l Appeals Nos
1567 of 1968 585 to 1026 and 1027 to 1082 of 1969
Appeals by special leave from the orders dated March 28 1968 and July 20 1968 of the Labour Court 11 UP Lucknow in Misc
Cases Nos 102 of 1965 etc
M C Chagla Harish Chandra H K Purl and Bishambar Lal for the appellant in all the appeals
J P Goyal and V C Prashar for respondent No 1 in all the appeals
section P Nayar for the Attorney General in CAs
585 to 1026 and 1027 to 1082 of 1969
The Judgment of the Court was delivered by Shah J
These three groups of appeals arise out of orders made by the Presiding Officer Labour Court 11 UP Lucknow awarding retrenchment compensation to certain employees of the UP Electric Supply Company Ltd in liquidation
In the last group of appeals orders of the Labour Court awarding in addition thereto compensation for earned leave not enjoyed by the employees are also challenged
The UP Electric Supply Company Ltd hereinafter called the Company  held two licences issued in 1914 by the Government of UP for generating and distributing electricity within thetowns of Allahabad and Lucknow
The periods of the licenses expired in 1964
Pursuant to the provisions of paragraph 121 in each of the said licenses and in exercise of the power under section 6 of the  the State Electricity Board UP hereinafter referred to as the Board took over the undertaking of the Company at Allahabad and Lucknow from the mid night of September 16 1964
The Company accordingly 510 ceased to carry on the business of generation and distribution of electricity in the areas covered by the original licences
All the workmen of the undertakings at Allahabad and Lucknow were taken over in the employment of the Board with effect from September 17 1964 without any break in the continuity of employment
On December 22 1964 443 workmen employed in the Allahabad undertaking filed before the Labour Court applications under section 6 H2 of the UP  for payment of retrenchment compensation and salary in lieu of notice
The work men submitted that fresh letters of appointment were issued by the Board on September 16 1964 taking them in the employment of the Board with effect from September 17 1964 in the posts and positions which they previously held but without giving credit for their past services with the Company
The workmen contended that they were entitled to retrenchment compensation and salary in lieu of notice and prayed for computation of those benefits in terms of money and for directions to the Company to pay them the amount so computed
A group of 56 workmen employed at the Company s undertaking at Lucknow also submitted applications under section 6H2 of the UP  for payment of retrenchment compensation and salary in lieu of notice and also for compensation for accumulated earned leave not enjoyed by them till September 16 1964
In the applications filed by the workmen of the Allahabad undertaking the Labour Court awarded to each workman retrenchment compensation at the rates specified in the order and also one month s salary and costs
To each workman of the Lucknow undertaking the Labour Court awarded retrenchment compensation at the rate specified salary in lieu of one month s notice and also wages for 30 days for earned leave not enjoyed by the workman before the closure of the undertaking and costs
The Company has appealed to this Court against the orders with special leave
The orders for payment of retrenchment compensation are resisted by the Company on two grounds i that the Labour Court was incompetent to entertain and decide the applications for awarding retrenchment compensation and ii that the workmen were not in fact retrenched and in any event since the workmen were admitted to the service of the Board without break in continuity and on terms not less favourable than the terms enjoyed by them with the Com 511 pany the Company was under no liability to pay retrenchment compensation
Some argument was advanced before us that in determining matters relating to the award of retrenchment compensation the provisions of the  and not the UP  apply
The question is academic because on the points in controversy between the parties the statutory provisions of the  and the UP  are substantially the same
We may however briefly refer to this argument since relying upon a judgment of this Court to be presently noticed counsel for the workmen insisted that section 33 C2 of the alone may apply
After the enactment of the  by the Dominion Parliament the UP  was enacted by the Provincial Legislature
The scheme of them two Acts is substantially the same
Chapter V A relating to layoff and retrenchment was added in the by Act 43 of 1953 with effect from October 24 1953
From time to time amendments were made in the provisions of the Act
By section 25 J 2 it was provided For the removal of doubts it is hereby declared that nothing contained in this Chapter shall be deemed to affect the provisions of any other law for the time being in force in any State in so far as that law provides for the settlement of industrial disputes but the rights and liabilities of employers and workmen in so far as they relate to lay off and retrenchment shall be deter mined in accordance with the provisions of this Chapter
 After this sub section was incorporated in the  a group of sections including section 6 R were incorporated in the UP by UP Act 1 of 1957
