Punjab Land Development and Reclamation Corporation Ltd., Cha Vs. Presiding Officer, Labour Court, Chandigarh [1990] INSC 190 (4 May 1990)
Saikia, K.N. (J) Saikia, K.N. (J) Mukharji, Sabyasachi (Cj) Ray, B.C. (J) Kania, M.H. Agrawal, S.C. (J)
CITATION: 1990 SCR (3) 111 1990 SCC (3) 682 JT 1990 (2) 489 1990 SCALE (1)878
ACT:
Industrial Disputes Act 1947:
Section 2(oo)--"Retrenchment"--Interpretation of--Wheth- er termination by the employer of the services of a workman by employer for any reason whatsoever or termination by the employer of the services of a workman for any reason whatso- ever otherwise than as a punishment inflicted by way of disciplinary action--Whether to be understood in its narrow, natural and contextual meaning or in its wider literal meaning.
Precedent--Ratio decidendi of the earlier decision--How to ascertain--Major premise, minor premise and decision in a case-Whether may be narrowed or widened by the subsequent decision.
Constitution of India, 1950--Article 141--Supreme Court is not bound by its earlier decision--Stare decisis--doc- trine of.
Decision per incuriam--meaning and effect of non refer- ence to an earlier larger bench decision of Supreme Court--Subsequent decision of Supreme Court will be per incuriam only if the ratio of the earlier decision is in conflict with it.
Interpretation of Statutes--Wider literal construction--When preferable to narrower, natural and contextual construction--Definition clause using the word means 'instead' of 'includes'--Shows that no other meaning can be assigned.
HEAD NOTE:
This batch of eighteen appeals by special leave involves a common question of law, regarding the scope and ambit of the word 'retrenchment' as defined in Section 2(oo) of the Industrial Dispute Act, 1947.
112 One of the appeals is by the workmen against the order of the High Court affirming the award of the Labour Court refusing to interfere with the order of termination of their services by the employer for their trade union-activities, while the rest are by the employers/ managements against the orders of High Courts/Industrial Tribunal/ Labour Court setting aside the orders of termination of the services of the illegal for non-compliance of the provisions of Section 25F of the Act.
While the employers' contention is that the word "re- trenchment" as defined in Section 2(oo) of the Act means termination of service of a workman only by way of surplus labour for any reason whatsoever, the workmen contend that "retrenchment" means termination of the service of a workman for any reason whatsoever, other than those expressly ex- cluded by the definition in Section 2(oo) of the Act.
Disposing of the appeals, this Court,
HELD: (1) Definition of 'retrenchment' in Section 2(oo) means termination by the employer of the service of a work- man for any reason whatsoever, otherwise than as a punish- ment inflicted by way of disciplinary action and those expressly excluded by the definition. This is the wider literal interpretation as distinguished from the narrow, natural and contextual interpretation of the word to mean termination by the employer of the service of a workman as surplus labour for any reason whatsoever. [156C; 131B] B.N. Mutto v. T.K. Nandi, [1979] 2 SCR 409; Jugal Ki- shore Saraf v. Raw Cotton Co. Ltd., [1955] 1 SCR 1369; Sussex Peerage Case, [1844] II CI & Fin 85:8 ER 1034 (HL); Thompson v. Goold & Co., 26 TLR 526; Ealsing L.B.C. v. Race Relations Board, [1972] 1 All ER 105; Whiteley v. Chappell, [1868] LR 4; Prince Ernest of Hanover v. Attorney General, [1956] Ch D 188 and Muir v. Keay, 44 MJMC 143, referred to.
(2) Difficulty was created by defining 'retrenchment' to mean something wider than what it naturally and ordinarily meant. Such a definition created complexity as the draftsman himself in drafting the other sections using the definition may slip into the ordinary meaning instead of the defined meaning. However, a judge facing such a problem of interpre- tation cannot simply fold his hands and blame the draftsman. [149A-B; F] 113
(3) The definition has used the word 'means'. When a statute says that a word or phrase shall 'mean'--not merely that it shall 'include' certain things or acts, "the defini- tion is a hard-and-fast definition, and no other meaning can be assigned to the expression than is put down in defini- tion." [150F-G] Queen v. Commissioners under the Boiler Explosions Act, 1882, [1891] I QBD 703 and Gough v. Gough, [1891] 2 QB 665:65 LT II; relied on.
(4) There are apparent incongruities when the definition Clause Section 2(oo) is considered in the context of the main provisions viz. Sections 25F, 25G and 25H but there is room for harmonious construction. The definitions contained in Section 2 are subject to there being anything repugnant in the subject or context. [152C-D] Vishwamitra Press v. Workers, AIR 1953 SC 41; Presidency Jute Mills Co. Ltd. v. Presidency Juite Mills Co. Employees Union, [1952] I LLJ 796 (LAT) (Cal); Iron & Steel Mazdoor Union, Kanpur v. J.K. Iron and Steel Co. Ltd., [1952] LAC 467; Halar Salt and Chemical Works, Jamnagar v. Workmen, [1953] 2 LLJ 39; Prakriti Bhushan Gupta v. Chief Mining Engineer, Railway Board, [1953] LAC 373; Sudarshan Banerjee v. Mcleod and C. Ltd., [1953] LAC 702; Srinivasa Enterprises v. Union of India, [1980] 4 SCC 507; Reserve Bank of India v. Peerless Central Finance and Investment Co. Ltd., [1987] 2 SCR I, referred to.
(5) The express exclusion of volitional element in cl. (a) and (b) of Section 2(oo) namely, voluntary retirement, and retirement on superannuation age implies that those would otherwise have been included. If such cases were to be included, termination on abandonment of service, on efflux of time and on failure to qualify, though only consequential or resultant would be included as those have not been ex- cluded. Then there appears to be a gap between the first part and the exclusion part. When such a gap is disclosed, the remedy lies in an amending Act. The Court has to inter- pret a statute and apply it to the facts. [150C-E] Duport Steels v. Sirs, [1980] 1 All ER 529, referred to.
(6) Construing retrenchment in its wider sense, the rights of the employer under the standing orders and under contracts of employment may have been affected by Sections 2(00) and 25F and other relevant sections. Secondly, it may be said that the rights as such are not affected or taken away but only additional social obligation has been 114 placed on the employer so as to give retrenchment benefit to affected. workmen perhaps for tiding over immediate finan- cial distress. Seen from this angle, there is implicit a social policy. So goes the maxim-Stat Pro ratione voluntes populi--the will of the people stands in place of a reason.
