Holding

The terminations were illegal as the employer failed to comply with section 25F of the Industrial Disputes Act; the respondents are entitled to reinstatement with full back wages.

Summary

The Krishna District Co‑operative Marketing Society (the petitioner) retrenched nine clerks, invoking the Andhra Pradesh Shops and Establishments Act, 1966. The employees (respondents) challenged the terminations, arguing that the retrenchment provisions of the Industrial Disputes Act, 1947 (particularly s.25F) applied. A single High Court judge held s.25F inapplicable to proceedings under the State Act, but the Division Bench reversed, holding that the Central Act’s Chapter V‑A governs retrenchment even in State‑Act proceedings. The Supreme Court affirmed this view, noting that s.251/25J of the Industrial Disputes Act gives Chapter V‑A precedence over any inconsistent State law and that no repugnancy exists. Consequently, the terminations were illegal for non‑compliance with s.25F, and the respondents were entitled to reinstatement with full back wages. The special leave petitions were dismissed, upholding the Division Bench’s order.

Issues considered

Whether the provisions of section 25F of the Industrial Disputes Act, 1947 apply to retrenchment proceedings initiated under section 41 of the Andhra Pradesh Shops and Establishments Act, 1966.
Whether there is any repugnancy between the later State Act and the earlier Central Act, invoking Article 254(2) of the Constitution.
Whether the authorities created under the State Act have jurisdiction to enforce the conditions of section 25F.

Legislation cited

Andhra Pradesh Shops and Establishments Act, 1966s. 40, s. 41
Constitution of Indias. Art 136, s. Art 254(2)
Industrial Disputes Act, 1947s. 251, s. 25F, s. 25G, s. 25H, s. 25J

Subjects

retrenchmentIndustrial Disputes ActShops and Establishments Actsection 25Fsection 40repugnancycentral vs state lawreinstatementback wages

Judgment

KRISHNA DISTRICT CO-OPERATIVE MARKETING
SOCIETY LIMITED, VIJAYAWADA.
v.
N.V. PURNACHANDRA RAO & ORS.

AUQUST 3, 1987
B
[E.S. VENKATARAMIAH AND K.N. SINGH, JJ.J -\

Andhra Pradesh Shops and Establishments Act, 1966: ss. 40 & 11'
41: Retrenchment of workmen by the establishment-/1/~ture of pro-

c
ceedings under the Act-Employer-Whether to comply witlrs. 25F of
the Industrial Disputes Act. -
Industrial Disputes Act, 1947: ss. 25F & 251-Workmen- ~
Services terminated under s. 40, A. P. Shops and Establishments Act-
Whether mtitled to relief under the Central Act.

0 Constitution of India, Art 254(2): Repugnancy between the special
provisions contained in an earlier law and general provisions of later )..
law-Implications of.

Sub-section (1) of s. 40 of the Andhra Pradesh Shops and
Establishments Act, 1966 interdicts the employer governed by the Act
E from terminating the services of an employee without complying with
the conditions laid therein. Section 25F of the Industrial Disputes Act,
1947 lays down conditions precedent to retrenchment of workmen non- ~-
compliance with which will bi; fatal to any order of retrenchment.
....,..
The petitioner-society retrenched the respondents on the ground
F that the business of the management did not warranUhe continuance of
its heavy establishment. In an appeal under s. 41(1) of the Act the
appellate authority set aside the orders and directed reinstatement of
the respondents. The Labour Court set aside the orders of the appellate
authority in respect of some of the respondents.

G A Single Judge of the High Court found that the respondents were )--
'workmen' and the management was an 'industry' as defined in the
Industrial Disputes Act but dismissed the writ petition holding that they
could not claim the benefit of s. 25F of the Industrial Disputes Act in a
proceeding under s. 41 of the State Act, being of the view that there was
no scope either in the language of s. 40 of the State Act or its implication
H making it obligatory to read the condition of s. 25F of the Central Act as.
728
KRISHNA SOCIETY v. N.V.P. RAO 729

part of s. 40 of the State Act, that the statutory- authorities, created A
under s. 41(1) and s. 41(3) of the State Act being creatures of the
statute, had no right to apply the provisions of s. 25F of the Central Act
to proceedings before them and that whereas the rights under the Cent-
ral Act could he agitated by a reference to a Labour Court the right
agitated under s. 41(1) ands. 41(3) was a personal right.
B
The Division Bench on appeal by the respondents held that the
orders of termination were unsustainable. It took the view that the
question of their retrenchment was governed bys. 25F.

