Gauhati High Court
Board Of Major Port Authority vs Md Shakir Alam And 3 Ors on 31 October, 2025
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GAHC010106832024
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THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : WA/339/2024
BOARD OF MAJOR PORT AUTHORITY
FOR SYAMA PRASAD MOOKERJEE PORT. KOLKATA, A STATUTORY BODY
UNDER THE MAJOR PORT AUTHORITIES ACT 2121 REP. BY ITS
SECRETARY HAVING ITS OFFICE AT 15, STRAND ROAD, KOLKATA 700001
VERSUS
MD SHAKIR ALAM AND 3 ORS
S/O MD. NASIMUDDIN, EX RECORD KEEPER, RESIDENT OF HAMID
NAGAR, BURNPUR, ASANSOL MC. BURNPUR, BARDHMAN, WEST
BENGAL. 713325
2:MD. IBRAHIM
S/O LATE ABDUL MAJID
EX DECK HAND. ADD.Z 5/195/19 H.B.P AYUB NAGAR ROAD
KOLKATA 700044
3:MD. ATIK
EX DECK HAND
SON OF LATE MOTIUR RAHMAN
RESIDENT OF VILLAGE RASALPUR VIA HAYAGHAT
DIST DARBHANGA
BIHAR
847301
4:UNION OF INDIA
REP. BY THE SECRETARY TO THE MINISTRY OF SHIPPING
GOVT. OF INDIA
NEW DELHI 110001
Advocate for the Petitioner : MR. P K ROY, MR. S K CHAKRABORTY,MRS. A
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CHAKRABORTY
Advocate for the Respondent : MRS. R DEVI (R-4), MS. R BHARALI(R-1 TO 3),MR S NATH (R-1
TO 3) BEFORE HON'BLE THE CHIEF JUSTICE ASHUTOSH KUMAR HON'BLE MR JUSTICE ARUN DEV CHOUDHURY For the Appellant : Mr. P.K.Roy, Sr. Adv.
Mr. B. Nath, Adv.
For the Respondents : Mr. S. Dutta, Sr. Adv.
Ms. R. Medhi, Adv.
Date of hearing : 16.10.2025
Date of judgment : 31.10.2025
JUDGMENT & ORDER (CAV)
(Arun Dev Choudhury, J)
1. Heard Mr. P.K. Roy, learned Senior counsel assisted by Mr. B. Nath, learned counsel for the appellant. Also heard Mr. S. Dutta, learned Senior counsel assisted by Ms. R. Medhi, learned counsel for the respondents.
2. The present intra-Court appeal is filed assailing the judgment and order dated 25.04.2024 passed in WP(C) No. 6258/2016 by the learned Single Judge whereby the impugned order dated 14.10.2016 retrenching the respondent Nos.1 to 3 from service was set aside and quashed for non-compliance of the mandatory prescription of Section 25F of the ID Act, 1947 and accordingly, they were directed to be reinstated in service Page No.# 3/9 with their 50% of arrear salaries.
3. The material facts are not in dispute. The respondents Nos. 1, 2 & 3 were the employees of CIWTCL, dissolution of which was approved by the Union Cabinet on 31.08.2016. By a notice dated 14.09.2016, the Chairman cum Managing Director of CIWTCL notified implementation of Improved Voluntary Retirement Scheme (IVRS for short), which was open for a period of one month from 14.09.2016 asking the employees to opt for such IVRS. Subsequently, by another communication dated 26.09.2016, it was intimated that on expiry of IVRS i.e., on 13.10.2016, if any employees does not opt for it, he would be retrenched from services of the corporation.
4. While the majority of employees opted for the IVRS, five employees, including the three respondents, declined to do so. Thereafter, on 14.10.2016, the impugned retrenchment order was issued.
5. Being aggrieved by such retrenchment, as well as the Notice dated 14.09.2016 offering IVRS, and the letter dated 26.09.2016, notifying that if the IVRS is not accepted by 13.10.2016, the employees would be retrenched and the retrenchment order dated 14.10.2016 was challenged in the writ petition.
6. Initially, by order dated 06.10.2016, the learned Single Judge restrained the Union of India and CIWTCL from taking any action prejudicial to the interest of the writ petitioner therein/respondent Nos. 1 to 3 herein.
7. CIWTCL contended before the learned Single Judge that the retrenchment order had been issued following the decision of the Union Cabinet dated 31.08.2016, wherein the dissolution of CIWTCL was approved.
