2007 Supreme(SC) 75

2007(1) Supreme 440
SUPREME COURT OF INDIA
(From Punjab and Haryana High Court)
G.P. Mathur and Dalveer Bhandari, JJ.
Guru Jambheshwar University, Hisar—Appellant
versus
Dharam Pal—Respondent
Civil Appeal No. 252 of 2007
(Arising out of SLP (C) No. 15566 of 2005)
Decided on 17-1-2007
Counsel for the Parties :
For the Appellant : Neeraj Kumar Jain, Bharat Singh, Aditya Kumar Chaudhary and Ugra Shankar Prasad, Advocates.
For the Respondent : Ms. Suresh Kumari, Dinesh Verma and A.P. Mohanty, Advocates.

IMPORTANT POINT
Sub-section (b) of Section 25F of the Industrial Disputes Act requires payment of retrenchment compensation to a workman which shall be equivalent to 15 days’ ‘average pay’ (as defined in Section 2(aaa) of the Act) for every completed year of continuous service or any part thereof in excess of six months. The concept of 26 working days as evolved having regard to the definition of the word ‘wages’ as given in Section 2(s) of Payment of Gratuity Act, is not applied for determining the compensation which is payable in terms of Section 25F(b) of the Act.

Headnote:(i) LABOUR LAW—Industrial Disputes Act, 1947—Sections 2(aaa) and 25F—Retrenchment compensation—Determination of—Respondent was employed as an unskilled workman (Mali)—He was being paid on monthly basis at the rate of Rs. 1642/- per month—Services of respondent were retrenched—Retrenchment compensation of Rs. 1642/- was paid by the University to the respondent—On challenge, Labour Court held the retrenchment of respondent as illegal—It was held that retrenchment compensation of Rs. 1642/- paid to respondent fell short of the amount which was required to be paid under law—Whether Labour Court was correct in holding that one day’s average pay of respondent should be calculated by dividing his monthly salary of Rs. 1642/- by 26 and the quotient so arrived at should be multiplied by 30 (15x2) as he had worked for two years and one month—(No).

       Held : Sub-section (b) of Section 25F requires payment of retrenchment compensation to a workman which shall be equivalent to 15 days’ average pay for every completed year of continuous service or any part thereof in excess of six months. Average pay has been defined in Section 2(aaa) of the Act and, therefore, average pay has to be determined strictly in accordance with the aforesaid provision and not on the basis of some hypothetical calculation. Section 2(aaa) contemplates four different kinds of wage period for payment of wages. Clause (i) speaks of monthly paid workman and here the average wage has to be calculated by arriving at the average or mean of three complete calendar months. Clause (ii) refers to weekly paid workman where the average pay would be the average or mean of four complete weeks. Clause (iii) deals with daily wage workman and in this case the average pay would be the average or mean of wages in twelve full working days. The fourth category would be a case where it is not covered by any of the sub-clauses (i), (ii) or (iii) and in this case the average pay shall be calculated as the average of the wages payable to a workman during the period he had actually worked. The language used in Section 2(aaa) is absolutely plain and clear and there is not the slightest ambiguity in the same.(Paras 8 and 9)

       There is no dispute that the respondent was being paid wages on monthly basis though there is slight difference in the actual amount which was being paid to him. The Labour Court has recorded a finding that a cheque for Rs.1642/- was given by the University to the respondent as retrenchment compensation. Since the respondent was being paid wages on monthly basis, his average pay has to be calculated in accordance with the formula given in clause (i) of Section 2(aaa) of the Act which would mean the sum total of wages paid to him in three complete calendar months immediately preceding his retrenchment and dividing the said amount by three. The respondent was being paid wages amounting to Rs.1642/- per month in immediately three preceding months before his retrenchment. Therefore, the “average pay” in accordance with Section 2(aaa)(i) would come to Rs. 1642/-. The respondent had worked for two years and one month and, therefore, he was entitled to thirty (15 x 2) days of average pay by way of retrenchment compensation in order to comply with requirement of Section 25F(b) of the Act. The “average pay” of the respondent being Rs.1642/- per month and he being entitled to 30 days’ average pay by way of retrenchment compensation, he was required to be paid Rs.1642/- as retrenchment compensation. The University gave him a cheque for Rs.1642/- at the time of his retrenchment and, therefore, there was full compliance of Section 25F(b) of the Act. (Para 10)

       The concept of 26 working days was evolved having regard to the definition of the word “wages” as given in Section 2(s) of Payment of Gratuity Act, which uses the expression “all emoluments which are earned by an employee while on duty or on leave.” Therefore, there is no warrant or justification for importing the principle of 26 working days for determining the compensation which is payable in terms of Section 25F(b) of the Act. (Para 13)

       We are, therefore, of the opinion that the view taken by the Labour Court is clearly erroneous in law and has to be set aside. The High Court did not go into the question at all and summarily dismissed the writ petition by a one line order observing that the compensation offered to the workman was short of the amount actually due.(Para 15)

       (ii) INTERPRETATION OF STATUTES—Golden Rule—Words of a statute must prima facie be given their ordinary meaning—Natural and ordinary meaning of the words should not be departed from unless it can be shown that the legal context in which the words are used requires a different meaning.

       Held : It is well settled principle that the words of a Statute are first understood in their natural, ordinary or popular sense and phrases and sentences are construed according to their grammatical meaning, unless that leads to some absurdity or there is something in the context or in the object of the statute to suggest to the contrary. The true way is to take the words as the legislature have given them, and to take the meaning which the words given naturally imply, unless where the construction of those words is, either by the preamble or by the context of the words in question, controlled or altered. As is often said the golden rule is that the words of a statute must prima facie be given their ordinary meaning and natural and ordinary meaning of the words should not be departed from unless it can be shown that the legal context in which the words are used requires a different meaning.(Para 9)