Appeal No 752 of 1966
Appeal by special leave from the Award dated February 18 1965 of the Labour Court Assam in Reference No 38 of 1962
H R Gokhale G L Sanghi and K P Gupta for the appellants
section V Gupte Solicitor General and D N Mukherjee for respondent No 1
M M Kshatriya G section Chatterjee for P K Bose respondents Nos 2 and 3
The Judgment of the Court was delivered by Vaidialingam J
This appeal by special leave by the workmen of Brahmputra Tea Estate is directed against the award dated February 18 1965 of the Labour Court Assam in Reference No 38 of 1962 holding that the Reference has become infructuous
The circumstances
under which the Reference was made by the Government of Assam may be stated
The Brahmputra Tea Estate hereinafter called the Tea Company comprised of three gardens viz Negheritting Rangamati and Missamara Tea Estates with their outer gardens were owned and managed by Brahmputra Tea Co India Ltd The Tea Company had incurred very heavy liabilities and hence on November 6 1956 it created an equitable mortgage by deposit of title deeds in favour of the Eastern Bank Ltd hereinafter called the Bank
The gardens mentioned above formed part of the security covered by the equitable mortgage
This memorandum of equitable mortgage was registered on November 26 1956
As the Tea Company failed to make payment of the money due to the Bank the latter filed Suit No 21 of 1957 in the Court of the Subordinate Judge Upper Assam District Jorhat for enforcing its rights under the equitable mortgage
A preliminary decree was passed on February 21 1958 this was followed by a final decree on September 19 1960
LJN76SCI 14a 628 In the meantime on September 16 1958 the Calcutta High Court had ordered the winding up of the Tea Company because of certain defaults made by it
Mr D A Weatherson of the Bank who had been appointed bytheJorhat Court as Receiver of the Tea Gardens by his letter
dated December 30 1958 intimated the Superintendent of the Tea Gardens about the windingup order passed by the Calcutta High Court on September 16 1958 and stated that the winding up order operated as a statutory notice of discharge of all officers and employees of the Tea Company nevertheless the Receiver stated that he desired to offer employment to all the members of the staff who were employed in tile Tea Gardens on November 18
1958 with the exception of fifteen employees mentioned by him
The Superintendent was requested to obtain the consent of the members of the staff regarding the offer made by the Receiver
It may be stated at this stage that the fifteen employees who were excluded in the letter of the Receiver were the persons whose claims were referred by the Government of Assam to the Labour Court
in Reference No 38 of 1962
The Superintendent in his turn sent communication dated January 19 1959 to the various workmen offering employment on behalf of the Receiver and requesting them to intimate acceptance but so far as the fifteen workmen referred to above were concerned the Superintendent sent communication
to each of them on August 21 1961 terminating their services with one month s notice
The workmen concerned were also promised to be paid the Provident Fund amounts that might stand to their credit
It was specifically stated by the Superintendent that the communication was being sent by him
on behalf of tile Receiver of the Tea Company and that the termination of the services of the workmen was because of their age
The Assam Chah Karmachari Sangha hereinafter called the Karniachari Sangha complained to the Conciliation Officer Assam stating that the termination of the services of the fifteen workmen concerned was illegal and arbitrary
Though tile Conciliation Officer appears to have taken some steps to effect conciliation he could not proceed further because the Superintendent of the Tea Gardens regretted his inability to participate in the conciliation proceedings as he had not been authorized to do so by the Receiver of the Tea gardens
Nevertheless the Conciliation Officer on September 18 1961 wrote to the Receiver direct suggesting payment of compensation to the workmen concerned but that suggestion was riot accepted
by the Receiver
On February 18 1961
the Bank assigned all its rights under the mortgage dated November 6 1956 and the decree in Suit No 21 of 1957 in favour of Ms Shaw Wallace  Co Ltd The Registrar of Companies West Bengal Calcutta in or about 1960 629 had filed a petition in the Calcutta High Court for the winding up of the Tea Company as it had failed to comply with certain statutory requirements
By order dated June 16 1961the Calcutta High Court ordered the winding up of the Tea Company
and appointed Shri H K Ganguli the Official Liquidator of the High Court as the Official Liquidator of the Tea Company
On September 19 1961
