Appeal No 656 of 1966
Appeal by special leave
from the judgment and order dated June 2930 1964 of the Gujarat High Court in Special Civil Application No 589 of 1961
A K Sen and N H Hingorani for the appellant
R Gopalakrishnan for respondent No 3
The Judgment of the Court was delivered by Bhargava J
R section Ambwaney respondent No 3 was employed by the Sindhu Resettlement Corporation Ltd the appellant
as an Accounts Clerk at Gandhidham on 13th December 1950 in the pay scale of Rs 150 10 250 on a salary of Rs 200 plus 20 per cent as site allowance
This site allowance was discontinued in March 1952
In the year 1953 the Government of India decided to develop Kandla as a port and a subsidiary company was formed by the appellant under the name of Makenzies Heinrich Bulzer India Ltd in which one of the principal shareholders was the appellant
This Company later came to be known as Sindhu Hotchief India Ltd For convenience both Makenzies Heinrich Bulzer India Ltd and Sindhu Hotchief India Ltd shall hereinafter be referred to as Sindhu Hotchief
This subsidiary Company Sindhu Hotchief wanted some trained employees and amongst others the services of respondent No 3 were placed at its disposal by the appellant
The case of respondent No 3 was that he was told orally by the officers of the appellant on 2nd September 1953 that he was to work in the subsidiary company
Respondent No 3 was appointed in Sindhu Hotchief by its order dated 5th September1953 on a salary of Rs 240 pm as an Accounts Clerk on the conditions of service laid down in that order
It appears that just about this time the father of respondent No 3 died and he was granted leave by the appellant for the period from 2nd September to 17th September 1953
With effect from 18th September 1953 his services were placed at the  disposal of Sindhu Hotchief and an order to that effect was issued in writing on behalf of the appellant on 24th September 1953
Respondent No 3 worked with Sindhu Hotchief up to 20th February 1958 when his  services were terminated after payment
of retrenchment compensation and all other dues payable to him
On 21st February 1958 respondent No 3 went to the office of the appellant reported himself for duty and requested that he might 517 be given posting orders in the appellant
Corporation
The appellant informed respondent NO 3 of I its inability to re employ him on the ground that the post which he had been occupying in 1953 had been permanently filed up
Thereupon respondent No 3 demanded retrenchment compensation  from the appellant also
This was also refused
His case was taken up by Mazdoor Mahajan Sangh Gandhidham Kutch  respondent No2
The Secretary of respondent No 2 also wrote a letter to the management of the appellant asking for payment of retrenchment com pensation to respondent No 3 on the ground that the appellant had refused to take him back in its employment
It seems that thereafter there were some conciliation proceedings and subsequently on the report of the Conciliation Officer the Government of the State of Gujarat by its notification dated 15th November 1960 referred the dispute to the Industrial Tribunal Gujarat for adjudication
The matter referred for adjudication was described in the notification as follows Demand No 1 Shri R section Ambwaney should be reinstated in the service of Ms Sindhu Resettlement Corporation Ltd and he should be paid his wages from 21st February 1958
 The Triunal after hearing the parties gave its Award on 10th August 1961 directing reinstatement of respondent No 3 and payment of back wages from 21st February 1958
The appellant challenged this award before the High Court of Gujarat by a petition under Articles 226 and 227 of the Constitution but the petition was dismissed
Consequently the appellant has come up to this Court in this appeal by special leave
In this appeal three points have been urged on behalf of the appellant to challenge the orders of the Industrial Tribunal and the High Court
The points are  1 that respondent No 3 having been given permanent appointment in Sindhu Hotchief and having obtained retrenchment compensation from that Company could not claim that he was still holding a post in the appellant Corporation and could not therefore claim reinstatement 2 that the dispute that was raised by respondent No 3 as well as respondent No 2 with the management of the appellant was confined to compensation for retrenchment and did not relate to the validity of the retrenchment or reinstatement so that the Government of Gujarat had no jurisdiction to refer the dispute to the Industrial Tribunal which it did  and 3 that in any case
since the validity of the retrench of respondent No 3 by the appellant was not 518 challenged the Tribunal committed a manifest error in directing reinstatement instead of awarding retrenchment compensation
After hearing learned counsel for parties we have come to the conclusion that the first two grounds urged on behalf of the appellant must be accepted while the third does not arise
The lease put forward on behalf of the respondents before the Industrial Tribunal was that respondent No 3 was a permanent employee of the appellant and when he joined the service of Sindhu Hotchief in the year 1953 he only went there on deputation or transfer so that he continued to hold a lien on his permanent post in the appellant Corporation
