Full Judgment Text
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PETITIONER:
M/S. LOKMAT NEWSPAPERS PVT. LTD.
Vs.
RESPONDENT:
SHANKARPRASAD
DATE OF JUDGMENT: 19/07/1999
BENCH:
S.B.Majmudar, Syed Shah Mohammed Quadri
JUDGMENT:
S.B.Majmudar, J.
Leave granted.
We have heard learned counsel for the parties finally
in this appeal. It is being disposed of by this judgment.
The question involved in this appeal at the instance
of the appellant-management pertains to the legality and
validity of the discharge of the respondent-employee and
also calls for the decision as to whether the said discharge
order amounted to unfair labour practice on the part of
the management. A few relevant facts are required to be
noted at the outset. Introductory facts: The respondent
was working in the composing department of the appellant at
Nagpur in Maharashtra State when his services were
terminated. He was a foreman in the composing department of
the appellant. The appellant is a company engaged in the
publication of a Marathi daily named Lokmat. The
appellant has its registered office at Nagpur and Lokmat is
being published therefrom. In the year 1976, the
appellant-company decided to start publication of Jalgaon
Edition of the said paper and for that purpose set up an
establishment at Jalgaon in the eastern district of
Maharashtra State. The Jalgaon Edition was composed and
printed at Nagpur and was taken to Jalgaon. The composing
of both the Editions was done by hand composing and printing
was done on rotary printing machine. In 1978, the appellant
decided to have composed and printed part of the Jalgaon
Edition at Jalgaon. Since then the Jalgaon Edition was
composed and printed partly at Jalgaon and partly at Nagpur.
Then in 1981, the appellant installed two photo type
composing machines at Nagpur. According to the appellant,
it was a new technique of rationalisation, standardisation
and improvement of plant or technique. It appears that the
said machine was operated on experimental basis for sometime
but by October 1981 it became fully operative.
Consequently, the respondent along with 24 other employees,
who were working in the hand composing department became
redundant. Therefore, they were sought to be transferred to
Jalgaon District in the State of Maharashtra where another
establishment of the appellant was located. The said orders
of transfer were challenged by the respodent and other
employees before the Industrial Court under the provisions
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of The Maharashtra [Recognition of Trade Unions & Prevention
of Unfair Labour Practices] Act, 1971 (hereinafter referred
to as the Maharashtra Act). The Industrial Court, after
hearing the parties, took the view that the said transfer
orders amounted to change in the conditions of service of
the complainants which resulted into unfair labour
practice on the part of the appellant. The said decision
of the Industrial Court was rendered on 12th February, 1982.
The order of the Industrial Court was challenged by the
appellant before the High Court by filing Writ Petition No.
630/82. It appears that subsequently the said Writ Petition
was withdrawn. Consequently, the order of the Industrial
Tribunal calling upon the appellant to withdraw the illegal
transfers of the respondent and others remained a final
order. Having realised that the respondent and other
workmen could not be transferred out of Nagpur even though
they had become surplus on account of introduction of the
aforesaid photo composing machine, the appellant issued a
notice on 25th March, 1982 under Section 9-A of the
Industrial Disputes Act, 1947 (for short the I.D. Act) to
the respondent inter alia, stating that as a result of the
installation of photo composing machine, there was no work
available with the appellant so as to provide the same to
the respondent and other employees.
The respondent and other employees opposed the said
notice and consequently the Conciliation Officer held
conciliation proceedings under Section 12 of the I.D. Act.
Parties were heard and efforts were made in conciliation to
enable them to amicably settle the dispute but those
proceedings ultimately failed. The Conciliation Officer
closed the proceedings on 22.6.1982 and subsequently sent
failure report to the State Government. The said report
reached the State Government on 13th August, 1982. In the
meantime, once the conciliation proceedings were closed, the
appellant issued the impugned discharge order dated 22nd
June,1982 terminating the services of the respondent. As a
consequence thereof, the services of the respondent and
other employees were terminated by following the provisions
of Section 25-F of the I.D. Act.
Immediately after the discharge order was served on
the respondent, he filed a complaint on 25.6.1982 before the
Labour Court under Section 28 of the Maharashtra Act
alleging that the respondent indulged in unfair labour
practice which falls within the provisions of Schedule -IV
item no. 1 (a), (b), (d) and (f) of the Maharashtra Act.
The appellant resisted the said proceedings and contended
that it has not resorted to any unfair labour practice
against the respondent. During the pendency of this
complaint, the State Government, acting on the failure
report of the Conciliation Officer, made a reference of the
Industrial dispute under Section 10 of the I.D. Act. The
appellant raised an objection before the Industrial Court,
Nagpur, that the reference proceedings under Section 10 of
the I.D. Act were incompetent and barred by Section 59 of
the Maharashtra Act. As the respondent had already filed
complaint under the Maharashtra Act challenging the very
same discharge order, these objections were upheld by the
Industrial Court, Nagpur and reference under Section 10 of
the I.D. Act was disposed of.
The complaint filed by the respondent was dismissed by
the Labour Court by its order dated 30.1.1990. It was held
that the impugned retrenchment order did not attract any of
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the provisions of Schedule IV, item no.1 of the Maharashtra
Act and that the respondent was not guilty of any unfair
labour practice when it passed the impugned retrenchment
order against the respondent.
The respondent filed a Revision Petition before the
Industrial Tribunal, Nagpur. The said Revision Petition was
dismissed by the Tribunal on 22nd November, 1990 upholding
the findings of the Labour Court that the respondent had not
engaged in any unfair labour practice.
The respondent then filed Writ Petition No. 70 of
1991 under Articles 226 and 227 of the Constitution of India
challenging the decision rendered by both the Courts below.
The said Writ Petition was also rejected by the learned
Single Judge on 25th April, 1991. Respondent thereafter
preferred Letters Patent Appeal No. 24 of 1991 before the
Division Bench of the High Court at Nagpur under Clause 15
of the Letters Patent. The said appeal was heard by the
Division Bench on merits. The Division Bench, by its orders
dated 6.11.1996, held that the appellant had engaged in
unfair labour practice under item 1 (a), (b), (d) and (f)
of Schedule IV of the Maharashtra Act and hence it was
directed to pay back-wages and other benefits to the
respondent from the date of the order of retrenchment i.e.
22.6.1982 till the date of his retirement as he had also got
superannuated in the meantime. This order of the Division
Bench of the High Court has been brought in challenge by the
appellant- management by way of present appeal on special
leave under Article 136 of the Constitution of India.
Learned counsel appearing for the appellant, at the
outset, submitted that the Writ Petition filed by the
respondent before the High Court was in substance under
Article 227 of the Constitution of India and hence was not
maintainable under Clause 15 of the Letters Patent Appeal.
In order to support this contention, he took us to the
relevant averments in the Writ Petition as well as the order
of the learned Single Judge. He also relied on judgments of
this Court to which we will refer hereinafter. His
submission was that the learned Single Judge had exercised
his jurisdiction under Article 227 of the Constitution only
and, therefore, the Letters Patent Appeal was not
maintainable. On merits, it was submitted that even if the
appeal was maintainable the Division Bench had patently
erred in taking the view that notice under Section 9-A of
the I.D. Act was illegal and inoperative. It was also
contended that the decision of the Division Bench that
respondents complaint was maintainable and that by passing
the impugned order of the retrenchment, the appellant had
resorted to unfair labour practice, was erroneous. It was
further submitted that the Division Bench had erred in
holding that the impugned discharge order was violative of
Section 33 of the I.D. Act and that in any case pure
finding of fact of courts below that the appellant was not
guilty of any unfair labour practice ought not to have
been interfered with by the Division Bench in the Letters
Patent Appeal.
On the other hand, learned counsel for the respondent
tried to support the decision rendered by the Division Bench
of the High Court on the points on which the Bench decided
in favour of the respondent. He also submitted that the
appeal under Clause 15 of the Letters Patent was
maintainable before the Division Bench.
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Learned Counsel for the respondent invited our
attention to a number of decisions of this Court in support
of the respondents case on merits. We shall refer to them
in latter part of this judgment when we shall consider these
contentions on merits.
In the light of the aforesaid rival contentions, the
following points arise for our consideration : 1. Whether
the respondents Letters Patent Appeal was maintainable; 2.
If yes, whether the Division Bench was right in taking the
view that the impugned retrenchment order was violative of
Section 33 (1) of the I.D. Act; 3. Whether the appellant,
in issuing the said order, had violated the provisions of
Section 9-A of the I.D. Act; 4. Whether the impugned
retrenchment order amounted to the commission of unfair
labour practice by the appellant as per Schedule IV items 1
(a), (b), (d) and (f) of the Maharashtra Act; 5. Whether
the Division Bench was justified in interfering with the
findings of fact arrived at by the authorities below and as
confirmed by the learned Single Judge while deciding the
aforesaid question of unfair labour practice; and 6.
What final order ? We shall deal with these points
seriatim. Point No.1: So far as the question of
maintainability of Letters Patent appeal is concerned, it
has to be noted that the Revisional Order was passed by the
Labour Court on respondents complaint under Section 28 of
the Maharashtra Act. The said order was confirmed by the
Industrial Tribunal under Section 44 of the same Act. Both
the courts held that retrenchment of the respondent does not
amount to any unfair labour practice on the part of the
appellant. These orders were challenged by the respondent
by filing Writ Petition under Articles 226 and 227 of the
Constitution of India before the High Court of Judicature at
Bombay, Nagpur Bench. The learned Single Judge dismissed
the said Writ Petition, but his order itself shows that he
was considering the Writ Petition of the respondent which
was moved before him invoking the High Courts Jurisdiction
under Articles 226 and 227 of the Constitution of India. In
the said Writ Petition under Articles 226 and 227 of the
Constitution, the respondent requested the High Court to
call for the record and proceedings of Revision Petition No.
70 of 1990 and after perusal thereof to be further pleased
to quash and set aside the Order dated 30.1.1990 passed by
the Second Labour Court, Nagpur in Complaint No. 262 of
1982 and order dated 20.11.1990 passed in Revision by the
Industrial Court.
When we turn to the relevant paragraph of the Writ
Petition, we find averments to the effect that the Courts
below, while interpreting the provisions contained in
Sections 9-A, 20 and 33 and other provisions of the I.D.
Act, 1947 and the rules framed thereunder, had totally lost
sight of the object and purpose of these provisions and had
put an interpretation alien to industrial jurisprudence and
had thus committed serious error of law apparent on the face
of the record which resulted in serious miscarriage of
justice and also in failure to exercise the jurisdiction
vested in the courts below under the provisions of the
Maharashtra Act. In para 9 of the Writ Petition, it was
averred that the impugned orders of the Courts below had
further resulted in infraction of his fundamental rights
guaranteed to him under Articles 14, 21 and other Articles
as enshrined in the Constitution of India.
