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A. Ramaswamy Iyer Vs. the Management of Bhuvaneswari Pulverising Mills and anr. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtChennai High Court
Decided On
Reported in(1981)1MLJ458
AppellantA. Ramaswamy Iyer
RespondentThe Management of Bhuvaneswari Pulverising Mills and anr.
Cases ReferredS.K.G. Sugar Ltd. v. Ali Hassan
Excerpt:
- .....to obtain the leave of the court which appointed the receiver where the concerned employer is a receiver appointed by a civil court. further, the power to make an order of reference is conferred on the appropriate government under section 10 of the act. the power to refer or not to refer a dispute for adjudication by a labour court or industrial tribunal is a discretionary power vested in the appropriate government. so long as there is no statutory provision in the industrial disputes act, that before an order of reference is made under section 10 of the act, the government or the workman concerned is bound to obtain the leave of the court which appointed the receiver, no such condition can be incorporated into the' act. to hold otherwise, would in effect mean that the court which,.....
Judgment:
ORDER

S. Padmanabhan, J.

1. The petitioner was employed as a general assistant in the Bhuvaneswari Pulversing Mills, a partnership firm from 11th September, 1973 on a monthly salary of Rs. 250 which was subsequently raised to Rs. 300 per month. In 1974 one of the partners of the firm tiled O.S. No. 4710 of 1974 on the file of the City Civil Court, Madras for dissolution and rendition of accounts. Pending disposal of the suit, an advocate-receiver was appointed to manage and carry on the business of the firm.

2. On 31st March, 1975 the advocate-receiver without any justification terminated the services of the petitioner with effect from the 1st April, 1975 on ground of economy. However the receiver employed one Rengachari after terminating the services of the petitioner.

3. The petitioner then took up the matter with the Labour Officer, Madras, who initiated conciliation proceedings. Conciliation having failed, the Labour Officer sent his failure report to the Government of Tamil Nadu. Thereafter, the Government in exercise of the powers conferred on it under Section 10(1) (c) of the Industrial Disputes Act, referred the question of the non-employment of the petitioner for adjudication by the Labour Court, Madras. The dispute was taken on the file of the Additional Labour Court, Madras as I.D. No. 226 of 1975. The Labour Court passed an award on 3rd May, 1977. It was contended on behalf of the management before the Labour Court that the petitioner was not a workman within the meaning of Section 2(s) of the Industrial Disputes Act, and that the termination of the services of the petitioner was as a matter of retrenchment. A further contention was also raised that the petitioner had not obtained the leave of the Court which appointed the receiver for raising the industrial dispute. The Labour Court found that the petitioner was a workman and that the provisions of Section 25(f) of the Industrial Disputes Act, regarding payment of wages in lieu of notice and compensation at the time of retrenchment had not been complied with and that consequently the order of termination of the services of the petitioner was null and void. However, the Labour Court held that the petitioner was not entitled to any relief in view of the fact that the leave of the Court which appointed the receiver had not been obtained. In the circumstances, the petitioner has filed this writ petition to quash the said award passed by the Labour Court to the extent to which the Labour Court has held that he was not entitled to any relief.

4. The question that arises for consideration therefore is whether the petitioner was bound to obtain the leave of the Court which appointed the receiver before raising an industrial dispute.

5. It is settled principle of civil law established by practice that the receiver being an officer of Court leave of the Court was necessary to warrant institution of proceedings against him. The rule requiring leave to sue a receiver is not based on any statutory authority, but has its origin and reason on considerations of public policy. In Broja Bhusan v. Srischandra, Mullick, J. 47 Cal. 719. held:

There is no statutory provision which requires a party to take the leave of the Court to sue a receiver. The rule has come down to us as a part of the rules of equity, binding upon all English Courts of justice in this country. It is a rule based upon public policy which requires that when the Court has assumed possession of a property in the interest of the litigants before it, the authority of that Court is not to be obstructed by suits designed to disturb the possession of the Court. The institution of such suits is in the eye of the law a contempt of the authority of the Court and therefore, the party contemplating such suit, is required to take the leave of the Court so as to absolve himself from that charge. The grant of such leave is made not in exercise of any power conferred by statute but in exercise of the inherent power, which every Court possesses to prevent acts which constitute or are akin to an abuse of its authority.