In the special leave petition it was contended on behalf of the
management that the provisions of s. 40, which deal with termination of c
service in a shop or establishment contained in the State Act, which is a
later Act, being repugnant to the provisions contained in Chapter V-A
of the Central Act, which is an earlier law, should prevail as the assent
of the Presillent has been given to the State Act.

Dismissing the special leave petition, 0

HELD: 1.1 The High Court was right • in holding that s. 25F of
the Industrial Disputes Act having not been complied with, all the
terminations were illegal. The respondents were, therefore, entitled to
be reinstated in service with full back wages. [743A]
E
1.2 If the employees are 'workmen' and the management is an
-;- by'industry' as defined in the Industrial Disputes Act and the action taken
the management amounts to 'retrenchment', then the rights l!Dd
liabilities of the parties are governed by provisions of Chapter V-A of
that Act and the said rights and liabilities may be adjudicated upon and
enforced in proceedings before the authorities under s. 41(1) and F
s. 41(3) of the Andhra Pradesh Shops and Establishments Act. In the
instant case the Single Judge of the High Court had found that the res-
pondents were 'workmen' and the management was an 'industry' as
defined in the Central Act. [741H-742A, 738C]

t.3 Sub-section (1) of s. 25J of the Industrial Disputes Act lays G
-{ down that Chapter V-A shall have effect notwithstanding anything in-
consistent therewith contained in any other law. The proviso to that
sub-section, however, saves any higher benefit available to a workman
under any law, agreement or settlement or award. Sub-section (2) of
s. 25J, which makes a distinction between any machinery provided by
any State law for settlement of industrial disputes and the substantive H

•
730 SUPREME COURT REPORTS [1987] 3 S.C.R.

rights and liabilities arising under Chapter V·A of the Central Act, )._
l\ provides that while that section would not affert the provisions in a
State law relating to settlement of industrial disputes, the rights and
liabilities of employers and workmen insofar as they relate to lay off and
retrenchment shall be determined in accordance with Chapter V·A of
the Central Act. It is thus apparent thats. 41(1) ands. 41(3) of the State
B Act prescribe alternative authorities to settle a dispute arising out of a
retrenchment. Those authorities may exercise their jurisdiction under 1.
the State Act but they have to decide the rights and liabilities arising out ,,...
of retrenchment in accordance with the provisions of Chapter V·A. The
said rights can be enforced by a workman personally by himself filing

c
an appeal under s. 41 (1) of the State Act. It is not necessary that a
reference should be sought under the Central Act by collective action of
workers. [739A-E]
-
y
Sawatram Ramprasad Mills Co. Ltd. v. Baliram Ukandaji and
Another, [1966] 1 SCR 764 and Pest Control India Pvt. Ltd. v. The
Labour Court, Guntur and Another, [1984] I Andhra Weekly Repor·
D ter 277, referred to.

-
2.1 There is no repugnancy between the two Acts. The State Act,
which is a later law, does not contain any express provision making the
)--

provisions relating to retrenchment in the Central Act ineffective
insofar as Andhra Pradesh is concerned. [740E]
E
2.2 Where there is a conflict between the special provisions con- _.,___
tained in an earlier law dealing with retrenchment and the general
provisions contained in a later law generally dealing with terminations
of service, the existence of repugnancy between the two laws cannot
easily be presumed. [740H]
F
Chapter V-A of the Central Act, which is the earlier law, deals
with rights and liabilities arising out of lay-off and retrenchment. Sec-
tion 25J of that Act deals with the effect of the provisions of Chapter
V·A on other laws inconsistent with that Chapter. Suh-section (2) of
s. 25J is quite emphatic about the provisions relating to the rights and
G liabilities arising out of lay-off and retrenchment. By enacting that >-
provision Parliament intended that such rights and liabilities should be
uniform throughout India where the Central Act was in force and did
not wish that the States should have their own laws inconsistent with the
Central law. These are special provisions and they do not apply to all
kinds of termination of services. If the State Legislature intended that it
H should have a law of its own regarding the rights and liabilities arising
KRISHNA SOCIETY v. N.V.P. RAO (VENKATAR1MIAH, J.] 731

out of retrenchment it would have expressly provided for it. The State A
Legislature had not done so in the instant case. Section 40 of the State
Act deals with termination of service generally. In such a situation it
cannot he said that there was any implied repugnaqcy between the
Central law and the State law. [740F, 741F, 740G, 741FG]

f- Maxwell on the Interpretation of Statutes, 12th Edn. p. 196 refer- B
red to.

