CENTRAL INLAND WATER TRANSPORT CORPORATION LTD. versus THEIR WORKMEN

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CENTRAL INLAND WATER TRANSPORT CORPORATION LTD.

.

v.

THEIR WORKMEN

May 2, 1975 [P. N. BHAGWATI AND P. K. GOSWAMI, JJ.J

Pay111e11t of Bonus Act, 1965--Sect'ion 16-newly set up establishnient

lnduJJrial Disputes Act-Section 25FF and 25FFF.

443

A

B

The River Steam Nagivation Co. Ltd. carried passengers and cargo in

It also owned a dock called Rajabagan Dockyard, where C

lnland Waters. it carried out fepairs to its own vessels. Majority of the shares of the Com· parry were purchased by the Government of lnclia and considerable financial ~istance was also given by the Government. ~n the year 1966,. th~ finan- cial position of the company became so precanous. that a_n apl?hcation ~or winding up of the company was made by one of its creditors 1n the Ji1gh ,Court of Calcutta. The Government of India put forward a scheme of arrangement and· compromise, and made an application to the High Court in the \\-inding up petition for sanction of the scheme. The appellant Cor~ D :poration was incorporated and all the properties and assets of the Company -st.ooa' transferred to and vested in the Corporation. As far as the liabilities .are concerned, only some of them were transferred to the Corpor.ation and the· rest had to be discharged by the company. It was also provided in the scheme that the Corporation should take as many of the existing employees .as possible. The scheme also provided that those employees who could not be taken over by the Corporation v.'ould be pai<i' all legitimate and legal ·compensation by the Company. The Company was to stand closed. 8000 E of when 5173 employees .employees were working in the Company, out were given fresh appointments by the Corporation on new terms and condi tions.

The workmen working in Rajabagan Dockyard demanded payment of bonus for the years 1967-68 and 1968-69 under the Payment of Bonus Act, 1965. that the establishment of the 'rhe' appellant raised a preliminary objection Curporation in which the V·iorkmen establishment since 5-6-1967 anCL' the workmen were by reason of section 16 'Of the Payment of Bonus Act, not entitled to payment of bonus for the year 1967-68 and 1968-~9, since the Corporation incurred losses during both these years.

\Vere en1ployed

\\'aS a newly set up F

t

The Industrial Tribunal held that the workmen were entitled to bonus on the ground that the appellant \\'as the successor in interest of the com ]lany in respect of the business carried on in the establishment of Rajabagan Dockyard.

{;

On appeal by special leave by the appe!lant, it was held : -

The question which arises for determination

is whether the Rajabagan Dockyard in the hanOS of the Corporation could be said to be an establish ment newly set up since 5-6-1967. The Industrial Tribunal erred in addres sing itself to a wholly different question namely whether the Corporation was the successor in interest of the company. That was not a relevant question.

(448 F-G]

H

HELD FURT1-IER-The establishment of Rajabagan Dockyard V.'as not a lt was the same estab new establishment in the hands of the Corooration. Jishment, the san1e manufacturing apparatus; \Vhich was operated by the com pany prior to its taking over by the Corporation. The name of the establish~ Its address remains the same anu' the ment also continued to be the same. registration number of the establishment under the Factories Act also rc maintained the same.

[451-HJ

444

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B

SUPREME C:OURT REPORTS

[1975] SUPP• S.C.R.

HELD-The \VOrkmen were entitled to be paid bonus for the two years, as the Rajabagan Dockyard was not a new establishmei;it. Observe~ further -The workmen who were taken over by the Corporation were given frcs~ avpointments after 5-6-1967 with differe!lt sc~les of. pay and O:ifI~rent condi tions of service and there was a break 1n their continuity of service. If cer tainty of service was to be decided to these \Vorkers, they should have b~en paid. closure compensation under section 25FFF or at any rate compensation under section 25FF of the Industrial Dispute.

[452-D-451-Etl

CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 179-180

of 1973.

Appeal by special leave from the Award dated the 28th July, 1972 of the Fourth Industrial Tribunal, West Bengal in case No. C VIII-51 of 1972 ordered to be published in the Gazette by Notice

dated the 10th August, 1972.

Jagdish Swamp, A.G. Meneses and K.J. John, for the appellant.

P.S. Khera, for respondent no. 1-

S. C. Agarwala, V. J. Francis and R. K. Garg, fpr respondent

D no. 2.

