Holding

The discharge was illegal as it breached Section 33(1) while conciliation was pending and the Section 9‑A notice was invalid; the employer committed an unfair labour practice only under Schedule IV clause (f) (undue haste).

Summary

Lokmat Newspapers introduced photo‑type composing machines, rendering hand‑composing workers surplus. It issued a notice under Section 9‑A of the Industrial Disputes Act on 25 March 1982, after the machines were already in operation, and initiated conciliation proceedings which were closed at 4:35 pm on 22 June 1982. The employer discharged the workers at 5 pm the same day without the Conciliation Officer’s permission. The Supreme Court held that the discharge violated Section 33(1) because the conciliation proceedings were still pending under the legal fiction of Section 20(2), that the Section 9‑A notice was invalid as it was issued post‑factum, and that the employer committed an unfair labour practice only under Schedule IV clause (f) (undue haste). The Court allowed the Letters Patent Appeal in part, modifying the High Court’s award to one‑third of back wages with interest.

Issues considered

Whether the Letters Patent Appeal is maintainable.
Whether the termination order violated Section 33(1) of the Industrial Disputes Act.
Whether the employer complied with the pre‑condition of notice under Section 9‑A of the Industrial Disputes Act.
Whether the employer’s actions amount to an unfair labour practice under Schedule IV items (a), (b), (d) and (f) of the Maharashtra Act.
Whether the High Court could interfere with the factual findings of the lower tribunals.
What relief, if any, should be awarded to the workman.

Legislation cited

Constitution of Indias. 226, s. 227
Industrial Disputes Act, 1947s. 12(4), s. 20(2), s. 25-F, s. 31(1), s. 33(1), s. 9-A
Maharashtra Recognition of Trade Unions & Prevention of Unfair Labour Practices Act, 1971s. Schedule IV items (a),(b),(d),(f)

Subjects

industrial disputeconciliation proceedingsSection 33Section 9-Aunfair labour practiceback wagesletters patent appeallegal fictionrationalisationterminationdischarge

Judgment

LOKMATNEWSPAPERS PVT. LTD. A
v.
SHANKAR PRASAD

JULY 19, 1999

[S.B. MAJMUDAR AND S.S.M. QUADRI, JJ.] B

Labour Law:

Industrial Disputes Act., 1947 : Sections 12(4) 20(2)(b), 33(1) and
33(J)(b)-Conciliation proceedings-Discharge of workman-During C
pendency of-Without permission from Conciliation Officer-Conciliation
proceedings failed and investigation closed at 4.35 p.m.-Management
discharged workman under S.25-F immediately at 5 p.m. on the very same
day without permission from Conciliation Officer-Validity-Held,
Conciliation proceedings continue even after closure of investigation under D
S. 12(4)-Such proceedings are deemed to be closed when the failure report
under S. 12(4) reaches the appropriate Government-Closure of investigation
does not mean conclusion of conciliation proceedings-Proceedings which
are not concluded are pending and proceedings which are pending cannot
be said to be concluded-In the circumstances of the case, S.33(1) is violated
since conciliation proceedings were pendings when the workman was E
discharged-hence, penal liability under S.31(1) is attracted.
t-
Section 9-A and Schedule IV Item 10-Conditions of service-Change
of-Notice of-Rationalisation, standardisation or improvement of plant or
technique-Introduction of-Employer installed two photo-type composing
machines initially on an experimental basis but later on a permanent basis- F
No prior notice was issued to workmen under S.9-A before introduction of
new scheme-This rendered some workmen in hand-composing department
as surplus-Subsequently, notice under S. 9-A was issued stating that due to
installation of the new machines no work could be given to these workmen
and, therefore, they were being discharged-Held : If there is likelihood of G
retrenchment of workmen no new scheme can be introduced without issuance
ofprior notice under S. 9-A-Introduction of such new scheme by itself would
amount to alteration of conditions of service of workmen to their prejudice-
Notice under S. 9-A prior to introduction of such scheme is a condition
precedent-Non-compliance with S.9-A renders change ofconditions ofservice
void ab initio-Issuance of notice after introduction of new scheme and H
. 907
908 SUPREME COURT REPORTS [1999] 3 ,S.C.R.

A discharging the surplus workmen is violative of S. 9-A-But if the proposed
scheme is not likely to displace any existing workmen Item 10 of Sch. iv not
attracted-Installation of new machines amounts to rationalisation,
standardisation, or improvement of plant or technique within the meaning
of Item JO of Sch. IV-Therefore, there is change of condition of service from
B manual to mechanical working-Hence, prior notice under S.9-A is mandatory
before installation of the new machines or before they become operative-
Discharge order of workmen being founded upon such illegal notice, set aside.

Conditions of service-Change of-Introduction of new machines-
Issuance of notice prior to-Purpose of-Held : If dispute regarding
C introduction of such new machines is referred to competent court for
adjudication that court can decide whether the scheme is justified or is
violative of S. 9-A-Also the court can decide whether retrenchment as a
result of the new scheme is illegal and order reinstatement of workmen with
back wages if such retrenchment is illegal.

D Maharashtra (Recognition of Trade Unions & Prevention of Unfair
Labour Practices) Act. I 97 I.

Schedule IV Item I-Unfair labour practice-"Discharge" and
"dismissal"-Connotation of-Held : The word "discharge" has wider
connotations comprising of punitive as well as simpliciter discharge-But
E the word "dismiss" is purely an order of penalty and that too of an extreme
type- Discharge and dismissal cover different types of situations and
circumstances under which they are passed-Principles of noscitur a sociis
and ejusdem generis cannot be invoked in connection with Item I Sch. IV so
that discharge may be construed as dismissal-Service Law.
F Schedule IV Items I (a) to (g)-Discharge or dismissal-Burden of
proof-Held : On the aggrieved employee to first show that he is discharged
on dismissed from service and that such an order attracts any of the clauses
(a) to (g) of Item I Sch. IV.

G Schedule IV Items I (a), (d) and (f)-Applicability-Victimisation-
Emp/oyer installed two photo-type machines rendering some workmen in
hand-composing department surplus-Such workmen transferred to another
unit of employer where hand-composing department existed-But workmen
refused-Notice under S.9-A of I.D. Act issued to such workmen-Conciliation
proceedings commenced but closed at 4.35 p.m. due to failure-Employer
H discharged said workmen on the very same day at 5 p.m.-Held :
LOKMAT NEWSPAPERS PVT. LTD. v. S. PRASAD 909

"Victimisation" under Cl. (a) not established-Lack of good faith on the part A
of employer also not made out so as to attract Cl.(b)-Discharge also not (
on patently false reasons under Cl.(d)-However, employer acted with undue
haste in discharging the workmen which amounted to unfair labour practice
under Cl.(d)

Back wages-Quantum of-Factors to be considered-Workman's B
retrenchment held illegal-But he could not be reinstated as he had already
superannuated-Employer held guilty of unfair labour practice under Item
1 Cl.(j) of Sch. IV of the Maharashtra Act-No effort made to ascertain about
gainful employment of workman-During conciliation proceedings workman's
union suggested compensation@ 4 months' wages for each completed year C
of service but such suggestion rejected by employer-Held : In the
circumstances of the case, such retrenched workman entitled to 1/Jrd of back
wages for each completed year of service.

Constitution of India, 1950.

Articles 226 and 227-High Courts-Letters Patent Appeal- D
Maintainability of-Writ petition filed under Arts. 226 and 227 averred that
Labour Court and Industrial Court committed serious error of law resulting
in miscarriage ofjustice and infraction offundamental rights-It was prayed
in the writ petition to call for the record and proceedings and after perusal
thereof to quash and set aside the orders of Labour Court and Industrial E

- Court in revision-Single Judge dismissed the writ petition-Held : Writ
petition sought writ of certiorari under Art. 226-Single Judge considered
writ petition under Art. 226 a/so-Therefore, it cannot be said that Single
Judge dismissed the writ petition only under Art. 227-lf Single Judge
exercising jurisdiction under Art. 226 LPA is maintainable but not if
jurisdiction is exercised under Art. 227-When petition is filed both under F
Arts. 226 and 227 and it is dismissed on merits, it should be treated as one
filed under Art. 226 so that the petitioner is_ entitled of file LPA before the
Division Bench of the High Court.

High Courts-Letters Patent Appeal-Cl. 15-Jurisdiction of-Held :
Division Bench of High Court has jurisdiction to correct patent errors of law G
committed by Courts below-If it does not do so it fails to exercise jurisdiction
on its part. '

Interpretation of Statutes :

legal fiction-Effect of-Held : Full effect of legal fiction has to be H
910 SUPREME COURT REPORTS [1999] 3 S.C.R.

A given for fructifying the purpose for which it is created
Subsidiary Rules-Noscitur a sociis-Principle-Applicability of-Held
: Applicable when two words in a statute are employed in the same sense or
hr;ive analogous meanmg-The word "discharge" does not have the same
meaning as the word "dismiss" and, therefore, the principle not applicable.
B
Subsidiary Rules-Ejusdem generis-Principle-Applicability of-Held
: Applicable if a particular word is followed by a general word-The principle
does not apply to a converse case i.e. where a genera word such as "discharge"
is followed by a particular word such as "dismiss".

C Words and Phrases:

"Discharge", "dismiss", "victimisation", "not in good faith", "patently
false reasons" and "undue haste"-Meaning/ of-In the context of Sch. IV
items 1(a), (b) (d) and(/) of the Maharashtra (recognition of Trade Unions
& prevention of Unfair Labour Practices) Act, 1971.
D
The respondent-workman was working in the composing department of
the appellant at Nagpur when his services were terminated. He was a foreman
in the composing department of the appellant. In the year the appellant-
company started publication of Jalgaon Edition of the said paper. The
E composing of both the editions was done by hand-composing and printing was
done on rotary printing machine. Since 1978 the Jalgaon Edition was
composed and printed partly at Jalgaon and partly at Nagpur. Then in 1981,
the appellant installed two photo-type-composing machines at Nagpur.
According to the appellant, it was a new technique of rationalisation,
standardisation and improvement of plant or technique. The said machines
F were operated on experimental basis for sometime but by October 1981 the
machines became fully operative. Consequently, the respondent along with
24 other employees, who were working in the hand-composing department,
became redundant. Therefore, they were sought to be transferred to Jalgaon
where another establishment of the appellant was located. The said orders
G of transfer were challenged by the respondent and other employees before
the Industrial Court under the provisions of the Maharashtra (Recognition
of Trade Unions & Pfevention of Unfair Labour Practices) Act, 1971. The
Industrial Court held that the said transfer orders amounted to change in
the conditions of service of the complainants, which resulted, in 'unfair
labour practice' on the part of the appellant. The said decision of the Industrial
H Court was allowed to become final. Thereupon the appellant issued a notice
L'OKMAT NEWSPAPERS PVT. LTD. v. S. PRASAD 911
on 25-3-1982 under Section 9-A of the Industrial Disputes Act, 1947 to the A
respondent, inter alia, stating that as a result of the installation of photo
composing machines, there was no work available with the appellant so as
to provide the same to the respondent and other employees.

The respondent and other employees opposed the said notice and
consequently the Conciliation Officer held conciliation proceedings under B
Section 12 of the Industrial Disputes Act, 1947 but the proceedings ultimately
failed. The Conciliation Officer closed the proceedings at 4.35 P.M. on 22-
6-1982. Immediately thereafter the appellant passed the impugned order of
termination against the respondent and others on the very same day i.e. on
22-6-1982 at 5.00 p.m. by following the provisions of Section 25-F of the I.D. C
Act. Subsequently the Conciliation officer sent a failure report of the State
Government

The respondent filed a complaint on 25-6-1982 before the Labour
Court under Section 28 of the Maharashtra Act alleging that the appellant
indulged in 'unfair labour practice which fell within the provisions of Schedule D
IV Item Nos. l(a), (b), (d) and (t) of the Maharashtra Act During the pendency
of this complaint, the State Government, acting on the failure report of the
Conciliation Officer, made a reference of the industrial dispute under Section
10 of the I.D. Act. The appellant raised an objection before the Industrial
Court that the reference proceedings under Section 10 of the I.D. Act were E
incompetent and barred by Section 59 of the Maharashtra Act. The Industrial
Court upheld this objection and reference under Section 10 of the I.D. Act
was disposed of. The Labour Court dismissed the complaint filed by the
respondent. revision petition filed by the respondent was also dismissed by
the Industrial Tribunal upholding the findings of the Labour Court that the
appellant had not engaged in any 'unfair labour practice'. F

The respondent then filed a writ petition under Articles 226 and 227
of the Constitution challenging the decision rendered by both the Courts
below. In the writ petition the respondent requested the High Court to call
for the record and proceedings of the Revision Petition and after perusal G
thereof to quash and set aside the orders passed by the Labour Court and
Industrial Court. The respondent averred in the writ petition that, while
interpreting the provisions contained in Sections 9-A, 20 and 33 and other
provisions of the I.D. Act, the courts below had put an interpretation alien
to industrial jurisprudence and had thus committed serious error of law
apparent on the face of the record which resulted in serious miscarriage of H
912 SUPREME COURT REPORTS [1999] 3 S.C.R.

A justice and also in failure to exercise the jurisdiction vested in the courts
below under the provisions of the Maharashtra Act It was also averred that
the impugned orders of the Courts below had further resulted in infrac~ion
of the respondent's fundamental rights guaranteed under Articles 14, 21
and other Articles as enshrined in the Constitution.

B · The writ petition was dismissed by a Single Judge of the High Court.
The respondent thereafter preferred Letters Patent Appeal before the Division
Bench of the High Court under Clause 15 of the Letters Patent. The Division
Bench heard the appeal on merits and held that the appellant had engaged
in 'unfair labour practice' under Items l(a), (b) (d) and (t) of Schedule IV of
C the Maharashtra Act and the appellant was directed to pay back wages and
other benefits to the respondent from the date of the order of retrenchment
i.e. 22-6-1982 till the date of his retirement as he had also got superannuated
in the meantime. Hence this appeal.

On behalf of the appellant it was contended that the writ petition filed
D by the respondent was in substance under Article 227 of the constitution and
hence was not maintainable under Clause 15 of the Letters Patent; that even
if the appeal was maintainable the Division Bench had patently erred in
taking the view that notice under Section 9-A of the I.D. Act was illegal and
inoperative; that the decision of the Division Bench that the respondent's
E complaint was maintainable and that by passing the impugned order of
retrenchmer..t the appellant had resorted to 'unfair labour practice' was
erroneous; that the Division Bench had erred in holding that the impugned
discharge order was violative of Section 33 of the I.D. Act; that in any case
pure finding of fact of courts below that the appellant was not guilty of any
'unfair labour practice' ought not to have been interfered with by the Division
F Bench in the Letters Patent Appeal; that Item No. l of Schedule IV of the
Maharashtra Act dealt with only punitive discharges or dismissals and not
any simpliciter discharge order or termination order which is not passed by
way of punishment and that the principles of interpretation, namely, the
principle of noscitur a sociis as well as the principle of ejusdem generis were
G applicable to the present case.

