Full Judgment Text
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PETITIONER:
KRISHNA DISTRICT CO-OPERATIVE MARKETINGSOCIETY LIMITED, VIJA
Vs.
RESPONDENT:
N.V. PURNACHANDRA RAO & ORS.
DATE OF JUDGMENT03/08/1987
BENCH:
VENKATARAMIAH, E.S. (J)
BENCH:
VENKATARAMIAH, E.S. (J)
SINGH, K.N. (J)
CITATION:
1987 AIR 1960 1987 SCR (3) 728
1987 SCC (4) 99 JT 1987 (3) 197
1987 SCALE (2)175
ACT:
Andhra Pradesh Shops and Establishments Act, 1966: ss.
40 & 41: Retrenchment of workmen by the
establishment--Nature of proceedings under the Act--Employ-
er--Whether to comply with s. 25F of the Industrial Disputes
Act.
Industrial Disputes Act, 1947: ss. 25F &
25J--Workmen-Services terminated under s. 40, A.P. Shops and
Establishments Act-Whether entitled to relief under the
Central Act.
Constitution of India, Art 254(2): Repugnancy between
the special provisions contained in an earlier law and
general provisions of later law--Implications of.
HEADNOTE:
Sub-section (1) of s. 40 of the Andhra Pradesh Shops and
Establishments Act, 1966 interdicts the employer governed by
the Act from terminating the services of an employee without
complying with the conditions laid therein. Section 25F of
the Industrial Disputes Act, 1947 lays down conditions
precedent to retrenchment of workmen noncompliance with
which will be fatal to any order of retrenchment.
The petitioner-society retrenched the respondents on the
ground that the business of the management did not warrant
the continuance of its heavy establishment. In an appeal
under s. 41(1) of the Act the appellate authority set aside
the orders and directed reinstatement of the respondents.
The Labour Court set aside the orders of the appellate
authority in respect of some of the respondents.
A Single Judge of the High Court found that the respond-
ents were ’workmen’ and the management was an ’industry’ as
defined in the Industrial Disputes Act but dismissed the
writ petition holding that they could not claim the benefit
of s. 25F of the Industrial Disputes Act in a proceeding
under s. 41 of the State Act, being of the view that there
was no scope either in the language of s. 40 of the State
Act or its implication making it obligatory to read the
condition of s. 25F of the Central Act as
729
part of s. 40 of the State Act, that the statutory authori-
ties, created under s. 41(1) and s. 41(3) of the State Act
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being creatures of the statute, had no right to apply the
provisions of s. 25F of the Central Act to proceedings
before them and that whereas the rights under the Central
Act could be agitated by a reference to a Labour Court the
right agitated under s. 41(1) and s. 41(3) was a personal
right.
The Division Bench on appeal by the respondents held
that the orders of termination were unsustainable. It took
the view that the question of their retrenchment was gov-
erned by s. 25F.
In the special leave petition it was contended on behalf
of the management that the provisions of s. 40, which deal
with termination of service in a shop or establishment
contained in the State Act, which is a later Act, being
repugnant to the provisions contained in Chapter V-A of the
Central Act, which is an earlier law, should prevail as the
assent of the President has been given to the State Act.
Dismissing the special leave petition,
HELD: 1.1 The High Court was right in holding that s.
25F of the Industrial Disputes Act having not been complied
with, all the terminations were illegal. The respondents
were, therefore. entitled to be reinstated in service with
full back wages. [743A]
1.2 If the employees are ’workmen’ and the management is
an ’industry’ as defined in the Industrial Disputes Act and
the action taken by the management amounts to ’retrench-
ment’, then the rights and liabilities of the parties are
governed by provisions of Chapter V-A of that Act and the
said rights and liabilities may be adjudicated upon and
enforced in proceedings before the authorities under s.
