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P.G. Brookes, Receiver Appointed by the Trustees for the Mortgagee Debenture Holders of the Madras Electric Tramways (1904) Ltd. Vs. the Industrial Tribunal, Madras and ors. - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies;Labour and Industrial
CourtChennai High Court
Decided On
Case NumberWrit Petn. No. 357 of 1953
Judge
Reported inAIR1954Mad369; [1953]23CompCas351(Mad); (1953)IILLJ1Mad; (1953)IIMLJ630
ActsTrustees and Mortgagees Powers Act, 1866 - Sections 13; Industrial Diputes Act, 1947 - Sections 18
AppellantP.G. Brookes, Receiver Appointed by the Trustees for the Mortgagee Debenture Holders of the Madras E
RespondentThe Industrial Tribunal, Madras and ors.
Appellant AdvocateO.T.G. Nambiar, Adv. for King and Partridge;Adv. General and ;Govt. Pleader
Respondent AdvocateRow and Reddy, ;Mohan Kumaramangalam, ;S. Viswanathan and ;R. Gopal, Advs.
DispositionPetition dismissed
Cases ReferredState of Madras v. Q. P. Sarathy
Excerpt:
industrial disputes act (xiv of 1947), section 18--power of tribunal to add parties--conveyancing and law of property act, 1881 (44 and 45, victoria, chapter 41), section 24-- trustees and mortgagees powers act (xxviii of 1866)--1receiver appointed by debenture-trustees--lf deemed to be agent of mortgagor--receiver represents mortgagor company for all practical purposes--impleading as party in dispute before industrial tribunal, if proper;the madras electric tramways, limited, a public utility company, mortgaged all its properties and assets to the trustees for the debenture-holders of the company. certain disputes between the company and its workmen were referred for adjudication to the industrial tribunal, and pending the adjudication, the managing director of the company resigned his.....1. this is an application under art. 236 of the constitution of india for issuing to the industrial tribunal, madras, a 'writ of certiorari' calling for the records in i. a. no. 32 of 1953 and for quashing the same.2. the madras electric tramways (1904) ltd., hereinafter called the "company" was. constituted to serve the city of madras with a tramway system. by an indenture dated 13-10-1924 and two subsequent supplemental deeds dated 26th march 1923 and 6th july 1950 respectively, all the properties and assets immoveable and moveable and the undertaking of the company were mortgaged and charged to the beaver trust ltd., being the trustees for the debenture holders of the company to secure the repayment of all principal moneys and interest due on debentures. the said tramway undertaking.....
Judgment:
1. This is an application under Art. 236 of the Constitution of India for issuing to the Industrial Tribunal, Madras, a 'writ of certiorari' calling for the records in I. A. No. 32 of 1953 and for quashing the same.

2. The Madras Electric Tramways (1904) Ltd., hereinafter called the "Company" was. constituted to serve the City of Madras with a tramway system. By an indenture dated 13-10-1924 and two subsequent supplemental deeds dated 26th March 1923 and 6th July 1950 respectively, all the properties and assets immoveable and moveable and the undertaking of the company were mortgaged and charged to the Beaver Trust Ltd., being the trustees for the debenture holders of the Company to secure the repayment of all principal moneys and interest due on debentures. The said tramway undertaking was notified by the Government as a public utility service.

By G. O. No. 5555 dated 30th December 1952 the following disputes between the company and its workmen were referred to the industrial Tribunal, Madras:

1. the fixation of the age of retirement and the quantum of gratuity payable to the persons retired from service;

2. fixation of the quantum of bonus for 1949, 1950 and 1951.

3. justification of the discharge of two workers and the relief they are entitled thereto and

4. the validity of the promotion of some conductors to the post of Inspectors. At the time of the reference, the petitioners, P. G. Brookes was the Managing Director of the company. In that capacity he took part in the proceedings before the tribunal. On 30th March 1953 i.e., 3 months after the reference and during the pendency of the proceedings before the arbitrator, he tendered his resignation of his office as Managing Director of the company from 1st April 1953. His resignation was accepted by the Board of Directors of the company on 9th April 1953.