The following points arose for consideration before this Court :

1. Whether the respondent's Letters Patent Appeal was
maintainable;

H 2. If yes, whether the Division Bench was right in taking the view
LOKMAT NEWSPAPERS PVT. LTD. v. S. PRASAD 913
that the impugned retrenchment order was violative of Section A
· 33(1) of the I.D. Act;
3. Whether the appellant, in issuing the said order, had violated
the provisions of Section 9-A of the I.D. Act;
4. Whether the impugned retrenchment order amounted to the
commission of 'unfair labour practice' by the appellant as per B
Schedule IV Items l(a), (b) (d) and (f) of the Maharashtra Act;
5. Whether the Division Bench was justified in interfering with
the findings of fact arrived at by the authorities below and as
confirmed by the Single Judge while deciding the aforesaid
question of'unfair labour practice'; C
6• What final order could be passed?
.Dismissing the appeal, this Court

HELD : Point No. 1 :
D
1.1. The writ petition invoking jurisdiction of the High Court both
under Articles 226 and 227 of the Constitution had tried to make out a case
for the High Court's interference seeking issuance of an appropriate Writ
of Certiorari under Article 226 of the Constitution of India. It is true that
the order of the Single Judge nowhere stated that the Court was considering
the writ petition under Article 226. It is equally true that the Single Judge E
dismissed the writ petition by observing that the Courts below had appreciated
the contentions and rejected the complaint. But the said observation of the
Single Judge did not necessarily mean that he did not in~line to interfere
under Article 227 only when he dismissed the writ petition of the respondent
The said observation equally supports the conclusion that the Single Judge F
was not inclined to interfere under Articles 226 and 227. He was considering
the aforesaid writ petition moved under Article 226 as well as 227.
[930-H; 931-A-D)
1.2. It was open to the respondent to invoke the jurisdiction of the High
Court both under Articles 226 and 227. Once such jurisdiction was invoked G
and when his writ petition was dismissed on merits, it cannot be said that
the Single Judge had exercised his jurisdiction only under Article 227. This
conclusion directly flows from the relevant averments made in the writ
petition and the nature of jurisdiction invoked by the respondent •.
Consequently, it could not be said that Clause 15 of the Letters Patent was
not attracted for preferring appeal against the judgement of the Single H
914 SUPREME COURT REPORTS (1999] 3 S.C.R. :

A Judge. The appellant being respondent in Letters Patent Appeal joined issues
on merits and did not take up the contention that the Letters Patent Appeal
was not maintainable. For all these reasons, therefore, the primary objection
to the maintainability of the Letters Patent Appeal has to be repelled.
[9~2-C-E]

B Umaji Keshao Meshram v. Radhikabai, (1986] Supp. SCC 401, relied
on.
Point No. 2:
2.1. The question of violation of Section 33(1) of the Industrial Disputes
Act, 1947 has a direct nexus with the further question whether on 22-6-1982
C when the impugned termination order was passed, conciliation proceedings
were pending before the authority or not. (935-B]
2.2. There is no doubt that after closing the investigation and after
having arrived at the conclusion that no settlement is possible between the
parties, the Conciliation Officer has to sp·end some more time .before
D submitting his detailed written report under Section 12(4) of the I.D. Act
about failure of conciliation, for information and necessary action by the
State Government. In the very nature of things, therefore, such requirement
will take at least a couple of days, if not more, for the conciliator after
closing the investigation to enable him to send an appropriate report to the
State Government. It is not possible to accept the contention of the appellant
E that closure of investigation automatically amounted to termination of
conciliation proceedings and that after the closure of investigation the
conciliator became functus officio and the Management could not have
approached him for express written permission to pass the impugned order.
Closure of investigation by the conciliator is not the same as closure of
F conciliation proceedings. The legislature while enacting Section 12(4) has
deliberately not used the words 'closure of conciliation'.
(935-F-G; 936-C-D; F-G] .l
2.3. It becomes obvious from Section 20(2) that the legislature has
introrluced by way of a legal fiction an irrebuttable presumption as per sub-
G clause (b) of Section 20(2) that when during conciliation proceedings no
settlement is arrived at between the parties, the conciliation proceedings
initiated under Section 12(1) whether of a discretionary nature or of a
mandatory nature shall be treated to have continued and only to have concluded
when the failure report reaches the appropriate Government. Conciliation
proceedings, which are deemed not to have concluded, must be deemed to
H have continued or remained pending. That which is not concluded is pending,
LOKMAT NEWSPAPERS PVT. LTD. v. S. PRASAD 915
equally that which is pending cannot be said to be concluded. During the A
interregnum of necessity such conciliation proceedings have to be treated
as pending before the conciliation officer. Legal fiction created by Section
. 20(2) is for the purpose of laying down as to till what sHtg~iconciliation
-proceedings can bt said to be pending and whe,11 they can be _said to have
concluded. The legal fiction, which is created for t_hat purpose by Section
,. 20(2), has to be given its full effect for fructifying the said legislative B
intention. [937-F-G; 938-A-B; 940-B; 939-F-~)
Andheri Maro/ Kur/a Bus Service v. State of Bombay, AIR (1959) SC
841, relied on.
Chemicals & Fibres of India Ltd v. D.G. Bhoir, [1975] 4 SCC 332, held
inapplicable.
c
Bengal Immunity Co. Ltd v. State ofBihcir, AIR (1955) SC 661, referred
to.
Workers v. Industry Colliery, AIR (1953) SC 88 and Colliery Mazdoor
Congress v. New Beerbhoom Coal Co. Lid., 1952 Lab AC 219, cited. D
2.4. Conciliation proceedings would terminate only as provided by
Section 20(2)(b) of the I.D. Act. Meaning thereby, till the failure report
reaches the appropriate State Government, conciliation proceedings cannot
be said to have terminated. Hence, Breach of Section 33(1) of the I.D. Act
during the pendency of such proceedings could attract penal liability of the E
employer under Section 31(1) of the I.D. Act. [941-G-H]
2.5. Admittedly, after the closure Qf investigation on 22-6-1982 when
the conciliator sent the failure report, it reached the State Government only
on 13-8-1982. Therefore, it has to be held that the conciliation proceedings
in the present case had not terminated an~ got concluded only on 13-8-1982 F
as per the aforesaid statutory presumption created by the legal fiction provided
in Section 20(2)(b). Therefore, as a necessary corollary, it must be held that
these conciliation proceedings were pending till 13-8-1982. Therefore, on
22-6-1982 when the order of retrenchment was passed against the respondent,
the appellant-Management had committed breach ofSection.33(1) of the I.D.
Act by not passing the said order after obtaining express previous permission
G
..... in writing of the Conciliation Officer before whom the conciliation proceedings
must be held to be pending in the evening of 22-6-1982. The impugned
retrenchment order must'be held to be illegal being contrary to the aforesaid
provision of the I.D. Act. [937-G-H; 938-A; 942-D-EJ
Point No. 3: H
-i
916 SUPREME COURT REPORTS [l 999] 3 S.C.R.

A 3.1. It must.be held on the very wordings of Section 9-A read with Item ·
No. 10 of the Fourth Schedule of the I.D. Act "that any management which
seeks to introduce a new working pattern for its existing work force by any
future scheme of rationalisation, standardisation or improvement of plant or
technique which has a tendency to lead to future retrenchment of workmen"
B has to give prior notice of proposed change to the workmen who can get an
opportunity to show that they may not be retrenched because of the new
scheme of rationalisation etc. which is in the offing and can suggest ways
and 111eans available to the management to avoid such proposed retrenchment
of the workmen despite such introduction of a new scheme. If the proposed
scheme of rationalisation has a likelihood of rendering existing workmen
C surplus and liable to retrenchment, then Item No. 10 of Schedule IV would
squarely get attracted. It, therefore, follows that before effecting su~h a
change, meaning thereby, before introducing such a rationalisation scheme
which has a tendency to change the conditions of service of workmen, notice
under Section 9-A of the I.D. Act as a condition precedent becomes a must.
Such a notice under Section 9-A must precede the introduction of
D rationalisation concerned; it cannot follow the introduction of such a .
rationalisation. But if the proposed scheme is not likely to displace any
existing workmen then mere rationalisation which has no nexus with the
possibility offuture retrenchment of workmen would not attract Item No.10
of Schedule IV of the I.D. Act and would remain a benign scheme of
E rationalisation having no pernicious effect on the existing working staff.
[944-B-D; 949-G-H; 950-A]
North Brook Jute Co. Ltd v. Worhnen, [1960) 3 SCR 364 and Hindustan
Lever Ltd. v. Ram Mohan Ray, [1973] 4 SCC 141, relied on.

3.2. It is not possible to accept the contention of the appellant t!lat a
F machine can be introduced on an experimental basis first or even after it has
....I-
already worked for some time and is required to be continued as a full-
fledged machine, as and when the employer decides to terminate the services
of the workmen as a direct consequence of such introduction of machine, he
can give notice under Section 9-A of the I.D. Act at any such time. If such
G a contention is acc~pted then the very scheme of Section 9-A read with
Schedule IV Item No. 10 of the I.D. Act would be rendered ineffective and
inoperative. The purpose of issuing such a· notice prior to the ~ntroduction
of the scheme of rationalisation would get frustrated and then there would
remain no effective opportunity for the conciliator to try to arrive at an
amicable settlement regarding the dispute centering around the proposed
H introduction of the scheme of rationalisation which is likely to result in the
LOKMAT NEWSPAPERS PVT. LTD. v. S. PRASAD 917
retrenchment of workmen. Equally there would remain no opportunity for A
the State Government on receipt of failure report from the conciliator to
make a reference of such live industrial dispute for adjudication by the
competent Court on merits. (948-B-D]

3.3. When such a dispute-regarding the proposed introduction of the
rationalisation scheme is referred for adjudication of the competent Court, B
the said Court after hearing the parties and considering the evidence can
come to the conclusion whether the proposed scheme is justified on facts or
not and whether any violation of the provisions of Section 9-A had resulted
in illegality of the consequential orders of retrenchment. Such competent
Coul't can also accordingly pass appropriate consequential orders directing C
the management to withdraw such a scheme of rationalisation or in any case,
can order reinstatement of workmen with proper back wages if such
retrenchment is found to be illegal on account of failure to comply with the
provisions of Section 9-A of the I.D. Act. [948-D-F)

3.4. Admittedly, in the composing department of the appellant where D
the respondent was working, composing work was earlier being done-by
hand i.e. manually. That was the existing condition of service of the respondent
By substitution of that type of wo·rk by mechanical work having resorted to
photo-type-composition through machine, the then existing service condition
of the respondent was bound to be affected adversely. Consequently, before E
introducing such a change in the condition of service of the respondent by
installing photo type composing machine, introduction of which was directly
likely to lead to retrenchment of the respondent, a notice under Section 9-
A was a must The appellant had already installed such a photo-type machine
in January 1981. Therefore, such a notice could have been sent before
.January 1981 when such a machine was brought in the premises as an F
experimental measure or at least before 4-11-1981 when the same was
continued to be installed as a confirmed necessary component of machinery
for printing at the appellant's premises at Nagpur. If such a notice was given
to the respondent workman and other workmen similarly situated they could
have persuaded the appellant to resort to any other type of rationalisation or G
-to absorb them on suitable jobs in the same premises in any other department
of the appellant at Nagpur. That opportunity was never made available to the
respondent. Therefore, notice under Section 9-A issued after installation of
the machine and after ~ringing into force the rationalisation scheme was ex
facie a still born and incompetent notice and was clearly violative of the
provisions of Section 9-A of the I.D. Act which amounted to putting the cart H
918 SUPREME COURT REPORTS [1999) 3 S.C.R.

A before the horse. Such an incompetent and illegal notice under Section 9-
A could not legally enable the appellant to terminate the services of the
respondent. The foundation of the impugned order of discharge is the no*1ce
under Section 9-A dated 25-3-1982. Once that foundation is knocked off as
incompetent, illegal and uncalled for the entire edifice of retrenchment
B order against the respondent falls to the ground.
(944-D-F; 946-B-D; 947-A-B]

3.5. It must, therefore, be held that the impugned termination or
discharge of the respondent was violative of the provisions of Section 9-A of
the I.D. Act and he was discharged from service without the appellant's
C following the mandatory requirements of Section 9-A of the LD. Act. Effect
of non-compliance of Section 9-A of the I.D. Act renders the change in
conditions of service void ab initio. [950-C-D]

Point No. 4:

4.1. Before the principle of noscitur a sociis can be pressed in service,
D it must be shown that both the words 'discharge' and 'dismissal' are employed
by the Legislature in Item No. 1 of Schedule IV of the Maharashtra
(Recognition of Trade Unions and Prevention of Unfair Labour'Practices)
Act, 1971 in the same sense or that they are susceptible of analogous
meaning. This rule of construction in other words lays down : "The meaning
E of a word is to be judged by the company it keeps". "It is a legitimate rule
of construction to construe words in an Act of parliament with reference to
words found in immediate connection with them". It has, therefore, to be seen
whether in the settings of Item No. 1 clauses (a) to (g) the word 'discharge'
as employed by the Legislature has meaning analogous to that of the word
'dismiss'. (953-E-H]
F
MK. Ranganathan v. Govt. of madras, AIR (1955) SC 604, ~elied on.

Angus Robertson v. George Day, (1879) 5 AC 63 and Maxwell : "The
Interpretation of Statutes", l21h Edn. p. 289, referred to.

G 4.2. The word 'discharge' is not intended by the Legislature to have the
same or analogous meaning as the word 'dismiss'. The word 'dismiss' J
necessarily connotes an action of th~ employer who seeks to impose
punishment on his misconducting employee. Such a punishment cannot be
imposed without following the principles of natural justice and the relevan~
applicable rules of domestic inquiry. But the word 'discharge' is not
H necessarily confined to orders of termination by way of penalty only. The
LOKMAT NEWSPAPERS.,PVT. LTD. v. S. PRASAD 919
word 'discharge' has wider connotations. A misconducting employee facing A
• charges in a domestic inquiry may be punished by way of imposing on him
an order of dismissal which may make him ineligible for any other
employment but if it is found that the charges which are proved are not that
serious but the employee would not deserve to be continued in service then
an order of discharge by way of lesser penalty can be imposed on him. Such
an order would remain a punitive discharge. Thereby the employer wants to B
punish the employee for his misconduct but does not want him to become
ineligible for employment elsewhere considering the less serious nature of
proved charges of misconduct against him in domestic inquiry. But that is
not the end of the matter. In service jurisprudence the term 'discharge' has
assumed a wider connotation and may include in its fold not only punitive c
discharge orders but also simpliciter discharge orders where the employer
seeks to snap the relationship of employer and em1>loyee but without any
intention to penalise the employee. He does so because of exigencies of
service and employment conditions, which may require him to say goodbye
to the employee, but without any intention to punish him. Such simpliciter
discharge orders are-also a category of discharge orders. D
[954-A-E; 955-A]
4.3. Therefore, when the Legislature used the words 'discharge' or
dismissal' of the employee under circumstances enumerated in clauses (a)
to (g) in Item No. 1 of Schedule IV of the Maharashtra Act it contemplated
dismissal orders which obviously are penal in nature but it also contemplated E
discharge orders which may either be penal or non-penal in nature and still
if any of the relevant clauses of Item No. 1 got attracted in connection with
such discharge orders they would make the employer author of such discharge
orders and answerable for the alleged 'unfair labour practice' permeating
the passing of such simpliciter discharge orders. [956-F-G] F
4.4. In the l>resent case, the respondent's complaint is not that his
discharge was by way of penalty but his complaint is that the discharge order
in his case was a result of victimisation and was not passed in good faith but
was l>assed on patently false reasons and was a result of undue ha!l1e on the
part of the appellant-employer. Whether the said complaint was justified on
merits or not is a different matter but it cannot be said that such a complaint o/
';. regarding non-11enal discharge order was de hors the scope and ambit of Item
No. 1 of Schedule IV of the Maharashtra Act. [956-H; 957-A-B]

4.5. The principle of ejusdem generis cannot also be invoked in
connection with Item No. 1 of Schedule IV of the Maharashtra Act. The word H
920 SUPREME COURT REPORTS [1999] 3 S.C.R.

A 'discharge' is a general word. It is followed by the word 'dismissal', which
t
contemplates only one category of cases, or situations where penalty is
imposed by the employer on the workmen concerned. The rule of ejusdem
generis would have ap1>lied if the work 'discharge' represented a particular
species belonging to the genus reflected by the general word 'dismiss'. This
B is a converse case where a general word 'discharge' is followed by the word
'dismiss' which is of a particular nature or pe1iains to a limited class or
category of penal situations. Obviously, therefore, neither of them is a genus
and none of them is a species of the very same genus. The word 'discharge'
connotes an entirely different category of orders comprising of both smpliciter
discharge orders not by way of penalty as well as discharge orders by way
C of penalty but not involving extremely pernicious results flowing form such
orders while the word 'dismiss' is purely an order of penalty and that too
of an extreme type. On the contrary, the words 'discharge' and 'dismissal'
as employed by the Legislature in Item No. 1 of Schedule IV covered different
types of situations and circumstances under which they arc passed. It is,
therefore, not possible to agree with the contention of the appellant that
D unless the res1>0ndent shows that he was discharged by way of penalty, he
cannot invoke any. of the clauses of Item No. 1 of Schedule IV of the
Maharashtra Act. (957-E-H; 958-A)

K. Kandaswamy v. Union ofIndia, JT (1995) 7 SC 80 and High Court
E of Judicature at Patna v. Pandey Madan Mohan Frasad Sinha, (1997] 10
sec 409, relied on
State ofRajasthan v. Sripal Jain, [1964] 1 SCR 742, held inapplicable.

4.6. An employee who makes a grievance against an order of discharge
F or dismissal passed against him can invoke any of the listed clauses (a) to
(g) of Item No. 1 of Schedule IV of the Maharashtra Act; first it should be
alleged by the complainant-employee that he was discharged or dismissed
from service by the employer and then he has to further show whether such
an order attracted any of the cJauses (a) to (g) of Item No. 1 of Schedule IV
G of the Maharashtra Act. (952-F-H; 953-A)

4. 7. In the present case the appellant wanted to switch over to the
process of composing by utilising photo-type setting machine and in the
process the hand-composing department engaging the respondent and other
workmen had to be wound up. That naturally resulted in the employees in
H the erstwhile hand-composing department becoming excess and surplus.
LOKMAT NEWSPAPERS PVT. LTD. v. S. PRASAD 921
Th·at is the reason why the impugned notice under Section 9-A of the I.D. · A
Act was issued to the responde.nt and other workll'len and ultimately resulted
in the impugned retrenchment order. Such an action on the part of the
appellant cannot be treated to h~ve been the result of victimisation. The
respondent was not being victimised for any extraneous reason. On the
contrary, it was based on a genuine factual reason. [959-D-F)
B
4. 7. The term 'victimisation' is a term of comprehensive import. Thus,
if a person is made to suffer by treatment, it would amount to victimisation.
On the facts of the present case, therefore, it is not possible to hold that the
impugned discharge of the respondent was based on non-germane or
extraneous reasons or it was passed with a view to making the respondent
suffer for no real reason. Therefore, Item No. 1 clause (a) of Schedule IV C
of the Maharashtra Act does not apply to the facts of the present case.
/ [959-F-H; 960-A)
Colour-Chem Ltd. v. A.L. Alaspurkar, [1998] 1 SCALE 432, relied on.
4.8. On a parity of reasoning it has to be held that the discharge of the D
respondent from service cannot be said to be not-in good faith but in the
colourable exercise of employer's rights. The appellant had good re'ason to
discharge the respondent who was rendered surplus in hand-composing
department because of the introduction of the machine in question. It is
difficult to impute any bad faith to the appellant as the appellant tried its best
to provide alternative job to the respondent at Jalgaon but the said offer was E
not accepted by the respondent and, on the contrary, the transfer order was
got declared illegal and an act of 'unfair labour practice' in proceedings
culminating before the Tribunal. Clause (b) ofltem No. 1 of Schedule IV of
the Maharashtra Act, therefore, is also not attracted on the facts. of the

- present case. [960-B-C]
4.9. Clause (d) ofltem No. 1 of Schedule IV of the Maharashtra Act
F

can be attracted only if it is shown that the impugned termination was for
patently false reasons. The appellant had a genuine reason for terminating
the services of the respondent as hand-composing department had become
redundant on account of the introduction of the machine in question. It G
.... cannot be held that the proposed t_ermination was not based on real reason
or was effected on patently false reasons. If no such machine was ever
introduced and still such a ground was made out for passing the impugned
order, then it could have been said that the impugned termination was passed
on patently false reasons. The patently false reason would be one, which has
no existence at all in fact and is a mere pretext or an excuse. Such is not H
922 SUPREME COURT REPORTS [1999] 3 S.C.R.

