# M/S. SW ADESAMlTRAN LIMITED, MADRAS v. THEIR WORKMEN

- **Citation:** [1960] 3 S.C.R. 144
- **Court:** Supreme Court of India
- **Decided:** 1960
- **Case number:** Civil Appeal No. 483of1958
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/m-s-sw-adesamltran-limited-madras-v-their-workmen-1824
- **Pages:** 13

## Headnote

March I
•
144
SUPREME COURT REPORTS
[1960]
M/S. SW ADESAMlTRAN LIMITED, MADRAS
v.
THEIR WORKMEN
(P. B. GAJENDRAGADKAR, K. SuBBA RAO AND
K. c. DAS GUPTA, JJ.).
Industrial Dispute-Rule of retrenchment-" Last come first
go" -If citn be departed from by employer-Protracted litigation
and employment of other hands-If a ground for defeating claim
for re-instatement.
The management by a notice terminated the services of 39
workmen as a measure of retrenchment. The 'vorkmen went on
strike which led to an industrial dispute. The Industrial
Tribunal interalia held that the strike was not justified and that
the management had made out of a case of necessity for retrenchment and no malafidcs had been established; but the principle
of last come first go had not been observed in selecting the
personnel for retrenchment and ordered the reinstatement of 15
out of the 39 workmen retrenched. The Appellate Tribunal
confirmed the findings of the Industrial Tribunal with certain
modifications by way of compensation. The management came
up in appeal by special leave. ·
Held, that where a case of retrenchment is made out the
employer has
normally to
follow
the industrial rule of
retrenchment last come and first go; for valid reasons he may
however depart from the said rule; in that case he has to show
by reliable evidence, preferably from the recorded history of the
workmen concerned showing their inefficiency, unreliability or
habit'>i'l irregularity and can satisfy the Tribunal that the
deparfure from the rule was justified by sound and valid reasons;
otherwise the departure from the rule could be treated as being
malafide or amounting to unfair. Jabour practice. _
Held, further that once it was found that retrenchment was
unjustified and improper it is for the Tribunal to consider to
what relief the retrenched workmen will be entitled; ordinarily
retrenched workmen would be entitled to claim reinstatement,
and the fact that in the meantime the employer has engaged
other workmen would not necessarily defeat the claim for
reinstatement, nor would the fact that protracted litigation in
regard to the dispute has inevitably meant delay defeat such a
claim for reinstatement. Therefore the conclusion that 15
workmen were improperly retrenched cannot be sucessfully
challenged.
•
CIVIL
APPELLATE
JURISDICTION:
Civil Appeal
No. 483of1958.
Appeal by speoial leave from the decision dated
March 20, 1956, of the Labour Appellate Tribunal of
India, Madras, in Appeal No. Bow. 90 of 1952 arising
-
-
•
3 S.C.R. SUPREME COURT REPORTS .
145
out of the Award dated December 28, 1951, of the
r96o
Industrial Tribunal, Madras, in Industrial Dispute Swadesamilran Ltd.
No. 48 of 1951.
.
Madras
1960. February 11, 12.
M. 0. Setalvad, Attorneyv;
General of India, R. Ganapathy Iyer· and G. GopalTheir Workmen
krishnan, for the appellants. This appeal arises from
an Industrial Dispute between M/s. Swadesamitran
and their workmen. Three items of dispute were
referred for adjudication to the Industrial Tribunal
at Madras. One of them being whether the retrenchment of 39 workmen affected by the appellant in
May 1951, was justified, and if not, what relief the
retrenched workmen were entitled to. The modified
award directed the reinstatement of 15 of the retrenched workmen and the question is whether such direction is correct. It has to be remembered that the direction was given on March 28, 1956, in respect of
retrenchment made in May 1951, with half their back
wages.
·
The Tribunal erred in applying the rule "last come
first go " as if it were an inflexible rule. The management is the best Judge as to who were fit to be
retained and who should be sent out. No doubt, if
the selection of persons disclosed that the management was guilty of any unfair labour practice, that
would have been ground for interference. Tribunal
and the Appellate Tribunal found that the action of
management in selecting the personnel was not at all·
malafide. It cannot be said · to be unreasonabl~ if
persons

## Text

March I
•
144
SUPREME COURT REPORTS
[1960]
M/S. SW ADESAMlTRAN LIMITED, MADRAS
v.
