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B.M. Khadar HussaIn Sahib Vs. Mohamed Sheriff and anr. - Court Judgment

LegalCrystal Citation
SubjectLabour And Industrial
CourtChennai High Court
Decided On
Reported in(1962)2MLJ172
AppellantB.M. Khadar HussaIn Sahib
RespondentMohamed Sheriff and anr.
Excerpt:
- .....section 25-ff three conditions in the proviso because all these conditions ensure fair play to the workmen transferred to the new employer consequent on the transfer of the undertaking and therefore if these three conditions in the proviso are satisfied section 25-ff is not attracted and the workmen are not entitled to claim retrenchment compensation from the old employer. the labour court was therefore right in viewing the case as one falling under section 25-f and not under section 25-ff.6. a minor point was raised by mr. viswanathan as regards the quantum of compensation. it related to the payment of wages in lieu of the period of notice. mr. viswanathan pointed out that the first clause of the proviso to section 25-ff related to the service of the workmen being not interrupted by the.....
Judgment:
ORDER

Ganapatia Pillai, J.

1. These two petitions are filed by the erstwhile owner of a bus for quashing two orders of the Labour Court, Madras, in two applications preferred by two workmen employed in a bus of the petitioner for retrenchment compensation. The applications before the Labour Court were preferred under Section 33-C (2) of the Industrial Disputes Act and the compensation claimed included wages in lieu of the period of notice. The admitted facts are the following.

2. The petitioner in these two Writ Petitions was the owner of MSZ 7485 for which a permit had been issued under the Motor Vehicles Act for its being used as a stage carriage. This bus together with the permit was sold by the petitioner to one Appandanatha Nainar on 5th October, 1956. The first respondent to each of the petitions were the conductor and checking inspector respectively employed by the petitioner in relation to the bus. It is alleged that on the sale of the bus these two workmen voluntarily gave up employment under the petitioner and took up employment under the purchaser Nainar on and from 5th October, 1956. The claim for retrenchment compensation was resisted by the bus owner before the Labour Court on the ground that there was no retrenchment actually because the service of the workmen were transferred by the bus owner with their consent and they themselves agreed to serve the purchaser of the bus. The Labour Court took the view that Section 25-FF of the Industrial Disputes Act is not attracted to the facts of these cases and consequently compensation was payable under Section 25-F of that Act.

3. Though the point now taken before me was not specifically taken before the labour Court, I permitted Mr. Viswanathan, counsel for the petitioner, to argue the question of law, namely, whether on the sale of the bus in this case there was a transfer of the ownership or management of the undertaking. Mr. Viswanathan contended that Section 25-FF would only apply in the case of a bus owner who owns more than one bus, and transfers all the buses and the permits pertaining to those buses and goes out of employment as a bus owner in which case alone, according to him, it may be said that the undertaking was transferred. Whatever might be said of other kinds of businesses I am very clear that with reference to the business of running stage carriages in this State under the Motor Vehicles Act each bus is recognised as an individual unit because the Rules and the Act contemplate the issuing of a separate permit for each bus. The Rules in force do not permit the user of that bus except in accordance with the conditions of the licence appended to the permit. As an illustration I can say that normally the bus owner would not be permitted to ply that bus on any other route except the route for which that bus has been permitted to ply. Section 2 (00) of the Industrial Disputes Act defines' Retrenchment' thus:

' Retrenchment' means the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, but does not include:(a) voluntary retirement of the workman; or (A) retirement of the workman on reaching the age of superannuation if the contract of employment between the employer and the workman concerned contains a stipulation in that behalf; or (c) termination of the service of a workman on the ground of continued ill-health.

The definition of 'Retrenchment' has in my view no direct bearing on the question whether the provisions of Section 25-FF apply to these cases. What amounts to retrenchment cannot possibly determine whether a transfer of an undertaking or the ownership of that undertaking becomes in law a transfer indicated in Section 25-FF. Certainly on the sale of the bus along with the permit the management of the bus and the ownership of the bus have changed hands. It might be said that unless the appropriate authority recognises the transfer and allows the purchaser to use the bus on the route for which it was licensed to ply there may be no actual transfer of the undertaking, because undertaking implies the carrying on of a business activity by the purchaser in the way in which it was being done by the seller. There is no dispute in this case that so far as Nainar the purchaser was concerned, he was able to use the bus in the same way in which it was being used by the petitioner. On that assumption, namely, that the purchaser was able to use the bus under the permit already granted for the remaining period of that permit, I see no hindrance to my taking the view that the transfer of a bus by the petitioner amounts to the transfer of its ownership or of the undertaking even though the seller may still be the owner of other buses and may still be continuing the business of a bus owner by plying other buses for profit. The Labour Court was therefore right in its view that there was a transfer of ownership or management of the undertaking in this case when the bus was sold to Nainar.

