CEAT LTD. versus ANAND ABASAHEB HAWALDAR AND ORS.

Citation: [2006] 2 S.C.R. 254 · Decided: 16-02-2006 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
CEAT LTD. 
V. 
ANAND ABASAHEB HAWALDAR AND ORS. 
FEBRUARY 16, 2006 
B 
[ARIJ!T PASAYAT AND R.V. RAVEENDRAN, JJ.] 
labors Laws: 
C 
Maharashtra Recognition of Trade Unions and Prevention of unfair 
Labour Practices Act, 1971: Schedule IV, Item Nos. 5, 9 and I 0. 
Unfair labour practices-On the part of the employer-Voluntary 
Retirement Scheme (VRS)-Dijjerential treatment-Favoritism of partiality-· 
Allegations of-Company declared VRS-I for its employees which was accepted 
D by 337 employees--Subsequently, the company entered into a Memorandum 
of Understanding with the employees' union containing another VRS-l/-The 
same was accepted by I 79 employees· Some employees who had earlier 
accepted VRS-I filed a complaint before the Industrial Court all<!ging that the 
company had committed an unfair labour practice in terms of item Nos. 5, 9 
and IO of the Schedule IV-It was contended that one of the benefits which 
E was given to the employt1es who had accepted VRS-l/, namely, payment of a 
sum of Rs. 90,000 ex-gratia, had not been extended t0 the complainants who 
had retired pursuant to VRS-1-The Industrial Court directed the company to 
pay Rs. 90,000 to each of the employees who had retired under VRS-I-The 
High Court held that the fact that Rs. 90,000 was paid to those who accepted 
F VRS-l/ clearly indicated discrimination and confirmed the order of the Industrial 
Court-Correctness of-Held: Every kind of differential treatment is not 
'favouritism or partiality'-lt must be a prejudice which is not founded on 
reason, and actuated by selfinterest whether pecuniary or personal-The 
Memorandum of Understanding which was the foundation for VRS-l gave a 
different package but on the clear understanding that litigations of all types 
G were to be withdrawn-The background facts do not establish that the company 
was guilty of favouritism or pattiality-Mere breach of assurance is not 
favoritism or partiality-Hence, complaint of unfair labour practice not 
established 
H 
Words & Phrases: 
254 
\ . 
i 
7' 
CEA T LTD. v. ANAND ABASAHEB HAW ALDAR 
255 
''Favouritism or partiality' '-Meaning of-In the context of item 5 of A 
Schedule IV of the Maharashtra Recognition of Trade Union & Prevention of 
Unfair Labour Practices Act, 1971. 
The appellant-company declared a Voluntary Retirement Scheme 
(VRS-1) for its employees which was accepted by 337 employees. B 
Subsequently, the appellant entered into a Memorandum of Understanding 
with the employees' union containing another Voluntary Retirement 
Scheme (VRS-11). The same was accepted by 179 employees. Respondents 
I to 6 who had earlier accepted VRS-1 filed a complaint before the 
Industrial Court alleging that the appellant-company had committed an 
unfair labour practice in terms of item Nos. 5, 9 and 10 of Schedule IV to C 
the Maharashtra Recognition of Trade Union & Prevention of Unfair 
Labour Practices Act, 1971. It was contended that one of the benefits which 
was given to the employees who had accepted VRS-11, namely payment 
ofa sum of Rs. 90,000 ex-gratia, had not been extended to the complainants 
who had retired pursuant to VRS-1. 
D 
The Industrial Court directed the appellant to pay Rs. 90,000 to each 
of the employees who had retired under VRS-1. The High Court held that 
the fact that Rs. 90,000 was paid to those who accepted VRS-11 clearly 
indicated discrimination and confirmed the order of the Industrial Court. 
Hence the appeal. 
E 
On behalf of the appellant, it was contended that VRS-11 was offered 
in order to curtail litigations and, therefore, a Memorandum of 
Understanding was arrived at so that cases of all types were to be 
withdrawn by the employees who had raised disputes and had gone to 
court by not accepting the terms of VRS-1. 
F 
Allowing the appeal, the Court 
HELD: 1. In Item (5) of Schedule IV to the Maharashtra Recognition 
of Trade Union & Preven:ion of Unfair Labour Practices Act, 1971, the 
Legislature has consciously used the words 'favouritism or partiality to G 
one set of workers' and not differential treatment. Thus, the mental 
element of bias was necessary to be established by cogent evidence. No 
evidence in that regard was led. On the contrary the approach of the 
Industrial Court and the High Court was different. One proceeded on the 
basis of breach of assurance and the other on the ground of discrimination. H 
256 
SUPREME COURT REPORTS 
[2006J 2 S.C.R. 
A There was no evidence brought on record as regards the pre-req

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