C.W.P.No.11806 of 1989 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH C.W.P.No.11806 of 1989 Date of Decision:- 16.02.2009 Management of M/s.Dalmia Cement Ltd. ....Petitioner(s) vs. D.P.Chaudhary and others ....Respondent(s) *** CORAM:- HON'BLE MR.JUSTICE AUGUSTINE GEORGE MASIH *** Present:- Mr.P.K.Mutneja, Advocate for the petitioner. Mr.R.K.Verma, Advocate for the respondent. *** AUGUSTINE GEORGE MASIH, J. In the present writ petition, challenge is to award dated 24.5.1989 (Annexure P-2) passed by the Labour Court, Faridabad, vide which the workman has been held entitled to reinstatement in his job with continuity of service and with full back-wages. Briefly, the facts of the case are that D.P.Chaudhary-workman- (respondent No.1 in the present writ petition) was appointed on 2.11.1967 as Repairman with the Management of M/s.Telesound India Limited, Ballabgarh. He was a Trade Union activist being the Treasurer and therefore, was categorized as a protected worker under the Industrial Disputes act, 1947 (hereinafter referred to as the 1947 Act). He alleges that he was illegally and wrongfully retrenched from service with effect from 27.1.1976. Therefore, vide his demand notice dated 29.1.1976 he requested C.W.P.No.11806 of 1989 -2- for his reinstatement with continuity of service and full back-wages. After the conciliation proceedings failed, the Appropriate Government referred the matter to the Industrial Tribunal, Faridabad which was registered as reference No.192 of 1977. Notice was issued to M/s.Telesound India Private Limited but the same was returned back with the report that the factory was lying closed and was under liquidation. The proceedings were allegedly pending before the High Court of Delhi and a Liquidator/Receiver stood appointed. Thereafter, an application was moved by the workman impleading the Receiver as a party. The said application was allowed and accordingly notice was issued to Mr.M.P.Vaid, who appeared on 13.10.1978 before the Industrial Tribunal. He filed a detailed reply to the reference and stated therein that the said reference could not proceed further without the leave and permission of the High Court of Delhi. Accordingly, the Industrial Tribunal vide its award dated 10.1.1980 held that the Management has gone in liquidation and reference could not continue except by the leave of the High Court of Delhi. An application was subsequently moved by the workman wherein he asserted that the factory had started functioning. On the said application, the Industrial Tribunal passed an order dated 22.1.1981 for restoration of the case for further proceedings. Upon notice having been issued, M/s.Dalmia Cement (Bharat) Ltd. had put in appearance and filed a detailed written statement, to which a rejoinder was filed by the workman. Issues were framed on 29.4.1981. On consideration of the matter by the Tribunal, it was ordered that the reference could not continue further as the award had already been published in the Gazette and more so M/s. Telesound India Limited, Ballabhgarh had already C.W.P.No.11806 of 1989 -3- been closed. This order was passed by the Industrial Tribunal on 7.1.1982. The workman thereafter again preferred a fresh demand notice but now against M/s.Dalmia Cement (Bharat) Ltd., Ballabhgarh stating therein that he had been retrenched on 27.1.1976. This fresh demand notice was made on 27.1.1982 upon the Management for reinstatement with continuity of service and full back-wages. The conciliation proceedings again failed and thereafter reference was made to the Industrial Tribunal which was registered No.200 of 1982. Upon notice having been issued to the respondent- Management, a preliminary objection was taken thereon that there was no relationship of employer and employee between the parties and as such, the reference was bad. It was stated therein that D.P.Chaudhary was not the workman as defined under the Act and he was neither dismissed, charge- sheeted or retrenched by M/s.Dalmia Cement (Bharat) Ltd. It was further stated that he was never employed by M/s.Dalmia Cement (Bharat) Ltd. and as a matter of fact, he was employed by M/s. Telesound India Limited, Ballabgarh, with effect from 2.11.1967. He was suspended along with some other employees on 25.10.1975 by M/s.Telesound India Limited and he had then submitted a voluntary resignation without any duress, coercion or force etc. on 26.11.1975 which was accepted by the Management on 6.12.1975 and therefore, rest of the contentions which have been made by the workman were denied on the ground that they were ignorant about his claim to the effect that he was the office-bearer of any Workers' Union. It has been denied that he ever approached the previous Management for cancellation of his resignation and/or as a matter of fact, he had made an application. His legal dues were also calculated and offered to him but he C.W.P.No.11806 of 1989 -4- did not collect the same. It was further contended that M/s. Telesound India Limited went into liquidation and the matter was pending before the High Court of Delhi when Scheme of Amalgamation was sanctioned by the High Court and M/s. Dalmia Cement (Bharat) Ltd. became the successor of M/s. Telesound India Limited. This Scheme was sanctioned by the High Court of Delhi and Madras vide its order dated 5.10.1980 and it had become effective with effect from 1.1.1980. It was contended that as per the Scheme, a list of 137 employees of the Transferor company i.e. M/s.Telesound India Pvt.Ltd. was stated to be working with the said Company