[153E-G] (7) In Sundara Money and subsequent cases the Supreme Court has adopted wider liberal meaning rejecting the narrow natural and contextual meaning. The question of subsequent decisions of the Supreme Court being per incuriam on grounds of failure to apply the earlier law laid down by the Consti- tution Bench in Hariprasad Shukla case could arise only if ratio in Sunclara Money and subsequent decisions was in conflict with the ratio in Hariprasad and Anakapalli. Hari- prasad case is not an authority for the proposition that Section 2(oo) only covers cases of discharge of surplus labour and staff. Sundara Money and subsequent decisions in the line could not be held to be per incuriam in as much as in Hindustan Steel and Santosh Gupta cases the Division Benches of the Supreme Court had referred to Hariprasad case, and rightly held that its ratio did not extend beyond the case of termination on the ground of closure and as such it would not be correct to say that subsequent decision overlooked a binding precedent. In a fast developing branch of Industrial and Labour Law it may not be always of partic- ular importance to rigidly stick to a precedent and a prece- dent may need to be departed from if the basis of legisla- tion changes. [143B-C; 145E] L. Robert D'Souza v. Executive Engineer, Southern Rail- way and Anr., [1979] 1 LLJ 211; Rajasthan State Electricity Board v. Labour Court, [1966] 1 LLJ 381 (Raj.); Goodlas Nerolac Paints v. Chief Commissioner, Delhi, [1967] 1 LLJ 545 (Punj.) and The Managing Director, National Garages v. J. Gonsalves, [1962] 1 LLJ 56 (Bom.), overruled.
Delhi Cloth and General Mills Ltd. v. Shambhu Nath Mukherjee and Ors., [1978] 1 SCR 591; Hindustan Steel Ltd. v. The Presiding Officer, Labour Court, [1977] 1 SCR 586; Santosh Gupta v. State Bank of Patiala, [1980] 3 SCR 884; Gammon India Ltd. v. Niranjan Das, [1984] 1 SCC 509 and Reg v. Home Secretary, Ex P. Khawaja, [1984] AC 74 (HL), relied on.
Pipraich Sugar Mills Ltd. v. Pipraich Sugar Mills Maz- door Union, [1956] SCR 872; Sub Nomine Barsi Light Railway Co. v. K.N. Joglekar, [1957] 1 LLJ 243 (SC); Hariprasad Shivshankar Shukla v. A.D. Divikar, [1957] SCR 121; Anaka- palla Co-operative Agricultural 115 and Industrial Society Ltd. v. Workmen. [1963] Supp. 1 SCR 730 and Workmen of Subong Tea Estate v. The Outgoing Manage- ment of Subong Tea Estate and Anr., [1964] 5 SCR 602, dis- tinguished.
Employees v. India Reconstitution Corporation Ltd., [1953] LAC 563; Indian Hume Pipe Co. Ltd. v. Workmen, [1960] 2 SCR 32; Benett Coleman and Company Ltd. v. Employees, [1954] 1 LLJ 341 (LAT); Mahan Lal v. Bharat Electronic Ltd., [1981] 3 SCR 518 and Surendra Kumar Verma v. Central Govern- ment Industrial Tribunal-cum-Labour Court, New Delhi, [1981] 1 SCR 789, referred to.
(8) Article 141 embodies, a rule of law, the doctrine of precedents on which our judicial system is based. [136H]
(9) Per Incuriam means through inadvertance. A decision can be said generally to be given per incuriam when the Supreme Court has acted in ignorance of its own previous decision or when a High Court has acted in ignorance of a decision of the Supreme Court. The problem of judgment per incuriam when actually arises, should present no difficulty as the Supreme Court can lay down the law afresh if two or more of its earlier judgments cannot stand together. Article 141, which embodies as a rule of law, the doctrine of prece- dents, was enacted to make the law declared by the Supreme Court itself. [136G; 138G; 137F] Re Dawson's Settlement Lloyds Bank Ltd. v. Dawson, [1966] 3 All ER 68 and Bengal Immunity Company Ltd. v. State of Bihar, [1955] 2 SCR 603, relied upon-
(10) The doctrine of ratio decidendi has also to be interpreted in the same line. To consider the ratio deciden- di Court has to ascertain the principle on which the case was decided. The ratio decidendi of a decision may be nar- rowed or widened by the judges before whom it is cited as a precedent. [139G-H] State of Orissa v. Sudhansu Shikhar Misra, [1968] 2 SCR 154; F.A. & AB Ltd. v. Lupton (Inspector of taxes), [1972] A.C. 634; Osborne v. Rowlett. 13 Ch D 774 and Quinn v. Leathem. [1901] AC 495, relied on- Griffiths v. J.P. Harrison (Watford) Ltd., [1963] AC 1; Finsbury Securities Ltd. v. Inland Revenue Commissioners, [1966] 1 WLR 1402, referred to.
116
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 3241-48 of 1981 Etc.
From the Judgment and Order dated 20.7.1983 of the Punjab & Haryana High Court in C.W.P. Nos. 469,748,750,751,752 and 753 of 1981 B.N. Shinghvi, V.A. Bobde, M.K. Ramamurthy, N.B. Shetty K.K. Venugopal, Dr. Anand Prakash, S.S. JavaIi, H.S. Gill, Brij Bhushan, M.G. Ramachandran, M.C. Dhingra, A.K. Sanghi, U.A. Rana, B.R. Agarwala, R.C. Pathak, Naresh Mathur, S.K. Sajwan. Baby Lal, Praveen Kumar, B.B. Singh, Vineet Kumar, B.D. Ahmed. R.S. Hegde, Parijat Singh, Mrs. Jayshree Wad, S. Balakrishnan, Ms. Janani, Mrs. Urmila Kapoor, T.T. Kunhikan- nan, H.K. Puri, S. Srinivasan, Mrs. M. Karanjawala, Vijay Kumar Verma. Ashok Grover, V.N. Ganpule, M.A. Gagrat, Mrs. P.S. Shroff, Anil Gupta, R.A. Gupta, A.K. Ghosh, S. Mandal, Ranjit Kumar, M. Veerappa, Girish Chandra, Dr. Meera Aggar- wal, A.K. Srivastava, K.R. Nambiar, A.G. Ratnaparkhi, R. Satish, P.H. Parekh, S.A. Shroff and K.V. Sree Kumar for the appearing parties.
