GAMON INDIA LIMITED versus NIRANJAN DASS

Citation: [1984] 1 S.C.R. 959 · Decided: 05-12-1983 · Supreme Court of India · Bench: D.A. DESAI · Disposal: Dismissed

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Judgment (excerpt)

• 
f 
959 
· GAMON INDIA LIMITED 
v. 
NIRANJAN DASS 
December 5, 1983 . . · 
[0.A. DESAI, R.B. MISRA AND RANGANATH MISRA, JJ,J 
Industrial Disputes Act 1947, Section 2 (oo) retrenchmetJt-What is-
Services terminated on account of recession in work':'"·Termiliation whether O!flOUnts 
to retrenchment. 
The respondent was employed by the appellant!Company as a Senior 
Clerk till he received a notice terminating his services. The notice stated that 
on account of reduction in volume of the business of the Company as a result 
of recession, his serviceS were being terminated. 
On a reference by the Government, whether_ the retrenchment of the 
respondent was unjuStified or illegal the Industrial Tribunal held that since the 
conditions for a villid retrenchment have not been complied with, the respon· 
dent continued to be in service . 
·Jn a petition undei Acticle 226, a Single Judge held that since the 
• 
A 
B 
c 
D 
termination OT the services was consequent upon the closure of the Delhi office, 
E 
the case would be governed by Section 25 FFF of the Industrial Disputes Act 
1947 which does not prescribe payment of co1npensation as a cOndition prece-
dent to a valid termination of service by way of retrenchment. 
In the Letters Patent Appeal, the Division Bench set aside the judgment 
of the SingJc Judge on the ground that the reference to the Industriat Tribunal 
was to consider whether the retrenchment was illegal or unjustified and there-
. F 
· fore it was not open to the Single Judge to come to the conclusion that the case 
waS one of closure governed by Section 25 F FF. The Division Bench therefore 
restored the Tribunal's award. 
Dismissing the Appeal of the Company, · 
HELD: 1. The award of the Tribunal was correct and unassailable. 
The respondent had become surplus on account of reduction in volume of work 
and that constitutes retrenchment· even in the traditional sense of the term 
[963 HJ 
Pipraich Sugar Mills Ltd. v. Pipraich Sugar Mills Mazdoor Union, [1956) 
SCR 172; State Bank of India v. N. Sundara Money, [1976] 3 SCR 160; Hindustan 
Steel Ltd. v. The Presiding Officer, Labour Court. Orjssa and others, [1977] 1 SCR 
S86; Santosh Gupta v. State Bank of Patiala, (1980] 3 SCR 340; Delhi Cloth and 
G 
H 
. ·~ 
b 
D 
H 
960 
SUPREME COURT REPORTS 
(1984) I 9,C.ll. 
Genrol Mills Ltd. v. Shambu Nath Mukerjee, [1978] l SCR 591; Mohah. Lal v . 
Manaffement of M/s Bharat Electronict Ltd. [1981] 3 SCR 518; L. Robert D'suoza 
v. The Executive Engineer, Southirn Railway & Anr. [1982] 3 SCR 251, referred ' 
• t.o. 
2. Tho pre-requisite for a_ valid retrenchm.ent as laid down in Section 
'25 F has not been complied with, and therefore the retr"nchmeot bringing about 
termination.of service ia ab ~nitio :void. [964 E] 
in the instant _case, the n·otice fecites that as a result of the recession in 
the volum_e of the work of the company, the services of the respondent would 
not be required by tho company after October 14, 1967 and that this notice con-
templated by section 25F ca). Not even on~ word is Stated in the notice that the_ 
office·to which the reS:pondent was attached was -in the process of being closed 
down, so his seri<ices.would no more be required. [963 D-E) • 
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3. The terminatiori of service for the reasons mentioned in the notice is 
n0t covered by any of the Clauses (a), (b) and (c) of Section 2 (oo) which 
defines retrepchment anjf it is now well-settled that where the termination of 
service does not fall wJthin any of the excluded categories, the termination 
would be ipso facto retrenchment. It was not even attemPted to be urged that 
the case of the respondent would fatl in any of the excluded categories. It 
is there!or.e, indisputably a case of retrenchment. [964 C-D] 
4 (i). The appellant will have to establish the fact that the respondent 
has· reached the age of superannuation and that physical. re-instatement is not 
· possible. [965 A] · 
(ii). The respondent 'will be entitled to all backwages including benefit of 
rCvised ·wag'es or salary i-f there is revis_ion of pay-~ales with yearly increment, 
revised d~arriess _al1owa.i:ice or vafiable dearness allowance and all terminal 
benefits if be waS reached the age of superanriuaiion i;uch as Provident Fund, • 
Gratuity etc. Back wap should be calculated as if the respondent continued 
in sorvico uninterrupted.' [965 B-CJ 
(iii). Tho respondent has been unlawfully kept out of service. The 
appellant-company shall therefore pay aU 

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