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State of Gujarat and anr. Vs. Labour Court, Rajkot (P.R. Mankad) and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtGujarat High Court
Decided On
Case NumberSpecial Civil Application No. 1020 of 1963
Judge
Reported in(1968)0GLR815; (1968)ILLJ148Guj
ActsIndustrial Disputes Act, 1947 - SectionS 2, 25F and 33C
AppellantState of Gujarat and anr.
RespondentLabour Court, Rajkot (P.R. Mankad) and ors.
Cases ReferredHariprasad Shivshanker Shukla v. A. D. Divelkar
Excerpt:
labour and industrial - retrenchment - sections 2 (oo), 25f and 33c of industrial disputes act, 1947 and rules 161 (a) and 163 of bombay civil service rules - retrenchment means such action taken by employer for temination of service by way of surplusage of staff - termination on account of superannuation at certain age as prescribed by rules does not amount to rentrenchment - as per rules respondent-government servant liable to retire at age of 55 years - such termination does not constitute retrenchment entitling him to claim compensation. - - persons who were already permanent on the date of the merger will, however, continue to enjoy the benefits of permanency while holding the temporary posts, vide government resolution, political and services department, no. 469] that the.....bakshi, j. 1. this is an application under arts. 226 and 227 of the constitution of india challenging the legality of the order passed by the labour court, rajkot, in recovery application no. 122 of 1963. petitioner 1 is the state of gujarat and petitioner 2 is the port officer, okha. respondent 1 is the presiding officer of the labour court at rajkot and respondent 3 bholu natha who served as the first engine-driver, flotilla section at okha port and who made to retire by the okha port administration as from 1 august, 1961. this led to an application by respondent 3 under s. 33c of the industrial disputes act which was decided by the labour court at rajkot in favour of respondent 3 and it is that order of the labour court the validity of which has been challenged in these proceedings.....
Judgment:

Bakshi, J.

1. This is an application under Arts. 226 and 227 of the Constitution of India challenging the legality of the order passed by the labour court, Rajkot, in Recovery Application No. 122 of 1963. Petitioner 1 is the State of Gujarat and petitioner 2 is the Port Officer, Okha. Respondent 1 is the presiding officer of the labour court at Rajkot and respondent 3 Bholu Natha who served as the first engine-driver, flotilla section at Okha port and who made to retire by the Okha Port Administration as from 1 August, 1961. This led to an application by respondent 3 under S. 33C of the Industrial Disputes Act which was decided by the labour court at Rajkot in favour of respondent 3 and it is that order of the labour court the validity of which has been challenged in these proceedings before us.

2. A few facts as they appear in the petition and on which the petition is based may be briefly stated. The area comprising the Port of Okha was formerly under the administration of the former Baroda State. The Government of that State had, by a resolution of August, 1962, constituted all the unoccupied area and waste land of the village Adatra and all lands were in possession of the Gaikwad State Railway except the land occupied by the railway works into the port area of the Port of Okha. This port which was owned by the former Baroda State was managed and administered by that State through a board called the Okha Harbour Board which was constituted by the former Baroda State under the Okha Port Rules. The Board that was constituted under those rules was assigned the duty of carrying out the provisions of the rules and was to consist of such members as the Ruler of the State from time to time might appoint for the purpose of the administration of the port. The Port Officer was to act as the Secretary of the Harbour Board and schedules of staff and of pay and allowances were to be prepared and sanctioned by the Board. Rule 7 of the Okha Port Rules provides that :

'(1) The Board shall, with the previous approval of Government, from time to time prepare and sanction a schedule of the staff of officers and servants whom they shall deem it necessary and proper to maintain for the purposes of these rules. Such schedule shall also set forth the amount and nature of the salaries, fees and allowances which the Board sanctions for each officer or servant provided always that;

(a) artisans, porters and labourers and mukadams or porters and labourers and any persons employed in any capacity in any waiting or refreshment room constructed by the Board under the authority contained in S. 33(h),

(b) persons in temporary employment other than those who are in receipt of a monthly salary exceeding one hundred rupees,

shall not be deemed to be officers and servants within the meaning of this section or of S. 33(h).

(2) Port servants, not eligible for pension, shall have the State Provident Fund Rules applied to them.

