Case: New Gujarat Cotton Mills Limited Vs. Labour Appellate Tribunal &amp; Others

apparent on the face of the record.12-a. Mr. Palkhiwala urged that the error apparent on the face of the record is an error which can be demonstrated without fresh evidence; but if that be the test it would in effect be converting this Court exercising jurisdiction to grant high prerogative writs, into a Court exercising appellate jurisdiction against decisions of Tribunals from which no appeals lie thereto. The test suggested by Counsel is in our judgment a fallacious test and we are unable to accept the same. Normally, this Court does not entertain applications for issue of high prerogative writs, when the decision depends upon proof or disproof of disputed questions of fact. In considering applications for a writ of certiorari, not only does the Court not allow fresh evidence to be led to challenge the conclusions of an inferior Tribunal but it normally accepts the conclusion of the Tribunal as conclusive. It is difficult then to appreciate how the test suggested by Mr. Palkhiwalla can be applied in ascertaining whether in the decision impugned there is an error apparent on the face of the record. In our view the conclusion of the Labour Appellate Tribunal on the question whether the New Company may be regarded as a successor of the Old Company must be accepted in this application.13. It was then urged by Mr. Palkhiwala that assuming that the New Company is the successor of the Old Company, an application under S. 42 (4) at the instance of the employees of the Old Company cannot lie unless the successor has chosen to re-employ the employees of the original company. This argument we have incidentally referred to in considering the nature of the jurisdiction which the Industrial Court exercised. We have pointed out that the scheme of the Bombay Industrial Relations Act render a successor liable even in the absence of a contract between the employees of the old undertaking, and its successor. We have also observed that the raison detre of a Labour Tribunal is to be found in the desire of the State to provide a forum which may, unhindered by legalistic considerations, attempt to secure harmony between the employer and the employee, with the ultimate object of securing an efficient working of industry by resolving disputes through the medium of arbitration and adjudication. That being the real object of labour legislation like the Bombay Industrial Relations Act jurisdiction to adjudicate upon a claim made by an employee of a transferor undertaking as against the transferee undertaking must be implicit. We therefore think that the second contention raised by Mr. Palkhiwala cannot be entertained. It was then urged by Mr. Palkhiwala that in this case even if it be held that the employees of the Old Company can file an application under S. 42 (4), the services of the applicants having been determined before the date on which the sale-deed was executed by the Liquidator the applicants have no right to proceed against the New Company. It was urged that right to file an application under S. 42 (4) against a successor postulates the existence of a subsisting contract between the old employer and the employee at the date of the transfer of the undertaking. But if regard be had to the definition of the word "employee" as inclusive of an employee whose employment has been terminated we are unable to see why the subsistence of an effective contract between the transferor undertaking and the employees is a prerequisite to a claim against the transferee undertaking under S. 42 (4).14. It may be pointed out that this argument was not urged in any of the three Courts below and was sought to be raised before us for the first time. In our view there is no substance in this plea and it must be rejected.15. Mr. Palkhiwala also invited our attention to S. 42 (4) before it was amended by the Bombay Act 33 of 1948. Counsel pointed out originally the Legislature had used the expression "his employer in S. 42 (4). Relying upon that form of enactment, it was contended that the Legislature had intended that before an employee can make an application, he had to establish that he was an employee of the employer against whom the application was made or intended to be made. It was urged that the Legislature intended by the use of the pronoun his that if there was no contract between the employee and the employer against whom an application was sought to be made under sub-s. (4) of S. 42, the Labour Court was incompetent to entertain the application.16. It is unnecessary for us to consider whether S. 42 (4) before it was amended by substitution of the definite article "the for the pronoun "his" supports the contention of the New Company. According to Mr. Palkhiwala, this amendment was made with a view to bring into line the provisions of the Act in view of another amendment made by incorporating the word "representative union" and by harmonising the use of the word employer" in the context in which it stood. It is true that by the same amendment the words "or representative union" were added so as to confer a right to make an application upon a representative union. But from that circumstance we are not justified in holding that the expression "the employer has the same meaning and connotation as the expression his employer" as originally used.17. It was finally urged that an application for reinstatement cannot lie at the instance of employees whose employment has been terminated. It is now too late in the day to raise that contention. The question has been finally adjudicated upon by the Federal Court in 51 Bom LR 894 : (AIR 1949 FC 111) (A), that the Labour Court or the Industrial Court is competent to reinstate dismissed or discharged employees; and that appears clear from the definition of the expression "employee" in S. 3 (13) of the Bombay Industrial Relations Act.

