Case: Yeshwant G. Chikhalkar Vs. Killick Nixon Limited

grounds. ( 2 ) THE Industrial Court by its Order dated December 24, 1998 dismissed the Complaint. It must be noted here that the Industrial Court has squarely dealt with all the points raised by the parties and has recorded its reasons on every point. In his thorough order the learned Member of the Industrial Court has rightly held that there is no functional integrality of the different divisions of the company with the Shipping Division wherein the concerned employees were employed. The main contention of the employees was that as the employees were transferable from one division to another and that there was unity of ownership and management, the entire company should be taken as one unit ignoring the separate divisions/undertakings/ establishments. The learned member has not accepted this contention and according to us rightly. The true test of two units being functionally integrated is laid down by the Supreme Court in various Judgments. It is a well established position and therefore we need not cite those judgments. This point has often arisen in the cases under the Employees Provident Funds Act, whereunder clubbing of two divisions or undertakings was questioned by the employers. It is now very well established that if one unit which is totally independent and which will not be closed or affected by the closure or stoppage of another unit owned by the same employer in that case these two units would be independent and not interdependent and, therefore, there cannot be any functional integrality between these units. If, however, one unit is adversely affected or is closed down because of the closure of the other unit and it cannot survive unless the other unit also functions in such a situation two units would be interdependent mutually. One would not survive unless the other continues to function. This concept of integrality between the two units is totally absent in the present case. The Shipping Division of the Company is altogether different and has no connection or relation with the activities of the other units. Merely because some employees are transferable or were transferred there being a unity of ownership and management it cannot be said that there is a functional integrality between the Shipping Division and the other divisions. According to us, the Industrial Court has rightly come to the conclusion that there is no functional integrality in existence between the Shipping Division and the other Divisions of the employer company and the natural consequences would be that the Chapter V-B of the I. D. Act will not be attracted and therefore there was no necessity of seeking permission from the Government under Section 25-M of the Act and even the seniority of the shipping division alone was to be considered. ( 3 ) THE learned single Judge has dismissed the writ petition filed by the employees against the Order of the Industrial Court. ( 4 ) SHRI Pendse, the learned Counsel for the employees before us reiterated and stressed before us the point of functional integrality between the Shipping Division and the other divisions of the employer company. We heard him at length. We are not able to take any different view taken by the Industrial Court and the learned single Judge. We have ourselves applied our mind to the submissions of the learned Counsel. We find no substance as the legal position is absolutely clear and well established. When the attention of the learned Counsel was drawn by us to the definition of the "industrial Establishment" there was no reply from the learned Counsel. The definition of the Industrial Establishment is a complete answer to all the submissions of the learned Counsel of the employees. We reproduce the said definition for ready reference:"industrial establishment or undertaking" means an establishment or undertaking in which any industry is carried on: Provided that where several activities are carried on in an establishment or undertaking and only one or some of such activities is or are an industry or industries, then, (i) if any unit of such establishment or undertaking carrying on any activity, being an industry, is severable from the other unit or units of such establishment or undertaking, such unit shall be deemed to be a separate industrial establishment or undertaking; (ii) if the predominant activity or each of the predominant activities carried on in such establishment or undertaking or any unit thereof is an industry and the other activity or each of the other activities carried on in such establishment or undertaking or unit thereof is not severable from and is, for the purpose of carrying on, or aiding the carrying on of, such predominant activity or activities, the entire establishment or undertaking or, as the case may be, unit thereof shall be deemed to be an industrial establishment or undertaking. "Applying the said definition in our case it becomes clear that the employer company is having several activities which are severable from each other and the Shipping Divisions activities are definitely severable from its other divisions viz. , (i) Snowcem Sales Division, (ii) Construction Equipment Division (iii) Clearing and Forwarding Division, (iv) Agencies and Marketing Division, (v) Stationery Division and a Shipping Division. It is not the case of the employees that the lay-off given to the Shipping Division employees was caused by any other Divisions or this lay-off will have any chain effect on any of the other Divisions. ( 5 ) FROM the definition it is clear that each division having severable activities of the employer is to be treated as distinct and separate unless there is mutual inter-dependence, that is to say, one unit cannot survive in the absence of the other one. The learned Counsel has made a reference to the decision of the Supreme Court in the case of S. G. Chemicals and Dyes Trading Employees Union v. S. G. Chemicals and Dyes Trading Ltd. and Ors. reported in (1986-I-LLJ-490) (SC ). We are afraid the ratio of the said judgment is not applicable in the present case.

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

Explanation:
0[ds]We heard him at length. We are not able to take any different view taken by the Industrial Court and the learned single Judge. We have ourselves applied our mind to the submissions of the learned Counsel. We find no substance as the legal position is absolutely clear and well established. When the attention of the learned Counsel was drawn by us to the definition of the "industrial Establishment" there was no reply from the learned Counsel. The definition of the Industrial Establishment is a complete answer to all the submissions of the learned Counsel of the employees. We reproduce the said definition for ready reference:"industrial establishment or undertaking" means an establishment or undertaking in which any industry is carried on: Provided that where several activities are carried on in an establishment or undertaking and only one or some of such activities is or are an industry or industries, then, (i) if any unit of such establishment or undertaking carrying on any activity, being an industry, is severable from the other unit or units of such establishment or undertaking, such unit shall be deemed to be a separate industrial establishment or undertaking; (ii) if the predominant activity or each of the predominant activities carried on in such establishment or undertaking or any unit thereof is an industry and the other activity or each of the other activities carried on in such establishment or undertaking or unit thereof is not severable from and is, for the purpose of carrying on, or aiding the carrying on of, such predominant activity or activities, the entire establishment or undertaking or, as the case may be, unit thereof shall be deemed to be an industrial establishment or undertaking. "Applying the said definition in our case it becomes clear that the employer company is having several activities which are severable from each other and the Shipping Divisions activities are definitely severable from its other divisions viz. , (i) Snowcem Sales Division, (ii) Construction Equipment Division (iii) Clearing and Forwarding Division, (iv) Agencies and Marketing Division, (v) Stationery Division and a Shipping Division. It is not the case of the employees that thegiven to the Shipping Division employees was caused by any other Divisions or thiswill have any chain effect on any of the other5 ) FROM the definition it is clear that each division having severable activities of the employer is to be treated as distinct and separate unless there is mutualthat is to say, one unit cannot survive in the absence of the other one. The learned Counsel has made a reference to the decision of the Supreme Court in the case of S. G. Chemicals and Dyes Trading Employees Union v. S. G. Chemicals and Dyes Trading Ltd. and Ors. reported in(SC ). We are afraid the ratio of the said judgment is not applicable in the present5 ) FROM the definition it is clear that each division having severable activities of the employer is to be treated as distinct and separate unless there is mutualt is to say, one unit cannot survive in the absence of the other one. The learned Counsel has made a reference to the decision of the Supreme Court in the case of S. G. Chemicals and Dyes Trading Employees Union v. S. G. Chemicals and Dyes Trading Ltd. and Ors. reported inC ). We are afraid the ratio of the said judgment is not applicable in the presentcase.