Two facts no doubt support this plea
One is that Sindhu Hotchief was only a Subsidiary Company of the appellant and the other is that in its order dated 24th September 1953 the appellant merely stated that with effect from the 18th September 1953 the services of res pondent No 3 were placed at the disposal of Sindhu Hotchief
No specific order was passed terminating his services in the appellant Corporation Though this circumstance would raise a presumption that respondent No 3 did not cease to be an employee 0 the appellant when this order was issued on 24th September 1953 this presumption is rebutted by two circumstances
The first is that respondent No 3 was appointed in Sindhu Hotchief under the order dated 5th September 1953 which laid down that in that Company he would be on a probation for a period of three months in the first instance
The probationary period may have to be further extended by any period upto three months
The confirmation of his appointment would be considered at the end of his probationary period and would depend on the efficiency and utility of his services to the Company
Thereafter respondent No 3 continued to serve in that Company until 20th February 1958 ie for a period of about 4 12 yars
Clearly he must have been confirmed in his appointment in that company
Once he was confirmed in Sindhu Hotchief he could obviously not continue to be an employee of the appellant corporation simultaneously
The High Court did not attach any value to this order of appointment dated 5th September 1953 issued by Sindhu Hotchief on the ground that no evidence was tendered before the Tribunal to show that this order was actually served on respondent No 3
In proceeding on this basis the High Court clearly fell into an error because in this case when the adjudication of the industrial dispute was taken up by the Tribunal all the parties contented themselves with filing documentary evidence and no oral evidence was given by any party
At no stage was it challenged that the documents filed could not be taken into account until proved formally in the manner required to be proved in a regular civil proceeding in accordance with the provisions of the Indian Evidence Act
This order of Sindhu Hotchief dated 5th September was addressed to respondent No 3 himself and when there 519 was no challenge on behalf of respondent No 3 that he did not receive this order there was no justification for the High Court to hold that this
order had not been served on him
In proceedings before the Industrial Tribunal strict proof of documents in accordance with the provisions of the Indian Evidence Act is not required
Parties having agreed to base their case on the documents filed this order issued to respondent No 3 could not be ignored on the ground that no oral evidence had been tendered to prove that respondent No 3 actually received it
It was in accordance with the conditions of service laid down in this order that respondent No 3 was appointed in Sindhu Hotchief and by joining service there and continuing in that service for 4 12 years respondent No 3 clearly agreed to work in that Company on these conditions
As we have indicated earlier one of the conditions was that he would be confirmed at the end of the probationary period and once he was confirmed he would become a permanent employee of Sindhu Hotchief and would cease to be the employee of the appellant
Thus
though respondent No 3 did not cease to be an employee of the appellant when his services were first placed at the disposal of Sindhu Hotchief by the appellant witheffect from 18th September 1953 he ceased to be an employee of the appellant later when he was confirmed in Sindhu Hotchief
The other circumstance that bears out this conclusion is that at the time of termination of the employment of respondent No 3 in Sindhu Hotchief he was given retrenchment compensation which he accepted
In case he had continued to be in the service of the appellant
he would not have been entitled to retrenchment compensation from Sindhu Hotchief and even if Sindhu Hotchief had any legal liability to contribute towards his retrenchment compensation which might have become ultimately payable to him on his retrenchment from the appellant Corpn that amount would have been paid by Sindhu Hotchief to the appellant and not to respondent No 3 himself
It appears that respondent No 3 very well knew that he had become a permanent employee of Sindhu Hotchief and consequently on retrenchment he accepted the compensation but thereafter he seems to have decided to assert his claim to continuance of employment under the appellant
This claim
was also however very halfhearted
No doubt at the first stage on 21st February 1958 he demanded reinstatement in the appellant Corpn but very soon thereafter when that request was refused he demanded retrenchment compensation and one month s salary in lieu of notice
This demand was put forward by him in his letter dated 7th March 1958 wherein he stated that if the appellant refused to recognise Sindhu Hotchief as a sister concern and did not take him back in its Organisation where he had a genuine claim of service the appellant should please pay off his legal claims in respect of retrenchment compensation and one month s pay in lieu of notice