41(1) and s. 41(3) of the Andhra Pradesh Shops and Estab-
lishments Act. In the instant case the Single Judge of the
High Court had found that the respondents were ’workmen’ and
the management was an ’industry’ as defined in the Central
Act. [741H-742A, 738C]
1.3 Sub-section (1) of s. 25J of the Industrial Disputes
Act lays down that Chapter V-A shall have effect notwith-
standing anything inconsistent therewith contained in any
other law. The proviso to that sub-section, however, saves
any higher benefit available to a workman under any law,
agreement or settlement or award. Sub-section (2) of s. 25J,
which makes a distinction between any machinery provided by
any State law for settlement of industrial disputes and the
substantive
730
rights and liabilities arising under Chapter V-A of the
Central Act, provides that while that section would not
effect the provisions in a State law relating to settlement
of industrial disputes, the rights and liabilities of em-
ployers and workmen insofar as they relate to lay off and
retrenchment shall be determined in accordance with Chapter
V-A of the Central Act. It is thus apparent that s. 41(1)
and s. 41(3) of the State Act prescribe alternative authori-
ties to settle a dispute arising out of a retrenchment.
Those authorities may exercise their jurisdiction under the
State Act but they have to decide the rights and liabilities
arising out of retrenchment in accordance with the provi-
sions of Chapter V-A. The said rights can be enforced by a
workman personally by himself filing an appeal under s.
41(1) of the State Act. It is not necessary that a reference
should be sought under the Central Act by collective action
of workers. [739A-E]
Sawatram Ramprasad Mills Co. Ltd. v. Baliram Ukandaji
and Another, [1966] 1 SCR 764 and Pest Control India Pvt.
Ltd. v. The Labour Court, Guntur and Another, [1984] 1
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Andhra Weekly Reporter 277, referred to.
2.1 There is no repugnancy between the two Acts. The
State Act, which is a later law, does not contain any ex-
press provision making the provisions relating to retrench-
ment in the Central Act ineffective insofar as Andhra Pra-
desh is concerned. [740E]
2.2 Where there is a conflict between the special provi-
sions contained in an earlier law dealing with retrenchment
and the general provisions contained in a later law general-
ly dealing with terminations of service, the existence of
repugnancy between the two laws cannot easily be presumed.
[740H]
Chapter V-A of the Central Act, which is the earlier
law, deals with rights and liabilities arising out of lay-
off and retrenchment. Section 25J of that Act deals with the
effect of the provisions of Chapter V-A on other laws incon-
sistent with that Chapter. Sub-section (2) of s. 25J is
quite emphatic about the provisions relating to the rights
and liabilities arising out of lay-off and retrenchment. By
enacting that provision Parliament intended that such rights
and liabilities should be uniform throughout India where the
Central Act was in force and did not wish that the States
should have their own laws inconsistent with the Central
law. These are special provisions and they do not apply to
all kinds of termination of services. If the State Legisla-
ture intended that it should have a law of its own regarding
the rights and liabilities arising
731
out of retrenchment it would have expressly provided for It.
The State Legislature had not done so in the instant case.
Section 40 of the State Act deals with termination of serv-
ice generally. In such a situation it cannot be said that
there was any implied repugnancy between the Central law and
the State law. [740F, 741F, 740G, 741FG]
Maxwell on the Interpretation of Statutes, 12th Edn. p.
196 referred to.
[The Act should be suitably amended making it possible
to an individual workman to seek redress in an appropriate
forum regarding illegal termination of service which may
take the form of dismissal, discharge, retrenchment etc. or
modification of punishment imposed in a domestic enquiry.
There is also a great need to review and to bring into
existence an all-India Labour Appellate Tribunal with powers
to hear appeals against the decisions of all Labour Courts,
industrial Tribunals and even of authorities constituted
under several labour laws enacted by the States so that a
body of uniform and sound principles of labour law may be
evolved for the benefit of both industry and labour through-
out India.] [742B-G]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Special Leave Petition
(Civil) Nos. 6887-88 of 1987.
From the Judgment and Order dated 5.2. 1987 of the
Andhra Pradesh High Court in Writ Appeal Nos. 892 and 893 of
1983.
P.R. Ramachandra Rao, Dr. D.Y. Chandrachud, P.H. Parekh
and M.K.S. Menon for the Petitioner.
V.J. Rao and Y. Prabhakara Rao for the Respondents.
