IMPORTANT POINT
The main legal point established in the judgment is the mandatory nature of Section 25F of the Industrial Dispute Act, which requires full and complete payment of compensation without any unauthorized deductions.

JUDGMENT :

(Biren Vaishnav, J.)

1. All these appeals under Clause 15 of the Letters Patent have been filed by the Surendranagar Peoples Co-Operative Bank Ltd and its liquidators challenging the common oral judgement dated 23.03.2016, by which, the learned Single Judge dismissed the petition.

2. The appellant is a cooperative society which at the relevant time was engaged in banking activity. The Industrial Tribunal by its order dated 12.02.2013, partly modified the judgement and order passed by the labour Court in BIR Application No.2 of 2006, whereby the Labour Court had directed the petitioner bank to pay lump-sum compensation of Rs.75,000/- to each of the 28 workmen concerned in the proceedings. By an order dated 12.02.2013 passed by the Industrial Tribunal at Rajkot, the Industrial Tribunal partly allowed the appeals filed by the workmen directing the petitioner bank to pay 50% back-wages from the date of termination of their service until the date of liquidation. It was the case of the learned counsel for the appellant that the bank was declared as financially weak and ordered to be liquidated. The Registrar of Cooperative Societies had directed the bank to reduce the expenditure by 25% to 50% by adopting necessary and appropriate measures. As a result of certain directions asking the appellant bank to reduce the expenditure, the bank had to take a decision by which 28 employees faced retrenchment.

3. PIL Application No.2 of 2006 was filed before the Labour Court. The Labour Court partly allowed the applications by judgement and order dated 15.07.2011 and held that the bank in retrenching the 28 employees had carried out an illegal change and therefore the bank ought to pay Rs.75,000/- as lump-sum compensation to each of the 28 employees. Apart from the bank, the workman-Union also on being aggrieved by the judgement and order of the Labour Court, filed appeals before the Industrial Tribunal.

4. The learned Single Judge on appreciation of arguments set out on behalf of the appellant bank and taking into account the facts and circumstances of the case, found that the employees were retrenched in pursuance of the directions of the Registrar to reduce the expenditure. The challenge to the retrenchment by the Union was on five counts viz. (a) breach of principles of seniority, (b) shortfall in payment of retrenchment compensation, (c) bank having failed to issue notice of change, (d) bank committing breach of settlement and (e) bank committing breach of para 1 award.

5. The perusal of the order of the learned Single Judge would indicate that the learned Single Judge held that as far as the seniority principle was concerned, it was not violated which was not even challenged by the Union. As far as the second ground of short payment is concerned, the Labour Court has reached the specific finding that the appellant bank had deducted the allegedly outstanding unpaid amount of housing loan from the amount of compensation and it was in that context that the legality of retrenchment was examined. The learned Single Judge examining the legality of retrenchment, held as under:

“11.2 The legality of retrenchment of concerned, employees is required to be examined in light of the said fact viz. deduction of alleged dues of allegedly outstanding housing loan and alleged dues of interest thereon.

11.3 According to Section 25F of the Act contemplates that full amount payable towards the retrenchment compensation should be paid to the concerned (i.e. who are sought to be retrenched) employees (i) in accordance with the formula prescribed under Section 25F of the Industrial Dispute Act; (ii) at the time of retrenchment; (iii) and any deduction except/legally statutorily permitted or required deduction e.g. deduction of Tax in accordance with Income Tax Act, should not be made from the amount of compensation.

11.4 The purpose and object of Section 25F is to provide some support to the workman who are/who would be rendered jobless and to reduce or soft