A the situation in the present case. It may be that the reason given may not
be strictly accurate in the sense the machine was already introduced and was
not likely to be introduced by the time notice under Section 9-A of the I.D.
Act was given followed by the impugned termination order. That may have
I . •
the effect of non-compliance of tbe provisions of Section 9-A. The said notice
B on that score may become inoperative or illegal. Still the reason for
termination cannot be said to be patently false. [960-D-H; 961-A]

4.10. The order of discharge whether punitive or non-punitive if found
to be the result of undue haste on the part of the employer/ ~~e inevitable
result will be that the employer would be guilty of 'unfair labour practice'
C as laid down by Schedule IV Item No. 1 clause (t) second part.'ln the present
case, the conciliation proceedings had not terminated when the impugned
order was passed. The result was that Section 33(1) of the I.D. Act got
violated and the appellant become liable to be punished as per Section 31(1)
of the I.D. Act incurring a penalty for being convicted of an offence punishable
with imprisonment for a term which may extend to 6 months ~r wiih fine or
D with both. Thus the impugned order cannot but be held to have be'en passed
with undue haste. The intention behind passing such a hurried order was
obviously to cut across and pre-empt the submission of failure report by the
conciliator on the one hand and its consideration by the State on the other
and even for avoiding the future possibility of a reference under the I.D. Act
E and also the future possibility of tile Court's intervention by way of interim
relief against such order. But to crown it all by such undue hurry the
appellant made it liable to be punished and incurred a criminal liability for
the same. [961-C-D; 963-C-E] \ .
Hotel Imperial v. Hotel Workers' Union, AIR (1959) SC 1342 and The
Hind Cycles Ltd v. Workmen, AIR (197~C 588, referred to.
F ' \\ i ..
4.11. AS the Conciliation Officer, jlfter hearing the parties, had declared
that investigation was over and settlement had not taken place, at least a few
days were available after 22-6-1982 to the appellant for moving the
Conciliation Officer to give the appellant permission to retrench the
G respondent. It was possible that if such a request was made by the appellant
it could have been granted or it could have been rejected. If such a request
was rejected by the conciliator then, of course, the impugned order could not
have seen the light of the day and if thereafter the State Government had
made .the reference after reading the failure report, then the existing position
regarding the service condition of the respondent could have been continued
H by the Reference Court pending. the adjudication of such a dispute. The
LOKMATNEWSPAPERS PVT. LTD. v. S. PRASAD 923

appellant with a view to avoiding all these uncomfortable situations indulged A
in self-hel11 and llassed the impugned order on the very evening of 22-6-1982.
This is an additional facet of the deliberate undue haste resorted to by the
appellant for short circuiting all possible inconvenient situations and to
1uesent the respondent with afait accompli and also to placate the Conciliation
Officer on the one hand and the State Government on the other and ultimately
the Reference Court also. Consequently it must be held that the impugned B
order was clearly a result of undue haste and, obviosuly amounted to 'unfair
labour practice' on the part of the a11pellant as per Schedule IV Item No. 1
Clause (t) second part. [693-G-H; 694-D-E]

Point No. 5: c
5. In the Present case the Labour Court itself has found that notice
under Section 9-A was a belated one and should have been given at least by
November 1981 when the machine in question became fully operative resulting
in displacement of workers in hand-composing department. Still by curious
reasoning, it has been held that there was nothing wrong with the notice D
though given belatedly and that the termination order was also not offending
Section 33(1) of the LD. Act. These findings show patent errors of law and
could not be sustained. The Industrial Court, on the other hand, came to an
equally erroneous finding on the applicability ofltem No. 10 of Schedule IV
of the LD. Act when it held that the said Item would apply not at the time when E
the rationalisation scheme was introduced, but at the time when the employer
desired or decided to terminate the services of the employees. This reasoning
of the Industrial Court is contrary to the very scheme of Item 10 of Schedule
IV of the LD. Act and totally ignores the term 'like~y to lead to retrenchment'
as found in the said Item. These patent errors oflaw committed by the Labour
Court and the Industrial Court were totally by passed by the Single Judge F
while he dismissed the write petition. These patent errors of law, therefore,
were rightly set aside by the Division Bench of the High Court in the Letters
Patent Appeal. It could not, therefore, be said that the impugned judgement
had tried to interfere with the pure findings of the fact reached by the
authorities below on evidence against the respondent It was perfectly open G
to the Appellate Court in the hierarchy of proceedings to interfere with such
patent errors of law and to correct them, othenvise it could have been said
that it had failed to discharge its duty and that would have also amounted to
failure to exercise jurisdiction on its part. The aforesaid point is, therefore,
answered in the affirmative against the a11pellant and in favour of the.
respondent by holding that the Appellate Court had corrected patent errors H
i-

924 SUPREME COURT REPORTS [1999] 3 S.C.R.

A of law and had not interfered with pure findings of the facts not connected
with the relevant questions of law with which they were intertwined.
[964-G-H; 965-A-E]
Point No. 6:

6.1. The respondent's services were terminated on 22-6-1982 and that
B the termination is found to be amounting to unfair labour practice' as per
the provisions of Section 30 of the Maharashtra Act On this conclusion, the
appellant has to be asked to withdraw such 'unfair labour practice~, meaning
thereby, the impugned order has to be set aside and, thereafter, affirmative
action including reinstatement of the employee with or without back wages
C could be ordered by the Labour Comi in these proceedings. However, as the
High Comi has noted that reinstatement is out of question as the respondent
has reached the age of superannuation, in the meantime, with effect from 3-
5-1995, therefore, at the highest the respondent is entitled to back wages
for 13 years with gratuity and other retirement benefits. That is precisely
what is ordered by the High Court in the impugned judgement However, even
D before the conciliator the respondent's union or behalf of its members
including the present res1iondent who were all facing retrenchment suggested
that they were prepared to accept compensation @4 months' wages per every
completed year of service with a view to settling the dispute. But this proposal
did not find favour with the management Years rolled by thereafter and the
E compromise did not go through. The respondent has been denied not only
back wages but also interest on the said amount, which would have been
available to him years back. However, there is nothing on record to show that
the respondent was gainfully em1>loyed or was not employed in any alternative
avocation during all these years. It is, of course, true that it was for the
ap1>ellant to point out as to how 1:,'I'ant of back wages should be reduced on
F account of the gainful employment of the respondent, in the meantime. Such
an effort was not made by the appellant. However, the appellant has tried its
best to accommodate the respondent in alternative e~ployment at Jalgaon
where the hand-composing de1>artment was working. If the respondent accepted
the said offer he would have earned his full wages all throughout tiil
G retirement. Thus in a way the respondent also was responsible for the
unfortunate situation in which he found himself during all these years. The
complaint filed as early as on 25-6-1982 remained dismissed in the hierarchy
of proceedings from the Labour Cou_rt onwards up to the Single Judge's
decision in the High Court and it is only in the Letters Patent Appeal that
the res1iondent ultimately succeeded. Considering all these aspects interest
H of the justice will be served if, while confirming the final order of the High
LOKMATNEWSPAPERS PVT. LTD. v. S. PRASAD 925
Court impugned in this appeal, a modification is made regarding back wages A
payable to the respondent. This is required also in view of the further fact
that the conclusion of the Division Bench of the High Court that the appellant
was guilty of 'unfair labour practice' under Item No. l(a), (b) and (d) of
Schedule IV of the Maharashtra Act is not acceptable to this Court and the
decision of the High Court is being confirmed regarding 'unfair labour B
practice' of the appellant only under Item l(f) second part of schedule IV of
the said Act. While considering the grant of appropriate back wages, it is
deemed fit to adopt the same yardstick, which was suggested by the respondent-
workman 's union for all its members including the respondent that one third
of back wages for each completed year of service would be acceptable to them.
[965-F-H; 966-A-H; 967-A-B] C
6.2. In view of the above, the final order of the High Court is modified
to the following extent :

(a) The appeal of the respondent before the High Court will be treated
to be allowed by holding that the appellant management had indulged in D
'unfair labour practice' only under Item l (f) second part of Schedule IV of
the Maharashtra Act with rhe consequential direction that the appellant was
not to indulge into and desist from indulging into such 'unfair labour practice'.
(967-C]

(b)The appellant shall pay to the respondent-workman 113n1(i.e.33% E
approximately) of back wages with all other consequential benefits from 22-
6-1982 till the date of his superannuation i.e. 3-5-1995~ The said amount
shall be paid by the appellant to the respondent within a period of 3 months
from the date of this judgement and in case of failure to pay the said amount
within that_ time, the appellant shall be liable to pay the said amount with
running interest of 12% on the expiry of 3 months from the date of this F
judgement tiII the date of actual payment. The judgement and final order of
the High Court impugned in this appeal, is modified accordingly.[967-D-E]

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3826 of
1999.
G
From the Judgment and order dated 6-11-1996 of the Bombay High
Court in L.P.A. No. 24of1991.

H. W. Dhabe, Manish Pitale and A.K. Sanghi for the Appellant.

S.D. Thakur and Ms. Chandan Ramamurthi for the Respondent. H
926 SUPREME COURT REPORTS [I 999] 3 S.C.R.

A The judgement of the court was delivered by

S.B. MAJMUDAR, J. Leave granted.
-
We have heard learned counsel for the parties finally in this appeal. It
is being disposed of by this judgment.
B
The ques~ion involved in this appeal at the instance of the appellant-
management pertains to the legality and validity of the discharge of the
respondent-employee and also calls for the decision as to whether the said
discharge order amounted to 'unfair labour practice' on the part of the
management. A few relevant facts are required to be noted at the outset.
c
~Introductory facts:

The respondent was working in the composing department of the
appellant at Nagpur in Maharashtra State when his services were terminated.
He was a foreman in the composing department of the appellant. The appellant
D is a company engaged in the publication ofa Marathi daily named 'Lokmat'.
The appellant has its registered office at Nagpur ansJ1 Lokmat is being published
therefrom. In the year 1976, the appellant-company decided to start publication
of Jalgaon Edition of the said paper and for that purpose set up an establishment
at Jalgaon in the eastern district of Maharashtra State. The. Jalgaon Edition
E was composed and printed at Nagpur and was taken to Jalgaon. The composing
of both the Editions was done by hand composing and printing was done on
rotary printing machine. In 1978, the appellant decided to have composed and
printed part of the Jalgaon Edition at Jalgaon. Since then the Jalgaon Edition
was composed and printed partly at Jalgaon and partly at Nagpur. Then in
1981, the appell~nt installed two photo type composing machines at Nagpur.
F According to the appellant, it was a new technique of rationalisation,
standardisation and improvement of plant or technique. It appears that the
said machine was operated on experimental basis for sometime but by October
1981 it became fully operative. Consequently, the respondent along with 24
other employees, who were working in the hand composing department became
G redundant. Therefore, they were sought to be transferred to Jalgaon District
in the State of Maharashtra where ,another establishment of the appellant was
located. The said orders of transfer were challenged by the respondent and
other employees before the Industrial Court under the provisions of The
Maharashtra [Recognition of Trade Unions & Prevention of Unfair Labour
Practices] Act, 1971 (hereinafter referred to as 'the Maharashtra Act'). The
H Industrial Court, after hearing the parties, took the view that the said transfer
LOKMAT NEWSPAPERS PVT. LTD. v. S. PRASAD [S.B. MAJMUDAR, J.] 927

orders amounted to change in the conditions of service of the complainants A
which resulted into 'unfair labour practice' on the part of the appellab.t. The
said decision of the Industrial Court was rendered on 12th February, 1982. The
order of the Industrial Court was challenged by the appellant before the High
Court by filing Writ Petition No. 630/82. It appears that subsequently the said
Writ Petition was withdrawn. Consequently, the order of the Industrial Tribunal B
calling upon the appellant to withdraw the illegal transfers of the respondent
and others remained a final order. Having realised that the respondent and
other workmen could not be transferred out of Nagpur even though they had
become surplus on account of introduction of t11e aforesaid photo composing
machine, the appellant issued a notice on 25th March, 1982 under Section 9-
A of the Industrial Disputes Act, 1947 (for short the 'I.D. Act') to the C
respondent inter alia, stating that as a result of the installation of photo
composing machine, there was no work available with the appellant so as to
provide the same to t11e respondent and ot11er employees.

The respondent and other employees opposed the said notice and
consequently the Conciliation Officer held conciliation proceedings under D
Section 12 of the I.D. Act. Parties were heard and efforts were made in
conciliation to enable them to amicably settle the dispute but those proceedings
ultimately failed. The Conciliation Officer closed the proceedings on 22.6.1982
and subsequently sent failure report to the State Government. The said report
reached the State Government on 13th August, 1982. In the meantime, once E
the conciliation proceedings were closed, the appellant issued the impugned
discharge order dated 22nd June, 1982 terminating the services of the
respondent. As a consequence thereof, the services of the respondent and
other employees were terminated by following the provisions of Section 25-
F of the I.D. Act.
F
Immediately after the discharge order was served on the respondent, he
filed a complaint on 25.6.1982 before the Labour Court under Section 28 of
the Maharashtra Act alleging that the respondent indulged in 'unfair labour
practice' which falls within the provisions of Schedule -IV item no. 1 (a), (b),
(d) and (t) of the Ma11arashtra Act. The appellant resisted the said proceedings G
and contended that it has not resorted to any 'unfair labour practice' against
the respondent. During the pendency of this complaint, the State Government,
acting on the failure report of the Conciliation Officer, made a reference of the
Industrial dispute under Section 10 of the I.D. Act. The appellant raised an
o~j ection before the Industrial Court, Nagpur, that the reference proceedings
under Section 10 of the l.D. Act were incompetent and barred by Section 59 H
928 SUPREME COURT REPORTS (1999] 3 S.C.R.

A of the Maharashtra Act. As the respondent had already filed complaint under
the Maharashtra Act challenging the very same discharge order, ~ese
objections were upheld by the Industrial Court, Nagpur and reference under
Section 10 of the I.D. Act was disposed of.

The complaint filed by the respondent was dismissed by the Labour
B Court by its order dated 30.1.1990. It was held that the impugned retrenchment
order did not attract any of the provisions of Schedule IV, item no. 1 of the
Maharashtra Act and that the respondent was not guilty of any 'unfair labour
practice' when it passed the impugned retrenchment order against the
respondent.
c The respondent filed a Revision Petition before the Industrial Tribunal,
Nagpur. The said Revision Petition was dismissed by the Tribunal on 22nd
November, 1990 upholding the findings of the Labour Court that the respondent
had not engaged in any 'unfair labour practice'.

D The respondent then filed Writ Petition No. 70 of 1991 under Articles
226 and 227 of the Constitution of India challenging the decision rendered by
both the Courts below. The said Writ Petition was also rejected by the learned
Single Judge on 25th April, 1991. Respondent thereafter preferred Letters
Patent Appeal No. 24of1991 before the Division Bench of the High Court
at Nagpur under Clause 15 of the Letters Patent. The said appeal was heard
E by the Division Bench on merits. The Division Bench, by its orders dated
6.11.1996, held that the appellant had engaged in 'unfair labour practice'
under item I (a), (b), (d) and (f) of Schedule IV of the Maharashtra Act and
hence it was directed to pay back-wages and other benefits to the respondent
from the date of the order of retrenchment i.e. 22.6.1982 till the date of his
F retirement as he had also got superannuated in the meantime. This order of
the Division Bench of the High Court has been brought in challenge by the
appellant- management by way of present appeal on special leave under
Article 136 of the Constitution of India.

