MANAGEMENT OF HINDUSTAN STEEL LTD. versus THE WORKMEN & ORS.

Citation: [1973] 3 S.C.R. 303 · Decided: 12-01-1973 · Supreme Court of India · Bench: C.A. VAIDYIALINGAM · Disposal: Appeal(s) allowed

Cited by 5 judgment(s) · cites 2 · see the full citation network in Lexace

Judgment (excerpt)

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303 
MANAGEMENT OF HINDUSTAN STEEL LTD. 
v. 
THE WORKMEN & ORS. 
January 12, 1973 
[A. ALAGIRISWAMI, I. D. DUA AND C. A. VAIDIALINGAM, JJ.] 
Industrial Disputes Act 1947 Ss. 25 F(b) and 25 FFF-Notice of 
retrenchment-In case of closure of an undertaking s. 25FFF appue. 
and not s. 25F(b)-Undertaking, what is-Closure of part of business 
may amount to closure of undertaking within meaning of .9. :!SFFf"->. 
Plea c.s to defect in noUce must be specific and precise. 
The· Hindusto:n Steel Ltd. undertook in 1960 a project called 
the 
Ranchi Housing Project. The project was completed in 
1966. After 
the compktion of the residuary work the services of certain employees 
including N were terminated. 'The relevant notice said that N 
could 
receive his retrenchment compensation from the cashier within two days 
from the date of termination of his employment subject to the pro-
duction by him of. no demand certificates from the concerned branches 
mentioned in the notice. N pleaded before 
the Industrlal Tribunal 
inter alia that the notic,e did not comply with the terms of s. 25F(b) 
of the Industrial Disputes Act 1947, because the compeinsation was not 
paid immediately at the time of effecting the retrenchment. The infirmi-
ty in the notice being apparent on its face, in the 
opinion 
of the 
Tribunal, N was held entitled to be reinstated end also to his wages 
and other dues. The Tribunal further held that this plea though not 
expressly taken by N 'in his written statement was 
covered 
by 
the 
general grounds taken therein. Appeal against 
the 
award 
of 
the. 
Tribun9} was filed by the Management of Hindustan Steel 
Ltd., 
by 
special leave granted by this Court. It was contended Oill behalf ot 
the appellant that the Section applicable to the case was not 25F(b) 
but 25FFF(2)· and the Tribunal erred in basing the 
award 
on 
the 
fofn1er section. 
HELD : (i) In the case of Harl Prasad Shiv Shankar Shukla, 
it 
was held by this Court that s. 25F was not intended by the leg!slature 
to be applicable to bona fide closure Of business. In 
1957 s. 25FFF 
was inserted in order to give b,enefit of s. 25F 
to 
the 
retrenched 
workmen where an undertaking is closed down for "any reason whatso~ 
ever". According to sub-8.(2) of s. 25FFF it is quite clear 
that in 
case of closure of the categories of undertrutings as mentioned therei,n, 
no workman employed In those undertakings can claim 
compensation 
under cl. (b) of s. 25F. [310C-E) 
Harl Prasad Shiv Shankar Shukla v. A. D. Divekar, (1957) S.C.R. 
121, referred to. 
(ii) The word undertaking as used in s. 25FFF seems to have been 
used in its ordinary sense connoting thereby any w<>rk, enterprise, pro-
Ject or business undertaking. It is not intended to cover the 
tllltire 
industry or business of the employer. Even closure or stoppage 
of 
a part of the business or activities of the employer would seem jn law 
to be covered by this sub-section. The question has t<> be decided on 
the facts of each case. In the present case the Ranchi Housing Project 
was clearly a distinct venture undertaken by the 9ppellant and it had 
a distinct beginning and an end. The Tribunal rightly held that 
QD 
the completion of the project the undertaking was cl~d down. 
[310G-311BJ 
304 
SUPREME COURT REPORTS 
(1973] 3 S.C.R. 
Workmen of the Indian Leaf Tobacco Development Co. 
Ltd. 
v. 
Management, [1969] 2 S.C.R. 282 and Parry & Co. Ltd. v. P. C. Lal, 
[1969] 2 S.C.R. 976. referred to. 
(iii) Under s. 25FFF(l) which creates ~ statutory fiction. •.11 that 
N \\'as entitled to was notice and compensation in accordance with the 
provisions of s. 25F as if he had been retrenched. 
The retrenchment 
notice given to him quite clearly complied with the requirement. [311E·Fl 
(iv} The Tribunal was in error in holding the general ground 
irl 
the written statement to cover the specific plea of 
infirmity 
of . the 
notice because of its being conditional. 
The plea 'Should 
have 
been 
specific and precise so as to ""1able the appellant to meet it. 
[311F-Gl 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 175 of 
B 
1971. 
c 
Appeal by special leave from the Award dated July 20, 1970 
oi the Industrial Tribunal, Bihar. Patna in-Reference No. 52 
of 1969 published in the Bihar Gazette dated 28-10-1970. 
M. C. Setalvad, Santosh Chatterjee and G. S. Chatterjee, for 
the appellant. 
o 
Madan Mohan and Ram Das Chadha, for respondents Nos. 1 
and 2. 
The Judgment of the Court wa

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