Bangalore North Industrial Workers Union (Citu) Vs the Management of M/S Swan Silks Pvt. Ltd.

BANGALORE NORTH INDUSTRIAL WORKERS UNION (CITU), CITU OFFICE, NO. 1201, 4^TH CROSS, OPP. ST. LAWRENCE ENGLISH SCHOOL, KALYANA NAGAR, T. DASARAHALLI BANGALORE - 560 057 REPRESENTED BY ITS UNIT SECRETARY INCORPORATED UNDER TRADE UNION ACT 1926.

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…PETITIONER

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Digitally signed by C HONNUR SAB Location: HIGH COURT OF KARNATAKA

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(BY SMT. AVANI CHOKSHI, ADVOCATE)

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AND:

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THE MANAGEMENT OF M/S SWAN SILKS PVT. LTD., NO.99/100, KUDAVATHI VILLAGE, NANDI HOBLI, CHIKKABALLAPURA (T), CHIKKABALLPURA DISTRICT, KARNATAKA - 562 101, REPRESENTED BY ITS MANAGING DIRECTOR A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956.

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HC-KAR

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THE MANAGEMENT OF M/S DECO TEXTILES SWAN HOUSE, POST BOX NO. 25210, NO. 40, 4^TH CROSS, RESIDENCY ROAD, BANGALORE A PARTNERSHIP FIRM REPRESENTED BY ITS MANAGING PARTNER INCORPORATED UNDER THE COMPANIES ACT 1956.

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…RESPONDENTS

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(BY SRI. J. PRADEEP KUMAR, ADVOCATE FOR SMT. SUBHA ANANTHI K, ADVOCATE FOR R1; SRI. KRISHNA NAIK R, ADVOCATE FOR R2)

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THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO a) QUASH THE ORDER DTD 06.07.2023 IN ID REF.NO.11/2020 PASSED BY THE LEARNED PRINCIPAL DISTRICT AND SESSIONS JUDGE, CHIKKABALLAPURA (PRODUCED AS ANNEXURE-K) AND ETC.,

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THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN 'B' GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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CORAM: HON'BLE MR. JUSTICE ANANT RAMANATH HEGDE

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HC-KAR

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ORAL ORDER

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Heard learned counsel appearing for the petitioner and learned counsel appearing for respondent No.1.

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This Writ Petition is filed assailing the order rejecting the petitioner's application to implead respondent No.2 as a party to dispute which is pending before the Labour Court in I.D. Ref. No.11/2020 on the file of Principal District Judge/Labour Court at Chikkaballapura.

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Learned counsel for the petitioner submits that the application could not have been dismissed in the facts and circumstances of the case. Elaborating the facts of the case, it is urged that petitioner-Union is representing the employees of M/s. Swan Silks Pvt. Ltd. Attention of the Court is invited to Annexure-B, letter dated 19.09.2019, wherein it is indicated that M/s.Swan Silks Pvt. Ltd. i.e., respondent No.1, has intimated its employees that M/s. Swan Silks Pvt. Ltd. has transferred Establishment to the M/s. Deco Textiles in terms of lease deed dated 01.08.2019. It is also seen from the said letter that respondent No.1 - M/s. Swan Silks Pvt. Ltd. has

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HC-KAR

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informed its employees that its operation is coming to an end on 30.09.2019 and the industry is being closed.

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Referring to the said aspect, learned counsel for the petitioner would urge that the industry is not yet closed, the industry is transferred to M/s. Deco Textiles, as such, the petitioner has raised the grievance that some of the workers of the petitioner-Union have been unjustly to denied the employment.

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It is urged that M/s. Deco Textiles which is running the business as a lessee under respondent No.1 is also a necessary party on the premise that actually respondent No.1 is running the business in the name of proposed respondent No.2-M/s. Deco Textiles, with an intention to defeat the rights of the members of the petitioner-Union. Thus, it is urged that the application could not have been rejected and the presence of M/s. Deco Textiles is also necessary for complete adjudication of the dispute on hand.

