N.T.C. (SOUTH MAHARASHTRA) LIMITED versus RASHTRIYA MILL MAZDOOR SANGH AND ORS. ETC. ETC.

Citation: [1992] SUPP. 3 S.C.R. 229 · Decided: 24-11-1992 · Supreme Court of India · Bench: KULDIP SINGH · Disposal: Dismissed
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Judgment (excerpt)

N.T.C. (SOUTH MAHARASHTRA) LIMITED 
v. 
RASHTRIYA MILL MAZDOOR SANGH AND ORS. ETC. ETC. 
NOVEMBER 24, 1992 
[KULDIP SINGH, P.B. SAWANT AND N.M. KASLIWAL, JJ.] 
Tlie Textile Undertakings (Taking over of Management) Act, 
1983-Preamble-Object and purpose of~'Workman" and "Contract of 
employment''-Constmction. 
The Textile Undertakings (Taking Over of Management) Act, 
198rSectio11s 3(3), (4) and 13 read with Sections 25-F, 25-FF, l.D .. 
Act-Transfer of management of textile mi/I-Whether ends contract of 
employment of workmen-Notice and payment of compensation to 
workmen--Whether necessary. 
The workmen of all textile mills went on strike on 14.1.1982. The. 
strike was declared illegal on 8.2.1982. 
On 10.2.1984, the management of the textile mills was taken. over by 
A 
B 
c 
D 
the National Textile Corporation Limited (NTC) under the provisions of E 
the Textile Undertakings (Taking Over of Management) Act, 1983, which 
came into force on 18.10.1983. 
On the question whether the workmen ceased to be the workmen of 
the te~ile mills and, therefore, of the NTC after the management of the 
mills was taken over by the NTC w.e.f. 10th February, 1984, the Labour F 
Court and the High Court took the view that they continued to be the 
workmen of the mills and, therefore, of the NTC. 
The appellant - NTC contended before this Court that the employees 
ceased to be workmen of the mills when the mills were taken over; that the 
appellants had implicit and explicit power to choose which of the G 
employees and how many of them they would take over; that the task was 
of making the undertaking viable, the appellants were given a free-hand to 
re-organise their affairs which impliedly included also the re-organisation 
of the labour as they thought fit and necessary; that the contract of 
employment with the workmen came to an end from the appointed day, viz. H 
229 
230 
SUPREME COURT REPORTS [1992] SUPP. 3 S.C.R. 
. 
. 
A 
18th October, 1983 on which day the Textile Undertakings (Taking Over 
B 
c 
D 
of Management) Act came into force; that since the Government had not 
issued any notification under Section 6(1) (a) of the Act, the provisions of 
the l.D. Act mentioned in the Second Schedule of the Act, were applicable 
to the appellants; and that the provisions of Section 25-FF of the I.D. Act 
in effect terminated the contract of employment of the workmen on account 
of the transfer of ma~agemen~ of the textile mills to the appellant. 
Dismissing the appeals and transferred cases, this Court 
HELD: 1.1. The statute was enacted because the affairs of the textile 
mills were mismanaged and it was necessary to invest very large sums of 
money "for re-organising and rehabilitating the said undertakings and, 
thereby, to protect the interests of the workmen employed therein and to 
augment the production and distribution at fair prices of different 
varieties of cloth and yarn so as to subserve the interests of general public". 
[238-C] 
1.2. One of the principal objects of the Act is to protect the interests 
of the workmen who were already employed in the textile mills. Consistent 
with this objective,. the Act nowhere refers to the termination of the 
contract of employment of the workmen. [238-D] 
E 
1.3. 'The legislature has taken precaution to abolish only certain 
F 
G 
H 
contracts and provide for the vacation of the offices of only .those persons 
who were in charge of management. [239-8) 
1.4. The contracts of managements and the persons who were in 
charge of the management had, therefore, necessarily to go if the mills were 
to be re-organised and reh~bilitated both to protect the interests of the 
workmen employed as well as to augment the production and distribution 
of the cloth at fair prices to subserve the interests of the general public. 
[239-C] 
1.5. The work 'workman' .has not been specifically defined in the Act. 
However, iLcannot be disputed that looking at the nature, scope and the 
object of the Act, the said word will carry the same meaning as it attributed 
to it under Section 2(s) of the ID Act which is also specifically mentioned 
in the Second Schedule of the Act and has in no way been modified by the 
Government under the provisions of· Section 6 · of the Act although 'a 
specific power is vested in the Government to do so. [238-E-F] 
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N.T.C. LTD. v. MILL MAZDOOR SANGH 
1.6. The contract of employment of the workmen does not relate "to A 
be management of the business and affairs of the text
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