Holding

The Supreme Court dismissed both appeals, rejecting the new s.25F plea, finding no valid justification for breaching s.25G, and upholding the Tribunal’s award with directions for back‑wage payment and compensation in lieu of reinstatement.

Summary

In 1966 the Jorehaut Tea Co. Ltd. retrenched 23 workmen; 16 received compensation calculated under s.25F of the Industrial Disputes Act and were selected according to the 'last come, first go' rule of s.25G, while the remaining seven were dismissed out of turn. The Industrial Tribunal upheld the retrenchment of the 16 and ordered reinstatement with half back wages for the seven, a decision affirmed by the High Court. On appeal, the workmen sought to introduce a new plea that the compensation was computed on pre‑Wage Board wages, violating s.25F, and the management argued that the deviation from s.25G was justified. The Supreme Court rejected the new plea as it was not pleaded or proved before the Tribunal, held that the management had not shown any valid reason to depart from the 'last come, first go' principle, and affirmed the Tribunal’s award, directing payment of half back wages and, in lieu of reinstatement, one year’s wages for the seven workmen. Both appeals were dismissed.

Issues considered

The workmen’s claim that retrenchment compensation under s.25F was calculated on wages prior to the Wage Board Award, constituting non‑compliance with s.25F.
Whether the management’s departure from the 'last come, first go' rule of s.25G in retrenching the seven workmen was justified.
Whether grading within the same category creates separate categories for the purpose of applying s.25G.
Appropriate relief when reinstatement is impossible because the workshop no longer exists.

Legislation cited

Industrial Disputes Acts. 25F, s. 25G

Subjects

retrenchmentIndustrial Disputes ActSection 25FSection 25Glast come first goback wagesWage Board Awardreinstatementindustrial tribunalnew plea

Judgment

966

A WORKMEN OF SUDDER WORKSHOP OF JOREHAUT
TEA CO. LTD.
v. J
ITS MANAGEMENT AND VICE-VERSA
May 1, 1980
8
(V. R. KRISHNA IYER AND 0. CHINNAPPA RllDDY, JJ.]

New Pica-Article 136 of "the Cons1itution-Supre1ne l'ourt cannot accept .,,.
new plea not taken earlier.

lndustri/ll Diputes Act, Sections 25F and 25G, scope of-Back wages pay-
c nJent of.

The Management Tea Co. Ltd. appellant in C. A. 1538/71 retrenched on.
November 5, 1966, 23 workmen, 16 of whom were paid retrenchment compen-
sation allegedly in term. of section 25F of the Industrial Disputes Act based
on wages obtaining prior to Wage Board Award, which came into force on
1-4~66 retroactively and in the order of 'last come, first go', while the services
of other seven were terminated, although on payment of retrenchment com~
pensation, allegedly in breach of Section 25G of the Act, i.e. out of turn. The
dispute that was raised was decided by the Tribunal which upheld the validly
of the retrenchment of the 16, but set aside the termination of the other seven.
The High Court agreed with the Tribunal's Award and hence the appeals both
by the workmen and the management after obtaining special leave.

E Dismissing both the appeals, the Court

HELD : 1. The plea that the amount paid by way of retrenchment com-
pensation envisaged in Section 25F of the Industrial Disputes Act, not having
been computed as per the revised pay scales as per the Wage Boe.rd Award,
fell short of what was legally due and hence there was non-compliance is not
tenable because before the Tribunal this contention was neither pleaded nor
F proved·. There was \no hint of it in the Award. Jn the High Court this new
plea based on the facts was not permitted. Further the Wage Boards' .Award
was subsequent ro the retrenchment although retroactively applied and the.
\vorkmen had accepted the retrenchnient compensation on the wages prevalent
at the time of the retrenchment. In the absence of any basis for this new plea
Supreme Court cannor reopen cm ancient matter of 1966. But the 16 Work·
men, being admittedly eligible for the Wage Board scale, would be paid the
difference for the period between 1-4-66 to 5-11-66. [969 A-BJ
G
2. Se<:tion 25G of the Industrial Disputes Act postulates that ordinarily the
'last come, first g~ will be the methodology of retrenchment. Of course, it
is not an inflexible rule and extra-ordinary situations may justify variations.
There must be valid reason for this decision, and, obviously, the burden is on
the Management to substantiate the special ground for depsrture from the
rule. Surely, valid and justifiable reasons are for the management to make
H our, and if made out, s. 25G will be vindicated and not violated, varying the
ordinary rule of 'last come first go.' There is none made out here, nor even
a1leged, except the only plea that t'he retrenchment was done in compliance

