{"id":480,"date":"1990-03-20T00:00:00","date_gmt":"1990-03-19T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/state-of-tamil-nadu-and-ors-vs-nellai-cotton-mills-ltd-and-ors-on-20-march-1990"},"modified":"2018-01-07T00:19:20","modified_gmt":"2018-01-06T18:49:20","slug":"state-of-tamil-nadu-and-ors-vs-nellai-cotton-mills-ltd-and-ors-on-20-march-1990","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/state-of-tamil-nadu-and-ors-vs-nellai-cotton-mills-ltd-and-ors-on-20-march-1990","title":{"rendered":"State Of Tamil Nadu And Ors vs Nellai Cotton Mills Ltd. And Ors on 20 March, 1990"},"content":{"rendered":"
Supreme Court of India<\/div>\n
State Of Tamil Nadu And Ors vs Nellai Cotton Mills Ltd. And Ors on 20 March, 1990<\/div>\n
Equivalent citations: 1990 SCR (2)\t33, \t 1990 SCC (2) 518<\/div>\n
Author: K Shetty<\/div>\n
Bench: Shetty, K.J. (J)<\/div>\n
           PETITIONER:\nSTATE OF TAMIL NADU AND ORS.\n\n\tVs.\n\nRESPONDENT:\nNELLAI COTTON MILLS LTD. AND ORS.\n\nDATE OF JUDGMENT20\/03\/1990\n\nBENCH:\nSHETTY, K.J. (J)\nBENCH:\nSHETTY, K.J. (J)\nFATHIMA BEEVI, M. (J)\n\nCITATION:\n 1990 SCR  (2)\t33\t  1990 SCC  (2) 518\n JT 1990 (2)\t19\t  1990 SCALE  (1)633\n\n\nACT:\n    Labour  and Services: Tamil Nadu  Industrial  Establish-\nments (Conferment of permanent status to workmen) Act, 1981:\nSections  2 and 3--Permanent status as workmen--Con  ferment\nof--Judicial interpretation-Acceptance of by Legislature.\n    Practice  and Procedure: Statutes--Judicial\t interpreta-\ntion of-Legislative approval or disapproval--Court to  study\nthe subsequent action or inaction of the Legislature.\n\n\n\nHEADNOTE:\n    In\torder to confer permanent status to workmen in\tvar-\nious industrial establishments, who have put in a continuous\nservice for a period of 480 days in a period of 24  calendar\nmonths, the Tamil Nadu Industrial Establishments (Conferment\nof Permanent Status to Workmen) Act, 1981 was passed by\t the\nState Government. The constitutional validity of the Act was\nchallenged  before  the\t High Court  by\t various  industrial\nestablishments\tby  way of writ petitions.  The\t High  Court\nallowed\t the  writ  petitions in part,\tstriking  down\tsome\nportions of section 3 of the Act.\n    The\t State\tGovernment  preferred  appeals\tagainst\t the\njudgment  of the High Court. Meanwhile, the  Appellant-State\namended the Act in the light of the High Court's judgment.\n    On\tbehalf of the appellant, it was contended  that\t the\nview taken by the High Court as to the scope of section 3(2)\nhas to be determined notwithstanding the,amendments made.\n    The contention of the respondents was that the  legisla-\nture  while amending the Act with retrospective\t effect\t has\naccepted the judgment of the High Court, since the amendment\nhas  not given a different meaning to section 3(2) from\t the\none asserted by the High Court.\nDismissing the appeals, this Court,\nHELD: 1. When an Act has been judicially interpreted, Courts\n34\nmay study the subsequent action or inaction of the  legisla-\nture for clues as to legislative approval or disapproval  of\nthe  judicial  interpretation. After the  statute  has\tbeen\njudicially interpreted in a certain way and if the  legisla-\nture  by  taking note of the judgment  amended\tthe  statute\nappropriately so as to give it a different meaning from\t the\none  asserted  by the Courts, or not  giving  any  different\nmeaning\t from the view taken by the Court, it may be  argued\nwith  some justification that the legislature has  expressly\nor  by\timplication ratified  the  judicial  interpretation.\n[38G-H; 39A]\n    2.\tIn the instant case, the legislature  has  expressly\ntaken note of the High Court verdict and removed the practi-\ncal  difficulties caused thereby in implementing the  provi-\nsions  of the Act, by appropriate amendments. No  provision,\nhowever,  was inserted to re-write and validate the  portion\nwhich  was struck down by the High Court. It  could,  there-\nfore,  be reasonably held that the legislature has  accepted\nthe  judgment  of the High Court to  the  extent  indicated.\n[39A-B]\n    3.