The Order of the Court was delivered by
VENKATARAMIAH, J. The question arising for decision in
this case is whether an employer whose establishment is
governed by the Andhra Pradesh Shops & Establishments Act,
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1966 (hereinafter referred to as ’the State Act’) is re-
quired, while retrenching any worker, to comply with the
provisions of section 25F of the Industrial Disputes Act,
1947 (hereinafter referred to as’ the central act’) or with
section 40 of the State Act.
The petitioner in this case is a co-operative society carry-
ing on
732
business at Vijayawada in the State of Andhra Pradesh. It
retrenched nine of its clerks--Respondents 1 to 9 herein.
Respondents 1 to 4 Were retrenched on 1.10.1978 and Respond-
ents 5 to 9 were retrenched on 22.9. 1978 on the ground that
the business of the management did not warrant the continu-
ance of its heavy establishment. All the respondents chal-
lenged the orders terminating their services in an appeal
filed under section 41(1) of the State Act before the appel-
late authority. The appellate authority set aside the orders
of retrenchment by nine separate judgments delivered on
August 1, 1979 and directed the reinstatement of the re-
spondents with full back wages. Aggrieved by the decision of
the appellate authority the management, the petitioner
herein, filed nine appeals before the Labour Court, Guntur
under section 41(3) of the State Act. The Labour Court
allowed the appeals filed against Respondents 5 to 9 and set
aside the orders which had been passed by the first appel-
late authority. It, however, dismissed the appeals filed
against Respondents 1 to 4 holding that the orders of re-
trenchment were bad in law since employees junior to these
respondents had been retained in service. It, however,
directed that any amount paid to Respondents 1 to 4 as
notice pay and gratuity etc. under section 40 of the State
Act on account of the termination of their services may be
deducted from the back wages payable to them. Aggrieved by
the decision of the Labour Court Respondents 5 to 9 filed
Writ Petition No. 163 of 1981 on the file of the High Court
of Andhra Pradesh and the management, the petitioner herein,
filed Writ Petition No. 6151 of 1980 before the High Court
against Respondents 1 to 4. The learned Single Judge who
heard the said two writ petitions dismissed Writ Petition
No. 163 of 1981 filed by Respondents 5 to 9 and allowed Writ
Petition No. 6151 of 1980 filed by the management against
Respondents 1 to 4. The learned Single Judge took the view
that Respondents 5 to 9 could not claim the benefit of
section 25F of the Central Act in a proceeding initiated
under section 41 of the State Act and dismissed their writ
petition. He, however, allowed the writ petition filed by
the management and remanded the case to the Labour Court to
reheat the case after permitting Respondents 1 to 4 to
implead four other employees, namely, Seetharamaiah, Rajago-
pal Rao, Krishna Murthy and Khader Hussain, who were alleged
to be seniors to Respondents 1 to 4 and hearing them on the
question of inter se seniority between them and the said
four other employees. The learned Judge, however, observed
that if section 25F of the Central Act was applicable to the
cases ’I have no doubt that these orders of termination
would have to be set aside, because section 25F denies the
rights of the employer to terminate the service of an em-
ployee without payment of retrenchment compensation’ and
that compensation had
733
not been paid in accordance with section 25F. But he found
that section 25F of the Central Act was not applicable to
proceedings under the State Act. Aggrieved by the decision
of the learned Single Judge Respondents 1 to 4 and Respond-
ents 5 to 9 filed Writ Appeal Nos. 892 Of 1983 and 893 of
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1983 respectively before the Division Bench of the High
Court. The common contention urged by both the groups of
employees, who were appellants in these two appeals, was
that the question of their retrenchment, was governed by
section 25F of the Central Act and since the orders of
retrenchment had not been passed in conformity with the
provisions of section 25F of the Central Act the said orders
were liable to be Set aside and they were entitled to be
reinstated. The Division Bench accepted the above contention
of Respondents 1 to 9 and allowed both the appeals holding
that the orders of termination were unsustainable. Aggrieved
by the decision of the Division Bench of the High Court the
petitioner has filed these Special Leave Petitions under
Article 136 of the Constitution.
