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Ambalal Shivlal Vs. VIn D.M. and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtGujarat High Court
Decided On
Case NumberSpecial Civil Application No. 803 of 1961
Judge
Reported inAIR1964Guj192; [1964(9)FLR328]; (1964)GLR609; (1964)0GLR609
ActsIndustrial Disputes Act, 1947 - Sections 1, 7, 7A, 10, 10(1), 25C, 25F, 25-I, 33A, 33C and 33C(2)
AppellantAmbalal Shivlal
RespondentVIn D.M. and ors.
Appellant Advocate V. Premchand and; G.P. Vyas, Advs.
Respondent Advocate C.T. Daru and; S.K. Zaveri, Advs.
Disposition Petition allowed
Cases ReferredState of Bombay v. Hospital Mazdoor Sabha
Excerpt:
labour and industrial - retrenchment - section 25f of industrial disputes act, 1947 - section 25f imposes limitations upon and subjects power of employer to retrench workman to certain conditions - section does not create new right in favour of workman in case of retrenchment - limitations imposed are payment of notice pay, retrenchment compensation and notice to appropriate government. - - va, the workman may, without prejudice to any other mode of recovery, make an application to the appropriate government for the recovery of the money due to him, and if the appropriate government is satisfied that any money is so due, it shall issue a certificate for that amount to the collector who shall proceed to recover the same in the same manner as an arrear of land revenue. 33c(2), their.....miabhoy, j. 1. this is a writ petition under arts. 226 and 227 of the constitution of india. petitioner is ambalal shivlal. respondent 1 was, at the relevant time, the officer presiding over the first labour court, ahmedabad. petitioner was running at ahmedabad an establishment for manufacturing bidis. respondents 2 and 9 (hereafter called 'respondents' simpliciter) were petitioner's employees. the wages payable to respondents were governed by an award of the industrial tribunal. on 20 january 1956 petitioner gave a notice that respondents shall be paid at the rate of rs. 2-8-0 per 1,000 rolls. the rate so offered by petitioner was lower than the rate fixed by the industrial award. by their reply, dated 4 february 1956, respondents refused to accept the variation in the rate. thereafter,.....
Judgment:

Miabhoy, J.

1. This is a writ petition under Arts. 226 and 227 of the Constitution of India. Petitioner is Ambalal Shivlal. Respondent 1 was, at the relevant time, the officer presiding over the first labour court, Ahmedabad. Petitioner was running at Ahmedabad an establishment for manufacturing bidis. Respondents 2 and 9 (hereafter called 'respondents' simpliciter) were petitioner's employees. The wages payable to respondents were governed by an award of the industrial tribunal. On 20 January 1956 petitioner gave a notice that respondents shall be paid at the rate of Rs. 2-8-0 per 1,000 rolls. The rate so offered by petitioner was lower than the rate fixed by the industrial award. By their reply, dated 4 February 1956, respondents refused to accept the variation in the rate. Thereafter, there was some further correspondence between the parties and, ultimately on 13 February 1956, petitioner gave a notice to respondents in which he said that respondents had declined his offer and that, therefore, they were deemed to have left his services of their own accord and though, originally his offer stood till 28 February 1956, he had acquired a right to withdraw it and that he was not bound to wait till that date for the acceptance of his offer. Petitioner further contended in the notice that, under the circumstances of the case, he was not bound to give notice-pay to respondents but that, in spite of this, he was giving to respondents the notice-pay. Petitioner further stated in the notice that he was not under an obligation to pay any retrenchment compensation on the above grounds and also on the ground that S. 25F of the Industrial Disputes Act, 1947 (hereafter called 'the Act'), was ultra vires the Constitution. Petitioner ended the notice by stating that, however, if any competent authority decided that retrenchment compensation should be given to respondents, petitioner was prepared to do so. Respondents did not take any steps after this notice. On 3 April 1959, each of the respondents filed a separate application in the Court of the respondent 1 under S. 33C, Sub- section (2), of the Act. Respondents alleged therein that they were retrenched with effect from 13 February 1956 and that they had not been paid retrenchment compensation as provided for in S. 25F of the Act. Therefore, respondents claimed, under the aforesaid section, that the amount of their compensation should be determined by respondent 1 and that steps should be taken to recover the amount so determined under the provisions of the Act. Petitioner contested the applications. He contended that respondents were not retrenched but that the correct factual position was that petitioners establishment had been closed. Therefore, he contended that respondents were not entitled to receive any compensation amount from petitioner. Petitioner also raised the question about the amount of the retrenchment compensation claimed by each respondent. He also contended that the labour court had no jurisdiction to decide both or any of the aforesaid two questions and that those questions fell within the purview of the jurisdiction of the industrial tribunal. Respondent 1 found against all the aforesaid three contentions of petitioner. He held that he had jurisdiction to decide the question whether respondents were or were not retrenched and so he had also jurisdiction to determine the amount at which the retrenchment compensation should be computed. Respondent 1 also found that respondents ware retrenched and that the establishment was not closed. Respondent 1 then determined the amount of compensation payable to each of the respondents and passed a suitable order to enable respondents to take steps necessary for the purpose of recovering the amount. Respondent 1 had consolidated all the eight applications of respondents and he delivered one common judgment disposing of all the aforesaid applications. The present writ application is directed against that order of respondent 1 passed on 31 October 1961. Petitioner prays that the proceedings in the recovery applications made by respondents herein and the records thereof be called by this Court from the file of respondent 1 and that a writ of, or in the nature of, certiorari or any other writ or order or direction quashing the impugned order dated 31 October 1961 be issued.

