{"id":46672,"date":"2007-09-14T00:00:00","date_gmt":"2007-09-13T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/union-of-india-and-anr-vs-shree-shankar-textiles-on-14-september-2007"},"modified":"2016-08-17T14:41:38","modified_gmt":"2016-08-17T09:11:38","slug":"union-of-india-and-anr-vs-shree-shankar-textiles-on-14-september-2007","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/union-of-india-and-anr-vs-shree-shankar-textiles-on-14-september-2007","title":{"rendered":"Union Of India And Anr vs Shree Shankar Textiles &#8230; on 14 September, 2007"},"content":{"rendered":"<div class=\"docsource_main\">Supreme Court of India<\/div>\n<div class=\"doc_title\">Union Of India And Anr vs Shree Shankar Textiles &#8230; on 14 September, 2007<\/div>\n<div class=\"doc_author\">Author: . A Pasayat<\/div>\n<div class=\"doc_bench\">Bench: Dr. Arijit Pasayat, D.K. Jain<\/div>\n<pre>           CASE NO.:\nAppeal (civil)  5495 of 2000\n\nPETITIONER:\nUnion of India and Anr\n\nRESPONDENT:\nShree Shankar Textiles Ex-employees Union and Ors\n\nDATE OF JUDGMENT: 14\/09\/2007\n\nBENCH:\nDr. ARIJIT PASAYAT &amp; D.K. JAIN\n\nJUDGMENT:\n<\/pre>\n<p>J U D G M E N T<\/p>\n<p>CIVIL APPEAL NO. 5495 OF 2000<\/p>\n<p>Dr. ARIJIT PASAYAT, J.\n<\/p>\n<p>1.\tChallenge in this appeal is to the judgment of the<br \/>\nKarnataka High Court dismissing the Writ Appeal filed by the<br \/>\nappellants.\n<\/p>\n<p>2.\tBackground facts in a nutshell are as follows:\n<\/p>\n<p>Respondent No.1-Union filed a writ petition before the<br \/>\nKarnataka High Court for a declaration that the conditions<br \/>\nimposed under the Textile Workers Rehabilitation Fund<br \/>\nScheme (in short the &#8216;TWRFS&#8217;) to the effect that the mill<br \/>\nshould have been closed under Section 25-O of the Industrial<br \/>\nDisputes Act, 1947 (in short the &#8216;Act&#8217;) or the official liquidators<br \/>\nshould have been appointed offend Articles 14 and 16 of the<br \/>\nConstitution of India, 1950 (in short the &#8216;Constitution&#8217;) and for<br \/>\ndirecting the appellants by a writ of mandamus to extend the<br \/>\nbenefits of TWRFS to the members of the Union with all<br \/>\nconsequential reliefs including monetary benefits.\n<\/p>\n<p>3.\tThe writ petition was allowed and it was held that the<br \/>\nafore-noted conditions were unconstitutional, discriminatory<br \/>\nand therefore, were arbitrary.\n<\/p>\n<p>4.\tThe writ appeal was also dismissed on the ground that<br \/>\nthe order of the learned Single Judge did not suffer from any<br \/>\ninfirmity.\n<\/p>\n<p>5.\tIn support of the appeal, learned counsel for the<br \/>\nappellants submitted that both the learned Single Judge and<br \/>\nthe Division Bench lost sight of the fact that four conditions<br \/>\nwere to be satisfied in order to attract eligibility under the<br \/>\nScheme. Undisputedly, two of the conditions were not fulfilled<br \/>\nby the members of the Union.  Additionally, it was submitted<br \/>\nthat no reason has been indicated as to how the stipulations<br \/>\nregarding closure in terms of Section 25-O of the Act and\/or<br \/>\nthe appointment of the official liquidators were constitutionally<br \/>\nunsustainable.\n<\/p>\n<p>6.\tLearned counsel for the respondents on the other hand<br \/>\nsupported the order.\n<\/p>\n<p>7.\tAs a part of the Statement on Textile Policy 1985 in<br \/>\nChapter I, it was provided as follows:\n<\/p>\n<p>1.\t The textile industry has a unique place<br \/>\nin the economy of our country. Its contribution<br \/>\nto industrial production, employment and<br \/>\nexport earnings is very significant. This<br \/>\nindustry provides one of the basic necessities<br \/>\nof life. The employment provided by it is a<br \/>\nsource of livelihood for millions of people, most<br \/>\nof whom live in rural and remote area. Its<br \/>\nexports contribute a substantial part of our<br \/>\ntotal foreign exchange earnings. The healthy<br \/>\ndevelopment and rapid growth of this industry<br \/>\nis therefore of vital importance.