Full Judgment Text
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CASE NO.:
Appeal (civil) 4964 of 1999
PETITIONER:
WORKMEN REPRESENTED BY
Vs.
RESPONDENT:
VS.
DATE OF JUDGMENT: 21/03/2001
BENCH:
S. Rajendra Babu & S.N. Variava
JUDGMENT:
J U D G M E N TL...I...T.......T.......T.......T.......T.......T.......T..J
RAJENDRA BABU, J. :
The management of the Bhugatdih Rise Area Colliery was
taken over by the Central Government under the Coking Mines
(Emergency Provisions) Act, 1971 which came into effect on
October 17, 1971. Subsequently, the Colliery stood
nationalised with effect from May 1, 1972 under the
provisions of the Coking Coal Mines (Nationalisation) Act,
1972 (for short the Nationalisation Act). 111 workmen who
were working in these collieries were laid off by the
management in 1971 and subsequently retrenched from service.
Some of the workers of the Bhugatdih Colliery were taken
back in employment though they were purely temporary workmen
on daily basis. The Union of the workmen demanded
employment of these 111 workers but the respondents did not
employ them. Thereafter, a dispute whether the action of
the management of Industrial Colliery of Messrs Bharat
Coking Coal Limited in refusing employment to 111 workmen
listed in the Annexure below was justified and, if not, to
what relief are the said workmen entitled, was referred to
the Industrial Tribunal.
The claim of the workmen before the Tribunal is that
they are permanent workers and though they had been
retrenched, they are entitled to preference in the matter of
employment under Section 25-H of the Industrial Disputes
Act, 1947 (hereinafter referred to as the Act). The
respondents took the stand that Bharat Coking Coal Limited
is neither the employer of the workmen within the meaning of
Section 25-H of the Act nor is it successor-in-interest of
the colliery in question. The 111 workmen were retrenched
on June 9, 1971 long before the Coking Mines (Emergency
Provisions) Act, 1971 came into effect on October 17, 1971.
Inasmuch as the 111 workmen were retrenched on June 9, 1971,
they were neither in employment on the appointed day, that
is, May 1, 1972, nor their retrenchment was set aside by any
court or tribunal. It is contended that under Section 9 of
the Nationalisation Act, the Central Government shall not be
liable for any liability of the owner, agent, manager or
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managing director of a coking cool mine in relation to any
period prior to May 1, 1972 and such liability will be that
of the previous owner. The respondents contended that a
person who does not acquire both the assets and liabilities
cannot be a successor-in-interest and, therefore, reference
should be rejected.
The Tribunal held that the erstwhile management of the
Bharat Colliery retrenched as many as 150 or more workmen
for operational and financial problems and, therefore, there
was a statutory obligation on the owner flowing from Section
25-H of the Act to re-employ the retrenched workmen if it
proposes to take in its employment any person as envisaged
in that Section. The Tribunal, therefore, gave a direction
that the refusal to employ the 111 workmen in question is
not justified and on establishing the identity of the
workmen as indicated in the course of the award, their cases
will be considered for employment as and when any
recruitment is done. The matter was carried to the High
Court by way of a writ petition . After examining the
provisions of Sections 9 and 17 of the Nationalisation Act,
the High Court held that the workmen in question cannot
claim any benefit under Section 17 as they were neither in
employment on the appointed day, that is, May 1, 1972, nor
their retrenchment was set aside by any court or tribunal;
that thus they were neither workmen of the respondent nor
are entitled to be deemed to its workmen. The High Court
next considered whether the respondent is a
successor-in-interest of the Colliery and on examination of
Section 9 of the Nationalisation Act, took the view that the
Government or the respondent cannot be considered to be
successor-in-interest of the old business inasmuch as only
the right, title and interest of the coking coal mines have
been acquired by the Government under the Nationalisation
Act free from all encumbrances; that it is neither the
liability of the owners of the said mines nor goodwill
thereof has been acquired; that as long as both assets and
liabilities have not been acquired, it cannot be stated to
be a successor-in- interest in question unless statute
provides for the same; that there is no contract between
the Government and the owners providing otherwise and that,
therefore, there is no obligation on the respondents to give
effect to Section 25-H of the Act. On reaching these
conclusions, the writ petition was allowed and the award of
the Tribunal is quashed. Hence this appeal by special
leave.
The arguments addressed before the Tribunal and the High
Court are reiterated before us.
In the Workmen v. the Bharat Coking Coal Ltd. & Ors.,
1978 (2) SCC 175, this Court had occasion to consider the
effect of the provisions of Sections 9 and 17 of the
Nationalisation Act. Considering the definition of
workmen in the Act, Section 17 [as was in force then] is
interpreted. It is held that Section 17 is a special
provision relating to workmen and their continuance in
service notwithstanding the transfer from private ownership
to the Central Government or the Government company, which
was statutory protection and even a person who has been
dismissed or whose dismissal led to a dispute is also a
workman for the purpose of these provisions. Though they
may not be physically on the rolls on the appointed day of
the take over, it cannot be contended that they were not
legally workmen under the new owner. The statutory
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continuity of service will have to be taken note of and on
that basis this Court proceeded to hold that a dismissed
workman also is a workman under the Government company.
