Full Judgment Text
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PETITIONER:
CENTRAL INLAND WATER TRANSPORT CORPORATIONLTD.
Vs.
RESPONDENT:
THE WORKMEN & ANR.
DATE OF JUDGMENT23/04/1974
BENCH:
PALEKAR, D.G.
BENCH:
PALEKAR, D.G.
BHAGWATI, P.N.
CITATION:
1974 AIR 1604 1975 SCR (1) 153
1974 SCC (4) 696
ACT:
Industrial Disputes Act. 1947--Section 33(C)(2)--Powers of
the Labour Court under Sec. 33(C)(2)--What disputes can be
determined.
HEADNOTE:
The River Steam Navigation Co. Ltd., used to employ about
9000 workmen. The Company had been incurring heavy losses
for several years and, therefore, retrenchment was
undertaken on a large scale. Thereafter, a settlement was
arrived at on 25-8-1965 between the Company and its workmen,
inter alia, providing that there would be no retrenchment
for a period of 5 years. Under a scheme of arrangement and
compromise sanctioned by the High Court the appellant,
Corporation took over the said Company. The Corporation
issued fresh letters of appointment in favour of about 5173
out of 9000 employees. The employees who were not taken
over by the appellant Corporation moved the State Government
and the State Government made a reference on 27th October,
1969 to the Second Labour Court.
The Corporation. thereupon, challenged this reference by a
Writ Petition under Article 226 of the Constitution for
setting it aside on the ground that the questions referred
to the Labour Court did not fall within the jurisdiction of
the Labour Court , under section 33(C)(2) of the Industrial
Disputes Act. The learned single Judge, Ghose, J. struck
down issue no. 4 as not entertainable by the Labour Court,
but as regards the other 3 issues he was of the view that
the Labour Court had jurisdiction. The Union did not file
an appeal against the order by which issue no. 4 was struck
down. But the Corporation went in appeal against the order
of the learned Judge in so far as he had held that the
Labour Court had jurisdiction to adjudicate upon issues 1, 2
and 3. The Division Bench by its order dated December 14,
1972 dismissed the appeal. it was contended before this
Court that the Labour Court had no jurisdiction to
adjudicate on the issues referred to it under section
33(C)(2) of the Industrial Disputes Act.
HELD : A proceeding under section 3 3 (C) (2) is a
proceeding in the nature of an execution proceeding
wherein the Labour Court calculates the amount of money due
to a workman from his employer or if the workman is entitled
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to any benefit which is capable of being computed in terms
of money the Labour Court proceeds to compute the benefit in
terms of money. Since a proceeding under section 33(C)(2)
is in the nature of an execution proceeding, it would appear
that an investigation of the nature mentioned in the
reference in question is outside its scope. The Labour
Court cannot arrogate to itself The functions of an
Industrial Tribunal which alone is entitled to make an
adjudication on a question such as the one referred to the
Labour Court. The workers in the present case virtually
claimed reemployment or at least some benefits on the basis
of their alleged right to be reemployed. The problems
raised in the above reference in effect involve a major
industrial dispute, investigation into which is quite
outside the scope of section 33(C)(2). Only on a detailed
examination it would be possible to determine whether the
workmen bad any right to a benefit and if so whether the
appellant was liable to satisfy the same. The other
question which would be necessary to decide is whether the
appellant is a successor of the defunct Company. Problems
raised are appropriate for determination in an Industrial
Dispute on a reference under section 10 of the Act and
cannot be regarded as merely incidental to the computation
under section 33(C) (2). [158F; 159C-E; 163A & E]
154
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 1779 and
1780 of 1973.
Appeal by special leave from, the judgment and order dated
the 14th December, 1972 and Order dt. 20th July, 1973 of the
Calcutta High Court in Appeal No. 252 of 1971 and S.C.A. No.
262/71 respectively.
Niren De, Attorney General, B. Sen, M. K. Bannerjee, P. C.
Bhartari, J. B. Dadachanji, O. C. Mathur and Ravinder Narain
for the appellants.
Sudhis K. Ray and Rathin Das, for the respondents.
The Judgment of the Court was delivered by
PALEKAR, J. This is an appeal by special leave by the
Central Wand Water Transport Corporation Limited, her-in
after called the Corporation, from a judgment and order of
the Calcutta High Court in Appeal No. 252 of 1971 disposed
of on December 14 1972. Respondent No. 1 is the Inland
Steam Navigation Workers Union representing the Workmen, and
respondent No. 2 is the State of West Bengal. A reference
was made by the State of West Bengal to the Second Labour
Court at Calcutta under s. 33 (C) (2) of the Industrial
Disputes Act, 1947, and the point in issue is whether that
court had jurisdiction to entertain the reference.