the Calcutta High Court passed an order withdrawing to its file suit No 21 of 1957 from the Jorbat Court and the said suit was numbered as Transfer Company Suit No 7 of 1962
On October 5 1961
the Calcutta High Court directed the substitution of the name of Ms Shaw Wallace  Co Ltd in lie place of the Eastern Bank Ltd in the suit and it also appointed Shri K C Ganguli as Receiver of the Tea Gardens in the place of the Receiver appointed by the Jorhat Court
The new Receiver Shri K C Ganguli was also put in possession and management of the said properties
Therefore the position was that the Tea Company whose windingup had been ordered was with the Official Liquidator
and the Tea Gardens of the company were in the possession and management of tile Receiver appointed in the mortgage suit
On July 27 1962 the Government of Assam referred to the Labour Court Assam an industrial dispute between the management of Brahmaputra Tea Estate Receiver in Possession and their workmen represented by the Karamchari Sangh
The dispute that was referred related to the justification of the action of the management of the Tea Estate in terminating the services of the fifteen employees and as to whether
those fifteen workmen were entitled to reinstatement or any other relief in lieu thereof
The fifteen workmen referred to in this reference are the identical workers whose services had been terminated by the issue of the notice on August 21 1961 by the Superintendent of the Tea Gardens on behalf of the Receiver
This is the reference which had been numbered as Reference No 38 of 1962
We shall advert later to the claims made by the workmen as well as the contest made by the first respondent before us
The Labour Court on receipt of this reference
issued the necessary notices on August 26 1962
In the liquidation proceedings the Calcutta High Court on August 17 1962 permitted the Official Liquidator to sell the Tea Gardens which were the subject of mortgage and also certain other items of moveables
The Official Liquidator on the basis of this order conveyed by registered sale deed dated August 11
1962 in favour of Shri Ram Gopal Sahariya the first respondent herein the equity of redemption in the three Tea Gardens and also certain tractors lorries and other items of machinery for a total consideration of Rs 520000
This total consideration was made Lip of Rs 220000 being the price of the moveables and 630 Rs 300000 stated to be the value of the equity of redemption
The sale in favour of the first respondent was specifically by the Official Liquidator acting on behalf of the Tea Company and what was conveyed in the Tea Gardens was the equity of redemption owned by the Tea Company and the sale was subject to the mortgage decree and the liabilities payable to Ms Shaw Wallace  Co Ltd On September 18 1962 the first respondent s name was ordered by the Calcutta High Court to be included in Transfer Company Suit No 7 of 1962
The Court further  discharged Shri K C Ganguli from his Receivership in the suit and he was also directed to deliver possession of the three Tea Gardens belonging to the Tea Company to the first respondent
The first respondent on his own claim by virtue of the purchase from the Official Liquidator has become the sole proprietor of the Tea Gardens he also got actual possession of the Tea Gardens on September 21 1962
To resume the narrative regarding the proceedings in Refer ence No 38 of 1962 the Labour Court as we have stated earlier had issued notices to the parties concerned on August 26 1962
The workmen filed a written statement on February 23 1963
In that statement they had stated that the fifteen workmen concerned had completed service ranging from 8 to 47 years in the Tea Estates and that the termination of their services by the Superintendent of the Tea Gardens on behalf of the Receiver was absolutely illegal and arbitrary
They also referred to various other matters which it is not necessary to advert in this appeal
It is enough to note that the workmen required relief by way of reinstatement On June 27 1963 one K A Muddu as Superintendent of the Tea Estates filed a written statement on behalf of the management
He has stated therein
that the services of the fifteen employees were terminated on account of their age and also because some of them were too ill to be continued in service
He has adverted to the fact that two of the workmen had expressed a desire to retire voluntarily from service
It is further stated therein that as the employees concerned were 60 years or more of age it was not possible to continue them in service
Again the action of the Receiver who was in management of the Tea Gardens in terminating the services of the workmen was also be justified
The workmen filed an additional written statement on Sep tember 2 1963 controverting the allegation that they were either too ill or they had completed 60 years of age
