Case Laws Companies Act S K G Sugar Ltd Vs Shri Ali Hassan Chairman Industrial Tribunal Bihar and Others

PETITIONER:

S. K. G. SUGAR LTD.

Vs.

RESPONDENT:

SRI ALI HASSAN, CHAIRMAN, INDUSTRIAL TRIBUNAL,

BIHAR & OTHERS

DATE OF JUDGMENT:

04/11/1958

BENCH:
BHAGWATI, NATWARLAL H.
BENCH:
BHAGWATI, NATWARLAL H.
DAS, SUDHI RANJAN (CJ)
SINHA, BHUVNESHWAR P.
SUBBARAO, K.
WANCHOO, K.N.

CITATION:
1959 AIR 230 1959 SCR Supl. (1) 254
ACT:
Industrial Dispute-Discharge by employer of workmen Pending
adjudication-‘Employer’, Meaning of-Industrial Disputes Act,
1947 (XIV Of 1947), ss. 33, 33A-Indian Companies Act, 1913
(7 Of 19I3), s. 171.

 

HEADNOTE:
Gaya Sugar Mills Ltd. went into liquidation and the sugar
factory owned by it was leased out to the appellant by the
liquidator with the permission of the Court on December 6,
1954, to be worked in terms of the lease which provided,
inter alia, that the lessee would neither be liable for any
of the liabilities of the company, or of the liquidator or
the outgoing lessees nor bound to engage any of their
employees or those working from before except those
specifically mentioned in the lease. On December 2, 1954,
i.e. four days before the appellant came into possession of
the sugar factory, the Bihar Government issued a
notification referring a dispute between the managements of
certain specified sugar factories, including Gaya Sugar
Mills Ltd., and their workmen represented by their Unions,
for adjudication to the Industrial Tribunal constituted by
the respondent No. i. No notice was given to the appellant
and proceedings against it were all exparte. Complaints,
however, were made before the Industrial Tribunal by two
batches of workmen against the appellant under s. 33A of the
Industrial Disputes Act alleging in one case that they had
been discharged and in the other that the conditions of
their service had been changed by the appellant without
first obtaining the permission of the Tribunal under s. 33
Of the Act. It was asserted on behalf of the appellant that
there was no breach of the terms of the lease and no
contravention of s. 33 Of the Act. After unsuccessfully
moving the High Court under Arts. 226 and 227 Of the
Constitution for a writ of certiorari quashing the said
proceedings, the appellant came up to this Court by special
leave and it was contended on its behalf that
(1) no leave of the Court having been obtained under s. 171
Of the Indian Companies Act by the State Government
before it made the reference under s. 10(1) of the
Industrial Disputes Act, the reference was bad in law and
that (2) the word ’employer’ in ss. 33 and 33A of the
Industrial Disputes Act meant only such employer as was
actually concerned with the industrial dispute which was the
subject matter of the reference and the appellant having
come into possession of the Mills after the reference, could
not be an employer within the -meaning of those sections.
255
Held, that the terms of the notification properly construed
clearly showed that what was sought to be made a party to
the reference was not the company itself but its management
at the date of the reference and, therefore, no question of
leave of the court under s. 171 Of the Indian Companies Act
could arise.
The word ’employer’ occurring in ss. 33 and 33A of the
Industrial Disputes Act meant the identical employer
concerned with the industrial dispute, which was the
subject-matter of the adjudication, and could not include an
employer who merely happened to discharge or punish or alter
the conditions of service of workmen unless such employer
could be shown to be a mere nominee or bentamiday of the
former or fell within the category of his heirs, successors
or assigns within the meaning Of s. 18(3)(c) of the Act.
Since, in the instant case, the appellant satisfied none of
these tests, it was not bound to seek the permission of the
Tribunal under s. 33 Of the Act and the proceedings under s.
33A of the Act against it must be quashed.

 

JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No.793 of 1957.
Appeal by special leave from the judgment and order dated
September 20, of the Patna High Court in M.J.C. No. 392 of
1955.
C. K. Daphtary, Solicitor-General of India, A. B. N. Sinha
and B. P. Maheshwari, for the appellant.
S. P. Varma, for respondents Nos. 1,2,6-8 and 10-23.
1958. November 4. The Judgment of the Court was delivered
by
BHAGWATI, J.-This appeal with special leave is directed
against the judgment of the High Court of Judicature at
Patna dismissing the writ application of the appellant
seeking to quash the proceedings in Miscellaneous Cases Nos.
26 and 27 of 1955 before the Industrial Tribunal, Bihar,
Patna.
Gaya Sugar Mills Ltd., a Company incorporated in 1934 owned
a Sugar Factory at Guraru, District Gaya. An order for the
compulsory winding up of the Company was passed on November
4,1951, and by a subsequent order dated February 1, 1952,
one Dhansukh Lal Mehta was appointed liquidator of the
Company. In order to preserve the aforesaid Sugar Mills at
Guraru in proper running order and also for the beneficial
256
winding up of the Company the liquidator obtained under S.
III (b) of the Indian Companies Act sanction of the Court to
lease out the said Mills with all the lands, factory and
residential buildings and machineries etc. The Guraru Cane
Development and Cane Marketing Union Ltd., were the former
lessees of the said mills but on the expiration of their
lease, the liquidator obtained from the Court an order on
December 3, 1954, sanctioning the lease in favour of Shri
Krishna Gyanody sugar Ltd .; the appellant herein, for the
period December 5,1954 up to and inclusive of November
14,1955. The liquidator executed in favour of the appellant
lease of the said Mills on December 6, 1954, and handed
over possession of the same to the appellant the same day.
The terms and conditions of the lease, in so far as they are
material for our purposes provided that the appellant would
be put into possession of the leasehold properties in a
proper working order and would work and run the factory
without any interference or obstruction by or on behalf of
the lessor and would appropriate the entire income and
profit thereof and the lessor would have no concern with
profit or loss made by the lessee in running the said
factory and would not be entitled to any sum or amount over
and above the rent therein reserved. The appellant was not
to be in any way liable or responsible for any of the liabi-
lities of the Company or of the liquidator or of the out-
going lessees incurred whether before or after the appellant
entered into possession except those mentioned therein. The
appellant was at its own cost entitled always to install
‘any additional or other machinery or machineries and erect
god owns or structures for the Purposes of and in connection
with the running of the said Mills after intimation to the
lessor. The appellant was not bound to engage any or all of
the employees of the lessor or of the” Outgoing lessees or
any of the persons who had been working from before except
the 18 employees who were mentioned in Cl. 11 of the lease
and the appellant also agreed not to retrench any staff
already employed at that date in the Factory at Guraru (vide
cl. 13(v),of the lease). The
257
properties demised by the said lease were deemed to be in
the control of the Patna High Court and any dispute between
the lessor and the appellant in respect of the said lease
was to be placed before the said Court for decision and the
decision made by the said Court was to be binding on all the
parties.
It appears that on December 2, 1954, i.e., 4 (lays before,
the execution of the said lease and delivery of possession
of the said Mills by the liquidator to the appellant, the;
Government of Bihar issued a notification referring certain
disputes between the Managements of the, Sugar factories
specified in Appendix I thereto and their workmen
represented by the Unions specified in Appendix It for
adjudication to an Industrial Tribunal of which Shri Ali
Hassan, the respondent No. 1 herein, was to be tile sole
member.
The terms of the reference stated :-
” Whereas the State Government is of opinion that ail
Industrial dispute exists or is apprehended between the
Management of the Sugar factories as specified in Appendix I
and their workmen represented by the Unions as specified in
Appendix 11 regarding the matters specified in Annexure A ;
Now, therefore, in exercise of the powers conferred by
section 7 read with sub-section (1) of section 10 of the
Industrial Disputes Act, 1947 (XIV of 1947) and in
supersession of Notification No. III/-DI-14020/54L15146
dated the 1st October, 1954, the Governor of Bihar is
pleased to constitute an Industrial Tribunal of which Mr.
Ali Hussan shall be the sole member and to refer the said
dispute to the said Tribunal for adjudication.
Annexure “A”
1. Retaining allowance to seasonal employees in Sugar
factories in Bihar.
2. Leave and holidays to the employees including seasonal
employees in Sugar factories.
3. Whether the deduction made in leave and holidays of the
employees of the Management of the Sugar factories is
unjustified and if so what compensation or relief, the
workmen are entitled to
33
258
There were as many as 28 Sugar factories specified in
Appendix I and as many as 38 Labour Unions specified in
Appendix 11. The Gaya Sugar Mills Ltd., Guraru was the
second item in Appendix I and the Chini Mazdoor Sangh Guraru
was mentioned at the third item in Appendix 11.
The respondent No. 1 entered upon the said reference. Even
though Gaya Sugar Mills Ltd., Guraru which was then in
liquidation was not specifically described as such in
Appendix 1, notice was given to the, liquidator by the
respondent No. 1 for January 11, 1955, which was the date
fixed for hearing before him. The said letter however
reached the liquidator on January 13, 1955, whereupon by his
letter dated January 14, 1955, he informed respondent No.1
about it. Respondent No. 1 however satisfied himself by
merely endorsing on the letter of the liquidator that the
hearing had already concluded and nothing further than
inquiring of the post office as to the reason of the delay
in the delivery of the letter could be done. Respondent
No.1 made his award on February 17, 1955, and it was
published in the Official Gazette on February 23, 1955. The
adjudication proceedings which had thus commenced on the
date of the reference viz., December 2, 1954, came to a
conclusion on the expiry of 30 days of the publication of
the award viz., on March 25, 1955, under s. 20(3) of the
Industrial Disputes Act, 1947. It appears that an appeal
was taken to the Labour Appellate Tribunal against this
award and the appeal was decided on August 31, 1956.
Even though the appellant was in possession of the said
Mills under the terms-of the lease dated December 6, 1954,
no notice was given by respondent No. 1 to the appellant and
the appellant therefore could not and did not appear before
respondent No. 1. So far as the appellant was concerned the
proceedings before respondent No. 1 were ex parte. Two
applications were, however, made on March 23, 1955, under s.
33A of the Industrial Disputes Act, one by 15 persons
alleging that the appellant had without any reason and
without any notice discharged them from employ one by one
during the months of January and February
259
1955 and the other by 5 persons alleging that the appellant
had changed their conditions of service without any reason,
contending that the said discharges and the change in
conditions of service had been effected by the appellant
during the pendency of the disputes before the Industrial
Tribunal aforesaid without the permission of the Industrial
Tribunal having been obtained under s. 33 of the Act. These
applications were numbered as Miscellaneous Cases Nos. 26
and 27 of 1955 and the appellant received on April 7, 1955,
two notices from respondent No. 1, both dated March 25,
1955, informing the appellant about the filing of the two
miscellaneous cases and calling upon the appellant to file
statements showing cause by April 19, 1955. The appellant
accordingly filed before respondent No. 1 two applications
or statements contending inter alia that the application
under s. 33-A of the Industrial Disputes Act, filed by those
persons (respondents Nos. 4 to 23 herein) were not maintain.
able and were otherwise fit to be rejected. It was asserted
on behalf of the appellant that the appellant as lessee of
the said Mills had strictly complied with the terms and
conditions of the lease and there had been no contravention
on its part of s. 33 of the Act, in regard to any of the
workmen concerned in the aforesaid two miscellaneous cases.
It was pointed out that none of the persons who had filed
the said applications was comprised in the 18 persons who
were specifically mentioned in Cl. 11 of the lease and who
were specifically exempted from the operation of the said
clause nor were they comprised in the category of members of
the staff whom the appellant as lessee, was not entitled to
retrench under Cl. 13(v) of the lease, with the result that
none of the said clauses of the lease could be said to have
been violated by the appellant.
On July 13, 1955, the appellant filed in the High Court of
Judicature at Patna a writ application under Arts. 226 and
227 of the Constitution being Miscellaneous Judicial Case
No. 392 of 1955 impleading the Chairman, Industrial
Tribunal, Bihar as respondent No. 1, the State of Bihar as
respondent No. 2, the liquidator as respondent No. 3 and the
applicants in
260
the said miscellaneous cases Nos. 26 and 27 of 1955 pending
before the Industrial Tribunal as respondents ‘Nos. 4 to 23
for a writ of certiorari quashing the said Miscellaneous
Cases Nos. 26 and 27 of 1955, a writ of Mandamus restraining
the respondent No. 1 from proceeding with or otherwise
dealing with the said miscellaneous cases costs and further
and other reliefs.
The main Contentions urged by the appellant in the said
petition were:-
(1) that under each one of the points referred for
adjudication, considerable burden was sought to be imposed
on the sugar factories concerned ; that all the properties
and effects of the Gay Sugar Mills Ltd., were in the custody
of the Court as from the date of the order for Winding up
viz., November 14,1951 ; that ,the said notification did not
purport to include Gaya Sugar Mills Ltd., in that light and
did not describe the company as having already gone into
liquidation ; that no leave of the Court was obtained before
commencing or continuing the proceedings before the Tribunal
and in fact the liquidator was neither named as a party nor
was any notice given to him of the commencement of the
proceedings and that therefore go far as the Gava Stugar
Mills Ltd., (In Liquidation) was concerned there was no
proceedingly in the eye of the law before respondent No. 1
and as such the Miscellaneous Cases Nos. 26 and 27 of 1955
of which notices had been sent to the appellant were not
maintainable; and
(2) that no notice of the adjudication proceedings arising
out of the aforesaid Notification dated December 2, 1954, “-
as at any stage given to the appellant who was in possession
under the terms of the lease granted by the Court ; that the
appellant being lessee under orders and under terms of the
lease approved by the Court was liable for breach of the
terms of the lease, if any, and that also to the Court
alone; that there was no violation of s. 33 of the