It appears that the State of Baroda had passed Order No. 164 dated 13 October, 1941 applying the Provident Fund Rules of Gaikwad Baroda State Railways and to allow its staff to contribute to provident fund as laid down in those rules, to certain category of servants who were employed in the service of the administration of the Okha Port. Thus prior to August 1949, the Port of Okha was owned and administered by the former Indian State of Baroda and consequent upon the merger of that State with the Province of Bombay, the ownership of the Port of Okha vested in the Government of Bombay and the administration of the port was taken over by the Government of Bombay and the services of the staff at the Port of Okha were utilized by the Government of Bombay for the administration of the port. On 8 October 1953 the Government of Bombay passed Resolution No. OKP 5151 whereby it was resolved that the non-gazetted staff at Port Okha should be deemed to have been absorbed under the Bombay Government from the date on which their ports under the Bombay Government were sanctioned and the staff should from the date of absorption be governed by the rules of the Bombay Government in regard to service matters. The Government of Bombay also passed a Memorandum No. OKP 5153 dated 8 March, 1954 in respect of the workcharged staff, permanent and temporary, under the provident fund scheme. By that memorandum it was provided that the orders issued in the Government Resolution No. OKP 5151 referred to above were to be applicable also to the workcharged staff, permanent and temporary, under the provident fund scheme at Okha, except that the said staff was not to be eligible for pension but was to be entitled to Gaikwad Baroda State Provident Fund Scheme in accordance with the orders already in force. According to the petition, the staff at the Port of Okha was in the service of the State of Gujarat and was governed by the provisions of the Bombay Civil Service Rules and also by the Contributory Provident Fund Rules where the latter rules were applicable. Respondent 3 Bholu Natha was up to 1 August, 1961 in the service of the State at Port Okha as first engine-driver, flotilla section, and on 26 June, 1961 it was stated in a memorandum issued by the Port Officer, Okha that respondent 3 had reached the age of superannuation and was, therefore, required to retire from service on 1 August, 1961 and accordingly respondent 3 retired from service of petitioner 1 with effect from that date. There after on 17 August, 1961, respondent 3 wrote to the Port Officer, Okha that he was retired with effect from 1 August, 1961 and that therefore, he should be paid the amount of provident fund dues. On 19 March, 1961, the Port Officer, Okha passed an office-order which is quoted in Para. 10 of the petition as under :

'Bholu Natha who was working as first engine-driver, flotilla section, was a member of Contributory Provident Fund Scheme. He is retired on reaching to the superannuation of age. He has applied for refunding his contributory provident fund amount from the contributory provident fund at his credit. It is hereby ordered that the balance at his credit Rs. 1,956.07 and Rs. 1,691.32 being contribution and bonus, respectively, total Rs. 3,647.39 (rupees three thousand, six hundred, and forty seven and naye paise thirty nine only) may be refunded to him debiting the head C.P.F. 104 Nidhi of Okha Port Staff under the major head, S. Deposit and advances - Part IV Suspense Accounts - Suspense - Port Okha, as intimated by the Accountant General, Rajkot, under letter No. F/1/8(13) 3817 of 7 August, 1961 addressed to the Treasury officer, Jamnagar, and copy to this office. The bill should be presented to the Jamnagar District Treasury and the account of Bholu Natha should be closed.

3. The amount mentioned in the above order was subsequently paid to respondent 3. On 30 March, 1963 respondent 3 addressed a letter to the Port Officer, Okha Port, asking for retrenchment compensation and the Port Officer replied to that letter that the retrenchment compensation was not payable to respondent 3 as he was governed by the Bombay Civil Services Rules and the Contributory Provident Fund Rules. Thereafter, on 29 April, 1963, respondent 3 made an application being Recovery Application No. 122 of 1963 to the labour court under S. 33C of the Industrial Disputes Act, 1947, claiming Rs. 2,970 from the Port Officer, Okha on account of retrenchment compensation for 33 years of service. The Port Officer, Okha, in his reply stated that respondent 3 was a workcharged employee and was superannuated on 1 August, 1961 having completed 55 years of age and was not retrenched as was alleged by him. The recovery application was heard by the labour court. Rajkot, and on 18 July, 1963, the labour court passed an order directing the Port Officer, Okha to pay to respondent 3 retrenchment compensation of Rs. 2,970. It is this order of the labour court, respondent 1 the validity of which has been challenged by the State of Gujarat, petitioner 1, and the Port Officer Okha petitioner 2.

4. Two contentions have been raised by Sri Vidyarthi, learned Assistant Government Pleader, appearing on behalf of the petitioners, viz. :

(1) The administration and management of the Port of Okha by petitioner 1 State did not amount to conducting or running an industry within the meaning of that word as defined by S. 2(f) of the Industrial Disputes Act and that therefore the labour court had no jurisdiction to entertain and decide the recovery application preferred by respondent 3.

(2) The retirement of respondent 3 due to superannuation under the Bombay Civil Services Rules which constituted the terms and conditions of the service of respondent 3 could not, in law, be considered as 'retrenchment' within the meaning of S. 2(oo) of the Industrial Disputes Act and therefore respondent 3 was not entitled to any retrenchment compensation.

