As per case facts, the Petitioners challenged an Industrial Court's interim Order that stayed a circular from September 2025. The Order directed the Petitioners to continue granting additional wage increments ...
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Sayali
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.12 OF 2026
1.Brihanmumbai Municipal Corporation,
through the Municipal Commissioner &
Administrator, Dr. Bhushan Gagrani or
his Successor, having office at :
Municipal Head Office, Mahapalika
Marg, CSMT, Mumbai – 400 001
2.Dr. Ashvini Joshi, or her Successor,
Additional Municipal Commissioner
(City)
3.Kishor Gandhi,
Deputy Municipal Commissioner,
(General Administration), all having
office at Municipal Head Office,
Mahapalika Marg, CSMT,
Mumbai 400 001. … Petitioners
V/s.
Mumbai Mahanagarpalika Karyalayeen
Karmachari Sanghatana, Mumbai
office at Municipal Head Office,
Extension Building, Basement,
Mahapalika Marg, Mumbai – 400 001… Respondent
WITH
WRIT PETITION (ST.) NO.41402 OF 2025
1.Brihanmumbai Municipal Corporation,
Municipal Head Office at Mahapalika
Marg, Mumbai – 400 001
1
ATUL
GANESH
KULKARNI
Digitally signed by
ATUL GANESH
KULKARNI
Date: 2026.02.12
14:43:07 +0530
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2.Municipal Commissioner,
Brihanmumbai Municipal Corporation,
Municipal Head Office at Mahapalika
Marg, CSMT, Mumbai – 400 001
3.Additional Municipal Commissioner
(City), Brihanmumbai Municipal
Corporation,Municipal Head Office
aat Mahapalika Marg, CSMT,
Mumbai – 400 001
4.Deputy Municipal Commissioner
(General Administration),
Municipal Head Office
Mahapalika Marg, CSMT,
Mumbai – 400 001… Petitioners
V/s.
The Municipal Union,
having its office at Sunshine Plaza,
4th Floor, Mumbai Marathi Granth
Sangrahalay Marg, Dadar (East),
Mumbai – 400 014 … Respondent
Mr. N.V. Bandiwadekar, Senior Advocate with Mr.
Santosh Parad for the petitioners in WP/12/2026.
Mr. Santosh Parad for the petitioners in
WPST/41402/2025.
Mr. Prakash Devdas with Ms. Vidula Patil for the
respondent in WP/12/2026.
Mr. Satyanarayan Hegde i/by Mr. V. Khemka for the
respondent in WPST/41402/2025.
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CORAM :AMIT BORKAR, J.
RESERVED ON :JANUARY 23, 2026
PRONOUNCED ON:FEBRUARY 12, 2026
JUDGMENT:
1.The Petitioners have instituted the present writ petition
impugning the judgment and order rendered by the Industrial
Court in Complaint (ULP) No. 282 of 2025. By the said order, the
Industrial Court allowed the application at Exhibit “U2” preferred
by the Respondents, stayed the operation of the circular dated
05th September, 2025, and directed the Petitioners to continue the
prevailing practice of granting one or two additional wage
increments to employees who had secured admission to, and
obtained, Diplomas in LSG and LGS even subsequent to 29th
August, 2000. The challenge in the present proceedings arises from
the said interlocutory order and the directions contained therein.
2.The record indicates that the Petitioners, by decision dated
04th February, 1967, resolved to grant one additional increment to
employees serving as clerks upon acquisition of a Diploma in Local
Self Government (LSGD). A similar benefit of one additional
increment was extended to those employees whose pay scales did
not exceed the maximum of the clerical grade, upon their
acquiring the said diploma. The object of this decision was to
incentivize and encourage employees to obtain higher
qualifications. Subsequently, in its meeting dated 10th July, 1968,
the Standing Committee approved a proposal introducing one
additional increment for possession of an LGS Diploma, which
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culminated in the Corporation’s Resolution dated 23rd September,
1968. Thereafter, by Resolution dated 29th January, 1975, the
Standing Committee sanctioned the grant of two increments to
Municipal employees acquiring an LGS Diploma, provided their
pay scale did not exceed Rs. 660 and subject to stipulated
conditions. This was followed by the Corporation’s Resolution
dated 06th March, 1975, giving effect to the said decision.
