Holding

The Rihand Nagar project is a factory within the meaning of the Factories Act, 1948, making Section 25‑N of the Industrial Disputes Act, 1947 applicable, and the 1993 retrenchment notices issued without complying with Section 25‑N are void.

Summary

The case involved 25 workmen employed by Indian Railway Construction Co. Ltd. (IRCON) on the Rihand Nagar railway line project who were served retrenchment notices in 1993 stating that most work was completed. The workmen challenged the notices, arguing that the project constituted a "factory" under the Factories Act, 1948 and therefore Section 25‑N of the Industrial Disputes Act, 1947 applied, which was not complied with. The Division Bench of the Allahabad High Court had held otherwise, but the Supreme Court examined the statutory definitions of "factory", "premises" and "manufacturing process" and concluded that the project satisfied the criteria of a factory and an industrial establishment. Consequently, the retrenchment notices were illegal and void for non‑compliance with Section 25‑N. The Court set aside the High Court’s judgment, confirmed the earlier single‑judge order, and remanded the writ petitions for fresh adjudication on the later 1998 termination notices. The appeals were allowed and the matter was sent back to the High Court for further proceedings.

Issues considered

The project qualifies as a "factory" and an "industrial establishment" within the meaning of the Factories Act, 1948 and the Industrial Disputes Act, 1947.
Whether Section 25‑N of the Industrial Disputes Act, 1947 is applicable to the retrenchment of workmen employed on the Rihand Nagar project.
Whether the proviso to Section 25‑0 can be read into Section 25‑N for the purpose of the case.
The nature of the 1993 notices – retrenchment versus closure – and the applicability of Section 25‑FFF.
The legality of the subsequent 1998 termination notices in view of the earlier findings.

Legislation cited

Factories Act, 1948s. 2(k), s. 2(m)
Industrial Disputes Act, 1947s. 25-0, s. 25-F, s. 25-FFF, s. 25-H, s. 25-L, s. 25-N

Subjects

labour lawretrenchmentindustrial establishmentfactory definitionIndustrial Disputes ActFactories Actgovernment employersection 25-Nsection 25-0section 25-FFFconstitutional rightsArticle 12Article 14Article 16Article 21

Judgment

LAL MOHAMMAD AND ORS. A
v.
INDIAN RAILWAY CONSTRUCTION CO. LTD. AND ORS.

DECEMBER 4, 1998

[S.B. MAJMUDAR AND M. JAGANNADHA RAO, JJ.] B

Labour Law

Industrial Disputes Act, 1947--Ss. 25-N, 25-L, 25-0, 25-FFF read with
S.25-F(a)(b)-Retrenchment-Project for construction of railway line-More C
than hundred employees engaged-Project consisting "premises" were
"manufacturing process" carried on-Entire project not closed down-
Retrenchment notices without complying wi•h the provisions of S.25-N-
Validity of-Held, retrenchment notices illegal and void-Matter remanded
back to High Court to decide the fresh retrenchment notices issued during
the pendency of appeal-Factories Act, 1948--Ss. 2(m) and (k). D
Interpretation of statutes :

Legislative intent--Ss. 25-N and 25-0(i) proviso-Held, proviso to S.
25-0 cannot be transplanted by any judicial interpretation to be a proviso
to S. 25-N-Such an interpretation would go against the very legislative E
intent in enacting S. 25-N-Industrial Disputes Act, 1947--Ss. 25-N and 25-
0(i) proviso.

Words & Phrases

"Factory", "Premises"-Meaning and scope of in the context ofS.2(m) p
of the Factories Act, 1948.

"Manufacturing Process "-Meaning and scope of in the context of
S.2(k)(i) of the Factories Act, 1948.

"Industrial establishment"-Meaning and scope of in the context of
S.25-L of the Industrial Disputes Act, 1947. G
Respondent No. I was a railway construction company. Appellant-
workers employed in Rihand Nagar project 'of respondent No: I-company
were issued retrenchment notice stating that as most of the work in the
project was over, their services were terminated by offering retrenchment H
343
344 SUPREME COURT REPORTS [1998] SUPP. 3 S.C.R.

A benefits under S. 25-F(b) of the Industrial Disputes Act, I947. On challenge,
Single Judge of High Court quashed the retrenchment notices holding that
provisions ofS.25-N of the Act werr 1ot complied with. However, on appeal,
the Division Bench of High Court reversed the findings of Single Judge.
Hence the present appeal. During the pendency of appeal, respondent-company
B issued fresh retrenchment notices stating that the entire project stands
finally closed down.

On behalf of the appellant-workers it was contended that respondent
No. I-company employed more than hundred employees in the project at the
relevant time and it was a 'factory' within the meaning .of Factories Act.
C Thus, the Division Bench of High Court was not justified in holding that the
provisions ofS.25-N of the Act were not applicable; that they were workmen
of the company and not of any particular project and it was therefore,
obligatory on the company to absorb them in any other project.

On behalf of respondent No. I-company it was contended that the
D Rihand project spread over 54 Kms was not an "industrial establishment"
where any "manufacturing" work was being carried on and it had no "fixed
site". Thus, it was not 'factory' to which the provisions of S. 25-N of the Act
were applicable; the appellant were adhoc employees of the project and as
the project work has come to an end they were rightly retrenched after
E complying with the provisions of S.25-FFF read with S. 25-F of the Act.

Allowing the appeals and setting aside the order of the High Court,
the Court

HELD : I.I. The establishment of the respondent-company squarely
falls within the definition of the term "factory" under the Factories Act,
F I948 for the purpose of applicability ofS.25-N of the Industrial Disputs Act,
1947. Thus, the impugned retrenchment notices issued without following
that the provisions of S.25-N of the Act are void and illegal. High Court was
not justified in holding that the provisions of S.25-N of the Act are applicable
to the respondent. [366-F; 351-B]
G
1.2. Railway line cannot be laid except on a 'fixed site' and every part
of the land on which construction activity takes place would form part and
parcel of the "premises" as such. The term "premises" under the definition
not only covers building but even open land can also be a part of premises.
When railway line is to be constructed over an area of 54 Kms., it cannot
H be constructed overnight. For laying a railway line, number of workmen,
LAL MOHAMMAD v. IND!AN RAIL. CONST. CO. LTD. 345
supervisors and other clerical staff will have to be offered the site where the A
railway line is to be laid. That site on which railway line is to be laid will
necessarily have space for storage of loose rails, sleeppers, bolts. etc. All
these articles will have to be laid and fixed on a given site before any part
of railway tracks became ready. Thus it cannot be accepted that Rihand
Nagar project had no "fixed site" to operate upon and therefore was not a B
"premises". (363-C; 362-G-H]

Ardeshir H. Bhiwandiwala v. The State of Bombay, (1961] 3 SCR 592,
relied on.

Workmen of Delhi Electric Supply Undertaking v. The Management of
Delhi Electric Supply Undertaking, (1974] 3 SCC 108 and Nagpur Electric C
Light & Power Co. Ltd. v. Regional Director, Employees State Insurance
Corporation etc., (1967( 3 SCR 92, distinguished.

Halsbury's Laws of England, 3rd Edition, Volume 70, referred to.

1.3. S. 2(k)(i) of the Factories Act, defining the term "Manufacturing D
process" inter alia st.ates that "any process by which any article or substance
is adapted for its use can fall within the sweep of the term "manufacturing
process". In the present case, raw materials like railway sleepers, bolts and
loose railway rails were brought by respondent-company from open market
and were adapted for their use, viz. for ultimately laying down a railway line.
Thus, the definition of "manufacturing process" dealing with adaptation of E
these articles for use squarely get attracted. Further under the definition it
is not necessary that any end product which results after adapting any raw
material, article or substance "with a view to its use" must necessarily
result into a movable final product or a commodity. Though the final product
namely, construction of railway line embedded in earth wa£ not the subject
matter of sale, transfer, delivery or disposal, still the raw materials which F
were adapted for their use with a view to constructing railway line which was
the final product could be said to have fallen within the sweep of the definition
of the term "manufacturing process" under S. 2(k) of the Factories Act.
(363-G; 364-B-C-D]

Ardeshir H. Bhiwandiwa/a v. The State fJf Bombay, (1961 I 3 SCR 592, G
distinguished.

Zajfar Mohammad v. The State of West Bengal, AIR (1976) SC 171,
referred to.

2. The impugned notices are retrenchment notices and not closure H
346 SUPREME COURT REPORTS (1998] SUPP. 3 S.C.R.

A notices. The impugned notices did not say that the entire project was closed
down; on the contrary it stated that most of the work in Rihand Nagar project
had been completed. Closing down of most of the work of a project is not
equivalent to closing of the project as a whole. Thus, the said notices cannot
be regarded as one under S. 25-FFF read with S. 25-F(a)(b) of the Act.
[371-F-D)
B
Management of Hindustan Steel Ltd v. The Workmen and Ors., [1973)
3 SCC 564 and Workmen of the Indian Lea/Tobacco Development Co. Ltd
Guntur v. Management of the Indian Leaf Tobacco Development Co. Ltd.,
Guntur, [1969) 2 SCR 282, referred to.

C Hariprasad Shivshankar Shukla v. A.D. Divikar, [1957} SCR 121;
Hindustan Steel Works Construction Ltd. and Ors. v. Hindustan Steel Works
Construction Ltd. Employees' Union, Hyderabad and Anr., [1995) 3 SCC
474; H.P. Mineral & Industrial Develop.men/ Corporation Employees' Union
v. State ofH.P. and Ors., [1996) 7 SCC 139and ManagementofDandakaranya
D Project, Koraput v. Workmen through Rehabilitation Employees' Union and
Anr., [1997) 2 SCC 296, held inapplicable.

