Madhya Pradesh High Court
National Textile Corporation Limited … vs Todermal on 21 July, 2025
Author: Vivek Rusia
Bench: Vivek Rusia
NEUTRAL CITATION NO. 2025:MPHC-IND:18714 -1-
WP No.7041/2013
IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE VIVEK RUSIA
&
HON'BLE SHRI JUSTICE BINOD KUMAR DWIVEDI
ON THE 21st OF JULY, 2025
WRIT PETITION No. 7041 of 2013
NATIONAL TEXTILE CORPORATION LIMITED, NEW DELHI AND
OTHERS
Versus
GHAYSHYAM S/O NANDRAM JI DEAD THROUGH LRS SMT
RAMIBAI AND OTHERS
WITH
WRIT PETITION No. 7045 of 2013
NATIONAL TEXTILE CORPORATION LIMITED, NEW DELHI AND
OTHERS
Versus
SURESH S/O TULSIRAM
WRIT PETITION No. 7046 of 2013
NATIONAL TEXTILE CORPORATION LIMITED, NEW DELHI AND
OTHERS
Versus
BHOLARAM S/O HARIRAM
Signature Not Verified
Signed by: TRILOK SINGH
SAVNER
Signing time: 21-Jul-25
5:52:05 PM
NEUTRAL CITATION NO. 2025:MPHC-IND:18714 -2-
WP No.7041/2013
WRIT PETITION No. 7047 of 2013
NATIONAL TEXTILE CORPORATION LIMITED, NEW DELHI AND
OTHERS
Versus
TODALMAL S/O MOOLCHAND
MISCELLANEOUS PETITION No. 1127 of 2019
NATIONAL TEXTILE CORPORATION LIMITED, NEW DELHI AND
OTHERS
Versus
TODERMAL S/O MOOLCHANDRA JI
MISCELLANEOUS PETITION No. 1128 of 2019
NATIONAL TEXTILE CORPORATION LIMITED, NEW DELHI AND
OTHERS
Versus
SURESH S/O TULSIRAMJI
MISCELLANEOUS PETITION No. 1130 of 2019
NATIONAL TEXTILE CORPORATION LIMITED NEW DELHI AND
OTHERS
Versus
GHAYSHYAM S/O NANDRAM JI DEAD THROUGH LRS SMT
RAMIBAI AND OTHERS
MISCELLANEOUS PETITION No. 1131 of 2019
NATIONAL TEXTILE CORPORATION LIMITED, NEW DELHI AND
OTHERS
Versus
BHOLARAM S/O HARIRAM JI
Signature Not Verified
Signed by: TRILOK SINGH
SAVNER
Signing time: 21-Jul-25
5:52:05 PM
NEUTRAL CITATION NO. 2025:MPHC-IND:18714 -3-
WP No.7041/2013
_____________________________________________________________
Appearance:
Shri Dharmendra Sharma - Advocate for the petitioners.
Shri B.L. Nagar - Advocate for the respondents.
Reserved on : 09/07/2025
Pronounced on : 21/07/2025
_______________________________________________________________
ORDER
Per: Justice Vivek Rusia
1. This order shall govern the disposal of WP No.7041/2013, WP
No.7045/2013, WP No.7046/2013, WP No.7047/2013, MP No.1127/2019,
MP No.1128/2019, MP No.1130/2019 & MP No.1131/2019. Regard being
had to the similitude of the controversy involved in the petitions described
above, they are heard analogously and disposed of by this common order.
Brief facts of the case:-
2. This bunch of petitions arise from a common factual background
involving the grant and implementation of the Modified Voluntary
Retirement Scheme (in short: MVRS) in the context of the closure of Hira
Mills, Ujjain, which was a textile manufacturing unit under the erstwhile
National Textile Corporation (M.P.) Limited. Hira Mills, located on Agar
Road, Ujjain, was a textile undertaking that, owing to continuous financial
losses and failed modernisation efforts, was referred to the Board for
Industrial and Financial Reconstruction (BIFR) during the year 1992-93.
3. In the course of considering the rehabilitation scheme, the BIFR vide
its interim order dated 12.12.2001 directed that all non-viable and non-
Signature Not Verified
Signed by: TRILOK SINGH
SAVNER
Signing time: 21-Jul-25
5:52:05 PM
NEUTRAL CITATION NO. 2025:MPHC-IND:18714 -4-
WP No.7041/2013
working mills be closed, subject to the condition that employees of such
mills be offered a Modified Voluntary Retirement Scheme (MVRS).
