C.W.P.No.545 of 1986 -1-
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
C.W.P.No.545 of 1986
Date of Decision:- 27.01.2009
Management of M/s. Dalmia Cement
(Bharat) Ltd., Ballabgarh, Haryana ....Petitioner(s)
vs.
State of Haryana and others ....Respondent(s)
***
CORAM:- HON'BLE MR.JUSTICE AUGUSTINE GEORGE MASIH
***
Present:- Mr.P.K.Mutneja, Advocate for the petitioner.
Mr.D.S.Nalwa, Additional Advocate General, Haryana.
Mr.R.S.Sihota, Sr.Advocate with
Mr.H.P.S.Ishar, Advocate for respondent No.2.
***
AUGUSTINE GEORGE MASIH, J.
Through this order, I propose to decide C.W.P.No.545 of 1986
and 546 of 1986 (Management of M/s.Dalmia Cement (Bharat) Ltd.,
Ballabhgarh, (Haryana) vs. State of Haryana and others) wherein the
petitioner has challenged award dated 12.4.1985 (Annexure P-1) passed
by the Industrial Tribunal, Haryana Faridabad, holding that the
termination of services of respondent No.3-workman was neither
justified nor in order and as such, he was entitled to reinstatement but
without back-wages from the respondent for the reasons given under issue
No.3.
For the sake of convenience, the facts are being taken from
C.W.P.No.545 of 1986 -2-
C.W.P.No.545 of 1986.
In the claim statement filed on 23.11.1981, the workman has
stated that he was employed by the petitioner-management but his services
were terminated without any prior notice, charge-sheet or enquiry and
further that no compensation as per the Industrial Disputes Act, 1947 were
granted to him, which would vitiate termination order being illegal, thereby
entitling the workman to reinstatement with full back-wages. The stand of
the petitioner-Management before the Labour Court was that there was no
relationship of employer and employee between the parties. The
Management did not terminate the services of the claimant. The services of
the workman were terminated by M/s. Telesound India Ltd., as per
Certified Standing Order No.16, applicable to the establishment on
account of his continued and unauthorized absence for more than 8 days.
The scheme of amalgamation of M/s. Telesound India Ltd. with Dalima
Cement (Bharat) Limited was sanctioned by the High Court of Delhi
according to which no liability had been placed on the petitioner-
Management vis-a-vis. the employee of M/s. Telesound India Limited who
was not the employee of the said Company on the date on which the order
of the Delhi High Court sanctioning the scheme of Amalgamation was
passed, on 5.11.1980/5.12.1980. Another ground which was taken by the
petitioner-management was that the claim has been made by the respondent-
workman in the year 1981 i.e. after a lapse of 8 years from the date his name
was removed from the rolls of establishment by M/s. Telesound India
Limited, Ballabhgarh, as the date of termination of the respondent is dated
1.9.1973. The claim, therefore, is highly belated and the reference is not
maintainable. On the basis of the pleadings of the parties, following issues
C.W.P.No.545 of 1986 -3-
were framed by the Labour Court:-
“(1) Whether there was a relationship of employee and
employer between the parties? OPW.
(2)Whether the Management was liable for the claim of
the workman in view of the order of Hon’ble Delhi
High Court. OPW.
(3) Whether the claim was belated and if so, to what
effect? OPM.
(4) Whether the termination of services of Shri Shish
Ram was justified and in order? If not, to what relief
is he entitled? OPM.
On the basis of the evidence adduced by the parties, the Labour
Court has answered the reference in favour of the workman and against the
petitioner-management.
Counsel for the petitioner-management contends that the award
dated 12.4.1985 (Annexure P-1) passed by the Labour Court is not in
accordance with law and, therefore, deserves to be set aside. He submits
that there was no relationship of employee and employer between the
petitioner-management and respondent No.2-workman. He submits that
respondent No.2 was never the employee of the petitioner-Management.
He states that the petitioner, on the basis of the order dated 5.11.1980
passed by the High Court of Delhi, came into picture and as per the Scheme
of Amalgamation as sanctioned by the Court became the successor of M/s
Telesound India Limited. He submits that the workman was employed by
Telesound India Limited and his services were terminated on 1.9.1973 also
by M/s. Telesound India Limited. As per clause (12) of the Scheme of
C.W.P.No.545 of 1986 -4-
Amalgamation the liability of the petitioner with regard to the employees of
the transferor company i.e. M/s.Telesound India Limited was specified.
