# SUPREME COURT REPORTS [1959) Supp. S. K. G. SUGAR LTD v. STU ALI HASSAN, CHAIRMAN, INDUSTRIAL THIBUNAL, BIHAR & OTHERS

- **Citation:** [1959] Supp. 1 S.C.R. 254
- **Court:** Supreme Court of India
- **Decided:** 1959
- **Case number:** Civil Appeal No. 793 of 1957
- **Bench:** S. R. Das, N. H. Bhagwati, B. P. Sinha, K. SuBBA RAO, K. N. Wanchoo
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/supreme-court-reports-1959-supp-s-k-g-sugar-ltd-v-stu-ali-hassan-chairman-1651
- **Pages:** 21

## Headnote

I11d11strial Dispute-Discharge by employer of workmen pending
adjudication-'h'1nplo_)'Cr',
.~1ca.ni11g nf--Industrial Disputes Act,
I947 (.\'.IV of r947), ss. 33, 33A-lndian Companies Act, r9r3 (7of
r9r3), s. r7r.
Gaya Sugar Mills Ltd. went into liquidation and the sugar
factory owned by it was lease<! out to the appellant by the liquidator with tire permission of the Court on December 6, 1954, to
be worked in terms of the lease which provided, inter alia, that
the lessee would neither be liable for any of the liabilities of the
cotnpany, or of the liquidator or the outgoing lessees nor bound to
engage any of their employees or those working from before
except those specifically mentioned in the lease. On December 2,
r954, i.e. four days before the appellant came into possession of
the sugar factory, the Bihar Government issued a notification
referring a d.ispute bct\.vcen the n1anagements of certain specified
sugar factories, including Ga ya Sugar Mills Ltd., and their workmen represented by their Unions, for adjudication to the Industrial Tribunal constituted by the respondent No. I. No notice
was given to the appellant and proceedings against it were all
exparte.
Complaints, hO\Yever, \vere made before the Industrial
Tribunal by two batches of workmen against the appellant under
s. 33A of the Industrial Disputes Act alleging in one case that
they had been discharged and in the other that the conditions
of their service had been changed by the appellant without first
obtaining the permission of the Tribunal under s. 33 of the Act.
It was asserted on behalf of the appellant that there was no
breach of the terms of the lease and no contravention of s. 33 of
the Act.
After unsuccessfully moving the High Court under
Arts. 226 and 227 of the Constitution for a writ of certiorari
quashing the said proceedings, the appellant came up to this
Court by special leave and it was contended on its behalf that
(I) no leave of the Court having been obtained under s. r7r of
the Indian Companies Act by the State .Government before it
made the reference under s. ro(r) of the Industrial Disputes Act,
the reference was bad in law and that (2) the word 'employer' in
ss. 33 and 33A of the Industrial Disputes Act meant only such
employer as was actually concerned with the industrial dispute
which was the subject matter of the reference and the appellant having come into possession of the Mills after the reference, could not be an employer within the meaning of those
sections.
(1) S.C.R.
SUPREME COURT REPORTS
255
Held, that the terms of the notification properly construed
clearly showed that what was sought to be made a party to the
-
reference was not the company itself but its management at the s. K. G. Sugar Ltd.
date of the reference and, therefore, no question of leave of the
v.
court under s. r7r of the Indian Companies Act could arise.
Sri Ali Hassan,
Chairtnanl Indus~
The word 'employer' occurring in ss. 33 and 33A of the
trial Trit.unal,
Industrial Disputes Act meant the identical employer. concernBihar & Others
ed with the industrial dispute, which was the subject-matter of
the adjudication, and could not include an employer who merely
happened to discharge or punish or alter the conditions of service
of workmen unless such employer could be shown to be a mere
nominee or benamidar of the former or fell within the category of
his heirs, successors or assigns within the meaning of s. r8(3)(c)
of the Act.
Since, in the instant case, the appellant satisfied none of
these tests, it was not bound to seek the permission of the Tribunal under s. 33 of the Act and the proceedings under s. 33A of
the Act against it must be quashed.

## Text

_Characters 0–39,649 of 47,843. This is a partial read: ask again with offset=39649 for what follows._

November 4.
254
SUPREME COURT REPORTS [1959) Supp.
S. K. G. SUGAR LTD.
v.
STU ALI HASSAN, CHAIRMAN, INDUSTRIAL
THIBUNAL, BIHAR & OTHERS
(S. R. DAS, c. J., N. H. BHAGWATI, B. P. SINHA,
K. SuBBA RAO and K. N. WANCHOO, JJ.)
I11d11strial Dispute-Discharge by employer of workmen pending
adjudication-'h'1nplo_)'Cr',
.~1ca.ni11g nf--Industrial Disputes Act,
I947 (.\'.IV of r947), ss. 33, 33A-lndian Companies Act, r9r3 (7of
r9r3), s. r7r.