Section 6 R2 provided  For the removal of doubts it is hereby declared that nothing contained in Sections 6 H to 6 R shall be deemed to affect the provision of any other law for the time being in force so far as that law provides for the settlement of industrial disputes but the rights and liabilities of employers and workmen in so far as they relate to lay off and retrenchment shall be determined in accordance with the provisions of Sections 6 H to 6 Q By virtue of section 6 R2 the provisions of the UP  prima facie apply in the matters of lay off and retrenchment because under the Seventh Schedule to the Constitution 512 legislation in respect of Trade Unions Industrial and Labour Disputes falls within Entry 22 of the Concurrent List and both the State and the Union are competent to legislate in respect of that field of legislation
Whereas by adding section 25 J2 it was enacted that under the  the rights and liabilities of employers and workmen in so far as they relate to lay off and retrenchment shall be determined in accordance with the provisions of Ch
V A of that Act by the UP Act as amended by Act 1 of 1957 section 6 R2 enacts that the rights and liabilities of employers and workmen relating to lay off and retrenchment shall be determined in accordance with the provisions of sections 6 J to 6 Q Competence of the State Legislature to enact section 6 R2 is not denied
Act 1 of 1957 received the assent of the President and by virtue of article 2542 of the Constitution section 6 R2 of the UP Act prevails notwithstanding any prior law made by the Parliament
The provisions of the UP Act including section 6 R2 therefore apply in determining the rights and obligations of the parties in respect of retrenchment compensation
The observation to the contrary made by this Court in Rohtak  Hissar Districts Electric Supply Company vs State of UP 1 which primarily raised a dispute relating to the validity of certain model standing orders proceeded upon a concession made at the Bar and cannot be regarded as decisive
Since the relevant provisions of the two Acts on the matter in controversy in these groups of appeals are not materially different we do not think it necessary in this case to refer the question to a larger Bench
We accordingly propose to refer only to the provisions of the UP
Section 4 A of the UP Act authorises the State Government to constitute one or more Labour Courts for the adjudication of industrial disputes relating to any matter specified in the First Schedule and for performing such other functions as may be assigned to them under the Act
The items specified in the First Schedule are 1
The propriety or legality of an order passed by an employer under the Standing Orders 2 
The application and interpretation of Standing Orders 3 
Discharge or dismissal of workman including reinstatement of or grant of relief to workmen wrongfully dismissed 4
Withdrawal of any customary concession or privilege 1 513 5
Illegality or otherwise of a strike or lock out and 6
All matters other than those specified in the Second Schedule
 Section 4 B authorises the State Government to constitute one or more Industrial Tribunals for the adjudication of industrial disputes relating to any matter whether specified in the First Schedule or the Second Schedule
Item 10 of the Second Schedule relates to Retrenchment of workmen and closure of establishment
Prima facie disputes relating to retrenchment of workmen and closure of establishment fall within the exclusive competence of the Industrial Tribunal and not within the competence of the Labour Court constituted under section 4 A
The Company had expressly raised a contention that they had not retrenched the workmen and that the workmen had voluntarily abandoned the Company s service by seeking employment with the Board  even before the Company closed its undertaking
The workmen contended by their petitions filed before the Labour Courts that they were retrenched the Company contended that the workmen had voluntarily abandoned the employment under the Company because they found it more profitable to take up employment under the Board without any break in the same post and on the same terms and conditions on which they were employed by the Company
This clearly raises the question whether there was retrenchment of workmen which gave rise to liability to pay retrenchment compensation
A dispute relating to retrenchment is exclusively within the competence of the Industrial Tribunal by virtue of item 10 of the Second Schedule to the UP  and is not within the competence of the Labour Court
Section 6 H of the UP Act provides  1 Where any money is due to a workman from an employer under the provisions of Sections 6 J to 6 R or under a settlement or award or under an award given by an adjudicator or the State Industrial Tribunal appointed or constituted under this Act before the com mencement of the Uttar Pradesh Industrial Disputes Amendment and Miscellaneous Provisions Act 1956 the workman may without prejudice to any other mode of recovery make an application to the State Government for the recovery of the money due to him and if the State Government is satisfied that any amount is so due it shall issue a certificate for that amount to the Collector who shall proceed to recover the same as if it were an arrear of land revenue
2 Where any workman is entitled to receive from the employer any benefit which is capable of being computed in terms of money the amount at which such 514 benefit should be computed may subject to any rules that may be made under this Act be determined by such Labour Court as may be specified in this behalf by the State Government and the amount so determined may be recovered as provided for in sub section 1