While interpreting Section 9 of the Nationalisation Act it
was stated that the liability of the owner prior to the
appointed day shall not be enforceable against the Central
Government or the Government company but only against the
previous owner. It was stated in very emphatic terms that
employees are not a liability as yet in our country.
Section 9 deals with pecuniary and other contractual
liabilities and has nothing to do with workmen. If at all
it has anything to do with workmen, it is regarding arrears
of wages and other contractual, statutory or tortious
liabilities. Section 9(2) operates only in the area of
Section 9(1) and that is why provision is being made for
removal of certain doubts and the whole provision confers
immunity against liability not a right to jettison workmen
under the employment of the previous owner in the eye of
law.
Bearing these principles in mind if we examine the scope
of the Nationalisation Act, we may notice that in respect of
properties that vested in the Central Government, as
provided under Sections 8 and 9, the Nationalisation Act
provides immunity to the Central Government or its company
from prior liabilities. Chapter III of the Nationalisation
Act provides for payment of amount under that Chapter.
Chapter VI provides for appointment of Commissioner of
Payments who has an obligation to deal with the claims made
under Section 23 of the said Act to persons who makes a
claim before the Commissioner within 30 days from the
specified date. On examination of the provisions thereof,
we may relate all those items that have been mentioned in
Section 9 to Section 23 of the Nationalisation Act. They
all pertain to pecuniary or commercial obligations and not
to other matters. The claim made in the present case is one
relating to employment under Section 25-H of the Act which
merely creates an obligation that a retrenched workman will
have preference when fresh appointments are made and an
opportunity will have to be given to them to offer
themselves for re-employment. Such an obligation does not
fall within the scope of Section 9 of the Nationalisation
Act.
Shri Ajit Kumar Sinha, the learned counsel for the
respondents, relying upon the decision of this Court in
Anakapalle Co-operative Agricultural and Industrial Society
Ltd. v. Workmen and Ors., AIR 1963 SC 1489, contended that
the respondents are not successor-in-interest and,
therefore, have no obligation to give effect to Section 25-H
of the Act in respect of workmen in question; that since
both rights and obligations have not been taken over by the
respondents and only certain properties have been vested in
the respondent-Company without any obligation in terms of
Sections 8 and 9 of the Nationalisation Act, the contention
of the appellant for re-employment has to be rejected.
We have already adverted to the decision of this Court
in The Workmen v. The Bharat Coking Coal Ltd. & Ors.
(supra) which examines the scope of Section 9 of the
Nationlisation Act and the liability contemplated therein.
It is necessary to understand the obligation of employer as
such contemplated in Section 25-H of the Act as stated in
clear terms by this Court in that decision. Unlike civil
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law, industrial law takes a different view with regard to as
to who is the successor who runs the said industry
subsequently. Where there is transfer of business from one
owner to another, the rights and obligations which existed
between the old management and their workers continue to
exist vis-Ã -vis the new management after the date of the
transfer provided there is continuity of service and
identity of business. For purposes of continuity of service
Section 17 makes the necessary provisions. Thus a person on
such transfer becomes the owner of the concern and the
employer of the employees of the establishment, and as long
as there is identity of business itself and retains its
identity, it must be held that the respondent is also a
successor-in-interest to that extent. This Court in
Anakapalle Co-operative Agricultural and Industrial Society
Ltd. (supra) took this view after considering several
relevant factors into consideration.
Shri Sinha submitted that as soon as transfer has been
effected under Section 25- FF of the Act all the employees
became entitled to claim compensation and thus who had been
paid such compensation will not be entitled to claim
re-employment under Section 25-H of the Act as the same
would result in double benefit in the form of payment of
compensation and immediate re-employment and, therefore,
fair justice means that such workmen will not be entitled to
such conferment of double benefit. It is no doubt true that
this argument sounds good, but there has been no
retrenchment as contemplated under Section 25-FF of the Act
in the present case. The workmen in question have been
retrenched long before the colliery was taken over by the
respondents and, therefore, the principles stated in
Anakapalle Co-operative Agricultural and Industrial Society
Ltd. (supra) in this regard cannot be applied at all. The
workmen had been paid compensation only under Section 25-F
and not under Section 25-FF of the Act on transfer of the
colliery to the present management. That case has not been
pleaded or established. Hence, we do not think that the
line upon which the High Court has proceeded is correct.
The order made by the High Court deserves to be set aside
and the award made by the Tribunal will have to be restored.
The appeal shall stand allowed accordingly. However, in
the circumstances of the case, there shall be no order as to
costs.