3. The proviso to S.25-0 of the Act cannot be transplanted by any
judicial interpretation to be a proviso to S.25-N of the Act which deals with
entirely a different topic of condition precedent to retrenchment of workmen.
S. 25-0 of the Act deals with the procedure for closing down an undertaking
E and it is for such a concern which is closed down that the proviso to sub-
section (I) thereof would come into play. It is obvious that retrenchment
presupposes the termination of surplus workmen in a going concern which
is not closed down. If the concern itself is closed down then all the workmen
terminated would be paid compensation by resorting to S. 25-FFF of the Act.
F However, ifthe impugned notices are treated to have effected only retrenchment
of workmen of an on going project or establishment, proviso to S.25-0(i)
cannot be PT.~ in servke by any process of judicial interpretation, such
an ifltei pf'etaiion would go against the very legislative intent in enacting
S.25-N which does not contain any such proviso. Thus, High Court was not
justified in holding that if the procedure of S. 25-0 of the Act for closing
G down an undertaking had not been followed, then ipso facto for retrenching
workmen there is no necessity to follow the procedure of S.25-N of the Act.
[359-A; 358-F, B, CI
4. The retrenchment notices issued in 1998, during the pendency of
the appeal state that the entire Rihand Nagar project is finally closed down.
H However, appellants had no opportunity to challenge the said notice which
LAL MOHAMMAD v. INDIAN RAIL. CONST. CO. LTD. [S.B. MAJMUDAR, J.] 347

gave rise to fresh cause of action. Similarly, respondents had no opportunity A
to put forward their defence in support of the said notice. Thus, the illegality
and efficacy of the said retrenchment notices cannot be decided in the
present proceedings at this stage. Consequently the matter is remanded to
High Court to decide the legality and validity of the said retrenchment
notices after giving opportunity to appellants to amend their Writ Petition B
to challenge the fresh retrenchment notices, permitting the respondents to
file their reply and also permitting the parties to file relevant materials in
support of their cases. [374-F; 376-C; 377-A-B)

CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 6069-6073
of 1998. C
From the Judgment and Order dated 24.2.98 of the Allahabad High Court
in S.A. No. 34, 82-85of1994.

Sudhir Chandra, R.N. Karanjawala, Sandeep Mittal and Mrs. Manik
Karanjawala for the Appellants. D
Dushyant Dave, Sanjay Sen, Ms. Mayuri Nayyar and Mrs. Sarla Chandra
for the Respondents.

The Judgment of the Court was delivered by

S.B. MAJMUDAR, J. Leave granted in these Special Leave Petitions. E

We have heard learned eounsel for the rival parties finally in these
appeals and they are being disposed of by this judgment. These appeals on
special leave bring in challenge the common judgment and order passed on
24th February, 1998 by the Division Bench of the High Court of Judicature p
at Allahabad in five special Appeals allowing the same and dismissing their
writ petitions. Appeals before the Division Bench arose out of the common
judgment rendered by the learned Single Judge of the High Court on 7.12.1993,
allowing writ petitions filed by the petitioners concerned as the writ petitions
challenged identical orders of retrenchment passed by the Respondent
management against the concerned petitioner-workmen. In order to appreciate G
- the nature of controversy posed for our consideration in these appeals, it will
be necessary to note relevant background facts.

Background Facts :

While narrating these facts we will refer to the present 25 appellants as H
348 SUPREME COURT REPORTS [1998] SUPP. 3 S.C.R.

A original writ petitioner-workmen and the respondents as the company.
Respondent no. 1- company is a construction company wholly owned by the
Government of India. It is carrying on various construction projects through
out the country and abroad. At the relevant time when the writ petitioner-
workmen were employed, Respondent no. I company and Respondent no 2,
B it's Regional Manager had undertaken and were monitoring a project of
construction ofrailway line of 54 KMs known as Rihand Nagar Project in the
State of Uttar Pradesh. It is the case of the 25 petitioner-workmen who were
listed in Annexure P-1 in the SLP paper book that the respondent-company
offered employment to these workmen in Rihand Nagar project on different
dates during the period spread over from 26th December, 1983 up to 24th
C December, 1985 and were assigned different jobs of work at the Rihand Nagar
project. The writ petitioners were appointed as clerks, account clerks, store
clerks, store cashier, non-technical supervisors, site supervisers etc. The
petitioners contended that they were appointed in the service of the
Respondent company and were drafted to work in the Rihand Nagar project
in the Rihand area at different sites. It is their contention that initially they
D were required to undertake training and were, therefore, treated as appointed
on ad-hoc basis. Subsequently they were wrongfully not made regular
employees of the Respondent company though they were placed on regular
time scale as such. That their services were liable to be transferred to any
project of the Respondent company in India. In short, they contended that
E though initially they were made to work in the Rihand Nagar project at
different sites they became full-fledged employees of the company and were
treated for a number of years as such till August and September, 1993 when
some of the petitioners were served with retrenchment notices dated 20th
August, 1993 and others on 4th September, 1993. These notices were identical
in nature. It was recited in these notices that as most of the work in Rihand
F Nagar project was over and there was no other work available for the emplovees
concerned on this project or any other project of the company n&mely,
IRCON, they were rendered surplus and hence retrenchment benefits under
Section 25-F(b) of the Industrial Disputes Act, 1947 (for short 'the Act') were
being offered as per the details given in the notices. They were advised to
G collect their other dues namely, provident fund, gratuity, leave salary etc. in
accordance with rules of the company in force at the time of project. These
retrenchment notices were challenged by the petitioner and other workmen by
filing five writ petitions under Article 226 of the Constitution of India against
-
common respondents who were respondents in these appeals, being the
company and its Project Manager respectively. We will mention at this stage
H that the five writ petitions were filed before the High Court covering large
LAL MOllAMMAD v. INDIAN RAIL CONST. CO. LTD. [S.B. MAJMUDAR, J.] 349
number of workmen totalling upto 43. Writ Petition No. 18561 was filed by 16 A
writ petitioners, writ petition no. 32500 was moved by 7 writ petitioners and
writ petition no. 32651 was filed by 18 writ petitioners while writ petition no.
34 786 of 1993 and writ petition no. 44416 were filed by one petitioner each.
However, in the present appeals only 25 original writ petitioners have brought
in challenge common order passed against them by the Division Bench of the B
High Court. The aforesaid writ petitions were heard in common by the learned
Single Judge of the High Cou.rt as noted earlier. It was contended by the writ
petitioners that they were workmen of the company and not of any particular
project and that their services were transferable anywhere within the country.
The Respondent company had issued fresh advertisement for recmitment of
new hands and therefore, the retrenchment notices were unjustified and un- C
called for. That their retrenchments were illegal and also violative of Articles
14,16 and 21 of the Constitution oflndia inasmuch as the Respondent company
was a government company which was a "State" within· the meaning of
Article 12 of the Constitution of India. They also challenged their termination
orders on the additional ground that the respondents had illegally invoked D
the provisions of Chapter V-A of the Act and that in fact Chapter V-B of the
said Act applied as more than hundred workmen were being employed by the
respondents and therefore, the respondents, before retrenching the writ
petitioners were required to follow the provisions of Section 25-N of the Act,
which were not followed and hence the termination orders were ex-facie null
and void on that ground also. E
The Respondent company resisted the writ petitions and submitted that
the writ petitioners were only ad-hoc employees. They were not regularly
appointed after following due procedure of recruitment rules and were
employed only at the Rihand Nagar Project and as the project came to an end,
the writ petitioners were liable to be retrenched and were accordingly retrenched F
on closure of the project after complying with the provisions of Section 25-
F of the Act. It was also contended that Section 25-N of the Act did not apply
to the facts of the present cases as the Rihand Nagar Project of the company,
where the writ petitioners were employed, was not an 'industrial establishment'
as defined by Section 25-L of the Act read with Section 2(m) of the Factories G
Act, 1948 (for short 'Factories Act') as it was not a 'factory' at all. It was also
vehemently contended that the writ petitioners were not employees of the
company from the inception of their entry in service but they were recruited
solely for the purpose of Rihand Nagar Project and their services were
terminated after the said project got closed and they could not urge for being
absorbed in any other project of the company. It was also submitted that the H
350 SUPREME COURT REPORTS [1998] SUPP. 3 S.C.R.

A retrenchment orders were not arbitrary or illegal as submitted by the writ
petitioners.

Learned Single Judge, who heard these five writ petitions in common,
came to the conclusion that the Respondent company had employed the writ
petitioners initially on ad-hoc basis but subsequently their services were
B regularised and they were absorbed in the services of the company on
permanent basis. That all the writ petitioners had worked with the Respondent
company for nearly nine years and in a few cases even more than that and
that even if Rihand Nagar Project had come to an end such permanent
employees like the writ petitioners could have been engaged in other projects
C as their services were transferable through out the country. It was further held
that as the Respondent company is a "State" within the meaning of Article
12 of the Constitution of India, following the ratio of some of the judgments
of this Court to which reference will be made hereinafter, the Respondent
company was required to absorb the writ petitioners at one or other projects
instead of throwing them out of the job on the specious plea that the project
D in which they were employed was on the verge of completion. The learned
Single Judge lastly addressed himself to the question whether Section 25-N
applied to the facts of the present cases. Repelling the contentions on behalf
of the Respondent company that section 25-N will-not apply because it is not
a 'factory', it was held that the project in question where the writ petitioners
E were working at the time when two retrenchment notices were served, was a
'factory' within the meaning of Section 2(m) of the Factories Act read with
Section 25-L of the Act and as admittedly, provisions of Section 25-N were
not complied with in the present cases, all the retrenchment notices were null
and void. In the• result the learned Single Judge quashed the notices of
termination dated 20th August, 1993 and orders of termination dated 4.9.1993
F issued to writ petitioners concerned. They were ordered to be continued in
their job and were to be paid salary due to them.