The trustees in pursuance of the powers conferred on them by the aforesaid indenture deed and the supplemental deeds appointed him as a receiver of the properties of the company from 1st April 1953. On 17th April 1953, the second respondent, The Madras Electric Tramways Employee's Union by its Secretary, filed an application, being I. A. No. 32 of 1953 before the first respondent to implead the receiver as a party respondent to the adjudication proceedings. In the petition filed for impleading the receiver, it was stated that the receiver had stepped in and taken possession of the whole of the company's assets including land, buildings, stores, tram cars, cash etc., that some of the issues pending before the tribunal involved financial commitments and that therefore the receiver who had taken over the assets of the company should be rendered liable under the award that might be passed in the case.

The receiver filed a counter affidavit denying that he was neither a necessary nor a proper party to the proceedings and staling that the tribunal had no power or jurisdiction to add him as a party to the adjudication. The tribunal negatived his contentions and made him a party to the proceedings in the dispute before it. The tribunal gave the following two reasons for impleading him as a party: (1) the question whether by reason of the receiver's appointment the rights obtained by the workers under the award would be defeated, and if so, how far, had to be determined and it could only be done fully and effectively in the presence of the receiver, and (2) if the receiver is not on record the workers would not be able to enforce the award against him without further proceedings. It expressed the view that Section 18(b) of the Industrial Disputes Act gave it power to make him a party to the proceedings.

3. The aforesaid petition was filed to quash the said order.

4. The learned counsel for the receiver contended that there were serious errors of law apparent on the face of the order of the tribunal and that the tribunal acted without and in excess of its Jurisdiction.

His argument may be summarised thus: The jurisdiction of the Industrial Tribunal is to decide the issues in the dispute referred to it for arbitration. The liability of the Managing Director is, not one of those disputes and has not been referred to the tribunal for adjudication. The tribunal has no jurisdiction to implead the petitioner as a party to the dispute because the purpose is not for deciding anyone of the four issues referred to it but to determine the liability of the petitioner as the former Managing Director of the company. The tribunal is also wrong in holding that the petitioner's presence is necessary to avoid multiplicity of proceedings. A person cannot be made a party to a dispute merely on the ground of avoiding multiplicity of proceedings. Thus both the grounds advanced by the tribunal are irrelevant and untenable. The tribunal has also no jurisdiction under the provisions of the Industrial Disputes Act to implead new parties to the proceedings and the only category of persons that could be parties before the tribunal are the employer and the employee and the receiver appointed under the indenture does not come under any of the categories mentioned in Section 18 of the Act.

The Advocate General who argued for the respondents contended that the provisions of Section 8 are comprehensive enough to take in a person In the position of a receiver and that in any view the jurisdiction to decide that question is conferred on the tribunal arid if it went wrong the correct procedure is to prefer an appeal against its order to the appellate tribunal.

5. Before we proceed to consider the scope of Section 18 and the other questions raised, it may be convenient at this stage to ascertain the legal position of a receiver appointed under the trust deed executed for the benefit of the debenture-holders 'vis a vis' his position to the company. A long catena of cases was cited indicating the position of such a receiver under the English law.

The Court of Appeal in -- 'Gaskell v. Gosling', (1896) 1 QB 669 (A), dealt with this question at. some length. There by a deed made between a limited company and the defendants as trustees for debenture holders it was provided that in certain events the trustees might appoint a receiver of the mortgaged premises, who should have power to carry on the business and any receiver so appointed should be the agent of the company, who alone should be liable for his acts and defaults. The defendants appointed a receiver under the deed, stipulating that all monies received by him as receiver should on the day of their receipt be paid into an account to be opened by him with the banking firm, and that cheques drawn by him upon the account should be countersigned by their solicitor, shortly thereafter an order was made for compulsory winding up of the company. The receiver continued to carry on the business and in the course of so doing ordered goods from the plaintiffs. The suit was laid against the defendants for the price of the goods.

