# ST A TE BANK OF INDIA v. SHR[ N. SlJNDARA MONEY

- **Citation:** [1976] 3 S.C.R. 160
- **Court:** Supreme Court of India
- **Decided:** 1976-01-16
- **Bench:** Y. V. Chandrachud. \·. R. Krishna Iyer, A. C. Gl!PTA
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/st-a-te-bank-of-india-v-shr-n-sljndara-money-6745
- **Pages:** 8

## Headnote

Constitution of India-Art. 133( l)-Sche111e of-Conditions preceden; for
tlic issue of a certificate under in l'Xerci.H' of power under Art.
136 of
ifle
Constitution on such a ccrtific.alt'.
Jndt1.\'lrial l)ispntcs Act, 19-l-7 (Act 14 of 1947)-St•ction 25F read
with
s.\·. 2(oo) anti 25(B)(2)-Scupc of the co11cep1 of retre11clune11t under s. 2(00).
Statutory COil.\fruction of ,\ocial welfare legislation-Guidelines.
Words and
p/rrases-.~leanin.r: of the lvords ''.tennination ...... for any
reason lvhatsoe1·t•r" includes _autornatic exti11guisl1111ent of service by rirtuc of
a pre-en1ptivc pro\·ision to tenninate in the appointnient order itself.
Section 25(F)(b) of the Jndustrial Disputes Act,
1947, provides that no
·workman employed in {lny industry \Vho has been in continuous service for not
less than one year under an employer shall be retrenched by that employer until
he has been paid at the time of the refrcnchment, compensation which shall be
equivalent to 15 days· average pay for every completed year of service or any
part thereof in excess of six months-.
Section 2(00) of the Act de.fines 'retrcnch1nent' as meaning the termination by the employer of the service of a v1orkn1an
for any reasons \Vhatsoever, otherwise than as a punishment inflicted by \Vay of
disciplinary action. In the "Hospital Jvfazdoor Sabha's" the Supreme Court held
that the statutory requirell}ent of the
payment of compensation under
s. 25(F)(b) of the Industrial Disputes Act, 1947 is a condition precedent for
the retrenchment of a workman and any retrenchment \Vithout payment at the
time of the retrenchment makes the retrenchment order invalid and inoperatiYe.
As the aulomatic extinguishmcnt of his service consequent to the pre-en1;>tive
provision in his appointment order as to the 'Jemporariness and the period of
his cmploy111ent \Va<; covered by the \\'ords "termination ...... for any reasons
whatsoever" occurring ins. 2(00) of the Act, in an application under Art. 2~6
of the Constitution by the respondent claiming that by virtue of his deernecl
continuous service of one year within the meaning of s. 25B(2) of the Industrial Disputes Act. he \Vas entitled to be reinstated for non-compliance of s. 25F
of the Act. The High Court of Madras, allowing .the. \Vfit, made the rule nisi
absolute. The \\Tit appeal filed by the appellant respondent also failed. However, the High Court granted a certificate under Art. 133(l)(c) of the Constitution.
Disn1issing the appeals and negaliving the contentions of the aprellant, the
Court.
HELD : ( 1) The grant o.f a Constitutional passport to the Suprc1ne Cour·t
by the High Court is not a matter of easy insouciance but anxious advertenc~ to
the dual vital requirements built into Art. 133(1) by specific an1endment.
/.\
substantial question of law of general importance is a sine quo non to certify
Jitness for hearing by the apex court. Nay. more; the question, however, imp6r.·-
tant and substantial, must be of such pervasive import and deep significance
that in the High Court's judgn1ent it imperatively needs to be settled at the
national level by the highe:it bench.
Failure here· stultifies the schen1e of the
Article and floods this court \Vith cases of lesser magnitude with illegitimate entry.
[162 C-1']
Union of lndill v. Hafi.::. Mo/id. Said, JLR
[1973]
TI
Delhi
673,
676,
approved.
(2) While exercising the vital po\vers under Art. 136 the Supreme Court
must have due regard to the constitutional limitations of Art. 133(1) and owe
allegiance to those restraints save in exceptional cases. (163 A]
f
•
•
..
'
STATE BANK v. N: s. MONEY (Krishna Iyer. !.)
