Calcutta High Court Rules Central Govt is the Authority for Industrial Disputes in Nationalized Companies
The Calcutta High Court, in a recent judgment, clarified that when a company is nationalized under a law like the Nationalization Act, and it operates under the Central Government’s authority, the Central Government becomes the “appropriate government” for resolving any industrial disputes related to that company. This decision was made by a bench comprising Justice Shampa Dutt (Paul).
Case Background
In this case, the petitioner company, Braithwaite & Company (India) Limited, was nationalized under the Braithwaite & Company (India) Limited (Acquisition & Transfer of Undertaking) Act, 1976. According to the Nationalization Act, all employees working for the company before the appointed day became employees of the Central Government from April 1, 1975.
The issue arose when an industrial dispute was raised by the respondent Union regarding a punishment imposed by the petitioner company. The petitioner argued that since the company had been nationalized, the Central Government should be the authority to handle the dispute. However, the State Government issued an order to send the dispute to the Second Industrial Tribunal for resolution.
The Tribunal’s Decision
The petitioner filed an application questioning the jurisdiction of the State Government, arguing that the Central Government was the appropriate authority. However, the Tribunal rejected the application in 2010, stating that the dispute had been referred before the Central Government’s notification revoking an earlier notification issued in 1998. According to the Tribunal, the dispute had already been rightly referred by the State Government.
The petitioner then appealed the Tribunal’s decision in court.
The Court’s Ruling
The court reviewed the case and referred to Section 2(a)(i) of the Industrial Disputes Act, 1947, which specifies that the Central Government is the “appropriate government” when the industry is run under its authority, especially when a company is nationalized by law.
The court also referred to the Steel Authority of India Ltd. v. National Union of Waterfront Workers case, where the Supreme Court ruled that if a company is operated under the Central Government’s authority, the Central Government should handle any industrial disputes related to that company.
In this case, the court noted that Braithwaite & Company had been nationalized under the Nationalization Act, which meant that it was being operated under the authority of the Central Government. Therefore, the Central Government was the proper authority to resolve the dispute.
The court ruled that even without the 2008 notification, the case would still fall under the jurisdiction of the Central Government, as per the earlier ruling in the Steel Authority of India Ltd. case.
Conclusion
In light of these findings, the court set aside the orders issued by the Second Industrial Tribunal in 2010 and 2011, which had been based on the wrong assumption that the State Government was the appropriate authority. The appeal was allowed, confirming that for nationalized companies, the Central Government is indeed the appropriate authority for handling industrial disputes.
This judgment reinforces the importance of understanding which government body holds jurisdiction over industrial disputes, particularly when nationalized companies are involved.