Lord Esher M. R. and Lopes L. J. held that the correct inference was that, at any rate after the winding up order, the defendants were the principals for whom the receiver, as agent, carried on the business, and consequently the action was maintainable against them. Rigby L. J. in his dissenting judgment has given an interesting and instructive analysis of the position of a receiver appointed under the powers conferred upon the trustees. The learned Judge in tracing the difficulties encountered and the risks undertaken by the mortgagees in taking possession of properties mortgaged to them, pointed out how those difficulties were attempted to be got over by the device of appointing a receiver as an agent of the mortgagor. At p. 692 the learned Judge observed:

"Presently mortgagees stipulated that they themselves should in place of the mortgagor appoint the receiver to act as the mortgagor's agent. This made no difference in the receiver's position, and imposed no liability on the mortgagee appointing. Though it was the mortgagee who in fact appointed the receiver, yet in: making the appointment the mortgagee acted, and it was the object of the parties that he should act, as agent for the mortgagor."

This decision went on appeal and the House of Lords in -- 'Gosling v. Gaskell', (1897) AC 575 (B), accepted the view of Rigby L. J. and reversed the Judgment of the Court of Appeal. Lord Halsbury L. J. alter considering the previous law on the subject, particularly the leading case of -- 'Cox v. Hickman', (1856-60) 8 HLC 268 (C), mede the following observations at p. 583:

"The company is still the person solely interested in the profits, save only that it has mortgaged them to its creditors. It receives the benefit of the profits as they accrue, though it has precluded itself from applying them to other purpose than the discharge of its debts. The trade is not carried on by, or on account of, the creditors, though their consent is necessary in such a case, but the trade still remains the trade of the company. The company is the person by, or on whose behalf, the business is carried on."

In -- 'Reid v. Explosives Co., Ltd.', (1887) 19 QBD 264 (D), it was held that the appointment of a manager and receiver operated to discharge the servants of the company and that the plaintiff could not recover any damages from the company. The facts there were: The plaintiff was in the service of the defendant company under a contract. A manager and receiver was appointed by order of the Chancery Division at the instance of holders of debentures of the company. The plaintiff, by the instructions of the manager, continued for more than six months to discharge his former duties at the same salary. The business was then sold to a new company, and the plaintiff was dismissed without notice. He filed the suit for wrongful dismissal. Lord Esher M.R. expressed the view that the appointment of a manager or receiver by a court automatically discharged the servants from their service to the original employer and that there was wrongful dismissal for which an action would lie. But Fry L. J. was not able to accept the extreme position drawn by the other Judge for he observed at p. 269 that he is "not prepared to lay down that every entry by a mortgagee is a dismissal of the servants of the mortgagor from his employment."

In -- 'Midland Counties District Bank Ltd. v. Attwood', (1905) 1-Ch. D. 357 (E), Warrington J. held that a voluntary liquidation did not operate to dismiss the servants of the company for in that case there was no change in the personality of the employer as in the case of a compulsory winding up of a company.

In -- 'Deyes v. Wood', (1911) 1 KB 806 (F), the question was whether the receiver was entitled to remuneration from the debenture-holders or from the company. It was held that he was acting as the agent of the debenture-holders and therefore he was entitled to remuneration from them. The learned Judge came to a conclusion on a construction of the recitals in the indenture. At p. 821 Vaugan-Williams L. J. observed: ,

"When one looks at the provisions of the Conveyancing Act, 1881, with reference to the terms of the debenture in this case, one sees that they are directed to the appointment of a receiver, not for the purpose of taking possession, as a mortgagee taking possession used to do, or of realising the security, but only for the purpose of the receipt and application of income in the manner provided, for, formerly by Lord Cranworth's Act, and now more fully by the Conveyancing Act Itself, whereas under the provisions of the debenture here the object of the appointment of the receiver is really the sale and realisation of the security for the satisfaction of the debenture debts; and indeed, when one comes to look at the provisions of condition 18, one finds a great deal which goes to show that it was intended here that the receiver should be a receiver on behalf of the mortgagees, and not on behalf of the company, the mortgagors."