This position taken up by respondent No 3 himself thus shows that he was aware that his services under the appellant Corpn
had already 520 come to an end
Learned counsel appearing for the respondents urged that we should not hold that services of respondent No 3 in teh appellant Corpn
had come to an end when he was absorbed in Sindhu Hotchief because no retrenchment compensation was given to respondent No 3 by the appellant Corporation at the stage when his services ended in that Corporation
The submission ignores the circumstances that when respondent No3 went to Sindhu Hotchief be did so willingly
There was no compulsion on him to
go to that Company
His terms of service with the appellant did not entitle The appellant to transfer his services to the Subsidiary Company and the mere office order placing his services at the disposal of Sindhu Hotchief could not have been made effective unless respondent No 3 also voluntarily agreed to take service in Sindhu Hotchief
At no stage was it asserted on behalf of respondent No 3 that he did not go voluntarily or with his consent to Sindhu Hotchief
In case he took the service in Sindhu Hotchief and accepted permanent appointment there willingly it cannot be held that his services were retrenched by the appellant Corporation
He was not entitled to any retrenchment compensation when he left the service of the appellant willingly
The nonpayment of retrenchment compensation by the appellant at that stage does not therefore indicate that the services of respondent No 3 with the appellant had not come to an end
On the facts of this case it is clear that the Tribunal committed an error in drawing the legal inference that respondent No 3 continued to be in the service of the appellant Corporation even after he had received permanent appointment in Sindhu Hotchief
On a correct inference it is clear that the services of respondent No 3 under the appellant Corporation had come to an end and when he was retrenched by Sindhu Hotchief he could not claim reinstatement in the appellant Corporation
In this connection Mr Gopalakrishnan learned counsel for the respondents relied on some remarks of the House of Lords in Nokes vs Doncaster Amalgamated Collieries Ltd1 where it was held Counsel for the appellant argued that a contractual right to personal service was a personal right of the employer and was incapable of being transferred by him to anyone else and that a duty to serve a specific master could not be part of the property or rights of that master capable of becoming by transfer a duty to serve some one else
It is of course indisputable that apart from statutory provision to the contrary the benefit of a contract entered into by A to render personal service to X cannot be transferred by X to Y without A s consent which is the same thing as saying that in order to produce the desired result the old contract between A and X would r have to be terminated by notice or by mutual consent and a new contract of service entered into by agreement between A and Y 1 521 This principle laid down by teh House of Lords is not applicable to the facts of teh case before usbecause we have already held that respondent No3 joined the service of Sindhu Hotchief villingly and with his consent and it was not a case where he was transferred to Sindhuy Hotchief by the appellant without his consent
This case does not help the respondents
The second ground urged on behalf of the appellant is that in this case No dispute relating relating to reinstatement was  actually raised either by respondent No 2 or respondent No 3 before
the reference was made to the Industrial Tribunal by the Government of Gujarat and
consequently
that reference itself was  without jurisdiction
When Mr A K Sen counsel for the
appellant raised this ground it Was urged by Mt Gopalakrishnan on behalf of the respondents that this ground was being taken for the first time in this Court and had not been raised at any earlier stage so that it should not be allowed to be taken in this Court
It howeverappears that the question of jurisdiction of the State Government to refer the demand for reinstatement for adjudication to the Tribunal was specifically urged in the High Court and the High Court actually dealt with it in its judgment dismissing the petition filed on behalf of the appellant
The High Court clearly mentions that the counsel for the appellant contended that the Industrial Tribunal had no jurisdiction as the question referred to it and which it was called upon to adjudicate relating to reinstatement of respondent No 3 in the service of the Corporation would not fall within the scope of item 3 in the Second Schedule to the 
It was further urged that since the third respondent was neither discharged nor dismissed by the appellant the question of relief of reinstatement would not arise under that item and there being no item under which the demand would fall the State Government had no jurisdiction to refer such a demand for adjudication to the Tribunal
These points urged before the High Court would cover the ground now urged by Mr Sen before us
It is true that the form in which it was urged before the High Court was slightly different