The Judgment of the Court was delivered by

E

BHAGWATI, J., These two appeals, by special leave, arise out of an industrial dispnte between the Central Inland Water Transport Corporation Ltd. (hereinafter referred to as the Corporation) and its workmen in regard to the payment of bonus for the years 1967-6~ and 1968-69 under the Payment of Bonus Act, 1965. The indus trial dispute was referred to the Industrial Tribunal for adjudication under s. 10 of the Industrial Disputes Act, 194 7. The Corporation raised three preliminary objections, one of which was-and that is the only preliminary objection with which we are concerned in the F present appeals--that the establishment of the Corporation in which the workman were employed was newly set np since 5th June, 1967 and the workman were, therefore, by reason of s. 16 of the Payment of Bonus Act, 1964, not entitled to payment of bonus for the years 1967-68 and 1968-69. The Industrial Tribunal by an award dated 2nd March, 1971 rejected these preliminary objections and held inter alia that the Corporation was not entitled to claim immunity from G payment of bonus under s. 16 and directed that the hearing of. the reference should proceed on merits. The reference was then heard on the question of quantification of the amount of bonus and by an award dated 28th July, 1972, the Industrial Tribunal held that each workman was entitled to bonus at the rate of 4 per cent of the wage earned by him during each year or Rs. 40/- whichever is higher. This second and final award is challenged in appeal No. 179 of 1973. while the first preliminary award is challenged in appeal No. 180 of It is not disputed on behalf of the Corporation that if its liability to pay bonus is established and its claim to immunity is nega tived, the quantum of bonus payable to the workman would be what has been awarded by the Industrial Tribunal. The only question which, therefore, arises for consideration in these two appeals is as to the liability of the Corporation to pay bonus under the Payment

H 1973.

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CENTRAL INLAND WATER v. WORKMEN (Bhagwati, J.)

445

of Bonus Act, 1964. The Corporation claims to be free from liabi- A lity to pay bonus by virtue of the provisions of s. 16. Is this claim well founded ? To answer this question it is necessary to set out a few facts.

The River Steam Navigation Co. Ltd. (hereinafter referred to as the Company) was a limited liability company incorporated m It owned a fleet of vessels which it plied in inland England in 1914. waters for carrying passengers and cargo from Calcutta to dif!erent places in Assam and vice versa along rivers flowing through what was then East Pakistan. It afao owried a dock caJled Rajabagan Dock yard at 42, Garden Reach, Calcutta where it carried out repairs to its own vessels. A majority of shares of the Company were purchased by the Government of India and considerable financial assistance was given by the Government of India from time to time in view of the great strategic importance of keeping the river routes to Assam open, but even so, the Company incurred losses in ,carrying on its opera tions. The climax came with the armed conflict between India and Pakistan towards the end of 1965 wh.en river transport service had to be closed because the river routes passed through what was then East Pakistan and in fact, forty vessels belonging to the Company were seized by the Pakistan Government. This brought about total ces sation of the principal business activity of the Company and in con that on sequence, 21st June, 1966 an application for winding up of the Company was made by one of its creditors in the High Court of Calcutta. It was to save realised by the Government of India that it was impossible the Company as its total liabilities amounted to over Rs. 8 crores, the main creditors being the Government of India in the sum of about Rs. 6.19 crores, the State Bank of India in the sum of Rs. 1.50 crores and the Cbartered Bank in the sum of Rs. 1.60 crores. The Govern ment of India, therefore, put forward a scheme of Arrangement and Compromise under ss. 391 and 394 of the Companies Act, 1956 and made an application to the High Court in the winding up petition In anticipation of sanction, the for sanction of incorporated, on 22nd February, 1967, the Government of India Corporation-a company whoJly owned by it-for effectuating the (hereinafter referred to Scheme of Arrangement and Compromise as the Scheme) .

financial position becan1e so precarious

scheme.

snch

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The Scheme was sanctioned with some modifications by a Single Judge .of the High Court by an order dated 3rd May, 1967. It may be pomted out that when the Scheme was before the learned Single Judge, the Inland Steam Navigation Workers Union appeared and made its submissions with a view to safeguarding the interests of the workers and it was after hearing the Union, that the learned Single H Judge made the order sanctioning the scheme with certain modifica tions. The Union was aggrieved by the order sanctionina the Scheme and it j'f~~erred an appeal before a Division Bench of th~ High Court The D1v1swn Bench, however, by an order dated 14th July, 1967, sanctioning the confirmed the order of the learned Single Judge Scheme.

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446

SUPREME COURT REPORTS

[1975] SUPP· S.C.R.

