IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.T.SANKARAN TUESDAY, THE 17TH AUGUST 2010 / 26TH SRAVANA 1932 WP(C).No. 28028 of 2009(W) -------------------------- ID.12/2008 of LABOUR COURT, KOLLAM .................... PETITIONER(S): --------------- S.SARASWATHY, TC 9/984, ROHINI BHAVAN, SASTHAMANGALAM, THIRUVANANTHAPURAM-695 010. BY ADV. SRI.B.RAGUNATHAN SRI.G.S.MOHANDAS SRI.V.V.MATHEW SRI.R.SRINATH RESPONDENT(S): --------------- 1. STATE OF KERALA REPRESENTED BY PRINCIPAL SECRETARY TO GOVERNMENT, INDUSTRIES DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM-695 001. 2. MANAGING DIRECTOR, KERALA STATE ELECTRONICS DEVELOPMENT CORPORATION LIMITED, KELTRON HOUSE, VELLAYAMBALAM, THIRUVANANTHAPURAM-695 033. 3. KELTRON COUNTER LIMITED, REP. BY MANAGING DIRECTOR, KELTRON COUNTERS LIMITED, CHAVADIMUKKU, SREEKARIYAM P.O., THIRUVANANTHAPURAM-695 017. SUBSTITUTED AS KELTRON COUNTERS LIMITED, REP: BY OFFICIAL LIQUIDATOR, HIGH COURT OF KERALA, ERNAKULAM, KOCHI-682 031 [VIDE ORDER DTD.2.8.2010 BY KTS (J) IN I.A.10680/10 IN WP(C) 28028/09 W] 4. LABOUR COURT, REPRESENTED BY THE PRESIDING OFFICER, LABOUR COURT, KOLLAM. ADV. SRI.K.MONI FOR R3 THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 17/08/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: PETITIONER'S EXTS: EXT.P1:- COPY OF LETTER DTD.15.11.2002 ISSUED BY R3 EXT.P2:- COPY OF REPRESENTATION DTD.17.11.2002 EXT.P3:- COPY OF GO(Rt) NO.1061/2008/LBR DTD.26.4.2008 EXT.P4:- COPY OF SUMMONS DTD.20.5.2008 IN ID NO.12 OF 2008 EXT.P5:- COPY OF CLAIM STATEMENT DTD. NIL JUNE 2008 EXT.P6:- COPY OF WRITTEN STATEMENT DTD.16.10.2008 EXT.P7:- COPY OF AWARD DTD.27.4.2009 IN ID NO.12 OF 2008 RESPONDENTS EXTS: NIL /TRUE COPY/ P.A.TO JUDGE K.T.SANKARAN, J. ---------------------------------------------- W.P.(c) No.28028 of 2009 ----------------------------------------------- Dated this the 17th day of August, 2010 JUDGMENT The petitioner was employed as Senior Forman (R&D) in KELTRON Counters Limited. KELTRON Counters Limited is a subsidiary unit of the Kerala State Electronics Development Corporation Ltd. In the year 2002, the management sought for option for voluntary retirement of its employees under the Employees' Separation Scheme (for short 'ESS'). It is stated that 137 employees opted for retirement under the ESS. According to the petitioner, she did not opt for voluntary retirement. However, her name was also included in the list of employees opted for retirement. 2. Contending that the service of the petitioner was illegally terminated, she moved the Government for a reference under Section 10(1)(c) of the Industrial Disputes Act, 1947. The reference was the following: “whether the termination of Smt.S.Saraswathy, Senior Forman without giving arrears and service benefits by the Management (KELTRON), Thiruvananthapuram, is justifiable or not? If not what relief she is entitled to ?” 3. The Labour Court, Kollam raised the following points for consideration. W.P.(c) No.28028 of 2009 2 1. Whether there was employer-employee relationship between the Management and the Worker? 2. Whether the termination of the Worker was legal and proper? 3. Relief if any entitled to by the Worker? 4. Point No.1 was decided by the Labour Court, thus: “Point No.1: The Management herein is the Kerala State Electronics Development Corporation Ltd. which is a company owned by the Government of Kerala. The reference under Section 10(1)(c) of the Industrial Disputes Act is based on the dispute raised by the Worker that while in the service of the Management her service was terminated under the Employees' Separation Scheme though she had not opted for it and while doing so the salary in arrears and the service benefits were not disbursed to her. The contention of the Management is that the Worker was an employee of Keltron Counters, which is a subsidiary company of Keltron and Keltron, the holding company is not responsible for the liabilities of its subsidiary and associate companies and there is no privity of contract between the employees of the subsidiary and associate companies and Keltron, the holding company. Though the Worker has alleged in the claim statement filed in this Court and asserted in her chief examination while in the box as WW1 that she was an employee of Keltron, her allegation in the charter of demand based on which the reference was made and her statement during the cross examination at the instance of the Management would show that she was an employee of Metropolitan Metre Company which was taken over by Keltron Counters and after the take over she continued as an employee of Keltron Counters. W3, the order dated 15.11.2002 whereby the Worker was terminated from service and Ext.W1 which is an order dated 12.10.2006 of Keltron Counters Ltd., which is a subsidiary of Keltron also W.P.