Judgment

SAWANT, J.:- Special leave granted. The appeal is set down for hearing by consent of both the parties.

2. This appeal involves a question of interpretation of paragraphs 521 (5)(e) and 521 (10)(c) of the Award of the All India Industrial Tribunal (Bank Disputes) which is populary known as the Sastri Award, (hereinafter referred to as the Award) and is important for the entire banking industry in the country covered by the Award.

3. In order to appreciate the significance of the question, it is necessary to narrate the facts leading to this appeal. The employee concerned was working as a clerk in the Gadchiroli branch of the appellant State Bank of India at the relevant time. A departmental inquiry was held against him for four acts of misconduct and the inquiry officer came to the conclusion that two of the charges were fully proved while one charge was proved to a limited extent and the fourth  charge was not established. On the basis of the report of the inquiry officer, the competent authority tentatively decided to dismiss the employee from service, and issued a notice to him under paragraph 521 (10)(a) of the Award, to show cause as to why the said punishment should not be imposed on him. The competent authority also gave him a hearing as required by the said provision, and thereafter passed an order, the operative and relevant part of which is as follows:

"Looking at the entire case I find that the established charges, viz., uttering indecent word, threatening the Agent and failure to do the work allotted are quite serious charges and would warrant dismissal. However, the employee has had the benefit of a very tenacious defence from the date of the issue of the show cause notice for dismissal and various arguments have been raised with a view to evade the punishment which would ,,normally follow out of the seriousness of the offences. Taking note of them, even though I do not quite find them tenable, as indicated in my detailed observations thereon, and of the extenuating circumstances (most important of which is the comparatively young age of the employee) I have decided not to impose the punishment of dismissal. At the same time I am of the opinion that it would not be desirable to retain Shri Sadavarte in the Banks service and accordingly I order that he be discharged on payment of one months pay and allowances in lieu of notice. In terms of para 521 (10)(c) of the Sastry Award, this would not amount to disciplinary action."

4. An industrial dispute was raised by the first respondent-Union, and in due course it was referred to the Central Govt. Labour Court, Bombay for adjudication. By its award of March 2, 1981, the Labour Court held that the order of dismissal of the petitioner was proper. Against the said decision, the respondent-Union preferred a writ petition before the High Court raising several contentions. The High Court confined its decision only to one point, viz., whether the termination of the service was retrenchment, and if so, whether it was made in accordance with the provisions of Section 25F of the Industrial Disputes Act, 1947 (hereinafter referred to as the Act). The Court held that the termination of the services was retrenchment and was made in breach of the said provisions in as much as no retrenchment compensation was paid to the employee. The termination of the services was, therefore, set aside.

5. It is not possible to sustain the view taken by the High Court since it proceeds on too literal an interpretation of the provisions of paragraphs 521(5)(e) and 521(10)(c) of the Award and ignoring their -context. We may first refer to the provisions with regard to retrenchment under the Act. Section 2(oo) of the Act defines retrenchment as follows:

"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) reti