8. The learned Single Judge, amongst others, taking note of paragraph 6 of the affidavit filed by CIWTCL and, for the reason of non-compliance of the mandatory precondition of Section 25F of the ID Act, 1947, had adjudged the retrenchment order as unsustainable in law.
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9. It is important to note that pursuant to dissolution of CIWTCL, by a decision of the Union Cabinet dated 24.12.2014, all movable and immovable properties of CIWTCL were entrusted to the appellant. Admittedly, though the Union of India and CIWTCL were party respondents in the writ petition, it was not brought on record that the present appellant was managing the properties of CIWTCL in terms of the Cabinet Decision.
10. Mr. Roy, learned Senior counsel for the appellant, has contended that the retrenchment order would not attract Section 25F of the ID Act, 1947, but Section 25FFF would be applicable. It is the further contention of the learned Senior counsel for the appellant that, following the order dated 17.10.2023 passed by the Union of India, the name of CIWTCL was struck off from the Roll of Registrar of Companies. Thus, the direction for reinstatement in service passed by the learned Single Judge is inexecutable. It is also contended that the order of retrenchment of the respondent Nos. 1 to 3 herein is in the true sense compulsory retirement, not a retrenchment.
11. Mr. Roy, learned Senior counsel for the appellant, further contends that the appellant will now pay the retrenchment compensation to the respondent Nos. 1 to 3, and therefore, the defect that might have occurred in issuing the retrenchment order can still be cured.
12. Mr. Roy, learned Senior counsel in his support, places reliance on the judgment of the Hon'ble Apex Court in Hathisingh Manufacturing Co.Ltd. -Vs- Union of India reported in AIR 1960 SC 923.
13. Par contra, Mr. Dutta, learned Senior counsel for the respondents, contends that regardless of the circumstances leading to termination, whether it is a case of under Section 25 FF or Section 25FFF, the rigors of Section 25F get attracted and the condition prescribed for retrenchment is to be scrupulously followed as mandated under Section 25F, which was not admittedly followed in the present case. Therefore, the learned Single Judge has not committed any error of law.
14. In support, Mr. Dutta, learned Senior counsel for the respondents, places reliance Page No.# 5/9 on the decision of the Hon'ble Apex Court in Santosh Gupta Vs. State Bank of Patiala reported in (1980) 3 SCC 340 and Raj Kumar Vs. Director of Education reported in (2016) 6 SCC 541.
15. We have given our anxious consideration to the arguments advanced by the learned counsels for the parties before us in the light of the pleadings and undisputed documents available on record.
16. Before dealing with the arguments advanced by the learned counsels for the parties, let this Court first examines the scheme of the ID Act, 1947, more particularly Sections 25F, 25FF, and 25FFF.
17. Section 25F of the ID Act, 1947, lays down the conditions precedent to the retrenchment of workmen who have rendered continuous services for not less than one year. It mandates: one month's notice in writing or wages in lieu thereof; retrenchment compensation equivalent to fifteen days' average pay for every completed year of continuous service; and notice to the appropriate Government.
18. In State of Bombay and Others Vs. Hospital Mazdoor Sabha and Ors . reported in AIR 1960 SC 610, the Hon'ble Apex Court held that when Section 25F imposes mandatory terms, conditions precedent, non-compliance with such condition renders the retrenchment under Section 25F invalid.
19. Section 25FF of the ID Act, 1947, provides for compensation to workmen in terms of Section 25F, in the event of a transfer of ownership or management of an undertaking. Such a transfer entitles every workman who is in continuous service to get compensation, unless the transferee employer provides continuity of service.
20. In Anakapalle Co-operative Agricultural and Industrial Society Ltd Vs. Workmen and Ors. reported in 1963 Supp (1) SCR 730, Apex Court held that Section 25FF could be proceeded on the assumption that if the ownership of an undertaking was transferred, the cases of the employees affected by the transfer would be treated as Page No.# 6/9 cases of retrenchment to which Section 25-F would apply. Therefore, Section 25FF begins with a non obstante clause and lays down that the change of ownership by itself will not entitle the employees to compensation, provided the three conditions of the proviso are satisfied. Accordingly, if the three conditions specified in the proviso were not satisfied, retrenchment compensation would be payable to the employees under Section 25 F. Thus, as soon as the transfer is effected under Section 25FF, all employees are entitled to claim compensation, unless, of course, the case of transfer falls under the proviso.