5. We shall first deal with the second contention of Sri Vidyarthi because if his second contention was upheld, it would be unnecessary to go into the first contention of Sri Vidyarthi as regards the question whether the administration and the management of the Port of Okha by petitioner 1 State did or did not amount to conducting an industry within the meaning of the definition given in S. 2(j) of the Industrial Disputes Act. This was also the position taken by Sri Vidyarthi who had urged that even on the assumption for the sake of argument that the administration of the Port of Okha was to be considered as an 'industry', the cessation of service on account of superannuation would not amount to retrenchment and that, therefore, it would not be necessary to decide his first contention, if his second contention was accepted.

6. As already stated, the State of Baroda was merged with the State of Bombay in 1949 and consequent upon such merger, the ownership of the Port of Okha vested in the Government of Bombay and

the administration of the Port of Okha was taken over by that Government. When such administration was taken over, it appears that the Government of Bombay did not forthwith discharge all the staff but continued to take service from the staff at Port Okha until a final decision of absorption was taken by the Government of Bombay. It further appears that no final decision was taken as regards the future of the staff at the port and no decision was taken about the set-up of the port establishment or the rules governing the service conditions of the port staff. The establishment was simply continued under the Baroda scales of pay and their service matters were regulated according to the rules of the former Baroda State. But all this was to be continued till a final decision in the matter was taken by the Government of Bombay and it appears that such a decision was taken by Resolution No. OKP. 5151, dated 8 October, 1953. That resolution was produced before the labour court and has been filed with the petition at Ex. A. It would be advantageous here to quote the text of the resolution :

'Consequent on the merger of the former Baroda State with the State of Bombay, the administration of Port Okha was taken over by the Government of Bombay in August 1949. However, as the future of the port was not decided at that time, no decision was taken about the set-up of the port establishment or rules governing the service conditions of the post staff. The establishment was continued under the Baroda scales of pay and their service matters regulated according to the rules of the former Baroda State. This led to certain complications as full information was not readily available as regards the rules and policies of the former Baroda Government, relating to the administration of the port. As a result, certain orders were issued regarding confirmation, seniority, promotions, grant of increments, etc., which has to be reversed later. Government, therefore, has had under consideration for some time past the question of laying down definite principles to regulate service matters pertaining to the port establishment. After carefully considering the matter, Government is pleased to issue the following orders :

(i) The non-gazetted staff at Port Okha should be deemed to have been absorbed under the Bombay Government from the date on which their posts under this Government were sanctioned.

(ii) The staff should, however, for the present, be continued under the Baroda scales of pay. Since the pay scales sanctioned by this Government for the posts are the same as Baroda scales, it is not necessary to refix the pay of the staff on absorption and they should draw pay and increments as they would have drawn had they continued under the Baroda Government. Temporary employees who were not earning any increments under the Baroda Government should be allowed to earn increments from the date of absorption, i.e., they will earn their next increment after one incremental period from the date of absorption.

(iii) The staff should, from the date of absorption, be governed by the rules of Bombay Government in regard to traveling allowance, dearness allowance, leave, pension, increments, liens, confirmation and all other service matters.

(iv) The order regarding grant of higher starting pay to matriculate clerks, which were held in abeyance in Government letter No. OKP. 5351 F, dated 27 May, 1952, should continue to be applicable to the port staff with retrospective effect.

(v) The staff should continue to get Port Okha allowance as admissible under the Baroda rules.

7. With regard to confirmations ordered by this Government since the posts are at present sanctioned on a temporary basis it is not in order to confirm anyone in those posts. All the confirmations ordered by this Government since merger should, therefore, be treated as cancelled. Persons who were already permanent on the date of the merger will, however, continue to enjoy the benefits of permanency while holding the temporary posts, vide Government Resolution, Political and Services Department, No. 2735/46F, dated 26 April, 1950. It is, however, proposed to convert into permanent posts such of the temporary posts as are required on a permanent basis. The Port Officer and Harbour Engineer, should, therefore, examine the necessity of the various temporary posts and submit proposals to Government in this connexion, giving full details as to why each post is required on a permanent basis.

8. The expenditure should be debited to the budget head 'P. Deposits and Advances - Part IV - Suspense Accounts - Suspense - Okha Port' and should be met from the current year's sanctioned grants under the head.

(By order and in the name of the Governor of Bombay).'

9. The fact that such a resolution was passed has not been disputed and the following facts emerge from the resolution quoted above :

(1) That consequent on the merger of the Baroda State with the State of Bombay, the administration of the Port of Okha was taken over by the Government of Bombay.