16 I
(3) If the workman s\vim~ into the harbour of s. 25f'--of the Industrial DisA
pules Act. 1947, he cannot be retrenched Viithout payment, at the titne of retrenchment, compensation computed as prescribed therein read \vith s. 25ll(2).
[164 DJ
State of Bo111bay and other.~ v. Hospital Ma:::.door Sublia <C: others [1960] (2)
S.CR. 866, applied.
( 4) Statutory constructio

## Text

A
R
c
D
E
F
G
H
160
ST A TE BANK OF INDIA
v.
SHR[ N. SlJNDARA MONEY
January 16, 1976
[Y. V. CHANDRACHUD. \·. R. KRISHNA IYER AND A. C. Gl!PTA, JJ.J
Constitution of India-Art. 133( l)-Sche111e of-Conditions preceden; for
tlic issue of a certificate under in l'Xerci.H' of power under Art.
136 of
ifle
Constitution on such a ccrtific.alt'.
Jndt1.\'lrial l)ispntcs Act, 19-l-7 (Act 14 of 1947)-St•ction 25F read
with
s.\·. 2(oo) anti 25(B)(2)-Scupc of the co11cep1 of retre11clune11t under s. 2(00).
Statutory COil.\fruction of ,\ocial welfare legislation-Guidelines.
Words and
p/rrases-.~leanin.r: of the lvords ''.tennination ...... for any
reason lvhatsoe1·t•r" includes _autornatic exti11guisl1111ent of service by rirtuc of
a pre-en1ptivc pro\·ision to tenninate in the appointnient order itself.
Section 25(F)(b) of the Jndustrial Disputes Act,
1947, provides that no
·workman employed in {lny industry \Vho has been in continuous service for not
less than one year under an employer shall be retrenched by that employer until
he has been paid at the time of the refrcnchment, compensation which shall be
equivalent to 15 days· average pay for every completed year of service or any
part thereof in excess of six months-.
Section 2(00) of the Act de.fines 'retrcnch1nent' as meaning the termination by the employer of the service of a v1orkn1an
for any reasons \Vhatsoever, otherwise than as a punishment inflicted by \Vay of
disciplinary action. In the "Hospital Jvfazdoor Sabha's" the Supreme Court held
that the statutory requirell}ent of the
payment of compensation under
s. 25(F)(b) of the Industrial Disputes Act, 1947 is a condition precedent for
the retrenchment of a workman and any retrenchment \Vithout payment at the
time of the retrenchment makes the retrenchment order invalid and inoperatiYe.
As the aulomatic extinguishmcnt of his service consequent to the pre-en1;>tive
provision in his appointment order as to the 'Jemporariness and the period of
his cmploy111ent \Va<; covered by the \\'ords "termination ...... for any reasons
whatsoever" occurring ins. 2(00) of the Act, in an application under Art. 2~6
of the Constitution by the respondent claiming that by virtue of his deernecl
continuous service of one year within the meaning of s. 25B(2) of the Industrial Disputes Act. he \Vas entitled to be reinstated for non-compliance of s. 25F
of the Act. The High Court of Madras, allowing .the. \Vfit, made the rule nisi
absolute. The \\Tit appeal filed by the appellant respondent also failed. However, the High Court granted a certificate under Art. 133(l)(c) of the Constitution.
Disn1issing the appeals and negaliving the contentions of the aprellant, the
Court.
HELD : ( 1) The grant o.f a Constitutional passport to the Suprc1ne Cour·t
by the High Court is not a matter of easy insouciance but anxious advertenc~ to
the dual vital requirements built into Art. 133(1) by specific an1endment.
/.\
substantial question of law of general importance is a sine quo non to certify
Jitness for hearing by the apex court. Nay. more; the question, however, imp6r.·-
tant and substantial, must be of such pervasive import and deep significance
that in the High Court's judgn1ent it imperatively needs to be settled at the
national level by the highe:it bench.
Failure here· stultifies the schen1e of the
Article and floods this court \Vith cases of lesser magnitude with illegitimate entry.
[162 C-1']
Union of lndill v. Hafi.::. Mo/id. Said, JLR
[1973]
TI
Delhi
673,
676,
approved.
(2) While exercising the vital po\vers under Art. 136 the Supreme Court
must have due regard to the constitutional limitations of Art. 133(1) and owe
allegiance to those restraints save in exceptional cases. (163 A]
f
•
•
..