Gaya Sugar Mills Ltd. went into liquidation and the sugar
factory owned by it was lease<! out to the appellant by the liquidator with tire permission of the Court on December 6, 1954, to
be worked in terms of the lease which provided, inter alia, that
the lessee would neither be liable for any of the liabilities of the
cotnpany, or of the liquidator or the outgoing lessees nor bound to
engage any of their employees or those working from before
except those specifically mentioned in the lease. On December 2,
r954, i.e. four days before the appellant came into possession of
the sugar factory, the Bihar Government issued a notification
referring a d.ispute bct\.vcen the n1anagements of certain specified
sugar factories, including Ga ya Sugar Mills Ltd., and their workmen represented by their Unions, for adjudication to the Industrial Tribunal constituted by the respondent No. I. No notice
was given to the appellant and proceedings against it were all
exparte.
Complaints, hO\Yever, \vere made before the Industrial
Tribunal by two batches of workmen against the appellant under
s. 33A of the Industrial Disputes Act alleging in one case that
they had been discharged and in the other that the conditions
of their service had been changed by the appellant without first
obtaining the permission of the Tribunal under s. 33 of the Act.
It was asserted on behalf of the appellant that there was no
breach of the terms of the lease and no contravention of s. 33 of
the Act.
After unsuccessfully moving the High Court under
Arts. 226 and 227 of the Constitution for a writ of certiorari
quashing the said proceedings, the appellant came up to this
Court by special leave and it was contended on its behalf that
(I) no leave of the Court having been obtained under s. r7r of
the Indian Companies Act by the State .Government before it
made the reference under s. ro(r) of the Industrial Disputes Act,
the reference was bad in law and that (2) the word 'employer' in
ss. 33 and 33A of the Industrial Disputes Act meant only such
employer as was actually concerned with the industrial dispute
which was the subject matter of the reference and the appellant having come into possession of the Mills after the reference, could not be an employer within the meaning of those
sections.
(1) S.C.R.
SUPREME COURT REPORTS
255
Held, that the terms of the notification properly construed
clearly showed that what was sought to be made a party to the
-
reference was not the company itself but its management at the s. K. G. Sugar Ltd.
date of the reference and, therefore, no question of leave of the
v.
court under s. r7r of the Indian Companies Act could arise.
Sri Ali Hassan,
Chairtnanl Indus~
The word 'employer' occurring in ss. 33 and 33A of the
trial Trit.unal,
Industrial Disputes Act meant the identical employer. concernBihar & Others
ed with the industrial dispute, which was the subject-matter of
the adjudication, and could not include an employer who merely
happened to discharge or punish or alter the conditions of service
of workmen unless such employer could be shown to be a mere
nominee or benamidar of the former or fell within the category of
his heirs, successors or assigns within the meaning of s. r8(3)(c)
of the Act.
Since, in the instant case, the appellant satisfied none of
these tests, it was not bound to seek the permission of the Tribunal under s. 33 of the Act and the proceedings under s. 33A of
the Act against it must be quashed.
CIVIL APPELLATE JURISDICTION:
Civil Appeal No.
793 of 1957.
Appeal by special leave from the judgment and
order dated September 20, of the Patna High Court
in M.J.C. No. 392 of 1955.
0. J(. Daphtary, Solicitor-General of India, A. B. N.
Sinha and B. P. Maheshwari, for the appellant.
S. P. Varma, for respondents Nos. 1,2,6-8 and 10-23.
1958. November 4.
The Judgment of the Court
was delivered by
BHAGWATI, J.-This appeal with special leave is
Bhagwati J.
directed against the judgment of the High Court of
Judicature at Patna dismissing the writ application of
the appellant seeking to quash the proceedings in Miscellaneous Cases Nos. 26 and 27 of 1955 before the
Industrial Tribunal, Bihar, Patna.
Gaya Sugar Mills Ltd., a Company incorporated in
1934 owned a Sugar Factory at Guraru, District Gay a.
An order for the compulsory winding up of the Company was passed on November 4, 1951, and by a subsequent order dated February 1, 1952, one Dhansukh
I,al Mehta was appointed liquidator of the Company.
In order to preserve the aforesaid Sugar Mills at Guraru in proper running order and also for the beneficial
256
SUPREME COURT REPORTS
[1959] Supp.
r958
winding up of the Company the liquidator obtained
5 1. G-,-
It 1 under s. 171 (b) of the Indian Companies Act sanction
· '" · ~'.'g"' ·'·of the Court to lease out the said Mills with all the
s,; Ali Hassan. lands, factory and residential buildings and machineCh·•fr•nan. Indus- ries etc. The Guraru Cane Development and Cane
Mal r,;b11n·•I. Marketing Union Ltd., were the former lessees of the
Riha, & 01""' said mills but on the expiration of their lease, the liquiBhugwtlli ].
dator obtained from the Court an order on December
3, 1954, sanctioning the lease in favour of Shri Krishna
Gyanoday Sugar Ltd., the appellant herein, for the
period December5, 1954, up to and inclusive of November 14, 1955. The liquidator executed in favour of
the appellant a lease of the said Mills on December 6,
1954, and handed over possession of the same to the
appellant the same day.
