R.N. Pyne, J.
1. This appeal is directed against the judgment and order of P.K. Banerjee, J., dated December 12, 1972 dismissing the appellant's application made under Article 226 of the Constitution challenging the order of reference dated 8th December 1967 and the Order No. 52 of the respondent No. 1 Seventh Industrial Tribunal dated 2nd April, 1971. Relevant facts of this case may briefly be stated.
2. Rivers Steam Navigation Company Limited (hereinafter referred to as 'the Company') which was incorporated in England, operated as inland carrier of goods between West Bengal and Assam over the rivers flowing through East Bengal. It also owned a Rajabagan Dock-yard, a large enterprise in Calcutta for repairing vessels etc. The company had to close down its business during Indo-Pakistan conflict in 1966 as large number of vessels of the company had been seized by the Pakistan Government. After termination of Indo-Pakistan hostility the company started operation in Assam and in the port of Calcutta; but it could not do well in the business and had to incur a large recurring financial help from the Government of India. The company had various creditors whose dues amounted to considerable amount. The Government of India considered that the company should not just be closed down but it should be kept alive for strategic reasons as well as for business and commercial purposes. With that end in view and having regard to the importance of the business of the company, the Government of India since 1965 acquired by purchasing various shares of the company. According to the Government of India, it was considered financially practicable to continue the limited but nationally very important and useful service if a new company was set up by the Government of India and for that purpose it was decided to set up a new rupee company. On or about 16th February, 1967 a new company, namely, Central Inland Water Transport Corporation Limited (hereinafter referred to as 'the Corporation') the appellant herein was incorporated by the Government of India. Thereafter, the company made an application to the Hon'ble High Court at Calcutta for sanction of a scheme under Sections 391 and 394 of the Companies. Act, 1956. The said scheme was duly sanctioned with some modification by this Court by its order dated 3rd May, 1967. The relevant provisions of this scheme as presented before the Court are set out hereunder:
1. A new Government of India company will be incorporated within about six weeks with a Memorandum and Articles of Association amongst others with power to acquire the property and assets of the existing company with sufficient capital fixed by the Government of India (hereinafter called the 'New Company').
2. The Rivers Steam Navigation Company Ltd. (hereinafter called the Existing Company') will transfer to the new company all its properties and assets, uncalled capital amounting to 117,585 or Rs. 24,68,285 will be paid in rupees by the Government of India to the existing company.
3. The new company will undertake all the liabilities of the existing company in favour of the State Bank of India and the Government of India. The State Bank of India and the Government of India will accept the new company as its debtor in place of the existing company and will release the existing company from all its liabilities in respect of its said debts.
4. The amount due to The Chartered Bank for principal interest and costs which forms subject matter of a Suit No. 1730 of 1966 (The Chartered Bank v. Rivers Steam Navigation Co. Ltd.) or otherwise is reduced to Rs. 60 lakhs and the same shall be payable by the new company within 10 weeks from the dale of the final approval of the scheme by this Hon'ble Court or 30th June, 1967 whichever is later and this will be final settlement of all dues to the Chartered Bank.
5. No amount shall be payable to any creditor of the existing company who has directly or indirectly agreed with any person to accept the shares of the existing company in payment or satisfaction of his dues in whole or in part. The existing company, if so required, shall allot the shares agreed to be taken as aforesaid to the creditor concerned.
6. All the other creditors of the existing company, which comprise the unsecured creditors other than the State Bank of India, the Chartered Bank, the Government of India and the creditors referred to in paragraph 5 hereof, shall be paid in the manner following, viz.:
(a) All the creditors will be paid Rs. 5,000 or if the amount due to them is less than Rs. 5,000 then the full amount due upon the sanction of the scheme by this Hon'ble Court within ten weeks from the date of such sanction or the 30th June, 1967 whichever is later.
(b) 66.23 per cent of the balance of their dues appearing in the books of account of the existing company in the following instalments, viz., 33.1/3 per cent before 30th June, 1967 and the balance of 33.1/3 per cent on or before 30th June, 1968 in full and final settlement of their entire dues.
