# AMRIT BANASPATI CO. LTD v. S. TAKI BILGRAMI & ORS

- **Citation:** [1972] 1 S.C.R. 145
- **Court:** Supreme Court of India
- **Decided:** 1971-08-12
- **Case number:** Special Civil Application No. 1261 of 1963
- **Bench:** G. K. Mitter, C. A. Vaid!Alingam, P. Jaganmohan Reddy
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/amrit-banaspati-co-ltd-v-s-taki-bilgrami-ors-5338
- **Pages:** 14

## Headnote

Bombay !11dustrial Relations Act (I I of 1947), ss. 42(1), 46(2) and'
Schedule If item I-Closing of shiji and terminating emplop11e11t of
surplus staff-If reduction of posts.
The appellant company was the proprietor of certain mills, which
w:is working three shifts in some of its departments. The third shifr
"as closed and the appellant issued a month"s notice to three clerks
terminating their services. The subordinate tribunals and the High
Court held that it was a case of reduction of posts of clerks without
following the procedure prescribed by he Bombay Industrial Relations
Act 1946. namely, giving of notice of change as required by s. 42, and
thus committed an illegal change in contravention of s. 46, in respect
of an industrial matter in item 1 of Schedule II of the Act.
Allowing the appeal to this Court,
HELD : (I) The reply
sent by the management justifying thei1·
action, tothe Union of workers, indicates, that they had only effected
a retrenchment of clerks whom they considered to be surplus. There
was no admission that they had effected a reduction in the posts of
clerks. Read as a whole, the letter only shows that the termination
was necessitated by the closure of the third shift and that the reduction in the clerical strength in consequence of such termination did
not result in any increase in the work load of others.
(155 B-D]
(2)
Unless there is a reduction in posts item I of Scch. II will have
no application. The item refers to reduction intended to be of permanent or semi-permanent character in the number of persons to be employed in a shift, that is, the shift is not abolished but is working and the
employer effects a reduction in the number of persons employed in the
shift in consequence of which the work load on the remaining persons
may be more_
Under such a contingency it may be considered that
the employer has effected a reduction in the posts occupied by the per-
:-(\ns \vhose services have
been terminated.
But
\\'hen the working
of the entire shift is stopped there is no question of a reduction in the
number of persons employed in a shift. On the other hand, it is a case
of termination of employment of all the persons employed in the shift
\\hich has been stopped. ]156 A-HJ
Chaganlal Textile Mills Private Ltd. v. Chatisgoan
Girni Kamgar
['nivn, A.LR. 1959 S.C. 722, followed.
(3) In the present case, on the closure of the third. shift wha.t the:
employer did was to retrench the employees working 111 that shift
146
SUPREME COURT REPORTS
[1972] 1 S.C.R.
they were found to be surplus in the establishment. It was a case of
A
reduction of persons employed and not one of reduction of the number
of persons employed. Hence, it was not a case of reduction of posts.

## Text

A
B
c
D
E
F
G
H
AMRIT BANASPATI CO. LTD.
v.
S. TAKI BILGRAMI & ORS.
August 12, 1971
[G. K. MITTER, C. A. VAID!ALINGAM AND
P. JAGANMOHAN REDDY, JJ.]
Bombay !11dustrial Relations Act (I I of 1947), ss. 42(1), 46(2) and'
Schedule If item I-Closing of shiji and terminating emplop11e11t of
surplus staff-If reduction of posts.
The appellant company was the proprietor of certain mills, which
w:is working three shifts in some of its departments. The third shifr
"as closed and the appellant issued a month"s notice to three clerks
terminating their services. The subordinate tribunals and the High
Court held that it was a case of reduction of posts of clerks without
following the procedure prescribed by he Bombay Industrial Relations
Act 1946. namely, giving of notice of change as required by s. 42, and
thus committed an illegal change in contravention of s. 46, in respect
of an industrial matter in item 1 of Schedule II of the Act.
