Case: GLOBE GROUND INDIA EMPLOYEES UNION Vs. LUFTHANSA GERMAN AIRLINES

Court has considered powers of the Tribunal to add necessary and proper parties. In the said judgment this Court has held that if the employer named in reference does not fully represent the interests of the employer as such, other persons who are interested in the undertaking of the employer can be joined. But at the same time in the very said judgment it is held that, the test always must be is the addition of the party necessary to make adjudication itself effective and enforceable? 13. In another judgment relied upon by the learned senior counsel for the appellant in the case of Hussainbhai vs. Alath Factory Thezhilali Union and others (supra), this Court has prescribed the test for determining, workmen employed by independent contractor to work in employers factory, whether such workmen are workmen of the factory or not. In this judgment, this Court has held that the presence of intermediate contractors with whom alone workers have immediate or direct relationship ex contractu is of no consequence when, on lifting the veil or looking at the conspectus of factors governing employment. 14. Similarly, in another judgment relied upon by the learned senior counsel for the appellant in the case of Grindlays Bank Ltd. vs. Central Government Industrial Tribunal and others (supra), this Court has held that for the proceedings arising out of the Industrial Disputes Act, 1947, the provisions of the Evidence Act, in their strict sense, likewise do not apply to the proceedings. It is held that the authorities to whom reference is made under the Industrial Disputes Act, 1947, being quasi-judicial in nature, have to exercise their discretion in a judicial manner, without caprice, and according to the general principles of law and rules of natural justice. 15. There cannot be any second opinion on the ratio decided in the aforesaid cases relied on by the learned senior counsel for the appellant. But, whenever an application is filed for impleadment of a third party, who is not a party to the reference under the Industrial Disputes Act or any other proceedings pending before the Court, what is required to be considered is whether such party is either necessary or proper party to decide the lis. It all depends on the facts of each case; the allegations made and the nature of adjudication proceedings etc. In this case it is to be noted that only the scope of reference is limited which is already discussed above. However, it is also clear from Section 10(4) of the Industrial Disputes Act, 1947 that whenever a reference is made, the Industrial Court shall confine its adjudication to the point of reference and matters incidental thereto only. 16. Reverting back to the facts of the case on hand it is clear that the first respondent had a subsidiary, namely, Globe Ground Deutschland GmbH, which was holding 51% shares along with 49% shares held by the Bird Group in the second respondent company. Further, it is clear that the Bird Group had floated another company, Bird Worldwide Flight Services Ltd. to provide ground handling and ancillary services which started from the month of January, 2009. It is the allegation of the appellants union that even after the formation of a new company, such new company is utilizing same equipment and vehicles belonging to the second respondent. It is also the allegation of the appellant that after the formation of the new company, it has retained most of the employees, except the trade union activists. The appellant workers union does not seek employment of the alleged retrenched workers in the first respondent. 17. Having regard to facts and circumstances of present case, we are of the opinion that the case law relied on by the learned senior counsel for the appellant would not render any assistance in support of the appellants case. 18. At the same time in the judgment in the case of Balwant Rai Saluja and another vs. AIR India Limited and others (supra) relied upon by Sri Chander Uday Singh, learned senior counsel for the respondents, this Court has observed that the corporate veil can be pierced and the parent company can be held liable for the conduct of its subsidiary, only if it is shown that the corporal form is misused to accomplish certain wrongful purposes. In the aforesaid case, having regard to facts, it was opined that the doctrine of piercing veil cannot be applied. In the aforesaid case it is held by this Court that the doctrine of piercing veil, has been applied sparingly by the courts. 19. The other judgment relied on by the learned senior counsel for the respondents in the case of Kasturi vs. Iyyamperumal and others (supra), this Court again considered the test to be applied while considering the application filed under Order 1 Rule 10 of the Code of Civil Procedure, 1908. It is held that to consider the scope of application, the tests are:- (1) there must be a right to some relief against such party in respect of controversies involved in the proceedings; (2) no effective decree can be passed in its absence. Applying the aforesaid ratio laid down in the judgment, referred in the aforesaid cases, we are of the view that the said judgment relied on supports the case of the respondents. Further, we are of the view that even in a subsidiary company which is an independent corporate entity, if any other company is holding shares, by itself is no ground to order impleadment of parent company per se. In the case at hand, it is clear that the second respondent itself is a company in which the subsidiary of the first respondent, namely, Globe Ground Deutschland GmbH, was holding 51% shares and 49% shares were held by the Bird Group. As per the case of the appellant, the Bird Group has floated another company and started handling services from the month of January, 2009 by uitlizing the same equipments and vehicles belonging to the second respondent.

