RASHTRIYA MILL MAZDOOR SANGH versus NATIONAL TEXTILE CORPORATION (SOUTH MAHARASHTRA) LTD. AND ORS.

RASHTRIYA MILL MAZDOOR SANGH versus NATIONAL TEXTILE CORPORATION (SOUTH MAHARASHTRA) LTD. AND ORS.

NTC is not liable for the payment of gratuity under the Payment of Gratuity Act to an employee whose employment ended prior to the takeover; such liability remains solely that of the original textile company, as per section 3(7) of the Textile Undertakings (Take Over of Management) Act, 1983, and cannot be displaced by reference to the Act's preamble or section 6.

Parties
Appellant: Rashtriya Mill Mazdoor Sangh; Respondent No. 1: National Textile Corporation (South Maharashtra) Ltd.; Respondent No. 2: Mohan Sambhaji Parah; Respondent No. 3: M/s. Finlay Mills Ltd.
Jurisdiction
India
Judgment Date
24 November 1995
Procedural Posture
Civil Appeal / Supreme Court Judgment on Appeal by Special Leave From Bombay High Court
Outcome
Appeal dismissed
Legal Topics
Liability for Gratuity, Takeover of Management of Textile Undertakings, Interpretation of Preamble and Statutory Provisions
Labour Law Statutory Interpretation Administrative Law Liability for Gratuity Takeover of Management of Textile Undertakings Interpretation of Preamble and Statutory Provisions

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Parties

Rashtriya Mill Mazdoor Sangh

Appellant

National Textile Corporation (South Maharashtra) Ltd.

Respondent No. 1

Mohan Sambhaji Parah

Respondent No. 2

M/s. Finlay Mills Ltd.

Respondent No. 3

Procedural Posture

Civil Appeal / Supreme Court Judgment on Appeal by Special Leave From Bombay High Court

Legal Issues

  1. 1 Whether National Textile Corporation (NTC) is liable for gratuity payable to an employee who ceased to be in employment prior to the takeover under the Textile Undertakings (Take Over of Management) Act, 1983.
  2. 2 Whether the operation of section 3(7) of the Act excludes liabilities arising under the Payment of Gratuity Act for the pre-takeover period.

Ratio Decidendi

NTC is not liable for the payment of gratuity under the Payment of Gratuity Act to an employee whose employment ended prior to the takeover; such liability remains solely that of the original textile company, as per section 3(7) of the Textile Undertakings (Take Over of Management) Act, 1983, and cannot be displaced by reference to the Act's preamble or section 6.

Court Disposition

Appeal dismissed