The only question which arises for decision in this
case, as mentioned above, is whether the retrenchment of an
employee in an establishment governed by the State Act is
governed by the provisions of section 40 of the State Act or
by the provisions of Chapter V-A of the Central Act which
deals with lay-off and retrenchment. For purposes of conven-
ience section 40 of the State Act is set out below:
"40. Conditions for terminating the services
of an employee and payment of gratuity:---(1)
No employer shall without a reasonable cause
and except for misconduct terminate the serv-
ice of an employee who has been in his employ-
ment continuously for a period of not less
than six months without giving such employee,
at least one month’s notice in writing or
wages in lieu thereof and in respect of an
employee who has been in his employment con-
tinuously for a period of not less than five
years, a gratuity amounting to fifteen days’
average wages for each year of continuous
employment.
Explanation:-- For the purpose of this sub-
section,
(a) the expression ’wages’ does not
include overtime
wages;
(b) the expression ’average wages’
means the daily average of wages for the days
an employee actually worked during the thirty
days immediately preceding the date of termi-
nation of service;
734
(c) an employee in an establishment
shall be deemed to have been in continuous
employment for a period of not less than six
months, if he has worked for not less than one
hundred and twenty days in that establishment
within a period of six months immediately
preceding the date of termination of the
service of that employee;
(d) where the total continuous
employment is for a fraction of a year or
extends over a fraction of a year in addition
to one or more completed years of continuous
employment, such fraction, if it is not less
than a half year shall be counted as a year of
continuous employment in calculating the total
number of years for which the gratuity is to
be given.
(2) Where a gratuity is payable
under sub-section (1) to an employee, he shall
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be entitled to receive his wages from the date
of termination of his service until the date
on which the gratuity so payable is actually
paid subject to a maximum of wages for two
months.
(3). An employee, who has completed
the age of sixty years or who is physically or
mentally unfit having been so declared by a
medical certificate, or who wants to retire on
medical grounds or to resign his service, may
give up his employment after giving to his
employer notice of at least one month in the
case of an employee of sixty years of age, and
fifteen days in any other case; and every such
employee and the dependant of an employee who
dies while in service shall be entitled to
receive a gratuity as provided in sub-section
(1). He shall be entitled to receive the wages
from the date of giving up the employment
until the date on which the gratuity so pay-
able is actually paid, subject to a maximum of
wages for two months.
(4) The services of an employee shall
not be terminated for misconduct except, for
such act or omissions and in such manner, as
may be prescribed."
Sub-section (1) of section 40 of the State Act imposes a
restriction on the right of the employer of an establishment
governed by the State Act to terminate the services of an
employee. It says that an employer shall not without a
reasonable causes (except for miscon-
735
duct) terminate the service of an employee who has been in
his employment continuously for a period of not less than
six months without giving such employee, at least one
month’s notice in writing or wages in lieu thereof and in
respect of on employee who has been in his employment con-
tinuously for a period of not less than five years, a gratu-
ity amounting to fifteen days’ average wages for each year
of continuous employment. In the case of misconduct neither
one month’s notice or wages in lieu thereof nor gratuity
need be paid on the termination of his services. There are
no other restrictions on the right of the management to
terminate the services of an employee in an establishment
governed by the State Act which is enacted by the State
legislature in exercise of the powers conferred on it under
Entry No. 22 of List III of the Seventh Schedule to the
Consititution. The Central Act was enacted by the Central
Legislature before the commencement of the Constitution and
it is also traceable to an Entry in the Government of India
Act, 1935 corresponding to Entry No. 22 of List III of the
Seventh Schedule to the Constitution. When the Central Act
was originally enacted, it merely provided for investigation
and settlement of industrial disputes by establishing a
machinery for collective bargaining, mediation and concilia-
tion, investigation, arbitration, adjudication and other
allied matters. Chapter V-A---lay-off and retrenchment,
making provision for payment of compensation for lay-off,
retrenchment and closure and on transfer of undertakings was
not there. It was introduced by way of amendment in the year
1953. Sections 25F, 25G, 25H and 25J of the Central Act
which are relevant for purposes of this case read as fol-
lows:-
"25F. Conditions precedent to retrench-
ment workmen.--No workman employed in any
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industry who has been in continuous service
for not less than one year under an employer
shall be retrenched by that employer until--
(a) the workman has been given one
month’s notice in writing indicating the
reasons for retrenchment and the period of
notice has expired, or the workman has been
paid in lieu of such notice, wages for the
period of the notice:
Provided that no such notice shall
be necessary if the retrenchment is under an
agreement which specifies a date for the
termination of service;
(b) the workmen has been paid, at
the time of retrenchment, compensation which
shall be equivalent to fir-
736
teen days’ average pay for every completed
year of continuous service or any part thereof
in excess of six months; and
(c) notice in the prescribed manner
is served on the appropriate Government or
such authority as may he specified by appro-
priate Government by notification in the
Official Gazette."