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

Explanation:
0[ds]From a reading of the reference, which is referred to Industrial Tribunal, it is clear that the reference which is required to be answered by the Industrial Tribunal is that, whether the action of the Management of M/s Globe Ground India (Pvt.) Limited, in closing down their establishment on 15.12.2009 and retrenching the services of 106 workmen is justified and legal. At this stage, it is apt to refer to Section 10 of the Industrial Disputes Act. It is clear from the above said section, whenever, the appropriate Government refers the points of dispute for adjudication, the Labour Court or the Tribunal or the National Tribunal, as the case may be, shall confine its adjudication to those points only and matters incidential thereto11. Whenever, an application is filed in the adjudication proceedings, either before the Industrial Tribunal in a reference made under the Industrial Disputes Act, 1947 or any other legal proceedings, for impleadment of a party whois not a party to the proceedings, what is required to be considered is whether such party which is sought to be impleaded is either necessary or proper party to decide the lis. The expressions necessary or proper parties have been considered time and again and explained in several decisions. The two expressions have separate and different connotations. It is fairly well settled that necessary party, is one without whom no order can be made effectively. Similarly, a proper party is one in whose absence an effective order can be made but whose presence is necessary for complete and final decision on the question involved in the proceedings15. There cannot be any second opinion on the ratio decided in the aforesaid cases relied on by the learned senior counsel for the appellant. But, whenever an application is filed for impleadment of a third party, who is not a party to the reference under the Industrial Disputes Act or any other proceedings pending before the Court, what is required to be considered is whether such party is either necessary or proper party to decide the lis. It all depends on the facts of each case; the allegations made and the nature of adjudication proceedings etc. In this case it is to be noted that only the scope of referenceis limited which is already discussed above. However, it is also clear from Section 10(4) of the Industrial Disputes Act, 1947 that whenever a reference is made, the Industrial Court shall confine its adjudication to the point of reference and matters incidental thereto only16. Reverting back to the facts of the case on hand it is clear that the first respondent had a subsidiary, namely, Globe Ground Deutschland GmbH, which was holding 51% shares along with 49% shares held by the Bird Group in the second respondent company. Further, it is clear that the Bird Group had floated another company, Bird Worldwide Flight Services Ltd. to provide ground handling and ancillary services which started from the month of January, 2009. It is the allegation of the appellants union that even after the formation of a new company, such new company is utilizing same equipment and vehicles belonging to the second respondent. It is also the allegation of the appellant that after the formation of the new company, it has retained most of the employees, except the trade union activists. The appellant workers union does not seekemployment of the alleged retrenched workers in the first respondent17. Having regard to facts and circumstances of present case, we are of the opinion that the case law relied on by the learned senior counsel for the appellant would not render any assistance in support of the appellants case18. At the same time in the judgment in the case of Balwant Rai Saluja and another vs. AIR India Limited and others (supra) relied upon by Sri Chander Uday Singh, learned senior counsel for the respondents, this Court has observed that the corporate veil can be pierced and the parent company can be held liable for the conduct of its subsidiary, only if it is shown that the corporal form is misused to accomplish certain wrongful purposes. In the aforesaid case, having regard to facts, it was opined that the doctrine of piercing veil cannot be applied. In the aforesaid case it is held by this Court that the doctrine of piercing veil, has been applied sparingly by the courts19. The other judgment relied on by the learned senior counsel for the respondents in the case of Kasturi vs. Iyyamperumal and others (supra), this Court again considered the test to be applied while considering the application filed under Order 1 Rule 10 of the Code of Civil Procedure, 1908. It is held that to consider the scope of application, the tests are:- (1) there must be a right to some relief against such party in respect of controversies involved in the proceedings; (2) no effective decree can be passed in its absence. Applying the aforesaid ratio laid down in the judgment, referred in the aforesaid cases, we are of the view that the said judgment relied on supports the case of the respondents. Further, we are of the view that even in a subsidiary company which is an independent corporate entity, if any other company is holding shares, by itself is no ground to order impleadment of parent company per se. In the case at hand, it is clear that the second respondent itself is a company in which the subsidiary of the first respondent, namely, Globe Ground Deutschland GmbH, was holding 51% shares and 49% shares were held by the Bird Group. As per the case of the appellant, the Bird Group has floated another company and started handling services from the month of January, 2009 by uitlizing the same equipments and vehicles belonging to the second respondent.