Industrial Disputes Act, if the appellant bona fide acted up
to the terms of the lease and being itself no party to any
adjudication proceedings-before any Tribunal or before
respondent No. 1 there could be no breach of s. 33 of
261
the Act and as such no application under s. 33A.of the, Act
could be maintained against the appellant.
No affidavit in reply was filed by or on behalf of any of
the respondents and the application came up for hearing
before Ramaswami, C. J. and Raj Kishore Prasad, J. who
delivered the judgment of the Court on September 20, 1956,
dismissing the application with costs.
Assuming but without, expressing any opinion that the
reference made by the State Government under s. 10(1) of
the Industrial -Disputes Act was a legal proceeding within
the meaning of s. 171 of the Indian Companies Act the High
Court held that s. 10(1) of the Industrial , Disputes Act,
was not controlled by s. 171 of the Indian Companies Act and
therefore no leave of the Court was necessary before making
a reference of the Industrial Disputes under s. 10 (1) of
the Industrial Disputes, Act.. It was also of opinion that
even though the reference under s. 10(1) of the Industrial
Dispute Act was made by the State Government on December 2,
1954, and the applicant had taken the lease of the said
Mills subsequently i. e., on December 6, 1954, the applicant
was an ” employer ” within the meaning of the term used in
ss. 33 and 33A of the Act, and that it was not necessary for
the application of either of those sections that the
employer who discharges or punishes the workmen or who
alters the conditions of service of the workmen should be
the identical employer concerned in the industrial dispute
which is the subject-matter of adjudication. It was
sufficient for invoking the provisions of either of those
sections that there is the relationship of employer and
employee at the -time the workman is discharged or punished
or at the time his conditions of service are altered to his
prejudice. It was further of opinion that even though the
liquidator was not made a party to the reference made by the
State Government under s. 10(1) of the Industrial Disputes
Act, the Gaya Sugar Mills Ltd., Guraru was specifically
mentioned as one. of the parties in Appendix I, that the
Gaya Sugar Mills Ltd., continued to be a legal personality
though an order for winding up had been made and that there
262
fore the Company was properly made a party to the reference
under S. 10(1) of the Act. The fact that the notice given
to the liquidator on January 11, 1955, might have been
received late by the liquidator did not, in the opinion of
the Court, make any difference to the position inasmuch as
the award of the Industrial Tribunal was made on February
17, 1955, i. e., long after the date of the notice and there
was no lack of jurisdiction in the Industrial Tribunal to
make the award valid and binding on the Gaya Sugar Mills
Ltd., Guraru. The High Court accordingly rejected the
application as stated above.
The applicant applied for leave to appeal to this Court on
November 9, 1956, but the High Court refused to grant the
certificate on the ground that the proceeding for grant of a
writ of certiorari under Art. 226 is not a civil proceeding
within the meaning of Art. 133 of the Constitution. The
applicant thereupon applied for and obtained from this Court
on April 1, 1957, special leave to appeal and the appeal has
now come up for hearing and final disposal before us.
The two main contentions which were urged before us by the
learned Counsel for the appellant were:-
(1) that the Gaya Sugar Mills Ltd., Guraru had been
taken into liquidation and respondent No. 3 had been
appointed the liquidator thereof; that the reference made by
the State Government to the Industrial Tribunal on December
2, 1954, involved considerable financial burden on the said
Mills and- the State Government ought to have obtained the
sanction of the Court under s. 171 of the Indian Companies
Act before making a reference of the industrial disputes to
the Industrial Tribunal under s. 10(1) of the Industrial
Disputes Act, qua the said Mills and that not having been
done, the reference was bad in law and there was no question
of the applicability of either s. 33 or s. 33A of the Act,
and
(2) that on a true construction of ss. 33 and 33A of the
Act, the ” employer ” therein mentioned could only be the ”
employer ” concerned in the industrial dispute which was the
subject-matter of reference, that the applicant had taken
the lease of the said:
263
sugar Mills on December 6, 1954, 4 days after the date of
reference made by the State Government under, s. 10(1) of
the Act, and that therefore the applicant was not an ”
employer ” within the meaning of the terms as used in s. 33
or s. 33A of the Act, and even if the allegations made by
the applicants in Miscellaneous Cases Nos. 26 and 27 of 1955
before respondent No. 1 were correct, it was not necessary
for the applicant to have obtained the permission of the
Industrial Tribunal under a. 33 of the Act, and therefore
the said applications under s. 33A of the Act, filed by res-
pondents 4 to 23 were not maintainable.
It will be appropriate at this stage to set out the relevant
sections of the Indian Companies Act and the Industrial
Disputes Act, 1947 (as they then stood) which fall to be
considered by us in this appeal.
S. 171 (Indian Companies Act):
” Suits stayed on winding up order: When a winding up order
has been made or a provisional liquidator has been appointed
no suit or other legal proceeding shall be proceeded with or
commenced against the company except by leave of the Court,
and subject to such terms as the Court may impose.”
S.10(1) (Industrial Disputes Act, 1947):Reference of