They again reiterated that the stand taken by the management was absolutely illegal and the Receiver bad no right to authorize the termination of their services
631 On July 18 1964September 10 1964 Shri R G Sahariya as sole proprietor of the Tea Estates filed an additional written statement before the Labour Court on behalf of the incoming management
He has referred therein to the fact that the Tea Estate was no longer in the hands of a Receiver and its management had vested in him as sole proprietor
He has further referred to the fact that there is no continuity between the present management of the Tea Company represented by him and that of the past when the Tea Gardens were owned by the Tea Company and were managed by the Receiver appointed by the Court
He then refers to the purchase made by him on August 18 1962 from the Official Liquidator of the Tea Company of the equity of redemption in the Tea Gardens
He has further stated that the services of the workmen concerned had been terminated by the Superintendent of the Tea Gardens acting on behalf of the Court Receiver as early as August 21 1961 long before the Tea Estates were purchased by him
Shri Sahariya has further stated that on July 27 1962 when the Government of Assam made the present Reference the incoming management was nowhere in the picture and it was not in any manner concerned with the claim of the workmen inasmuch as it had no liability whatsoever towards them
He averred that he had not purchased the Tea Estates with the goodwill of the Tea Company or as a running concern
Therefore on all those grounds he urged that he was in no manner bound to reinstate or to compensate for the loss of employment of the workmen concerned
In fact he has specifically prayed that an order may be passed by the Labour Court that the dispute referred to it by the Government of Assam has lapsed
The Labour Court in its order under attack has taken the view that the services of the workmen concerned have been terminated under instructions of the Receiver of the Tea Gardens appointed in the suit long before the first respondent became owner of the Tea Gardens
It is also of the view that the Brahmputra Tea Estate Receiver in possession
is the only party impleaded and the new management viz the first respondent has not been brought on record nor was it a party to the reference made by the State Government
The purchase of the Tea Gardens by the first respondent does not show that the latter has taken over any liabilities of the previous management with regard to the claims of the workmen and that there has been no purchase of the goodwill of the Tea Company
On these grounds the Labour Court held that no relief could be granted as against the first respondent and that the reference itself had become infructuous
Mr Gokhale
learned counsel for the workmen appellants
raised two contentions before us i that the view of the Labour Court that the first respondent is not liable for the claims of the 632 workmen is erroneous and ii that even if it is held that the first respondent is not liable the Labour Court which had ample jurisdiction in this regard should have issued notice either to the Receiver appointed in the suit or the Official Liquidator to the both of them and proceeded to investigate and adjudicate upon the claims of the workmen
In this connection Mr Gokhale pointed out that the document of purchase by the first respondent would clearly show that the Official Liquidator ha1realised a sum of Rs 520000 as sale consideration and there might also be other assets of the company if a proper adjudication in the presence of those parties had been made and relief granted to the workmen they would have been in a position to enforce their claims as against these amounts and assets of the company
The learned Solicitor General
appearing on behalf of the first respondent urged that his client was not in any manner answerable to the claims made by the workmen
The first respondent was not the successor in interest of the Tea Company  nor did he claim through the Receiver who wag one of the parties to the Reference before the Labour Court
Even if the Tea Company could be considered to be a party to the Reference
his client Could not be considered to be a successor in interest of the Tea Company because he had purchased only some of the assets belonging to the said company by virtue of the sale
The document of purchase by the first respondent
would clearly show that he has not taken over any other liabilities of the Tea Com pany in that regard 
The learned Solicitor General further pointed out that the remedy
if any
of the appellant if so advised was only to proceed against the Receiver or the Official Liquidator even if it be held that the ownership or management of the undertaking had been transferred in favour of the first respondent the rights of the workmen would have to be worked out as against the Receiver or the Official Liquidator under section 25FF of the Act XIV of 1947 hereinafter called the Act inasmuch as there was nothing to show that the transfer in this case came within the proviso to that section
