Authority: High Court of Judicature at Madras

Order Date: 03 September 2026

Case Overview

  • Appellants: Five former employees of Bharat Technologies Auto Components Ltd (BTACL) – the workmen named in WA Nos. 469/2020, 875/2021, 2545/2021, 472/2020 and 471/2020.
  • Respondents:

1. The Lok Adalat‑II (organized by the High Court Legal Services Committee).

2. Presiding Officer, Principal Labour Court, Chennai.

3. Management of BTACL, represented by its Managing Director.

4. Hosur BTACL Employees Union (registered under Trade Unions Act, regd. No. 5/KRI), represented by President G. Mukesh, Secretary A.K. Udayakumar and Treasurer R. Ramakrishnan.

  • Background: BTACL manufactured auto components for two‑wheelers as an ancillary unit to TVS Motor Co. It employed ~160 permanent workers and 50 contract labourers. In 2005 the Hosur unit was taken over by Sundaram Auto Components Ltd. Management terminated 37 workers in the Hosur unit and transferred 12 workers to the Maraimalai Nagar unit, paying compensation under Section 25FF of the Industrial Disputes Act, 1947.
  • The union filed industrial disputes ID No. 279 of 2009 (37 workers) and ID No. 9 of 2007 (12 workers) before the Principal Labour Court, Chennai. The Court, by a Common Award dated 27 June 2013, ordered reinstatement, back wages and other benefits.
  • Claim Petitions CP‑445/2013 (ID 9 of 2007) and CP‑446/2013 (ID 279 of 2009) were later filed by the union.
  • Management filed writ petitions WP‑12191 & WP‑12192 of 2014 challenging the award. An 18(1) settlement was executed on 11 June 2015, offering Rs 3 Lakhs each to the 49 workers. The Lok Adalat recorded the settlement and passed an award on 17 June 2015 under Section 21 of the Legal Services Authorities Act, 1987.
  • In 2016, 20 workers claimed they had not received the settlement and filed writ petitions WP‑11205 to WP‑11224 of 2017. A Single Judge dismissed them on 23 Oct 2019.
  • During pendency, 15 of the 20 workers accepted Rs 8 Lakhs each as full and final settlement; their appeals were closed. The remaining five workers (the present appellants) continued the writ appeals.

Legal Issues

1. Whether the 18(1) settlement dated 11 June 2015 and the Lok Adalat award dated 17 June 2015 are valid and binding on the appellants.

2. If not, what relief the appellants are entitled to.

Court Reasoning

  • Statutory Basis: Section 18(1) of the Industrial Disputes Act, 1947 permits a settlement between employer and workmen (or their duly registered union) to be binding on the parties. Section 2(p) defines “settlement” and Section 21 of the Legal Services Authorities Act, 1987 declares a Lok Adalat award to be a decree of a civil court, final and binding with no right of appeal.
  • Union’s Authority: The Hosur BTACL Employees Union is a registered trade union under the Trade Unions Act, 1926. As such, it can enter into contracts, represent its members before labour courts and Lok Adalat, and be treated as an operational creditor (JK Jute Mill Mazdoor Morcha v. Juggilal Kamlapat Jute Mills Co. Ltd, 2019 11 SCC 332).
  • Representation: The union consistently represented the workmen in the Labour Court, the 18(1) settlement and the Lok Adalat proceedings. There is no evidence that the appellants withdrew consent; the settlement and award were signed by the union and accepted by the majority of workmen.
  • Precedents: The Court relied on P.T. Thomas v. Thomas Job (2005 (6) SCC 478) and other Supreme Court judgments affirming the finality of Lok Adalat awards and the binding nature of settlements entered by a recognised union.
  • Union Office‑Bearers: The appellants argued that the union’s office‑bearers had expired, rendering the settlement invalid. The Court held that the union remained the sole registered representative and that the expiry of individual office‑bearers does not affect the union’s authority.
  • Conclusion: The settlement dated 11 June 2015 and the Lok Adalat award dated 17 June 2015 are valid, binding on all appellants, and cannot be reopened.

Final Outcome

  • The writ appeals (WA 469/2020, WA 875/2021, WA 2545/2021, WA 472/2020, WA 471/2020) are dismissed as devoid of merit.
  • The 18(1) settlement and the Lok Adalat award are declared valid and binding on the appellants.
  • No order as to costs.
  • The Court, as a non‑binding suggestion, advised the employer to consider offering the Rs 8 Lakhs settlement to the remaining five workmen and urged the appellants to reconsider their stance.

Topics: Industrial Dispute Settlement, Lok Adalat Award, Trade Union Representation