4. The next question for my consideration, is whether on the facts found by the Labour Court, namely, the taking over of the workmen by the purchaser without any break in service would not amount to retrenchment. Section 25-FF contains three clauses in the Proviso all of which should be satisfied before the petitioner could contend that Section 25-FF would cease to apply to his case. The Proviso reads thus:

Provided that nothing in this section shall apply to a workman in any case where there has been a change of employers by reason of the transfer, if--(a) the service of the workman has not been interrupted by such transfer; (b) the terms and conditions of service applicable to the workman after such transfer are not in any way less favourable to the workman than those applicable to him immediately before the transfer; and (c) the new employer is, under the terms of such transfer or otherwise, legally liable to pay to the workman, in the event of his retrenchment, compensation on the basis that his service has been continuous and has not been interrupted by the transfer.

The Labour Court held that though Clauses (a) and (b) of the Proviso were satisfied in this case Clause (c) was not satisfied. It is not contended by Mr. Viswanathan for the petitioner that under the terms of the sale there was any legal liability cast upon the purchaser to pay compensation to the workman, the first respondent in each of these petitions, on the basis that the service of such workmen had been continuous and had not been interrupted by the transfer. A reading of the section shows that all the three clauses of the Proviso must co-exist before the Proviso can come into operation. The finding of the Labour Court that Clause (c) did not exist in this case immediately excludes the operation of the Proviso. We are therefore thrown back upon the applicability of Section 25-FF of the Act.

5. Mr. Kumaramangalam attempted an argument which I may in passing mention because he submitted that a decision of the question as to what amounts to transfer of an undertaking within the meaning of Section 25-FF would not be necessary in this case. He pointed out by reading from the counter statement filed by the petitioner before the Labour Court that

The petitioner's service as a Conductor was transferred as and from 5th October, 1956 to Sri D. S. Appandanathan Nainar who was put in possession of the Bus MSZ 7485. The transfer was with the consent of the petitioner.

From this Mr. Kumaramangalam construed the case put forward by the bus owner before the Labour Court to be a case of retrenchment with the consent of the labourer and therefore he argued Section 25-F would be attracted. The plea taken in the counter statement filed before the Labour Court is not clear in my opinion to indicate whether the change of employers would not as a matter of law amount to retrenchment consequent upon the transfer of the undertaking. I would rather prefer to base my conclusion upon the view that whenever a sale of a bus with a permit takes place and the purchaser employs the workmen employed in the bus by the vendor without any written contract compelling him to pay retrenchment compensation taking into account the services under the previous employer, the case must be governed by Section 25-FF. Even though the transfer of the workmen may be loosely called a willing transfer in the sense that the previous employer was willing to release him and the employee himself was willing to work under the new employer, in law a transfer of an undertaking does not depend upon the transfer of the employee from the previous employer to the new employer. That is a matter of separate arrangement between the parties. That does not affect the question whether the change of masters was consequent upon a transfer of the undertaking. That is why in my view the Legislature has thought fit to include in Section 25-FF three conditions in the Proviso because all these conditions ensure fair play to the workmen transferred to the new employer consequent on the transfer of the undertaking and therefore if these three conditions in the Proviso are satisfied Section 25-FF is not attracted and the workmen are not entitled to claim retrenchment compensation from the old employer. The Labour Court was therefore right in viewing the case as one falling under Section 25-F and not under Section 25-FF.

6. A minor point was raised by Mr. Viswanathan as regards the quantum of compensation. It related to the payment of wages in lieu of the period of notice. Mr. Viswanathan pointed out that the first clause of the Proviso to Section 25-FF related to the service of the workmen being not interrupted by the transfer of the undertaking. From this he wanted me to draw the inference that if such interruption had not taken place the workmen concerned would not be entitled to wages in lieu of one months wages. If I accept this argument it will amount to reading words into Section 25-F which are not there. If a workman is entitled to retrenchment compensation the quantum of that compensation is governed solely by Section 25-F because the first clause of the Proviso to Section 25-FF is not at all concerned with the quantum of retrenchment compensation. It only deals with the question of the applicability of the main provision in Section 25-FF. Even though in these cases the service was continuous and uninterrupted Section 25-F (a) is attracted because factually no notice as required by that clause has been given by the petitioner. The award by the Labour Court of wages in lieu of a month's notice is 'therefore proper.

7. Both the Writ Petitions therefore fail and are dismissed. The rule nisi issued in each case is discharged. Petitioner will pay the costs of the first respondent an each petition. Advocated fee Rs. 50 in each petition.


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