The aforesaid common order of the learned Single Judge of 7th December,
1993 resulted in special appeals before the Division Bench of the High Court
G as noted earlier. The Division Bench of the High Court allowed these appeals
of the Respondent company by taking the view that Section 25-N of the Act
did not apply to the facts of the present case on two grounds; (i) that for
construction company like Respondent No. I if the procedure of section 25-
0 of the Act for closing down an undertaking had not to be followed, then
ipso facto for retrenching workmen when project came to an end, there was
H also no question of following the procedure of section 25-N even on the basis
LAL MOHAMMAD v. JNDIAN RAIL. CONST. CO. LTD. [S.B. MAJMUDAR, J.] 351
that the workmen at the project were more than hundred in number. (ii) A
Secondly it was also held that in any case section 25-N of the Act would not
apply as Respondent no. 1 company was not a 'factory' as it was not an
industrial establishment as contemplated by Section 25-L of the Act read with
Section 2(m) of the Factories Act. So far as petitioner nos.3 and 7 in writ
petition no. 32500 of 1993 were concerned, it was observed that the writ B
petitioners were not 'workmen' under the Act, and therefore, the Act could
have no application to them. It was further held that the writ petitioners were
employees of the company which was carrying on the business of the
construction work; and the concept of regular employees did not exist under
the industrial law. The question of absorption would arise only in government
service and not in service of the company. It was further held that as the C
project in which the writ petitioners were employed was completed; their
retrenchment in accordance with the provisions of Act was perfectly valid
and they could not be absorbed in any other project. The question of
regularising their services did not arise. As a result of these findings, the
appeals of the Respondent company were allowed and writ petitions were
dismissed. That is how .the 25 writ petitioners who are aggrieved by the D
decision of the Division Bench are before us in these appeals on grant of
special leave.

Rival Contentions
E
Shri Sudhir Chandra, learned senior counsel for the appellant-writ
petitioners contended that Division Bench had patently erred in law in taking
the view that Section 25-N of the Act was not applicable to the facts of the
present case. It was submitted that the petitioners at the time of impugned
retrenchment were working on a project which employed more than hundred
workmen. That this was not in dispute. Consequently, Section 25-N of the Act F
directly got attracted. That the Division Bench of the High Court was in error
when it took the view that provisions of Section 25-0 of the Act could be
pressed in service for considering the applicability of Section 25-N to
Respondent no. 1 construction company. It was also submitted that the
Division Bench equally erred in taking the view that Respondent no. I company G
was not an 'industrial establishment' and that it was not a 'factory' within
the meaning of the Factories Act. In support of this submission judgments
of this Court and other Courts were pressed in service to which we will make
a reference hereinafter. It was also contended that the Division Bench itself
held that if Section 25-N of the Act applied, the retrenchment orders would
obviously be bad but it wrongly held that Section 25-N was out of the picture. H
352 SUPREME COURT REPORTS [1998] SUPP. 3 S.C.R.

A It was next contended that Respondent company is a 'State' within the
meaning of Article 12 of the Constitution of India. Therefore, it could not
arbitrarily discharge old employees like the writ petitioners who had been
working for a number of years and it could have absorbed them in any other
project. That its refusal to do so violated Articles 14, 16 and 21 of the
Constitution of India. That the rule of hire and fire could not be resorted to
B by the Respondent company which is a wholly owned government of India
undertaking and was as good as Central government. That it was incumbent
on it to absorb permanent employees like the writ petitioners in any other
project if the Rihand Nagar Project had come to an end. In support of these
contentions, reliance was placed on a number of decisions of this Court to
C which we will refer hereinafter. It was vehemently contende~ that the
documentary evidence which was considerzd by the learned Single Judge and
which is of clinching nature as it is offered by Respondent no. 1 company
itself, conclusively establish that the writ petitioners were regular employees
of the company and were not employees of any project as such. It was
therefore, submitted that the decision, rendered by the learned Single Judge
D was quite justified, legal and proper and could not have been interfered with
by the Division Bench in appeals.

Shri Dushyant Dave, learned senior counsel for the Respondent company
on the other hand submitted that the writ petitioners were ad-hoc employees.
E Till the date of their retrenchment they were never regularised and absorbed
in the services of the company. That they were recruited for the project in
question in the Rihand Nagar region and once the project came to an end they
had no right to continue in service in the project concerned and they were,
therefore, rightly retrenched as per the impugned orders on closure of the
undertaking. It was also contended that highly disputed questions of fact
F arise for consideration of these proceedings. That such disputed questions
of fact could not be gone into under Article 226 of the Constitution of India
and the petitioners should have been relegated to the remedy of raising an
industrial dispute. It was also contended that whether the Respondent
company's Rihand Nagar Project was 'factory' or not also required
G consideration of disputed questions of fact. In any case, the entire project
spread over 59 KMs where railway line was being laid and on which project
the writ petitioners-workmen were employed, cannot be held to be a 'factory'.
That no manufacturing process was being carried on in the said project.
Placing reliance on various judgments of this Court, Shri Dave, learned senior
counsel for the respondent, submitted that the Division Bench of the High
H Court was justified in taking the view that Section 25-N did not apply to the
LAL MOHAMMAD v. INDIAN RAIL. CONST. CO. LTD. [S.B. MAJMUDAR, J.] 353
facts of the present case and that the retrenchment orders were validly passed A
after complying with provisions of Section 25-FFF read with Section 25-F of
the Act and that writ petitioners could not be ordered to be absorbed in any
other projects of the company which were separate and independent
establishments of the company spread over different parts of the country. It
was, therefore, submitted that the appeals deserve to be dismissed.
B
Shri Dave also submitted that in any case after the judgment of the
Division Bench, the respondents have issued fresh notices of termination of
services of petitioners which squarely fall within the scope of Section 25-FFF
and even on that ground the appeals are liable to be dismissed. He, however,
fairly stated that whatever amounts were paid to the petitioners till the date C
of these fresh notice will not be recovered from them even if it is held that
earlier retrenchment notices of August & September, 1993 were valid.

In rejoinder, learned senior counsel for the appellants, reiterated the
main contentions urged by him in support of the appeals and repudiated the D
contentions canvassed by learned senior counsel, Shri, Dave, for the
respondents. He also submitted that fresh notices of retrenchment are not
under Section 25-FFF but are only in continuation of earlier invalid notices
of 1993 and are issued as a corollary to the judgment of the Division Bench.
Jf that judgment goes, these consequential notices must also go. In the light
of these rival contentions, the following points arise for consideration : E
(1) Whether Section 25-N of the Industrial Disputes Act applies to
the facts of the present case;
(2) If yes, what are the legal consequences thereof in connection
with the impugned termination notices of August & September,
F
1993;

(3) Whether the present 25 writ petitioner-appellants were employed
only for Rihand Nagar Project or they were employees of the
company from the very inception of their service;

(4) Even if Section 25-N of the Act is not applicable, whether the G
termination orders were violative of Articles 14,16 and 21 of the
Constitution of India and consequently impugned retrenchment
orders of 1993 under Section 25-F of the Act were liable to be
set aside being arbitrary, illegal and not justified;
(5) Whether fresh notices of termination issued after decision of the H
354 SUPREME COURT REPORTS [1998] SUPP. 3 S.C.R.

A Division Bench are legal & valid; and
(6) What final orders?

Point No. I :

B So far as this point is concerned, it will be necessary for us to have a
look at the relevant statutory provisions as applicable to the facts which are
no longer in dispute between the parties. It has to be kept in view that the
writ petitioners contended before the High Court in writ petitions as well as
in special appeals that they were 'workmen', governed by the provisions of
the Act. It is, of course, true that the Division Bench in the impugned
C judgment has noted that two of the writ petitioners cannot be said to be
'workmen'. Shri Dave, learned senior counsel for the Respondent company,
fairly stated that it is not the contention of the Respondent in these proceedings
that the writ petitioners or any of them are not 'workmen' within the meaning
of Section 2(s) of the Act. We, therefore, proceed on the footing that all the
D 25 writ petitioners-appellants before us are 'workmen' governed by the Act.
In fact it is on that basis that the Respondent company had issued impugned
termination notices to these workmen invoking Section 25-F of the Act. It is
also not in dispute between the parties that these workmen-writ petitioners,
at the relevant time when the impugned termination orders were passed
E against them, were working in Rihand Nagar Project which employed more
than hundred workmen. In the light of these admitted facts, we have to see
whether Section 25-F or Section 25-FFF of the Act as invoked by the
Respondent company would get attracted or Section 25-N of the Act would
apply. We, therefore, have to look at the relevant provisions of the Act
dealing with 'lay off and 'retrenchment'. Chapter V-A of the Act deals with
F "lay-off and retrenchment of the industrial workmen". Section 25-F provides
conditions precedent to retrenchment of workmen and lays down that "no
workman employed in any industry who has been in continuous service for
not less than one years under an employer shall be retrenched by that
employer until the employer fulfils the conditions laid down in clauses (a),(b)
and (c) of the Act of the said section". It is pertinent to note that in the
G impugned retrenchment notices of 1993 it has been expressly averred that the
concerned workmen were being served with retrenchment notices as per
Section 25-F (b) of the Act. It is also not in dispute between the parties that
if Section 25-F applied to the facts of the present case, then the procedural
requirement of the said section were complied with by the Respondent
H company. At present, while considering this point, it is not necessary for us
LAL MOHAMMAD v. INDIAN RAIL. CONST. CO. LTD. [S.B. MAJMUDAR, J.] 355

to examine the further question whether the impugned notices under Section A
25-F were otherwise illegal, unjustified or arbitrary. That aspect will be covered
by point no. 4. For the present it is sufficient to note that it is the contention
of the Respondent company that Section 25-F read with 25-FFF had been
complied with and no further requirement of law as laid down in the Act was
to be followed by the company. Learned counsel for the appellant-writ B
petitioners on the other hand, submitted that as total number of workmen
employed at the Rihand Nagar Project was more than hundred, neither Section
25-F nor Section 25-FFF found in Chapter V-A of the Act would apply but
only provisions found in Chapter V-B of the Act relating to the procedure for
'retrenchment' in such establishments would get attracted.
c
We, therefore, tum to consider the relevant Sections in Chapter V-B.
Section 25-K of the Act lays down that "provisions of this Chapter shall
apply to an industrial establishment (not being an establishment of a seasonal
character or in which work is performed only intermittently) in which not less
than [one] hundred workmen were employed on an average per working day
for the preceding twelve months". It is not in dispute betweQn the parties as D
noted earlier that in 1993 when the impugned termination notices were issued
to the writ petitioners, they were working in Rihand Nagar project wherein
more than hundred workmen were employed. Therefore, the moot question
which would arise is whether the Respondent company was an 'industrial
establishment 'so as to be covered by the sweep of Chapter V-B. For answering E
this question the definition in Section 25-L becomes relevant. It lays down
that "for the purpose of this Chapter V-B,-(a) 'industrial establishment' means-
(i) a factory as defined in clause (m) of Section 2 of the Factories Act, 1948
(63 of 1948)". We are not concerned with other sub-clauses (ii) and (iii)
Section 25-L. As far as appl_ication of Chapter V-B is concerned, the real
question that arises is whether the Respondent company can be said to be F
an 'industrial establishment' being a 'factory' within the meaning of Section
2(m) of the Factories Act when it engaged itself in laying railway track over
an area of 54 KMs in the Rihand Nagar Project. The next relevant provision
for our consideration is Section 25-N in Chapter V-B which requires to be
extracted in full as its applicability or otherwise will have a direct impact on G
the final result of these proceedings :

"25-N- Conditions precedent to retrenchment of workman-(!) No
workman employed in any industrial establishment to which this
Chapter applies, who has been in continuous service for not less than
one year under an employer shall be retrenched by that employer H
356 SUPREME COURT REPORTS [1998] SUPP. 3 S.C.R.

