WORKMEN OF MEENAKSHI MILLS LTD. ETC. ETC. versus MEENAKSHI MILLS LTD. AND ANR. ETC. ETC.

Citation: [1992] 3 S.C.R. 409 · Decided: 15-05-1992 · Supreme Court of India · Bench: J.S. VERMA

Cited by 2 judgment(s) · cites 12 · see the full citation network in Lexace

Judgment (excerpt)

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. 
/ 
WORKMEN OF MEENAKSHI MILLS LTD. ETC. ETC. 
A 
v. 
MEENAKSHI MILLS LTD. AND ANR. ETC. ETC. 
MAY 15, 1992 
[J.S.VERMA, K. JAYACHANDRA REDDY, S.C. AGRAWAL, 
G.N. RAY AND R.C. PATNAIK, JJ.] 
Industrial Disputes Act, 1947/Industrial Disputes (Central) Rules: 
'B 
Section 25-N/Rule 76-A and Form P-A-Rcstriction imposed on C 
employer's right to retrench workmen-Whether violative of Article 
19( 1 )(g)'-Whether provision saved by Article .19( 6 }-Confem1ent of power to 
grant or refuse permission to retrench workmen on appropriate Govern-
ment-Whether valid-Delegation of power to appropriate Government to 
specify authority-Whether unreasonable or arbitrary-Power to refuse or grant 
pennission-4Vhether administrative or judicial in nature-Whether non- ,D 
prescription of principles or guidelines for exeri:ise of powl'r and absence of 
provision for appeal or judicial review render provision unconstitution-
al-Denial of right to employer to challenge order refusing permis~ion to 
1 
retrench while granting similar right to workmen to challenge order granting 
pennission-Wliether discriminatory and unreasonable: 
E 
Constitution of India, .1950: 
Articles 14, 19(l)(g)," 19(6), 136 and 226-Restrictions imposed on the 
employer's right to retrench workmen-Constitutional validity of Section 25-N 
of the Industrial Disputes Act, 1947-~rr:ise of power to grant or refuse F 
permission to retrench workmett-Non-prescription of guidelines-Wliether a 
vitiating factor-Absence of appeal or revision or review against the order of 
authority-Whether arbitrary or unreasonable-Denial of right to employer to 
challenge order refusing pennissi01i to retrench, while granting a similar right 
to workmen to challenge order granting permission to retrenclt-Whether G 
discriminatory. 
The validity of Section 25-N in Chapter V-B of the Industrial Disputes 
Act, 1947, inserted by the Amendment Act, 1976, prescribing conditions 
precedent for retrenchment of workmen in an industrial establishment, was 
challenged before various High Courts. There was difference of opinion H 
409 
410 
SUPREME COURT REPORTS 
[1992) 3 S.C.R. 
A 
amongst the High Courts. ~ile one High Court upheld the validity of the · 
-l( 
Section, two other High Courts held the Section to be violative of the right 
guaranteed under Article 19(1) (g) of the Constitution imposing un-
reasonable restrictions on the right of the employer to retrench workmen, 
B 
and invalid. The correctness of the decisions of these two High Court was 
challenged in the appeals and Writ Petitions filed before this Court. 
On behalf of the workmens it was contended that the right to retrench 
the workmen could only be regarded as a peripheral or concomitant right 
which facilitated the exercise of the right to carry on business but it could not 
be treated as an integral part of the right to carry on business; that the 
C employers in the instant cases were all companies registered under the 
Companies Act, 1956; and a company, being an artificial person, was not a 
citizen and it could not claim the fundamental rights guaranteed to citizens 
under Article 19 of the Constitution; that the shareholder of a limited 
company could not be permitted to challenge the validity of Section 25-N 
inasmuch as by the said provision none of the fundamental rights of the 
D shareholder is impaired; that i.n a modern public company, the shareholder, 
although a member, was in economic reality, a mere lender of capital on 
which he hoped for retuni but without any effective control over the bor-
rower; that while considering the matter of grant or refusal of permission for 
retrenchment the appropriate Government or authority was required to 
E 
exercise its power in a quasi-judicial manner, i.e., it must pass the order after 
affording an opportunity to both the parties, (the employer and the 
workmen) to make their submissions; that reference of a dispute for ad-
judication to the Industrial Tribunal depended on the discretion of the 
appropriate Government and there was no right as such to approach the 
Industrial Tribunal; that the power that was exercised by the appropriate 
F 
Government or authority under sub- section (2) of section 25-N was similar 
to th~t exercised by the various authorities under section 33 of the Act while 
giving approval to the action taken by the management in discharging or 
punishing a workman whether by dismissal or otherwise or altering the 
condition.s of service of the workma

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