[The Act should he suitably amended making it possible to an
individual workman to seek redress in an appropriate forum regarding
- illegal termination of service which may take the form of dismissal,
discharge, retrenchment etc. or modification of punishment imposed in C
a domestic enquiry. There is also a great need to review and to bring
into existence an all-India Labour Appellate Tribunal with powers to
hear appeals against the decisions of all Labour Courts, Industrial Tri-
bunals and even of authorities constituted under several labour laws
enacted by the States so that a body of uniform and sound principles of
labour law may he evolved for the benefit of both industry and labour D
throughoutlndia.] [742B·G]

CIVIL APPELLATE JURISDICTION: Special Leave Petition
(Civil) Nos. 6887-88of1987.

From the Judgment and Order dated 5.2.1987 of the Andhra E
- ~· Pradesh High Court in Writ Appeal Nos. 892 and 893 of 1983.

P.R. Ramachandra Rao, Dr. D.Y. Chandrachud, P.H. Parekh
'-t and M.K.S. Menon for the Petitioner.

V .J. Rao and Y. Prabhakara Rao for the Respondents. F

The Order of the Court was delivered by

VENKATARAMIAH, J. The question arising for decision in this
case is whether an employer whose establishment is governed by the
-.{ Andhra Pradesh Shops & Establishments Act, 1966 (hereinafter refer- G
red to as 'the State Act') is required, while retrenching any worker, to
comply with the provisions of section 25F of the Industrial Disputes
Act, 1947 (hereinafter referred to as 'the Central Act') or with section
40 of the State Act.

The petitioner in this case is a co-operative society carrying on H

.
732 SUPREME COURT REPORTS [ 1987] 3 S.C.R.

A business at Vijayawada in the State of Andhra Pradesh. It retrenched
nine of its clerks-Respondents 1 to 9 herein. Respondents I to 4 were
retrenched on 1.10.1978 and Respondents 5 to 9 were retrenched on
22.9.1978 on the ground that the business of the management did not
warrant the continuance of its heavy establishment. All the respon-
dents challenged the orders terminating their services in an appeal
B filed under section 41( 1) of the State Act before the appellate autho- -\
rity. The appellate authority set aside the orders of retrenchment by
nine separate judgments delivered on August 1, 1979 and directed the
reinstatement of the respondents with full back wages. Aggrieved by
the decision of the appellate authority the management, the petitioner
herein, filed nine appeals before the Labour Court, Guntur under
c section 41(3) of the State Act. The Labour Court allowed the appeals
filed against Respondents 5 to 9 and set aside the orders which had
been passed by the first appellate authority. It, however, dimissed the
appeals filed against Respondents I to 4 holding that the orders of
retrenchment were bad in law since employees junior to these respon-
dents had been retained in service. It, however, directed that any
D amount paid to Respondents 1 to 4 as notice pay and gratuity etc. under
section 40 of the State Act on account of the termination of their
services may be deducted from the back wages payable to them.
Aggrieved by the decision of the Labour Court Respondents 5 to 9
filed Writ Petition No. 163 of 1981 on the file of the High Court of
Andhra Pradesh and the management, the petitioner herein, filed Writ
E Petition No. 6151 of 1980 before the High Court against Respondents I
to 4. The learned Single Judge who heard the said two writ petitions
dismissed Writ Petition No. 163 of 1981 filed by Respondents 5 to 9
and allowed Writ Petition No. 6151of1980 filed by the management
against Respondents 1 to 4. The learned Single Judge took the view
that Respondents 5 to 9 could not claim the benefit of section 25F of
F the Central Act in a proceeding initiated under section 41 of the State
Act and dismissed their writ petition. He, however, allowed the writ
petition filed by the management and remanded the case to the Labour
Court to rehear the case after permitting Respondents 1 to 4 to
implead four other employees, namely, Seetharamaiah, Rajagopal
Rao, Krishna Murthy and Khader Hussain, who were alleged to be
G seniors to Respondents 1 to 4 and hearing them on the question of inter )--
se seniority between them and the said four other employees. The
learned Judge, however, observed that if section 25F of the Central
Act was applicable to the cases 'I have no doubt that these orders of
termination would have to be set aside, because section 25F denies the
rights of the employer to terminate the service of an employee without
H payment of retrenchment compensation' and that compensation had
Kll.ISHNA SOCIETY v. N.V.P. RAO (VENKATARAMIAH, J.] 733

