J.K. SYNTHETICS versus RAJASTHAN TRADE UNION KENDRA AND ORS.

Citation: [2000] SUPP. 5 S.C.R. 552 · Decided: 12-12-2000 · Supreme Court of India · Bench: S. RAJENDRA BABU, S.N. VARIAVA · Disposal: Disposed off

Judgment (excerpt)

A 
J.K. SYNTHETICS 
v. 
RAJASTHAN TRADE UNION KENDRA AND ORS. 
DECEMBER 12. 2000 
B 
[S. RAJENDRA BABU AND S.N. VARIAVA, JJ.] 
labour laws : 
Industrial Disputes Act, 1947- -Section 25-!V Termination uf services 
C of workmen on closure of unit of a company--He/d, on facts, there was 
closure which was referred and decided by Industrial Tribunal. 
In January 1983, Appellant-company had a 'lay ofr on account of 100% 
power cut and non-functioning oCits generators. The Company terminated 
D services of 1164 workmen on closure of Textile Division of the company 
because of huge losses and lack of power. Later, another 1201 workmen were 
retrenched by the Company. The respondent-union filed a Writ Petition before 
the High Court challenging the termination and retrenchment of 2367 
workmen. The un-retrenched workmen refused to report for duty and went 
on a strike when the company lifted the lay-off. The Company filed a Writ 
E Petition before the High Court challenging the constitutional validity of Section 
25-N of the Industrial Disputes Act, 1947. The High Court in October 1983 
allowed the Writ Petition of the Company and dismissed the Writ Petition of 
the respondent-union. In January 1984, the respondent-union filed a Special 
Leave Petition. Leave was granted and by an interim order, the Company was 
F directed to pay I/3rd of disputed total wages subject to future adjustment. 
In December 1983, Industrial Tribunal framed questions to be decided 
on a reference made by the State Government under Section 10-H of the Act 
regarding the justification of lay-off, closure of an unit and subsequent 
termination and retrenchment of the workers and the relief to be given to 
G them. In March 1985, the Company claimed before the Industrial Tribunal 
that a settlement has been arrived at with different Unions concerned and filed 
H 
a joint application praying for an award on the basis of the settlement. However, 
the respondent-union opposed the settlement stating that the settlement 
entered into with other Unions are not binding on the workmen. The Industrial 
Tribunal held a secret poll. A majority of the workers voted against the 
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.i.K. SYNTHETICS v RAJAS HAN TRADE l'.NIUN KENDRA 
553 
settlement. In May 1985, the Industrial Tribunal passed an Award holding A 
that the lay off was bona-fide due to 100% power cut and failure of the 
company's generators and further held that the strike by un-retrenched 
workmen was illegal and termination of 1164 workmen was justified on 
closure of the plant of the company. The Industrial Tribunal awarded various 
reliefs to the workmen, which was based mainly on the earlier settlement. B 
The Company accepted and paid the dues to the workmen as per the award. 
The respondent-union filed a Special Leave Petition against the Award of the 
Industrial Tribunal. Leave was granted. In August 1993, the company filed a 
Writ Petition before the High Court challenging the Award of the Industrial 
Tribunal. 
Meanwhile in May 1982 the Court in the case of Workmen v. Meenakshi 
Mills ltd. held that Section 25-N of the Industrial Disputes Act, 1947 is valid 
c 
and not unconstitutional. The Court remanded the pending appeals of the 
respondent-unions back to the High Court for consideration on merits in the 
light of the judgment in Mcenakshi Mills Ltd. Single Judge of the High Court 
upheld the award of the Industrial Tribunal and directed payment of full wages D 
to 1201 workmen. The Company and the Unions filed a('peals before the 
Division Bench of the High Court against the judgment of the Single Judge. 
The High Court rejected the Writ Petition of the company filed in August 
1993 on grounds of delay and !aches and that the award was already accepted 
by the company. The High Court reversed the judgment of the Single Judge E 
holding that there was no closure and directed reinstatement of 1164 workmen 
and payment of full wages. 
In these appeals, the Company contended that the finding of the High 
Court on closure of the unit is erroneous and that reinstatement of workmen 
is unjustified, and that the company contended that the closure of the unit F 
was not referred to the Industrial Tribunal. 
Disposing of the appeals, the Court 
HELD : I. The High Court erred in concluding that the Industrial G 
Tribunal could not have gone into the question of closure, as it was not referred 
to it. Before deciding upon the question of justification of retrench

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