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It is, therefore, obvious that the Writ Petition
invoking jurisdiction of the High Court both under Articles
226 and 227 of the Constitution had tried to make out a case
for High Courts interference seeking issuance of an
appropriate Writ of Certiorari under Article 226 of the
Constitution of India. Basic averments for invoking such
jurisdiction were already pleaded in the Writ Petition for
High Courts consideration. It is true, as submitted by
learned counsel for the appellant, that the order of the
learned Single Judge nowhere stated that the Court was
considering the Writ Petition under Article 226 of the
Constitution of India. It is equally true that the learned
Single Judge dismissed the Writ Petition by observing that
the Courts below had appreciated the contentions and
rejected the complaint. But the said observation of the
learned Single Judge did not necessarily mean that the
learned Judge did not inclined to interfere under article
227 of the Constitution of India only. The said observation
equally supports the conclusion that the learned Judge was
not inclined to interfere under Articles 226 and 227. As
seen earlier, that he was considering the aforesaid Writ
Petition moved under Articles 226 as well as 227 of the
Constitution of India. Under these circumstances, it is not
possible to agree with the contention of learned counsel for
the appellant that the learned Single Judge had refused to
interfere only under Article 227 of the Constitution of
India when he dismissed the Writ Petition of the respondent.
In this connection, it is profitable to have a look at the
decision of this Court in the case of Umaji Keshao Meshram
and Others vs. Radhikabai, widow of Anandrao Banapurkar and
Anr., [(1986) Supp SCC 401]. In that case O.Chinnappa Reddy
and D.P.Madon, JJ., considered the very same question in the
light of clause 15 of the Letters Patent Appeal of the
Bombay High Court. Madon J., speaking for the Court in para
107 of the Report at page 473, made the following pertinent
observations :
Petitions are at times filed both under Articles 226
and 227 of the Constitution. The case of Hari Vishnu Kamath
v. Syed Ahmad Ishaque before this Court was of such a type.
Rule 18 provides that where such petitions are filed against
orders of the tribunals or authorities specified in Rule 18
of Chapter XVII of the Appellate Side Rules or against
decrees or orders of courts specified in that rule, they
shall be heard and finally disposed of by a Single Judge.
The question is whether an appeal would lie from the
decision of the Single Judge in such a case. In our
opinion, where the facts justify a party in filing an
application either under Article 226 or 227 of the
Constitution, and the party chooses to file his application
under both these articles, in fairness and justice to such
party and in order not to deprive him of the valuable right
of appeal the court ought to treat the application as being
made under Article 226, and if in deciding the matter, in
the final order the court gives ancillary directions which
may pertain to Article 227, this ought not to be held to
deprive a party of the right of appeal under Clause 15 of
the Letters Patent where the substantial part of the order
sought to be appealed against is under Article 226. Such
was the view taken by the Allahabad High court in Aidal
Singh v. Karan Singh and by the Punjab High Court in Raj
Kishan Jain v. Tulsi Dass and Barham Dutt v. Peoples
Co-operative Transport Society Ltd., New Delhi and we are in
agreement with it.
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The aforesaid decision squarely gets attracted on the
facts of the present case. It was open to the respondent to
invoke jurisdiction of the High Court both under Articles
226 and 227 of the Constitution of India. Once such
jurisdiction was invoked and when his Writ Petition was
dismissed on merits, it cannot be said that the learned
Single Judge had exercised his jurisdiction only under
Article 226 of the Constitution of India. This conclusion
directly flows from the relevant averments made in the Writ
Petition and the nature of jurisdiction invoked by the
respondent as noted by the learned Single Judge in his
Judgment, as seen earlier. Consequently, it could not be
said that Clause 15 of the Letters Patent was not attracted
for preferring appeal against the judgment of learned Single
Judge. It is also necessary to note that the appellant
being respondent in Letters Patent Appeal joined issues on
merits and did not take up the contention that Letters
Patent Appeal was not maintainable. For all these reasons,
therefore, the primary objection to the maintainability of
the Letters Patent Appeal as canvassed by learned counsel
for the appellant, has to be repelled. Point no.1 is,
therefore, answered in affirmative against the appellant and
in favour of the respondent. It takes us to the
consideration of points arising for our decision on merits.
Point No.2: The question of violation of Section
33(1) of the I.D. Act requires to be considered in the
light of the relevant statutory provisions. Section 33 as
found in Chapter VII of the I.D. Act, sub-section (1)
thereof, which is relevant for our present discussion, reads
as under : 33. Conditions of service, etc., to remain
unchanged under certain circumstances during pendency of
proceedings.- (1) During the pendency of any conciliation
proceeding before [an arbitrator or] a conciliation officer
or a Board or of any proceeding before a Labour Court or
Tribunal or National Tribunal in respect of an industrial
dispute, no employer shall,-
(a) in regard to any matter connected with the
dispute, alter, to the prejudice of the workmen concerned in
such dispute, the conditions of service applicable to them
immediately before the commencement of such proceeding; or
(b) for any misconduct connected with the dispute,
discharge or punish, whether by dismissal or otherwise, any
workman concerned in such dispute;
save with the express permission in writing of the
authority before which the proceeding is pending.
Now it must be stated that the impugned termination
order was passed against the respondent-workman on 22nd
June, 1982. Within three days thereof, the respondent
raised an industrial dispute by filing a complaint under
Section 28 of the Maharashtra Act alleging that the impugned
termination order amounted to unfair labour practice.
Before the impugned termination order was passed by the
management, it had already served a notice under Section 9-A
of the I.D. Act to the respondents union to the effect that
it proposed to introduce a change in the conditions of
service of the respondent and other members of the union on
the ground that it was proposing to rationalise the printing
work at the appellants concern at Nagpur by setting up
photo-type machine for carrying out the work of composing,
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resulting in substantial reduction in the work of composing
by hand. It may be stated that the respondent was employed
as a foreman in the hand-composing department of the
appellant at the relevant time. The respondents union
objected to the said notice of change and approached the
Conciliation Officer under Section 12(1) of the I.D. Act
which reads as under :- 12. Duties of Conciliation
Officers.- (1) Where an industrial dispute exists or is
apprehended, the conciliation officer may, or where the
dispute relates to a public utility service and a notice
under Section 22 has been given shall, hold conciliation
proceedings in the prescribed manner.
The Conciliation Officer took the dispute in
conciliation within his discretion even though as
appellants concern was not a public utility service it was
not mandatory for the Conciliation Officer to start
conciliation proceedings. As the report of the Conciliation
Officer submitted to the State Government shows, he invited
the management and the respondents union for preliminary
discussions on 14.4.1982 in his office and thereafter the
matter was adjourned during conciliation from time to time.
It can, therefore, be said that by 14th April, 1982
the matter was taken up for investigation and thus the
conciliation proceedings had commenced. It is also well
established on the record of the case that the parties could
not come to any settlement with the result that on 22nd
June, 1982 the investigation was closed by the Conciliation
Officer at 4.35 p.m. at Nagpur. Immediately thereafter the
appellant passed the impugned order of termination against
the respondent and others on the very same day i.e. on
22.6.1982 at 5.00 p.m. The said order was placed on the
notice board of the appellants office at Nagpur on the
evening of that day. It is not in dispute between the
parties that thereafter the Conciliation Officer submitted
his report to the Government which reached the State
Government on 13.8.1982.
On the aforesaid facts, the question arises whether
the impugned termination order dated 22.6.1982 was passed
during the pendency of the conciliation proceedings. It is
not in dispute between the parties that before passing such
an order no express permission in writing was obtained by
the appellant from the Conciliation Officer. The Labour
Court, the Industrial Court and the learned Single Judge of
the High Court have taken the view that because
investigation was closed by the conciliator by 4.35 p.m. on
22.6.1982, immediately thereafter the conciliation
proceedings could be said to have ended and were not pending
before him. Consequently at 5.00 p.m. on that very day
when the appellant issued the impugned order, it did not
violate Section 33 of the I.D. Act. While, on the other
hand, the Division Bench of the High Court in the impugned
judgment has taken the view that merely because the
conciliator closed the investigation in the evening of
22.6.1982 till he prepared his report as per Section 12(4)
of the I.D. Act and till that report reached the
Government, conciliation proceedings were deemed to have
continued and had not got terminated till 13th August, 1982
and as in the meantime on 22.6.1982, the impugned
termination order was passed without following the procedure
of Section 33(1) of the I.D. Act it got vitiated in law.
Under these circumstances, a moot question arises
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whether the impugned retrenchment order was passed on
22.6.1982 during the pendency of conciliation proceedings.
It cannot be disputed that the impugned order was directly
connected with the matter in dispute before the Conciliation
Officer wherein the question of legality of notice under
Section 9-A of the I.D. Act was under consideration for the
purpose of arriving at any settlement between the parties in
this connection. The impugned order had definitely altered
to the prejudice of the respondent his conditions of
service. It was not a case of retrenchment simpliciter but
was a consequential retrenchment on the introduction of the
scheme of rationalisation as contemplated by Section 9-A
read with Schedule IV item no.1 of the I.D. Act.
We shall refer to these provisions in greater detail
later on while considering the question of legality of
notice under Section 9-A of the I.D. Act. For the time
being, it is sufficient to note that the question of
violation of Section 33(1) of the I.D. Act has a direct
nexus with the further question whether on 22.6.1982 when
the impugned termination order was passed, conciliation
proceedings were pending before the authority or not.
In order to answer these questions, it is necessary to
note sub- section (4) of Section 12 of the I.D. Act which
reads as under : (4) If no such settlement is arrived at,
the conciliation officer shall, as soon as practicable after
the close of the investigation, send to the appropriate
Government a full report setting forth the steps taken by
him for ascertaining the facts and circumstances relating to
the dispute and for bringing about a settlement thereof,
together with a full statement of such facts and
circumstances, and the reasons on account of which, in his
opinion, a settlement could not be arrived at.
A mere look at this provision shows that if the
Conciliation Officer finds during conciliation proceedings
that no settlement is arrived at between the disputing
parties, then after closing the investigation he has, as
soon as practicable, to send to the appropriate Government a
full report setting forth the steps taken by him for
ascertaining the facts and circumstances relating to the
dispute and has also to mention all other details as
required to be mentioned in the report under Section 12(4)
of the I.D.Act.
The aforesaid statutory requirements leave no room for
doubt that after closing the investigation and after having
arrived at the conclusion that no settlement is possible
between the parties, the Conciliation Officer has to spend
some more time before submitting his detailed written report
about failure of consideration for information and necessary
action by the State Government. In the very nature of
things, therefore, such requirement will take at least a
couple of days, if not more, for the conciliator after
closing the investigation to enable him to send an
appropriate report to the State Government. It is,
therefore, obvious that on 22.6.1982 when by 4.35 p.m. the
Conciliation Officer declared that settlement was not
possible between the parties and he closed the
investigation, neither his statutory function did not come
to an end nor did he become functus officio. His
jurisdiction had to continue till he submitted his report as
per Section 12(4) to the appropriate Government. Even such
preparation of the report and sending of the same from his
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end to the appropriate Government would obviously have taken
at least a few days after 22.6.1982. It must, therefore, be
held that the conciliator remained in charge of the
conciliation proceedings at least for a couple of days after
22.6.1982. It is, therefore, difficult to appreciate how
within half an hour after the closing of investigation by
the conciliator and before his getting even a breathing time
to prepare his detailed written report about failure of
conciliation to be sent to the Government as per Section
12(4), the appellant could persuade itself to presume that
conciliation proceedings had ended and, therefore, it was
not required to follow the procedure of Section 33(1) and
straightaway could pass the impugned order of retrenchment
within 25 minutes of the closing of the investigation by the
conciliator on the very same day. It is difficult to
appreciate the reasoning of the Labour Court that after the
closer of investigation the conciliator became functus
officio and the management could not have approached him for
express written permission to pass the impugned order. It
is easy to visualise that even on the same day i.e. on
22.6.1982 or even on the next day, before the conciliator
had time even to start writing his report, such an express
permission could have been asked for by the appellant as the
conciliator by then could not be said to have washed his
hand off the conciliation proceedings. He remained very
much seized of these proceedings till at least the time the
report left his end apart from the further question whether
conciliation proceedings could be said to have continued
till the report reached the State Government. Thus, on the
express language of Section 12(4) the conclusion is
inevitable that closer of investigation by 4.35 p.m. on
22.6.1982 did not amount to termination of conciliation
proceedings by that very time. The argument of learned
counsel for the appellant was that closer of investigation
automatically amounted to termination of conciliation
proceedings. This argument proceeds on a wrong premise that
closer of investigation by the conciliator is the same as
closer of conciliation proceedings. The legislature while
enacting Section 12(4) has deliberately not used the words
closer of conciliation but, on the contrary, provided that
after closer of investigation something more was required to
be done by the conciliator as laid down under Section 12(4)
before he can be said to have done away with conciliation
proceedings earlier initiated by him. On this conclusion
alone the decision rendered by the Division Bench of the
High Court that the impugned order of termination dated
22.6.1982 was issued by the appellant without following the
procedure of Section 33(1) of the I.D. Act has to be
sustained.
But even that apart, sub-sections (1) and (2) of
Section 20 of the I.D. Act also become relevant in this
connection. They read as under :- Commencement and
conclusion of proceedings- (1) A conciliation proceeding
shall be deemed to have commenced on the date on which a
notice of strike or lock-out under Section 22 is received by
the conciliation officer or on the date of the order
referring the dispute to a Board, as the case may be.
(2) A conciliation proceeding shall be deemed to have
concluded- (a) where a settlement is arrived at, when a
memorandum of the settlement is signed by the parties to the
dispute; (b) where no settlement is arrived at, when the
report of the conciliation officer is received by the
appropriate Government or when the report of the Board is
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published under Section 17, as the case may be ; or (c)
when a reference is made to a Court, [Labour Court, Tribunal
or National Tribunal] under Section 10 during the pendency
of conciliation proceedings.
(Emphasis supplied)
A mere look at the aforesaid provisions shows that in
cases of public utility services referred to in Section 22
(2) of the I.D. Act, the conciliation proceedings shall be
deemed to have commenced on the date on which a notice of
strike or lockout under Section 22 is received by the
Conciliation Officer. That deals with commencement of
mandatory conciliation proceedings as laid down by Section
12(1) read with Section 20(1). But when we come to Section
20(2), it becomes obvious that the legislature has
introduced by way of legal fiction an irrebutable
presumption as per sub-clause (b) of Section 20(2) that when
during conciliation proceedings no settlement is arrived at
between the parties, the conciliation proceedings shall be
deemed to have concluded when the failure report of the
Conciliation Officer is received by the appropriate
Government. Consequently, the legislative intention becomes
clear that conciliation proceedings initiated under Section
12(1) whether of a discretionary nature or of a mandatory
nature shall be treated to have continued and only to have
concluded when the failure report reaches the appropriate
Government. As noted earlier, it is not in dispute between
the parties that after the closer of investigation on
22.6.1982 when the conciliator sent the failure report, it
reached the State Government only on 13.8.1982. Therefore,
it has to be held that the conciliation proceedings in the
present case had not got terminated and got concluded only
on 13.8.1982 as per the aforesaid statutory presumption
created by the legal fiction provided in Section 20(2)(b).
Therefore, as a necessary corollary, it must be held that
these conciliation proceedings were pending till 13.8.1982.
It is axiomatic that conciliation proceedings which are
deemed not to have concluded must be deemed to have
continued or remained pending. That which is not concluded
is pending, equally that which is pending cannot be said to
be concluded.
Learned counsel for the appellant tried to salvage the
situation by submitting that the deeming fiction created by
Section 20(2) of the I.D. Act referred to only deemed
conclusion of the proceedings, but had nothing to do with
the pendency of the proceedings. To highlight this
submission, he invited our attention to Section 22(1)(d) and
Section 22(2)(d) as well as Section 23(b) of the I.D. Act.
We fail to appreciate how these provisions can be of any
avail to him. Section 22(1)(d) reads as under:
during the pendency of any conciliation proceedings
before a conciliation officer and seven days after the
conclusion of such proceedings.
Similar is the wording of Section 22(2)(d). Section
23(b) contains similar phrase in connection with pending
proceedings before the Labour Court or the Tribunal. All
these provisions show that even after the pending
proceedings are concluded for further period of time no
strikes or lock- outs can be permitted to take place between
the parties. But the said provisions do not indicate that
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pendency of proceedings is a concept which is different from
the conclusion of such proceedings. On the contrary, the
conclusion of proceedings puts an end to the pendency of
such proceedings. Learned counsel for the appellant in
support of his contention seeking a dichotomy between the
concept of pendency and concept of deemed conclusion of
proceedings placed strong reliance on a decision of this
Court in Chemicals & Fibres of India Ltd. vs. D.G. Bhoir
& Ors. [(1975) (4) SCC 332]. In that case this Court was
concerned with entirely a different situation under Section
2A of the I.D. Act after it was brought on the Statute
Book. As per this provision, an individual dispute raised
by workman who had suffered dismissal from service was to be
considered as an industrial dispute within the meaning of
the relevant provisions of the Act so that such a dispute
could be conciliated upon, arbitrated or could be referred
for adjudication before competent authorities under the Act.
For that limited purpose, an individual workman could be
said to have raised an industrial dispute. The question
before this Court was whether raising of such a dispute by
an individual workman which was not sponsored by a large
body of workmen could attract Section 33 of the I.D. Act
even qua other workmen who had nothing to do with this
individual dispute. Answering the question in negative, it
was held by this Court that the fiction created by Section
2A had a limited effect and could not be pressed in service
for applicability of Section 33(1) in connection with
lock-out qua other workmen who were not the parties to the
said industrial dispute. In that case during the pendency
of such individual dispute the appellant company before this
Court discharged about 312 of its employees and filed 12
applications before the Industrial Tribunal for approval of
such a discharge on the ground that a reference was pending
before it. The question was whether these applications were
maintainable for approval under Section 33(1) when the
dispute which was pending before the Industrial Tribunal was
one under Section 2A of the I.D. Act. In this connection,
it was held by this Court that the legal fiction created by
Section 2A had a limited effect and those workmen who were
not parties to such a dispute, if had gone on strike, it
could not be said that their strike was necessarily illegal.
In para-5 of the report, it was observed that:
.While there is justification for preventing a
strike when a dispute between the employer and the general
body of workmen is pending adjudication or resolution, it
would be too much to expect that the Legislature intended
that a lid should be put on all strikes just because the
case of a single workman was pending. We fail to
appreciate how this decision can be pressed in service by
learned counsel for the appellant while construing Section
20(2) of the I.D. Act. That Section, as noted earlier, has
created an irrebutable presumption by way of legal fiction
and that presumption covers the very question as to when
conciliation proceedings once commenced can be said to have
concluded. In other words, when they can be said to have
not remained in pending. As seen earlier, the legal fiction
which is created for that purpose by Section 20(2) has to be
given its full effect. As it is well- settled while giving
effect to the legal fiction for the purpose for which it is
created by Legislature it has to be given full play for
fructifying the said legislative intention. We cannot allow
our imagination to boggle on that score. It is, of course,
true as laid down by the Constitutional Bench of this Court
in the case of Bengal Immunity Co. Ltd., vs. State of
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Bihar and Others (AIR 1955 SC 661 at 680). Das, Actg. C.J.
speaking for the Court in Para 31 of the report, made the
following pertinent observations : Legal fictions are
created only for some definite purpose. Xxxxxx xxxxx xxxxxx
a legal fiction is to be limited to the purpose for which it
was created and should not be extended beyond that
legitimate field.
However, as noted earlier, legal fiction created by
Section 20(2) is for the purpose of laying down as to till
what stage conciliation proceedings can be said to be
pending and when they can be said to have concluded. On
that basis if it is held that conciliation proceedings once
validly started under Section 12(1) of the I.D. Act can by
way of an irrevocable presumption be treated to have
continued till the failure report reached the appropriate
Government, during the interregnum of necessity such
conciliation proceedings have to be treated as pending
before the conciliation officer. In fact, on these aspects
of the matter, we have a decision of this Court in Andheri
Marol Kurla Bus Service & Anr. vs. The State of Bombay
[AIR 1959 SC 841]. In that case a Bench of two judges of
this Court had to consider the question as to when
conciliation proceedings can be said to have concluded under
the relevant provisions of this very Act. In that case
during the admitted pendency of conciliation proceedings the
management had dismissed the workman bus conductor.
However, the submission on the part of the management was
that such dismissal was after the expiry of statutory period
of 14 days within which the conciliation proceedings once
started had to be concluded and as 14 days were already over
the dismissal did not attract Section 33(1) and consequently
the management could not be penalised under Section 31(1) of
the I.D. Act which lays down as under: Any employer who
contravenes the provisions of Section 33 shall be punishable
with imprisonment for a term which may extend to six months
or with fine which may extend to one thousand rupees, or
with both.
In the aforesaid factual matrix of the case, this
Court in Andheri Marol Kurla Bus Service & Anr vs. The
State of Bombay, (supra) had to consider the scope of
Section 33(1) read with Section 20(2)(b). On a conjoint
reading of these relevant provisions at page 841, paragraphs
4 & 5 of the report, J.L. Kapur J., speaking for the Court,
made the following pertinent observations : .The
provisions of sub-s. 20(2) apply to all conciliation
proceedings whether in regard to utility services or
otherwise. All conciliation proceedings under this
sub-section shall be deemed to have concluded in the case
where no settlement is reached, when the report of the
Conciliation Officer is received by the appropriate
Government. The conciliation proceedings therefore do not
end when the report under S.12(6) is made by the
Conciliation Officer but when that report is received by the
appropriate Government. It was contended that the
conciliation proceedings should be held to terminate when
the Conciliation Officer is required under S.12(6) of the
Act to submit his report but the provisions of the Act above
quoted do not support this contention as the termination of
the conciliation proceedings is deemed to take place when
the report is received by the appropriate Government. That
is how S.20(2)(b) was interpreted in Workers of the Industry
Colliery Dhanbad v. Management of the Industry Colliery,
1953 SCR 428: (AIR 1953 SC 88).
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It was next contended that on this interpretation the
conciliation proceedings could be prolonged much beyond what
was contemplated by the Act and the termination would depend
upon how soon a report is received by the appropriate
Government. It is true that S.12(6) of the Act contemplates
the submission of the report by the Conciliation Officer
within 14 days but that does not affect the pendency of the
conciliation proceedings and if for some reason the
Conciliation Officer delays the submission of his report his
action may be reprehensible but that will not affect the
interpretation to be put on S.20(2)(b) of the Act. Section
12 lays down the duties of the Conciliation Officer. He is
required to bring about settlement between the parties and
must begin his investigation without delay and if no
settlement is arrived at he is to submit his report to the
appropriate Government. No doubt S.12 contemplates that the
report should be made and the proceedings closed within a
fortnight and if proceedings are not closed but are carried
on, as they were in the present case, or if the Conciliation
Officer does not make his report within 14 days he may be
guilty of a breach of duty but in law the proceedings do not
automatically come to an end after 14 days but only
terminate as provided in S.20(2)(b) of the Act.
