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Judgment
Devinder Gupta, J.—This Judgment is meant to dispose of two Civil Writ Petitions, one filed by Himachal Pradesh Mineral & Industrial Development Corporation Employees'' Union, (CWP 650/85) hereinafter referred to as ''the Union'' and the other CWP 980 of 1985 by the Managing Director,Himachal Wool Processors Limited, Nalagarh hereinafter referred to as ''the Company'', since common questions of law and fact arise for determination and in both challenge has been made to the award of the industrial Tribunal .
Himachal Wool Processors Limited was incorporated in October, 1974 as a Public Limited Company under the Indian Companies Act in 1974 as a subsidiary of the Himachal Pradesh Mineral & Industrial Development Corporation Limited, a Company wholly managed and controlled by the State Government. A factory was set up at Nalagarh to process wool. The company had been running in loss. In view of the continuing losses, on 23.10.1982, the State Government took a decision that it would not be possible to provide any future funds to the Company to meet its statutory liabilities. It is the case of the Company that as a consequence to this decision, a Committee was set up to make an attempt to dispose of the Unit to an Industrialist in private Sector. The attempt having failed, and the State Government having expressed its inability to provide any more funds, the Board of Directors of the Company, through its resolution passed on 29th of July, 1983 took a decision to appoint a Sub Committee authorising it to take a decision after obtaining legal advice about the closure of the factory. Simultaneously the Managing Director was authorised to retain minimum of security staff & account personnel to maintain the administrative functions.
On 6th of August, 1983, the Sub Committee took decision to close the undertaking withv effect from 13th of August 1983. The relevant portion of the resolution is reproduced as under:
Resolved that the Undertaking be closed w.e.f. 13.8.1983 arid the services of workmen be terminated on the same day after obtaining exemption of 60 days notice from the State Government, the Committee authorised the Managing Director to sign the exemption letter to be submitted to the State Government.
Further resolved that the workmen be paid one month notice pay in lieu of notice, closure compensation equal to 15 days average pay for every completed year of continuous service or any part thereof, gratuity under the Gratuity Act, 1972, bonus under the Bonus Act, 1965 and any other amount due to the workmen.
The Sub-Committee also authorised the Managing Director to keep a minimum of staff to maintain administrative functions till the Mills are finally liquidated.
Before the appointment of Sub Committee and before it took the aforementioned decision, on 19th of July, 1983, an Office Order was issued by the Company informing its workers/staff members of the decision of the State Government and asking them to give their options either for absorption by the State Government in other Public Sector Undertakings/Private Sector Undertakings or for receiving retrenchment benefits. The relevant portion of office order dated 19th of July, 1983 is extracted as under:
It has been decided by the State Government to liquidate Himachal Wool Processors Ltd., Nalagarh. The State Government has further decided to absorb the workers/staff in some Govt. Deptts./Public Sector Undertakings/ Private Sector Undertakings. In case of non-absorption by the State Government, the retrenchment workers/employees would be granted retrenchment benefits as admissible under the rules on the liquidation of a Government Company.
All the Workers/staff members are hereby given a chance to give their options either for absorption or for having retrenchment benefits within three days from the date of issue of this Office Order. The option will not be taken as granted and the final decision vests with the Management/State Government.
The State Government on 9th of August, 1983, in exercise of its powers under Sub-section (2) of Section 25-FFA of the Industrial Disputes Act, 1947 (Act No. 14 of 1947) hereinafter referred to as ''the Act'' granting exemption directing that provisions of Sub-section (1) of Section 25-FFA of the Act regarding 60 days'' notice shall not apply to ''the Company''. On 10th of August, 1983, Company issued an Office Order informing its workmen that on account of continuous heavy losses and Company''s inability to pay wages, it has been decided to close the undertaking with effect from 13th of August, 1983. Services of workmen were terminated with effect From 13th of August, 1983 barring those necessary to maintain a minimum of administrative functions. It was notified that workmen will be paid one month''s pay in lieu of notice, closure compensation, gratuity, amount in lieu of due leave, earned wages and any other amount due to them. The workmen were directed to contact the Accounts Department for settlement of their accounts. The order is reproduced as under:
All the workmen of Himachal Wool Processors Ltd., are hereby informed that on account of continuous heavy losses and Company''s inability to pay the wages, it has been decided to close the undertaking w.e.f. 13.8.1983. The services of all the workmen are, therefore, terminated w.e.f. 13.8.1983 barring those necessary to maintain a minimum of administrative functions.