under liquidation and the said 137 employees were entitled to continue with the transferee company i.e. M/s. Dalmia Cement (Bharat) Ltd. The present workman was not one of those employees as listed and, therefore, no claim would arise against the petitioner. On issues having been framed, the Labour Court on the basis of the evidence produced by the parties has decided the reference in favour of the workman vide award dated 24.5.1989 (Annexure P-2) which has been challenged by the petitioner in the present writ petition. Counsel for the petitioner-Management contends that the award is not sustainable in law as this Court vide its order dated 27.1.2009 in C.W.P.No.545 of 1986 has in the case of similarly situated employees held that the workman who were not within the list of 137 employees which formed part of the Amalgamation Scheme, would not be entitled to any claim against the petitioner-company. He contends that as per Clause 12 of the Scheme, all rights and liabilities as far as the employees are concerned, would flow from the said clause and since that clause specifically provided for the list of employees who were working on the specified date i.e. C.W.P.No.11806 of 1989 -5- 1.1.1980, the workman could not claim any benefit against the company and the reference itself was bad as there was no relationship of employer and employee between the petitioner and the respondent-workman and further, on the ground that neither the respondent-workman was appointed by the petitioner nor had he resigned to the petitioner or was his resignation accepted by the petitioner nor was it aware as to the claim of the petitioner. He contends that only those workmen who were included within the list of 137 employees were taken on rolls by the company and their liability was limited to that claim only. The claim, if any, was against M/s.Telesound India Limited against whom the reference was preferred by the workman being reference No.192 of 1977 wherein the Labour Court had vide its award dated 10.1.1980 held that the Management had gone into liquidation and reference can only continue with the leave and permission of the High Court of Delhi. The workman should have approached the Hon'ble High Court of Delhi for seeking leave for proceeding with the reference which the workman has failed to do and therefore, the reference did not survive. The workman having failed to avail his remedy which was available to him at the appropriate time, cannot now be allowed to turn around and raise same claim against the present petitioner. Had the workman approached the Delhi High Court which was the competent Forum, the petitioner- management would have been aware of his claim and would have taken appropriate steps in accordance with law. That having not been done, the present reference itself is not maintainable and further that the second reference i.e. Reference No.200 of 1982, also would not be maintainable against the petitioner as there is no relationship of employer and employee between the petitioner and the workman. He contends that the details about C.W.P.No.11806 of 1989 -6- the factual aspect whether the workman had submitted his resignation and whether the same had been accepted or whether resignation was conditional and the effect thereof would not concern the petitioner as the workman was not an employee of the petitioner-management. On the other hand, counsel for the respondent-workman submits that as per clause (2) of the Scheme of Amalgamation on the date of transfer, all debts, liabilities, duties and obligations of the transferor company stood transferred to the transferee company and, therefore, the claim of the workman would be very much available against the petitioner. He submits that since the petitioner is a transferee company, therefore, reference will be maintainable against them, the facts which are undisputed need to be looked into. He submits that the workman had submitted his resignation from service on 26.11.1975, and it was a conditional offer which was to take effect from 25.1.1976. The said resignation was accepted by the Management on 6.12.1975 when the workman went to join his service on 27.1.1976. The company refused to take him back in service on the ground that his resignation stood already accepted and, therefore, he was not entitled to continue in service. Thereafter, a demand notice was served on the Management on 29.1.1976 leading to the filing of reference No.192 of 1977 whereafter due to liquidation proceedings pending in the High Court of Delhi, in the said reference it was held vide order dated 10.1.1980 that the proceedings could not continue without the permission of High Court of Delhi. He, on this basis, submits that the conditional resignation which was to take effect from 25.1.1976 could not have been accepted by the Management before the date it took effect and even if the same was accepted by the Management of M/s. Telesound India Ltd. on C.W.P.No.11806 of 1989 -7- 6.12.1975, then also the same would take effect from 25.1.1976. On this basis, he submits that the acceptance of the resignation was bad in law and, therefore, the workman is entitled to continue in service and when he is deprived of his re-joining the service that would tantamount to retrenchment and, therefore, the workman was entitled to reinstatement in service with continuity thereof along with full back-wages as his termination was not in accordance with law, without paying him the retrenchment compensation, or giving notice or holding enquiry. In support of his