We are in agreement with the contentions of the learned Solicitor General that the view of the Labour Court that the first respondent is not liable to answer any of the claims of the workmen concerned is perfectly justified
From the various facts given above it will clearly be seen that the order terminating the services of the workmen was made on August 21 1961 by the Superintendent of the Tea Gardens under instructions from The Receiver appointed by the Jorhat Court in the mortgage suit
On October 5
1961 the High Court had appointed a Receiver for the Tea Gardens
as separate from the Tea Company in the suit Transfer Company Suit No 7 of 1962
The order referring the dispute to the Labour Court was made by the Government on July 27 1962 The 1st respondent admittedly 633 was not in the picture on these various dates
It cannot also be stated having due regard to the various recitals contained in the sale deed dated August 11 1962 and considered in the light of the principles laid down by this Court in Anakapalla Cooperative Agricultural  Industrial Society Ltd vs Workmen1 that the first respondent is the successor in interest of the Tea Company
What was purchased by the first respondent was only the equity of redemption in a part of the assets of the Tea Com pany in respect of which the Official Liquidator was still functioning
Therefore the learned Solicitor General is perfectly justified in his contention that the first respondent cannot be considered to be a successor in interest of the Tea Company nor can he be considered to claim through the Receiver or Liquidator
Even on the basis that the first respondent is considered to be a person to whom the ownership of the undertaking has been transferred it will be seen that the claims of the workmen will have to be considered
as against the Tea Company in accordance with section 25FF of the Act when its proviso cannot be invoked
Learned counsel for the appellant has not been able to satisfy us that the transfer in this case in favour of the respondent comes within the proviso to section 25FF
The appellants is laid down by this Court under the circumstances in the decision referred to above will not be entitled to claim reinstatement as against the first respondent
Section 25FF was first introduced in the Act by the Industrial Disputes Amendment Act 1956 LXI of 1956 and in its present form it has been substituted by the Industrial Disputes Amendment Act 1957 Act XVIII of 1957
Section 25F was in force on August 21 1961 when the services of the workmen were terminated and s 25FF had1 come into effect long before the purchase by the first respondent of the Tea Gardens and we have already shown that there is no liability so far as the first respondent is concerned
Therefore the first contention of Mr Gokhale will have to be rejected
But we are impressed by the second contention of Mr Gokhale that the Labour Court should have issued notices to the Receiver or Official Liquidator
or to both as it was entitled to
and proceeded to consider as to whether any reliefs Could be granted to the appellants
In this connection counsel pointed out that section 18 of the Act clearly visualizes parties being summoned  to appear by the Labour Court in proceedings as parties to the disputes in which case the award made will be binding on them also
In this appeal before us
the Tea Company in Liquidation and the Official Liquidator of the Tea Company figure as respondents Nos 2 and 3 respectively and are represented by same counsel
Learned counsel appearing for those parties pointed out that the Official Liquidator may have various defences 1 1963 Supp 1 SCR 730
634 available to him if any claim is sought to be enforced against the company in liquidation or the Official Liquidator
Those matters do not arise for consideration at this stage in this appeal because the claim of the appellants as against those persons remains yet to be considered by the Labour Court
We are satisfied that even after negativing the claims of the workmen as against the first respondent the Labour Court should not have merely closed the proceedings by holding that the reference has lapsed
On the other hand the Labour Court should have issued notices to the Receiver or the Liquidator
or to both and in their presence should have considered the question as to whether the workmen were entitled to claim any relief
In fact the order of reference also clearly shows that the Labour Court will have full jurisdiction to consider as to whether the termination of the services of the workmen concerned is justified and whether they are entitled to either reinstatement or any other relief in lieu thereof