The Judgment of the Court was delivered by K.N. SAIKIA. J. This analogous cluster of seventeen appeals by special leave, and a special leave petition involves a common question of law though they arise out of the following respective facts:
c.A. Nos. 324 z-3248 of 1981 These eight appeals by the Land Development and Reclama- tion Corporation, Chandigarh are from the Judgment and Order of the Punjab and Haryana High Court dismissing its writ petitions challenging the Award dated 2.8.1980 of the Labour Court, Chandigarh holding that the respondents were entitled to reinstatement with back wages except Yaspal (C.A. No. 3242 of 1981) who was to get wages up to 10.10.1979, with benefits of continuity of service. The respondents were workmen under the management of the Corporation and their services were terminated on the ground that the Chairman had no power to appoint them. The Labour Court in its Award held that their services were terminated illegally without pay- ment of retrenchment compensation under the Industrial Disputes Act, 1947, hereinafter referred to as the Act', and that they were entitled to reinstatement.
117 C.A. No. 686 (NL) of 1982 This appeal is from the Judgment dated 9.11.1981 of the High Court of Bombay (Nagpur Bench). The first respondent was an employee of the appellant's corporation since 1972.
He was taken on probation in 1975 for one year which was extended from time to time, lastly from 1.9.1977 to 31.10. 1977, whereafter his services being not found satisfactory were terminated with effect from 1.11.1977 under Regulation 44(b) of the State Transport Employees Service Regulations of the Corporation. The Labour Court took the view that it amounted to retrenchment and the provisions of s. 25F of the Act having not been complied with the termination was ille- gal. The appellant's writ petition therefrom was dismissed.
C.A. No. 1817 of 1982 The respondent workman was employed by the appellant Bank on 3.10.1962 as a clerk and he was put on probation for six months. As allegedly there was total lack of confidence of the bank in the employee it terminated his service on 27.7.1974 on payment of three month's salary. The industrial tribunal by its award dated 3.12.1981 directed reinstatement of the workman with full back wages on the ground of non- compliance with the provisions of s. 25F of the Industrial Disputes Act. The employer Bank now appeals from that Award.
C.A. No. 1898 of 1982 Respondent Nos. 2-6 were employed on probation by the appellant a partnership firm on 12.6.1975. Respondent Nos. 2-5 assaulted a supervisor and being afraid of police re- mained absent from 29.3.1976 and abandoned their jobs and their services were terminated. Respondent No. 6 stopped attending duties from 9.8.1975 and he left the service of his own accord. The Labour Court by its Award dated 16.9. 1980 held that their termination amounted to retrenchment and was illegal for non-compliance with the provisions of s. 25F of the Act and they were entitled to reinstatement with full back wages. The Management's writ petition challenging the Award having been unsuccessful, it has appealed.
C.A. No. 3261 of 1982 Respondent Namdeo was a clerk under the appellant Maha- rashtra State Road Transport Corporation. Pursuant to a disciplinary 118 proceeding his service was terminated with effect from 23.4.1963 by giving him one month's salary in lieu of no- tice. Moved by the respondent, the Assistant Commissioner under s. 16 of the C.P. & Berar Industrial Disputes Settle- ment Act, 1947 held the Inquiry Proceeding to be an empty paper formality and the termination amounted to dismissal and accordingly he set aside the order and directed the corporation to reinstate and pay him his back wages amount- ing to Rs. 15,97 1.66 within one month. The Corporation having moved the State Industrial Court at Nagpur under s. 16(5) of the Settlement Act, that Court by its order dated 29.9.1973 allowed the application and set aside the Assist- ant Labour Commissioner's judgment and dismissed the work- man's application holding that the acts of misconduct fairly stood proved and he deserved to be dismissed from service.
The High Court on being moved by the workman set aside the Labour Court's order and restored that of the Assistant Labour Commissioner. Hence this appeal.
CIVIL APPEAL NO. 3025 .......... OF 1990 The services of the workman Sri Pratap Singh, driver respondent No. 3 were terminated with effect from 18.10.1974 under clause 9(a)(i) of the DRTA (Conditions of Appointment and Service) Regulations 1952. As the conciliation efforts failed, the order was placed before the Labour Court, Delhi, who set aside the order on the ground of noncompliance with the provisions of s. 25F of the Act and ordered reinstate- ment with full back wages and continuity of service. The High Court having dismissed the writ petition there from, the appellant seeks special leave. We grant special leave and hear the appeal.
C.A. No. 885 of 1980 The workmen appellants Nos. 2 and 3 were discharged on I 1.11.1972 for their trade union activities. The Labour Court, Bombay by its Award dated 25.8.1977 refused to inter- fere. Challenge to the Award in the High Court having failed, the workmen appealed to this Court.
C.A. No. 1866 of 1982 The workman respondent No. 2 reported for artisan train- ing on 25.9.1963 and was absorbed as artisan trainee on 16.3.1964. He was made a skilled machine operator, under the appellant company and was discharged with effect from 23.7.1970. The Labour Court by its 119 Award dated 1.8.1980 held the termination to be illegal on ground of non-compliance of s. 25F of the Act, though the order of discharge was issued under Standing Order 18(1).
The Company has appealed against the said order.
C.A. No. 1868 of 1984 The respondent was an employee in the appellant's facto- ry as welder and his services were terminated with effect from 21.11.1972 under Standing Order No. 28. The Labour Court by its Award dated 30.12.1980 held the order of termi- nation amounted to retrenchment and bad for non-compliance with s. 25F and hence set it aside and ordered reinstatement with full back wages. Hence this appeal.
C.A. No. 8456 of 1983 The respondent was dismissed by the appellant--Corpora- tion after disciplinary inquiry by order dated 28.5.1971 paying one month's wages in advance. The workman having raised an industrial dispute, the Labour Court, Aurangabad by its Award dated 9.11.1979 held the order of termination to be legal and proper. The respondent's writ petition therefrom was allowed and the Award was quashed and the workman was declared entitled t0 reinstatement. Hence this appeal.
C.A. No. 10828 of 1983.
The respondent was a store keeper of Rungta Colliery.
His name was struck off the rolls of the Colliery with effect from 8.7.1975. He having raised an industrial dis- pute, the Industrial Tribunal, Jabalpur by its Award dated 22.8.1977 held the striking off t0 be unjustified and that the termination amounted to retrenchment and bad for non payment of retrenchment compensation. In the workman's Letters Patent Appeal the Division Bench of the High Court also held that the termination amounted to retrenchment.
Hence this Management's appeal.
The respective cases were argued with some dexterity by the learned counsel Mr. B.N. Singhvi, Mr. N.B. Shetye, Mr. S.S. Javali, Mr. K.K. Venugopal, Mr. V.A. Bobde, Mr. M.K. Ramamurthy, Mr. M.G. Ramachandran & Mr. R.S. Hegde.
