Workmen who forgo permanent-status benefits under a binding settlement cannot claim retrospective regularisation.

The respondent, a temporarily engaged employee, obtained an order from the competent authority under the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981, on 31 May 2005.

A Section 12(3) settlement followed on 31 August 2005; under its terms, the respondent undertook not to claim benefits under that order.

His services were regularised from 1 September 2005.

In 2014, he sought consideration of a representation for regularisation from completion of 480 days’ service.

After the Corporation rejected his claim in 2023, he filed W.P. No. 10561 of 2024, which was allowed by a Single Judge.

The Corporation appealed.

1. Whether the respondent, having accepted regularisation under the Section 12(3) settlement and undertaken not to claim benefits under the permanent-status order, could later seek retrospective regularisation based on that order

2. Whether the respondent’s delay and acquiescence, and his failure to challenge the settlement and consequential regularisation, barred the claim

Section 3 of the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981, provides for conferment of permanent status upon qualifying workmen.

A Section 12(3) settlement under the Industrial Disputes Act, 1947, binds the parties; the Court also referred to Section 18(3) in discussing the binding effect of the settlement.

Under the doctrines of laches and acquiescence, a claim brought after unreasonable, unexplained delay may be rejected, particularly where the claimant stood by while arrangements inconsistent with the asserted right were acted upon; the Court relied on Prabhakar v. Joint Director, Sericulture Department [(2015) 15 SCC 1].

It also relied on the Division Bench decision in Managing Director, Tamil Nadu State Transport Corporation Ltd. v. O. Veeraiyya and its subsequent application in R. Rajendran v. Metropolitan Transport Corporation (Chennai) Ltd., concerning claims for retrospective regularisation following acceptance of a Section 12(3) settlement.

The Court found that the respondent had expressly undertaken not to claim benefits under the permanent-status order and had accepted regularisation under the 2005 settlement.

He did not challenge either the settlement or the consequential regularisation order, and offered no valid explanation for waiting nine years before pursuing retrospective regularisation.

Applying the binding effect of the settlement and the principles of laches and acquiescence, the Court held that he could not accept the settlement’s benefits and later claim an inconsistent benefit under the earlier order.

The respondent’s cited cases were distinguished because, unlike this case, they involved no such undertaking; the Court also observed that delay and acquiescence had not been considered in those cases.

It set aside the Single Judge’s order dated 1 October 2024, allowed the writ appeal, made no order as to costs, and closed the connected miscellaneous petition.