Agreement Between Mill and Union Cannot Override Statutory Service Rules Framed by NTC Under Nationalisation Act: Bombay High Court Validates Retirement at 58

“The petitioner’s conditions of service stood duly altered by the rules framed by the National Textile Corporation… The said alteration is a due alteration under Section 14 of the Nationalisation Act” – In a pivotal ruling Bombay High Court (Nagpur Bench) dismissed a challenge by a former mill-grade employee against his retirement at the age of 58, holding that the National Textile Corporation (NTC) had validly exercised its authority under the Sick Textile Undertakings (Nationalisation) Act, 1974 to alter the age of superannuation from 60 to 58. Justice Nandesh S. Deshpande, while deciding Writ Petition No. 3388 of 2017, upheld concurrent findings of the Labour Court and Industrial Court which had dismissed the employee’s complaint of unfair labour practice under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (MRTU & PULP Act).

The petitioner, Shri Bhagwandas Rathi, who had served since 1967 in Model Mills, Nagpur (later taken over by NTC), had challenged the notice of superannuation issued in 2005, contending that the retirement age was 60 years as per an earlier agreement with the Union. He claimed that retiring him at 58 constituted illegal termination and an unfair labour practice under Item 1 of Schedule IV of the MRTU & PULP Act.

“No unfair labour practice is made out… The NTC validly exercised its right to alter the age of superannuation” – High Court affirms power under Section 14 of Nationalisation Act

Justice Deshpande began by affirming the concurrent reasoning of the Labour Court and Industrial Court, which had rejected the employee’s claim that the retirement at 58 amounted to illegal termination. The courts had concluded that the employer had the legal authority to revise the retirement age under the NTC Recruitment and Promotion Rules, 1985. The High Court agreed that the retirement was “legal and proper”, and not a result of any unfair labour practice.

Referring to the statutory framework, the Court emphasised that once Model Mills was taken over by NTC under the 1974 Nationalisation Act, the conditions of service could be lawfully altered. The Court held:

“The petitioner’s conditions of service stood duly altered by virtue of the Rules framed by the N.T.C. The said alteration is a due alteration under Section 14 of the Nationalisation Act.”

“An agreement confined to a single mill is not an industry-wide agreement... Rule 2.3 of NTC Rules not attracted” – Court rejects claim of overriding agreement

A significant contention raised by the petitioner was based on a past agreement between Model Mills and the workers’ union which fixed the retirement age at 60. The Court, however, rejected this argument as untenable in light of Rule 2.3 of the NTC Recruitment Rules, 1985, which exempts only those posts covered under an industry-wide agreement.

Justice Deshpande clarified:

“The agreement between the erstwhile Model Mills and the Union cannot be held to be an industry-wise agreement as is commonly understood in Industrial Law. It is merely an agreement between the Union and that particular Industrial Establishment.”

This finding was crucial in affirming the applicability of the NTC Rules to the petitioner’s service, thereby validating his retirement at 58.

“Rolling back of superannuation age from 60 to 58 is within employer’s legal discretion” – No interference warranted in well-founded factual findings

In reaffirming the employer’s discretion, the Court cited and relied upon the Division Bench judgment in Vasant Sheshrao Kale v. National Textile Corporation, 2010 (3) Mh.L.J. 610, where the same issue was conclusively decided. The Division Bench had held that the NTC, under the statutory authority granted by Section 14, could lawfully frame rules altering the age of superannuation. Justice Deshpande quoted the precedent with approval and observed:

“The Division Bench held that the only those categories as enumerated in Rule 2.2 of the NTC Rules stand excluded. The petitioner does not fall in any of those exclusions. Hence, his retirement at 58 is valid.”

The Court further observed that the Industrial Court had rightly followed the precedent in Haripratap Nandbhadur Singh v. NTC, where identical facts had led to the same conclusion — that a mill-grade employee of Model Mills could be superannuated at 58 under NTC rules.

“Concurrent findings of fact are well-supported... No perversity demonstrated” – Writ Court declines interference

Justice Deshpande declined to interfere with the concurrent findings of the Labour and Industrial Courts, noting that the petitioner had failed to show any perversity in the appreciation of facts. He held:

“There are concurrent findings recorded by the Courts below which cannot be said to be perverse... The petition, therefore, lacks merits and is liable to be dismissed.”

Even the petitioner’s reliance on a judgment reported in 2009 (3) Mh.L.J. 259 was rejected on the ground that the facts in that case were entirely distinguishable and not applicable to the present controversy.

“Rule stands discharged, parties to bear their own costs” – Writ petition dismissed

With these observations, the Court dismissed the petition and discharged the rule, while directing both parties to bear their own costs.

The judgment thus conclusively settles the position that employees of nationalised textile mills under NTC cannot rely on prior establishment-specific agreements to claim service conditions that are inconsistent with the NTC’s statutory recruitment rules. The authority of NTC to prescribe the age of superannuation stands upheld.

Date of Decision: 3 November 2025