1992 (5) TMI 195 - SC - Indian Laws

Summary

Issues Involved:
1. Constitutional validity of Section 25-N of the Industrial Disputes Act, 1947.
2. Whether the right to retrench workmen is an integral part of the right to carry on business under Article 19(1)(g) of the Constitution.
3. Reasonableness of restrictions imposed by Section 25-N under Article 19(6).

Summary:

1. Constitutional Validity of Section 25-N:
These appeals and writ petitions challenge the constitutional validity of Section 25-N of the Industrial Disputes Act, 1947, on the grounds of violation of the right guaranteed under Article 19(1)(g) of the Constitution. The validity of Section 25-N was questioned due to conflicting decisions by various High Courts. The Andhra Pradesh High Court upheld its validity, while the Madras and Rajasthan High Courts declared it unconstitutional.

2. Right to Retrench Workmen:
The Court examined whether the right to retrench workmen is an integral part of the right to carry on business under Article 19(1)(g). It was argued that the right to retrench is essential for organizing business efficiently. However, the Court noted that the right to retrench should be considered as a peripheral or concomitant right facilitating the exercise of the fundamental right to carry on business.

3. Reasonableness of Restrictions:
The Court assessed whether the restrictions imposed by Section 25-N are reasonable under Article 19(6). It emphasized that restrictions promoting Directive Principles can be presumed reasonable. Section 25-N requires prior permission for retrenchment, aiming to prevent hardship to workmen and maintain industrial peace. The Court highlighted that the power under Sub-section (2) involves a quasi-judicial function, requiring an objective consideration of relevant facts and a speaking order with reasons. The absence of an appeal or revision provision was not deemed unreasonable, as judicial review under Article 226 is available.

Conclusion:
The Court rejected the contentions against Section 25-N, holding that it does not violate Article 19(1)(g) and is saved by Article 19(6). The decisions of the Madras and Rajasthan High Courts declaring Section 25-N unconstitutional were not upheld. The matters were referred to a Division Bench for further consideration in light of this judgment.