(
J

WORKMEN SUDDER WORKSHOP v. MANAGEMENT (Krishna Iyer, J.)957

with s. 25G grade-wise. Absence of mala fides by itself is no absolution from A
the rule in s.25G. Affirmatively, some valid and justifiable grounds must be
proved by the Management to be exonerated from the 'last come first gc>' prin·
ciple. The aboye rule can be applied category wise. That is to say tbose
who fell in the same category shall suffer retrenchment only in accordance with
!be principle of last come first go. [969 E, H, 970 A, B, 0-FJ

Ml s. Om Oil & Oil Seeds Exchange Ltd., Delhi v. Their Workmen,
[1966] Suppl. S.C.R. 74, followed. B

,..
I
3. Grading for purposes of scales of pay and like considerations will no!
create new categorisation. ..ft is a· confusion or unwarranted circumvention to
contend that within the seme category if grades for scales of pay, based on
length of service etc., are evolved, that process amounts to creation of seporate
I 't categories. In the instant case, the senioriiy List is the same which is a tell·
T ing circumstance to show that they fell in the same category. [971 C-E] c
4. Supreme eoUrt cannot sympathise with a party who gambles in
i. litigation to put off the evil day and when that day arrives prays to be
saved from his own gamble. The Award had given convincing reasons for
reinstatement and even reduced the back wages to half. Still, the workmen
were dragged to the High Court and, worse, when worsted there, were driven
from Assam to Delhi to defend their pittance. The logistics of litigation for D
indipt work.men is a burden the management tried to use by a covert black-
mail throogh the judicial process. Misplaced sympathy is a mirage justice.
[971 G-H, 972 A-Bl

CML APPELLATE JURISDICTION : Civil Appeals Nos. 1303 of
1972 and 1538 of 1971.
E
Appeals by Special Leave from the Judgment and Orders dated
13-4-1971 Of the Assam and Nagaland High Court in Civil Rule No.
368/68 and 174/68.
M. N. Phadke and S. N. Choudhary for the appellant in CA.
No. 1538 and Respondent in CA No. 1303172. F
P. R. Mridul and K. P. Gupta for Respondent No. 1 in CA 1538
and Appellant in CA No. 1303/72.
The Judgment of the Court was delivered by

KRISHNA IYER, J. These two appeals, turning on the validity of
G
the retrenchment of 23 workmen way back in 1966, arp amenable to
common dispo1al. Mr. Phadke, appearing for the Management, ar-
gued straight to the point; so did Shri Mridul, with the result that we

""' could get the hang of the case without much wrestling with time or

I getting paper-logged. Since, in substance, we are inclined to leave
undisturbed the Award of the Industrial Tribunal, affirmed, as it were,
by the High Court, both these appeals will be given short shrift with
brief reasons.
H
968 SUPREME COURT REPORTS (1980] 3 s.c.R.

A The facts, to the extent necessary to appreciate the iss~es canvas-. '
sect, are brief. The Management of a tea plantation by name Jorehaut -~
Tea Co., Ltd., retrenched 23 workmen, 16 of. whom were paid retren-
chment compensation allegedly in terms of s.25F of the Industrial
Disputes Act (for short, the Act) and in the order of 'last come, first go',
while the services of the other seven were terminated, although on pay-
...
B ment of retrenchment compensatioo, allegedly in breach of s. 25G of
the Act, i.e. out of tum. The dispute that was raised was decided b'y the
Tribunal which upheld the validity of the retrenchment of the 16 but
set aside the termination of the other 7. Consequently it directed their
re-instatement with some back wages. The Award granted the follo-
wing relief: ·
c
In respect of the workmen, viz., Sri Bhogeswar Saikia
Sri Nandeswar Bora, Sri Gunai Bora, Sri Premodhar Sarma,
Sri Alimuddin Ahmed, Sri Deven Sarma and Shri Harlal
Biswas whose retrenchment has been found to be not justified
they are entitled to reinstatement with continuity of service.
D These workmen have not come forward to say that they
remained unemployed from the date of their retrenchment.
In the circumstances of ·the case, I think they may be given
wages at half the rate from the date of retrenchment till the
date of publication of the award in the Gazette.
E We may first dispose of the workers' appeal. In all, 23 persons
were retrenched. In respect of 16 the rule of 'last come, first go' was
applied .. Thus homage was paid to s.25G of the Act. But then, the
workmen in their appeal, contended before us that s. 25F bad been
breached and, therefore, the termination was bad in law. The
Management's case is that, as a fact, all or most of them had been
F
reinstated when fresh vacancies had arisen, although neither party is
able to assert with certainty this case of reinstatement. That apart, if I
there be non-<:ompliance with s.25F, the Jaw is plain that the retrench-
ment is bad. However, when probed further as to bow s.25F had been r
violated, Shri Mridul argued that the amount paid by way of retrench-
ment compensation envisaged in s.25F fell short of what was legally .
due and hence there was non-<:ompliance. Under more searching
interrogation, Shri Mridul stated that the compensation bad been com-
puted on the basis of wages previously paid and in derogation of the
Wage Board Award which had been implemented by the Management
with effect from 1-4-1966. The retrenchment was on November 5,
B 1966, i.e. months after April 1, 1966. Therefore, the revised· pay-
scales as per the Wage Board Award should have been adopted in cal-
culating the retrenchment c~mpensation. This spinal flaw rendered
WORKMEN SUDDl!ll. WORKSHOP v. MANAGEMENT (Krishna Iyer, I.) 9 6 9
- -:"~-