2. Sri Vyas appearing on behalf of petitioner, raised four questions for decision of this Court. The first three points were the same which ware raised before respondent 1. In addition to that, Sri Vyas submitted that there was no evidence before respondent 1 on the basis of which he could have held that petitioner's establishment was not closed and that, therefore, the finding of respondent 1 on that subject was vitiated by the fact that it was recorded on no evidence.

3. In our judgment, the contention of Sri Vyas that, on the facts of the case, the labour court had no jurisdiction to decide the question as to whether respondents were or were not retrenched is valid and that the petition deserves to be allowed on that ground. In view of our conclusion, it is not necessary for us to consider the validity or otherwise of the other submissions made by Sri Vyas.

4. Now, as already stated, the petition was made under S. 33C, Sub- section (2), of the Act. Section 33C is as follows :

'33C. (1) Where any money is due to a workman from an employer under a settlement or an award or under the provisions of Chap. VA, the workman may, without prejudice to any other mode of recovery, make an application to the appropriate Government for the recovery of the money due to him, and if the appropriate Government is satisfied that any money is so due, it shall issue a certificate for that amount to the Collector who shall proceed to recover the same in the same manner as an arrear of land revenue.

(2) Where any workman is entitled to receive from the employer any benefit which is capable of being computed in terms of money, the amount at which such benefit should be computed may, subject to any rules that may be made under this Act, be determined, by such labour court as may be specified in this behalf by the appropriate Government, and the amount so determined may be recovered as provided for in Sub-section (1).

(3) For the purposes of computing the money value of a benefit, the labour court may, if it so thinks fit, appoint a commissioner who shall after taking such evidence as may be necessary, submit a report to the labour court and the labour court shall determine the amount after considering the report of the commissioner and other circumstances of the case.'

5. The contention of Sri Vyas is that the question as to whether respondents are or are not retrenched is a question which falls within the special jurisdiction of the industrial tribunal, that, that question does not fall within the jurisdiction of the labour court and that, therefore, the labour court has no jurisdiction, under the provisions of the Act, to decide the question as to whether respondents were or were not retrenched. In support of these contentions, Sri Vyas relies upon Ss. 7 and 7A of the Act which deal with the jurisdictions of the labour court and the industrial tribunal respectively. Section 7 enacts that the appropriate Government may, by a notification in the official gazette, constitute one or more labour courts

'for the adjudication of industrial disputes relating to any matter specified in the Second Schedule and for performing such other functions as may be assigned to them under this Act.'

6. Section 7A enacts that the same Government, by a similar notification, may constitute one or more industrial tribunals

'for the adjudication of industrial disputes relating to any matter, whether specified in the Second Schedule or the Third Schedule.'

7. Against item 6 in Sch. II, matters mentioned as coming within the jurisdiction of the labour court are :

'All matters other than those specified in the Third Schedule.'

8. In Sch. III, the following matters are mentioned against item 10 :

'Retrenchment of workmen and closure of establishment.'

