ANAKAPALLA CO-OPERATIVE AGRICULTURAL AND INDUSTRIAL SOCIETY LIMITED versus WORKMEN

Citation: [1963] SUPP. 1 S.C.R. 730 · Decided: 23-10-1962 · Supreme Court of India · Bench: P.B. GAJENDRAGADKAR · Disposal: Appeal(s) allowed

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Judgment (excerpt)

730 SUPREME COURT REPORTS [1963] SUPP. 
1962 
ANAKAPALLA GO-OPERATIVE 
Octoh,,, 23. 
AGRICULTURAL AND INDUSTRIAL 
SOCIETY LIMITED 
'I:. 
WORKMEN 
( P. B. 
GAJF.NDRAGADKAR, A. K. 
SARKAR, 
K. N. WANCHOO, K. C. DAS GUPTA and 
N. RAJAGOPALA 
AYYANGAR, JJ.) 
Jndustrwl Dispute-Transfer 
of 
underta(ng-Wlten 
transferee is successor-in-interest of 
trnnsferor-Payment of 
compensation 
by transferor-Reinstatement 
clai1ned against 
transferee-Whether claim su.<tainable--Industrial Disputes Act, 
1947 (14 of 1947), ss.25F, 25FF, 25H. 
A company running a sugar 1nill was suffering losses· every 
year due to insufficient supply of 
sugar-cane and wanted 
to shift the mill. The cane-growers formed a co-0pecative 
society and 
purchased the mill. As agreed between the 
company and the society, the company terminated tl1e services 
of the employees and paid retrenchrnent compensation to t!"!ein 
under s.25FF of the Industrial Disputes Act, 1917. The 
society employed some of the old employees of the company 
but did not employ , 49 permanent and 103 >easonal employees 
out of them. The dispute arising out of the refusal of the 
society to absorb these workmen was referred for adjudicatiOn. 
The Tribunal, by its award, directed the appellant society to 
re-employ with continuity of service as many of old employres 
as \Vere .left out in fav\1ur of new employees, and to re~empJoy 
the remaining employees cis and when vacancies occurred. 
The 
society contended that it was not a successor-in-interest of the 
company and the claim for re-employment was not sustainabJe 
and that the services of the employees having been terminated 
upon payment of compensation by the company under s. 25FF 
no claim could be made against the transferee of the company. 
Hel.d, that the appellant society was the successor-;n-
interest of the company. The question as to whether,a 
purchaser of an indus:rial concern is a successor-in-intere_st 
of the vendor has to be decided on a consideration of several 
relevant facts such as whether the purchaser purchased the 
whole of the business; w;is the bilsiness p;irchased as a going 
l S.C.R. 
SUPREME COURT REPORTS 
731 
concern; is the business carried on the same or similar as that 
carried on by the vendor; is it carried on at the same place; 
is the business carried on without a substantial break in con-
tinuity; has goodwill been purchased; is the purchase of all the 
parts or only of some etc. The decision of the question 
depends upon the evaluation of all the relevant factors and it 
cannot be reached by treating any one of them a• of over-ridinsi 
or conclusive sig-nificance. rn• the present case the society 
purchased the concern for the purpose of manufacturing sugai 
and carried on the same business, at the same place without 
any appreciable break. 
Ramji/,al Nat/iu/,al v. 
Himabhai Mills Co. Lid., (1956) II 
L. L J. 244, New Gujarat Cotton Mills Ltd. v. 
Labour 
Tribunal, (1957) II L. L.J. I94andAntony D' Souza v. Sri 
Motichand Silk Mills, (1954) I L. L. J. 793, referred to. 
Held, further that the claim of the employees for re· 
instatement was not mstainable. In all cases falling under 
s.25FF of the Act, if the transfer does not come within the 
proviso, the employees of the transferred concern arc entitled 
to claim compensation against the transferor but they cannot 
make any claim for re-employment against the transferee. 
The employees were not entitled to both compensation for 
termination of service and immediate re-employment at the hands 
of the transferee. 
Section 25H 
was not applicable t'> the 
case as the termination of service upon transfer or closure is 
not retrenchment properly so called. Termination of service 
with which s. 25FF. deals cannot be equated with retrenchment 
covered bys 25 F. The words 
"as if" in s. 25FF clearly 
distinguish between retrenchment under s.2(00) and termina-
ti'?n of ser:ice under _s.25FF. 
Nor could the principles under-
lymg ~· 25H ~e applied. tn the _case. 
'.Th~ general principles 
of social JUS!lce and fa1r play did not JUst1fy the claim for re-
employmei;t simultaneously with the payment ofre~nchment 
compensation. 
HaripNUJad Bhivshankar ,S,hulda v. A. D. DitJalcar, [1957] 
S. C. R: 
121, ¥-/s. 
HatAVJingh 
Manufaclurif&g Co. Lid. 
v. 
Union of India, [1960] 3 S. C.R. 
528 and Indian llutM 
Pipe Co. Lt4. v. The Workmen. [1960] 2 S.C.R. 32, referred to. 
C1vrr. APPELLATE JURISDICTION : Civil Appeal 
No. 224of1962. 
June 
Appeal by special l

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