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1995 Supreme(Cal) 52

High Court Of Calcutta
Prabir Kumar Majumdar, Vidya Nand
GUEST KEEN WILLAMS LTD. - Appellant
Versus
THE FIFTH INDUSTRIAL TRIBUNAL - Respondent
APLICATION 804  Of  1993
Decided On : 02/08/1995

Advocates Appeared:
Bhaskar Gupta, NILOV SENGUPTA, P.N.CHATTERJI, PARTHA SARATHI SENGUPTA, SAIBAL MUKHERJI

The mandatory conditions of Section 25F of the Industrial Disputes Act, 1947, which require notice or one month's pay in lieu of notice and retrenchment compensation, were complied with by the company, and therefore the retrenchment was valid.

Headnote:

INDUSTRIAL DISPUTES ACT, 1947 - SECTION 25F - RETRENCHMENT - VALIDITY - CONDITIONS PRECEDENT - EX-GRATIA PAYMENT - INTERPRETATION.

Fact of the Case:

The appellant company, engaged in the manufacture of Railway track materials, closed down its undertaking in 1969. The services of 32 Junior Management staff were terminated and they were paid their contractual dues, including pay in lieu of notice, leave and Provident Fund, and an ex-gratia sum of money to mitigate their hardship. The affected employees challenged the termination of their services and the issue of whether the retrenchment was justified was referred to the Industrial Tribunal. The Tribunal held that the retrenchment was invalid and directed the company to pay back wages to the workmen.

Finding of the Court:

The Court held that the termination of services of the 32 employees amounted to retrenchment within the meaning of the Industrial Disputes Act, 1947, and that the mandatory conditions of Section 25F of the Act, which require notice or one month's pay in lieu of notice and retrenchment compensation, were complied with by the company. Therefore, the retrenchment was valid and the workmen were not entitled to any further sum as directed by the Tribunal.

Issues: 1. Whether the termination of services of the 32 employees amounted to retrenchment within the meaning of the Industrial Disputes Act, 1947? 2. Whether the mandatory conditions of Section 25F of the Act were complied with by the company? 3. Whether the workmen were entitled to any further sum as directed by the Tribunal?

Ratio Decidendi: 1. The Court interpreted Section 25F of the Act and held that the mandatory conditions of the section, which require notice or one month's pay in lieu of notice and retrenchment compensation, were complied with by the company. Therefore, the retrenchment was valid and the workmen were not entitled to any further sum as directed by the Tribunal. 2. The Court held that the ex-gratia payment made by the company to the workmen at the time of termination of their services could not be taken as retrenchment compensation within the meaning of the Act, as it was not made under any legal obligation.

Final Decision: The Court allowed the appeal, set aside the award of the Tribunal and the judgment of the Trial Court, and held that the retrenchment of the 32 employees was valid and they were not entitled to any further sum.

PRABIR KUMAR MAJUMDAR, J.

( 1 ) THIS appeal is against the judgment and order dated August 26, 1993, passed by a learned Single Judge of this Court on an application challenging the award passed by the 5th Industrial Tribunal. West Bengal. The issue in the award case before the 5th Industrial Tribunal, West Bengal was whether the management was justified in retrenching the workmen named in the attached list? What relief, if any, were the workmen entitled to? The 5th Industrial Tribunal by the said order held that the order of retrenchment of the 32 concerned workmen was invalid, void, ah intitio and not justified. The Tribunal directed that the concerned workmen would- however, not be entitled to reinstatement as the same would jeopardise the administration of the company, but they would be entitled to backwages on the terms stated in the award, namely :-- (a) The 10 concerned workman under reference who died during the proceeding would be entitled to full back wages including other allowances from the date of retrenchment till the respective dates of their death of the age of superannuation whichever is earlier; (b) Those concerned workmen who are deemed to have retired on attaining the age of superannuation during the continuance of proceeding, would be entitled to full back wages including other allowances till the dates of their superannuation; (c) Those concerned workmen, namely. Phani Mohan Karmakar, Atul Krishna, Kundu, Madhusudan Chatterjee, Nirmalendu Dey Sarkar, Samirendra Dutta, Krishna Pada Sarkar, Sankar Kumar Sen Sharma, Debi Prosad Mitra, R. N. Dey, Parimalendu Ghosh, Bimal Chandra Chatterjee, Prabir Kumar Mukherjee who are gainfully employed in other concerns, would be entitled back wages including allowances from the date of retrenchment till the date of their respective employment in other concern where they are gainfully employed.

( 2 ) THE appellants have challenged the said award by filing a writ petition in the Court of first instance. It was the contention of the appellant before the Trial Court that said 32 employees were working in a particular unit of the appellant company and on the closure of such unit the services of the said 32 workmen who, according to the appellant company, were terminated and the company had paid substantial amount as ex-gratia, payment, to the said 32 employees, whose services were terminated. It was the contention of the appellant before the Court of first instance that if this termination was equated as retrenchment in view of the finding that the said employees were not officers but workmen that the payment of the said amount should be considered as compensation towards retrenchment.

( 3 ) THE respondents sought to justify the award made in their favour inter alia, contending that this is a clear case of retrenchment within the meaning of Industrial Disputes Act, 1947, (hereinafter referred to as the Act) and under the relevant provisions of the Industrial Disputes Act they were entitled to retrenchment compensation as they were held to be workmen within the meaning of the said Act.

( 4 ) THE learned Trial Judge by the said judgment and order observed that the Writ Court under Article 226 of the Constitution does not sit in appeal upon the decision of the statutory authority. The learned trial Judge also observed that the writ Court has to examine the decision making process and if it does not find any error of jurisdiction or any perversity of the order, the Writ Court, would not be inclined to interfere with the order as a matter of course. The learned Judge also observed that a litigant is expected to see the finality of the litigation thereof within the limited scope of interference by the Writ Court and the Writ Court being essentially a Court of equity has to consider the points of grievance of the parties in their proper perspective. The learned Judge made an interim order staying the operation of the award on the condition that 50% of the back wages, as directed


























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