'
STATE BANK v. N: s. MONEY (Krishna Iyer. !.)
16 I
(3) If the workman s\vim~ into the harbour of s. 25f'--of the Industrial DisA
pules Act. 1947, he cannot be retrenched Viithout payment, at the titne of retrenchment, compensation computed as prescribed therein read \vith s. 25ll(2).
[164 DJ
State of Bo111bay and other.~ v. Hospital Ma:::.door Sublia <C: others [1960] (2)
S.CR. 866, applied.
( 4) Statutory construction, when courts consider \\'elf are legislation with an
economic justice bias. cannot turn on cold print, glorified as grammatical construeB
tion, but on teleological purpose an<l protective intendment. Sections 25F, 25B
aud 2(00), of the Industrial Disputes Act. 1947 ha\'e a \Yorkers' 111ission and
the input of Part IV of the Constitution also underscores this benignant approach.
\Vhile canons- of tra1.1itional sanctity cnnnot wholly govern. courts ..:a::u1ot go hay-
\vire in interpreting provisions, ignoring the text and context. Words of multipk:
import have to he winno,Ye<l judicially to suit the social philosophy of the statute.
Dictionaries are not dictators of statutory construction '"'here the
benignant
1nood of a la\v and. more en1phatically, the definition clause furnish a difi:'i.:rent
denotation. Section 2 ( oo) is the master of the situation and t11~ Court cannot
C
truncate its amplitude. The won.ls "for atiy reason whatsoever" ins. 2(oo) of
the Industrial Disputes Act are very wide and almost admit of no exception.
[163 G, 164 H, 165 B, 166 BJ
(5) A breakdo\vn of s. 2(oo) unmis.takably expands the sen1antics of ret1u1chment.
"Termination ...... for any reason \Vhatsoever" are the
key
words.
Every termination
spells retrenchment. A
termination takes
place
\\here a term expires either by the active step of the master or the running out
of the stipulated term. To protect the weak against the strong this policy of
D
cu1nprehensive definition has been
effectuated. Termination
embraces
not
n1crely the act of termination by the employer, but the fact of !ermination ho\vo;,oev<:r produced. Retrenchment is no longer terra incognita but area covered
b1 an expansive definition. It means 'to end' conclude, cease'. That to write
inlo the order of appointment the date of tern1ination confers '!10 n1oksha from
s. 25F(b) is inferable "from the proviso to s. 25F(l). A separate subsequent
termination of the service is not the sole n1agnetic pull of the provision. A
pre-emptive provision to terminate is struck by the same vice as a post·appoint11:.
ment termination. Dexterity of diction cannot defeat the articulated conscience
of the provision. [165 B-C. D. E, 166 CJ
Ob,.,ervatio11 :.-Social justice has two sides and occasionally one party or
the other makes myopic mistakes resulting in further litigation. [166 G]
[The Court reiterated its vie'"'·s hel<l out in Trustees of Port, Bo111bay's case,
nan1ely, where the law is not free from obscurity and needs this Court's pronouncement an<l one of the affected parties is weak, being a Vv'orl.;.er, the costs
i~n1st come out of public funds and suggested the constitution by the State of a
··suitors Fund'' which will take care of hardships and publi\.: interest in the area
or necessary litigation.]
CIVIL APPELLATE JURISDfCTION : Civil Appeals Nos.
933
and
934 of 1975.
-
From the judgment and orders dated the 24th and 25th March,
1975 of the Madras High Court at Madras in writ appeal No. 231
of 1973 and writ petition No. 5062 of 1973.
F. S. Nari"""'' MI s. I. N. Shroff and H. S. Parihar, for the appel-
!ant.
M. K. Rwnamurthi and J. Ra111a111urthi, for the respondent.
The Judgment 9f the Court was delivered by
F
KRISHNA lYER, J.-The appellant employer, undaunted by a double
H
defeat at both tiers in the High Court, has appealed against the adverse judgments, by certificate, on the only ground that there was no
rctrenchmem of the respondent-employee (within the meaning
of
162
SUPREME COURT REPORTS
[1976] 3 S.C.R.
A
of s. 2(oo) of the.Industrial Disputes Act, 1947 (Act XIV of 1947)
hereinafter called the Act) and, consequently the latter was ineligible
to the statutory compensation the non-payment of
which,
along
with the termination of service, nullified the termination itself.