There the point raised was that a demand for reinstatement when there had been retrenchment only and no discharge or dismissal could not be held to constitute an industrial dispute
On the facts of the case as they appeared from the material before the Tribunal it is now urged that in fact the demand which was being pressed with the management by both the respondents was in respect of retrenchment compensation and not reinstatement
The demand for reinstatement seems to have been given up because the respondents realised that the services of respondent No 3 had not been terminated by discharge or dismissal but by retrenchment only and that retrenchment not being
the result of any unfair labour practice or victimization respondent No 3 could only claim retrenchment compensation
In the evidence given before the Tribunal there were included two letters written by the two respondents containing the demand for retrenchment compensation
522 We have already referred to one of these letters which was sen on 7th March 1958 by respondent
No 3 to the Administrative Officer of the
appellant
The other letter was sent on 10th July 1959 by the General Secretary of respondent No 2 in which again it was stated that Sindhu Hotchief had paid retrenchment dues to respondent No 3 in respect of the services he had rendered in than Company but the appellant Corporation was responsible for his retrenchment dues for the service which had been rendered by respondent No 3 in the appellant Corpn
 The prayer was that as the appellant had refused him re employment arrangement should be made to pay his retrenchment dues according to section 25F of the 
Thus both the respondents in their claims put forward before the management of the appellant requested for payment of retrenchment compensation and did not raise any dispute for reinstatement
Since no such dispute about reinstatement was raised by either of the respondents before the management of the appellant it is clear that the State Government was not competent to refer a question of rein statement as an industrial dispute for adjudication by the Tribunal
The dispute that the State Government could have referred competently was the dispute relating to payment of retrenchment compensation by the appellant to respondent No 3 which had been refused
No doubt the order of the State Government making the reference mentions that the Government had considered the report submitted by the Conciliation Officer under sub section 4 of section 12 of the  in respect of the dispute between theappellant and workmen employed under it over the demand mentioned in the Schedule appended to that order and in the Schedule the Government mentioned that the dispute was that of reinstatement of respondent No 3 in the service of the appellant and payment of his wages from 21st February 1958
It was urged by Mr Gopalakrishnan on behalf of the respondents that this Court cannot examine whether the Government in forming its opinion that an industrial dispute exists came to its view correctly or incorrectly on the material before it
This proposition is no doubt correct but the aspect that is being examined is entirely different
It may be that the Conciliation Officer reported to the Government that an industrial dispute did exist relating to the reinstatement of respondent No 3 and payment of wages to him from 21st February 1958 but when the dispute came up for adjudication before the Tribunal the evidence produced clearly showed that no such dispute had ever been raised by either respondent with the management of the appellant
If no dispute at all was raised by the respondents with the management any request sent by them to the Government would only be a demand by them and not an industrial dispute between them and their employer
An industrial dispute as defined must be a dispute between employers and employers employers and workmen and workmen and workmen
A mere demand to a Government without a dispute being raised by the workmen with 523 their employer cannot become an industrial dispute Consequently the material before the Tribunal clearly showed that no such industrial dispute as was purported to be referred by the State Government to the Tribunal had ever existed between the appellant Corpn
and the respondents and the State Government in making a reference obviously committed an error in basing its opinion on material which was not relevant to the formation of opinion
The Government had to come to an opinion that an industrial dispute did exist and that opinion could only be formed on the basis that there was a dispute between the appellant and the respondents relating to reinstatement
Such material could not possibly exist when as early as March and July 1958 respondent No 3 and respondent No 2 respectively had confined their demands to the management to retrenchment compensation only and did not make any demand for reinstatement
On these facts it is clear that the reference made by the Government was not competent
The only reference that the Government could have made had to be related to payment of retrenchment compensation which was the only subject matter of dispute between the appellant and the respondents
So far as the third ground is concerned it loses force and toes not arise in view of our decision relating to the first ground
