A. SATYANARAYANA REDDY AND ORS. versus THE PRESIDING OFFICER, LABOUR COURT, GUNTUR & ORS.

Citation: [2008] 7 S.C.R. 105 · Decided: 29-04-2008 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Matter referred to larger bench

Judgment (excerpt)

[2008) 7 S.C.R. 105 
,:_ y 
A. SATYANARAYANA REDDY AND ORS. 
A 
v. 
THE PRESIDING OFFICER, LABOUR COURT, GUNTUR & 
ORS. 
• 
(Civil Appeal No. 3053 of 2008) 
• .<( 
APRIL 29, 2008 
B 
(S.B. SINHA AND V.S. SIRPURKAR, JJ.) 
Labour laws: 
Industrial Disputes Act, 1947; Ss .. 32(S) and 33C(2) and c 
G.O. MS.No.25 dated 21.5.2001 issued by Government of 
Andhra Pradesh: 
Lay-off compensation and benefits under Voluntary 
Retirement Scheme to workmen of a Public .Sector D 
Undertaking in terms of a Government Order - Entitlement -
Proceedings u/s. 33 C(2) of the Act - Maintainability of - Held: 
Right of workman to claim lay off compensation not denied/· 
disputed by Management of the Public Sector Undertaking -
Since, claim of lay off compensation has no nexus with VRS, 
E 
proceedings uls. 33 C(2) of the Act would be maintainable -
However, in view of an apparent conflict on the issue as 
apparent in the decisions of the Supreme Court in the case of 
National Buildings Construction Corporation vs. Pritam 
-~1 
Singh Gill & Ors. and in the case of A.K. Bindal vs. Union of 
India, the question is referred to the larger Bench,. 
F 
• 
Appellants were the employees of an Undertaking 
of Government of Andhra Pradesh, which was declared 
to be a relief Undertaking in terms of Andhra Pradesh 
Relief Undertaking (Special Provisions) Act, 1971. The said G 
Undertaking declared lay off compensation to its workmen 
for certain period. In the meantime, the State Government 
sold the factory run by the Undertaking to a private limited 
company, which shifted the factory in the adjoining State 
105 
H 
106 
SUPREME COURT REPORTS 
[2008] 7 S.C.R. 
A of Karnataka. The employees working in the erstwhile 
factory did not show their willingness to continue to work 
in the new factory. The State Government issued an order 
providing for special compensation under Voluntary 
Retirement Scheme for the employees who did not opt to 
s continue their employment in the new factory. Appellant-
employees opted for voluntary retirement under the 
Scheme. Accordingly, the special compensation in terms 
)S 
of the Government order was paid to them but the 
authorities refused to provide them lay off compensation 
C for certain period. The Labour Union filed a writ petition, 
which was disposed of by the High Court giving liberty to 
the petitioner-Union to file claim petition before the 
appropriate forum. The aggrieved workmen filed a claim 
petition before the Labour Court claiming lay off 
0 compensation for certain period. The Labour Court did 
not entertain the claim petitions holding that the same were 
not maintainable. A writ petition filed thereagainst was 
dismissed by the Single Judge of the High Court and the 
appeals filed by the workmen were dismissed by the 
Division Bench of the High Court. Hence the present 
E appeal. 
Appellants-workmen contended that the Labour 
Court and consequently the High Court committed a 
manifest error in passing the impugned orders insofar as 
F they failed to take into consideration that the existing right 
of the workmen for obtaining the lay off compensation 
payable to them under the! Industrial Disputes Act having 
nothing to do with the Voluntary Retirement Scheme and 
furthermore having regard to the directions of the High 
G Court in the earlier Writ Petition, the proceedings under 
Section 33C(2) of the Act was maintainable. 
Respondents submitted that in view of the definition 
of workman as contained in Section 2(s) of the Industrial 
Disputes Act, 1947, the workman having opted for 
H v
1oluntary retirement ceased to be the workman of the 
•' 
' ~ 
;., 
- )' 
A.S. REDDY & ORS. v. THE PRESIDING OFFICER, 
LABOUR COURT, GUNTUR & ORS. 
107 
State and thus the proceedings under Section 33C(2) of 
the Act was rightly held by the High Court to be not 
maintainable. 
Referring the case to a larger Bench, the Court 
HELD: 1. There cannot be any doubt whatsoever that 
ordinarily upon opting for a voluntary retirement under a 
Voluntary Retirement Scheme framed in that behalf, the 
workmen would cease to have any claim against the 
management. However, the same prima facie would not 
mean that a statutory right of opting for lay off 
compensation, unless expressly waived, may continue 
to remair;i within the realm of legal right, so as to enforce 
the same before a forum constituted unde.r the Industrial 
Disputes Act. The Bombay High Court in the case of 
Premier Automobiles Ltd. as also this Court in the 

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