(Colliery Mazdoor Congress (222) Asansol v. New Beerbhoom
Coal Co., Ltd., 1952 Lab AC 219
The aforesaid decision, therefore, has settled the
controversy on this aspect by holding that conciliation
proceedings would terminate only as provided by Section
20(2)(b) of the Act. Meaning thereby, till the failure
report reaches the appropriate State Government,
conciliation proceedings cannot be said to have terminated.
Hence, breach of Section 33(1) during the pendency of such
proceedings could attract penal liability of the employer
under Section 31(1) of the Act. Learned counsel for the
appellant tried to submit that the aforesaid decision had
not considered the legal effect of the fiction created by
Section 20(2)(b) and its limited scope regarding deemed
conclusion of the conciliation proceedings which was
different from actual pendency of the proceedings as
required by Section 33(1). It is difficult to appreciate
this contention for the simple reason that the relevant
provisions of the Act to which our attention was drawn by
learned counsel for the appellant for submitting that there
was a difference between pendency and conclusion of
proceedings do not advance the case of the appellant, as we
have seen earlier, nor can it be said that any relevant
provisions of the Act were not noticed by the Division Bench
of this Court which decided the case referred in Andheri
Marol Kurla Bus Service & Anr. vs. The State of Bombay
(supra). On the contrary, we find that the aforesaid
decision has taken a correct view on the question posed for
our consideration in the present case. In view of the
aforesaid discussion, therefore, there was no escape from
the conclusion to which the Division Bench in the impugned
judgment reached that on 22.6.1982 when the order of
retrenchment was passed against the respondent, the
appellant-management had committed breach of Section 33(1)
of the Act by not passing the said order after obtaining
express previous permission in writing of the Conciliation
Officer before whom the conciliation proceedings must be
held to be pending in the evening of 22.6.1982. The
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impugned retrenchment order must be held to be illegal being
contrary to the aforesaid provision of the I.D. Act. Point
No.2 is, therefore, answered in affirmative against the
appellant and in favour of the respondent. Point No.3: So
far as this point is concerned, we have to turn to Section
9- A of the I.D. Act. The relevant provision thereof reads
as under : Notice of change.-No employer, who proposes to
effect any change in the conditions of service applicable to
any workman in respect of any matter specified in the Fourth
Schedule, shall effect such change,- (a) without giving to
the workman likely to be affected by such change a notice in
the prescribed manner of the nature of the change proposed
to be effected ; or (b) within twenty-one days of giving
such notice
A mere look at the aforesaid provision shows that if
an employer proposes to effect any change in the conditions
of service applicable to any workman in respect of any
matter specified in the Fourth Schedule, such change has to
find preceded by the procedure laid down in the said
section.
When we turn to the Fourth Schedule of the I.D. Act,
we find mentioned therein various conditions of service of
workmen. The said schedule with all of its items reads as
follows :
CONDITIONS OF SERVICE FOR CHANGE OF WHICH NOTICE IS
TO BE GIVEN
1. Wages, including the period and mode of payment;
2. Contribution paid, or payable, by the employer to any
provident fund or pension fund or for the benefit of the
workmen under any law for the time being in force; 3.
Compensatory and other allowances; 4. Hours of work and
rest intervals; 5. Leave with wages and holidays; 6.
Starting, alteration or discontinuance of shift working
otherwise than in accordance with standing orders; 7.
Classification by grades; 8. Withdrawal of any customary
concession or privilege or change in usage; 9.
Introduction of new rules of discipline, or alteration of
existing rules except insofar as they are provided in
standing orders; 10. Rationalisation, standardisation or
improvement of plant or technique which is likely to lead to
retrenchment of workmen; 11. Any increases or reduction
(other than casual) in the number of persons employed or to
be employed in any occupation or process or department or
shift [not occasioned by circumstances over which the
employer has no control]
So far as item nos.1-9 and 11 are concerned, it
becomes obvious that before any such change in conditions of
service of the workmen is to be effected, as a pre-condition
for such proposed change, notice under Section 9-A has to be
issued; without complying with such a pre-condition of
notice, proposed change would not legally come into
operation. We are directly concerned with item no. 10 of
this Schedule. It, therefore, becomes obvious that before
any rationalisation, standardisation or improvement of plant
or technique is to be resorted to by any management if by
such an exercise retrenchment of workmen is likely to
result, then before introducing such rationalisation,
standardisation or improvement of plant or technique, as the
case may be, a prior notice under Section 9-A is to be
issued to the workmen who can get an opportunity to show
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that they may not be retrenched because of the new scheme of
rationalisation etc. which is in the offing and can suggest
ways and means available to the management to avoid such
proposed retrenchment of the workmen despite such
introduction of a new scheme. Consequently, it must be held
on the very wordings of Section 9-A read with item no.10 of
Fourth Schedule that any management which seeks to
introduce a new working pattern for its existing work force
by any future scheme of rationalisation, standardisation or
improvement of plant or technique which has a tendency to
lead to future retrenchment of workmen has to give prior
notice of proposed change. Therefore, it must be held that
notice under Section 9-A must precede the introduction of
rationalisation concerned, it cannot follow the introduction
of such a rationalisation. In the present case, it is not
in dispute between the parties that in the composing
department of the appellant where the respondent was
working, composing work was earlier being done by hand i.e.
manually. That was the existing condition of service of the
respondent. By substitution of that type of work by
mechanical work having resort to photo type composition
through machine, the then existing service condition of the
respondent was bound to be affected adversely.
Consequently, before introducing such a change in the
condition of service of the respondent by installing photo
type composing machine, introduction of which was directly
likely to lead to retrenchment of the respondent, a notice
under Section 9-A was a must before commissioning such a
photo type machine at the work place of the appellant. It
is not in dispute between the parties that such a photo type
machine was already installed by the appellant in January
1981. Learned counsel for the appellant seeks to contend
that it was installed on an experimental basis. Even
granting that, the evidence on record clearly established
that by November, 1981 because of the successful working of
the photo type composing machine it was felt by the
appellant that respondent and other compositors working in
the hand composing department were rendered surplus. Of
course, the appellant on humanitarian ground tried to shift
them to its another concern at Jalgaon, but those transfer
orders were held to amount to unfair labour practice on
the part of the appellant when the Industrial Court on the
complaints of these transferee workmen held that such
transfer orders would amount to unfair labour practice
being illegal at law. Thus the attempt on the part of the
appellant to transfer these excess workmen from November,
1981 on the admitted position that they had become surplus
in the composition department at Nagpur because of the
successful installation and working of the photo type
composing machine at the premises, became abortive.
Consequently, from November, 1981 the installation of the
photo type machine ceased to remain an experimental measure
but became a stark reality and this machine had necessarily
a tendency to displace the workmen who were earlier working
in the hand composing department. Thus, at least from
November, 1981 scheme of rationalisation had come to stay in
composing department of the appellant. Under these
circumstances, even accepting the contention of learned
counsel for the appellant that the likelihood of the
respondent and other workmen being retrenched because of the
aforesaid machine was not a realised possibility from
January, 1981 at last became a certainty from November,
1981. In fact the Labour Court has also come to this very
conclusion in paragraph 13 of its judgment wherein the
Labour Court on the admitted position on record has held as
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under :
The management had transferred about 11 hand
compositors including the complainant to Jalgaon by order
dated 4.11.81. It appears that at that time only the
management was ready to get the work of composing done
exclusively by that photo type setting machine and hence the
services of hand compositors were no longer required at
Nagpur. In fact at least that time the notice of change
ought to have been given by the respondent because the
services of hand compositors were not useful and were
transferred only in November 1981 obviously because the work
of composing was done on the photo type setting machines
The aforesaid finding of fact which was confirmed by
the Revisional Court as well as the learned Single Judge of
the High Court leaves no room for doubt that by 4.11.1981
the scheme of rationalisation had already come into force
and that scheme had a direct nexus and a realised
possibility of making the respondent and other workmen
surplus liable to retrenchment as surplus staff. Once that
happened, it becomes obvious that there remained no occasion
thereafter for the appellant-management to resort to Section
9-A of the Act belatedly by giving notice of change only in
February, 1982. The appellant in this connection had missed
the bus. It was a futile attempt to lock the stables after
horses had bolted.
As noted earlier, on the scheme of Section 9-A read
with item 10 of the Fourth Schedule, before introducing such
a new scheme of rationalisation which had a likelihood and a
tendency to affect the existing service conditions of the
workmen, a notice under Section 9-A was required to be
issued prior to the installation of the photo composing
machine. Such a notice could have been sent before January,
1981 when such a machine was brought in the premises as an
experimental measure or at least before 4.11.1981 when the
same was continued to be installed as a confirmed necessary
component of machinery for printing at the appellants
premises at Nagpur. If such a notice was given to the
respondent - workman and other workmen similarly situated
they could have persuaded the appellant to resort to any
other type of rationalisation or to absorb them on suitable
jobs in the same premises in any other department of the
appellant at Nagpur. That opportunity was never made
available to the respondent. Therefore, notice under
Section 9-A issued after installation of the machine and
after bringing into force the rationalisation scheme was ex
facie a stillborn and incompetent notice and was clearly
violative of the provisions of Section 9-A of the Act which
amounted to putting the cart before the horse. Such an
incompetent and illegal notice under Section 9-A could not
legally enable the appellant to terminate the services of
the respondent. We may mention at this stage that the
impugned termination order dated 22.6.1982 clearly recites
as follows :
In the notice given on 25th March, 1982, under
Section 9-A of the Industrial Disputes Act, 1947, the
Management had noted that it may require to reduce 25
workmen from service for the purpose of introducing new
technology in the composing section.
The Conciliation Officer has noted in his order dated
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22.6.82 that the proceedings started on the basis of this
notice have proved unsuccessful and, therefore, the
Management has now decided to terminate with immediate
effect the following 25 workmen.
Name of Workmen Post 1. Shri Maniram Choudhary
Foreman 2. Shri Shankarprasad Pathak Foreman 3. to 25
Xxxxxxxxxxxxxx
---------------------------------------------------------------------------------
That is how the listed workmen, including the
respondent herein, were sought to be discharged from
service. Thus the foundation of the impugned order of
discharge is the notice under Section 9-A dated 25th March,
1982. Once that foundation is knocked off as incompetent,
illegal and uncalled for the entire edifice of retrenchment
order against the respondent falls to the ground.
