MAYURAKSHI COTTON MILLS AND ORS. versus PANCHRA MAYURAKSHI COTION MILLS EMPLOYEES UNION AND ORS.

Citation: [2000] 2 S.C.R. 189 · Decided: 08-03-2000 · Supreme Court of India · Bench: S. RAJENDRA BABU · Disposal: Disposed off
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Judgment (excerpt)

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MAYURAKSIIl COTION MILLS AND ORS. 
v. 
PANCHRA MAYURAKSIIl COTION MILLS 
EMPLOYEES UNION AND ORS. 
MARCH 8, 2000 
[S. RAJENDRA BABU AND S.N. PHUKAN, JJ.] 
A 
B 
Constitution of India-A,rticles 136, 226-Interference in labour mat-
ters-Mills purchased by State Government after liquidation proceedings and 
employees of erstwhile mills employed in new set-up-Lock out by manage-
C 
ment of new mill due to financial crisis-Writ petition filed before High 
Court-Settlement arrived at between both parties resulting in retrenchment_ 
of some workmen-Prayers in writ petition appropriately moulded-Single--_ 
· Judge held it to be an industrial dispute and that interest of all workmen had 
not been protected in the settlement-Division Bench held, settlement in 
contravention of the law as workmen had been compelled to voluntarily enter 
into settlement for termination of service-On appeal Held, in absence of the 
factual background it is impossible to examine the fairness of the settlement-
Reference to an Industrial Tribunal necessary to adjudicate upon the issue~ 
Industrial Disputes Act, 1947-Sections 25-F and 25-G. 
The appellant mills were purchased by the State of West Bengal 
following liquidation proceedings. Workmen of the respondents who were 
employees of the erstwhile mill were provided employment in the new set-
up. A notice of lock-out was issued by the new management which was 
challenged in a writ petition before the High Court. A memorandum of 
settlement was arrived at, resulting in retrenchment of some workmen, due 
to which the prayers in the petition were appropriately moulded. Single 
Judge was of the view that interest of all workmen had not been protected 
in the settlement and gave the dispute the character of an industrial 
dispute. Division Bench on appeal examined Sections 25-F and 25-G of the 
Industrial Disputes Act, 1947 in the light of Article 21 of the Constitution 
and held that workmen could not have been compelled to voluntarily enter 
into a settlement for termination of service which was in contravention of 
the law. Hence this appeal. 
The appellants contended before this Court that whether the terms of 
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E 
F 
G 
the said settlement were unfair or whether workmen had been victimised 
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189 
190 
SUPREME COURT REPORTS 
[2000) 2 S.C.R. 
A 
were questions of fact which could only be decided by an Industrial Tribu-
nal. 
The respondents contended that a bare perusal of the memorandum 
indicates unfair labour practices on the part of the management; that no 
facts were in dispute therefore adjudication by an Industrial Tribunal was 
B 
not necessary; and that the order of the IDgh Court which was based on 
Section 25-F and 25-G of the Act in the light of Article 21 of the Constitu-
tion should not be interfered with. 
Disposing of the appeal, this Court 
C 
. HELD : l. In the absence of the factual background it cannot be 
D 
examined whether a settlement is fair or unfair or valid. H the mills were 
in financial doldrums retrenchment bad to take place and if a method 
worked out by the management and the workers was fair, it cannot be 
easily said that the mills should not work with lesser number of workmen 
and provide a scheme of retrenchment or otherwise~ It is not easy to state 
that such settiement is unfair or amounts to victimisation as sometimes 
hard choices have to made and sacrifices are expected from either side 
when the option is between closure of mills or opening them with lesser 
number of workmen. [193-E] 
E 
2. The order made by the Division Bench is set aside and a reference 
shall be made to an appropriate Industrial Tribunal in respect of all 
matters arising in this case as to employment, non.employment, the valid-
ity of the settlement and all other allied issues and the .reliefs to be granted 
to the parties. [193-G~H] 
F 
CIVIL APPELLAIB JURISDICTION: Civil Appeal No. 6552 of 1995. 
From the Judgment and Order dated 20.3.95 of the Calcutta High Court 
in F.M.A.T. No. 2905 of 1993. 
D.P. Gupta, Solicitor General, N.S. Hegde, B. Sen, S.K. Dhcilakia, 
G. 
Dipankar Gupta, Dilip Sinha, Ms. Madhu Moolchandani, S.K. Bandhopadhyay~ 
C.D. Singh, Anip Sachthey, J.R. Das, H. Munshi, Dayal Krishnan, Ms. Dip~ 
Sinha, Kalyan K. Bandopadhyay, Anupamlal Das, H.K. Puri, Uijwal Banerjee,\ 
Ms. Gargi Khanna, K.K. Mahalik, S.K. Puri, Rajesh Srivastava, D.K. Garg, ' 
B.S. Billowria, Ms. Renu George and Ms. Ritu Singh for the appearing parties. 
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The Judgment of the Court was de
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