1956 (9) TMI 27 - HC - Companies Law

State Government not require leave from High Court for industrial dispute referral. Petitioner subject to Industrial Disputes Act.

SKG. Sugar Ltd. Versus Ali Hassan

The court held that the State Government did not require leave from the High Court under Section 171 of the Companies Act to refer an industrial dispute ... Winding up – Suits stayed on winding-up order Issues Involved:1. Whether the State Government required leave of the High Court under Section 171 of the Companies Act before making a reference under Section 10(1) of the Industrial Disputes Act.2. Whether the petitioner, who was not a party to the original industrial dispute, could be proceeded against under Sections 33 and 33A of the Industrial Disputes Act.3. Whether the official liquidator needed to be made a party to the reference made by the State Government under Section 10(1) of the Industrial Disputes Act.Issue-wise Detailed Analysis:1. Requirement of Leave under Section 171 of the Companies Act:The petitioner argued that the State Government should have obtained leave from the High Court under Section 171 of the Companies Act before making a reference of the industrial dispute under Section 10(1) of the Industrial Disputes Act. Section 171 states, '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.' The petitioner relied on the Federal Court's decision in Governor-General in Council v. Shiromani Sugar Mills Ltd., which held that 'legal proceeding' should be construed broadly to include any proceeding prescribed by law. However, the court observed that Section 10(1) of the Industrial Disputes Act grants the State Government the power to refer an industrial dispute to a Tribunal for adjudication without any condition other than the opinion that such a dispute exists or is apprehended. The court concluded that Section 10(1) of the Industrial Disputes Act is not controlled by Section 171 of the Companies Act, and the State Government is not bound to apply for leave before making a reference.2. Applicability of Sections 33 and 33A of the Industrial Disputes Act to the Petitioner:The petitioner contended that since they were not a party to the original industrial dispute, they could not be proceeded against under Sections 33 and 33A of the Industrial Disputes Act. The court rejected this argument, stating that the expression 'employer' in Sections 33 and 33A is unqualified and should not be limited to the employer concerned in the original industrial dispute. The court emphasized that the relationship of employer and employee at the time of the alleged discharge or alteration of service conditions is sufficient for the application of these sections. The court noted that the purpose of the statute is to protect workmen from victimization by the employer and to ensure peaceful resolution of industrial disputes, which would be nullified if the petitioner's interpretation were accepted.3. Necessity of Making the Official Liquidator a Party:The petitioner argued that the official liquidator should have been made a party to the reference made by the State Government under Section 10(1) of the Industrial Disputes Act. The court found that the reference order specifically mentioned Gaya Sugar Mills of Guraru as a party, and it was not necessary to make the official liquidator a party since the company continued to exist as a legal entity despite the winding-up order. The court also dismissed the objection that no notice was given to the official liquidator, noting that notice was indeed given, albeit late, but well before the Tribunal's award.Conclusion:The court held that the State Government did not need the High Court's leave under Section 171 of the Companies Act to make a reference under Section 10(1) of the Industrial Disputes Act. The petitioner could be proceeded against under Sections 33 and 33A of the Industrial Disputes Act despite not being a party to the original dispute. The official liquidator did not need to be made a party to the reference. Consequently, the application was dismissed with costs.