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Learned counsel for respondent No.1 would urge that M/s. Swan Silks Pvt. Ltd/respondent No.1 has closed its operation and transferred its operation by way of lease to

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HC-KAR

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respondent No.2 - M/s. Deco Textiles and the petitioner cannot have any claim against the lessee of respondent No.1 and if at all there is any liability, it is the liability of respondent No.1 and the Labour Court is justified in dismissing the application to implead respondent No.2 - M/s. Deco Textiles.

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Elaborating his submission, learned counsel for respondent No.1 would also urge that the Labour Court is only required to adjudicate the dispute which is covered under the point for reference framed by the appropriate Government and it is no competence to go beyond the point for reference and in the point for reference framed by the appropriate Government, there is no reference to M/s. Deco Textiles and there is no reference to prayer against M/s. Deco Textiles and as such M/s. Deco Textiles is not a necessary party to the proceedings.

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M/s. Deco Textiles is duly served.

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The Court has considered the contentions raised at the Bar and perused the records.

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It is not in dispute that there is no absolute transfer of ownership of M/s. Swan Silks Pvt. Ltd. in favour of M/s. Deco

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HC-KAR

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Textiles. It is a transfer of property by way of lease. The lease agreement does not indicate that the business is transferred. What is transferred is the premises and machineries by way of lease.

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It is also relevant to notice that in paragraph No.9 of the claim statement, the petitioner has taken a contention that M/s. Deco Textiles is a subsidiary of M/s. Swan Silks Pvt. Ltd. At this juncture, the Court is not in a position to give any finding as to whether M/s. Deco Textiles is a subsidiary of M/s. Swan Silks Pvt. Ltd. or not. It is a matter of trial.

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For any reason during the course of the trial if the petitioner-Union is able to establish that M/s. Swan Silks Pvt. Ltd. is having a subsidiary by name M/s. Deco Textiles, in that event probably M/s. Deco Textiles would also be a necessary party to the proceedings.

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Under these circumstances, the Court is of the view that M/s. Deco Textiles should also be made a party.

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HC-KAR

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And as it is rightly pointed by the learned counsel

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for respondent No.1, there is no point for reference framed as against M/s. Deco Textiles.

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In the peculiar facts of the case the Court is of the

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view that the following issues be raised by the Labour Court and let there be an adjudication of the following issues:

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(i) Whether the petitioner-Union establishes that M/s. Deco Textiles is a subsidiary of M/s. Swan Silks Pvt. Ltd?

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(ii) Whether petitioner is able to establish that M/s. Deco Textiles is run by M/s. Swan Silks Pvt. Ltd. with an intention to deny the right of the members of the petitioner-Union?

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In case the Court finds that the petitioner is not able to establish the contention raised in paragraph No.9 of the claim statement, the Labour Court shall ensure that the petition against M/s. Deco Textiles is dismissed with appropriate cost. If it is found that M/s. Deco Textiles is run and managed by respondent No.1, then appropriate orders in accordance with law will have to be passed against both respondents.

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HC-KAR

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It is made clear that this Court has not expressed

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any opinion whether M/s. Deco Textiles is a subsidiary of M/s. Swan Silks Pvt. Ltd. or any other entity which is run by or under the control of M/s. Swan Silks Pvt. Ltd. All those questions are kept open.

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Hence the following:

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ORDER

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(i) Writ Petition is allowed ;

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(ii) Impugned order dated 06.07.2023 passed in I.D.Ref.No.11/2020 on the file of Principal District Judge/Labour Court at Chikkaballapura is set aside;

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(iii) Respondent No.2 of this petition is made a party to the proceedings before the Labour Court.

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(iv) The Labour Court shall frame the aforementioned two issues in addition to the points for reference framed by appropriate Government and thereafter shall afford an opportunity to all the parties to lead evidence to substantiate their claim and decide the matter in accordance with law.

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