The
end result was that the Division Bench of the Court ruled that the
respondent 'was entitled to retrenchment compensation' which, not
having been paid, 'the termination would be invalid'.
The
subtle
B
legal issue, substantial in its financial impact, is whether s. 25F read
with s. 2 ( oo), vis a vis a short employment, casts a lethal spell on
the cessation of service for non-compliance with the condition precedent set out in the provision.
·C
D
If
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The Certificate
The certificate issued by the High Court under Art.133 (1) is
bad on its face. according to counsel for the respondent and
the
appeal consequently incompetent.
We are inclined to agree
that
the grant of a constitutional passport to the Supreme Court by the
High Court is not a matter of easy insouciance but anxious advertence to the dual vital requirements built into Art. 133 (I) by specific
amendment. , Failure here stultifies the scheme of the Article and
floods this Court with cases of lesser magnitude with
illegitimate
entry.
A substantial question of law of general
importance is
a
sine qua non to certify fitness for hearing by the apex court. Nay,
more; the question, however important and substantial, must be of
such pervasive import and deep significance that. in the High Court's
judgment it imperatively needs to be settled at the national level
by the highest bench.
The crux of the matter has been correctly
set out in a decision(') of the Delhi High Court in words
which
find our approval :
"A certificate can be granted only if the case involves a
question of law :-
(i) which is not only substantial but is also of general
importance; and
(ii) the said question, in our opinion, needs to be decided by the Supreme Court.
It has to be noted that all the above requirements should
be satisfied before a certificate can be granted. It means
that it is not sufficient if the case involves
a substantial
question of law of general importance but in addition to it
the High Court should be of the opinion that such question
needs to be decided by the Supreme Court.
Further, the
word 'needs' suggests that there has to be a necessity for a
decision by the Supreme Court on the question, and such
a necessity can be said to exist when, for instance,
two
views are possible regarding the question and
the
High
Court takes one of the said views.
Such a necessity can
also said to exist when a different view has been expressed
by another High Court.
(!) Union of India v. Hafiz Mohd. Said: ILR [19731 II Delhi 673, 676.
j
J
L
STATE BANK v. N. s. MONEY (Krishna Iyer, I.)
163
It is but fair to add an implied but important foot note that
A
while exercising the wider power under Art. 136 this Court must
have due regard to the constitutional limitations on Art. 133(1) and
owe allegiance to those restraints save in exceptional cases.
This view of the certificate would have put the lid on this appeal
but on hearing counsel we feel that the omission of the High Court
to assess the case explicitly from this angle does not disable us from
8,
granting special leave, if applied for.
So much so
counsel
have
proceeded to argue on the merits, the penumbra! area of industrial
law covered by the subject matter being one which cannot be left in
legal twilight.
The facts
One of the two employees involved in these appeals has
been
re-absorbed in service and his case is therefore of lesser import, but
the other is still out in the cold ~ad his legal fate falls for examination
in the matrix of facts which we proceed to state.
This respondent
was appointed as cashier, off and on, by the State Bank of India
between
July
31 ,
1973
and
August
29, 1973.
The
intermittent breaks notwithstanding, his total number of days of employment answered the test of
'deemed'
continuous
service
within
s. 258 (2) and both sides accept that fact situation.
But the order
of appointment. which bears in its bosom the 'good bye'
to
the
employee after a few days, calls for construction in
the
light
of
s . 2 ( oo) and s. 25F and we may as well read it here
"(I) The appointment is purely a temporary one for
a
period of 9 days but may be
terminated earlier,
without assigning any reason therefor at the bank's
discretion;
(2) The employment, unless
terminated
earlier,
will
automaticallv cease at the expiry of the period i.e.,
18-11-1972."
c
This nine days' employment, tacked on to what has gone before,
F
has ripened to a continuous service for a year on the
antecedent
arithmetic of 240 days of broken bits of service.
The le11al issue
The skiagram of the employment order must now be studied to
ascertain which of the rival meanings counsel have pressed deserves
preference.
Statutory construction, when
courts
consider welfare
legislation with an economic justice bias, cannot turn on cold print
glorified as grammatical construction but on teleological purpose and
protective intendment.