Allowing the appeal to this Court,
HELD : (I) The reply
sent by the management justifying thei1·
action, tothe Union of workers, indicates, that they had only effected
a retrenchment of clerks whom they considered to be surplus. There
was no admission that they had effected a reduction in the posts of
clerks. Read as a whole, the letter only shows that the termination
was necessitated by the closure of the third shift and that the reduction in the clerical strength in consequence of such termination did
not result in any increase in the work load of others.
(155 B-D]
(2)
Unless there is a reduction in posts item I of Scch. II will have
no application. The item refers to reduction intended to be of permanent or semi-permanent character in the number of persons to be employed in a shift, that is, the shift is not abolished but is working and the
employer effects a reduction in the number of persons employed in the
shift in consequence of which the work load on the remaining persons
may be more_
Under such a contingency it may be considered that
the employer has effected a reduction in the posts occupied by the per-
:-(\ns \vhose services have
been terminated.
But
\\'hen the working
of the entire shift is stopped there is no question of a reduction in the
number of persons employed in a shift. On the other hand, it is a case
of termination of employment of all the persons employed in the shift
\\hich has been stopped. ]156 A-HJ
Chaganlal Textile Mills Private Ltd. v. Chatisgoan
Girni Kamgar
['nivn, A.LR. 1959 S.C. 722, followed.
(3) In the present case, on the closure of the third. shift wha.t the:
employer did was to retrench the employees working 111 that shift
146
SUPREME COURT REPORTS
[1972] 1 S.C.R.
they were found to be surplus in the establishment. It was a case of
A
reduction of persons employed and not one of reduction of the number
of persons employed. Hence, it was not a case of reduction of posts.
CIVIL APPELLATE JURISDICTION : Civil
1922 of 1966.
[157 F-HJ
Appeal No.
Appeal by special leave from the judgment and order
dated
January 5, 1965 of the Bombay High Court in
Special Civil Application No. 1261 of 1963.
K. K. Jain and H. K. Puri for the appellant.
B
B. P. Maheshwari and S. M. Jain for respondent No.
C
2.
G. L. Sanghi and P. N.
Tiwari, for
respondent
No. 3.
The Judgment of the Court was delivered by
Vaidialingam, J.-The short
question
that arises
D
for consideration in this appeal, by special leave, is whether
by terminating the services of the three clerks in question,
the appellant Company had
made any illegal change
within the meaning of s. 46 of the Bombay Industrial
Relations Act., 1946 (Bombay Act XI of 1947) (hereinE
after to be referred as the Act).
The facts
leading up to the appeal may be
stated.
The appellant Company was the former proprietor of the
New Pralhad Mills, Bombay. At the
material time,
namely, 1957, the mills were working three shifts in some
of their
departments.
On December
8, 1957, the
F
third shift was closed. On January 7, 1958 the appellant issued notices to the three clerks Nayak, Kelwalkar
and Mhatre, with whom we are concerned in these proceedings terminating their services with effect from February
8, 1958.
The second respondent herein, the Union of the
workers employed in the mills, by their letter dated
February 7, 1958 requested the management to cancel
G
the notices
terminating the services of the clerks. The
management sent a reply to the Union on February 10.
1958 justifying their action and declining to accede to
H
the
request of the Union. The
exact terms of the
notices dated January 7, 1958 as well as the reply dated
•
AMRIT BANASPA TI co. v. BILGRAMI ( Vaidialingam, J.)
14 7
A February 10, 1958 will be adverted to later. There was
another clerk
Dhuri against whom a notice of termination of service had also been issued. But we are
not concerned with that clerk in these proceedings.
The Union filed four applications before the Second
B Labour Court at Bombay, challenging the termination
of the services of the four clerks, referred to above, on the
ground that the appellant had reduced the clerical strength
of the Company without following the procedure prescribed in the Act and as such the appellant had committed
an illegal change.
In
consequence the
Union prayed
C
for a declaration that the appellant Company had committed an illegal change
and further
prayed for the
reinstatement of the clerks after directing the management to withdraw the illegal
change. An additional
ground for reinstatement was also· urged. It was urged
that the management had also contravened s. 25G of the
D Industrial Disputes Act, 1947. On these allegations the
Union after praying for the reinstatement of the clerks
desired also payment of compensation
from
the date
of termination of their services till their reinstatement.