The test in such cases is whether the property in the hands of the receiver is going to be affected.

6. Industrial Disputes Act, 1947 is a piece of legislation intended to secure speedy settlement of all industrial disputes arising between the employees and employers by peaceful methods and through the machinery of conciliation, arbitration and if necessary by approaching the Tribunal constituted under the Act. It is meant to protect workmen against victimisation by the employer and to ensure termination of industrial disputes in a peaceful manner. It is a piece of social legislation. In the words of Rajamannar, CJ., in Sree Meenakshi Mills Limited v. Slate of Madras : AIR1952Mad124 .

the essential object of all recent labour legislation has been not so much to lay down categorically the mutual rights and liabilities of employer and employees as to provide recourse to a given form of procedure for the settlement of disputes in the interests of the maintenance of peaceful relations between parties, without apparent conflicts such as are likely to interrupt production and entail other dangers.

There is no provision in the Act which makes it incumbent upon a workman to obtain the leave of the Court which appointed the receiver where the concerned employer is a receiver appointed by a civil Court. Further, the power to make an order of reference is conferred on the appropriate Government under Section 10 of the Act. The power to refer or not to refer a dispute for adjudication by a Labour Court or Industrial Tribunal is a discretionary power vested in the appropriate Government. So long as there is no statutory provision in the Industrial Disputes Act, that before an order of reference is made under Section 10 of the Act, the Government or the workman concerned is bound to obtain the leave of the Court Which appointed the receiver, no such condition can be incorporated into the' Act. To hold otherwise, would in effect mean that the Court Which, appointed the receiver will have the discretion to decide whether a particular industrial dispute should be referred for adjudication or not before the Labour Court. Such a position Would result in defeating the provisions of Section 10 and taking away the power conferred on the Government by the said section. In the circumstances, the right of the Government to refer an industrial dispute for adjudication before the Labour Court cannot in any manner be controlled by any general principle of law which states that no suit or proceeding can be instituted against the receiver appointed by Court unless leave of the Court which appointed the Court is obtained. Further a statutory proceeding initiated under Section 10 of the Industrial Disputes Act cannot be said to be a proceeding initiated against the receiver.

7. In this connection, it may be useful to refer to two decisions, one of this Court and the other of the Kerala High Court. The first decision is a Bench decision of this Court in Price v. Chandrasekharon : AIR1951Mad987 . The case related to the Andhra Paper Mills Co., Ltd. By reason of some agreement arrived at among the interested parties the debenture trustees were running the mills. On 24th May, 1947 the debenture trustees in possession of the mills put up a notice that the trustees had to close down the mills with a view to avoid further loss and that workmen and members of the staff would be paid the wages earned upto and including the 26th May, 1947. The mills were duly closed. Thereupon, at the instance of the workers the Government referred the matter for adjudication by the Industrial Tribunal. The Industrial Tribunal conducted an enquiry and passed an award on 16th August, 1947. On 22nd August, 1947 an application for winding up the company was filed and on 23rd September, 1947 the winding up order was passed by this Court. The Workers filed a claim petition before the liquidator who rejected the same. An application under Section 230 of the Indian Companies Act was filed and Panchapagesa Sastri, J., who heard the application allowed the application., The Official Liquidator then preferred an appeal. It was contended before this Court on the basis of Section 171 of the Indian Companies Act, 1913 that when a winding up order had been made, or a provisional liquidator had been appointed, no suit or other legal proceeding should be proceeded with or commenced against the company except by leave of the Court and subject to such terms as the Court might impose, and that that therefore, the Government should have applied to the winding-up Court for permission before the Government passed an order declaraing the award as binding on the parties. Rajamannar, CJ., speaking for the Bench rejected the contention on the ground that a declaration made by the Government under Section 15(2) of the Industrial Disputes Act could not be held to be a legal proceeding. The learned Chief Justice further added as follows:

Apart from this legal position we are of opinion that Section 171 of the Indian Companies Act would have no application to enquiries, investigations and orders made either by Government or statutory bodies in exercise of statutory powers. In In re, Pontyprid etc., Tramways Co. (1889) 58 L.J. Ch. 536. the corresponding provision in the English Act of 1862 was held not to apply to an enquiry under Section 42 of the Tramways Act, 1842 on the ground that the statutory proceeding which was being taken was in no way a proceeding against the company. This contention must therefore fail.