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

Explanation:
0[ds]The employees in this case applied to the New Company fort but the New Company declined to accede to that request. The requirements of the Proviso to(4) are, therefore, fulfilled. A claim fornt must be deemed to fall within item (6) to Sch. III to the Act. The dispute raised by the employees expressly fell within item No. 6 in Sch. III and it was competent to the employees to make an application to the Labour Court desiring a change in respectfirst sight it may appear, that there is no contract of employment between the applicants and the New Company. The applicants were employees of the Old Company and it appears that there was termination of the employment either by a notice served upon them or by virtue of S. 172, Companies Act. The New Company before us also appears to be a new undertaking: it has been so registered under the Bombay Industrial Relations Act and it has been registered as a new company under the Companies Act. The New Company is admittedly a purchaser of the assets, goodwill and the immovable property which belonged to the Old Company including the. In our view, the jurisdiction of the Industrial Tribunal to pass orders in relation to industrial matters is derived not so much from considerations as to the existence of contractual rights and obligations, as on considerations of equity, security of service of workman, promotion of industrial peace and thereby the larger interest of the community. Merely because under the law of contracts under the ordinary jurisprudence of this country, a claim may not lie at the instance of the applicants to beor reinstated by the New Company, the claim made by the applicants cannot be regarded as inadmissible. It appears to have been settled by a large number of decisions of the Industrial and Labour Courts that the Industrial Law takes a different view about the duties and obligations of a successor in business and if a successor decides to run the same business which was carried on by his predecessor, the employees of the old concern are entitled to submit a dispute before the Industrial Tribunal regarding their rights and obligations in the business of the old concern, and those rights and obligations must be regarded as continuing and enforceable against the new management and not affected by the substitution of the new management for theis also implicit in Ss. 114 and 115 of the Bombay Industrial Relations Act that the rights and obligations of a management of an industrial undertaking are enforceable in proper cases against its successor. It appears from the terms of S. 18 (c) of the Industrial Disputes Act that a successor to an old undertaking is liable to meet certain obligations of its predecessors. In our view, therefore, the absence of a direct contractual relations between the applicants and the New Company is by itself not a ground for rejecting the claim made by theare unable to accept these submissions. It is true that there is no express reference in the habendum clause to a sale of the business of a going concern but on a reasonable reading of the document ofwe have no doubt that there was a conveyance of the property ordered to be sold by the Court and in respect of which tenders were invited. All the three items of property which were recited as properties in respect of which tenders were invited are the properties which ultimately have been sold and conveyed. We do not think that in this application we will be justified in allowing fresh evidence to be produced so as tothe proceedings at this late stage. Even if the factories of the Company had stopped working, it is difficult from that circumstance to arrive at a conclusion that the business of the Old Company had ceased. There is necessarily no direct connection between the stoppage of the factory and the stoppage of a business of the concern. For diverse reasons the factory may have closed but that does not lead to the conclusion that the business comes to an end. Again the goodwill of a business is inclusive of positive advantages such as carrying on the commercial undertaking at a particular place and in a particular name, and also its business connections, its business prestige, and several other intangible advantages which a business may acquire. Unless there is clear evidence to show that this goodwill which was intended to be sold and in fact sold by the Liquidator to the New Company, was nothing but a name, we will not be justified in holding that no real and substantialgoodwill of the OldEven if it be possible to take a view different from the one which has appealed to the Labour Appellate Tribunal on the interpretation of thewe do not think that in exercising jurisdiction under Art. 227 of the Constitution we have any powers to interfere with the conclusions of thatassuming that there is some error committed by the Tribunal, we do not think that the Tribunal has gone outside the bounds of its authority in interpreting theand in coming to a conclusion that what was conveyed was the business of a going concern and not merely the assets of a business which had closedin our judgment having regard to the findings of the