LexM/S. OSWAL AGRO FURANE LTD. AND ANR. versus OSWAL AGRO FURANE WORKERS UNION AND ORS.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
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'M/S. OSWAL AGRO FURANE LTD. AND ANR.
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OSWAL AGRO FURANE WORKERS uNiON AND ORS.
FEBRUARY'l4, 2005
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. [N. SANTOSH HEGDE AND S.B. SINHA, JJ.] ·
Labour Laws :
Industrial Disputes Act, 1947; Ss. 2(P), 2(S), 12(3), 18(3), 25(1), 25(0)
C and 25(N):
Closure of an industrial undertaking and retrenchment of workmen-
Requirements of-Held: Employer bound to seek prior permission from
appropriate Government before effecting closure of Undertaking-Interest of
D workmen has to be taken into consideration by the appropriate Government
before granting/refusing such permission-Since 'statutory requirements are
imperative in character, they prevail over right of parties to arrive at a
settlement-Settlement arrived at between employer and workmen did not
conform to statutory conditions and public policy in terms of relevant mandatory
provisions of the Act-Hence void-Contract Act, 1872-Section 23.
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Legal Maxims :
Maxim "ex turpi causa non oritur action"-Applicability of
The questions which arose for determination in this appeal were as
F to whether in case of closure of an Industrial Undertaking, prior
permission of the appropriate Government is imperative and as to whether
a settlement arrived at between the employer and the workmen would
prevail over the statutory requirements as contained in Section 25-N and
Section 25-0 of the Industrial Disputes Act.
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It was contended by the appellant-Undertaking that having regard
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to the purport and object of the Industrial Disputes Act, a settlement
arrived at in the course of conciliation proceedings within the meaning of
sub-section (3) of Section 12 of the Act is binding on all workmen in terms
of Section 18 of the Act; that in view of such a settlement, the writ petition
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OS WAL AGRO FURANE LTD. 1·. OS WAL AGRO FURANE WORKERS UNION
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filed by the Respondents was not maintainable; and that the 11011-obstante A
clause contained in Section 25-J occurring in Chapter V-A will have no
application to a proceeding contained in Chapter V-B thereof.
Respondent-workmen's Union submitted that the provisions of
Section 25-N and 25-0 of the Act are imperative in character.
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JM-
Dismissing the appeal, the Court
HELD : 1. The provisions contained in Sections 25-N and 25-0 of
the Industrial Disputes Act leaves no manner of doubt that the employer
who intends to close down the undertaking and/or effect retrenchment of c
workmen working in such industrial establishment, is bound to apply for
prior permission at least ninety days before the date on which the intended
closure is to take place. They constitute conditions precedent for effecting
a valid closure. Obtaining a prior permission form the appropriate
Government, thus, must be held to be imperative in character. {101-G-H)
2.1. A settlement can be arrived at between the employer and D
workmen in case of an industrial dispute. An industrial dispute may arise
as regard the validity of a retrenchment or a closure or otherwise. Such a
settlement, however, as regard retrenchment or closure can be arrived at
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provided such retrenchment or closure has been effected in accordance
with law. One of the factors which is required to be taken into E
consideration by the appropriate Government before grant or refusal of
such permission is the interest of the workmen. 1102-C, El
2.2. Requirements of issuance of a notice in terms of Section 25-N
and 25-Q of the Act, and/or a decision thereupon by the appropriate
Government are clearly suggestive of the fact that thereby a public policy F
has been laid down. These provisions being imperative in character would
prevail over the right of the parties to arrive at a settlement. Such a
settlement must conform to the statutory conditions laying down a public
policy. A contract which may otherwise be valid, however, must 11atisfy
the tests of public policy not only in terms of the provisions of the G
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Industrial Disputes Act but also in terms of Section 23 of the Contract
Act. 1102-D-E-Fl
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2.3. It is trite that having regard to the maxim ''ex turpi causa non
oritur action", an agreement which opposes public policy as laid down in
terms of Section 25-N and 25-0 of the Act would be void and of no effect. H
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SUPREME COURT REPORTS
[2005] 2 S.C.R.
A The Parliament has acknowledged the governing factors of such public
policy. Furthermore, the imperative character of the statutory
requirements would also be borne outExcerpt shown. Read the full judgment & AI analysis in Lexace.