The terms and conditions of the lease, in so far as
they are material for our purposes provided that the
appellant would be put into possession of the leasehold
properties in a proper working order and would work
and run the factory without any interference or obstruction by or on behalf of the lessor and would appropriate the entire income and profit thereof and the
lessor would have no concern with profit or loss made
by the lessee in running the said factory and would
not be entitled to any sum or amount over and above
the rent therein reserved. The appellant was not to
be in any way liable or responsible for any of the liabilities of the Company or of the liquidator or of the outgoing lessees incurred whether before or after the appellant entered into possession except those mentioned
therein. The appellant was a,t its own cost entitled
always to install any additional or other machinery or
machineries and erect godowns or structures for the
purposes of and in connection with the running of the
said Mills after intimation to the lessor.
The appellant was not bound to engage any or all of the employees of the lessor or of the outgoing lessees or any
of the persons who had been working from before
except the 18 employees wJ:io were mentioned in Cl. 11
of the lease and the appellant also agreed not to retrench any staff already employed at that date in the
Factory at Guraru (vide cl. 13(v) of the lease). The
L
I
(1) S.C.R.
SUPREME COURT REPORTS
257
properties demised by the said lease were deemed to
r958
be in the control of the Patna High Court and any 5 K G-;-
L d
dispute between the lessor and the appellant in respect · · · v~gar
1
•
of the said lease was to be placed before the said Sri Ali Hassan,
Court for decision and the decision made by the said Chairman, TndusCourt was to be binding on. all the parties.
trial Tribunal,
It appears that on December 2, 1954, i.e., 4 days Bihar ..,_ Othm
before the execution of the said lease and delivery of
Bhagwati J.
possession of the said Mills by the liquidator to the
appellant, the Government of Bihar issued a notification referring certain disputes between the Managements of the Sugar factories specified in Appendix I
thereto and their workmen represented by the Unions
specified in Appendix II for adjudication to an Industrial Tribunal of which Shri Ali Hassan, the respondent No. 1 herein, was to be the sole member.
The terms of the reference stated :-
" Whereas the State Government is of opinion
that an Industrial dispute exists or is apprehended
between the Management of the Sugar factories as
specified in Appendix I and their workmen represented
by the Unions as specified in Appendix II regarding
the matters specified in Annexure A ;
Now, therefore, in exercise of the powers conferred
by section 7 read with sub-section (1) of section 10 of
the Industrial Disputes Act, 1947 (XIV of 1947) and
in supersession of Notification No. III/DI-14020/54L15146 dated the 1st October, 1954, the Governor of
Hihar is pleased to constitute an Industrial Tribunal
of which Mr. Ali Hussan shall be the sole member and
to refer the said dispute to the said Tribunal for adjudifation.
Annexure "A"
I. Retaining allowance to seasonal employees in
Sugar factories in Bihar.
2.
Leave and holidays to the e):Ilployees including seasonal employees in Sugar factories.
3.
Whether the deduction made in leave and holidays of the employees of the Management of the SuO'ar
factories is unjustified and if so what compensation° or
relief, the workmen are entitled to ?"
33
258
SUPREME COURT REPORTS [1959] Supp.
1958
There were as many as 28 Sugar factories specified
-
in Appendix I and as many as 38 Labour Unions specis. K. G. Suga' Ltd. fied in Appendix II. The Ga.ya Sugar Mills Ltd.,
S . Al':H·
Guraru was the second item in Appendix I and the
"
'
aS<an. Ch' . M d
S'
h G
.
d
h
c1i(iirman, Indusin1
az oor ang
~uraru \Vas ment1one
at t e
tdal Tribunal. third item in Appendix IJ.
Biha• & Othm
The respondent No. l entered upon the said reference.
Even though Gaya Sugar Mills Ltd., Guraru which
Bhagwati f.
was then in liquidation was not specifically described
as such in Appendix I, notice was given to the liquidator by the respondent No. l for January ll, 1955,
which was the date fixed for hearing before him. The
sa.id letter however reached the liquidator on January
13, 1955, whereupon by his letter dated January 14,
1955, he informed respondent No. l about it. Respondent No. l however satisfied himself by merely endorsing on the letter of the liquidator that the hearing
had already concluded and nothing further than enqui1ing of the post office as to the reason of the delay in
the delivery of the letter could be done.
Respondent
No. l made his award on February 17, l9fi5, and it
was published in the Official Gazette on February 23,
1955.
The adjudication proceedings which had thus
commenced on the date of"the reference viz., December 2, 1954, came to a conclusion on the expiry of 30
days of the publication of the award viz., on March 25,
1955, under s. 20(3) of the Industrial Disputes Act.,
1947. It appears that an appeal was taken to the
Labour Appeliate Tribunal against this award and the
appeal was decided on August 31, 1956.