A few facts are necessary to be stated. There was a Limited
Company known as the River Steam Navigation Co. Ltd.
(hereinafter called the Company) which used to operate a
river service from West Bengal to Assam through what was
formerly East Pakistan. It had employed for its business
about 8,000 workmen, including clerical staff. Due to
conflict with Pakistan in 1965 the Company came to grief and
had to suspend a major part of its operations. Retrenchment
was undertaken on a large scale because the Company had been
incurring heavy losses for several years inspite of the
Government of India acquiring a controlling interest in it
to prevent its voluntary liquidation. In the course of
conciliation proceedings the Management of the Company
arrived at a settlement with the respondent Union on August
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25, 1965 whereby it was agreed, inter alia, that the
settlement was valid for 5 years till the end of 1969, that
the retiring age of the workmen would be 57 years and that
there would be no retrenchment for 5 years. The Company’s
fortunes did not improve, and, therefore, in 1966 owing to
its indebtedness to various creditors, including the Union
of India, the State Bank of India, the Chartered Bank etc.
to the tune of several chores of rupees, a winding up
petition was filed in the Calcutta High Court. The Company,
thereupon, made an application under Sections 391 to 394 of
the Companies Act for sanctioning a scheme of arrangement
and compromise between the Company and the appellant
Corporation which was incorrupt on February 22, 1967 as a
wholly owned Central Government Company.
The scheme was sanctioned by a learned Judge of the Calcutta
High Court by his order dated May 3, 1967. It is to be
noted that when the proceeding was before the learned Judge,
the respondent Union had appeared before the court with a
view to safeguard the
155
interests of the workers. Aggrieved by the order which
sanctioned the scheme, the Union went in appeal before a
Division Bench of the High Court. The Division Bench by its
judgment and order dated July 14, 1967 upheld the order of
the single Judge sanctioning the scheme.
It is not necessary to quote the scheme extensively. It is
enough to point out that it provided, inter alia, that all
the properties and assets but only some of the liabilities
of the Company would vest in the appellant Corporation. It
was further agreed that the Corporation would take over as
many of the staff and labour of the Company as was possible
under the circumstances, but as to how many would be
employed by the Corporation was entirely left to the
discretion of the Corporation. It was further agreed that
those employees who were not taken over by the Corporation
would. be paid compensation by the Company out of funds the
Government of India agreed to supply. It was further agreed
that upon the approval of the scheme, the Company would be
closed and on payment of all creditors it would stand dis-
solved without winding up. All these terms of the scheme
were confirmed in appeal but with a view to safeguard the
rights of workers, if any, the following observations were
made:
"I am of opinion, that the questions, first,
whether there is a closure of the company
within the meaning of the Industrial Disputes
Act, secondly, whether the agreement dated
25th August, 1965, is capable of enforcement,
thirdly, whether the workers or workmen are
entitled to prefer and assert their claims on
the agreement dated 25th August 1965 and
fourthly, whether the Rivers Navigator Company
Limited and the new transferee company are
entitled to assert that there has been a
closure and further that the agreement is not
capable of enforcement, should all be left
open for the rival contentions to be pursued
in the proper forum and on proper materials
and in the proper jurisdiction. I am of
opinion that if any claim be made in the
proper jurisdiction it will be a matter for
enforcement of That claim in properly
constituted proceedings. It is needless to
say that unless there is adjudication there
cannot be any enforcement of the claim and
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such adjudication has to be made in a proper
forum."
The scheme, as already pointed out, was sanctioned by Order
dated May 3, 1967 and, as envisaged in the scheme itself,
the Company on that very day issued a notice of closure.
Thereafter the Corporation issued fresh letters of
appointment, and out of about 8,000 former employees of the
Company, the Corporation employed about 5173.
This left a larger body of employees of the former Company
unemployed. On September 12, 1968 the Government of West
Bengal made two orders of reference purporting to be under
s. 33(C)(2) of the Industrial Disputes Act. By the first
order of reference it asked the Labour Court to compute the
benefits covered by the settlement dated August 25, 1965
between the Union and the Company and by
156
the second order of reference, it asked for the computation
of retrenchment benefits under section 25FF of the
Industrial Disputes Act. The Corporation challenged those
orders in a Writ Petition in the Calcutta High Court,
principally, on the ground that the references had made
several unjustified assumptions, which by the nature of the
frame of the references had become non-justiciable. In a
detailed judgment B. C. Mittra, J. held that the reference
orders were misconceived and set them aside by was order
dated July 15, 1969. The learned Judge, however, observed :
"The respondent No. 3 (State) will be at liberty to make
fresh order or orders of reference in the light of the
observations made in this judgment and in compliance with
the directions in the judgment of the Appellate Court and in
accordance with law." There was no appeal from that order.
Thereafter on October 27, 1969 the Government of West Bengal
made the present consolidated reference to the Second Labour
Court in the following terms :
"Whereas the workmen mentioned in the attached
Est No. 1, represented by the Inland Steam
Navigation Workers’ Union, 16/17 College
Street, Calcutta-12, (hereinafter referred to
as the said Union), have preferred claims that
they are entitled, in terms of the settlement
dated the 25th August, 1965 (hereinafter
referred to as the said settlement), to
receive from Messrs. Central Inland Water
Transport Corporation Limited, 4, Fairlie
Place, Calcutta-1, (hereinafter referred to as
the said Company) benefits which are capable
of being computed in terms of money;
And whereas the workmen mentioned in the
attached list No. 11 represented by the said
Union have preferred claims that they are
entitled to get from said Company retrenchment
benefits under Section 25FF of the Industrial
Disputes Act, (Act 14 of 1947), which are
capable of being computed in terms of money :
And whereas the workmen in lists Nos. 1 and
II have requested the State Government to
specifya Labour Court for determination of the
amount to whichsuch benefits should be
computed;
Now therefore in exercise of the power
conferred by sub-section(2) of Section 33(C)
of the Industrial Disputes Act, 1947 (Act 14
of 1947), the Governor is pleased to specify
the Second Labour Court constituted by
notification No. 1727-1 B/IB/3A-1/58 dated the
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28th April, 1958 as the Labour Court to which
the following issues are referred for
adjudication.
Issues
(1) Whether the undertaking or the business
of M/S Rivers Steam Navigation Company Limited
has been transferred to Messrs. Central
Inland Water Transport Corporation Limited.
If so, whether the settlement dated the 25th
August, 1965 is binding on
157
Messrs. Central Inland Water Transport
Corporation Limited ?
(2) Whether the workmen mentioned in list
No. 1, bound by the Settlement, dated the 25th
August, 1965 are, entitled to continue in
employment under Messrs. Central Inland Water
Transport Corporation Limited ? If so, what
amount of money are they entitled to ? Is that
money recoverable from Messrs. Central Inland
Water Transport Corporation limited ?
(3) Whether the workmen mentioned in List
No. 11 are entitled to get retrenchment
compensation under Section 25F, read with
Section 25 FF of the Industrial Disputes Act,
1947 ? If so, what amount of money are they
entitled to ?
(4) Whether the undertaking or the business
of Messrs. Rivers Steam Navigation Company
Limited has been closed within the meaning and
contemplation of Section 25 FFF of the
Industrial Disputes Act, 1947 ? If so, what
amount of money as compensation are If so
workmen mentioned in Lists Nos. I and II en-
titled to?"
List No. 1 referred to above gives the names and addresses
of 420 employees. list No. 11 contains the names of 92
employees. The employees raising the dispute are mentioned
in two separate lists and in two separate issues because the
employees in List No. 1 who were parties to the settlement
dated August 25, 1965 were supposed to have rights other
than those which were claimed by employees mentioned in List
No. 11 who were not parties to the settlement.
It will be seen from the order of reference that four issues
were referred to the Labour- Court for adjudication. The
first issue raises the question whether the undertaking of
the Company had been transferred to the Corporation and, if
so, whether the settlement- of August 25, 1965 between the
Company and the Union was binding on the Corporation. By
the second issue the question was raised whether the 420
employees who were parties to the settlement of August 25,
1965 were entitled to continue in the employment of the
Corporation and, if so, to what amount they were entitled.