He submits that during the proceedings before the Delhi High Court, list of
137 employees (Annexure P-4) was produced which was taken to be the
employee strength on the date of approval of the scheme of amalgamation
by the Delhi High Court i.e. 5.11.1980. On this basis, he submits that as on
the date of amalgamation, respondent No.3 was not an employee of the
transferor company. The petitioner-management company was not his
employer nor was the respondent its employee. Clause (12) of the Scheme
of Amalgamation is reproduced here-in-below:-
“12. All the employees of the Transferor Company on the
date on which the order of the Court sanctioning the
scheme is passed, will become the employees of the
transferee company with effect from the Transfer Date
without any break or interruption in service and on terms
and conditions not less favourable to them.”
He states that M/s. Telesound India Limited has not been impleaded as a
party respondent and, therefore, the reference would not survive because
claim, if any, was against M/s. Telesound India Limited which had
employed the workman and had terminated his services.
On the other hand, counsel for the respondent-workman
submits that as per clause (2) of the Scheme of Amalgamation on the date
of transfer, all debts, liabilities, duties and obligations of the transferor
company stood transferred to the transferee company and in the light of this,
the claim of the respondent-workman would lie against the petitioner as it
has stepped into the shoes of the original employer. Clause (2) of the
C.W.P.No.545 of 1986 -5-
scheme of amalgamation is reproduced herein below:-
“2. With effect from the Transfer Date, all debts,
liabilities, duties and obligations of the Transferor
Company shall stand transferred without any further act
or deed to the Transferee Company pursuant to the
provisions of Section 394 of the said Act, so as to
become the debts, liabilities and duties and obligations of
the Transferee Company. It is hereby made clear that
mortgages/charges created by “Telesound” on its assets
in favour of the secured creditors will continue after the
“Transfer Date” on the assets of “Telesound” taken over
by “Dalmia Cement” and the said morgages and charges
will not be extended to the assets of other Divisions and
undertakings of “Dalmia Cement”. It is hereby further
clarified that neither “Dalmia Cement” nor any of its
Directors and Officers will be liable or responsible in
any way for the omissions, commissions and statutory
defaults made by “Telesound” upto the date of its
amalgamation with “Dalmia Cement”.
Counsel for the petitioner in response to this assertion of the
counsel for the respondent states that clause (2) deals with the financial
liabilities of the transferor company and the transferee company. He
submits that where there is a specific clause (12) dealing with the
employees, the same would hold the field and nothing more and nothing
less can be read into it. All rights and liabilities as far as the employees are
concerned, would flow from clause (12) of the Scheme. Since clause (12)
C.W.P.No.545 of 1986 -6-
specifically states that all the employees of the transferor company on the
date on which the order of the Court sanctioning the scheme is passed, will
become the employees of the transferee company with effect from the
transfer date and the respondent not being in service of the transferor
company on the date of the order of Court sanctioning the scheme, he could
by no stretch of imagination be termed as an employee of the petitioner-
company.
He submits that on amalgamation of a company, a new entity
comes into existence. Under the order of amalgamation made on the basis
of the High Court order, the transferor company ceases to be in existence in
the eyes of law and it effaced itself for all practical purposes. After
amalgamation of two companies, the transferor company ceases to have any
entity and the amalgamated company acquires a new status and it is not
possible to treat the two companies as partners or jointly liable in respect of
their liabilities and assets. For this submission, counsel relies upon a
judgment of the Hon’ble Supreme Court in the case of Saraswati Industrial
Syndicate Ltd. vs. Commissioner of Income Tax, 1990 (Supp.) SCC 675.
A perusal of this judgment would show that this proposition
has been laid by the Hon’ble Supreme Court but it has further been said that
the amalgamation order and the Scheme made thereunder would be the
guiding force for determining the liabilities of the parties. Therefore, to
determine as to whether there was any relationship of the employer and
employee, the Scheme of Amalgamation as approved by the Delhi High
Court would be the relevant document from where all the rights and
liabilities of the parties would flow.
Counsel for the respondent has relied upon a judgment of the
C.W.P.No.545 of 1986 -7-
Hon’ble Supreme Court in the case of Karnataka Power Transmission
Corporation Ltd. And another vs. Amalgamated Electricity Co.Ltd.
and others, AIR 2001 Supreme Court 291 to submit that the liability of the
company would be the same as that of the predecessor. For the same
proposition, he also relies upon a judgment of the Hon’ble Supreme Court
on Workman Represented by Akhil Bhartiya Koyla Kamgar Union vs.
Employers in relation to the Management of Industry Colliery of M/s.
Bharat Coking Coal Ltd. And others, AIR 2001 SC 1994 and submits
that the successor company who has stepped into the shoes of its
predecessor would be liable as if the predecessor would have been liable.
He argues that by legal fiction the workman would be the employee of the
petitioner as the liabilities would be of the petitioner as per the Scheme of
Amalgamation. Since the claim of the workman was against M/s.