The workmen will be paid, one month pay in lieu of notice, closure compensation, gratuity, amount in lieu of due leave, earned wages and other any amount due to them.
The workmen are requested to contact the Accounts Department for settlement of their accounts.
In pursuance to this order, which had been passed, on the basis of resolution of Sub Committee dated 6th of August, 1983, workmen were paid the compensation, which they received under protest. Simultaneously, workmen, through their Union on 10th August, 1983 sent a telegram to the Labour Officer to intervene in the matter and on 16.8.1983 made representation to the Labour Officer, South Zone, District Solan and Labour Commissioner, Government of Himachal Pradesh, complaining of the closure of the Company and non-payment of dues with a request to reconciliate on the issues referred therein which are reproduced hereunder:
All the workmen were given options vide letter of dated 19.7.1983 for absorption of them in other concerns but same was not done inspite of the fact that all workmen submitted it few are retained against law.
The terminations of the workmen have been done without affording any opportunity of defence.
The provisions of Chapter VB of I.D. Act, 1947 in respect of closing down the undertaking resulting retrenchment were not fulfilled. Thereby, neither any opportunity was afforded to workmen nor three months notice pay u/s 25-N(1) was paid.
The notice period under rules was not considered for calculating the gratuity, retrenchment compensation, bonus and contribution C.P.F.
"Average Pay" or "Wages" has not been taken into account by the Management as per the definition given in Industrial Dispute Act, 1947.
The effort for conciliation having failed, the State Government accordingly made a reference under Sub-section (5) Section 12 of the Act to the Industrial Tribunal, Himachal Pradesh for adjudication of the following matters:
Whether the retrenchment of workers as a result of closure of the Himachal Wool Processors Ltd., Nalagarh is legal ? If not, what amount of compensation and relief the workers are entitled to?
Whether the workers who were retrenched have been paid all the benefits under the various Labour Laws ? If not, what relief they are entitled to ?
Whether the claim of the workers who have been retrenched, for their re-employment is justified ? If not, the relief they are entitled to ?
The Industrial Tribunal entered upon reference and after affording opportunity of being heard to the Union and the Company, made its award on 7th of July, 1985, which was published in Himachal Pradesh Rajpatra Extraordinary on 7th of August, 1985. The Presiding Officer of the Industrial Tribunal, in its award, has held the retrenchment of the workmen as legal. It further held the workmen entitled to wages for a period of 3 months instead of one month already paid to them by the Management. Claim of the workmen, which they had laid for granting the relief of alternative employment in Government Departments or in Government undertakings was negatived. As a consequence of the findings, the Management was directed to pay wages for 2 months, which admittedly had not been paid to the workmen. It is this award (Annexure P-5 dated 7.7.1985 in CWP 980 of 1985) which is under challenge in this Writ Petition, at the behest of ''the Union'' as well as by ''the Company''.
The Union has challenged the award on various grounds, such as (i) that the legality of closure of Unit/Undertaking has not been decided by the Industrial Tribunal which it was incumbent to decide in order to answer the issue about the legality of the termination of services of workmen; (ii) Retrenchment of the workmen ought to have been dealt with u/s 25-N of the Act read with rules 81-B and 81-C of the Himachal Pradesh Industrial Disputes Rules, since Chapter V(B) applied to the facts and circumstances of the case irrespective of Section 25-O having been declared as void; (iii) ''Termination'' being ''retrenchment'' u/s 2(00), therefore, all provisions of retrenchment did apply which had not been complied; (iv) Employees in the Industrial Unit being more than 300, provisions of Section 25-N and procedure laid down in Section 25-B ought to have been followed. The retrenchment in the absence of service of three months'' notice u/s 25-N(1)(a) of the Act was bad in law; (v) Section 25-FFA and 25-FFF were wrongly applied. There were no exceptional circumstances, present, as provided in Sub-section (2) of Section 25-FFF and the reasons assigned while granting exemption were wholly irrelevant and foreign, even there was no compliance of requirement of Section 25-FFA and Section 25-FFF of the Act; (vi) Without requisite notice and payment of wages in lieu of notice, termination of workmen is bad in law; (vii) Government being ex-officio employer, the offer as contained in office order dated 19th of July, 1983 ought to have been taken as an offer on behalf of the Government. Award of the tribunal is vitiated due to taking note of only memorandum dated 8.7.1983. Since there was an offer on behalf of the Government for absorbing the workmen in Government undertakings, a direction ought to have been made for absorbing of all the workmen who had exercised option.