A until,

(a) the workman has been given three months' notice in writing
indicating the reasons for retrenchment and the period of notice
has expired, or the workmen has been paid in lieu of such notice
wages for the period of the notice; and
B (b) the prior permission of the appropriate Government or such
authority as may be specified by that Government by notification
in the Official Gazette (hereafter in this section referred to as the
specified authority) has been obtained on an application made
in this behalf.
c (2) An application for permission under sub-section ( 1) shall be
made by the employer in the prescribed manner stating clearly
the reasons for the intended retrenchment and a copy of such
application shall also be served simultaneously on the workman
concerned in the· prescribed manner.
D (3) Where an application for permission under sub-section (I) has
been made, the appropriate Government or the specified authority,
after making such enquiry as it thinks fit and after giving a
reasonable opportunity of being heard to the employer, the
workman concerned and the persons interested in such
E retrenchment, may, having regard to the genuineness and
adequacy of the reasons stated by the employer. the interests
of the workmen and all other relevant factors, by ordt:r and for
reasons to be recorded in writing, grant or refuse to grant such
permission and a copy of such order shall be communicated to
the employer and the workmen.
F
(4) Where an application for permission has been made under sub-
section (I) and the appropriate Government or the specified
authority does not communicate the order granting or refusing
to grant permission to the employer within a period of sixty days
from the date on which such a!)plication is made, the permission
G applied for shall be deemed to have been granted on the expiration
of the said period of sixty days.
(5) An order of the appropriate government or the specified authority
granting or refusing to grant permission shall, subject to the
provisions of sub-section (6), be final and binding on all the
H parties concerned and shall remain in force for one year from the
LAL MOHAMMAD v. lNDIAN RAIL. CONST. CO. LTD. [S.B. MAJMUDAR, l.] 357
date of such order. A
(6) The appropriate Government or the specified authority may,
either on its own motion or on the application made by the
employer or any workman, review its order granting or refusing
to grant permission under sub-section (3) or refer the matter or,
as the case may be, cause it to be referred, to a Tribunal for B
adjudication :

Provided that where a reference has been made to a Tribunal
under this sub-section, it shall pass an award within a period of
thirty days from the date of such reference.

(7) Where no application for permission under sub-section (I) is
c
made, or where the permission for any retrenchment has been
refused, such retrenchment shall be deemed to be illegal from the
date on which the notice of retrenchment was given to the
workman and the workman shall be entitled to all the benefits
under any law for the time being in fore.: as if no notice had been D
given to him.

(8) Notwithstanding anything contained in the foregoing provisions
of this section, the appropriate Government may, if it is satisfied
that owing to such exceptional circumstances as accident in the
establishment or death of the employer or the like, it is necessary E
so to do, by order, direct that the provisions of sub-section (1)
shall not apply in relation to such establishment for such period
as may be specified in the order.

(9) Where permission for retrenchment has been granted under sub-
section (3) or where permission for retrenchment is deemed to F
be granted under sub-section (4 ), every workman who is
employed in that establishment immediately before the date of
application for permission under this section shall be entitled to
receive, at the time ofretenchment, compensation which shall be
equivalent to fifteen days' average pay for every completed year G
of continuous service or any part thereof in excess of six months.

We may note at this stage that both the learned Single Judge as well as the
Division Bench of the High Court have accepted the legally fatal consequences
of non-compliance of Section 25-N if it was applicable. It is not in dispute
between the parties that if Section 25-N applied then admittedly Respondent H
358 SUPREME COURT REPORTS [1998] SUPP. 3 S.C.R.

A no. I company had not followed the procedure laid down therein before
issuing impugned retenchment orders of 1993. Consequently, the bone of
contention between the contesting parties centres round the question whether
Section 25-N of the Act was at all atracted in the facts of the present cases.

As noted earlier, the Division Bench of the High Court in the impugned
B judgment has taken the view that Section 25-N is not applicable on twin
reasons. Firstly, it observed, as noted earlier, that if the procedure for closing
down of an undertaking governed by Chapter V-B as laid down by Section
25-0 of the very same chapter gets excluded for an undertaking dealing with
construction of buildings etc. or for other construction work then ipso facto
C the said exclusion would also apply to retrenchment of workmen of that very
establishment governed by Chapter V-B of the Act. For coming to this
conclusion the High Court has also pressed in service provisions of Section
25-FFF sub-section (2) of the Act. The second reason given by the Division
Bench for excluding Section 25-N as noted earlier is that Respondent company
in any case is not an 'industrial establishment' as defined by Section 25-L(a)
D of the Act being not a 'factory' as defined by the Factories Act. The learned
Single Judge on the other ha.1d, has taken a contrary view about the
applicability of Section 25-L read with Section 25-N of the Act. It becomes,
therefore, necessary for us to closely examine the twin reasons given by the
· Division Bench of the High Court in the impugned judgment for excluding
E applicability of Section 25-N of the Act. We accordingly proceed to do so.
So far as the first reason which appealed to the Division Bench of the
High Court in the impugned judgment for excluding the applicability of Section
25-N of the Act is concerned, it has to be noted that Section 25-0 on its own
language deals with the procedure for closing down an undertaking and it is
F for such a concern which is closed down iliat the proviso to sub-section (I)
thereof would come into play. It is not in dispute between the parties that the
Rihand Nagar Project on which the appellants were working at the relevant
time was an undertaking which was dealing with construction of railway line
spread over 54-KMs and the question is whether by the impugned notices
G of 1993 procedure of Section 2 5-0 was pressed in service by the respondent.
Learned senior counsel for the Respondent states that it is not the case of
the Respondent that procedure of Section 25-0 was invoked by the respondent,
as according to him, Chapter V-B itself did not apply as held by the Division
Bench of the High Court in the impugned judgement. We shall deal with this
aspect when we consider the second reason given by the Division Bench of
H the High Court for excluding the applicability of Section 25-N. Suffice it to say
LAL MOHAMMAD v. INDIAN RAIL. CONST. CO. LTD. [S.B. MAJMUDAR, J.] 359

that so far as the first reason is concerned, the proviso to Section 25-0 cannot A
be transplanted by any judicial interpretation to be a proviso to Section 25-
N which deals with entirely a different topic of conditions precedent to
retrenchment of workmen. It is obvious that retrenchment presupposes the
termination of surplus workmen in a going concern which is not closed down.
If the concern itself is closed down all the workmen would be terminated by B
closure and on such for closure for calculating the compensation payable to
them as closure compensation, the amount of compensation may be computed
by adopting the measure for compensation as if it was retrenchment and to
that extent Section 25-FFF may be pressed in service by the closed undertaking.
However, if the impugned notices of 1993 are treated to have effected only
retrenchment of workmen of an ongoing project or establishment, we fail to C
appreciate how the proviso to Section 25-0 sub-section 1 can be pressed in
service by any process of judicial interpretation; such an intrepretation would
go against the very legislative intent in enacting Section 25-N(l) which does
not contain any such proviso. The first reason which appealed to the High
Court for ruling out the applicability of Section 25-N to an understanding set
up for construction work therefore, cannot be countenanced. D

That takes us to the consideration of the second reason which weighed
with the High Court for dispensing with the applicability of Section 25-N in
the present case. As noted earlier, sub-section (1) of Section 25-N lays down
the procedure as conditions precedent to retrenchment of workmen employed E
in an 'industrial establishment' to which Chapter V-B applies. Section 25-N
is in Chapter V-B. We have, therefore, to tum to Section 25-L which lays down
the requirements of 'industrial establishment governed by Chapter V-B. It is
a definition section which lays down that for the purpose of Chapter V-B an
industrial establishment amongst others would mean "(i) a factory as defined
in clause(m) of Section 2 of the Factories Act,1948 (63of1948)". This is not F
an inclusive definition. Therefore, all its requirements have to be met by an
establishment so as to fall in Chapter V-B.

We are not concerned with other parts of the said definition. It, therefore,
becomes necessary to find out as to whether Rihand Nagar project of the G
Respondent company was an 'industrial establishment' meaning thereby
whether it was a 'factory' as defined in clause (m) of Section 2 of the Factories
Act., 1948. It is obvious that if it was not such a 'factory', it would not be
an 'industrial establishment' governed by Chapter V-B. Consequently, the
workmen employed therein would not be covered by Section 25-N sub-
section (!). Definition of the term 'factory' as found in Section 2(m) of the H
360 SUPREME COURT REPORTS [1998] SUPP. 3 S.C.R.

