M/S. MARUTI UDYOG LTD. versus RAM LAL AND ORS.

Citation: [2005] 1 S.C.R. 790 · Decided: 25-01-2005 · Supreme Court of India · Bench: N. SANTOSH HEGDE · Disposal: Appeal(s) allowed

Cited by 3 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A 
MIS. MARUTI UDYOG LTD. 
v. 
RAM LAL AND ORS. 
JANUARY 25, 2005 
B 
[N. SANTOSH HEGDE AND S.B. SINHA, JJ.] 
Labour Laws: 
Industrial Disputes Act, 1947-Sections 25F, 25FF, 25FFF, 25H, 25J, 
C 2(00)-Closure of undertaking-Retrenchment-Transfer of assets to new 
company on appointed day i.e. on the date of enactment of the I 980 Acquisition 
Act-Claim of retrenched workmen for re-employment in new company--
Maintainability of-Held, in case of transfer or closure of undertaking, workmen 
are entitled to receive compensation only-Reemployment cannot be sought as 
D they were not in employment of the company before appointed day-Expression 
"as if' used in Section 25FF and Section 25FFF relates only to computation 
of compensation in terms of Section 25F and not the other consequences 
flowing therefrom-Maruti Limited (Acquisition and Transfer of Undertakings) 
Act, 1980-Section 13. 
E 
Interpretation of statutes: 
F 
Deeming provision-Legal fiction-Jn construing, the purpose for which 
it is created should be kept in mind and not to be extended beyond the scope 
thereof or beyond the language by which it is created-Deeming provision not 
to be pushed too far as to result in an anomalous or absurd position. 
Words and phrases-'As if'-Meaning of in the context of Section 25FF 
and S.25FFF of Industrial Disputes Act, 1947. 
Respondents were workmen in Maruti Ltd. (erstwhile company). 
Their services stood terminated in 1977 as a result of closure of factory. 
G In terms of settlement with the official liquidator, retrenched workmen 
were paid one month's salary in lieu of notice. 
H 
In 1980, Parliament enacted Maruti Limited (Acquisition and 
Transfer of Undertakings) Act, 1980 for the purpose of utilization of 
790 
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.J 
MARUTI UDYOG LTD. v. RAM LAL 
791 
production activities and equipment of erstwhile company. By virtue of A 
this Act, assets of erstwhile company vested in Central Government w.e.f. 
13.10.1980. However, in 1981, Central Government issued a notification 
directing that its right, title and interest in relation to the undertakings 
of erstwhile company shall vest in the appellant company. Workmen of 
erstwhile company filed writ petition in this Court seeking direction for B 
re-employment in appellant company, which was dismissed in limine. 
Sometime later, respondents raised industrial dispute seeking re-
employment in terms of S.25-H of Industrial Disputes Act, 1947. Labour 
Court held that appellant company is successor-in-interest of erstwhile 
company and was liable to re-employ respondents with back wages. C 
Aggrieved appellant company filed writ petition. Single Judge of High 
Court set aside the award of Labour Court. Respondent filed Letters 
patent appeal, which was allowed. Hence the present appeal. 
Appellant-company inter alia contended that the appellant is not 
successor-in-interest of the erstwhile company; that respondents had been D 
paid compensation in terms of S.25FFF of 1947 Act, and hence S.25H 
thereof would have no application having regard to the definition of 
retrenchment contained in S.2(oo) thereof; that there is no provision in 
the Act for taking over the liability of erstwhile company and as same 
contains non-obstante clause, provisions thereof would prevail over the 
1947 Act. 
E 
Respondent contended that with a view to give effect to S.13 of 
Acquisition Act, termination of employment by erstwhile company should 
be held to be a retrenchment under S.25F of 1947 Act. Alternatively it 
was .contended that in view of fact that the term 'workmen' is used in F 
S.25F, 25FF, 25FFF would include retrenched workman; that S.25H 
should be held to be applicable having regard to non-obstante clause 
contained in S.25J thereof. 
Allowing the appeal, the Court 
HELD: 1. A workman who has ceased to be in employment of 
company before appointed day, is not entitled to the benefit of 
reemployment in terms of S. 13 of the Acquisition Act,1980. [802-Fj 
2. The Respondents could have claimed a legal right of employment 
G 
in the Appellant company provided they were employed in any of the H 
792 
SUPREME COURT REPORTS 
[2005] I S.C.R. 
A undertakings of the company immediately before the appointed day. By 
virtue of S.13 of the Acquisition Act, only persons who were in the service 
on the date of the take over, viz. 13.10.1980, could become the employees 
of the appellant company and since the Respondents were not employed 
in the undertakings on the said date and had already been

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