Hon’ble Tarun Agarwala, J.—The petitioner is a Company under the Companies Act, 1956 and is under the control and supervision of the Ministry of Textiles, Government of India and is engaged in the manufacture of woolen fabric. The British India Corporation is a holding Company and its unit is known as Cawnpore Woolen Mills, better known as ‘Lal Imli’ in Kanpur which has been declared a sick Company and has been recommended to be wound up by the BIFR. For the security of the property of the Company, a contract was given to Guardwell Security Services Pvt. Ltd., New Delhi for the engagement of the security guards on contract labour. A written contract was executed in July 1989 and, upon the expiry of the contract, the security guards deployed by the contractors were withdrawn. The 46 security guards, being aggrieved by the alleged removal of their services, filed Writ Petition No. 12028 of 1991. During the pendency of the writ petition, certain negotiations were held with the management and, a settlement was arrived at between the parties, which was duly registered under Section 6-B of the U.P. Industrial Disputes Act. Clause 2 of the said settlement is relevant for the purpose of the case which is quoted hereunder :

“That in view of the above the Management has also decided to take a sympathetic view in the matter and has agreed to consider the cases of employees of the said Guardwell Security Services mentioned in Annexure 1 to the writ petition. In the event of new recruitment in the Security staff of the company, i.e. after absorbing the Home Guards employees already on the panel of the Security Guards of the company and who are engaged as Security Guards for the past several months, if any further recruitment is made they will be given preference."

2. The aforesaid settlement contemplated that the management would consider the case of the employees of the security agency which were mentioned in Annexure 1 to the writ petition and in the event of a new recruitment drive, the security guards would be given preference after the Home Guards already employed on the panel of the security guards are absorbed. It is alleged, that the settlement was given effect to by the Management and, out of 46 security guards, 20 security guards of the security agency were employed by the petitioner over a period of time. 17 of these security guards could not be given employment as, in the meantime, the Government of India issued a ban on fresh appointments. It is alleged, that the management issued a notice dated 24.6.1996 inviting applications from the employees and the Home Guards, for the post of Security Guards and peons. A condition was imposed in the said notice that there would be no change in the benefits or in the salary that was already being paid to them. Pursuant to this notice, it transpires, that the Home Guards who were working in other departments of the petitioner Company were deployed as security guards. The respondents, being aggrieved by the action of the petitioner and feeling left out, alleged violation of the settlement that was arrived at between the parties and accordingly the security guards through their union moved an application before the Conciliation Officer for conciliation, and upon its failure, the State Government referred the matter for adjudication under Section 4-K of the U.P. Industrial Disputes Act. The terms of the reference order was “Whether the employers were justified in not absorbing the 21 workers in the services of the Company? If not, to what relief were the workers entitled to ?”

3. Before the Labour Court, the Union contended that the security guards had worked in the employment of the Company and had raised a grievance against the alleged termination by filing Writ Petition No. 12028 of 1991 before the High Court, which was disposed of in terms of the settlement dated 13.5.1992 arrived at between the parties and which settlement had been registered under Section 6-B of the U.P. Industrial