9. From the above provisions, it is obvious that the jurisdiction of the industrial tribunal is wider than that of the labour court in the matter of industrial disputes. Its jurisdiction extends to all industrial disputes. It is also equally obvious that the jurisdiction of the labour court is not so wide and does not include all industrial disputes. It has no jurisdiction to deal with matters which are mentioned in Sch. III. However, in addition to the matters mentioned in Sch. II, the labour court has been given the power to perform functions assigned to it under the Act. Therefore, it is crystal clear that whereas the industrial tribunal can deal with all industrial disputes which can be dealt with by the labour court, the labour court cannot deal with those industrial disputes which are included in Sch. III. Thus, the jurisdiction of the labour court embraces only those matters which are mentioned in Sch. II and those functions which are assigned to it by the Act and does not include any other powers and functions. On the other hand, the industrial tribunal enjoys a plenary jurisdiction over industrial disputes but does not appear to have been given the power to perform functions specially assigned to the labour court.

10. The contention of Sri Vyas, the learned counsel for petitioner, is based on item 10 in Sch. III which mentions

'Retrenchment of workmen and closure of establishment.'

11. The contention is that the questions relating to retrenchment of workmen and closure of establishment are within the special jurisdiction of the tribunal and that, therefore, they did not fall within the jurisdiction of the labour court.

12. The contention of Sri Daru, the learned counsel for respondents, is based upon S. 33C(2) of the Act. The contention is that, though Sch. II does not mention the above two questions, S. 33C(2) gives implied power to the labour court to deal with them. It is the validity of this contention which requires to be examined in the case.

13. (3 October 1963) : Sub-section (2) of S. 33C confers jurisdiction upon the labour court to determine the amount at which a benefit is to be computed. The primary function assigned under that sub-section to the labour court is the determination of the amount of benefit. Thus, the sub-section deals with benefit. If we compare the language of Sub-section (1) with that of Sub-section (2), we find that Sub-section (2) is wider in some respects than Sub-section (1). The two sub-sections confer right upon an individual workman to obtain relief from the authorities mentioned therein. Whereas Sub-section (1) confers right to recover money, Sub-section (2) confers right to recover benefit which need not necessarily be money itself, but, which is capable of being converted into money. Sub- section (1) limits the jurisdiction of the authority only to the question as to whether the money claim is or is not still due at the date when the application for its recovery is made. On the other hand, Sub-section (2) confers jurisdiction upon the labour court to determine the amount at which the benefit is to be computed. Under Sub-section (1), the money claim must arise under one of three heads - a settlement, an award or under Chap. VA of the Act. There is no such limitation in Sub-section (2) in regard to the source of benefit. In addition to the aforesaid three sources, benefit may arise from any other source also. The authority which is entitled to grant relief under Sub-section (1) is the appropriate Government, whereas, under Sub-section (2), the authority is the labour court. Therefore, under Sub-section (2), it is quite clear that the primary function which is assigned to the labour court is to determine the amount at which benefit is to be computed so that the workman concerned may be enabled to recover it in the manner provided in Sub-section (1). Thus, the labour court has undoubted jurisdiction to decide all questions relating to the computation of the amount of benefit. But, the question which arises for our consideration is as to whether that Court has or has no jurisdiction to determine the existence of the benefit on the basis of which the amount is sought to be computed. In other words, when the employer disputes the right of the workman to a benefit, on the basis of which the workman founds his claim, the question arises whether, under Sub-section (2) aforesaid, the labour court has got jurisdiction to determine the source on the basis of which the claim is made.

