TMI Blog1956 (11) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... he principal respondent is the President of the Barsi Light Railwaymen's Union, respondent No. I to the appeal. The General Manager, Central Railway, Bombay, and the Secretary, Railway Board, New Delhi, are respondents Nos. 4 and 5. The facts, so far as they are relevant for our purpose, are these. Under an agreement dated August 1, 1895, between the Secretary of State for India in Council and the Railway Company, the latter constructed, maintained and worked a light railway between Barsi Town and Barsi Road Station on the railway system, known then as the Great Indian Peninsular Railway. It is not necessary to state here the various clauses of the aforesaid indenture of agreement except to mention that it contained a clause under which the Secretary of State could purchase and take over the undertaking after giving the Railway Company not less than twelve calendar months' notice in writing of the intention so to do. On December 19, 1952, a notice was given to the Railway Company, for and on behalf of the President of India, by the Director of the Railway Board to the effect that the undertaking of the Railway Company would be purchased and taken over as from January 1, 195 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as made clear, however, that the Government Railway rules applicable to other staff appointed on the same day would be applicable to the 'staff of the Railway Company, and previous service under the Railway Company would not count for the purpose of seniority. It appears from the statement of respondents 4 and 5 that when the undertaking was actually taken over on January 1, 1954, about 77 per cent. of the staff of the Railway Company were re-employed on the same scales of pay, about 23 per cent. were re-employed on somewhat lower scales of pay though the pay which they actually drew at the time of re-employment was not affected; only about 24 of the former employees of the Railway Company declined service under the Government. Soon after, respondent No. I filed some sixty-one applications on behalf of the erstwhile workmen of the Railway Company under s. 15 of the Payment of Wages Act, 1936, for payment of retrenchment compensation to the said workmen under cl. (b) of a. 25F of the Industrial Disputes Act, 1947 (hereinafter called the Act). The applications were made to respondent No. 3, Civil Judge (Junior Division) Madha, who was the relevant authority under the Payment of W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finding was given by the High Court on merits, subject to an appeal to this Court. The High Court (Chagla C. J. and Dixit J.) held by its judgment and order dated January 24, 1955, that the workmen were entitled to claim compensation under clause (b) of s. 25F of the Act and the Railway Company was liable to pay such compensation to them. It is from that decision that Civil Appeal No. 105 of 1956 has been brought. CIVIL APPEAL No. 103 OF 1956 The facts in this appeal are somewhat different. The main appellant is Shri Dinesh Mills Ltd., Baroda, and the principal respondent is the District Labour Officer and Inspector under the Payment of Wages Act, 1936, at Baroda. The appellant Company was running a woollen mill at Baroda for several years and had in its employ at the relevant time 450 workmen and 20 clerks. The work was done in shifts, day and night. On or about October 31, 1953, the appellant put up a notice declaring its intention to close down the entire mills from December 1, 1953. On November 19,1953, this notice was withdrawn and another notice was put up declaring the intention of the appellant to close down the second shift with effect from December 20, 1953. A thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y under the Payment of Wages Act, 1936, is not a live question in Civil Appeal No. 105 of 1956 after the agreement of parties in the High Court. It does arise, however, in Civil Appeal No. 103 of 1956. But learned counsel for the appellants in that appeal has been ingenuous enough to state that he does not wish to take our time by addressing us on that question-not because he considers that the question of jurisdiction is devoid of all merit, but by reason of the fact that under the provisions of s. 25 1 of the Act the claim for retrenchment compensation, if found to be legally valid, can still be enforced against the appellants. Section 19 of the Industrial Disputes (Amendment and Miscellaneous Provisions) Act, 1956, purports to repeal s. 25 I of the principal Act, but that section has not yet been brought into force with the result that the provisions of s. 25 I are still available for the recovery of retrenchment compensation. Learned counsel has, therefore, submitted before us that these appellants will be content to abide by our decision on the principal question in these two appeals, namely, the validity or otherwise of the claim for retrenchment compensation under cl. (b) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a workman on the groundof continued ill-health. Leaving out the excluding sub-cls. (a), (b) and (c) for the time being-these sub-clauses not being directly applicable to the cases under our -consideration-the definition when analysed consists of the following four essential requirements-(a) termination of the service of a workman; (b) by the employer; (c) for any reason whatsoever; and (d)otherwise than as a punishment inflicted by way of disciplinary action. It must be conceded that the definition is in very wide terms. The question, however, before us is-does this definition merely give effect to the ordinary, accepted notion of retrenchment in an existing or running industry by embodying the notion in apt and readily intelligible words or does it go so far beyond the accepted notion of retrenchment as to include the termination of services of all workmen in an industry when the industry itself ceases to exist on a bona fide closure or discontinuance of his business by the employer 9 Learned counsel for the appellants contend that the first gives the correct meaning of the definition, while learned counsel for the principal respondents urge that by reason of the wide wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the expression 'for any reason whatsoever' a somewhat narrower scope; one may say that it gets a color from the context in which the expression occurs; but we do not agree that it amounts to importing new words in the definition. What after all is the meaning of the expression 'for any reason whatsoever'? When a portion of the staff or labour force is discharged as surplusage in a running or continuing business, the termination of service which follows may be due to a variety of reasons; e.g., for economy, rationalization in industry, installation of a new labor saving machinery etc. The legislature in using the expression 'for any reason whatsoever' says in effect: It does not matter why you are discharging the surplus; if the other requirements of the definition are fulfilled, then it is retrenchment. In the absence of any compelling words to indicate that the intention was even to include a bona fide closure of the whole business, it would, we think, be divorcing the expression altogether from its context to give it such a wide meaning as is contended for by learned counsel for the respondents. What is being defined is retrenchment, and that is the cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yyar