The main defence of the appellant was that no illegal
E change has been made and hence the Labour
Court
had no jurisdiction to entertain the applications. They
further denied that
there has been any contravention
of s. 2SG of the Industrial Disputes Act, 1947 inasmuch
as no clerks junior to those whose services were termi- ·
nated
had been retained in service.
According to the
F appellant the clerks were retrenched as they were surplus
t_o _the requirement of the mills.
The Labour Court, on a consideration of the materials
produced before it, held that by terminating the services
of the clerks, the appellant has really effected a reduction
G in three clerical posts. It is the further view of the Labour
Court that as this reduction of posts had been done without giving a notice of change under the Act, its action
was illegal and that the Company was guilty of making
illegal change in contravention Qf s. 46 of the Act. The
· Labour
Court further held that so far as Nayak and
H Kelwalkar were concerned the principles of "last come
first go" embodied in ~. 257 of the Industrial Disputes
Act had been contravened as those two clerks were
148
SUPREME COURT REPORTS
[1972] 1 S.C.R.
senior to several others who were still retained in service.
A
As regards the third clerk Mhatre,
the Labour Court
accepted the appellant's
p_lea that he was only a temporary clerk for the third shift and that with the stoppage
of the third
shift
his
termination
was justified.
Jn
consequence, the Labour Court passed an order, on June
B
19, 1959
directing the appellant to withdraw the illegal
change introduced by it and reinstate Nayak and Kelwalkar and also to pay them 50 % of their wages including
Dearness Allowance till the date of reinstatement. The
Union's application, so far as Mhatre was concerned, was
dismissed.
c
The
appellant
appealed to the Industrial Court at
Bombay
against the decision of the Labour Court regarding Nayak and Kelwalkar. The Union also filed an
appeal against the decision of the Labour Court refusing
to grant relief to Mhatre. The two appeals were (LC.)
0
Nos. 182 of 1959 and 188 of 1959 respectively.
The Industrial Court did not agree with the findings
of the Labour Court
that Mhatre had been appointed
only temporarily for the third shift. On the other hand
it held that Mhatre was in the permanent employ of the
E
Company. The Industrial Court
held that the appellant had contravened the provisions of s. 25G. when it
terminated the services of Nayak, Kelwalkar and Mhatre.
It did not consider the main question whether the appellant had committed an illegal change when it terminated
the services of the clerks.
On the basis of its findings
regarding contravention of s. 25G, the Industrial Court,
F
by its order dated January, 30, 1960 affirmed the decision
of the Labour Court with a slight variation regarding
payment of compensation,
wages and Dearness Allowance. At
this stage we may
say that Mhatre, whose
claim was rejected by the Labour Court, was also granted
G
the same relief that was given to the other two clerks
by the Labour Court. The result was that the management's appeal No. I. C. 182 of 1958 stood dismissed and
the appeal of the Union, No. LC. 188of1959 was allowed.
Aggrieved by these orders of the Industrial Court the
appellant filed in- the Bombay High Court Special Civil
H
Application No.
368 of 1960 under Arts. 226 and 227
-0f the Constitution. This writ petition was dismissed in
'
AMRIT BANASPATI co. v. BILGRAMI (Vaidialingam, J.)
149
A llmine by the High Court
on March 22, 1960. The.
appellant came by special leave to this Court in Civil
Appeal No. 230 of 1962.