THEIR WORKMEN
(P. B. GAJENDRAGADKAR, K. SuBBA RAO AND
K. c. DAS GUPTA, JJ.).
Industrial Dispute-Rule of retrenchment-" Last come first
go" -If citn be departed from by employer-Protracted litigation
and employment of other hands-If a ground for defeating claim
for re-instatement.
The management by a notice terminated the services of 39
workmen as a measure of retrenchment. The 'vorkmen went on
strike which led to an industrial dispute. The Industrial
Tribunal interalia held that the strike was not justified and that
the management had made out of a case of necessity for retrenchment and no malafidcs had been established; but the principle
of last come first go had not been observed in selecting the
personnel for retrenchment and ordered the reinstatement of 15
out of the 39 workmen retrenched. The Appellate Tribunal
confirmed the findings of the Industrial Tribunal with certain
modifications by way of compensation. The management came
up in appeal by special leave. ·
Held, that where a case of retrenchment is made out the
employer has
normally to
follow
the industrial rule of
retrenchment last come and first go; for valid reasons he may
however depart from the said rule; in that case he has to show
by reliable evidence, preferably from the recorded history of the
workmen concerned showing their inefficiency, unreliability or
habit'>i'l irregularity and can satisfy the Tribunal that the
deparfure from the rule was justified by sound and valid reasons;
otherwise the departure from the rule could be treated as being
malafide or amounting to unfair. Jabour practice. _
Held, further that once it was found that retrenchment was
unjustified and improper it is for the Tribunal to consider to
what relief the retrenched workmen will be entitled; ordinarily
retrenched workmen would be entitled to claim reinstatement,
and the fact that in the meantime the employer has engaged
other workmen would not necessarily defeat the claim for
reinstatement, nor would the fact that protracted litigation in
regard to the dispute has inevitably meant delay defeat such a
claim for reinstatement. Therefore the conclusion that 15
workmen were improperly retrenched cannot be sucessfully
challenged.
•
CIVIL
APPELLATE
JURISDICTION:
Civil Appeal
No. 483of1958.
Appeal by speoial leave from the decision dated
March 20, 1956, of the Labour Appellate Tribunal of
India, Madras, in Appeal No. Bow. 90 of 1952 arising
-
-
•
3 S.C.R. SUPREME COURT REPORTS .
145
out of the Award dated December 28, 1951, of the
r96o
Industrial Tribunal, Madras, in Industrial Dispute Swadesamilran Ltd.
No. 48 of 1951.
.
Madras
1960. February 11, 12.
M. 0. Setalvad, Attorneyv;
General of India, R. Ganapathy Iyer· and G. GopalTheir Workmen
krishnan, for the appellants. This appeal arises from
an Industrial Dispute between M/s. Swadesamitran
and their workmen. Three items of dispute were
referred for adjudication to the Industrial Tribunal
at Madras. One of them being whether the retrenchment of 39 workmen affected by the appellant in
May 1951, was justified, and if not, what relief the
retrenched workmen were entitled to. The modified
award directed the reinstatement of 15 of the retrenched workmen and the question is whether such direction is correct. It has to be remembered that the direction was given on March 28, 1956, in respect of
retrenchment made in May 1951, with half their back
wages.
·
The Tribunal erred in applying the rule "last come
first go " as if it were an inflexible rule. The management is the best Judge as to who were fit to be
retained and who should be sent out. No doubt, if
the selection of persons disclosed that the management was guilty of any unfair labour practice, that
would have been ground for interference. Tribunal
and the Appellate Tribunal found that the action of
management in selecting the personnel was not at all·
malafide. It cannot be said · to be unreasonabl~ if
persons are selected for discharge because they had
reached an age which would affect their efficiency and
so fit for being retrenched. It cannot be the rule
that once a workmen is entertained he should be kept
on for ever. Moreover, the evidence shows that a
committee of three sat for the purpose of making a
selection and they applied their minds to the problem
and took into account all factors, viz. length of
service, efficiency, defect in eye-sight with regard to
very small types and general aptitude for the new
kind of work on lino machines. Further, the workmen had themselves settled accounts with the
management and drawn whatever was due t.o them
and their claims having been satisfied it was unfair
'9
146
SUPREME COURT REPORTS
[1960]
r96o
and unjust to direct that they should be reinstated in
-
their old jobs with back wages. The others were
Swadesamitran Ltd. f
d · ffi · t
d ·
1
·
tt d
d
M d
5
oun
me cien
an
irregu ar m a en ance an
::•
therefore the selection by the management should
Their Workmen not have been interfered with at all by the Tribunal.