A Factories Act, 1948, reads as under :

"factory" means any premises including the precincts thereof -

B
(i) whereon ten or more workers are working, or were working on
any day of the preceding twelve months, and in any part of
which a manufacturing process is being carried on with the aid
-
of power, or is ordinarily so carried on, or

(11) whereon twenty or more workers are working, or were working
on any day of the preceding twelve months, and in any part of
which a manufacturing process is being carried on without the
c aid of power, or is ordinarily so carried on, but does not include
a mine subject to the operation of [the Mines Act, 1952 (XXXV
of 1952], or [a mobile unit belonging to the armed forces of the
Union, a railway running shed or a hotel, restaurant or eating
place];
D [Explanation [!]-For computing the number of workers for the
purposes of this clause all the workers in [different groups and relays]
in a day shall be taken into account;] •

[Explanation II-For the purposes of this clause, the mere fact that an
E Electronic Data Processing Unit or a Computer Unit is installed in any
premises or part thereof, shall not be construed to make it a factory
if no manufacturing process is being carried on in such premises or
part thereof;]

In the light of the aforesaid definition, in order that the project in question
F can be treated to be a 'factory', the following requirements of the definition
have to be fulfilled :

(i) In the premises, including the precincts thereof, ten or more
workmen must be working where manufacturing process is carried
out with the aid of power, or
G
(it) where twenty or more workmen must be working at the relevant
time and in any part of such premises manufacturing process is
being carried on without the aid of power; or

(iii) In any case manufacturing process must be carried on in any
H part of the premises;
LAL MOHAMMAD v. INDIAN RAIL. CONST. CO LTD. [S.B. MAJMUDAR, J.] 36J

So far as the first and the second requirements are concerned, it cannot A
be disputed that at the relevant time when the impugned notices of 1993 were
served on the appellants more than hundred workmen were working in the
premises. Consequently, the question whether the construction of railway line
was being done with the aid of power or without the aid of power pales into
insignificance. Therefore, the remaining (iii) requirement for applicability of B
the definition of the term 'factory' which becomes relevant is whether any
'manufacturing process' was being carried on in the premises or any part
thereof. Consideration of this aspect will require fulfilment of twin conditions,
namely, i) whether the project was having any 'premises' where the work was
being carried on by these workmen; ii) whether the work which was carried
on by them amounted to a 'manufacturing process'. The term "premises" is C
not defined by the Act, but the term 'manufacturing process' is defined in
Section 2(k) of the Factories Act as under :

"manufacturing process" means any process for -

(i) making, altering, repairing, ornamenting, fmishing, packing, oiling, D
washing, cleaning, breaking up, demolishing, or otherwise treating
or adapting any article or substance with a view to its use, sale,
transport, delivery or disposal, or
[(Ii) pumping oil, water, sewage or any other substance, or;

(m) generating, transforming or transmitting power, or E
[(iv) composing types for printing, printing by letter press, Iitography,
photogravure of other similar process or book binding;]
(v) constructing, reconstructing, repairing, refitting, finishing or
breaking up ships or vessels; [or]
F
[(vi) preserving or storing any article in cold storage;]

The defmition of the term "worker" also becomes relevant in this context. It
is defined in Section 2(1) of the Factories Act as under :

"worker" means a person [employed, directly or by or through any G
agency (including a contractor) with or without knowledge of the
principal employer, whether for remuneration or not] in any
manufacturing process or in cleaning any part of the machinery or
premises used for a manufacturing process, or in any other kind of
work incidental to, or connected with, the manufacturing process, or
the subject of the manufacturing process [but does not include any H
362 SUPREME COURT REPORTS [1998] SUPP. 3 S.C.R.

A member of the armed forces of the Union]"

We shall first deal with the question whether Rihand Nagar Project of the

B
Respondent was having any 'premises'. Mr. Dave, learned senior counsel for
the Respondent placed strong reliance on a decision of this Court in Workmen
of Delhi Electric Supply Undertaking v. The Management of Delhi Electric
Supply Undertaking, [1974] 3 sec 108, for submitting that the definition of
-
the term 'factory' in Section 2(m) of the Factories Act, 1948 requires fixed site.
In para 18 of the Report, it is observed that "the factory must occupy a fixed
site or premises". In that case, the question was whether the sub-stations and
zonal stations of Delhi Electric Supply Undertaking where no manufacturing
C process was being carried out could be considered to be a 'factory'. Answering
it in the negative it was held that "after the electricity is generated when the
current passes through the transmission lines and reaches the sub-stations
no further 'manufacturing process' of electricity takes place". While answering
the said question, reliance was ·placed on the observations of Halsbury's
Laws of England, 3rd Edition, Volume 70 to the effect that a 'factory' must
D occupy a fixed site. Reliance was also placed on the observations of this
Court in an earlier judgment in Nagpur Electric Light & Power Co. Ltd v.
Regional Director, Employees State Insurance Corporation Etc., [1967] 3
SCR 92, for supporting the same proposition on the same lines. Mr. Dave,
invited our attention to an earlier Constitution Bench Judgment of this Court
E in Ardeshir H. Bhiwandiwala v. The State of Bombay, [1961] 3 SCR 592,
wherein at page 595, interpreting the very same definition, it was observed
that "premises" has gradually acquired the popular sense of land or buildings
and ordinarily the word "premises" is a generic term meaning "open land or
land with buildings or buildings alone". Relying on the aforesaid judgments,
it was contended by Shri Dave, learned senior counsel for the Respondent
F that on the facts of the present case, Rihand Nagar Project which was
concerned with construction and laying down of railway lines spread over 54
KMs, can not be said to constitute a 'factory' as it had no fixed site.

It is difficult to accept this contention. It is true that the word "premises"
G as found in the definition must have a fixed site but as held by the Constitution
Bench judgement of this Court in Ardeshir H. Bhiwandiwala, (supra) the term
"premises" not only covers building but even open land can also be a part
of premises. It is easy to visualise that when railway line is to be constructed
over an area of 54 KMs, it can not be constructed overnight. The whole
exercise would be carried out in a phased manner. For laying railway line
H number of workmen, supervisors and other clerical staff will have to attend
LAL MOHAMMAD v. INDIAN RAIL CONST. CO. LTD. [S.B. MAJMUDAR, J.] 363
the site where the railway line is to be laid. That site on which the railway A
line is to be laid will necessarily have space for storage of loose rails, sleepers,
bolts etc. All these articles will have to be laid and fixed on a given site before
any part of the railway track becomes ready. Consequently, construction of
railway line would necessarily imply fixed sites on which such construction
activity gets carried on in a phased manner. Every time when such construction B
activity is carried on it must necessarily be on a given fixed site where all the
workmen concerned would work for the purpose of laying down railway line
..at · at that site. Thus, even though the railway line is to be laid over 54 KMs.
of land every part of the said land would consist of a 'factory' at a given point
of time as from time to time in a phased manner entire railway line will have
to be laid. Once the entire work is finished, then a stage would be reached C
when the construction activity would come to an end and the premises
thereof may cease to be a 'factory' but so Jong as construction work is being
carried out in phases every part of the land on which such construction
activity takes place would form a part and parcel of the 'premises' as such.
Railway line cannot be laid except on a fixed site. It is not, therefore, possible
to accept the submission of learned senior counsel Shri Dave that Rihand D
Nagar project which was to carry out the construction work of railway line
up to 54 K.Ms. had no fixed site to operate upon and therefore, was not a
'premises'. All the 54 KMs. of land were phase-wise factories for construction
of railway lines over them. The reasoning adopted by the High Court and
which was tried to be supported by Shri Dave on this aspect therefore, cannot E
be countenanced. The two decisions relating to 'electric lines' not being
factories are distinguishable in as much as the court was not considering the
situation at the time of laying the lines but was dealing with a situation Jong
after the laying of lines and whether it constituted to be 'factory'. In the
present case, we are dealing with the situation where the railway lines are
being laid and not the position after that stage is completed. F

Then comes the more important question whether any 'manufacturing
activity' was being carried on in Rihand Nagar Project where the appellant
workmen were working at the relevant time. In order to answer this question
we have to closely examine the definition of the term 'manufacturing process' G
as found in Section 2(k)(i) of the Factories Act. A mere look at the said
provision shows that "any process by which any article or substance is
adapted for its use can fall within the sweep of 'manufacturing process'. It
cannot be disputed that while railway lines are being constructed on a given
site no article or substance is being made or repaired, maintained, finished etc.
However, only relevant clause of the definition which has to be seen is H
364 SUPREME COURT REPORTS [1998] SUPP. 3 S.C.R.

A whether at the Rihand Nagar Project of the Respondent company the process
of construction of railway line amounted to adapting any article or substance
with a view to its use. It cannot be seriously disputed that raw-materials like
railway sleepers, bolts and loose railway rails when bought by the respondent-
company from open market and brought on site were articles visible to eyes
and were movable articles. These articles were adapted for their use. Their use
B was for ultimately laying down a railway line. In that process sleepers, bolts
and rails would get used up. If that happens, the definition of 'manufacturing
process' dealing with adaptation of these articles for use would squarely get
attracted. However, Shri Dave, learned counsel for the Respondent submitted
that the ultimate product of this exercise or process is the bringing into
C existence a railway track which is embedded in the earth which cannot be
sold, transported, delivered or disposed of like a movable property. To that
extent Shri Dave is right. However, as the definition is worded, it cannot be
said of necessity that any end product which results after adapting any raw-
material article or substance "with a view to its use" must necessarily result
into a movable final product or a commodity. It has to be kept in view that
D the definition of 'manufacturing process' in Section 2(k) of the Factories Act
has nothing to do with manufacturing of goods which may attract excise duty
under the Central Excise and Salt Act , 1944 which deals with 61ccise duty
chargeable on manufacturing of goods where the end product must be a
movable commodity attracting the charge of excise leviable at the factory gate
E when it is removed by the manufacturer therefore. Such is not the scheme of
the definition of the term 'manufacturing process' as found in Section 2(k)
of the Factories Act. For this definition end product may be goods or otherwise.
Shri Dave, learned counsel for the Respondent strongly relied upon the
decision of a Constitution Bench of this court in Ardeshir H Bhiwandiwala
(supra) wherein it was observed that "when the salt is being manufactured
F from water in salt works, the finished article is salt. It does not enter the salt
work as "salt". It enters as brine which, under the process carried out,
changes its quality, and becomes salt, a marketable article." Shri Dave submitted
that the Constitution Bench in that case held that salt works would be a
'factory' as open land on which sea water was stored treated to be a part of
G the "premises" wherein process of manufacturing of salt was carried on and
water was changed into marketable commodity salt. Placing reliance on the
said decisions, it was submitted by Shri Dave that therefore, the end product
must be marketable. It is difficult to appreciate this contention. The Constitution
Bench in that case was concerned with entirely a different part of the definition
of the term 'factory' as found in Section 2{k) of the Factories Act, namely,
H 'making an article or substance with a view to its sale.' No question arose
LAL MOHAMMAD v. INDIAN RAIL. CONST. CO. LTD. [S.B. MAJMUDAR ,l.] 365

