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Sambhu Vaidyan and anr. Vs. Industrial Tribunal and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtKerala High Court
Decided On
Judge
Reported in(1961)IILLJ476Ker
AppellantSambhu Vaidyan and anr.
Respondentindustrial Tribunal and ors.
Cases ReferredNiemla Textile Finishing Mills Ltd. v. Second Punjab Tribunal
Excerpt:
.....industrial disputes, whereas the proceedings in the civil court related to the dissolution of the firm, the employees being no parties to them. the next contention, that the firm having been dissolved by the preliminary decree, there can be no industrial dispute and no employer-employee relationship, is unacceptable in view of the provisions of section 25fff of the act, which provides for the payment of compensation on closure of business, which can well be the subject of an industrial dispute. 3 that the amount set apart by the firm for 'these purposes,'which may well be interpreted to refer to provident fund and other compensation payable to the employees by the firm,'will be given to the purchaser of the goodwill. 8. the petitioners next complained, that the liability now imposed on..........a conciliation is mandatory only when the dispute relates to a public utility service, which the firm's business was, and on the decision of the supreme court in niemla textile finishing mills ltd. v. second punjab tribunal 1957--i l.l.j. 460 at 466. the third contention that the reference was bad as the court was in seisin of the case, is without substance, as the act has specifically provided a machinery for the adjudication of industrial disputes, whereas the proceedings in the civil court related to the dissolution of the firm, the employees being no parties to them. the next contention, that the firm having been dissolved by the preliminary decree, there can be no industrial dispute and no employer-employee relationship, is unacceptable in view of the provisions of section 25fff.....
Judgment:

Velu Pillai, J.

1. The two petitioners and their father's brother, the respondent 4 were members of a firm which was doing business, under the name and style 'Swarajya Pharmacy.' The respondent 4 instituted a suit O.S. No. 225 of 1956 for the dissolution of the partnership and succeeded in obtaining a preliminary decree on 27 March 1957. The first petitioner moved the Court which passed the decree on 1 March 1958, for permission to terminate the services of the employees of the firm; this motion was not opposed, the Court granted permission and their services were dispensed with on 6 March 1958. On a petition which some of the employees had made, it was ordered on 7 March 1958, that

the condition of the service of the employees will be governed by the agreement between the employees and the management and the labour laws prevailing in the State.... The liability of the management for the amount due to them and their future conditions of service will be considered later.

2. On a motion made by the respondent 4 for the sale of the goodwill of the firm, the Court passed an order, Ex.P. 3, on 14 March 1958, the relevant part of which reads:

the person who purchases the goodwill will be liable to the employees for their provident fund and other compensation that have to be paid to them. The amount set apart for these purposes by the firm will be given to the purchaser of the goodwill.

3. The petitioners purchased the goodwill In Court auction on 23 August 1958. On 12 December 1958 the Court ordered by Ex.P. 4 that the petitioners would be liable to the employees for their provident fund and the compensation, that have to be paid to them, and would be given the amount set apart for that purpose. A final judgment followed, adjusting the mutual rights and liabilities of the petitioners and the respondent 4.

4. In the meanwhile, on 16 December 1958, the respondent 2, the State of Kerala, referred by Ex.P. 5, an industrial dispute between the management of the Swarajya Pharmacy, petitioners 1 and 2 and the respondent 4 on the one hand, and the workmen of the aforesaid firm represented by their labour union on the other, to the Industrial Tribunal, Ernakulam under Section 10(1)(d) of the Industrial Disputes Act, 1947, which may be referred to briefly as the 'Act.' The annexure to Ex.P. 5 specified the dispute, as 'non-employment of the following workmen 'and gave a list of 30 employees. The industrial tribunal passed an award, Ex.P. 1, which is sought to be quashed by this petition, on various grounds which may now be dealt with.