Principles of social justice do not compel an employer
to keep an inefficient or unsuitable and superannuated
workman in his service. The principle of ' last come
first go' should not have been so strictly applied on
the facts of this case. The Labour Appellate Tribunal
erred in law in directing reinstatement when it did
not differ from the conclusion of the Industrial
Tribunal that the strike of the respondents
\W1S
unjustified and that the appellants had acted bona
fide in coming to the conclusion that retrenchment of
39 workmen was necessary. It is only if the Industrial Tribunal was satisfied that in retrenching its
employees the appellant had acted malafide that it
would be open to the Tribunal to interfere with the
order of retrenchment passed by the appellant. The
order of reinstatement in substance is inconsistent
with the findings about the bona fides of the appellant.
The Tribunal further erred in preparing a pooled
seniority list to determine the seniority.
The
management must be given the discretion to run the
business in its best interests and it is not for the
Tribunal to say that the work done in the several
sub-sections of composing department was similar
and the workmen can be inter-shifted. Merely because
no' record was maintained as to the fitness or otherwise of each individual worker prior to the retrenchment, it was not right to infer that there was no
material for the management to judge of the comparative fitness of the workmen under it. In entertaining
the grievan!Je of the workmen against their order of
retrenchment the Labour Appellate Tribunal has
exceeded its jurisdiction. Retrenchment is and must
be held to be a normal management function and
privilege, and as soon as a case for retrenchment has
· been made out liberty and discretion must be left to
the employer to select which employee should in fact
be retrenched. In holding an enquiry about the
validity of reasonableness of retrenchment of certain
-
"""
.
-
3 S.C.R. SUPREME COURT REPORTS
147
specified persons the appellate tribunal had trespassed
x960
on the management function and as such exceeded
-
't · · d' t'
-Swadesamitran Ltd.
l S JUflS lC 10n.
M d
0. Anthoni. Pillai, (President, City Printing Press
a;,as
Workers' Union), for the respondents was not called Their Workmen
upon to reply.
.
1960. March, I. The Judgment of the Court was Gajendragadkar J . •
delivered by
GAJENDRAGADKAR, J.-This appeal by special leave
arises from an industrial dispute between Messrs.
Swadesamitran Ltd., Madras (hereinafter called the
appellant) and their workmen (hereinafter called the
respondents). On November 3, 1951, three items of
dispute were referred for adjudication to the Industrial Tribunal at Madras by the Madras Government
under s. lO(l)(c) of the Industrial Disputes Act, 1947
(Act XIV of 1947) (hereinafter called the Act). One
of these item·s was whether the retrenchment of 39
workmen effected by the appellant in May 1951 was
justified~ and if not, what relief the retrenched workmen were entitled to. It would be relevant to mention
briefly the material facts leading to this dispute. It
appears that on August 26, 1950, the respondents
addressed a charter. of demands to the appellant in
which eleven demands were made, and they intimated
to the appellant that, if the said demands were not·
granted, they would go on . strike. The appellant
pointed out to the respondents that it was working at
a loss and that proposals for retrenchment and
rationalisation were then under its active considera- ·
tion. It promised the respondents that as soon as its
financial condition improved their de!llands would be
sympathetically considered. Thereupon the demands
were withdrawn; but on January 24, 1951, another
communication was addressed by the respondents
making as many as thirteen demands coupled with
the same threat that if the said demands were not
granted the respondents would go on strike. A copy
of this communication was sent to the State Government which was requested to refer the said demands
for adjudication to the industrial tribunal. The
Government, however referred the matter to the
Conciliation Officer who found that the demands were
148
SUPREME COURT REPORTS
[1960]
x960
not justified. He accordingly made a report on
-
February 22, 1951.
Immediately thereafter the
Swade~=~::,n Ltd"respondents wrote to the .Governmen_t repeating their
v.
request for reference, but on April 24, 1951, the
Their Workmen Government ordered that no case for reference had
been made.
Gajendragadkar J.