It may also be noted at this stage that by two
decisions rendered by Bench of three learned Judges of this
Court in connection with the time for issuance of notice
under Section 9-A read with item 10 Schedule IV with which
we are concerned in the present case it has been clearly
ruled that such notice must precede the introduction of
rationalisation scheme. We may usefully refer to them at
this stage. In the case of M/s. North Brook Jute Co. Ltd.
& Anr. vs. Their Workmen (1960 (3) S.C.R. 364), a three
Judge Bench of this Court had to consider the question
whether in a reference regarding proposed introduction of
rationalisation scheme which was preceded by notice under
Section 9-A of the I.D. Act, such a scheme could be
actually introduced pending reference proceedings and
whether such an act on the part of the management could be
treated to be illegal entitling the workmen affected by such
an introduction to go on strike and still earn wages for the
strike period. Answering this question in affirmative it
was held by this Court that after notice under Section 9-A
of the I.D. Act when a scheme of rationalisation was said
to be introduced but was not actually introduced it could
not be introduced till the dispute regarding such proposed
introduction was resolved by the competent Court. Dealing
with the scheme of proposed rationalisation as envisaged by
item no.10 of Schedule IV of the I.D. Act it was observed
that : Rationalisation which was introduced had therefore
two effects- first that some workers would become surplus
and would face discharge; and secondly, the other workmen
would have to carry more workload. The introduction of the
rationalisation scheme was therefore clearly an alteration
of conditions of service to the prejudice of the workmen.
The alteration was made on the 16th December, when reference
as regards the scheme had already been made and was pending
before the Industrial Tribunal. The Tribunal has therefore
rightly held that this introduction was a contravention of
s. 33.
The aforesaid decision, therefore, has clearly ruled
that introduction of rationalised scheme by itself would
amount to alteration of conditions of service of the workmen
to their prejudice. It, therefore, follows that before
effecting such a change, meaning thereby, before introducing
such a rationalisation scheme which has a tendency to change
the conditions of service of workmen, notice under Section
9-A as a condition precedent becomes a must. If learned
counsel for the appellant is right, that machine can be
introduced on experimental basis first or even after it has
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already worked for some time and is required to be continued
as a full-fledged machine, as and when the employer decides
to terminate the services of the workmen as a direct
consequence of such introduction of machine, he can give
notice under Section 9-A of the Act at any such time, then
the very scheme of Section 9-A read with Schedule IV item
no.10 of the I.D. Act would be rendered ineffective and
inoperative. The purpose of issuing such a notice prior to
the introduction of the scheme of rationalisation would get
frustrated and then there would remain no effective
opportunity for the conciliator to try to arrive at an
amicable settlement regarding the dispute centering round
the proposed introduction of the scheme of rationalisation
which is likely to result in the retrenchment of workmen.
Equally there would remain no opportunity for the State
Government on receipt of failure report from the conciliator
to make a reference of such live industrial dispute for
adjudication by the competent Court on merits. It is
obvious that when such dispute regarding the proposed
introduction of the rationalisation scheme is referred for
adjudication of the competent Court, the said Court after
hearing the parties and considering the evidence can come to
the conclusion whether the proposed scheme is justified on
facts or not and whether any violation of the provisions of
Section 9-A had resulted into illegality of the
consequential orders of retrenchment. Such competent Court
can also accordingly pass appropriate consequential orders
directing the management to withdraw such a scheme of
rationalisation or in any case, can order reinstatement of
workmen with proper back-wages if such retrenchment is found
to be illegal on account of failure to comply with the
provisions of Section 9-A of the Act. The question
regarding the stage at which notice under Section 9-A can be
issued in connection with proposed scheme of rationalisation
which has likelihood of rendering existing workmen surplus
and liable to retrenchment as mentioned in item no.10 of
Schedule IV of the I.D. Act was once again examined by a
three judge bench of this Court in Hindustan Lever Ltd. vs.
Ram Mohan Ray & Ors. (1973 (4) SCC 141). In that case,
this Court was concerned with a scheme of rationalisation
and re-organisation which were proposed to be introduced by
Hindustan Lever Ltd., appellant before this court, and for
which a prior notice under Section 9-A before introducing
such re- organisation scheme was issued to the workmen but
which had no tendency or likelihood of displacing or
retrenching them. It was the contention of the workmen that
even for such a scheme a notice under Section 9-A was a
must. Examining the scheme of reorganisation in question,
it was held that once the scheme was not likely to result in
retrenchment of any workman Section 9-A read with item no.10
of Schedule IV did not get attracted on the facts of the
case. In this connection the following pertinent
observations on the scheme of Section 9-A read with item
no.10 of Schedule IV were made by Alagiriswami J., while
dealing with the contention of learned counsel for the
workmen :
He also urged that rationalisation and
standardisation per se would fall under item 10 even if they
were not likely to lead to retrenchment of workmen and only
improvement of plant or technique would require that they
should lead to retrenchment of workmen in order to fall
under item 10. A further submission of his was that
standardisation merely meant standardisation of wages. We
are not able to accept this argument. It appears to us that
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the arrangement of words and phrases in that item shows that
only rationalisation or standardisation or improvement of
plant or technique, which is likely to lead to retrenchment
of workmen would fall under that item. In other words,
rationalisation or standardisation by itself would not fall
under item 10 unless it is likely to lead to retrenchment of
workmen. The reference to rationalisation at page 257 of
the report of the Labour Commission and the reference to
standardisation of wages in it are not very helpful in this
connection. Standardisation can be of anything, not
necessarily of wages. It may be standardisation of
workload, standardisation of product, standardisation of
working hours or standardisation of leave privileges.
Indeed in one decision in Alembic Chemical Works Co. Ltd.
v. The Workmen, there is reference to standardisation of
conditions of service, standardisation of hours of work,
wage structure. That case itself was concerned with
standardisation of leave. The whole question whether this
reorganisation falls under item 10 depends upon whether it
was likely to lead to retrenchment of workmen
In view of the aforesaid decision, it becomes obvious
that if the proposed scheme of rationalisation has a
likelihood of rendering existing workmen surplus and liable
to retrenchment, then item no.10 of Schedule IV would
squarely get attracted and would require as a condition
precedent to introduction of such a scheme a notice to be
issued under Section 9-A by the management proposing such an
introduction of the scheme of rationalisation, but if the
proposed scheme is not likely to displace any existing
workmen then mere rationalisation which has no nexus with
the possibility of future retrenchment of workmen would not
attract item no.10 of Schedule IV and would remain a benign
scheme of rationalisation having no pernicious effect on the
existing working staff. In view of the aforesaid settled
legal position, there is no escape from the conclusion that
the impugned notice dated 25th March, 1982 under Section 9-A
which was issued long after the actual installation of the
photo composing machine had fallen foul on the touchstone of
Section 9-A read with Schedule IV item no.10. Such a notice
in order to become valid and legal must have preceded
introduction of such a machine and could not have followed
the actual installation and effective commission of such a
machine. The decision rendered by the Division Bench in
this connection is found to be perfectly justified both on
facts and in law. It must, therefore, be held that the
impugned termination or discharge of the respondent was
violative of the provisions of Section 9-A of the I.D. Act
and he was discharged from service without the appellants
following the mandatory requirements of Section 9-A of the
I.D. Act. Effect of non-compliance of Section 9-A of the
I.D. Act renders the change in conditions of service void
ab initio. This legal position is well settled in the case
of Workmen of the Food Corporation of India vs. Food
Corporation of India [(1985) (2) SCC 136], a three Judge
Bench of this Court, speaking through Desai J., in para 19
of the report, laid down as under :- It is at this stage
necessary to examine the implication of Section 9-A of the
I.D. Act, 1947. As hereinbefore pointed out, Section 9-A
makes it obligatory upon an employer who proposes to effect
any change in the conditions of service applicable to any
workman in respect of any matter specified in the Fourth
Schedule to give a notice of desired or intended change. It
cannot do so without giving to the workman likely to be
affected by the change, a notice in the prescribed manner of
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the nature of the change proposed to be effected and within
21 days of giving such notice. There is a proviso to
Section 9-A which has no relevance here.
Xxxxxx xxxxx xxxxx Xxxxxxx xxxxx xxxxx
Therefore, obviously a notice of change was a must
before introducing the change, otherwise it would be an
illegal change. Any such illegal change invites a penalty
under Section 31(2) of the I.D. Act, 1947. Such a change
which is punishable as a criminal offence would obviously be
an illegal change. It must be held that without anything
more such an illegal change would be wholly ineffective.
Point No.3, therefore, is answered in affirmative
against the appellant and in favour of the respondent.
Point No.4: It has to be kept in view that the
present proceedings arise out of a complaint filed by the
respondent-workman alleging unfair labour practice on the
part of the appellant-management when it passed the impugned
order of retrenchment against him.
The said complaint was moved under Section 28 of the
Maharashtra Act. The topic of unfair labour practice is
dealt with in Chapter VI of the said Act. Section 26 is the
first section in the said chapter which provides as follows
: unfair labour practices:- In this Act, unless the
context requires otherwise, unfair labour practices mean
any of the practices listed in Schedules II, III and IV.
Section 27 lays down as follows : Prohibition on
engaging in unfair labour practices:- No employer or union
and no employee shall engage in any unfair labour practice.
Section 28 lays down the procedure for dealing with
complaints relating to unfair labour practices.
Sub-section (1) thereof provides as follows :- (1) Where
any person has engaged in or is engaging in any unfair
labour practice, then any union or any employee or any
employer or any Investigating Officer may, within ninety
days of the occurrence of such unfair labour practice,
file a complaint before the Court competent to deal with
such complaint either under section 5, or as the case may
be, under section 7, of this Act:
Provided that, the Court may entertain a complaint
after the period of ninety days from the date of the alleged
occurrence, if good and sufficient reasons are shown by the
complainant for the late filing of the complaint.
It is not in dispute in this case that the respondent
invoked the jurisdiction of the Labour Court which was
competent to deal with his complaint regarding unfair
labour practice, under items 1 (a), (b), (d) and (f) of
Schedule IV of the Maharashtra Act. Section 7 of the Act
lays down the duties of Labour Court and states as under :-
It shall be the duty of the Labour Court to decide
complaints relating to unfair labour practices described in
item 1 of Schedule IV and to try offences punishable under
this Act.
When we turn to Schedule IV item no.1, we find therein
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listed number of heads of unfair labour practices which
can support any complaint thereunder. The relevant clauses
of item no.1 of Schedule IV which were invoked by the
respondent for supporting his complaint against the impugned
retrenchment order were clauses (a), (b), (d) and (f). Item
no.1 with all its sub-clauses reads as under :- To
discharge or dismiss employees - (a) by way of
victimisation; (b) not in good faith, but in the colourable
exercise of the employers rights; (c) by falsely
implicating an employee in a criminal case on false evidence
or on concocted evidence; (d) for patently false reasons;
(e) on untrue or trumped up allegations of absence without
leave; (f) in utter disregard of the principles of natural
justice in the conduct of domestic enquiry or with undue
haste; (g) for misconduct of a minor or technical
character, without having any regard to the nature of the
particular misconduct or the past record of service of the
employee, so as to amount to a shockingly disproportionate
punishment.