(c) No.28028 of 2009 3 would show that she was not in the service of Keltron, which is the Management herein. The worker who was employed in Keltron Counters Ltd. has claimed in her cross-examination at the instance of the Management that it is a unit of Keltron. The Worker has not adduced any evidence to show that Keltron Counters Ltd., wherein she was employed at the time when her service was terminated as per Ext.W3 is a Unit of Keltron or one of its Departments. On the other hand Exts.W1 and W3 would show that Keltron Counters Ltd. is a subsidiary company of Keltron, the Management herein. The Hon'ble Supreme Court has considered the liability of holding company with regard to the liabilities of the subsidiary company in the decision reported in 2009(120) FLR-385 and held that the Subsidiary Company has an independent existence as against the holding company. The Hon'ble High Court of Andra Pradesh has considered the difference between holding and subsidiary company in the decision reported in 2004(1) KLT SN 86 (Case No.110) and held that holding company is a separate company and holding company and subsidiary are separate legal entities and workmen in one company cannot be treated as workmen of the other. The decisions referred to above would show that a Subsidiary Company is entirely different and distinct from the holding company and its employees are also independent and separate from the employees of the holding company. The Worker involved in the reference is found to be an employee of Keltron Counters which is a subsidiary of Keltron, the Management, herein. As the employees of the subsidiary company cannot be treated as the employees of the holding company and as the Worker was an employee of Keltron Counters Ltd. which is only a subsidiary company of Keltron, the Management herein much discussion and deliberation is quite unnecessary and unwarranted to conclude that there was no employer-employee relationship between Keltron, the Management herein and the Worker involved in the reference and I find so. Based on the above discussion and the conclusions arrived at therefrom I hold answering the point in the negative W.P.(c) No.28028 of 2009 4 that there was no employer-employee relationship between Keltron, the Management herein and the Worker involved in the reference”. 5. On the finding of point No.1, the Labour Court held that the petitioner is not entitled to get any relief against Kerala State Electronics Development Corporation Limited. The award of the Labour Court is under challenge in this writ petition. 6. Originally the third respondent in the Writ Petition was KELTRON Counter Ltd. represented by its Managing Director. Later the petitioner filed I.A.10680 of 2010 to substitute the third respondent as KELTRON Counters Ltd., represented by Official Liquidator, High Court of Kerala, Ernakulam. This was on the basis that KELTRON Counters Ltd. was ordered to be wound up and the Official Liquidator was appointed as Liquidator for the Company. 7. KELTRON Counters Ltd. was not a party before the Labour Court. The dispute referred for a decision of the Labour Court was not whether the petitioner was denied employment by KELTRON Counters Ltd. Therefore, the Labour Court rightly held that it could not decide the dispute of denial of employment of the petitioner by KELTRON Counters Ltd.. The reasons stated by the Labour Court are legal and proper. 8. It is submitted by the learned Counsel for the petitioner that W.P.(c) No.28028 of 2009 5 the Labour Court could implead the proper party and consider the dispute involved in the case. The learned Government Pleader as well as learned counsel appearing for the KELTRON Counters Ltd. and the learned counsel appearing for the Official Liquidator submitted that the Labour Court could not decide a dispute which was not referred to it, and under the pretext of impleading the proper party, the Labour Court could not decide a dispute quite different from the dispute which was referred to it. I am inclined to accept the contention put forward by the learned counsel for the respondents. 9. For the aforesaid reasons, no relief can be granted to the petitioner, upsetting the award passed by the Labour Court. However, the disposal of this Writ Petition and the award of the Labour Court would not stand in the way of the petitioner moving the Government for appropriate reference with the appropriate parties on the party array. With these observations, the Writ Petition is disposed of. K.T.SANKARAN, JUDGE cms