21. It was reiterated that the object of the enactment of Section 25FF is to give partial protection to workmen who are thrown out of employment for no fault of their own, to tide them over the period of unemployment.
22. Section 25FFF of the ID Act, 1947, relates to closure of an undertaking and mandates that where an undertaking is closed down for any reason, every workmen who has been in continuous service for not less than one year shall be entitled to notice and compensation as if the workmen has been retrenched under Section 25F.
23. In State of Bombay and Ors. (supra), the Supreme Court held that the provisions of Section 25F are the conditions precedent to a valid retrenchment, and any retrenchment made in violation thereof is void ab initio. In the case of Pramod Jha and ors. Vs. State of Bihar and Ors. reported in (2003) 4 SCC 619, it was reiterated that the payment of retrenchment compensation must be made at the time of retrenchment, not subsequently. In Anakapalle (supra), it was held that, in the case of the transfer of an undertaking, the employees shall be deemed to have been retrenched unless the transferee undertakes to continue them in service on the same terms and conditions.
24. In Hathising (supra), while interpreting Section 25 FFF, the Apex Court held that the compensation on closure is a statutory liability and bona fide closure must be distinguished from same and a colourable device to evade an obligation.
25. Thus, the compliance with the provisions of Section 25F, Section 25FF & Section 25FFF has been held to be mandatory and the conditions precedent to terminating Page No.# 7/9 employees in such cases.
26. Coming to the present case, the Notice dtd. 14.09.2016 offering IVRS and communication dtd. 26.09.2016 intimating that on non acceptance of IVRS within stipulated time shall entail retrenchment, in the considered opinion of this Court, cannot be equated to a notice of retrenchment within the meaning of Section 25F.
27. The IVRS notice is an invitation to voluntary separation, not an intimation of compulsory termination. The communication dated 26.09.2016 neither indicates the reason for retrenchment nor satisfies the statutory requirement of tendering compensation and notice to pay simultaneously. Therefore, retrenchment of the respondents without compliance with the conditions prescribed under Section 25F is vitiated in law, and therefore, the learned Single judge has rightly interfered with such retrenchment order.
28. Section 25FF of the ID Act 1947 provides for compensation to workmen in cases where the ownership or management of an undertaking is transferred, unless the new employer continues the service of the workmen on terms and conditions not less favourable than those applicable before the transfer.
29. Thus, the continuity of employment is the decisive test under Section 25FF: if the transferee entity does not take over the employees, the transfer cannot be regarded as one falling within the exemption clause, and compensation equivalent to that under Section 25F becomes payable, as if the workmen were retrenched. Herein, the transfer of CIWTCL to Kolkata Port Trust did not include the transfer of employees, nor is it a case of transfer of CIWTL. Even otherwise since the transfer of employees is not included, the workmen are entitled to compensation under Section 25FF read with Section 25F.
30. Section 25FFF concerns the closure of an undertaking and mandates compensation for workmen. Closure compensation under Section 25FFF is payable irrespective of the reason for closure. In the present case, the dissolution of the CIWTCL by the Union Cabinet is a policy decision and amounts to closure within the meaning of Page No.# 8/9 Section 25FFF (1). Therefore, the workmen are entitled to Notice and compensation in accordance with Section 25F.
31. In the present factual context, the closure of CIWTCL and the transfer of its properties to Kolkata Port Trust, without the absorption of its employees, cannot extinguish the statutory rights of the workmen under the ID Act, 1947. Since the retrenchment order is found to be in violation of Sections 25F, it cannot be sustained in law.
32. However, in view of the complete dissolution of the undertaking, reinstatement would be impracticable. Therefore, the appropriate relief is grant of monetary compensation following the principles laid down in Bharat Sanchar Nigam Ltd. Vs. Bhurumal reported in (2014) 7 SCC 177, though it was a case of illegal termination and direction of reinstatement.
33. Therefore, in the present case, where the reinstatement is impracticable due to closure, this Court is of the opinion that the ends of justice would be met if this Court directs that each of the respondent Nos. 1 to 3, be paid the retrenchment compensation in accordance with Section 25FFF read with Section 25F of the ID Act, 1947, along with interest @ 6% per annum from the date of termination until payment.
34. Ordered accordingly.
35. The appellants shall complete such exercise and disbursement within 12 (twelve) weeks from the date of this judgment. In case of default, such amount shall carry with it an enhanced interest @ 9% per annum.
JUDGE CHIEF JUSTICE
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Comparing Assistant