(2) That the future of the port was not decided at the time and that no decision was taken about the set-up of the port establishment or rule governing service conditions of the port staff.

(3) That the establishment was continued under old Baroda State Rules pending a final decision.

(4) That the non-gazetted staff at Port Okha should be deemed to have been absorbed under the Bombay Government from the date on which their posts under the Government were sanctioned.

(5) That it was not necessary to refix the pay of the staff on absorption since the pay-scales sanctioned by the Government of Bombay for the posts were the same as the Baroda scales, that is to say, the scales prevailing at the time were taken to be the fresh scales that were fixed by the Government of Bombay on absorption of the staff.

(6) From the date of absorption of the staff, the staff was to be governed by the rules of the Bombay Government in regard to service matters.

10. From the aforesaid resolution, it appears that no final decision was taken as regards the set-up of the port establishment or as regards the rules governing the service conditions of the port staff. The continuance of the services of the port staff till the date of final absorption was thus provisional, i.e., pending the final decision of the Government of Bombay and it was by the resolution of 1953 that the terms and conditions of service on which the port staff was to be absorbed were determined and whereby the Bombay Civil Service Rules were applied to them. Respondent 3 never claimed the status of a gazetted officer and nothing has been shown to indicate that respondent 3 was not one of the workcharged staff to whom the Provident Fund Scheme at Okha did not apply. On the other hand, it appears to be sufficiently clear from the resolution of 1953 that the staff at the Okha Port was merely continued provisionally till its final absorption and that it was in 1953 that the scales of pay were fixed and the service rules of the Bombay Government were applied to the staff who should be deemed to have been absorbed under the Bombay Government from the date on which their posts were sanctioned. It further appears that the Government of Bombay had passed a memorandum dated 8 March, 1954 in respect of the workcharged staff, permanent and temporary, under the Provident Fund Scheme at Okha. That resolution has been filed with the petition as annexure B and reads as under :

'Memorandum

[Subject. - Workcharged staff, permanent and temporary, under Provident Fund Scheme at Okha.]

The undersigned presents compliments to the Port Officer and Harbour Engineer, Okha, and with reference to his letter No. 1574, dated 23 October, 1953, on the subject noted above, is directed to state that the orders issued in Government Resolution No. OKP. 5151, dated 8 October, 1953, are also applicable the workcharged staff, permanent and temporary, under Provident Fund Scheme at Okha, except that this staff will not be eligible for pension but will be entitled to Gaikwad Baroda State Provident Fund Scheme in accordance with the orders already in force.

(By order and in the name of the Governor of Bombay).'

11. As already stated, on 17 August, 1961, respondent 3 had written to the Port Officer, Okha, stating that he was retired from service with effect from 1 August, 1961 and requested him to pay the amount of his provident fund dues and the amount that was due to respondent 3 was paid to him. It cannot, therefore, be said as was urged by Sri Vyas, that the servants of the Baroda State were absorbed and continued in the service of the new State immediately on the merger and that they had become the servants of the new State under the old rules. Sri Vyas had also contended that while applying the Bombay Civil Service Rules and while passing the resolution of 1953, the Government of Bombay had not obtained the consent of respondent 3 and that, therefore, such a resolution was not binding on him and that respondent 3 continued to be an employee of the new State under the old rules of the Baroda State. But as stated above, on the merger of the Baroda State, the Government of Bombay did not absorb and accept the servants at the Okha Port as Government servants on a permanent basis and on terms and conditions prevalent and applicable to them in the Baroda State. What the Government of Bombay did was to merely continue to take work from the staff who was in service at the time of the merger until it took a final decision as regards their absorption in the service of the Government of Bombay and as regards the terms and conditions of their service. On the formation of the new State, the new State was not bound to accept the servants of the old State into the service of the new State and was not bound to absorb them and to continue them as the servants of the new State on old terms. The resolution of 1953 makes it clear that the decision as regards final absorption and conditions of service as regards the staff of the Okha Port was not taken by the Government of Bombay and Sub-clause (1) of the resolution makes it further clear that the staff should be deemed to have been absorbed under the Bombay Government from the date on which their posts under the Government of Bombay were sanctioned. On their absorption it was necessary to fix the scale of pay on which the absorption into the service of the new State was made and such fixation was made by stating in Sub-clause (2) of the resolution that the absorbed staff would draw the same scale as the Baroda scales. But it was made clear that this was done as the pay-scales sanctioned by the Government of Bombay for the posts were the same as the Baroda scales. These scales must be considered to have been fixed by the Government of Bombay on absorption and it could not be said that the services of the staff at the Port Okha were permanently continued by the Government of Bombay on their old terms. Sub-clause (3) of the resolution in terms applies the rules of the Bombay Government in respect of all service matters from the date of absorption and these were the terms and conditions on which the servants were absorbed and on which the servants entered the services of the new State as the servants of that State and if the servants did not approve those conditions, there were no other conditions which were offered by the State for their absorption and if these conditions were not acceptable, the staff could never be deemed to have been absorbed in the service of the new State. This position does not appear to have been seriously contested before the labour court and no question as regards the consent of respondent 3 to the resolution of 1953 was specifically raised. But apart from that, the two resolutions which were produced before the labour court and which have been filed along with the petition sufficiently make out the position that is set-out above. The contention of Sri Vyas, therefore, that the servants of the Port at Okha were continued immediately on merger as the permanent servants of the State of Bombay under the old rules of the Baroda State cannot be accepted.