A

B

It is not necessary for the purpose of the present appeals to reproduce the provisions of the Scheme in extenso. Suffice it to state that the Scheme provided inter alia that all the properties and assets of the Company shall stand transferred to and vest in the Corporation, but so far as the liabilities were concerned, only some of them shall_ be transferred to and become the liabilities of the Corporation and the rest sliall be discharged. by the Company in the manner set out in the Scheme out of funds provided by the Government of India. It was also provided in the Scheme that the Corporation shall take as many of the existing employees as possible and as can be reason ably taken, over, but as to exactly how many can be employed was left entirely to the discretion of the Corporation. The Scheme also C contained a provision that those employees who cannot be taken over by the· Corporation shall be paid "all legitimate and legal compensa tions" by the Company and monies for the same shall be provided by the Government of India. Lastly, it was stipulated that upon the approval of the Scheme, the Company shall be closed and on pay ment of all creditors, it shall stand dissolved without winding up.

D

The Scheme, as already pointed out, was sanctioned by the order dated 3rd May, 1967 and pursuant to the Scheme, the Company issued a notice on the same day stating that the entire undertaking of the Company will be closed with immediate effect. There were at that time about 8000 employees in the various establishments of the Company and out of them, about 5173 were given fresh apoint· E ments by the Corporation on new terms and conditions from and after 5th June, 1967. The Corporation did not carry on any business activity though it took over the assets of the Company from 3rd May, 1967 and it was only on 5th June, 1967 that it opened the Rajba gan Dockyard and started operating it with workers who were for- F merly employees of the Company but given fresh employment by the

Corporation as aforestated.

When the Rajabagan Dockyard was owned by the Company, the main purpose for which it was used was maintenance and repairs of the large fleet of vessels belonging to the Company. It did very little work for outside parties. The result was that when hostilities G broke out between India and Pakistan and it became impossible to run rivers transport service and in fact a part of the fleet was seized by Pakistan Government, the Rajabagan Dockyard was paralysed and it became an establishment without any work and in consequence a large number of workers working in the Rajabagan Dockyard had to be laid off. The operational result of the working of the Rajabagan Dockyard from and after the commencement of the hostilities showed H considerable loss, as the work was completely at stand-still. On taking over the Rajabagan Dockyard, the Corporation, as pointed out above, started operating it again from 5th June, 1967, but the nature and volume of the activities were changed. The Corporation em barked on ship building and ship repairs, general engineering works and deep sea ship repairs and more than 80 per cent of these acti vities were carried out by the Corporation for outside parties. It

CENTRAL INLAND WATER v. WORKMEN (Bhagwati; !.)

447

was found that the machinery taken .over from the Company was lar gely obsolete and antiquated and much of it was not usable and the ·Corporation could put to use only a part of the machinery worth about Rs. 13 lacs. The nature of the work having changed and its volume increased, the Corporation found it difficult to cope with the work with the existing plant 'and machinery and soon felt the need of purchasing new plant and machinery both by way of replacement In the meantime, a Development Committee was and addition. appointed by the Government. of India to examine various questions relating to development of Rajbagan Dockyard and this Committee submitted its report in June 1968 making various recommendations which involved an outlay of about Rs. 3 crores in constructing new It sheds and purchasing and installing new plant and machinery. seems that the recommendations of the Development Committee were accepted by the Government of India and the necessary funds were made available according to a phased programme. The Corporation accordingly started construction of six industrial sheds in the premi ses of Raiabagan Dockyard and also purchased and installed new plant and machin~ry worth about Rs. 50 lacs. The Rajabagan Dock yard, however, continued to work at a loss and during the years 1967- 68 and 1968-69, these being the years with which we are concerned in the present appeals, the losses of the Corporation from the opera tion of the Rajabagan Dockyard continued to mount. Vide the First and Second Annual Reports of the Corporation for the years 1967-68 and 1968-69.