Learned counsel appearing for the appellant, at the outset, submitted
G that the Writ Petition filed by the respondent before the High Court was in
substance under Article 227 of the Constitution of India and hence was not
maintainable under Clause 15 of the Letters Patent Appeal. In order to support
this contention, he took us to the relevant averments in the Writ Petition as
well as the order of the learned Single Judge. He also relied on judgments of
this Court to which we will refer hereinafter. His submission was that the
H learned Single Judge had exercised his jurisdiction under Article 227 of the
LOKMAT NEWSPAPERS PVT. LTD. v. S. PRASAD [S.B. MAJMUDAR, J.] 929
Constitution only and, therefore, the Letters Patent Appeal was not A
maintainable. On merits, it was submitted that even if the appeal was
maintainable the Division Bench had patently erred in taking the view that
notice under Section 9-A of the l.D. Act was illegal and inoperative. It was
also contended that the decision of the Division Bench that respondent's
complaint was maintainable and that by passing the impugned order of the B
retrenchment, the appellant had resorted to 'unfair labour practice', was
erroneous. It was further submitted that the Division Bench had erred in
holding that the impugned discharge order was violative of Section 33 of the
I.D. Act and that in any case pure finding of fact of courts below that the
· appellant was not guilty of any 'unfair labour practice' ought not to have
been interfered with by the Division Bench in the Letters Patent Appeal. C

On the other hand, learned counsel for the respondent tried to support
the decision rendered by the Division Bench of the High Court on the points
on which the Bench decided in favour of the respondent. He also submitted
that the appeal under Clause 15 of the Letters Patent was maintainable before
the Division Bench. D
Learned Counsel for the respondent invited our attention to a number
of decisions of this Court in support of the respondent's case on merits. We
shall refer to them in latter part of this judgment when we shall consider these
contentions on merits.
E
In the light of the aforesaid rival contentions, the following points ari~e
for our consideration :

' ' I. Whether the respondent's Letters Patent Appeal was
maintainable;
F
2. If yes, whether the Division Bench was right in taking the view
that the impugned retrenchment order was violative of Section
33 (1) of the l.D. Act;
3. Whether the appellant, in issuing the said order, had violated the
provisions of Section 9-A of the I.D. Act;
G
4. Whether the impugned retrenchment order amounted to the
commission of 'unfair labour practice' by the appellant as per
Schedule IV items I (a), (b), (d) and (f) of the Maharashtra Act;
5. Whether the Division Bench was justified in interfering with the
findings of fact arrived at by the authorities below and as H
930 SUPREME COURT REPORTS [1999] JS.C.R.
\

A confirmed by the learned Single Judge while deciding the
aforesaid question of 'unfair labour practice'; and

6. What final order ?

We shall deal with these points seriatim.

B Point No. 1: So far aStqe question of maintainability of Letters Patent
appeal is concerned, it has to be noted that the Revisional Order was passed
by the Labour Court on respondent's complaint under Section 28 of the
Maharashtra Act. The said order was confirmed by the Industrial Tribunal
under Section 44 of the same Act. Both the courts held that retrenchment of
C the respondent does not amount to any 'unfair labour practice' on the part
of the appellant. These orders were challenged by the respondent by filing
Writ Petition under Articles 226 and 227 of the Constitution of India before
the High Court of Judicature at Bombay, Nagpur Bench. The learned Single
Judge dismissed the said Writ Petition, but his order itself shows that he was
considering the Writ Petition of the respondent which was moved before him
D invoking the High Court's Jurisdiction under Articles 226 and 227 of the
Constitution of India. In the said Writ Petition under Articles 226 and 227 of
the Constitution, the respondent requested the High Court to call for the
record and proceedings of Revision Petition No. 70 of 1990 and after perusal
thereof to be further pleased to quash and set aside the Order dated 30.1.1990
E passed by the Second Labour Court, Nagpur in Complaint No. 262 of 1982 and
order dated 20.l l.1990 passed in Revision by the Industrial Court.

When we turn to the relevant paragraph of the Writ Petition, we find
averments.to the effect that the Courts below, while interpreting the provisions
contained in Sections 9-A, 20 and 33 and other provisions of the I.D. Act,
F 1947 and the rules framed thereunder, had totally lost sight of the object and
purpose of these provisions and had put an interpretation alien to industrial
jurisprudence and had thus committed serious error of law apparent on the
face of the record which resulted in serious miscarriage of justice and also
in failure to exercise the jurisdiction vested in the courts below under the
G provisions of the Maharashtra Act. In para 9 of the Writ Petition, it was \
averred that the impugned orders of the Courts below had further resulted in
infraction of his fundamental rights guaranteed to him under Articles 14, 21
and other Articles as enshrined in the Constitution of India. ·

It is, therefore, obvious that the Writ Petition invoking jurisdiction of
H the High Court both under Articles 226 and 227 of the Con,stitution had tried
LOKMATNEWSPAPERS PVT. LTD. ·v. S. PRASAD (S.B. MAJMUDAR, J.) 931

-. to make out a case for High Court's interference seeking issuance of an A
appropriate Writ of Certiorari under Article 226 of the Constitution of India.
Basic averments for invoking such jurisdiction were already pleaded in the
Writ Petition for High Court's consideration. It is true, as submitted by learned
• counsel for the appellant, that the order of the learned Single Judge nowhere
stated that the Court was considering the Writ Petition under Article 226 of
the Constitution of India. It is equally true that the learned Single Judge B
dismissed the Writ Petition by observing that the Courts below had appreciated
the contentions and rejected the complaint. But the said observation of the
learned Single Judge did not necessarily mean that the learned Judge did not
=- inclined to interfere under article 227 of the Constitution of India only. The
said obser\ration equally supports the conclusion that the learned Judge was c
not inclined to interfere under Articles 226 and 227. As seen-earlier, that he
was considering the aforesaid Writ Petj.tion moved under Articles 226 as well
as 227 of the Constitution of India. Under these circumstances, it is not
possible to agree with the contention of learned counsel for the appellant that
the learned Single Judge had refused to interfere only under Article 227 of
the Constitution of India when he dismissed the Writ Petition of the respondent.
D
In this connection, it is profitable to have a look at the decision of this Court
in the case of Umaji Keshao Meshram and Others v. Radhikabai, widow of
Animdrao Banapurkar and Anr., [1986] Supp SCC 401. In that case 0.
Chinnappa: Reddy and D.P. Madon, JJ.; considered the very same question in
the light of clause 15 of the Letters Patent Appeal of the Bombay High Court. E
Madon J., speaking for the Court in para 107 of the Report at page 473, made
the following pertinent observations :

"Petitions are at times filed both under Articles 226 and 227 of the
Constitution. The case of Hari Vishnu Kamath v. Syed Ahmad Ishaque
before this Court was of such a type. Rule 18 provides that where F
such petitions are filed against orders of the tribunals or authorities
specified in Rule 18 of Chapter XVII ofthe Appellate Side Rules or
against decrees or orders of courts specified in that rule, they shall
/
be heard and finally disposed of by a Single Judge. The question is
whether an appeal would lie from the decision of the Single Judge in
such a case. In our opinion, where the facts justify a party in filing
G
an application either under Articles 226 or 227 of the Constitution, and
the party chooses to file his application under both these articles, in
fairness and justice to such party and in order not to deprive him of
the valuable right of appeal the court ought to treat the application
~ as being made under Article 226, and if in deciding the matter, in the H
-+"

932 SUPREME COURT REPORTS [1999] 3 S.C.R.

A final order the court gives ancillary directions which may pertain to
Article 227, this-ought not to be held to deprive a party of the right
of appeal under Clause 15 of the Letters Patent where the substantial
.Part of the o~d~r sought .to be."appealed agrunst is under Article 226.
Such was the view taken by the Allahabad High Court in Aida/ Singh
v .. Karan Singh and by the Pllnjab High.Court in_Raj Kishan Jain v.
B Tutsi Dass and Barham Dutt v. Peoples' Co-operative Transport
: Society Ltd., New Delhi and we are in a~eemeni with it."

The ·aforesaid qecision squarely gets attracted on the facts- of the
present case. It was open to the respondent to invoke jurisdiction of the High
.c Court both under Articles 226 and 227 of the Constitution of India. Once such
jurisdiction was invoked and when his Writ Petition was dismissed on merits,
it cannot be sa~d that the learned Single Judge had exercised his jurisdiction
only under Artide 226 of the Constitution of India. This conclusion directly
flows from the releyant avenncnts made in the Writ Petition and the nature
of jurisdi~on invoked by the respond~nt as noted by the le;uned Single.
D Judge in his Judgment,· as seen earlier. <;oQsequently, it could not be said that
Clause 15 of th~ Letters Patent Appeal was not attracted for preferring appeal
against the judgment of lt<Clffied Single Judge. It is also necessary to note that
the appellant being -respondent in Letters Patent Appeal joined. issues on
merits and did not take up the contention that Letters Patent Appeal was not
E maintainable. For all these reasons, therefore, the primary objection !o the
maintainability of the Letters Patent Appeal as canvassed by learned c~unsel
for the appellant, has to be repelled. Point No. 1 is, therefore, answered in
affirmative against the appellant and in favour of the respondeii.t: It takes us
to the consideration of points arising for our de~ision on merits .
.·
F Point No. 2: The question of violation of Section 33(1) of ~e LP> Act
requires to be considered in the light of the relevant statutory provisions.
Section 33 as folind in Chapter VII of the I.D. Act, sub-section (1) thereof,
which is relevant for our present discussion, reads ~s under : ·

"33. ConditiOns of service; etc., to remain unchanged under certain
G circumstances during pendency of proceedings.- (1) During the
pendency of any conciliation proceeding before [an arbitrator or] a
Conciliation Officer or a Board or of any proceeding before a Labour
Court or Tribunal or National Tribunal in respect of an industrial
dispute, no employer shall,-

H (a) in regard to any matter connected with the dispute, alter, to the
LOKMAT NEWSPAPERS PVT. LTD. v. S. PRASAD [S.B. MAJMUDAR, J.] 933
prejudice 'Of the workmen concerned in such dispute, the A
conditions of service applicable to them immediately before the
commencement of such proceeding; or

(b) for any misconduct connected with the dispute, discharge or
punish, whether by _dismissal or otherwise, any workman
- concerned in such d[spute; B
save with the express permission in writing of the authority before
which the proceeding is pending."

Now it must be stated that the impugned termination order was passed
against the respondent-workman on 22nd June, 1982. Within three days thereof, C
the respondent raised an industrial dispute by filing a complaint under Section
28 of the Maharashtra Act alleging that the impugned termination order
amounted to 'unfair labour practice'. Before the impugned termination order
was passed by the management, it had already served a notice under Section
9-A of the I.D. Act to the respondents union to the effect that it proposed D
to introduce a change in the conditions of service of the respondent and
other members of the union on the ground that it was proposing to rationalise
the printing work at the appellant's concern at Nagpur by setting up photo-
type machine for carrying out the work of composing, resulting in substantial
reduction in the work of composing by hand. It may be stated that the
respondent was employed as a foreman in the hand-composing department E
of the appellant at the relevant time. The respondent's union objected to tpe
said notice of change and approached the Conciliation Officer under Section
12(1) of the 1.D. Act which reads as under:-

"12. Duties of Conciliation Officers.-( I) Where an industrial dispute
exists or is apprehended, the Conciliation Officer may, or where the F
dispute relates to a public utility service and a notice under Section
22 has been given shall, hold conciliation proceedings in the prescribed
manner."

The Conciliation Officer took the dispute in conciliation within his G
discretion even though as appellant's concern was not a public utility service
it was not mandatory for the Conciliation Officer to start conciliation
proceedings. As the report of the Conciliation Officer submitted to the State
Government shows, he invited the management and the respondent's union
for preliminary discussions on 14.4.1982 in his office and thereafter the matter
was adjourned during conciliation from time to time. H
934 SUPREME COURT REPORTS [1999] 3 S.C.R.

A It can, therefore, be said that by 14th April, 1982 the matter was taken
up for investigation and thus the conciliation proceedings had commenced.
It is also well established on the record of the case that the parties could not
come to any settlement with the result that on 22nd June, 1982 the investigation
was closed by the Conciliation Officer at 4.35 p.m. at Nagpur. Immediately
B thereafter the appellant passed the impugned order of termination against the
respondent and others on the very same day i.e. on 22.6.1982 at 5.00 p.m. The
said order was placed on the notice board of the appellant's office at Nagpur
on the evening of that day. It is not in dispute between the parties that
thereafter the Conciliation Officer submitted his report to the Government
which reached the State Government on 13.8.1982.
c On the aforesaid facts, the question arises whether the impugned
termination order dated 22.6.1982 was passed during the pendency of the
conciliation proceedings. It is not in dispute between the parties that before
passing such an order no express permission in writing was obtained by the
appellant from the Conciliation Officer. The Labour Court, the Industrial Cotirt
D and the learned Single Judge of the High Court have taken the view that
because investigation was closed by the conciliator by 4.35 p.m. on 22.6.1982,
immediately thereafter the conciliation proceedings could be said to have
ended and were not pending before him. Consequently at 5.00 p.m. on that
very day when the appellant issued the impugned order, it did not violate
Section 33 of the l.D. Act. While, on the other hand, the Division Bench of
E the High Court in the impugned judgment has taken the view that merely
because the conciliator closed the investigation in the evening of 22.6.1982
till he prepared his report as per Section 12(4) of the l.D. Act and till that
report reached the Government, conciliation proceedings were deemed to
I
have continued and had not got terminated till 13th August, 1982 and as in
F the meantime on 22.6.1982, the impugned termination order was passed without
following the procedure of Section 33(1) of the l.D. Act it got vitiated in law.
Under these circumstances, a moot question arises whether the impugned
retrenchment order was passed on 22.6.1982 during the pendency of
conciliation proceedings. ,It cannot be disputed that the impugned order was
G directly connected with the matter in dispute before the Conciliation Officer
wherein the question of legality of notice under Section 9-A of the I.D. Act
was under consideration for the purpose of arriving at any settlement between
the parties in this connection. The impugned order had definitely altered to
the prejudice of the respondent his conditions of service. It was not a case
of retrenchment simpliciter but was a consequential retrenchment on the
H introduction of the scheme of rationalisation as contemplated by Section 9-
LOKMATNEWSPAPERS PVT. LTD. v. S. PRASAD (S.B. MAJMUDAR, J.) 935
A read with Schedule IV item no. I of the l.D. Act. A
We shall refer to these provisions in greater detail later on while
considering the question of legality of notice under Section 9-A of the I.D.
Act. For the time being, it is sufficient to note that the question of violation
of Section 33(1) of the I.D. Act has a direct nexus with the furth~r question
whether on 22.6.1982 when the impugned termination order was passed, B
conciliation proceedings were pending before the authority or not.

Jn order to answer these questions, it is necessary to note sub- section
(4) of Section 12 of the I.D. Act which reads as under :

"(4) If no such settlement is arrived at, the conciliation officer shall, C
as soon as practicable after the close of the investigation, send to the
appropriate Government a full report setting forth the steps taken by
him for ascertaining the facts and circumstances relating to the dispute
and for bringing about a settlement thereof, together with a full
statement of such facts and circumstances, and the reasons on account D
of which, in his opinion, a settlement could not be arrived at."

A mere look at this provision shows that if the Conciliation Officer finds
during conciliation proceedings that no settlement is arrived at between the
disputing parties, then after closing the investigation he has, as soon as
practicable, to send to the appropriate Government a full report setting forth E
the steps taken by him for ascertaining the facts and circumstances relating
to the dispute and has also to mention all other details as required to be
mentioned in the report under Section 12(4) of the LO.Act.

The aforesaid statutory requirements leave no room for doubt that after
closing the investigation and after having arrived at the conclusion that no F
settlement is possible between the parties, the Conciliation Officer has to
spend some more time before submitting his detailed written report about
failure of consideration for information and necessary action by the State
.... Government. ln the very nature of things, therefore, such requirement will take
at least a couple of days, if not more, for the conciliator after closing the G
investigation to enable him to send an appropriate report to the State
Government. It is, therefore, obvious that on 22.6.1982 when by 4.35 p.m. the
Conciliation Officer declared that settlement was not possible between the
parties and he closed the investigation, neither his statutory function did not
come to an end nor did he become functus officio. His jurisdiction had to
continue till he submitted his report as per Section 12(4) to the appropriate H
936 SUPREME COURT REPORTS [1999] 3 S.C.R.

A Government. Even such preparation of the report and sending of the s~me
from his end to the appropriate Government would obviously have taken at
least a few days after 22.6.1982. It must, therefore, be held that the conciliator
remained in charge of the conciliation proceedings at least for a couple of
days after 22.6.1982. It is, therefore, difficult to appreciate how within half an
B hour after the closing of investigation by the conciliator and before his
getting even a breathing time to prepare his detailed written report about
failure of conciliation to be sent to the Government as per Section 12(4), the
appellant could persuade itself to presume that conciliation proceedings had
ended and, therefore, it was not required to follow the procedure of Section
33(1) and straightaway could pass the impugned order ofretrenchment within
C 25 minutes of the closing of the investigation by the conciliator on the very
same day. It is difficult to appreciate the reasoning of the Labour Court that
after the closer of investigation the conciliator became functus officio and the
management could not have ~pproached him for express written permission
to pass the impugned order. It is easy to visualise that even on the same day
D Le. on 22.6.1982 or e".'en on the next day, before the conciliator had time even
to start writing his report, such an e'q>ress permission could have been asked
for by the appellant as the conciliator by then could not be said to have
washed his hand off the conciliation proceedings. He remained very much
seized of these proceedings till at least the time the report left his end apart
from the further question whether conciliation proceedings could be said to
E have continued till the report reached the State Government. Thus, on the
express language of Section 12(4) the conclusion is inevitable that closer of
investigation by 4.35 p.m. on 22.6.1982 did not amount to termination of
conciliation proceedings by that very time. The argument of learned counsel
for the appellant was that closer of investigation automatically amounted to
termination of conciliation proceedings .. This argument proceeds on a wrong
F premise that closer of investigation by the conciliator is the same as closer
of conciliation proceedings. The legislature while enacting Section 12(4) has
deliberately not used the words 'closer of conciliation' but, on the contrary,
provided that after closer of investigation something more was required to be
done by the conciliator as laid down under Section 12(4) before he can be
G said to have done away with conciliation proceedings earlier initiated by him.
On this conclusion alone the decision rendered by the Division Bench of the
High Court that the impugned order of termination dated 22.6.1982 was issued
by the appellant without following the procedure of Section 33(1) of the I.D.
Act has to be sustained.