We have, therefore, to see as to whether in the light
of our findings on point nos.2 and 3 the respondent could
rely upon any of these clauses of item no.1 of Schedule IV
in support of his complaint. Now a mere look at the
aforesaid provision shows that an employee who makes a
grievance against order of discharge or dismissal passed
against him can invoke any of the listed clauses (a) to (g)
of item no.1 of Schedule IV. Learned counsel for the
appellant was, therefore, right when he contended that first
it should be alleged by the complainant-employee that he was
discharged or dismissed from service by the employer and
then he has to further show whether such an order attracted
any of the clauses (a) to (g) of item no.1 of Schedule IV.
Learned counsel for the appellant, in this connection,
vehemently contended that item no. 1 of Schedule IV of the
Maharashtra Act deals with only punitive discharges or
dismissals and not any simpliciter discharge order or
termination order which is not passed by way of punishment.
In order to support this contention, learned counsel for the
appellant relied upon principles of interpretation, namely,
the principle of noscitur a sociis as well as the principle
of ejusdem generis. So far as the first principle of
interpretation is concerned, he referred to Maxwell on The
Interpretation of Statutes, 12th Edition at page 289
dealing with the question regarding understanding associated
words in common sense. The learned author in connection
with this principle has made the aforesaid pertinent
observations : Where two or more words which are
susceptible of analogous meaning are coupled together,
noscuntur a sociis. They are understood to be used in their
cognate sense. They take, as it were, their colour from
each other, the meaning of the more general being restricted
to a sense analogous to that of the less general. (One
application of this general principle is the ejusdem generis
rule, which is discussed in the next section of this
chapter.)
It becomes, therefore, obvious that before this
principle of interpretation can be pressed in service, it
must be shown that both the words discharge and dismissal
are employed by the Legislature in Schedule IV item no.1 in
the same sense or that they are susceptible of analogous
meaning. This rule of construction in other words lays down
as follows : The meaning of a word is to be judged by the
company it keeps.
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As held by this Court in the case of M.K. Ranganathan
& Anr vs. Govt. of Madras & Ors. (AIR 1955 SC 604 at 609)
relying upon Privy Council decision in Angus Robertson v.
George Day, [(1879) 5 AC 63 at p 69 (E)]: It is a
legitimate rule of construction to construe words in an Act
of Parliament with reference to words found in immediate
connection with them.
Keeping in view this well settled principle of
construction of statutes, let us see whether in the settings
of item no.1 clauses (a) to (g) the word discharge as
employed by the Legislature has meaning analogous to that of
the word dismiss. When we have a close look at clauses
(a) to (g) of item no.1 of Schedule IV, we find that the
word discharge is not intended by the Legislature to have
the same or analogous meaning as the word dismiss. The
reason is obvious. The word dismiss necessarily connotes
an action of the employer who seeks to impose punishment on
his mis- conducting employee. Such a punishment cannot be
imposed without following the principles of natural justice
and the relevant applicable rules of domestic inquiry. But
the word discharge is not necessarily confined to orders
of termination by way of penalty only. The word discharge
has wider connotations. A mis-conducting employee facing
charges in a domestic inquiry may be punished by way of
imposing on him an order of dismissal which may make him
ineligible for any other employment but if it is found that
the charges which are proved are not that serious but the
employee would not deserve to be continued in service then
an order of discharge by way of lesser penalty can be
imposed on him. Such an order would remain a punitive
discharge. Thereby the employer wants to punish the
employee for his misconduct but does not want him to become
ineligible for employment elsewhere considering less serious
nature of proved charges of misconduct against him in
domestic inquiry. But that is not the end of the matter.
In service jurisprudence the term discharge has assumed a
wider connotation and may include in its fold not only
punitive discharge orders but also simpliciter discharge
orders where the employer seeks to snap the relationship of
employer and employee but without any intention to penalise
the employee. He does so because of exigencies of service
and employment conditions which may require him to say
goodbye to the employee but without any intention to punish
him. Such simpliciter discharge orders can be illustrated
as under :
An employee, on probation, may not be found to be
suitable and may not earn sufficient merit so as to be
confirmed in service. Consequently, his probation may be
terminated and an order of discharge simpliciter can be
passed against him. There may also be other cases of single
discharge under the contract of employment for a fixed
period where an employee on efflux of time may be
terminated. There may also be cases where an employee may
become surplus and would no longer be required by the
employer. An order of retrenchment, therefore, may be
passed against him subject, of course, to following the
statutory requirements of Section 25-F and 25-G of the I.D.
Act if they are applicable. These illustrations are not
exhaustive but they indicate such orders of discharge are
passed by an employer who does not want to punish the
employees but still is not in a position to continue them in
service. Such simpliciter discharge orders are also a
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category of discharge orders. Therefore, the word
discharge as employed by the Legislature in item no.1 of
Schedule IV cannot necessarily be confined only to punitive
discharges as tried to be submitted by learned counsel for
the appellant. Once we consider the words discharge or
dismissal as employed in the opening part of item no.1 by
the Legislature in the light of various clauses representing
different situations under which such discharge or dismissal
orders are said to amount to unfair labour practice on the
part of the employers, it becomes at once clear that the
Legislature was not contemplating only punitive discharge
orders but was contemplating both types of discharge orders,
namely, punitive as well as non-punitive discharge orders.
The very first item (a) deals with the discharge or
dismissal order passed by way of victimisation of the
employee. It is easy to visualise that an employer may like
to dispense with the services of an employee who, according
to him, is a trouble maker. He may not have been involved
in any misconduct as such still by way of putting an end to
his service on extraneous reasons, if an order of discharge
is passed it may remain simpliciter order of discharge but
if it is found based on extraneous reasons it would be by
way of victimisation. Such a discharge order may not
necessarily be a punitive discharge order. The employer
would not like to punish the employee for any of his
misconduct but would not like him to continue in service as
according to the employer he may be an undesirable person
not suitable to the management is for example a militant
trade union leader who, according to the employer, is any
how to be required to be sent out of service. When such
type of discharge orders are passed by way of victimisation
they would be simpliciter discharge orders when not backed
up by relevant reasons. It cannot be said that such
simpliciter discharge orders are not covered by item 1
clause (a) of Schedule IV. Similarly clause (b) may
contemplate a discharge order which is not passed in good
faith but in the colourable exercise of employers rights.
Thus, the employer may have merely a pretext to put an end
to the service of the employee who may not have misconducted
himself at all. Therefore, there will be no occasion to
have any departmental inquiry against him as no charge could
be framed regarding any misconduct on his part. Still if
such an undesirable employee is to be removed from service
then even though the simpliciter discharge order is passed
if it is shown that it is not in good faith but as a result
of malafide intention of the employer, then such a discharge
order can also attract the category of unfair labour
practice as enacted by the Legislature in item nos. (a)
and (b). Similar Legislature scheme is discernible from
clause (c) of item no. 1 which deals with an order of
discharge or dismissal by falsely implicating an employee in
a criminal case on false evidence or on concreted evidence.
In such a situation discharge or dismissal order may operate
as a penal order. Similarly, clause (d) may cover cases
which are orders of discharge or dismissal by way of penalty
as well as simpliciter discharge orders based on a patently
false reasons. Clause (e) referring to discharge or
dismissal may cover both the cases of dismissal by way of
penalty on such grounds or discharge by way of penalty on
such grounds and equally a discharge order simplicitor on
account of false allegations of absence without leave. So
far as Clause (f) is concerned, the first part squarely
covers a case of dismissal or discharge by way of penalty as
it deals with such orders passed after conducting domestic
inquiry about the alleged misconduct of the employee but in
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utter disregard of the principles of natural justice but so
far as the second part of clause (f) of item no.1 is
concerned, if an employee is dismissed with undue haste it
may be by way of penalty as in domestic inquiry apart from
following the principles of natural justice, sufficient and
reasonable opportunity to defend may be denied to the
employee and with undue haste the dismissal order may be
passed. That would obviously be a penal order but so far as
discharge order is concerned, it may also be passed by way
of penalty with undue haste but the said part of clause (f)
may equally cover those discharge orders which are
simpliciter discharge orders not by way of penalty but still
being passed with undue haste on the part of the employer
who may not be wishing to punish the employee but wishing to
say goodbye to the employee on the ground that he is
otherwise an unwanted person. Such discharge orders passed
with undue haste may not necessarily be penal and still may
amount to unfair labour practice if they are passed with
undue haste. Clause (g) of item no.1 obviously refers to
only discharge or dismissal orders which are penal in nature
as they have a direct linkage with misconduct of the
employee.
The aforesaid resume of various clauses of item no.1
of Schedule IV leaves no room for doubt that when the
Legislature used the words discharge or dismissal of the
employees under circumstances enumerated in clauses (a) to
(g) in item no.1 of Schedule IV it contemplated dismissal
orders which obviously are penal in nature but it also
contemplated discharge orders which may either be penal or
non- penal in nature and still if any of the relevant
clauses of item no. 1 got attracted in connection with such
discharge orders they would make the employer, author of
such discharge orders answerable for the alleged unfair
labour practice permeating the passing of such simpliciter
discharge orders. To recapitulate, in the present case,
respondents complaint is not that his discharge was by way
of penalty but his complaint is that the discharge order in
his case was a result of victimisation and was not passed in
good faith but was passed on patently false reasons and was
a result of undue haste on the part of the
appellant-employer. Whether the said complaint was
justified on merits or not is a different matter but it can
not be said that such a complaint regarding non-penal
discharge order was dehors the scope and ambit of item no.1
of Schedule IV of the Maharashtra Act. Before parting with
the discussion on this aspect we may mention that learned
counsel for the appellant also relied upon the other rule of
interpretation, namely, rule of ejusdem generis. The said
rule of interpretation provides as follows :
When particular words pertaining to a class, category
or genus are followed by general words, the general words
are construed as limited to things of the same kind as those
specified. This rule which is known as the rule of ejusdem
generis reflects an attempt to reconcile incompatibility
between the specific and general words in view of the other
rules of interpretation that all words in a statute are
given effect if possible, that a statute is to be construed
as a whole and that no words in a statute are presumed to be
superfluous.