The Labour Court was further asked to adjudicate whether the
amount so computed was money recoverable from the
Corporation. By the third issue the question was raised
whether the 92 employees mentioned in Est No. 11 who were
not parties to, the settlement referred to above were
entitled to get compensation under Section 25 FF of the
Industrial Disputes Act and, if so, what was the amount to
which they were entitled ? By the fourth issue the Labour
Court was invited to adjudicate whether the undertaking of
the Company had been closed within the contemplation of
section 25 FFF of the Act and if so, what amount of
compensation the workmen mentioned in both the lists were
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entitled to ?
158
The Corporation, thereupon, challenged this reference also
by a Writ Petition under Article 226 of the Constitution for
setting it aside ,on the ground that the questions referred
to the Labour Court did not fall within the jurisdiction of
the Labour Court under section 33(C) (2) of the Industrial
Disputes Act. The learned single Judge, Ghose, J struck
down issue No. 4 as not entertainable by the Labour Court,
but as regards the other 3 issues he was of the view that
the Labour Court had jurisdiction. The Union did not file an
appeal against the order by which issue No. 4 was struck
down. But the Corporation went in appeal against the order
of the learned Judge in so far as he had held that the
Labour Court had jurisdiction to adjudicate upon issues 1, 2
and 3. The court of appeal by its order dated December 14,
1972 dismissed the appeal. The Corporation asked for a
certificate to appeal to this court, but on its dismissal,
this court gave special leave and that is how the present
appeal arises.
The only question which arises for determination in this
Court is whether the Labour Court has jurisdiction to
adjudicate on the issues referred to it under section 3 3
(C) (2) of the Industrial Disputes Act. Sub-section(2),
which is part of section 33C dealing with "the recovery of
money due from an employer" reads as follows
"(2) Where any work-man is entitled to receive
from the employer any money or any benefit
which is capable of being computed in terms of
money and if any question arises as to the
amount of money due or as to the amount at
which such benefit should be computed, then
the question may, subject to any rules that
may be made under this Act, be decided by such
Labour Court as may be specified in this
behalf by the appropriate Government."
It is now well-settled that a proceeding under section
33(C)(2) is a proceeding, generally, in the nature of an
execution proceeding wherein the Labour Court calculates the
amount of money due to a workman from his employer, or if
the workman is entitled to any benefit which is capable of
being computed in terms of money, the Labour Court proceeds
to compute the benefit in terms of money. This calculation
or computation follows upon an existing right to the money
or benefit, in view of its being previously adjudged, or,
otherwise, duly provided for. In (Thief Mining Engineer,
East India Coal Co. Ltd. v. Rameshwar & ors.(1) it was
reiterated that proceedings under section 33(C)(2) are
analogous to execution proceedings and the Labour Court
called upon to compute in terms of money the benefit claimed
by workmen is in such cases in the Position of an executing
court. It was also reiterated that the right to the benefit
which is sought to be computed must be an existing one, that
is to say, already adjudicated upon or provided for and must
arise in the course of and in relation to the relationship
between an industrial workman and his ,,employer.
(1) [1968] 1 S.C.R. 140.
159
In a suit, a claim for relief made by the plaintiff against
the defendant involves an investigation directed to the
determination of (i) the plaintiff’s right to relief; (ii)
the corresponding liability of the defendant, including,
whether the defendant is, at all, liable or not; and (iii)
the extent of the defendant’s liabiliey, if any. The
working out of such liability with a view to give relief is
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generally regarded as the function or an execution
proceeding. Determination No. (iii) referred to above, that
is to say, the extent of the defendant’s liability may
sometimes be left over for determination in execution
proceedings. But that is not the case with the
determinations under heads (i) and (ii). They are normally
regarded as the functions of a suit and not an execution
proceeding. Since a proceeding under section 33(C)(2) is in
the nature of an execution proceeding it should follow that
an investigation of the nature of determinations (i) and
(ii) above is, normally, outside its scope. It is true that
in a proceeding under section 3 3 (C) (2), as in an
execution proceeding, it may be necessary to determine the
identity of the person by whom or against whom the claim is
made if there is a challenge on that score. But that is
merely ’Incidental’. To call determinations (i) and (ii)
’Incidental’ to an execution proceeding would be a per-
version, because execution proceedings in which the extent
of liability is worked out are just consequential upon the
determinations (i) and (ii) and represent the last stage in
a process leading to final relief. Therefore, when a claim
is made before the Labour Court under section 33(C)(2) that
court must clearly understand the limitations under which it
is to function. It cannot arrogate to itse the functions-
say of an Industrial Tribunal which alone is entitled to
make adjudications in the nature of determinations (i) and
(ii) referred to above, or proceed to compute the benfit by
dubbing the former as ’Incidental’ to its main business of
computation. In such cases determinations (i) and (ii) are
not ’Incidental’ to the computation. The computation itself
is consequential upon and subsidiary to determinations (i)
and (ii) as the last stage in the process which commenced
with a reference to the Industrial Tribunal. It was,
therefore, held in State Bank of Bikaner and Jaipur v. R.
L. Khandelwal(1) that a workman cannot put forward a claim
in an application under section 33(C)(2) in respect of a
matter which is not based on an existing right and which can
be appropriately the subject-matter of an industrial dispute
which requires a reference under section 10 of the Act.
The scope of section 33(C)(2) was illustrated by this Court
in The Central Bank of India Ltd. v. P. S. Rajagapalan etc.
(2). Under the Shastri Award, Bank clerks operating the
adding machine were declared to be entitled to a special
allowance of Rs. 10/- per month. Four clerks made a claim
for computation before the Labour Court. The Bank denied
the claim that the clerks came within the category referred
to in the award and further contended that the Labour Court
(1) [1968]L.L.J.589. (2) [1964] 3 S.C.R. 140.
160
under Section 33(C)(2) had no jurisdiction to determine
whether the clerks came within that category or not.
Rejecting the contention, this Court held that the enquiry
as to whether the 4 clerks came within that category was
purely "incidental’ and necessary to enable the Labour Court
to, give the relief asked for and, therefore, the Court had
jurisdiction to enquire whether the clerks answered the
sescription of the category mentioned in the Shastri Award,
which not only declared the right but also the corresponding
liability of the employer bank. This was purely a case of
establishing the identity of the claimants as coming within
a distinct category of clerks in default of which it would
have been impossible to give relief to anybody falling in
the category. When the Award mentioned the category it, as
good as, named every one who was covered by the category and
hence the enquiry, which was necessary, became limited only
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to the clerks’ identity and did not extend either to a new
investigation as to their rights or the Bank’s liability to
them. Both the latter had been declared and provided for in
the Award and the Labour Court did not have to investigate
the same. Essentially, therefore, the assay of the Labour
Court was in the nature of a function of a court in
execution proceedings and hence it was held that the Labour
Court had jurisdiction to determine, by an incidental
enquiry, whether the 4 clerks came in the category which was
entitled to the special allowance.
It is, however, interesting to note that in the same case
the court at page 156 gave illustrations as to what kinds of
claim of a workman would fail outside the scope of section
33(C)(2). It was pointed out that a workman who is
dismissed by his employer would not be entitled to seek
relief under section 32(C)(2) by merely alleging that, his
dismissal being wrongful, benefit should be computed on the
basis that he had continued in service. It was observed
"His dismissal may give rise to an industrial dispute which
may be appropriately tried, but once it is shown that the
employer has dismissed him, a claim that the dismissal
is unlawful and, therefore, the employee continues to be the
workman of the employer and is entitled to the benefits due
to him under a preexisting contract, cannot be made under S.
33(C)(2)". By merely making a claim in a loaded form the
workmen cannot give the Labour Court jurisdiction under s. 3
3 (C) (2). The workman who has been dismissed would no
longer be in the employment of the employer. It may be that
an industrial tribunal may find on an investigation into the
circumstances of the dismissal that the dismissal was un-
justified, But when he comes before the Labour Court with
his claim for computation of his wages under section
33(C)(2) he cannot ask the Labour Court to disregard his
dismissal as wrongful and on that basis compute his wages.
In such cases, a determination as to whether the dismissal
was unjustified would be the principal matter for
adjudication, and computation of wages just consequential
upon such adjudication. It would be wrong to consider the
principal adjudication as ’incidental’ to the computation.
Moreover, if we
161
assume that the Labour Court had jurisdiction to make the
investigation into the circumstances of the dismissal, a
very anomalous situation would arise. The Labour Court
after holding that the dismissal was wrongful would have no
jurisdiction to direct reinstatement under section 3 3 (C)
(2). And yet if the jurisdiction to compute the benefit is
conceded it will be like conceding it authority to pass
orders awarding wages as many time comes before it without
being reinstated. Therefore, the Labour Court exercising
jurisdiction under section 33 (C) (2) has got to be
circumspect before it undertakes an investigation, reminding
itself that any investigation it undertakes is, in a real
sense, incidental to its computation of a benefit under an
existing right, which is its principal concern.
