IN THE HIGH COURT OF BOMBAY
M.S. Karnik, J.
Vidyut Metallics Pvt. Ltd. - Appellant
Vs.
Kamgar Ekta And Others - Respondents
Writ Petition No. 13837 of 2016
Decided On : 05-04-2019
Indian Companies Act, 1956 - Constitution of India,1950 - Article 226 and 227 - Business Of Manufacturing Of Safety Razor Blades Shaving Products - Prior To Transfer Of Its Business - Engaged Trainees - Business Transfer Agreement - Excluding Immovable Properties - Petitioner is a private limited company registered under Indian Companies Act, 1956 - Petitioner was engaged in business of manufacturing of safety razor blades shaving products etc - It is case of petitioner that prior to transfer of its business as a part of its corporate social responsibility had engaged trainees in its Thane factory - They paid monthly stipend to said trainees - Said trainees at time of appointment had entered into an agreement with petitioner - company - According to petitioner by Business Transfer Agreement signed between petitioner - Company and respondent) business of petitioner - Company where concerned trainees were imparted training was transferred to respondent - Company including all its employees trainees assets and liabilities as a going concern excluding immovable properties - It is case of petitioner that thereafter they are not in position to provide training to concerned trainees upon transfer of business of said factory undertaking as a going concern – Held, At cost of repetition and as observed earlier on one hand petitioners are contending that trainees are employees of respondent and on other hand respondent contends that trainees are employees of petitioner - It is in these circumstances if petitioner has chosen to implead petitioner and respondent as party respondents in complaint filed by them and thereby sought a relief against both I am of opinion that it cannot be said that complaint is not maintainable – Court do not find any error in order passed by Industrial Court - By virtue of Business Transfer Agreement business has changed hands and therefore Industrial Court was well justified in observing that enquiry will have to be held about who is employer of these employees and same can be ascertained only on oral as well as documentary evidence available before Court - Petition Is Dismissed.
Key Points: - The Industrial Court held that the dispute over who is the employer of the trainees can be ascertained only through oral and documentary evidence, and that the complaint was maintainable despite a Business Transfer Agreement (!) (!) (!) (!) . - The Business Transfer Agreement transferred the business, manpower, and machinery as a going concern to the respondent No.2, leaving the question of trainees’ employer status as a matter for enquiry (!) (!) (!) (!) (!) . - The petitioner argued that traineeship terminated due to transfer; respondent No.2 contended trainees remained employees of petitioner; the court rejected a strict bar on maintainability where employer–employee relationship is disputed (!) (!) (!) (!) (!) . - The court emphasized that where there is undisputed or indisputable relationship, the Industrial Court may entertain; but in presence of dispute, the matter should be resolved through enquiry to determine actual employer (!) (!) (!) . - The Court dismissed the petition and upheld the Industrial Court’s order that an enquiry is necessary to ascertain the true employer (!) .
JUDGMENT :
1. The petitioner - M/s. Vidyut Metallics Pvt. Ltd., by this Petition filed under Article 226 and 227 of the Constitution of India, impugns an order dated 11/4/2016 (below Exhibits C 19 and CA15) passed by the Member Industrial Court at Thane.
2. Facts of the case in brief are, the petitioner is a private limited company registered under the Indian Companies Act, 1956. The petitioner was engaged in the business of manufacturing of safety razor blades, shaving products, etc. It is the case of the petitioner that prior to transfer of its business, as a part of its corporate social responsibility, had engaged trainees in its Thane factory. They paid monthly stipend to the said trainees. The said trainees at the time of appointment had entered into an agreement with petitioner - company. According to petitioner, by the Business Transfer Agreement dated 30th December, 2010, signed between the petitioner - Company and respondent No.2 - Company (M/s. Super Max Personal Care Pvt. Ltd.), the "business" of the petitioner - Company, where the concerned trainees were imparted training, was transferred to respondent No.2 - Company including all its employees, trainees, assets and liabilities as a going concern, excluding immovable properties. It is the case of the petitioner that thereafter they are not in position to provide training to the concerned trainees upon transfer of business of the said factory undertaking as a going concern.
3. It is the petitioner's further case that upon transfer of business to respondent No.2 - company, with effect from 18/3/2011, all trainees engaged by them became the trainees of the respondent No.2 - Company. Therefore, effective from 18/3/2011 the concerned trainees started working for respondent No.2 - company and were imparted training by respondent No.2 - Company. It is the petitioner's case that in view of the Business Transfer Agreement, these trainees cannot claim any relationship in their capacity as trainees and/or workmen with the petitioner - Company. The petitioner averred that traineeship with petitioner came to an end by virtue of the transfer of business. In the alternative and without prejudice to this stand, petitioners have taken a stand that the trainees have left their traineeship on their own accord as petitioner was not in a position to impart training and they were engaged by respondent No.2 M/s. Super Max Personal Care Pvt. Ltd. (hereinafter referred to as 'respondent No.2') with effect from 18/3/2011.
4. It is the petitioner's case and as urged by learned Senior Counsel Shri Naik for petitioner that two persons namely Mr. Subhash D. Chaudhari and Mr. P.B. Vyas, who were the Directors of the petitioner - company at the concerned time and were also the Executives of respondent No.2 - Company at the same time had acted against the interest of petitioner - company. By an order dated 31/1/2013 passed by the Company Law Board, these two Directors were removed by the shareholders of the petitioner company from its Board of Directors. The said order of Company Law Board was upheld by this Court vide an order dated 12th/20th August, 2014. This Court held that the said two Directors were acting against the interest of petitioner - company. Learned Senior Counsel for the petitioner would submit that these two erstwhile hostile directors ceased to be the directors of the petitioner company with effect from 12/20 August, 2014. Learned Senior Counsel would therefore submit that the said hostile directors of the petitioner company who were acting against the interest of the petitioner company, were at the same time working as executives of the respondent No.2 - company and therefore, it is quite evident that the letters dated 11/4/2013 discontinuing the traineeship of the concerned trainees were issued by the said hostile Directors in collusion with the respondent No.2 company to create paper records against the petitioner contrary to the real facts.
5. With these background facts let us n
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