INDUSTRIAL PAPER (ASSAM) LTD. EMPLOYEES UNION versus MANAGEMENT ASSAM INDUSTRIAL DEV. CORPN. LTD.

Citation: [2007] 1 S.C.R. 661 · Decided: 10-01-2007 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Dismissed

Judgment (excerpt)

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INDUSTRIAL PAPER (ASSAM) LTD. EMPLOYEES UNION 
A 
v. 
MANAGEMENT ASSAM INDUSTRIAL DEV. CORPN. LTD. 
JANUARY 10, 2007 
[DR. ARIJIT PASAYAT AND S.H. KAPADIA, JJ.] 
B 
Labour Laws: 
Industrial Disputes Act, 1947; s.3(j): 
Workmen working under a project sponsored by a State-Corporation 
Transferring of project to another company-Non-payment of salaries-
C 
Industrial dispute-Labour Court held, no material available on record to 
show that project transferred to the company and it was incumbent upon 
the Corporation either to terminate services of workmen and give terminal 
benefits and pay salaries to them till such decision taken-Challenged by 
both parties-Single Judge held since workmen in question not employees 
of the Corporation, it was not bound to give them benefit as awarded by 
Labour Court-Appeal dismissed by Division Bench of High Court-On 
appeal, Held: Both the Corporation and the Company have separate 
independent existence having independent Board of Directors-State 
Corporation a nodal agency/promotional organization promoting company 
at initial stages-Thus, it cannot be called as owner of the establishment, 
a company-Hence, judgment of High Court cannot be faulted-However, 
employees/Unions could make claim for arrears of salaries or claim due 
from Company-Companies Act, 1956. 
Words and Phrases: 'owner '-Meaning of in the context of Industrial 
D 
E 
Disputes Act, 1947. 
F 
Appellant, a registered Trade Union raised a dispute regarding non-
payment of salaries to its members employed in a Project under M/s 
Industrial papers (ASSAM) Ltd., a company by Assam Industrial Development 
Corporation Ltd. (AIDC) after October 1998 on the plea that the members 
of the appellant-Union were not the employees of the Corporation but of the 
G 
Company. The appropriate Govt. referred the following issues to the 
Labour Court for adjudication: 
"1. As to whether the management of the Corporation is justified to 
deny as owner of the project of the company, though they have signed an 
agreer..ent with a contractor as 'owner' of the project; 
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A 
B 
c 
662 
SUPREME COURT REPORTS 
(2007] I S.C.R 
2. As to whether the Corporation is justified to deny to take the 
responsibility of company's employees, though the employees were appointed 
by the Corporatio~; 
3. As to whether the management of AIDC is justified by not absorbing 
or engaging .the employees of the Company, in their other Promoted 
industries or give them salary regularly though they have failed to install 
or run the Company; 
4. If not, then as to whether the affected employees are entitled for 
either regular monthly salary from the management or absorption in the 
other Industrial Units promoted by the Corporation •. 
5. And as to whether the Corporation should not recruit or appoint 
·new employees, to say in their Promoted Industries until and unless the 
employees of the Industrial paper are engaged or absorbed by the 
D 
Management." 
E 
F 
G 
H 
· Labour Court held that there was no material on reeord to show that 
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the Corporation had transferred the project to the Company in question, at 
any point of time; that the Issue is redundant as members of the Union do 
not come within the categories of posts advertised; that it was not incumbent 
on the Corpor~tion to absorb members of the appellant union; that the 
Company could not be run, it was incumbent for the Corporation to 
terminate the services of the members of the appellant-Union giving them 
terminal benefits according to relevant ·industrial and labour laws; and that 
until that was done the Corporation was obliged to give the members of the 
appellant union regular salaries. Aggrieved, both the appellant and the 
Corporation filed writ petitions. The writ petitions filed by the Corporation 
were allowed and one filed by the appellant was dismissed by the Single 
Judge of the High Court. Hence the present appeal. 
Appellant-employees Union contended that the Labour Court had 
taken a practical and pragmatic view; and that the Division Bench of the 
High Court should not have interfered with the findings recorded.· 
Respondent-Corporation submitted that in view of materials placed on 
record, both Single Judge and Division Bench of the High.Court were 
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INDL PAPER (ASSAM) LTD. EMPLOYEES UNION v. MANAGEMENT ASSAM INDL. DEV. CORPS. LTD. 
(i63 
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justified in its conclusion and no interference is called for; that there is 
A 
ample material on record to show that emplo

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