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SUPREME COURT OF INDIA
R. Banumathi, R. Subhash Reddy, JJ.
Globe Ground India Employees Union – Appellant
Versus
Lufthansa German Airlines & Anr. – Respondents
Civil Appeal Nos. 4076-4077 of 2019 [Arising out of SLP(C) Nos. 25341-42 of 2017]
Decided on : 23-04-2019
(b) Industrial Disputes Act, 1947 – Section 10(4) – Tribunal shall confine its adjudication to the point of reference and matters incidental thereto only. (Para 15)
(c) Code of Civil Procedure, 1908 – Order I Rule 10 and Order I Rule 10, Code of Civil Procedure, 1908 – Second respondent itself a company in which the subsidiary of the first respondent, Globe Ground Deutschland GmbH, was holding 51% shares and 49% shares were held by the Bird Group – Bird Group floating another company and starting handling services from the month of January, 2009 by uitlizing the same equipments and vehicles belonging to the second respondent – Held, first respondent not a necessary and proper party to be impleaded in the adjudication u/s 10(4). (Para 19)
(2014) 9 SCC 407; (2005) 6 SCC 733 – Relied upon
AIR 1964 SC 1746; (1978) 4 SCC 257; 1980 (Supp) SCC 420 – Distinguished
Facts of the case:
The appellant workers' union raised the industrial dispute which was referred by the Central Government to Industrial Tribunal-cum-Labour Court.
Though, no relief is claimed against the first respondent i.e. the Lufthansa German Airlines, the appellant's union has filed an application for impleadment of the first respondent in ongoing proceedings relating to industrial dispute. On a remand from High Court the Industrial Tribunal has passed an order impleading the first respondent as a party.
The first respondent i.e. Lufthansa German Airlines has filed Writ Petition before the High Court of Delhi at New Delhi, which was allowed by the Single Judge.
The appellant employees' union has filed intra court appeal which is dismissed by the Division Bench of the High Court. Further petition seeking review of the said order is also dismissed.
Finding of the Court:
Even in a subsidiary company which is an independent corporate entity, if any other company is holding shares, by itself is no ground to order impleadment of parent company per se.
Result: Appeals dismissed.
Certainly. Here are the key points derived from the provided legal document:
The core issue pertains to whether the parent company (Lufthansa German Airlines) should be impleaded as a party in proceedings related to an industrial dispute involving its subsidiary, Globe Ground India Pvt. Ltd. (!) (!)
The proceedings involve an industrial dispute concerning the closure of the subsidiary’s establishment and the retrenchment of workers, with the dispute referred by the appropriate government to a tribunal for adjudication (!) .
The tribunal initially allowed the impleadment of the parent company, considering it a necessary and proper party due to its controlling interest and relationship with the subsidiary (!) (!) .
The parent company challenged this order, and the High Court set aside the tribunal’s decision, holding that the parent company was neither a necessary nor a proper party for the specific scope of the dispute, especially since the dispute was confined to the subsidiary’s actions (!) (!) .
The scope of the reference and the limits imposed by the law require that the tribunal’s jurisdiction be confined to the points of dispute referred by the government, and incidental matters outside this scope should not be included (!) (!) .
The decision emphasizes that an entity is a necessary party only if no effective order can be made without its presence, and a proper party if its presence is essential for a complete and final resolution of the dispute (!) .
The relationship between the parent and subsidiary, including shareholding and control, does not automatically make the parent a necessary or proper party unless it is directly involved or necessary to resolve the dispute effectively (!) (!) .
Piercing the corporate veil to hold the parent liable is only justified if there is misuse of the corporate structure for wrongful purposes; mere shareholding does not suffice (!) .
The courts have consistently held that the mere existence of a parent-subsidiary relationship, without evidence of misuse or direct involvement in the dispute, does not warrant impleading the parent as a party (!) .
Overall, the courts found no error in the decisions of the lower courts and upheld that the parent company is not a necessary or proper party in the proceedings, given the limited scope of the dispute and the independence of the subsidiary (!) .
These points summarize the legal reasoning and conclusions regarding the impleadment of the parent company in the context of an industrial dispute involving a subsidiary.
JUDGMENT
R. Subhash Reddy, J.
Leave granted.
2. These appeals are directed against the judgment and order dated 24.11.2016 passed in L.P.A. No. 107 of 2016 and order dated 14.7.2017 in R.P.No. 146 of 2017 by the High Court of Delhi at New Delhi.
3. Necessary facts in brief for disposal of these appeals are that, the appellant workers' union raised the industrial dispute which was referred by the Central Government to Industrial Tribunal-cum-Labour Court by an order dated 04.02.2010. The question which was referred for adjudication by the Industrial Tribunal reads as under:-
"Whether the action of the Management of M/s Globe Ground India Private Ltd., New Delhi, a subsidiary of Lufthansa German Airlines (Carrier), in closing down their establishment on 15.12.2009 and retrenching the services of 106 workmen (as per annexure) is justified and legal? To what reliefs are the workmen concerned entitled?"
4. The aforesaid reference order was sent by the Government to the Presiding Officer of Tribunal and also to the second respondent herein. There was no communication of such reference to, Lufthansa German Airlines. Before the Industrial Tribunal, the appellant workers' union filed a statement on 10.3.2010, inter alia stating that the second respondent company is a subsidiary of the first respondent and was providing ground handling and ancillary services at the Indira Gandhi International Airport and airports located in different places like Calcutta, Mumbai, Bengaluru, Chennai, Hyderabad etc. The second respondent Globe Ground Private Limited is a company, and is a joint venture formed by Globe Ground Deutschland GmbH and the Bird Group with 51% and 49% shares respectively. In December, 2008, the Bird Group had floated another company, Bird Worldwide Flight Services Ltd. which has undertaken ground handling and ancillary services to international airlines. In the claim petition filed before the Industrial Tribunal, it is the specific case of the appellant that, the new company which has started ground handling services from January, 2009, is utilising the same equipment belonging to the second respondent. On the information furnished by the first respondent that they would stop ground handling services from the International Airlines at Delhi w.e.f. 15.12.2009, the members of the appellant's union were issued termination notices and the same is in violation of Sections 25-F, 25-G, 25-O and 25-N and other provisions of the Industrial Disputes Act, 1947. It is the allegation of the appellant that the first respondent has not closed down or stopped the business in India. It is also specifically alleged that the new company has retained most of the employees who worked earlier except the trade union activists. As claimed before the Industrial Court, it is the case of the appellant that management i.e. the second respondent should reinstate left out workmen in service by extending the benefit of continuity of service and full wages. Before the Industrial Court, the second respondent herein has filed reply. In the reply filed, while denying various allegations made by the claimant, the second respondent as a fact has stated that the second respondent was providing handling services to the Lufthansa German Airlines.
5. Though, no relief is claimed against the first respondent i.e. the Lufthansa German Airlines, the appellant's union has filed an application for impleadment of the first respondent in ongoing proceedings relating to industrial dispute. There was an order allowing the application filed by the appellant earlier, which was set aside by the High Court in the Writ Petiton by remitting the matter back for fresh consideration and subsequently the Industrial Tribunal has passed an order dated 12.12.2013, impleading the first respondent as a party, mainly on the ground that the first respondent was a holding company of the second respondent. Aggrieved by the order dated 12.12.2013, the first respondent i.e. Lufthansa German Airlines has fi
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