3 Under section 6 H2 the Labour Court was competent to determine what each workman was entitled to receive from the employer by way of retrenchment compensation payable in terms of money and the denial of liability by the Company did not affect the jurisdiction of the Labour Court
In several decisions of this Court the inter relation between sub sections
1  2 of section 33 C which are substantially in the same terms as sub sections
1  2 of section 6 H of the UP  was examined
It was held by this Court in The Central Bank of India Ltd vs P section Rajagopalan etc1 that the scope of section 33 C2 is wider than that of section 33 C1
Claims made under section 33 C1 can only be those which are referrable to settlement award or the relevant provisions of Ch
V A but those limitations are not to be found in section 33 C2
The three categories of claims mentioned in section 33 C1 fall under section 33 C2 and in that sense section 33 C2 can itself be deemed to be a kind of execution proceeding but it is possible that claims not based on settlements awards or made under the provisions of Ch
V A may also be competent under section 33 C2
Elaborating this thesis Gajendragadkar J who delivered the judgment of the Court observed pp 155 156 There is no doubt that the three categories of claims mentioned in section 33C1 fall under section 33C2 and in that sense section 33C2 can itself be deemed to be a kind of execution proceeding but it is possible that claims not based on settlements awards or made under the provisions of Chapter V A may also be competent under section 33C2 and that may illustrate its wider scope
We would however like to indicate some of the claims which would not fall under section 33C2 because they formed the subject matter of the appeals which have been grouped together for our decision along with the appeals with which we are dealing at present
If an employee is dismissed or demoted and it is his case that the dismissal or demotion is wrongful it would not be open to him to make a claim for the recovery of his salary or wages under section 33C2
His demotion or dismissal may give rise to an industrial dispute which may 1 515 be appropriately tried but once it is shown that the employer has dismissed or demoted him a claim that the dismissal or demotion is unlawful and therefore the employee continues to be the workman of the employer and is entitled to the benefits due to him under a pre existing contract cannot be made under section 33C2
 The same view was reiterated in Bombay Gas Co Ltd vs Gopal Bhiva and Others1
Mr Goyal on behalf of the workmen however contended that in a recent judgment of this Court a different view has been expressed
He invited our attention to The Board of Directors of the South Arcot Electricity Distribution Co Ltd vs N K Mohammad Khan etc2
In that case the Electricity undertaking was taken over by the Government of Madras in exercise of the powers conferred by the Madras Electricity Supply Undertakings Acquisition Act 1954 and the employees of the undertaking were taken over by the new employer
The employees claimed retrenchment compensation from the old employer under section 25FF of the 
It was urged before this Court that the Labour Court was incompetent to decide the claim for retrenchment compensation
This Court observed that section 25FFb applied as the terms of service under the new employer were less favourable than those under the old employer and under the terms of sections 15 1   2 of the Acquisition Act and sections 9A and 10 of the  liability to pay retrenchment compensation rested upon the previous employer and on that account the Labour Court was competent to entertain the petitions under section 33C2
The language of section 25FF in the view of the Court made it perfectly clear that if the right to compensation accrued under the Act the workmen became entitled to receive retrenchment compensation when under the Madras Act the undertaking stood transferred to the State Government from the Company
Referring to the contention that the Labour Court was not competent to determine the liability to Day retrenchment compensation where the liability itself was denied the Court referred to the judgments of this Court in Chief Mining Engineer East India Coal Co Ltd vs Rameswar and Others3 State Bank of Bikaner 4  and Jaipur vs R L Khandelwal Punjab National Bank Ltd vs K L Kharbanda5 Central Bank of India vs P section Rajagopalan and Others6 and Bombay Gas Company Ltd vs Gopal Bhiva and Others1 and proceeded to observe that the right 1 1964 2 3 1968 1 SCR 140
4 5 1962 Supp 2 SCR 977
6  516 which has been claimed by the various workmen in their applications under section 33C2 of the Act was a right which accrued to them under section 25FF of the Act and was an existing right at the time when those applications were made and the Labour Court had jurisdiction to decide in dealing with the applications under that provision whether such a right did or did not exist
The mere denial of that right by the Company it was said could not take away its jurisdiction and that the order of the Labour Court was competently made
The decision in the Central Bank of India vs P section Rajago palan and Others1 to which we have already referred makes it clear that all disputes relating to claims which may be computed in terms of money are not necessarily within the terms of section 33C2