Tribunal, we are unable to issue a writ of Certiorari. The limitations which inhere the exercise of jurisdiction under Art. 227 apply with greater force when this Courts powers under Art. 226 of the Constitution are invoked. If the Tribunal acts within the limitations of its authority, this Court will have no power to interfere with the conclusions recorded bywe do not think that the question whether the New Company is a successor of the Old Company is a jurisdictional question. The distinction between a collateral fact upon the proof of which the jurisdiction of a Tribunal depends and upon a fact which forms part of the issue to be decided by the Tribunal may be stated as follows: If the fact be collateral to the actual matter which the lower Court has to try, that Court cannot, by a wrong decision with regard to it, give itself jurisdiction which it would not otherwise possess. The lower Court must, indeed, decide as to the collateral fact, in the first instance but the superior Court may upon certiorari inquire into the correctness of the decision, and may quash the proceedings in the lower Court if such decision is erroneous or at any rate if there is no evidence to support it. On the other hand, if the fact in question be not collateral but a part of the very issue which the lower Court has to inquire into, certiorari will not be granted, although the lower Court may have arrived at an erroneous conclusion with regard to it.We have no doubt that the question whether the New Company are successors of the Old Company is a part of the issue which the Industrial Tribunal had to inquire into and decide and Certiorari cannot be granted merely to correct an error committed by thatthat be the test it would in effect be converting this Court exercising jurisdiction to grant high prerogative writs, into a Court exercising appellate jurisdiction against decisions of Tribunals from which no appeals lie thereto. The test suggested by Counsel is in our judgment a fallacious test and we are unable to accept the same. Normally, this Court does not entertain applications for issue of high prerogative writs, when the decision depends upon proof or disproof of disputed questions of fact. In considering applications for a writ of certiorari, not only does the Court not allow fresh evidence to be led to challenge the conclusions of an inferior Tribunal but it normally accepts the conclusion of the Tribunal as conclusive. It is difficult then to appreciate how the test suggested by Mr. Palkhiwalla can be applied in ascertaining whether in the decision impugned there is an error apparent on the face of the record. In our view the conclusion of the Labour Appellate Tribunal on the question whether the New Company may be regarded as a successor of the Old Company must be accepted in thisargument we have incidentally referred to in considering the nature of the jurisdiction which the Industrial Court exercised. We have pointed out that the scheme of the Bombay Industrial Relations Act render a successor liable even in the absence of a contract between the employees of the old undertaking, and its successor. We have also observed that the raison detre of a Labour Tribunal is to be found in the desire of the State to provide a forum which may, unhindered by legalistic considerations, attempt to secure harmony between the employer and the employee, with the ultimate object of securing an efficient working of industry by resolving disputes through the medium of arbitration and adjudication. That being the real object of labour legislation like the Bombay Industrial Relations Act jurisdiction to adjudicate upon a claim made by an employee of a transferor undertaking as against the transferee undertaking must be implicit. We therefore think that the second contention raised by Mr. Palkhiwala cannot beif regard be had to the definition of the word "employee" as inclusive of an employee whose employment has been terminated we are unable to see why the subsistence of an effective contract between the transferor undertaking and the employees is a prerequisite to a claim against the transferee undertaking under S. 42 (4).It may be pointed out that this argument was not urged in any of the three Courts below and was sought to be raised before us for the first time. In our view there is no substance in this plea and it must be rejected.It is unnecessary for us to consider whether S. 42 (4) before it was amended by substitution of the definite article "the for the pronoun "his" supports the contention of the Newis true that by the same amendment the words "or representative union" were added so as to confer a right to make an application upon a representative union. But from that circumstance we are not justified in holding that the expression "the employer has the same meaning and connotation as the expression his employer" as originallyquestion has been finally adjudicated upon by the Federal Court in 51 Bom LR 894 : (AIR 1949 FC 111) (A), that the Labour Court or the Industrial Court is competent to reinstate dismissed or discharged employees; and that appears clear from the definition of the expression "employee" in S. 3 (13) of the Bombay Industrial Relations Act.