in that case about adapting raw-material which is admittedly an article 'with A
a view to its use' or creating another product. The aforesaid observations
were made by the Constitution Bench for bringing the manufactured article
salt within the sweep of the definition. The term adapting the article or
substance with a view to its use' therefore, did not fall for consideration
before the Constitution Bench in the facts of that case. We, therefore, are not B
in a position to sustain even the second reason given by the High Court in
the impugned judgment to the effect that no 'manufacturing process' was
being carried out in the project in question. Even accepting the contention
of learned counsel Shri Dave for the Respondent that the final product
namely, construction of railway line embedded in earth was not the subject
matter of sale, transfer, delivery or disposal, still the raw-materials which were C
adapted for their use with a view to construction railway line which was the
final product could be said to have fallen within the sweep of the definition
of the term 'manufacturing process' as found in Section 2(k) of the Factories
Act. Once that conclusion is reached, the result becomes obvious. All the
appellant workers would squarely attract the definition of the term 'workmen' D
as found in Section 2(1) of the Factories Act as they were working for
remuneration in a manufacturing process carried out by the project in question.
It must, therefore, be held that all the requirements of the term 'factory' as
defined by Section 2(m) of the Factories Act are satisfied on the facts of the
present case.
E
We may also mention one submission of learned senior counsel for the
appellants. Placing reliance on a decision of this Court .in Zaffar Mohammad
v. The State of West Bengal, AIR (1976) SC 171, it was submitted that an
"article" means "a piece of goods or property" meaning thereby, it should be
a tangible substance. As we have already discussed earlier, raw materials like
bolts and rails before they are embedded in earth can not but be treated as F
articles or commodities. In the light of the this conclusion, therefore, Section
25-L of the Act also is found to have applied to the construction activity
carried on by the Rihand project at the relevant time. It must be held to be
an 'industrial establishment' which is a 'factory' as defined in clause (m) of
Section 2 of the Factories Act. Consequently, Section 25-N would get squarely G
attracted to such a project. Second reason given by the High Court for ruling
out the applicability of Section 25-N is, therefore, found to be un-sustainable.

Before, parting with discussion on the point, we may note one submission
of learned senior counsel for the appellants. In his submission the proviso
to Section 25-0 sub-section (I) itself postulates the legislative intent that but H
r
366 SUPREME COURT REPORTS [1998] SUPP. 3 S.C.R.

A for the said proviso even construction activities undertaken by the
undertakings would be covered by Chapter V-B of the Act and therefore, it
can be said to be an 'industrial establishment' i.e. a factory. Shri Dave, learned
senior counsel for the Respondent tried to repel this contention by submitting
that Section 25-N deals with 'industrial establishments 'to which Chapter V-
B applies while Section 25-0 deals with the undertaking of an 'industrial
B establishment'. It is, therefore, possible that an 'industrial establishment' may
be a 'factory' as defined by Section 25-L of the Act still one of its undertakings
which may not by itself be a 'factory' but still may get covered by Chapter
V-B and therefore, Section 25-0 would apply to such an undertaking and only
such undertakings of the industrial establishment which are factories that are
C sought to be exempted by the proviso to Section 25-0 sub-section (1). He
gave an illustration for highlighting his contention. For, example, a cement
company, which manufactures cement may be a 'factory' covered by Section
25-L of the Act where manufacture of cement takes place. It may undertake
construction activities through one of its limbs or undertakings at a different
place. This may result into a situation where the industrial establishment as
D such may be a 'factory' but its unit or construction undertaking may not be
a 'factory' and still would be covered by Chapter V-B and would attract
Section 25-0 but for the proviso. In short, it was contended that the proviso
to sub-section (I) of Section 25-0 necessarily does not operate in the same
field in which the main parent establishment may operate. We find considerable
E force in the aforesaid contention of Shri Dave. It must, therefore, be held that
before Section 25-N can be held applicable to an 'industrial establishment' the
establishment itself must be found to be a 'factory' as defined by Section 25-
L before provisions of Section 25-N can be pressed in service qua such an
'industrial establishment,' and for deciding this question the provisions of
Section 25 (0)(1) or its proviso would not offer any assistance.
F
However, as we have seen above, the establishment of the Respondent
company squarely falls within the definition of the term 'factory' for the
purpose of applicability of Section 25-N of the Act. The first point for
consideration, therefore, has to be decided in the affirmative in favour of the
G appellants and against the respondent.

Point No. 2

So far 1s this point is concerned, the legal effect of the violation of
Section 25-N will have to be appreciated in the light of the recitals in the
H impugned notices. Identical termination notices were served on all the
LAL MOHAMMAD v. INDIAN RAIL. CONST. CO.LTD. [S.B. MAJMUDAR, J.] 367
applicants. We may refer to one of such notices : A
This is to inform you that most of the work in Rihand Nagar Project
has been completed and there is no further work available for you on
this project or on any other project of IRCON.

2. You are, therefore, rendered surplus at the said project. Retrenchment B
benefits in accordance with Section 25F(a)(b) of the l.D. Act, 1947 are
enclosed as per the details given below :-

(a) Salary for the period 1.9.93 to
4.9.93 Rs. 321.00
c
(b) Notice pay Rs. 2,408.00

(c) Retrenchment compensation Rs. 9,632.00

D
Rs. 12, 361.00

3. Pending grant of clarification by the Hon'ble High Court of Judicature
at Allahabad, if need be, in accordance with order dated 27th May E
1993 of the Hon 'ble High Court, you are placed on panel in the order
of seniority. Employment at other projects will be offered to you as
and when vacancy befitting the work done by you at this project or
suitable for your working arises at any of the Company's project in
India. Offer of employment will be made in accordance with seniority,
you have acquired at this project. F

4. Your dues up to 4.9.93 are hereby paid. You will cease to have lien
of employment at this project with effect from 4.9.93.

5. You are advised to collect your other dues namely PF, gratuity, G

- Leave salary etc. in accordance with the Rules of the Company as in
force at the project.

6. Your name on Panel is kept with address furnished to us. You may
leave permanent address with us, if you so to ensure delivery of
communication to you from other project offices of the company. For H
368 SUPREME COURT REPORTS [1998) SUPP. 3 S.C.R.

A any correspondence, you may be in touch with Corporate Office at
Palika Bhawan, Sector-13, R.K. Puram, New Delhi 110066.

Yours faithfully,

sd/-
t
B
(C.R. Morty)

Regional Manager
IRCON/ Rihand
Encl : As above"
c
A conjoint reading of all the recitals of this notice shows that it is not the
case of the Respondent that on 20th August, 1993 when this notice was
served, the entire project had closed down. On the contrary it is stated in
black & white that most of the work in Rihand project had been completed
D and therefore, no further work was available for being offered to the addressee
at this project or any other project of IRCON. He was rendered surplus,
consequently, he was being offered retrenchment benefits in accordance with
Section 25-F (a)(b) of the Act. The third paragraph of the said notice also
clearly indicates that employment was to be offered in any other project of
the company for the retrenched workman if vacancy arises. This is in
E consonance with Section 25-H of the Act which deals with re-employment of
retrenched workmen. It reads as under :

"25-H-Re-employment ofretenched 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
F prescribed, give an opportunity [to the retrenched workmen who are
citizens of India to offer themselves for re-employment, and such
retrenched workmen] who offer themselves for re-employment shall
have preference over other persons."

G It is not possible to agree with the submission of Shri Dave for the
Respondent that paragraph 3 has been mentioned in the notice because of
the order of the High Court in a pending writ petition. Even if the High Court
might have directed the Respondent to take steps to offer suitable employment
to the retrenched workmen the question of putting them on a panel in the
order of seniority and offer of employment according to seniority would not
H have arisen but for applicability of Section 25-H. The valiant attempt made by
LAL MOHAMMAD v. INDIAN RAIL. CONST CO. LTD. [S.B. MAJMUDAR, J.] 369
Shri Dave, learned counsel for the Respondent to treat this notice as one A
under Section 25-FFF cannot be countenanced even for a moment. Section 25-
FFF reads as under

"25-FFF-Compensation to workmen in case of closing down of
undertakings-( 1) Where an undertaking is closed down for any
reason whatsoever, every workman who has been in continuous service B
for not less than one year in that undertaking immediately before such
closure shall, subject to the provisions of sub-section (2), be entitled
to notice and compensation in accordance with the provisions of
Section 25-F, as if the workman had been retrenched :

Provided that where the undertaking is closed down on account of C
unavoidable circumstances beyond the control of the employer, the
compensation to be paid to the workman under clause (b) of Section
25-F shall not exceed his average pay for three months.

