MANAGEMENT OF DANDAKARANYA PROJECT, KOREPUT versus WORKMEN THROUGH REHABILITATION EMPLOYEES UNION AND ANR.

Citation: [1997] 1 S.C.R. 55 · Decided: 07-01-1997 · Supreme Court of India · Bench: S.C. AGRAWAL, G.B. PATTANAIK · Disposal: Appeal(s) allowed
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Judgment (excerpt)

MANAGEMENT OF DANDAKARANYA PROJECT, KOREPUT 
A 
v. 
WORKMEN THROUGH REHABILITATION 
EMPLOYEES' UNION AND ANR. 
JANUARY, 7, 1997 
(S.C. AGRAWAL AND G.B. PATTANAIK, JJ.) 
Labour Law.~Industrial Disputes Act, 1947 : Sections 2(j) and 
IO(l)(d) & (2-A) and 25-FFF. 
"lndust1y''-Scope of-Dandakaranya Project-Disputes of employees 
-Reference of-Held : the said project was indust1y--Hence, reference of 
disputes, not incompetent. 
B 
c 
Retrenchment-Closure of Undertaking-Dandakaranya Project--
Rehabilitated refugees and wound up after completion of work-lts assets and D 
liabilities transferred to concemed States-No employment facilities ifXisted 
for regular abs01ption of N.M.R. workers-Project authority and Central 
Govemment, despite their best eff 01ts could not absorb N.M.R. workers in any 
· Govemment job or Public Sector U11dertaki11g-Howeve1; lndusflial Tiibunal 
directed not to retrench the said N.M.R. workers-Held: In such circumstan-
ces, the said direction of Indusflial T1ibunal was illegal-The said N.M.R. E 
workers entitled only to compensation S. 25-FFF of I.D. Act. 
Retrenchment-Closure of Unde1taking-Issuance of mandamus-By 
Tribunal-Not to retrench workers and to find out work for them-Held.: 
Issuance of mandamus illegal. 
Words and Phrases : 
"Indusfly''-Meaning of-In the context of S. 2(j) of the lndustlial 
Disputes Act, 1947. 
F 
The Central Government in exercise of its powers under Sections G 
lO(l)d) and 10(2-A) of the Industrial Disputes Act, 1947 referred certain 
disputes, arising out of the demands raised by the respondents to the 
Industrial Tribunal for adjudication. The Industrial Tribunal directed the 
appellant-management not to retrench the N.M.R. workers after the 
project was wound up and to find out through the Central Government H 
55 
56 
SUPREME COURT REPORTS 
[1997] 1 S.C.R. 
A ways and means to regulariSe these N.M.R. workers either under the 
Central Government of the concerired State Governments or under Public 
Sector Undertakings of the Central GoverRlIR!nt. The High Court refused 
to interfere with the award of the Tribunal. Henee this appeal. 
B 
On behalf of the appellant it was cooteoded that the project was 
undertaken by the Central Government in discharge of its sovereign 
function to rehabilitate the refugees from Pakistan and, therefore, the 
project was not an 'industry' and consequently the reference was incom-
petent; and that the project itself having been wound up and its assets and 
liabilities having been transferred to the roncerned States there did not 
C exist regular posts and, therefore, the question of regularisation of the 
N.M.R. workers did not arise. 
Allowing the appeal, this Court 
Held : 1.1. Bearing in mind the dominant nature of the activities of 
D the project and the nature of duties discharged by the workers in the 
project it has to be held that the Dandakaranya Project is an industry 
within the meaning of Section 2(j) of the Industrial Disputes Act, 1947 and 
the conclusion of the Tribunal ,in this respect fs unassailable. [59-F] 
E 
Bang/ore Water SuppZy & Sewerage Board v.A. Rajappa, [1978] 2 SCC 
213, followed. 
1.2. Steps have been taken duly and bona fide by the authorities of 
the project as well as the competent authority of the Central Government 
and inspite of their best efforts and persuasion it has not been possible to 
F 
absorb the N.M.R. workers in any of the department of the Government 
or in any Public Sector Undertakings, in view of the relevant rules and 
regulations and in view of the situation prevailing in those organisations. 
In such circumstances, the Industrial Tribunal's direction to the project 
authorities not to retrench the said N.M.R. workers and to find out 
G through the Central Government ways and means to regularise them is 
illegal. The said N.M.R. workers are entitled only to compensation under 
Section 25-FFF of tl1e Act. [60-F-G] 
2. Even after coming to the conclusion that the project has been 
wound up and there are no employment facilities for these N.M.R. workers 
H for regular absorption, yet the Tribunal issued the direction requiring the 
M.O.D. PROJECTv. REHABILITATION EMPLOYEES UNION [PATIANAIK, J.J 57 
). 
project authorities to find out work for the N.M.R. workers who have been A 
working in the project continuously for more than 240 days. It is no doubt 
true that in the interest of these N.M.R. workers who have spent a consid-
erable period with the project anthoriti,es, possibility of
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