Here s. 25F, 25B and 2 ( oo) have a workers'
mission and the input of Part IV of the Constitution also underscores
this benignant approach.
While canons of traditional sanctity cannot wholly govern, courts cannot go haywire in interpreting provisions, ignoring the text and context.
With these guidelines
before
us, we seek to decode the implications of the order of appointment.
But before doing so, an analysis of the legal components of s. 25F
will facilitate the diagnostic task.
G
H
164
Sl;PREME COURT REPORTS
[J 976] 3 S.C.R.
A
The leading case on this facet of law is The Hospital Mazdoor
ll
c
0
F
G
H
Sabha( 1). Gajendragadkar, J. (as he then was) observed:
"Section 25F(b) provides that no workman
employed
in any industry who has been in continuous service for not
Jess than one year under an employer shall be retrenched
by that employer until he has been paid at the time of retrenchment compensation which shall
be
equivalent
to
fifteen days' aYeragc pay for every completed year of service
or any part thereof in excess of six months.
Clauses (a)
and ( c) of the said section prescribe similar conditions but
we are not concerned with them.
On a plain reading of
s. 25F(b) it is clear that the requirement prescribed by it
is a condition precedent for the retrenchment of the workman.
The section provides that no workman
shall · be
retrenched until the condition in question has been satisfied.
It is difficult to accede to the argument that when
the
section imposes in mandatory terms a condition precedent,
non-compliance with the said condition would not render
the impugned retrenchment invalid .... failure to
comply
with the said provision renders the impugned orders invalid
a.nd inoperative."
Without further ado, we reach the conclusion that if the workman
swims into the harbour of ·s. 25F, he cannot be retrenched without
payment, at the time of retrenchment, compensation computed as
prescribed therein read with s. 25B(2).
But, argues the appellant,
all these obligations flow only out of retrenchment, not termination
outside that species of snapping employment.
What, then,
is
retrcnchm~.1t? The key to this vexed question is to be found in
s.
2 ( oo) which reads thus :
"2 ( oo) "retrenchment" means the termination by the employer of the service of a workman for any reason
whatsoever, otherwise than as a punishment inflicted by way of disciplinary action,
but
does
not
include-
(a) voluntary retirement of the workman; or
(b) retirement of the workman on reaching the age
of supera-annuation if the contract of employment between the employer and the workman
concerned contains ." stipulation in that behalf;
or
( c) termination of the service of a workman on the
ground of continued ill-health;
for any reason whatsoever-very wide and almost admitting of
no
exception.
Still, the employer urges that when the order of appointment carries an automatic cessation
of
service,
the
period of
ci;1ployment works itself out by efflux of times, not by act of employer.
---- - --
-----~
(1) [1960] 2 S.C.R. 866, 871-872.
' •
..
•
STATE BANK v. N. s. MONEY (Krishna Iyer, J.)
165
Such C•\scs arc outside the concept of 'retrenchment' and cannot entail
the burdensome conditions of s. 25F. Of course, that a nine-days'
employment, hedged in with an express condition of temporariness
and automat'c cessation, may look like being in a different street (if
we may use a colloquialism) from telling a man off by retrenching
him.
To retrench is to cut down.
You cannot retrench
without
trenching or cutting.
But dictionaries are not dictators o! statutory
construction where the benignant mood of a law and, more emphatically, the definition clause furnish a different
denotation.
Section
2 ( oo) is the master of the situation and the Court cannot truncate
its amplitude.
A hreak-down of s. 2(oo) unmistakably expands the semantics
of retrenchment.
'Termination. . . for any reason whatsoever'
are
the key words.
Whatever the reason, every termination srells
retrenchment.
So the sole question is-has the employee's service
been terminated?
Verbal apparel apart, the substance is decisive.
A termination 'takes place where a term expires either by the active
step of the master of the running out of the stipulated term.
To
protect the weak against the strong this policy of comprehensive
definitio11 has been effectuated. Termination embraces not merely the
act of termination by the employer, but the fact of termination howsoever produced.
May be, the present may be a
hard
case,
but
we can visualise abuses by employers, by suitable verbal
devices,
circumventing the armour of s .25F ands .2(oo). Without speculat-
,ing on possibilities, we may agree that 'retrenchment' is no longer
terra incognita but area covered by an expansive definition. It means
'to end, conclude, cease'.