On the above diverse facts two rival contentions are raised by the parties. The learned counsel for the employers contend that the word 'retrenchment' as defined in s. 2(00) of the Act means termination of 120 service of a workman only by way of surplus labour for any reason whatsoever. The learned counsel representing the workmen counted that 'retrenchment' means termination of the service of a workman for any reason whatsoever, other than those expressly excluded by the definition in s. 2(00) of the Act.
The precise question to be decided, therefore, is whether on a proper construction of the definition of "retrenchment" in s. 2(00) of the Act, it means termination by the employer of the service of a workman as surplus labour for any reason whatsoever, or it means 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, and those expressly excluded by the definition. In other words, the question to be decided is whether the word "retrenchment" in the definition has to be understood in its narrow, natural and contextual meaning or in its wider literal meaning.
Mr. N.B. Shetye, Mr. K.K. Venugopal, and the learned counsel adopting their arguments refer to the introduction of the provision of "retrenchment" in the Act. Retrenchment was not defined either in the repealed Trade Disputes Act, 1929, or in the Industrial Disputes Act, 1947, as originally enacted. Owing to a crisis in the textile industry in Bom- bay, apprehending large scale termination of services of workmen, the Government of India issued an Ordinance which later became the Industrial Disputes (Amendment) Act, 1953 (Act 43 of 1953) which was deemed to have come into force on the 24th day of October, 1953. Besides introducing the definitions of "lay-off" [Clause 2 (kkk)] and "Retrenchment" [Clause 2(oo)] this Amendment Act of 1953 also inserted Chapter VII in the Act which dealt with "lay-off" and "Retrenchment". That Chapter contained sections 25A to 25J.
Section 25A provided that sections 25C to 25E inclusive shall not apply to certain categories of industrial estab- lishments. Section 25C dealt with right of workmen laid-off compensation. Section 25D provided for maintenance of muster rolls of workmen by employers and section 25E stated the cases in which the workmen were not entitled to lay-off compensation. Section 25F dealt with conditions precedent to retrenchment of workmen. Section 25G dealt with procedure for retrenchment and section 25H dealt with re-employment of retrenched workmen; and section 25J dealing with the effect of laws inconsistent with this Chapter said that the provi- sions of this Chapter shall have effect notwithstanding anything inconsistent therewith contained in any other law (including standing orders made under the Industrial Employ- ment (Standing Orders) Act, 1946 (XX of 1946);
121 provided that nothing contained in this Act shall have effect to derogate from any fight which a workman has under any award for the time being in operation or any contract with the employer.
The Statement of Objects and Reasons of the Amendment Act, 1953 was as under:
"The Industrial Disputes (Amendment) Bill, 1953 seeks to provide for payment of compensation to workmen in the event of their lay-off or retrenchment. The provisions included in the Bill are not new and were discussed at various tripar- tite meetings. Those relating to lay-off are based on an agreement entered into between the representatives of em- ployers and workers who attended the 13th session of the Standing Labour Committee. In regard to retrenchment, the Bill provides that a workman who has been in continuous employment for not less than one year under an employer shall not be retrenched until he has been given one month's notice in writing or one month's wages in lieu of such notice and also a gratuity calculated at 15 days' average pay for every completed year of service or any part thereof in excess of six months. A similar provision was included in the Labour Relations Bill, 1950, which has since lapsed.
Though compensation on the lines provided for in the Bill is given by all progressive employers, it is felt that a common standard should be set for all employers" Clause 2(00) as inserted read as under:
"'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 ac- tion, but does not include-- (a) voluntary retirement of the workman; or (b) retirement of the workman on reaching the age of super- 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." 122 We are referred to contemporaneous interpretation of the word "retrenchment. In Employees of Messrs India Reconstruc- tion Corporation Ltd., Calcutta v. Messers. India Recon- struction Corporation Ltd., reported in 1953 LAC 563 it was observed by the Calcutta High Court:
"Ordinarily retrenchment means discharge from service of only the surplus part of the labour force but in the case of closure the whole labour force is dispensed with. In sub- stance the difference between closure and normal retrench- ment is one of degree only. As in the case of retrenchment so in the case of closure the workmen are not responsible for closing their jobs. In both the cases, what is called compensation by way of retrenchment relief should be admis- sible." In Messrs Benett Coleman and Company Ltd. v. Their Employees, reported in 1954 LAC 24 it was observed by Cal- cutta High Court:
"Thus whether the closure was justified or not, the workmen who have lost their jobs would in any event get compensa- tion. If it was not bona fide or not justified, it may be that the measure of compensation would be larger than if it was otherwise." The above almost contemporaneous exposition is worth consideration, Contemporanea expositio est optima et fortio- sima in lege, (2 Inst. 11). Contemporaneous exposition is the best and strongest in the law. A statute is best ex- plained by following the construction put upon it by judges who lived at the time it was made.
In Pipraich Sugar Mills Ltd. v. Pipraich Sugar Mills Mazdoor Union, [1956] SCR 872, the appellant company could not work its mills to full capacity owing to short supply of sugar-cane and got the permission of the Government to sell its machinery but continued crushing cane under a lease from the purchaser. The workmen's union in order to frustrate the transaction resolved to go on strike and serving a strike notice did not cooperate with the management with the result that it lost heavily. On the expiry of the lease and closure of the industry, the services of the workmen were duly terminated by the company. The workmen claimed the share of profits on the basis of the offer earlier made by the compa- ny and accepted by the workers. The company having declined to pay and the dispute having been referred, 123 the Industrial Tribunal held that the company was bound to pay and accordingly awarded a sum of Rs.45,000 representing their share of the profits and the award was affirmed by the Labour Appellate Tribunal. Question before this Court in appeal was whether the termination of the workmen on the closure of the industry amounted to retrenchment. It was held that the award was not one for compensation for termi- nation of the services of the workmen on closure of the industry, as such discharge was different from the discharge on retrenchment, which implied the continuance of the indus- try and discharge only of the surplusage, and the workmen were not entitled either under the law as it stood on the day of their discharge or even on merits to any compensa- tion.