12. Sri Vidyarthi next contended that since respondent 3 from the date of his absorption into the service of the Bombay Government was governed by the rules of the Bombay Government, those rules constitute the terms and conditions of service between the State and respondent 3 and the contract of employment between petitioner 1 and respondent 3. It was contended that according to those terms, respondent 3 was liable to be retired on attaining the age of 55 years and that in view of the definition of 'retrenchment' in S. 2(oo) of the Industrial Disputes Act, retirement from service by respondent 3 did not amount to retrenchment as the cessation of service of respondent 3 was on account of his reaching the age of superannuation according to the terms of his employment. It was urged that by virtue of the Bombay Civil Services Rules and rules 161A and 163, respondent 3 was retired from service on account of superannuation as he reached the age of 55 years and that, therefore, respondent 3 was not entitled to any retrenchment compensation under the provisions of the Industrial Disputes Act even if that Act was applicable. On the other hand, the contention of Sri Vyas, learned advocate appearing on behalf of respondent 3, was that the very termination of service for whatsoever reason would amount to retrenchment within the definition given by S. 2(oo) of the Industrial Disputes Act; that Clause (b) of S. 2(oo) which excludes certain categories of retirement from the definition of 'retrenchment' cannot apply as the contract referred to in that clause is the original contract between the parties, i.e., terms and conditions of service contained in the Baroda State Rules. It was contended that the three exceptions that have been provided for in S. 2(oo) indicated that those matters which did not fall within the purview of those exceptions must be considered to have been included within the meaning of the term 'retrenchment' and that therefore, the retirement of respondent 3 which did not fall within the purview of Clause (b) would amount to retrenchment and respondent 3 would, therefore, be entitled to retrenchment compensation.

13. The word 'retrenchment' has been defined by S. 2(oo) as under :

''retrenchment' means the termination by the employer of the service of the workmen for any reason whatsoever, otherwise than as a punishment inflicted 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.'

14. On reading the definition, at first sight it might appear that the definition of 'retrenchment' is so wide as to include any termination of service for whatsoever reason. But on a closer reading of the section, it would appear that that is not so. That definition clause, no doubt, uses the word 'termination' but with that word the clause also uses the words 'by the employer' and when we read the entire sentence together, it would read as 'termination by the employer' and the words 'by the employer' are not words without any significance. These words by themselves indicate some kind of an action taken by or on behalf of the employer and cannot mean termination of every kind as otherwise that would amount to ignoring the words 'by the employer' used in the definition clause. It could not be said, as was urged by Sri Vyas, that the words 'by the employer' were used by the legislature by way of surplusage. The subject-matter of the definition is 'retrenchment' and that word has a meaning of ordinary acceptation and as has been held in the case of Hariprasad Shivshanker Shukla, v. A. D. Divelkar [1957 - I L.L.J. 243], that where, within the framework of the ordinary acceptation of the word, every single requirement of the definition clause was fulfilled, it would be wrong to take the definition as destroying the essential meaning of the word defined. In that case it was observed that it would be against the entire scheme of the Act to give the definition clause relating to retrenchment such as meaning as would include within the definition termination of service of all workmen by the employer when the business itself ceased to exist. It was also observed that Sub-cls. (a), (b) and (c) of the definition clause were not conclusive of the question and that whether inserted by way of abundant caution or on account of excessive anxiety for clarity, these clauses merely excluded certain categories of termination of service from the ambit of the definition, but they did not necessarily show what was to be included within the definition. The relevant observations appear at pp. 247-249 of the report in the following words :

''Leaving out the excluding Sub-cls. (a), (b) and (c) for the time being - these sub-clauses not being directly applicable to the cases under out consideration - the definition when analysed consists of the following four essential requirements -

(a) termination of the service of a workman :

(b) by the employer;

(c) for any reason whatsoever; and

(d) otherwise than as a punishment inflicted by way of disciplinary action.'