\n<\/p>\n<p>2. \tIn the past few years, the development of<br \/>\nthe textile industry has been guided by the<br \/>\npolicy framework announced in March 1981.<br \/>\nWhile considerable  progress has since been<br \/>\nachieved in several areas under this policy<br \/>\nframework, the objectives of the textile policy<br \/>\noutlined in the Textile Policy statement have<br \/>\nnot been fully achieved. Thus the per capita<br \/>\navailability for and the per capita consumption<br \/>\nof cloth, of our growing population still remain<br \/>\nat a very low level. There is evidence of an<br \/>\nincrease in the incidence of sickness,<br \/>\nparticularly in the organised mill sector,<br \/>\nreflected in a large number of closed units.<br \/>\nThere is a large unsatisfied demand for<br \/>\ndurable synthetic and blended fabric at<br \/>\ncheaper prices which is not being met by<br \/>\nindigenous production. The full export<br \/>\npotential of textile products remains to be<br \/>\nrealised.\n<\/p>\n<p>3.\tThe\ttextile\tindustry\thas experienced<br \/>\nfluctuations in its fortunes in the past also.<br \/>\nHowever an analysis of the current difficulties<br \/>\nfaced by the industry reveals that the present<br \/>\ncrises of the industry is neither cyclical nor<br \/>\ntemporary, but suggests deeper structural<br \/>\nweaknesses, therefore, the Government have<br \/>\nreviewed the present textile policy and after<br \/>\ncareful consideration have formulated this new<br \/>\npolicy for the restructuring of the textile<br \/>\nindustry in India with a longer term perspective.\n<\/p>\n<p>8.\tThe present dispute relates to the legality of the<br \/>\nstipulations. The eligibility criteria of four conditions as spelt<br \/>\nout for payment of relief under the TWRFS dated 1.5.1991,<br \/>\naccording to the appellants, are as follows:\n<\/p>\n<p>(i)\tThe Unit must be a medium scale.\n<\/p>\n<p>(ii)\tThere must be a complete grinding halt.\n<\/p>\n<p>(iii)\tThere must be a closure of unit in terms of Section<br \/>\n25-O of the Act.\n<\/p>\n<p>(iv)\tAn illegal strike as defined under the Act leading to<br \/>\nclosure of the mill either under Section 25-O of the<br \/>\nAct or by an order of the High Court upon which the<br \/>\nofficial liquidator is appointed makes the scheme<br \/>\ninapplicable.\n<\/p>\n<p>9.\tIt is pointed out that the conditions are cumulative and<br \/>\nin the instant case conditions (ii) and (iii) are not fulfilled.  The<br \/>\nclosure was essentially in terms of conciliation under Section<br \/>\n12(3) of the Act and the production had come to grinding halt<br \/>\nbefore 5.6.1985. In the writ application there was no challenge<br \/>\nto the policy on the ground that conditions (ii) and (iii) suffered<br \/>\nfrom irrationality  and discrimination.\n<\/p>\n<p>10.\tThe High Court has not indicated any reason as to why it<br \/>\nwas held that the conditions stipulated relating to Section 25-<br \/>\nO were in any way violative of Articles 14 and 16 of the<br \/>\nConstitution.\n<\/p>\n<p>11.\tThe policy decision should not have been held to be<br \/>\nillegal without even indicating reasons.\n<\/p>\n<p>12.\tIt is pointed out that a Memorandum of Settlement was<br \/>\narrived at on 30.5.1986 and it was clear from all documents<br \/>\nplaced on record that the mill was closed on 9.10.1984.\n<\/p>\n<p>13.\tLearned counsel for the respondent-Union submitted<br \/>\nthat there was no rational connection between Section 25-O of<br \/>\nthe Act and as such offended Articles 14 and 16 of the<br \/>\nConstitution.  A scheme being beneficial in nature is intended<br \/>\nto benefit the workers and same was the object of the scheme.<br \/>\nIt is pointed out that all the workers who are members of the<br \/>\nUnion are employed in a closed textile mill on the date of its<br \/>\nclosure. They had been continuously working for five years or<br \/>\nso and were earning wages upto Rs.1600\/-p.m. They were not<br \/>\non any illegal strike when the closure took place. According to<br \/>\nthem, though the Memorandum of Settlement was signed on<br \/>\n30.5.1986, it was given effect much later and the relevant<br \/>\ndate, therefore, should be 30.10.1986. Since the management<br \/>\nagreed to pay terminal benefits w.e.f. 30.5.1986 and the same<br \/>\nwas to be paid within 90 days it cannot be said that the<br \/>\nproduction had found to be a grinding halt before 5.6.1985.