5. It was first contended, that the reference was invalid and incompetent, as the dispute between the parties was not specified in Ex.P. 5, and that the tribunal was therefore in error in passing an award on such issues, as to compensation on closure of business, and to provident fund. It is sufficient to state, that the contention has to be overruled on the authority of the decision of the Federal Court in India Paper Pulp Co. Ltd. v. India Paper Pulp Workers' Union 1949 L.L.J. 258 and of the Supreme Court in State of Madras v. C.P. Sarathy 1953--I L.L J. 174. The second contention, that no reference for adjudication should be made, unless preceded by conciliation proceedings under the Act, is equally untenable, both the terms of Section 12(1) of the Act, under which a conciliation is mandatory only when the dispute relates to a public utility service, which the firm's business was, and on the decision of the Supreme Court in Niemla Textile Finishing Mills Ltd. v. Second Punjab Tribunal 1957--I L.L.J. 460 at 466. The third contention that the reference was bad as the Court was in seisin of the case, is without substance, as the Act has specifically provided a machinery for the adjudication of Industrial disputes, whereas the proceedings in the civil Court related to the dissolution of the firm, the employees being no parties to them. The next contention, that the firm having been dissolved by the preliminary decree, there can be no industrial dispute and no employer-employee relationship, is unacceptable in view of the provisions of Section 25FFF of the Act, which provides for the payment of compensation on closure of business, which can well be the subject of an industrial dispute.

6. It was then contended that the finding of the tribunal, that the petitioners alone and not the respondent 4 also, are liable for the payment of compensation to the employees, is contrary to the orders passed by the civil Court in the proceedings for the dissolution of the firm. As stated, the Court had ordered by Ex.P. 3 that the amount set apart by the firm for 'these purposes,' which may well be interpreted to refer to provident fund and other compensation payable to the employees by the firm,' will be given to the purchaser of the goodwill. 'But Clause 12 of the proclamation for sale of the goodwill provided as a specific condition, that

the successful purchaser shall be liable to the employees of the Swarajya Pharmacy in respect of all their claims already accrued and accruing in future. The provident fund amount of the employees which is now in bank deposit will be made over to the purchaser.

7. By their purchase, the petitioners became liable to the employees for all their claims past and future, subject to the provident fund amount only, being made over to them for payment. In the final judgment in the suit for dissolution, the Court ordered the respondent 4 to make contribution of one-half of this amount kept in deposit to the petitioners, and the mutual liabilities of the petitioners and the respondent 4 were adjusted on that basis. No liability for any other claim of the employees was fastened on the respondent 4 by the final judgment. Having purchased the goodwill subject to Clause 12 of the proclamation it is not open to the petitioners to contend, that they have to be exonerated to any extent, by making the respondent 4 also liable. It has also to be mentioned as pointed out by the learned Counsel for the respondent 4 that the petitioners had no case before the tribunal, that any other fund had to be set apart to them for the payment of compensation on the contrary, the stand taken by them was, that the respondent 4 ought to be held liable for the whole amount. The present contention of the petitioner has to be over-ruled.

8. The petitioners next complained, that the liability now imposed on them, embraces partly, compensation which related to the period even antecedent to the formation of the partnership and could not be charged against them. This plea was taken in a general form before the tribunal, and was repeated in this petition, but there was no further plea by them, that as between the firm and the previous proprietor of the business there was no continuity of service of the employees or identity of business. The tribunal has found on the materials before it, that the business was previously conducted by the petitioner's father and the respondent 4, more or less as a joint family concern, which was then converted into a partnership concern. There being no plea as to the absence of the two conditions necessary to establish a succession in business in industrial law, I am not prepared to hold that the tribunal had committed any error of law, much less an error which is apparent on the face of the record. This contention also fails.

9. The last contention was, that in determining the amount of compensation payable to the employees, the tribunal had committed a patent error in coming to the conclusion, that the business was not closed down on account of unavoidable circumstances beyond the control of the employer. A plea, also in a general form, had been taken before the tribunal without specifying such circumstances. The learned Counsel for the petitioners attempted to make out, that the reasoning of the tribunal in recording its finding, is faulty and unsustainable, but objection was taken on behalf of the respondents that no ground has been taken in the petition before me, that the finding is so vitiated. The learned Counsel could rely only on grounds 1 and 2 raised in the petition which, in my opinion, are not specific to cover the point. He also pointed out, that the circumstances under which the business was closed have been set out in the various paragraphs of the affidavit. I am not satisfied, that these averments in the affidavit are sufficient to afford a basis for the contention. In any event, in the absence of a specific ground, that the tribunal had committed a patent error in this respect, I do not think, I will be justified in going into this contention.

10. As a result of the foregoing discussion, the petition is dismissed but without costs.


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