Before this Court the counsel for the Union conceded
that the appellant has not violated s. 25G of the Industrial
8
Disputes
Act. Bμt
nevertheless it was urged by
the Union that the order of the
Industrial Court
confirming the decision of the Labour Court was correct,
as the latter has recorded a finding that the appellant
had reduced the number of posts of clerks and thus come niitted an illegal change without issuing the necessary
notice under the Act. This Court was of the opinion
that the main basis of the decision of the Industrial Court
was that s. 25G of the Industrial Disputes Act had been
violated. That finding of the tribunal was clearly erroneous in view of the concession made on behalf of the
0
Union. This Court was further of the view that the
Industrial Court has not considered the correctness or
otherwi,se of the more important question decided by the
Labour Court against the management, namely, whether
the appellant had committed an ille~al change in contravention of the Act. In view of tliis serious ·infirmity
E in the order of the Industrial
Court, by its judgment
and order dated January 14 1963 this Court remanded
the proceedings to the Industrial Court to adjudicate
upon on the
abovementioned
aspect. This Court
further gave a direction that if the Industrial Court
came to the conclusion that any illegal change was made
F
by the management, it was to give appropriate relief
to the workmen concerned and . that .if, on the other
hand, it came to the conclusion that no illegal change
had been made, the applications filed by the Union
had to be dismissed.
G
On remand the Industrial Court by its order dated
July 18, 1963 has agreed with the findings of the labour
Court that by termination of the services of the three
clerks in question, the Company has reduced its clerical
strength and thus has effected a reduction in the posts
of clerks. For coming to this conclusion the Industrial
H Court has placed considerable reliance
on the reply
dated February 10, 1958 sent by the appellant to the
Union. It is the view of the Industrial Court that in this
'
150
SUPREME COURT REPORTS
(1972] l
S.C.R
letter, the appellant has indicated in very clear terms
A
its intention when it terminated the services of the
clerks. In the end the industrial Court held that the
appellant had committed an illegal change under s. 46
by not giving a notice of change under s. 42 (1) of the
Act. The Industrial Court also gave certain consequen8
tial
directions regarding the amount of compensation
to be paid to the workmen.
The appellant filed before the Bombay High Court
Special Civil Application No. 1261 of 1963 under Art.
227
of the Constitution challenging the decision of the
Industrial Court. The High Court by its judgment and c
order dated January, 5, 1965, after a reference to the
material provisions of the Act, as well as the terms
of the notice dated January 7, 1958 issued to the clerks
and the reply dated February 10, 1958 sent by the
management to the Union, agreed with the conclusion
0
arrived at by the Industrial Court that the appellant
had committed an illegal change in an industrial matter
referred to in item 1 of Schedule II wihout giving
the
notice
of change
as required by s. 42. It is against
this judgment and order of the High Court that the appellant has come to this Court by special leave.
E
Before we proceed to set out the contentions of the
learned counsel, it may be stated that the appellant
Company,
which was formerly
the proprietor
of
New
Pralhad Mills had sold the same to the third
respondent on September 8, 1962. The
third
respondent was not a party to the proceedings before the
F
Industrial Court when it passed its order dated May 3,
1963. Though the appellant does not claim any relief
against the third respondent, it had been impleaded as a
party in these proceedings.
Mr. K. K. Jain, learned counsel appearing for the
G
appellant, urged that by terminating the services of the
three clerks, in view of the closure of the third shift,
the Company has only effected a retrenchment of surplus hands in the employ of the comany. There has
been no reduction of posts of clerks and no such reducti0n can be considered to have happened in law in
H
the particular circumstances of this case when the third
shift itself was closed. The notices had been issued to
AMRIT BANASPATI co. v. olll.LGRAMI (Vaidialingam, !.)
151
A the clerks terminating their services as they were found ·
to be surplus. The
counsel further urged that there
has been no reduction of posts of clerks when it terminated the services of the clerks in consequence of the
closure of the third shift. The question of illegal change
B and contravention of the Act will arise only when there
has
been a reduction
in the posts of the clerks. He
also pointed out that the Union does not dispute the
fact regarding the closure of the third shift with effect
from
December
8, 1957. The counsel further urged
that the third shift was resumed on November I, 1958
c
and notices were issued to the three clerks to join the
Company, which they did not do. The counsel further
pointed that the letter dated February 10, 1958 sent by
the appellant has been completely misunderstood by the
High Court
and the subordinate tribunals. He contended that there has been no admission of reduction
D of posts made by the appellant in the said letter as wrongly
assumed by the High
Court and the two subordinate
tribunals. This error has vitiated
the decision of the
High Court. This contention of Mr. Jain has been
supported by Mr. G. L. Sanghi, learned counsel appearing for the third respondent.
