Industrial Paper (Assam) Ltd. Emps. ... vs Management Assam Industrial ...

Background facts in a nutshell are as follows:

The Labour Court issued notice dated 22.5.1999 to the respective parties to the alleged disputes. In pursuance of the notice, both the AIDC and the appellant filed their respective written statements and additional written statements. AIDC, in their written statement, raised preliminary objection, specifically with the issues under reference, inter-alia, questioning the maintainability of the reference stating that the purported dispute referred to by the Notification is not an industrial dispute within the meaning of Industrial Disputes Act, 1947 (hereinafter called as the Act') and the Notification issued by the Government cannot constitute an industrial dispute because AIDC was not a proper or necessary party and the members of the appellant, being employees of a separate company i.e. IPAL, cannot claim to be employees of AIDC which was only a Promoter Company.

Apart from the preliminary objection so raised as mentioned above, AIDC gave its reply in respect of all other issues. Regarding issue No.1, it was stated that AIDC, being a promotional organization, had also promoted the IPAL by signing various documents and agreements with IPAL since it was in the nascent stage for the project for protection of ESKPP at Dhing. The role of AIDC was merely to assist IPAL as its promoter for setting up its project. AIDC claimed that under no circumstances AIDC could be called as owner of the project because IPAL was a separate Company registered under the Companies Act, 1956 with an independent Board of Directors having its separate Memorandum and Articles of Association. In support of its claim, AIDC mentioned that the Govt. of Assam vide Notification dated 23.2.88 re-constituted the Board of Directors of IPAL Insofar as issue No.2 is concerned, it was stated that since the ESKPP of IPAL was not owned by AIDC, the appellants were the employees of IPAL, and AIDC being a nodal agency of the State Government for implementation of various projects as promoter only, cannot be saddled with any responsibility of the employees of IPAL and the appellant's members were not the employees of AIDC Besides IPAL, the AIDC promoted several other companies like Fertichem Ltd., Assam Syntex Ltd. Assam Petrochemical Ltd. etc. and those are managed by their independent Board of Directors. The employees who were claimed by the appellant to be the employees of AIDC, on being appointed in pursuance of the advertisement, were not the workmen as defined under the Act. According to them, none of 11 categories of posts advertised, mentioned in the reference itself, were workmen as defined under the Act arid the persons appointed against those posts had not raised dispute. Such dispute had only been raised by the IPAL Employees Union, the appellant, which did not represent the persons appointed as per the advertisement. As regards issue No.3, the contention of AIDC was that they were already overstaffed for which Voluntary Retirement Scheme had already been introduced to reduce excess manpower and as such absorption of employees of IPAL in AIDC did not arise. With regard to issue No.4, AIDC stated that AIDC as a promoter was not liable for payment of salaries to the employees of IPAL which was a separate and distinct Company. On issue No.5, the stand of AIDC was that due to the precarious financial position, the question of fresh recruitment did not come.

The appellant in the written statement alleged that the ESKPP was owned by AIDC inasmuch as ESKPP, being established under the licence obtained from the Central Government under the Industries (Development and Regulation) Act, 1951 (for short, the 'IDR Act'), AIDC cannot claim that they established the said project as a 'Promoter' as they failed to show that the Industrial Licence obtained by it was either transferred or revoked at any stage. According to it, AIDC also admitted that ESKPP was never amalgamated with any other company under the Companies Act and as such, the AIDC remained the 'owner' for the said project even under the Act itself and no further document or any evidence was necessary to prove the same from the appellant's side. Accordingly it was pleaded that issue No.1 should be decided in favour of the appellant holding that AIDC was not justified in denying the ownership of the project. Regarding issue No.2, it was alleged that since AIDC was owner of the project, it could not deny its responsibilities to its employees who were appointed in the project. Insofar as issue No.3 and 4 are concerned, it was claimed that the AIDC, being the owner of the project, was liable to pay regular salaries to its workmen. As regards issue No.5, it was submitted that AIDC should be restrained from recruiting or appointing new employees until and unless the employee of IPAL were engaged or absorbed by AIDC.

As noted above, both the appellant and AIDC filed writ petitions. While the writ petitions filed by the AIDC was allowed and one filed by the appellant was dismissed. Learned Single Judge held that since workmen were not employees of the AIDC, the question of giving them benefit as done by the Labour Court did not arise. The question of employer and employees (of AIDC) was not the subject matter of reference. Writ appeal was filed by appellant before the High Court. The High Court inter alia held while dismissing the writ appeal that AIDC is not the owner of the Extensible Sack Craft Paper Project of IPAL. Being a separate and independent company, the members of the appellant-union are not the employees of AIDC which could not be saddled with the responsibility of these employees. Therefore, AIDC was not liable for absorption or engagement of the employees of IPAL in any other AIDC promoted industry and to give them salaries regularly after the closure of the project.

Above being the position, the judgment of the Division Bench affirming that of learned Single Judge cannot be faulted and the appeal stands dismissed. Subject to what is stated above, dismissal of the appeal shall not stand in the way of the concerned employees or recognized Unions making claim for arrears of salaries or claims to be due from IPAL.

The appeal is dismissed but without any orders as to costs.