2010 (3) TMI 1183 - SC - Indian Laws

Summary

Issues Involved:
1. Whether the respondents retained their lien in TANMAG after being transferred to the Joint Venture Company (JVC).
2. Whether the principle of promissory estoppel applies to the respondents' claim for reabsorption in TANMAG.
3. Whether the High Court was justified in directing TANMAG to reabsorb the respondents.

Summary:

1. Lien in TANMAG:
The respondents were initially employed by TANMAG and later transferred to the JVC due to surplus staff in TANMAG. TANMAG argued that the respondents lost their lien in TANMAG upon permanent transfer to the JVC, as their services were terminated and they were issued fresh appointment letters by the JVC. The respondents contended that their service conditions were protected and they should be reabsorbed by TANMAG upon the closure of the JVC. The learned single judge held that the respondents lost their lien in TANMAG, and the Division Bench reversed this decision, directing TANMAG to reabsorb the respondents.

2. Principle of Promissory Estoppel:
The Division Bench applied the principle of promissory estoppel, stating that TANMAG was bound by the assurance given to the respondents that their service conditions would be protected. The Supreme Court, however, found that there was no unequivocal promise by TANMAG ensuring continuous employment or reabsorption upon the closure of the JVC. The respondents were aware of the potential termination of their services and accepted the transfer to the JVC as a better alternative. The Supreme Court concluded that the Division Bench erred in applying the principle of promissory estoppel, as the respondents were not disadvantaged by any unequivocal promise made by TANMAG.

3. High Court's Direction:
The Supreme Court held that the High Court erred in issuing a writ of mandamus directing TANMAG to reabsorb the respondents. The respondents' claim for reabsorption was not supported by any legal or fundamental right infringement. The Supreme Court emphasized the need for the High Court to exercise caution and restraint while issuing writs u/s Article 226/227 of the Constitution of India. The appeals were allowed, and the impugned judgment of the Division Bench was set aside, with no order as to costs.

Conclusion:
The Supreme Court set aside the Division Bench's judgment, holding that the respondents did not retain their lien in TANMAG after their transfer to the JVC and that the principle of promissory estoppel did not apply. The High Court's direction to reabsorb the respondents was found to be erroneous.