He proceeded to state that the receiver to be appointed was not intended to be in the position of a receiver appointed under the machinery provided by the Conveyancing Act in lieu of entry into possession by mortgagees, but was intended to be the agent of the mortgagees to take such possession as was necessary for the purpose of realising the security and distributing the proceeds amongst them.

In -- 'Cully v. Parsons', 1923-2 Ch. 512 (G). Sargant J. on the construction of the document in that case came to the conclusion that the receiver appointed in that case was the agent of the company. One circumstance relied upon for that conclusion was the inclusion of the following clause in the deed:

"And the holder of this debenture shall not, in making or consenting to such appointment, incur any liability to the receiver for his remuneration or otherwise".

Relying upon that clause the learned Judge observed that the object of that was "to restore the prima facie effect of the incorporation of Section 24 of the Conveyancing Act, 1881, which had been watered down or rather almost entirely negatived by that decision -- '(1911) 1 KB 806 (F)', of the Court of Appeal."

In -- 'Meigh v. Wickenden', 1942-2 KB 161 (H), a debenture-holder, acting under a debenture, appointed the appellant receiver and manager of a company which carried on business in a factory within the meaning of the Factories Act. The debenture provided that

"any receiver so appointed shall so far as the law allows be deemed to be the agent of the company for all purposes and the holder of this debenture shall not be under any liability for his remuneration or otherwise."

After the appellant, as receiver and manager, entered on the factory premises the business continued to be controlled by the directors of the company by day and by night and the receiver attended the premises infrequently and conducted his receivership mainly by a clerk. An employee who was injured in consequence of a guard not being provided for a milling machine filed a suit. The question was whether the receiver was liable under the Factories Act for a contravention of the regulation made under the Act. He would be liable if he was the occupier. Viscount Caldecote C. J. succinctly stated the position of a receiver under the aforesaid circumstances as follows at p. 166:

"It may, Indeed, be said with accuracy, I think, that he took the place of the directors and was responsible in their stead for the management of the affairs and business of the company even while he permitted them to manage the business under him. No doubt, the company continued to exist, and, unless and until steps were taken to wind up the company's affairs and to liquidate the company, it would continue to be answerable for engagements into which the company had entered before the appointment of the appellant as receiver and manager."

At p. 168 the learned Judge gave additional reasons for his conclusion;

"He was appointed 'to manage and carry on the business of the company, to take possession of, get in and collect property and assets' charged by the debenture. I must assume that he did what he was appointed to do, which was something very different from what a director had to do. He was not in the same position as the directors for instance, in so far as his duty to take possession of the property of the company was concerned. He was complete master of the affairs of the company. He had absolute and complete power to manage the property of which be took possession including the factory, with a possible view to its realisation, if necessary, in order to secure the debt owed to the debenture-holder. As between the appellant and the company, therefore, I think the appellant was the person in possession and it follows, in my Judgment, that he was properly convicted as occupier.".

6. A perusal of the aforesaid decisions indicates that in final analysis the question is one of fact depending on the construction of the provisions of a particular indenture and the clauses of the Conveyancing Act incorporated therein. The relevant provisions of the Conveyancing and Law of Property Act, 1881 (44 and 45 Vict. Ch. 41) referred to in the aforesaid judgments may be noticed. Section 19 confers on the mortgagee a power when the mortgage money has become due to appoint a receiver of the income of the mortgaged property, or of any part thereof. Under Section 24 he cannot appoint a receiver unless he has become entitled to exercise the power of sale conferred by the Act. Section 24(2) which is the important clause reads as follows:

"The receiver shall be deemed to be the agent of the mortgagor; and the mortgagor shall be solely responsible for the receiver's acts or defaults, unless the mortgage deed otherwise provides."

