The main legal point established in the judgment is the binding nature of settlements under labor legislation and the protection of employees' rights, emphasizing the illegality of unilateral actions that violate such settlements.

Markandey Katju, CJ.

These four writ appeals are filed against the common order of the learned single Judge passed in four connected writ petitions on 11.12.2002.

2. Heard learned counsel for the parties, and perused the records.

3. The writ petitioners prayed for quashing of paragraph-8 of the impugned circular in R.C.No.11677/B.L.4/89 of the respondent (appellant herein) dated 24.08.1993 discontinuing payment of subsidy interest to the Housing Development Finance Corporation (hereinafter referred to as HDFC), and for a consequential order directing the respondent in the writ petitions (the appellant) to continue to give subsidy interest towards house building advance and to refund the amount deducted from their salary towards subsidy to HDFC.

4. The petitioner in W.P.No.7660 of 1994 Mr.N.Pandurangan joined the service of the Tamil Nadu Cements Corporation Ltd. as typist in the year 1972 at their Alangulam works. The respondent is a Government of Tamil Nadu Undertaking and is a ‘State’ under Article 12 of the Constitution of India. The petitioner was promoted as Senior Typist in the year 1987. It is alleged that on 10.09.1992 his post was upgraded to the Managerial Cadre though his duties remained the same.

5. On 24.10.1989 the respondent-Corporation entered into a settlement under Section 12(3) of the Industrial Disputes Act, 1947 with various unions including its Staff Association providing for House Building Advance. At that time the petitioner was a member of the Staff Association. As per the terms of the said settlement, an employee could avail House Building Advance from HDFC, and the HDFC used to charge 14% interest per annum on the loans so advanced. As per the terms of the settlement the employees had to pay 6% interest per annum and the interest exceeding 6% had to be borne by the respondent-Corporation. The employee, who had put in 10 years of service and had 7 years of service left, could avail of the loan.

6. According to the notice dated 05.05.1990, the workers, who are covered by the Cement Wage Board were eligible to get Rs.75,000/- towards House Building Advance. The petitioner in W.P.No.7660 of 1994 availed House Building Advance of Rs.60,000/- and the first instalment was disbursed on 1.4.1990. On 18.09.1992 he was upgraded to managerial cadre.

7. It is alleged in paragph – 8 of the petitioner’s affidavit filed in support of the writ petition in W.P.No.7660 of 1994 that the respondent-Corporation put up the impugned Circular dated 24.08.1993 stating that the persons who had been promoted from workmen category to managerial cadre will not get the benefit of subsidised interest which in this case works out to 8% per annum. In short the petitioner had to bear the interest burden of 8% which worked out to Rs.49,126/- in his case. It is further alleged that had he known of this discontinuation of subsidy, he would not have availed of the loan itself. Further, the terms of the settlement dated 24.10.1989 does not envisage such a contingency. The petitioner made a representation to the General Manager, and Chairman and Managing Director of the respondent-Corporation, but to no avail. On the other hand, the respondent-Corporation has started deducting the subsidy interest of 8% from October 1993, which according to the petitioner is illegal. It is further alleged by the writ petitioner in W.P.No.7660 of 1994 that there is no provision in the settlement dated 24.10.1989 under Section 12(3) of the Industrial Disputes Act, 1947 that in the event of an employee moving to the managerial cadre the interest subsidy on the House Building Advance will not be available to him. It is also alleged that the respondent-Corporation has no jurisdiction to stop the interest subsidy of 8% when the petitioner was moved into the managerial cadre.

8. A counter affidavit has been filed by the General Manager of the respondent-Corporation, and we have perused the same. It is alleged in paragraphs 3 and 4 that when the petition