Even though the appellant was in possession of the
said Mills under the terms of the lease dated December
6, 1954, no notice was given by respondent No. l to
the appellant and the appellant therefore could not
and did not appear befove respondent No. l. So far as
the appellant was concerned the proceedings before
respondent No. l were ex parte. Two applications
were, however, made 'on March 23, 1955, under s. 33A
of the Industrial Disputes Act, one by 15 persons alleg.
ing that the appellant had without an,.r reason and
without any notice discharged them from employ one
by one during the months of January and February
{l) S.C.R. SUPREME COURT REPORTS
259
1955 and the other by 5 persons alleging that the
z958
appellant had changed their conditions of service with-
-
d•
th t th
'd d" h
S. KG. Sugar Lid.
out any reason, conten mg
a
e sa1
1sc arges
v.
and the change in conditions of service had been effectSri Ali Hassan,
ed by the appellant during the pendency of the Chairman. Indus
disputes before the Industrial Tribunal aforesaid withtrial fribunol,
out the permission of the Industrial Tribunal having Bihar 6 Others
been obtained under s. 33 of the Act. These applicaBha1:wati J.
tions were numbered as Miscellaneous Cases Nos. 26
and 27 of 1955 and the appellant received on April 7,
1955, two notices from respondent No. 1, both dated
March 25, 1955, informing the appellant about the
filing of the two miscellaneous cases and calling upon
the appellant to file statements showing cause by
April 19, 1955. The appellant accordingly filed before
respondent No. 1 two applications or statements contending inter alia that the application under s. 33-A
of the Industrial Disputes Act, filed by those persons
(respondents Nos. 4 to 23 herein) were not maintainable and were otherwise fit to be rejected. It was asserted on behalf of the appellant that the appellant as
lessee of the said Mills had strictly complied with the
terms and conditions of the lease and there hR.d been
no contravention on its part of s. 33 of the Act, in
regard to any of the workmen concerned in the aforesaid two miscellaneous cases. It was pointed out that
none of the persons who had filed the said applications
was comprised in the 18 persons who were specifically
mentioned in Cl. 11 of the lease and who were specifically exempted from the operation of the said clause
nor were they comprised in the category of members
of the staff whom the appellant as lessee was not
entitled to retrench under Cl. 13(v) of the lease, with.
the result that none of the said clauses of the lease
vould be said to have been violated by the appellant.
On July 13, 1955, the appellant filed in the High
Court of ,Judicature at Patna a writ application under
Arts. 226 and 227 of the Constitution being Miscellaneous Judicial Case No. 392 of 1955 impleading the
Cha.irman, Industrial Tribunal, Bihar as respondent
No. l, the State of Bihar as respondent No. 2, the
liquidator as respondent No. 3 and the applicants in
260
SUPREME COURT REPORTS (l959j Supp.
z958
the said miscellaneous cases Nos. 26 and 27 of 1955
K G-;-
L d pending before the Industrial Tribunal as respondents
s. · · "8"'
1 ·Nos. 4 to 23 for a writ of certiorari quashiug the said
Sri AlivHa,,an, Miscellaneous Cases Nos. 26 and 27 of 1955, a writ of
Chairman, Indus- Mandamus restraining the respondent No. 1 from protrial Tribunal, ceeding with or otherwise dealing with the said miscclJJihar &- 01""' laneous cases costs and further and other reliefa.
lJhagwali J.
The main contentions urged by the appellant ill the
said petition were :-
(1) that under each one of the points referred for
adjudication, considerable burden was sought to be
imposed on the sugar factories concerned ; that all the
properties and effects of the Gaya Sugar Mills Ltd.,
were in the custody oft.he Court as from the date of
the order for winding up viz., November 14, 1951; that
the said notification did not purport to include Gaya
Sugar Mills Ltd., in that light and did not describe the
company as having already gone into liquidation ; that
no leave of the Court was obtained before commencing
or continuing the proceedings before the Tribunal and
in fact the liquidator was neither named as a party nor
was any notice gfren to him oft.he commencement of
the proceedings and that therefore so fo,r as the Gaya
Sugar Mills Ltd., (In Liquidation) was concerned there
was no proceeding in the eye of the law before respondent No. 1 and as such the Miscellaneous Cases Kos. 26
and 27 of 1955 of which notices had been sent to tho
appellant were not maintainable; an<l
(2) that no notice of tho adjudication proceedings
arising out of the aforesaid Notification dated December 2, 1954, was at any stage given to the appel!d.nt
who was in possession under the t<'l_rms of the lease
granted by the Court ; that the appellant being lessee
under orders and under terms of the lease approved by
the Court was liable for breach of the terms o.f the
lease, if any, and that also to the Court. alone; that
there was no violation of s. 33 of the Industrial
Disputes Act, if the appellant bona fide acted up to
the terms of the lease and being itself no party to any
adjudication proceedings before any Tribunal or before
respondent No. 1 there could be no breach of s. 33 of
(1) S.C.R. SUPREME COURT B.EPORTS
261
the Act and as such no application under s. 33A of the
r95B
Act could be maintained against the appellant.
s. t<. G. sug"r Ltd.
No affidavit in reply was filed by or on behalf of
v.
any of the respondents and the application came up Sri Ali Hassan,...
for hearing before B.amaswami, C. J. and Raj Kishore Chairman, lndusPrasad, J. who delivered the judgment of the Court on
trial Tribunal,
lhhar 0- Others
September 20, 1956, dismissing the application with
costs.