3.The aforesaid policy underwent further modification by
circulars dated 07th June, 1984, issued in the backdrop of a
general revision of pay scales of Municipal employees with
retrospective effect from 01st January, 1975. Under the revised
scheme, two additional increments were made admissible to
Municipal employees who passed or acquired an LGS Diploma,
provided that the maximum of their pay scale did not exceed the
maximum prescribed for the cadre of Office Superintendent or AA-
II.
4.It is the case of the Petitioners that the original circular dated
04th February, 1967 was thus altered and refined from time to
time through successive resolutions and circulars. According to the
Petitioners, these decisions were matters of policy determined by
the Standing Committee in exercise of its administrative authority,
and neither the employees nor their Union were consulted or
involved in the formulation or modification of the policy relating
to grant of additional increments.
5.By circular dated 25th September, 2009, the earlier circulars
were again modified pursuant to approval granted by the
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Municipal Corporation on 15th September, 2009. Thereafter, the
Petitioner–Corporation placed a proposal dated 18th August, 2025
before the Standing Committee seeking discontinuation of the
additional increment, setting out the reasons in support thereof.
Since the Standing Committee stood dissolved at the relevant time,
the proposal was placed before the Administrator, who approved it
on 25th August, 2025, resulting in the cancellation of the earlier
circulars. Subsequently, on 29th August, 2025, a resolution was
passed clarifying that additional increments for LSGD and LGS
would be governed by specified conditions. Upon completion of
the requisite formalities and approval process, the Corporation
issued the circular dated 05th September, 2025, which forms the
subject matter of challenge before the Industrial Court.
6.Aggrieved thereby, the Respondent instituted Complaint
(ULP) No. 263 of 2025 alleging commission of unfair labour
practice. It was contended that the Corporation could not
unilaterally alter service conditions relating to qualifications and
monetary benefits without issuing a notice of change as mandated
under Section 9A of the Industrial Disputes Act. The Petitioners
opposed the complaint and the accompanying application for
interim relief by filing a detailed reply. However, by order dated
11th December, 2025, the Industrial Court granted interim relief,
stayed the operation of the circular dated 05th September, 2025
pending final adjudication of the complaint, and directed the
Petitioner–Corporation to continue the earlier practice of granting
one or two additional increments. The present petition challenges
the legality and correctness of the said interim order.
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7.Mr. Bandiwadekar, learned Senior Counsel appearing for the
Petitioners, submitted that the Industrial Court has virtually
granted final relief at the interim stage, which is impermissible in
law. On that ground alone, according to him, the impugned order
warrants interference. He contended that the grant of one or two
additional increments was a voluntary policy decision of the
Petitioner–Corporation, intended to encourage clerical staff to
acquire additional qualifications. He argued that the Industrial
Court proceeded on an erroneous premise by treating such
increments as benefits granted to employees upon passing
departmental examinations, which, according to him, is factually
incorrect.
8.Learned Senior Counsel further submitted that the Industrial
Court wrongly concluded that withdrawal of an increment forming
part of basic pay amounts to alteration in wage structure attracting
Item 1 or Item 4 of Schedule IV of the Industrial Disputes Act. He
pointed out that the Respondent–Union had not invoked any
specific item under Schedule IV. It was argued that the decision to
discontinue future increments does not result in reduction of
wages already drawn by any employee. He contended that the
finding of the Industrial Court that such increments constitute a
well-recognized service condition, and that their withdrawal alters
the fundamental wage structure with continuing future impact, is
legally unsustainable and contrary to the material on record.
9.It was further submitted that the circular dated 05th
September, 2025 does not adversely affect employees who have
already been granted additional increments. Those increments
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continue to be protected. He contended that clerks and Head
Clerks who acquired LSGD or LGS diplomas on or before 29th
August, 2025 remain entitled to such increments even under the
said circular. According to him, no dual wage structure has been
created. On these grounds, he urged that the impugned order be
set aside.
