Transfer of undertaking and parity relief: workmen got continuity of service and limited back wages, but no reinstatement.

Pumping water in lift irrigation schemes was treated as a manufacturing process, bringing the schemes within the definition of a factory and the Industrial Disputes Act. Because the schemes were transferred as a separate undertaking, the termination of the workmen's services was governed substantially by the transfer-of-undertaking regime under Section 25FF, rather than ordinary retrenchment provisions. On relief, the Court applied parity and complete justice principles, noting long service and prior relief granted to similarly placed workmen. Reinstatement was declined, but continuity of service and limited back wages were ordered, together with retirement benefits where due; the claim for full back wages was rejected.

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Issues: (i) whether the lift irrigation schemes, where the workmen were employed in pumping water, constituted a factory and an industrial establishment so as to attract the Industrial Disputes Act, and whether the termination of service on transfer of the schemes was governed by Section 25FF rather than Section 25F or Section 25N; (ii) what relief should be granted to the workmen, including the extent of back wages, continuity of service, and parity with similarly situated workmen.

Issue (i): whether the lift irrigation schemes, where the workmen were employed in pumping water, constituted a factory and an industrial establishment so as to attract the Industrial Disputes Act, and whether the termination of service on transfer of the schemes was governed by Section 25FF rather than Section 25F or Section 25N.

Analysis: The activity of pumping water falls within the definition of manufacturing process under the Factories Act, and the schemes therefore answered the description of a factory. By reason of the statutory scheme, the undertaking was covered by the Industrial Disputes Act. At the same time, the facts showed transfer of the lift irrigation schemes as a separate unit, so the termination was not a simple case of retrenchment. In such a situation, the governing principle is that on transfer of an undertaking the workmen's claim is ordinarily for compensation as contemplated by Section 25FF, and not reinstatement as of right.

Conclusion: The schemes were covered by the Industrial Disputes Act, but the termination arose out of transfer of an undertaking and fell substantially within the framework of Section 25FF.

Issue (ii): what relief should be granted to the workmen, including the extent of back wages, continuity of service, and parity with similarly situated workmen.

Analysis: The Court took into account that the workmen had long service, that similarly placed workmen from the same schemes had already been granted relief, and that the State had not taken effective steps either to absorb the workmen elsewhere or to secure comparable placement with the transferee. Exercising the power to do complete justice, the Court moulded relief on the basis of parity, but declined to sustain reinstatement after such a long passage of time. The workmen were therefore granted continuity of service and limited back wages, with retirement benefits where due, while the challenge to a higher claim for full back wages was rejected.

Conclusion: The workmen were held entitled to continuity of service and 25% back wages, but not to reinstatement or 100% back wages.

Final Conclusion: The impugned judgment was modified to the extent of denying reinstatement while preserving continuity-related and monetary relief on a parity basis, and the connected challenge for enhancement of back wages was rejected.

Ratio Decidendi: Where termination follows transfer of an undertaking, the workmen's substantive entitlement is ordinarily governed by the statutory compensation scheme, but relief may be moulded in equity and parity to secure complete justice, including continuity of service and limited back wages, without ordering reinstatement.

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