M/S. SW ADESAMLTRAN LIMITED, MADRAS versus THEIR WORKMEN

Citation: [1960] 3 S.C.R. 144 · Decided: 01-03-1960 · Supreme Court of India · Bench: P.B. GAJENDRAGADKAR · Disposal: Dismissed

Cited by 3 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

March I 
• 
144 
SUPREME COURT REPORTS 
[1960] 
M/S. SW ADESAMlTRAN LIMITED, MADRAS 
v. 
THEIR WORKMEN 
(P. B. GAJENDRAGADKAR, K. SuBBA RAO AND 
K. c. DAS GUPTA, JJ.). 
Industrial Dispute-Rule of retrenchment-" Last come first 
go" -If citn be departed from by employer-Protracted litigation 
and employment of other hands-If a ground for defeating claim 
for re-instatement. 
The management by a notice terminated the services of 39 
workmen as a measure of retrenchment. The 'vorkmen went on 
strike which led to an industrial dispute. The Industrial 
Tribunal interalia held that the strike was not justified and that 
the management had made out of a case of necessity for retrench-
ment and no malafidcs had been established; but the principle 
of last come first go had not been observed in selecting the 
personnel for retrenchment and ordered the reinstatement of 15 
out of the 39 workmen retrenched. The Appellate Tribunal 
confirmed the findings of the Industrial Tribunal with certain 
modifications by way of compensation. The management came 
up in appeal by special leave. · 
Held, that where a case of retrenchment is made out the 
employer has 
normally to 
follow 
the industrial rule of 
retrenchment last come and first go; for valid reasons he may 
however depart from the said rule; in that case he has to show 
by reliable evidence, preferably from the recorded history of the 
workmen concerned showing their inefficiency, unreliability or 
habit'>i'l irregularity and can satisfy the Tribunal that the 
deparfure from the rule was justified by sound and valid reasons; 
otherwise the departure from the rule could be treated as being 
malafide or amounting to unfair. Jabour practice. _ 
Held, further that once it was found that retrenchment was 
unjustified and improper it is for the Tribunal to consider to 
what relief the retrenched workmen will be entitled; ordinarily 
retrenched workmen would be entitled to claim reinstatement, 
and the fact that in the meantime the employer has engaged 
other workmen would not necessarily defeat the claim for 
reinstatement, nor would the fact that protracted litigation in 
regard to the dispute has inevitably meant delay defeat such a 
claim for reinstatement. Therefore the conclusion that 15 
workmen were improperly retrenched cannot be sucessfully 
challenged. 
• 
CIVIL 
APPELLATE 
JURISDICTION: 
Civil Appeal 
No. 483of1958. 
Appeal by speoial leave from the decision dated 
March 20, 1956, of the Labour Appellate Tribunal of 
India, Madras, in Appeal No. Bow. 90 of 1952 arising 
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• 
3 S.C.R. SUPREME COURT REPORTS . 
145 
out of the Award dated December 28, 1951, of the 
r96o 
Industrial Tribunal, Madras, in Industrial Dispute Swadesamilran Ltd. 
No. 48 of 1951. 
. 
Madras 
1960. February 11, 12. 
M. 0. Setalvad, Attorney-
v; 
General of India, R. Ganapathy Iyer· and G. Gopal-
Their Workmen 
krishnan, for the appellants. This appeal arises from 
an Industrial Dispute between M/s. Swadesamitran 
and their workmen. Three items of dispute were 
referred for adjudication to the Industrial Tribunal 
at Madras. One of them being whether the retrench-
ment of 39 workmen affected by the appellant in 
May 1951, was justified, and if not, what relief the 
retrenched workmen were entitled to. The modified 
award directed the reinstatement of 15 of the retren-
ched workmen and the question is whether such direc-
tion is correct. It has to be remembered that the direc-
tion was given on March 28, 1956, in respect of 
retrenchment made in May 1951, with half their back 
wages. 
· 
The Tribunal erred in applying the rule "last come 
first go " as if it were an inflexible rule. The manage-
ment is the best Judge as to who were fit to be 
retained and who should be sent out. No doubt, if 
the selection of persons disclosed that the manage-
ment was guilty of any unfair labour practice, that 
would have been ground for interference. Tribunal 
and the Appellate Tribunal found that the action of 
management in selecting the personnel was not at all· 
malafide. It cannot be said · to be unreasonabl~ if 
persons are selected for discharge because they had 
reached an age which would affect their efficiency and 
so fit for being retrenched. It cannot be the rule 
that once a workmen is entertained he should be kept 
on for ever. Moreover, the evidence shows that a 
committee of three sat for the purpose of making a 
selection and they applied their minds to the problem 
and took into account all fac

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