Accordingly, the appropriate authority had granted permission for closure of
Hira Mills under the provisions of Section 25(O) of the Industrial Disputes
Act, 1947 vide order dated 05.09.2002, and pursuant thereto, the unit was
closed with effect from 31.10.2002. A public notice was issued and
displayed on the notice board of the Mill premises on 24.10.2002 stating that
the employees whose resignations under MVRS had been accepted by the
competent authority would stand retired with effect from 31.07.2002 and
would be extended the benefits of MVRS from 01.08.2002. The notice
further clarified that those employees who either did not apply for MVRS or
whose applications were not accepted would be entitled only to closure
compensation in accordance with Section 25(O) of the I.D. Act.
4. It is not in dispute that out of 896 employees at the time of its closure,
as many as 878 employees were extended the benefits under MVRS. The
remaining employees, including the respondents, were not granted MVRS
benefits either due to non-application or due to rejection of their
applications. The respondents were, however, paid closure compensation in
terms of the statutory provisions.
5. Aggrieved such denial by the petitioner, the respondents filed
applications before the labour Court, Ujjain under Sections 31(3), 61 and 62
of the M.P. Industrial Relations Act, 1960 (hereinafter referred to as “the Act
of 1960”) challenging the validity of the closure notice dated 24.10.2002
also seeking reinstatement and in the alternative seeking direction for the
grant of MVRS benefits on parity with other employees. Applications
Signature Not Verified
Signed by: TRILOK SINGH
SAVNER
Signing time: 21-Jul-25
5:52:05 PM
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WP No.7041/2013
seeking an interim stay of closure were also moved by the respondents;
however, this was rejected by the ld. Labour Court vide order dated
11.06.2003.
6. Being aggrieved by the order dated 11.06.2003, the respondents filed
Miscellaneous Civil cases before the Industrial Court at Indore, which was
decided by a common order dated 05.07.2005 whereby the learned Industrial
Court directed the petitioners to grant MVRS benefits to the respondents.
This order was challenged by the petitioners before this court in Writ
Petition Nos. 3193/2005, which was allowed by this court vide order dated
06.08.2009 whereby the matter was remanded back to the labour court for
fresh adjudication on merits and without being influenced by the
observations of the Industrial Court. Upon remand, the labour court, Ujjain,
adjudicated the matter after recording evidence and by its detailed order
dated 12.11.2010, directed the petitioners to grant the same benefits of
MVRS to the respondents as given to other employees. Dissatisfied with this
order, the petitioners filed a civil appeal before the Industrial Court, Indore,
which was decided by order dated 30.09.2011 whereby the matter was
remanded back to the labour court, Ujjain, for consideration. Upon remand,
the Labour Court, Ujjain by its detailed order dated 07.12.2011 dismissed
the claims of the respondents holding that they were not entitled to the
benefits of MVRS in the absence of acceptance of MVRS application by the
petitioner and further held that the claimants had already accepted closure
compensation and that no enforceable right under MVRS could be claimed
unilaterally.
Signature Not Verified
Signed by: TRILOK SINGH
SAVNER
Signing time: 21-Jul-25
5:52:05 PM
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WP No.7041/2013
7. Aggrieved by this rejection, the respondents preferred appeals before
the Industrial Court, Indore, which were allowed by a common order dated
05.03.2013 whereby the decision of the labour court dated 07.12.2011 has
been set aside with the direction to grant similar MVRS benefits to the
respondents after deducting the amount already paid to them as closure
compensation. Aggrieved by the order dated 05.03.2013 of the industrial
court, Indore, the petitioners have filed the present batch of writ petitions
under Article 226/227 of the Constitution of India seeking quashment of the
appellate order and benefit of reinstatement.