\tThe view taken by the High Court in striking down  a\nportion\t of sub-section 2 of section 3 of the Act cannot  be\nfound  fault with. The word 'non-employment'  would  include\nretrenchment  as well and a person whose services have\tbeen\nterminated  or\tdischarged albeit illegal cannot at  all  be\nsaid  to  be a person in service, much\tless  in  continuous\nservice.  Therefore,  the period of  non-employment  or\t the\nperiod\tafter discharge cannot be accounted for the  purpose\nof  giving  continuity of service. If the discharge  is\t set\naside and workmen is reinstated by process known to law\t the\nworkman automatically gets continuity of service. No special\nprovision is necessary for such purposes. [39C; E-F]\n\n\n\nJUDGMENT:\n<\/pre>\n
    CIVIL  APPELLATE JURISDICTION: Civil Appeals Nos.  3222-
\n3241 of 1988.\n<\/p>\n
From the Judgment and Order dated 5.2.1981 of the Madras
\nHigh  Court  in W.P. Nos. 59 18, 67 12,\t 7495,\t7496,  7591,
\n8623,  8624  and 9088 of 1982, 502, 503, 1336,\t2433,  3460,
\n3596,  3846, 6797, 8859, 104 18, 104 19 of 1983 and 5888  of
\n1984.\n<\/p>\n
V. Krishnamurthy for the Appellants.\n<\/p>\n
    P.\tChidambaram,  A.S. Nambiar, Smt.  Shanta  Vasudevan,
\nP.K. Manohar, M.N. Krishnamani, Sunder Rao, Diwan Balak Ram,
\nC.S.  Vaidyanathan,  S.R. Setia and K.V. Mohan for  the\t Re-
\nspondents.\n<\/p>\n
35<\/span><\/p>\n
The Judgment of the Court was delivered by
\n    K.\tJAGANNATHA  SHETTY,  J. The  Tamil  Nadu  Government
\npassed\tan Act called the Tamil Nadu  Industrial  Establish-
\nments (Conferment of Permanent Status to Workmen) Act,\t1981
\n(“The Act”) which came into force on 1st January, 1982.\t The
\nAct  was  to confer permanent status to workmen\t in  various
\nindustrial establishments who have put in continuous service
\nfor  a period of 480 days in a period of 24 calendar  months
\nin  an\tindustrial  establishment. Section 3  is  a  crucial
\nprovision in the Act. It reads as under:\n<\/p>\n
“Sec. 3. Conferment of permanent status to workmen–
\n(1)  Notwithstanding anything contained in any law  for\t the
\ntime  being  in\t force every workman who  is  in  continuous
\nservice\t for a period of four hundred and eighty days  in  a
\nperiod\tof  twenty-four\t calendar months  in  an  industrial
\nestablishment shall be made permanent.\n<\/p>\n
\t  (2)  A workman shall be said to be  in  continuous
\nservice for a period if he is, for that period, in  uninter-
\nrupted\tservice, including service which may be\t interrupted
\non account of sickness or authorised leave or an accident or
\na  strike, which is not illegal, or a lockout or on  account
\nof non-employment or discharge of such workman for a  period
\nwhich does not exceed three months and during which period a
\nsubstitute  has been employed in his place by the  employer,
\nor a cessation of work which is not due to any fault on\t the
\npart of the workman.\n<\/p>\n
\t  Explanation  For the purposes of this section\t the
\nnumber of days on which a workman has worked in an industri-
\nal establishment shall include the days on which\n<\/p>\n
(i) he has been laid-off under an agreement or as  permitted
\nby  standing  orders made under\t the  Industrial  Employment
\n(Standing  Orders)  Act, 1946 (Central Act XX  of  1946)  or
\nunder any other laws applicable to the industrial establish-
\nment;\n<\/p>\n
(ii)  he  has been on leave with full wages, earned  in\t the
\nprevious years;\n<\/p>\n
36<\/span><\/p>\n
(iii) he has been absent due to temporary disablement caused
\nby accident arising out of and in the course of his  employ-
\nment; and\n<\/p>\n
(iv)  in  the case of a female, she has\t been  on  maternity
\nleave, so, however, that the total period of such  maternity
\nleave does not exceed twelve weeks.”‘
\n    The constitutional validity of the Act was challenged in
\na  batch of writ petitions by various industrial  establish-
\nments  before the High Court of Madras. The High  Court\t has
\nallowed\t the writ petitions in part holding, inter alia,  as
\nfollows:\n<\/p>\n
“The  Explanation to section 3 is incapable  of\t enforcement
\nand must therefore be held to be redundant.