The contention of the workmen was that even before the enactment of Industrial Disputes (Amendment) Act, 1953, the tribunal had acted on the view that the retrenchment includ- ed discharge on closure of business and had awarded compen- sation on that footing and that the award of the tribunal in Pipraich's case could be supported in that view and should not be disturbed. This was based on the decision in Employ- ees of Messrs India Reconstruction Corporation Ltd. Calcutta v. Messrs India Reconstruction Corporation Ltd., (supra); and Messrs Benett Coleman and Company Ltd. v. Their Employ- ees, (supra). But their Lordship did not agree. Venkatarama Ayyar, J. speaking for the four Judge Bench said:
"Though there is discharge of workmen both when there is retrenchment and closure of business, the compensation is to be awarded under the law, not for discharge as such but for discharge on retrenchment, and if, as is conceded, retrench- ment means in ordinary parlance, discharge of the surplus, it cannot include discharge on closure of business." As a result it was held that the Award in Pipraich was against the agreement and could not be supported as one of compensation to the workmen.
Thus this Court in Pipraich (supra) was dealing with the question whether the discharge of the workmen on closure of the undertaking would constitute retrenchment and whether the workmen were entitled on that account to retrenchment compensation; and it was observed that retrenchment connoted in its ordinary acceptation that the business itself was being continued but that a portion of the staff or 124 the labour force was discharged as surplusage and the termi- nation of services of all the workmen as a result of the closure of the business could not, therefore, be properly described as retrenchment, which in the ordinary parlance meant discharge from the service and did not include dis- charge on closure of business.
The same view was expressed in Hariprasad Shivshankar Shukla v. A.D. Divikar, [1957] SCR 121; also reported sub nomine Barsi Light Railway Co. v. K.N. Joglekar, [1957] 1 L.L.J. 243 (SC), wherein the Constitution Bench heard two appeals; namely, Civil Appeal Nos. 103 and 105 of 1956. In Civil Appeal No. 105 of 1956 the main appellant was the Barsi Light Railway Company Ltd., and the principal respond- ent was the President of the Barsi Light Railwaymen's Union.
Under an agreement dated August 1, 1895 between the Secre- tary of State for India in Council and the Railway Company, the Secretary of State could purchase and take over the undertaking after giving Railway Company a notice. On Decem- ber 19, 1952 a notice was given to the Railway Company for and on behalf of the President of India that the undertaking of the Railway Company would be purchased and taken over as from January 1, 1954. On November 11, 1953, the Railway Company served a notice on its workmen intimating that as a result of the talking over, the services of all the workmen of the Railway Company would be terminated with effect from December 31, 1953. The notice further stated that the Gov- ernment of India intended to employ such of the staff of the company as would be willing to serve on the railway on terms and conditions which were to be notified later. About 77 per cent of the staff of the Railway Company were reemployed on the same scales of pay, about 23 per cent were reemployed on somewhat lower scales of pay and only about 24 per cent of the former employees of the Railway Company declined service under the Government. Applications for compensation having been filed on behalf of the erstwhile workmen of the Railway Company under s. 15 of the Payment of Wages Act, 1936, for payment of retrenchment compensation to the said workmen under clause (b) of s. 25F of the Act, the question was whether the erstwhile workmen were entitled to claim compen- sation under clause (b) of s. 25F of the Act; and whether they had been retrenched by their former employer within the meaning of the expression 'retrenchment' in the Act. In Civil Appeal No. 103 of 1956, the main appellant was Sri Dinesh Mills Ltd. Baroda and the principal respondent was District Labour Officer and Inspector under the Payment of Wages Act. The appellant company was running a woollen mill at Baroda and had abut 450 workmen and 20 clerks who worked in shifts day and night. On or about October 31, 125 1953, the appellant put up a notice declaring its intention to close down the entire mill. As a result of the closure, the services of all 450 workmen and 20 clerks were terminat- ed and the appellant company claimed that the closure was bona fide being due to heavy losses sustained by the compa- ny. The principal respondent claimed retrenchment compensa- tion for the workmen of the appellant under clause (b) of s. 25F of the Act.
Section 25F at the relevant time stood as follows:
"25F. Conditions precedent to retrenchment of workmen.--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-- (a) the workman has been given one month's notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice;
Provided that no such notice shall be necessary if the retrenchment is under an agreement which specifies a date for the termination of service;
(b) the workman 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; and (c) notice in the prescribed manner is served on the appro- priate Government." In both the appeals the question before the Constitu- tion Bench was whether the claim of the erstwhile workmen both of the Railway Company and of Shri Dinesh Mills Ltd., to the compensation under clause(b) of s. 25F of the Act was a valid claim in law. Observing that the Act had a 'plexus of amendments', and some of the recent amendments had been quite extensive in nature and that s. 25F occurred in Ch. VA of the Act which dealt with 'lay off and retrenchment' in the Amending Act, and analysing s. 25F as it then stood, S.K. Das, J. speaking for the Constitution Bench observed that in the first part of the section both the words 're- trenched' and 'retrenchment' were used and obviously they had the same meaning except that one was verb 126 and the other was a noun and that to appreciate the true scope and effect of s. 25F one must first understand what was meant by the expression 'retrenched' or 'retrenchment'- Analysing the definition of 'retrenchment' in s. 2(00) the Court found in it the following four essential require- ments: (a) termination of the service of a workman;, (b) by the employer; (c) for any reason whatsoever; and (d) other- wise than as a punishment inflicted by way of disciplinary action. The Court then said:
"It must be conceded that the definition is in very wide terms. The question, however, before us is does this defini- tion merely give effect to the ordinary, accepted notion of retrenchment in an existing or running industry by embodying the notion in apt and readily intelligible words or does it go so far beyond the accepted notion of retrenchment as to include the termination of services of all workmen in an industry when the industry itself ceases to exist on a bona fide closure or discontinuance of his business by the em- ployer?" The Court further said:
"There is no doubt that when the act itself provides a dictionary for the words used, we must look into that dic- tionary first for an interpretation of the words used in the statute. We are not concerned with any presumed intention of the legislature; our task is to get the intention as ex- pressed in the statute. Therefore, we propose first to examine the language of the definition and see if the ordi- nary, accepted notion of retrenchment fits in, squarely and fairly, with the language used." The Court reiterated the following observations in Pipraich (supra):