disputes to Boards, Courts or Tribunals:
Where the appropriate Government is of opinion that any
industrial dispute exists or is apprehended, it may at any
time, by order in writing-
(a) refer the dispute to a Board for promoting a settlement
thereof;
(b) refer any matter appearing to be connected with or
relevant to the dispute to a Court for inquiry
or
(c) refer the. dispute or any matter appearing to be
connected with or relevant to, the dispute to a Tribunal for
adjudication:
Provided that where the dispute relates to a public utility
service and a notice under section 22 has been given, the
appropriate Government shall, unless it considers that the
notice has been frivolously or vexatiously given or that it
would be inexpedient so
264
to do, make a reference under this subsection not-
withstanding that any other proceedings under this Act in
respect of the dispute may have commenced,”
S. 33 (Ibid): Conditions of service etc., to remain
unchanged during pendency of proceedings
During the pendency of any conciliation proceedings or
proceedings before a Tribunal in respect of any industrial
dispute, no employer shall-
(a) alter, to the prejudice of the workmen concerned in
such dispute, the conditions of service applicable, to them
immediately before the commencement of such proceedings; or
(b) discharge or punish, whether by dismissal or otherwise,
any workman concerned in such dispute, save with the express
permission in writing of the conciliation officer, Board or
Tribunal, as the case
may be.”
33-A (Ibid): Special provisions for adjudication
as to whether conditions of service etc., changed during
pendency of proceedings:
” Where an employer contravenes the provisions of section 33
during the pendency of proceedings before a Tribunal, any
employee aggrieved by such contravention, may make a
complaint in writing, in the prescribed manner to such
Tribunal and on receipt of such complaint that Tribunal
shall adjudicate upon the complaint as if it were a dispute
referred to or pending before it, in accordance with the
provisions of this Act and shall submit its award to the
appropriate Government and the provision of this Act shall
apply accordingly.”
As to (1):-Section 171 of the Indian Companies Act occurs in
Part V which relates to the winding up of companies and
prescribes that once a winding up order has been made no
suit or other legal proceedings shall be proceeded with or
commenced against the Company except by leave.of the winding
up Court and subject to such terms as the Court may impose.
The Court is in custody of all. the properties and assets of
the Company through the liquidator and is in control of the
winding up-proceedings with a view to the proper realization
of the assets: and, the equitable,
265
distribution thereof amongst the creditors of the Company.
No suit or other legal proceeding can therefore be proceeded
with or, commenced against the’ Company except by leave of
the Court and such leave is a necessary prerequisite of the
prosecution of such legal proceeding. In order to decide
the question of the applicability of s. 171 of the Indian
Companies Act it has to be ascertained (a) whether the
reference in question is a proceeding against the Company,
and, if So (b) whether such reference can be said to be a
legal proceeding within the meaning of s. 171 of the Indian
Companies Act.
There has been unfortunately a considerable confusion of
thought in the court below and the facts have not been
properly appreciated. The first question to determine was
who was the party to the reference. It appears to have been
assumed that the Gay a Sugar Mills Ltd., was a party to the
reference and that the only defect in the order of reference
was that the liquidator was not made a party to the refer-
ence. This difficulty was sought to be got over by holding
that the Gaya Sugar Mills Ltd., continued to be a legal
personality though an order for winding up had been made,
that the Company had not ceased to exist as a legal. entity,
and, therefore, the Company was properly made a party to the
reference under s. 10(1) of the Industrial Disputes Act.
This was, however, not the correct position on a true
interpretation of the terms of reference. The reference was
between the managements of the Sugar factories specified in
Appendix I and their workmen represented by the Unions
specified in Appendix 11. Gaya Sugar Mills Ltd., Guraru was
mentioned as item 2 in Appendix I but it is quite clear that
what was intended to be made a party to the reference under
this item was the:-management of the Sugar factory which
belonged to the Company called the Gaya Sugar Mills Ltd.,
whoever. that management may be. The mention of the Company
was to indicate and to point out the particular factory
whose management for the time being was to be one of the
parties to the reference and
34
266
it required to be ascertained who was comprised within the ”
management ” of the Mills. The State Government could not
have been oblivious of the fact that the Company had gone
into liquidation and a liquidator of the Company had been
appointed by the court and was leasing out the factory to
different lessees. If the Company itself were a party to
the reference the liquidator ought to have been mentioned
there as such but that apparently was not done for the
simple reason that the factory was being worked by the
lessees under the terms of the leases duly sanctioned by the
court. The liquidator was therefore not in management of
the factory and the only persons who were in management were
the then lessees to whom leases were granted by the
liquidator with the sanction of the court. The Industrial
Tribunal was obviously in error when it gave notice of the
proceedings to the liquidator. The liquidator was no more