Bhugwati ].
Assuming but without expressing any opinion that
the reference made by the State Government under
s. 10(1) of the Industrial Disputes Act was a legal proceeding within the meaning of s. 171 of the Indian
Companies Act the High Court held that s. 10(1) of the
Industrial Disputes Act, was not controlled by s. 171
of the Indian Companies Act and therefore no leave of
the Court was necessary before making a reference of
the Industrial Disputes under s. 10 (1) of the Industrial Disputes Act. It was also of opinion that even
though the reference under s. 10(1) of the Industrial
Disputes Act was ma.de by the State Government on
December 2, 1954, and the applicant had taken the
lease of the said Mills subsequently i. e., on December
G, 1954, the applicant was an "employer" within the
meaning of the term used in ss. 33 and 33A of the
Act, and that it was not necessary for the application
of either of those sections that the employer who
discharges or punishes the workmen or who alters the
conditions of service of the workmen should be the
identical employer concerned in the industrial dispute
which is the subject-matter of adjudication. It was
sufficient for invoking t.he provisions of either of those
sections that there is the relationship of employer and
employee at the time the workman is discharged or
punished or at the time his conditions of service are
altered to his prejudice. It was further of opinion that
even though the liquidator was not made a party to
the refer~nce made by the State Government under
s. 10(1) of the Industrial Disputes Act, the Gaya Sugar
Mills Ltd., Guraru was specifically mentioned as one
of the parties in Appendix I, that the Gaya Sugar
Mills Ltd., continued to be a legal personality though
an order for winding up had been made and that there-
262
SUPREME COURT REPORTS [1959) Supp.
'958
fore the Company was properly made a party to the
s. !<. G. sugar Ltd. refe.reuce. nuder s. 10(1) of. the Act. The fact that the
v.
notwe g1veu to the hqmdator ou January 11, 1955,
Sri Ali Ha,,on, might have beeu received late by the liquidator did
Chairman, 1 .. dus- not, iu the opinion of the Court, make auy difference
t.iut Tribunal, to the position inasmuch as the award of the Industrial
Bihar 6- Others T 'b
1
F b
17 19
'
1
n uua was made on
e ruary
,
55, 1. e., oug
Bhagwuti J.
after the date of the uotice aud there was uo lack of
jurisdiction in the Industrial Tribunal to make the
award valid and binding on the Ga ya Sugar Mills Ltd.,
Guraru.
The High Court accordingly rejected the
application as stated above.
The applicant applied for leave to appeal to this
Court ou November 9, 1956, but the High Court refus.
ed to graut the certificate on the grouud that the proceeding for graut of a writ of certiorari uuder Art. 226
is uot a civil proceeding within the meaning of Art.
133 of the Coustitutiou. The applicant thereupon
applied for and obtained from this Court on April 1,
1957, special leave to appeal and the appeal has now
come up for hearing and final disposal before us.
The two maiu contentions which were urged before
us by the learned Counsel for the appellant were:-'-
(1) that the Ga ya Sugar Mills Ltd., Guraru had been
t:>ken into liquidation and respondent No. 3 had been
appointed the liquidator thereof; that the reference
made by the State Government to the Industrial
Tribunal on December 2, 1954, involved considerable
financial burden on the said Mills and the State
Government ought to have obtained the sanction of
the Court under s. 171 of the Indian Companies Act
before making a reforeuce of the industrial disputes to
the Industrial Tribunal under 8. 10(1) of the Industrial
Disputes Act, qua the said Mills fl.nd that not hfl.ving
been done, the reference was bad in law and there was
no question of the applicability of either s. 33 or
s. 33A of the Act, and
(2) that on a true construction of ss. 33 and 33A of
the Act., the "employer" therein mentioned could
only be the " employer " concerned in the industrial
dispute which was the subject-matter of reference,
that the applicant had taken the lease of the said
(1) S.C.R.
SUPREME COURT REPORTS
263
sugar Mills on December 6, 1954, 4 days after the date
i958
of reference made by the State Government under 5 K G ~-
s. 10(1) of the Act, and that therefore the applicant · ·
·v~gar Ltd.
was not an "employer" within the meaning of the Sri Ali Hassan,
terms as used in s. 33 or s. 33A of the Act, and even Chairman, Indusif the allegations made by the applicants in Miscellatrial Tribunal,
neous Cases Nos. 26 and 27 of 1955 before respondent Biliar & Others
No. 1 were correct, it was not necessary for the appliBhagw .. li J.
cant to have obtained the permission of the Industrial
Tribunal under s. 33 of the Act, and therefore the
said applications under s. 33A of the Act, filed by respondents 4 to 23 were not maintainable.
It will be appropriate at this stage to set out the
relevant sections of the Indian Companies Act and
the Industrial Disputes Act, 1947 (as they then stood)
which fall to be considered by us in this appeal.
8. 171 (Indian Companies Act):
" Suits stayed on winding up order :
When a
winding up order has been made or a provisional
liquidator has been appointed no suit or other legal
proceeding shall be proceeded with or commenced
against the company except by leave of the Court,
and subject to such terms as the Court may impose."