14. Now, this subject came up for consideration before their lordships of the Supreme Court in the case in Central Bank of India, Ltd., and others v. Rajagopalan and others [1963 - II L.L.J. 89]. The question which arose for decision in that case was whether, when the employer disputes the right of the workman, on the basis of which right the claim is made under Sub-section (2) aforesaid, the labour court has jurisdiction to decide about the existence of that right. Their lordships held on two grounds that the labour court had, such jurisdiction. Firstly, they held that the first clause of Sub-section (2) did not mean that the labour court had jurisdiction to determine the amount at which the benefit is to be computed only in those cases where the right on the basis of which the benefit was claimed, was admitted by the employer. Secondly, they held that, if any such construction were to be adopted, then it would place the jurisdiction of the labour court at the mercy of the employer. Their lordships also referred to that canon of interpretation of statutes which says that, where an Act confers jurisdiction it also grants impliedly the power of doing all such acts, or employing such means, as are essentially necessary to its execution which canon is referred to in Maxwell on Interpretation of Statutes, at p. 350. Therefore, there is no doubt whatsoever that the question as to whether the labour court has or has not the power or jurisdiction to determine the question about the existence of the right on the basis of which the amount at which the benefit is to be computed has been finally determined by the Supreme Court. Therefore, in our judgment, it cannot be now disputed that the labour court has got the jurisdiction to determine the question as to whether the right on which the benefit is sought to be claimed is or is not in existence in any case where the employer disputes that particular right. Sri Vyas does not dispute this proposition. But his contention is that this power or jurisdiction of the labour court is subject to a limitation which their lordships themselves have mentioned in the above case and, according to him, that limitation applies to the facts of the present case. Before dealing with the scope and ambit of S. 33C(2), their lordships traced the legislative history of that sub-section and also some other allied sections and then made the following observations :

'The legislative history to which we have just referred clearly indicates that having provided broadly for the investigation and settlement of industrial disputes on the basis of collective bargaining, the legislature recognized that individual workman should be given a speedy remedy to enforce their existing individual rights, and, so inserted S. 33A in the Act in 1950 and added S. 33C in 1956. These two provisions illustrate the cases in which individual workman can enforce their rights without having to take recourse to S. 10(1) of the Act, or without having to depend upon their union to espouse their cause. Therefore, in construing S. 33C we have to bear in mind two relevant considerations. The construction should not be so broad as to bring within the scope of S. 33C cases which would fall under S. 10(1). Where industrial disputes arise between employees acting collectively and their employers, they must be adjudicated upon in the manner prescribed by the Act, as for instance, by reference under S. 10(1). These disputes cannot to brought within the purview of S. 33C. Similarly, having regard to the fact that the policy of the legislature in enacting S. 33C is to provide a speedy remedy to the individual workmen to enforce or execute their existing rights, it would not be reasonable to exclude from the scope of this section cases of existing rights which are sought to be implemented by individual workmen. In other words, though in determining the scope of S. 33C we must take care not to exclude cases which legitimately fall within its purview, we must also bear in mind that cases which fall under S. 10(1) of the Act, for instance, cannot be brought within the scope of S. 33C.'

15. The contention of Sri Vyas is based on the above observations of their lordships. He contends that inasmuch as the question about the retrenchment of workmen and closure of establishment falls within the special jurisdiction of the industrial tribunal, the questions whether the respondents were or were not retrenched or whether the establishment was or was not closed can be dealt with only by the tribunal or the labour court under S. 10(1) and that, in such a case, a reference on the subject was necessary by the appropriate Government under that section. Sri Vyas contends that the jurisdiction to decide the aforesaid question belongs to the tribunal and that too only if a reference is made in respect thereof by the appropriate Government and that, if the conditions mentioned in the proviso to S. 10(1) are fulfilled, then, the labour court will have jurisdiction to decide those disputes, provided a reference is also made to it by the appropriate Government. It is not disputed before us that the conditions mentioned in the proviso to S. 10(1) are satisfied on the facts of the present case and that the appropriate Government could have made a reference under S. 10, Sub-section (1), to the labour court. However, under that section, the labour court cannot take cognizance of those disputes unless a reference thereon is made by the appropriate Government. Therefore, the contention of Sri Vyas is that no reference having been sought on the aforesaid disputes and no reference having been made to the labour court by the appropriate Government on the subject, the question as to whether respondents have been retrenched or whether petitioner's establishment has been closed cannot be dealt with by the labour court.

