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A. St. Arunachalam Pillai and anr. Vs. the Chairman, Central Government Industrial Tribunal, Madras and anr. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtChennai High Court
Decided On
Case NumberWrit Petn. Nos. 940 and 960 of 1956
Judge
Reported inAIR1957Mad614; (1957)IILLJ682Mad; (1957)2MLJ26
ActsIndustrial Disputes Act, 1947 - Sections 18, 23 and 23A
AppellantA. St. Arunachalam Pillai and anr.
RespondentThe Chairman, Central Government Industrial Tribunal, Madras and anr.
Appellant AdvocateK. Thirumalai and ;V.R. Naganathan, Advs.
Respondent AdvocateS. Swamikannu, Adv.
Cases ReferredMadras v. Industrial Tribunal
Excerpt:
labour and industrial - compensation - sections 18, 23 and 23a of industrial disputes act, 1947 - buses and permit of motor service operator transferred on pendency of dispute regarding change in service condition before labour appellate tribunal - transferee of bus and permit directed by tribunal to compensate employees of transferor-motor service operator - transfer of few buses does not amount to transfer of business in entirety - transferee not to be treated as successor in interest of previous operator - no employment relation between transferee and transferor's employees - held, tribunal erred in directing transferee to compensate transferor's employees. - .....madras. it is necessary to state a few facts to understand the point raised. one shanmugha motor service, tiruchirapalli, was being conducted by one a. sm. kandaswami who was carrying on business as a motor transport operator.this concern had ten buses and two spare buses and was employing a number of workmen stated to be about 55. there was a dispute between this concern and the workers in respect of the payment of bonus for the years 1949 to 1951 and also as regards the terms of service of some drivers and conductors employed by this establishment. the matter in dispute was referred by the local government to an industrial tribunal for adjudication, and the tribunal passed an award on 3-3-1952 which was published in the fort st. george gazette on 28-5-1952. the award was.....
Judgment:
ORDER

Rajagopala Ayyangar, J.

1. W. P. No. 940 of 1956: This is a petition for the issue of a writ of certiorari to quash the award of the Chairman, Central Government Industrial Tribunal, Madras. It is necessary to state a few facts to understand the point raised. One Shanmugha Motor Service, Tiruchirapalli, was being conducted by one A. SM. Kandaswami who was carrying on business as a motor transport operator.

This concern had ten buses and two spare buses and was employing a number of workmen stated to be about 55. There was a dispute between this Concern and the workers in respect of the payment of bonus for the years 1949 to 1951 and also as regards the terms of service of some drivers and conductors employed by this establishment. The matter in dispute was referred by the local Government to an Industrial Tribunal for adjudication, and the Tribunal passed an award on 3-3-1952 which was published in the Fort St. George Gazette on 28-5-1952. The award was substantially in favour of the workmen, granting most of the relief prayed for by them. From this award the management filed an appeal to the Labour Appellate Tribunal -- A. S. No. 228 of 1952. The Appellate Tribunal modified in spme respects the award as regards bonus, but otherwise confirmed that of the Industrial Tribunal.

2. Pending the adjudication of the appeal by the Labour Appellate Tribunal, there were certain disputes which arose between the management and the workmen. This consisted of the transfer by the Shanmugha Motor Service of their buses to three parties, one of whom is the petitioner here and another the petitioner in W. P. No. 960 of 1958. Four of the buses were transferred to the petitioner while the other six and the spare buses were transferred to the other two parties.

The transfer of these buses was in May 1952. The workers, when they came to know of the transfer of these buses, appeared before the Transport Authority and resisted the application for the transfer of the route permits in relation to these buses. The transport authority, however, overruled these objections, and by an order made in June 1952, allowed the transfer. The transferees have been working the buses on these transferred permits ever since.

3. Besides this, the workers also filed an application before the Labour Appellate Tribunal, invoking their jurisdiction under Section 23 of the Labour Appellate Tribunal Act, and complaining of a violation of Section 22 of that Act. That complaint would have meaning Only if the conditions of service of the employees had been adversely affected by some action of the employer.

The case put forward by the workmen before the Tribunal was that this transfer effected in favour of the petitioner and the two other co-transferees constituted a change in the conditions of service. This application was transferred by the Labour Appellate Tribunal under Section 23-A of the Act to the Central Government Industrial Tribunal, Madras, for adjudication. The Tribunal conducted an enquiry and passed an award on 16th July 1956, under which they directed the Managements of the three transferees to pay compensation to ten of the workers who filed the complaint before the Labour Appellate Tribunal.