It is difficult to appreciate how this principle of
interpretation can be invoked by learned counsel for the
appellant in connection with item no.1 of Schedule IV. The
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word discharge is a general word. It is followed by the
word dismissal which contemplates only one category of
cases or situations where penalty is imposed by the employer
on the workmen concerned. The rule of ejusdem generis would
have applied if the word discharge represented a
particular species belonging to the genus reflected by the
general word dismiss. This is a converse case where a
general word discharge is followed by the word dismiss
which is of a particular nature or pertains to a limited
class or category of penal situations. Obviously,
therefore, neither of them is a genus and nor of them is a
species of the very same genus. The word discharge
connotes an entirely different category of orders comprising
of both simpliciter discharge orders not by way of penalty
as well as discharge orders by way of penalty but not
involving extremely pernicious results flowing from such
orders while the word dismiss is purely an order of
penalty and that too of an extreme type. Consequently, the
aforesaid rule of interpretation cannot be of any avail to
learned senior counsel for the appellant. On the contrary,
as seen by us earlier, the words discharge and dismissal
as employed by the Legislature in item no.1 of Schedule IV
covered different types of situations and circumstances
under which they are passed. It is, therefore, not possible
to agree with the submission of learned senior counsel for
the appellant that unless the respondent shows that he was
discharged by way of penalty, he cannot invoke any of the
clauses of item no.1 of Schedule IV.
Before leaving the discussion on this aspect, we may
refer to a decision of this Court on which strong reliance
was placed by learned counsel for the appellant. In the
decision of the Constitutional Bench of this Court in State
of Rajasthan & Anr. vs. Sripal Jain, (1964 (1) SCR 742),
this Court was concerned with the interpretation of Rule
244(2) of the Rajasthan Service Rules read with rule 31(vii)
(a) of the Rules. In the light of the said statutory scheme
of these Rules, the Court made the following pertinent
observations :
Held, that compulsory retirement provided in r.
31(vii)(a) is a compulsory retirement as a penalty and not
compulsory retirement of the other two kinds namely (1)
Compulsory retirement on attaining the age of superannuation
and (2) compulsory retirement under r.244(2), neither of
which is a punishment
It is difficult to appreciate how the said decision
rendered on the special scheme considered by this Court in
that case can be of any assistance to learned counsel in the
present case. The scheme with which we are concerned
contraindicates any such conclusion as tried to be pressed
in service by learned counsel in support of his contention
that the word discharge is used synonymously or
analogously by the Legislature along with the word
dismissal. It is also well settled that the word
discharge may not only be by way of penalty. Discharge of
a probationer on unsuitability, as noted earlier, would not
be by way of penalty. Similarly, even in case of compulsory
retirement as laid down by a catena of decisions of this
Court in the context of the relevant statutory rules, this
action may not be penal. In this connection, we may refer
to a decision of this Court in K.Kandaswamy vs. Union of
India & Anr., (JT 1995 (7) S.C. 80), wherein it has been
observed that .Compulsory retirement does not amount to
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dismissal or removal from service within the meaning of
Article 311 of the Constitution. It is neither punishment
nor visits with loss of retiral benefits ; nor does it cast
stigma
Consequently, it cannot be held that wherever the word
discharge is used in any statutory instrument it must
necessarily connote a penal discharge as tried to be
submitted by learned counsel for the appellant. In the case
of High Court of Judicature at Patna vs. Pandey Madan Mohan
Prasad Sinha & Ors. [(1997) 10 SCC 409], it has been held
by the Bench of this Court that if a probationer is
discharged on the ground of unsuitability, the said order
can be challenged only on the ground that it is arbitrary or
punitive. If it is not punitive then such an order cannot
be challenged at all. It is further observed that
principles of natural justice have no application in case of
termination of services of a probationer during the period
of probation since he has no right to hold that post. In
such case, it is obvious that discharge of such a
probationer on the ground of unsuitability cannot be treated
to be a punitive discharge.
Once this ground is cleared, the arena of contest
between the parties becomes well defined. It has to be
pleaded and proved by the respondent-complainant that though
the order of termination or retrenchment was not passed by
way of penalty by the appellant, it attracted all or any of
the clauses (a),(b),(d) & (f) of item no.1 of Schedule IV as
his complaint was based on these clauses only. In the light
of the evidence which is on record and on which there is no
dispute between the parties, it becomes clear that the
appellant wanted to switch over to the process of composing
by utilising photo type-setting machine and in the process
the hand composing department engaging respondent and other
workmen had to be wound up. That naturally resulted in the
employees in the erstwhile hand composing department
becoming excess and surplus. That is the reason why
impugned notice under Section 9-A of the I.D. Act was
issued to the respondent and other workmen and ultimately
resulted in the impugned retrenchment order. It is
difficult to appreciate how such an action on the part of
the appellant can be treated to have been the result of
victimisation. The respondent was not being victimised for
any extraneous reason. On the contrary, it was based on a
genuine factual reason. Hence picture. clause (a) of item
no.1 of Schedule IV is out of Parameters of the term@@
IIIIIIIIIIIIIIIIIIIIIIIII
victimisation have been considered by a three Judge Bench@@
IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII
of this Court in the case of Colour-chem Limited vs. A.L.
Alaspurkar & Ors. [1998 (1) Scale 432], where one of us,
S.B.Majmudar J., speaking for the Bench in para 13 of the
report observed that the term victimisation is a term of
comprehensive import. Thus, if a person is made to suffer
by treatment, it would amount to victimisation. On the
facts of the present case, therefore, it is not possible to
hold that the impugned discharge of the respondent was based
on non-germane or extraneous reasons or it was passed with a
view to make the respondent suffer for no real reason.
It is, therefore, not possible to agree with the
reason of the Division Bench of the High Court in the
impugned judgment that the action of the appellant was by
way of victimisation of the respondent. Item no.1 clause
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(a) of Schedule IV, therefore, does not apply to the facts
of the present case.
On a parity of reasoning it has to be held that the
discharge of the respondent from service cannot be said to
be not in good faith but in the colourable exercise of
employers rights. It cannot be gainsaid that the appellant
had good reason to discharge the respondent who was rendered
surplus in hand composing department because of the
introduction of the machine in question. It is difficult to
impute any bad faith to the appellant as the appellant tried
its best to provide alternative job to the respondent at
Jalgaon but the said offer was not accepted by the
respondent and, on the contrary, the transfer order was got
declared illegal and an act of unfair labour practice in
proceedings culminating before the Tribunal. Clause (b) of
item no.1 of Schedule IV, therefore, is also not attracted
on the facts of the present case. The third prank of
respondents complaint pertains to the applicability of
clause (d) of item no.1 of Schedule IV. The said clause can
be attracted only if it is shown that the impugned
termination was for patently false reasons. It is difficult
to appreciate how the Division Bench persuaded itself to
hold that the said clause was attracted on the facts of the
present case. The appellant had a genuine reason for
terminating the services of the respondent as hand
composition department had become redundant on account of
the introduction of the machine in question. It is true, as
submitted by learned counsel for the respondent, that the
impugned retrenchment order dated 22.6.1982 showed that the
management, as per notice under Section 9-A, had noted that
it may require to reduce 25 workmen from service for the
purpose of introducing new technology. It is also true that
the new technology was already introduced by the management
months prior to the day of the termination order dated 22nd
June, 1982, to be precise from January, 1981 on an
experimental basis as submitted by learned counsel for the
appellant and on regular basis at least from November, 1981.
Still it cannot be held that the proposed termination was
not based on real reason or was effected on patently false
reasons. If no such machine was ever introduced and still
such a ground was made out for passing the impugned order,
then it could have been said that the impugned termination
was passed on patently false reasons. The patently false
reason would be one which has no existence at all in fact
and is a mere pretext or an excuse. Such is not the
situation in the present case. It may be that the reason
given may not be strictly accurate in the sense machine was
already introduced and was not likely to be introduced by
the time notice under Section 9-A was given followed by the
impugned termination order. That may have effect of
non-compliance of the provisions of Section 9-A. The said
notice, as we have seen earlier, on that score may become
inoperative or illegal. Still the reason for termination
cannot be said to be patently false. We, therefore,
disagree with the conclusion of the Division Bench of the
High Court in view of our aforesaid findings regarding
non-applicability of clauses (a), (b) & (d) of item 1 of
Schedule IV. On this conclusion, we would have been
required to dismiss the respondents complaint but for the
fact that the fourth leg of the respondents complaint
invoking clause (f) second part of item no.1 cannot be said
to be non-existent or unjustified or uncalled for. As we
have already discussed, order of discharge whether punitive
or non-punitive if found to be the result of undue haste on
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the part of the employer, the inevitable result will be that
the employer would be guilty of unfair labour practice as
laid down by Schedule IV item no.1 clause (f) second part.
In the facts of the present case, the decision rendered by
the Division Bench of the High Court on this score cannot be
found fault with. It has to be recalled that the
proceedings in connection with notice under Section 9-A were
pending in conciliation. Efforts were made by the
Conciliation Officer for seeing that the parties come to an
amicable settlement. Of course, those efforts failed and on
22nd June, 1982 by 4.35 p.m. the Conciliation Officer
orally declared that the conciliation had failed and
investigation was at an end. However, as seen earlier, that
was not the end of the matter. The Conciliation Officer did
not become functus officio on that day. As per Section 12
sub-section (4) of the I.D. Act thereafter he had to give a
full report setting forth the steps taken by him for
ascertaining the facts and circumstances relating to the
dispute and for bringing about a settlement thereof,
together with a full statement of such facts and
circumstances, and the reasons on account of which, in his
opinion, a settlement could not be arrived at. That
obviously would have taken a few days, if not more, before
such report could have been prepared by the Conciliation
Officer. It is, therefore, difficult to appreciate how the
appellant in hot hurry and within almost half an hour from
the close of investigation on the very same day by 5O clock
in the evening could pass the impugned termination order
against the respondent. It has to be appreciated that in
the report which was to follow, the Conciliation Officer was
required to highlight the nature of the dispute between the
parties in the light of the notice under Section 9-A given
by the appellant to the respondent union. It is easy to
visualise that even in such a failure report the conciliator
could have given his prima-facie opinion regarding the
nature of the dispute and the reasonableness thereof. It is
also to be kept in mind that once such report reaches the
State Government, in the light of the report if the State
Government finds that the dispute is a genuine dispute which
requires adjudication, it may make an order of reference or
if, on the other hand, the State Government finds from the
report that the dispute is frivolous it may not make a
reference but that stage could reach only after the report
is received and scrutinised by the State Government. Under
these circumstances, for passing the impugned retrenchment
order within half an hour of the close of investigation by
the Conciliation Officer, the appellant could not have
presumed that the report would necessarily indicate total
frivolousness of the dispute and that would not persuade the
State to make a reference of the dispute for adjudication by
a competent Court. Without waiting to see as to what will
be the nature of the report and the contents, the appellant
tried to help itself and in undue hurry passed the impugned
order. The result was that by one stroke the appellant
pre-empted the report of the conciliator on the one hand and
on the other hand even the future objective action of the
State Government on such a report. It is also important to
note that on the report of the conciliator, the State
Government could have thought it fit to refer the dispute
for adjudication and in the present case on the basis of the
said report, reference was in fact made by the State
Government regarding the legality of the scheme of
rationalisation resulting in the likelihood of retrenchment
of the workmen concerned. The said reference became
infructuous only because the appellant, in the meantime,
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invoked jurisdiction of the Labour Court under Section 28 of
the Maharashtra Act. That resulted in the applicability of
Section 59 of the Maharashtra Act which lays down as under :
If any proceeding in respect of any matter falling within
the purview of this Act is instituted under this Act, then
no proceeding shall at any time be entertained by any
authority in respect of that matter under the Central Act
or, as the case may be, the Bombay Act; and if any
proceeding in respect of any matter within the purview of
this Act is instituted under the Central Act, or, as the
case may be, the Bombay Act, then no proceeding shall at any
time be entertained by the Industrial or Labour Court under
this Act.
