Judgment : Ghulam Mohammed These batch of writ appeals are preferred by the Housing Board, challenging the correctness of the Judgment rendered by the learned single Judge who allowed the writ petitions instituted by the workmen challenging the legality and validity of the notice dated 08.04.2005 issued by the appellant/housing board and ordering for their reinstatement with continuity of service, but without any backwages. 2. The case of the writ petitioner/workmen was that, some of them were employed on the work charged establishment of the housing board, while the others were employed on nominal muster rolls (NMR) basis. But however, they were in continuous employment of the housing board ranging from 15 to 30 plus years. It was also their case that, their services have been provincialized upon completion of ten years of continuous service. However, the appellant/housing board has issued on 08.04.2005 the following notice: NOTICE The following [As Per List Attached] Work charged/ NMR employees are found surplus, therefore their services are dispensed with effect from 11.04.2005 They are being paid notice pay in lieu of notice and retrenchment compensation as per Section 25-F of the Industrial Disputes Act, 1947. For Andhra Pradesh Housing Board Sd/-….. 08.04.2005 Executive Engineer Signature of Employer Contd….2 BENEITS UPON RETRNECHMENT WORK CHARGED 1. ‘45’ days salary for every completed year and any period in excess of ‘6’ months. 2. Gratuity under the Gratuity Act equivalent to nearly ‘17’ days salary for every completed year of service based on last pay. 3. EPF amount @ 8.33% of the monthly salary for the entire length if there is no GPF NMR 1. One Month salary for every completed year and any period in excess of ‘6’ months. 2. Gratuity under the Gratuity Act equivalent to nearly ‘17’ days salary for every completed year of service based on last pay. 3. It is worthy to notice that, the Andhra Pradesh Housing Board is created by virtue of Section 3(1)of the Andhra Pradesh Housing Board Act, 1956. In accordance with Section 13-A of the Andhra Pradesh Housing Board Act, the Government is empowered to appoint a Vice-Chairman and Housing Commissioner to the Andhra Pradesh Housing Board, who shall be it’s Chief Executive Officer responsible for implementing various resolutions of the said Board and also discharge such functions as are entrusted to him by the Government. In accordance with Section 13-A of the Andhra Pradesh Housing Board Act, the Government is empowered to appoint a Vice-Chairman and Housing Commissioner to the Andhra Pradesh Housing Board, who shall be it’s Chief Executive Officer responsible for implementing various resolutions of the said Board and also discharge such functions as are entrusted to him by the Government. A little earlier i.e., on 20.10.2004, the Vice-Chairman and Housing Commissioner has circulated an open letter addressing all those who are working with the Housing Board and the letter was exhibited on the notice board of every office/establishment of the Housing Board. The Vice-Chairman and the Housing Commissioner has very effectively put paid to all the apprehensions of the employees about an impending closure of the Housing Board. The Housing Commissioner has reassured that, the housing segment in the social sector will continue to be very strong in the next twenty years. He has also reassured that, the Andhra Pradesh Housing Board is financially sound and it has got a mandate from the Government to build 50,000 houses a year and therefore, beseeched all his colleagues to bestow a thought as to the manner in which such a mammoth work has got to be organized and accomplished. He closed his letter with the following reassuring words: “………… not that the Andhra Pradesh Housing Board will be closed or the employees of the Andhra Pradesh Housing Board need to look around for job opportunities outside.” 4. But, surprisingly, in less than six months of the reassuring words of the Vice-Chairman and the Housing Commissioner of the Housing Board, came the impugned notice referred to supra on 08.04.2005. Nearly 487 employees of the Housing Board have been retrenched. According to the learned counsel for the petitioner Sri A.K. Jayaprakash Rao, a vast majority of them, to be very precise, 433 of them, have settled all their claims amicably with the appellant/Housing Board by receiving the package of benefits including the retrenchment compensation payable to them. Only a small section of the retrenched employees have not accepted the compensation package and are fighting for their reinstatement. Therefore, these employees should also receive compensation but should not have insisted for their reinstatement, appears to be the burden of the song of the Appellant. 5. The notice dated 08.04.2005 has been challenged on various counts and grounds. Only a small section of the retrenched employees have not accepted the compensation package and are fighting for their reinstatement. Therefore, these employees should also receive compensation but should not have insisted for their reinstatement, appears to be the burden of the song of the Appellant. 