·
E
On the other hand Mr. B. P. Maheshwari, learned
counsel for the Union, supported in full the decision of
the High Court confirming the orders of the two subordinate
tribunals. The counsel pointed out that the
appellant, by terminating the
services of
the three
F clerks has really effected a reduction in the clerical
strength of the Company. Such a reduction, according
to the counsel, amounts in law to a reduction of clerical
posts attracting the provisions of ss. 42 and 46 read with.
Item 1 of Schedule II of the Act. It is his further
G contention that the finding that there has been a reduction of posts of clerks is one of fact concurrently recorded by the two tribunals and affirmed
by the High
Court. On
that finding,
the counsel
urged, the
view of the High · Court that the appellant is guilty of
effecting
an illegal change
without giving notice of
H change is justified.
In order to appreciate the contention of the learned
counsel on both sides, it is pertinent to refer to the relevant
11-Ml 245SJ;1.Cl/7l
152
SUPREME COURT REPORTS
[1972] I S.C.R.
A
prov1s10ns of the Act. Before
we refer to those provisions, it should be stated that it is common ground
that the working of the third shift was stopped on
December 8,
1957. According to the management the
work of the third shift was again resumed on November
1, 1958. Jt is the further case of the management that
B
the three clerks were offered
employment,
but
they
declined to accept the offer, as, according to them, the
offer was made subject to the condition that the Union
withdraws the applications that had already
been filed
before the Labour Court. At any rate,
one thing is
dear namely, that the working of the third shift which c
was closed on December 8, 1957 was resumed only on
November l, 1958 and an offer of employment was then
made
to the three workmen. Another
aspect
to be
noted is that it was represented before us that no standing
orders relating to the appellant's
iridustry
had been
framed or had come into operation at the material time.
D
Therefore, the model standing orders
notified by the
Government were operative.
The
notices issued to the workmen on .January 7,
1958 was as follows :
"Dear Sir '
We regret to inform you that your services
will no longer ·be required from 8th February,
1958. This may be treated as one month's notice.
Yours faithfully
for New Prahlad Mills,
Sd/-
Superintendent
The letter dated February 10, 1958 sent by the
appellant to the Union was as follows :
"Dear Sir,
E
F
G
.
Re: No. N. D. 5090/57, d/7-2-1958 appliH
cat10n under rule 53 of B. I. R. Act, Shri S. A.
Nayek.
•
-,,_I
\.
'
___ \
:---~
l
A
B
c
D
E
AMRIT BANASPATI co. v. BILGRAMI (Vaidialingam, J.)
153
With reference to the above we have to inform you that Shri Nayak's
services
were terminated with
a
month's
notice, owing
to
closure of 3rd shift, which necessitated a reduction in our clerical strength. We may point out
that clerks have been reduced from all departments, according
to juniority and further reductions
are still
contemplated
and the cases of
other juniors like Shri Sharma and Shah are also
under
consideration. As
such reduction has
not effected any increase in work load, and as the
individual clerks who are reduced are offered all
their legal dues, we submit that notice of change
is not necessary.
We submit that whatever is done is legal and
proper and regret we cannot comply with your
request.
Yours faithfully
Sd/-
for New Pralhad Mills,
Manager.
Now we will refer to the material provisions of the
Act. Section 35 (1) of the Act provides for the procedures for framing of standing orders in regard to
matters mentioned
in Schedule 1 of the Act. Under
sub-s. (5) the model standing orders notified by the
Government would
apply
till standing orders framed
F under the section come into operation. We have already
referred to the fact that there are no standing orders
framed by the appellant Company relating to its industry
at the material time. Section 40 (1) provides
that
standing orders for the time being in operation shall be
determinative of the relations between the employer and
G his employee in regard to all industria,l matters referred
to in Schedule I. Item 3 of Schedule I deals with:
"Shift working including notice to be given to employees of starting, alteration or discontinuance of
two or more shifts in a department or departments".
H
Item 10 in the same Schedule again relates to :
"Termination of emploympnt including notice to be
given by employer and employee."