7. Section 19 was amended by the Conveyancing Act of 1911, Sec. 4 and Section 24 by Section 19.

8. In every trust deed the aforesaid sections of the Conveyancing Act have been incorporated by inference. Prima facie, therefore, a Receiver appointed was treated to be an agent of the mortgagor, But courts differed on the question whether the conditions of the document varied that intention for Sections 19 and 24 of the Conveyancing and Law of Property Act, 1911, provided for such variations and extensions, by the terms of a particular indenture.

As Lopes L. J. pointed out, the mortgagee found himself in a very difficult position when he entered into possession. He was treated with exceptional severity in a suit for redemption and made to account not only for what he actually received but what he might without wilful default have received. His risks were greater when the mortgaged property consisted of property embarked in trade. To avoid all these difficulties the mortgagees allowed the mortgagors to appoint receivers; but later on they followed the convenient device of appointing receivers themselves but retaining the responsibility of the mortgagor to the receiver.

This was recognised and adopted In the Conveyancing and Law of Property Act, 1881. A power was conferred on the mortgagee to appoint a receiver who was to be the agent of the mortgagor. This was made a usual incident of mortgages unless excluded by an instrument between the parties. Therefore the question in each case turns upon the construction of the mortgage deed.

9. Let us now turn to the documents in question. The first indenture was made on 13th October 1924 between the Madras Electric Tramways (1904) Ltd. (hereinafter called the company) of the one part and the Beaver Trust Ltd. (hereinafter called 'the present trustees') of the other part. Under that deed a fixed charge on specific properties and a floating charge on the company's undertaking, its properties and assets, both present and future were created in favour of the trustees for the benefit of the debenture holders. The trustees were empowered to take possession, to sell, call in, collect, and convert into money the mortgaged premises after the security became enforceable. Clause 8 narrated the circumstances when the security became enforceable. By Clause 17 they were empowered after taking possession to carry on the business of the company. At any time after the right of the trustees to enter upon the mortgaged premises shall have arisen, they could appoint one or more persons as receiver or receivers of alt or any part of the mortgaged premises in like manner in every respect as if the trustees were mortgagees within the meaning of the Conveyancing Act, 1881 and had become entitled under that Act to exercise the power of sale thereby conferred with power from time to time to remove any receiver so appointed and appoint another in his place.

The receiver so appointed may be invested by the trustees or trustee with such powers and directions as the trustees or trustee may think expedient with power to delegate. Unless otherwise directed by the Trustees or Trustee such Receiver or Receivers may exercise all the powers and authorities vested in the Trustees or Trustee by Clause 17 of the indenture. Clause 17 authorises the trustees to carry on the business of the company and the trustees could fix the remuneration payable to the receiver. They could ask the receiver to give security for the performance of his duties. Save as otherwise directed by the trustees the moneys received by the receiver should be paid over to the trustees. The trustees should determine the sum of money that should be allowed to be kept in the hands of the receiver. Then comes the important provision which reads:

"The provisions in this clause are intended to take effect by way of variation and extension of the provisions of Sections 19 and 24 of the Conveyancing Act, 1881, as modified by the Conveyancing Act, 1911 and such provisions so varied and extended shall be regarded as incorporated herein and the Trustees or Trustee and the Debenture holders shall not in making the appointment or in consenting thereto incur any liability for the remuneration of the Receiver or Receivers or otherwise."

Under clause 26 a further attempt was made to safeguard the position of the mortgagees. The trustee or the Receiver entered into possession of the mortgaged premises or any part thereof shall not be liable to account as mortgagees in possession or for anything except actual receipts, or be liable for any loss upon realisation or tor any default or omission for which a mortgagee in possession might be liable; but every receiver duly appointed under those presents shall be deemed to be the agent of the company and shall as such agent be deemed to be in the same position as a receiver duly appointed by a mortgagee under the Conveyancing Act, 1881 and the Trustee or Trustees and every such receiver shall be entitled to all the rights, powers, privileges and immunities the said Act conferred on mortgagees and receiver appointed under the Act.