5. The notice dated 08.04.2005 has been challenged on various counts and grounds. One of the principal contentions canvassed was, the retrenchment compensation has not been tendered along with the retrenchment notice dated 08.04.2005 and hence, the retrenchment of the workmen is liable to be declared as illegal. This question is sought to be answered by the appellant in an ambiguous and unclear manner setting out that, when the workmen refused to receive the compensation offered to them, the cheques were dispatched to their addresses by registered post which were subsequently returned undelivered. The answer furnished by the Housing Board was vague and opaque. The necessary details such as on which date the retrenchment compensation was offered to the respective workmen is not spelt out. The date on which the retrenchment compensation has been dispatched by registered post, is left to be imagined by us. Therefore, for sheer lack of the vital details in this regard, we cannot accord any approval to such a disguised answer. 6. Section 2(oo) of the Industrial Disputes Act, defined the expression “Retrenchment” in the following terms: “2(oo) “retrenchment” means the termination by the employer of the service of a workman for any reason what so ever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include- (a) voluntary retirement of the workman; or (b) retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; or (c) termination of the service of a workman on the ground of continued ill-health.” It is therefore plain that, termination of the service of workman for any reason whatsoever by the employer would amount to retrenchment unless, such a termination falls in the excepted categories specified therein. The excepted categories are, where the termination is brought about as a result of punishment inflicted by way of disciplinary action, an employee voluntarily retiring from service for reasons of his own, retirement of the workman from service on reaching the age of superannuation as prescribed in the conditions of service and in case of an unfortunate termination of service of the workman on the ground of his continued ill-health. When we perused the notice dated 08.04.2005, the services of the workmen were sought to be dispensed with, as they were found surplus. On a true construction of the notice dated 08.04.2005, it would clearly appear, the respondent/writ petitioners had become surplus possibly, due to reduction of volume of work and that constitutes retrenchment, as is normally understood in its traditional sense of the word ‘retrenchment’. There is hardly any doubt, that termination of employment of workmen due to surplusage amounts to retrenchment. (See Pipraich Sugar Mills Limited Vs. Pipraich Sugar Mills Mazdoor Union (1956 SCR 172)). Even otherwise, after the dicta of the Supreme Court in State Bank of India Vs. N. Sundaran Money (1976 I LLJ 478 SC), termination of employment of a workman, for whatever be the reason, amounts to retrenchment.Therefore, the termination of the service of the workmen amounts to retrenchment is not at all in dispute. The appellant has also understood the termination brought about by it amounts to retrenchment and therefore it was conscious of its obligations to tender notice pay in lieu of one month’s notice and also payment of retrenchment compensation. 7. Why was the compensation required to be tendered along with the retrenchment notice, as was set out in Section 25-F of the Industrial Disputes Act, was not all difficult to be answered. 7. Why was the compensation required to be tendered along with the retrenchment notice, as was set out in Section 25-F of the Industrial Disputes Act, was not all difficult to be answered. Section 25-F deserves a closer look, which is as follows: "25F: Conditions precedent to retrenchment of workmen: No workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until - (a) the workman has been given one month's notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice; (b) the workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days' average pay (for every completed year of continuous service) or any part thereof in excess of six months; and (c) notice in the prescribed manner is served on the appropriate Government (or such authority as may be specified by the appropriate Government by notification in the Official Gazette).” 8. The underlying object of Section 25-F is two fold. Firstly, a retrenched employee must have one month’s time available at his disposal to search for an alternate employment, and so, either he should be given one month’s notice of the proposed termination or he should be paid wages for the notice period. Secondly, the workman must be paid retrenchment compensation at the time of retrenchment, or before, so that once having been retrenched there should be no need for him to go to his former employer demanding retrenchment compensation and the compensation so paid is not only a reward earned for his previous services rendered to the employer but is also a source of sustenance to the workmen for the period which may be spend in searching and securing another employment (See Pramod Jha V. State of Bihar ( (2003) 4 SCC 619 )). 9. It is therefore imperative for every employer to give his workman one month’s notice in writing, indicating the reasons for his retrenchment or in the alternative, pay him wages equivalent to the notice period in lieu of such notice. 