We have already held when dealing with the first ground that the appellant had neither dismissed respondent No 3 nor had it discharged him from service
There was no question of wrongful dismissal or discharge by the appellant
It was not even a case of retrenchment
because respondent No 3 had willingly gone to join the service under Sindhu Hotchief
He obviously joined the service in Sindhu Hotchief because of the financial advantages that were to accrue to him
In September 1953 he was drawing a salary of Rs 200 Pm in the scale of Rs 150 10 250 while serving the appellant
The site allowance of 20 per cent which he had been receiving earlier had been discontinued from March 1952 and he was not getting it at the time when he went to join Sindhu Hotchief where he was given a start of Rs 240 in the grade of Rs 200 20 400
Consequently in addition to the immediate rise in salary of Rs 40 Pm he had the advantage of working in the higher grade in which within two years he exceeded the maximum of the scale in which he had been working with the appellant
He served Sindhu Hotchief for a period of  about 4 12 years and became confirmed there in accordance with the terms and conditions which were offered to him by Sindhu Hotchief
In these circumstances the respondents cannot  urge that the services of respondent No 3 were retrenched by the appellant either when he went and joined Sindhu Hotchief or when he wanted to get back to his post with the appellant
His appointment in the service of the appellant having terminated no question could arise of retrenching him at the stage when he wanted to come back after serving Sindhu Hotchief
His services 524 were in fact retrenched by his employer Sindhu hotchief and from that Company he received retrenchment compensation
The third ground therefore needs consideration The appeal succeeds and is allowed
The award of the Tri bunal is quashed
In the circumstances of this case there will be no order as to costs YP Appeal allowed


Summary:
The services of respondent No 3 a permanent employee of appellant corporation were placed at the disposal of appellant s subsidiary company
The subsidiary company by an order appointed respondent No 3
on probation and stated that he would be confirmed after the end of probation period
After respondent No 3 had worked with the subsidiary company for more than the probationary period his services were terminated and he was paid retrenchment compensation
Respondent No 3 asserted continuance of his employment under the appellant which was declined There upon he demanded retrenchment compensation from the appellant also which too was refused
The matter was referred for adjudication by the State Government and the Tribunal directed reinstatement of respondent No 3 with back wages
In appeal to this Courtthe appellant Corporation contended that i respondent No 3 having been given permanent appointment in the subsidiary company and having obtained retrenchment compensation from that company could not claim that he was still holding a post in the appellant corporation and could not therefore claim reinstatement and ii the dispute that was raised was confined to compensationfor retrenchment and did not relate to the validity of the retrenchment or reinstatement so that the State Government had no jurisdiction to refer the dispute to the Industrial Tribunal
HELD i Respondent No 3 could not claim reinstatement in the appellant corporation
Though he did not cease to be an employee of the appellant when his services were first placed at the disposal of the subsidiary company by the appellant he ceased to be an employee of the appellant later when he was confirmed in the subsidiary company
He also accepted the retrenchment compensation at the time of termination of the employment in the subsidiary company
In case he had continued to be in the service of the appellant he would
not have been entitled to retrenchment compensation from the subsidiary company and even if the subsidiary company had any legal liability to contribute towards his retrenchment compen sation which might have become ultimately payable to him on his retrenchment from the appellant corporation that amount would have been paid by the subsidiary company to the appellant and not to respondent No 3 himself
Further he was not entitled to any retrenchment compensation when he left the service of the appellant willingly for there was no compulsion on him to go to the subsidiary company
519C F Nokes vs Doncaster Amalagamated Collieries Ltd 1940 AC 1014 held inapplicable
ii The respondents
in their claims Put forward before the management of the appellant requested for payment of retrenchment compensation and did not raise any dispute for reinstatement
516 Since no such dispute about reinstatement was raised by the respondents before the management of the appellant the State Government was not competent to refer a question of reinstatement as an industrial dispute for adjudication by the Tribunal 
The dispute that the State Government could have referred competently was the dispute relating to payment of retrenchment compensation by the appellant to respondent No 3 which had been refused
A mere demand to a Government without a dispute being raised by the workmen with their employee cannot become an industrial dispute
522H 523D