Judgement

VENKATARAMIAH, J. :- The question arising for decision in this case is whether an employer whose establishment is governed by the Andhra Pradesh Shops & Establishments Act, 1966 (hereinafter referred to as the State Act) is required, while retrenching any worker, to comply with the provisions of section 25F of the Industrial Disputes Act, 1947 (hereinafter referred to as the Central Act) or with Section 40 of the State Act.

2. The petitioner in this case is a cooperative society carrying on business at Vijayawada in the State of Andhra Pradesh. It retrenched nine of its clerks - Respondents 1 to 9 herein. Respondents 1 to 4 were retrenched on 1-10-1978 and respondents 5 to 9 were retrenched on 22-9-1978 on the ground that the business of the management did not warrant the continuance of its heavy establishment. All the respondents challenged the orders terminating their services in an appeal filed under S. 41(1) of the State Act before the appellate authority. The appellate authority set aside the orders of retrenchment by nine separate judgments delivered on August 1, 1979 and directed the reinstatement of the respondents with full back wages. Aggrieved by the decision of the appellate authority the management, the petitioner herein, filed nine appeals before the Labour Court, Guntur under S. 41(3) of the State Act. The Labour Court allowed the appeals filed against respondents 5 to 9 and set aside the orders which had been passed by the first appellate authority. It however, dismissed the appeals filed against respondents 1 to 4 holding that the orders of retrenchment were bad in law since employees junior to these respondents had been retained in service. It, however, directed that any amount paid to respondents 1 to 4 as notice pay and gratuity etc. under S. 40 of the State Act on account of the termination of their services may be deducted from the back wages payable to them. Aggrieved by the decision of the Labour Court respondents 5 to 9 filed writ petition No. 163 of 1981 on the file of the High Court of Andhra Pradesh and the management, the petitioner herein, filed writ petition No. 6151 of 1980 before the High Court against respondents 1 to 4. The learned single Judge who heard the said two writ petitions dismissed Writ Petition No. 163 of 1981 filed by respondents 5 to 9 and allowed Writ Petition No. 6151 of 1980 filed by the management against respondents 1 to 4. The learned single Judge took the view that respondents 5 to 9 could not claim the benefit of S. 25F of the Central Act in a proceeding initiated under S. 41 of the State Act and dismissed their writ petition. He, however, allowed the writ petition filed by the management and remanded the case to the Labour Court to rehear the case after permitting respondents 1 to 4 to implead four other employees, namely, Seetharamaiah, Rajagopal Rao, Krishna Murthy and Khader Husain, who were alleged to be seniors to respondents 1 to 4 and hearing them on the question of inter se seniority between them and the said four other employees. The learned Judge, however, observed that if S. 25F of the Central Act was applicable to the cases I have no doubt that these orders of termination would have to be set aside, because S. 25F denies the rights of the employer to terminate the service of an employee without payment of retrenchment compensation and that compensation had not been paid in accordance with S. 25F. But he found that S. 25F of the Central Act was not applicable to proceedings under the State Act. Aggrieved by the decision of the learned single Judge respondents 1 to 4 and respondents 5 to 9 filed writ appeal Nos. 892 of 1983 and 893 of 1983 respectively before the Division Bench of the High Court. The common contention urged by both the groups of employees, who were appellants in these two appeals, was that the question of their retrenchment was governed by S. 25F of the Central Act and since the orders of retrenchment had not been passed in conformity