"But retrenchment connotes in its ordinary acceptation that the business itself is being continued but that a portion of the staff of the labour force is discharged as surplusage and the termination of services of all the workmen as a result of the closure of the business cannot therefore be properly described as retrenchment." 127 This was the ordinary accepted notion of 'retrenchment' in an industry before addition of s. 2(oo) to the Act, as retrenchment in that case took place in 1951. Replying to the argument that by excluding the bona fide closure of business as one of the reasons for termination of the serv- ice of workmen by the employer, one would be cutting down the amplitude of the expression 'for any reason whatsoever' and reading into the definition the words which did not occur there, the Court agreed that the adoption of the ordinary meaning would give to the expression 'for any reason whatsoever' a somewhat narrower scope; one might say that it would get a colour in the context in which expres- sion occurred; but the Court did not agree that it amounted to importing new words in the definition and said that the legislature in using that expression said in effect: "It does not matter why you are discharging the surplus; if the other requirements of the definition are fulfilled, then it is retrenchment". In the absence of any compelling words to indicate that the intention was to include bona fide closure of the whole business, it would be divorcing the expression altogether from its context to give it such a wide meaning as was contended. About the nature of the definition it was said:
"It is true that an artificial definition may include a meaning different from or in excess of the ordinary accepta- tion of the word which is the subject of definition; but there must then be compelling words to show that such a meaning different from or in excess of the ordinary meaning is intended. Where, within the framework of the ordinary acceptation of the word, every single requirement of the definition clause is fulfilled, it would be wrong to take the definition as destroying the essential meaning of the word defined." The Court in Hariprasad dealt with two other conten- tions; one was that before the amending Act of 1953 the retrenchment had acquired a special meaning which included the payment of compensation on a closure of business and the legislature gave effect to that meaning in the definition clause and by inserting section 25F. The second was that section 25FF inserted in 1956 by Act 41 of 1956 was 'Parlia- mentary exposition' of the meaning of the definition clause and of section 25F. Rejecting the contentions the Court held that retrenchment meant the discharge of surplus workmen in an existing or continuing business; it had acquired no special meaning so as to include discharge of workmen on bona fide closure of business, though a number of Labour Appellate Tribunals awarded compensation to 128 workmen on closure of business as an equitable relief for variety of reasons. The Court accordingly held:
"... that retrenchment as defined in s. 2(00) and as used in s. 25 has no wider meaning than the ordinary, accepted connotation of the word; it means the discharge of surplus labour or staff by the employer for any reason whatsoever, otherwise than as a punishment inflicted by way of discipli- nary action, and it has no application where the services of all workmen have been terminated by the employer on real and bona fide closure of business as in the' case of Shri Dinesh Mills Ld. or where the services of all workmen have been terminated by the employer on the business or undertaking being taken over by another employer in circumstances like those of the Railway Company." It is interesting to note that the Amending Act No. 41 of 1956 inserted original section 25FF on September 4, 1956.
The objects and reasons were stated thus:
"Doubt has been raised whether retrenchment compensation under the Industrial Disputes Act 1947 becomes payable by reason merely of the fact that there has been a change of employers, even if the service of the workman is continued without interruption and the terms and conditions of his service remain unaltered. This has created difficulty in the transfer, re-constitution and amalgamation of companies and it is proposed to make the intention clear by amending section 25F of the Act." Hariprasad's case (supra) was decided on November 27, 1956. The Industrial Disputes (Amendment) Ordinance, 1957 (4 of 1957) was promulgated immediately thereafter with effect from December 1, 1956 and that Ordinance was replaced by the Industrial Disputes (Amendment) Act 1957 (XVIII of 1957).
The following was the Statement of Objects and Reasons:
"In a judgment delivered on the 27th November, 1956, the Supreme Court held that no retrenchment compensation was payable under section 25F of the Industrial Disputes Act, 1947, to workmen whose services were terminated by an em- ployer on a real and bona fide closure of business, or when termination occurred as a result of transfer of owner- 129 ship from one employer to another (see AIR 1957 SC 12 1).
This has led and is likely to lead to a large number of workmen being rendered unemployed without any compensa- tion. In order to meet this situation which was causing hardship to workmen, it was considered necessary to take immediate action and the Industrial Disputes (Amendment) Ordinance, 1957 (4 of 1957), was promulgated with retrospec- tive effect from 1st December, 1956." "This Ordinance was replaced by an Act of Parliament enact- ing the provisions contained in sections 25FF and 25FFF.
These sections provide that 'compensation would be payable to workmen whose services are terminated on account of the transfer or closure of undertakings.' In the case of trans- fer of undertakings, however, if the workman is re-employed on terms and conditions which are not less favourable to him, he will not be entitled to any compensation. This was the position which existed prior to the decision of the Supreme Court. In the case of closure of business on account of the circumstances beyond the control of the employer, the maximum compensation payable to workmen has been limited to his average pay for three months. If the undertaking is engaged in any construction work and it is closed down within two years on account of the completion of its work, no compensation would be payable to workmen employed there- in." Hariprasad (supra) having accepted the ordinary contex- tual meaning of retrenchment, namely, termination of surplus labour as the major premise it was surely open to the Par- liament to have amended the definition of retrenchment in s. 2(00) of the Act. Instead of doing that the Parliament added s. 25FF and 25FFF which said:
"25FF. Compensation to workmen in case of transfer of under- takings--Where the ownership or management of an undertaking is transferred, whether by agreement or by operation of law, from the employer, in relation to that undertaking to a new employer, every workman who has been in continuous service for not less than one year in that undertaking immediately before such transfer shall be entitled to notice and compen- sation in accordance with the provisions of section 25F, as if the workman had been retrenched:
130 Provided that nothing in this section shall apply to a workman in any case where there has been a change of employers by reason of the transfer, if-- (a) the service of the workman has not been interrupted by such transfer;
(b) the terms and conditions of service applicable to the workman after such transfer are not in any way less favour- able to the workman than those applicable to him immediately before the transfer; and (c) the new employer is under the terms of such transfer or otherwise, legally liable to pay to the workman, in the event of his retrenchment, compensation on the basis that his service has been continuous and has not been interrupted by the transfer." "25FFF. Compensation to workmen in case of closing down of undertakings--(1) Where an undertaking is closed down for any reason whatsoever, every workman who has been in contin- uous service for not less than one year in that undertaking immediately before such closure shall, subject to the provi- sions of sub-section (2), be entitled to notice and compen- sation in accordance with the provisions of section 25-F, as if the workman had been retrenched;
Provided that 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 aver- age pay for three months." Thus, by this Amendment Act the Parliament clearly provided that though such termination may not have been retrenchment technically so-called, as decided by this Court, neverthe- less the employees in question whose services were terminat- ed by the transfer or closure of the undertaking would be entitled to compensation, as if the said termination was retrenchment. As it has been observed, the words "as if" brought out the legal distinction between retrenchment defined by s. 2(00) as it was interpreted by this Court and termination of services consequent upon transfer of the undertaking. In other words, the provision was that though termination of services on transfer or closure of 131 the undertaking may not be retrenchment, the workmen con- cerned were entitled to compensation as if the said termina- tion was retrenchment.