Meanwhile the appellant was taking steps to effect
retrenchment in. the staff owing to the steep rise in
the prices of newsprint and scarcity of supplies, the
imposition by the ·Government of India of a pricepage schedule and the progressive introduction of
mechanisation in the composing section by installation of lino-type machines. When the respondents
came to know about this their Union called for a
strike ballot and as a result of the ballot the respondents decided to go on strike. A notice in that behalf
was issued on May 9, 1951. The ·appellant then
appealed to the respondents not to precipitate matters,
promised to consider their demands as soon as its
financial position improved and warned them that, if
they refused to report for work in accordance with the
strike notice, it would deem to amount to resignatiOn
of each one of the strikers of his job. The Conciliation
Officer who was approached by the appellant also
advised the respondents not to go on strike.
· Nevertheless the respondents went on strike on May
30, 1951.
Before the r~spondents thus went on strike
services of 39 members of the staff had been terminated by a notice as a measure of retrenchment witli
effect from May 18, 1951. It is the retrenchment of
these 39 workmen which led to the industrial dispute
with which we are concerned in tlie present appeal.
Before this dispute was thus referred for adjudication the respondents had filed a writ petition in the
Madras High Court asking for a writ calling upon the
Government to make a reference under s. lO(l)(c) of
the Act. This writ application was allowed; but on .
appeal the Court of Appeal modified the order issued
by the original court by substituting a direction that
the Government should discharge its duties under
s. 12(5) of the Act. On June 12, 1951, the strike was
called off by the respondents and they offered to
resume work ; but by then the appellant had engaged
-
-
-,._)
I
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..
3 S.C.R.
SUPREME COURT REPORTS
149
new hands and so it was able to re-engage only some
r960
of the respondents who offered to resume work. The
-
failure of the appellant to take into service all its Swades;:m~tran Ltd.
workmen is another item of dispute between the
::as
parties; but with the said dispute the present appeal Their Workmen
is not concerned. It was as a result of the order
passed by the Madras High Court that the present Gajendragadkar J.
dispute was ultimately referred for adjudication to the
industrial tribunal. .
The tribunal held that the strike declared by the
respondents was not justified. and that the appellant
was justified in retrenching 39 workmen in question.
According to the tribunal, though in retrenching 39
workmen the principle qf 'last 9.ome first go' was not
strictly followed, the appellant was justified in departing from the said principle. because it was entitled to
give preference to "persons mechanically inclined
and having good eyesight." Thatis why the tribunal
rejected the respondents' plea that in effecting
retrenchment the appellant had indulged in any unfair labour practice .. Since the tribunal was satified
that the retrenchment of39 workmen was effected in
the usual course for good and sufficient reasons it
ordered that the said retrenched workmen were not
entitled to any relief.
·
The respondents challenged this award by an appeal
before the Labour Appellate Tribunal. The appellate
tribunal was satisfied that the impugned finding about
.the. bona fides and the validity of the _retrenchment
was not justified. It, therefore, remanded the proceedings to the industrial tribunal for df)ciding afresh
the four points formulated by it. Two of these points
are relevant for our purpose. One was whether the
formula 'last com:e first go' had been complied with;
and if it was not, the tribunal was asked to scrutinise
in relation to each individual whether the reasons for
breaking the said rule were sufficient in his case ; and
the other was whether the management was motivated by any unfair labour practice or victimisation.
Pursuant to this order of remand the industrial
tribunal allowed an opportunity to the appellant to
lead evidence, and, on considering the evidence, it
came to the conclusion that the appellant had made
150
SUPREME COURT REPORTS
[1960]
'960
out a case of necessity for retrenchment and that it
5
d -.1
Ltd had justified the extent of retrenchment as pleaded by
wa '';;;;,,:•
·it. No mala jides in that behalf had been established
v.
according to the tribunal. It, however, held that the
Their Workmen principle of' last come first go' had not been observed
. -
in selecting the personnel for retrenchment; and it
Ga;endragadkar J. rejected the explanation given by the appellant in
retrenching 15 out of the said 39 workmen. That is
why it ordered the appellant to reinstate the said
15 workmen without any back wages. In regard to
the remaining 24 workmen no order was made by the
tribunal in respect of any compensation payable to
them.
.
On receipt of the fi._ndings recorded by the tribunal
the matter went back to the Labour Appellate Tribunal. Both parties had filed objections against the
findings in question. The appellate tribunal considered
these objections and held that the appellant had
made out a case for retrenching 39 of its employees;
but it agreed with the industrial tribunal that the
principle of' last come first go' had not been observed
and that no case had been made out to depart from
the said principle. That is why it confirmed the
finding of the tribunal that the 15 named employees
should be reinstated and added that they should be
given half the amount of their back wages. In regard
to the remaining 24 workmen who had been retrenched,
the appellate tribunal directed that they should be
awarded compensation at the rate of half a month's
wages including dearness allowance for each year of
service. It is against this decision· that the present
appeal has been preferred by special leave.