not been paid in accordance with section 25F. But he found that sec- A
lion 25F of the Central Act was not applicable to proceedings m1der
the State Act. Aggrieved by the decision of the learned Single Judge
Respondents 1to4 and Respondents 5 to 9 filed Writ Appeal Nos. 892
of 1983 and 893 of 1983 respectively before the Division Bench of the
High Court. The common contention urged by both the groups of
t employees, who were appellants in these two appeals, was that the B
question of their retrenchment was governed by section 25F of the
Central Act and since the orders of retrenchment had not been passed
in conformity with the provisions of section 25F of the Central Act the
said orders were liable to be set aside and they were entitled to be

- reinstated. The Division Bench accepted the above contention of
Respondents 1 to 9 and allowed both the appeals holding that the
orders of termination were unsustainable. Aggrieved by the decision
c
of the Division Bench of the High Court the petitioner has filed these
Special Leave Petitions under Article 136 of the Constitution.

The only question which arises for decision in this case, as
mentioned above, is whether the retrenchment of an employee in an D
establishment governed by the State Act is governed by the provisions
of section 40 of the State Act or by the provisions of Chapter V-A of
the Central Act which deals with Jay-off and retrenchment. For
purposes of convenience section 40 of the State Act is set out below:
"40. Conditions for terminating the services of an E
employee and payment of gratuity:-{ 1) No employer shall
without a reasonable cause and except for misconduct
terminate the service of an employee who has been in his
employment continuously for a period of not less than six
months without giving such employee, at least one month's
notice in writing or wages in lieu thereof and in respect of F
an employee who has been in his employment continuously
for 1 period of not less than five years, a gratuity amount-
ing to fifteen days' average wages for each year of continu-
ous employment.
Explanation:- For the purpose of this sub-section,
G
(a) the expression 'wages' does not include overtime
wages;
(b) the expression 'average wages' means the daily
average of wages for the days an employee actually worked
during the thirty days immediately preceding the date ol
termination of service; · H
734 SUPREME COURT REPORTS [1987] 3 S.C.R.

A (c) an employee in an establishment shall be deemed
to have been in continuous employment for a period of not
less than six months, if he has worked for not less than one
hundred and twenty days in that establishment within a
period of six months immediately preceding the date of
termination of the service of that employee;
B
(d) where the total continuous employment is for a
fraction of a year or extends over a fraction of a year in
addition to one or more completed years of continuous
employment, ~uch fraction, if it is not less than a half year

c
shall be counted as a year of continuous employment in
calculating the total number of years for which the gratuity
is to be given.
-
y
(2) Where a gratuity is payable under sub-section (1)
to an employee, he shall be entitled to receive his wages
from the date of termination of his service until the date on
D which the gratuity so payable is actually paid subject to a
maximum of wages for two months.

(3). An employee, who has completed the age of sixty
years or who is physically or mentally unfit having been so
declared by a medical certificate, or who wants to retire on
E medical grounds or to resign his service, may give up his
employment after giving to his employer notice of at least
one month in the case of an employee of sixty· years of age,
and fifteen days in any other case; and every such employee
and the dependant of an employee who dies while in
service shall be entitled to receive a gratuity as provided in
f sub-section (1). He shall be entitled to receive the ,wages
from the date of giving up the employment until the date on
which the gratuity so payable is actually paid, subject to a
maximum of wages for two months.

(4) The services of an employee shall not be termi-
G nated for misconduct except, for such act or omissions and '--
in such manner, as may be prescribed."

Sub-section (1) of section 40 of the State Act imposes a restric-
tion on the right of the employer of an establishment governed by the
State Act to terminat~ the services of an employee. It says that an
!-I _employer shall not without a reasonable causes (except for miscon-
KRISHNA SOCIETY v. N.V.P. RAO (VENKATARAMIAH. J.) 735

duct) terminate the service of an employee who has been in his emp- A
loyment continuously for a period of not less than six months without
giving such employee, at least one month's notice in writing or wages
in lieu thereof and in respect of on employee who has been in his
employment continuously for a period of not less than five years, a
gratuity amounting to fifteen days' average wages for each year of
~ continuous employment. In the case of misconduct neither one B
month's notice or wages in lieu thereof nor gratuity need be paid on
the termination of his services. There are no other restrictions on the
right of the management to terminate the services of an employee in an
establishment governed by the State Act which is enacted by the State