Telesound India Limited, whose rights and liabilities have been taken over
by the petitioners, so all claims would lie against the present petitioner and
it is for this reason that M/s. Telesound India Limited has not been
impleaded by the workman in the demand.
The question in the present case is that there is a Scheme of
Amalgamation as sanctioned and approved by the High Court from where
all the rights and liabilities of the parties flow. Therefore, the determining
factor would ultimately be the Scheme and we will have to fall back on it to
decide the issue in hand.
A perusal of Clause (2) of the Scheme would clearly indicate
that it deals primarily with financial liabilities and the statutory obligations
dealing with financial matters. It does not talk about the employees, more
so when a specific clause has been provided in the Scheme itself which
C.W.P.No.545 of 1986 -8-
takes care of the employees.
A clause which specifically deals with a particular subject
would be determinative of the rights or the liabilities of the transferee
company and would determine the relationship, the rights and liabilities qua
that subject which is governed by that clause. Since Clause (12) specifically
deals with the employees, the liabilities and rights of the employees would
be governed by this clause. As per this clause only, the employees of the
transferor company, who on the date of the order of the Court sanctioning
the Scheme has been passed, would become the employees of the transferee
company and none else.
In the light of this specific clause dealing with the employees
and in the light of the admitted facts that on the date when the High Court
passed the order i.e. on 5.11.1980, respondent No.3 was not in service nor
was he the employee of the petitioner. Even no claim qua his services or
relating to his employment was pending either with the transferor company
or any Authority under the Industrial Disputes Act, 1947. It is an admitted
position that the demand notice is dated 27.4.1981 which is after the order
of amalgamation was passed by the Delhi High Court on 5.11.1990.
In the light of the above, I have no hesitation in holding that
there is no relationship of employer and employee between the petitioner
and respondent No.3.
The next submission which has been put forth by the
counsel for the petitioner is that although there is no relationship of
employer and employee between the petitioner and respondent No.3, but
still the reference itself is not maintainable because of the delay
involved in it. He submits that it was a stale claim which did not call
C.W.P.No.545 of 1986 -9-
for adjudication by the Labour Court. He submits that a specific ground
to that effect was taken by the petitioner-Management before the
Labour Court and issue No.3 was framed in this regard but the Labour
Court has simply proceeded to make observations that the workman
would not be entitled to back-wages and has, thus, failed to give a proper
finding on the issue.
Counsel for the petitioner submits that the order of
termination of the workman is dated 1.9.1973 and the demand notice is
dated 27.4.1981. No explanation whatsoever is forthcoming in the demand
notice or in the claim petition for the delay nor has the workman in his
statement given reasons justifying the delay in putting forth his demand.
He submits that as there was no dispute and even if there was one, it
was only in the year 1973 when the services of the workman were
terminated. With the passage of time, the said dispute had become stale
and, therefore, could not have been agitated by the workman-
respondent No.3. He relies upon a judgment of the Hon’ble Supreme
Court in the case of Nedungadi Bank Ltd. vs. K.P. Madhavankutty
and others, (2000) 2 Supreme Court Cases 455. He submits that in the
said case the dispute was raised against the dismissal by the
workman after a period of 7 long years. The Hon’ble Supreme Court has
held that although the law does not prescribe any time limit for the
Appropriate Government to exercise its powers under Section 10 of the
Industrial Disputes Act, 1947 but this power cannot be exercised at any
point of time and to revive matters which had already been settled. The
power of reference is to be exercised reasonably and in a rationale
manner. There is no rational basis on which the Govt. has exercised
C.W.P.No.545 of 1986 -10-
powers in the said case after a lapse of 7 years of the order dismissing
the workman from service. It has been further held that at the
time when the reference was made, no industrial dispute existed or could
be even said to have been apprehended. A dispute which is stale cannot
be the subject-matter of reference under Section 10 of the Act. It has
further been observed that as to when a dispute can be said to be stale
would depend upon the facts and circumstances of each case. Counsel
for the petitioner relying on these observations of the Hon’ble Supreme
Court states that the present dispute also is of same nature as there has
been delay of more than 7 years in raising the demand. He further relies
upon a judgment of the Hon’ble Supreme Court which also deals with the
question of stale disputes i.e. U.P. State Road Transport Corporation
vs. Babu Ram, (2006) 5 Supreme Court Cases 433. There also the
Hon’ble Supreme Court had held that delay cannot be condoned merely
on conjectures and surmises and the onus would be on the workman to
explain such delay.