9. It is therefore imperative for every employer to give his workman one month’s notice in writing, indicating the reasons for his retrenchment or in the alternative, pay him wages equivalent to the notice period in lieu of such notice. It is also imperative that, such workman has got to be paid compensation at the rate of 15 days average pay for every completed year of continuous service or any part thereof in excess of six months. It is vital to remember that, Section 25-F(b) clearly indicated as to the time at which the compensation is required to be paid by specifying the words ‘at the time of retrenchment’. In the instant case, the retrenchment is sought to be effective from 11.04.2005. In the instant case, there had been a sufficient compliance with the requirements of Section 25-F(c) only; as mode of service of notice prescribed in the statute is merely directory but not mandatory. Since, the notice has been exhibited on the notice board where the workmen are employed, the requirements of Section 25-F(c) may have been complied with by the appellant. If the appellant had demonstrated with reference to credible and satisfactory material that, wages in lieu of notice period and the retrenchment compensation have been tendered to the workman concerned, even through a cheque drawn in their name, which may not be actual payment of money, any time prior to 11.04.2005, then alone the mandatory requirement of payment ‘at the time of retrenchment’ could have been complied with. There is no material on record to vouch for the fact that the compensation has been actually tendered or offered or dispatched prior to 11.04.2005. It is hardly in doubt that, if the pre-requisites for a valid retrenchment as laid down in Section 25-F have not been complied with, then the retrenchment bringing about termination of employment becomes ab initio void (See Mohan Lal Vs. Management of Bharat Electronics Ltd. ( (1981) 3 SCC 225 ), Gammon India Limited Vs. Niranjan Dass ( AIR 1984 SC 500 )). 10. We may, in the present context, also recapitulate with profit, the ringing words of S. Saghir Ahmad, J, speaking for the Court in Nar Singh Pal Vs. Union of India & Ors. ( AIR 2000 SC 1401 )which are as under: “13. Niranjan Dass ( AIR 1984 SC 500 )). 10. We may, in the present context, also recapitulate with profit, the ringing words of S. Saghir Ahmad, J, speaking for the Court in Nar Singh Pal Vs. Union of India & Ors. ( AIR 2000 SC 1401 )which are as under: “13. The Tribunal as also the High Court, both appear to have been moved by the fact that, the appellant had encashed the cheque through which retrenchment compensation was paid to him. They intended to say that once retrenchment compensation was accepted by the appellant, the chapter stands closed and it is no longer open to the appellant to challenge his retrenchment. Thus, we are constrained to observe, was wholly erroneous and was not the correct approach. The appellant was a casual labour who had attained the ‘temporary’ status after having put in ten years’ of service. Like any other employee, he had to sustain himself, or may be, his family members on the wages he got. On the termination of his services, there was no hope left for payment of salary in future. The retrenchment compensation paid to him, which was only a meager amount of Rs.6,350/-, was utilized by him to sustain himself. This does not mean that he had surrendered all his constitutional rights in favour of the respondents. Fundamental Rights under the Constitution cannot be bartered away. …..” 11. Therefore, we have no hesitation whatsoever to conclude that the retrenchment brought about by the appellant/Housing Board is ab initio void. 12. Learned counsel for the appellant tried to reason it out by placing reliance upon the Judgment rendered by the Supreme Court in Rajender Singh Chauhan and Ors. Vs. State of Haryana and Ors. (JT 2005 (10) SC 25), U.P. State Bridge Corporation Ltd. and Ors. Vs. U.P. Rajya Setu Nigam S. Karamchari Sangh ( (2004) 4 SCC 268 )and Rajasthan State Road Transport Corporation and Anr. Vs. Krishna Kant and Ors. (JT 1995 (4) SC 348)Rajinder Singh Chauhan’scase is a case where, there was no dispute whatsoever about compliance of the requirements of Section 25-F and hence, it has no application for resolving the controversy involved in this case. Vs. Krishna Kant and Ors. (JT 1995 (4) SC 348)Rajinder Singh Chauhan’scase is a case where, there was no dispute whatsoever about compliance of the requirements of Section 25-F and hence, it has no application for resolving the controversy involved in this case. U.P. State Bridge Corporation Ltd is a case where, services of 168 workmen have been put to an end on the presumption that, they had abandoned their services with the Corporation on their own and it was debated as to whether such an action could be justified in the facts and circumstances of the case. We, therefore, do not consider the ratio in the said case to be of any help to the appellants. In Rajasthan State Road Transport Corporation case, the question that was agitated before the Supreme Court is, whether the Civil Court had any jurisdiction to entertain a suit where conditions of service of workmen were governed by certified standing orders, in view of the Judgment of the Supreme Court rendered earlier in Premier Automobiles Limited etc. Vs. Kamlekar Shantaram Wadke of Bombay and Ors. ((1975)II LLJ 445 SC)and hence, the said Judgment is also of not much help to the learned counsel for the appellant. 13. We are not able to see any merit in these batch of writ appeals and they are accordingly dismissed. No costs.