Bearing in mind these limitations of a Labour Court
functioning under section 33(C)(2) we have to approach the
question before us. The old Company closed its business on
May 3, 1967. The Corporation, in due course, appointed a
large number of the Company’s employees by fresh letters of
appointments, but it could not absorb all of them. The
reference was made on behalf of the employees mentioned in
Lists I and 11. They were in all 512. Out of these, it
appears, 24 were reemployed by the Corporation later can.
The rest of them virtually claimed reemployment or at least
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some benefits on the basis of their alleged right to be re-
employed. In actual fact, however, the Corporation did not
employ these workmen after the Company’s undertaking was
transferred to it. The scheme of transfer did not compel
the Corporation to employ the workmen. Nor is there any
term in the transfer-agreement or scheme which passed over
to the Corporation any responsibility in respect of the
workmen. Section 25 FF-of the Industrial Disputes Act
declare what are the rights of the workmen of an undertaking
which is transferred. The right is to receive-compensation
as if the workmen are retrenched under section 25 F and is
available only against the owners of the undertaking, that
is to say, the transferor of the undertaking. The liability
of the transferor to gay compensation does not arise only
when (i) there has been a change of employers by reason of
the transfer and (ii) the 3 sub-clauses (a), (b) and (c) of
the proviso of that section come into play. It is pointed
out in South Arcot Electricity Company v. N. K. Khan(1) that
each one of the 3 conditions in clauses (a), (b) and (c) is
to be satisfied before it can be held that the right
conferred by the principal clause does not accrue to the
workmen. In the present case there is no actual change of
employers by reason of the transfer, nor do the 3 subclauses
apply. Therefore, prima facie, the claim of the workmen
would be for compensation under section 25 FF, directed, not
against the Corporation, but against the Company of which
they were formerly the employees. As a matter of fact the
scheme itself shows that the employees of the Company who
were not taken over by the Corporation were to be paid by
the Company all money due to them under the law. The scheme
further shows that the Company
(1) [1969] 2 S.C.R. 902 at 908.
162
was, to ,be put in possession of funds by the Government of
India for satisfying the liabilities to the workers.
The effect of section 25 FF. which is explained by this
Court in Anakapalli Co-operative Agricultural & Industrial
Society Limited v. Workmen(1) is, so far as it is relevant,
as follows : (i) the first part of the section postulates
that on a transfer of the ownership or management of an
undertaking, the employment of workmen engaged by the said
undertaking comes to an end, and compensation is made
payable because of such termination (p. 745) ; (ii) in all
cases to which s 25-FF applies, the only claim which the
employees of the transferred concern can legitimately make
is a claim for compensation against their employers. No
claim can be made against the transferee of the said concern
(p. 746); (iii) By the present s. 25-FF the Legislature has
made it clear that if industrial undertakings ;are
transferred, the employees of such transferred undertakings
should be entitled to compensation, unless, of course, the
continuity. in their service or employment is not disturbed
and that can happen if the transfer satisfies the three
requirements of the proviso (p. 746) and (iv) since section
25-FF provides for payment of benefit on the basis that the
services of the employees stand terminated, neither fair-
play nor social justice would justify the claim of the
employees that they ought to be reemployed by the transferee
(p. 748). That being the position in law under section 25-
FF, the former employees of the company who were not
absorbed by the Corporation can hardly make out a claim
against the transferee Corporation either for compensation,
on- termination of their service following the transfer or
for reemployment. The claim at any rate of the employees in
List II as against the Corporation under section 25-FF was
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clearly misconceived.
Mr. Ray, appearing for the respondent Union, however,
contended that whatever may be the position of the workers
mentioned in List II, the case of the workers in List I
stood on a different footing because these workers were
parties to a settlement dated 25-8-1965 between the Company
and its workers and under section 18(3)(C) the settlement
was binding not only on the Company but also its successor
or assign the present Corporation. Under that settlement,
it was contended, the employees in List I were entitled to
continue uninterrupted service, without retrenchment, till
at least December 31’ 1969 and this stipulation it was
claimed, was binding on the Corporation which became the
successor of the Company from the date of the transfer of
the undertaking , that is to say, May 3,1967. The further
contention was that the Corporation’s refusal to continue
the employees in service as the Corporation’s employees from
the date was wrongful and hence it must be held, in law,
that the employees continued in the service of the
transferee Corporation and on that basis the Labour Court
could compute the benefit under section 33 (C) (2).
