisions.....
Judgment:

Chandka Reddy, C.J.

1. This is an appeal against the order of the Special Officer of the Guntur Power and Light Ltd., (hereinafter called the Company) rejecting the claims of the ex-employees of the Company, 117 in number, to gratuity and retrenchment compensation for services rendered by them to the company upto 1st May, 1956, under Sections 25-F and 25(FF) of the Industrial Disputes Act.

2. The salient facts of the case are these: Consequent on the passing of the Andhra Electricity Supply Undertaking (Acquisition) Act, 1954, (hereinafter referred to as the Act) the Government of Andhra proposed to take over all the electricity undertakings in the State including the company in question. Acting under the provisions of this Act, a notice was issued by the State Government on 27-12-1955, proposing to take over the management of this company and 1-5-1956 was appointed for this purpose. The company, as a result of this, issued notices on 27-3-1956 to all its employees terminating their services with effect from 1-5-1956.

Subsequently the Deputy Registrar of the Andhra High Court was appointed the Special Officer for the purpose of determining the compensation payable to the company and adjudicating on any claims that might be made on behalf of the employees or creditors of the company. Some time thereafter, the ex-employees of the concern presented the claims mentioned above before the Special Officer, They were rejected by the Special Officer on the ground that the provisions of the Industrial Disputes Act were inapplicable and that it was Section 15 of the Act that would govern this case. It is this order that is assailed before us in this appeal.

3. In order to appreciate the relevant Contentions of the parties, it is useful to read the relevant statutory provisions.

4. Section 25-F of the Industrial Disputes Act reads:-

'No workman employed in any industry who has been in continuous service for not less than one year under an employer shall he retrenched by the employer until -

(a) the workman has been given one month's notice in writing indicating the reaons 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 service or any part thereof in excess of six months; and

(c) notice in the prescribed manner is served on the appropriate Government.'

5. Section 25-FF is in these words:-

'Where the ownership or management of an undertaking is transferred, whether by agreement or by operation of law, from the employer in relation to that undertaking to a new employer, every workman who has been in continuous service for not less than one year in that undertaking immediately before such transfer shall be entitled to notice and compensation in accordance with the provisions of Section 25-F, as if the workman had been retrenched:

Provided that nothing in this section shall apply to a workman in any case where there has been a change of employers by reasons of the transfer, if -

(a) the service of the workman has not been interrupted by such transfer;

(b) the terms and conditions of service applicable to the 'workman after such transfer are 'of in any way less favourable to the workman than those applicable to him immediately before the transfer; and

(c) the new employer is, under the terms of such transfer or otherwise legally liable to pay to the workman, in the event of his retrenchment, compensation on the basis that his service has been continuous and has not been interrupted by the transfer.

6. We may also look at the definition of 'ret-renchment1' as contained in Section 2(oo) of the Industrial Disputes Act.

'Retrenchment' means the termination by the employer of the service of a workman for any reason whatsoever otherwise than as a punishment indicated by way of disciplinary action, but does not include --

(a) voluntary retirement of the workman; or

(b) retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; or .

(c) termination of the service of a workman on the ground of continued ill-health.

7. Section 15 of the Act on which reliance was placed by the Special Officer is in these words:-

'Notwithstanding anything to the contrary in any contract or agreement or in any law for the time being in force, the following provisions shall apply and shall be deemed always to have applied in regard to the persons on the staff of the licensee immediately before the vesting date:

(1) The Government shall have and shall be deemed always to have had power to terminate the services of any such person after giving him three calendar months' notice in writing or paying him three months' pay in lieu of such notice.

(2) Persons whose services are or have been retained shall be governed or shall be deemed to have been governed by such rules as the Government may from time to time, make in regard to them.'

8. As it is specifically provided that the services of persons who have been retained by the Government would be governed by such rules as may be framed by the Government, it is necessary to extract the material rules. We are here concerned only with Rule 19 which says;-

(1) Employees on the staff of a licensee immediately before the vesting date who are willing to serve tinder the Government shall be retained and continued provisionally for a period not exceeding twelve months from the said date:

Provided that the Government may, from timeto time, extend the period of provisional continuance aforesaid in respect of any employee or employees, so, however, that the total period shall notexceed twenty four months from the vesting date.' xx xx xx xx

9. Indisputably, all the employees-appellant have been retained in service by the Government.

10. However the question for consideration is whether the employees are entitled to any of the benefits Conferred by the relevant provisions of the Industrial Disputes Act. For the purpose of this enquiry, we shall proceed on the assumption that it is the Industrial Disputes Act that is applicable to the present case, without deciding whether Section 15 of the Act comes into operation in cases like the instant one. The question is, whether the employees fall within the ambit of either Section 25-F or 25-FF of the Industrial Disputes Act.

11. At the outset, it should be noted that Section 25-FF was introduced by Act 41 of 1956 which came into force on 4th September, 1956. It is plain from the language of that section that retrospective operation is not given to it. That being the position, Section 25-FF cannot be invoked by the employees, since the management was taken over before this section came into force, namely on 1-5-56. Therefore, Section 25-FF is not applicable to the present case.

12. The next point debated before us is whether Section 25-F could be resorted to by the employees. A perusal of that Section convinces us that it would have application only to cases where the employees are retrenched as being 'surplus labour'. It has no bearing to a case where the business was discontinued or was taken over by another company or the Government, as in the present ease. There can be little doubt on the terms of that section that it is attracted only to 'retrenchment' by the same employer.

13. The same concept is also expressed in Section 2(oo) of the Industrial Disputes Act which emphasises the dispensing with the services by an employer which can only have reference to a person who continues to be the employer. We are reinforced in this conclusion of ours by the judgment of the Supreme Court in Hariprasad v. Divelkar, (S) AIR 1957 SC 121. The legal position is summed up by their Lordships in paragraph 19 of their judgment in the following words:-

'For the reasons given above, we hold, contrary to the view expressed by the Bombay High Court, that retrenchment as defined in Section 2(oo) and as used in Section 25-F has no wider meaning than the ordinary, accepted connotation of the word; it means the discharge of surplus labour or staff by the employer for any reasons whatsoever, other wise than as a punishment inflicted by way of disciplinary action, and it has no application where the services of all workmen have been terminated by the employer on a real and bona fide closure of business as in the case of Shri Dinesh Mills Ltd. or where the services of all workmen have been terminated by the employer on the business or undertaking being taken over by another employer in circumstances like those of the Railway Company. Mr. Mehta appearing for the respondents 4 and 5 in Civil Appeal 105 of 1956, tried to make a distinction between transfer of ownership with continuation of employment (which according to him did not come within the definition) and termination of service on closure of business. There is in fact a distinction between transfer of business and closure of business; but so far as the definition clause is concerned, both stand on the same footing if they involve termination of service of the workmen by the employer for any reason whatsoever, otherwise than as a punishment by way of disciplinary action. On our interpretation, in no case is there any retrenchment, unless there is discharge of surplus labour or staff in a Continuing or running industry.'

The last sentence makes it abundantly clear that the section is inapplicable to both the cases of an industry being closed and to an industry being taken over either by another concern or by the Government.

14. On this discussion, it follows that the employees cannot have recourse either to Section 25-F or 2(oo) of the Industrial Disputes Act which defines 'retrenchment'. In the circumstances, the appeal is dismissed and the judgment under appeal is sustained, though on grounds different from those given by the Special Officer. But we make no order as to costs. The dismissal of this appeal does not preclude the appellants from pursuing such remedies as may be available to them in law.


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