4. I have mentioned the fact that the Labour force employed by the Shanmugha Motor Service consisted of about 55 workmen. Subsequent to the transfer, the workers approached the Labour Officer and requested his services to effect a conciliation between themselves and the transferees. The workers at that stage appear to have been represented by two Unions, one Union represented 38 workers and the other 12.

The Labour Officer, suggested certain terms which were accepted by the transferees and by the Union composed of the 38 workmen, and these workmen were absorbed by the three transferees. The Union which represented the 12 workmen, however, would not accept the terms suggested by the Conciliation Officer, and it was this Union that preferred the complaint to the Labour Appellate Tribunal which has resulted in the award now impugned.

5. As I said before, the order of the Central Government Industrial Tribunal conveys a direction to the three transferees as a group to compensate ten of the workmen by paying them five months' salary. It is the validity of this award that is challenged in this writ petition.

6. Though in the affidavit in support of this writ petition several objections have been taken to the validity of the award, the main, and, in fact, the only, point to be considered is whether the transferees are persons who fell within the terms of Section 18(c) of the Industrial Disputes Act. The Tribunal has answered this in the affirmative and the question for consideration in this petition is whether that finding is correct.

That there was a dispute between the Shanmugha Motor Service and the workers, and that, by reason of the closure of their business, the workmen were left without employment, is not in dispute. But the defence of the transferees was that they were not either the successors or assigns of the Shanmugha Motor Service so as to be bound by any adjudication between themselves and their workmen.

The question whether the petitioner and his co-transferees were successors or assigns in respect of the establishment of Shanmugha Motor Service is dependent on whether they are the transferees of that business. The facts found by the Tribunal, however, were only that the petitioners had obtained, by purchase, four of the buses pertaining to the Shanmugha Motor Service. Along with the purchase of the buses, they had transferred to them the route-permits under which the buses could run.

The question for consideration is whether this I constituted a transfer of the business of the operator -- the Shanmugha Motor Service. In reaching a conclusion adverse to the Management, the Tribunal has relied on a decision of mine reported in Palace Theatre Salem v. Labour Appellate Tribunal of India, 1954 1 Lab LJ 635 (A). In that case, however, there had been merely a change in the management of the establishment. That is clear from the passage in that judgment, which I will now extract:

'The next ground upon which the order is impugned is that the present Management of the petitioner's establishment came into existence only on 28lh April 1952 and that for the act of the previous Management the Tribunal had no power to direct reinstatement of the workers in July 1952.' It will be seen that this was the contention which I rejected. There, there was no case of a transfer of an asset belonging to a previous employer which was held to constitute the purchaser of the asset a successor to the establishment. On the other hand, the learned counsel for the petitioner relied on another decision of this Court reported in Odeon, Madras v. Industrial Tribunal, Madras, : (1954)IILLJ314Mad (B).

That case was concerned with the liability of the lessee of a theatre, where the lease comprised only the theatre buildings. The contention urged on behalf of the workers was that, as it was in that theatre that the workmen were employed and did their duties the person who conducted the business in that theatre was a successor or assign of that establishment within the meaning of Section 18(c). That contention was repelled by this Court.

In my judgment, the present case falls within the principle laid down in : (1954)IILLJ314Mad (B). The case before the Court then was concerned with a lease of the premises. Here, it is the case of a transfer of an asset which is used in the business. No doubt, along with the bus, the permit to enable that bus to run was also transferred. But these do not Constitute the entirety of the business; nor can the transferee of the bus and the permit be treated as a successor, in interest of the previous operator.

7. If the petitioner was not the successor of the Shanmugha Motor Service, it follows that the Tribunal had no jurisdiction to direct payment of compensation to workers, because, their employment was only under the Shanmugha Motor Service and there was no relationship of employee and the employer between these workers and the present petitioner. The writ petition is allowed, and the order of the Tribunal is set aside, and the rule is made absolute.

There will be no order as to costs. W. P. N. 960 of 1956;--

The petitioner here is another of the transferees and for the reasons already set out in W. P. No. 940 of 1956, the rule will be made absolute and the order of the Tribunal set aside. No order as to costs.


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