RASHTRIYA MILL MAZDOOR SANGH versus NATIONAL TEXTILE CORPORATION (SOUTH MAHARASHTRA) LTD. AND ORS.

Citation: [1995] SUPP. 5 S.C.R. 641 · Decided: 24-11-1995 · Supreme Court of India · Bench: S.C. AGRAWAL, G.B. PATTANAIK · Disposal: Dismissed

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Judgment (excerpt)

•. 
RASHTRIYA MILL MAZDOOR SANGH 
v. 
NATIONAL TEXTILE CORPORATION (SOUTH 
MAHARASHTRA) LTD. AND ORS. 
NOVEMBER 24; 1995 
[S.C. AGARWAL AND G.B. PATTANAIK, JJ.] 
Textile Undertakings (Take Over of Management) Act, 1983-Sections 
3(7) & 6(1)-Liability arising under Payment of Gratuity Act-Whether ex-
cluded by the provisions of the Act-Held, No-Liabilities for period prior to 
take over of management of textile undertakinfj-TO be discharged from 
amount payable to owner of undertaking for its acquisition. 
A 
B 
c 
Interpretation of Statutes-Rules of-Preambl~Where language of an 
enactment is clear-Preamble cannot be invoked to cwtail or restrict scope of D 
enactment. 
Respondent No. 2 being in the employment of the respondent No. 3 
from 1.1.1954 till 22.3.1983 when he resigned, made a claim of an amount _ 
towards gratuity payable under the Payment of Gratuity Act, 1972. Since 
respondent No. 3 failed to pay the amount of gratuity, respondent No. 2 E 
moved the Controlling Authority under the Payment for Gratuity Act 
seeking for the recovery of the amount. The Textile Undertaking (Take 
Over of Management) Act, 1983 was brought into force w.e.f. 18.10.1983 
whereby the Central Government vested the management of the textile 
undertaking of respondent No. 3 with the National Textile Corporation F 
(NTC) thereafter NTC was impleaded as a party in the proceedings. The 
Controlling Authority directed respondent No. 3 to pay the gratuity 
amount while upholding the objection raised by NTC regarding its liability 
for the gratuity amount payable to respondent No. 2. An appeal filed by 
respondent No. 2 before the Industrial Court against the order of the 
Controlling Authority wherein he claimed that NTC was liable to pay the G 
gratuity amount to him, was allowed. The Industrial Court directed that 
in the event of respondent No. 3 failing to deposit the gratuity in the Court, 
the same shall also be recovered from NTC to the extent of the assets and 
other properties of the textile undertaking of respondent No. 3 taken over 
~N~ 
H 
641 
642 
SUPREME COURT REPORTS (1995] SUPP. 5 S.C.R. 
.~ ...... 
A 
NTC filed a writ petition which was dismissed. A contention was 
r
raised that since the matter was pending before the Controlling Authority 
1
on 18.10.1983 when the management of the Textile undertaking of respon-
dent No. 3 was taken over under the Act and the actual determination of 
the amount of gratuity payable to respondent No. 2 was made, the liability 
.. 
B for gratuity was of NTC and section 3(7) was not applicable. Rejecting the 
contention, the High Court held that the liability to pay gratuity to respon-
dent No. 2 arose prior to taking over of the mimagement of the textile 
undertaking of respondent No. 3 and the liability for the gratuity was that 
of respondent No. 3 and in view of section 3(7) of the Act, NTC was not 
liable for the same. The appellant had filed this appeal, by special leave, 
c against the decision of the High Court. 
The question raised for consideration was whether in respect of a 
textile undertaking whose management has been taken over under the 
provisions of the Textile Underta~ngs (Take over of Management) Act, 
D 
1983, the National Textiles Corporation was liable for the gratuity payable 
to an employee who had ceased to be1 in employme~t prior to the take over 
of the management of the undertaking. 
The appellant submitted that under the provision of section 6 of the 
Act, liabilities accruing or arising under the enactments referred to in the 
E Second Schedule alone can be suspended and since the Payment of 
Gratuity Act is not an enactment mentioned in the Second Schedule, there 
is no suspension of the liability in relation to payment of gratuity under 
the Payment of Gratuity Act; that since the Act had been enacted to protect 
· the interests of the workmen employed in the textile undertakings whose 
F 
management had been taken over, sub-section (7) of section 3 should be· 
construed in the light of the preamble to the Act; that sub-section (7) of 
section 3 should be confined in its application to liabilities other than the 
liabilities relating to the dues of the workmen in respect of the gratuity 
payable under the Payment of Gratuity Act. 
G 
Dismissing the appeal, .this Court 
HELD : 1.1. Under section 4 of the Payment of Gratuity Act, gratuity 
becomes payable to an employee on the termination of his employment, on 
his retirement or resignation and since the res

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