UNION OF INDIA versus SHREE SHANKAR TEXTILES EX-EMPLOYEES UNION AND ORS.

Citation: [2007] 9 S.C.R. 983 · Decided: 14-09-2007 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Appeal(s) allowed
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Judgment (excerpt)

UNION OF INDIA 
A 
v. 
SHREE SHANKAR TEXTILES EX-EMPLOYEES UNION AND ORS. 
SEPTEMBER 14, 2007 
(DR ARIJIT PASAY AT AND D.K. JAIN, JJ.I 
B 
Labour Law: 
Closure of Textile Mill-Textile Workers Rehabilitation Fund Scheme-
Writ petition by Workers' Union of closed Mill claiming benefit of the scheme- C 
High Court allowing writ petition holding that conditions in the Scheme 
with regard to closure of Mill in terms of s.25-0 of Industrial Disputes Act 
was unconstitutional, discriminatory and arbitrary-Held, High Court has 
not indicated any plausible reason for holding the condition relating to 
Section 25-0 of Industry Disputes Act as irrational-Besides, the documents D 
clearly show date of factual closure of Mill as 9.10.1984-High Court erred 
in holding to the contrary-Orders of Single Judge and Division Bench of 
High Court set aside-Industrial Disputes Act, 1947-s.25-0--Government 
of India Textile Policy, 1985-Textile Workers Rehabilitation Fund Scheme, 
1991. 
Government of India announced Textile Policy on 6.6.1985. Under the 
said Textile Policy, Textile Workers Rehabilitation Fund Scheme (TWRFS) 
E 
was framed to provide interim relief to the workers rendered unemployed in 
consequence of permanent closure/liquidation of those textile units, production 
whereof would have come to an end after 5.6.1985. Respondent no. 1 Union 
representing the workers of Shri Shankar Textile Mills, which was closed F 
w.e.f. 9.10.1984, filed a writ petition in the High Court contending that the 
conditions imposed under the TWRFS to the effect that the Mill should have 
been closed under Section 25-0 of the Industrial Disputes Act, 1947 or official 
liquidator should have been appointed, offend Articles 14 and 16 of the 
Constitution of India, and prayed for a direction to extend the benefits of G 
TWRFS to the members of the Union including the monetary benefits. The 
single Judge of the High Court held that the conditions were unconstitutional, 
discriminatory and, therefore, were arbitrary. The Division Bench, having 
upheld the findings in the writ appeal, the Union of India filed the instant 
983 
H 
984 
A appeal 
SUPREME COURT REPORTS 
[2007] 9 S.C.R. 
It was contended for the appellant that the High Court lost sight of the 
fact that all the four conditions were to be satisfied in order to attract eligibility 
under the Scheme and since two of the said conditions were not satisfied by 
the respondent-Union, the Scheme was not attracted and that no reason has 
B been indicated as to how the stipulations regarding closure in terms of Section 
25-0 the Industrial Disputes Act, 1947 and/or the appointment of the official 
liquidators were constitutionally unsustainable. 
Allwoing the appeal, the Court 
C 
HELD: _1.1. The High Court has not indicated any plau~ible reason for 
holding that the condition relating to Section 25-0 of the Industrial Disputes 
Act, 1947 was illegal, contrary and in any way irrational. The policy decision 
should not have been held to be illegal without even indicating reasons. 
Therefore, the orders of the single Judge and the Division Bench of the High 
D Court are unsustainable. It may be noted that there was no challenge to parts 
of conditions stipulated in the Scheme. 
[Paras 11, 14 and 16) (987-B, F, G; 988-C-D) 
1.2. Besides, the documents on record clearly established that the 
stoppage of the work in mill was w.e.f. 9.10.1984. This itself di!lentitles the 
E employees from the benefits under the Scheme. The view of the High Court 
that though there was physical closure in 1984, the formal closure would be 
th~ date on which the agreement was signed, is contrary to the clear terms of 
the policy mentioning ~he date on which the mill came to a grinding halt. The 
orders of the single Judge and the Division Bench of the High Court are, 
therefore, set aside. (Paras 15 and 17) (987-H; 988-B, D, F) 
F 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5495 of2000. 
From the Judgment and Order dated 24.07. I 999 of the High Court of 
Kamataka at Bangalore in Writ Appeal No. 2246 of 1999. 
G 
Vikas Singh, ASG, D.S. Mehra, Sunita Sharma and B. Krishna Prasad for 
the Appellants. 
Hetu Arora, (for Shiv Kumar Suri), Ramesh S. Jadhav, Vikrant Yadav, 
Amit Kr. Chawla and Sanjay R. Hegde for the Respondents. 
H 
The Judgment of the Court was delivered by 
' . 
U.O.l.v.SHREESHANKARTEXTILESEX-EMP.UNION[PASAYAT,J.]9g5 
DR. ARIJIT PASAYA T, J. 1. Challenge in this appeal is to the judgment A 
of the Kamata
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