HARIPRASAD SHIVSHANKAR SHUKLA versus A. D. DIVIKAR

Citation: [1957] 1 S.C.R. 121 · Decided: 27-11-1956 · Supreme Court of India · Bench: SUDHI RANJAN DAS, NATWARLAL HARILAL BHAGWATI, T.L. VENKATARAMA AIYYAR, S.K. DAS, P. GOVINDA MENON · Disposal: Appeal(s) allowed

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Judgment (excerpt)

... 
S.C.R. 
SUPREME COURT REPORTS 
121 
HARIPRASAD 
SHIVSHANKAR 
SHUKLA 
v. 
A. D. DIVIKAR 
(With Connected Appeal) 
(S. R. 
DAS c. J., 
BHAGWATI, 
VENKATARAMA 
AYYAR, 
S. K• DAs and Gov1NDA MENoN JJ.) 
Industrial Dispute-'Retrenchment', 
Meaning 
of-If includes 
termination of service on bona fide closure of industry or change of 
011Jnership 
or 
management-Construction 
of 
statute-lndusn·ial 
Disputes 
Act (XIV of 1947), as amended by 
Act XLl/I of 1953, 
ss. 2(00), 25F. 
The word 'retrenchment' as defined in s. 2(00) and the word 
'retrenched' in s. 25F of the 
Industrial Disputes 
Act, 1947, 
a~ 
amended by Act XLIII of 1953, have no wider meaning than the 
ordinary accepted 
connotation of those 
words and 
mean the 
discharge of surplus labour or staff by the employer for any reason 
whatsoever, otherwise than as a punishment 
inflicted by way of 
disciplinary action, and do not include termination of services of 
all workmen on a bona fide closure of industry or on change of 
ownership or management thereof. 
Pipraich Sugar Mills Ltd. v. Pipraich 
Sugar 
Mills Mazdoor 
Union (1956] S.C.R. 872, followed. 
Burn & Co., Calcutta v. Their Employees (1956] 
S.C.R. 781, 
referred to. 
The provisions of the 
Act have in view 
an existing 
and 
continuing industry and els. (a), (b) and (c) of the definition only 
exclude certain categories of termination of service from within its 
ambit but do not indicate what arc to be included therein. 
The word 'retrenchment' has acquired no special meaning so 
as to include a discharge of workmen on a bona fide 
closure of an 
industry, as a result of certain Labour Appellate Tribunals awarding 
compensation to workmen on such 
closure as an equitable relief 
for a variety of reasons. 
The intention of the legislature in enacting 
s. 25F of the Act appears to have been to simplify and standardise 
the payment of 
compensation for 
retrenchment, as ordinarily 
understood, on the basis of the length of service ·of the retrenched 
workman. 
The Hyderabad Vegetable Oil Products. Ltd. v. Their Workers 
(1950] 2 LL.J. 1281, Employees of Messrs. India Reconstruction 
Corporation [1953] L.A.C. 563 and Kahdan 
Tcrtiles Ltd. v. Their 
Workers [1954] 2 LL.J. 249, considered. 
Section 25FF, which was inserted into the Act by the amending 
Act of 1~56, is not retrospective and does not apply to the instant 
16 
1956 
Hari""4111l SAiv-
sharikar Shukla 
Y. 
A. D. Di•ikar 
122 
SUPREME COURT REPORTS 
[1957] 
cases, and the object the legislature had 
in view in enacting the 
same was to partially nullify the effect of certain judicial decisions 
relating to the effect of a change of ownership or management and 
it was not intended to be a parliamentary exposition 
of the pre~ 
existing law. 
The language of item JO of the third an~ fourth scho.dules, 
engrafted into the 
Act by s. 29 of the Industrial Disputes (Amend-
ment and Miscellaneous Provisions) }\ct, 1956, indicates that the 
legislature 
envisaged 
a 
distinction 
between 
retrenchment 
and 
closure and the former does not include the latter. 
Although 
on 
such 
construction, s. 25F applies only 
to an 
e.-xisting industry 
and s. 
25FF 
becomes 13rgely 
redundant, 
no 
question of any hardship arises as the 
judicial decisions on the 
basis of which s. 25FF was enacted 
\~:ere themselves incorrect and 
must be overruled, 
In construing a parliamentary statute the time when and the 
circn1nstance." in which it \Vas enacted may be taken into considera-
tion and the general 
principle of parliamentary exposition or 
subsequent legislation as "an aid to construction of prior legislation, 
can have no 
application where 
the subsequent 
statute itself was 
based on incorrect assumptions and judicial decisiOns b.1sed on such 
assumptions. 
Great Northern Railway v. United States 
of America, 315 U.S. 
262 and Ormond Investment Co. Limited v. Betts [ 1928] A.C. 143, 
referred to. 
If the other conditions of the definition clause are fulfilled, the 
transfer of o\vnership or management of an ind.ustry and its closure 
st.1nd on the same footing so far as the definition clause is con-
cerned, notwithstanding that there is a distinction in fact between 
the two ; there is, however, no retrenchment within the meaning 
of the definition clause unless there is a discharge of surplus labour 
or staff by the employer in a continuing industry, for any reason 
whatsoever, otherwise than as a punishment inflicted 
by way of 
disciplinary action. 
· 

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