Again in Chief Mining Engineer East India Coal Co Ltd vs Rameswar and Others 2  Shelat J observed    that the right to the benefit which is sought to be computed under section 33C2 must be an existing one that is to say already adjudicated upon or provided for and must arise in the course of and in relation to the relationship between an industrial workman and his employer
Since the scope of sub section
2 is wider than that of sub section
1 and the sub section is not confined to cases arising under an award settlement or under the provisions of Ch
V A there is no reason to hold that a benefit provided for under a statute or a scheme made thereunder without there being anything contrary under such statute or section 33C2 cannot fall within sub section
Consequently the benefit provided in the bonus scheme made under the Coal Mines Provi dent Fund and Bonus Schemes Act 1948 which remains to be computed must fall under sub section
2 and the Labour Court therefore had jurisdiction to entertain and try such a claim it being a claim in respect of an existing right arising from the relationship of an industrial workman and his employer
 That judgment clearly indicates that in order that a claim may be adjudicated upon under section 3 3C 2 there must be an existing right and the right must arise under an award settlement or under the provisions of Ch
V A or it must be a benefit provided by a statute or a scheme made thereunder and there must be nothing contrary under such statute or section 3 3C 2
But the possibility of a mere claim arising under Ch
V A is not envisaged by the Court in that case as conferring jurisdiction upon the Labour Court to decide matters which are essentially within the jurisdiction of the Industrial Tribunal
1  2 1968 1 SCR 140
517 The legislative intention disclosed by sections 33 C  1  and 3 3 C 2 is fairly clear
Under section 33 C1 where any money is due to a workman from an employer under a settlement or an award or under the provisions of Ch
V A the workman himself or any other person authorised by him in writing in that behalf may make an application to the appropriate Government to recover of the money due to him
Where the workman who is entitled to receive from the employer any money or any benefit which is capable of being computed in terms of money applies in that behalf the Labour Court may under section 33 C2 decide the questions arising as to the amount of money due or as to the amount at which such benefit shall be computed
Section 33 C2 is wider than section 33C1
Matters which do not fall within the terms of section 33C1 may if the workman is shown to be entitled to receive the benefits fall within the terms of section 33C2
If the liability arises from an award settlement or under the provisions of Ch
V A or by virtue of a statute or a scheme made thereunder mere denial by the employer may not be sufficient to negative the claim under section 33 C2 before the Labour Court
Where however the right to retrenchment compensation which is the foundation of the claim is itself a matter which is exclusively within the competence of the Industrial Tribunal to be adjudicated upon a reference it would be straining the language of section 33C2 to hold that the question whether there has been retrenchment may be decided by the Labour Court
The power of the Labour Court is to compute the compensation claimed to be payable to the workmen on the footing that there has been retrenchment of the workmen
Where retrenchment is conceded and the only matter in dispute is that by virtue of section 25FF no liability to pay compensation has arisen the Labour Court will be competent to decide the question
In such a case the question is one of computation and not of determination of the conditions precedent to the accrual of liability
Where however the dispute is whether workmen have been retrenched and computation of the amount is subsidiary or incidental in our judgment the Labour Court will have no authority to trespass upon the powers of the Tribunal with which it is statutorily invested
In the unreported judgment of this Court in The Board of Directors of the South Arcot Electricity Distribution Co Ltd vs N K Mohammed Khan etc1 apparently the only argument advanced before this Court was that section 25FF applied to that case having regard to the fact that the terms of employment under the new employer were not less favourable than those immediately applicable to them before the transfer and the Court proceeded to hold that the Labour Court was competent to determine the compensation
1 518 The finding that the Labour Court was incompetent to decide the applications of the workmen would be sufficient to dispose of the appeals before us
But other arguments were advanced before us and which have an important bearing on the claims made  we propose briefly to deal with these arguments
Assuming that the Labour Court had jurisdiction to determine the liability of the Company to pay retrenchment compensation no order awarding retrenchment compensation could still be made without recording a finding that there was retrenchment of the workmen and compensation was payable for retrenchment
