Judgement

SHELAT, J. :- The Praga Tools Corporation (hereinafter referred to as the company) is a company incorporated under the Indian Companies Act, 1913. At the material time, however, the Union Government and the Government of Andhra Pradesh between them held 56 per cent and 32 per cent of its shares respectively and the balance of 12 per cent shares were held by private individuals. Being the largest shareholder, the Union Government had the power to nominate the company s directors. Even so, being registered under the Companies Act and governed by the provisions of that Act, the company is a separate legal entity and cannot be said to be either a Government corporation or an industry run by or under the authority of the Union Government.

2. At the material time there were two rival workmen s unions in the company, the Praga Tools Employees Union and the Praga Tools Corporation Mazdoor Sabha (hereinafter referred to as the union and the sabha respectively). On July 1, 1961 a settlement was arrived at between the company and the said union under which the workmen inter alia agreed to observe industrial truce for a period of three years and not to resort to stakes, stoppage of work or go-slow tactics. On December 10, 1962 the company and the said union entered into a supplementary settlement under which the company agreed not to retrench or lay-off any of the workmen during the said period of truce on an assurance from the said union of co-operation and willingness of the workmen to out alternative tasks assigned to them even if they were in a slightly lower cadre without loss of emoluments. The said two settlements were arrived at and recorded in the presence of the Commissioner of Labour under Sections 2 (p) and 18 (1) of the Industrial Disputes Act 1947 and were to be in force as aforesaid until July 1, 1964. On December 20, 1963, however, the company entered into an agreement with the said union to which the said sabha was not a party. The agreement recited that there were several disputes between the company and the union and that some of them were the subject-matter of conciliation proceedings and some were pending arbitration or adjudication. Clause (1) provided that the said agreements dated July 1, 1961 and December 10, 1962 to the extent that they were inconsistent with this agreement would stand automatically repealed or modified by this agreement. Clause (6) stated that there was an immediate, unavoidable need for reducing substantially the overhead expenditure of the company and for effecting economy and therefore notwithstanding the agreement dated December 10, 1962 "both the parties have prepared a list of the categories and persons who would be retrenched after careful consideration." The said list was attached to the agreement as annexure VI. Clause (6) also provided that the agreement dated December 10, 1962 stood modified so as to allow the said retrenchment to take place immediately in accordance with law. The clause further provided that in order to mitigate the consequences of the proposed retrenchment the company had evolved a scheme of voluntary retirement with terminal benefits superior to those provided under the Industrial Disputes Act, but the scheme of voluntary retirement would be available to the workmen only for a period of 10 days from the date of the agreement. It further provided that the company and the said union had agreed that an attempt would be made to rehabilitate the retrenched persons by helping them to obtain alternative employment and the company had for that purpose contacted public sector and other industries an in particular the Heavy Engineering Corporation, Ranchi for absorption as far as possible of the retrenched personnel.The effect of this agreement was to enable the company notwithstanding the two earlier settlements, to carry out retrenchment of 92 workmen mentioned in annexure VI thereto with effect from January 1, 1964.

3. Respondent 1 and 40 other workmen thereupon f