in management of the factory and was therefore not entitled
to be served with any notice; the then lessees were in
management and they were the only parties to whom notice of
the proceedings should have been given. The liquidator no
doubt wrote to the Industrial Tribunal that he had received
the notice too late for him to attend. This letter of the
liquidator was treated with scant courtesy by the Industrial
Tribunal who merely endorsed at the foot of the letter that
the hearing had already concluded and nothing further than
enquiring of the Post Office as to the reason of the delay
in the delivery of the letter could be done. The Industrial
Tribunal proceeded to make its award on February 17, 1955,
without having before it the management of the factory,
viz., the lessees who had obtained the lease of the said
Mills from the liquidator and for all practical purposes the
said award was ex parte so far as the lessees who were at
the date of the reference in management of the factory and
were obviously intended to be a party to the reference were
concerned. The appellant came into management of the
factory after the reference and could not at the date of the
reference be in contemplation of the State Government as a
party and in- any
267
event, no notice whatever was given to the appellant’ of the
proceedings before the Tribunal. By no stretch of
imagination could it be said that the Company (In
Liquidation) was a party to the reference, the said Mills
having been given on lease to the lessees who worked the
Mills thereafter not for and on behalf of the Company but on
their own account, they being responsible for the profit and
loss in the working of the Mills. The Company thus not
being a party to the reference the proceedings which were
commenced on December 2, 1954, before the Tribunal were not
proceedings against the Company (In Liquidation). -This
being the position on a true construction of the terms of
the notification by which the reference was made the
question whether the reference was a legal proceeding within
the meaning of s. 171 Of the Indian Companies Act does not
arise for our decision and we prefer not to express any
opinion on that part of the question.
As to (2):-The next question to consider is the connotation
of the term ” employer ” as used in ss. 33 and 33A of the
Industrial Disputes Act. These sections postulate the
pendency of a proceeding of an industrial dispute. It
requires two to raise a dispute. An Industrial Dispute is
thus defined in s. 2(k) of the Act:,,
Industrial dispute ” means any dispute or difference between
employers and employers, or between employers and workmen,
or between workmen and workmen, which is connected with the
employment or non-employment or the terms of employment or
with conditions of labour, of any person.
If this definition is bodily lifted from s. 2 (k) and
substituted for the expression ” industrial dispute ”
,occurring in s. 33 and ss. 33 and 33A of the Act are then
read, it will at once become clear that the employer can be
no other than the employer with whom the workers had the
industrial dispute and cannot mean merely an employ who
discharges or punishes or who alters the conditions of
service of the workmen concerned. If the interpretation
adopted by the High Court was correct it would mean that the
Industrial
668
dispute which is referred for adjudication to the Industrial
Tribunal may have arisen between employer A and his workmen
but during the pendency of those proceedings employer B who
had nothing to do with employer A would be prevented from
discharging or punishing the workmen or altering their
conditions of service, provided only that the workmen
concerned happened to be interested in the industrial
dispute which was pending before the Industrial Tribunal.
If there is no connection at all between the employer A and
the employer B in the illustration given above, one fails to
see how a mere identity of the establishments or the
identity of the workmen could be enough to bring the
employer B within the purview of these sections. The very
purpose of the enactment of as. 33 and 33A of the Industrial
Disputes Act is, as observed by this Court in the Automobile
Products of India Ltd.
v. Bukmaji Bala (1).
” to ensure that proceedings in connection with industrial
disputes already pending should be brought to a termination
in a peaceful atmosphere and that no employer should during
the pendency of those proceedings take any action of the
kind mentioned in the sections which may give rise to fresh
disputes likely to further exacerbate the already strained
relation between the employer and the workmen. To achieve
this object a ban has been imposed upon the ordinary right
which the employer has under the ordinary law governing a
contract of employment. Section 22 of the 1950 Act and
section 33 of the 1947 Act which impose the ban also provide
for the removal of that ban by the granting of express
permission in writing in appropriate cases by the authority
mentioned therein.”
The scope of the enquiry under section 33 of the Industrial
Disputes Act has also been the subject matter of
adjudication by this Court and it was held in Atherton West
& Co., Ltd. v. Suti Mill Mazdoor Union (2) that the
authority:
” concerned would institute an enquiry and come to the
conclusion whether there was a prima facie case
(1) [1955] i S.C.R. 1241, 1256.
(2) [1953] S.C.R. 780, 787.
269
made out for the discharge or dismissal of the workman and
the employer, his agent or manager was not actuated by any
improper motives or did not resort to any unfair practice or
victimisation in the matter of the proposed discharge or
dismissal of the workman.”
A similar ratio would apply where an employer changes the