On the aforementioned grounds, ''the Union'' has sought directions for quashing the award and prayed for issuance of directions that the retrenchment/removal of workmen being illegal, the workmen be declared to be still continuing in service entitled to receive their wages. In the alternative, the petitioners have prayed for issuing directions for their re-employment.
At the behest of ''the Company'' the challenge to the award is mainly on two grounds, firstly that termination on closure of Industrial concern is not retrenchment and as such, order directing payment of compensation u/s 25-N is bad and secondly; Section 25-O of the Act, which, had been introduced through Industrial Disputes (Amendment) Act, 1976 (Act No. 32 of 1976) with effect from 5th of March, 1976 had been struck down by Supreme Court through its Judgment in Excel Wear and Others Vs. Union of India (UOI) and Others, decided on 29.9.1978, whereafter the new Section 25-O was introduced by Industrial Disputes (Amendment) Act, 1982 (Act No. 56 of 1982), which did not come in force till 21st of August, 1984. As such, the Company was liable only to pay the compensation as per provisions of Section 25-FFF, which it did pay and nothing more was required to be paid.
In order to appreciate the respective contentions raised by the learned Counsel for the parties, it will be necessary to make reference to the history of some of the provisions of the Act.
The Act as enacted in 1947 was a piece of legislation mainly concerned with providing machinery for investigation and settlement of industrial disputes. By subsequent frequent amendments, it has undergone a sea change. Till the promulgation of Industrial Disputes (Amendment) Ordinance, 1953, (Ordinance 5 of 1953) on 24th of October, 1953, which was repealed and replaced by Industrial Disputes (Amendment) Act, 1953 (ACT 43 of 1953) which came into force retrospectively w.e.f. 24th of October, 1953, there was no provision for payment of retrenchment compensation to the workmen, who were retrenched in certain contingencies. By Act No. 43 of 1953 Chapter V-A with Section 25-A, 25-J was engrafted in the Act, which made provisions for compensation for lay off or retrenchment, setting a common standard for all employers. Section 25-F provided for the payment of compensation to the retrenched workmen in an existing or continuous industry.
The Supreme Court in Pipraich Sugar Mills Ltd. Vs. Pipraich Sugar Mills Mazdoor Union, dealing with the question whether the discharge of workmen on closure of the undertaking would constitute ''retrenchment'', hence the workmen were entitled to retrenchment compensation, held that ''retrenchment'' connotes in its ordinary acceptation that the business itself is being continued but that a portion of the staff or the labour force is discharged as surplusage and the termination of service of all the workmen as a result of the closure of business cannot, therefore, be properly described as ''retrenchment'' and further held that retrenchment means, in ordinary parlance, discharge of the surplus and it cannot include discharge on closure of business. The compensation which was payable u/s 25-F was to those workmen who were retrenched as a result of becoming surplus but not on closure of business. The original Chapter V-A as was inserted by Act No. 43 of 1953 did not contain Section 25-FF. It was only by the Industrial Disputes (Amendment) Act, 1957 (Act No. 18 of 1957) that Section 25-FF was inserted, when the Supreme Court had in its decision in Harihar Prasad Shivshankar Shukla and Anr. v. A.D. Divelkar and Ors. AIR 1957 S.C. 121 noticed that no retrenchment compensation u/s 25-F was payable, on the construction of the term "retrenchment" in Section 2(00) of the Act to the workmen whose services were terminated by an employer on a real and bonafide closure of business or when termination of service occurred as a result of transfer of ownership from one employer to the Anr. . This decision necessitated further amendment, which was ultimately carried out by the Industrial Disputes (Amendment) Act, 1957, when present Section 25-FF alongwith Section 25-FFF were inserted. This amendment provided that compensation would be payable to workmen whose services are terminated on account of transfer or closure of an undertaking.