16. Sri Daru's argument is that the above contentions are based upon an incorrect reading of the observations of their lordships of the Supreme Court in the above-quoted passage. His submission is that the aforesaid passage most be read in the context of the main point which their lordships were called upon to decide and which they have decided. He contends that the main point which their lordships have decided in the above case is that S. 33C has been designed to provide a speedy remedy to individual workmen to enforce or execute their existing rights. His submission is that the correct interpretation of the above passage is that if there is an existing right and the workman seeks a money claim in enforcement of such a right, then, within the framework of the existing right, the labour court has the fullest jurisdiction to determine all questions which may be necessary for the purpose of giving effect to the right which is already in existence. His submission is that, it is only when there is no existing right and the workman seeks the benefit of the industrial law de hors any such existing right, then, the limitation which their lordships have mentioned in the aforesaid passage would come into play. His sub-mission is that the effect of the aforesaid passage is that, if in order to enforce his claim, the workman does not rely upon an existing right but seeks to make good his claim under the industrial law which will create a new right for him, as a result of which only the claim can be awarded to him, then, resort to the machinery laid down in Sub-section (1) of S. 10 is necessary and it is only then that the limitation which their lordships have imposed in the aforesaid passage comes into play. In other words, the contention is that, if the law has created or a contract between the parties grants a right to compensation on retrenchment and the source of that benefit is that law or that contract, then, the condition precedent which is laid down in the first clause of Sub-section (2) of S. 33C has been satisfied and the jurisdiction of the labour court is attracted and if, in the exercise of such jurisdiction, the question arises whether the workman is or is not retrenched, that is, whether the right which is already in existence inheres in a particular workman, then that narrow question can be decided by the labour court and it does not come within the purview of S. 10, Sub-section (1), of the Act. He submits that, in that contingency, a reference to an industrial tribunal or in cases where the conditions laid down in the proviso are satisfied, to the labour court is not necessary at all. If the law or the contract confers the right to compensation for retrenchment, or if the right is already in existence and is not required to be brought into existence by a reference to an industrial authority, then, there is no question of the application of S. 10, Sub-section (1), at all. He submits that the case would then be similar to the case of Central Bank which their lordships were dealing with. In that particular case, the claim was based on the basis of an award and the question which had got to be determined was whether the workman who claimed the benefit under the award were or were not the workmen to whom the benefit had been given. Sri Vyas contends that the aforesaid contention ignores two other limitations, which, according to him, have been mentioned by their lordships of the Supreme Court in Central Bank case. On the other hand. Sri Daru contends that those two limitations are nothing but illustrations of the wider principle that the labour court must act within the frame-work of an existing right and must not travel beyond it. The two illustrations which their lordships have given are, firstly, the illustration of a dismissed or demoted employee whose case is that his dismissal or demotion is wrongful, and, secondly, the illustration of an employee claiming wages on the basis that a settlement had come to an end. Their lordships have pointed out that, in the two cases, the jurisdiction of the labour court was barred. In our judgment, the submission of Sri Daru is right. Both the instances are the illustrations of the wider principle that when a claim is based not on an existing right, but on a right which is yet to be brought into existence by means of an award of an industrial authority, then, the labour court has no jurisdiction in the matter. When an employee contends that his dismissal or demotion is wrongful and claims a salary or wages on that basis, then it is quite clear that he makes the claim not on the basis of the contract of service but de hors the same. The basis of his claim is the wrongful act of the employer in dismissing sing or demoting him. In the second illustration, the basis of the claim is outside the settlement and not the settlement already arrived at between the parties. In both these cases, before the wages can be given to the employee, a reference to the industrial authority will be necessary. As has been held in Western India Automobile Association v. Industrial Tribunal, Bombay, and others [1949 L.L.J. 245 at 256] an industrial tribunal does not adjudicate

'according to the strict law of master and servant,' but that, 'The award of the tribunal may contain provisions for settlement of a dispute which no Court could order if it was bound by ordinary law, but the tribunal is not fettered in any way by these limitation.'

17. Their lordships have further observed in the same as follows :

'In Vol. I of the 'Labour Disputes and Collective Bargaining' by Ludwig Teller, it is said at p. 536, that industrial arbitration may involve the extension of an existing agreement or the making of a new one, or in general, the creation of new obligation or modification of old ones, while commercial arbitration generally concerns itself with interpretation of existing obligations and disputes relating to existing agreements.'