7. The new company will employ such of the workers and staff of the existing company as may be necessary and suitable for its business on such terms and conditions as it, in its discretion, thinks fit.
8. Upon the approval of the scheme by the Court, the existing company shall be closed and upon payment to all the creditors the existing company shall be dissolved without winding up pursuant to an order to be obtained from this Hon'ble Court.
9. The Court shall have the right to add, alter, vary or modify the above scheme and Shri B.B. Ghosh, the Chairman of the existing company is hereby authorised to accept such additions, alterations, variations and modifications as this Hon'ble Court may be pleased to make on the company and all the creditors and members of company shall be bound by such additions, alterations, variations and modifications as this Hon'ble Court may think fit to make.
3. Clauses 6 & 7 of the scheme as set out herein above were modified by the Court by its order dated 3rd May, 1967. The modified Clauses 6 & 7 of the scheme are as follows:
That the following clauses be incorporated in Clause 6 of the said scheme of compromise or arrangement:
(i) That the Government of India agrees to pay the amount due to the secured and unsecured creditors as indicated in the scheme proposed.
(ii) That the Government of India shall provide necessary fund to the said transferee company to pay the amount provided in the scheme For settlement.
That Clause 7 of the said scheme be modified as follows:
(a) That new company shall take as many of the existing staff of labour as possible and as can be reasonably taken over by the said transferee company subject to any valid objection to any individual employee or employees.
(b) That as to exactly how many can be employed it is left to the said transferee company's bona fide discretion.
(c) That those employees who cannot be taken over shall be paid by the transferor company all moneys due to them under the law and all legitimate and legal compensations payable to them either under Industrial Disputes Act or otherwise legally admissible and that such moneys shall be provided by the Government of India to the existing transferor company who will pay these dues.
(The above modification or amendment will appear from pages 25-26 of the Paper Book).
4. One Bejon Kumar Roychowdhury was appointed in the Head Office of the company in February 1948. Towards the end of 1963 Bejon was working as a clerk at Jagannath Ghat Office of the company. It appears that in 1963 Bejon went on leave on account of his indifferent health and while he was on leave his service was terminated by the company by a letter dated 7th September 1963 with immediate effect. It is alleged that no opportunity was given to Bejon Roychowdhury to make a representation against the termination. On receipt of the said letter it is stated that Bejon Roychowdhury wrote to the Superintendent, Jagannath Ghat Office and prayed that he would be allowed to join on 13th September 1963 and as he was not allowed to join his post, an industrial dispute in respect of dismissal of Bejon Roychowdhury was raised by Inland Steam Navigation Workers' Union. There were reconciliation proceedings and the same having failed the matter was referred to the Tribunal for adjudication by an order dated 8th December 1967. The said order dated 8th December 1967 is set out hereunder:
Whereas an industrial dispute exists between Messrs. The Central Inland Water Transport Co. Ltd., 4, Fairlie Place, Calcutta-1 and their workmen represented by the Inland Steam Navigation Workers' Union, 16/17, College Street, Calcutta-12 relating to the undermentioned issue being a matter specified in the Second Schedule to the Industrial Disputes act, 1947 (XIV of 1947); And whereas it is expedient that the said dispute should be referred to an Industrial Tribunal constituted under Section 7A of the said Act;
Now, therefore, in exercise of the powers conferred by Section 10 of the Industrial Disputes Act, 1947 (XIV of 1947), the Governor is pleased hereby to refer the said dispute to the Seventh Industrial Tribunal constituted under notification No. 3115-I. R.I.R./3 A-6/59, dated the 21st June 1960, for adjudication.
The said Seventh Industrial Tribunal shall meet at such places and on such date as it may direct. 1. Whether the termination of service of Shri Bejon Kr. Roy Chowdhury is justified? What relief, if any, is he entitled?
5. Here, it may be mentioned, that another industrial dispute between the said Union and the company with regard to termination of service of Bejon Roychowdhury was referred to the Industrial Tribunal by the order dated 14th June 1967 but the same ultimately resulted in a no-dispute award.
