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Allahbad High Court
SATISHCHANDRA
U.P. Electric Supply Co. Ltd. - Appellant
Versus
H. V. Bowen - Respondent
Decided On : 01/31/1967
INDUSTRIAL DISPUTES - Maintainability of application under Section 6-H(2) of the U.P. Industrial Disputes Act - Applicability of Section 25-J(2) of the Central Act in preference to Section 6-R of the State Act - Whether it was a case of closure of business or transfer - Entitlement of officers to bonus and retrenchment compensation - Interpretation of Section 25-FF of the Central Act.
Fact of the Case:
The petitioner company, U.P. Electric Supply Co. Ltd., carried on the business of generation and distribution of electricity at Allahabad under a license granted in 1914. In 1964, the State Electricity Board took over the company's undertaking and continued the work of generation and distribution of electricity. Many of the company's officers and workmen joined the employment offered to them by the Board and filed petitions before the Labour Court at Allahabad under Section 6-H(2) of the U.P. Industrial Disputes Act claiming retrenchment compensation and bonus. The company contested the claim, raising preliminary objections to the maintainability of the petitions and the competence of the Labour Court to entertain them.
Finding of the Court:
The Labour Court decided the preliminary objections in favor of the workmen, holding that the petitions were maintainable under Section 6-H(2), that Section 25-J(2) of the Central Act applied and not Section 6-R of the State Act, and that the transaction of taking over by the State Electricity Board was a transfer and not a closure. The court also held that the officers were entitled to bonus and retrenchment compensation, rejecting the company's defense that they had voluntarily abandoned their services and entered into service agreements renouncing any claim to bonus.
Issues: 1. Whether the workmen's application was maintainable under Section 6-H(2) or should it have been filed before the State Government under Section 6-H(1)? 2. Whether retrenchment compensation was claimable under the Uttar Pradesh Act and not under the Central Industrial Disputes Act? 3. Whether the transaction of taking over by the State Electricity Board was a transfer or a closure? 4. Whether the officers were entitled to bonus and retrenchment compensation?
Ratio Decidendi: 1. The court held that the application was maintainable under Section 6-H(2) of the U.P. Industrial Disputes Act, relying on a Division Bench decision of the Allahabad High Court and the Supreme Court's decision in Kays Construction Co. (P) Ltd. v. State of Uttar Pradesh. 2. The court held that Section 25-J(2) of the Central Industrial Disputes Act applied and not Section 6-R of the State Act, relying on the Supreme Court's decision in Rohtak and Hissar Districts Electric Supply Co. Ltd. v. State of U.P. 3. The court held that the transaction of taking over by the State Electricity Board was a transfer and not a closure, relying on the Supreme Court's decision in Workmen of Uttar Pradesh State Electricity Board v. Upper Ganges Valley Electricity Supply Co. 4. The court held that the officers were entitled to bonus and retrenchment compensation, rejecting the company's defense that they had voluntarily abandoned their services and entered into service agreements renouncing any claim to bonus.
Final Decision: The court dismissed all the petitions filed by the company, upholding the findings of the Labour Court.
2. The petitioner company carried on at Allahabad the business of generation and distribution of electricity under a licence granted in 1914. In view of the provisions in the licence the State Electricity Board, Uttar Pradesh took over the Company's undertaking and continued the work of generation and distribution of electricity with effect from 17th September, 1964. Since then the Company has ceased to have any business at Allahabad. Most of the petitioner company's officers and workmen Joined the employment offered to them by the U.P. Electricity Board at Allahabad. They filed petitions before the Labour Court at Allahabad under Section 6-H(2) of the U.P. Industrial Disputes Act claiming retrenchment compensation. Some of the officers claimed bonus for past years as also leave benefits. The petitioner company contested the claim. It raised preliminary objections to the maintainability of the petitions and to the competence of the Labour Court to entertain them. It also contested the claim on the merits. The following objections were treated as preliminary objections :-
(1) Whether the workmen's application was maintainable under Section 6-H(2) or should it have been filed before the State Government under Section 6-H(1) ?
(2) That retrenchment compensation was claimable under the Uttar Pradesh Act and not under the Central Industrial Disputes Act.
(3) That the transaction of taking over by the State Electricity Board was not a transfer but a closure, and Section 25-FF of the Central Industrial Disputes Act was not applicable.
3. The Tribunal decided the questions by its order dated September 11, 1965, It held that the petition was maintainable under Section 6-H(2). It answered the second question also in favour of the workmen, and held that in the view of Section 25-J(2) of the Central Act, Sec. 6-R of the U.P. Industrial Disputes Act will not apply and the provisions of Chapter V-A of the Central Act will govern these cases. In respect of the third question, the Labour Court held that this was a case of transfer and not closure of business and as such the workmen were entitled to the benefit or retrenchment compensation under Section 25-FF of the Central Act. All these three findings are questioned in the present petitions.
4. The officers and the workmen of the Company are claiming retrenchment compensation. The Officers are also claiming bonus (the claim for leave benefits was given up). The petitioner company is disputing the right of the officers and the workmen to receive both these kinds of claims its case is that the officers and the workmen voluntarily abandoned their services with the Company and joined the services offered by the State Electricity Board; and as such the Company had not terminated their services and was not liable to pay retrenchment compensation. In respect of bonus, the company's defence was that the officers had entered into service agreements with the Company renouncing any claim to bonus and on that ground they were not entitled to receive any bonus. It had also pleaded that the officers do not answer the definition of workmen as given in the Industrial Disputes Act and so they were not entitled to any relief. There was no dispute as to the rate of pay or the length of service. It is clear that the dispute between the parties does not relate to mere arithmetical verification of the retrenchment compensation or bonus, but to the entitlement or the right to receive itself. On these facts the decision of a Div
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