When the proceedings are being dealt with afresh as against the parties indicated above the Tribunal will bear in mind the observations made above and consider the nature of the relief if any that may be granted to the workmen concerned 
We make it clear that if and when either the Receiver or the Tea Company in liquidation or the Official Liquidator or all of them are brought before the Labour Court they will be entitled to raise any plea in defence of the claim of the workmen that may be available to them in law
In that adjudication the first respondent herein will be completely out of the picture as no relief can be claimed by the workmen against him
Further if the claim of the workmen is that their services have been dispensed with by way of retrenchment that claim will have to be adjudicated in accordance with section 25F of the Act
If on the other hand their claim is based on the event of a transfer having been effected that claim will have to be adjudicated under section 25FF of the Act
All these aspects will have to be properly considered and adjudicated upon by the Labour Court
In the result while confirming the findings of the Labour Court that the first respondent is not answerable for any of the claims of the workmen the award dated February 18 1965 is set aside and the Labour Court is directed to take up the Reference over again for being dealt with afresh in the light of the directions contained above
The appeal is allowed to the extent indicated above and in other respects will stand dismissed as against 1st respondent
Parties will bear their own costs in this appeal


Summary:
On reference of an industrial dispute the Labour Court took the view that the services of the workmen concerned had been terminated under instructions of the Receiver of the Company appointed in a suit long before the first respondent became owner of the company that the Receiver in possession was the only party impleaded and the new management viz the first respondent had not been brought on record nor was it a party to the reference made by the State Government that the purchase of the company by the first respondent did not show that the latter had taken over any liabilities of the previous management with regard to the claim of the workmen and that there had been no purchase of the goodwill of the company
On these grounds the Labour Court held that no relief could be granted as against the first respondent and that the reference itself had become infructuous
In appeal to this Court the workmen appellants contended that i the view of the Labour Court that the first respondent was not liable for the claims of workmen was erroneous and ii even if it be held that the first respondent was not liable the Labour Court which had ample jurisdiction in this regard should have issued notice either to the Receiver appointed in the suit or the Official Liquidator or to both of them an proceeded to investigate and adjudicate upon the claims of the work men
HELD i The first respondent was not liable to answer any the claims of the workmen
He was not in the picture when the order terminating their service was made nor when the order referring the dispute to the Labour Court was made
Having due regard to the various recitals in the sale deed and considered in the light of the principles laid down by this Court in Anakapalla Cooperative Agricultural  Industrial Society Ltd vs Workmen the first respondent was not the successor in interest of the Company
What was purchased by the first respondent was only the equity of redemption in a part of the assets of the Tea Company with respect to whit the Official Liquidator was still functioning
Even on the basis that the first respondent was considered to be a person to whom the ownership of the undertaking has been transferred the claims of the workmen had to be considered as against the Company in accordance with section 25 FF of the Industrial Disputes Act when its pro viso could not be invoked
Section 25F was in force when the se vices of the workmen were terminated and section 25FF had come in effect long before the purchase by the first respondent
632G 633F 627 Anakapalla Co operative Agricultural and Industrial Society Ltd V Its Workmen 1963 Supp 1 SCR 730 followed
ii Even after negativing the claims of the workmen as against the first respondent the Labour Court should not have merely closed the proceedings by holding that the reference had lapsed
On the other hand the Labour Court should have issued notices to the Receiver or the Liquidator or to both and in their presence should have considered the question as to whether the workmen were en titled to claim relief
In fact the order of reference also clearly showed that the Labour Court had full jurisdiction to consider as to whether the termination of the services of the workmen was justified and whether they were entitled to either reinstatement or any other relief in lieu thereof
634B D