"25G. Procedure for
retrenchment.--Where any workman in an indus-
trial establishment, who is a citizen of
India, is to be retrenched and he belongs to a
particular category of workmen in that estab-
lishment, in the absence of any agreement
between the employer and the workman in this
behalf, the employer shall ordinarily retrench
the workman who was the last person to be
employed in that category, unless for reasons
to be recorded the employer retrenches any
other workman."
"25H. Re-employment of retrenched
workmen.Where any workmen are retrenched, and
the employer proposes to take into his employ
any persons, he shall, in such manner as may
be prescribed, give an opportunity to the
retrenched workmen who are citizens of India
to offer themselves for re-employment, and
such retrenched workmen who offer themselves
for re-employment shall have preference over
other persons."
"25J. Effect of laws inconsistent
with this Chapter.(1) The provisions of this
Chapter shall have effect notwithstanding
anything inconsistent therewith contained in
any other law [including standing orders made
under the Industrial Employment (Standing
Orders) Act, 1946].
Provided that where under the provi-
sions of any other Act or rules, orders,
notifications issued thereunder or under any
standing orders or under any award, contract
of service or otherwise, a workman is entitled
to benefits in respect of any matter which are
more favourable to him than those to which he
would be entitled under this Act, the workman
shall continue to be entitled to the more
favourable benefits in respect of that matter,
no withstanding that he receives benefits in
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respect of other matter under this Act.
737
(2) For the removal of doubts, it is
hereby declared that nothing contained in this
Chapter shall be deemed to affect the provi-
sions of any other law for the time being in
force in any State insofar as that law pro-
vides for the settlement of industrial dis-
putes, but the rights and liabilities of
employers and workmen insorfar as they relate
to lay-off and retrenchment shall be deter-
mined in accordance with the provisions of
this Chapter."
Section 25F of the Central Act deals with the conditions
precedent to retrenchment of workmen non-compliance with
which will be fatal to any order of retrenchment. Section
25G of the Central Act prescribes the procedure for re-
trenchment and under it an employer shall ordinarily re-
trench a workman in accordance with the rule of ’last come,
first go’ unless for reasons to be recorded the employer
retrenches any other workman. Section 25H of the Central Act
requires the management to show preference to retrenched
workmen over others, where any workman is retrenched and the
management proposes to take into its employ any person again
for work, where the retrenched workman offers himself for
re-employment. This indeed is a substantial right. Section
25J of the Central Act which is very material for our pur-
pose provides that provisions of Chapter V-A of the Central
Act shall have effect notwithstanding anything inconsistent
therewith contained in any other law including standing
orders made under the Industrial Employment (Standing Or-
ders) Act, 1946. The proviso to sub-section (1) of section
25J of the Central Act provides that where under the provi-
sions of any other Act or rules, orders, notifications
issued thereunder or under any standing orders or under any
award, contract of service or otherwise, a workman is enti-
tled to benefits in respect of any matter which are more
favourable to him than those to which he would be entitled
under the Central Act, the workman shall continue to be
entitled to the more favourable benefits in respect of that
matter, notwithstanding that he receives benefits in respect
of other matter under the Central Act. Sub-section (2) of
section 25J of the Central Act is more categorical as re-
gards the effect of Chapter V-A of the Central Act on any
other law which may be in force in any State. It provides
that nothing contained in Chapter V-A of the Central Act
shall be deemed to affect the provisions of any other law
for the time being in force in any State insofar as that law
provides for the settlement of industrial disputes, but the
rights and liabilities of employers and workmen insofar as
they relate to lay-off and retrenchment shall be determined
in accordance with the provisions of Chapter V-A of the
Central Act.