10.In opposition, Mr. Satyanarayan Hegde learned counsel for
the Respondent supported the impugned order. He submitted that
pursuant to the Corporation’s Resolution dated 08th December,
1966, the Petitioner–Corporation has continuously granted one
additional increment to employees possessing LSGD up to 04th
September, 2025. Likewise, in view of the Standing Committee
Resolution and the Corporation’s Resolution dated 06th March,
1975, two additional increments were granted to employees
holding an LGS diploma. He argued that such long-standing and
uninterrupted practice has acquired the status of a service
condition. Any alteration thereof, according to him, attracts the
mandate of Section 9-A of the Industrial Disputes Act.
11.He further submitted that before effecting discontinuance of
additional increments, the Corporation was bound to issue a notice
of change under Section 9-A read with Item 8 of Schedule IV of the
Industrial Disputes Act. No such notice was issued. Consequently,
according to him, the action amounts to an unfair labour practice
within the meaning of Items 5 and 9 of Schedule IV of the MRTU
and PULP Act, 1971. He contended that the Union has established
a prima facie case demonstrating unilateral withdrawal of a long-
standing benefit without compliance with statutory requirements.
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12.Ms. Vidula Patil, learned counsel for the Respondent-Union,
submitted that the condition of granting one increment for passing
LSGD and two increments for passing LGS has crystallized into a
customary concession and recognized service condition. Its
withdrawal, she contended, is prejudicial to workmen and squarely
falls within the ambit of Item 8 of Schedule IV of the Industrial
Disputes Act, as also Items 3 and 7 thereof. She maintained that
compliance with Section 9-A is mandatory where alteration in
service conditions is proposed.
13.She submitted that the Petitioner has admittedly failed to
comply with Section 9-A read with the relevant items of Schedule
IV of the Industrial Disputes Act. According to her, Items 1, 7 and 8
of Schedule IV are clearly attracted. In absence of a statutory
notice of change, the action of the Corporation constitutes an
unfair labour practice under Item 9 of Schedule IV of the MRTU
and PULP Act, 1971.
14.Placing reliance upon the decision of the Supreme Court in
S.G. Chemicals and Dyes Trading Employees’ Union v. S.G.
Chemicals and Dyes Trading Ltd., reported in 1986 Law Suit (SC)
98
, she submitted that statutory obligations operate irrespective of
their incorporation in employment contracts, and any action
contrary to law is rendered invalid.
15.She also relied upon the judgment of the Supreme Court in
Paradeep Phosphates Ltd. v. State of Orissa and Others, reported in
2018 Law Suit (SC) 400
, to contend that issuance of notice of
change under Section 9-A is mandatory and cannot be dispensed
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with. Further reliance was placed on the decision of the Hon’ble
Supreme Court in Annamalai University case, wherein it was held
that when a statute prescribes a particular procedure, the same
must be strictly followed and no deviation is permissible.
16.It was contended that in the present case, the proposed
withdrawal of increments amounts to alteration of existing service
conditions to the detriment of workmen who are members of the
Respondent-Union. Such alteration, effected without compliance
with Section 9-A, has resulted in serious prejudice and financial
loss. It was therefore submitted that the Industrial Court has
correctly recorded a finding of a strong prima facie case of breach
of Section 9-A read with Schedule IV, and that the interim
protection granted is justified. According to the Respondents, no
interference is warranted in exercise of writ jurisdiction. In the
aforesaid circumstances, the Respondents prayed for dismissal of
the writ petition with costs.
Reasons and analysis:
Statutory framework.
17.Section 9-A of the Industrial Disputes Act, 1947 reads as
under:
“9-A. Notice of change.-- No employer, who proposes to
effect any change in the conditions of service applicable to
any workman in respect of any matter specified in the Fourth
Schedule, shall effect such change
a) without giving to the workmen likely to be affected by
such change a notice in the prescribed manner of the nature
of the change proposed to be effected; or
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b) within twenty-one days of giving such notice.