With respect to the closure of an undertaking, the Legislature by Industrial Disputes (Amendment) Act, 1972 (Act No. 32 of 1972) introduced Section 25-FFA requiring an employer to serve 60 days notice of its intention to close an undertaking employing 50 or more persons prior to the closure. There was no provision, however, for prior scrutiny of the reasons for such closure and an employer had unfettered right to close down his establishment subject to the provisions of serving 60 days notice. To plug this loophole, by the Industrial Disputes (Amendment) Act, 1976 (Act No. 32 of 1976), Chapter V-B was inserted in the main Act which contains Section 25-K, 25-S. Corresponding amendment was also carried out in the then Section 25-A providing that Section 25-C, 25-E will not apply to those Industrial establishments to which Chapter V-B applied. Chapter V-B applied to special categories of industrial establishments which were defined in Section 25-L. By enacting Chapter V-B strict curb was put on the employers in effecting lay off, retrenchment and closure of industrial establishments and for providing stringent penalities for the contravention of those provisions.
Section 25-N laid down certain conditions precedent in retrenching workmen of an industrial undertaking and Section 25-O provided for procedure for closing down such undertaking. Section 25-O was struck down by the Supreme Court in Excel Wear''s case supra being violative of the fundamental right to carry on business guaranteed by Article 19(1)(g) of the Constitution of India. The Supreme Court on examination of the nature and restrictions imposed on the fundamental right of the employer held that Section 25-O was violative of the fundamental right of the employer to close down the business on the ground that it suffers from the vice of excessive and unreasonable restrictions in not permitting him to close down his business, which is essentially an interference with the fundamental right to carry on business. While striking down the provisions, the Supreme Court observed that all the comprehensive and detailed information given in the application forms is of no avail to the employer if the law permits the authority to pass an "cryptic, capricious, whimsical and one sided order".
After Section 25-O, as it then existed, had been struck by the Apex Court in Excel Wear''s case Supra, new Section 25-O, as it now stands was enacted by Industrial Disputes (Amendment) Act, 1982 (Act No. 42 of 1982) which was brought into force w.e.f 21st of August, 1984. Since, original Section 25-O had been struck down by the Supreme Court in Excel Wear''s case supra, as a consequence thereto Sub-section (1) of Section 25-R, which provided for penalty for closure without complying the requirement of Section 25-O was also struck down. After reinsertion of Section 25-O by amending 46 of 1982 Act, Sub-section (1) of Section 25-R also stood automatically revived in the self same language.
Following the ratio of the decision of Supreme Court in Excel Wear''s case supra, a Division Bench of Madras High Court in K.B. Rajendran v. the Deputy Commissioner of Labour, Madurai (1981) LIC 799 and a Full Bench of Rajasthan High Court in J.K. Synthetics v. Union of India (1984) LIC 40 (Raj) struck down Section 25-N also holding that the same suffered from arbitrariness and unreasonableness as neither the section, nor any other provision in the Act provide any guidelines as to how the application for the permission by an employer for retrenchment has to be disposed off and on what grounds permission can be refused. Moreover, the Act no where provided for right of appeal or revision against the arbitrary order of refusal to grant permission sought for. The restrictions imposed for closing down were held to be un-reasonable. Striking of the original provisions of Section 25-N by the aforementioned two judgments of Madras High Court and Rajasthan High Court necessitated in re-insertion of present Section 25-N by the Industrial Disputes (Amendment) Act, 1984 (Act No. 49 of 1984) which came into fore w.e.f. 18th of August, 1984.
