Judgment

WANCHOO, J. : This appeal is directed against the decision of the Labour Appellate Tribunal of India in an industrial matter. The appellant is a partnership concern carrying on business in the manufacture of pharmaceutical products. There was a gratuity scheme in force in the appellant-concern for a long time. This scheme was modified by an award of the industrial tribunal dated 18-8-1952 (hereinafter called the Award), and since then the modified scheme has been in force. The financial condition of the appellant deteriorated and consequently it was compelled to retrench a number of workmen. It, therefore, applied to the Appellate Tribunal under S. 22 of the Industrial Disputes (Appellate Tribunal) Act, No. XLVIII of 1950, for permission to retrench 89 workmen. The Appellate Tribunal granted permission for retrenchment of 75 workmen only. Consequently, after obtaining such permission, the appellant retrenched the workmen and paid them compensation as provided in S. 25F of the Industrial Disputes Act, 1947 (hereinafter called the Act). Thereupon a dispute was raised by the retrenched workmen through the union in existence in the appellant-concern for gratuity on retrenchment under the award. This dispute was referred to the Second Industrial Tribunal, West Bengal, on 23-3-1956, for adjudication in the following terms :

"Whether the seventy-five retrenched employees (as per attached list) are entitled to gratuity in addition to retrenchment benefits?"

There was another matter included in the reference, but we are not concerned with that in the present appeal. The Industrial Tribunal came to the conclusion that the retrenched workmen were only entitled to relief as provided under S. 25F of the Act and were not entitled to any gratuity under the Award over and above the compensation payable to them under the Act. Then followed an appeal by the workmen to the Appellate Tribunal held that the workmen were entitled to gratuity under the Award, as gratuity benefit therein was not a retrenchment benefit. The appellant then applied for special leave to appeal, which was granted; and that is how the matter has come up before us.

2. The general question has been considered by this Court in Indian Hume Pipe Company Ltd. v. Its Workmen, C. A. N. 169 of 1958: judgment in which is being delivered today. As the penultimate paragraph in that judgment shows special considerations may arise on the terms of agreements or awards in particular cases and it is this aspect which falls to be considered in the present appeal.

3. The sole question, therefore, for determination in this appeal is whether the retrenched workmen are entitled under the Award to gratuity provided therein in addition to retrenchment benefit under S. 25F of the Act. We may therefore reproduce here the relevant part of the Award, which is in these terms :

"The following gratuity scheme shall be for cases of retrenchment or termination of service by the company for any reason other than misconduct or for cases of resignation with the consent of the management. The gratuity will be paid up to a maximum of 15 months basic pay at the following rates. The period of service to qualify for the gratuity shall be one year. Consistently with the modification about the maximum qualifying service, the basic pay for the purpose of gratuity shall be the average of the last 12 months basic pay drawn by the workmen concerned."

Then followed the rates; and it was also provided that no gratuity would be payable before the completion of one year of service and that persons discharged for misconduct would not be entitled to any gratuity. Finally, it was provided that in case of death of an employee, his widow or children or other dependents would be granted gratuity on the above basis.

4. It will be seen that the Award is a composite scheme providing for what is termed gratuity therein under three conditions, namely, (I) where there is retrenchment, (ii) where there is termination of service for