On the other hand, counsel for the respondent-workman has
submitted that there was ample justification with the workman for not
approaching and putting forth his claim before 1981. He submits that the
services of the respondent were terminated on 1.9.1973 on the ground that
he had absented from duty for more than 8 days. He submits that the then
Management of M/s.Telesound India Ltd. had got registered a First
Information Report against the workman on account of theft in the company
due to which he was arrested on 22.8.1973. He remained in judicial
custody for 12/13 days because of which he could not come present on his
duty. It was during this period that his services were terminated on
C.W.P.No.545 of 1986 -11-
1.9.1973 on the ground of absence for more than 8 days as per the Certified
Standing Order No.16 of M/s. Telesound India Limited. Since his absence
is attributable to the F.I.R. that was got registered by the Management of
M/s.Tele sound India Limited which led to his arrest, he did not have any
ground or reason for putting forth his demand unless a decision on the
criminal case registered against him had come from the Court. He submits
that the respondent was acquitted by the Court on 4.12.1978. During the
said interregnum, M/s.Telesound India Limited was closed down in the year
1977. The right, if any, therefore, accrued to the respondent only on his
acquittal on 4.12.1978, on which date M/s.Telesound India Limited stood
closed. The company petitions were going on in the High Court and till the
finalization of the proceedings the workman could not prefer any claim
against the company. Therefore, he waited for the amalgamation scheme
which was being formulated and when the said scheme was finally
accepted, sanctioned and approved by the High Court of Delhi on
5.11.1980, he preferred a claim petition on 27.4.1981. Counsel on the basis
of these submissions states that there is no delay on the part of the
respondent in putting forth his claim and even if it is assumed to be so, then
also it cannot be attributed to the respondent. His claim was always alive
but due to the reasons which have been submitted above he could not put a
demand to that effect.
I am afraid these submissions although may appear to be quite
natural and justified but cannot be taken to be a reasonable explanation for
condoning the delay. It is not in dispute that the services of the respondent-
workman were terminated on the ground of his absence of more than 8 days
as per certified standing order No.16 of M/s. Telesound India Limited and
C.W.P.No.545 of 1986 -12-
not on the basis of the registration of an F.I.R. for theft. The claim for non-
compliance of the provisions of the Industrial Disputes Act while
terminating his services or for challenging his termination on the ground
that it was not in accordance with the Standing Order or the Industrial
Disputes Act was not dependent either on the FIR or on the outcome of
the criminal trial which followed the registration of the F.I.R. It was
purely an independent cause of action which had accrued to the
workman, which has been taken as a ground by the workman while
putting forth his demand on 27.4.1981. Therefore, the cause of action
arose to the workman on his termination in September, 1973. It is not in
dispute that the first demand which has been put-forth by the workman
is through his demand notice dated 27.4.1981. That being the position and
there being a delay of more than 7 years in raising a dispute with no cogent
and reasonable explanation forth-coming from the side of the respondent,
this Court has no option but to hold that the claim was stale and there was
no industrial dispute in existence on the date the demand notice was
submitted.
This dispute which is stale, therefore, could not be the subject-
matter of the reference under Section 10 of the Act. Demand raised by the
respondent for raising an industrial dispute after a delay of more than 7
years is ex-facie bad and incompetent and, therefore, the reference was not
maintainable before the Labour Court.
In the light of the above, I do not feel it necessary to go into
the question as to whether the termination of the services of the respondent-
workman was in accordance with Certified Standing Order No.16 of M/s.
Telesound India Limited or not.
C.W.P.No.545 of 1986 -13-
In view of what has been held above, the present writ petition is
allowed and the impugned award dated 12.4.1985 passed by the Industrial
Tribunal-cum-Labour Court, Haryana Faridabad (Annexure P-1) is hereby
quashed.
January 27, 2009 ( AUGUSTINE GEORGE MASIH )
poonam JUDGE
Whether referred to Reporters ________ Yes/No
C.W.P.No.545 of 1986 -14-
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
C.W.P.No.546 of 1986
Date of Decision:- 27.01.2009
Management of M/s. Dalmia Cement
(Bharat) Ltd., Ballabgarh, Haryana ....Petitioner(s)
vs.
State of Haryana and others ....Respondent(s)
***
CORAM:- HON’BLE MR.JUSTICE AUGUSTINE GEORGE MASIH
***
Present:- Mr.P.K.Mutneja, Advocate for the petitioner.
Mr.D.S.Nalwa, Additional Advocate General, Haryana.
Mr.R.S.Sihota, Sr.Advocate with
Mr.H.P.S.Ishar, Advocate for respondent No.2.
***
AUGUSTINE GEORGE MASIH, J.
For orders, see separate detailed judgment of even date passed
in C.W.P.No.545 of 2006 (Management of M/s. Dalmia Cement (Bharat)
Ltd., Ballabgarh, Haryana vs. State of Haryana and others).
January 27, 2009 ( AUGUSTINE GEORGE MASIH ) poonam JUDGE