Isabella Mariam

The Calcutta High Court Single Bench of Justice Shampa Dutt (Paul) set aside two orders passed by the Second Industrial Tribunal, Kolkata, and held that the Central Government is the appropriate authority in relation to an industrial dispute concerning a nationalised undertaking.

The writ petition was filed by M/s. Braithwaite & Co. Limited, seeking the quashing of orders dated November 10, 2010, and February 18, 2011, passed by the Second Industrial Tribunal, Kolkata. The company contended that since it was nationalised under the Braithwaite & Company (India) Limited (Acquisition & Transfer of Undertaking) Act, 1976, it functions as a Central Government undertaking and, therefore, falls under the purview of the Central Government as the appropriate authority under the Industrial Disputes Act, 1947.

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The petitioner stated that under Section 12(1) of the Nationalisation Act, all workmen employed immediately before the appointed date—April 1, 1975—became employees of the Central Government. Despite this, the respondent union raised an industrial dispute regarding disciplinary action taken by the petitioner company. The State Government, via an order dated February 5, 2008, referred the matter to the Second Industrial Tribunal.

An application under Section 11 of the Industrial Disputes Act, 1947, read with Rule 20H(2) of the West Bengal Industrial Disputes Rules, 1958, was filed challenging the maintainability of the reference. The Tribunal rejected this application on November 10, 2010. A subsequent review application was also dismissed on February 18, 2011.

The petitioner based its arguments on three main grounds:

1. That under Section 12(1) of the Nationalisation Act, all workmen had become employees of the Central Government effective April 1, 1975.

2. That, being a nationalised entity, the petitioner is a Central Government undertaking, and thus, the Central Government is the appropriate authority under the Industrial Disputes Act.

3. That a notification dated July 3, 1998, issued in light of the Supreme Court's earlier judgment in Air India Statutory Corporation vs. Union of India, had become infructuous following the Constitution Bench decision in Steel Authority of India Ltd. vs. National Union of Waterfront Workers, thereby invalidating subsequent references based on that notification.

In its order dated November 10, 2010, the Tribunal held:

"The Notification dated 05.05.08 is clear enough to understand that this Notification although rescinded earlier Notification dated 3rd July, 1998 but the acts done or omitted to be done following this Notification after the publication of notification dated 3rd July, 1998 till the Notification dated 05.5.08 cannot be discarded as there is no retrospective effect given by this Notification dated 05.5.08."

The Tribunal, thus, rejected the employer's application challenging the maintainability of the reference. The review petition met with the same fate, as the Tribunal stated:

"After so doing, I have no hesitation to hold that when the latest Notification dated 05.5.2008 has been issued by the Central Govt. of India in the Gazette of India rescinding the earlier Notification dated 3rd July, 1998 the latest decision shall be binding on the parties."

The petitioner relied on the Constitution Bench decision in Steel Authority of India Ltd. vs. National Union Waterfront Workers [(2001) 7 SCC 1]. Paragraph 39 of the judgment was particularly cited:

"Therefore, it will be incorrect to say that in relation to any establishment of a Central Government company/undertaking, the appropriate Government will be the Central Government... the court must be satisfied that the particular industry in question is carried on by or under the authority of the Central Government... This is a question of fact and has to be ascertained on the facts and in the circumstances of each case."

According to the petitioner, the facts of the present case showed that it operated under the authority of the Central Government, which had acquired all rights and liabilities of the company through nationalisation. Hence, the Central Government was the only appropriate authority to deal with industrial disputes involving the company.

Justice Shampa Dutt (Paul) held that the Tribunal’s interpretation did not align with the prevailing legal position post the judgment in Steel Authority of India Ltd. vs. National Union Waterfront Workers. The Court recorded:

"The petitioner herein carries on its industry under the authority of the Central Government since its nationalization in the year 1976 and is an undertaking under the authority of the Central Government."

Addressing the issue of the 1998 notification and its rescission in 2008, the Court stated:

"Considering all these facts it is apparent that even if the notification of 2008 rescinding the notification of 1998 had not been passed, the petitioner’s case would be governed by the constitution bench judgment in Steel Authority of India Limited & Ors. vs. National Union Waterfront Workers & Ors. (Supra) and the Central Govt. would be the appropriate authority in this case."

Further referencing Section 2(a) of the Industrial Disputes Act, 1947, the Court noted that the Central Government is the appropriate Government in respect of industrial undertakings carried on under its authority.

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The Court set aside the orders dated November 10, 2010, and February 18, 2011, of the Second Industrial Tribunal, Kolkata. It directed:

"The appropriate authority (Central Government) shall make a ‘reference’ in respect of the dispute in the present case within 60 days from the date of communication of this order."

The writ petition (WPA 2477 of 2012) and all connected applications were disposed of. Any interim order stood vacated. The Court also directed that urgent photostat certified copies of the judgment be supplied to the parties upon completion of formalities.

Advocates Representing the Parties

For the Petitioner: Mr. Ranajay De (Senior Advocate), Mr. Basabjit Banerjee, Mr. Adityajit Abel Bose

For the Respondents: Mr. Bipin Ghosh

Case Title: M/s. Braithwaite & Co. Limited vs. Second Industrial Tribunal & Ors.

Case Number: WPA 2477 of 2012

Bench: Justice Shampa Dutt (Paul)

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