conditions of service of the workmen concerned. If this be
the criterion for determining whether an employer was
entitled to discharge or punish the workmen or alter their
conditions of service without the permission in writing of
the authority concerned that employer cannot be any other
than the one who is concerned in the industrial dispute
which is the subject matter of adjudication. If employer B
has nothing to do at all with employer A who is really the
party concerned in such industrial dispute which is the
subject-matter of adjudication, there will be no question of
attributing any improper motives or unfair practice or
victimization to the employer B in regard to the action
which he proposed to take against the workmen. Whether the
employer B would be entitled to such action or not would
have to be determined in other proceedings which may be
taken in the matter of industrial disputes which may
subsequently arise between himself and his workmen after
such action was taken. But he would certainly not be bound
before taking such action to seek the permission in writing
of the Industrial Tribunal before which an industrial
dispute was pending as between those workmen and another
employer with whom he had no concern. The latter
interpretation is therefore more in consonance with the
principle underlying the enactment of s. 33 of the
Industrial Disputes Act and it must be held that the
employer contemplated by ss. 33 and 33A of the Industrial
Disputes Act must be the identical employer concerned in the
industrial dispute which is the subject-matter of
adjudication. In other words, the employer contemplated by
ss. 33 and 33A of the Industrial Disputes Act must be the
employer with whom the workmen mentioned as aggrieved under
s. 33 had a subsisting relationship of employer
270
and employees at the commencement of the proceedings
referred to in those sections. The identity of the employer
at the commencement of the reference with the employer who
intends to take proceedings within the ban of s. 33 of the
Act must be established and if the latter has no concern
with or relationship with the former ss. 33 and 33A of the
Act do not dome into operation at all. Such identity could
in the event of change in the employers be established by
showing that the latter employer was merely a nominee or
Benamidar of the former or that on the analogy of s.
18(3)(c) of the Industrial Disputes Act he came with in the
description of ” his heirs, successors or assigns in respect
of the establishment to which the dispute relates, in which
event the award made by the Indus. trial Tribunal would be
binding on him just as much as on the former employer of the
workmen concerned. These are, however, the only cases in
which according to the provisions of the Industrial Disputes
Act the identity of the employers at the commencement of the
proceedings and the intended discharge or punishment or
change in the conditions of service of the workmen concerned
could be established and unless the employer who intended to
discharge or punish or change the conditions of service of
the workmen was in this sense identical with the employer
who was concerned in the industrial dispute which is the
subject-matter of adjudication no question could arise of
the operation of section 33 or section 33A of the Industrial
Disputes Act.
What then was the position of the appellant under the
reference in question ? It does not appear from the record
as to who was the management of the said Mills on December
2, 1954. The lease in favour of the old lessees, Guraru
Cane Development and Cane Marketing Union Ltd., had
apparently come to an end by efflux of time, the period of
the lease presumably being up to the end of the crushing
season which would end some time in the month of November,
1954. An application had been made by the liquidator to
grant a lease in favour of the appellant and this
application was granted by the Court on December 3, 1954, so
that in any event before December 3, 1954, the appellant
could
271
not be said to be in management of ‘the said Mills. As a
matter of fact, the lease was executed in favour of the
appellant on December 6, 1954, and the possession of the
said Mills was also given to the appellant by the liquidator
on the same day. It could not, therefore, be said that the
appellant was comprised within the description of the
management of the Gaya Sugar Mills Ltd., at the date when
the reference was made by the State Government. If that was
so, a reference Of a previous date, without anything more,
could not comprise the appellant within its scope and that
appears to have been the position as understood even by the
Industrial Tribunal which gave no notice to the appellant
but gave notice of the proceedings erroneously as we hold to
the liquidator of the Company. The appellant was not in
management of the said Mills and it could not be bound by
the reference because at no stage was any attempt made
either to amend the terms of the reference or even to serve
on the appellant a notice of the proceedings which were to
take place before the Industrial Tribunal. Under the
Industrial Disputes (Central) Rules, 1947, enacted by the
Central Government in exercise of the powers conferred upon
it by section 38 of the Industrial Disputes Act, intimation
of the place and time of hearing had got to be given to the
parties to the reference (Rule 10); and the Industrial
Tribunal was enjoined to call upon the parties at the first
sitting to state their case (Rule 11) the only power given
to the Industrial Tribunal to proceed ex parte was when a
party to the proceedings failed to attend or to be
represented without good cause shown (Rule 19) ; and the
representatives of the parties appearing before an
