APHC010228362003 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI WRIT PETITION NO: 1102 of 2003 Bench Sr.No:- 11 [3506] S.kothuramma and Others ...Petitioner(s) Vs. The State Of Andhra Prdesh and Others ...Respondent(s) ********** Advocate for Petitioner: NUTHALAPATI KRISHNA MURTHY Advocate(s) for Respondent(s): THE ADVOCATE GENERAL, GP FOR INDUSTRIES & COMMERCE CORAM : SRI JUSTICE CHALLA GUNARANJAN DATE : 5th February 2026 The Court made the following order: The petitioners, 156 in number, are stated to have worked with the 4th respondent-Cooperative Spinning Mills limited at Nandyal, in various capacities. Initially, the 4th respondent-Mill was established in the year 1986 and went into production in the year 1988. Due to adverse market conditions, the unit declared 2 layoff on 06.05.1996. Though the petitioners continued to be engaged and were working, they were not paid wages during the said layoff period. Eventually, the unit was ordered to be closed on 31.10.1999. Subsequently, at the instance of the State Government, which had extended loans in order to settle the issues among the workmen, a voluntary retirement scheme (VRS) came to be floated. In pursuance of the said scheme, which was rolled out in the month of April 2002, the workmen were extended one time benefits under different heads such as ex-gratia, earned leave, gratuity, and notice pay. However, the said scheme did not take into consideration the compensation for layoff wages. It is stated that the petitioners have accepted the scheme and received one time settlement amounts. Inasmuch as the said scheme did not contemplate payment of compensation towards layoff wages, claiming that they were entitled to the same in terms of Section 25C of the Industrial Disputes Act, 1947, they instituted the present writ petition. 2. The 4th respondent filed counter affidavit, inter alia, stating that as the Cooperative Spinning Mill had become sick, in terms of the guidelines framed by the Government of Andhra Pradesh, Public Enterprises Department, a decision was taken to extend 3 the special severance package scheme to the workmen. The said scheme was rolled out after taking into consideration the opinion expressed by the union representatives of Nandyal Cooperative Spinning Mill and accordingly, all the workmen were settled with one-time benefits. All the workmen have also executed undertakings while receiving the ex-gratia amounts. The payments that were made duly compensated the period from 06.05.1996 to 03.05.2001, till the settlement was considered. It is further stated that even the aforesaid settlement amounts were secured by the 4th respondent through the Government of Andhra Pradesh after the unit was referred under the provisions of the Andhra Pradesh Relief Undertakings (Special Provisions) Act, 1971, which envisages the Government extending financial aid to sick units. In that view of the matter, as ex-gratia had already been received, the petitioners were not entitled to claim any further benefits, much less wages during the layoff period. Therefore, dismissal of the writ petition was sought. 3. Heard learned counsel for the petitioner and learned Government Pleader for Industries and Commerce, appearing for the respondents. 4 4. Perused the record and considered the rival submissions. 5. The prayer made in the writ petition essentially claiming layoff wages, gratuity, and other benefits without reference to the VRS that was implemented for the 4th respondent-Mill. It is not in dispute that the petitioners, being employees/workmen, have accepted the VRS that was rolled out in the month of April 2002 and have executed undertakings before accepting one-time settlement amounts. The said scheme envisaged payment of ex-gratia at the rate of 30 days’ wages for every completed year of service, ex-gratia for the closure period at the rate of Rs.3,000/- per annum, gratuity as per eligibility, one month notice pay, and for employees who are regular or permanent and had put in 10 years of service were to receive Rs.30,000/-. Lastly, the amounts payable under the heads of provident fund and payments towards unpaid salary for the working period, if any, were to be settled by the management out of the sale proceeds. It is also not denied that the petitioners were paid the aforesaid amounts under different heads except the amounts falling under the heads of provident fund and payments towards unpaid salary for the working period, if any, which were to be settled out of the sale proceeds. 5 6. Though learned counsel for the petitioner tried to persuade this Court by contending that despite implementation of the VRS, the petitioners still had the right to claim layoff wages in terms of Section 25C of the Industrial Disputes Act, 1947, this Court is of the opinion that the petitioners had the option either to accept the VRS or to agitate for their rights to claim the legitimate amounts to which they were entitled under the provisions of the Industrial Disputes Act. Having accepted the VRS and received the payments, they are precluded from claiming any further amounts, much less layoff wages. The VRS is a complete package of settlement and would invariably include even the layoff wages as well, which the petitioners now seek to claim. 7. Be that as it may, insofar as claim towards the provident fund and the payments towards unpaid salary for the working period, if any, the same were agreed to be settled by the management out of the sale proceeds. Though the 4th respondent-Mill proposed to be privatized and subjected to auction by taking recourse to the provisions of the Andhra Pradesh Co-operative Societies Act, 1964, such course of action could not fructify. It is now informed that the 4th respondent has 6 been ordered for liquidation and the 3rd respondent has been appointed as liquidator. 8. In that view of the matter, the claim made by the petitioners to the extent of layoff wages, which otherwise stands included under the scheme of VRS, has no basis and the writ petition to that extent stands dismissed. However, the petitioners are granted liberty to make appropriate application before the liquidator claiming provident fund or any other payments in terms of memo dated 03.05.2001, which are required to be settled by the management out of the sale proceeds, if the petitioners are otherwise eligible. 9. With the above observations, the Writ Petition stands dismissed. There shall be no order as to costs. As a sequel thereto, miscellaneous applications, if any, shall stand closed. _____________________________ JUSTICE CHALLA GUNARANJAN Date: 05.02.2026 ANS 7 161 THE HONOURABLE SRI JUSTICE CHALLA GUNARANJAN WRIT PETITION NO: 1102 OF 2003 Date: 05.02.2026 ANS