Law abiding ex-employees cannot be put to disadvantage merely for vacating the quarters on notice; SC holds decision to grant quarters only to unauthorized occupants is illegal  

Supreme Court: The Division Bench of M.R. Shah* and A.S. Bopanna, JJ., held that to allot plots to a few ex-employees to avoid undue hardship as a welfare measure and as a rehabilitation, and excluding others similarly placed ex-employees is discriminatory and violative of Right to Equality.

Factual Matrix

The Azam Jahi Mills, owned and run by the National Textile Corporation Ltd. (NTC) had about 452 employees who worked there for more than 20 years till the said Mill was closed in the year 2002.

During the period of service, all the workers were allotted Employees’ Quarters. As all the employees took voluntary retirement pursuant to a Modified Voluntary Scheme of 2002, the Mill had asked them to vacate the quarters stating that the quarters were in dilapidated condition and became unfit for human habitation. Approximately 318 employees including the members of the Workers Association were forcefully evicted from the quarters, however, some of the employees who were about 134 in number, continued to stay in their respective quarters despite service of the notice asking them to vacate the quarters.

Meanwhile, the Mill submitted application for closer, during the hearing a request was made on behalf of the representatives of the Union to allot quarters to the concerned workmen at reasonable rates. As a portion of the land owned by the Mill was sold to Housing Board, Kakatiya Urban Development Authority (KUDA), KUDA submitted a proposal to the State to allot free of cost house sites of 200 Sq. Yards each to 134 employees of the Mill, who continued to stay in their respective quarters as a rehabilitation and welfare measure; which was accepted by the State.

Findings of the High Court

It was in the above backdrop that 318 retired workers who also took voluntary retirement along with other 134 workers made representation to allot to them 200 Sq. Yards plot as allotted to other 134 workers. Since no action was taken by the authorities concerned the Association representing 318 employees approached the High Court of Telangana for relief. The Single Judge allowed the said petition and directed the respondents to allot house sites of 200 Sq. Yards each to all the eligible 318 members of the Workers Association by observing that they were at par with other 134 ex-employees of the Mill, who were already allotted house sits of an extent of 200 Sq. Yards. However, the said order was quashed by the Division Bench.

Intelligible differentia

Noticeably, 318 ex-employees who were not allotted the 200 Sq. Yards of plots and 134 ex-employees who were allotted 200 Sq. Yards of plots free of cost were similarly situated and as such there was no difference between them at all. On the contrary, 318 ex-employees could be said to be law abiding ex-employees who vacated the quarters pursuant to the notice.

Therefore, holding that 134 ex-employees who were allotted 200 Sq. Yards of plots free of cost were in unauthorized occupation of the quarters and they did not vacate the quarters despite the notice and even after 31-08-2002 when they accepted the voluntary retirement and relieved, the Bench opined that to allot the plots to those employees who were found to be in unauthorized occupation would tantamount to giving a premium to their illegality and remaining in occupation and possession of the quarters illegally and unauthorizedly.

Legal Nexuses

Initially, the reason for allotting house to 134 employees, as stated by the respondent was to avoid undue hardship to the ex-employees and as a welfare measure. However, later on the respondent contended that the decision of allotting plots free of cost was taken to any litigation and/or litigation cost. Therefore, the Bench opined that the respondents could not be permitted to improve their case which was not even their case earlier viz. at the time when they made a proposal to permit them to allot 200 Sq. Yards of plots free of cost to 134 ex-employees

Hence, the Bench held that there was no rationale justification in providing differential treatment to one class of ex-employees similarly placed with another class of ex-employees who were allotted plots. Therefore, the Bench stated, to allot 200 Sq. Yards of plots to 134 ex-employees to avoid undue hardship to the ex-employees and as a welfare measure and as a rehabilitation to only 134 case ex-employees and not other ex-employees similarly situated, would be discriminatory and violative of Article 14 of the Constitution.


In view of the above, the appeals were allowed and the impugned judgment and order of the Division Bench were quashed and set aside. The Judgment of the Single Judge was restored and the respondents were directed to treat and consider the remaining 318 ex-employees at par with other 134 ex-employees who were allotted 200 Sq. Yards of plots free of cost.

Additionally, the Bench held that the respondent would be at liberty to approach the State government for allotment of additional land and/or to allot the plots which might be vacant and available with the Central Government/NTC as the case may be. [Azam Jahi Mill Workers Association v. National Textile Corporation Limited, 2021 SCC OnLine SC 972, decided on 26-10-2021]

Kamini Sharma, Editorial Assistant has put this report together 

Appearance by:

For the Appellant: Nitya Ramakrishnan, Senior Advocate

For KUDA: V. Giri, Senior Advocate

For NTC and Union of India: Aishwarya Bhati, ASG

*Judgment by: Justice M. R. Shah     

Know Thy Judge | Justice M. R. Shah

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