We are concerned in the present appeals with the workers in represented by two Unioss, the Rajabagan Dockyard. They are namely, Central Inland Water Transport Corporation Ltd. Mazdoor Sabha and Egra and Rajabagan Dockyard Workers Union. These two unions made a demand for payment of bonus for the years 1967- 68 and 1968-69 under the Payment of Bonus Act, 1965. The Cor poration rejected the demand mainly on the ground that the esta blishment of Rajabagan Dockyard, as operated by it, was newly set up since 5th June, 1967 and no profit was derived by the Corpora tion from this establishment during the years 1967-68 and 1968-69 and therefore, the workers were not entitled to payment of bonus by reason of s. 16 of the Act. This led to the making of a reference by the Government of West Bengal under s. 10 of the Indus-trial Dis pntes Act, 1947. The Industrial Tribunal, as already pointed out above, tried the issue as to the claim of the Corporation to exemp tion from payment of bonus under s. 16 of the Act, as a preli minary issue. The Corporation examined three witnesses on its behalf, namely, Krishnaswami Srinivasan, Jovdev Basak and Gir dharilal Makhija, while the workers examined only the Joint Secre tary of one of the two unions, namely, Ashgar Hussain. Some docu mentary evidence was also produced on behalf of the parties. The Industrial Tribunal, on a consideration of the oral as well as docu mentary evidence, came to the conclusion that the Corporation was the snccessor-in-interest of the Company in regard to the business of Rajabagan Dockyard which was taken over by it as a going concern and the establishment of Rajabagan Dockyard could not, therefore,

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448

SUPREME COURT REPORTS

[1975] SUPP. S.C.R.

A be said to be newly set up so as to attract the applicability of s. 16 of the Act. The Industrial Tribunal, on this view, rejected the con tention of the Corporation and by its preliminary award dated 2nd March, 1971 held that the Corporation was liable to pay bonus to the workers. This was followed by the final award dated 28th July, 1972 quantifying the amount of bonus. The Corporation challenges the correctness of tne view taken by the Industrial Tribunal and contends that, oon the facts and circumstances of the case, as appear ing from the evidence, the establishment of Rajabagan Dockyard, as operated by it, is newly set up and it is accordingly not liable to pay bonus to the workers.

B

It would be convenient at this stage to refer to the provisions C of s. 16 of the Act in order to appreciate the true nature and scope of the inquiry before us. Sub. section (I) of Section 16 which is the only material sub-section provides : -

D

E

"16. (1) Where an

newly set up whether before or after the commencement of this Act, the employees of such establishment shaU be entitled to be paid bonus under this Act only-

establishment is

( a) from the accounting year in which

the employer

derives profit from such establishments; or

(b) from the sixth accounting year following the account ing year in which the employer sells the goods pro duced or manufactured by him or renders services, as the case may be from such establishments, which ever is earlier."

Now it is obvious that if the establishment of Rajabagan Dockyard could be said to be newly set up from 5th June, 1967, the workers F would not be entitled to payment of bonus for tl;ie years 1967-68 and 1968-69, because the corporation admittedly did not derive any profit from such establishment till then. The question which, there fore, arises for determination is whether the Rajabagan Dockyard in the hands of the Corporation could be said to be, an establishment newly set up since 5th June, 1967. On looking at the award of the Industrial Tribunal, however, we find that the Industrial Tribu- G nal addresses itself to a wholly different question, namely, whether the Corporation took-over the business of Rajabagan Dockyard as a going concern from the Company and was a successor-in-interest of the company in respect of such business. That was not a rele vant question for the purpose of determining the applicability of sec tion 16. An establishment may not be newly set up, it may be an existing establishment of which merely the ownership has changed. H But the new owner may not necessarily be the successor-in-interest of the old in respect of the business carried on in the establishment. The two concepts are entirely different. One may acquire the owner ship of an establishment without taking-over the business as a going concern and becoming a successor-in-interest in respect of it. The word 'establishment' is also found used iri section 3 and that section clearly indicates that an establishment may consist of different depart-

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CENTRAL INLAND WATER v. WORKMEN (Bhagwati, !.)