The provisions in the Act providing for the compensation to the workmen, in case of closing down of an undertaking, thus, are presently found in two chapters namely, Chapter V-A and Chapter V-B. The object of Section 25-FFA in Chapter V-A requiring the employer to give 60 days notice, to the Government of his intention to close down his undertaking is to prevent sudden closure and to give an opportunity to the Government, as held in Walford Transport Ltd. v. State of West Bengal (1979) LIC 70, to consider whether it should take any measure in respect of such intended closure in accordance with the provisions of the Act, such as making a reference. Section 25-FFF which deals with the paying of compensation to workmen in case of closing down of an undertaking, which also finds place in Chapter V-A, in view of Sections 25-K and 25-L, are not applicable to such an ''Industrial Establishments'' to which Chapter V-B is applicable, in which case the relevant corresponding provisions applicable are Section 25-N, laying down conditions precedent to the retrenchment of workmen and Section 25-O providing for the procedure for closing down an undertaking. But the special provisions, which are applicable to the industrial establishments, such as, ''the Company'', wherein admittedly more than 300 workmen were employed on the day when it was closed down namely; Section 25N and Section 25-O, which finds place in Chapter V-B stood struck down by the three aforementioned decisions namely; Excel Wear''s Case, K.B. Rajendran''s case and J.K. Synthetics (Supra). The undertaking of ''the Company'' was closed down w.e.f. 13th of August, 1983 on which date Section 25-N had neither been re-introduced after amendment nor had come into force and Section 25-O which had though been re-enacted by amendment Act 46 of 1982, had not been brought into force. It was only w.e.f. 18th August, 1984 that Section 25-N and w.e.f. 25th of August, 1984 that Section 25-O were brought into force. In view of this, in case as on the date of closure special provisions to the industrial undertaking, as regards the payment of compensation and the procedure to be followed contained in Section 25-N and Section 25-O respectively were not applicable, in our opinion the general provisions as contained in Chapter V-A would automatically apply, as regards the procedure to be followed in payment of compensation. Section 25-FFA is the general provision requiring an employer, who intends to close down an undertaking to serve a notice on the appropriate Government, which should comply with the following requirements
(i) It should be in the prescribed manner. The manner of notice may be prescribed by promulgation of the corresponding Rules in the Central or the State Rules. Even if there are no Rules prescribing the manner, the service of notice is a mandatory requirement which has to be complied with in accordance with the requirement as discernible from the Section itself.
(ii) The notice should state clearly the reasons for the intended closure of the undertaking. The requirement of stating reasons has been engrafted with a view to enable the appropriate Government to know as to what actually motivates the employer to close down the undertaking and then to devise ways and means, if possible, to avert the closure. If the government, from the statement of reasons, finds that the closure is due to trade exigencies, it may try to help the employer through its various agencies to overcome his difficulties to continue the undertaking. But if the Government comes to the conclusion that the intended closure is on account of bad and uncompromising industrial relations between the employer and the employees, it may use its good offices by promoting harmony to bring about amity between the parties. Failing that, the Government may also use coersive pressures on the parties to come to working terms and thus avoiding the catastrophic situation of closure(c).
(iii) The notice should be served on the appropriate. Government at least 60 days before the date on which the intended closure is to become effective. In other words, the appropriate Government must have 60 clear days'' notice before the date on which the closure is to become effective so that it may have sufficient to examine the motives, implications and consequences of the proposed closure and, if possible, try to avert it.
The Board of Directors of the Company had on 29th of July, 1983 taken a decision to close down its undertaking for various reasons, such as it had incurred heavy losses and there being no possibility of providing funds in future by the Government to meet its statutory liability. A Committee had been set up to make an attempt to sell the undertaking to an industrialist in the Private Sector, the attempt having failed and the State Government having expressed its inability to provide any further funds, there was no other alternative but to close down the factory. The appropriate Government namely; the State of Himachal Pradesh on 9th of August, 1983, on being satisfied that due to exceptional circumstances, it was necessary to waive the notice period of 60 days, in exercise of its powers under Sub-section (2) of Section 25-FFA of the Act directed that provisions of Sub-section (1) of Section 25-FFA shall not apply in relation to the undertaking of the company. At the behest of the Union a challenge has also been made that the reasons which prevailed with the State Government in granting exemption were extranuous and outside the purview of Sub-section (2) of Section 25-FFA.