- legislature in exercise of the powers conferred on it under Entry No.
22 of List III of the Seventh Schedule to the Consitituion. The Central
Act was enacted by the Central Legislature before the commencement
c
of the Constitution and it is also traceable to an Entry in the Govern-
ment of India Act, 1935 corresponding to Entry No. 22 of List III of
the Seventh Schedule to the Constitution. When the Central Act was
originally enacted, it merely provided for investigation and settlement
of industrial disputes by establishing a machinery for collective bar- D
gaining, mediation and conciliation, investigation, arbitration, adjudi-
cation and other allied matters. Chapter V-A-lay-off and retrench-
ment, making provision for payment of compensation for lay-off, re-
trenchment and closure and on transfer of undertakings was not there.
It was introduced by way of amendment in the year 1953. Sections 25F,
25G, 25H and 25J of the Central Act which are relevant for purposes E
of this case read as follows:-

"25F. Conditions precedent to retrenchment of
workmen.-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- F

(a} the workman has been given one month's notice
in writing indicating the reasons for retrenchment and the
period of notice has expired, or the workman has been paid
in lieu of such notice, wages for the period of the notice:
G
Provided that no such notice shall be necessary if the
retrenchment is under an agreement which specifies a date
• for the termination of service;

(b) the workmen has been paid, at the time of re-
trenchment, compensation which shall be equivalent to fif. H

--,-~ -
736 SUPREME COURT REPORTS (1987] 3 S.C.R.
~

teen days' average pay for every completed year of con- A-
A tinuous service or any part thereof in excess of six months;
and

(c) notice in the prescribed manner is served on the
appropriate Gove{Ilment or such authority as may he

--
B specified by appropriate Government by notification in the-4
Official Gazette." \

"25G. Procedure for retrenchment-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 establishment, in the absence
c of any agreement between the employer and the workman
in this behalf, the employer shall ordinarily retrench the
workman who was the last person to be employed in that
category, unless for reasons to be recorded the. employer
retrenches any other workman."
D
"25H. Re-employment of retrenched workmen.-'>-
Where any workmen are retrenched, and the employer
proposes to take into his employ any persons, he shall, in
such manner as may be prescribed, give an opportunity to
the retrenched workmen who are citizens of India to offer
themselves for re-employment, and such retrenched work-
E
men who offer themselves for re-employment shall have..__
preference over other persons." ·

"25J. Effect of laws inconsistent with this Chapter.- ·,,_
( 1) The provisions of this Chapter shall have effect notwith-
standing anything inconsistent therewith contained in any
F
other law [including standing orders made under the In-
dustrial Employment (Standing Orders) Act, 1946].

Provided that where under the provisions of any
other Act or rules, orders, notifications issued thereunder
or under any standing orders or under any award, contracl)-
G
of service or otherwise, a workman is entitled to benefits iri
respect of any matter which are more favourable to him
than those to which he would be entitled under this Act,
the workman shall continue to be entitled to the more
favourable benefits in respect of that matter, nowithstand-
ing that he receives benefits in respect of other matter
under this Act.
KRISHNA SOCIETY v. N.V.P. RAO [VENKATARAMIAH, J.) 737

J (2) For the removal of doubts, it is hereby declared A
that nothing contained in this Chapter shall be deemed to
affect the provisions of any other law for the time being in
force in any State insofar as that law provides for the settle-
ment of industrial disputes, but the rights and liabilities of
employers and workmen insorfar as they relate to lay-off
and retrenchment shall be determined in accordance with B
the provisions of this Chapter."

Section 25F of the Central Act deals with the conditions prece-
dent to retrenchment of workmen non-compliance with which will be
- fatal to any order of retrenchment. Section 25G of the Central Act
prescribes the procedure for retrenchment and under it an employer c
shall ordinarily retrench a workman in accordance with the rule of 'last
come, first go' unless for reasons to be recorded the employer
retrenches any other workman. Section 25H of the Central Act re-
quires the management to show preference to retrenched workmen
over others, where any workman is retrenched and the management
proposes to take into its employ any person again for work, where the D
retrenched workman offers himself for re-employment. This indeed is
a substantial right. Section 25J of the Central Act which is very mate-
rial for our purpose provides that provisions of Chapter V-A of the
Central Act shall have effect notwithstanding anything inconsistent
therewith contained in any other law including standing orders made
under the Industrial Employment {Standing Orders) Act, 1946. The E
proviso to sub-section (1) of section 25J of the Central Act provides
that where under the provisions of any other Act or rules, orders,
notifications issued thereunder or under any standing orders or undr
'·-../ any award, contract of service or otherwise, a workman is entitled to
benefits in respect of any matter which are more favourable to him
than those to which he would be entitled under the Central Act, the F
workman shall continue to be entitled to the more favourable benefits
in respect of that matter, notwithstanding that he receives benefits in
respect of other matter under the Central Act. Sub-section (2) of
section 25J of the Central Act is more categorical as regards the effect
of Chapter V-A of the Central Act on any other law which may be in
force in any State. It provides that nothing contained in Chapter V-A G
of the Central Act shall be deemed to affect the provisions of any other
law for the time being in force in any State insofar as that law provides
for the settlement of industrial disputes, but the rights and liabilities of
employers and workmen insorfar as they relate to lay-off and retrench-
ment shall be determined in accordance with the provisions of Chapter
V-A of the Central Act. H