\n(2)  The  provisions of Section 3(2) of the  Act  are  valid
\nexcept\tthat the ‘clause or on account of non-employment  or
\ndischarge of such workman for a period which does not exceed
\nthree  months and during which period a substitute has\tbeen
\nemployed in his place by the employer’ is void on the ground
\nthat it amounts to an unreasonable restriction on the  right
\nof the employer.\n<\/p>\n
(3) An apprentice or a badli worker could not be included in
\nthe  ‘workman’\treferred to in section 3(1) and (2)  of\t the
\nAct, and they will, therefore, be not entitled to the  bene-
\nfit of section 3.\n<\/p>\n
(4)  The  Act will not supersede a  settlement\tbetween\t the
\nworkers\t and  the employer in so far as it  deals  with\t the
\nsubject of conferment of permanent status to workman.
\n(5)   The  Act\tcannot\tbe  held  to  be  retrospective\t  in
\ncharacter.”\n<\/p>\n
    On 7th July 1985, the State of Tamil Nadu preferred this
\nappeal\tchallenging the judgment of the High  Court.  During
\nthe  pendency  of  the appeal, the State  also\tamended\t the
\nprincipal Act in order to obviate the practical difficulties
\nin  implementing the provisions of the Act by reason of\t the
\njudgment of the High Court.\n<\/p>\n
    The\t relevant  portion of the Amending Act\t44  of\t1985
\nreads as under:\n<\/p>\n
37<\/span><\/p>\n
“2.  Amendment\tof section 3, Tamil Nadu Act 46\t of  1981-In
\nsection\t 3  of\tthe  Tamil  Nadu  industrial  Establishments
\n(Conferment of Permanent Status to Workmen) Act, 1981 (Tamil
\nNadu Act 46 of 1981) (hereinafter referred to as the princi-
\npal Act)–\n<\/p>\n
(1)  in the Explanation, for the opening  portion  beginning
\nwith the words “for the purposes of this section” and ending
\nwith  the words “include the days on which”,  the  following
\nshall be substituted, namely–\n<\/p>\n
“For  the purposes of computing the continuous\tservice\t re-
\nferred\tto in sub-sections (1) and (2), a workman  shall  be
\ndeemed\tto  be\tin continuous service  during  the  days  on
\nwhich–“;\n<\/p>\n
(2)  the Explanation shall be numbered as Explanation I\t and
\nafter  Explanation I as so numbered, the following  Explana-
\ntion shah be added, namely:–\n<\/p>\n
“Explanation  II–For  the purposes of this  section,  ‘law’
\nincludes  any  award, agreement, settlement,  instrument  or
\ncontract  of service whether made before or after  the\tcom-
\nmencement of this Act.\n<\/p>\n
    The Amending Act also contains provision for  validation
\nin the following terms:\n<\/p>\n
“3.  Validation–Notwithstanding anything contained  in\t any
\njudgment,  decree or order of any court or other  authority,
\nall acts done or proceedings taken in pursuance of section 3
\n(including the Explanation) of the principal Act at any time
\non or after the 1st day of January 1982 and before the\tdate
\nof  publication\t of this Act in the  Tamil  Nadu  Government
\nGazette in relation to every workman in an industrial estab-
\nlishment  for the purpose of conferment of permanent  status
\nto  such workman by any officer or authority shall, for\t all
\npurposes, be deemed to be, and to have always been,  validly
\ndone or taken in accordance with law as if section 3 of\t the
\nprincipal  Act as amended by this Act had been in  force  at
\nall  material times when such acts or proceedings were\tdone
\nor taken”.\n<\/p>\n
38<\/span><\/p>\n
    Mr.\t Chidambaram  learned counsel  for  the\t respondents
\nargued that the Legislature while amending the principal Act
\nwith retrospective effect and also validating the acts\tdone
\nand  proceedings  taken under the principal Act\t appears  to
\nhave  accepted the judgment of the High Court so far  as  it
\nrelates\t to  the  offending portion in\tsub-section  (2)  of
\nsection 3, since no different meaning has been given to that
\nportion from the one asserted by the High Court. But counsel
\nfor  the  appellant argued that the view taken by  the\tHigh
\nCourt as to the scope of sub-section (2) of section 3 has to
\nbe  determined notwithstanding the foregoing amendments.  He
\nclaimed that non-employment or discharge of any workman\t for
\na  period  which does not exceed three\tmonths,\t and  during
\nwhich period a substitute has been employed in his place  by
\nthe  employer  was intended to cover such  cases  where\t the
\nemployer  deliberately\tdischarges  a workman  in  order  to
\neffect\ta  break in service and again re-employs  him  as  a
\nfresh candidate without continuity of service.