Sub-section (2) of Section 25-FFA begins with the non obstante clause, which empowers the appropriate government, notwithstanding anything contained in Sub-section (1), to direct that the provisions of Sub-section (1) shall not apply in relation to any particular undertaking. It is necessary that appropriate Government has to be satisfied, before an order is made under Sub-section (2) that owing to some exceptional circumstances, such as, accident in the undertaking or death of the employer or the like, it is necessary to exempt the undertaking from the necessity of serving requisite 60 days''notice, it may grant exemption. The words "or the like" refer to "exceptional circumstances". It is the argument of the learned Counsel for the Union that the same have to be construed ejusdem generis to the other circumstances, as are referred to in Sub-section (2), namely; accident in the undertaking or death of the employer or the like. Whether the circumstances as were projected by the Company, namely its having suffered heavy losses and the Government having expressed its inability to provide any more funds by sending communication dated 23rd of July, 1983 can be said to be an exceptional circumstances or where it is only death of the employer or the like requires consideration. Financial constraints on the employer can be said to be one of the circumstances, which can be termed as an exceptional circumstance, if the same on consideration by the appropriate Government is considered fit and sufficient enough to accord permission, especially when the Company had done whatever was possible even to transfer the undertaking to an industrialist in the Private Sector which attempt also failed. There are no malafides alleged against the appropriate Government. It has not been disputed that the Company had suffered heavy losses and the State Government had declined to render financial assistance and it had become impossible to continue the working in the undertaking. This circumstance in our opinion can be said to be the exceptional circumstance, enabling and empowering the State Government to exercise its power to exempt. There is no room for the application of the doctrine of ejusdem generis as held in Rajasthan State Electricity Board, Jaipur Vs. Mohan Lal and Others, unless there is a genus or category. The rule of ejusdem generis is intended to be applied where the general words have been used following particular and specific words of the same nature. The two specific circumstances referred to namely ''accident in the undertaking'' and the ''death of the employer'' are not of the same genus or nature. These have been enumerated as few instances but cannot control the words precedings narr.ely ''exceptional circumstance''. The appropriate Government will have to be satisfied from the facts & circumstances of each case to find out as to whether the grounds projected seeking exemption are or are not exceptional circumstances so as to direct that provisions of Sub-section (1) of Section 25-FFA shall not apply for such period as may be specified. The circumstances, in our opinion also were exceptional one and no fault can be found in the manner in which power was exercised by the appropriate Government.
After the petitioner-Company had been accorded the necessary exemption by the appropriate Government, in the absence of the special provision, which stood struck down, the Company was not bound to follow the stringent provisions contained in Section 25-F, which in view of the Judgment in Pepriaich''s case and Harihar Prasad Shivshankra Shukla'' case supra would not apply in the case of workmen, who are retrenched on closure of an undertaking in which case the more general provisions of Section 25-FFF would apply. The undertaking admittedly was closed down on account of unavoidable circumstances, which was said to be beyond the control of the employer. The Company instead of paying compensation to the workmen by working out the same u/s 25-FFF paid the same u/s 25-F, namely one month''s wages. The Labour Court directed same to be paid as per the provisions of Section 25-N. In case reference is made to Section 25-FFF of the Act, it can be seen that like Section 25-FF, it introduces a fiction in providing that in case of closure of undertaking, the workmen concerned are entitled to compensation as if the termination of their services was retrenchment, even though, in fact or in law, it is not retrenchment. A comparison of the language employed in Section 25-F, Section 25-FFF(1) would bring in the difference between the pharaseology employed by the Legislature and its import on the resultant rights of the workmen. u/s 25-F, a workmen cannot be retrenched unless and until payment, as required in its Clauses (a) and (b) is made. But Sub-section (1) of Section 25-FFF says that workmen shall be entitled to notice and compensation in accordance with the provisions of Section 25-F, if the undertaking is closed for any reason. Quantum of compensation in both is the same as if the workmen had been retrenched. It is'' only where the undertaking is closed down on account of unavoidable circumstances beyond the control of the employer, the compensation to be paid to the workmen under Clause (b) of Section 25-F shall not exceed his average