It must be conceded that the definition is in very wide terms. The question, however, before us is : Does this definition merely give effect to the ordinary, accepted notion or retrenchment in an existing or running industry by embodying the notion in apt and readily intelligible words or does it go so far beyond the accepted notion of retrenchment as to include the termination of services of all workmen in an industry when the industry itself ceases to exist on a bona fide closure or discontinuance of his business by the employer Learned counsel for the appellants contend that the first gives the correct meaning of the definition, while the learned counsel for the principal respondents urge that by reason of the wide words used in the definition, the second gives the correct meaning of the expression 'retrenchment.'

15. There is no doubt that when the Act itself provides a dictionary for the words used, we must look into that dictionary first for an interpretation of the words use in the statute. We are not concerned with any presumed intention of the legislature; our task is to get at the intention as expressed in the statute. Therefore, we propose first to examine the language of the definition and see if the ordinary, accepted notion or retrenchment fits in, squarely and fairly, with the language used. What is the ordinary, accepted notion of retrenchment in an industry We have had occasion to consider this question in Pipraich Sugar Mills, Ltd. v. Pipraich Sugar Mills Mazdoor Union [1957 - I L.L.J. 235] where we observed at p. 241 :

'But retrenchment connotes in its ordinary acceptation that the business itself is being continued but that a portion of the staff or the labour force is discharged as surplusage and the termination of services of all the workmen as a result of the closure of the business cannot therefore be properly described as retrenchment.'

16. It is true that these observations were made in connexion with a case where the retrenchment took place in 1951, and we specially left open the question of the correct interpretation of the definition of 'retrenchment' in S. 2(oo) of the Act. But the observations do explain the meaning of retrenchment in its ordinary acceptation. Let us now see how far that meaning fits in with the language used. We have referred earlier to the four essential requirements of the definition, and the question is : Does the ordinary meaning of retrenchment fulfil those requirements In our opinion it does. When a portion of the staff or labour force is discharged as surplusage in a continuing business, there are :

(a) termination of the service of a workman;

(b) by the employer;

(c) for any reason whatsoever; and

(d) otherwise than as a punishment inflicted by way of disciplinary action.

17. It has been argued that by excluding bona fide closure of business as one of the reasons for termination of the service of workmen by the employer, we are cutting down the amplitude of the expression 'for any reason whatsoever' and reading into the definition words which do not occur there. We agree that the adoption of the ordinary meaning gives to the expression 'for any reason whatsoever' a somewhat narrower scope; one may say that it gives a colour from the context in which the expression occurs, but we do not agree that it amounts to importing new words in the definition. What after all is the meaning of the expression 'for any reason whatsoever' When a portion of the staff or labour force is discharged as surplusage in a running or continuing business, the termination of service which follows may be due to a variety of reasons; e.g., for economy, rationalization in industry, installation of a new labour-saving machinery, etc. The legislature in using the expression 'for any reason whatsoever' says in effect :

'it does not matter why you are discharging the surplus; if the other requirements of the definition are fulfilled, then it is retrenchment.'

18. In the absence of any compelling words to indicate that the intention was even to include a bona fide closure of the whole business, it would, we think, be divorcing the expression altogether from its context to give it such a wide meaning as is contended for by learned counsel for the respondents. What is being defined is retrenchment, and that is the context of the definition. It is true that an artificial definition may include a meaning different from or in excess of the ordinary acceptation of the word which is the subject of definition; but there must then be compelling words to show that such a meaning different from or in excess of the ordinary meaning is intended. Where, within the framework of the ordinary acceptation of the word, every single requirement of the definition clause is fulfilled, it would be wrong to take the definition as destroying the essential meaning of the word defined.

19. There is another way of looking at the problem. Let us assume that the definition clause is so worded that the requirements laid down therein are fulfilled, whether we give a restricted or a wider meaning; to that extent there is an ambiguity and the definition clause is readily capable of more than one interpretation. What then is the position We must then see that light is thrown on the true view to be taken of the definition clause by other provisions of the Act or even by the aim and provisions of subsequent statutes amending the Act or dealing with the same subject-matter. In 1957 - I L.L.J. 235 it was observed at p. 239 :

'It cannot be doubted that the entire scheme of the Act assumes that there is in existence an industry, and then proceeds on to provide for various steps being taken, when a dispute arises in that industry. Thus, the provisions of the Act relating to lockout, strike, lay-off, retrenchment, conciliation and adjudication proceedings, the period during which awards are to be in force, have meaning only if they refer to an industry which is running and not one which is closed.'

