JUDGMENT
B. N. Srikrishna, J.
1.This writ petition is brought by a worker Sheriyar D. Foujdar who finds himself without a remedy today for reasons of his own making.
2. The Petitioner joined service as an employee in a textile undertaking known as Empress Mills, situated at Nagpur. and owned by the 2nd respondent Company. On 1.12.1979, the petitioner was transferred to Bombay (now known as Mumbai) to work in the head office of the 2nd respondent. The 2nd respondent Company was in financial difficulties as a result of which winding up proceedings were taken up before this Court in Company Petition No. 183 of 1986. A winding up order was made and provisional liquidator was appointed on 14.5.1986. Upto 31.4.1985, although the petitioner was rendering service in the head office of the 2nd respondent Company at Bombay, he continued to be on the muster roll of the Empress Mills, Nagpur. With effect from 1.5.1985, even this situation was changed and the petitioner’s name was transferred to and shown on the muster roll of the head office of the 2nd respondent at Bombay. The Empress Mills did not function for considerable lime on account of the financial difficulties and prolonged lockout. The Maharashtra Legislature passed Maharashtra Act No. XLVI of 1986 by which the said undertaking of the 2nd respondent Company known as Empress Mills was acquired to protect the interests of the general public and about 6000 employees of the said undertaking. The acquisition came into effect from the appointed day i.e. 3.10.1986.
3. It is the case of the petitioner that his service was terminated as a result of the coming into force of Maharashtra Act No. 46 of 1986 and, therefore, he is entitled to certain amount of gratuity which remained unpaid either by the 2nd respondent or by the State Government of Maharashtra and the 1st respondent who are responsible for discharging liabilities of the employees. This writ petition is intended to enforce the said claim of the petitioner.
4. Sub-section (1) of Section 12 of the Maharashtra Act No. 46 of 1986 (hereinafter referred to as “the Act”) deals with what was to happen to the service of an employee who was a “workman” within the meaning of Section 2(s) of the Industrial Disputes Act, 1947, who was employed in the Empress Mills undertaking immediately before 3.10.1986. Sub-section (2) of Section 12 deals with the case of non-workman employees. Both these sub-sections provide that such workman and non-workman employees shall become, from the date of appointment by the 1st respondent Corporation, an employee of the Corporation and continue as such until their services are validly terminated. The scheme of the Act is that the acquired undertaking vests in the State and immediately stands transferred to the 1st respondent by virtue of Section 3 of the Act. The Act gives the discretion to the 1st respondent Corporation to decide the required complement of employees -both workmen and non-workmen. If such employees are taken over and appointed by the Corporation, under the provisions of sub-section (1) and sub-section (2) of Section 12, they would continue as employees of the Corporation. Sub-section (3) of Section 12 deals with the converse situation. If such employees are not taken over, then their services stand terminated by reason of clause (b) of sub-section (3) of Section 12 which also provides that such employees whose services stand terminated, shall not be entitled to claim employment in the Corporation as of right. Then comes sub-section (4} which deals with the payment of gratuity and compensation for closure to persons whose services stand terminated under sub-clause
(i) of clause (a) of sub-section (3) of Section 12. Then we have Section 12(5) which provides that if the services of any person employed before the appointed day in the undertaking are terminated under the terms of any contract or service or otherwise or under sub-section (3), and such person is entitled to any arrears of salary or wages or other dues “not being payment by way of gratuity or compensation for retrenchment,” such person may enforce his claim against the “proprietors” of the undertaking but not against the State Government or the 1st Respondent Corporation. Since we are dealing with a case of claim for gratuity, this provision need not detain us. There is a proviso to sub-section (5) of Section 12 under which the liability for payment of gratuity or arrears of wages, even if payable by the State Government or the 1st respondent Corporation, is restiicted to certain periods. Section 14 of the Act appoints a Commissioner of Payments for disbursement of amounts payable to the proprietors. Under Section 17 every person having a claim, other than the claim relating to gratuity or compensation for retrenchment or closure, against the proprietors is empowered to prefer such claim before the Commissioner. There are detailed provisions as to how the Commissioner adjudicate such claims, the priorities should be given for such claims and so on with which we are not concerned.
5. Against this background, we shall now address ourselves to the contentions urged by the learned counsel for the petitioner. Ms. Gopal urges that section 12 uses the words “undertaking” and “proprietors” at different places; since both terms are separately defined in Section 2(k) and 2(h) respectively, one cannot be substituted for the other. She contends that section 12(3)(a) talks of the service of every person employed by the “proprietor” before the appointed day standing terminated if such person is not employed before the designated day by the Corporation under subsection (1) or (2). She contends that as a consequence of this sub-section, services of all persons employed by the 2nd respondent Company stood terminated if such persons were not employed before the designated day by the 1st respondent Corporation under sub-section (1) or (2). According to her. the petitioner’s case falls squarely within it. In her submission, the petitioner not having been appointed under sub-section (1) or (2) of Section 12 by the “proprietor” i.e. the 2nd respondent Company, before the designated day. his services shall be deemed to have been terminated under subsection (3). Hence, she contends that the petitioner became entitled to gratuity upon such termination of his services and such claim of gratuity is preferable against and to be discharged by the 1st or the 3rd respondents. Consequently, gratuity amount is payable by the 1 st or the 3rd respondent.