Under clause 5 of the Indenture it is agreed that a separate mortgage deed be executed in respect of freehold property owned by the company and described in the second schedule. Pursuant to that term a mortgage deed was executed on 26th March 1925. One of the important clauses relevant to the purpose in that deed, namely, clause 5, reads as follows: "....... ...It is hereby agreed that the trustees shall not nor shall any receiver or receivers appointed as aforesaid by reason of the trustees or such receiver or receivers entering into possession of the mortgaged premises or any part thereof be liable to account as mortgagee or mortgagees in possession or for anything except actual receipts or be liable for any loss upon realisation or for any default or omission for which a mortgagee in possession might be liable but every receiver duly appointed under these presents shall be deemed to be the agent of the company and shall as such agent be deemed to be in the same position as a receiver duly appointed by a mortgagee under the Trustees and Mortgagees Powers Act 1866 and the trustees & every such receiver shall be entitled to all the rights and powers and privileges and immunities by the said act conferred on mortgagees and receivers appointed under that Act." The Act of 1866 referred to is the Indian Act 28 of 1866, the Trustees and Mortgagees Powers Act, Section 13 of the Act says:

"Every receiver appointed as aforesaid shall be deemed to be the agent of the person entitled to the property subjected to the charge who should be solely responsible for his acts and defaults unless otherwise provided for in the charge."

The other powers of the receiver were also narrated in the Act. On 6th July 1950 another indenture was executed between the same parties giving additional security subject to the conditions mentioned in the first two deeds. From the aforesaid documents it is manifest that the mortgagee was anxious to see that he should be free from the liability of a mortgagee put in possession. In the first deed the provisions of Sections 19 and 24 of the Conveyancing Act of 1881 as modified by the Conveyancing Act of 1911 were embodied. Lest there should be some doubt about the legal position the parties agreed in express terms that the debenture holders should not in appointing the receiver, be liable for his remuneration. They also made it clear in clause 26 that the receiver shall be deemed to be the agent of the company and shall be deemed to be in the same position as receiver duly appointed by the mortgagee under the Conveyancing Act of 1881. The emphasis was, therefore, on the fact that the receivers were the agents of the mortgagor.

10. It is true that under the mortgage deed the receiver is appointed by the trustee. He has to act under the directions of the trustee. Moneys collected by him should be handed over to the trustee. He is also given a power to conduct the business. Though the powers are conferred on him by the trustee and though he should act under his directions, he is expressly made an agent of the mortgagor. The parties obviously intended that the trustee should have the power of control but should be free from all liabilities. This purpose was effectuated by enabling the trustees to appoint a receiver and to give him directions and by making the receiver the agent of the company. The contention of the learned counsel for the petitioner that the receiver should be deemed to be an agent of the mortgagor and therefore is not in fact an agent of the mortgagor, does not appeal to us. He is deemed to be the agent of the mortgagor for the purpose of the indenture and therefore his rights and liabilities must be regulated on that basis.

11. Under Section 24 of the Conveyancing Act ft receiver shall be deemed to be the agent of the mortgagor unless the mortgage deed otherwise provides. The mortgage deed not only did not provide otherwise but emppasised his correct legal position at more than one place. Whatever scope for argument there may be in the case of the first document, in the case of the second document there is none for the document refers to the Trustees & Mortgagees powers Act of 1866, which clearly states that the receiver appointed shall be deemed to be the agent of the person entitled to the property unless otherwise provided for in the charge. Under the second document he is clearly described as the agent of the company. It is therefore clear that under both documents the receiver' must be deemed to be the agent of the company.

12. Further the management of the entire estates of the company is entrusted to the Receiver subject to directions by the trustees. If he is so minded, he is empowered to carry on the business or start the business if circumstances are propitious. The appointment of the receiver does not effect any change in the personality of the employer; the only effect is to put the company and its assets under his management. Thereafter, be represents the company for all practical purposes.