\n    We\tmay first examine whether there is  legislative\t ap-
\nproval of the High Court decision to the extent indicated by
\nMr. Chidambaram for the respondent. The Statement of Objects
\nand  Reasons accompanying the Amending Act 44 of 1985  reads
\nas follows:\n<\/p>\n
“STATEMENT TO OBJECTS AND REASONS
\nThe  Tamil  Nadu Industrial  Establishments  (Conferment  of
\nPermanent Status to Workmen) Act, 1981 (Tamil Nadu Act 46 of
\n1981)  has been enacted with a view to provide for the\tcon-
\nferment\t of  permanent status to workmen in  the  industrial
\nestablishments\tin the State of Tamil Nadu. The judgment  of
\nthe Madras High Court rendered in a batch of Writ  Petitions
\n(Nellai\t Cotton\t Mills Ltd. Tirunelveli v.  State  of  Tamil
\nNadu,  (Writ Petition No. 5910 of 1982 etc.) had given\trise
\nto certain practical difficulties in implementing the provi-
\nsions  of the said Act. It has, therefore, been\t decided  to
\namend  section 3 of the said Act to remove the\tdifficulties
\ncaused by the said judgment and confer the intended benefits
\non workmen.\n<\/p>\n
2. The Bill seeks to achieve the above object.”\n<\/p>\n
    When the Act has been judicially interpreted, Courts may
\nstudy the _subsequent action or inaction of the\t legislature
\nfor  clues  as\tto legislative approval\t or  disapproval  of
\njudicial  interpretation. After the statute has\t been  judi-
\ncially\tinterpreted in a certain way and if the\t legislature
\nby taking note of the judgment amended the statute appro-\n<\/p>\n
39<\/span><\/p>\n
priately  so as to give it a different meaning from the\t one
\nasserted by the courts, or not giving any different  meaning
\nfrom the view taken by the court, it may be argued with some
\njustification  that  the  legislature has  expressly  or  by
\nimplication  ratified  the judicial interpretation.  In\t the
\ninstant\t case, the legislature has expressly taken  note  of
\nthe  High Court verdict and removed the practical  difficul-
\nties  caused thereby in implementing the provisions  of\t the
\nAct,  by appropriate amendments. No provision, however,\t was
\ninserted  to  re-write and validate the\t portion  which\t was
\nstruck\tdown by the High Court. It could therefore, be\trea-
\nsonably held that the legislature has accepted the  judgment
\nof the High Court to the extent indicated.
\n    That apart, the view taken by the High Court, in  strik-
\ning  down  a  portion of sub-section (2),  in  our  opinion,
\ncannot\tbe  found fault with. Sub-section (2) of  section  3
\nconsists of three parts. The first part refers to  interrup-
\ntion of service including service which may be\tinterruption
\non account of sickness or authorised leave or an accident or
\na strike which is not illegal or a lockout. The second\tpart
\nConsists  of the portion which has been struck down  by\t the
\nHigh  Court as unreasonable restriction on the right of\t the
\nemployer.  The third part refers to cessation of work  which
\nis  not\t due to any fault on the part of  the  workmen.\t The
\nprovisions  under the first and the third parts seem  to  be
\nsimilar\t to the terms of section 25B of the Industrial\tDis-
\nputes Act which also provides for continuous service of\t the
\nworkman.  The  second part dealing with\t non-employment\t and
\ndischarge  of a workman is distinct from the first  and\t the
\nthird  parts. It refers to the period during which there  is
\nno  subsisting relationship of master and servant. We  agree
\nwith  the  High Court that the word  ‘non-employment’  would
\ninclude\t retrenchment  as well and a person  whose  services
\nhave been terminated or discharged albeit illegal cannot  at
\nall be said to be a person in service. much less in continu-
\nous service. Therefore, the period of non-employment or\t the
\nperiod after discharge cannot be counted for the purpose  of
\ngiving continuity of service. If the discharge is set  aside
\nand workman is reinstated by process known to law the  work-
\nman  automatically  gets continuity of service.\t No  special
\nprovision is necessary for such purposes.
\n    In\tany view of the matter we cannot  therefore,  accept
\nthis appeal and is accordingly dismissed.
\nIn the circumstances of the case, however, we make no  order
\nas to costs.\n<\/p>\n
G.N.\t\t\t\t\t  Appeal dismissed.\n40<\/span>\n\n\n\n<\/pre>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India State Of Tamil Nadu And Ors vs Nellai Cotton Mills Ltd. And Ors on 20 March, 1990 Equivalent citations: 1990 SCR (2) 33, 1990 SCC (2) 518 Author: K Shetty Bench: Shetty, K.J. (J) PETITIONER: STATE OF TAMIL NADU AND ORS. Vs. RESPONDENT: NELLAI COTTON MILLS LTD. AND ORS. DATE OF […]<\/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-480","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nState Of Tamil Nadu And Ors vs Nellai Cotton Mills Ltd. 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