Rajinder Singh vs M/S Beltek Appliances Ltd. & Ors
2010 Latest Caselaw 2885 Del

               *IN THE HIGH COURT OF DELHI AT NEW DELHI

+                             W.P.(C) 10442/2004

%                                               Date of decision: 2nd June, 2010.

RAJINDER SINGH                                                     ..... Petitioner
                              Through:      Mr. Jagdeep         Kumar Sharma,
                                            Advocate.

                                       Versus

M/S BELTEK APPLIANCES LTD. & ORS.               .... Respondents
                   Through:   Mr. Jagat Arora & Mr. Rajat Arora,
                              Advocates.

CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1.       Whether reporters of Local papers may
         be allowed to see the judgment?                          No

2.       To be referred to the reporter or not?                   No

3.       Whether the judgment should be reported                  No
         in the Digest?

RAJIV SAHAI ENDLAW, J.

1. The petitioner workman has instituted the present writ petition seeking a

direction to the respondent no.1 M/s Beltek Appliances Ltd. and the respondent

nos.2 & 3 described as Directors of the said M/s Beltek Appliances Ltd. to allow

the petitioner workman to join duty henceforth and also to pay to him back wages

with interest and to otherwise comply with the order dated 2nd February, 2002 of

the Industrial Tribunal. The order dated 2nd February, 2002 of the Industrial

Tribunal was made on an application under Section 33(2)(b) of the I.D. Act filed

by one M/s Beltek Electronics Ltd. The Industrial Tribunal vide the said order

dated 2nd February, 2002 held the said M/s Beltek Electronics Ltd. to have not

conducted a valid inquiry prior to dismissal of the petitioner workman and the

said M/s Beltek Electronics Ltd. having failed to lead any evidence before the

Industrial Tribunal and prove the misconduct, dismissed the said application. The

petitioner workman in the writ petition had described the respondent M/s Beltek

Appliances Ltd. as formerly known as M/s Beltek Electronics Ltd. It is also

pleaded that Form-23 has been filed with the Registrar of Companies for change

of name of M/s Beltek Electronics Ltd. to M/s Beltek Appliances Ltd. The

petitioner workman contended that the effect of dismissal of the application

under Section 33(2)(b) (supra) is that the order of termination of his services is

void ab initio and he continued to be in employment. The petitioner workman

further avers that M/s Beltek Electronics Ltd. has indulged in unfair labour

practice by changing its name to M/s Beltek Appliances Ltd. to defeat the claims

of the petitioner workman. The petitioner workman also claims the relief of

prosecution of the respondents in the event of not complying with the orders.

2. Notice of the writ petition was issued to the respondents. The respondents

filed a counter affidavit denying that the name of M/s Beltek Electronics Ltd. has

been changed to M/s Beltek Appliances Ltd.; it is pleaded that M/s Beltek

Electronics Ltd. is a separate legal entity. It is pleaded that M/s Beltek

Appliances Ltd. was initially incorporated as M/s Beltek Electronics &

Electricals Ltd. and has no concern with M/s Beltek Electronics Ltd. It is further

pleaded that though the respondent no.2 was at one time also a Director of M/s

Beltek Electronics Ltd. but he had since ceased to be a Director. It is thus pleaded

that the right of relief, if any, of the petitioner workman is against M/s Beltek

Electronics Ltd. and not against M/s Beltek Appliances Ltd. Along with the

counter affidavit, a photocopy of the certificate of change of name of M/s Beltek

Electronics & Electricals Ltd. to M/s Beltek Appliances Ltd. has also been filed.

3. The petitioner workman has not filed any rejoinder to the said counter

affidavit. Vide order dated 25th March, 2010 the respondent no.2 was directed to

appear before this Court in person to make a statement regarding the Companies

aforesaid. The respondent no.2 Mr. Yash Pal Verma appeared before this Court

on 11th May, 2010 and his statement on oath was recorded. He deposed that M/s

Beltek Appliances Ltd. was incorporated in 1993 as M/s Beltek Electronics &

Electricals Ltd. and the name so changed in the year 2004; that he and his two

sons are the only Directors of M/s Beltek Appliances Ltd. and he, his wife, his

two sons, his daughter-in-law, his nephew besides a few others are the

shareholders of the said Company. He has further deposed that M/s Beltek

Electronics Ltd. was a different Company from M/s Beltek Electronics &

Electricals Ltd.; that he was also a Director in M/s Beltek Electronics Ltd. till the

year 1991; various other persons are deposed to have been the other Directors of

M/s Beltek Electronics Ltd. He has further deposed that M/s Beltek Electronics

Ltd. was incorporated in 1973 and that the petitioner workman was employed in

M/s Beltek Electronics Ltd. He has however disclosed that M/s Beltek

Electronics Ltd. and M/s Beltek Electronics & Electricals Ltd. both were using

the same name 'Beltek' because of an agreement between the shareholders and

the Directors of the two companies under which the two Companies were

manufacturing different items.

4. The petitioner workman has not been able to substantiate that M/s Beltek

Appliances Ltd. against whom only this writ petition has been filed, was formerly

known as M/s Beltek Electronics Ltd. with whom the petitioner workman was

employed. No case of the respondent M/s Beltek Appliances Ltd. being the

successor or assignee of M/s Beltek Electronics Ltd. has also otherwise been

made out. The writ petition filed against M/s Beltek Appliances Ltd. is thus

misconceived. I also entertain doubt about the very maintainability of the writ

petition. The remedies of the petitioner workman even against his employer M/s

Beltek Electronics Ltd. are before the Labour Commissioner/Labour Court and

not by way of filing the writ petition.

5. The counsel for the petitioner workman at the time of hearing has

contended that both M/s Beltek Electronics Ltd. and M/s Beltek Appliances Ltd.

even if different legal entities, belonged apparently to the same group. Though

there are no pleadings or basis for the same but even if that be so, the entity of a

Company is distinct from that of its shareholders/Directors. The claim of the

petitioner workman can be enforced only against M/s Beltek Electronics Ltd.

with whom the petitioner workman was employed and cannot be enforced against

M/s Beltek Appliances Ltd. even if the shareholders and Directors of M/s Beltek

Appliances Ltd. are the same as that of M/s Beltek Electronics Ltd. For

enforcement of a claim of a workman, the corporate veil can certainly be lifted.

However, for doing so a case for piercing the corporate veil has to be made out

and which has not been done in the present case. The counsel for the petitioner

workman in this regard has drawn attention to N.T.C. (South Maharashtra)

Limited Vs. Rupchand Sabhu Mohite (1993) 1 SCC 218. However, that was a

case under Section 25FF of the I.D. Act and has no application to the present

case.

6. The Supreme Court in Central Inland Water Transport Corporation Ltd.

Vs. The Workmen AIR 1974 SC 1604 has held that an inquiry whether a person

is an assignee of the employer under the award is to be conducted by raising a

dispute on a reference under Section 10 of the I.D. Act and not under Section

33C(2) of the said Act. Following the said dicta, a case for piercing the corporate

veil will also have to be made out by way of industrial dispute under Section 10

of the I.D. Act.

7. There is therefore no merit in the writ petition; the same is dismissed.

However, the said dismissal shall not come in the way of the petitioner workman

seeking reliefs, if any, entitled to against M/s Beltek Electronics Ltd. or the

petitioner workman seeking a reference of the dispute for piercing the corporate

veil against M/s Beltek Appliances Ltd.

No order as to costs.

RAJIV SAHAI ENDLAW (JUDGE) 2nd June, 2010 bs