6. In our judgment, the contention is unsound. It is true that the expression used in Section 12(3)(a) is “proprietor”. But we do not think that the Act was intended to take into its sweep persons who were not employed in the textile undertaking as on the designated day. (There is also no material on record as to what the designated day was). The Act was intended to ameliorate the distress caused to employees in the specific textile undertaking known as Empress Mills which was owned by the 2nd respondent. It was not intended to take over or acquire the 2nd respondent Company and simultaneously terminate the services of all the employees of the 2nd respondent Corporation wherever they were situated. In the
context, therefore, the expression “proprietor” has to be read down as the employer qua the textile undertaking known as Empress Mills. We, therefore, disagree with the contention of Ms. Gopat in this respect.
7. Turning to the facts of the case, it appears that the petitioner can have no claim either against the 1st or third respondents. This is so because the petitioner was permanently transferred to and borne on the head office muster roll at Bombay from 1.5.1985. As on the date of acquisition, i.e. 3.10.1986, the petitioner was not an employee at the textile undertaking known as Empress Mills, nor was his name carried on the muster roll of the Empress Mills. There is no material on record to suggest as to when and how his services came to an end even as an employee of the 2nd respondent while he was working at Bombay in the head office. There is a letter issued by M/s. Svadeshi Mills Company Ltd., an associate of 2nd respondent Company, from its head office, which is on record at Exhibit-1 to the affidavit in reply filed by Ramchandran Subrarnanian on behalf of the 1st respondent. This letter dated 8.6.1994 suggests that the petitioner was a bonafide employee of the 2nd respondent Company and was on the muster roll of the said Company till February, 1986. He joined as a new employee in Svadeshi Mills on 1.10.1987 and retired from the said Mills on superannuation on 31.3.1990. There is another letter dated 20.12.1993 from Tata Textiles also suggesting that the petitioner had joined the 2nd respondent’s Empress Mills at Nagpur on 1.10.1963 and was transferred to the head office on 1.5.1985 and served the Company upto February, 1986. It also suggests that the petitioner was not paid any gratuity by Tata Textile or by Empress Mills. Thus, it would appear that the service of the petitioner came to an end in February, 1986. In February, 1986, the petitioner was undoubtedly working in the head office of the 2nd respondent at Bombay. At any rate, he was not an employee of the Empress Textile Mills at Nagpur, nor was his name carried on the muster roll of the said textile undertaking. We do not have the exact date when the winding up order was made by this Court in Company Petition No. 183 of 1986. We are informed that a provisional liquidator was appointed on 19.3.1986 and the official liquidator was appointed on 14-5.1986. We, therefore, assume that the winding up order must have been made around that lime. Even if the argument of Ms. Gopal is taken to the highest, namely, that until the service of the petitioner was formally terminated by the 2nd respondent Company, he continued to be an employee, as the vinculum juris was not snapped, we cannot lose sight of the fact that upon passing of the winding up order, the services of the petitioner stood terminated by reason of section 445(3) of the Companies Act, 1956. Thus, there is no escape from the conclusion that the petitioner’s service came to an end from February, 1986, or at any rate in March, 1986. Conversely, the petitioner was not an employee of the textile mills, nor of the 2nd respondent Company, as on the date of acquisition i.e. 3.10.1986. Thus, we have no hesitation in coming to the conclusion that the petitioner got no right under the Act at all and his claim to gratuity, purportedly based on the provisions of the Act. must therefore, fail.
8. Finally, it is contended by Ms. Gopal that, in any event, the petitioner’s gratuity has to be paid by the 2nd respondent Company, if not, by the 1st respondent by reason of the operation of the Act. We express no opinion on this. However, we find that though the present writ petition was
admitted on 4.6.1996 and rule issued, till today, the rule does not appear to have been served on the 2nd respondent at all. Though Ms. Gopal requested us that the petition be adjourned to serve the 2nd respondent, we decline to do so at this late stage. The petition must, therefore, fail as against the 2nd respondent also.
9. In the result, the petition is dismissed. Rule is discharged. We make it clear that we have expressed no opinion as to the right, if any, of the petitioner in the matter of gratuity against the 2nd respondent. The petitioner is at liberty to pursue the said claim against the 2nd respondent, if permissible in law. Subject to these observations, the writ petition stands dismissed with no order as to costs.
10. The parties may be provided ordinary copy of this order duly authenticated by Court Associate.
11. Certified copy expedited.