Judgment

RANGANATH MISRA, J.:- The employer - Karnataka State Road Transport Corporation - created under a State Act entitled the Transport Corporation Act of 1950 (Corporation Act for short) is in appeal by special leave and the common decision of a Division Bench of the High Court which held that termination of employees while on probation on ground of unsuitability amounted to retrenchment and for non-compliance with the provisions of Section 25-F of the Industrial Disputes Act, 1947 (Disputes Act for short), the termination is bad, is challenged.

2. As per Rule 7 made under Section 45 of the Corporation Act, direct recruits are to be on probation for two years and such probation can be extended. The employer terminated the employment of some of the employees during the initial period of probation and of some others during the extended period on the ground of unsatisfactory service. Thereupon an industrial dispute was raised questioning the legality of their termination and the State Government referred the dispute to the Labour Court for adjudication under Section 10 of the Disputes Act. The Labour Court held, overruling the stand of the employer that Section 25-F of the Disputes Act had no application, to the effect that the discharge was invalid. The employer Corporation came before the High Court challenging the Award. A learned single Judge dismissed the writ petition holding that the order of discharge amounted to retrenchment as defined in Section 25-F of the Disputes Act and those orders were bad for non-compliance of Section 25-F. The employer Corporation challenged the decision of the single Judge before a Division Bench and the Division Bench by the impugned judgment upheld the decision of the learned single Judge.

3. Admittedly the employees were probationers at the time of discharge from service. There is no dispute that as, a condition precedent to discharge the requirements of Section 25-F of the Disputes Act had not been complied with. If the discharge of the employees would amount to retrenchment, appellants counsel does not dispute that the order of discharge would be bad for non-compliance of Section 25-F of the Disputes Act. The only question for considering these appeals, therefore, is whether the discharge of the employees from service amounted to retrenchment.

4. It is the stand of the employer Corporation that the employees were probationers and the order of discharge in every case was on account of unsatisfactory service. Since the order of discharge has been grounded upon unsatisfactory service during the period of probation, it has been argued that such termination of service is not retrenchment.

5. Section 2 (oo) of the Disputes Act defines retrenchment to mean: "retrenchment, means the termination by the employer of the service of a workman 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."

6. A Constitution Bench of this Court in Hariprasad Shivshanker Shukla v. A. D. Divekar, N57 SCR 121 : (AIR 1957 SC 121), examined the true meaning of the expression retrenchment and posed the following question (at p. 126 of AIR) :

"The question, however, before us is does this definition merely give effect to the ordinary, accepted notion of 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."

It went on to say (at Pp. 126-127 of AIR)