6. Written statements were duly filed by the parties before the Tribunal. In its written statement the Corporation raised several objections as preliminary objections before the Tribunal. It was contended that the Tribunal had no jurisdiction to adjudicate upon the issue because Bejon Roychowdhury was never employed by the Corporation and was not an employee of the Corporation. There was no and never could be an industrial dispute between Bejon Roychowdhury and the Corporation. It was further contended that the Corporation was not a 'successor' of the company. Therefore, the point that was urged before the Tribunal was whether the Corporation was a successor company and as such was bound to take all the employees of the company. The contention of the Union before the Tribunal was that Bejon's service was terminated by notice and if the termination was bad then he continued to be an employee of Corporation and as such the said industrial dispute could be proceeded with. It appears that the preliminary issue as to whether the Corporation was a 'successor' of the company or not was not decided as a preliminary issue and by its Order No. 52 dated 2nd April, 1971 the Tribunal directed that the said point should be decided by the Tribunal on merits after the parties had adduced evidence. The relevant portion of the Tribunal's order are set out hereunder:
It thus appears that the question whether Central Inland Water Transport Corporation Limited is successor of River Steam Navigation Co. Ltd. has to be decided in the instant reference on merits alter the parties have adduced evidence regarding the same. I do not think that it should be decided at this stage when the Corporation has not adduced any evidence on this point and has not also argued the point. In my opinion, this question is to be decided when the case is heard on merits. I do not think it should be decided while considering the question of jurisdiction at this stage. Before the said question is decided it cannot also be said that Shri Roy Chowdhury will have no right against the Corporation. It would thus not be possible to hold at the present moment that the reference is invalid. The contentions of the Union and the Corporation regarding this point will be considered in due course when this question is heard on merits.
7. As stated earlier, the petitioner moved an application under Article 226 of the Constitution in this Court challenging the said order of reference dated 8th December, 1967 and the said order No. 52 dated 2nd April, 1971 as illegal, void without jurisdiction and not binding on the Corporation and for quashing the same on various grounds as will fully appear from the petition of the said application.
8. Although the appellant as the petitioner in the Court of first instance challenged both the order of reference and the said order No. 52 dated 2nd April, 1971 yet it appears that at the hearing of the application the challenge was limited only to the said order and the Court of the first instance considered only the question of validity of the said order.
9. The point which was argued before the Court of the first instance was whether the Corporation was a successor of the company and whether the Corporation as successor of the company was bound to take all employees of the Corporation. On behalf of the Union it was urged in the said application, that if termination of Bejon Roychowdhury was bad he continued to be an employee of the company and as such the reference could be proceeded with because the Corporation was a successor to the company. On behalf of the Corporation it was urged that in view of the judgment of B.C. Mitra, J., in Matter Nos. 717 and 718 of 1968 decided on 15th July, 1969: (reported in 1971 Lab. I.C. 229) where his Lordship held that as the Corporation was not a successor to the company the reference could not be proceeded with against the Corporation. P.K. Banerjee, )., however, observed that there was no force in the argument advanced on behalf of the Corporation. His Lordship was of the opinion that it was premature to decide the point in an application under Article 226 of the Constitution though there was some observation in the order passed by the learned Judge, but the fact remained that the Tribunal specifically stated that whether the company was a successor or not was to be decided after the evidence were adduced at the hearing and it had specifically made no finding whatsoever about the Corporation being successor of the company. In the aforesaid view of the matter his Lordship was not inclined to interfere with the matter at that stage and discharged the Rule.
10. The short question that arises for consideration in the instant appeal is whether the Tribunal was right in its finding that the question as to whether the Corporation was a successor to the company or not could be decided at the trial after evidence were adduced. According to the appellant the Corporation cannot be said to be the successor of the company and the question whether the Corporation is the successor of the company would not arise in the reference. Respondent's contention on the other hand is that Corporation is the successor of the company and it is within the jurisdiction of the Tribunal to decide the issue at the hearing after the evidence are adduced by the parties.