\n<\/p>\n<p>14.\tWe find that the High Court has not indicated any<br \/>\nplausible reason for holding that the condition relating to<br \/>\nSection 25-O of the Act was illegal, contrary and in any way<br \/>\nirrational. As a matter of fact, the policy decision is not likely<br \/>\nto have beneficial effect unless the same is sustainable on the<br \/>\ntouchstone of rationality.\n<\/p>\n<p>15.\tAs rightly contended by learned counsel for the<br \/>\nappellants, it has not been shown by the respondent No.1-<br \/>\nUnion as to why the conditions impugned were irrational or<br \/>\nviolative of Articles 14 and 16 of the Constitution. In addition,<br \/>\nthe documents on record clearly established that the stoppage<br \/>\nof the work in mill was w.e.f. 9.10.1984. In fact the mill&#8217;s letter<br \/>\ndated 21.6.1989 addressed to the Regional Office, Coimbatore<br \/>\nin the annexed proforma stated that date and time of stoppage<br \/>\nwas 10.10.1984 and the stoppage was complete. The fact of<br \/>\nclosure of the Unit was stated in the application and had<br \/>\nalready been informed to the State Government. It was further<br \/>\nstated that the question of spindle utilization for the last six<br \/>\nmonths did not arise as the mill was closed since 10.10.1984.<br \/>\nThis itself disentitles the employees from the benefits under<br \/>\nthe scheme. Though the Memorandum of Settlement was<br \/>\nsigned on 30.5.1986 and the closure under conciliation in<br \/>\nterms of Section 12(3) of the Act was w.e.f. 30.5.1986, in the<br \/>\ndocuments it was clearly indicated that the factual date of<br \/>\nclosure is 9.10.1984 i.e. the date on which the mill had come<br \/>\nto a grinding halt. The High Court erred in holding to the<br \/>\ncontrary. On that ground alone, the orders of the learned<br \/>\nSingle Judge and Division Bench cannot be maintained.\n<\/p>\n<p>16.\tAdditionally, in the absence of any reason having been<br \/>\nindicated by the learned Single Judge and the Division Bench<br \/>\nas to how the conditions stipulated relating to Section 25-O of<br \/>\nthe Act are arbitrary, the orders are unsustainable.  It may be<br \/>\nnoted here that there was no challenge to parts of conditions<br \/>\nstipulated in the scheme. The view of the High Court was that<br \/>\nthough there was physical closure in 1984, the formal closure<br \/>\nwould be the date on which the agreement was signed. This<br \/>\nview is contrary to the clear terms of the policy mentioning the<br \/>\ndate on which the mill came to a grinding halt.\n<\/p>\n<p>17.\tIn view of the above-noted position the appeal deserves to<br \/>\nbe allowed which we direct. The orders of the learned Single<br \/>\nJudge and the Division Bench are set aside. The writ<br \/>\napplication filed by the respondent No.1 is dismissed. There<br \/>\nwill be no order as to costs.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court of India Union Of India And Anr vs Shree Shankar Textiles &#8230; on 14 September, 2007 Author: . A Pasayat Bench: Dr. Arijit Pasayat, D.K. Jain CASE NO.: Appeal (civil) 5495 of 2000 PETITIONER: Union of India and Anr RESPONDENT: Shree Shankar Textiles Ex-employees Union and Ors DATE OF JUDGMENT: 14\/09\/2007 BENCH: Dr. [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-46672","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Union Of India And Anr vs Shree Shankar Textiles ... on 14 September, 2007 - Free Judgements of Supreme Court &amp; High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/union-of-india-and-anr-vs-shree-shankar-textiles-on-14-september-2007\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Union Of India And Anr vs Shree Shankar Textiles ... on 14 September, 2007 - Free Judgements of Supreme Court &amp; 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