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PATNA HIGH COURT
V.Ramaswami and Raj Kishore Prasad JJ.
S.K.G.Sugar Ltd.
Versus
Ali Hassan
Miscellaneous Judicial Case No. 392 of 1955 ;
Decided On : SEPTEMBER 20, 1956
INDUSTRIAL DISPUTES ACT - SECTION 10(1), 171, 33, 33-A - COMPANIES ACT - SECTION 171 - REFERENCE OF INDUSTRIAL DISPUTE TO TRIBUNAL - LEAVE OF HIGH COURT UNDER SECTION 171 OF COMPANIES ACT - NOT NECESSARY - EMPLOYER - MEANING OF - OFFICIAL LIQUIDATOR - NOT A NECESSARY PARTY TO REFERENCE - NOTICE TO OFFICIAL LIQUIDATOR - DELAY IN GIVING - EFFECT OF.
Fact of the Case:
The petitioner, S. K. G. Sugar Ltd., obtained a rule from the High Court calling upon the respondent to show cause why Miscellaneous cases nos. 26 and 27 of 1955, pending before the Industrial Tribunal under Section 33-A of the Industrial Disputes Act, should not be quashed by a writ in the nature of certiorari. The petitioner had taken a lease of a sugar factory from the Gaya Sugar Mills Ltd., which was under compulsory winding up. The State Government had referred an industrial dispute between the Gaya Sugar Mills Ltd. and its workmen to the Industrial Tribunal under Section 10(1) of the Industrial Disputes Act. The petitioner contended that the reference was incompetent as the State Government had not obtained the leave of the High Court under Section 171 of the Companies Act.
Finding of the Court:
The court held that the reference made by the State Government under Section 10(1) of the Industrial Disputes Act was not a "legal proceeding" within the meaning of Section 171 of the Companies Act and, therefore, the State Government was not required to obtain the leave of the High Court before making the reference. The court also held that the expression "employer" in Sections 33 and 33-A of the Industrial Disputes Act was unqualified and included the petitioner, who was the lessee of the sugar factory, even though he was not a party to the industrial dispute which was the subject matter of the reference. The court further held that the Official Liquidator was not a necessary party to the reference and that the delay in giving notice to the Official Liquidator did not affect the jurisdiction of the Industrial Tribunal.
Issues: 1. Whether the reference of an industrial dispute to a Tribunal under Section 10(1) of the Industrial Disputes Act is a "legal proceeding" within the meaning of Section 171 of the Companies Act? 2. Whether the expression "employer" in Sections 33 and 33-A of the Industrial Disputes Act includes a lessee of a factory who was not a party to the industrial dispute which was the subject matter of the reference? 3. Whether the Official Liquidator is a necessary party to a reference under Section 10(1) of the Industrial Disputes Act? 4. Whether the delay in giving notice to the Official Liquidator affects the jurisdiction of the Industrial Tribunal?
Ratio Decidendi: 1. The expression "legal proceeding" in Section 171 of the Companies Act should not be construed in a narrow sense as "proceedings in a court of law". It should be construed as "any proceeding prescribed by law and in pursuance of law or a legal enactment". 2. The power of the State Government under Section 10(1) of the Industrial Disputes Act or the statutory duty under the proviso to that sub-section is not controlled by anything in the language of Section 171 of the Companies Act. 3. The expression "employer" in Sections 33 and 33-A of the Industrial Disputes Act is unqualified and there is no reason why any limitation should be imposed on the plain meaning of the expression. 4. The Official Liquidator is not a necessary party to a reference under Section 10(1) of the Industrial Disputes Act because the Company continues to be a legal personality even after an order for winding up has been made.
Final Decision: The court dismissed the petition and held that there was no case made out for grant of a writ under Article 226 of the Constitution.
Ramaswami, J.
1. In this case the petitioner, S. K. G. Sugar Ltd., has obtained a rule from the High Court calling upon the respondent to show cause why Miscellaneous cases nos. 26 and 27 of 1955, pending before the Industrial Tribunal under Section 33-A of the Industrial Disputes Act, should not be quashed by a writ in the nature of certiorari.
2. Cause has been shown by the learned Government Pleader on behalf of respondents 1 and 2 and the learned Counsel on behalf of the respondents 4 to 23 appearing through the Secretary of the Chini Mazdoor Sangh.
3. It appears that the Gaya Sugar Mills Ltd., which is an incorporated Company under the Indian Companies Act, owned a sugar factory at Guraru in the district of Gaya. On the 4th of November, 1951, there was an order made by the High Court for the compulsory winding up of this Company. On the 1st of February, 1952, the High Court made a subsequent order appointing respondent no. 3, Mr. Dhansukh Lal Mehta, as Liquidator. On the 3rd of December, 1954, the High Court granted permission to the official Liquidator to execute a lease of the sugar factory at Guraru in favour of the petitioner for the period from the 5th of December, 1954, up to the 14th of November, 1955.
It is said that the petitioner took possession of the sugar factory from the Official Liquidator on the 6th of December, 1954, and commenced working of the factory. It appears that a few days before, that is, on the 2nd of December, 1954, the State Government, had referred an industrial dispute between the Gaya Sugar Mills Ltd. and certain workmen employed in the sugar factory to the Industrial Tribunal under Sec.10(1) of the Industrial Disputes Act. The award of the Tribunal was given on the 25th of March, 1955, but there was an appeal taken to the Labour Appellate Tribunal and the appeal was decided on the 31st of August, 1956.
On the 7th of April. 1955, the petitioner received notices from the Industrial Tribunal to the effect that respondents 4 to 23 had filed two miscellaneous cases nos. 26 and 27 of 1955, under Sec.33-A of the Industrial Disputes Act, alleging that the petitioner had either discharged the workmen or changed their service conditions during the pendency of the adjudication! proceedings.
4. The argument of the petitioner is that the State Government ought to have taken the leave of the High Court under Sec.171 of the Companies Act before making a reference of the industrial dispute under Sec.10(1) of the Industrial Disputes Act. It was submitted on behalf of the petitioner that an order for the compulsory winding up of the Gaya Sugar Mills Ltd. (to be hereinafter called the "lessor") was made by the High Court on the 4th of November, 1951.
It was submitted that the reference made by the State Government under Section 10(1) was "a legal proceeding" within the meaning of Sec.171 of the Companies Act and it was incumbent on the State Government to apply for permission of the High Court before making the reference. The point taken by the petitioner was that the reference made by the State Government was incompetent and the proceedings taken by the Industrial Tribunal were a nullity in the eye of law. It was, therefore, contended that the proceedings taken under Section 33-A were also in competent. The argument of learned Counsel is based upon Sec.171 of the Companies Act which is in the following terms:-
- "171. Suits stayed on winding up order.--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."
In this connection Counsel on behalf of the petitioner referred to the decision of the Federal Court in Governor-General in Council V/s. Shiromani Sugar Mills Ltd., AIR 1946 F. C. 16 (A) in which it was held by the Federal Court that the expression "or other legal proceeding" in Sec.171 should not
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