738
The learned Single Judge who decided the writ petitions
formulated three points for his consideration, namely, (i)
whether Respondents 1 to 9 were ’workmen’, (ii) whether the
management could be treated as an ’industry’ and (iii)
whether the three conditions laid down by section 25F of the
Central Act would be applicable to the proceedings under the
State Act. He found that both the authority under section
41(1) of the State Act and the authority under section 41(3)
of the State Act had proceeded on the assumption that the
Central Act was applicable to proceedings under the State
Act. On a consideration of the submissions made on behalf of
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the management, the learned Single Judge felt that it was
not possible to hold that Respondents 1 to 9 were not ’wor-
kmen’ and, the management was not an ’industry’ as defined
in the Central Act. Having said so the learned Single Judge
proceeded to decide the third question namely whether sec-
tion 25F of the Central Act could be enforced under the
provisions of the State Act. The learned Single Judge held
that ’there is no scope either in the language of section 40
or its implication making it obligatory to read the condi-
tion of section 25F as a part of section 40 of the Shops and
Establishments Act.’ Then he proceeded to hold that since
the conditions under section 40 of the State Act had been
fulfilled in the case of the Respondents 5 to 9, the termi-
nation was legal. But in the case of Respondents 1 to 4
since it had been alleged that their juniors had been al-
lowed to continue in service the learned Judge felt that the
matter required further consideration and hence remanded the
case because he was of the view that the above question had
to be decided before recording a finding on the question
whether the termination was for a reasonable cause. The
learned Single Judge was however of the view that if section
25F of the Central Act was applicable ’I have no doubt that
these orders of termination would have to be set aside
because section 25F denies the right of the employer to
terminate the services of an employee without payment of
retrenchment compensation.’ The learned Single Judge gave
the following reasons for holding that section 25F was not
applicable to proceedings under the State Act: (i) that the
statutory authorities created under section 41(1) and sec-
tion 41(3) of the State Act being creatures of the statute
had no right to apply the provisions of section 25F of the
Central Act to proceedings before them, and (ii) that where-
as the rights under the Central Act could be agitated by a
reference to a Labour Court, the right agitated under sec-
tion 41(1) and section 41(3) was a personal right. We find
it difficult to agree with the learned Single Judge on both
these grounds. It is already seen that the learned Single
Judge has found that the Respondents were ’workmen’ and the
management was an ’industry’ as defind in the Central Act.
We have explained earlier
739
the effect of section 25J of the Central Act. Sub-section
(1) of section 25J of the Central Act lays down that Chapter
V-A shall have effect notwithstanding anything inconsistent
therewith contained in any other law. The proviso to that
sub-section however saves any higher benefit available to a
workman under any law, agreement or settlement or award.
