THE PAPNASAM LABOUR UNION versus MADURA COATS LTD. AND ANR.

Citation: [1994] SUPP. 6 S.C.R. 369 · Decided: 08-12-1994 · Supreme Court of India · Bench: G.N. RAY · Disposal: Appeal(s) allowed

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Judgment (excerpt)

&I
THE PAPNASAM LABOUR UNION 
V. 
MADURA COATS LTD. AND ANR. 
DECEMBER 8, 1994 
[G.N. RAY AND B.L. HANSARIA, JJ.] 
Industrial Disputes Act, 1947 : 
Section 25-M- Whether ultra vires the provisions of Art. 19 (1) (g)-
Held: No. 
Constitution of India, 1950: 
Article 19(/)(g)-Section 25-M of Industrial Disputes Act-Whether 
violative of 
A 
B 
c 
Respondent No. 1 filed a Writ petition before the Madras High D 
Court for a declaration that S. 25-M of the Industrial Disputes Act, 
1947 as amended in 1976, in so far as it required prior permission to be 
obtained to effect lay off, was ultra vires and ~oid. Similar writ petitions 
challenging the said provision, were heard together and disposed of by 
the High Court. It held that section 25-M as amended by the Amending 
Act, 1976 was constitutionally invalid for the reasons given by this E 
Court in invalidating section 25-0 of the Industrial Disputes Act, in the 
decision rendered in Excel Wear etc. v. Union of India, [1979) 1 SCR 
1009. 
This appeal by the Labour Union is against the said decision. It was 
contended that Sections 25-M and 25-N have common distinguishing F 
features which make the said two provisions different from section 25-
0, the validity of which was considered in Excel Wear. 
Respondent- No.1 contended inter alia that for appreciating the 
question of unreasonable restriction imposed on the fundamental right 
to carry on trade or business under the guise of protecting public G 
interest, it was necessary to consider whether or not the restriction 
imposed under the statute was consistent with and limited to the extent 
of control required for achieving the purpose for which the restriction 
was sought to be imposed; that if the distinction between lay off and 
retrenchment and different types of problems associated with lay off 
and retrenchment are considered in their proper perspective, the H 
369 
370 
SUPREME COURT REPORTS 
[1994] SUPP. 6 S.C.R 
A 
reasonings for upholding the validity of Section 25-N in Workmen of 
Meenakshi Mills Ltd. v. Meenakshi Mills Ltd, [1992] 3 SCC 336, should 
not be made applicable in deciding the vires of Section 25-M: that for 
the purpose of upholding the constitutional validity of a statute, upon a 
challenge on account of unreasonable restriction, the Court is required 
to look into the facts and circumstances and the ground realities under 
B 
which the offending provision of the statute is to be applied that no 
strait-jacket formula, therefore, can be laid down for deciding the 
question of reasonable restriction in each and every statute; that in the 
matter of lay off under Section 25-M, excepting in the case of power 
failure and natural calamity, in all other cases, even if there are 
genuine urgent grounds for immediate action or lay off, a prior 
C 
permission is required to be obtained, that it is permissible under 
Section 25-M to defer disposal of an application for such permission for 
approval upto a period of two months from the date of application even 
if ultimately such permission is accorded, such outer limit of two 
months in a given case, may be wholly unreasonable thereby 
· frustrating the very purpose for which an immediate action for lay off 
D 
was warranted; and that the impugned decision holding Section 25-M 
before amendment in 1984 as unconstitutional need not be interfered 
with. 
E 
F 
G 
Allowing the appleals, this Court 
HELD: 1. Considering various decisions of this Court in deciding 
the question of reasonableness of the restriction imposed by a statute 
on the fundamental rights guaranteed by Article 19 of the Constitution 
of India, it appears that the following principles and guidelines should 
be kept in mind for considering the constitutionality of a statutory 
provision upon a challenge on the alleged vice of unreasonableness of 
the restriction imposed by it: 
(a) The restriction sought to be imposed on the fundamental rights 
guranteed by Article 19 of the Constitution must not be arbitrary or of 
an excessive nature so as to go beyond the requirement of felt need of 
the society and object sought to be achieved. [370 H] 
(b) There must be a direct and proximate nexus or a reasonable 
connection between the restriction imposed and the object sought to be 
achieved. [384 A] 
(c) No abstract or fixed principle can be laid down which may have 
H universal application in all cases. Such consideration on the question of 
LABOUR UNION v. MADURA COATS LTD. 
371 
quality of rea

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