154
SUPREME COURT REPORTS
(1972] l. S.C.R.
The model standing order 8 (1) (c) provided that A
whenever an additional shift
is started, altered or discontinued,
seven day notice has to be given, but one
month's notice will have to be given if as a result of the
the discontinuance
of the shift any permanent employee is likely to be discharged. There is no grievance
B
in the case before us
that the requisite notice regarding the stoppage of the third shift has not been given.
Similarly, standing order 23 (1) provided that
employment of a permanent employee may be terminated
. by one month's notice or on payment of one month's
wages
(including all allowance in lieu of notice). We c
have referred to these provisions in order to appreciate
the contents of Item 1 of Schedule II with which we are
concerned ii1 this appeal.
Section 42 (1) of the Act provides for an employer
intending to effect any change in respect of an industrial
D
matter specified in Schedule II to give notice of such
intention in the prescribed form to the representatives
of the employees. The other authorities to whom a
copy of such notice is to be given as well as the publication
to be given to the said notice are also contained therein.
A notice under s. 42 (1)
is called "notice of change".
E
Section 46 (2)
prohibits an employer from making any
change in any
industrial matter mentioned in Schedule
II, without giving the notice of change as required by
the
provisions of sub-section
(l) of s. 42.
Item l of
Schedule II runs as follows :
"Schedule II
(l) Reductions intended to be of permanent or semipermanent character in the number of persons
employed or to be employed in any occupation
or process or department or departments or in
a shift not due to forie majeure."
We have
already
indicated that
the
industrial
F
G
Court,
in particular, has placed very great reliance on
the letter dated February,10 1958, for holding that by
terminating the services of the clerks,
the appellant
has really effected
a reduction in the clerical strength
H
of the establishment which has the effect
of reducing
the posts of clerks. In fact the Industrial Court goes
., ,
AMRIT BANASPATI co. v. BILGRAMI (Vaidialingam, J.)
155
A further and holds that there is an admission by the
management itself in
the said letter regarding their
having effected reduction in the posts of clerks. The
interpretation has found favour with the High Court.
We are not inclined to1 agree with the learned Judges
B of the High Court in the interpretation placed on the
letter dated February 10, 1958. The letter which has to
be read as a whole clearly indicates that the termination
of the serivces of the clerks was necessitated owing to the
closure of the third shift and that the reduction in the
clerical strength in consequence of such termination has
C not resulted in any increase in the work load of others.
This
itself clearly shows that the appellant have not
effected any
reduction in the posts of clerks. On the
other hand, they have only effected a retrenchment of
the clerks, whom they considered to be surplus, in consequence of the closure of the third shift. There is a
D marked difference between the matters dealt with under
Items 3 and l 0 of Schedule I and Item l of Schedule II.
Item 1 of Schedule II has come up for consideration
before
this Court in
Chaganlal Textile Mills Private
Ltd., v. Chalisgaon Girni Kamgar Union (1). After an
E analysis of the contents of Items 3 and I 0 of Schedule I
and Item 1 of Schedule II, it has been held that Item l
relates only to posts and not to the personnel occupying
the posts. Dealing with item No. 1 of Schedule II this
Court observes as follows:
F
G
H
"Furthermore, the language of Item No.
I of
Schedule I clearly refers to a reduction in posts.
It deals with the reduction not of persons employed
but with the number of persons employed.
Therefore it clearly
contemplates posts. Again, this
item also refers to the number of persons to be employed. That of course has nothing to do with
the retrenchment of persons actually employed.
Again, when a notice of change in respect of Item
No. 1 of Schedule II is to be given, it is not to be
given to any employee but to the representative of
the employees which would include a union of employee&. It could hardly have been intended that
when employees were to be retrenched
they would
not be given any notice."
{I) A.LR. 1959 S.C. 722
156
SUPREME COURT REPORTS
[1972] l S.C.R.
