Transfer of employment contracts requires clear statutory language; general amalgamation wording does not bind an employee to a new employer.

General statutory words in a corporate amalgamation provision were held insufficient to transfer a contract of personal service to a new company without the employee's consent. The article explains that, although Section 154 of the Companies Act, 1929 authorised transfer of property, rights, liabilities and duties to support reconstruction and amalgamation, that language did not clearly abrogate the common-law rule against assigning employment contracts to a new employer. The provision was therefore construed as operating on corporate assets and obligations, not as compelling novation of personal service contracts or overriding third-party rights by implication.

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Issues: Whether an order under Section 154 of the Companies Act, 1929 transferring the undertaking, property and liabilities of a transferor company to a transferee company automatically substitutes the transferee company as employer under an existing contract of personal service, thereby binding the employee without consent.

Analysis: The statutory language authorised transfer of property, rights, powers, liabilities and duties in aid of amalgamation, but the Court held that these general words did not clearly extend to contracts of personal service. A contract of service is founded on the employee's right to choose the employer and cannot, at common law, be assigned or transferred to a new master without the employee's assent unless Parliament uses clear words to abrogate that principle. The section was construed as facilitating reconstruction and avoiding winding up, not as effecting compulsory novation of personal employment contracts or overriding the rights of third parties by implication.

Conclusion: An order under Section 154 did not automatically transfer the appellant's contract of personal service to the respondent company, and the respondent was not the appellant's employer under that contract.

Ratio Decidendi: General statutory words authorising transfer of property, rights and liabilities in a corporate amalgamation do not, without clear and definite language, abrogate the common-law rule that a contract of personal service cannot be transferred to a new employer without the employee's consent.

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