Case Note & Summary
The petitioner, Empress Mills (a unit of Maharashtra State Textile Corporation), challenged an order dated 14.12.1998 passed by the First Labour Court, Nagpur, in ID Application No. 351/88 under Section 33(c)(2) of the Industrial Disputes Act, 1947, directing payment of Rs. 27,965/- to respondent no. 2 (Gajanan Raghunath Shambharkar) as retrenchment compensation. The respondent workman expired during the pendency of the petition, and his legal representatives were brought on record. The facts reveal that prior to 3.10.1986, the Empress Mills was owned by the Central India Spinning, Weaving and Manufacturing Company Limited, which declared a lock-out on 3.5.1986 and filed winding-up proceedings. The State Government nationalized the company by promulgating an Ordinance on 3.10.1986, later replaced by the Central India Spinning, Weaving and Manufacturing Company Limited, the Empress Mills, Nagpur (Acquisition and Transfer of Undertaking) Act, 1986. By virtue of this Act, the undertaking was transferred and vested in the Maharashtra State Textile Corporation Ltd. On 30.10.1986, the Corporation published an advertisement inviting workmen who were in employment immediately before the appointed day (3.10.1986) to apply for appointment. The legal issue was whether the petitioner, as successor employer, is liable to pay retrenchment compensation under Section 33(c)(2) of the Industrial Disputes Act. The court upheld the Labour Court's order, holding that the liability to pay retrenchment compensation is not extinguished by the nationalization and transfer of the undertaking. The petition was dismissed.
Headnote
A) Industrial Disputes Act, 1947 - Section 33(c)(2) - Retrenchment Compensation - Computation - The Labour Court directed the petitioner to pay Rs. 27,965/- to the respondent workman as retrenchment compensation. The court held that the liability to pay retrenchment compensation arises under the Industrial Disputes Act and is not extinguished by the nationalization and transfer of the undertaking. (Paras 1-3)
B) Nationalization Act - Central India Spinning, Weaving and Manufacturing Company Limited, the Empress Mills, Nagpur (Acquisition and Transfer of Undertaking) Act, 1986 - Liability of Successor Employer - The petitioner, as the successor employer, is liable to pay retrenchment compensation to workmen who were in employment immediately before the appointed day. The court held that the provisions of the Nationalization Act do not absolve the petitioner from liability under the Industrial Disputes Act. (Paras 2-3)
Issue of Consideration
Whether the petitioner (successor employer) is liable to pay retrenchment compensation to the respondent workman under Section 33(c)(2) of the Industrial Disputes Act, 1947, despite the nationalization and transfer of the undertaking.
Final Decision
The High Court dismissed the writ petition, upholding the Labour Court order dated 14.12.1998 directing payment of Rs. 27,965/- to the respondent workman as retrenchment compensation.
Law Points
- Retrenchment compensation
- Section 33(c)(2) Industrial Disputes Act
- 1947
- Nationalization Act
- Transfer of undertaking
- Liability of successor employer
Case Details
2011 LawText (BOM) (06) 163
Writ Petition No. 3335/1999
Shri R.B. Puranik for Petitioner, Shri Samudra Sing for Respondent no. 2
Empress Mills, Nagpur, Union of Maharashtra State Textile Corporation Limited, through its General Manager
Presiding Officer, First Labour Court, Nagpur; Gajanan Raghunath Shambharkar (through L.Rs: Shubhang Gajanan Shambharkar, Shwetang Gajanan Shambharkar, Smt. Sushma Vinayak Borkar)
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Nature of Litigation
Writ petition challenging order of Labour Court under Section 33(c)(2) of Industrial Disputes Act, 1947 directing payment of retrenchment compensation.
Remedy Sought
Petitioner sought to quash the Labour Court order dated 14.12.1998 directing payment of Rs. 27,965/- to respondent no. 2.
Filing Reason
Petitioner challenged the Labour Court order on the ground that it was not liable to pay retrenchment compensation due to nationalization and transfer of the undertaking.
Previous Decisions
Labour Court passed order dated 14.12.1998 in ID Application No. 351/88 under Section 33(c)(2) of Industrial Disputes Act, 1947 directing payment of Rs. 27,965/- to respondent no. 2.
Issues
Whether the petitioner is liable to pay retrenchment compensation under Section 33(c)(2) of the Industrial Disputes Act, 1947 despite the nationalization and transfer of the undertaking.
Submissions/Arguments
Petitioner argued that it is not liable to pay retrenchment compensation as the undertaking was nationalized and transferred under the said Act.
Respondent argued that the liability to pay retrenchment compensation under the Industrial Disputes Act continues and is not extinguished by nationalization.
Ratio Decidendi
The liability to pay retrenchment compensation under Section 33(c)(2) of the Industrial Disputes Act, 1947 is not extinguished by the nationalization and transfer of the undertaking under the Central India Spinning, Weaving and Manufacturing Company Limited, the Empress Mills, Nagpur (Acquisition and Transfer of Undertaking) Act, 1986. The successor employer is liable to pay such compensation.
Judgment Excerpts
This petition is preferred by the Empress Mills, a Unit of Maharashtra State Textile Corporation, challenging the order dated 14.12.1998, passed in ID Application No. 351/88, under Section 33(c)(2) of the Industrial Disputes Act, 1947, directing the petitioner to pay Rs. 27,965/- to the respondent no. 2 towards the retrenchment compensation.
By virtue of the provisions of the said Act, the said Company stood transferred and vested in the Maharashtra State Textile Corporation Ltd.
Procedural History
The Labour Court passed order dated 14.12.1998 in ID Application No. 351/88 under Section 33(c)(2) of the Industrial Disputes Act, 1947 directing payment of Rs. 27,965/- to respondent no. 2. The petitioner filed Writ Petition No. 3335/1999 challenging the order. During pendency, respondent no. 2 expired and his L.Rs were brought on record. The High Court dismissed the petition on 16.06.2011.
Acts & Sections
- Industrial Disputes Act, 1947: Section 33(c)(2), Section 2(S)
- Central India Spinning, Weaving and Manufacturing Company Limited, the Empress Mills, Nagpur (Acquisition and Transfer of Undertaking) Act, 1986:
