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2026 Supreme(Mad) 1384

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
N. Sathish Kumar, M. Jothiraman, JJ.
The Tamil Nadu State Transport Corporation (Madurai) Ltd. - Appellant
Versus
S.Palaniraj - Respondent
W.A.(MD)Nos.604 & 605 of 2026 and C.M.P.(MD)Nos.5775 & 5776 of 2026
Decided On : 30-04-2026

Advocates Appeared:
For the Appellant : Mr.S.C.Herold Singh
For the Respondent: Mr.M.Mohammed Imran, for M/s. Ajmal Associates.

Permanent Status Act S.3 overrides ID Act settlements for conferring permanency after 480 days service.

Headnote:The case involves daily wage drivers claiming permanent status under Section 3(1) of the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981 (Permanent Status Act), after completing 480 days in 24 months, despite a Section 12(3) settlement under the Industrial Disputes Act, 1947 (ID Act) regularizing them from 01.09.2005. Court finds the non-obstante clause and Explanation II to Section 3 override settlements, as 'law' includes agreements. Prior rulings upheld similar claims. Issues framed: Whether Section 3(1) Permanent Status Act overrides binding Section 12(3) ID Act settlement under Section 18(3). Ratio: Permanent Status Act prevails over ID Act settlements via Article 254(2) Constitution, post-1985 amendment including settlements in 'law'; statutory rights non-waivable. Writ appeals dismissed.

Table of Content
1. workmen completed 480 days, entitled to permanency. (Para 2 , 10)
2. settlement binds; continuous service needs evidence. (Para 3 , 4)
3. permanent status act s.3 overrides id act settlement. (Para 5 , 12)
4. prior judgments upheld permanency claims. (Para 6 , 7 , 8 , 9)
5. 1985 amendment includes settlements in 'law'. (Para 13 , 14)
6. state act prevails via art.254(2); rights non-waivable. (Para 15 , 17 , 18)
7. appeals dismissed. (Para 19)

JUDGMENT :

M.JOTHIRAMAN J.

Under assail is the common order passed in WP.(MD)Nos.2069 & 2071 of 2013 dated 30.08.2022.

2.It is the case of the respondents/writ petitioners that they were recruited as Drivers through employment exchange. They were appointed as Drivers on 18.05.2001 and 15.01.2001 respectively. Since their appointment, they were in continuous service as Drivers without any interruption. They have completed 240 days of actual service, on or before May 2002 and April 2002 respectively and therefore, they were deemed to have been confirmed workers, in view of the settlement under Section 12(3) settlement of Industrial Dispute Act, 1947[hereinafter referred as ID Act]. The Transport Corporation did not give any formal order for their confirmation. The Trade Union preferred complaint for prosecution under Section 29 of the ID Act and the same was disposed of on 08.06.2005 with an advise to the Transport Corporation to confirm the service of the workmen, who were completed 240 days of service. By adhering the settlement under Section 12(3) of ID Act dated 25.09.2006, the Transport Corporation confirmed their service with effect from 01.09.2005, instead of confirming their service with effect from the date on the completion of 240 days of their service vide order dated 01.09.2005. The said order came to be challenged by the respondents herein in the writ proceedings. The learned Single Judge by the impugned order partly allowed the said writ petitions, which has resulted in filing of the present writ appeals.

3.The learned counsel for the Appellants would submit that the services of the respondent were originally engaged by the appellant Corporation purely on a daily-rated and temporary basis, subject to specific terms and conditions that such engagement was temporary in nature and liable to be terminated at any point of time. Section 12(3) Settlement was entered in the year 2005 between the management of the Transport Corporation and the representatives of the Union, wherein it was agreed to regularise 1375 daily wage employees with effect from 01.09.2005 and further agreed that casual labourers would be treated as daily wage employees and would be considered for regularisation upon completion of 240 days of service. Hence, the respondents/workmen, being bound by the settlement, are not entitled to seek benefits from the date of their initial appointment. The above mentioned settlement was not challenged either by the respondent or by any other workman. Thus, the respondents/workman cannot dispute its terms. Since the respondent did not challenge the 12(3) Settlement dated 31.05.2005, under which he became entitled to benefits only from 01.09.2005, the Settlement remains binding on the respondents. Thus, the respondent cannot claim any right beyond the terms of engagement or beyond the settlement. The Government had imposed a ban on recruitment, which was lifted only on 13.12.1999. Thereafter, appointments of Drivers were made through the Employment Exchange and public advertisement. Subsequently, on 05.07.2001, the Government directed to stop the fresh engagement of casual labourers and the regularisation of existing daily wage employees. Therefore, to meet administrative exigencies, certain drivers, including the respondents herein, were engaged on a daily wage basis temporarily.

4.The learned counsel for the Appellant would further submit that the respondents/workmen have not preferred the appeal before the authority as per the act and directly filed the writ petition.

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