Sub-section (2) of section 25J however makes a distinction
between any machinery provided by any State law for settle-
ment of industrial disputes and the substantive rights and
liabilities arising under Chapter V-A of the Central Act
where a lay off or retrenchment takes place. It provides
that while section 25J would not affect the provisions in a
State law relating to settlement of industrial disputes, the
rights and liabilities of employers and workmen insofar as
they relate to lay off and retrenchment shall be determined
in accordance with Chapter V-A of the Central Act. It is
thus seen that section 41(1) and section 41(3) of the State
Act prescribe alternative authorities to settle a dispute
arising out of a retrenchment. Those authorities may exer-
cise their jurisdiction under the State Act but they have to
decide such dispute in accordance with the provisions of
Chapter V-A. The learned Single Judge omitted to notice the
effect of section 25J of the Central Act. Sub-section (2) of
section 25J of the Central Act which makes the procedure for
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securing relief under section 41(1) and (3) of the State Act
available to a workman emphasises that the rights and li-
abilities arising out of retrenchment shall be decided in
accordance with Chapter V-A of the Central Act. The said
rights can be enforced by a workman personally by himself
filing an appeal under section 41(1) of the State Act. It is
not necessary that a reference should be sought under the
Central Act by collective action of workers. The effect of
section 25J(2) of the Central Act has been considered by
this Court in Sawattain Ramprasad Mills Co. Ltd. v. Baliram
Ukandaji and Another, [1966] 1 S.C.R. 764. In that case the
question for decision was whether the C.P. and Berar Indus-
trial Disputes (Settlement) Act, 1947 was applicable to the
case involving the determination of the rights and liabili-
ties of the management and workmen in the case of lay-off or
whether the provisions of Chapter V-A of the Central Act
were applicable. The Court found that the C.P. and Berar
Industrial Disputes (Settlement) Act, 1947 contained no
provisions either for recovery of money or for compensation
for lay-off and held that if a workman had a claim arising
in a lay-off it could only be dealt with under the Central
Act. In that case no question similar to the one involved
here was however in issue.
In Pest Control India Pvt. Ltd. v. The Labour Court,
Guntur and Another, [1984] 1 Andhra Weekly Reporter 277 the
Andhra Pradesh
740
High Court has very recently laid down that in considering
whether the termination of service of an employee by way of
retrenchment is legal or justified, it is open to the au-
thority under section 41 of the State Act to determine
whether section 25F and section 25G of the Central Act were
complied with or not and to set aside the orders of termina-
tion and to grant appropriate relief if it is found that
there was no compliance with sections 25F and 25G of the
Central Act. The Division Bench of the High Court while
reversing the decision of the learned Single Judge has
relied on the above decision.
We shall now proceed to consider the merits of the
contention that the State Act which is a later Act and which
has received the assent of the President should prevail over
the provisions of Chapter V-A of the Central Act. The above
contention is based on Article 254(2) of the Constitution
and the argument is that the provisions of section 40 which
deal with termination of service, in a shop or an establish-
ment contained in the State Act which is enacted by the
State Legislature in exercise of its powers under Entry 22
of List III of the Seventh Schedule to the Constitution
being repugnant to the provisions contained in Chapter V-A
of the Central Act which is an earlier law also traceable to
Entry 22 of the List II1 of the Seventh Schedule to the
Constitution should prevail as the assent of the President
has been given to the State Act. It is true that the State
Act is a later Act and it has received the assent of the
President but the question is whether there is any such
repugnancy between the two laws as to make the provisions of
the Central Act relating to retrenchment ineffective in the
State of Andhra Pradesh. It is seen that the State Act does
not contain any express provision making the provisions
relating to retrenchment in the Central Act ineffective
insofar as Andhra Pradesh is concerned. We shall then have
to consider whether there is any implied repugnancy between
the two laws. Chapter V-A of the Central Act which is the
earlier law deals with cases arising out of lay-off and
retrenchment. Section 25J of the Central Act deals with the
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effect of the provisions of Chapter V-A on other laws incon-
sistent with that Chapter. Sub-section (2) of section 25J is
quite emphatic about the supremacy of the provisions relat-
ing to the rights and liabilities arising out of lay-off and
retrenchment. These are special provisions and they do not
apply to all kinds of termination of services. Section 40 of
the State Act deals generally with termination of service
which may be the result of misconduct, closure, transfer of
establishment etc. If there is a conflict between the spe-
cial provisions contained in an earlier law dealing with
retrenchment and the general provisions contained in a later
law generally dealing with terminations of service, the
existence
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of repugnancy between the two laws cannot be easily pre-
sumed. In Maxwell on the Interpretation of Statutes, (12th
Edn. ) at page 196 it is observed thus:
"Now if anything be certain it is this, "said
the Earl of Selborne L.C. in The Vera Cruz,
(1884) 10 App. Cas, 59 at p. 68 "that where
there are general words in a later Act capable
of reasonable and sensible application without
extending them to subjects specially dealt
with by earlier legislation, you are not to
hold that earlier and special legislation
indirectly repealed, altered, or derogated
from merely by force of such general words,
without any indication of a particular inten-
tion to do so." In a later case, Viscount
Haldane said: "We are bound ....... to apply
a rule of construction which has been repeat-
edly laid down and is firmly established. It
is that wherever Parliament in an earlier
statute has directed its attention to an
individual case and has made provision for it
unambiguously, there arises a presumption that
if in a subsequent statute the Legislature
lays down a general principle, that general
principle is not to be taken as meant to rip
up what the Legislature had before provided
for individually, unless an intention to do so
is specially declared. A merely general rule
is not enough even though by its terms it is
stated so widely that it would, taken by
itself, cover special cases of the kind I have
referred to."