pay for three months. Now, in case reference is made to Section 25-F the compensation payable is two fold. Firstly, it is the wages of one month in lieu of. one month''s notice, in case the notice is not served which is provided under Clause (b) of Section 25-F namely 15 days average pay for every completed year of continuous service or any part thereof in excess of six months. It is only in the case when an undertaking is closed down on account of unavoidable circumstances beyond the control of employer that compensation which is to be paid under Clause (b) of Section 25-F, the same shall not exceed his average pay for three months. The dispute between the parties is as to whether it is as regards compensation referred to in Clause (a), whether it will be one month''s wages or three months wages in lieu of notice. The Company admittedly has paid one month''s wages in lieu of notice. The Labour Court in the impugned award has held the workmen entitled to the payment of three months wages instead of one month and directed the payment of two months wages in addition to one month''s wages already paid. In case Section 25-F and Section 25-FFF are read together, it will be seen, as noticed above, the workman in case of closing down of an undertaking is entitled to the same compensation as provided in Section 25-F, as if the termination of his service was retrenchment even though, in fact or in law it is not retrenchment. Namely, notice or wages in lieu of notice and the other compensation as provided in Section 25-F, which admittedly has been paid to (sic by) the employer.
In Section 25-F there is prohibition against retrenchment until the conditions prescribed therein are fulfilled while u/s 25-FFF termination of employment on closure of an undertaking and without payment of compensation and without either serving notice or payment of wages in lieu of notice is not prohibited.
In view of the above, we hold that the Company had paid the compensation which was due and payable to the workmen. That part of the impugned award which directs the Company to pay two months wages over and above the one month''s wages already paid, as such, is bad in law and is liable to be struck down. The provisions of Section 25-FFA and Section 25-FFF were rightly applied in their exceptional circumstances present for having granted exemption to the Company from the requirement of the compliance of provisions of Sub-section (1) of Section 25-FFA. It was not necessary to have paid wages in lieu of notice or paid the other amount of compensation before terminating the services of the workmen.
The reference which the Government made through Notification dated 31st of March, 1984 was for adjudication of three matters in dispute as are referred to in Annexure P-4 in CWP No. 980 of 1985. The Labour Court was required to confine its adjudication to the points in controversy and matters incidental thereto. In order to decide the legality of the termination of the services of the workmen, it was neither necessary, nor incumbent upon the Labour Court to have gone into the question of legality of the closure of Unit or an undertaking since such question cannot be said to be a matter of incidental to the first question referred to for adjudication. The first question referred for adjudication was as to whether retrenchment of workers as a result of the closure of the Unit was legal. The form in which the question was referred pre-supposed that the closure of the Unit or an undertaking was not the subject matter of the dispute. The dispute was as to whether the retrenchment was legal. In our view, the Labour Court was right in not going into the question about the legality of the closure of the undertaking.
The arguments of the learned Counsel for the Union that the workmen ought to have been absorbed in Government undertakings has no force. The arguments proceed on the assumption that the Government, was an Ex-officio employer and as such, the offer as contained in Office Order dated 19th July, 1983 ought to have been taken as an offer on behalf of the Government. We are afraid that we are unable to accept this contention. The offer contained in letter dated 19th of July, 1983 by the employer cannot be said to be an offer made on behalf of the Government. The matter pertained to the Company and the workmen. The Company on its having closed its undertaking paid the due compensation. It was under no obligation to have compelled the State Government to employ the workmen in its various other undertakings. No directions could be issued for absorbing the workmen in other Government undertakings. Accordingly, the Labour Court was right in not accepting the contention on behalf of the Union. No other point was urged.
In the view which we have taken the submissions made on behalf of the Company deserve to be up-held and the submissions made on behalf of the Union deserve rejection. As such, while dismissing CWP No. 980 of 1985, we allow CWP No. 650 of 1985. The award Annexure P-5 in CWP No. 980 of 1985 as published through Notification Annexure P-6, in so far as it has held the workmen entitled to additional wages for two months over and above the amount of one month''s wages paid to workmen is quashed and set aside. Parties are left to bear their own costs.