- . ..,......
-~
_,
738 SUPREME COURT REPORTS (1987] 3 S.C.R.

A The learned Single Judge who decided the writ petitions for-
mulated three points for his consideration, namely, (i) whether
Respondents 1 to 9 were 'workmen', (ii) whether the management
could be treated as an 'industry' and (iii) whether the three conditions
laid down by section 25F of the Central Act would be applicable to the
proceedings under the State Act. He found that both the authority
B under section 41(1) of the State Act and the authority under section ~
41(3) of the State Act had proceeded on the assumption that the Cent- '
ral Act was applicable to proceedings under the State Act. On a con- .--
sideration of the submissions made on behalf of the management, the
learned Single Judge felt that it was not possible to hold that Respon-

C
dents 1 to 9 were not 'workmen' and, the management was not an
'industry' as defined in the Central Act. Having said so the learned -
Single Judge proceeded to decide the third question namely whether
section 25F of the Central Act could be enforced under the provisions
of the State Act. The learned Single Judge held that 'there is no scope
either in the language of section 40 or its implication making it obliga-
tory to read the condition of section 25F as a part of section 40 of the
D Shops and Establishments Act.' Then he proceeded to hold that since
the conditions under section 40 of the State Act had been fulfilled in
the case of the Respondents 5 to 9, the termination was legal. But in
the case of Rtspondents 1 to 4 since it had been alleged that their
junior~ had beer. allowed to continue in service the learned Judge felt
that the matter required further consideration and hence remanded
E the case because he was of the view that the above question had to be
decided before recording a finding on the question whether the termi- ~ ._
nation was for a reasonable cause. The learned Single Judge was how-
ever of the view that if section 25F of the Central Act was applicable 'I
have no doubt that these orders of termination would have to be set ~
aside because section 25F denies the right of the employer to terminate
F the services of an employee without payment of retrenchment com-
pensatio11.' The learned Single Judge gave the following reasons for
holding that section 25F was not applicable to proceedings under the
State Act: (i) that the statutory authorities created under section 41(1)
and section 41(3) of the State Act being creatures of the statute had no
right to apply the provisions of section 25F of the Central Act to
G proceedings before them, and (ii) that whereas the rights under the~'
Central Act could be agitated by a reference to a Labour Court, the{ .
right agitated under section 41(1) and section 41(3) was a personal'
right. We find it difficult to agree with the learned Single Judge on
both these grounds. It is already seen that the learned Single Judge has
found that the Respondenis were 'workmen' and the management was
H an 'industry' as defind in the Central Act. We have explained earlier
KRISHNA SOCIETY v. N.V.P. RAO [VENKATARAMIAH, J.I 739

j the effect of section 251 of the Central Act. Sub-section (1) of section A
251 of the Central Act lays down that Chapter V-A shall ha11e effect
notwithstanding anything inconsistent therewith contained in any
other law. The proviso to that sub-section however saves any higher
benefit available to a workman under any law, agreement o.r settle-
ment or award. Sub-section (2) of section 251 however makes a distinc-
~ tion between any machinery provided by any State law for settlement B
of industrial disputes and the substantive rights and liabilities arising
under Chapter V-A of the Central Act where a lay off or retrenchment
takes place. It provides that while section 251 would not affect the
provisions in a State law relating to settlement of industrial disputes,