contention, counsel for the respondent-workman has relied upon the judgments in the cases of Mohinder Pal Singh vs. Punjab and Sind Bank, Ambala Cantt and others, 2002 (2) RSJ 341, Coromandal Fertilizers Ltd.Vizagapatnam represented by its Assistant Manager vs. P.Venugopal and others, 1986 (1) LLJ 417 and P.Nagaraju vs. State of Karnataka and others, 1985 (II) LLJ 97. I have heard counsel for the parties and with their assistance have gone through the records of the case. The first point which needs adjudication by this Court is as to whether there is any relationship of employer and employee between the petitioner and the respondent-workman because that would determine as to whether the present reference was maintainable or not. This issue has already been dealt with by this Court in C.W.P.No.545 of 1986 decided on 27.1.2009 titled as Management of M/s.Dalmia Cement (Bharat) Ltd., Ballabgarh, Haryana vs. State of Haryana and others wherein it was held as follows:- “Counsel for the petitioner-management contends that the award dated 12.4.1985 (Annexure P-1) passed by the Labour C.W.P.No.11806 of 1989 -8- Court is not in accordance with law and, therefore, deserves to be set aside. He submits that there was no relationship of employee and employer between the petitioner-management and respondent No.2-workman. He submits that respondent No.2 was never the employee of the petitioner-Management. He states that the petitioner, on the basis of the order dated 5.11.1980 passed by the High Court of Delhi, came into picture and as per the Scheme of Amalgamation as sanctioned by the Court became the successor of M/s Telesound India Limited. He submits that the workman was employed by Telesound India Limited and his services were terminated on 1.9.1973 also by M/s. Telesound India Limited. As per clause (12) of the Scheme of Amalgamation the liability of the petitioner with regard to the employees of the transferor company i.e. M/s.Telesound India Limited was specified. He submits that during the proceedings before the Delhi High Court, list of 137 employees (Annexure P-4) was produced which was taken to be the employee strength on the date of approval of the scheme of amalgamation by the Delhi High Court i.e. 5.11.1980. On this basis, he submits that as on the date of amalgamation, respondent No.3 was not an employee of the transferor company. The petitioner-management company was not his employer nor was the respondent its employee. Clause (12) of the Scheme of Amalgamation is reproduced here-in-below:- “12. All the employees of the Transferor Company on the date on which the order of C.W.P.No.11806 of 1989 -9- the Court sanctioning the scheme is passed, will become the employees of the transferee company with effect from the Transfer Date without any break or interruption in service and on terms and conditions not less favourable to them.” He states that M/s. Telesound India Limited has not been impleaded as a party respondent and, therefore, the reference would not survive because claim, if any, was against M/s. Telesound India Limited which had employed the workman and had terminated his services. On the other hand, counsel for the respondent-workman submits that as per clause (2) of the Scheme of Amalgamation on the date of transfer, all debts, liabilities, duties and obligations of the transferor company stood transferred to the transferee company and in the light of this, the claim of the respondent-workman would lie against the petitioner as it has stepped into the shoes of the original employer. Clause (2) of the scheme of amalgamation is reproduced herein below:- “2. With effect from the Transfer Date, all debts, liabilities, duties and obligations of the Transferor Company shall stand transferred without any further act or deed to the Transferee Company pursuant to the provisions of Section 394 of the said Act, so as to become the debts, liabilities and duties C.W.P.No.11806 of 1989 -10- and obligations of the Transferee Company. It is hereby made clear that mortgages/charges created by “Telesound” on its assets in favour of the secured creditors will continue after the “Transfer Date” on the assets of “Telesound” taken over by “Dalmia Cement” and the said morgages and charges will not be extended to the assets of other Divisions and undertakings of “Dalmia Cement”. It is hereby further clarified that neither “Dalmia Cement” nor any of its Directors and Officers will be liable or responsible in any way for the omissions, commissions and statutory defaults made by “Telesound” upto the date of its amalgamation with “Dalmia Cement”. Counsel for the petitioner in response to this assertion of the counsel for the respondent states that clause (2) deals with the financial liabilities of the transferor company and the transferee company. He submits that where there is a specific clause (12) dealing with the employees, the same would hold the field and nothing more and nothing less can be read into it. All rights and liabilities as far as the employees are concerned, would flow from clause (12) of the Scheme. Since clause (12) specifically states that all the employees of the transferor C.W.P.No.11806 of 1989 -11- company on the date on which the order of the Court sanctioning the scheme is passed, will become the employees of the transferee company with effect from the transfer date and the respondent not being in service of the transferor company on the date of the order of Court sanctioning the scheme, he could by no stretch of imagination be termed as an employee of the