11. On behalf of the appellant it was submitted that there was no industrial dispute between the Corporation and the respondent Union in respect of the matter sought to be referred to the tribunal, i.e., question regarding termination of Bejon's service because after closure of the company no claim of workmen survived against the Corporation. Further, the question of closure and whether the Corporation was a ('successor') of the company could not be decided as an incidental question to the main question referred to the Tribunal. Referring to the amended Clauses 6 and 7 of the scheme, it was submitted that whether the Corporation was a successor of the company or not would not arise in the reference and further, it could not be determined as an incidental question. That is major industrial dispute and is not an incidental question. It has also been submitted that whether the Corporation is a successor or not is not a question which arises in the present reference and the Tribunal has no jurisdiction to go into the question. It was also the submission of the counsel that an enquiry as to whether the corporation is a successor or not would be futile because even if the Corporation is found to be successor no relief can be granted against it in view of the modified clause of the scheme mentioned earlier. In support of his contention, counsel has relied on the modified Clause 7 of the scheme stated hereinbefore and an unreported decision of P.K. Goswami, C.J., in a case of Assam High Court in Civil Rule No. 251 of 1968: (since reported in 1971 Lab. I.C. 788) (Management of River Steam Navigation Co. Ltd. v. Workmen, River Steam Navigation Co. Ltd. and Central Inland Water Transport Corporation Ltd. v. The Workmen 1975-II L.L.J. 117.
12. On behalf of the respondent No. 3 it has been argued that the question as to whether the Corporation is a successor or not is the main question although not expressly stated in the order of reference and hence that question can be decided by the Tribunal in the instant reference. It has been argued that the Corporation is a party to the reference and, therefore, relief can be claimed against it. It has been further argued that if it is held that the service of the workmen, Bejon Roychowdhury, is wrongfully terminated, relief can be claimed against the Corporation as a 'successor' of the company.
13. On behalf of the respondent No. 2 Union it was submitted that there was no change of employer and as such the workman who was in the employment of the company had the right to be employed in the Corporation without any break of service or non-continuation of service. It was further submitted that assuming but not admitting that there was change in the employer the workmen had the right to be employed by the transferee Corporation even if the transferee is held not to be a successor. It was also submitted that the Corporation became successor in interest of the transferor company and as such the workmen of the company including Bejon Roychowdhury had a right against the transferee corporation.
14. The point that arises, for consideration is whether the Tribunal was right in its decision that the question as to whether the Corporation is the 'successor' of the company is to be decided at the hearing of the reference on merit after the evidence is adduced by both sides. Learned fudge of the Court of the first instance has upheld the decision of the Tribunal in this behalf. With respect we are unable to agree with the decision of the learned Judge of the Court of the first instance. From the judgment appealed against it appears that his Lordship has referred to the scheme as submitted to the Court but has not considered the modifications of the scheme particularly, the modified Clause 7 thereof as sanctioned by the Court by its order dated 3rd May 1967. Modified Clause 7 of the scheme extracted earlier would show that the Corporation was not under any obligation to take all the existing workers of the company. Under the said clause Corporation would take as many of the existing staff of labour as possible and as could be reasonably taken over by the Corporation subject to any valid objection to any individual employee or employees and that as to exactly how many could be employed was left to the Corporation's bona fide discretion. Further, those employees who could not be taken over by the Corporation would be paid by the company all moneys due to them under the law and all legitimate and legal compensations payable to those employees either under Industrial Disputes Act or otherwise legally admissible and that such moneys would be provided by the Government to the company who would pay those dues. It, therefore, appears that all the employees of the company would not become the employees of the Corporation upon transfer of the company's undertaking to the Corporation. It would depend upon the discretion of the Corporation as to how many of the existing staff of the company would be taken by the Corporation. Those employees who could not be taken by the Corporation would be entitled to be paid their legitimate claim and other legal dues as admissible under the law by the company . and not by the Corporation and such payments would be made out of the moneys to be provided by the Government to the company. It, therefore, appears that the employees who could not and/or were not taken over by the Corporation could not have any claim against the Corporation. Further, as the company closed down its business on 3rd May, 1967 the services of its employees who were not taken over by the Corporation stood terminated on and from the said date.
