Case Note & Summary
The dispute arose from the termination of the appellant's services by the Narang Bank of India Ltd. on February 10, 1975. Following the termination, the Central Government referred the dispute to the Central Government Industrial Tribunal for adjudication. The Tribunal found the termination unjustified and awarded reinstatement with back wages. The United Bank of India, which took over the Narang Bank, sought to cross-examine the appellant after being impleaded in the proceedings. The Tribunal dismissed this request, leading to a writ petition by the United Bank, which was set aside by a Single Judge of the High Court on grounds of natural justice. The Division Bench upheld this decision, prompting the appellant to appeal to the Supreme Court. The Supreme Court analyzed whether the United Bank, as the successor, could reopen the proceedings. It concluded that the transferee company is bound by the proceedings of the transferor and cannot introduce new pleas or recall witnesses unless exceptional circumstances exist. The court found no such circumstances in this case and held that the principles of natural justice were not violated. The Supreme Court set aside the High Court's judgments and remanded the case for consideration of other grounds raised by the United Bank, allowing the appeal and directing costs to be paid to the appellant.
Headnote
A) Industrial Disputes - Rights and Liabilities - Transfer of Rights - Industrial Disputes Act, 1947, Section 18 - The court held that in cases of transfer or merger, the transferee company assumes the rights and liabilities of the transferor, and cannot reopen proceedings without exceptional circumstances. The principles of natural justice were not violated as the transferee was bound by prior proceedings (Paras 1095-1098).
Issue of Consideration
Whether a party who acquires the rights and liabilities of a party to a proceeding is entitled to reopen the proceedings on being impleaded.
Final Decision
The Supreme Court allowed the appeal, set aside the judgments of the High Court, and remanded the case for consideration of other grounds raised by the United Bank, directing costs to be paid to the appellant.
Law Points
- Industrial Disputes
- Labour Court
- Cross-examination
- Natural Justice
- Merger
- Assignment