Section 6 0 of the UP which in its phraseology is somewhat different from section 25FF of the Industrial Disputes Act provides  Notwithstanding anything contained in Section 6 N no workman shall be entitled to compensation under that section by reason merely of the fact that there has been a change of employers in any case where the ownership or management of the undertaking in which he is employed is transferred whether by agreement or by operation of law from one employer to another Provided that a the service of the workman has not been interrupted by reason of the transfer b the terms and conditions of service applicable to the workman after such transfer are not in any way less favourable than those applicable to him immediately before the transfer and c the employer to whom the ownership or management of the undertaking is so transferred is under the terms of the transfer or otherwise legally liable to pay to the workman in the event of his retrenchment compensation on the basis that his service has been continuous and has not been interrupted by the transfer In the present groups of appeals it is common ground that there was no interruption resulting from the undertaking being taken over by the Board
The agreements between the Board and the workmen to admit the workmen into employment of the Board were reached before the undertakings of the Company were taken over
The Company contended that the terms and conditions of service applicable to workmen after the transfer were not in any way less favourable to the workmen than those applicable to them immediately before the undertakings were taken over and that the employer to whom the ownership or manage 519 ment of the undertakings were so transferred was under the terms of the transfer or otherwise legally liable to pay to the workmen in the event of their retrenchment compensation on the basis that their services had been continuous and had not been interrupted by the taking over
The workmen denied that claim
The Labour Court could award compensation only if it determined the matter in controversy in favour of the workmen it could not assume that the conditions of the proviso to section 6 0 were fulfilled
Section 6 0 is in terms negative
It deprives the workmen of the right to retrenchment compensation in the conditions mentioned therein
The Company asserted that the conditions precedent to the exercise of jurisdiction did not exist
The workmen asserted the existence of the conditions
Without deciding the issue the Labour Court could not compute the amount of compensation payable to the workmen
On the assumption that the workmen had been retrenched and their claim fell within the proviso to section 6 0
It was urged by Mr Goyal on behalf of the workmen that this plea was not raised or argued before the Labour Court and it cannot be permitted to be raised in this Court
But this contention was raised in the reply filed by the Company and the judgment of the Labour Court does indicate that its authority to decide that question was disputed
We are unable to hold that the objection though raised was not urged before the Labour Court and on that account to confirm the decision of the Labour Court which until the matter in controversy was decided could not be rendered
Even if therefore the Labour Court was competent to entertain the dispute relating to award of retrenchment com pensation the order made by the Labour Court must be set aside
One more contention raised at the Bar by Mr Chagla for the Company may be considered
It was urged that the obligation to pay retrenchment compensation in the event of liability arising must in law be deemed to be taken over by the Board
In The Board of Directors of the South Arcot Electricity Distribution Company Ltd vs N K Mohammad Khan etc1 to which we have already made a reference it was contended on behalf of the Electricity Company that the liability to pay retrenchment cornpensation did not fall on the licensee but on the Madras Government
This Court held having regard to the scheme of the Act that if retrenchment compensation is payable it is the original undertaking which remains liable and not the undertaking which takes over the business
Counsel however relied upon sections 6 and 7 of the  in support of his plea that the liability to pay retrenchment compensation rests upon the 1 14Sup
Cl69 4 520 undertaking which takes over the undertaking
Section 6 of the  provides  1 Where a license has been granted to pay person not being a local authority the State Electricity Board shall a in the case of a license granted before the commencement of the Indian Electricity Amendment Act 1959 on the expiration of each such period as is specified in the license and b have the option of purchasing the undertaking and such option shall be exercised by the State Electricity Board serving upon the licensee a notice in writing of not less than one year requiring the licensee to sell the Undertaking to it at the expiry of the relevant period referred to in this sub section
ln the present case notice was given of termination of the license after the expiry of the period of the original license and the Board took over the undertaking of the Company
Section 7 of the provides  Where an undertaking is sold under section  6 then upon the completion of the sale or on the date on which the undertaking is delivered to the intending purchaser under sub section 6 of section 6 i the undertaking shall vest in the purchaser   free from any debt mortgage or similar obligation of the licensee or attaching to the undertaking  Provided that any such debt mortgage or similar obligation shall attach to the purchase money in substitution for the undertaking ii the rights powers authorities duties and obligations of the licensee under his license shall stand transferred to the purchaser and such purchaser shall be deemed to be the licensee  Provided that where the undertaking is sold or delivered to a State Electricity Board or the State Government the license shall cease to have further operation