H But.even that apart, sub~sections (1) and (2) of Section 20 of the I.D.
LOKMAT NEWSPAPERS PVT. LT.D. v. S. PRA.SAD [S.B. MAJMUOAR, J.] 937
. .
Act also become relevant in this connection. They read as under :- A
"Commencement and conclusion of proceedings-{1) A conciliation
prQceeding shall be deemed to have commenced on the date on which
a .notice of strike .or lock-out u~der Section 22 is received by the
Conciliation Officer or on the date of the order ~eferring the. dispute B
· to a Board, as the case m~y be. ·

(2) A conciliation proceeding shall be deemed to ·)lave concluded-

(a) where a settlement is arrived.at, when a.memorandum of the
settlement is signed by the parties to the dispute;

(b) where no settlement is. arrived at, when the report of the
c
Conciliation Officer is received by the appropriate Government
or when the report of the 'Board is published under Section 17,
as the case may be ; or
. . .
(c) when a reference is made to a Court, [Labour Court, Tribunal or D
National Tribunal] under Section 10 during the pendency of
conciliation proceedings. · (Emphasis supplied)
. A mere look at the aforesaid provisions shows that in cases of public
utility services referred to in Se~tion 22 (2) .of the· l.D. Act, the conciliation
proceedings shall be deemed to have commenced on the date on which a E
notice of strike or lockout under Section 22 is received by the Conciliation
Officer. That deals with commencement of mandatory conciliation proceedings
as laid down by Section 12(1) read with Section 20(1). But when we come to
Section 20(2), it becomes obvious that the legislature has introduced by way
of legal fiction an irrebutable presumption as per sub-clause (b) of Section
20(2) that when during conciliation proceedings no settlement is arrived at F
between the parties, the conciliation proceedings shall be deemed to have
concluded when the failure report of the Conciliation Officer is received by
the appropriate Government. Consequently, the legislative intention becom.es
clear that conciliation proceedings initiated under Section 12(1) whether :of a
discretionary nature or of a mandatory nature shall be treated to have continued. G
and only to have concluded when. the failure report reaches the .app~priate.
Government. As noted earlier, it is not in dispute between the parties that arter ·
the closer of investigation on 22.6.1982 when the conciliator sent the failure
report, it reached the State Government only on 13.8.1982. Therefore, it has
to be held that the conciliation proceedings in the present case had not got
terminated and got concluded only on 13 .8.1982 as per the aforesaid statutory H
938 SUPREME COURT REPORTS [I 999) 3 S.C.R.

A presumption created by the legal fiction provided in Section 20(2)(b). Therefore,
as a necessary corollary, it must be held that these conciliation proceedings
were pending till 13.8. l 98i It is axiomatic that conciliation proceedings which
are deemed not. to have concluded must be deemed to have continued or
remained pending. That which is not .concluded is pending, equally that
B which is pending cannot be said to be concluded.

Learned counsel for the appellant tried to salvage the situation by
submitting that the deeming fiction created by Section 20(2) of the l.D. Act
referred to only deemed conclusion of the proceedings, but had nothing to
do with the pendency of the proceedings. To' highlight this submission, he
C invited our attention to Section 22(l)(d) and Section 22(2)(d) as well as
Section 23(b) of the l.D. Act. We fail to appreciate how these provisions can
be of any avail to him. Section 22(l)(d) reads as under:

"during the pendency of any conciliation proceedings before a
conciliation officer and seven days after the conclusion of such
D proceedings."

Similar is the wording of Section 22(2)(d). Section 23(b) contains similar
phrase in connection with pending proceedings before the Labour Court or
the Tribunal. All these provisions show that even after the pending
proceedings are concluded for further period of time no strikes or lock- outs
E can be permitted to take place between the parties. But the said provisions
do not indicate that pendency of proceedings is a concept which is different
from the conclusion of such proceedings. On the contrary, the conclusion of
proceedings puts an end to the pendency of such proceedings. Learned
counsel for the appellant in support of his contention seeking a dichotomy
between the concept of pendency and concept of deemed conclusion of
F proceedings placed strong reliance on a decision of this Court in Chemicals
& Fibres of India Ltd. v. D.G. Bhoir & Ors., [1975] 4 SCC 332. In that case
this Court was concerned with entirely a different situation under Section 2A
of the I.D. Act after it was brought on the Statute Book. As per this provision,
an individual dispute raised by workman who had suffered dismissal from
G service was to be considered as an 'industrial dispute' within the meaning of
the relevant provisions of the Act so that such a dispute could be conciliated
upon, arbitrated or could be referred for adjudication before competent
authorities under the Act. For that limited purpose, an individual workman
could be said to have raised an industrial dispute. The question before this
Court was whether raising of such a dispute by an individual workman which
H was not sponsored by a large body of workmen could attract Section 33 of
LOKMAT NEWSPAPERS PVT. LTD. v. S. PRASAD (S.B. MAJMUDAR, J.] 939

the I.D. Act even qua other workmen who had nothing to do with this A
individual dispute. Answering the question in negative, it was held by this
Court that the fiction created by Section 2A had a limited effect and could
not be pressed in service for applicability of Section 33(1) in connection with
lock-out qua other workmen who were not the parties to the said industrial
dispute. In that case during the -pend~ncy of such individual dispute the B
appellant company before this Court discharged about 312 of its employees
and filed 12 applications before the Indµstrial ~ribunal for approval of such
a discharge on the ground that a reference was pending before it. The

- question was whether these applications were maintainable for approval under
Section 33(1) when the dispute which was pending before the Industrial
Tribunal was one under Section 2A of the I.D. Act. In this connection, it was
held by this Court that the legal fiction created by Section 2A had a limited
C

effect and those workmen who were not parties to such a dispute, if had gone
on strike, it could not be said that their strike was necessarily illegal. In para-
5 of the report, it was observed that:

" .. While there is justification for preventing a strike when a dispute D
between the employer and the general body of workmen is pending
adjudication or resolution, it would be too much to expect that the
Legislature intended that a lid should be put on all strikes just because
the case of a single workman was pending .. "
E
We fail to appreciate how this decision can be pressed in service by
learned counsel for the appellant while construing Section 20(2) of the I.D.
Act. That Section, as noted earlier, has created an irrebutable presumption by
way of legal fiction and that presumption covers the very question as to wh~n
conciliation proceedings once commenced can be said to have concluded. In
other words, when they can be said to have not remained in pending. As seen F
earlier, the legal fiction which is created for that purpose by Section 20(2) has
to be given its full effect. As it is well- settled while giving effect to the legal
fiction for the purpose for which it is created by Legislature it has to be given
full play for fructifying the said legislative intention. We cannot allow our
imagination to boggle on that score. It is, of course, true as laid down by the G
Con~titutional Bench of this Court in the case of Bengal Immunity Co. Ltd,
v. State of Bihar and Others, AIR (1955) SC 661 at 680. Das, Actg. C.J.
speaking for the Court in Para 31 of the report, made the following pertinent
observations :

".Legal fictions are created only for some definite purpose. H
940 SUPREME COURT REPORTS [1999] 3 S.C.R.

A xxx xxx xxx
,'•

a legal fiction is to be limited to the purpose for which it was created
and should not be e>.1ended beyond that legitimate field.°."

However, as noted earlier, legal fiction s;reated by Section 20(2) is for
B the purpose of laying down as to tili what stage conciliation proceedings can
9e said to be pending and when they can be said to have concluded. On that
basis if it is held that conciliation proceedings once validly started under
Section 12(1) of the I.D. Act can by way of an irrevocable presumption be
treated to have continued till the failure report reached the appropriate
Government, during the interregnum of necessity such conciliation proceedings
C have to be treated as pending before the Conciliation Officer. In fact, on these
aspects of the inatter, we have a decision of this Court in Andheri Maro/
Kur/a Bus Service & Anr. v. The State ofBombay, AIR (1959) SC 841. In that
case a Bench of two judges of this Court had to consider the question as to
when conciliation proceedings can be said to have concluded under the
D relevant provisions of this very Act. In that case during the admitted pendency
of conciliation proceedings the management had dismissed the workman bus
conductor. However, the submission on the part of the management was that
such dismissal was after the e>.]liry of statutory period of 14 days within
which the conciliation proceedings once Started had to be concluded and as
14 days were already over the dismissal did not attract Section 33(1) and
E consequently the management could not be penalised under Section 31(1) of
the I.D. Act which lays down as under:

"Any employer who contravenes the provisions of Section 33 shall
be punishable with imprisonment for a term which may extend to six
months or with fine which may extend to one thousand rupees, or with
F both."

In the aforesaid factual matrix of the case, this Court in Andheri Maro/
Kur/a Bus Service & Anr v. The State ofBombay, (supra) had to consider the
scope of Section 33(1) read with Section 20(2)(b). On a conjoint reading of
G these relevant provisions at page 841, paragraphs 4 & 5 of the report, J.L.
Kapur J., speaking for the Court, made the following pertinent observations:

" .. The provisions of sub-s. 20(2) apply to all conciliation proceedings
whether in regard to utility services or otherwise. All conciliation
proceedings under this sub-section shall be deemed to have concluded
H in the case where no settlement is reached, when the report of the
LOKMAT NEWSPAPERS PVT. LTD. v. S. PRASAD [S.B. MAJMUDAR, J.] 941
Conciliation Officer is received by the appropriate· Government. The A
conciliation proceedings therefore do not end when the report under
S.12(6)° is made by the Conciliatiori Officer but when·that report is
received by the appropriate Government. It was contended that the
conciliation proceedings should be held to terminate when the
Conciliation Officer is required under S..12(6) of the Act to submit his B
report but the provisions of the Act above ·quoted do not support this
contention as the tennination of the conciliation proceedings is deemed
to take pface when the· report is received by th_e appropriate
Government. That is how S.20(2)(b) was interpreted in Workers of the
Industry Colliery Dhanbad v. Management of the Industry Colliery,
[1953] SCR428: (AIR 1953 SC88). C
It was next contended that on this interpretation the conciliation
proceedings could.be prolonged much beyond what was contemplated by the
Act and the termination would depend upon how soon a report is received
by the appropriate Government. It is true that S.12(6) of the Act contemplates
the submission of the report by the Conciliation Officer within 14 days but D
that does not affect the pendency of the conciliation proceedings and if for
some reason the Conciliation Officer delays the submission of his report his
action may be reprehensible but that will not affect the interpretation to be
put on S.20(2)(b) of the Act. Section 12 lays down the duties of the Conciliation
Officer. He is required to bring about settlement between the parties and must E
begin his investigation without delay and if no settlement is arrived at he is
to .submit his report to the appropriate Government. No doubt S.12
contemplates that ·the report should be made _and the proceedings closed
within a fortnight and if proceedings are not closed but are carried on, as they
were in the present case, or ifth~ Conciliation Officer does not make his report
within 14 days he may be guilty of a breach of duty but in law the proceedings F
do not automatically come to an end after 14 days but only terminate as
provided in S.20(2)(b) of the Act. (Colliery Mazdoor Congress Asanso/ v.
New Beerbhoom Coal Co., Ltd, 1952 Lab AC 219 (222)"
l

The aforesaid decision, therefore, has settled the controversy oil this G
aspect by holding that conciliation proceedings would terminate only as
provided by Section 20(2)(b) of the Act. Meaning thereby, till the failure
report reaches the appropriate State Government, conciliation proceedings
cannot be said to have terminated. Hence, breach of Section 33( l) during the
pendency of such proceedings could attract penal liability of the employer
under Section 31(1) of the Act. Learned counsel for the appellant tried to H
942 SUPREME COURT REPORTS [1999) 3 S.C.R.

A submit that the aforesaid decision had not considered the legal effect of the
fiction created by Section 20(2)(b) and its limited scope regarding deemed
conclusion of the conciliation proceedings which was different from actual
pendency of the proceedings as required by Section 33(1). It is difficult to
appreciate this contention for the simple reason that the relevant provisions
B of the Act to which our attention was drawn by learned counsel for the
appellant for submitting that there was a difference between pendency and
conclusion of proceedings do not advance the case of the appellant, as we
have seen earlier, nor can it be said that any relevant provisions of the Act
were not noticed by the Division Bench of this Court which decided the case
referred in Andheri Maro/ Kur/a Bus Service & Anr. v. The State of Bombay,
C (supra).

On the contrary, we find that the aforesaid decision has taken a correct
view on the question posed for our consideration in the present case. In view
of the aforesaid discussion, therefore, there was no escape from the conclusion
to which the Division Bench in the impugned judgment reached that on
D 22.6.1982 when the order of retrenchment was passed against the respondent,
the appellant-management had committed breach of Section 33(1) of the Act
by not passing the said order after obtaining express previous permission in
writing of the Conciliation Officer before whom the conciliation proceedings
must be held to be pending in the evening of 22.6.1982. The impugned
E' . retrenchment order must be held to be illegal being contrary to the aforesaid
provision of the l.D. Act. Point No.2 is, therefore, answered in affirmative
against the appellant and in favour of the respondent.

Point No. 3 : So far as this point is concerned, we have to turn to
Section 9- A of the I.D. Act. The relevant provision thereof reads as under:
F "Notice ofchange.-No employer, who proposes to effect any change
in the conditions of service applicable to any workman in respect of
any matter specified in the Fourth Schedule, shall effect such change,-
(a) without giving to the workman likely to be affected by such
change a notice in the prescribed manner of the nature of the
G' change proposed to be effected ; or
(b) within twenty-one days of giving such notice"

A mere look at the aforesaid provision shows that if an employer
proposes to effect any change in the conditions of service applicable to any
H workman in respect of any matter specified in the Fourth Schedule, such
LOKMAT NEWSPAPERS PVT. LTD. v. S. PRASAD [S.B. MAJMUDAR, J.) 943

change has to be preceded by the procedure laid down in the said secti~n. A
When we turn to the Fourth Schedule of the I.D. Act, we find mentioned
therein various conditions of service of workmen. The said schedule with all
of its items reads as follows :

"CONDITIONS OF SERVICE FOR CHANGE OF WHICH NOTICE IS TO BE B
GIVEV
1. Wages, including the period and mode of payment;
2. Contribution paid, or payable, by the employer to any provident
fund or pension fund or for the benefit of the workmen under
any law for the time being in force;
c
3. Compensatory and other allowances;
4. Hours of work and rest intervals;
5. Leave with wages and holidays;
D
6. Starting, alteration or discontinuance of shift working otherwise
than in accordance with standing orders;
7. Classification by grades;
'- Withdrawal of any customary concession or privilege or change
8.
in usage; E
9. Introduction of new rules of discipline, or alteration of existing
rules except insofar as they are provided in standing orders;

10. Rationalisation, standardisation or improvement of plant or
technique which is likely to lead to retrenchment of workmen; F
11. Any increases or reduction (other than casual) in the number of
persons employed or to be employed in any occupation or
process or department or shift [not occasioned by circumstances
over which the employer has no control]"
G
So far as item nos.1-9 and 11 are concerned, it becomes obvious that
before any such change in conditions of service of the workmen is to be
effected, as a pre-condition for such proposed change, notice under Section
9-A has to be issued; without complying with such a pre-condition of notice,
proposed change would not legally come into operation. We are directly
concerned with item no. 10 of this Schedule. It, therefore, becomes obvious H
944 SUPREME COURT REPORTS [1999] 3 S.C.R

A that before any rationalisation, standardisation or improvement of plant or
technique is to· be resorted to by any management if by such an exercise
retrenchment of workmen is likely to result, then before introducing such
rationalisation, standardisation or improvement of plant or technique, as the
case may be, a prior notice under Section 9-A is to be issued to the workmen
who can get an opportunity to show that they may not be retrenched because.
B of the new scheme of rationalisation etc. which is in the offing and can
suggest ways and means available to the management to avoid sach proposed ·
retrenchment of the workmen· despite such introduction of a new schem~.
Consequently, it must be held on the very wordings of Section 9-A read with
Item no. I 0 of Fourth Schedule "that any management which seeks to introduce
C a new working pattern for its existing work force by any future scheme of..
rationalisation, standardisation or improvement of plant or techllique which
has a tendency to lead to future retrenchment of workmen" has to give prior
notice of proposed change. Therefore, it must be held that notice under
Section 9-A must precede the introduction of rationalisation concerned," it
carinot follow the introduction of such a rationalisation. In the present case,
D it is not in dispute between the parties that in the composing departiiient of
the appellant where the respondent was working, composing work w~ earlier
being done by hand i.e. manually. That was the existing condition of service
of the respondent. By substitution of that type of work by·mechanical work
having resort to photo type composition through machine, the then existing
E seivice condition of the respondent was ·bound to be affected adversely.
. Consequently, before introducing such a change in the condition of service
of the respondent by installing photo type composing machine, introduction
of which was directly likely to lead to retrenchment of the respondent, a
notice under Section 9-A was a must before commissioning such a photo type
machine· at th~ work place of the appellant It is not in dispute between the
F parties that such a photo type machine was alieady installed by the appellant
in January 1981. Learned counsel for the appellant seeks to contend that it
was instaJled on an experimental basis. Even granting·that, the evidence on
record clearly established that by November, 1981 because of the successful
working of the photo type composing machine it was felt by the appellant that
G respondent and other compositors working in. the hand composing department
were rendered smplus. Of course, the appellant on humanitarian ground tried
to shift them to its another concern at Jalgaon, but those transfer orders were
held to amount to 'unfair labour practice' on the part of the appellant when
the Industrial Court on the complaints of these transferee workmen held that
such transfer orders would amount to 'unfair labour practice' being illegal at
H law. Thus the attempt on the part of the appellant to transfer these excess
LOKMAT NEWSPAPERS PVT. LTD. v: S. PRASAD [S.B. MAJMUDAR, J.] 945

workmen from November, 1981 on the admitted position that they had become .A
surplus in the composition department at Nagpur because of the successful
installation and working of the photo type composing machine at the premises,
became abortive. Consequently, frorri November, 1981 the installation of the
photo type machine ceased to remain an experirriental measure but became a
stark reality arid "this machine had necessarily a tendency to displace the B
workmen who were earlier working in the hand composing department. Thus,
at least from November, 1981 scheme of rationalisation had come to stay in
composing department of the appellant. Under· these circumstances, even
accepting the contention of learned counsel for the appellant that the likelihood
of the respondent and other workmen being retrenched because of the aforesaid
machine was not a realised possibility from January, 1981 at last became a C
certainty from November, 1981.

