LAL MOHAMMAD AND ORS. versus INDIAN RAILWAY CONSTRUCTION CO. LTD. AND ORS.

Citation: [1998] SUPP. 3 S.C.R. 343 · Decided: 04-12-1998 · Supreme Court of India · Bench: S.B. MAJMUDAR · Disposal: Appeal(s) allowed

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Judgment (excerpt)

LAL MOHAMMAD AND ORS. 
A 
v. 
INDIAN RAILWAY CONSTRUCTION CO. LTD. AND ORS. 
DECEMBER 4, 1998 
[S.B. MAJMUDAR AND M. JAGANNADHA RAO, JJ.] 
B 
Labour Law 
Industrial Disputes Act, 1947--Ss. 25-N, 25-L, 25-0, 25-FFF read with 
S.25-F(a)(b)-Retrenchment-Project for construction of railway line-More C 
than hundred employees engaged-Project consisting "premises" were 
"manufacturing process" carried on-Entire project not closed down-
Retrenchment notices without complying wi•h the provisions of S.25-N-
Validity of-Held, retrenchment notices illegal and void-Matter remanded 
back to High Court to decide the fresh retrenchment notices issued during 
the pendency of appeal-Factories Act, 1948--Ss. 2(m) and (k). 
D 
Interpretation of statutes : 
Legislative intent--Ss. 25-N and 25-0(i) proviso-Held, proviso to S. 
25-0 cannot be transplanted by any judicial interpretation to be a proviso 
to S. 25-N-Such an interpretation would go against the very legislative E 
intent in enacting S. 25-N-Industrial Disputes Act, 1947--Ss. 25-N and 25-
0(i) proviso. 
Words & Phrases 
"Factory", "Premises"-Meaning and scope of in the context ofS.2(m) p 
of the Factories Act, 1948. 
"Manufacturing Process "-Meaning and scope of in the context of 
S.2(k)(i) of the Factories Act, 1948. 
"Industrial establishment"-Meaning and scope of in the context of 
S.25-L of the Industrial Disputes Act, 1947. 
G 
Respondent No. I was a railway construction company. Appellant-
workers employed in Rihand Nagar project 'of respondent No: I-company 
were issued retrenchment notice stating that as most of the work in the 
project was over, their services were terminated by offering retrenchment H 
343 
344 
SUPREME COURT REPORTS [1998] SUPP. 3 S.C.R. 
A benefits under S. 25-F(b) of the Industrial Disputes Act, I947. On challenge, 
Single Judge of High Court quashed the retrenchment notices holding that 
provisions ofS.25-N of the Act werr 1ot complied with. However, on appeal, 
the Division Bench of High Court reversed the findings of Single Judge. 
Hence the present appeal. During the pendency of appeal, respondent-company 
B issued fresh retrenchment notices stating that the entire project stands 
finally closed down. 
On behalf of the appellant-workers it was contended that respondent 
No. I-company employed more than hundred employees in the project at the 
relevant time and it was a 'factory' within the meaning .of Factories Act. 
C Thus, the Division Bench of High Court was not justified in holding that the 
provisions ofS.25-N of the Act were not applicable; that they were workmen 
of the company and not of any particular project and it was therefore, 
obligatory on the company to absorb them in any other project. 
On behalf of respondent No. I-company it was contended that the 
D Rihand project spread over 54 Kms was not an "industrial establishment" 
where any "manufacturing" work was being carried on and it had no "fixed 
site". Thus, it was not 'factory' to which the provisions of S. 25-N of the Act 
were applicable; the appellant were adhoc employees of the project and as 
the project work has come to an end they were rightly retrenched after 
E complying with the provisions of S.25-FFF read with S. 25-F of the Act. 
Allowing the appeals and setting aside the order of the High Court, 
the Court 
HELD : I.I. The establishment of the respondent-company squarely 
falls within the definition of the term "factory" under the Factories Act, 
F I948 for the purpose of applicability ofS.25-N of the Industrial Disputs Act, 
1947. Thus, the impugned retrenchment notices issued without following 
that the provisions of S.25-N of the Act are void and illegal. High Court was 
not justified in holding that the provisions of S.25-N of the Act are applicable 
to the respondent. [366-F; 351-B] 
G 
1.2. Railway line cannot be laid except on a 'fixed site' and every part 
of the land on which construction activity takes place would form part and 
parcel of the "premises" as such. The term "premises" under the definition 
not only covers building but even open land can also be a part of premises. 
When railway line is to be constructed over an area of 54 Kms., it cannot 
H be constructed overnight. For laying a railway line, number of workmen, 
LAL MOHAMMAD v. IND!AN RAIL. CONST. CO. LTD. 
345 
supervisors and other clerical staff will have to be offered the site where the A 
railway line is to be laid. That site on which railway line is to be laid will 
necessarily have 

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