the tender of campensation insufficient and, therefore, the retrench- A
ment itself was invalid. Maybe, there is apparent force in this conten-
tion. But Shri Phadke countered it by saying that it was not open to

... the workmen to spring a surprise on the Management especially when
the question was one of fact. He urged that before the Tribunal no
. I. plea based on the Wage Board -!\ward was made and it was quite
pllssi'llfe that the Management would have adequately met the conten- · B
tion if such a plea had been raised. The fact is that before the Tnl>u-
nal the contention pressed before us was neither pleaded nor proved.
There is no hint of it in the Award. In the High Court this new plea
based on the facts was not permitted. Had there been some founda-
tion laid at least in the written statement of the workmen, we might
have been inclined to expli>re the tenability of the plea, especially be-
c
cause there is no dispute about the. Wage Board Award and the fact
that it had been given effect to from 1-4-1966 and the further fact that
in the retrenchmlll!t notice the wages were not calculated according to I
the Wage Board's Award. It must be remembered, however, that the
Wage Board's Award was subsequent to the retrenchment although re-
D
troactively applied and the workmen had accepted the retrenchment
compensation on the wages prevalent at the time of the retrenchment.
In the absence of any basis for this new plea we are unable to reopen
an ancient matter of 1966 and, agreeing with the High Court; dismiss
tht appeal. But the 16 workmen, being eligible admittedly for the
·.Y Wage Board scale, will be paid the difference for the period between E
1-4-1966 to 5-11-1966. ·
Now, we will take up the merits of the Management's appeal which
relates to the retrenchment of seven workmen. Admittedly, the rule in
s.25G of the Act, which postulates that ordinarily the 'last come, first
gd Mll be the methQdology of retrenchment, has not been complied
\
with provided we treat all the workmen in the category as .one group. F
It makes for better appreciation of the point if we read s. 25G at
·~· this stage :
Where any workman in an industrial establishment, who
is a citizen of India, is to be retrenched and he belongs to
•• . a particular category of workmen in that es!ablishment, in
the absence of any agreement between the employer and G
·the workman in this behalf, the employer shall ordinarily
retrench the workman who was the last person to be emp-
loyed in that category, unless for reasons tt'.1 be recorded the
employer retrenches any other workman.
The key-note thought of the provision, even on ii bare reading, Is B
evident.. The rule is that the employer shall retrench the wotkman
who came last, first, poptJlarly known a8 'last come first go'. Of
3-610SCI/80
970 SUPREME COURT REPORTS • [1980) 3 S.C.R.

A course it is not an inflexible rule and extra-ordinary situations may
justify variations. For instance, a junior recruit who has a special
qualification needed by the employer may be retained even though
another who is one up is retrenched. There must be a valid reason
for tbis deviation, and obviously,, the burden 1s on the Management to
substantiate the special ground for departure from the ru!ei.
B
Shri Phadke brought to oui notice the decision in Ml s Om Oil
& Oilseeds J;xchange Ltd., Delhi v. Their Worf<n?en(') to make out
that it was not a universal principle which could not . be departed
from by the Management that the last should go first. The Manage-
ment had a discretion provided it acted bona fide, and on good
c grounds. Shah, J. in that very ruling, while agreeing that a breach
of the rule could not be assumed as prompted by ma1a fides or induced
bY unfair labour practice merely because of a departure or deviation, ·
further observed· that the Tribunal had to determine in each case wheth-
er the Management had acted fairly and not. with ulterior motive.
The crucial consideration next mentioned by the learned Judge is
D . ' '
that the Management's decision to depart from the nde must be for
valid and justifiable reasons, in which case "the senior employee may
be retrenched before his junior in employment.'' Surely, valid and
justifiable r~asons are for the Management to make out, and if made
out, s. 25G will be vindicated and not violated. Indeed, that very deci-
sion stresses the necessity for valid and good ground for varying the
It ordinary rule of 'last come first go'. There is none made out here,
nor even alleged, ex~t the only plea that the retrenchment was done
in compliance with s. 25G grade-wise. Absence of mala fides by
itself is no absolution from' the rule in s. 2SG. Affirmatively, · some
valid a!Jd justifiable grounds must, be proved by the Management to
be exonerated from the 'last come first go' prim;iple.
F
It must be remembered that the above provision which we have
quoted insists on the rule being applied category-wise. That is to
say, those who fall in the same category shall suffer retrenchment
only in accoroance with the principle of last come first go. The
short pmnt raised is tha~ the seven workmen are not in the same cate-
gory. The finding of· the Tribunal, concurred in by the High Court
is that they fell in the same category. We quote the award :
"It will be seen that when there is no trade test or any-
thing to mark efficiency, there is no basis for placing the
workmen in different grade~ and when all the workmen o!I'
the same category are to do the same work inasmuch as by
the management's own evidence there is no gradewisel allo-
(1) (1966) Supp. SCR. 74.
WORKMEN SUDDER WORKSHOP v. MANAGEMENT (Krishna Iyer, !.) 971