 521 It is clear that when the undertaking vests in the purchaser any debt mortgage or similar obligation attaches to the purchase money in substitution of the undertaking
The liability to pay retrenchment compensation is a debt  if it arises on transfer it will attach to the purchase money payable to the Company in substitution for the undertaking
Sections 6 and 7 of the do not support the case of the Company that the liability is enforceable against the Board after it takes over the undertakings
The provisions of sections 57 and 57A of the Indian  also do not assist the case of the Company
Sections 57  57A of the  deal with the licensee s charges to consumers and the Rating Committees
By the Sixth Schedule dealing with financial principles and their application it is provided by cl
TV that certain amount shall be appropriated towards Contingencies Reserve from the revenues of each year of account
By cl
V of the Sixth Schedule it is provided  1 The Contingencies Reserve shall not be drawn upon during the currency of the licence except to meet such charges as the State Government may approve as being a expenses or loss of profits arising out of accidents strikes or circumstances which the management could not have prevented b expenses on replacement or removal of plant or works other than expenses requisite for normal maintenance or renewal c compensation payable under any law for the time being in force and for which no other provision is made
2 On the purchase of the undertaking the Contingencies Reserve after deduction of the amounts drawn under sub paragraph 1 shall be handed over to the purchaser and maintained as such Contingencies Reserve  Provided that where the undertaking is purchased by the Board or the State Government the amount of the Reserve computed as above shall after further deduction of the amount of compensation if any payable to the employees of the outgoing licensee under any law for the time being in force be handed over to the Board or the State Government as the case may be 522 Clause V only provides for the appropriation of the Contingencies Reserve  it requires an undertaking to hand over the Contingencies Reserve to the purchaser
If any amount of compensation is payable to the employees of the outgoing licensee under any law for the time being in force it is chargeable to the Contingencies Reserve
If the retrenchment compensation becomes properly due to the employees of the Company it would by virtue of cl
V sub cl
2 proviso be charged upon the Contingencies Reserve and the balance alone would be handed over to the purchaser
It was urged that the Contingencies Reserve has been paid over to the purchaser
There is however no finding by the Labour Court in that behalf
If it be found in appropriate proceedings that retrenchment compensation is payable to the workmen and the Contingencies Reserve out of which it is payable has been handed over to the Board the charge for payment of that amount may attach to that amount
On that matter we need express no opinion at this stage
Finally it was contended and that contention relates only to the cases of 56 workmen in the Lucknow undertaking that the workmen who had not availed themselves of earned leave were entitled to compensation equal to thirty days wages
But we do not think that any such compensation is statutorily payable
So long as the Company was carrying on its business it was obliged to give facility for enjoying earned leave to its workmen
But after the Company closed its business it could not obviously give any earned leave to those workmen nor could the workmen claim any compensation for not availing themselves of the leave
In the absence of any provision in the statute governing the right to compensation for earned leave not availed of by the workmen before closure or transfer of an undertaking we do not think that any such compensation is payable
On the view taken by us that the Labour Court was incom petent to determine the question as to liability to pay retrenchment compensation these appeals must be allowed and the petitions under section 6 H2 filed by the respondents must be dismissed
There will be no order as to costs throughout
GC Appeals allowed


Summary:
In exercise of the power under section 6 of the the undertakings of the appellant company at Allahabad and Lucknow were taken over by the State Electricity Board UP with effect from September 17 1964
The workmen of the company were taken into the employment of the Board without any break in continuity of employment
Certain workmen of the Allahabad undertaking filed before the Labour Court applications under section 6 H2 of the UP  for payment of retrenchment compensation and salary in lieu of notice
A group of workmen from the Lucknow undertaking also sub mitted applications under section 6 H2 with the same prayers in addition they claimed compensation for accumulated earned leave not enjoyed by them till September 16 1964
The Labour Court allowed the applications
The Company appealed to this Court by special leave
According to the company there was no retrenchment of the workmen because they had voluntarily left the service of the company to join the service of the Board with no break in their service