It is because of the aforesaid provision of Section 59
of the Maharashtra Act that the referred dispute under
Section 10 of the I.D. Act got disposed of. However, the
fact remains that on the failure report submitted by the
Conciliation Officer the appropriate Government had thought
it fit to prima facie hold that the dispute was a real one
which required adjudication by the competent Court under the
I.D. Act. It is also necessary to note that in such
references received by the competent Court under the I.D.
Act in appropriate cases, the Court to which such references
are made has ample jurisdiction to pass interim orders and
if the Court had found that the impugned retrenchment order
was required to be stayed even though it had been passed
after conciliation proceedings were over and when there was
no prohibitory order from any authority such retrenchment
order could have been stayed. Further implementation of the
impugned change could have been stayed vide The Management
Hotel Imperial, New Delhi and others vs. Hotel Workers
Union (AIR 1959 SC 1342) and The Hind Cycles Ltd. and
another vs. The Workmen (AIR 1974 SC 588).
It is also to be noted that in the facts of the
present case, as already held by us on point no.1, the
conciliation proceedings had not terminated when the
impugned order was passed. The result was that Section
33(1) got violated and the appellant became liable to be
punished as per Section 31(1) of the I.D. Act incurring a
penalty for being convicted of an offence punishable with
imprisonment for a term which may extend to 6 months or with
fine or with both. Thus the impugned order cannot, but be
held to have been passed with undue haste. The intention
behind passing such a hurried order was obviously to cut
across and pre-empt the submission of failure report by the
conciliator on the one hand and its consideration by the
State on the other and even for avoiding the future
possibility of a reference under the I.D. Act and also the
future possibility of the Courts intervention by way of
interim relief against such order. But to crown it all by
such undue hurry the appellant made itself liable to be
punished and incurred a criminal liability for the same.
All these consequences unequivocally project only one
picture that the impugned order was passed in a great hurry
and with undue haste. This conclusion is inevitable on the
aforesaid facts which have remained well established on the
record of the present case. Consequently, agreeing with the
view of the Division Bench in the impugned judgment it must
be held that the respondents complaint was well sustained
at least under clause (f) second part of item 1 of Schedule
IV and as the impugned order was passed with undue haste the
inevitable result is that by the said act the appellant is
liable to be treated as guilty of unfair labour practice.
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We may also mention in this connection one another
facet of this question. As the Conciliation Officer, after
hearing the parties, had declared that investigation was
over and settlement had not taken place, at least a few days
were available after 22nd June, 1982 to the appellant for
moving the Conciliation Officer to give the appellant
permission to retrench the respondent. It is not possible
to agree with the finding of the Labour Court that the
Conciliation Officer could not have entertained such a
request. He had not even drafted his report, much less
submitted the same to the State Government at least within a
few days after 22nd June, 1982. The very fact that the
report reached the State Government on 13th August, 1982
shows that the conciliator would have despatched the same at
least a couple of days after 22nd June, 1982, having
complied with all the statutory requirements under Section
12(6) for preparation of such a report. Even on the next
day of 22nd June, 1982 such a request could have been made
by the appellant and the conciliator would not have felt any
inhibition in recalling both the parties and hearing them on
such a request on the part of the appellant to give
permission to it to pass the impugned termination order as
the conciliation had failed. Even by passing such a legally
permissible and factually feasible course, and without
waiting even for more than half an hour the impugned order
was passed. It is easy to visualise that it was possible
that if such a request was made by the appellant it could
have been granted or it could have been rejected. If such a
request was rejected by the conciliator then, of course, the
impugned order could not have seen the light of the day and
if thereafter the State Government had made the reference
after reading the failure report, then the existing position
regarding service condition of the respondent could have
been continued by the reference Court pending the
adjudication of such a dispute. The appellant with a view
to avoid all these uncomfortable situations indulged in self
help and passed the impugned order on the very evening of
22nd June, 1982. This is an additional facet of the
deliberate undue haste resorted to by the appellant for
short circuiting all possible inconvenient situations and to
present the respondent with a fait accompli and also to
placate the Conciliation Officer on the one hand and the
State Government on the other and ultimately the reference
Court also. Consequently it must be held that the impugned
order was clearly a result of undue haste and, obviously
amounted to unfair labour practice on the part of the
appellant as per Schedule IV item 1 clause (f) second part.
Consequently, this point for determination is held against
the appellant and in favour of the respondent only to the
extent of applicability of the aforesaid provision.
Point No.5: So far as this point is concerned, we
have already noted that the Labour Court itself has found
that notice under Section 9-A was a belated one and should
have been given at least by November, 1981 when the machine
in question became fully operative resulting in displacement
of workers in hand composing department. Still by curious
reasoning, it has been held that there was nothing wrong
with the notice though given belatedly and that the
termination order was also not offending Section 33(1) of
the Act. These findings show patent errors of law and could
not be sustained. The Industrial Court, on the other hand,
came to an equally erroneous finding on the applicability of
item 10 of Schedule IV of the I.D. Act when it held that
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the said item would apply not at the time when the
rationalisation scheme was introduced, but at the time when
the employer desired or decided to terminate the services of
the employees. This reasoning of the Industrial Court is
contrary to the very scheme of item 10 of Schedule IV of
I.D. Act and totally ignores the term likely to lead to
retrenchment as found in the said item. The reasoning of
the Industrial Court almost amounts to rewriting the said
phrase as decide to retrench the workmen. These patent
errors of law committed by the Labour Court and the
Industrial Court were totally bypassed by the learned Single
Judge while he dismissed the Writ Petition. These patent
errors of law, therefore, were rightly set aside by the
Division Bench of the High Court in the Letters Patent
Appeal. It could not, therefore, be said that the impugned
judgment had tried to interfere with the pure findings of
the fact reached by the authorities below on evidence
against the respondent. It was perfectly open to the
Appellate Court in the hierarchy of proceedings to interfere
with such patent errors of law and to correct them,
otherwise it could have been said that it had failed to
discharge its duty and that would have also amounted to
failure to exercise jurisdiction on its part. The aforesaid
point is, therefore, answered in affirmative against the
appellant and in favour of the respondent by holding that
the Appellate Court had corrected patent errors of law and
had not interfered with the pure findings of the facts not
connected with the relevant questions of law with which they
were intertwined.
Point No.6: Now is the time for us to take stock of
the situation in view of our aforesaid findings on the
relevant points for determination. The final order passed
by the High Court in the impugned judgment has to be
sustained. However, one aspect of the matter cannot be lost
sight of while closing the present chapter. The
respondents services were terminated on 22nd June, 1982 and
that the termination is found to be amounting to unfair
labour practice as per the provisions of Section 30 of the
Maharashtra Act. On this conclusion, the appellant has to
be asked to withdraw such unfair labour practice, meaning
thereby, the impugned order has to be set aside and,
thereafter, affirmative action including reinstatement of
the employee with or without back-wages could be ordered by
the Labour Court in these proceedings. However, as the High
Court has noted that reinstatement is out of question as
respondent has reached the age of superannuation, in the
meantime, with effect from 3.5.1995, therefore, at the
highest the respondent is entitled to back-wages for 13
years with gratuity and other retirement benefits. That is
precisely what is ordered by the High Court in the impugned
judgement. However, learned counsel for the appellant is
right when he contends that even before the conciliator the
respondents union on behalf of its members including the
present respondent who were all facing retrenchment
suggested that they were prepared to accept compensation @ 4
months wages per every completed year of service with a view
to settle the dispute. This suggestion on behalf of the
workmen by their union is noted by the conciliation officer
in his report which reached the State Government on 13th
August, 1982. It may be seen that by that time the impugned
retrenchment order was only two months old as it was passed
on 22nd June, 1982. It is also noted by the conciliation
officer that this proposal did not find favour with the
management. If it had been accepted by the management at
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that time the respondent-workman would have been satisfied
by way of compensation amounting to only one third of the
back- wages for each year of service. It is, of course,
true that years rolled by thereafter and the compromise did
not go through. It is also true that the value of money in
1982 was much higher than what it is today. It is also true
that the respondent has been denied not only back-wages but
also interest on the said amount which would have been
available to him years back. However, one aspect of the
matter cannot be lost sight of. There is nothing on record
to show that the respondent was gainfully employed or was
not employed in any alternative avocation during all these
years. It is, of course, true that it was for the appellant
to point out as to how grant of back-wages should be reduced
on account of the gainful employment of the respondent, in
the meantime. Such an effort was not made by the appellant.
However, still one fact which stares in the face of the
respondent is well established that the appellant has tried
his best to accommodate the respondent in alternative
employment at Jalgaon where hand composing department was
working. If the respondent accepted the said offer he would
have earned his full wages all throughout till retirement.
Thus in a way the respondent also was responsible for the
unfortunate situation in which he found himself during all
these years. It is also to be noted that the complaint
filed as early as on 25th June, 1982 remained dismissed in
the hierarchy of proceedings from the Labour Court onwards
up to the learned Single Judges decision in the High Court
and it is only in the Letters Patent Appeal that he
ultimately succeeded. Considering all these aspects, in our
view, interest of the justice will be served if, while
confirming the final order of the High Court impugned in
this appeal, a modification is made regarding back-wages
payable to the respondent. This is required also in view of
the further fact that we disagree with the conclusion of the
Division Bench of the High Court that the appellant was
guilty of unfair labour practice under item Nos.1(a), (b)
and (d) of Schedule IV of the Maharashtra Act and the
decision of the High Court is being confirmed regarding
unfair labour practice of the appellant only under item
1(f) second part of Schedule IV of the said Act. While
considering the grant of appropriate back-wages, we deem it
fit to adopt the same yardstick which was suggested by the
respondent-workmans union for all its members including the
respondent that one third of back wages for each completed
year of service would be acceptable to them. We,
accordingly, deem it fit to modify the final order of the
High Court to the following extent : The appeal of the
respondent before the High Court will be treated to be
allowed by holding that the appellant management had
indulged in unfair labour practice only under item 1(f)
second part of Schedule IV of the Maharashtra Act with the
consequential direction that the appellant was not to
indulge into and shall desist from indulging into such
unfair labour practice.
The second modification in the impugned judgment of
the High Court will be to the extent that the appellant
shall pay to the respondent-workman 1/3rd (i.e. 33%
approx.) of back-wages with all other consequential benefits
from 22nd June, 1982 till the date of his superannuation
i.e. 3rd May, 1995. The said amount shall be paid by the
appellant to the respondent within a period of 3 months from
the date of this judgment and in case of failure to pay the
said amount within that time the appellant shall be liable
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to pay the said amount with running interest of 12% on the
expiry of 3 months from today till the date of actual
payment. Subject to the aforesaid modifications in the
judgment and final order of the High Court impugned in this
appeal, the appeal stands dismissed.
In the facts and circumstances of the case, there will
be no order as to costs.