S. 10(1) (Industrial Disputes Act, 1947) :-
Reference of disputes to Boards, Courts or Tribunals:
Where the appropriate Government is of opinion
that any industrial dispute exists or is apprehended, it
may at any time, by order in writing-
(a) refer the dispute to a Board for promoting a
settlement thereof;
(b) refer any matter appearing to be connected
with or relevant to the dispute to a Court for inquiry;
or
(c) refer the dispute or any matter appearing to
be connected with or relevant to, the dispute to a
Tribunal for adjudication :
Provided that where the dispute relates to a
public utility service and a notice under section 22
has been given, the appropriate Government shall,
unless it considers that the notice has been frivolously
or vexatiously given or that. it would be inexpedient so
264
SUPREME COURT REPORTS (1959) Supp.
r958
to do, make a reference under this sub-section not-
-
withstanding that any other proceedings under this
5· K. G. Suga• Lid. Act in respect of the dispute may have commenced."
s,; Alivifass•"·
S. 33 (Ibid): ·Conditions of service etc., to remain
Chafrman. Indm- unchanged during pendency of proceedings :
tdal 1",ibunal.
"During the pendency of any conciliation prollilw & Othm ceedings or proceedings before a Tribunal in respect
of any industrial dispute, no employer shallBliagwati ],
(a) alter, to the prejudice of the workmen concerned in such dispute, the conditions of service applici1ble
to them immediately before the commencement of
such proceedings; or
(b) discharge or punish, whether by dismissal or
otherwise, any workman concerned in such dipute,
save with the express permission in writing of the
conciliation officer, Board or Tribunal, as the case
may be."
S. 33-A (Ibid): Special provisions for adjudication
as to whether conditions of service etc., changed during
pendency of proceedingB :
"Where au employer contravenes the provisions
of section 33 during the pendency of proceedings before a Tribunal, any employee aggrieved by such contravention, may make a complaint in writing, in the
prescribed manner to such Tribunal and on receipt
of such complaint that Tribunal shall adjudicate upon
the complaint as if it were a dispute referred to or
pending befor~ it, in accordance with the provisions
of this Act and shall submit its award to the appropriate Government and the provision of this Act shall
apply accordingly."
As to (1) :-Section 171 of the Indian Companies
Act occurs in Pa.rt V which relates to the winding up
of companies and prescribes that once a winding up
order has been made no suit or other legal proceedings shall be proceeded· with or commenced against
. the Company except by leave of the winding up Court
and subject to such terms as the Court may impose.
The Court is in custody of all the properties and assets
of the Company through the liquidator and is in control of the winding up proceedings with a view to the
proper realization of the assets and the equitable
.....
(1) S.C.R, SUPREME COURT REPORTS
265
distribution thereof amongst the creditors of the Comr958
pany. No suit or other legal proceeaing can there-
-
£
b
d d
'th
d
· · t th. S. K.G. Sugar Ltd.
ore
e procee e
w1
. or commence agams
e
· v.
·
Company except by leave of the Court and such leave Sri Ali Hassan,
is a necessary prerequisite of the prosecution of such Chairman, Induslegal proceeding. In order to decide the question of trial Tribunal,
the applicability of s. 171 of the Indian Companies Bihar a;. Others
Act it has to be ascertained (a) whether the reference
Bhagwati ].
in question is a proceeding against the Company, and,
if so, (b) whether such reference can be said to be a
legal proceeding within the meaning of s. 171 of the
Indian Companies Act.
There has been unfortunately a considerable confusion of thought in the court below and the facts
have not been properly appreciated. The first question to determine was who was the party to the reference. It appears to have been assumed that the
Gaya Sugar Mills Ltd., was a party to the reference
and that the only defect in the order of reference was
that the liquidator was not made a party to the refer.
ence. This difficulty was sought to be got over by
holding that the Ga.ya Sugar Mills Ltd., continued to
be a legal personality though an order for winding up
had been made, that the Company had not ceased to
exist as a legal entity, and, therefore, the Company
was properly made a party to thP. reference under
s. 10(1) of the Industrial Disputes Act. This was,
however, not the correct position on a true interpretation of the terms of reference. The reference was
between the managements of the Sugar factories specified in Appendix I and their workmen represented by
the Unions specified in Appendix II. Gaya Sugar
Mills Ltd., Guraru was mentioned as item 2 in Appendix I but it is quite clear that what was intended to
be made a party to the reference under this item was
the; management of the Sugar factory which belonged
to the Company called the Gaya Sugar Mills Ltd.,
whoever that managernent may be.
The mention of
the Company was to indicate and to point out the
particular factory whose management for the time
being was to be one of the parties to the reference and.
34
266
SUPREME COURT REPORTS [1959rSupp.