Industrial Tribunal were to have the right of examination,
cross-examination and of addressing the Tribunal when
evidence had been called (Rule 24) : The ‘whole of this
procedure envisaged the parties to the reference being
properly notified of the proceedings before the Industrial
Tribunal and taking part therein either by themselves or
through, their authorised representatives. The fact that no
such notice was given to the appellant by the Industrial
Tribunal goes to show that in the circum-
272
stances that obtained the appellant was certainly not
understood by the Tribunal as having been a party to the
reference and it could not be said on the -terms of the
reference itself which was made on December 2, 1954, that
the appellant, which came into existence as the lessees of
the said Mills on December 6, 1954, was a party to the said
reference. If the old lessees were in management of the
said Mills on December 2 1954, there was no identity of
employers as between them and the appellant, the appellant
certainly did not claim under the old lessees nor could it
be described as their ” heirs, successors or assigns ” in
respect of the establishment to which the dispute related
within the meaning of s. 18(3) (c) of the Industrial
Disputes Act, There is no suggestion whatever that the
appellant was or is a benamidar of the previous lessees. In
no event could the appellant therefore be held to be, bound
either by the reference or the award made by the Industrial
Tribunal, the identity of the employers at the date of the
reference with the employers at the time when the acts
complained of in the applications under s. 33-A of the
Industrial Disputes Act were purported to be done by them
not having been established.
If that is the true position, no question of the appellant
obtaining written permission of the Industrial Tribunal
under s. 33 of the Act for discharging or punishing or for
effecting a change in the conditions of service of the
workmen concerned could arise. If no such permission were
needed, s. 33A of the Act also could not come into operation
and the applications in Miscellaneous Cases Nos. 26 and 27
of 1955 we’re not maintainable.
The result is no doubt unfortunate ; because the Industrial
disputes which were referred to the Industrial Tribunal by
the reference in question were general in their nature and
would comprise within their scope the workmen who were
working in the Gaya Sugar Mills Ltd., at all relevant times.
The appellant came in management of the said Mills from and
after December 6, 1954, and it was certainly intended that
these, disputes which had either existed or were apprehended
between the appellant on the one hand and the workmen
273
working in the said Mills on the other should be adjudicated
upon under the terms of that reference. If the appellant
could be comprised within the description of the ”
management ” of the said Mills at the date of the reference,
viz., December 2, 1954, the object and the purpose of the
reference qua the workmen of the said Mills would be
accomplished. The difficulty, however, is that the several
managements which would come into existence on successive
leases being granted by the Court in the present case cannot
be said to have been comprised within the term “managements
of the Sugar factories specified in Appendix I” even though
the Gaya Sugar Mills Ltd., Guraru is mentioned as item 2
therein. Such a construction would make the several
successive lessees who came into existence during the whole
of the period when the reference was pending -before the
Industrial Tribunal parties to the reference involving fresh
notices to be issued, fresh statements of case to be
furnished, fresh hearing to be granted, to each of the
successive lessees under the Industrial Disputes (Central)
Rules, 1947, a result which certainly could not have been
contemplated by the State Government when the reference was
made.
It, therefore, follows that the appellant was not by any
count a party to the reference dated December 2, 1954, and
not being such a party was not an “employer” within the
meaning of ss. 33 and 33-A of the Industrial Disputes Act
qua the workmen who filed the applications in Miscellaneous
Cases Nos. 26 and 27 of 1955. If the workmen felt that they
have been victimised or that there had been an unfair labour
practice, they could perhaps raise fresh industrial disputes
and press the State Government to make a fresh reference of
their industrial disputes under s. 10(1) of the Act, as to
which we say nothing, but it is quite clear to us that the
workmen cannot in the circumstances of this case raise an
industrial dispute indirectly by having recourse to an
application under s. 33-A of the Act. In the premises if
the appellant was not bound, as we hold it was not, to ask
for the written permission of the
35
274
Industrial Tribunal before discharging, punishing or
effecting a change in the conditions of service of the
workmen concerned no application under s. 33-A of the Act
could be maintained against it even on the assumption that
the allegations made in the said applications were correct.
The result, therefore, is that the proceedings in Mis-
cellaneous Cases Nos. 26 and 27 of 1955 before the res-
pondent No. 1, Industrial Tribunal, Bihar, Patna are without
jurisdiction and liable to be quashed. The appeal of the
appellant will therefore be allowed, the order made by the
High Court on September 20, 1956, will be set aside and a
writ of certiorari will issue against respondent No. 1
quashing the proceedings in the said Miscellaneous Cases
Nos. 26 and 27 of 1955. The appellant will be entitled to
its costs throughout against the contesting respondents.
Appeal allowed.

 

 

 

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