449

ther!'fore, not sy!'onymous with A

"an institution or J?lace of business, B

ments or undertakings and it is, 'undertaking which has been defined, though in a different context, by this Court in Gymkhana Club Unpn v. Management(') to mean "any business or any work or any project which one engages in or attempts as an enterprise analogous to business or trade". The dic tionary meaning of 'establishment' as given in Webster's International Dictionary includes inter-alia with its fixtures and organised staff; as, large establishment, a manu facturing establishment." 'Establishment' therefore means the whole trading, business or manufacturing apparatus with a separate identi fiable existence. This apparatus which is used for the purpose of carrying on trade, business or undertaking may change hands and pass from one owner to another. The workers operating this appa- C ratus and working in it may change; new workers may take the place of old or come as additional workers. When the ownership of the establishment, which is nothing but another name for this apparatus, is transferred from one person to another the establishment remains the same: merely its ownership is changed and it cannot be said to be a new establishment in the hands of the transferee. Now, though the transferee may become the owner of the establishment, he would D not necessarily be a successor-in-interest of the transferor in respect of the business carried on in the establishment. The question as to whether he can be held to be a successor-in-interest of the transferor would depend on consideration of several relevant facts. What should be the relevant facts to be taken into account in determining this question was explained by Gajcndragadkar, J. in the following E words : "Did the purchaser purchase the whole of the business ? Was the business purchased a going concern at the time of the sale tran saction ? Is the b>Jsiness purchased carried on at the same place Is the business carried on without a substantial break as before ? Is . the business carried on by the purchaser the samc in time ? If there has or similar to the business in the hands of the vendor ? been a break in the continuity of the business, what is the nature of F the break and what were the reasons responsible for it ? What is the length of the break ? Has goodwill been purchased ? Is the purch~se only of some parts ar.d 1he purchaser having purchased the said parts purchased some other new parts and starte.d a business of his own which is not the same 13 the old business but is similar to it ? These. and all other relevant factors have to be borne in mind G in deciding the question as to whether the purchaser can be said to be. su~ee~sor-in-int.erest of the vendor for the purpose of industrial ad1uchcatton. It 1s hardly necessary to emphasise in this connec- tion that though illustrations are relevant, it would be unreasonable to exaggerate the importance of any one of these facts or to adopt the. i?flexible rule ·that the presence or absence of any of them is decmve of the matter one way or the other-The decision of the H _ question must ultimately depend npon the evaluation of all the rele- vant factors. a?d it cannot ~e re~ch.ed by treating any one of them as of ?ver-nd1_ng or conclusive s1gmficance." Vide Anakapalla Co operaJive Agricultural and Industrial Society Ltd. v. Workmen.(•)

(t) [1968] (1) SCR 742. (2) [1963] Supp. l SCR 730.

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450

SUPREME COURT REPORTS (1975] SUPP. S.C.R.

A

B before the Industrial Tribunal was whether the

Now in the present case the Industrial Tribunal concentrated only on the question as to whether the Corporation had become the sucessor in-interest of the company in respect of the business carried on in the establishment of Rajabagan Dockyard and answered this question in the affirmative. We do not think that this was a correct line of enquiry pursued by the Industrial Tribunal. The only limited question establishment of Rajabagan Dockyard in the hands of the Corporation was a new establishment or it was the some old establishment which was owned by the company prior to its taking over by the Corporation. We shall presently turn to consider this question, but before we do so, we may point out that prima facie even in the view taken by it as regards the question whether the Corporation was the successor-in- c interest of the Company, the Industrial Tribunal appears to have missed some material aspects. The Industrial Tribunal seems to have overlooked the following important am! relevant considerations. The entire undertaking of the compnay including tl1e business carried on in the Rajabagan Dockyard had to be closed dowri owing to heavy loss. The Rajabagan Dockyard in fact became idle on the conm1ence- D ment of the hostilities between India and Pakistan and the workers employed in the Rajabagan Dockyard had to be laid off. The notice of closure was put up by the company on 3rd May, 1967 pursuant to the order made by the High Court of Calcutta sanctioning the scheme. There was, therefore, no business which was being carried on in the Rajabagan Dockyard as a going concern when the Rajabagan Dockyard E was taken over by the Corporation in terms of the scheme. So far as the workers in the Rajabagan Dockyard were concerned. it was specifically provided in the Scheme after hearing the Union that the Corporation shall take as many of the existing employees as possible and as can be reasonably taken-over but as to exactly how many can be employed was left entirely to the discretion of the Corporation. There was thus no obligation on the Corporation to take-over or absorb all the workers who were previously working the Rajabagan. Dockyard under the Company. Though the Corporation took-over the Rajbagan Dockyard on 3rd May, 1967 under the Scheme, the Corporation did not start operating it until 5th June, 1967. There was thus a fairly long break from the commencement of th~ hosti· lilies between India and Pakistan up to 5th June, 1967 before the Ra.!abagan Dockyard started functioning again. Then again the busi- G ness which was started by the Corporation in the Rajabagan Dockyard was to a large extent different in character from that carried on by the company. The pnnc1pal activny which the Company cnrrie<l ·on in the Rajabagan Dockyard was maintenance and repairs of its own fleet of vessels bnt the Corporation commenced not only ship build. ing and ship repairing work but also general engineering work such as structural fabrication work, forging, casting and machining and also H deep sea ship repairing and general engineering work comprised more than 80 per cent of the total work as against only. a negligible frac tion in the time of the Company and moreover a very substantial part of the work was done for outside parties. It was also provided in the Scheme that the workers who were not taken-over by the Corpo ration would be paid "all legitimate and legal compensation." The workers who were taken-over by the Corporation were given fresh