Provided that no notice shall be required for effecting
any such change
a) where the change is effected in pursuance of any
settlement or award; or
b) where the workmen likely to be affected by the change
are persons to whom the Fundamental and Supplementary
Rules, Civil Services Regulations, Civil Service Temporary
Service Rules, Revised Leave Rules, Civil Service
(Classification, Control and Appeal) Rules, Civil Service
(Classification, Control and Appeal) Rules, or the Indian
Railway Establishment Code or any other rules or regulations
notified in this behalf by the appropriate Government in the
Official Gazette apply.”
18.Item 5 of Schedule IV to the Industrial Disputes Act, 1947
reads as under:
“Introduction of new rules of discipline, or alteration of
existing rules, except in so far as they are provided in
standing orders.”
19.Item 8 of Schedule IV reads as under:
“Withdrawal of any customary concession or privilege or
change in usage.”
20.Item 9 of Schedule IV reads as under:
“Introduction of new rules, or alteration of existing rules,
except in so far as they are provided in standing orders.”
21.For the purpose of deciding the controversy raised in the
present writ petition, it is necessary to examine the above statutory
scheme governing the field.
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22.Section 9-A of the Industrial Disputes Act restrains an
employer from effecting any change in the conditions of service
applicable to workmen in respect of matters enumerated in the
Fourth Schedule unless a notice of change is first issued in the
prescribed manner. The provision introduces a waiting period of
twenty one days after issuance of such notice, during which the
proposed change cannot be implemented. The section provides
that the employer may propose. However, the employer cannot act
immediately. The time gap is intended to afford workmen an
opportunity to consider the proposal, raise objections and if
necessary seek conciliation.
23.The Fourth Schedule provides specific categories of matters
which Parliament considered necessary which require prior notice
before alteration. Item 8 contemplates withdrawal of any
customary concession or privilege or change in usage. The
expression “customary concession” is not confined to statutory
rights or contractual stipulations alone. A benefit extended
consistently over a period of time, acted upon, and accepted as
part of the service may acquire the character of a customary
concession. Once such a character is established, its withdrawal
falls within the purview Section 9-A.
24.Item 5 and Item 9 of the Fourth Schedule address
introduction of new rules or alteration of existing rules relating to
discipline and other matters, except in so far as they are provided
in standing orders. The statute recognises that changes in rules
which may have a direct bearing on the rights and obligations of
workmen cannot be effected unilaterally without compliance with
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the statutory procedure.
25.The scheme of Section 9-A read with the Fourth Schedule
thus regulates the manner in which change is to be brought about.
Any unilateral withdrawal of an established concession, or
alteration of rules that have governed service conditions, without
issuance of notice and observance of the prescribed period, would
amount to bypassing the legislative mandate. The requirement of
notice is a condition precedent to the validity of the proposed
change in respect of matters covered by the Fourth Schedule.
Nature of the benefit.
26.The material placed on record shows that the beginning of
the concession can be traced to the decision taken in the year
1967, whereby the Corporation resolved to grant additional
increments to employees acquiring specified diplomas in Local Self
Government. In the years 1968, 1975 and 1984, the Standing
Committee as well as the Corporation revisited the policy, modified
and reaffirmed it through resolutions and circulars. Each of these
instruments was was acted upon in implementation.
27.The benefit was extended to defined clerical cadres and to
employees falling within specified pay ceilings. The grant of
increments followed getting of LSGD or LGS diplomas in a
consistent manner. Over time, the practice became part of the
service structure of the establishment. Employees who pursued
such qualifications did so with the legitimate expectation that the
additional increment would follow. The continuity of the policy
over several decades indicates that it was neither temporary nor
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discretionary in an ad hoc sense. It assumed the character of a
regular feature of service.
28.When a concession is repeatedly sanctioned by formal
resolutions, implemented uniformly, and continued without
interruption for a long duration, it acquires sanctity within the
establishment. In industrial jurisprudence, such a long standing
and consistent practice is capable of converting into a concession
or established usage. Item 8 of the Fourth Schedule specifically
takes within its fold withdrawal of any customary concession or
privilege or change in usage. The record supports the inference
that the grant of additional increments for LSGD and LGS
diplomas had attained that character.