In fact the Labour Court has also come to this very conclusion in
paragraph l 3 o~ its judgment wherein the Labour Court on the admitted
position on rec.ord has held as under :
D
" ... The management had transferred about 11 hand compositors
including the complainant to Jalgaon by order dated 4.11.81. It appears
that at that time only the management was ready to get the work of
composing done exclusively by that photo type setting machine and
hence the services of ha.nd compositors were no longer required at
Nagpur. In fact at least that time the notice of change ought to have E
been given by the respondent because the services Of hand
compositors were not useful and were transferred only in November
1981 obviou~ly because the work of composing was done on the
photo type .setting machines."

--· The aforesaid finding of fact which was confirmed by the Revisional
Court as well as the learned Single Judge of the High Court leaves no room
F

for doubt that by 4.11.1981 the schenie of rationalisation had already come
into force and that scheme had a direct nexus and a realised possibility of
making the respondent and other workmen surplus liable to retrenchment as
surplus staff. Once that happened, it becomes obvious that there remained G
no occasion thereafter for the appellant-management to resort to Section 9-
A of the Act belatedly by giving notice of change only in February, 1982. The
appellant in this connection had missed the bus. It was a futile attempt to lock
the stables after horses had bolted.

As noted earlier, on the scheme of Section 9-A read with item I 0 of the H
946 SUPREME COURT REPORTS [1999] 3 S.C.R. 1

A Fourth Schedule, before introducing such a hew scheme of rationalisation
·-
which had a likelihood and a tendency to affect the existing service conditions.
of the workmen, a notice under Section 9-A was required to be issued prior
to the installation of the photo composing machine. Such a notice could have
been sent before January, 198 l when such a machine was brought in the
premises as an experimental measure or at least before 4.11.1981 when the
same was continued to be installed as a confirmed necessary component of
machinery for printing at the appellant's premises at Nagpur. If such a notice
-'
was given to the respondent - workman and other workmen similarly situated
they could have persuaded . the appellant to resort to any other type of
rationalisation or to absorb" th~m on suitable jobs in the same premises in any
C other department of the appellant at Nagpur. That opportunity was never
made available to the respondent. Therefore, notice under Section 9-A issued
after installation of the machine and after bringing into force the rationalisation
scheme was ex facie a stillborn and incompetent notice and was clearly
violative of the provisions of Section 9-A of the Act which amounted to
D putting the cart before the horse. Such an incompetent and illegal notice
under Section 9-A could not legally enable the appellant to terminate the
services of the respondent. We may mention at this stage that the impugned·
termination order dated 22.6.1982 clearly recites as follows :

"In the notice given on 25th March, 1982, under Section 9-A of the
E Industrial Disputes Act, 1947, the Management had noted that it may
require to reduce 25 workmen from service for the purpose of
introducing new technology in the composing section.

The Conciliation Officer has noted in his order dated 22.6.82 t9at the
F proceedings started on the basis of this notice have tjroved
unsuccessful and, therefore, the Management has now decioed to
terminate with immediate effect the fo~owing 25 workmen. l
Name of Workmen Post

G 1. Shri Maniram Choudhary Foreman

2. Shri Shankarprasad Pathak Foreman

3. to 25

H :Xxxxxxxxxxxxxx"
LOKMATNEWSPAPERS PVT. LTD. v. S. PRASAD [S.B. MAJMUDAR, J.) 947

That is how the listed workmen, including the respondent herein, were A
sought to be discharged from service. Thus the foundation of the impugned
order of discharge is the notice under Section 9-A dated 25th March, 1982.
Once that foundation is knocked off as incompetent, illegal and uncalled for
the entire edifice of retrenchment order against the respondent falls to the
ground.
B
It may also be noted at this stage that by two decisions rendered by
Bench of three learned Judges of this Court in connection with the time for
issuance of notice under Section 9-A read with item 10 Schedule IV with
which we are concerned in the present case it has been clearly ruled that such
notice must precede the introduction of rationalisation scheme. We may C
usefully refer to them at this stage. In the case of .Mis. North Brook Jute Co.
ltd. & Anr. v. Their Workmen, (1960) 3 S.C.R. 364, a three Judge Bench of
this Court had to consider the question whether in a reference regarding
proposed introduction of rationalisation scheme which was preceded by notice
under Section 9-A of the I.D. Act, such a scheme could be actually introduced
pending reference proceedings and whether such an act on the part of the D
management could be treated to be illegal entitling the workmen affected by
such an introduction to go on strike and still earn wages for the strike period.
Answering this question in affirmative it was held by this Court that after
notice under Section 9-A of the I.D. Act when a scheme of rationalisation was
said to be introduced but was not actually introduced it could not be introduced E
till the dispute regarding such proposed introduction was resolved by the
competent Court. Dealing with the scheme of proposed rationalisation as
envisaged by Item no. I 0 of Schedule IV of the l.D. Act it was observed that:

"Rationalisation which was introduced had therefore two effects- first
that some workers would become smplus and would face discharge; F
and secondly, the other workmen would have to carry more workload.
The introduction of the rationalisation scheme was therefore clearly
an alteration of conditions of service to the prejudice of the workmen.
The alteration was made on the 16th December, when reference as
regards the scheme had already been made and was pending before
the Industrial Tribunal. The Tribunal has therefore rightly held that G
this introduction was a contravention of s. 33."

The aforesaid decision, therefore, has clearly ruled that introduction of
rationalised scheme by itself would amount to alteration of conditions of
service of the workmen to their prejudice. It, therefore, follows that before H
948 SUPREME COURT REPORTS [1999) 3 S.C.R

A effecting such a change, meaning thereby, before introducing such a
rationalisation scheme which has a tendency to change the conditions of
service of workmen, notice under Section 9-A as a condition precedent becomes
a must. If learned counsel for the appellant is right, that machine can be
introduced on experimental basis first or even after it has already worked for
B some time and is required to be continued as a full-fledged machine, as and
when the employer decides to terminate the services of the workmen as a
direct consequence of such introduction of machine, he can give notice under
Section 9-A of the Act at any such time, then the very scheme of Section 9-
A read with Schedule IV Item no. IO of the l.D. Act would be rendered
ineffective and inoperative. The purpose of issuing such a notice prior to the
C introduction of the scheme of rationalisation would get frustrated and then
there wol.ild remain no effective opportunity for the conciliator to try to arrive
at an amicable settlement regarding the dispute centering round the proposed
introduction of the scheme of rationalisation which is likely to result in the
retrenchment of workmen. Equally there would remain no opportunity for the
State Government on receipt of failure report from the conciliator to make a
D reference of such live industrial dispute for adjudication by the competent
Court on merits. It is obvious that when such dispute regarding the proposed
introduction of the rationalisation scheme is referred for adjudication of the
competent Court, the said Court after hearing the parties and considering the
evidence can come to the conclusion whether the proposed scheme is justified
E on facts or not and whether any violation of the provisions of Section 9-A
had resulted into illegality of the consequential orders of retrenchment. Such
competent Court can also accordingly pass appropriate consequential orders
directing the management to withdraw such a scheme of rationalisation or in
any case, can order reinstatement of workmen with proper back-wages if such
retrenchment is found to be illegal on account of failure to comply with the
F provisions of Section 9-A of the Act. The question regarding the stage at
which notice under Section 9-A can be issued in connection with proposed
scheme of rationalisation which has likelihood of rendering existing worlanen
surplus and liable to retrenchment as mentioned in item no. I 0 of Schedule IV
of the I.D. Act was once again examined by a three judge bench of this Court
G in Hindustan Lever Ltd. v. Ram Mohan Ray & Ors., [1973] 4 SCC 141. In that
case, this Court was concerned with a scheme of rationalisation and re-
organisation which were proposed to be introduced by Hindustan Lever Ltd.,
appellant before this court, and for which a prior notice under Section 9-A
before introducing such re- organisation scheme was issued to the workmen
but which had no t~ndency or likelihood of displacing or retrenching them.
H It was the contention of the workmen that even for such a scheme a notice
LOKMAT NEWSPAPERS PVT. LTD. v. S. PRASAD [S.B. MAJMUDAR, J.] 949
r
under Section 9-A was a must. Examining the scheme of reorganisation in A ()

question, it was held that once the scheme was not likely to result in
retrenchment of any workman Section 9-A read with Item no.10 of Schedule
IV did not get attracted on the facts of the case. In this connection the
following pertinent observations on the scheme of Section 9-A read with item
no. 10 of Schedule IV were made by Alagiriswami J., while dealing with the
contention of learned counsel for the workmen : B

"He also urged that rationalisation and standardisation per se would
fall under item 10 even if they were not likely to lead to retrenchment
of workmen and only improvement of plant or technique would require
that t?ey should lead to retrenchment of workmen in order to fall
under item 10. A further submission of his was that standardisation
c
merely meant standardisation of wages. We are not able to accept this
argument. It appears to us that the arrangement of words and phrases
in that item shows that only rationalisation or standardisation or
improvement of plant or technique, which is likely to lead to
retrenchment of workmen would fall under that item. In other words, D
rationalisation or standardisation by itself would not fall under item
I 0 unless it is likely to lead to retrenchment of workmen. The reference
to rationalisation at page 257 of the report of the Labour Commission
and the reference to standardisation of wages in it are not very helpful
in this connection. Standardisation can be of anything, not necessarily
E
of wages. It may be standardisation of workload, standardisation of
product, standardisation of working hours or standardisation of leave
privileges. Indeed in one decision in Alembic Chemical Works Co.
ltd. v. The Workmen, there is reference to standardisation of conditions
of service, standardisation of hours of work, wage structure. That
case itself was concerned with standardisation of leave. The whole F
question whether this reorganisation falls under item I 0 depends
upon whether it was likely to lead to retrenchment of workmen".

In view of the aforesaid decision, it becomes obvious that ifthe proposed
scheme of rationalisation has a likelihood of rendering existing workmen
G
surplus and liable to retrenchment, then item no. IO of Schedule IV would
=-·· squarely get attracted and would require as a condition precedent to
introduction of such a scheme a notice to be issued under Section 9-A by
the management proposing such an introduction of the scheme of
rationalisation, but if the proposed scheme is not likely to displace any
existing workmen then mere rationali~ation which has no nexus with the H
950 SUPREME COURT REPORTS [1999} 3 S.C.R.

0 A possibility of future retrenchment of workmen would not attract Item no. I 0
of Schedule IV and would remain a benign scheme of rationalisation having
---
no pernicious effect on the existing working staff.

In view of the aforesaid settled legal position, there is no escape from
the conclusion that the impugned notice dated 25th March, 1982 under Section
B 9-A which was issued long after the actual i~stallation of the photo composing
machine had fallen foul on the touchstone of Section 9-A read with Schedule
IV Item no. 10. Such a notice in order to become valid and legal must have
preceded introduction of such a machine and could not have followed the
actual installation and effective commission of such a machine. The decision
c rendered by the Division Bench in this connection is found to be perfectly
justified both on facts and in law. It must, therefore, be held that the impugned
termination or discharge of the respondent1 was violative of the provisions of
Section 9-jA of the I.D. Act and he was dlscharged from service without the
appellant's following the mandatory requirements of Section 9-A of the l.D.
Act. Effect of non-compliance of Section 9-A of the I.D. Act renders .the
D change in conditions of service void ab initio. This ·legal position is well
settled in the case of Workmen of the Food Corporation of India<. Food
Corporation of India, [1985] 2 SCC 136, a three Judge Bench of this Court,
speaking through Desai J., in para 19 of the report, laid down as under :-

"It is at this stage necessary to examine the implication of Section 9- L.
E
A of the l.D. Act, 1947. As hereinbefore pointed out, Section 9-A
makes it obligatory upon an employer who proposes to effect any
change in the conditions of service applicable to any workman in
\ respect of any matter specified in the Fourth Schedule to give a notice
of desired or intended chan~e. It cannot do so without giving to the
F workman likely to be affected by the change, a notice in the prescribed
manner of the nature of the change proposed to be effected and ""
within 21 days of giving such notice. There is a proviso to Section
9-A which ha~ no relevance here.
1'

xxxxx xxxxx xxxxx
G
xxxxxx xxxxx xxxxx

Therefore, obviously a notice of change was a must before introducing
the change, otherwise it would be an illegal change. Any such illegal
change invites a penalty under Section 31(2) of the l.D. Act, 1947.
H Such a change which is punishable as a criminal offence would
LOKMATNEWSPAPERS PVT. LTD. v. S. PRASAD (S.B. MAJMUDAR, J.) 951

obviously be an illegal change. It must be held that without anything A
more such an illegal change would be wholly ineffective."

Point No.3, therefore, is answered in affirmative against the appellant
and in favour of the respondent

· Point No. 4: It has to be kept in view that the present proceedings arise B
out of a complaint filed by the respondent-workman alleging 'unfair labour
i}ractice' on the part of the appellant-management when it passed the impugned
order of retrenchment against him.

The said complaint was moved under Section 28 of the Maharashtra C
Act. The topic of 'unfair labour practice' is dealt with in Chapter VI of the
said Act. Section 26 is the first section in the said chapter which provides
as follows :

"unfair labour practices:-In this Act, unless the context requires
otherwise, 'unfair labour practices' mean any of the practices listed, in D
Schedules II, III and IV."_

Section 27 lays down as follows :

"Prohibition on engaging in unfair labour practices:-No employer
or union and no employee shall engage in any unfair labour practice." E
Section 28 lays down the procedure for dealing with complaints relating
to 'unfair labour practices'. Sub-section (1) thereof provides as follows:-

"(I) Where any person has engaged in or is engaging in any unfair
labour practice, then any union or any employee or any employer or F
any Investigating Officer may, within ninety days of the occurrence
of such 'unfair labour practice', file a complaint before the Court
competent to deal with such complaint either under section 5, or as
the case may be, under section 7, of this Act:

Provided that, the Court may entertain a complaint after the period of G
ninety days from the date of the alleged occurrence, if good and
·- sufficient reasons are shown by the complainant for the late filing of
the complaint."

It is not in dispute in this case that the respondent invoked the
jurisdiction of the Labour Court which was competent to deal with his complaint H
952 SUPREME COURT REPORTS [1999] 3 S.C.R.

A regarding 'unfair labour practice', under items 1 (a), (b), (d) and (f) of Schedule i
IV of the Maharashtra Act. Section 7 of the Act lays down the duties of
Labour Court and states as under :-

"It shall be the duty of the Labour Court to decide complaints relating
to unfair labour practices described in Item I of Schedule IV and to
B try offences punishable under this Act."

When we tum to Schedule IV Item no. l, we find therein listed number
of heads of 'unfair labour practice's which can support any complaint
thereunder. The relevant clauses of Item no. I of Schedule IV which were
invoked by the respondent for supporting his complaint against the impugned
C retrenchment order were clauses (a), (b), (d) and (f). Iteqino. I with alJ its sub-
clauses reads as under :-

"To discharge or dismiss employees ~

(a) byl way of victimisation;
D
(b) not in good faith, but in the colourable exercise of the employer's
rights;
(c) by falsely implicating an employee in a criminal case on false
evidence or on concocted evidence;
E (d) for patently false reasons;
(e) on untrue or trumped up allegations of absence without leave;
(f) in utter disregard of the principles of natural justice in the
conduct of domestic enquiry or with undue haste;
F (g) for misconduct of a minor or technical character, without having
any regard to the nature of the particular misconduct or the past
record of senrice of the employee, so as to amount to a shockingly
disproportionate punishment."

