STATE OF TAMIL NADU AND ORS. versus NALLAI COTTON MILLS LTD. AND ORS.

Citation: [1990] 2 S.C.R. 33 · Decided: 20-03-1990 · Supreme Court of India · Bench: K. JAGANNATHA SHETTY · Disposal: Dismissed
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Judgment (excerpt)

STATE OF TAMIL NADU AND ORS. 
A 
v. 
NALLAI COTTON MILLS LTD. AND ORS. 
·y' 
' 
MARCH 20, 1990 
[K. JAGANNATHA SHETTY AND M. FATHIMA BEEVI, JJ.] 
B 
Labour and Services: Tamil Nadu Industrial Establishments 
(Conferment of permanent status to workmen) Act, 198/: Sections 2 
! 
and 3-Permanent status as workmen-Conferment of-Judicial inter· 
r 
pretation-Acceptance of by Legislature. 
Practice and Prqcedure: Statutes-Judicial interpretation of- c 
--
Legislative approval or disapproval-Court to study the subsequent 
action or inaction of the Legislature. 
In order to confer permanent status to workmen in various 
industrial establishments, who have put in a continuous service for a 
D 
period of 480 days in a period of 24 calendar months, the Tamil Nadu 
Industrial Establishments (Conferment of Permanent Status to Work-
men) Act, 1981 was passed by the State Government. The constitutional 
validity of the Act was challenged before the High Court by various 
industrial establishments by way of writ petitions. The High Court 
allowed the writ petitions in part, striking down some portions of E 
section 3 of the Act. 
The State Government preferred appeals ~ainst the judgment of 
the High Court. Meanwhile, the Appellant-State amended the Act in the 
...--
light of the High Court's judgment • 
.. 
F 
On behalf of the appellant, it was contended that the view taken 
by the High Court as to the scope of section 3(2) has to be determined 
~ 
_, 
notwithstanding the;imendments made. 
The contention of the respondents was that the legislature while 
amending the Act with retrospective effect has accepted the judgment of 
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the High Court, since the amendment has not given a different meaning 
to section 3(2) from the one asserted by the High Court. 
...... 
Dismissing the appeals, this Court, 
HELD: 1. When an Act has been judicially interpreted, Courts 
H 
33 
34 
SUPREME COURT REPORTS 
(1990] 2 S.C.R. 
A 
may study the subsequent action or inaction of the legislature for clues 
as to legislative approval or disapproval of the judicial interpretation. 
Aller the statute has been judicially interpreted in a certain way 
and if the legislature by taking note of the judgment amended the 
statute appropriately so as to give it a different meaning from the one 
asserted by the Courts, or not giving any different meanini: from the 
B 
view taken by the Court, it may be argued with some justification that 
the legislature has expressly or by implication ratified the judicial 
interpretation. (38G-H; 39A] 
:. In the instant case, the legislature has expressly taken note of 
the High Court verdict and removed the practical difficulties caused 
thereby in implementing the provisions of the Act, by appropriate 
C 
amendments. No provision, however, was inserted to re-write and vali-
date the portion which was struck down by the High Court. It could, 
therefore, be reasonably held that the legislature has accepted the judg-
ment of the High Court to the extent indicated. (39A-B] 
D 
3. The view taken by the High Court in striking down a portion of 
sub-section 2 of section 3 of the Act cannot be found fault with. The 
word 'non'-employment' would include retrenchment as well anrl a 
person whose services have been terminated or discharged albeit 1illegal 
cannot at all be said to be a person in service, much less in con-
tinuous service. Therefore, the period of non-employment or the period 
E after discharge cannot be accounted for the purpose of giving con-
tinuity of service. If the discharge is set aside and workmen is 
reinstated by process known to law the workman automatically gets 
continuity of service. No special provision is necessary for such 
purposes. [39C; E-F] 
F 
CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 
3222-3241of1988. 
From the Judgment and Order dated 5.2.1981 of the Madras 
High Court in W.P. Nos. 5918, 6712, 7495, 7496, 7591, 8623, 8624 and 
9088 of 1982, 502, 503, 1336, 2433, 3460, 3596, 3846, 6797, 8859, 
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10418, 10419 of 1983 and 5888 of 1984. 
V. Krishnamurthy for the Appellants. 
P. Chidambaram, A.S. Nambiar, Smt. Shanta Vasudevan, P.K. 
Manohar, M.N. Krishnamani, Sunder Rao, Diwan Balak Ram, C.S. 
H Vaidyanathan, S.R. Setia and K.V. Mohan for the Respondents. 
y-
STATE OF TAMIL NADU v. NELLA! COTTON MILLS [SHETTY, l.] 
35 
The Judgment of the Court was delivered by 
K. JAGANNATHA SHETTY, J. The Tamil Nadu Government 
passed an Act called the Tamil Nadu Industrial Establishments (Con-
ferment of Per
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