Thus we find that till then the accepted meaning of retrenchment was ordinary, contextual and narrower meaning of termination of surplus labour for any reason whatsoever.
In Anakapalla Co-operative Agricultural and Industrial Society Ltd. v. Workmen, [1963] Suppl. 1 SCR 730, a company running a sugar mill was suffering losses every year due to insufficient supply of sugarcane and wanted to shift the mill. The cane-growers formed a co-operative society and purchased the mill. As agreed between the company and the society, the company terminated the services of the employ- ees and paid retrenchment compensation to them under section 25FF of the Act. This society employed some of the old employees and refused to absorb some of them who raised an industrial dispute. The Industrial Tribunal having directed the purchaser-society by its award to re-employ them, the society contended that it was not a successor in-interest of the company and hence the claim of re-employment was not sustainable and the services of the employees having been terminated upon payment of compensation by the company under s. 25FF no claim could be made against the transferee socie- ty. This Court held that the society was the successor-in- interest of the company as it carried on the same or similar business as was carried by the vendor company at the same place and without substantial break in continuity. It was further held that the employees were not entitled to both compensation for termination of service and immediate re- employment at the hands of the transferee and section 25H was not applicable to the case as the termination of service upon transfer or closure was not retrenchment properly so called and that termination of service dealt with in s. 25FF could not be equated with retrenchment covered by s. 25F. It was observed that the words 'as if' in s. 25FF clearly distinguished retrenchment under s. 2(00) and termination under s. 25FF. Gajendragadkar, J., as he then was, speaking for the five Judges Bench said that in Hariprasad this Court was called upon to consider the true scope and effect of the concept of retrenchment as defined in s. 2(00) and it held that the said definition had to be read in the light of the accepted connotation of the words, and as such, it could have no wider meaning than the ordinary connotation of the word and according to this connotation retrenchment meant the discharge of surplus labour or staff by the employer for any reason whatsoever, otherwise' then as a punishment inflicted by way of disciplinary action, and did 132 not include termination of services of all workmen on the bona fide closure of industry or on change of ownership or management thereof. It was observed:
" ..... the effect of this decision was that though the definition of the word 'retrenchment' may perhaps have included the termination of services caused by the closure of the concern or by its transfer, these two latter cases could not be held to fall under the definition because of the ordinary accepted connotation of the said word. This decision necessarily meant that the word 'retrenchment' in s. 25FF had to bear a corresponding interpretation." In Workmen of Subong Tea Estate v. The outgoing Manage- ment of Subong Tea Estate and Anr., reported in [1964] 5 SCR 602, it was similarly observed at page 613 of the report:
"In dealing with the question of retrenchment in the light of the relevant provisions to which we have just referred, it is, however, necessary to bear in mind that the manage- ment can retrench its employees only for proper reasons. It is undoubtedly true that it is for the 'management to decide the strength of its labour force, for the number of workmen required to carry out efficiently the work involved in the industrial undertaking of any employer must always be left to be determined by the management in its discretion, and so, occasions may arise when the number of employees may exceed the reasonable and legitimate needs of the undertak- ing. In such a case, if any workman become surplus, it would be open to the management to retrench them. Workmen may become surplus on the ground of rationalisation or on the ground of economy reasonably and bona fide adopted by the management, or of other industrial or trade reasons. In all these cases, the management would be justified in effecting retrenchment in its labour force. Thus, though the right of the management to effect retrenchment can not normally be questioned, when a dispute arises before an Industrial Court in regard to the validity of any retrenchment, it would be necessary for industrial adjudication to consider whether the impugned retrenchment was justified for proper reasons.
It would not be open to the management either capriciously or without any reason at all to say that it proposes to reduce its labour 133 force for no rhyme or reason. This position can not be seriously disputed" In Delhi Cloth and General Mills Ltd. v. Shambhu Nath Mukherjee and Ors., reported in [1978] 1 SCR 591 where the post of motion setter was abolished and the respondent was given a job of a trainee on probation for the post of As- sistant Line Fixer and the management found him unsuitable for the job even after extending his probation period upto nine months and offered him the post of fitter on the same pay and the respondent instead of accepting the offer wanted to be given another chance to show his efficiency in his job and the management struck off his name from the rolls with- out complying with the provisions of s. 25F(a) and (b) of the Act and the Labour Court having given award in the respondent's favour and the appellant's writ petition was rejected by the High Court, Goswami, J. speaking for three Judges Bench said: "Striking off the name of the workman from the rolls by the management is termination of his service. Such termination of service is retrenchment within the meaning of s. 2(00) of the Act. There is nothing to show that the provisions of section 25F (a) and (b) were complied with by the management in this case. The provisions of s. 25F(a), the proviso apart, and (b) are mandatory and any order of retrenchment in violation of these two peremptory conditions precedent is invalid." The appeal was accordingly dismissed. The earlier decisions were not referred to.
Next comes the decision in State Bank of India v. Shri N. Sundara Money, reported [1976] 3 SCR 160, (Y.V. Chandra- chud, V.R. Krishna lyer and A.C. Gupta, JJ.). In an applica- tion under Article 226, the respondent on automatic extin- guishment of his service consequent to the pre-emptive provision as to the temporariness of the period of his employment in his appointment letter claiming to have been deemed to have had continuous service for one year within the meaning of s. 25(B)(2) of the Act, the Single Bench of the High Court having allowed his writ petition and the writ appeal of the appellant having also failed, this Court in appeal found as fact that the appointment was purely tempo- rary one for a period of 9 days but might be terminated earlier, without assigning any reason therefor at the peti- tioner's discretion; and the employment unless terminated earlier, would automatically cease at the expiry of the period i.e. 18.11.1972. This 9 days' employment added on to what had gone before ripened to a continuous service for a year "on the antecedent arithmetic of 240 days of broken bits of service" and considering the meaning of 'retrench- ment' it was held that the expression for any reason whatso- ever 134 was very wide and almost admitting of no exception. The contention of the employer was that when the order of ap- pointment carried an automatic cessatioin of service, the period of employment worked itself out by efflux of time, not by act of employer and such cases were outside the concept of retrenchment. This Court observed that to re- trench is to cut down and one could not retrench without trenching or cutting, but "dictionaries are not dictators of statutory construction where the benignant moo&of a law and, more emphatically, the definition clause furnish a different denotation." Accepting the literal meaning, Krishna Iyer, J. observed:
"A break down of s. 2(00) unmistakably expands the semantics of retrenchment. 'Termination ..... for any reason whatso- ever' are the key words. Whatever the reason, every termina- tion 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 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 termina- tion howsoever produced. May be, the present may be a hard case, but we can visualise abuses by employers, by suitable verbal devices, circumventing the amount of s. 25F and s. 2(00). 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, con- clude, cease.' In the present case the employment ceased, concluded, ended on the expiration of 9 days automatically may be, but cessation all the same. That to write into the order of appointment the date of termination confers no mokshas 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 a omatic extinguishment of service by effluxion of time cannot be sufficient." It was further observed:
"Words of multiple import have to be winnowed judicially 135 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 con- science of the provision." The precedents including Hariprasad do not appear to have been brought to the notice of their Lordship in this case. It may be noted that since Delhi Cloth and General Mills (supra) a change in interpretation of retrenchment in s. 2(00) of the Act is clearly discernible.