18. Therefore, in our judgment, the mere fact that a certain point which arises for determination in an application under S. 33C(2) is a point which is mentioned as a matter in Sch. III does not necessarily mean that the labour court has no jurisdiction to deal with that point. If there is a pre-existing right which confers a benefit upon a workman or the class to which the workman belongs, then, the labour court will have jurisdiction to determine all questions irrespective of the fact that it can be also dealt with by the other tribunal under its special jurisdiction. It will not deprive the labour court of its jurisdiction to deal with that point provided the question which the labour court has got to consider is in relation to the individual right of the workman which right is sought to be enforced by him. In other words, if there is the framework of an existing right and if the worker claims the enforcement of that right within that particular framework and the only question which has got to be determined is, whether the right which is claimed on the basis of which the amount is sought to be computed, does or does not inhere or vest in that particular employee, then the labour court has jurisdiction to determine the narrow question as to whether the particular workman is or is not the person in whom the right vests and is or is not the person who is entitled to the benefit of that right. This interpretation follows from the plain language of Sub-section (2) of S. 33C. The condition precedent for computation of a benefit is stated to be the title to receive that benefit. The workman can claim to have his benefit computed only if he is able to establish the benefit, i.e., if there is already a pre-existing right vesting in him which confers a benefit sought to be computed. In our judgment, therefore, the fact that the subject of retrenchment of workmen and closure of establishment is within the special jurisdiction of the industrial tribunal cannot be a bar to the determination of the question as to whether respondents are or are not retrenched provided respondents are able to show that they have a pre-existing right to receive retrenchment compensation. In this connexion, it is note-worthy that the ratio of the case in Sawatra Ramprasad Mills Company, Ltd., Akola v. Beliram [1963 - I L.L.J. 400] decided by the Bombay High Court, was approved by their lordships of the Supreme Court in Central Bank case already referred to. In that Bombay case, their lordships were dealing with a claim arising out of a lay-off and the objection of the employer that the labour court had no jurisdiction to determine the question as to whether there was or was not a 'lay-off' was answered in the negative. Though, their lordships of the Supreme Court state in Central Bank case that all the observations which the Bombay High Court made whilst considering S. 33C(2) were not consistment with their own decision, the actual decision of the Bombay High Court was approved. It is noteworthy that S. 25C of the Act itself gives the right to the workman to receive compensation for being laid off.

19. However, Sri Vyas, alternatively, contends that, even if Sri Daru is right in his aforesaid submission, S. 25F on the basis of which the right to retrenchment compensation is made, dose not create any such right in favour of respondents. Sri Vyas's submission is that, unlike S. 25C, S. 25F itself does not create any right in favour of an employee to receive nor does it impose any obligation upon an employer to give retrenchment compensation. He submits that S. 25F is based upon the assumption that every employer has got a right to retrench his employee, and all that it does is to impose certain conditions precedent which must be satisfied before a workman is retrenched. He submits that the correct interpretation of that section is not that on a retrenchment being made, a workman is entitled to receive retrenchment compensation on the scale mentioned in that section, but the correct interpretation is that, if the employer wishes to exercise his power of retrenchment, then, he shall do so only on those terms. His contention is that if a workman is retrenched and the retrenchment compensation is not paid, then, the true legal effect thereof is that there is no retrenchment in the eye of law, that the order of retrenchment is null and void and that the relationship between the workman and the employer of master and servant continues and the workman will be entitled to receive his wages. In our judgment, the contentions of Sri Vyas are valid and must be upheld.

20. Section 25F is as follows :

'25F. Conditions precedent to retrenchment of workmen. - 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 service or any part, thereof in excess of six months; and

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

21. It will be noticed that the section does not say, in terms, that, on retrenchment being effected, retrenchment compensation must be paid by the employer to the workmen of the type referred to in the section. The section only creates a bar to retrenchment without payment of the notice - pay, the retrenchment compensation and service of the prescribed notice to the appropriate Government. The contention of Sri Daru is that Clause (b) of the aforesaid section creates a new right in favour of the above type of workman to receive compensation. In our judgment, this contention is not valid. If we compare the language of S. 25C already referred to, with that of S. 25F, we find that whereas in S. 25F it has been definitely stated that on a 'lay- off' taking place the workman shall be paid the amount of compensation, in S. 25F no such right of receiving payment has been created by the section itself. All that the latter section does is to create a bar on the employer to retrench the workman of the kind mentioned therein without payment of retrenchment compensation. In other words, all that the section does that if a workman of the type mentioned therein is to be retrenched at all, it can be done only in the mode mentioned therein. This view of S. 25F is supported by high authority. The same question arose for consideration of their lordships of the Supreme Court in State of Bombay v. Hospital Mazdoor Sabha [1960 - I L.L.J. 251]. At p. 255 their lordships have observed as follows :