13. The next question is whether the tribunal has jurisdiction to make him a party to the proceedings pending before it. The answer to the question turns upon the true construction of the provisions of Section 18 of the industrial Disputes Act, Act XIV of 1947. As the argument turned upon the said section, it will be convenient to read it. It reads:

"Section 18: A settlement arrived at in the course of conciliation proceedings under this Act or an award which is declared by the appropriate Government to be binding under Sub-section (2) of Section 15 shall be binding on:

(a) all parties to the industrial disputes;

(b) all other parties summoned to appear in the proceedings as parties to the dispute, unless the Board or Tribunal, as the case may be, records the opinion that they were so summoned without proper cause;

(c) where a party referred to in Clause (a) or Clause (b) is an employer, his heirs, successors, or assigns in respect of the establishment to which the dispute relates;

(d) where a party referred to in Clause (a) of Clause (b) is composed of workmen, all persons who were employed in the establishment or part of the establishment, as the case may be, to which the dispute relates on the date of the dispute and all persons who subsequently become employed in that establishment or part". The principle underlying the Act has been succinctly stated by the Chief Justice of India in --'State of Madras v. Q. P. Sarathy', , as follows:

"In view of the increasing complexity of modern life and the Interdependence of the various sectors of a planned national economy, it is obviously in the interest of the public that labour disputes should be peacefully and quickly settled within the frame-work of the Act rather than by resort to methods of direct action which are only too well calculated to disturb the public peace and order and diminish production in the country, and courts should not be astute to discover formal defects and technical flaws to overthrow such settlements."

The object, therefore, is to bring about industrial peace by settling the disputes between the employers & employees expeditiously. To enable that object all the necessary & proper parties should be before the tribunal. Otherwise any award that may be passed would be made nugatory. With that background the sections of the Act may now be scrutinised, for however meritorious the object of the legislature might be, unless the necessary powers to effectuate it were given under the Act, the purpose would be defeated.

14. As contended by the learned counsel for the petitioner there is no section in the Act expressly empowering the tribunal to add parties to the proceedings. Section 11(3) restricted the application of the provisions of the Civil Procedure Code to the four matters mentioned in Sub-clauses (a), (b), (c) and (d) of that section. The tribunal is authorised to enforce the attendance of any person and examine him on oath, compel the production of documents and material objects, issue commissions for the examination of witnesses and in respect of such other matters as may be prescribed. It is not suggested that any other matters have been prescribed. It is therefore contended that Order I, Rule 10, C. P. C. does not apply and therefore the tribunal cannot add new parties.

But in our view such power is necessarily implied in Section 18 of the Act. Clause (b) of Section 18 will not have any meaning unless the tribunal has power to add parties. Under that clause an award is binding on all other parties summoned to appear in the proceedings as parties to the dispute, unless the Board or Tribunal, as the case may be, records the opinion that they were so summoned without proper cause. Clause (a) deals with all parties to the Industrial dispute. Clause (b) refers to all other parties summoned to appear as parties in the dispute. This necessarily implies that parties other than the original parties to an industrial dispute can be summoned as parties to the proceedings. Such parties can be summoned at the instance of a party or 'suo motu' by the tribunal by issuing notice to them.

The clause also empowers the tribunal to decide whether .the parties so summoned were really proper parties. The only suggestion the learned counsel can make is that the parties mentioned in Clause (b) are parties summoned by the Government. To put it differently, according to learned counsel, if an industrial dispute is proceeding before a tribunal, the Government may go on adding parties to the dispute. This construction Will obviously introduce confusion in the proceedings and will enable the Government to interfere with the progress of the judicial process, which could not have been the intention of the legislature. We would therefore hold that Clause (b) by necessary implication gives a power to the tribunal to add parties.

