Case: Board Of Directors Of The South Arcot Elec-Tricity Distrib Vs. N.K. Mohammad Khan, Etc

of the right accruing to them under Section25-FF of the Act.In this connection, an additional point urged by Mr. Gupte was that the principal clause of Section25-FF of the Act does not lay down which of the two employers mentioned there in is liable to pay the retrenchment compensation and, consequently, where there is dispute between the two employers, an application for computation of the benefit under Section25-FF of the Act cannot be competently entertained and decided by a Labour Court. It appears to us that the language of that principal clause makes it perfectly clear that, if the right to retrenchment compensation accrues under it, it must be a right to receive that compensation from the previous employer who was the owner up to the date of transfer. It is implicit in the language of that clause. The clause lays down that every workman mentioned therein shall be entitled to notice and compensations in accordance with the provision of Section 25-F as if the workman had been retrenched. Obviously, in such a case, the date of the deemed retrenchment would be the date when the ownership or management of the undertaking stands transferred to the new employer. In the present case, that date would be the 1st of June, 1957, when the undertaking of the company was taken over by the Government of Madras under the Madras Act. If the workmens services are to be deemed to be retrenched on that very date, it is clear that, for purposes of determining who has retrenched the workmen and who is liable to pay the retrenchment compensation, the workmen could not become the employees of the new employer. The employment under the new employer could only commence from the time when the ownership or the management of the undertaking vested in the State Government; but, simultaneously with this vesting, the workmen had to be deemed to be retrenched from service. That retrenchment could, therefore, be deemed to have been made only by the previous employer. Further, it would be that previous employer who would be competent to give the notice in accordance with the provisions of Section25-F of the Act. The notice of retrenchment, which has to be deemed to have become effective on the date of vesting of the undertaking in the State Government, could not possibly be given by the State Government. In these circumstances, the conclusion is irresistible that the claim under Section25-FF of the Act to compensation accrues to the workmen against the previous employer under whom he was employed until the date of transfer. In the present case, therefore, the right to receive compensation clearly accrued under Section25-FF of the Act against the company and there was, therefore, no difficulty in the Labour Court exercising jurisdiction on that basis.So far as the second point is concerned, it is fully answered by our decision in Chief Mining Engineer, East India Coal Co. Ltd. v. Rameshwar and others, [1968 - I S.C.R. 140] where it was held : It is clear that the right to the benefit which is sought to be computed for must be an existing one, that is to say, already adjudicated upon or provided for and must arise in the course of and in relation to the relationship between an industrial workman and his employer. 6. The view was further clarified and affirmed by this Court in State of Bikaner and Jaipur v. R. L. Khandelwal, [1968 - I L.L.J. 589] where the court took notice of the decisions of this court in the case cited above, and in Punjab National Bank Ltd. v. K. L. Kharbanda [1962 - Supp. 2 S.C.R. 977]. Central Bank of India v. P. S. Rajagopalan and Others [1964 - 3 S.C.R. 140] and Bombay Gas Company Ltd. v. Gopal Bhiva and Others, [1964 - 3 S.C.R. 709], and held : These decisions make it clear that a workman cannot put forward a claim in an application under Section 33-C(2) in respect of a matter which is not based on an existing right and which can be appropriately the subject-matter of an industrial dispute only requiring reference under Section10 of the Act. 7. In the present case, we have already indicated, when dealing with the first point, that the right, which has been claimed by the various workmen in their applications under Section33-C(2) of the Act, is a right which accrued to them under Section25-FF of the Act and was an existing right at the time when these application were made. 8. The Labour Court clearly had jurisdiction to decide whether such a right did or did not exist when dealing with the application under that provision. The mere denial of that right by the company could not take away its jurisdiction, so that the order made by the Labour Court was competent.The third and the last point raised by Mr. Gupte fails and could not be pressed in view of our decision that the right of the workmen which has been adjudicated upon by the Labour Court in the application under Section33-C(2) of the Act, was a right accruing to them against the company under Section25-FF of the Act. The right having initially accrued under this provision of law against the company, the Labour Court was clearly justified in computing the benefit under that right and laying it down that the liability was enforceable against the company. The Labour Court was concerned with the right claimed under the Act. Whether, by virtue of the provisions or the terms of transfer of the undertaking from the company to the Government, or by virtue of the provisions of the Madras Act, the company is entitled to claim that this liability should be ultimately met by the State Government was a point which did not affect the right of the workmen to claim the compensation from the company and the Labour Court was, therefore, not require to go into this question when dealing with applications under Section33-C(2) of the Act. 9.

