Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2025 Supreme(Online)(Mad) 63940

IN THE HIGH COURT OF JUDICATURE AT MADRAS
Ms. JUSTICE P.T. ASHA, J
R.Balaji – Appellant
Versus
M/s.Marshall Sons & Co.(Manufacturing) Ltd. – Respondent
W.P.Nos.17153 of 2010|W.P.No.11041 of 2011|W.P.No.6171 of 2014|M.P.No.1 of 2014

Advocates:
For the Appellants/Petitioners: M/s.S.Senthilnathan, M/s.S.Chandra Bose, M/s.M.R.Raghavan
For the Respondents: M/s.M.R.Raghavan, Tribunal, Court, M/s.S.Chandra Bose

Failure to obtain prior permission for closure under the Industrial Disputes Act renders a lockout illegal, entitling affected workmen to reinstatement and benefits.

Headnote:(A) Industrial Disputes Act - Sections 2(1), 12(3), 33-C(2), 25-N, and 25-O - Challenge to lockout as unjustified - Management's failure to obtain statutory permission prior to closure deemed illegal - Petitioners entitled to reinstatement, continuity of service, and back wages - Settlement with other workmen does not affect these rights. (Paras 6, 12, 26, 32)

(B) Legal Principles: Declarations of lockout without appropriate government permission under ID Act are illegal - Compliance with statutory provisions for closure is mandatory, binding on all workmen. (Paras 24, 28)

Facts of the case:
Petitioners, workmen of a manufacturing company, claimed reinstatement and wages after management declared a lockout without statutory authorization. They challenged the legality of the lockout as mandated by the Industrial Disputes Act.

Findings of Court:
The Tribunal incorrectly directed only minimal compensation rather than reinstatement despite acknowledging the lockout was unjustified.

Issues: Whether the management's lockout was illegal due to lack of required governmental permission and whether subsequently entered settlements can bind all workmen.

Ratio Decidendi: The court held that without statutory permission, the closure was invalid and required the reinstatement of workmen with due benefits as mandated by the ID Act.

Result: Writ petitions allowed for reinstatement and payment of back wages.

Table of Content
1. introduction and overview of writ petitions. (Para 1 , 2 , 3 , 4)
2. factual background involving the workmen's claims and disputes. (Para 5 , 6 , 7 , 8)
3. management's contentions against workmen's claims. (Para 9 , 10 , 11 , 12)
4. legal grounds and arguments regarding maintenance of petitions. (Para 13 , 14 , 15)
5. workmen's rights post-closure and arguments for reinstatement. (Para 16 , 17 , 18)
6. management's stance on binding settlements and arguments for dismissal. (Para 19 , 20 , 21)
7. court's examination of statutory provisions and their application. (Para 22 , 23 , 24 , 25)
8. court's reflections on statutory compliance concerning industrial closure. (Para 26 , 27 , 28 , 29)
9. settlement agreements and their binding nature under labor law. (Para 30 , 31)
10. conclusion on the legality of the lockout situation. (Para 32)
11. final decisions on the writ petitions and directions for the management. (Para 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40)

COMMON ORDER

A common order is being passed since the facts involved in all the writ petitions are one and the same.

2. WP.No.17153 of 2010 has been filed by the petitioners 1 to 5 who are the petitioners 2, 4, 5, 11 and 8 respectively in the proceedings before the Labour Court in ID.No.13 of 2004.

3. WP.No.11041 of 2011 has been filed by the petitioners 1 to 4 who are the petitioners 10, 7, 9 & 6 respectively in ID.No.13 of 2004. The petitioners are the workmen of the 1st respondent company in WP.No.17153/2010.

4. WP.No.6171 of 2014 has been filed by the management challenging the order passed in CP.No.421 of 2005.

5. Since the facts are common in all the Writ Petitions, they are being culled out herein below:-

6. The petitioners in WP.No.17153/2010 and 11041 of 2011 had joined the 1st respondent company on various dates in various capacities. It is the case of the workmen that on 23.09.1999, they had entered into a settlement under Section 12 (3) of the Industrial Disputes Act (herein after called as the “ID Act”) regarding the revision of wages and other service conditions. This Settlement was valid for a period of 3 years ie. upto 31.12.2002. After the expiry of the said settlement, the workmen had submitted a fresh charter of demands in February 2003. As the management did not come forward to negotiate on the charter of demands, the workmen had raised an Industrial Dispute and the same was taken up for conciliation by the Assistant Commissioner of Labour (Conciliation-II), Chennai. On 01.05.2003, a settlement under (3) of the ID Act has been arrived at between the parties and the same was effective for a period of 3 years i.e. upto 30.04.2006. However, the management did not implement the terms of settlement and in fact did not pay the earned wages for June and July 2003. Subsequently, the workmen had raised a demand seeking payment of wages for the months of June and July. Immediately, on 02.08.2003 a board was put up in the factory premises by the management stating that the workmen were indulging in riotous behaviour and threatening the personnel of the company. Therefore, they had declared suspension of operation of its work at the factory. The petitioner would contend that this is nothing but declaring a lockout as defined under Section 2 (1) of the ID Act.

7. The management had thereafter attempted to remove the materials from out of the factory premises which was effectively prevented by the workman by staging Dharna. The police had intervened in the matter and on the very same day a peace meeting was held and minutes were drawn up. The management thereupon agreed to remove the materials pertaining to the customers alone in the presence of the union leaders.

8. The petitioners would submit that challenging the illegal action of the management in declaring suspension of operations, the union had raised an Industrial Dispute under Section 2K of the ID Act before the Joint Commissioner of Labour, Chennai. The Conciliation Officer was unable to bring about the

Click Here to Read the rest of this document

2025 Supreme(Online)(Mad) 63940

IN THE HIGH COURT OF JUDICATURE AT MADRASMs. JUSTICE P.T. ASHA, JR.Balaji – AppellantVersusM/s.Marshall Sons & Co.(Manufacturing) Ltd. – RespondentW.P.Nos.17153 of 2010|W.P.No.11041 of 2011|W.P.No.6171 of 2014|M.P.No.1 of 2014

Failure to obtain prior permission for closure under the Industrial Disputes Act renders a lockout illegal, entitling affected workmen to reinstatement and benefits.

Cases Referred (6)

IN THE HIGH COURT OF JUDICATURE AT MADRAS
Ms. JUSTICE P.T. ASHA, J
R.Balaji – Appellant
Versus
M/s.Marshall Sons & Co.(Manufacturing) Ltd. – Respondent
W.P.Nos.17153 of 2010|W.P.No.11041 of 2011|W.P.No.6171 of 2014|M.P.No.1 of 2014