TaxTMI 
TaxTMI 
1958 (11) TMI 48
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....an 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 Gyanoday 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 a lease of the said Mills on December 6, 1954, and handed over possession of the same to the appellant the same day. 3. 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 amou....
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....n 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 ?" 6. There were as many as 28 Sugar factories specified in Appendix I and as many as 38 Labour Unions specified in Appendix II. 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 II. 7. 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 I, 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 ....
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....section 33A of the Industrial Disputes Act, filed by those persons (respondents Nos. 4 to 23 herein) were not maintainable 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 section 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 Clause 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 Clause 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. 9. On July 13, 1955, the appellant filed in the High Court of Judicature at Patna a writ application under of the Constitution of India - Articles 226 and 227 being Miscellaneous Judicial Case No. 392 of 1955 im....
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.... Act could be maintained against the appellant. 11. 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. 12. Assuming but without expressing any opinion that the reference made by the State Government under section 10(1) of the Industrial Disputes Act was a legal proceeding within the meaning of section 171 of the Indian Companies Act the High Court held that section 10(1) of the Industrial Disputes Act, was not controlled by section 171 of the Indian Companies Act and therefore no leave of the Court was necessary before making a reference of the Industrial Disputes under section 10(1) of the Industrial Disputes Act. It was also of opinion that even though the reference under section 10(1) of the Industrial Disputes 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 sections 33 and 33A of the Act....
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....1954, involved considerable financial burden on the said Mills and the State Government ought to have obtained the sanction of the Court under section 171 of the Indian Companies Act before making a reference of the industrial disputes to the Industrial Tribunal under section 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 section 33 or section 33A of the Act, and (2) that on a true construction of sections 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 sugar Mills on December 6, 1954, 4 days after the date of reference made by the State Government under section 10(1) of the Act, and that therefore the applicant was not an "employer" within the meaning of the terms as used in section 33 or section 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 ....
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...., Board of Tribunal, as the case may be." 19. S. 33A (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." 20. 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 cont....
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....uidator 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 hea....
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....om section 2(k) and substituted for the expression "industrial dispute" occurring in section 33 and sections 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 employer 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 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 with....
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....tion 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 sections 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 sections 33 and 33A of the Industrial Disputes Act must be the employer with whom the workmen mentioned as aggrieved under section 33 had a subsisting relationship of employer and employees at the commencement of the proceedings referred to ....
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....quidator 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....
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....ration and the applications in Miscellaneous Cases Nos. 26 and 27 of 1955 were not maintainable. 28. 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 the nature and would comprise within their scope the workmen who were working in he 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 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 "manageme....