GLOBE GROUND INDIA EMPLOYEES UNION v. LUFTHANSA GERMAN AIRLINES & Anr.

Even in a subsidiary company which is an independent corporate entity, if any other company is holding shares, by itself is no ground to order impleadment of parent company per se – In the present case, the second respondent itself is a company in which the subsidiary of the first respondent, Globe Ground Deutschland GmbH, was holding 51% shares and 49% shares were held by the Bird Group – Further, having regard to the limited scope of adjudication to answer the reference, circumscribed by s.10(4) of the 1947 Act, the first respondent is neither necessary nor proper party, to answer the reference by the Industrial Court – No error in the order passed by the Single Judge or the Division Bench – Code of Civil Procedure, 1908 – Or.1, r.10 – Doctrine of Piercing Veil. Code of Civil Procedure, 1908 – Or.1, r.10 – Impleadment of third party, not a party to the reference under the 1947 Act – Held: For deciding such application for impleadment what is required to be considered is whether such party is necessary or proper party to decide the lis – It all depends on the facts of each case; the allegations made and the nature of adjudication proceedings etc. – Industrial Disputes Act, 1947. Words & Phrases – “Necessary Party” and “Proper Party” – Meaning of – Explained. Dismissing the appeals, the Court HELD: 1.1 The reference which was required to be answered by the Industrial Tribunal was that, whether the action of the Management of M/s Globe Ground India (Pvt.) Limited, in closing down their establishment on 15.12.2009 and retrenching the services of 106 workmen was justified and legal. It is clear from Section 10 of the Industrial Disputes Act, 1947 that whenever, the appropriate Government refers the points of dispute for adjudication, the Labour Court or the Tribunal or the National Tribunal, as the case may be, shall confine its adjudication to those points only and matters incidential thereto. Whenever, an application is filed in the adjudication proceedings, either before the Industrial Tribunal in a reference made under the Industrial Disputes Act, 1947 or any other legal proceedings, for impleadment of a party who is not a party to the proceedings, A B C D E F G H GLOBE GROUND INDIA EMPLOYEES UNION v. LUFTHANSA GERMAN AIRLINES 643 what is required to be considered is whether such party which is sought to be impleaded is either necessary or proper party to decide the lis. The two expressions “necessary” or “proper” parties have separate and different connotations. Necessary party, is one without whom no order can be made effectively. Similarly, a proper party is one in whose absence an effective order can be made but whose presence is necessary for complete and final decision on the question involved in the proceedings. [Paras 10, 11][649-C-G]

1.2 Whenever an application is filed for impleadment of a third party, who is not a party to the reference under the Industrial Disputes Act or any other proceedings pending before the Court, what is required to be considered is whether such party is either necessary or proper party to decide the lis. It all depends on the facts of each case; the allegations made and the nature of adjudication proceedings etc. In this case it is to be noted that only the scope of reference is limited. It is also clear from Section 10(4) of the Industrial Disputes Act, 1947 that whenever a reference is made, the Industrial Court shall confine its adjudication to the point of reference and matters incidental thereto only. In the case on hand, the first respondent had a subsidiary, namely, Globe Ground Deutschland GmbH, which was holding 51% shares along with 49% shares held by the Bird Group in the second respondent company. The Bird Group had floated another company, Bird Worldwide Flight Services Ltd. to provide ground handling and ancillary services which started from the month of January, 2009. [Paras 15, 16][650-G-H; 651-A-C]

1.3 Even in a subsidiary company which is an independent corporate entity, if any other company is holding shares, by itself is no ground to order impleadment of parent company per se. In the case at hand, the second respondent itself is a company in which the subsidiary of the first respondent, namely, Globe Ground Deutschland GmbH, was holding 51% shares and 49% shares were held by the Bird Group. As per the case of the appellant, the Bird Group has floated another company and started handling services from the month of January, 2009 by uitlizing the same equipments and vehicles belonging to the second respondent. A B C D E F G H 644 SUPREME COURT REPORTS [2019] 6 S.C.R. Further, having regard to limited scope of adjudication, to answer the reference, which is circumscribed by Section 10(4) of the Industrial Dispute Act, 1947, the first respondent is neither necessary nor proper party, to answer the reference by the Industrial Court. No error in the order passed by the Single Judge or in the order of the Division Bench passed by the High Court of Delhi in the impugned judgment, so as to interfere with such reasoned and concurrent findings recorded by the courts. [Para 19][652-B-E]