Case: Central Inland Water Transport Corporation Ltd Vs. The Workmen &amp; Another

of the employees stand terminated, neither fair play nor social justice would justify the claim of the employees that they ought to be re-employed by the transferee (p. 748).That being the position in law under Section 25FF, the former employees of the company who were not absorbed by the Corporation can hardly make out a claim against the transferee Corporation either for compensation on termination of their service following the transfer or for re-employment. The claim at any rate of the employees in List II as against the Corporation under Section 25FF was clearly misconceived.19. Mr. Ray, appearing for the respondent Union, however, contended that whatever may be the position of the workers mentioned in List II, the case of the workers in List I stood on a different footing because these workers were parties to a settlement dated 25-8-1965 between the Company and its workers and under Section 18(3)(c) the settlement was binding not only on the Company but also its successor or assign - the present Corporation. Under the settlement, it was contended, the employees in List I were entitled to continue in uninterrupted service, without retrenchment, till at least December 31, 1969 and this stipulation, it was claimed, was binding on the Corporation which became the successor of the Company from the date of the transfer of the undertaking, that is to say. May 3, 1967. The further contention was that the Corporations refusal to continue the employees in service as the Corporations employees from that date was wrongful and hence it must be held, in law, that the employees continued in the service of the transferee Corporation and on that basis the Labour Court could compute the benefit under S. 33C(2).20. The several problems raised by the above contentions involve in effect a major industrial dispute, an investigation into which is quite outside the scope of Section 33C(2). Only on a detailed investigation would it be possible to determine whether the workmen had any right to a benefit and, if so, the Corporation was liable to satisfy the same. The other question which would be necessary to decide is whether the Corporation was a successor of the defunct Company. As pointed out in Anakapalla Cooperative case, 1963 Supp (1) SCR 730 = (AIR, 1963 SC 1489) already referred to, the question whether a transferee of an undertaking is a successor or not involves consideration of several factors as set out at pages 737 to 738 of the report.Such an investigation would clearly be quite outside the speedy individual remedy contemplated by Section 33C(2). Assuming further that on such investigation, the court comes to the conclusion that the Corporation is a successor, that again will not settle the matter because, as pointed out in that case, in view of Section 25FF the transferee even as a successor would be liable neither to pay compensation to nor to re-employ the workmen whose employment stood automatically terminated on the transfer. Where by operation of the law viz., Section 25FF the employment of workmen stands terminated, it may be difficult to sustain it one the basis of a term in a settlement prohibiting retrenchment, though statutorily binding on the transferee as a successor. It is perfectly arguable that such an argument would not have been available even against the transferor of the undertaking in view of S. 25FF.In any event, the question is not one which the Labour Court could be expected to deal with in a proceeding under S. 33C(2) the principal business whereunder is just computation of a benefit demonstrably existing. In short, the problems raised are appropriate for determination in an Industrial Dispute on a reference under S. 10 of the Act and cannot be regarded as merely incidental to the computation under Section 33C(2).21. If the above disputes were referred to an Industrial Tribunal under S. 10, the Tribunal would necessarily go into a detailed investigation of the alleged right of the employees to be continued in service by the Corporation. After such investigation the Tribunal may have held that they had no such right. Or it may have come to the conclusion that the Corporation had wrongfully refused to absorb the employees, in which case the Tribunal could have given relief in several forms depending on the fact and circumstances of each case. It could direct re-employment by the Corporation with or without continuity of service. It could order re-employment from any particular date found just and fair, or it could direct payment of wages fully or partially. Now, none of these things can be done by the Labour Court under Section 33C(2). All it can do is to compute the benefit if there was already an adjudication in favour of the workmen as against the Corporation or the said benefit was otherwise provided for as payable by the Corporation. A moments reflection will show that it would be impossible for the Labour Court to compute any benefit unless the Court, after considering all the matters which an Industrial Tribunal has to consider, ultimately decides upon one or the other of the several alternative reliefs which the Industrial Tribunal alone has a right to determine. By saying that the Labour Court would determine the alternative reliefs as incidental to computation, one cannot conceal the fact that it is actually exercising the function of an Industrial Tribunal. The investigation is not incidental to computation, but the computation itself is consequential upon the main finding as to the nature of relief the workmen are entitled to in an industrial disputes. The situation is the same as when a workman who is discharged wants relief, as shown in (1964) 3 SCR 140 = (AIR 1964 SC 743 ) already referred to. The discharged workmen can obtain relief by way of Section 10 only and not by an application to the Labour Court under Section 33C(2) claiming computation of the benefit on the basis that the discharge being unlawful, his services must be deemed to be continuous and uninterrupted.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]12.It is now well-settled that a proceeding under Section 33C (2) is a proceeding, generally, in the nature of an execution proceeding wherein the Labour Court calculates the amount of money due to a workmen from his employer, or if the workman is entitled to any benefit which is capable of being computed in term of money, the Labour Court proceeds to compute the benefit in terms of money. This calculation or computation follows upon an existing right to the money or benefit, in view of its being previously adjudged, or, otherwise, duly provided for.In such cases, a determination as to whether the dismissal was unjustified would be the principal matter for adjudication, and computation of wages just consequential upon such adjudication. It would be wrong to consider the principal adjudication as incidental to the computation. Moreover, if we assume that the Labour Court had jurisdiction to make the investigation into the circumstances of the dismissal, a very anomalous situation would arise. The Labour Court after holding that the dismissal was wrongful would have no jurisdiction to direct reinstatement under Section 33C (2). And yet if its jurisdiction to compute the benefit is conceded it will be like conceding its