[Explanation-,-an undertaking which is closed down by reason merely
of- D
(i) financial difficulties (including financial losses); or

(ii) accumulation of undisposed of stock; or

(iii) the expiry of the period of the lease or licence granted to it; or
E
(iv) in a case where the undertaking is engaged in mini!lg operations,
exhaustion of the minerals in the area in which such operations are
carried on; shall not be deemed to be closed down on account of
unavoidable circumstances beyond the control of the employer within
the meaning of the proviso to this sub-section.]
F
It is true that the said provision applies in cases where the undertaking is
closed down and when compensation has to be afforded to the workers of
the closed undertaking in accordance with the, provisions of Section 25-FFF
as if the workmen had been retrenched but for issuing a notice under Section
25-FFF it has to be clearly stated in the notice that the undertaking is closed G
down as a whole and that the workmen will have to be terminated and only
compensation has to be paid as per Section 25-FFF read with Section 25-F.
No question will arise in such a case to treat the workmen excess qua the
other staff which can continue to be employed. It is impossible to agree with
Shri Dave that the notice in substance be read as one under Section 25-FFF
when the notice did not even mention that the entire Rihand project had been H

,.
370 SUPREME COURT REPORTS (1998] SUPP. 3 S.C.R.

A closed down by that date. Closing down of most of the work of a project is
not equivalent to closing of the project as a whole. It was also nowhere stated
that the notice was being given under Section 25-FFF read with Section 25-
F(a)(b). Shri Dave was, however, right when he contended that notice of
termination has to be read in the light of then existing fact situation and that
B in order to constitute closure of a unit, it is not necessary that the entire
industry or business of other units should be closed. He rightly placed
reliance on two judgments of this court in Management of Hindustan Steel
Ltd. v. The Workmen & Ors., [I 973] 3 SCC 564 and in Workmen of the Indian
Leaf Tobacco Development Co. Ltd, Guntur v. Management of the Indian
Leaf Tobacco Development Co. Ltd, Guntur, [I 969] 2 SCR 282. However, the
C moot question would survive as to whether in 1993 when the impugned
notices were issued, the Respondent had in fact closed down the undertaking,
namely, Rihand project. On the express wording of the impugned notice, as
we have noted earlier, it is impossible to reach that conclusion when the
notice itself states that most of the work is over and not that the entire project
D is over. In this connection, Shri Dave also invited our attention to a Constitution
Bench judgment of this Court in Hariprasad Shrivshankar Skukla v. A. D.
Divikar, [1957] SCR, 121, wherein it was observed that:
"The word retrenchment as defined in s. 22( oo) and the words
'retrenched' in S.25F of the Industrial Disputes Act, 1947, as amended
by Act XLIII of 1953 , have no wider meaning than the ordinary
E accepted connotation of those words and mean the discharge of
surplus labour or staff by the employer for any reason whatsoever,
otherwise than as a punishment inflicted by way of disciplinary action,
and do not include termination of services of all workmen on a bona
fide closure of industry or on change of ownership or management
F thereof."
This judgment cannot be of any assistance to Shri Dave as the wording of
the notices in question do not lead to the conclusion that they were issued
because the entire project was closed. Reliance was then placed by learned
senior counsel Shri Dave for the respondents on a decision of a three member
G Bench of this Court in Hindustun Steel Works Construction Ltd & Ors. v.
Hindustan Steel Works Construction Ltd employees' Union Hyderabad &
Anr., [995] 3 SCC 474. This decision cannot be of any assistance to him for
the simple reason that in the facts of that case, the workers concerned were
employed by a Government company solely for its works at Hyderabad and
its project at Hyderabad had admittedly come to an end and the workers were
H retrenched. Absorption in another project of the company at Visakhapatnam
LAL MOHAMMAD v. INDIAN RAIL. CONST. CO. LTD. [S.B. MAJMUDAR, J. J 371

was effected for those workmen who as per their appointment orders were A
liable to be absorbed elsewhere in any other project of the company. In the
said case, the question of applicability of Section 25-N was expressly kept
open. The aforesaid decision rendered on its own facts, therefore, can not be
of any assistance to Shri Dave in the present case. Shri Dave then invited
our attention to a decision of a two member Bench of this Court in H.P. B
Mineral & Industrial Development Corporation Emplr?yees' Union v. State
of H.P. & Ors., [1996] 7 SCC 139. In that case when the concerned workmen
were retrenched Section 25-N as amended in 1984 was not available on the
statute book. On facts it was found that termination of the services of the
workmen was brought about as \!. result of the closure of the undertaking and
consequently only Section 25-FFF was applicable. The said decision also C
cannot be of any avail to Shri Dave. Similarly, a decision of this Court in
Management of Dandakaranya Project, Koreput v. Workmen through
Rehabilitation Employees' Union & Anr., [1997] 2 SCC 296, also cannot be
of any assistance to Shri Dave for the simple reason that in the said case the
entire Dandakaranya Project was closed down and the N.M.R. Workers who D
were working were held entitled only to compensation under Section 25-FFF
of the Act. It cannot be disputed, if the entire project is closed down and if
the employees are only of the project they would be entitled to compensation
under Section 25-FFF and if they are more than hundred workmen in that
project, additional requirement of following Section 25-0 procedure may also
have to be complied with if the industrial undertaking is not covered by the E
proviso to sub-section(!) of Section 25-0. It must, therefore, be held that the
impugned notices of 1993 are retrenchment notices and not closure notice as
tried to be submitted by Shri Dave. Once that conclusion is reached, as the
workmen who were subjected to the impugned notices were stated to be
retrenched from the project which employed more than hundred workmen at
the given point of time, it was not Chapter V-A but only Chapter V-B which F
got attracted for retrenching such large body of workmen from the project.
Hence, the procedure of Section 25-N had to be followed. As we have already
held that Section 25-N would apply to the facts of the present case while
deciding point no. I, the net effect of the aforesaid conclusion of ours is that
the impugned retrenchment notices which were issued without following the G
conditions precedent to retrenchment of such workmen as required by Section
25-N are necessarily to be treated to be void and of no legal effect. Point No.
2 is therefore, answered by holding that the impugned notices on account of
non compliance of Section 25-N of the Act had no legal effect and were null
and void and the employer-employee relationship between the parties did not
get snapped and all the 25 appellants, therefore, continued to be in the service H
372 SUPREME COURT REPORTS [1998) SUPP. 3 S.C.R.

A of the Respondent despite such null and void notices. Conclusion to the
same effect as reached by the learned single Judge who allowed the writ
petitions only on this ground must be held to be well sustained and has to
be confirmed and the contrary decision of the Division Bench is required to
be set aside.

B Point No. 3 will be considered along with Point No. 5. Point No. 4 :

This point arises for consideration in the alternative if Section 25-N of
the Act is not applicable. But as we have found that Section 25-N was
applicable at the relevant time when the impugned notices of 1993 were
C issued, this point would not survive for our consideration. We may also
mention in this connection that neither the learned single Judge nor the
Division Bench of the High Court had considered the applicability of Articles
14, 16 and 21 for voiding the impugned notices and or for upholding the same
on the ground of non-applicability of these relevant articles. Shri Sudhir
Chandra, learned senior counsel for the appellants was right when he
D contended that he had cited a catena of decisions of this Court before the
High Court for showing that the Respondent company was a 'State' within
the meaning of Articles 12 and it could not have arbitrarily thrown out the
appellants from service after they have put in more than 10 years in the
project and they should have been absorbed elsewhere as regular employees.
E The aforesaid contention of learned counsel for the appellants would have
required a closure scrutiny but for the fact that once the impugned notices
of 1993 are held to be null and void being violative of Section 25-N, this
contention becomes of academic nature. We, therefore, do not think it fit to
dilate on the same and leave, this point un-answered.

F Points Nos. 3 & 5 :

This takes us to the consideration of points nos. 3 and 5. So far as point
no. 3 is concerned, once we have held that the impugned termination notices
of 1993 were violative of Section 25-N of the Act, the question whether the
G 25 writ petitioner-appellants were employed only at Rihand Nagar project or
they were employees of the company from the very inception of their services
also becomes academic. This is for the simple reason that even assuming that
Rihand Nagar Project was the employer of the appellants and they were
employed only for that project as the procedure of Section 25-N was not
followed their retrenchment had become void. This is because the Rihand
H project itself was, on the date of impugned notices, not completely over.
LAL MOHAMMAD v. INDIAN RAIL. CONST. CO.LTD. [S.B. MAJMUDAR, J.] 373

Therefore, the said finding of ours gets sustained even on the assumption A
that the appellants were employees only for the project and of the project and
not of the company.

We must, however, state that voluminous documents on record were
pressed in service by learned counsel for the appellants to buttress his
contention that these workmen were employees of the company as the B
appointment orders themselves showed that their service were transferable to
any part of the company's establishments in India and they were only asked
to report at Rihand Nagar Project, as the employer-employee relationship was
between the Respondent company on the one hand and the appellants on the
other hand. Shri Dave, learned senior counsel on the other hand submitted
that these workmen were employed for the Rihand project and were not C
employed by the company as such. As discussed earlier, this question which
would have required serious consideration is not necessary to be gone into
at this stage and hence no finding is required to be reached one way or the
other on this question while considering the legality of the impugned notices
ofl993. l)

However, this question will assume importance when we come to the
discussion on point and 5 which centres round the subsequent development
which took place during the pendency of the special leave petition in this
court after the impugned decision was rendered by the Division Bench of the
High Court. Shri Dave, learned senior counsel for the-Respondent company E
brought to our notice a subsequent event. He submitted that on 24th March,
1998 all these appellants were served with fresh notices of termination by way
of office order No. 3/I/98. A specimen copy of one of such notice reads as
under:

"On completion of the Project works, the services of the under-
F
mentioned employees of Ex-Anpara-Rihand Project were dispensed
with w.e.f. 4th September, 1993 (A.N.) vide Office Order No. 9/93,
.. dated 04-09-1993 on tendering of salary in lieu of notice and
retrenchment compensation as admissible under the provisions of the
I.D. Act. G
2. Subsequently, pursuant to the order of the Hon 'ble Allahabad High
Court dated 07-12- 1993 and 06-04-94 on the WPs No. 32651/93; 18561/
93; 34786/93; 44416/93 & 32500/93 they were, however, allowed to
continue on the job; subject to the final decision of the special
appeals filed by the Company against the said order. H
374 SUPREME COURT REPORTS (1998) SUPP. 3 S.C.R.