petitioner-company. He submits that on amalgamation of a company, a new entity comes into existence. Under the order of amalgamation made on the basis of the High Court order, the transferor company ceases to be in existence in the eyes of law and it effaced itself for all practical purposes. After amalgamation of two companies, the transferor company ceases to have any entity and the amalgamated company acquires a new status and it is not possible to treat the two companies as partners or jointly liable in respect of their liabilities and assets. For this submission, counsel relies upon a judgment of the Hon'ble Supreme Court in the case of Saraswati Industrial Syndicate Ltd. vs. Commissioner of Income Tax, 1990 (Supp.) SCC 675. A perusal of this judgment would show that this proposition has been laid by the Hon'ble Supreme Court but it has further been said that the amalgamation order and the Scheme made thereunder would be the guiding force for determining the liabilities of the parties. Therefore, to determine as to whether there was any relationship of the employer and employee, the C.W.P.No.11806 of 1989 -12- Scheme of Amalgamation as approved by the Delhi High Court would be the relevant document from where all the rights and liabilities of the parties would flow. Counsel for the respondent has relied upon a judgment of the Hon'ble Supreme Court in the case of Karnataka Power Transmission Corporation Ltd. And another vs. Amalgamated Electricity Co.Ltd. and others, AIR 2001 Supreme Court 291 to submit that the liability of the company would be the same as that of the predecessor. For the same proposition, he also relies upon a judgment of the Hon'ble Supreme Court on Workman Represented by Akhil Bhartiya Koyla Kamgar Union vs. Employers in relation to the Management of Industry Colliery of M/s. Bharat Coking Coal Ltd. And others, AIR 2001 SC 1994 and submits that the successor company who has stepped into the shoes of its predecessor would be liable as if the predecessor would have been liable. He argues that by legal fiction the workman would be the employee of the petitioner as the liabilities would be of the petitioner as per the Scheme of Amalgamation. Since the claim of the workman was against M/s. Telesound India Limited, whose rights and liabilities have been taken over by the petitioners, so all claims would lie against the present petitioner and it is for this reason that M/s. Telesound India Limited has not been impleaded by the workman in the demand. The question in the present case is that there is a Scheme of C.W.P.No.11806 of 1989 -13- Amalgamation as sanctioned and approved by the High Court from where all the rights and liabilities of the parties flow. Therefore, the determining factor would ultimately be the Scheme and we will have to fall back on it to decide the issue in hand. A perusal of Clause (2) of the Scheme would clearly indicate that it deals primarily with financial liabilities and the statutory obligations dealing with financial matters. It does not talk about the employees, more so when a specific clause has been provided in the Scheme itself which takes care of the employees. A clause which specifically deals with a particular subject would be determinative of the rights or the liabilities of the transferee company and would determine the relationship, the rights and liabilities qua that subject which is governed by that clause. Since Clause (12) specifically deals with the employees, the liabilities and rights of the employees would be governed by this clause. As per this clause only, the employees of the transferor company, who on the date of the order of the Court sanctioning the Scheme has been passed, would become the employees of the transferee company and none else. In the light of this specific clause dealing with the employees and in the light of the admitted facts that on the date when the High Court passed the order i.e. on 5.11.1980, respondent No.3 was not in service nor was he the employee of the petitioner. C.W.P.No.11806 of 1989 -14- Even no claim qua his services or relating to his employment was pending either with the transferor company or any Authority under the Industrial Disputes Act, 1947. It is an admitted position that the demand notice is dated 27.4.1981 which is after the order of amalgamation was passed by the Delhi High Court on 5.11.1990. In the light of the above, I have no hesitation in holding that there is no relationship of employer and employee between the petitioner and respondent No.3.” In view of the above, the question as to whether the resignation submitted by the respondent-workman and the acceptance thereof by the then management i.e. M/s.Telesound India Limited vide order dated 6.12.1975 was in accordance with law or not and whether the workman- respondent was wrongly not allowed to continue on his reporting for duty on 27.1.1976 and, therefore, amounted to retrenchment, has no effect on the decision of the present case and, therefore, does not call for further adjudication. In any case, the claim, if any, of the workman would lie against M/s.Telesound India Limited, Ballabgarh, which is not a party to the present reference and the petitioner-company has all through taken a stand that no claim against it would lie, as claimed by the respondent-workman. In the light of the above, the present writ petition is allowed; the impugned award dated 24.5.1989 (Annexure P-2) is hereby quashed. February 16th , 2009 ( AUGUSTINE GEORGE MASIH ) poonam JUDGE Whether referred to Reporters ________ Yes/No