authority to pass orders awarding wages as many times as the workman comes before it without being reinstated. Therefore, the Labour Court exercising jurisdiction under Section 33C (2) has got to be circumspect before it undertakes an investigation, reminding itself that any investigation it undertakes is, in a real sense, incidental to its computation of a benefit under an existing right, which is its principal concern.17. Bearing in mind these limitations of a Labour Court functioning under Section 33C (2) we have to approach the question before us.The old Company closed its business on May 3, 1967. The Corporation, in due course, appointed a large number of the Companys employees by fresh letters of appointments, but it could not absorb all of them. The reference was made on behalf of the employees mentioned in Lists I and II. They were in all 512. Out of these, it appears, 24 were re-employed by the Corporation later on. The rest of them virtually claimed reemployment or at least some benefits on the basis of their alleged right to be re-employed. In actual fact, however, the Corporation did not employ these workmen after the Companys undertaking was transferred to it.The scheme of transfer did not compel the Corporation to employ the workmen. Nor is there any term in the transfer agreement or the scheme which passed over to the Corporation any responsibility in respect of the workmen. Section 25 FF of the Industrial Disputes Act declares what are the rights of the workmen of an undertaking which is transferred. The right is to receive compensation as if the workmen are retrenched under Section 25F and is available only against the owners of the undertaking, that is to say, the transferor of the undertaking. The liability of the transferor to pay compensation does not arise only when (i) there has been a change of employers by reason of the transfer and (ii) the 3 sub-clauses (a) (b) and (c) of the proviso of that section come into play.Mr. Ray, appearing for the respondent Union, however, contended that whatever may be the position of the workers mentioned in List II, the case of the workers in List I stood on a different footing because these workers were parties to a settlement dated 25-8-1965 between the Company and its workers and under Section 18(3)(c) the settlement was binding not only on the Company but also its successor or assign - the present Corporation. Under the settlement, it was contended, the employees in List I were entitled to continue in uninterrupted service, without retrenchment, till at least December 31, 1969 and this stipulation, it was claimed, was binding on the Corporation which became the successor of the Company from the date of the transfer of the undertaking, that is to say. May 3, 1967. The further contention was that the Corporations refusal to continue the employees in service as the Corporations employees from that date was wrongful and hence it must be held, in law, that the employees continued in the service of the transferee Corporation and on that basis the Labour Court could compute the benefit under S. 33C(2).The several problems raised by the above contentions involve in effect a major industrial dispute, an investigation into which is quite outside the scope of Section 33C(2). Only on a detailed investigation would it be possible to determine whether the workmen had any right to a benefit and, if so, the Corporation was liable to satisfy the same. The other question which would be necessary to decide is whether the Corporation was a successor of the defunct Company. As pointed out in Anakapalla Cooperative case, 1963 Supp (1) SCR 730 = (AIR, 1963 SC 1489)   already referred to, the question whether a transferee of an undertaking is a successor or not involves consideration of several factors as set out at pages 737 to 738 of the report.Such an investigation would clearly be quite outside the speedy individual remedy contemplated by Section 33C(2). Assuming further that on such investigation, the court comes to the conclusion that the Corporation is a successor, that again will not settle the matter because, as pointed out in that case, in view of Section 25FF the transferee even as a successor would be liable neither to pay compensation to nor to re-employ the workmen whose employment stood automatically terminated on the transfer. Where by operation of the law viz., Section 25FF the employment of workmen stands terminated, it may be difficult to sustain it one the basis of a term in a settlement prohibiting retrenchment, though statutorily binding on the transferee as a successor. It is perfectly arguable that such an argument would not have been available even against the transferor of the undertaking in view of S. 25FF.In any event, the question is not one which the Labour Court could be expected to deal with in a proceeding under S. 33C(2) the principal business whereunder is just computation of a benefit demonstrably existing. In short, the problems raised are appropriate for determination in an Industrial Dispute on a reference under S. 10 of the Act and cannot be regarded as merely incidental to the computation under Section 33C(2).21. If the above disputes were referred to an Industrial Tribunal under S. 10, the Tribunal would necessarily go into a detailed investigation of the alleged right of the employees to be continued in service by the Corporation. After such investigation the Tribunal may have held that they had no such right. Or it may have come to the conclusion that the Corporation had wrongfully refused to absorb the employees, in which case the Tribunal could have given relief in several forms depending on the fact and circumstances of each case. It could direct re-employment by the Corporation with or without continuity of service. It could order re-employment from any particular date found just and fair, or it could direct payment of wages fully or partially. Now, none of these things can be done by the Labour Court under Section 33C(2). All it can do is to compute the benefit if there was already an adjudication in favour of the workmen as against the Corporation or the said benefit was otherwise provided for as payable by the Corporation. A moments reflection will show that it would be impossible for the Labour Court to compute any benefit unless the Court, after considering all the matters which an Industrial Tribunal has to consider, ultimately decides upon one or the other of the several alternative reliefs which the Industrial Tribunal alone has a right to determine. By saying that the Labour Court would determine the alternative reliefs as incidental to computation, one cannot conceal the fact that it is actually exercising the function of an Industrial Tribunal. The investigation is not incidental to computation, but the computation itself is consequential upon the main finding as to the nature of relief the workmen are entitled to in an industrial disputes. The situation is the same as when a workman who is discharged wants relief, as shown in (1964) 3 SCR 140   = (AIR 1964 SC 743  ) already referred to. The discharged workmen can obtain relief by way of Section 10 only and not by an application to the Labour Court under Section 33C(2) claiming computation of the benefit on the basis that the discharge being unlawful, his services must be deemed to be continuous and uninterrupted.