We respectfully agree with the rule of construction
expounded in the above passage. By enacting section 25J(2)
Parliament, perhaps, intended that the rights and liabili-
ties arising out of lay-off and retrenchment should be
uniform throughout India where the Central Act was in force
and did not wish that the State should have their own laws
inconsistent with the Central law. If really the State
Legislature intended that it should have a law of its own
regarding the rights and liabilities arising out of re-
trenchment it would have expressly provided for it and
submitted the Bill for the assent of the President. The
State Legislature has not done so in this case. Section 40
of the State Act deals with terminations of service general-
ly. In the above situation we cannot agree with the conten-
tion based on Article 254(2) of the Constitution since it is
not made out that there is any implied repugnancy between
the Central law and the State law.
The result of the above discussion is that if the employees
are
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742
’workmen’ and the management is an ’industry’ as defined in
the Central Act and the action taken by the management
amounts to ’retrenchment’ then the rights and liabilities of
the parties are governed by the provisions of Chapter V-A of
the Central Act and the said rights and liabilities may be
adjudicated upon and enforced in proceedings before the
authorities under section 41(1) and section 41(3) of the
State Act.
We may incidentally observe that the Central Act itself
should be suitably amended making it possible to an individ-
ual workman to seek redress in an appropriate forum regard-
ing illegal termination of service which may take the form
of dismissal, discharge, retrenchment etc. or modification
of punishment imposed in a domestic enquiry. An amendment of
the Central Act introducing such provisions will make the
law simpler and also will reduce the delay in the adjudica-
tion of industrial disputes. Many learned authors of books
on industrial law have also been urging for such an amend-
ment. The State Act in the instant case has to some extent
met the above demand by enacting section 41 providing for a
machinery for settling disputes arising out of termination
of service which can be resorted to by an individual work-
man. In this connection we have one more suggestion to make.
The nation remembers with gratitude the services rendered by
the former Labour Appellate Tribunal which was manned by
some of our eminent Judges by evolving great legal princi-
ples in the field of labour law, in particular with regard
to domestic enquiry, bonus, gratuity, fair wages, industrial
adjudication etc. The Industrial Disputes (Appellate Tribu-
nal) Act, 1950 which provided for an all-India appellate
body with powers to hear appeals against the orders and
awards of Industrial Tribunals and Labour Courts in India
was repealed in haste. If it had continued by now the labour
jurisprudence would have developed perhaps on much more
satisfactory lines than what it is today. There is a great
need today to revive and to bring into existence an all-
India Labour Appellate Tribunal with powers to hear appeals
against the decisions of all Labour Courts, Industrial
Tribunals and even of authorities constituted under several
labour laws enacted by the States so that a body of uniform
and sound principles of Labour law may be evolved for the
benefit of both industry and labour throughout India. Such
an appellate authority can become a very efficient body on
account of specialisation. There is a demand for the revival
of such an appellate body even from some workers’ organisa-
tions. This suggestion is worth considering. All this we are
saying because we sincerely feel that the Central Act passed
forty years ago needs a second look and requires a compre-
hensive amendment.
743
It is not disputed that section 25F of the Central Act
has not been complied with in this case and hence the Divi-
sion Bench of the High Court was right in holding that all
the terminations were illegal. All the respondents are,
therefore, entitled to be reinstated in service with furl
back wages as held by the authority under section 41(1) of
the State Act.
These petitions are dismissed.
P.S.S Petitions dismissed.
744