The first point which the learned Attorney-General
has raised before· us in this appeal on behalf of the
appellant is that the Labour Appellate Tribunal erred
in law in directing reinstatement when it did not differ
from the conclusion of the industrial tribunal that the
strike of the respondents was unjustified and that the
appellant had acted bona fide in coming to the conclusion that retrenchment of 39 workmen was necessary.
It is urged that it is only if the industrial tribunal is
satisfied that in retrenching its employees the appellant had acted mala fide that it would be open to the
\,---:
\
-
-
-
'1
-\
3 S.C.R. SUPRE¥E COURT REPORTS
151
tribunal to interfere with the order of retrenchment
r960
passed by the appellant; and the argument is that
-. L d
h
d
f
. t t
t .
b t
. .
. t
t Swadesamitran
I •
t e or er o reins a emen In su s ance IS Inconsis en
Madras
with the findings about the bona fides of the appellant.
v.
In our opinion this argument is misconceived. There Their Workmen
are two aspects of the question with which the appel-
--
late tribunal was concerned in the present proceedings : Gajendragadkar I·
Was the appellant justified in coming to the conclusion in exercise of its management function and authority that 39 workmen had to be retrenched ; if yes,
.has the retrenchment been properly carried out ? The
first question has been answered in favour of the
appellant by both the tribunals below. It has been
found that the respondents' strike was unjustified and
that for the reasons set out by the appellant retrenchment to the extent pleaded by it was also called for
and justified. It is in regard to this aspect of the
matter that the appellant's bonafides have no doubt
qeen found; but the bona fides of the appellant in
coming to the conclusion that 39 workmen had to be
retrenched have no material bearing nor have they
any. relevance in fact with the question as to whether
the appellant a~ted fairly or reasonably in selecting
for retrenchment the 39 workmen in question. It is
in regard to this latter aspect of the matter that
concurrent findings have been recorded against the
appellant that it acted without justification and the
retrenchment of the 15 workmen in question amounts
to an unfair labour practice. Therefore, it is not
possible to accept the argument that there is any
inconsistency in the two findings. They deal with
two different aspects of the matter and so they cannot
be said to conflict with each other at all.
It is then urged that in entertaining the grievance
of the respondents against their order of retrenchment
the Labour Appellate Tribunal has exceeded its
jurisdiction. The case presented before us on this
ground assumes that retrenchment is . and must be
held to be a normal management function and privilege, and as soon as a case for retrenchment had been
made out liberty and discretion must be left to the
•
employer to select which employees should in fact be
retrenched. In holding an enquiry about the valiQ.i~y
152
SUPREME COURT REPORTS
[1960]
· 1960
or reasonableness .of retrenchment of certain specified
-
persons the appellate tribunal has trespassed on the
Swadesamitran Ltd.
t f
t•
d
h h
d d •t
M d
managemen
unc 10n an
as sue
as excee e
1 s
::•s
jurisdiction. We are not impressed by this argument.
Their Workmen It may be conceded that if a case for retrenchment
is made out it would normally be for the employer to
Gajendragadkar J. decide which of the employees should be retrenched;
but there can be no doubt that the ordinary industrial
rule of retrenchment is 'last come first go', and where
other things are equal [this rule has to be followed by
the employer in effecting retrenchment. We must,
however, add that when it is stated that other things
being equal the rule 'last come first go' must be
applied, it is not intended to deny freedom to the
employer to depart from the said rule for sufficient
and valid reasons. The employer may take into
account considerations of efficiency 0.nd trustworthy
character of the employees, and if he is satisfied that
a person with a long service is inefficient, unreliable
or habitually irregular in the discharge of his duties,
it would be open to him to retrench his services while
retaining in his employment employees who are more
efficient, reliable and regular though they may be
junior in service to the retrenched workmen. Normally,
where the rule is thus departed from there should be
reliable evidence preferably in the recorded history of
the workmen concerned showing their inefficiency,
unreliability or habitual irregularity. It is not as if
industrial tribunals insist inexorably upon compliance
with the industrial rule of retrenchment; what they
insist on is on their being satisfied that wherever the
rule is departed .from the departure is justified by
sound and valid reasons. It, therefore, follows that,
wherever it is proved that the rule in question has
been departed from, the employer must satisfy the
industrial tribunal that the departure was justified ;
and in that sense the onus would undoubtedly be on
the employer. In dealing with cases of retrenchment
it is essential to remember that the industrial rule of
'last come first go' is intended to afford a very healthy
•
safeguard against discrimination of workmen in the
matter of retrenchment, and so, though the employer
may depart from the rule, he s.hould be able to justify
·-
'
-
-
3 S.C.R. SUPREME COURT REPORTS
153 .