The questions that fell for consideration wer i Whether the matter was to be decided under the provisions of the or those of the UP  ii Whether the Labour Court had jurisdiction under section 6 H2 of the UP Act to decide the applications or because of there being dispute as to the liability to pay retrenchment compensation the matter was in view of item 10 of the second schedule to the UP Act within the exclusive jurisdiction of the Industrial Tribunal iii Whether section 6 0 of the UP Act also necessitated that the question of liability to pay retrenchment compensation be first determined iv Whether in view of sections 6  7 of the and sections 57  57A of the Indian read with Cl
V of the sixth schedule thereto the liability to pay retrenchment compensation was that of the Board and not that of the company v Whether the claim of the Lucknow workmen for compensation for earned leave not enjoyed by them was allowable
Held  i Under the Seventh Schedule to the constitution legislation in respect of Trade Union Industrial and Labour Disputes  falls within Entry 22 of the Concurrent List and both the State and the Union are competent to legislate in respect of that field of legislation
Act 1 of 1957 added to the UP  section 6 R2 which enacts that the rights and liabilities of employers and workmen relating to lay off and retrenchment shall be determined in accordance with the provisions of 508 sections 6 J to of 1957 received the assent of the President and by virtue of article 2542 of the Constitution section 6 R2 of the UP Act prevails notwithstanding any prior law made by the Parliament
The rights and obligations of the parties had therefore to be decided under the UP Act including section 6 R2
511 H 512 D Rohtak  Hissar Districts Electric Supply Company vs State of UP  distinguished
ii Section 6 H1 and 2 of the UP Act were substantially the same as sub sections
1 and 2 of section 33 C of the Central Act and cases decided by this Court under the latter provisions were applicable in the interpretation of the former
According to the rule laid down in section 6 H2 the Labour Court was competent to determine what each workman was entitled to receive from the employer by way of retrenchment compensation payable in terms of money and the denial of liability of the company did not affect the jurisdiction of the Labour Court
Where however as in the present case the dispute was whether the workmen had been retrenched and computation of the amount of compensation was subsidiary or incidental the Labour Court had no authority to trespass upon the powers of the industrial Tribunal which had exclusive jurisdiction under item 10 of the second schedule of the UP Act to decide disputes relating to retrenchment
514 B D 517 F The Central Bank of India Ltd vs P section Rajagopalan etc  and Bombay Gas Co Ltd vs Gopal Bhiva and Others   applied
The Board of Directors of the South Arcot Electricity Distribution Co Ltd vs N K Mohammad Khan etc  explained
Chief Mining Engineer East India Coal Co Ltd vs Rameswar and Others 1968 1 SCR 140 State Bank of Bikaner and Jaipur vs R L Khandelwal and Punjab National Bank Ltd vs K L Kharbanda 1962 Supp
2 SCR 977 referred to
iii Assuming that the Labour Court had jurisdiction to determine the liability of the company to pay retrenchment compensation no order awarding retrenchment compensation could still be made without recording a finding that workmen were retrenched and compensation was payable for the retrenchment
For section 6 0 of the UP Act deprives the workmen of the right to retrenchment compensation in the conditions mentioned therein
The company asserted  that the conditions precedent to the exercise of the jurisdiction did not exist while the workmen asserted the existence of the conditions
Without deciding the issue the Labour Court could not compute the amount of compensation payable to the workmen on the assumption that the workmen had been retrenched and their claim fell within section 6 0
518 B 519 B C iv Sections 6 and 7 of the did not support the case of the Company that the liability was enforceable against the Board after it took over the undertaking
Under these sections when the undertaking vests in the purchaser any debt mortgage or similar obligation attaches to the purchase money in substitution of the undertaking
The liability to pay retrenchment compensation is a debt  if it arises on transfer it will attach to the purchase money payable to the Company in substitution of the undertaking
521 A B 509 v The provisions of sections 57 and 57A of the Indian  also did not assist the case of the Company
These sections deal with the licencee s charges to consumers and the Rating Committees
In the Sixth Schedule to the Act incorporated into every license by section 57 aforesaid it is provided by cl
IV that certain amount shall be appropriated towards Contingencies Reserve from the revenues of each year of account
Clause V then provides for the appropriation of the Contingencies Reserve it requires the undertaking to hand over the Contingencies Reserve to the purchaser
If the retrenchment compensation becomes properly due to the employees of the Company it would by virtue of cl
V sub cl
2 proviso be charged upon the Contingencies Reserve and the balance alone would be handed over to the purchaser
In the present case however there was no finding by the Labour Court that the Contingencies Reserve had been paid over to the purchaser
521 C 522 Cl vi The claim of the Lucknow workmen to compensation in lieu of earned leave not enjoyed by them could not be allowed
After the company closed its business it could obviously not give any earned leave to these workmen and the latter could not claim it
In the absence of a statutory provision to that effect no such compensation was payable
522 E