Dismissed

Raj. State Granites and M.M. San. andORS v. Raj.State Mines and Minerals Limited

Rajasthan HC2 Mar 2015SAW/433/2008

Case brief

AI extract

What is this about?

The High Court of Rajasthan dismissed an appeal challenging a single bench order that upheld the rejection of reinstatement claims. The court held that because the subsidiary company was closed and wound up without amalgamation, the parent corporation retained no liability for its former employees' retrenchment.

What the court decided

AI extract

Raj. State Granites and M.M. San. andORS Vs… — Company and Corporate | Rajasthan HC (2015)

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IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR.

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J U D G M E N T

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D.B. Civil Special Appeal (Writ) No.433/2008

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Rajasthan State Granites and Marble Mazdoor Sangh & Ors. vs Rajasthan State Mines and Minerals Ltd. & Ors.

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Date of Judgment :: 2^nd March, 2015

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P R E S E N T

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HON'BLE MR.JUSTICE GOVIND MATHUR HON'BLE MISS JUSTICE JAISHREE THAKUR

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Mr. Ravindra Singh for Dr. Nupur Bhati, for the appellants. Mr. M.S.Singhvi, Senior Advocate, assisted by Mr. Hemant Dutt and

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Ms. Garima Dadhich for Mr. Vikas Balia, for the respondents.

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BY THE COURT :

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To question correctness of the judgment dated 5.3.2008 passed by learned Single Bench in SB Civil Writ Petition No.5430/2003, this appeal is preferred.

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The facts necessary to be noticed for adjudication of this appeal are that the Government of Rajasthan incorporated a company in the name of Rajasthan State Granites and Marble Ltd. (hereinafter referred to as 'the RSGML'). The RSGML was a subsidiary of Rajasthan State Mineral Development Corporation (hereinafter referred to as 'the Corporation') which was holding more than 50% share capital. The RSGML suffered huge losses and thereafter there was an order of closure dated 1.12.1985, ultimately it was wound up in the year 1999.

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The services of workers of the RSGML were terminated on 30.11.1985, hence, they raised an industrial dispute that came to be referred for its adjudication to the Labour Court, Jodhpur under a notification dated 12.9.1997 in the terms that “whether the Secretary, Rajasthan State Mineral Development Corporation, Jaipur/ Rajasthan State Granite and Marbles Ltd., Jaipur and the Rajasthan State Mineral Development Corporation, Jaipur are justified in terminating the employees named in the annexed list on closure of their Jodhpur unit? If not, then for what relief and amount the workmen are entitled?”

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By way of submitting statement of claim the workmen urged that the RSGML was a subsidiary company of Rajasthan State Mineral Development Corporation, therefore, the Corporation should be treated as their employer. It was urged that their services were terminated which amounts to retrenchment as defined under Section 2(oo) of the Industrial Disputes Act, 1947. The retrenchment was made without adhering to mandatory conditions pertaining to retrenchment, hence the same is illegal and unsustainable. The Rajasthan State Mineral Development Corporation Ltd. contested the dispute with a definite stand that it had no relationship of master and servant with the workmen. The RSGML was a separate company and merely on count of it being a subsidiary company, the Corporation cannot be treated as employer of the claimant workmen.

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Learned Labour Court after examining the material available on record arrived at the conclusion that being a

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subsidiary company the Rajasthan State Mineral Development Corporation was under obligation to adhere mandatory condition precedent to effect a valid retrenchment and in absence of that the retrenchment of the workmen was illegal. Learned Labour Court while holding retrenchment of the claimant workmen illegal directed the Rajasthan State Mineral Development Corporation to reinstate the workmen in service with 25% of the back wages from the date of reference i.e. 12.9.1997.

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Being aggrieved by the award passed by learned Labour Court, the Rajasthan State Mines and Mineral Ltd. preferred a petition for writ before this Court that came to be allowed under the judgment impugned. Suffice to mention that the Rajasthan State Mines and Mineral Ltd. was not party to the reference that came to be answered by the Labour Court, Jodhpur. The Rajasthan State Mines and Mineral Ltd. approached this Court as the Rajasthan State Mineral Development Corporation was amalgamated with it.

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Learned Single Bench after hearing counsel for the parties and also on basis of the record available held that no liability could have been fastened with Rajasthan State Mineral Development Corporation being not employer of the claimant workmen. Suffice to mention that before learned Single Bench a definite statement was made on behalf of the claimants that no challenge was given by them to the closure of RSGML. Non challenge to the closure of the company aforesaid was also noticed by the Labour Court in its award.

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In appeal, the argument advanced by learned counsel for the appellants is that the RSGML was a subsidiary company of Rajasthan State Mineral Development Corporation that amalgamated with Rajasthan State Mines and Mineral Ltd., therefore, the respondent writ petitioner Rajasthan State Mines and Mineral Ltd. is to be treated as employer of the claimant workmen. The retrenchment of the claimant workmen was admittedly made without adhering to the mandatory condition precedents for effecting retrenchment, hence the same was illegal. Learned Labour Court appreciating this position answered the reference with a direction for reinstatement of the workmen, but learned Single Bench interfered with the same without appreciating that the RSGML was a subsidiary of the Rajasthan Mineral Development Corporation, thus, was having complete liability to act as employer.

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We do not find any merit with the argument advanced. It is the position admitted that the RSGML was a company incorporated under the Companies Act 1956 having a separate and an independent identity of its own. Though it was a subsidiary of Rajasthan Mineral Development Corporation but the Corporation had no administrative control over the company. It is also pertinent to note that the company aforesaid came to be closed and was also wound up. In Balwant Rai Saluja & Anr. v. Air India Ltd. & Ors., reported in (2014) 9 SCC 407, it has been held that mere fact that the company has a certain degree of control over the subsidiary company, does not mean that the employees working in the subsidiary company are its employees. The RSGML never amalgamated/merged with the Rajasthan State

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Mineral Development Corporation Ltd., as such, no liability of RSGML can be transferred to the Rajasthan State Mineral Development Corporation. The claimant workmen did not challenge closure of the company. The facts noticed above clearly indicate that no relationship of master and servant existed between the claimant workmen and the Rajasthan State Mineral Development Corporation.

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In view of it, we do not find any wrong with the finding arrived by learned Single Bench. No interference therein is warranted. Hence, the appeal is dismissed.

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(JAISHREE THAKUR),J. (GOVIND MATHUR),J.

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Mathuria.KK/PS

Raj. State Granites and M.M. San. andORS v. Raj.State Mines and Minerals Limited

Case brief

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Raj. State Granites and M.M. San. andORS v. Raj.State Mines and Minerals Limited

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