In the present
case
the
employment
ceased, concluded, ended on the expiration of nine days-automatically may be, but cessation all the same.
That to write into
the
order of appointment the date of termination confers no moksha from
s. 25F(b) is inferable from the proviso to s. 25F(l ).
True,
the
section speaks of retrenchment by the employer and it is urged that
some act of volition by the employer to bring about the termination
is essential to attract s. 25F and automatic extinguishment of service
by effluxion of time cannot be suflicient.
An English case R.
v.
Secretary of State(') was relied
on where
Lord Denning
MR
observed :
"I think that the word 'terminate' or 'termination' is by
itself ambiguous. It can refer to either of two things-either
to termination by notice or to tcr1ninatio11 by effluxion of
time. lt is often used in that dual sense in landlord and tenant and in n1astcr and servant cases.
But there are several
indications in this paragraph to show that it refers here onlv
to termination by notice."
·
Buckley L.C., concurred and said :
"In my judgment the words are not capable of bearing
that meaning. As counsel for the Secretary of State has pointed out, the verb 'terminate' can be used either transitively or
-- -----
(!) {1973] 2 All E.R. 103.
A
B
c
D
E
F
G
H
A
B
c
D
E
F
G
H
166
SUPREME COURT REPORTS
[J 976] 3 S.C.R.
intransitively. A contract niay be said to terminate when it
comes to an end by eflluxiou of time, or it may be said to be
terminated when it is determined at notice or otherwise bv
some act of one of the parties. Here in my judgment the
word 'terminated' is used in this passage in para 190 in the
transitive sense, and it postulates some act by somebody
which is to bring the appointment to an end, and is not applicable to a case in which the appointment comes to end merely
by effluxion of time."
Words of multiple import have to be winnowed judicially to suit the
social philosophy of the statute. So screened we hold that the transitive and intransitive senses are covered in the current context. Moreover, an employer terminates employment not merely by passing an
order as the service runs. He can do so by writing a composite order,
one giving employment and the other ending or limiting it. A separate.
subsequent determination is not the sole magnetic pull of the provision.
A pre-emptive provision to terminate is struck by the same vice as
the post-appointment termination.
Dexterity of diction cannot defeat
the articulated conscience of the provision.
What follows ? Had the State Bank known the !aw and acted on
it, hall-a-month's pay would have concluded the story.
But that did
not happen.
And now, some years have passed and the Bank has to
pay, for no service rendered.
Even so, hard cases cannot make bad
law.
Re-instatement is the necessary relief that follows.
At what
point ? In the particular facts and circumstances of this case, the respondent shall be put back where he left off, but his new salary will be
what he would draw where he to be appointed in the same post today
de nova.
As for benefits, if any, flowing from service he will be rankbelow all permanent employees in that cadre and will be deemed to be
a temporary hand upto now.
He will not be allowed to claim any
advantages in the matter of seniority or other priority inter se among
temporary employees on the ground that his retrenchment is being
declared invalid by this Court.
Not that we are laying down any
general proposition of law, but make this direction in the special circumstances of the case.
As for the respondent's emoluments, he will
have to pursue other remedies, if any.
We substantially dismiss the appeal (C.A. 934 of 1975) subject to
the slight modification made above. There was some intervening suggestion !or settlement of the dispute but it fell through. We are persuaded to make the observation based on that circumstance that social
justice has two sides and, occasionally, one party or the other makes
myopic mistakes resulting in further litigation.
Subject to the above observations, the appeal is dismissed.
The
parties will bear their costs throughout, although, in cases like this,
where the law is not free from obscurity and needs this Court's pronouncement and one of the affected parties is weak, being a worker,
the costs must come out of public funds as suggested in Trustees of
Port, Bombay(f) .. The State, we hope, will constitute a snitors' fund
(1) [1974]4S.C.C. 710.
•
•
STATE BANK v. N. s. MONEY (Krishna Iyer, J.)
167
which will take care of hardships and public interest in the area of
necessary litigation.
In C.A. 933 of 1975 the respondent has been re-employed by the
A
•
appellant although in !!is case also we declare, for reasons already
given and subject to the same terms till his absorption that the retrenchment is invalid. The costs, in this appeal, will be borne by each of the
B
•
parties.
S.R.
Appeal dismissed.
!2--L390SCl/76