G We have; therefore, to see as to whether in the light of our findings on
point nos. 2 and 3 the respondent could rely upon any of these clauses of
item no. 1 of Schedule IV in support of his complaint. Now a mere look at th~
aforesaid provision shows that an employee who makes a grieyance against
order of discharge or dismissal passed against him can invoke any of the
listed clauses (a) to (g) of Item no. 1 of Schedule IV. Learned counsel for the
H appellant was, therefore, right when he contended that first it should be
LOKMAT NEWSPAPERS PVT. LTD. v. S. PRASAD [S.B. MAJMUDAR, J.] . 95~

alleged by the complainant-employee that he was discharged or dismissed A
from service by the employer and then he has to further show whether such
an order attracted any of the clauses (a) to (g) of item no. 1 of Schedule IV.
Learned counsel for the appellant, in this connection, vehemently contended
that item no. l of Schedule IV of the Maharashtra Act deals with only punitive
discharges or dismissals and not any simpliciter discharge order or termination B
order which is not passed by way of punishment. In order to support this
contention, learned counsel for the appellant relied upon principles of
interpretation, namely, the principle of noscitur a sociis as well as the principle
of ejusdem generis. So far as the first principle of interpretation is concerned,
he referred to "Maxwell on The Interpretation of Statutes", 12th Edition at
page 289 dealing with the question regarding understanding associated words C
in common sense. The learned author in connection with this principle has
made the aforesaid pertinent observations :

"Where two or more words which are susceptible of anaJogous meaning
are coupled together, noscuntur a sociis. They are understood to be
used in their cognate sense. They take, as it were, their colour from D
each other, the meaning of the more general being restricted to a
sense analogous to that of the less general. (One application of this
general principle is the ejusdem generis rule, which is discussed in the
next section of this chapter.)"

It becomes, therefore, obvious that before this principle of interpretation E
can be pressed in service, it must be shown that both the words 'discharge
and dismissal' are employed by the Legislature in Schedule IV Item no. I in
the same sense or that they are susceptible of analogous meaning. This rule
of construction in other words lays down as follows :

"The meaning of a word is to be judged by the company it keeps." F
As held by this Court in the case of MK. Ranganathan & Anr. v. Govt.
of Madras & Ors., AIR (1955) SC 604 at 609 relying upon Privy Council
decision in 'Angus Robertson v. George Day', (1879) 5 AC 63 at p 69 (E):

"It is a legitimate rule of construction to construe words in an Act of G
Parliament with reference to words found in immediate connection
with them".

Keeping in view this well settled principle of construction of statutes,
Jet us see whether in the settings of Item no. l clauses (a) to (g) the word
'discharge' as employed by the Legislature has meaning analogous to that H
954 SUPREME COURT REPORTS [1999] 3 S.C.R.

A of the word 'dismiss'. When we have a close look at clauses (a) to (g) of item -:

no. 1 of Schedule IV, we find that the word 'discharge' is not intended by the
Legislature to have the same or analogous meaning as the word 'dismiss'.
The reason is obvious. The word 'dismiss' necessarily connotes an action of
the employer who seeks to impose punishment on his mis-conducting
employee. Such a punishment cannot be imposed without following the
B principles of natural justice and the relevant applicable rules of domestic
inquiry. But the word 'discharge" is not necessarily confined to orders of
termination by way of penalty only. The word 'discharge' has wider
connotations. A mis-conducting employee facing charges in a domestic inquiry
may be punished by way of imposing on him an order of dismissal which may
c make him ineligible for any other employment but if it is found that the
charges which are proved are not that serious but the employee would not
deserve to be continued in service then an order of discharge by way of
lesser penalty can be imposed on him. Such an order would remain a punitive
discharge. Thereby the employer wants to punish the employee for his
misconduct but does not want him to become ineligible for employment
D elsewhere considering less serious nature of proved charges of misconduct
against him in domestic inquiry. But that is not the end of the matter. In
service jurisprudence the term 'discharge' has assumed a wider connotation
and may include in its fold not· only punitive discharge orders but also
simpliciter discharge orders where the employer seeks to snap the relationship
E of employer and employee but without any intention to penalise the employee.
He does so because of exigencies of service and employment conditions
which may require him to say goodbye to the employee but without any
intention to punish him. Such simpliciter discharge orders can be illustrated
as under :

F An employee, on probation, may not be found to be suitable and may
not earn sufficient merit so as to be confirmed in service. Consequently, his
probation may be terminated and an order of discharge simpliciter can be
passed against him. There may also be other cases of single discharge under
the contract of employment for a fixed period where an employee on efflux
of time may be terminated. There may also be cases where an employee may
G
become surplus and would no longer be required by the employer. An order
;;,'
of retrenchment, therefore, may be passed against him subject, of course, to
following the statutory requirements of Section 25-F and 25-G of the I.D. Act
if they are applicable. These illustrations are not exhaustive but they indicate
such orders of discharge are passed by an employer who does not want to
H punish the employees but still is not in a position to continue them in service.
LOKMAT NEWSPAPERS PVT. LTD. v. S. PRASAD [S.B. MAJMUDAR, J.] 955
Such simpliciter discharge orders are also a category of discharge orders. A
Therefore, the word 'discb.arge' as employed by the Legislature in item no. I
of Schedule IV cannot necessarily be confined only to punitive discharges
as tried to be submitted by learned counsel for the appellant. Once we
consider the words 'discharge' or 'dismissal' as employed in the opening part
of item no. I by the Legislature in the light of various clauses representing
different situations under which such discharge or dismissal orders are said B
to amount to 'unfair labour practice' on the part of the employers, it becomes
at once clear that the Legislature was not contemplating only punitive discharge
orders but was contemplating both types of discharge orders, namely, punitive
as well as non-punitive discharge orders. The very first item ('a') deals with
the discharge or dismissal order passed by way of victimisation of the C
employee. It is easy to visualise that an employer may like to dispense with
the services of an employee who, according to him, is a trouble maker. He may
not have been involved in any misconduct as such still by way of putting
an end to his service on extraneous reasons, if an order of discharge is passed
it may remain simpliciter order of discharge but if it is found based on
extraneous reasons it would be by way of victimisation. Such a discharge D
order may not necessarily be a punitive discharge order. The employer would
not like to punish the employee for any of his misconduct but would not like
him to continue in service as according to the employer he may be an
undesirable person not suitable to the management is for example, a militant
trade union leader who, according to the employer, is any how to be required E
to be sent out of service. When such type of discharge orders are passed
by way of victimisation they would be simpliciter discharge orders when not
backed up by relevant reasons. It cannot be said that such simpliciter discharge
orders are not covered by item 'l' clause ('a') of Schedule IV. Similarly clause
('b') may contemplate a discharge order which is not passed in good faith but
in the colourable exercise of employer's rights. Thus, the employer may have F
merely a pretext to put an end to the service of the employee who may not
have misconducted himself at all. Therefore, there will be no occasion to have
any departmental inquiry against him as no charge could be framed regarding
any misconduct on his part. Still if such an undesirable employee is to be
removed from service then even though the simpliciter discharge order is G
passed if it is shown that it is not in good faith but as a result of malafide
intention of the employer, then such a discharge order can also attract the
category of 'unfair labour practice' as enacted by the Legislature in item nos.
('a') and ('b'). Similar Legislature scheme is discernible from clause (c) of item
no. 1 which deals with an order of discharge or dismissal by falsely implicating
an employee in a criminal case on false evidence or on concreted evidence. H
956 SUPREME COURT REPORTS [1999] 3 S.C.R.

A In such a situation discharge or dismissal order may operate as a penal order.
Similarly, clause (d) may cover cases which are orders of discharge or dismissal
by way of penalty as well as simpliciter discharge orders based on a patently
false reasons. Clause (e) referring to discharge or dismissal may cover both
the cases of dismissal by way of penalty on such grounds or discharge by
B way of penalty on such grounds and equally a discharge order simplicitor on
account of false allegations of absence without leave. So far as Clause (f) is
concerned, the first part squarely covers a case of dismissal or discharge by
way of penalty as it deals with such orders passed after conducting domestic
inquiry about the alleged misconduct of the employee but in utter disregard
of the principles of natural justice but so far as the second part of clause (f)
C of Item no. I is concerned, if an employee is dismissed with undue haste it
may be by way of penalty as in domestic inquiry apart from following the
principles of natural justice, sufficient and reasonable opportunity to defend
may be denied to the employee and with undue haste the dismissal order may
be passed. That would obviously be a penal order but so far as discharge
order is concerned, it may also be passed by way of penalty with undue haste
D but the said part of clause (f) may equally cover those discharge orders which
are simpliciter discharge orders not by way of penalty but still being passed
with undue haste on the part of the employer who may not be wishing to
punish the employee but wishing to say goodbye to the employee on the
ground that he is otherwise an unwanted person. Such discharge orders
E passed with undue haste may not necessarily be penal and still may amount
to 'unfair labour practice' if they are passed with undue haste. Clause (g) of
Item no. I obviously refers to only discharge or dismissal orders which are
-
penal in nature as they have a direct linkage with misconduct of the employee.

The aforesaid resume of various clauses of item no. 1 of Schedule IV
F leaves no room for doubt that when the Legislature used the words 'discharge'
or 'dismissal' of the employees under circumstances enumerated in clauses
(a) to (g) in Item no. 1 of Schedul~ IV it contemplated dismissal orders which
obviously are penal in nature but it also contemplated discharge orders which
may either be penal or non- penal in nature and still if any of the relevant
G clauses of item no. 1 got attracted in connection with such discharge orders
they would make the employer, author of such discharge orders answerable
for the alleged 'unfair labour practice' permeating the passing of such
simpliciter discharge orders. To recapitulate, in the present case, respondent's
-
complaint is not that his discharge was by way of penalty but his complaint
is that the discharge order in his case was a result o~~tion and was
H not passed in good faith but was passed on patently false reasons and was
LOKMAT NEWSPAPERS PVT. LTD. v. S. PRASAD [S.B. MAJMUDAR, J.] 957
a result of undue haste on the part of the appellant-employer. Whether the A
said complaint was justified on merits or not is a different matter but it can
not be said that such a complaint regarding non-penal discharge order was
de hors the scope and ambit of item no. 1 of Schedule IV of the Maharashtra
Act.

B
Before parting with the discussion on this aspect we may mention that
learned counsel for the appellant also relied upon the other rule of interpretation,
namely, rule of ejusdem generis. The said rule of interpretation provides as
follows:

"When particular words pertaining to a class, category or genus are C
followed by general words, the general words are construed as limited
to things of the same kind as those specified. This rule which is
known as the rule of ejusdem generis reflects an attempt "to reconcile
incompatibility between the specific a~d general words in view of the
other rules of interpretation that all words in a statute are given effect
if possible, that a statute is to be construed as a whole and that no D
words in a stahlte are presumed to be superfluous".

It is difficult to appreciate how this principle of interpretation can be
invoked by learned counsel for the appellant in connection with Item no. 1
of Schedule IV. The word 'discharge' is a general word. It is followed by the E
word 'dismissal' which contemplates only one category of cases or situations
where penalty is imposed by the employer on the workmen concerned. The
rule of ejusdem generis would have applied ifthe word 'discharge' represented
a particular species belonging to the genus reflected by the general word
'dismiss'. This is a converse case where a general word 'discharge' is followed
by the word 'dismiss' which is of a particular nature or pertains to a limited F
class or category of penal situations. Obviously, therefore, neither of them is
a genus and nor of them is a species of the very same genus. The word
'discharge' connotes an entirely different category of orders comprising of
both simpliciter discharge orders not by way of penalty as well as discharge
orders by way of penalty but not involving extremely pernicious results O
flowing from such orders while the word 'dismiss' is purely an order of
penalty and that too of an extreme type. Consequently, the aforesaid rule of
interpretation cannot be of any avail to learned senior counsel for the appellant.
On the contrary, as seen by us earlier, the words 'discharge' and 'dismissal'
as employed by the Legislature in Item no. 1 of Schedule IV covered different
types of situations and circumstances under which they are passed. It is, H
958 SUPREME COURT REPORTS [1999] 3 S.C.R.

A therefore, not possible to agree with the submission of learned senior counsel
for the appellant that unless the resp<?ndent shows that he was discharged
by way o'f penalty, he cannot invoke any of the clauses of item no. I of
Schedule IV.

Before leaving the discussio~ on this aspect, we may refer to a decision
B of this Court on which strong reliance was placed by learned counsel for the
appellant. In the decision of the Constitutional Bench of this Court in State
ofRajasthan & Anr. v. Sripal Jain, [1964] 1 SCR 742, this Court was concerned
with the interpretation of Rule 244(2) of the Rajasthan Service Rules read with
rule 3 l(vii) {a) of the Rules. In the light of the said statutory scheme of these
C Rules, the Court made the following pertinent observations :

"Held, that compulsory retirement provided in r. 31 (vii)(a) is a
compulsory retirement as a penalty and not compulsory retirement of
the other two kinds namely (1) Compulsory retirement on attaining the
age of superannuation and (2) compulsory retirement under r.244(2),
D neither of which is a punishment.."

It is difficult to appreciate how the said decision rendered on the special
scheme considered by this Court in that case can be of any assistance to
learned counsel in the present case. The scheme with which we are concerned
contradicts any such conclusion as tried to be pressed in service by learned
E counsel in support of his contention that the word 'discharge' is used
synonymously or analogously by the Legislature along with the word
'dismissal'. It is also well settled that the word 'discharge' may not only be
by way of penalty. Discharge of a probationer on unsuitability, as noted
earlier, would not be by way of penalty. Similarly, even in case of compulsory·
retirement as laid down by a catena of decisions of this Court in the context
- F
of the relevant statutory rules, this action may not be penal. In this connection,
we may refer to a decision of this Court in K. Kandaswamy v. Union of India
& Anr., JT (1995) 7 S.C. 80, wherein it has been observed that

" .. Compulsory retirement does not amount to dismissal or removal
from service within the meaning of Article 311 of the Constitution. It
G
is neither punishment nor visits with loss of retiral benefits ; nor does
it cast stigma.."

Consequently, it cannot be held that wherever the word 'discharge' is
used in any statutory instrument it must necessarily connote a penal discharge
H as tried to be submitted by learned counsel for the appellant. In the case of
LOKMAT NEWSPAPERS PVT. LTD. v. S. PRASAD (S.B. MAJMUDAR, J.) 959

High Court of Judicat 1re at Patna v. Pandey Madan Mohan Prasad Sinha
1 A
& Ors., [1997] 10 SCC 409, it has been held by the Bench of this Court that
if a probationer is discharged on the ground of unsuitability, the said order
can be challenged only on the ground that it is arbitrary or punitive. If it is
not punitive then such an order cannot be challenged at all. It is further
observed that principles of natural justice have no application in case of
termination of services of a probationer during the period of probation since B
he has no right to hold that post. In such case, it is obvious that discharge
of such a probationer on the ground of unsuitability cannot be treated to be
a punitive discharge.

Once this ground is cleared, the arena of contest between the parties C
becomes well defined. It has to be pleaded and proved by the respondent-
complainant that though the order of termination or retrenchment was not
passed by way of penalty by the appellant, it attracted all or any of the
clauses (a),(b),(d) & (f) of item no. I of Schedule IV as his complaint was based
on these clauses only. In the light of the evidence which is on record and
on which there is no dispute between the parties, it becomes clear that the D
appellant wanted to switch over to the process of composing by utilising.
photo type-setting machine and in the process the hand composing department
engaging respondent and other workmen had to be wound up. That naturally
resulted in the employees in the erstwhile hand composing department
becoming excess and surplus. That is the reason why impugned notice under E
. Section 9-A of the I.D. Act was issued to the respondent and other workmen
and ultimately resulted in the impugned retrenchment order. It is difficult to
appreciate how such an action on the part of the appellant can be treated to
have been the result of victimisation. The respondent was not being victimised
for any extraneous reason. On the contrary, it was based on a genuine factual
reason. Hence clause (a) of item no. 1 of Schedule IV is out of picture. F
Parameters of the term 'victimisation' have been considered by a three
Judge Bench of this Court in the case of Colour-chem Limited v. A.L.
Alaspurkar & Ors., (1998) l Scale 432, where one of us, S.B. Majmudar J.,
speaking for the Bench in para 13 of the report observed that the term
'victimisation' is a 'term of comprehensive import. Thus, if a person is made G
to suffer by treatment, it would amount to victimisation. On the facts of the
present case, therefore, it is not possible to hold that the impugned discharge
of the respondent was based on non-gem1ane or extraneous reasons or it was
a
passed with view to make the respondent suffer for no real reason.

It is, therefore, not possible to agree with the reason of the Division H
960 SUPREME COURT REPORTS [1999] 3 S.C.R.

