M/S. S.V. TANK & VESSEL PVT. LTD. versus ENGINEERING WORKERS ASSOCIATION

Citation: [2005] 3 S.C.R. 651 · Decided: 18-04-2005 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Disposed off
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Judgment (excerpt)

MIS. S.V. TANK & VESSEL PVT. LTD. 
v. 
ENGINEERING WORKERS ASSOCIATION 
APRIL 18, 2005 
[ARIJIT PASAYAT AND S.H. KAPADIA, JJ.] 
Interim Order-Bank guarantee for payment of dues of workers-
Retrenchment of workers-Challenged before Industrial Court-Jurisdiction 
A 
B 
of Industrial Court questioned-It was pleaded that instead, the labour court C 
had jurisdiction-Industrial court set aside order of retrenchment and directed 
the employer to pay wages of all retrenched employees as also of striking 
employees-Writ petition before High Court-Interim order by High Court 
staying operation of the order-Division Bench of High Court directing 
employer to furnish bank guarantee to the extent of 50% of wages due-Held, 
employer would pay two years ' wages to each employee concerned-High D 
Court to dispose of expeditiously the writ petition involving the issues relating 
to jurisdiction of Industrial Court and justifiability of retrenchment order-
Labour Law-Retrenchment. 
Appellant-employer retrenched some of its employees. A large number 
of employees went on strike. Employer did not allow some of the striking E 
employees to resume their work. Later, the respondent-Association filed a 
complaint in the Industrial Court challenging the retrenchment. The appellant 
contended that the Industrial Court had no jurisdiction and the matter could 
be dealt with only by the labour court. The Industrial Court set aside the 
retrenchment order and gave direction for payment of back wages of the F 
retrenched employees and the dues of striking employees with effect from 
1991. The employer filed a writ petition before the High Court and the single 
Judge, by an interim order, partly stayed operation of the order of the 
Industrial Court. On appeal by the respondent-Association, the Division Bench 
of the High Court directed the employer to furnish security/bank guarantee 
to the extent of50% of the amount of wages payable to the employees as per G 
order of Industrial Court. Aggrieved, the employer filed the present appeal. 
Disposing of the appeal, the Court 
HELD : Basic issue relates to jurisdiction of the Industrial Court. 
651 
II 
652 
SUPREME COURT REPORTS 
[2005) 3 S.C.R. 
A Additionally, the justifiability of the order of retrenchment has to be gone 
into. Taking the peculiar facts into account, interest of justice would be best 
served if the appellant pays each of the employees concerned an amount 
equivalent to two years' wages on the basis of the last wages drawn without 
prejudice to the claims involved in the writ petition. Considering the limited 
B nature of the controversy, the High Court would explore the possibility of 
early disposal of the writ petition. [654-C-EJ 
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 2657-2658 
of 2005. 
From the Judgment and Order dated 5.1.2004 of the Bombay High 
C Court in L.P.A. No. 143/2003 with C. Application No. 261/2003 against 
W.P. No. 6229 of 2003. 
D 
Bim Rao Naik, Sishil Karanjkar and V .R. Anumolu with him for the 
Appellant. 
Ajay Majithia, Mahesh Jain and Dr. Kailash Chand for the Respondent. 
The Judgment of the Court was delivered by 
ARIJIT PASAYA T, J. Leave granted. 
E 
The appellant (hereinafter referred to as the 'Employer') calls in question 
legality of the· judgment rendered by a Division Bench of the Bombay High 
Court directing it to furnish security/bank guarantee of a Nationalised Bank 
to the extent of 50% of the amount of wages as per the calculation to be 
made on the basis of the order passed by the Industrial Court, Maharashtra 
F at Thane . 
. TJle background facts as projected by the appellant are as follows :-
The employer retrenched 33 employees after giving notice of 
retrenchment alongwith cheques covering the notice pay and retrenchment 
G compensation. Some of the workers refused to accept the same. On account 
of financial stringency and reduction of work force, Voluntary Retirement 
Scheme was announced which was availed by 72 employees. The respondent-
Association, however, instigated some of the employees not to opt for the 
scheme. Some of the employees took law into their own hands and tried to 
destroy the appellant's properties and this created chaotic conditions for which 
H the appellant was forced to lodge complaint in the Industrial Court and orders 
. 
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MIS. S. V. TANK & VESSEL PVT. LTD. v. ENGINE. WORKERS ASSON. [PASA YAT, J.] 653 
were passed prohibiting some workmen from coming within a radius of 100 A 
meter
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