cation of duty within the same category. Although in the A
e.vJdence the Management wanted to justify their departure
from the principle of 'last come first go' there is nothing to
show that such a reason was recorded for deviating from
. the principle. In the circumstances of the case it cannot
be said that the management's selection of persons to be
retrenched leaving the juniormost in. some category was justi- B
fied and the reason now adduced for deviating from the
principle cannot be accepted in the absence of the reason
being not recorded at. the time of retrenchment. Further
11 will be also noticed that although there is classification of
. I J workmen into grades (?) within the cat.egory, there is
·-r nothing to distinguish one workman of one grade from an- c
other workman of another Grade inasmuch as there is no
allocation of duties amongst the workmen of different Grades
in the category."
The seniority list is the same, which is a telling circumstance to show
that they fell in the same category. Grading for purposes of scales D
of pay and like considerations will not create new categorisation. It
JS a confusion or unwarranted circumvention to contend that within
the same category if grades for scales of pay, based on length of
service etc., are evolved, that process amounts to creation of separate
categories. This fallacy has been rightly negatived by a detai!lld dis-
cussion in the Award. The High Court has a voided the pitfall and we E
decline to accept the submission. The result is that the Award must
hold good in regard to the illegally retrenched seven workmen.

What remains to be considered is the last submis~ion of Shri
Phadke that the engineering establishment wherein these seven work-
men· are to be reinstated is no longer in existence. Further, he• pleads F
that on account of long lapse of time on account of the pendency
of the appeal in this Court the compensation payable by way of full
wages may amount to a huge sum disproportiom1te to the deviance
from the law. He, therefore, pleads for moulding the relief Jes~
. harshly.
G •
We cannot sympathise with a party who gambles in litigation to
put off the evil day and when that day' arrives prays to be saved from
his own gamble. The Award had given convincing reasons for rein-
-~
statement and even reduced the back wages to half. Still, the1 work-
men were dragged to the High Court and, worse, when worsted
there, were driven from Assam to Delhi to defend their pittance. the B
logistics of litigation for indigent workmen is a burden the Manaoe-
•
ment trie.d to nse by a covert blackmail through the judicial proce"s.~.

:\
972 SUPREME COURT REPORTS [1980]" 3 S.C.R.

A Misplaced sympathy is mirage justice. We cannot agree. Even so,
we take note of the inordinate delay due to long pendency which is "'
part of the pathology of processual justice in the Supreme Court. So
we direct that half the back wages between the \]ate of retrenchment
~
and the publication of the Award shall be paid, as directed in the ,.
Award itself. For the post-Award period, full wages )Vill be paid
• until the High Court's judgment on 13-4-71 and thereafter 75% of
the wages will be paid until 30-4-1980.
"

. Counsel contends that the Workshop is not in existence now and '1"
reinstatement is physically impossible. Sri Mridul, for the workmen,
states that a just solution by the court in the given (circumstances 1s \'· '
e acceptable. We direct that, in lieu of reinstatement, one year's wages ~
calculated on the scale sanctioned by the Wage Board recommendations ....
for each such workman be paid. All the sums, if no~ paid before
15-5-80, shall carry 12% interest. And upto 15-5-80 they shall carry
9% interest in superses~ion of the interim order dated 5-5-72. Rough
and ready justice, for want of full information, is riot satisfactory but · ,.
D cannot be helped.
We dismiss the workmen's apF.1. No costs. We dismiss the
Management's appeal, subject to the above directions, with costli
quantified at Rs. 5,000/-.

s. R.
Appeals dismissed