Judgment

SHAH, J. : In these three petitions the validity of S. 25 FFF (1) of the Industrial Disputes Act No. XIV of 1947 as amended by Act 43 of 1953 is impugned.

2. Petition No. 88 of 1957 is by a company manufacturing cotton textiles in the town of Ahmedabad. The machinery in the factory of the company was installed in the year 1893 and has not been replaced thereafter. The factory had, it is claimed by the petitioners, become by the passage of time, an uneconomic unit and was closed on that account on April 27, 1957. An attempt was made by the management to increase the number of spindles to make the unit economic, but without success. The company was incurring losses year after year and early in the year 1956, the Registrar of Companies, Bombay requested the Central Government to authorise him to wind up the company. This authority was not given and the factory continued to work till April 28, 1957, on which date it was closed after notice of closure given in March, 1957.

3. The petitioner in petition No. 106 of 1957 was running a coal mine which he had purchased in November, 1953. The petitioner says that he made large investments in the mine, but due to flooding by underground water, the working of the mine consistently resulted in losses which aggregated to over rupees seven lakhs by February 1957. The petitioner decided to close the mine and gave notice in that behalf to the employees. The petitioner paid one month s salary to the monthly paid staff and 15 days wages to the weekly and daily rated staff, and closed the mine on February 10, 1957.

4. Petition No. 103 of 1959 is by a company which owns a spinning and weaving factory at Jamnagar. This factory which was started in the year 1938, proved an uneconomic unit, it is claimed resulting in persistent losses which aggregated to about Rs. 28 lakhs by the end of the year 1957. In view of these losses, the weaving department of the factory was closed on February 1, 1957, and the entire factory was closed on April 24, 1957, after notice of closure to the employees.

5. By their petitions the three petitioners impugn the validity of S. 25 FFF (1) of the Industrial Disputes Act, 1947, which requires them to pay compensation on closure of their undertakings, which they claim was due to circumstances beyond their control.

6. To appreciate the contentions, a brief review of the relevant legislative history may be set out :

7. The Parliament amended the Industrial Disputes Act 1947 by Act 43 of 1953 and incorporated therein Ch. VA which contained Ss. 25A to 25J. By this Chapter, provision was made for payment of compensation for lay-off and retrenchment, and certain incidental provisions enunciating and regulating liability for payment of compensation were enacted. By S. 25F it was enacted that no workmen employed in any industry who had been in continuous service for not less than one year under an employer shall be retrenched unless the workmen had been given notice of one month s duration, or wages in lieu thereof and also had been paid at the time of retrenchment compensation equivalent to 15 days average pay for every completed year of service or any part thereof in excess of six months. Retrenchment was defined by cl. (oo) of S. 2, as meaning termination of service of a workman for any reason whatsoever otherwise than as a punishment inflicted by way of disciplinary action. But the amending act of 1953 did not expressly provide for liability to pay compensation for termination of employment on closure of an industrial undertaking. In Hariprasad Shivshankar v. A. D. Divikar, (1957) SCR 121 : decided on 27-11-1958, it was held by this Court :

"The word retrenchment as defined in S. 2 (oo) and the word retrenched in S. 25F of the Industrial Disputes Act, 1947, as amended by Act XLIII of 1953, have no wider meaning than the ordinary accepted connotation of those words and mean the discharge of surplus labour or staff by the employer for any reason whatsoever, otherwise than as