8. The decision of Raman Nayar, J., as he then was in B.V. John v. Coir Yarn and Textiles Limited : (1960)ILLJ311aKer . dealt with the question whether Section 446 of the Companies Act, 1956 would have application to proceedings pursuant to a reference under Section 10 of the Industrial Disputes Act. The learned Judge observed as follows:

Section 446 of the Companies Act can have no application to proceedings pursuant to a reference under Section 10 of the Industrial Disputes Act. Giving the term, other legal proceedings' appearing in Sub-section (1) of the section, the wide meaning given to the same term in the corresponding Section 171 of the 1913 Act in Governor-General-in-Council v. Shiromani Sugar Mills Ltd. (1945) 2 MLJ 486; 72 IA 305; 59 LW 9; A.I.R. 1946 P.C. 16 : . and not confining it by an ejusdem generis construction to proceedings analogous to a suit, I still think that to come within the scope of this section, the proceeding must be in the nature of an action against the property of the company.

Over again the learned judge observed:

The Industrial Disputes Act, needless to say, is conceived in the public interest. Its object is to ensure fair terms to workmen and to secure industrial peace, so that the economy might not suffer. Although an adjudication under the Act might have the result of giving individual workmen personal rights against the property of the owner of the under taking, be it an individual or a company, its purpose is not really that, but to settle the industrial dispute. Obviously, the purpose is something before which the personal interests of the creditors or member's of the company concerned must yield, jus-as, for example, they must before a criminal prosecution or a proceeding under Section 145 of the Criminal Procedure Code. If we turn next to Section 10 of the Industrial Disputes Act, we find that, as pointed out in S.K.G. Sugar Ltd. v. Ali Hassan AIR 1957 Pat 722. the section makes it obligatory on the appropriate Government to make a reference in cases falling under the proviso to Sub-section (1) or under Sub-section (2) of the section. Even the 'May' of the body of Sub-section (1), it seems to me, gives a power coupled with a duty, and, where in its opinion the necessary conditions exist, the appropriate Government is under public duty to make a reference. The status imposes the duty solely on. the appropriate Government, free of any outside control, and apart from that, if this duty were subject to control under Section 446 of the Companies Act, it might become well-nigh impossible of performance, it would be strange if a duty that has to be performed in the public interest were to be controlled in order to serve the private interests, of the creditors and members of a company running an industrial establishment.

The principles started in the above two decisions are clearly applicable to the facts of this case. When once the appropropriate Government is satisfied that there is an industrial dispute, it is the duty of the appropriate Government to refer the dispute for resolution by the Labour Court or the Industrial Tribunal. Such a power which is conferred or the Government under the provisions of a special statute viz., the Industrial Disputes Act, in the interest of industrial peace and harmony cannot in any manner be said to be controlled by any general principles of law that the leave of the Court which appointed the receiver should be obtained before instituting any proceeding against the receiver. The enquiry before the Labour Court under the Industrial Disputes Act, on a reference under Section 10 of the Act cannot be said to be an enquiry initiated by a party against the receiver or against the property in the hands of the receiver. I have therefore no hesitation in coming to the conclusion that the Labour Court erred in holding that the petitioner was not entitled to any relief on account of the fact that the leave of Court that appointed the receiver had not been obtained prior to raising of the industrial dispute.

9. I accept the finding of the Labour Court that the order of retrenchment passed against the petitioner by the management did not comply with the conditions laid down in Section 25-F of the Industrial Disputes Act and that therefore the order was void. The award of the Labour Court is therefore set aside to the extent it has held that the petitioner is not entitled to any relief on the ground that before reference was made to the Labour Court leave of the Court that appointed the receiver had not been obtained. The matter is remitted back to the Labour Court for appropriate award being passed in the light of its finding that the order f retrenchment passed against the petitioner was void and in the light of the finding of this Court that no leave of the Court was necessary for making a reference under Section 10 of the Industrial Disputes Act. The writ petition is allowed, but under the circumstances without costs.


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