(1) [1963] Suppl. 1 S.C.R. 730.
163
The several problems raised by the above contentions involve
in effect a major industrial dispute, an investigation in to
which is quite outside the scope of section 33(C)(2). Only
on a detailed investigation would it be possible to
determine whether the workmen had any right to a benefit
and, if so, the, Corporation was liable to satisfy the same.
The other question which would be necessary to decide is
whether the Corporation was a successor of the defunct
Company. As pointed out in Anakapalli Co-operative case,
already referred to, the question whether a transferee of an
undertaking is a successor or not involves consideration of
several factors as set Out at pages 737 to 738 of the
report. Such an investigation would clearly be quite
outside the, speedy individual remedy contemplated by
section 33 (C) (2). Assuming further that on such
investigation, the court comes to the conclusion that the
Corporation is a successor, that again will not settle the
matter because, as pointed out in that case, in view of
section 25-FF the transferee even as a ’successor would be
liable neither to pay compensation to nor to reemploy the
workmen whose employment stood automatically terminated on
the transfer. Where the operation of the law viz.Section
25-FF the employment of workmen stands terminated, it may be
difficult to sustain it on the basis of a term in a
settlement’ prohibiting retrenchment, though statutorily
binding on the transferee as a successor. It is perfectly
arguable that such an argument would not have been available
even against the transferor of the undertaking in view of
Section 25-FF. In any event, the question is not one which
the Labour Court could be expected to deal with in a
proceeding u/s 33 (C) (2) the principal business where-under
is just computation of a benefit demonstrably existing. In
short, the problems raised are appropriate for determination
in an Industrial Dispute on a reference u/s 10 of the Act
and cannot be regarded as merely ’incidental’ to the
computation u/s. 33(C) (2).
If the above disputes were referred to an Industrial
Tribunal u/s 10, the Tribunal would necessarily go into a
detailed investigation ’of the alleged right of the
employees to be continued in service by the, Corporation.
After such investigation the Tribunal may have held they had
no such right. Or it may have come to the ’conclusion that
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the Corporation had,wrongfully refused to absorb the
employees, in which case the Tribunal could have given
relief in several forms depending on the facts and
circumstances of each case. It could direct reemployment by
the. Corporation with or without continuity of service. It
could order reemployment from any particular date found just
and fair, or it could direct payment of wages fully or
partially. Now, none of these things can be done by the
Labour Court u/s 33 (C) (2). AR it can do is to compute the
benefit if there was already an adjudication in favour of
the workmen as against the Corporation or the said benefit
was otherwise provided for as payable by the Corporation. A
moment’s reflection will show that it would be impossible
for the Labour Court to compute any benefit unless the
Court, after considering all the matters which an Industrial
Tribunal has to consider, ultimately decides upon one or the
other
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of the several alternative reliefs which the Industrial
Tribunal alone has a right to determine. BY saying that the
Labour Court-would determine the alternative reliefs as
’incidental’ to computation, one, cannot conceal the fact
that it is actually exercising the function of an Industrial
Tribunal. The investigation is not incidental to com-
putation, but the computation’ itself is consequential upon
the main finding as to the nature of relief the workmen are
entitled to in an industrial dispute. The situation is the
same as when a workman who is discharged wants relief,. as
shown in the case of the Central Bank of India v.
Rajagopalan-already referred to. The discharged workman can
obtain relief by way of section 10 only and not by an
application to the Labour Court u./s 33(C)(2) claiming
computation of the benefit on the basis that the discharge
being unlawful, his services must be deemed to be continuous
and uninterrupted.
We, are, therefore, unable to agree with the High Court’s
view, that the Labour Court had jurisdiction to deal with
the questions referred to it u/s 33(C)(2). The appeal must,
therefore, be allowed. But there shall be no order as to
costs.
Civil Appeal No. 1780 of 1973.
Palekar, J. This appeal is from the Order of the High Court
dated July 20, 1973 refusing to grant a certificate to
appeal to this Court under Article 133(1) of the
Constitution. Since this Court had granted leave to appeal
under Article 136 in special leave petition No. 2543/1973,
and Civil Appeal No. 1779 (NL) of 1973 resulting therefrom,
has already succeeded, it is not necessary to pass any
orders on this appeal except to say that in view of the
orders passed in Civil Appeal No. 1779 (NL) of 1973, no
orders are necessary on this appeal.
Appeal allowed.
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