v. The State of Madras, that the industrial dispute to which the provisions of the Act apply is only one which arises out of an existing industry is clearly correct. Therefore, where the business has been closed and it is either admitted or found that the closure is real and bona fide, any dispute arising with reference thereto would, as held in K. M. Padmanabha Ayyar v. The State of Madras (4), fall outside the purview of the Industrial Disputes Act. In view of these observations, it would be against the entire scheme of the Act to give the definition clause relating to retrenchment such a meaning as would include within the definition termination of service of all workmen by the employer when the business itself ceases to exist. Learned counsel for the appellants in the two appeals have pointed out that the definition clause is inartistically drawn up and sub-cls. (a) and (b) of s. 2 (oo) are not easily intelligible with reference to one of the essential requirements of the definition, namely, that the termination of service of the workman must be by the employer. It has been submitted that voluntary retirement of the workmen cannot be termination of service by the employer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion though they continue in service as before ? There must indeed be found very compelling reasons in the words of the statute before it can be held that such was the intention of the legislature. We think that no such compelling reasons are available from the provisions of the Act; on the contrary, they point really one way-that the Act contemplates an existing or continuing industry and not a dead industry. This brings us to two other arguments advanced by the learned Attorney-General. One is that before the enactment of the amending Act of 1953 (Act XLIII of 1953) retrenchment had acquired a special meaning meaning which included the payment of compensation on a closure of business, and the legislature gave effect to that meaning in the definition clause and by inserting s. 25F. The second argument is that s. 25FF inserted in 1956 (Act XLI of 1956) is 'parliamentary exposition of the meaning of the definition clause and of s. 25F. We shall now consider these two arguments. As to the first argument, a large number of decisions of Industrial or Lpobour Appellate Tribunals have been placed before us. The learned Attorney-General has relied particularly on three decisions: T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cases and adopted a simple yard stick of the length of service of the retrenched workmen. If the intention of the legislature 'was to give statutory effect to those decisions which awarded compensation on real and bona fide closure of business, the legislature would have said so instead of being content by merely adding a definition clause, every requirement of which is fulfilled by the ordinary, accepted meaning of the word 'retrenchment'. We turn now to the second argument. We have said that s. 25FF was inserted in 1956 by amending Act XLI of 1956, which came into force on September 4,1956. Before that date, the two decisions under appeal had been given by the Bombay High Court as also a further decision in The Hospital Mazdoor Sabha v. The State of Bombay (1) where it was held that the failure to comply with the condition for payment of compensation to an employee at the time of his retrenchment under s. 25F (b) of the Act gave the employee the right to challenge his retrenchment and to contend that his services were not legally and effectively terminated. Faced with the situation created by those decisions, the legislature stepped in and enacted s. 25FF. That sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim for retrenchment compensation, with consequences which might result in a complete industrial deadlock. The legislature could not declare the decisions to be incorrect, but could partially supersede their effect by an amendment of the law. These were the circumstances in which s. 25FF was enacted. We agree with learned counsel for the appellants that the aim or object of the enactment was to supersede partially the effect of the aforesaid judicial decisions, at least with regard to the urgent matter of change of ownership or management of a business undertaking which is of quite frequent occurrence, rather than parliamentary exposition of the pre-existing law; the general question of closure of business, of a lesser degree of urgency, was naturally left to be dealt with, if necessary, after the appeals had been disposed of. We are fortified in this view by an examination of the provisions of the Industrial Disputes (Amendment and Miscellaneous Provisions) Act, 1956. Be it noted that this Act was passed on August 28, 1956,-only about seven days before the enactment of s. 25FF. Section 29 of the Industrial Disputes (Amendment and Miscellaneous Provisions) Act, 1956, inserts new ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to the lifeless words of the statute and formalistic canons of construction in our search of the intent of Congress (Parliament in our case) and in construing a statute, we may with propriety. recur to the history of the times when it was passed. That history shows indubitably the aim and purpose of the enactment of s. 25FF. As Lord Atkinson pointed out in his speech in Ormond Investment Co. Limited v. Betts (2), an Act of Parliament does not alter the law by merely betraying an erroneous opinion of it. Legislation founded on a mistaken or erroneous assumption has not the effect of making that the law which the legislature had erroneously assumed to be so. In the cases before us, the legislature proceeded on the basis of the judicial decisions then available to it, and on that basis enacted s.25FF. We do not think that the general principle of parliamentary exposition or subsequent legislation as an aid to construction of prior Acts can be called in aid for construing the definition clause and s. 25F of the Act. For 'the reasons given above, we hold, contrary to the view expressed by the Bombay High Court, that retrenchment as defined in s. 2 (oo) and as used in s. 25F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, it is argued, imposes a restriction on that right, if the section is so widely interpreted as to include a closure of business. The restriction, it is submitted, is not a reasonable restriction in the interests of the general public, because (a) it is unrelated to the capacity of the employer to pay and (b) unrelated to the needs of the employee. From the other point of view, the argument is that even in respect of a running or continuing industry, s. 25F imposes an unreasonable restriction. Reasonableness,it is submitted, has to be considered with regard to the object of the legislation and if the direct and immediate object of s. 25F is relief against involuntary unemployment, then the restriction imposed is excessive, because a provision for such relief unrelated to the period of unemployment and other relevant factors is over-simplification of a complex problem. Such over-simplification, it is stated, itself amounts to an unreasonable restriction. On the construction which we have adopted of the definition clause and of s. 25F of the Act, we are relieved of the task of making any final pronouncement on this constitutional question. On our construction, s. 25F has no app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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