15. It was then contended that even if the tribunal had such power, it could not implead parties other than employer and employee and enlarge the scope of the disputes referred to the tribunal. Clause (a) obviously refers to parties to the industrial dispute, i.e., the original parties to the dispute at the time when the reference was made to the tribunal. "Industrial dispute" has been defined by Section 2(k) to mean

"any dispute or difference between employers and employers, or between employers arid workmen, or between workmen and workmen, which is connected with the employment of non-employment or the terms of employment or with the conditions of labour, of any person." The original parties therefore will necessarily be either employers or workmen. Clause (b) refers to "other parties summoned to appear as parties in the dispute." The other parties can only mean parties other than those mentioned in Clause (a) i.e., the original parties. They must be summoned as parties to the dispute, i.e., as persons who are affected by or interested in the dispute. A party to a dispute is either a necessary or proper party. A person against whom a relief is claimed is a necessary party to a proceeding. A person against whom though no relief is claimed, whose presence is necessary for a complete and final decision of the questions involved is a proper party as distinguished from a necessary party.

We should think that Clause (b) though apparently wide in terms, is intended to take in only necessary or proper parties. It could not have been in the contemplation of the legislature to include parties against whom either no relief is claimed or whose presence is not necessary for adjudicating the disputes between the parties. But we find it difficult to hold that the parties can only be employer or employee and none else. When a question was put by us to the learned counsel for the petitioner to which category of parties Clause (b) would apply, he stated that there may be different unions of labour in respect of a particular establishment and that one of such unions which was not originally made a party could be made a party under Clause (b). It may be one illustration; but obviously it cannot be exhaustive. It is intended to enable parties whose presence is necessary or proper for completely disposing of the disputes raised before the tribunal to be impleaded as parties.

The learned counsel then pointed out that Clauses (c) and (d) only refer to employer or workmen mentioned in Clauses (a) and (b) and therefore Clause (b) is intended only to cover the case of an employer or workman. It does not necessarily follow from the aforesaid circumstance that Clause (b) is confined only to employer or employee, for, in the case of an employer and employee, it becomes necessary to specify that the successors of the employer or the workmen in the establishment would also be bound by the award. The non-mention of other categories of persons in Clauses (c) and (d) cannot support the conclusion that the words "other parties" in Clause (b) take in only employers and employees.

The question therefore is whether the receiver in the present case cannot be added as a party to the dispute now pending before the industrial Tribunal. As aforesaid, the dispute relates to four matters, viz., (1) the fixing of the age of retirement, (2) the quantum of bonus for three years, (3) the Justification of the discharge of two workmen and the relief they are entitled to, and (4) the validity of the promotion of some conductors to the posts of Inspectors. These disputes involve the liability of the company to the employees mentioned therein. Can it be said that the receiver in the present case is not a proper party in regard to the said dispute? It is not a case of a rank outsider or a disinterested spectator being made a party. He was the erstwhile Managing Director of the company. There is no change in the personality of the company; it continues to have its legal existence. The Receiver is now its Agent and its entire assets are now under his charge or management. Though for the present the business is at a standstill, he is empowered in his discretion to carry on the business and he may do so at any moment he likes end there is no one else who has power to do so. If he is an agent of the company and a person in management thereof, it is not disputed that he would be liable to the employees, though it is contended that his liability is confined to Section 129 of the Indian Companies Act.

It is not necessary or advisable to express our opinion on the extent of his liability. It would be for the Tribunal to decide on that question. When the Tribunal, having regard to his position 'vis-a-vis' the company, held that such a person is a proper party to the dispute, we cannot say that its decision is without jurisdiction, for Section 18 (b) itself says that the Tribunal can record its opinion whether a party is summoned without proper cause. We cannot even hold that the order Of the Tribunal is vitiated by an error apparent on the face of the record. If the contentions of the learned counsel for the petitioner are sound it would be at the most a wrong order. If it is wrong, the petitioner's remedy, if any, is to prefer an appeal to the appellate Tribunal and to get it rectified. In the circumstances, we have no hesitation to hold that the Tribunal has acted with in its Jurisdiction and its order is not vitiated by any error apparent on the face of the record. In the result the petition is dismissed with costs; one. set. Advocate's fee: Rs. 200.


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