SURENDRA KUMAR VERMA ETC. versus THE CENTRAL GOVERNMENT INDUSTRIAL TRIBUNAL CUM-LABOUR COURT, NEW DELHI & ANR.

Citation: [1981] 1 S.C.R. 789 · Decided: 23-09-1980 · Supreme Court of India · Bench: V.R. KRISHNA IYER · Disposal: Appeal(s) allowed

Cited by 7 judgment(s) · cites 4 · see the full citation network in Lexace

Judgment (excerpt)

•. ... 
SURENDRA KUMAR VERMA ETC. 
v. 
THE CENTRAL 
GOVERNMENT 
INDUSTRIAL TRIBUNAL-
CUM-LABOUR COURT, NEW DELHI & ANR. 
September 23, 1980 
[V. R. KRISHNA IYER, R. S. PATHAK AND 0. CHINNAPPA REDDY JJ.) 
Industrial Disputes Act, 1947-Sections 2(00), 25F and 25B Scope-Retrench-
ment-When the Court would order reinstatement with full back wages-Work-
man in employment for 240 days during twelve months-If in "conti1111011s ser-
vice" for purposes of section 25F. 
Interpretation-Welfare legislation-how interpreted. 
The respondent Bank terminated the services of the appellants on the 
ground that they could not pass the prescribed tests for their permanent absorp-
tion in its service. On reference the Labour Court held that the Bank's action 
in terminating their services (except . in the case of two workmen) was in 
violation of section 25F of the Industrial Disputes Act, 1947 and, therefore, 
was invalid and inoperative. 
The Labour Court, however, refused to order 
their reinstatement with full back wages on the ground that reinstatement 
would have the effect of equating them with workmen who had qualified for 
permanent· absorption •by passing the test; instead it directed payment of 
compensation of six months' salary in addition to retrenchment compensation. 
In Santosh Gu pt~ v. State' Bank of· Patiala it ·was held by this Court that 
the discharge of 'the' workman for the reason that she did not pass the test 
"which would have enabled her to be confirmed was retrenchment within the 
meaning of section 2(oo) and therefore the requirement of section 25F had 
to be complied with .. The workman in that case was directed· to be reinst~ted 
with full back wages. 
The workmen claimed that their case being identical 
with this case, they should be reinstated with full back wages. 
The Bank on the other hand contended that non-complbnce with the 
requirements of section 25F did not render the termination of their service 
void ab initio but made it invalid and inoperative and that the Court had 
full discretion to direct payment of suitable compensation instead of ordering 
reinstatement with full back wages. 
789' 
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In respect of two of the seven appellants, however, it was conceded before 
H'. 
the Labour Court that these two employees worked in the Bank for a few 
days more than 240 days during the preceding 12 months and' since they had 
/90 
SUPREME COURT REPORTS 
[1981] 1 S.C.R. 
.A 
not been· in th(' Bank's employment for one year, there was no violation of 
section 25F. 
But this concession was questioned before this Court in appeal 
and it was contended that there was non-compliance with the requirements 
of section 25F. 
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Allowing the appeals, 
HELD : [per Krishna Iyer and Chinnappa Reddy, JJ. Pathak, l. concurring] 
The five retrenched workmen should be reinstat_ed with full back wages . 
When an order terminating the services of a workman is struck down 
it is as if that order had never been passed and it must ordinarily lead to 
reinstatement of the workman with full backwages. 
In cases where 1t is 
impossible or wholly inequitable vis-a-vis the employer and the worker to 
direct reinstatement with full back wages, as for instance, where the industry 
has closed down or where the industry is in severe financial straits, for to 
order reinstatement in such a case would place an impossible burden on the 
employer or whc:re the workman had secured better or an alternative employ-
ment elsewhere and so on, there is a vestige of discretion left in the court 
to make appropriate orders. 
Occasional hardship may be caused to the em-
ployer; but more often than not, far greater hardship is certain to be caused 
to the workman if the relief is denied than to the employer 1f the relief is 
granted. [795B-E] 
In the instant case there is no special impediment in the way of awarding 
the relief of reinstatement with back wages. The apprehension of the Labour 
Court that reinstatement with full back wages would put these workmen on 
a par with those who weri~ qualified for permanent absorption by passing the 
prescribed test and that that would create dissatisfaction amongst the latter 
is unfounded because firstly these workmen can never be on par with the 
others since reinstatement would not qualify them for permanent absorption but 
they would continue to be temporary liable to be retrenched. Secondly there 
is nothing to show that their reinstatement would cause dissatisfacti

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