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TMI Blog2001 (2) TMI 955X X X X Extracts X X X X X X X X Extracts X X X X ..... ore such closure shall be entitled to notice and compensation in accordance with the provision of section 25F, as if the workman has been retrenched. In case where an undertaking is closed down by reason of financial difficulties as was the position in the present case, it cannot be deemed to have been closed down on account of unavoidable circumstances beyond the control of the employer. Therefore, if an application is made by the workmen or by the union on their behalf before a Labour Court under section 33C(2), it will be proper for the Labour Court to examine the claims under section 25FFF of the Industrial Disputes Act, of each of these workmen and award compensation accordingly, which shall be payable by the Union of India and to those proceedings, the erstwhile company and the Union of India shall be parties. Thus direct the Labour Court concerned on the filing of such applications to dispose of the same within a period of three months - CIVIL APPEAL NO. 1422 OF 1999 - - - Dated:- 1-2-2001 - S. RAJENDRA BABU AND SHIVARAJ V. PATIL, JJ. Altaf Ahmed, Ms. Smita Mukherjee, Tara Chand Sharma, Ms. Neelam Sharma, P.P. Malhotra, Satpal Singh, Manoj Swarup and Ms. Anil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e company within the meaning of the Industrial Disputes Act, 1947 ? 2.Whether the agreement dated 25-8-1965 is capable of enforce- ment ? 3.Whether the workers are workmen or entitled to prefer any claim on the basis of the agreement dated 25-8-1965 ? and 4.Whether the transferor-company or the transferee-Corporation can assert that there has been closure and further that agreement is not capable of enforcement ? 3. The scheme was, in fact, sanctioned by an order made on 3-5-1967 and on that very day, the company issued a notice of closure. Thereafter, the Corporation issued fresh letters of appointment, and out of 8,000 employees of the company, the Corporation is stated to have employed about 5,173 workers. Thus, a large number of employees of the former company stood unemployed. 4. The State of West Bengal made an order of reference purportedly under section 33C(2) of the Industrial Disputes Act to compute the benefits covered by the settlement dated 25-8-1965 between the union and the company, and by another order of reference, called for computation of the retrenchment benefits arising under section 25FF of the Industrial Disputes Act. The orders of references we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ? If the Tribunal comes to the conclusion that the Corporation wrongfully absorbed the employees, the Tribunal will have to consider as to what reliefs are to be given depending upon the circumstances and such questions can be adjudicated under section 33C(2); and, thus, allowed the appeal, holding that the Labour Court had no jurisdiction to deal with the questions referred to it under section 33C(2). Thereafter, yet another reference was made to the Labour Court. 6. The Government of West Bengal by an order made on 8-6-1978 with subsequent corrigendum referred the industrial dispute between the company and the Corporation on the one hand and their workmen represented by appellant union on the other for adjudication upon the following issues : 1.Whether River Steam Navigation Co. Ltd. has been closed down within the meaning and contemplation of section 25FFF of the Industrial Disputes Act ? 2.Whether the said company has been transferred to Central Inland Water Transport Corpn. Ltd. ? 3.Whether section 25FF of the Industrial Disputes Act is attracted to the present case ? 4.Whether the settlement dated 25-8-1965 is binding on Central Inland Water Transport Corpn. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o which the Corporation is a party and the binding effect on the company which is not in existence and which was not a party to the settlement cannot be agitated. On issue 5, the Tribunal held that the scheme does not provide for any right to continuation in service in the Corporation in respect of former employees of the company. On the contrary, the scheme of arrangement provided that it was left with the bona fide discretion of the Corporation as to the number of employees it could take. Thus, there was no right to continue in employment with the Corporation. In was also held that the transferee Corporation has no obligation whatsoever in relation to payment of compensation, etc. to the workmen as per the list attached and these workmen are not entitled to any relief whatsoever. This award was challenged before the High Court and the High Court held that none of the reliefs could be granted to the appellant union and so far as the claim made in respect of compensation under section 25FFF [is concer- ned ?], the High Court took the view that the appellant union can claim the same, but the quantum of compensation can be determined by a court in accordance with law in the presenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rkmen of the erstwhile company are not absorbed in service of the Corporation. 10. This Court in Central Inland Water Transport Corpn. Ltd. s case ( supra ) took the view that the liability of the Corporation would not arise in the case because the question as to whether the transferee of an undertaking is a successor or not involves several factors. So far as the claim against the Corporation is concerned, this court made it clear that the workers who were taken over by the Corporation, were given fresh appointments from 5-6-1967 with different conditions of service and there was break in the condition of service. Even assuming that on such investigation, conclusion could be drawn that the Corporation is a successor, the matter will not be settled because, the transferee, even as a successor would be liable neither to pay compensation nor to re-employ the workmen whose employment stood automatically terminated on the transfer. Where by operation of law, the employment of workmen stands terminated, it may be difficult to sustain it on the basis of a term in a settlement prohibiting retrenchment, though statutorily binding on the transferee as a successor. Therefore, the view ..... X X X X Extracts X X X X X X X X Extracts X X X X
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