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2025 Supreme(Mad) 2255

IN THE HIGH COURT OF JUDICATURE AT MADRAS
A.D.MARIA CLETE, J. 
M.Arumugam S/o. Meenachi Sundaram – Appellant 
Versus
Tamil Nadu Khadi and Village Industries Board, Rep. by its Chief Executive Officer – Respondent 
W.P.No. 25467 of 2019 and 3528 of 2020 and W.M.P.No.24992 of 2019 
Decided on : 24-04-2025

Advocate Appeared:
For the Appellant :V.Prakash, Senior Counsel S.R.Bubala Chandran, S.Jayasheelan,U.Manohar and U.Sabari Kumar, Advocates
For the Respondent:Mr.P.A.Arvind Viveks, Advocate For Mr.C.Rajkumar, Advocate

The court reinforced that a settlement under the Industrial Disputes Act cannot override the existing statutory rights of workers to claim wages resulting from illegal closure, as stipulated in the tribunal's award.

Headnote:(A) Industrial Disputes Act, 1947 - Sections 33C(2) and 25-O - Closure of industrial establishment - Writ petitions challenge the dismissal of claim petitions regarding back wages following closure without permission - The court found that the prior settlement did not negate entitlement to full wages according to the Tribunal's award. (Paras 7, 18, 24, 41)

(B) Settlement under the Industrial Disputes Act - Legal requirements and binding nature - The settlement executed lacked proper adherence to the procedural mandates and could not override the tribunal's prior award of full back wages to the workers. (Paras 22, 35, 40)

Facts of the case:
The petitioners, former workers of the Khadi Board, sought the enforcement of an Industrial Tribunal award that reiterated their rights to back wages due to the illegal closure of their units without necessary permissions. (Paras 22, 41)

Findings of Court:
The Labour Court's dismissal of petitions was found to be improper. The petitioners are entitled to full back wages as per the tribunal's award without the limitation set by the alleged settlement. (Paras 40, 44)

Issues: 1. Whether the workers were entitled to full wages under the tribunal's award despite a claimed settlement. 2. Whether the settlement overrides statutory rights of workers under Section 25-O(6). (Paras 20, 21)

Ratio Decidendi: The court held that the purported settlement could not override the tribunal's award; the workmen retained an independent statutory right to full wages. Procedural failures in executing the settlement rendered it legally ineffective. (Paras 24, 36)

Result: Writ Petition No. 25467 of 2019 allowed; Writ Petition No. 3528 of 2020 dismissed.

Table of Content
1. common judgment concerning the appeal of wage claims. (Para 1)
2. overview of petitioners and procedural background. (Para 2 , 3 , 4 , 5 , 6)
3. closure of units without valid permissions. (Para 7 , 8 , 11)
4. legal implications of the industrial tribunal's ruling. (Para 9 , 10 , 12)
5. challenge of common order by employees and khadi board. (Para 16)
6. labour court's dismissal and reasoning. (Para 18 , 19)
7. key issues raised in the writ petitions. (Para 20 , 21)
8. analysis of settlement's eligibility and enforceability. (Para 22 , 23)
9. statutory entitlement of workmen under industrial disputes act. (Para 27)
10. legal stance on override of awards by settlements. (Para 30 , 31 , 32)
11. entitlements and prior rights of workers. (Para 36 , 38)
12. final judgment and directions. (Para 40 , 41 , 42 , 43 , 44)

COMMON JUDGMENT

Heard.

2. Since both writ petitions challenge the common order dated 30.04.2019 passed by the III Additional Labour Court, Chennai, they were heard together and are being disposed of by this common judgment.

3.The first writ petition is filed by 40 Petitioners, of whom 39 were the original claimants in separate claim petitions. The 32nd Petitioner, S. Nagendiran, is the son of M. Sankaranarayanan, the Claim Petitioner in C.P. No. 156 of 2015, and he has approached this Court as his legal representative. He has chosen to challenge the common order passed by the Labour Court. Before the Labour Court, a total of 51 claim petitions—being C.P. Nos. 117 to 150 and 152 to 168 of 2015—were clubbed together and adjudicated by way of a common order following a joint trial.

4.Although there were 51 claim petitions, the present writ petition challenges only 40 of them, as 11 of the claimants have not chosen to assail the order. In such circumstances, it was incumbent upon the Petitioners to implead the remaining 11 claimants as party respondents to the writ petition. In the absence of such impleadment, the adjudication would be incomplete, and the unchallenged portion of the order would attain finality and operate as res judicata against them. The first writ petition was admitted on 20.11.2019, and in the application filed for interim relief, only notice was ordered.

5.Fortunately for the 40 Petitioners in the first writ petition, a second writ petition came to be filed by the Tamil Nadu Khadi and Village Industries Board (hereinafter referred to as the 'Khadi Board'), challenging the very same common order in respect of all 51 claim petitions. By order dated 14.02.2020, the said writ petition was directed to be heard along with the earlier writ petition filed by the workers.

6.In that case, even before the Labour Court, one of the claimants—A. Appavu, the Petitioner in C.P. No. 126 of 2015—had passed away. Consequently, his legal heirs, namely his son and daughter, have been impleaded as Respondents 10 and 11 in the second writ petition. It could be stated that in view of the Khadi Board having filed a comprehensive challenge covering all 51 claim petitions and all concerned parties now being before this Court, the technical defect in the maintainability of the workers’ writ petition, to some extent, stands cured.

7.Before dealing into the facts of the claim petitions filed under Section 33C(2) of the Industrial Disputes Act, 1947, it is necessary to set out the background of the case. The Petitioners, who were employees of the Khadi Board, were engaged in various handmade paper units. They were represented by a trade union affiliated to the Centre of Indian Trade Unions (CITU). The said trade union raised an industrial dispute concerning the closure of 15 handmade paper units. The dispute was referred for adjudication to the Industrial Tribunal, Tamil Nadu, and was taken on file as I.D. No. 100 of 2000.

8.The Industrial Tribunal, by its award dated 10.05.2006, held that the closure of the handmade paper units was illegal and amounted to victimization of the workmen. In paragraphs 22 to 25 of the award, the Tribuna

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