M/S. HATISINGH MFG. CO. LTD. AND ANOTHER versus UNION OF INDIA AND OTHERS.

Citation: [1960] 3 S.C.R. 528 · Decided: 14-04-1960 · Supreme Court of India · Bench: BHUVNESHWAR PRASAD SINHA · Disposal: Dismissed

Cited by 9 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

528 
SUPREME COURT REPORTS 
[1960] 
1960 
permanenl enjoyment as Kapal-Giras, it has come to 
an end. 
Darbar Shri Vira 
Vala Surag Vala 
In that view of the matt.er the jJClitioner must be 
Vadia 
v. 
held to have failed to make oul any infringement of 
State"! ~"':rashtra his fundamental right by reason of the notification 
Kapur J. 
dated May 213, l 952. 
The inf1;ingement which the 
petitioner complains of is depri\ation of his property 
oy State action and he bases his right on the terms 
of the grant. If the grant is not an absolute grant 
in the sense in which the peLiLioner contends, but is a 
grant which Ly its \cry nature contains a defeasance 
clause, then the petitioner cannot found his claim on 
any violation of his fundamental rig·ht. 
1960 
Ap6l 14. 
The petition is therefore dismissed with costs. 
Petition dismissed. 
M/s. 1-IATISINGH i\IFG. CO. LTD. 
AND ANOTHER 
v. 
UNION OF INDIA AND OTHERS. 
(B. P. SINHA, C. ]., JAFER IMAM, A. K. SARKAR, 
K. N. \VANCHOO and]. C. SHAH, JJ.) 
Industrial Undertaking, Closure of-Compensation to workmen 
-Constitutional validity of enactment-Industrial Disputes 
Act, 
1947 (14 of 1947), as amended by Act 18 of 1957, s. 25FFF(l)-
Constitution of India, Arts. 19\l)(g), 14, 20. 
The question 
for determination 
in these 
petitions relates 
to the 
constitutional 
validity of s. 25FFF(l) of the 
Industrial 
Disputes Act, 1947, inserted by Act 18 of 1957, which provides 
for payment of compensation to workmen on the closure of an 
industrial undertaking. 
The petitioners urged that the impugned 
section (i) imposed 
unreasonable restrictions 
on the freedom to 
carry on business 
guaranteed by Art. 19(l)(g), 
which included 
the right to close 
the business, 
(ii) discriminated 
between em-
ployers who closed their undertakings on or before November 27, 
1956, and employers who closed thereafter and thus contravened 
Art, 14 and (iii) also penalised acts which were not offences when 
committed contrary to Art. 20( 1) of the Constitution: 
Held, that s. ZSFFF(l) of the Industrial Disputes Act, 1947, 
inserted by Act 18 of 1957, including the proviso and the expla-
nation, is not violative of Arts. 19(l)(g), 14, and 20 of the Cons-
titution and its constitutional validity is beyond question: 
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3 S.C.R. 
SUPREME COURT REPORTS 
529 
Held, further, that the question whether a restriction imposed 
1960 
by a law on the exercise of the fundamental right guaranteed by 
Hatisingh Mfg. 
Art. 19( 1 )(g) is a reasonable restriction 
within the meaning of 
Co. Ltd. 
Art. 19(6) of the Constitution is to be judged not. by any theore-
v. 
tical standards or 
fixed patterns but in the light of the nature 
Union of Indio 
and incidents of the right, 
the interest of the 
general public 
sought to be secured and the reasonableness of the quality and 
extent of the restriction itself. 
The clear intention of the legislature in using the words "as 
if the workmen had 
been retrenched" 
in s. ZSFFF(l) of the 
Act was not to place the closure of an undertaking on the same 
footing as retrenchment under s. ZSF. 
While under s. ZSF of 
the Act no 
workman can 
be retrenched until 
the conditions 
prescribed therein are fulfilled, s. ZSFFF(l) does not prohibit the 
closure of an undertaking without payment of compensation or 
service of notice, or payment of wages in lieu thereof, and lays 
down no conditions precedent to closure. 
But termination of service due to closure of an industrial 
under<aking stands on the same footing as termination of service 
on retrenchment and it is in the interest of the general public 
that the unemployed workmen should be afforded some protection 
to tide over the period of unemployment. 
Since the impugned 
provision, 
with that 
object in view, 
seeks to 
achieve social 
justice, 
it is not 
material to 
probe into the 
motives of 
the 
employer or the bona fides of the closure. 
Indian Hume Pipe Co., Ltd. v. Their Workmen, 
[1960] 2 
S.C.R. 32, referred to. 
Since wages in 
lieu of 
notice are normally inadequate re-
compense for loss of employment, 
the payment 
of additional 
compensation related to the length of service of the employee 
cannot be said to be unreasonable. 
Nor can the provisicin for standardisation of compensation, 
which does not leave it to be judicially ascertained on the basis 
of the employer's capacity 
to pay or the loss 
suffered by the 
employees, be said to be unreasonable. 
Payment of gratuity, which is a 

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