Supreme Court Ensures Equal Land Allotment for All Mill Workers: Modified Voluntary Retirement Scheme of 2002 of Azam Jahi Mill Workers Association vs. National Textile Corporation Limited & Ors. (26 October 2021)

Date of the Judgment: 26 October 2021
Citation: Modified Voluntary Retirement Scheme of 2002 of Azam Jahi Mill Workers Association vs. National Textile Corporation Limited & Ors., Civil Appeal Nos. 6260-61 of 2021
Judges: M.R. Shah, J. and A.S. Bopanna, J.

Can a group of employees be denied benefits granted to their similarly situated colleagues simply because they followed the law? The Supreme Court of India recently addressed this question, ruling that all mill workers who took voluntary retirement under a specific scheme are entitled to equal benefits, regardless of whether they vacated their quarters as per the notice or not. This decision ensures that no one is penalized for complying with the law and upholds the principle of equality.

Case Background

The case revolves around the workers of Azam Jahi Mills, owned and run by the National Textile Corporation Limited (NTC). The mill closed in 2002, and approximately 452 employees had worked there for more than 20 years. During their employment, many workers were provided with employee quarters. Following a Modified Voluntary Retirement Scheme in 2002, a large number of employees took voluntary retirement on 31 August 2002.

Prior to this, on 17 July 1986, all employees were asked to vacate their quarters, which were deemed dilapidated and unfit for habitation. About 318 employees vacated their quarters, while 134 employees continued to stay despite the notice. The mill was later closed, and the NTC sold most of the land to the Kakatiya Urban Development Authority (KUDA) on 1 March 2007. KUDA proposed to the State to allot 200 sq. yards plots to the 134 employees who had continued to occupy the quarters, which was accepted by the State Government on 27 June 2007 as a rehabilitation and welfare measure. The remaining 318 workers, who had also taken voluntary retirement, were not allotted any plots, leading to the present dispute.

Timeline

Course of Proceedings

The Workers Association, representing the 318 workers who were not allotted land, filed a writ petition before the High Court. The single judge ruled in favor of the Workers Association, directing the respondents to allot house sites of 200 sq. yards each to the 318 members, stating that they were at par with the 134 ex-employees who had already been allotted land. However, the Division Bench of the High Court overturned this decision, leading the Workers Association to appeal to the Supreme Court.

Legal Framework

The judgment primarily revolves around the interpretation and application of Article 14 of the Constitution of India, which guarantees equality before the law and equal protection of the laws. The court examined whether the differential treatment of the 318 workers, who were denied land allotment, violated this constitutional right.

Arguments

Appellant (Workers Association) Arguments:

• ✓ The Workers Association argued that the 318 workers were similarly situated to the 134 workers who received land allotments. Both groups were employees of the same mill, took voluntary retirement under the same scheme, and were initially provided with quarters.
• ✓ The Association contended that the only difference was that the 318 workers vacated their quarters as per the notice, while the 134 workers did not. Therefore, they should not be penalized for complying with the law.
• ✓ They argued that the allotment of land was intended as a welfare measure, and all eligible workers should benefit equally.
• ✓ The Association relied on the principle of equality under Article 14 of the Constitution, asserting that the differential treatment was discriminatory.
• ✓ The Association cited Ramana Dayaram Shetty vs. International Airport Authority of India, (1979) 3 SCC 489 and D.S. Nakara vs. Union of India, (1983) 1 SCC 305, emphasizing that State instrumentalities must act fairly and without discrimination.

Respondent (KUDA & NTC) Arguments:

• ✓ KUDA argued that it was an independent organization that purchased the land from NTC and was not obligated to provide land to the ex-employees.
• ✓ KUDA contended that the 134 employees were allotted land to avoid litigation with encroachers, as these employees had not vacated their quarters.
• ✓ The respondents argued that there was no legal right or privity of contract between the ex-employees and KUDA/State, therefore, no writ of mandamus could be issued.
• ✓ They also stated that the 318 workers had already vacated their quarters and were not in possession, thus not comparable to the 134 employees.
• ✓ The respondents argued that the allotment to 134 workers was a settlement to expedite the development of the land.
• ✓ The respondents relied on Director of Settlements, A.P. & Ors vs M.R. Apparao & Anr, (2002) 4 SCC 638; Lalaram and Others vs. Jaipur Development Authority and Another, (2016) 11 SCC 31 and Municipal Corporation of Greater Mumbai and Others vs. Rafiqunnisa M. Khalifa (Deceased) Through his Legal Heir Mohd. Muqueen Qureshi and Anr., (2019) 5 SCC 119 to argue that a writ of mandamus is only maintainable if the person aggrieved has a legal right and a corresponding legal duty on the party against whom the mandamus is sought.
• ✓ The respondents also cited Shri Ram Krishna Dalmia vs Shri Justice S. R. Tendolkar & Others, 1959 SCR 279 to argue that affidavits can be looked into to determine the rationale behind the differential treatment.
• ✓ The respondents cited State of Odisha vs. Anup Kumar Senapati, (2019) 19 SCC 626, arguing that two wrongs do not make a right and that there is no concept of negative equality under Article 14.