the departure before the industrial tribunal whenever
r960
an industrial dispute is raised by retrenched workmen
. -
d h
h . .
d
h
Swadesamitran Lid.
on the groun .t at t eir ni;ip~gne . r~t~enc. ment
Madras
amounts to unfair labour practice or victimisat10n.
v.
It appears that in 1946 the Government of India, TlieirWorkmm
in its Department of Labour, formulated certain rules .
-
.
for retrenchment and commended them to the atten- Gajendragadkar l·
tion of all employers of labour and trade unions so
that disputes on that score may be minimised. Rule 4
amongst the said rules was that as a rule discharge
of personnel who are still surplus to requirements
should be in accordance wft;h the principles of short
service, that is to say, last man engaged should be the
first man to be discharged. Due notice or wages in
lieu thereof should be given. The same principle has
been accepted and applied by industrial tribunals on
several occasions (Vide: Indian Navigation & Industrials, Alleppey And Certain Workmen (1); Outtack
Electric Supply Go. Ltd. And Their Workmen (2); and
Shaparia Dock and Steel Company And Their Workers (3) ). We ought to add that the same principle has
now been statutorily recognised by s. 25(g) of the Act.
This section provides inter alia that where any workman in an industrial establishment, who is a citizen
of India, is to be retrenched, the employer shall
ordinarily retrench the workman who was the last
person to be employed in the same category, unless,
for reasons to be recorded, the employer retrenches
any other workman; in other words, by this section a
statutory obligation is imposed on the employer to
follow the rule, and if he wants to depart from it to
record his reason for the said departure.
In support of his contention that the Labour Appellate Tribunal has exceeded its jurisdiction in examining the merits of the retrenchment effected by the
appellant, the learned Attorney-General has relied
upon certain observations made by this Court in the
case of J. K. Iron & Steel Go. Ltd. v. Its Workmen (4).
Dealing with the argument of the appellant that the
order of retrenchment should be left to the management and that the decision by the management that
(r) (1952) II L.L.J. 6n.
(2) 1954 I L.L.J. 723.
(3) (1954) II L.L.J. 208.
(4) Civil Appeal No, 2Q6 of 1958 decid~d on u-a-1960.
154
SUPREME COURT REPORTS
(1960]
r960
some,employees are better qualified than others should
S
-.
not be questioned by the adjudicator unless he came
wadesamitran Ltd.
h
l
.
h
h
.I'
• l
Madras
to t e cone us10n t at t e _Pre1erentra treatment was
v.
deemed· to be mala: fide, this Court observed that the
Their Workmen proposition involved in the argument was unexception-
.
-
able, it was added, that, if the preferential trea.tGa1endrag•dkar J. ment given to juniors ignores the well recognised
principles of industrial law of' first come last go' without any acceptable or sound reasoning a tribunal or
an adjudicator will be well justified _to hold that the
action of the management is not bona fide.
We do not
see how either of the two propositions set out in this
judgment can support the appellant's argument before
us.
The position under the industrial law seems to us
to be fairly clear. The management has the right to
retrench the workmen provided retrenchment is justified.
In effecting retrenchment the management normally has to adopt and give effect to the industrial
rule of retrenchment. For valid reasons it may depart
from the said rule. If the departure from the said rule
does not appear to the industrial tribunal as valid or
satisfactory, then the action of the management in so
departing from the rule can be treated by the tribunal
as being mala fide or as amounting to unfair labour
practice ; in other words, departure from the ordinary
industrial rule of retrenchment without any justification may itself, in a proper case, lead to the inference
that the impugned retrenchment is the result of
ulterior considerations and as such it is mala fide and
amounts to unfair labour practice and victimisation.
That is precisely what this Court has held in the case
of J. K. Iron & Steel Co. Ltd. (').