'958
it required to be ascertained who was comprised
-
within the "management" of the Mills. The State
s. K. G. Suga. Ltd. Government could not have been oblivious of the fact
Sri Aliviiassan tha_t the Company had gone into liquidation and a
Clwirm~n. Iudu;. liquidator of the Company had been appointed by the
tdal Tr;bunal. court and was leasing out the factory to .different
Biha. & Oehm lessees. If the Company itself were a party to the
reference the liquidator ought to have been mentioned
lihagwati 1·
there as such but that apparently was not done for the
simple reason that the factory was being worked by
the lessees under the terms of the leases duly sanctioned by the court. The liquidator was therefore not in
management of the factory and the only persons who
were in management were the then lessees to whom
leases were granted by the liquii:lator with the sanction
of the court. The Industrial Tribunal was obviously
in error when it gave notice of the proceedings to
the liquidator.
The liquidator was no more in
management of the factory and was therefore not
entitled to be served with any notice ; the then
lessees were in management and they were the only
parties to whom notice of the proceedings should
have been given.
The liquidator no doubt wrote
to the Industrial Tribunal that he had received the
notice too late for him to attend.
This Jetter
of the liquidator was treated with scant courtesy
by the Industrial Tribunal who merely endorsed at the
foot of the letter that the hearing had already concluded
and nothing further than enquiring of the Post Office as
to the reason of the delay in the delivery of the letter
could be done. The Industrial Tribunal proceeded to
make its award on February 17, 1955, without having
before it the management of the factory, viz., the
lessees who had obtained the lease of the said Mills
from the liquidator and for all practical purposes the
said award was ex parte so far as the lessees who were
at the date of the reference in management of the
factory and were obviously intended to be a party to
the reference were concerned. The appellant came into management of the factory after the reference and
could not at the date of the reference be in contemplation of the State Government as a party and in 'iny
(1) S.C.R. SUPREME COURT REPORTS
267
event, no notice whatever was given to the appellant
x958
of the proceedings before the Tribunal. By no stretch _
-
f .
.
.
Id . b
"d th t th
C
(I S. K. G. Sligar Ltd.
o 1magmat10n cou
it e sa1
. a
e
ompany
n
v.
Liquidation) was a party to the reference, the said Sri Ali Hassan.
Mills having been given on lease to the lessees who Chairman. Indusworked the Mills thereafter not for and on behalf of trial Tribunal.
the Company but on their own account, they being Bihar & Others
responsible for the profit and loss in the working of
Bhagw~ti J.
the Mills. The Company thus not being a party to the
reference the proceedings which were commenced on
December 2, 1954, before the Tribunal were not proceedings against the Company (In Liquidation). This
being the position on a true construction of the terms
of the notification by which the reference was made
the question whether the reference was a legal proceeding within the meaning of s. 171 of the Indian
Companies Act does not arise for our decision and we
prefer not to express any opinion on that part of the
question.
As to (2) :-The next question to consider is the connotation of the term "employer" as used in ss. 33
and 33A o.f the Industrial Disputes Act. These sections
postulate the pendency of a proceeding of a.n industrial
dispute. It requires two to raise a dispute. An Industrial Dispute is thus defined in s. 2(k) of the Act:-
"Industrial dispute" means any dispute or difference between employers and employers, or between
employers and workmen, or between workmen and
workmen, which is connected with the employment or
non-employment or the terms of employment or with
conditions of labour, of any person.
If this definition is bodily lifted from s. 2 (k) and
substituted for the expression "industrial dispute"
occurring in s. 33 and ss. 33 and 33A of the Act are
then read, it will at once become clear that the employer can be no other than the employer with whom
the workers had the industrial dispute and cannot
mean merely an employer who discharges or punishes
or who alters the conditions of service of the workmen
concerned. If the interpretation adopted by the High
Court was correct it would mean that the Industrial
268
SUPREME COURT REPORTS [1959] Supp.
z958
dispute which is referred for adjudication to the Induss. I<. G. Su•ar Ltd. trial T~ibimal may have a'.isen between employer A
v.
0
and his workmen but durmg the pendenoy of those
Sri Ali Hassan. proceedings employer B who had nothing to do with
Chafrman, Indus- employer A would be prevented from discharging or
t.ial Trib1<na1, punishing the workmen or altering their conditions of
Bihar °' Olliers service, provided only that the workmen concerned
Bhagwati 1.
happened to be interested in the industrial dispute
w hioh was pending before the Industrial Tribunal. If
there is no connection at all between the employer A
and the employer B in the illustration given above,
_one fails to see how a mere identity of the establishments or the identity of the workmen could be enough
to bring the employer B within the purview of these
sections. The very purpose of the enactment of ss. 33
and 33A of the Industrial Disputes Act is, as observed
by this Court in the Automobile ProductB of India Ltd.
v. Rukmaji Bala (1) :
" to ensure that proceedings in connection with
industrial disputes already pending should be brought
to a termination in a peaceful atmosphere and that no
employer should during the pendenoy of_ those proceedings take any action of the kind mentioned in the
sections which may give rise to fresh disputes likely to
further exacerbate the already strained relation between the employer and the workmen.
To achieve
this object a ban has been imposed upon the ordinary
right which the employer has under the ordinary law
governing a contra.ct of employment. Section 22 of
the 1950 Act and section 33 of the 1947 Act which
impose the ban also provide for the removal of that
ban by the granting of express permission in writing
in appropriate oases by the authority mentioned
therein."
