The central legal point established in the judgment is the employer's right to reorganize the business as an economy measure and the limitations on the Tribunal's interference with the decision, as long as the retrenchment is bona fide and not vitiated by victimization or unfair labor practice.

JUDGMENT

V.P. Gopalan Nambiyar, C.J.—The learned Judge against whose judgment this appeal has been preferred, dismissed the writ petition to quash Ext. p6 Award of the Industrial Tribunal, Calicut. The dispute referred for adjudication was termination of service of one P. K. Sreenivasan, checking inspector from 30-8-1971. The appellant before us under whom the writ petitioner was employed was a Fleet owner who owned 32 stage carriages. By Ext. P1 notice it gave notice of termination of eight out of seventeen checking inspectors. That notice set out that it was issued as the financial condition of the company needed certain economy measures (vide Annexure to Ext. P1). This was repeated in the individual notices issued to the workmen (vide Ext. P2). In pursuance of the notices thus issued, eight of the juniormost workmen were retrenched. Seven of them have accepted the notices and the compensation offered, and allowed the matter to rest. P. K. Sreenivasan alone in respect of whom the Industrial Dispute was referred, chose to contest the matter and it was in respect of him that the matter went up before the Industrial Tribunal, Calicut. Exhibit P4 is the statement filed before the Tribunal on behalf of P. K. Sreenivasan. That took the plea that the retrenchment was an act of victimisation. Exhibit P5 statement of the management pleaded that the termination was as a result of "certain economy to reduce the working cost" (vide paragraph 2). In paragraph 8 again this aspect of the matter was a little more fully elaborated. The Tribunal found against the plea of victimisation urged by the workmen. It found that the economy measure pleaded by the appellant was on the ground that the appellant had been incurring loss and that this had not been established. In that view and also in view of the fact that the fleet strength had not been reduced but had actually increased and that the strength of checking inspectors was also found to have increased, the Tribunal recorded its finding that the retrenchment effected by the management cannot be said to be bona fide. In the light of the said finding it directed re-instatement of the workman P. K. Sreenivasan with back wages.

2. The learned Judge in effect took the view that in writ proceedings there is no ground to interfere with the Tribunal's finding that the retrenchment was not bona fide and, therefore, dismissed the writ petition.

3. Before the learned Judge, on behalf of the appellant, the strongest reliance was placed on the decision in Parry and Co. Ltd. Vs. P.C. Pal and Others, AIR 1970 SC 1334 and in particular on the following passage in the said decision :

14. It is well-established that it is within the managerial discretion of an employer to organise and arrange his business in the manner he considers best. So long as that is done bona fide it is not competent of a Tribunal to question its propriety. If a scheme for such reorganisation results in surplusage of employees no employer is expected to carry the burden of such economic deadweight and retrenchment has to be accepted as inevitable, however unfortunate it is. The Legislature realised this position and, therefore, provided by Section 25F compensation to soften the blow of hardship resulting from an employee being thrown out of employment through no fault of his. It is not the function of the Tribunal, therefore, to go into the question whether such a scheme is profitable or not and whether it should have adopted by the employer. In the instant case, the Tribunal examined the propriety of reorganisation and held that the company had not proved to its satisfaction that it was profitable. The Tribunal then held (a) that the scheme was not reasonable inasmuch as the number of agencies given up in Madras was less than that in Calcutta, (b) that though development of manufacturing activity was taken up in Madras, no such activity was undertaken in Kidderpore, and (c) that the company should have developed its manufacturing activity i