Whether the circular effects a change.
29.The circular dated 5 September 2025 effects a prospective
discontinuance of the benefit. It saves increments already granted.
However, it closes the door for employees who would acquire the
requisite diplomas thereafter. The core issue is whether such
prospective stoppage amounts to a change in conditions of service
within the meaning of Section 9-A.
30.The argument that no present reduction in wages occurs
does not conclude the enquiry. Section 9-A does not confine itself
to cases of immediate monetary deduction. The expression
“change in conditions of service” is of wider amplitude. Where a
category of employees, upon fulfilling defined conditions, was
entitled as a matter of consistent practice to receive additional
increments, the removal of that entitlement alters the service
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regime governing that category. The fact that the change operates
prospectively does not dilute its character as a change. The statute
is concerned with the nature of the alteration, not merely with its
temporal reach.
31.By withdrawing the concession for the future, the
Corporation has altered the framework within which employees
may seek advancement in pay upon acquisition of qualifications.
The structure of entitlement has been modified. Employees who
acquire diplomas after the effective date stand in a materially
different position from those who did so earlier. That
differentiation flows directly from the impugned circular. Such
alteration squarely falls within the field contemplated by Item 8 of
the Fourth Schedule.
32.The legislative intent underlying Section 9-A is to ensure that
workmen are not confronted with unilateral changes affecting
established service conditions without prior notice and opportunity
to respond. The requirement of notice is not limited to cases where
accrued wages are withdrawn. It extends to situations where a
customary benefit forming part of the service pattern is sought to
be discontinued. On a plain reading of the statutory text, and in
light of settled principles governing industrial relations, the
prospective withdrawal of a long standing concession constitutes a
change attracting the mandate of Section 9-A.
Interim relief standards.
33.The Industrial Court applied the well known test for interim
protection in unfair labour practice complaints. The Court
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recorded a prima facie case, found that irreparable injury was
likely if the circular were to be allowed to operate pending final
adjudication, and held that the balance of convenience favoured
preservation of the status quo. The record discloses material on
continuity of the practice, the representations made by the Union,
and the absence of any notice of change having been given prior to
the circular. Those findings, if supported by material on record,
suffice for maintenance of interim protection until final
adjudication. The existence of a statutory procedure that was not
followed strengthens the Union’s claim at the prima facie stage.
The Supreme Court has emphasised that where the statutory
procedure is mandatory, an employer’s failure to comply itself
furnishes strong material for a prima facie case.
Whether the Industrial Court granted final relief at the interim
stage.
34.The Industrial Court has, by the impugned order, stayed the
operation of the circular and directed that the earlier practice of
granting additional increments shall continue for the time being.
The effect of this direction is limited. It maintains the position as it
stood prior to issuance of the circular. It prevents an immediate
disruption in the service conditions of the concerned employees. In
other words, it preserves the status quo.
35.An interim order must be understood in its proper setting. At
that stage, the Court is not expected to record final findings on
disputed questions. It is required to ensure that the subject matter
of the complaint is not rendered infructuous before it is finally
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decided. Here, if the circular were allowed to operate without
restraint, employees acquiring diplomas during the pendency of
the complaint would stand deprived of the benefit. Once that stage
passes, restoration may not be simple. The interim protection
therefore serves a practical purpose.
36.The real test is whether the Industrial Court has finally
decided the rights of the parties or whether it has only preserved
the existing arrangement until the complaint is heard and disposed
of on merits. A careful reading of the order shows that the Court
has not conclusively pronounced upon the legality of the circular.
It has not declared the circular invalid. It has only kept it in
abeyance until final adjudication. The direction to continue the
prior practice operates only during the pendency of the
proceedings.
37.It is also necessary to keep in mind the statutory background.
Section 9-A places a clear restriction on effecting changes in
service conditions without notice where the matter falls within the
Fourth Schedule. When a long standing concession is sought to be
withdrawn without following that procedure, the Court is justified
in being cautious. Until the issue is fully examined, maintaining
the existing arrangement is a reasonable course.
38.The contention that the Industrial Court has granted final
relief at the interim stage does not stand scrutiny. Final relief
would mean a definitive adjudication on the legality of the circular
with binding consequences. That has not occurred. The present
order is temporary in nature. It operates only to prevent possible
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prejudice during the pendency of the complaint. The petitioners
have not demonstrated that the Industrial Court exceeded its
jurisdiction or pre judged the matter.
39.In these circumstances, the grievance that final relief has
been granted at the interim stage is not borne out by the record.
The order under challenge is essentially protective. It does not
foreclose the rights of either party at the stage of final
adjudication.
40.Petitioners submit that the grant of increments was voluntary
and purely discretionary. An employer may at any time grant a
discretionary benefit. However, where a discretionary concession is
granted repeatedly, approved by administrative authorities,
published by circular and acted upon for decades, it may acquire
the character of a customary concession or service condition. The
facts here show repeated administrative approvals and
incorporation in published circulars and resolutions. That pattern
removes the concession from the realm of purely isolated
discretion. Where the concession so crystallises, the employer
cannot withdraw it without compliance with Section 9-A.
41.Petitioners submit that those increments, so far as already
granted, are not affected by the circular and no reduction of wages
is claimed. It is correct that the circular preserves increments
already granted. That fact is material but not decisive. The
statutory protection is not confined to retrospective protection of
sums already paid. It extends to preventing unilateral alteration of
entitlements that form part of the service regime going forward.
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The withdrawal of a concession that has been habitually extended
to a defined class of employees alters the terms on which
employees will be engaged in future. That alteration lies within the
statutory mischief Section 9-A seeks to remedy. The petitioners’
argument that no immediate reduction of wages already drawn
occurs therefore does not negate the statutory requirement of
notice.
42.Petitioners argue that cessation of future grants does not
amount to change in conditions of service. The respondents relied
on multiple items of the Fourth Schedule and on companion
provisions of state unfair labour practice law. Item 8 is squarely
engaged. Items dealing with rules of discipline or alteration of
rules may also be attracted if the concession has been formalised
into service rules or standing orders. The precise scope and
classification are matters for final adjudication. At the
interlocutory stage it suffices that Item 8 is plainly engaged on the
established facts.
43.On review of the material and the legal position, the
Industrial Court did not commit error in staying the circular dated
5 September 2025 and directing continuation of the prior practice
until final adjudication. The respondents have established a strong
prima facie case that the circular effects a change caught by
Section 9-A and Item 8 of the Fourth Schedule. The balance of
convenience and the risk of irreparable prejudice likewise favour
preservation of the status quo. The interim order was therefore
legally sustainable.
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44.The Industrial Court will proceed to decide the complaint on
merits with expedition. The parties shall be at liberty to lead
evidence on the historic practice, the nature of approvals and
circulars, the precise contents of the standing orders, and the
administrative and financial considerations relied upon by the
Corporation. The Industrial Court shall determine whether the
prior practice has crystallised into a service condition or customary
concession, whether the Fourth Schedule was attracted, and
whether the statutory procedure was complied with. If the
Industrial Court finds non-compliance with Section 9-A, it shall
consider the appropriate remedy within the statutory scheme and
principles of industrial jurisprudence.
45.It is clarified that all observations recorded herein are
confined to a prima facie assessment undertaken for the purpose of
examining the legality of the interim order. These observations
shall not be construed as final findings on the merits of the
controversy. The Industrial Court shall decide the complaint
independently, on the basis of the evidence and material placed
before it, and without being influenced by any tentative views
expressed in this judgment.
46.The writ petition is dismissed. The interim order of the
Industrial Court dated 11 December 2025 is upheld.
47.At the request of learned Advocate for the petitioner, ad-
interim relief granted earlier shall continue to operate for a period
of four weeks from today.
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48.No order as to costs.
(AMIT BORKAR, J.)
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