8. During the pendency of the above writ petitions, the respondents had
filed separate petitions bearing W.P. Nos. 5867/2013 and other connected
matters, praying for the award of interest on the amount of MVRS benefits
as directed by the Industrial Court. These petitions were disposed of vide
common order dated 02.08.2013 by this court, granting liberty to the
respondents to approach the competent authority under the Act of 1960 for
appropriate relief with respect to their claim for interest. Exercising this
liberty, the respondents instituted independent applications before the
Industrial Court, Indore, seeking payment of interest on the MVRS benefits
allegedly due to them. The Petitioners opposed the said applications,
contending that no claim for interest could arise when the very entitlement to
MVRS was under judicial scrutiny and had not attained finality. Despite the
aforesaid objection, the learned Industrial Court, by separate orders dated
22.10.2018, allowed the said applications and directed the petitioners to pay
interest at 6% per annum on the amounts payable under MVRS. The
petitioners have assailed these orders through the present petitions.
Signature Not Verified
Signed by: TRILOK SINGH
SAVNER
Signing time: 21-Jul-25
5:52:05 PM
NEUTRAL CITATION NO. 2025:MPHC-IND:18714 -7-
WP No.7041/2013
Submission of learned counsel for the petitioner:-
9. Learned counsel appearing for the petitioner submitted that the
petitioner-establishment had already been closed under Section 25(O) of the
Industrial Disputes Act, 1947. Before closure on 31.10.2002, the scheme of
voluntary retirement was introduced, which is a contract between the
employer and employees. If the employee does not make an application for
acceptance of MVRS, then later on, he cannot claim as a matter of right
because it is purely a contract between the parties. The respondents who are
now claiming the benefit of MVRS did not submit any application to get the
MVRS or the benefit arising out of it. Even if they are held entitled to get the
benefit of MVRS, the direction to pay interest would cause a heavy financial
burden on the petitioner, which had closed the manufacturing activities in
the year 2002.
10. It is further submitted that the learned Labour Court has rightly
rejected their claim, but the Industrial Court has wrongly reversed the same.
In support of his contention, ld. Counsel has placed reliance on the judgment
passed in the case of HEC Voluntary Retired. Emps. Welfare Soc. & Anr.
Vs. Heavy Engineering Corporation Ltd. & Ors. reported in AIR 2006 SC
1420, in which the Apex Court held that only because the scheme of MVRS
remained in force for a period of 10 years, the same would not mean that it
become a part of general terms and condition of contract for employment
because the financial considerations are relevant factor both for floating of a
scheme as well as revision of pay. Learned counsel has also placed reliance
on a judgment in the case of Bank of India v. O.P. Swarnkar reported in
AIR 2003 SC 858, in which the Apex Court has held that the voluntary
Signature Not Verified
Signed by: TRILOK SINGH
SAVNER
Signing time: 21-Jul-25
5:52:05 PM
NEUTRAL CITATION NO. 2025:MPHC-IND:18714 -8-
WP No.7041/2013
retirement scheme is not a proposal or offer but an invitation to treat the
application filed by the employees constituted offer, in absence of any other
independent binding contract or statute or statutory rules. In the case of A.K.
Bindal Vs. Union of India reported in AIR 2003 SC 2189, the Apex Court
has held that the VRS scheme is a golden handshake. The main purpose of
paying the amount is to bring about a complete cessation of the juridical
relationship between the employer and employee. There is no compulsion on
either side of the parties to accept or not to accept. In the case of Hathsing
Manufacturing Co. Ltd. Vs. Union of India reported in AIR 1960 SC 923,
the Apex Court has held that there is a significant difference between the
provisions of Section 25F and Section 25-FFF. In the case of Management
of Gordon Woodroffe Agencies Pvt. Ltd. Vs. Presiding Officer, Principal
Labour Court and others reported in AIR 2004 SC 4124, the Apex Court
has held that the closure of the establishment is legally justifiable and the
management had the right to offer compensation payable for closure and
other statutory dues. The High Court has no authority to direct payment of
any additional sum by way of ex gratia payment contrary to the statute.
Lastly, learned counsel has placed reliance on the judgment in the case of
N.S. Giri Vs. The Corporation of the City of Mangalore and others
reported in AIR 1999 SC 1958 and National Textile Corporation (M.P.)
Ltd. Vs. M.R. Jadhav reported in 2008 AIR SCW 3753, in which the Apex
Court has held that when the scheme is floated for voluntary retirement, it
constitutes an offer to treat and when such offer is made, it is required to be
accepted by an employee and unless the offer is accepted, the binding
contract does not come into place. In the absence of communication of the
Signature Not Verified
Signed by: TRILOK SINGH
SAVNER
Signing time: 21-Jul-25
5:52:05 PM
NEUTRAL CITATION NO. 2025:MPHC-IND:18714 -9-
WP No.7041/2013
offer, the workman derives no legal right to obtain the benefit of the
voluntary scheme.