15. In the unreported decision of the Assam High Court in Civil Rule No. 251 of 1968: (since reported in 1971 Lab. I.C. 788) (The Management of River Steam Navigation Co. Ltd. v. Workmen of River Steam Navigation Co. Ltd.) (supra) the State Government made a reference under Section 10(l)(c) of the Industrial Disputes Act referring the issue for adjudication as to 'whether the management of R.S.N.Co. Ltd, is justified in dismissing Shri Sita Ram Ahir.' The Rule was obtained against the order passed by the Presiding Officer, Labour Court, Gauhati rejecting a preliminary objection as to his jurisdiction in an industrial reference. In his judgment P.K. Goswami, C.J., referring to Clause 7 of the scheme observed that (at p. 790):
From some of the above provisions appearing in the scheme, it is clear that if there was any existing liability of the transferor company, namely, the petitioner, there was provision how that liability would be met. In this context we have got to examine the nature of the industrial dispute. Here, the petitioner was dismissed by the transferor company, while it was functioning. If this dismissal is held to be unjustified, the Labour Court will have to consider the second relief, namely, whether he will be entitled to reinstatement or to any other relief in lieu thereof. Even if reinstatement is allowed, it could not be automatically beyond 3rd May, 1967, since on that date the scheme came into operation. If the answer to the first issue is in favour of the workman and if the Labour Court decides that he is entitled to reinstatement it could be only employment upto 3rd May, 1967, which means that he would be entitled to his wages up to that date from the transferor company. Thereafter his case will be considered by the new company along with other employees under the provisions of the scheme. There could not be any relief of reinstatement in the ordinary sense of putting him back to the job even after 3rd May 1967 in the circumstances of this case.
16. In the case of Central Inland Water Transport Corporation Limited v. The Workmen, (supra) while considering the validity of the proceeding under Section 33-C(2) of the Industrial -Disputes Act Supreme Court observed as follows (Paras 17 & 18):
Therefore, prima facie, the claim of the workman would be for compensation under Section 25FF, directed, not against the Corporation, but against the company of which they were formerly the employees. As a matter of fact the scheme itself shows that the employees of the company who were not taken over by the Corporation were to be paid by the company all money due to them under the law. The scheme further shows that the company was to be put in possession of funds by the Government of India for satisfying liabilities to the workers.
* * * * *That being the position in law under Section 25FF, the former employees of the company, who were not absorbed by the Corporation can hardly make out a claim against the transferee Corporation either for compensation on termination of their service following the transfer or for re-employment.
17. It would, therefore, appear that those employees of the company who were not or could not be taken over by the Corporation could not have any claim against the Corporation as transferee of the Company's undertaking. According to the scheme, the claims of such employees were to be paid by the company out of the moneys to be provided for by the Government. In view of the modified scheme it cannot be said that so far as the claims of the employees of the company who were or could not be taken over by the Corporation had any claim against the Corporation as 'successor' of the company. Modified Clause 7 of the scheme would show that regarding the claims of the employee not taken over by the Corporation, the Corporation could not be treated as 'successor' of the company. Hence the question whether the Corporation is the 'successor' of the company does not come within the purview of the reference. As the question whether the Corporation is the 'successor' of the company is beyond the scope of the reference for reasons stated hereinbefore it was not open to the tribunal to decide that said question and the said question was beyond the jurisdiction of the tribunal to decide. The Tribunal, therefore, had no jurisdiction to consider the said question. Hence the decision of the Tribunal to consider the question as to whether the Corporation is the 'successor' at the time of hearing after evidence is adduced cannot be upheld. Consideration of the said question being beyond the jurisdiction of the Tribunal it was incompetent to decide the same.
18. In the aforesaid view of the matter, Tribunal's Order No. 52 dated 2nd April, 1971 cannot be sustained. The appeal is, therefore, allowed. Tribunal's Order No. 52 dated 2nd April, 1971 is quashed and a writ in the nature of certiorari do issue for the same. These will, however, be no order as to cost.
S.C. Ghose, C.J.
19. I agree.