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CENTRAL INLAND WATER v. WORKMEN (Bhagwati, !.)

appointments from and after 5th June, 1967 with different scales of pay and different conditions of service. and there was a break m their continuity of service. The Industnal Tribunal observed that fresh letters of appointment were accepted by the workers under compulsion and duress arising on account of economic necessity but that is not the kind of compulsion or duress which deprives an action of its voluntary character and introduces an infirmity in it. It is in- deed unfortunate that in our country there is so much poverty and there are so few job opportunities that the spectre of unemployment and economic :-vant haunts our underprivileged segments of society and corrodes their freedom and choice of action and reduces them to a position where they can be easily dominated and exploited. But the remedy for this state of affairs is not in the hands of the Court, unless an industrial dispute is raised and the Court gets an opportu- nity of bringing about social justice through the machinery of indns- Here, as the matter stands, there can be no trial adjudication. doubt that the workers who were taken-over by the Corporation were given fresh employment on different scales of pay and different terms and conditions than those enjoyed by them under the Company and they suffered a break of more than a month in their continuity of service. One observation, however, we cannot fail to make and it · is that, though the entire undertaking of the Company was closed on 3rd May, 1967, it is strange that no provision was made in the Scheme for payment of closure compensation to those workers who might subsequently be taken-over by the Corporation. If continuity of serVice was to be denied to these workers, then surely they should be entitled to c16sure compensation under section 25FFF or at any rate compensation under section 25FF of the Industrial Disputes Act, 1947. We hope and trust that, though no such provision is made in the Scheme, the Government of India will consider this aspect of payment of compensation under section 25FF or section 25FFF vis-a-vis those workers who were fortunate enough to be taken over by the Corporation but whose continuity of service was interrupted. That apart, these were some of the important and relevant considera- tions which ought to have been taken into account by tbe Industrial Tribunal but which the Industrial' Tribunal apparently failed to do. How far this would. vitiate the finding of the Industrial Tribunal on thi.s 9uestion !s a matter on which we do not wish to express any final cpmton a• it ts not necessary to do so for the purpose of the present appeaJs. We le_ave. the question open for adjudication as and when occasion may anse m future.

451

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It w~ the same establishment-the

One th_ing is however clear that the establishment in Rajabagan Dockyard m the hands of the Corporation was not a new establish- same manufacturin ment. bpparatus-wh1c~ was op~rated by the company prior to its taking-ave~ H . Y the Corporat10n. It 1s true that the Corporation purchased and lns~all~ ne; wa11:t and ~achine!"Y in substitution as also in addition Rn ba o a de srx new mdustnal sheds within the premises of the a1a gan D~ckyard but that does not mean that it became a newly set u~ estahltshment. T~e establishment went by the same name of Raiabagan Dockyard; its address remained the same and some of

452

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SUPREME COURT REPORTS (1975] SUPP. S.C.R.

the old plant and machinery also continued to be used by the Corpo ration. The Registration number of the establishment under the It is however not necessary Factories Act also remained the same. to discuss this aspect of the case any further, as it was almost con-, ceded by Mr. Jagdish Swaroop, learned counsel appearing on b~half of the appellants, that Rajabagan Dockyard could not be said to be an establishment newly set up by the Corporation within the meaning of section 16. His real grievance was against the finding of the Industrial Tribunal that the Corporation was the successor-in-interest of the company in respect of the business carried on in the Rajabagan Dockyard. That finding however ·cannot stand because as already pointed out by us, it was wholly unnecessary for the decision of the present question and moreover it failed to take into account diverse important and relevant considerations. So far as concerns the ques tion which is directly before us for consideration, we take the view that the Rajabagan Dockyard was not an establishment newly set up by the Corporation from 5th June, 1967 as claimed by but was the same establishment as was owned by the Company prior to 3rd May, 1967. Section 16, sub-s. (1) was, therefore, not attracted and the Corporation was not entitled to claim immunity from payment of bonus under that provision.

We, therefore, uphold the claim of the workers for payment of bonus for the years 1967-68 and 1968-69 as awarded by the Indus trial Tribunal and dismiss the appeals with costs.

E P.H.P.

Appeals dismissed.

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