20. In Burn & Co., Ltd., Calcutta v. Their workmen [1957 - I L.L.J. 226] this Court observed that that the object of all labour legislation was firstly to ensure fair terms to the workmen, and secondly to prevent disputes between employers and employees so that production might not be adversely affected and the larger interests of the public might not suffer. It was then observed in Pipraich Sugar Mills case [1957 - I L.L.J. 235 at 239] (vide supra) :

'Both these objects again can have their fulfilment only in an existing and not a dead industry. The view therefore expressed in Indian Metal and Metallurgical Corporation v. Industrial Tribunal, Madras [952 - I L.L.J. 364], and K. M. Padmanaba Ayyar v. State of Madras [1954 - I L.L.J. 469] that the industrial dispute to which the provisions of the Act apply is only one which arises out of an existing industry is clearly correct. Therefore, where the business has been closed and it is either admitted or found that the closure is real and bona fide, any dispute arising with reference thereto would, as held in 1954 - I L.L.J. 469 (vide supra), fall outside the purview of the Industrial Disputes Act.'

21. In view of these observations it would be against the entire scheme of the Act to give the definition clause relating to retrenchment such a meaning as would include within the definition termination of service of all workmen by the employer when the business itself ceases to exist. Learned counsel for the appellants in the two appeals have pointed out that the definition clause is inartistically drawn up and Sub-cls. (a) and (b) of S. 2(oo) are not easily intelligible with reference to one of the essential requirements of the definition, namely, that the termination of service of the workmen must be by the employer. It has been submitted that voluntary retirement of the workman cannot be termination of service by the employer. We do not, however, think that Sub-cls. (a), (b) and (c) are conclusive of the question before us; they, no doubt, apply to a running or continuing business only, but whether inserted by way of abundant caution or on account of excessive anxiety for clarity, they merely exclude certain categories of termination of service from the ambit of the definition. They do not necessarily show what is to be included within the definition.'

22. The Supreme Court thus gave effect to the ordinary accepted notion of retrenchment and it would appear that the definition cannot be extended beyond the accepted notion of retrenchment so as to include termination simpliciter of services of a workman in an industry. The definition, no doubt, includes termination of the service of a workman, but it must not be forgotten that such termination as the provisions requires must be by the employer and not termination of every kind which is not the result of such an action on the part of the employer. The Supreme Court judgment further indicates that in all probability Cls. (a), (b) and (c) which exclude certain categories of 'termination' might have been introduced merely to exclude certain categories of termination of service from the ambit of the definition, but that they do not necessarily show what is to be included within the definition. To the same effect is the decision of Pipraich Sugar Mills, Ltd. v. Pipraich Sugar Mills Mazdoor Union [1957 - I L.L.J. 235] (vide supra) where it was observed that the word 'retrenchment' indicates in its ordinary acceptation that the business itself is being continued but that a portion of the staff or the labour force is discharged as surplusage. The termination of services of all the workmen as a result of the closure of the business could not, therefore, be properly described as retrenchment. Here also the meaning or 'retrenchment' in its ordinary sense was accepted by the Supreme Court. In Sh. Parsidh Singh v. State of Jammu and Kashmir and others [A.I.R. 1965 J. & K. 124], the argument that the definition of 'retrenchment' which was similar to the one given by S. 2(oo) of the Industrial Disputes Act, was not used in the ordinary sense of retrenchment but was wide enough to include all cases of termination of services generally, was rejected by the High Court in the following words :

'Sri Avtar Singh contended that in view of the fact that there is no proof of the existence of any contract by which the employment of the petitioner could be terminated on his reaching the age of superannuation, it must be held that the case of the petitioner fell beyond Sub-clause (b) of S. 2(mm) quoted supra, and therefore, the termination of the service of the petitioner would amount to retrenchment within the meaning of this clause. It was argued that the definition given in S. 2(mm) has not been used in the ordinary sense of retrenchment but is wide enough to include the case of the petitioner. In my opinion, however, this matter is now settled by a number of decisions of the Supreme Court as also of the High Courts of India. The language of the Industrial Disputes Act prevalent in India is exactly the same as the language of S. 2(mm) of the State Act quoted above. While interpreting the import and ambit of this section, the Supreme Court in Hariprasad Shivshanker v. A. D. Divelkar [1957 - I L.L.J. 243] (vide supra) held that the definition or retrenchment in this section was not different from the one used in the ordinary connotation of the word 'retrenchment.'

23. As regards Sub-cls. (a), (b) and (c) of the definition section, it was observed that -

'As regards Sub-cls. (a), (b) and (c) of S. 2(mm) also their lordships made the following observations : 'We do not, however, think that sub-cls. (a), (b) and (c) are conclusive of the question before us; they do doubt, apply to a running or continuing business only, but whether inserted by way of abundant caution or on account of excessive anxiety for clarity, they merely exclude certain categories of termination of service from the ambit of the definition. They do not necessarily show what is to be included within the definition.'