- the rights and liabilities of employers and workmen insofar as they
relate to lay off and retrenchment shall be determined in accordance C
with Chapter V-A of the Central Act. It is thus seen that section 41( 1)
and section 41(3) of the State Act prescribe alternative authorities to
settle a dispute arising out of a retrenchment. Those authorities may
exercise their jurisdiction under the State Act but they have to deciqe
such dispute in accordance with the provisions of Chapter V-A. The
learned Single Judge omitted to notice the effect of section 251 of the D
-{ Central Act. Sub-section (2) of section 251 of ~he Central Act which
makes the procedure for securing relief under section 41(1) and (3) of
the State Act available to a workman emphasises that the rights and
liabilities arising out of retrenchment shall be decided in accordance
with Chapter V-A of the Central Act. The said rights can be enforced
by a workman personally by himself filing an appeal under section E
41(1) of the State Act. It is not necessary that a reference should be
-,~~ sought under the Central Act by collective action of workers. The
effect of section 251(2) of the Central Act has been considered by this
Court in Sawatram Ramprasad Mills Co. Ltd. v. Ba/iram Ukandaji and
._,, Another, [1966] 1 S.C.R. 764. In that case the question for decision
was whether the C.P. and Berar Industrial Disputes (Settlement) Act, F
1947 was applicable to the case involving the determination of the
rights and liabilities of the management and workmen in the case of
lay-off or whether the provisions of Chapter V-A of the Central Act
were applicable. The Court found that the C.P. and Berar Industrial
Disputes (Settlement) Act, 1947 contained no provisions either for
~ recovery of money ?r for ~ompensation for lay-off and held that if a G
. · · \ workman had a claim ansmg m a lay-off tt could only be dealt with
under the Central Act. In that case no question similar to the one
involved here was however in issue.

In Pest Control India Pvt. Ltd. v. The Labour Court, Guntur and
Another, (1984] 1 Andhra Weekly Reporter 277 the Andhra Pradesh H

~ir-·
740 SUPREME COURT REPORTS [1987] 3 S.C.R.

A High Court has very recently laid down that in considering whether the A
termination of service of an employee by way of retrenchment is legal
or justified, it is open to the authority under section 41 of the State Act
to determine whether section 25F and section 25G of the Central Act
were complied with or not and to set aside the orders of termination
B and to grant appropriate relief if it is found that there was no comp-
liance with sections 25F and 25G of the Central Act. The Division
Bench of the High Court while reversing the decision of the learned
Single Judge has relied on the above decision.

We shall now proceed to consider the merits of the contention
that the State Act which is a later Act and which has received the
C assent of the President should prevail over the provisions of Chapter
V-A of the Central Act. The above contention is based on Article
-
254(2) of the Constitution and the argument is that the provisions of
section 40 which deal with termination of service in a shop or an
establishment contained in the State Act which is enacted by the State
Legislature in exercise of its powers under Entry 22 of List III of the
D Seventh Schedule to the Constitution being repugnant to the provi-
sions contained in Chapter V-A of the Central Act which is an earlier
law also traceable to Entry 22 of the List III of the Seventh Schedule to
the Constitution should prevail as the assent of the President has been
given to the State Act. It is true that the State Act is a later Act and it
has received the assent of the President but the question is whether
E there is any such repugnancy between the two laws as to make the
provisions of the Central Act relating to retrenchment ineffective in
the State of Andhra Pradesh. It is seen that the State Act does not
contain any express provision making the provisions relating to
retrenchment in the Central Act ineffective insofar as Andhra Pradesh
is concerned. We shall then have to consider whether there is any
F implied repugnancy between the two laws. Chapter V-A of the Central
Act which is the earlier law deals with cases arising out of lay-off and
retrenchment. Section 25J of the Central Act deals with the effect of
the provisions of Chapter V-A on other laws inconsistent with that
Chapter. Sub-section (2) of section 25J is quite emphatic about the
supremacy of the provisions relating to the rights and liabilities arising
G out of lay-off and retrenchment. These are special provisions and they
do not apply to all kinds of termination of services. Section 40 of the
State Act deals generally with termination of service which may be the
result of misconduct, closure, transfer of establishment etc. If there is
a conflict between the special provisions contained in an earlier law
dealing with retrenchment and the general provisions contained in a
H later law generally dealing with terminations of service, the existence
KRISHNA SOCIETY v. N.V.P. RAO (VENKATARAMIAH, J.] 741

of repugnancy between the two laws cannot be easily presumed. In A
Maxwell on the Interpretation of Statutes, (12th Edn.) at page 196 it is
observed thus:

"Now if anything be certain it is this, "said the Earl of
Selborne L.C. in The Vera Cruz, (1884) 10 App. Cas, 59 at
p. 68 "that where there are general words in a later Act B
capable of reasonable and sensible application without ex-
tending them to subjects specially dealt with by earlier
legislation, you are not to hold that earlier and special
legislation indirectly repealed, altered, or derogated from

- merely by force of such general words, without any indica-
tion of a particular intention to do so." In a later case, C
Viscount Haldane said: "We are bound ....... to apply a
rule of construction which has been repeatedly laid down
and is firmly established. It is that wherever Parliament in
an earlier statute has directed its attention to an individual
case and has made provision for it unambiguously, there
arises a presumption that if in a subsequent statute the D
Legislature lays down a general principle, that general
principle is not to be taken as meant to rip up what the
Legislature had before provided for individually, unless an
intention to do so is specially declared. A merely general
rule is not enough even though by its terms it is stated so
widely that it would, taken by itself, cover special cases of E
the kind I have referred to."

We respectfully agree with the rule of construction expounded in
the above passage. By enacting section 25J(2) Parliament, perhaps,
intended that the rights and liabilities arising out of Jay-off and
retrenchment should be uniform throughout India where the Central F
Act was in force and did not wish that the State should have their own
laws inconsistent with the Central law. If really the State Legislature
intended that it should have a law of its own regarding the rights and
liabilities arising out of retrenchment it would have expressly provided
for it and submitted the Bill for the assent of the President. The State
--(Legislature has not done so in this case. Section 40 of the State Act G
deals with terminations of service generally. In the above situation we
cannot agree with the contention based on Article 254(2) of the Con-
stitution since it is not made out that there is any implied repugnancy
between the Central law and the State law.

The result of the above discussion is that if the employees are H
742 SUPREME COURT REPORTS [1987] 3 S.C.R.
A
'workmen' and the management is an 'industry' as defined in the Cent-
ral Act and the action taken by the management amounts to 'retrench-
ment' then the rights and liabilities of the parties are governed by the
provisions of Chapter V-A of the Central Act and the said rights and
liabilities may be adjudicated upon and enforced in proceedings before
B the authorities under section 41(1) and section 41(3) of the State Act.
~
We may incidentally" observe that the Central Act itself should be \
suitably amended making it possible to an individual workman to seek y ·
redress in an appropriate forum regarding illegal termination of
service which may take the form of dismissal, discharge, retrenchment
C etc. or modification of punishment imposed in a domestic enquiry. An
amendment of the Central Act introducing such provisions will make
the law simpler and also will reduce the delay in the adjudication of
industrial disputes. Many leamec authors of books on industrial law Y
have also been urging for such an amendment. The State Act in the
instant case has to some extent met the above demand by enacting
D section 41 providing for a machinery for settling disputes arising out of
termination of service which can be resorted to by an individual work-
man. In this connection we have one more suggestion to make. The ""'
nation remembers with gratitude the services rendered by the former
Labour Appellate Tribunal which was manned by some of our eminent
Judges by evolving great legal principles in the field of labour law, in
E particular with regard to domestic enquiry, bonus, gratuity, fair wages,
industrial adjudication etc. The Industrial Disputes (Appellate Tri-
bunal) Act, 1950 which provided for an all-India appellate body with . ~ _
powers to hear appeals against the orders and awards of Industrial
Tribunals and Labour Courts in India was repealed in haste. If it had
continued by now the labour jurisprudence would have developed -.
F perhaps on much more satisfactory lines than what it is today. There is
a great need today to revive and to bring into existence an all-India
Labour Appellate Tribunal with powers to hear appeals against the
decisions of all Labour Courts, Industrial Tribunals and even of
authorities constituted under several labour laws enacted by the States
so that a body of uniform and sound principles of Labour law may be
G evolved for the benefit of both industry and labour throughout India.
Such an appellate authority can become a very efficient body on 'r
account of specialisation. There is a demand for the revival of such an .
appellate body even from some workers' organisations. This sugges-
tion is worth considering. All this we are saying because we sincerely
feel that the Central Act passed forty years ago needs a second look
~ and requires a comprehensive amendment.
KRISHNA SOCIETY v. N.V.P. RAO [VENKATARAMIAH, J.) 743

It is not disputed that section 25F of the Central Act has not been A
complied with in this case and hence the Division Bench of the High
Court was right iii holding that all the terminations were illegal. All the
respondents are, therefore, entitled to be reinstated in service with
full back wages as held by the authority under section 41(1) of the
State Act.
B
'
! These petitions are dismissed.
'
~ P.S.S Petitions dismissed.

-