The scope of the enquiry under section 33 of the
Industrial Disputes Act has also been the subjectmatter of adjudication by this Court and it was held in
Atherton West & Co., Ltd. v. Suti Mill Mazdoor
Union (2) that the authority:
"concerned would institute an enquiry and come
to the conclusion whether there was a prima faoie case
(1) [1955] I S.C.R. 1241, 1256.
(2) [1953] S.C.R. 780, 787.
(I) S.C.R. SUPREME COURT REPORTS
269
made out for the discharge or dismissal of the worki958
m:an and the employe~, his a.gent ?r ma.na.g~r was s. K. G. Sugar Ltd.
not actuated by any nnproper motives or did not
v.
resort to any unfair practice or victimisation in the s;.; Ali HtJSsan,
matter of the proposed discharge or dimissa.l of the Chairman, Ind1<sworkman."
tri"l Tribunal.
A similar ratio would appty where a.n employer llihar & Oihers
changes the conditions of service of the workmen conBhagwati 1.
cerned. If this be the criterion for determining
whether an employer was entitled to discharge or
punish the workmen or alter their conditions of service
without the permission in writing of the authority
concerned that employer cannot be any other than the
one who is concerned in the industrial dispute which is
the subject matter of adjudication. If employer B has
nothing to do at all with employer A \vho is really the
party concerned in such industrial dispute which is
the subject-matter of adjudication, there will be no
question of attributing any improper motives or unfair
practice or victimization to the employer B in regard
to the action which he proposed to take against the
workmen. Whether the employer B would be entitled
to such action or not would have to be determined in
other proceedings which may be taken in the matter
of industrial disputes which may subsequently arise
between himself and his workmen after such action
was taken. But he would certainly not be bound
before taking such act,ion to seek the permission in
writing of the Industrial Tribunal before which an
industrial dispute was pending as between those workmen and another employer with whom he had no
concern. The latter interpretation is therefore more
in consonance with the principle underlying the enactment of s. 33 of the Industrial Disputes Act and it
must be held that the employer contemplated by ss. 33
and 33A of the Industrial Disputes Act must be the
identical employer concerned in the industrial dispute
which is the subject-matter of adjudication. ·In other
words, the employer contemplated by ss~ 33 and 33A
of the Industrial Disputes Act must be the employer
with whom the workmen mentioned as aggrieved
under s. 33 had a subsi6ting relationship of employer
270
SUPREME COURT REPORTS [1959) Supp.
'958
and employees at the commencement of the proceecls K G-s
L
ings referred to in those sections. The identity of the
.
. . ugar Id.
l
h
v.
emp oyer at t e commencement of the reference with
Sri Ali Ha,,an. the employer who intends to take proceedings within
Chairman. fodus- the ban of s. 33 of the Act must be established and if
t•ial T•ibunal. the latter has no concern with or relationship with the
Biha• & 01""' former ss. 33 and 33A of the Act do not come into
Bhagwati J.
operation at all.
Such identity could in the event of
change in the employers be established by showing
that the latter employer was merely a nominee or
Benamidar of the former or that on the analogy of
s. 18(3)(c) of the Industrial Disputes Act he came within the description of " his heirs, successors or assigns "
in respect of the establishment to which the dispute
relates, in which event the award made by the Industrial Tribunal would be binding on him just as much
as on the former employer ofthe workmen concerned.
These are, however, the only cases in which according
to the provisions of the Industrial Disputes Act the
identity of the employers at the commencement of the
proceedings and the intended discharge or punishment
or change in the conditions of service of the workmen
concerned could be established and unless the employer
who intended to discharge or punish or change the conditions of service of the workmen was in this sense
identical with the employer who was concerned in the
industrial dispute which is the subject-matter of adjudication no question could arise of the operation of section 33 or section 33A of the Industrial Disputes Act.
What then was the position of the appellant under
the reference in question ? It does not appear from
the record as to who was the management of the said
Mills on December 2, 1954. The lease in favour of the
old lessees, Guraru Cane Development and Cane Marketing Union Ltd., had apparently come to an end by
efflux of time, the period of the lease presumably being
up to the end of the crushing season which would end
some time in the month of November, 1954. An application had been made by the liquidator to grant a lease
in favour of the appellant and this application was
granted by the Court on December 3, 1954, so that in
any event before December 3, 1954, the appellant could
(1) S.C.R.
SUPREME COURT REPORTS
271
not be said to be in management of the said Mills. As
r95S
a matter of fact, the lease was executed in favour of 5 K G --:;-
d
the appellant on December 6, 1954, and the possession · ·
·v~gar Lt ·
of the said Mills was also given to the appellant by the Sri Ali Hassan,
liquidator on the same day. It could not, therefore, Chairman, Indusbe said that the appellant was comprised within the
trial Tribunal,
description of the mana{J'ement of the Ga ya Sugar Bihar &- Others
Mills Ltd., at the date when the reference was made
Bhagwati J.
by the State Government.