CENTRAL INLAND WATER TRANSPORT CORPORATION LTD. versus THEIR WORKMEN

Citation: [1975] SUPP. 1 S.C.R. 443 · Decided: 02-05-1975 · Supreme Court of India · Bench: P.N. BHAGWATI · Disposal: Dismissed

Judgment (excerpt)

1' 
t 
CENTRAL INLAND WATER TRANSPORT 
443 
A 
. 
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. 
B 
The River Steam Nagivation Co. Ltd. carried passengers and cargo in 
lnland Waters. It also owned a dock called Rajabagan Dockyard, where 
C 
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 
.employees were working in the Company, out 
of when 5173 employees 
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. 
'rhe' appellant raised a preliminary objection 
that the establishment of the 
Curporation in 
which the V·iorkmen 
\Vere en1ployed 
\\'aS a 
newly set up 
F 
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. 
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] 
HELD FURT1-IER-The establishment of Rajabagan Dockyard V.'as not a 
new establishment in the hands of the Corooration. lt was the same estab-
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~ 
ment also continued to be the same. 
Its address remains the same anu' the 
registration number of the establishment under the Factories Act also rc-
maintained the same. 
[451-HJ 
H 
444 
A 
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. Kh

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