Mr. Venugopal would submit that the Judgment in Sundara Money's case and for that matter the subsequent decisions in the line are per incuriam for two reasons: (i) that they failed t0 apply the law laid down by the Constitution Bench of this Hon'ble Court in Hariprasad Shukla's case (supra) and (ii) for the reason that they have ignored the impact of two of the provisions introduced by the Amendment Act of 1953 along with the definition of "retrenchment" in s. 2(00) and s. 25F namely, ss. 25G and 25H. We agree with the learned counsel that the question of the subsequent deci- sions being per incuriam could arise only if the ratio of Sundara Money's case and the subsequent Judgments in the line was in conflict with the ratio in the Hariprasad Shuk- la's case (supra) and Anakapalla's case (supra). The issue, it is urged, was, whether it was necessary for the Court to interpret s. 2(00) as being restricted to termination of services of workmen rendered surplus for arriving at a decision in the case and if it was unnecessary to so inter- pret s. 2(00) for the purpose of arriving at a decision in that case, the interpretation of s. 2(00) would necessarily by rendered obiter. According to counsel, the long discus- sion on interpretation of s. 2(00) could not be brushed aside as either obiter or mere casual observations of the Constitution Bench.
It is urged that for the.purpose of ratio decidendi, the question is not whether a subsequent Bench of the Su- preme Court thinks that it was necessary or unnecessary for the Constitution Bench, of the earlier Bench to have dealt with the issue, but whether the Constitution Bench itself thought it necessary to interpret Section 2(00) for 136 arriving at its final decision. If the smaller Bench of the Supreme Court could ignore the earlier decision of a larger Bench of the Supreme Court by holding that in its opinion, it was not necessary for the earlier Bench to have gone into the issue, equally it would be open to a High Court to adopt the same approach and ignore binding Judgments of the Su- preme Court; giving rise to judicial indiscipline. According to counsel the Constitution Bench, in its unanimous verdict, undoubtedly found it necessary to go into the interpretation of s. 2(00) and did so with elaborate reasoning supporting its findings, because if the contention of the Management in that case was accepted, namely, that "retrenchment" would cover only termination of surplus labour for any reason whatsoever, the logical result of this finding, would be twofold: (i) that the termination of the entirety of workmen by reason of closure, would not be a termination of workmen rendered surplus and, therefore, a case of closure would be outside s. 2(00), and (ii) secondly, such termination of workmen rendered surplus, could arise only if the industry continued to be a running industry.
The question whether the positive content of s. 2(00) restricting the definition of workmen rendered surplus, for any reason, whatsoever, is part of the ratio or not, submits Mr. Venugopal, is wholly an academic question in view of the fact that as many as 9 High Courts have restricted the applicability of s. 25F, 25G and 25H to only cases of termi- nation of services of surplus labour for any reason whatso- ever and not to other types of termination, whatever may be the reason for such termination. Even if a Judgment was to be based on two alternative reasons or conclusions, each one of these alternative reasons or basis, would form the ratio of the Judgment. It is also urged that the argument would equally apply to the ratio of Anakapalla's case rendering the Judgments in Sundra Money's case and the later decisions per incuriam, for not having noticed or followed a binding precedent of the Supreme Court itself, as the Judgment of the Constitution Bench binds smaller Divisions of the Court.
We now deal with the question of per incuriam by reason of allegedly not following the Constitution Bench decisions.
The Latin expression per incuriam means through inadvert- ence. A decision can be said generally t0 be given per incuriam when this Court has acted in ignorance of a previ- ous decision of its own or when a High Court has acted in ignorance of a decision of this Court. It can not be doubted that Art. 141 embodies, as a rule of law, the doctrine of precedents on which our judicial system is based. In Bengal Immunity Company Ltd. v. State of Bihar, [1955] 2 SCR 603, it was held that the words of Art. 137 14 1, "binding on all courts within the territory of India", though wide enough to include the Supreme Court, do not include the Supreme Court itself, and it is not bound by its own judgments but is free to reconsider them in appropriate cases. This is necessary for proper development of law and justice. May be for the same reasons before judgments were given in the House of Lords in Re-Dawson's Settlement Lloyds Bank Ltd. v. Dawson and Ors., [1966] 1 WLR 1234, on July 26, 1966 Lord Gardiner, L.C. made the following statement on behalf of himself and the Lords of Appeal in Ordinary:
"Their Lordships regard the use of precedent as an indis- pensable foundation upon which to decide what is the law and its application to individual cases. It provides at least some degree of certainty upon which individuals can rely in the conduct of their affairs, as well as a basis for orderly development of legal rules. Their Lordships nevertheless recognise that too rigid adherence to precedent may lead to injustice in a particular case and also unduly restrict the proper development of the law. They propose, therefore, to modify their present practice and, while treating former decisions of this House as normally binding, to depart from a previous decision when it appears right to do so.
In this connection they will bear in mind the danger of disturbing retrospectively the basis on which contracts, settlements of property and fiscal arrangements have been entered into and also the especial need for cer- tainty as to the criminal law." Though the above announcement was not made in the course of judicial proceeding it shows that it is open to House of Lords to depart from the doctrine of precedent when consid- ered justified. Section 2 12 of the Government of India Act, 1935 and Art. 141 of the Constitution of India were enacted to make the law declared by the Supreme Court binding on all courts in the country excluding, as is now being interpret- ed, the Supreme Court itself. The doctrine of ratio deciden- di has also to be interpreted in the same line. In England a decision is said to be given per incuriam when the court has acted in ignorance of a previous decision of its own or of a court of co-ordinate jurisdiction which covered the case before it, or when it has acted in ignorance of a decision of the House of Lords. In the former case it must decide which decision to f