We are, therefore,
satisfied that there is no substance in the appellant's
contention that the tribunals below have exceeded
their jurisdiction in enquiring into the validity of the
retrenchment of the 39 workmen in question.
There is one more point which may briefly be mentioned in this connection. After the matter was
remanded the industrial tribunal has carefully considered the evidence given by the appellant. In fact it is
clear from the record that at the original enquiry
no evidence had been led by thl appellant to justify
tI) Civil Af.ipeal No. :266 of 1958 decided on 11:.2-6~.
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I
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'l
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3 S.C.R. SUPREME COURT REPORTS
155
the departure from the rule even though it was. conI960
ceded that the rule had not be.en followed.
The 5
d -. L d
.
l
£ .
wa esamitran
t •
Labour Appellate Tribuna, therefore,
airly gave a
Madras
chance to the appellant to justify the said departure,
v.
and accordingly evidence was led by the appellant.
Their Workmen
This evidence consists of the testimonv of Mr. Lakshminarasimhan, who has been working ~ith the appellant Gajendragadkar J •.
for 32 years. He works as an Assistant Editor, and in
addition attends to press work. He stated that he
was having a personal supervision of the entire work
and that when retrenchment was actually effected a
committee was appointed consisting of himself, the
Manager Mr. Ayyangar and the Press Manager Mr.
Rajagopala Ayyangar. At the time of the enquiry the
Manager was dead. According to the witness the
committee took the advice of the Foremen of various
sections in deciding which workmen should be retained
and which should be retrenched. The witness gave
evidence about the defects in the cases of the 39
workmen who were retrenched; and in support . of his
oral testimony he filed two statements T-1 and T-2
giving material particulars in respect of all the said
workmen. It is admitted that no records were made
at the time when the cases of these workmen were
examined, and so the witness was driven to give .
evidence merely from memory. The tribunal has
held that having regard to the nature . of the defects
attributed to the several workmen to which the witness deposed it was impossible to accept his testimony
as satisfactory, and the tribunal was also not satisfied
that it was likely that the witness should have any
personal· knowledge in regard to the said defects. In
the 'result the tribunal rejected this testimony. It also
examined some cases 'in detail, and it was satisfied
that the reasons given for retrenching them· were
demonstrably unsatisfactory. It is on these findings
that the tribunal came to the conclusion that the
appellant had not shown any valid or rea.sonable ground
for departing from the usual rule, and thie. finding has
been accepted by the Labour Appellate Tribunal. In
such a case we do not see how in .the present appeal
the appellant can successfully challenge the correctness
of the conclusion that in substance the retrenchment
156
SUPREME COURT REPORTS
[1960]
z960
of the 15 workmen amounts to an unfair labour practice and victimisation.
Swad'5amitran Ltd.·
That leaves two minor questions which were formuM":/."s
lated for our decision by the learned Attorney-General.
Their Workmen He contended that, even if the impugned retrenchment of the 15 workmen in question was not justified,
Gajendragadkar J. reinstatment should not have been directed; some
compensation instead should have been ordered; and
in the alternative he argued that the order directing
compensation to the remaining 24 retrenched workmen was also not justified. We do not see any substance in either of these two contentions. Once it is
found that retrenchment is unjustified and improper
it is for the tribunals below to consider to what relief
the retrenched workmen are entitled. Ordinarily, if
a workman has been improperly and illegally retrenched he is entitled to claim reinstatement. The fact
that in the meanwhile the employer has engaged other
workmen would not necessarily defeat the claim for
reinstatement of the retrenched workmen ; nor can
the fa
0ct that protracted litigation in regard to the dispute has inevitably meant delay, defeat such a claim
for reinstatement. This court has consistently held
that in the case of wrongful dismissal, discharge or
retrenchment, a claim for reinstatement cannot be
defeated merely because time has lapsed or that the
employer has engaged fresh hands (Vide: The Punjab
National Bank Ltd. v. The All-India Punjab National
Bank Employees' Federation (1); and National Transport and General Co. Ltd. v. The Workmen (2).
Then as
to the compensation awarded to the 15 and 24 workmen respectively, it is a matter of discretion and as
such is not open to challenge in the present appeal.
In the result the appeal fails and is dismissed with
costs.
Appeal dismissed
(t) t196o] I S.C.R. 806.
(t) Civil Appeal No. 312 of 1956 decided on januaty 22, 1937,
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