The Indore Parliamentary High Court has held that the Industrial Court is empowered to issue notice to a party who cannot be a party to the reference.

The division bench of Justice Sushrut Arvind Dharmadhikari And Justice Binod Kumar Dwivedi observed, “Since it was referred to in a previous suit registered under number 11/ID/2024 and taking into account that the rights of a large number of employees are at stake, it is still appropriate to involve the subsequent purchaser as a party, as he had already taken over the assets and liabilities of the company, therefore the appellants cannot argue that since they came into existence subsequently, no relief can be claimed against them.

The court upheld the decision of a single judge who held that the Labor Court had the power to notify any establishment, group or category of group which is not a party to the reference in view of the Globe Ground India Employees Union v Lufthansa German Airlines (2019).

Background

The appellants had filed the aforesaid petitions under Article 226 of the Constitution of India challenging the order passed by the Labor Commissioner, M.P., by which reference was made to the question whether the transfer effected by Century Yarn and Century Denum Unit in favor of Manjit Golbal Pvt.Ltd. And Manjit Cotton Pvt. Ltd and accordingly, payment of compensation under Section 25-FF of the Industrial Disputes Act, 1947 by the concerned unit to the members of respondent No.3/union is legal and valid and, if not, what compensation were the workers entitled to.

The learned counsel for the appellants before the learned Single Judge submitted that they are not aggrieved by the order of reference in so far as it relates to respondents Nos. 2 and 3 but it is not permissible to include them also in the reference since the appellants were not parties to the earlier proceedings and as the petitioners/appellants purchased respondent unit no.2 on 15.07.2021, the appellant came into existence. Since the workers of respondent unit no.3 were never employed by the appellants/industry, therefore no liability can be incurred in respect of payment of compensation to them.

Accepting the observations made by the single judge, the division bench of the High Court said: “The learned Single Judge has rightly come to the conclusion that the Industrial Court is empowered to issue notice to a party who may not be a party to the reference. In any event, the rights of the parties would be decided with reference to the merits, after recording the evidence and taking into account the elements available in the file.

The appeals were therefore dismissed.

Case Title: MANJEET GLOBAL PRIVATE LIMITED v. STATE OF MADHYA PRADESH AND OTHERS, WRITTEN APPEAL No. 2137 of 2024 & MANJEET COTTON PRIVATE LTD v. STATE OF MADHYA PRADESH AND OTHERS, WRITTEN APPEAL No. 2138 of 2024

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