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

Explanation:
0[ds]In our opinion, it is unnecessary to go into the question whether condition (c) has or has not been satisfied, because it is very clear that condition (b) of the proviso is certainly not satisfied. Under clause (b), the requirement is that the terms and conditions of service applicable to the workman after transfer must not in any way be less favourable than those applicable to him immediately before the transfer. On examination of the Madras Act and the rules, it is manifest that the terms and conditions of service of the workmen have not remained as favourable under the State Government or the Electricity Board as they were when the workmen were employed by the company. Under clause (1) of Section15 of the Madras Act, the State Government is given the power to terminate the services of any workman after giving him three calendar months notice in writing or paying him three months pay in lieu of such notice. It has not been shown to us on behalf if the company that there was any such liability to termination of service of these workmen while they were employed by the companyIt is clear that, in exercise of this power, the Government can make rules altering the terms and condition of services of the workmen retained by the Government, and this power can be exercised from time to time. There was no such liability of change of conditions of service of the workmen while they were employed under the company. If the company had desired to alter their conditions of service, the company would have been required to comply with the provisions of either Section9-A of the Act, or Section10 of the Industrial Employment (Standing Orders) Act No. 20 of 1946. Obviously, the right of the Government of Madras as the new employer under Section15(2) of the Madras Act to change the conditions of services of the workmen from time to time, in its very nature, alters the conditions of services of the workmen to their disadvantage. Rule 17 of the rules further shows that, immediately on the vesting of the undertaking in the State Government the service of the workmen retained by the Government become provisional and the subsequent permanent employment of those workmen in the under-taking is dependent on the conditions laid down in that rule. This liability imposed on the workmen is clearly disadvantageous to those workmen who were in the permanent employ of the company. The same rule also shown that the employees would not be entitled to bonus or other concession not allowed to the servants of the Government, even it the workmen were entitled to bonus and the concessions from the company. The workmen also became liable to transfer to any other place or post in the Government Electricity Department depending on exigencies of service. These are instances of a number of conditions of services which became less favourable to the workmen on their becoming employees of the State Government when the undertaking vested in that Government by transfer from the company. In these circumstances, the requirements of the proviso to Section25-FF of the Act are obviously not satisfied and that proviso cannot be invoked by the company for the purpose of defeating the claim made by the workmen under the principal clause of that section. Under that principal clause, the workmen became entitled to receive retrenchment compensation in accordance with the provision of Section25 F of the Act on the basis of the legal fiction envisaged that those rights would accrue to them as if the workmen had been retrenched. The Labour Court and the High Court were, therefore, right in holding that the workmen were entitled to claim retrenchment compensation in accordance with the provisions of Section25-F of the Act because of the right accruing to them under Section25-FF of the Act.In this connection, an additional point urged by Mr. Gupte was that the principal clause of Section25-FF of the Act does not lay down which of the two employers mentioned there in is liable to pay the retrenchment compensation and, consequently, where there is dispute between the two employers, an application for computation of the benefit under Section25-FF of the Act cannot be competently entertained and decided by a Labour Court. It appears to us that the language of that principal clause makes it perfectly clear that, if the right to retrenchment compensation accrues under it, it must be a right to receive that compensation from the previous employer who was the owner up to the date of transfer. It is implicit in the language of that clause. The clause lays down that every workman mentioned therein shall be entitled to notice and compensations in accordance with the provision of Section 25-F as if the workman had been retrenched. Obviously, in such a case, the date of the deemed retrenchment would be the date when the ownership or management of the undertaking stands transferred to the new employer. In the present case, that date would be the 1st of June, 1957, when the undertaking of the company was taken over by the Government of Madras under the Madras Act. If the workmens services are to be deemed to be retrenched on that very date, it is clear that, for purposes of determining who has retrenched the workmen and who is liable to pay the retrenchment compensation, the workmen could not become the employees of the new employer. The employment under the new employer could only commence from the time when the ownership or the management of the undertaking vested in the State Government; but, simultaneously with this vesting, the workmen had to be deemed to be retrenched from service. That retrenchment could, therefore, be deemed to have been made only by the previous employer. Further, it would be that previous employer who would be competent to give the notice in accordance with the provisions of Section25-F of the Act. The notice of retrenchment, which has to be deemed to have become effective on the date of vesting of the undertaking in the State Government, could not possibly be given by the State Government. In these circumstances, the conclusion is irresistible that the claim under Section25-FF of the Act to compensation accrues to the workmen against the previous employer under whom he was employed until the date of transfer. In the present case, therefore, the right to receive compensation clearly accrued under Section25-FF of the Act against the company and there was, therefore, no difficulty in the Labour Court exercising jurisdiction on that basisThe Labour Court clearly had jurisdiction to decide whether such a right did or did not exist when dealing with the application under that provision. The mere denial of that right by the company could not take away its jurisdiction, so that the order made by the Labour Court was competent.The third and the last point raised by Mr. Gupte fails and could not be pressed in view of our decision that the right of the workmen which has been adjudicated upon by the Labour Court in the application under Section33-C(2) of the Act, was a right accruing to them against the company under Section25-FF of the Act. The right having initially accrued under this provision of law against the company, the Labour Court was clearly justified in computing the benefit under that right and laying it down that the liability was enforceable against the company. The Labour Court was concerned with the right claimed under the Act. Whether, by virtue of the provisions or the terms of transfer of the undertaking from the company to the Government, or by virtue of the provisions of the Madras Act, the company is entitled to claim that this liability should be ultimately met by the State Government was a point which did not affect the right of the workmen to claim the compensation from the company and the Labour Court was, therefore, not require to go into this question when dealing with applications under Section33-C(2) of the Act.