State Bank of India Vs. Shri N.
Sundara Money  INSC 3 (16 January 1976)
CITATION: 1976 AIR 1111 1976 SCR (3) 160 1976
SCC (1) 822
CITATOR INFO :
F 1977 SC 31 (2,4) R 1979 SC 170 (17) F 1980
SC1219 (11,12,13) RF 1981 SC 422 (5) RF 1981 SC1253 (7,8) R 1982 SC 854 (5,6) D
1983 SC 865 (6) E 1983 SC1320 (7,8,9,11,12) R 1984 SC 500 (2) R 1984 SC 684
(50) RF 1986 SC 132 (7) RF 1986 SC1680 (4) E&D 1990 SC1808 (5)
Constitution of India-Art. 133(1)-Scheme of
-Conditions precedent for the issue of a certificate under in exercise of power
under Art. 136 of the Constitution on such a certificate.
Industrial Disputes Act. 1947 (Act 14 of
1947)-Section 25F read with ss. 2(oo) and 25(B) (2)-Scope of the concept of
retrenchment under s.2(oo).
Statutory construction of social welfare
Words and phrases-Meaning of the words
"termination.....for any reason whatsoever" includes automatic
extinguishment of service by virtue of a preemptive provision to terminate in
the appointment order itself.
Section 25(F)(b) of the Industrial Disputes
Act, 1947, provides that no workman employed in any industry who 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
retrenchment, 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(oo) of the Act defines 'retrenchment' as meaning the termination by
the employer of the service of a workman for any reasons whatsoever, otherwise
than as a punishment inflicted by way of disciplinary action. In the
"Hospital Mazdoor Sabha's" the Supreme Court held that the statutory
requirement 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 without payment at the time of the retrenchment makes the
retrenchment order invalid and inoperative As the automatic extinguishment of
his service consequent to the preemptive provision in his appointment order as
to the temporariness and the period of his employment was covered by the words
"termination . for any reasons whatsoever" occurring in s. 2(oo) of
the Act, in an application under Art. 226 of the Constitution by the respondent
claiming that by virtue of his deemed continuous service of one year within the
meaning of s. 25B(2) of the Industrial Disputes Act, he was entitled to be reinstated
for non-compliance of s. 25F of the Act. The High Court of Madras allowing the
writ made the rule nisi absolute. The writ appeal filed by the appellant
respondent also failed. However, the High Court granted a certificate under
Art. 133(1)(c) of the Constitution.
Dismissing the appeals and negativing the
contentions of the appellant, the Court.
HELD: (1) 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(1) by specific amendment. A substantial question of law of general
importance is a sine quo 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. Failure here stultifies the scheme of the Article
and floods this court with cases of lesser magnitude with illegitimate entry.
[162 C-E] Union of India v. Hafiz Mohmd.
Said, ILR  II Delhi 673, 676, approved.
(2) While exercising the vital powers 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] 161 (3) If the workman swims into the harbour of s.
25F of the Industrial Disputes Act, 1947, he cannot be retrenched without
payment, at the lime of retrenchment, compensation computed as prescribed
therein read with s. 25B(2) [164 D] State of Bombay and others v. Hospital
Mazdoor Sabha & others  (2) S.C.R. &66. applied.
(4) 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
Sections 25F, 25B and 2(oo), of the Industrial
Disputes Act, 1947 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 hay wire in
interpreting provisions, ignoring the text and context. Words of multiple import
have to be winnowed judicially to suit the social philosophy of the statute.
Dictionaries are not dictators of statutory construction where the benignant
mood of a law and, more emphatically, the definition clause furnish a different
denotation. Section 2(00) is the master of the situation and the Court cannot
truncate its amplitude. The words "for any reason whatsoever" in s.
2(00) of the Industrial Disputes Act are very wide and almost admit of no
[163 G, 164 H, 165 B, 166 B] (5) A breakdown
of s. 2(00) unmistakably expands the semantics of retrenchment.
"Termination .. for any reason whatsoever" are the key words. Every
termination spells retrenchment. A termination takes place where 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 comprehensive
definition has been effectuated. Termination embraces not merely the act of termination
by the employer, but the fact of termination how soever produced. Retrenchment
is no longer terra incognita but area covered by an expansive definition. It
means 'to end' conclude, cease'. 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(1). A separate subsequent termination of the service is not
the sole magnetic pull of the provision. A preemptive provision to terminate is
struck by the same vice as a post appointment termination. Dexterity of diction
cannot defeat the articulated conscience of the provision. [165 B-C, D, E, 166
C] Observation:-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 views held out in Trustees of Port, Bombay's case, namely, 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 and suggested the constitution by the State of a "Suitors
Fund" which will take care of hardships and public interest in the area of
CIVIL APPELLATE JURISDICTION : 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. Nariman, M/s. 1. N. Shroff and H. S.
Parihar, for the appellant.
M. K. Ramamurthi and J. Ramamurthi, for the
The Judgment of the Court was delivered by
KRISHNA 1 YEAR, J.-The appellant employer, undaunted by a double defeat at both
tiers in the High Court, has appealed against the ad verse judgments, by
certificate, on the only ground that there was no retrenchment of the
respondent-employee (within the meaning of 162 Of s. 2(00) 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 nonpayment
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 r legal issue, substantial
in its financial impact, is whether s. 25F read with s. 2(00), 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.
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(1) 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(l) 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. r _ 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.
(1) Union of India v. Hafiz Mohd. Said: ILR
 II Delhi 673, 676.
163 It is but fair to add an implied but
important foot note that 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 o f 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 B. granting special leave, if applied for. So much so counsel have
proceeded to argue on the merits, the penumbral 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 and 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:
"(1) 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 automatically cease at the expiry of the period i.e., 1972."
This nine days' employment, tacked on to what has gone before, Fr has ripened
to a continuous service for a year on the antecedent arithmetic of 240 days of
broken bits of service.
The legal 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.
164 The leading case on this facet of law is
The Hospital Mazdoor 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 less 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' average pay for every completed year of service or any part
thereof in excess of six months. Clauses (a) c and (e) 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 work man. The section
provides that no workman shall be .1, retrenched until the condition in
question has been satisfied. It is difficult to accede to the argument that
when the P 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 and 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 retrenchment ? 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 super a annuation if the
contract of employment between the employer and the workman concerned contains
a 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, tho period of
employment works itself out by efflux of times, not by act of employer.
(1)  2 S.C.R. 866, 871-872.
165 Such cases are 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 automatic 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 of 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 break-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 spells 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 definition 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 and
s.2(oo). Without speculating 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(1). 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 sufficient. An English case R. v. Secretary of
State(l) 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 termination by effluxion of time. It is
often used in that dual sense in landlord and tenant and in master and servant
cases. But there are several indications in this paragraph to show that it
refers here only 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.
166 intransitively. A contract may be said to
terminate when it s comes to an end by effluxion of time, or it may be said to
be terminated when it is determined at notice or otherwise by some act of one
of the parties.
Here in my judgment the 7 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
c 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
law and acted on it, half-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 novo. As for benefits, if any, flowing from service he
will be rank below 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 for 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 r 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(1). The State, we hope, will constitute a suitors' fund (1)  4
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 appellant although in his case also we declare, for reasons
already given and subject to the same term till his absorption that the
retrenchment is invalid. The costs, in this appeal, will be borne by each of the
S.R. Appeal dismissed .