From the above observations, it is clear that unless
A
there is a reduction in posts. Item 1 of Schedule II will
have no application and in consequence there is no necessity
to give a notice of change under s. 46 (2) read with s. 42
(I) of the Act. In the ilght of the above principles, if we
examine the facts of the case before us, it is clear that on
B
the closure of the third shift what the employer did was
to retrench the employees working in that shift as they
were found to be surplus in the establishment. Therefore, it was a case of reduction of persons employed
and not one of reduction of the number of persons
employed. Hence it is not a case of reduction of posts. c
The matter also can be considered from another point
of view.
Item No. 1 of Schedule II leaving out the portions which are not necessary for the present case refers
to:
"reduction intended to be of permanent or semio
permanent character in the number of persons to
be employed in a shift."
If read in that manner it is clear that the shift is not
abolished but is working and the employer effects a
reduction in the number of persons employed
in the E
shift. Under such a contingency it may be considered
that the employer has effected a reduction in the posts
occupied by the persons whose services have been terminated, in which case it will be an illegal change unless
notice has been given under s. 42 (1) as contemplated by
s. 46 (2) of the Act. That is, for instance twenty perF
sons occupying twenty posts are necessary to work is
a shift and if five persons are sent out, that will amount
to a reduction of five
posts, in consequence of which
the work load on the remaining
fifteen persons may be
more. In these circumstances the act provides for giving
a notice of change and under s. 42 (I) copies of such G
notice have to be given apart, from the representative of
employees, to the Chief Conciliator and other officers
mentioned therein. That will be a case of reduction of
posts. But when the working of the entire shift is stopped
there is no question of a reduction in the number of
persons employed in a shift. On the other hand it is
H
a case of termination of employment of all the persons
employed in that shift which has been stopped. Such
AMRIT BANASPATI co. v. BILGRAM! (Vaidialingam, J.) 157
A a case will not attract Item No. 1 of Schedule II. To the employees whose services have been so terminated, as the
consequence of the closure of the entire shift. Though
other remedies are available to them in law, but they
cannot invoke Item No. 1 of Schedule II.
B
We may also refer briefly to the facts of the case reported in Chaganla/ Mills Textile Private Ltd., v. Chalisgoan
Girni Kamgar Union (1) On July 9, 1957 the Company
therein gave
notice that the working of the second shift
in their mill
would be discontinued
after one month.
c On August 9, 1957 the second shift was actually closed
in terms of the notice. Fourteen employees, who were
not workmen in the sect>nd shift but whose services were
necessary to make all arrangements ready for the second
shift to start working, were served with the notice on
September 1, 1957
that their services were terminated.
0
They
were paid retrenchment compensation and other
dues according to law.
On
November 9,
1957 the
Company gave a notice called "notice of change" that it
wished to abolish 27 posts including the posts held by the
14 employees, whose services were terminated by the notice
dated November I, 1957. Even under those circumsE tances this Court held that the notice given on November 1, 1957 terminating the services of 14 employees was
only by way of retrenchment and was legal. It was further emphasised that as the said notice was legal, it did not
cease to be so because within eight days a notice of change
was also given. In the case before us it is not contended
F
that the three clerks to whom notice had been given on
January 7, 1958 were not given proper notice and that
their dues have not been paid. Nor is it contended that
after the admitted closure of the third shift with effect
from December 8, 1957 the services of these three clerks
did not become surplus to the appellant.
We
are
G satisfied that the notice dated January 7, 1958 is only a
notice of retrenchment of surplus staff.
By that notic<:
the appellant has not effected any reduction in posts so
as to attract Item No. 1 of Schedule JI, read with
42 (1) and 46 (2) of the Act. If that is so, it follows that
by terminating the services of the three clerks, the appelH !ant has not made any illegal change within the meanin&
of s. 46 of the Act.
~~~--~~~~~~-
(\) A.I.R. 1959 S.C. 722.
SUPREME COURT REPORTS
[ 1972] 1
S.C.R.
In consequence, the judgment and order of the High·
Court are set aside and the applications filed on behalf
of the three clerks
before the Labour Court will stand
dismissed. The appeal is allowed.
Parties will bear their
own costs.
V.P.S.
Appeal allowed.
A
B