A Bench of the High Court in the impugned judgment that the action of th~
appellant was by way of victimisation of the respondent. Item no. 1 clause ·
(a) of Schedule IV, therefore, does not apply to the facts of the present case.
On a parity of reasoning it has to be held that the discharge of the -.
respondent from service cannot be said to be not in good faith but in the
B colourable exercise of employer's rights. It cannot be gainsaid that the appellant
had good reason to discharge the respondent who was rendered surplus in
hand composing department because of the introduction of the machine in
question. It is difficult to impute any bad faith to the appellant· as the
appellant tried its best to provide alternative job to the respondent at Jalgaon
but the said offer was not accepted by the respondent and, on the contrary,
c the transfer order was got declared illegal and an act of 'unfair labour practice'
in proceedings culminating before the Tribunal. Clause (b) of item no. 1 of
Schedule IV, therefore, is also not attracted on the facts of the present case.
The third prank of respondent's complaint pertains to the applicability
of clause (d) of item no. 1 of Schedule IV. The said clause can be attracted
D only if it is shown that the impugned termination was for patently false
reasons. It is difficult to appreciate how the Division Bench persuaded itself
to hold that the said clause was attracted on the facts of the present case.
The appellant had a genuine reason for terminating the services of the
respondent as hand composition department had become redundant on account
E of the introduction of the machine in question. It is true, as submittecl by
learned counsel for the respondent, that the impugned retrenchment order
..
dated 22.6.1982 showed that the management, as per notice under Section 9- ...
A, had noted that it may require to reduce 25 workmen from service for the
purpose of introducing new technology. It is also true that the new technology
was already introduced by the management months prior to the day of the
F termination order dated 22nd June, 1982, to be precise from January, 1981 on
an experimental basis as submitted by learned counsel for the appellant and
on regular basis at least from November, 1981. Still it cannot be held that the
proposed termination was ' not based on real reason or was effected on
patently false reasons. If no such machine was ever introduced and still such
G a ground was made out for passing the impugned order, then it could have
been said that the impugned termination was passed on patently false reasons. ,..
...
The patently false reason would be one which has no existence at all in fact
and is a mere pretext or an excuse. Such is not the situation in the present
case. It may be that the reason given may not be strictly accurate in the sense
machine was already introduced and was not likely to be introduced by the
H time notice under Section 9-A was given followed by the impugned termination
LOKMAT NEWSPAPERS PVT. LTD. v. S. PRASAD [S.B. MAJMUDAR, J.] 961
order. That may have effect of non-compliance of the provisions of Section A
9-A. The said notice, as we have seen earlier, on that score may become
inoperative or illegal. Still the reason for termination cannot be said to be
patently false. We, therefore, disagree with the conclusion of the Division
Bench of the High Court in view of our aforesaid findings regarding non-
applicability of clauses (a), (b) & (d) of item I of Schedule IV. On this B
conclusion, we would have been required to dismiss the respondent's complaint
but for the fact that the fourth leg of the respondent's complaint invoking
clause (t) second part of item no. I cannot be said to be non-existent or
unjustified or uncalled for.

As we have already discussed, order of discharge whether punitive or C
non-punitive if found to be the result of undu~ haste on the part of the
employer, the inevitable result will be that the employer would be guilty of
'unfair labour practice' as laid down by Schedule IV item no. I clause (t)
second part. In the facts of the present case, the decision rendered by the
Division Bench of the High Court on this score cannot be found fault with.
It ~as to be recalled that the proceedings in connection with notice under D
Section 9-A were pending in conciliation. Efforts were made by the Conciliation
Officer for seeing that the parties come to an amicable settlement. Of course,
those efforts _failed and on 22nd June, 1982 by 4.35 p.m. the Conciliation
Officer orally declared that the conciliation had failed and investigation was
at an end. However, as seen earlier, that was not the end of the matter. The E
Conciliation Officer did not becomefunctus officio on that day. As per Section
-.:. 12 sub-section (4) of the l.D. Act thereafter he had to give a full report setting
. forth the steps taken by him for ascertaining the facts and circumstances
relating to the dispute and for bringfo.g about a settlement thereof, together
with a full statement of such facts and circumstances, and the reasons on
account of which, in his opinion, a settlement could not be arrived at. That F
obviously would have taken a few days, if not more, before such report could
have been prepared by the Conciliation Officer. It is, therefore, difficult to
appreciate how the appellant in hot hurry and within almost half an hour from
the close of investigation on the very same day by 5'0 clock in the evening
could pass the impugned termination order against the respondent. It has to G
be appreciated that in the report which was to follow, the Conciliation Officer
was required to highlight the nature of the dispute between the parties in the
light of the notice under Section 9-A given by the appellant to the respondent
union. It is easy to visualise that even in such a failure report the conciliator
could have given his prima-facie opinion regarding the nature of the dispute
and the reasonableness thereof. It is also to be kept in mind that once such H
962 SUPREME COURT REPORTS [1999] 3 S.C.R.

A report reaches the State Government, in the light of the report if the State ~·
.
Government finds that the dispute is a genuine dispute which requires
adjudication, it may make an order of reference or if, on the other hand, the
State Government finds from the report that the dispute is frivolous it may ·11-
not make a reference but that stage could reach only after the report is
received and scrutinised by the State Government. Under these circumstances,
B for passing the impugned retrenchment order within half an hour of the close
of investigation by the Conciliation Officer, the appellant could not have
presumed that the report would necessarily indicate total frivolousness of the
dispute and that would not persuade the State to make a reference of the
dispute for adjudication by a competent Court. Without waiting to see as to
c what will be the nature of the report and the contents, the appellant tried to
help itself and in undue hurry passed the impugned order. The result was that
by one stroke the appellant pre-empted the report of the conciliator on the
one hand and on the other hand even the future objective action of the State
Government on such a report. It is also important to note that on the report
of the conciliator, the State Government could have thought it fit to refer the
D
dispute for adjudication and in the present case on the basis of the said·
report, reference was in fact made by the State Government regarding the
legality of the scheme of rationalisation resulting in the likelihood of
retrenchment of the workmen concerned. The said reference became infructuous
only because the appellant, in the meantime, invoked jurisdiction of the ~

.'
E Labour Court under Section 28 of the Maharashtra Act. That resulted in the
applicability of Section 59 of the Maharashtra Act which lays down as under:
·1"-
"If any proceeding in respect of any matter falling within the purview
of this Act is instituted under this Act, then no proceeding shall at
any time be entertained by any authority. in respect of that matter
F under the Central Act or, as the case may be, the Bombay Act; and
if any proceeding in respect of any matter within the purview of this
Act is instituted under the Central Act, or, as the case may be, the
Bombay Act, then no proceeding shall at any time be entertained by
the Industrial or Labour Court under this Act."
G
It is because of the aforesaid provision of Section 59 of the Maharashtra
(
Act that the referred dispute under Section l 0 of the I.D. Act got disposed
of. However, the fact remains that on the failure report submitted by the
I'-
Conciliation Officer the appropriate Government had thought it fit to prima
facie hold that the dispute was a real one which required adjudication by the
H competent Court under the l.D. Act. It is also necessary to note that in such
LOKMAT NEWSPAPERS PVT. LTD. v. S. PRASAD (S.B. MAJMUDAR, J.) 963

references received by the competent Court under the I.D. Act in appropriate A
cases, the Court to which such references are made has ample jurisdiction to
pass interim orders and if the Court had found that the impugned retrenchment
order was required to •. b~ stay~d even though it had been passed after
conciliation proceedings were over and when there was no prohibitory order
from any authority such retrenchment order could have been stayed. Further B
implementation of the impugned change could have been stayed vide The
Management Hotel Imperial, New Delhi and others v. Hotel Workers' Union,
AIR (1959) SC 1342 and The Hind Cycles Ltd. and another v. The Workmen,

- AIR (1974) SC 588.

It is also to be noted that in the facts of the present case, as already
held by us on point no. l, the conciliation proceedings had not terminated
C

when the impugned order was passed. The result was that Section 33(1) got
violated and the appellant became liable to be punished as per Section 31(1)
of the LD. Act incurring a penalty for being convicted of an offence punishable
with imprisonment for a term which may extend to 6 months or with fine or
with both. Thus the impugned order cannot, but be held to have been passed D
with. undue haste. The intention behind passing such a hurried order was
obviously to cut across and pre-empt the submission of failure report by the
conciliator on the one hand and its consideration by the State on the other
and even for avoiding the future possibility of a reference under the LD. Act
and also the future possibility of the Court's intervention by way of interim E
relief against such order. But to crown it all by such undue hurry the appellant
made itself liable to be punished and incurred a criminal liability for the same.
All these consequences unequivocally project only one picture that the
impugned order was passed in a great hurry and with undue haste. This
conclusion is inevitable on the aforesaid facts which have remained well
established on the record of the present case. Consequently, agreeing with F
the view of the Division Bench in the impugned judgment it must be held that
the respondent's complaint was well sustained at least under clause (f) second
part of item 1 of Schedule IV and as the impugned order was passed with
undue haste the inevitable result is that by the said act the appellant is liable
to be treated as guilty of 'unfair labour practice'. G
We may also mention in this connection one another facet of this
question. As the Conciliation Officer, after hearing the parties, had declared
that investigation was over and settlement had not taken place, at least a few
days were available after 22nd June, 1982 to the appellant for moving the
Conciliation Officer to give the appellant permission to retrench the respondent. H
964 SUPREME COURT REPORTS [1999] 3 S.C.R.

A It is not possible to agree with the finding of the Labour Court that the
Conciliation Officer could not have entertained such a request. He had not
even drafted his report, much less submitted the same to the State Government
at least ·within a few days after 22nd June, 1982. The very fact that the report
reached the State Government on 13th August, 1982 shows that the conciliator
would have despatched the same at least a couple of days after 22nd June,
B 1982, having complied with au the statutory requirements under Section 12(6)
for preparation of such a report. Even on the next day of 22nd June, 1982 such
a request could have been made by the appellant and the conciliator would

C
not have felt any inhibition in recalling both the parties and hearing them on
such a request on the part of the appellant to give permission to it to pass
the impugned tern1ination order as the conciliation had failed. Even by passing
such a legally permissible and factually feasible course, and without waiting
-
even for more than half an hour the impugned order was passed. It is easy
to visualise that it was possible that if such a request was made by the
appellant it could have been granted or it could have been rejected. If such
a request was rejected by the conciliator then, of course, the impugned order
D could not have seen the light of the day and if thereafter the State Government
had made the reference after reading the failure report, then the existing
position regarding service condition of the respondent could have been
continued by the reference Court pending the adjudication of such a dispute.
The appellant with a view to avoid all these uncomfortable situations indulged
E in self help and passed the impugned order on the very evening of 22nd June,
1982. This is an additional facet of the deliberate undue haste resorted to by
the appellant for short circuiting all possible inconvenient situations and to
present the respondent with a fait accompli and also to placate the Conciliation
Officer on the one hand and the State Government on the other and ultiniately
the reference Court also. Consequently it must be held that the impugned
F order was clearly a result of undue haste and, obviously amounted to 'unfair
labour practice' on the part of the appellant as per Schedule IV item 1 clause
(f) second part. Consequently, this point for determination is held against the
appellant and in favour of the respondent only to tl1e extent of applicability
of the aforesaid provision.
G
Point No. 5: So far as this point is concerned, we have already noted
that the Labour Court itself has found that notice under Section 9-A was a
belated one and should have been given at least by November, 1981 when
the machine in question becan1e fully operative resulting in displacement of
wor~rs in hand composing department. Still by curious reasoning, it has
H been held that there was nothing wrong with the notice though given belatedly
LOKMAT NEWSPAPERS PVT. LTD. v. S. PRASAD [S.B. MAJMUDAR, J.] 965
and that the termination order was also not offending Section 33(1) of the Act. A
These findings show patent errors of law and could not be sustained. The
Industrial Court, on the other hand, came to an equally erroneous finding on
the applicability of item 10 of Schedule IV of the I.D. Act when it held that
the said item would apply not at the time when the rationalisation scheme was
introduced, but at the time when the employer desired or decided to terminate
the services of the employees. This reasoning of the Industrial Court is B
contrary to the very scheme of item 10 of Schedule IV of I.D. Act and totally
ignores the term 'likely to lead to retrenchment' as found in the said item. The
reasoning of the Industrial Court almost amounts to rewriting the said phrase
as "decide to retrench the workmen". These patent errors of law committed
by the Labour Court and the Industrial Court were totally bypassed by the C
learned Single Judge while he dismissed the Writ Petition. These patent errors
of law, therefore, were rightly set aside by the Division Bench of the High
Court in the Letters Patent Appeal. It could not, therefore, be said that the
impugned judgment had tried to interfere with the pure findings of the fact
reached by the authorities below on evidence against the respondent. It was
perfectly open to the Appellate Court in the hierarchy of proceedings to D
interfere with such patent errors of law and to correct them, otherwise it could
have been said that it had failed to discharge its duty and that would have
also amounted to failure to exercise jurisdiction on its part. The aforesaid
point is, therefore, answered in affirmative against the appellant and in favour
of the respondent by holding that the Appellate Court had corrected patent E
errors of law and had not interfered with the pure findings of the facts not
connected with the relevant questions of law with which they were intertwined.

Point No. 6: Now is the time for us to take stock of the situation in view
of our aforesaid findings on the relevant points for determination. The final
order passed by the High Court in the impugned judgment has to be sustained. F
However, one aspect of the matter cannot be lost sight of while closing the
present chapter. The respondent's services were terminated on 22nd June,
1982 and that the termination is found to be amounting to 'unfair labour
practice' as per the provisions of Section 30 of the Maharashtra Act. On this
conclusion, the appellant has to be asked to withdraw such 'unfair labour G
practice', meaning thereby, the impugned order has to be set aside and,
thereafter, affirmative action including reinstatement of the employee with or
without back-wages could be ordered by the Labour Court in these proceedings.
However, as the High Court has noted that reinstatement is out of question
a.s respondent has reached the age of superannuation, in the meantime, with
effect from 3.5.1995, therefore, at the highest the respondent is entitled to H
966 SUPREME COURT REPORTS [1999) 3 S.C.R.

A back-wages for 13 years with gratuity and other retirement benefits. That is
precisely what is ordered by the High Court in the impugned judgement.
However, learned counsel for the appellant is right when he contends that
even before the conciliator the respondent's union on behalf of its members
including the present respondent who were all facing retrenchment suggested
that they were prepared to accept compensation @ 4 months wages per every
B completed year of service with a view to settle the dispute. This suggestion
on behalf of the workmen by their union is noted by the conciliation officer
in his report which reached the State Government on 13th August, 1982. It
may be seen that by that time the impugned retrenchment order was only two
months old as it was passed on 22nd June, 1982. It is also noted by the
C conciliation officer that this proposal did not find favour with the management.
If it had been accepted by the management at that time the respondent-
workmen would have been satisfied by way of compensation amounting to
only one third of the back- wages for each year of service. It is, of course,
true that years rolled by, thereafter and the compromise did not go through.
It is also true that the value of money in 1982 was much higher than what
D it is today. It is also true that the respondent pas been denied not only back-
wages but also interest on the said amount which would have been available
to him years back. However, one aspect of the matter cannot be lost sight of.
There is nothing on record to show that the respondent was gainfully employed
or was not employed in any alternative avocation during all these years. It
E is, of course, true that it was for the appellant to point out as to how grant
of back-wages should be reduced on account of the gainful employment of
the respondent, in the meantime. Such an effort was not made by the appellant. .;.,-
However, still one fact which stares in the face of the respondent is well
established that the appellant has tried his best to accommodate the respondent
in alternative employment at Jalgaon where hand composing department was
F working. If the respondent accepted the said offer he would have earned his
full wages all throughout till retirement. Thus in a way the respondent also
was responsible for the unfortunate situation in which he found himself
during all these years. It is also to be noted that the complaint filed as early
as on 25th June, 1982 remained dismissed in the hierarchy of proceedings
G from the Labour Court onwards up to the learned Single Judge's decision in
the High Court and it is only in the Letters Patent Appeal that he ultimately
succeeded. Considering all these aspects, in our view, interest of the justice
will be served if, while confirming the final order of the High Court impugned
in this appeal, a modification is made regarding back-wages payable to the
respondent. This is required also in view of the further fact that we disagree
H with the conclusion of the Division Bench of the High Court that the appellant
LOKMAT NEWSPAPERS PVT. LTD. v. S. PRASAD [S.B. MAJMUDAR, J.] 967

was guilty of 'unfair labour practic~· under item Nos. l(a), (b) and (d) of A
Schedule IV of the Maharashtra Act and the decision of the High Court is
being confirmed regarding 'unfair labour practice' of the appellant only under
item l(t) second part of Schedule IV of the said Act. While considering the
grant of appropriate back-wages, we deem it fit to adopt the same yardstick
which was suggested by the respondent-workman's union for all its members B
including the respondent that one third of back wages for each completed
year of service would be acceptable to them. We, accordingly, deem it fit to
modify the final order of the High Court to the following extent :

The appeal of the respondent before the High Court will be treated to
be allowed by holding that the appellant management had indulged in 'unfair C
labour practice' only under item l{t) second part of Schedule IV of the
Maharashtra Act with the consequential direction that the appellant was not
to indulge into and shall desist from indulging into such unfair labour practice.

The second modification in the impugned judgment of the High Court
will be to the extent that the appellant shall pay to the respondent-workman D
I/3rd (i.e. 33% approx.) of back-wages with all other consequential benefits
from 22nd June, 1982 till the date of his superannuation i.e. 3rd May, 1995.
The said amount shall be paid by the appellant to the respondent within a
period of 3 months from the date of this judgment and in case of failure to
~pay the said amount within that time the appellant shall be liable to pay the
said amount with running interest of 12% on the expiry of 3 month:; from E
today till the date of actual payment. Subject to the aforesaid modifications
in the judgment and final order of the High Court impugned in this appeal,
the appeal stands dismissed.

In the facts and circumstances of the case, there will be no order as F
to costs.

v.s.s. Appeal dismissed.