We were also referred to a case decided by the Calcutta High Court, i.e., Haji Ismail Said & Son (private), Ltd. v. Fourth Industrial Tribunal and others [1966 - II L.L.J. 59] and reliance was placed on the following observations occurring at pp. 63-64 of the report :

'The present judicial opinion seems to favour the view that some limitation must be imposed on the apparently wide definition in S. 2(oo) of the Industrial Disputes Act defining retrenchment to mean termination by the employer of the service of the workmen for any reason whatsoever save and except the exceptions expressly made therein. Obviously termination of service as a punishment inflicted by way of disciplinary action is not retrenchment, as it is expressly excluded by the definition. Similarly, retrenchment either voluntarily or reaching superannuation age even though it terminates the service is not a retrenchment. So termination of service on the ground of continued ill-health is not retrenchment. The other case of termination of service where it is not retrenchment is when the termination is not in the volition, option and free choice of the employer or within the control of his reason. If the situation is compelling, then termination in such force of circumstances is not retrenchment.

The Supreme Court is Hariprasad Shivshanker Shukla v. A. D. Divelkar [1957 - I L.L.J. 243] expressed the following view at p. 252 :

'... retrenchment as defined in S. 2(oo) and as used in S. 25F has no wider meaning than the ordinary, accepted connotation of the word.

Therefore, the bounds of the ordinary connotation should not be exceeded on the ground of amplitude of expression used.'

24. It would thus appear that the word 'retrenchment' used in S. 2(oo) of the Industrial Disputes Act cannot be given a very wide meaning as has been suggested by Sri Vyas. That word connotes a meaning which it has acquired in ordinary use and would include within its meaning such actions as are taken by the employer for termination of service by way surplusage of staff. The termination of service on account of superannuation at a particular age which has been prescribed by the rules which constitute the conditions of service could not be considered to be the consequence of any overt act taken by the employer that would undoubtedly result in cessation of service of the workman, but such cessation or termination is not the result of an action which is required to be initiated by the employer on his own, but the cessation of service is the consequence that has been provided for, and prescribed by the rules and conditions of service that are applicable to the workmen. Moreover, in such cases there is no element of termination of service on account of surplusage because the cessation of service has occurred irrespective of the question of surplusage and as a result and a necessary consequence of the conditions of service. We are, therefore, unable for the reasons stated above to accept the argument of Sri Vyas that the termination of the services of respondent 3 would fall within the meaning of the definition of 'retrenchment' given by S. 2(oo) of the Industrial Disputes Act. The argument of Sri Vyas was that the contract referred to in Clause (b) of the definition of 'retrenchment' must mean the old contract on which respondent 3 was engaged as a servant by the Baroda State. But, as already state, the terms and conditions of service that were applicable at the time of the Baroda State came to an end and on the merger of the Baroda State into the State of Bombay and on a final decision taken by the Government of Bombay as regards the absorption of the servants of the Okha port into the service of the new State of Bombay, the terms and conditions of service that would be applicable would be the terms and conditions that were prescribed by the new State, i.e., the State of Bombay. The staff of the port at Okha was absorbed into the service of the new State on conditions which have been set out in the resolution of 1953 and it was by virtue of this resolution that respondent 3 could claim to be the servant of the State. This resolution clearly lays down that the service rules of the Bombay Government would apply to the staff that has been finally absorbed in the State of Bombay and the relevant rules in respect of superannuation are rules 161(a) and 163 of the Bombay Civil Service Rules which have been quoted in Para. 16 of the petition as under :

'161. (a) Except as otherwise provided in the other clauses of this rule, the date of compulsory retirement of a Government servant, other than a class IV servant, is the date on which he attains the age of 55 years. He may be retained in service after the date of compulsory retirement only with the previous sanction of Government, on public grounds which must be recorded in writing.'

'163. No claim to compensation from a Government servant who is required to retire under the provisions of rule 161 will be entertained.'

25. The date of retirement, therefore, of a Government servant is the date on which he would attain the age of 55 years and as the respondent 3 was retired on account of superannuation prescribed under the rules, it cannot be said that he was retrenched from service within the meaning of S. 2(oo) of the Industrial Disputes Act. The result, therefore, would be that his claim for compensation before the labour court could not be entertained. The labour court was, therefore, in error in awarding an amount of Rs. 2,970 to respondent 3 and its order dated 18 July, 1963 must be set aside.

26. We, therefore, order that a writ be issued quashing the order of the labour court at Rajkot, dated 18 July, 1963, awarding Rs. 2,970 to respondent 3 by way of retrenchment compensation : we make the rule absolute, with no order as to costs.


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