MAHARASHTRA STATE ELECTRICITY BOARD Vs. INDUSTRIAL TRIBUNAL BOMBAY

JUDGEMENT

(1.) An industrial dispute relating to several matters was referred by the Government of Maharashtra to the industrial tribunal for adjudication, under the Industrial Disputes Act. This dispute was between the Poona Electric Supply Company, Ltd. (hereinafter referred to as the company), respondent 2 in this petition, and the workmen of that company. The industrial tribunal, to which this dispute was referred, was presided over by respondent 1 in this petition. During the tendency of the dispute, the company made an application to respondent 1 tribunal requesting the tribunal not to adjudicate upon three of the matters which were pending before the tribunal. By this application, the company drew the attention of the tribunal to an agreement executed between the company and the Maharashtra State Electricity Board (hereinafter referred to as the Board) on June 12, 1963. It was pointed out that by this agreement the company had agreed to sell to the Board the undertaking of the company, upon the terms and conditions mentioned in that agreement. The company had agreed to deliver possession of the company's undertaking to the Board on the date of the revocation of its licence by the Government of Maharashtra. It was the company's case that the Board was not liable to take over the workmen engaged by the company and the Board was to employ such workmen as they thought fit as fresh entrants on fresh terms and condition. Attention was drawn to one of the conditions in the agreement that the company was required to give notices of termination of the employments of its employees and to pay them such dues as they were entitled to under the law. The application stated : "The company is in a process of closing down its work within a short period."

(2.) On these grounds the company requested that demands for wage-scales, dearness allowance and classification, which were pending before the tribunal, should not be adjudicated upon. The Poona Electric Supply Company Kamgar Union, respondent 3, in this petition (hereinafter referred to as the union), submitted a reply to the company's application. This reply attempted to refute the company's request and requested the tribunal to direct the company to produce certain documents in order to show that the arrangement by which the company has agreed to deliver to the Board its undertaking was not in the nature of the closure of the business of the company, but was merely a transfer of a running business. It is not necessary for the purposes of this petition to refer to all the other contentions made in this reply, but one of the prayers made by the union was that the Board should be joined as party to the proceedings which were pending before the industrial tribunal. The industrial tribunal thereupon issued a notice addressed to the Chairman of the Board, calling upon him to show cause why the Board should not be joined as a party to the proceedings pending before the tribunal. In response to this notice, the Board filed its written statement before the tribunal. The Board objected to its being made a party to the proceedings on several grounds. The statement pointed out that the agreement between the Board and the company was reached as a result of tripartite negotiations between the company, the Government of Maharashtra and the Board, and as a result of these negotiations it was agreed, in the public interest, that the Board should take over the assets of the company on revocation of the company's licence, under S. 4 of the Indian Electricity Act, 1910. The principal contentions of the Board were that the Board was neither a proper nor a necessary party and since the assets of the company's undertaking were being taken over by the Board by operation of law, the Board was not a successor-interest of the company as contemplated by S. 18(3)(c) of the Industrial Disputes Act (hereinafter referred to as the Act). It was also contended, in the alternative, that even if it was held to be a successor-in-interest, the Board was not bound to employ the workmen of the company since the company had terminated the services of its employees and had agreed to pay all the dues of the workmen. The company also filed a statement in which it was contended inter alia that all the employees had been paid their salaries and were paid retrenchment compensation and the payment was accepted by each and every employee without protest. The tribunal has not passed any order on the company's original application requesting the tribunal not to adjudicate upon certain matters which were in dispute between the company and its workmen. We are, therefore, not concerned with that aspect of the matter. The tribunal, however, decided the question as to whether the Board should be joined as a party to the dispute and came to the conclusion that the Board should be added as a party. The tribunal held that the Board had taken over the undertaking of the company as a going concern. According to the tribunal, the agreement entered into between the Board and the company was in substance a transfer of the company's business to the Board as a going concern. For coming to this conclusion the tribunal relied mainly on two circumstances : One was that the nature of the business was such that the arrangement must be for transfer as a going concern, since "there cannot be any break or interval or discontinuance in the supply owing to the handing over." The second circumstance was that the entire business and practically all the equipment and machinery were in fact being taken over by the Board. On these considerations, the tribunal observed as follows : "So both the conditions that it should be taken over as a going concern and that it should take over all the equipment are fulfilled."

(3.) Aggrieved by this order made by the tribunal, the Board has approached this Court under Arts. 226 and 227 of the Constitution of India.