A 3. As the special appeals filed by the Company against the said
impugned order on the above mentioned WPs have since been finally
allowed by the order of the Hon'ble DB of the Allahabad High Court
dated 24-02-98 and the Writ Petitions stand dismissed they are no
longer entitled to continue in employment and accordingly their services
shall stand dispensed with from the date of issue of this letter.
B
4. Notw ithstanding that all concerned petitioners were offered salary
1

in lieu of notice and retrenchment compensation etc., at the time of
their original date of termination and further all of them have been
paid salary and all other dues up to date beyond their original date
of termination i.e., 4th September, 1993 in compliance with the aforesaid
c order of the Hon'ble High Court of Allahabad date 07-12-93 and 06-
• 04-94, all concerned employees are being paid herewith up to date pay,
one month pay in lieu of notice, retrenchment and gratuity through
Bank Drafts for amount shown against each towards full and final
settlement as per the provisions under Section 25(F) of the I.D. Act.
D
5. As regards other dues such as CPF, Bonus, Miscellaneous dues,
if any, all concerned are advised to collect the same from the Manager
(Accounts), Rear-Party of Ex-Anpara Project at the above address
since the project stands finally closed down we.f. 6th February, 1998.
sd/-
E
(S.K. Sood)
Joint General Manager
Rea-Party, Ex-Anpara Project."

It is obvious that these notices were served on the appellants during the
F pendency of special leave petitions and therefore, they could not have been
challenged by the appellants before the High Court in the writ petitions filed
earlier by them and from which the present proceedings arise. It is also true
that these notices indicate in express terms that Anpara Rihand project was
finally closed down with effect from 6th February, 1998 and accordingly, the
services of the workmen concerned stood dispensed with from the date of
G issue of notice i.e. from 24th March, 1998. Learned senior counsel for the
appellants vehemently contended that these notices are issued consequent
upon the impugned order of the Division Bench of the High Court and if the
impugned order of the High Court is quashed and set aside these notices
would not survive. He, however stated that on a conjoint reading of the
H clauses of these notices it may prima facie appear that they were dosure
LAL MOHAMMAD v. INDIAN RAIL. CONST. CO. LTD. [S.B. MAJMUDAR, J. l 375

notices but according to him the said project is still not fully closed and some A
work is still being carried out there. Placing reliance on tender notice issued
by the Respondent company subsequent to the impugned notices of 1998 it
was submitted that some work in the project is still continuing. Shri Dave,
learned counsel for the respondent, on the other hand, contended that the
work of laying down railway line is over and only some maintenance work B
pursuant to the agreement with the railway authorities is being undertaken for
affixing ballast on the railway track wherever necessary. In any case these
rival contentions raising disputed questions of fact will have to be thrashed
out in the light of appropriate pleadings and evidence to be lead in this
connection. We may, however, state that as we have already held that the
Rihand project where the appellants worked was covered by Chapter V-B of C
the Act, even for closing down such an undertaking to which Chapter V-B
applies, procedure to Section 25-0 would get attracted subject to the proviso
to Section 25-0( 1). Hence, even assuming that the aforesaid notices of 24th
March, 1998 could be said to have been issued under Section 25-0 of the Act,
a further question would squarely arise whether appellants were ~orkmen D
attached to the project or were employees of the company which admittedly
is not closed and is a going concern. If the appellants are found to be
employees of the company, then the notices of 1998 would go out of the
sweep of Section 25-0 of the Act and would not also fall within the scope
of Section 25-FFF as tried to suggested by Shri Dave. In such an eventuality,
question of applicability to proviso to Section 25-0(1) also would not be of E
real assistance to shri Dave who submitted that the procedure of Section 25-
0 would not be applicable to such a project which was set up for construction
of railway lines. In such a case these notices will still remain retrenchment
notices and get widened by non-compliance of Section 25-N. Learned counsel
for the appellants is also right when he contends that even if these 1998 F
notices are closure notices a moot question would arise whether the appellants
were the employees of Anpara Rihand project or were employees of the
Respondent company. It is obvious that if they are employees of tlie
Respondent company itself then impugned notices of 24th March, 1998 woul\P
have no legal effect qua appellants as the Respondent company cannot be
said to have closed down. If on the other hand, it is held that the appellants G
were employees of Rihand project and were not employees of the company
then the notices of 24th March, 1998 would effectively bring their services
to an end under Section 25-0 of the Act if it is found that the entire project
had in fact in closed down. Learned counse 1 for the appellants also subMitted
in the alternative that as the Respondent company is a 'State' within the
meaning of Article 12 of the Constitution of India and the appellants being H
376 SUPREME COURT REPORTS (1998] SUPP. 3 S.C.R.

A employees of the company, their services could not have been arbitrarily
tenninated even assuming that the Anpara Rihand project was closed and
consequently Section 25-0 read with Section 25-FFF of the Act could not
have applied in the case of the appellants as they were not employees of the
project but employees of the company as such and therefore, their tennination
B would remain arbitrary and discriminatory and would violate Articles 14, 16
and 21 of the Constitution of India. These question of facts which are highly
disputed cannot be answered in the present proceedings at this stage for the
simple reason that these impugned notices of 24th March, 1998 which have
given fresh cause of action to the appellants are not made subject matter of
any writ petition till date. The appellants have not got opportunity to put
C forward all their contentions for challenging these notices. Similarly,
Respondent has also not got an opportunity to put forward its contentions
in defence of these notices. Jn short, for deciding the legality of these notices
of 24th March, 1998 proper stage is still not reached. In the present appeals
we are only concerned with the legality and validity of impugned retrenchment
D notices of 1993. We have already held that those notices are void being
violative of Section 25-N of the Act. On that finding, the decision rendered
by the learned single Judge of the High Court allowing writ petitions of the
appellants has to be confinned and the contrary decision of the Division
Bench in appeals has to be set aside as observed earlier. Still, however, the
question remains as to what proper order can be passed in these proceedings
E especially in the light of subsequent events centering round notices of 24th
March, 1998. Jn our view interest of justice would be served by setting aside
the impugned order of the Division Bench of the High Court and by confinning
the decision rendered by learned single Judge dated 7th December, 1993
subject to fresh opportunity to be given to parties to have their say regarding
p the notices of March, 1998. The order passed by the learned single Judge in
disposing of these writ petitions finally will be required to be set aside and
the writ petitions of the 25 writ petitioners will be required to be restored to
the file of the High Court for the limited purpose as indicated hereunder.

All the 25 appellants will be given an opportunity to amend their writ
G
petitions by inserting relevant submissions for challenging the impugned
notices of 24th March, 1998 as issued to them by the Respondent company.
All the relevant averments legally permissible for adjudicating the said notices
will be permitted to be inserted in the writ petitions by necessary amendments.
In the said amended petitions the respondents will be entitled to file their
H reply by way of counters. Thereafter the appellants as well as the respondents
LAL MOHAMMAD v. INDIAN RAIL. CONST. CO. LTD. [S.B. MAJMUDAR, J.] 377
will be permitted to produce all relevant supporting material in connection A
with their respective cases centering around the legality of the notices dated
24th March, 1998. The remanded writ petitions will thereafter be decided by
High Court in accordance with law on the basis of the evidence on record
as well as further evidence that may be lead by the parties. Only on the
aforesaid limited question regarding the legality and efficacy of the notices B
dated 24th March, 1998 will have to be decided in the remanded proceedinp.
.....
;
In view of the aforesaid discussion and in the light of our finding that
Chapter V-B applies to respondents' Anpara-Rihand project, in the remanded
proceedings in the restored writ petitions of the present 25 appellants, the
following questions would squarely arise for consideration of the High Court: C
(i) Whether Anpara Rihand nagar project is subjected to a factual
closure as mentioned in the impugned notices of March; 1998 or
whether the project is not still completed;

(ii) In the light of the answer to the aforesaid question a further D
question would arise whether impugned notices of March, 1998
were in fact and in law closure notices as per Section 25-0 read
with Section 25-FFF of the Act or whether they still remain
retrenchment notices and hence would be violative of Section
25-N of the Act.
E
(fu) Even if it is held that the Anpara Rihand nagar project is in fact
closed down whether the 25 appellants were employed in the
project or they were employees of the Respondent company
entitling them to be absorbed in any other project of the company
and consequently whether the impugned notices have not F
effected any snapping of employer employee relationship between
the appellant on the one hand and the Respondent company on
the other;

(iv) Even apart from the aforesaid questions whether the impugned
notices are violative of the guarantee of Articles 14, 16 and 21 G
of the Constitution of India on the ground that the termination
of services of the 25 appellants was arbitrary and discriminatory,
Respondent company being a 'State' within the meaning of
Article 12 of the Constitution of India.

Appropriate orders may be passed by the High Court in the remanded writ H
378 SUPREME COURT REPORTS [1998) SUPP. 3 S.C.R.

A petitions accordingly. We make it clear that we express no opinion on the
merits of the aforesaid controversies between the parties. Whatever other
quesiions of fact and law may arise in the light of the amended pleadings of
parties may also have to be decided in these proceedings.

As the appellants are out of service after the order of the Division
B Bench, we deem it fit to observe that the remanded writ petitions may be
placed for disposal before a Division Bench to avoid delay due to further tiers
of appellate proceedings. The remanded writ petitions may be disposed of by
the appropriate Division Bench to which the writ petitions may be assigned
by the Hon'ble Chief Justice of the High Court as expeditiously as possible
C preferably within six !llOnths from the receipt of the copy of this order at the
High Court's end. The office shall send a copy of this order to Registrar of
the High Court at the earliest for being placed before the Hon'ble Chief
Justice of that High Court for doing the needful in this connection.

Accordingly, these appeals are allowed, the impugned common judgment
D of the Division Bench is set aside and the Judgment and Order passed by
the learned single Judge in the writ petition dated 7th December, I 993 are
confirmed. However, the final order of the learned single Judge disposing the
writ petitions is set aside and the 25 appellants' writ petitions are restored to
the file of the High Court for being disposed by a Division Bench in the light
of the observations contained herein above.
E
In the facts and circumstances of the case, there will be no order as to
costs.

S.V.K. Appeals allowed.