Judgment-

S. C. AGRAWAL

( 1 ) THE question which falls for consideration in this appeal is whether in respect of textile undertaking whose management has been taken over under the provision of the Textile Undertaking (Take Over of Management) Act. 1983 (for short the Act) the National Textiles Corporation (South Maharashtra) Ltd.- Respondent No. 1 (for short ntc) is liable for the gratuity payable to an employee who had ceased to be in employment prior to the take over of the management of the undertaking.

( 2 ) MOHAN Sambhaji Parab, respondent No. 2 herein. was in the employment of M/s. Finlay Mills Ltd.- respondent No. 3 from 1/01/1954 till 22/03/1983 when he resigned. He made a claim of Rs. 16730. 00 towards gratuity payable under the Payment of Gratuity Act, 1972 and submitted and application in Form I with respondent No. 3 Since the respondent No. 3 failed to pay the amount of gratuity, respondent No. 2 moved the Controlling Authority under the Payment of Gratuity Act seeking for the recovery of the said amount of Rs. 16,730. 00. On 18/10/1983, the President of India promulgated the Textile Undertakings (Taking Over of Management) Ordinance, 1983 whereby the management of the Cotton Textile undertaking of respondent No. 3 was taken over by the Central Government. The said Ordinance was subsequently replaced by the Act which was brought into force with effect from 18/10/1983. The Central Government vested the management of the textile undertaking of respondent No. 3 with the NTC with effect from 18/10/1983. NTC was implement as a party to the proceedings before the Controlling Authority. Respondent No. 3 did not appear to contest the petition before the Controlling Authority but the NTC appeared and contested its liability for the payment of gratuity to respondent No. 2. By order dated 31/10/1984, the Controlling Authority upheld the objection raised by NTC regarding its liability for the gratuity amount payable to respondent No. 2 and held that the said gratuity amount was payable by respondent No. 3. The Controlling Authority, therefore, directed respondent No. 3 to deposit the amount of Rs. 16,730. 00 towards gratuity in the Court of the Controlling Authority within one month from the date of the said order, respondent No. 2 filed an appeal before the Industrial Court, Maharashtra against the said order of the Controlling Authority dated 31/10/1984 wherein he claimed that NTC was liable to pay the gratuity amount to him. The said claim of the respondent No. 2 was upheld by the industrial Court and, allowing the appeal, the Industrial Court, by order dated 7/08/1985, directed that in the event of respondent No. 2 failing to deposit the gratuity in the Court, the same shall also be recovered from NTC to the extent of the assets and other properties of the textile undertaking of respondent No. 2 taken over by NTC. Feeling aggrieved by the said order of the Industrial Court, NTC filed a writ petition (Writ Petition No. 8 of 1986) in the Bombay High Court. The said writ petition was dismissed by the High Court, by the impugned judgment dated 4/10/1990. The High Court has held that the liability to pay gratuity to respondent No. 2 arose prior to taking over of the management of the textile undertaking of respondent No. 3/10/1983 and the liability for the said gratuity was that of respondent No. 2 and in view of Section 3 (7) of the Act, NTC was not liable for the same. Since the appellant, namely, Rashtriya Mill Mazdoor Sangh, had been impleaded as a party in the proceedings, the appellant has filed this appeal, by special leave, against the said decision of the Bombay High Court.

( 3 ) THE question regarding the liability to NTC has to be determined on the basis of the provision contained in the Act. The relevant provision in that regard is contained in Section 3 which deals with the vesting of the management of the textile undertakings in the Central Government under the provisions of the Act. The said Section provides as und