ID Act | Labour Court Possesses Power To Issue Notice To A Party Which May Not Be Party To The Reference: MP High Court

The MP High Court at its Indore Bench has held that the Labour Court is possessed with the power to issue notice to a party which may not be a party to the reference.

The division bench of Justice Sushrut Arvind Dharmadhikari and Justice Binod Kumar Dwivedi observed, “Since reference has been made in earlier round of litigation which is registered as 11/ID/2024 and looking to the fact that the rights of large number of employees is at stake, it is always appropriate to implead the subsequent purchaser as party since had already taken over the assets and liabilities of the company, therefore, the appellants cannot raise a plea that since they came subsequently into picture, no relief can be claimed against them.”

The court upheld the decision of a Single-judge bench which held that the Labour Court possessed the power to issue notice to any establishment, group or class of group which is not party to the reference in the light of Globe Ground India Employees Union vs Lufthansa German Airlines (2019).

Background

The appellants had filed aforesaid writ petitions under Article 226 of the Constitution of India challenging order passed by the Labour Commissioner, M.P. whereby a reference was made to the effect as to whether the transfer made by Century Yarn and Century Denum Unit in favour of Manjit Golbal Pvt.Ltd. And Manjit Cotton Pvt. Ltd and a consequence payment of compensation under Section 25-FF of the Industrial Disputes Act, 1947 by the concerned unit to the members of respondents No.3/Union is legal and valid and if not then what relief were the labours entitled to.

The counsel for the appellants before the Single Judge contended that they are not aggrieved by the order of reference so far as it relates to between the respondent No.2 and 3, however, making them also part of the reference is not permissible since the appellants were not party to the earlier proceedings and as the petitioners/appellants purchased the respondent No.2 unit on 15.07.2021, the appellant came into picture. Since the labours of respondent No.3 unit were never employees of the appellants/industry, therefore, no liability can be fastened regarding payment of compensation to them.

Upholding the observations made by the Single-judge, the division bench of the High Court stated, “The Learned Single Judge has rightly come to the conclusion that the Labour Court is possessed with the power to issue notice to a party which may not be a party to the reference. In any case the right of the parties would be decided in reference on merits after recording the evidence and taking into consideration the material available on record.”

The appeals were hence, dismissed.

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

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