'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 noncompliance with the said condition would not render the impugned retrenchment invalid. The argument which appealed to Tendolkar. J., however, was that the consequences of non- compliance with the requirement of S. 25F(b) was not to render the impugned retrenchment invalid, because he thought that by S. 25I a specific provision has been made for the recovery of the amount prescribed by S. 25F(b). Section 25I provides for the recovery of moneys due from employers under Chap. V and according to Tandolkar, J., the provision covers the amount due to the workman by way of compensation under S. 25F(b). In our opinion this view is untenable. Having regard to the fact that the words used in S. 25F(b) are mandatory and their effect is plain and unambiguous it seems to us that the Court of appeal was right in holding that S. 25F covered cases of recovery of moneys other than those specified in S. 25F(b), and it is obvious that there are several other cases in which moneys become due from the employers to the employees under Chap. V; it is for the recovery of these moneys that S. 25I had been enacted. Therefore, we see no substance in the argument that the Court of appeal has misconstrued S. 25F(b).'

22. In our judgment, therefore, the correct interpretation of S. 25F is that it imposes a limitation upon and and subjects the power of the employer to retrench his workman, to certain conditions which must be satisfied before the power can be exercised and not that it creates a new right in favour of the workman of the type mentioned therein to receive retrenchment compensation. In that view of the matter, the amount of compensation which is claimed by each of the respondents cannot be justified directly under S. 25F. We are not called upon to consider in the present case, as to whether, de hors S. 25F, respondents are or are not entitled to receive any compensation under any existing law or contract. All that we can say is that Sri Daru did not refer us to any other law or any contract under which such a right can be supported. Thus all that we can say is that, if respondents do lay any claim, then, it will be not within the framework of an existing right created by the Act. Therefore, if any claim is made that claim must be under the industrial law and having regard to item 10 in Sch. III and Sub-sec.(2) of S. 33C, the labour court has no jurisdiction to determine the same as its jurisdiction is confined only to the determination of the amount of benefit arising out of an existing right.

23. We may say that Sri Daru had contended before us that it was optional for the workman, when an employer purported to retrench him, either to accept the retrenchment and to claim compensation. Having regard to the view which their lordships have taken regarding the correct interpretation of S. 25F it is impossible to accept this argument. In our judgment, when an order of retrenchment does not comply with the conditions laid down in S. 25F, the order is not voidable but it is void. That being so, the order of retrenchment is null and void. It follows, that till compensation amount is paid by the employer, the relationship of master and servant between the employer and the employee continues and the only legal right which the employee has is to receive his wages on the basis that he continues to be in service.

24. Sri Daru mentioned to us that, even if there was a closure of establishment. in law, respondents were entitled to notice-pay and, to that extent, the order of the labour court should be maintained. He contended that, in any case, we should make if clear that the right of respondents to claim notice-pay was not affected. It is not possible for us to express any opinion on this aspect of the case. Unless and until the question is decided as to whether this was a case of retrenchment or closure, it is not necessary to decide whether, in law, respondents are or are not entitled to notice-pay. If they are so entitled, the matter would be within the jurisdiction of the competent authority to decide it and it is not necessary for this Court to express any opinion on the subject. If the matter happens to to carried before the competent authority, it will be for that authority to consider whether in the event of there having been a closure of establishment, respondents are or are not entitled to receive notice-pay.

25. We may mention that the ultimate view which has prevailed with us is not directly in answer to the question raised by Sri Vyas. Our ultimate conclusion is not based on the issues or the points raised by him, but it is based on the finding that as there is no pre-existing right in the respondents to claim retrenchment compensation. It any retrenchment compensation is claimed for, it must necessarily be claimed de hors any such existing right. Therefore, we do not answer directly the point whether the question that respondents were or were not retrenched could or could not be dealt with by the labour court. The only finding that we record is that, having regard to the fact that the retrenchment compensation cannot be claimed under S. 25F and must necessarily be claimed de hors that section, the labour court has got no jurisdiction to deal with the matter. As regards the determination of the amount of the compensation, in our judgment, there is also no doubt, having regard to our aforesaid conclusion, that the labour court will have no jurisdiction to do so as the right to retrenchment is not claimed under any existing law or award or settlement.

26. For the aforesaid reasons, the petition must be allowed and the rule made absolute. In the circumstances of the case, each party shall bear its own costs. Rule absolute. No order as to costs.


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