Submissions

Issues Framed by the Supreme Court

The Supreme Court framed the following key issues for consideration:

1. Whether the writ petition filed by the appellant Association under Article 226 of the Constitution was maintainable.
2. Whether the appellant Association had a legal right to claim allotment of 200 sq. yards of land.
3. Whether Article 14 of the Constitution was applicable in this case.
4. Whether the affidavit filed by the respondents to determine the intelligible differentia could be considered.
5. Whether any relief could be claimed against KUDA and/or NTC.

Treatment of the Issue by the Court

Authorities

Cases Cited:

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

✓ The court relied on Ramana Dayaram Shetty vs. International Airport Authority of India, (1979) 3 SCC 489* and D.S. Nakara vs. Union of India, (1983) 1 SCC 305* to emphasize that State instrumentalities must act fairly and without discrimination. These cases supported the argument that the State must treat equals equally.

✓ The court rejected the respondents’ reliance on Director of Settlements, A.P. & Ors vs M.R. Apparao & Anr, (2002) 4 SCC 638*, Lalaram and Others vs. Jaipur Development Authority and Another, (2016) 11 SCC 31* and Municipal Corporation of Greater Mumbai and Others vs. Rafiqunnisa M. Khalifa (Deceased) Through his Legal Heir Mohd. Muqueen Qureshi and Anr., (2019) 5 SCC 119* as the court held that the right to equality under Article 14 was a vested right and was enforceable against State instrumentalities.

✓ The court found Shri Ram Krishna Dalmia vs Shri Justice S. R. Tendolkar & Others, 1959 SCR 279* inapplicable as the respondents’ justification for differential treatment was not part of the original proposal or the Government Order. The court stated that the respondents could not improve their case by filing an affidavit before the Supreme Court.

✓ The court also found State of Odisha vs. Anup Kumar Senapati, (2019) 19 SCC 626* inapplicable, as there was no negative equality being claimed by the Workers Association. The court noted that the allotment to 134 employees was not a mistake, and therefore, the principle of negative equality was not relevant.

What weighed in the mind of the Court?

The Supreme Court was primarily influenced by the principle of equality enshrined in Article 14 of the Constitution. The court found that the 318 ex-employees were similarly situated to the 134 ex-employees who had been allotted land and that there was no rational basis for treating them differently. The court emphasized that the allotment of land was intended as a welfare measure and that all eligible workers should benefit equally.

The court also noted that the justification provided by the respondents for the differential treatment was not consistent with the original proposal or the Government Order. The court held that the respondents could not improve their case by filing an affidavit before the Supreme Court.

Sentiment Analysis of Reasons Given by the Supreme Court:

Fact:Law Ratio:

Logical Reasoning Flowchart:

The court rejected the argument that the 134 employees were allotted land to avoid litigation, stating that this was not the original reason for the allotment. The court also emphasized that the purpose of the allotment was for rehabilitation and welfare, and therefore, all similarly situated employees should benefit.

The court held that treating the 318 ex-employees differently would be tantamount to punishing them for complying with the law, while rewarding the 134 ex-employees for defying it. This, the court stated, is manifestly unjust.

The court also considered the argument that the 318 ex-employees had no legal right to the land, but the court held that the right to equality under Article 14 was a vested right and was enforceable against State instrumentalities.

The court stated, “We find no justification at all in treating 318 ex-employees different from those 134 ex-employees who were allotted 200 Sq. Yards of plots free of cost.” The court further stated, “We find that as such the equals are treated unequally and therefore, when the equals are treated unequally, there is a violation of Article 14 of the Constitution.” The court also noted, “It will be open for the respondent Nos.2 and 3 to approach the respondent No.1 and/or the State Government for allotment of additional land and/or to allot the plots from the remaining land of the respondent No.4 Mills which might be vacant and available with the Central Government / NTC as the case may be.”

Key Takeaways

• ✓ The Supreme Court affirmed the principle of equality under Article 14 of the Constitution, ensuring that similarly situated individuals are treated equally, especially in matters of welfare and rehabilitation.
• ✓ State instrumentalities must act fairly and without discrimination when distributing state largesse.
• ✓ Individuals should not be penalized for complying with the law, nor should they be rewarded for defying it.
• ✓ The decision highlights that justifications for differential treatment must be consistent with the original intent and purpose of any scheme or policy.
• ✓ This ruling sets a precedent for ensuring fair and equitable treatment of all employees in similar circumstances.

Directions

The Supreme Court quashed the High Court’s judgment and restored the single judge’s order, directing the respondents, particularly KUDA, to treat the 318 ex-employees at par with the 134 ex-employees who were allotted 200 sq. yards of land. The court also allowed KUDA to approach the State Government, NTC or the Central Government for additional land to fulfill this direction. The court directed that the allotment of plots to the remaining 318 ex-employees should be completed within six months from the date of the judgment.

Development of Law

The ratio decidendi of this case is that similarly situated employees must be treated equally, and differential treatment without a valid justification violates Article 14 of the Constitution. This case reinforces the principle that State instrumentalities must act fairly and without discrimination. The court also clarified that the right to equality is a vested right that is enforceable against State instrumentalities.

Conclusion

In conclusion, the Supreme Court’s judgment in this case ensures that all mill workers who took voluntary retirement under the Modified Voluntary Retirement Scheme of 2002 are treated equally. The court upheld the principle of equality under Article 14 of the Constitution, ruling that the 318 ex-employees were entitled to the same land allotment as the 134 ex-employees. This decision prevents discrimination and upholds the principle that individuals should not be penalized for complying with the law.