THE INDIAN HUME PIPE CO. LTD. versus THE WORKMEN AND ANOTHER

Citation: [1960] 2 S.C.R. 32 · Decided: 16-10-1959 · Supreme Court of India · Bench: BHUVNESHWAR PRASAD SINHA · Disposal: Dismissed

Cited by 9 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

•959 
I. G. N. & Rly. 
Co. Lid. 
v. 
Th1ir Workn1sn 
Sinha]. 
I959 
Octob~r I6 
32 
SUPREME COURT REPORTS [1960 (2)] 
in respect of Jahangir Sardar and Keayamat Hussain, 
is set aside, (2) similarly, the order of reinstatement in 
respect of the thirty seven workmen, who had been 
convicted under s. 188 of the Indian Penal Code, is also 
set a.side, and (3) the order for payment of full back 
wages, etc., is modified by reducing those amounts by 
half, for the period aforesaid. 
As success between the 
parties has been divided, they are directed to bear 
their own costs in this Court. 
Appeal allowed in part. 
THE INDIAN HUME PIPE CO. LTD. 
v. 
THE WORKMEN AND ANOTHER 
(B. P. SINHA, C.J., P. B. GAJENDRAGADKAR, and 
K. N. WANCHOO, JJ.) 
Industrial Dispute--Retrenchment compensation-Grnt11ity-
Workmen's claim for both on retrenchment-Maintainability-Use of 
Statement of objects and reasons for construing statute-Validity-
Ordinance V of r953, s. 25E(b)-Indmtrial Disputes Act, r947 (I4 
of I947), SS. 2(rr), 25F(b). 
Section 25F(b) of 
the Industrial Disputes Act, 1947, 
provided : "No workman employed in any industry who has 
been in continuous service for not less than one year under an 
employer shall be retrenched by that employer until ... (b) the 
workman has been paid, at the time of retrenchment, compensa-
tion which shall be equivalent to fifteen days' average pay for 
e:'ery complete~ year of service or any part thereof in excess of 
s1x months ... 
The dispute between the appellant company and its workmen 
related to the claim for gratuity made by the latter and it was 
the appellant's contention that in the scheme of gratuity framed 
by the Tribunal no gratuity should be paid to workmen who 
would be entitled to receive retrenchment cou1pensation under 
s. 25F of the Industrial Disputes Act, 1947· Before s. 25F was 
introduced in the Act by Act 43 of 1953, workmen were given 
the benefit of both retrenchment compensation and gratuity by 
industrial awards, but the decisions were not always uniform. 
Ordinance V was promulgated on October 24, 1953, by s. 25E(b) 
of which it was provided that before a workman was retrenched 
he must be paid at the time of retrenchment gratuity which shall 
be equivalent to 15 days' average pay for every completed year 
of service or any part thereof in excess of six months. The 
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S.C.R. 
SUPREME COURT REPORTS 
33 
Ordinance was followed by Act 43 of 1953, which was deemed to 
have ceme into force on October 24, 1953; and in the statement 
of aims and objects of the Act it was said "that a workman ... 
shall not be retrenched until he has been given one month's notice 
in writing or one month's wages in lieu of such notice, and also 
a gratuity ... ". Section 25(F)(b) of the Act was in the same 
terms as s. 25E(b) of the Ordinance, except that for the word 
"gratuity" the expression " retrenchment compensation " was 
substituted. The. appellant's case was that after s. 25F was 
enacted there was no longer any scope for framing gratuity 
schemes in addition to the statutory retrenchment compensation 
for retrenched employees on the grounds(1) that both ins. 25E(b) 
of the Ordinance and the statement of aims and objects of the 
amending Act, the word "gratuity" had been used and not 
retrenchment compensation, (2) that in determining the amount 
of compensation payable to a retrenched workman the length of 
his past service had been taken into account, and schP-mes of 
gratuity also provide for payment of gratuity on similar consider-
ations and adopt a similar measure, and (3) that a retrenched 
workman would get both retrenchment compensation and gratuity 
and so get more than what other workmen with corresponding 
length -0f service would· get on their retirement. 
_ 
Held: (1) that for construing s 25F of the Industrial 
Disputes Act, 1947, the words used in the statement about the 
aims and objects of the Act are not relevant and that the charac-
ter of the payment prescribed by the section could only be 
determined by the expression "retrenchment compensation" 
used therein ; and, 
(2) that in the absence of any provision in the Industrial 
Disputes Act excluding the claim or grant of gratuity the mere 
enactment of s. 25F cannot oust the jurisdiction of industrial 
tribunals to entertain claims for gratuity schemes or make it 
improper or unjust to frame such schemes for all employees 
including those who are retrenched. 
The object of granting retrenchment compe

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