Submissions of the respondent’s counsel:-
11. Learned counsel appearing for the respondents argued that no
interference in the order passed by the Industrial Court is liable to be made
in the writ petition under Article 227 of the Constitution of India, especially
when the Industrial Court has noticed that out of 896, the benefit of VRS
was given to 878 employees. The respondents had been given only the
benefit of closure, which is much less than the benefit given to the large
number of workmen under MVRS. Nothing has been brought to the record
to show that the application submitted by the respondents for voluntary
retirement was rejected for valid reasons. The respondents were forced not to
attend the duties from 31.10.2002 on the grounds of closure. They applied
for voluntary retirement on 5.7.2002, but no information about acceptance or
rejection was given to them. In the case of respondents, the Labour Court
passed an award of reinstatement with 50% back wages, but the management
of the petitioner put pressure on them to abandon that claim. When they
refused, the benefit of MVRS was not granted to them. Hence, the petition is
dismissed.
We have heard the learned counsel for the parties at length and
perused the record.
12. The learned Industrial Court vide impugned award dated 5.3.2013 has
decided the appeals filed by Suresh, Bholaram, Ghanshyam and Todarmal,
in whose favour the Labour Court had already passed an award for
reinstatement with 50% of backwages. Suresh submitted an application for
Signature Not Verified
Signed by: TRILOK SINGH
SAVNER
Signing time: 21-Jul-25
5:52:05 PM
NEUTRAL CITATION NO. 2025:MPHC-IND:18714 -10-
WP No.7041/2013
VRS on 19.6.2002, Ghanshyam on 5.7.2002 and Todarmal on 26.6.2002, but
the same were neither rejected nor accepted. Thereafter, they approached the
Labour Court although challenging the closure and alternatively the benefits
of MVRS. The petitioner-Company got a permission from the Central
Government for closure under Section 25(O) on 5.9.2002, and thereafter, the
petitioner stopped the respondents and other workers from attending their
duties. Except 15 workmen who refused to forego the benefit granted by the
Labour Court, have been denied the benefit of MVRS scheme to remaining
878 workmen have been granted such benefits. Thus, an unfair labour
practice was adopted by the petitioner.
13. Before the date of closure of the unit, the Labour Court had already
passed an award in favour of the respondents for reinstatement with 50%
backwages and classification as a permanent employee, which had attained
finality. Therefore, they were liable to be taken into the service when the
scheme of VRS was floated, hence they submitted an application for MVRS.
According to the respondents, the pressure was put on them to withdraw the
benefit given by the Labour Court. When they denied the benefit of the
MVRS, it was not given to them. The learned Industrial Court has
considered this matter in detail and categorically held that no material has
been produced by the petitioner-Management to show that the application
submitted for MVRS by these four employees was rejected or accepted.
Apart from that, the petitioner had granted the benefit of VRS to 878
workmen out of 896. Therefore, there is no justification to deny the benefit
to these four petitioners who have only come to the Labour Court and have
Signature Not Verified
Signed by: TRILOK SINGH
SAVNER
Signing time: 21-Jul-25
5:52:05 PM
NEUTRAL CITATION NO. 2025:MPHC-IND:18714 -11-
WP No.7041/2013
been fighting for their rights for the last three decades. Hence, no
interference is required.
14. No case for awarding interest is made out as there is a delay in
payment of the benefit of VRS. The benefit of closure, which was given to
these respondents, is admittedly 1/3rd of the benefit given to 878 workmen
of VRS. Therefore, there cannot be discrimination between similarly placed
persons. The respondents are entitled to get the benefits of MVRS from the
date when it was given to the ex-workman, along with interest, within 60
days.
15. In view of the above, the petitions are dismissed.
16. Signed order be kept in the file of WP No.7041/2013 and a copy
thereof be placed in the file of WP No.7045/2013, WP No.7046/2013, WP
No.7047/2013, MP No.1127/2019, MP No.1128/2019, MP No.1130/2019 &
MP No.1131/2019.
(VIVEK RUSIA) (BINOD KUMAR DWIVEDI)
JUDGE JUDGE
trilok
Signature Not Verified
Signed by: TRILOK SINGH
SAVNER
Signing time: 21-Jul-25
5:52:05 PM
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