Successor liability under industrial awards requires transfer of business as a going concern, not mere takeover of hypothecated assets.

A mere takeover of hypothecated assets under section 29 of the State Financial Corporations Act does not make the corporation a successor or assign for fastening liability under section 18(c) of the Industrial Disputes Act. The binding effect of an award extends to heirs, successors or assigns only where the employer's business or industrial establishment is transferred as a going concern. Here, the corporation only recovered dues through a limited asset takeover, later returned the assets under settlement, and never acquired or operated the business itself. On that basis, it was not a transferee in interest, and recovery proceedings against it were unsustainable.

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Issues: Whether a financial corporation that took over only the hypothecated assets of a loanee company under section 29 of the State Financial Corporations Act and later handed those assets back after settlement could be treated as the successor or assign of the company for the purpose of binding liability under section 18(c) of the Industrial Disputes Act.

Analysis: The binding effect of an award under section 18(c) extends to an employer's heirs, successors or assigns in respect of the establishment concerned. The decisive question was whether the corporation had stepped into the shoes of the loanee company in relation to the industrial establishment. The taking over under section 29 was only for recovery of dues against hypothecated assets, not a transfer of the business as a going concern. The assets were later returned to the original company under the settlement and the corporation neither purchased the whole business nor carried it on as an operating concern. In such circumstances, the statutory takeover did not convert the corporation into a transferee of the business or a successor in interest, and the recovery certificate issued against it could not be sustained.

Conclusion: The corporation was not the successor or assign of the loanee company, and the recovery certificate and consequential recovery proceedings were unsustainable.

Ratio Decidendi: A mere takeover of hypothecated assets under section 29 of the State Financial Corporations Act, without transfer of the business as a going concern, does not make the corporation a successor or assign of the loanee company for the purpose of fastening liability under section 18(c) of the Industrial Disputes Act.

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