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High Court Of Calcutta
S.P.Mitra & Sabyasachi Mukherji, JJ.
Central Inland Water Transport Corporation
Vs.
Second Labour Court
Decided On : Dec 14, 1972
INDUSTRIAL DISPUTES ACT - SECTION 33C (2) - JURISDICTION OF LABOUR COURT - COMPUTATION OF MONEY DUE TO WORKMEN - INCIDENTAL DETERMINATION OF ISSUES - CLOSURE OF UNDERTAKING - SUCCESSOR IN TITLE - LIABILITY FOR SETTLEMENT AND RETRENCHMENT BENEFITS.
Fact of the Case:
The Rivers Steam Navigation Co. Ltd. (transferor company) and its workers entered into a settlement on August 25, 1965, fixing retirement age and prohibiting retrenchment of clerical staff for five years. The settlement was valid until December 31, 1969, and continued to be binding thereafter until the expiry of two months from the date of termination notice by either party. On February 22, 1967, the Central Inland Water Transport Corporation Ltd. (successor company), a company wholly owned by the Union of India, was incorporated. On May 3, 1967, the Calcutta High Court sanctioned a scheme of arrangement and compromise under the Companies Act, 1956, transferring all properties and assets of the transferor company to the successor company. The transferor company issued a closure notice on the same day, citing the scheme and various circumstances. An appeal against the scheme sanction was filed, and the Appellate Court observed that questions related to the closure, enforceability of the settlement, and workers' claims should be left open for proper adjudication. The State of West Bengal made two orders of reference to the Labour Court in September 1968, dealing with claims under the settlement and retrenchment benefits under Section 25ff of the Industrial Disputes Act, 1947. These references were challenged and quashed by the High Court, which directed the State Government to make fresh orders in compliance with the Appellate Court's judgment. The State Government made a fresh order of reference on October 27, 1969, referring four issues to the Labour Court, including the question of transfer of the undertaking, binding nature of the settlement, entitlement of workers to continue employment or compensation, and entitlement to retrenchment compensation. The High Court upheld the order of reference as far as issues 1, 2, and 3 were concerned, but struck down issue 4 related to closure.
Finding of the Court:
The Labour Court has jurisdiction to entertain issues 1, 2, and 3 referred to it, which relate to the binding nature of the settlement, entitlement of workers to continue employment or compensation, and entitlement to retrenchment compensation. The main issue is the computation of money due to the workmen, and the Labour Court can incidentally determine the question of succession in title to decide the liability of the successor company.
Issues: 1. Whether the Labour Court has jurisdiction to entertain issues 1, 2, and 3 referred to it, which relate to the binding nature of the settlement, entitlement of workers to continue employment or compensation, and entitlement to retrenchment compensation. 2. Whether the question of closure of the undertaking is the fundamental issue that must be decided before computation of benefits can be made.
Ratio Decidendi: 1. The Labour Court's jurisdiction under Section 33c (2) of the Industrial Disputes Act, 1947, extends to the computation of money due to workmen from an employer under a settlement or an award. 2. In determining the amount of money due, the Labour Court can incidentally determine all questions which arise incidentally or which could be said to be essential or indispensable for the purpose of computation. 3. The question of succession in title is an incidental question that the Labour Court can determine in order to decide the liability of the successor company for the settlement and retrenchment benefits claimed by the workmen. 4. The main issue in the present case is the computation of compensation, and the question of closure is only an incidental question that may arise in determining the liability of the successor company.
Final Decision: The appeal is dismissed, and the order of reference made by the State Government on October 27, 1969, is upheld as far as issues 1, 2, and 3 are concerned.
1. THIS is an appeal from a judgment of S. C. Ghosh J. dated June 28, and 29, 1971. The appellant before us, in an application under Article 226 of the Constitution, had challenged an order of reference dated October 27, 1969 by the State of West Bengal (the respondent No. 3) to the Second Labour Court, West Bengal (the respondent No. 1. The Facts briefly are that on August 25, 1965, a memorandum of settlement was arrived at, in course of conciliation proceedings, between Rivers Steam Navigation Co. Ltd. and the Central Steam Navigation Workers Union. By this settlement, inter alia, the retirement age had been fixed and it had been provided that there would be no retrenchment of clerical staff for five years. The settlement was valid from August 25, 1965, to December 31, 1969, both days inclusive. Under section 19 (2) of the Industrial Disputes Act, 1947, this settlement, according to the respondents, shall continue to be binding on the parties after the expiry of the aforesaid period and until the expiry of two months from the date on which a notice in writing of an intention to terminate the settlement is given by one of the parties to the other party or parties to the settlement. In the instant case, no notice in writing, the respondents state, has been served.
2. ON February 22, 1967, the appellant central Inland Water Transport Corporation Ltd. a company wholly owned by the Union of India was incorporated. On May, 3, 1967, this Court, in its company Jurisdiction, sanctioned a scheme of arrangement and compromise under the provisions of Sections 391 and 394 of the Companies Act, 1956. By this order sanctioning the scheme all properties and assets of the Rivers Steam Navigation Co. Ltd. were transferred to and vested in the Central Inland Water Transport Corporation Ltd. It was further ordered that "upon the approval of the scheme by the Hon'ble Court the Rivers Steam Navigation Co. Ltd. shall be closed and upon payment to all the creditors the Rivers Steam Navigation Co. Ltd. Shall be dissolved without winding up pursuant to an order to be obtained from this Hon'ble Court. "
3. ON May 3, 1967, the Managing Director of the Rivers Steam Navigation Co. Ltd. issued a notice as follows :
"notice is hereby given that the entire undertaking of Rivers Steam Navigation Company Limited in West Bengal, Assam and other places including the Dockyard, Ghats, etc. will be closed with immediate effect. (ii) This closure is being effected in terms of the scheme sanctioned by the Calcutta High Court by its order dated the 3rd May, 1967, and due to various circumstances placed before the said High Court including the stoppage of the through river transport service from Calcutta to Assam. (iii) Such of the staff and workers of the Company in all establishment of the Company at Calcutta other than the Rajabagan Dockyard and Kulpi as have not already drawn their salaries for the month of April, 1967, can do so at the Company's Head Office at 4, Fairlie Place, Calcutta, between 1 p. m. and 5 p. m. either on the 8th May or the 9th May, 1967. Workers and staff of the Rajabagan dockyard and Kulpi workship can similarly drawn their salaries as may be due for the month of April during the same hours on the 9th and 10th May at the Rajabagan Dockyard and Kulpi workship respectively. Workers and staff in Assam can draw their salaries as may be due for the month of April during the same hours on the 10th May at the premises where they used to draw their salaries previously".
4. AN appeal was preferred against the judgment sanctioning the scheme. The Trial Court made an observation that the substratum of the transferor company had completely gone and the rights under the agreement between the transfer or company and its workers had been extinguished. But the Appellate Court, it appears, took a different view. A. N. Ray, J. delivering the judgment of the Appellate Court in (1) I. S. N. Workers' Union v. Rivers Steam Navigation co. Ltd. and others 71
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