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Supreme Court of India

GLOBE GROUND INDIA EMPLOYEES UNIONversusLUFTHANSA GERMAN AIRLINES & ANR.

Citation
2019 INSC 559
Decided
23 April 2019
Disposal
Appeal(s) allowed

Holding

Under Section 10(4) of the Industrial Disputes Act, a parent company is not a necessary or proper party to an industrial dispute concerning its subsidiary unless its presence is essential for an effective order, and mere shareholding does not warrant impleadment.

Summary

The Globe Ground India Employees Union raised an industrial dispute alleging that Globe Ground India Pvt Ltd, a subsidiary of Lufthansa German Airlines, closed its establishment and retrenched 106 workers. The union sought to implead Lufthansa, claiming it was the holding company and therefore a necessary and proper party. The Industrial Tribunal initially allowed the impleadment, but the High Court set aside that order. On appeal, the Supreme Court examined whether the parent company could be joined under Section 10(4) of the Industrial Disputes Act, 1947. It held that mere shareholding does not make a parent company a necessary or proper party unless its presence is essential for an effective order, and the doctrine of piercing the corporate veil was not applicable. Consequently, the appeals were dismissed and Lufthansa was not impleaded.

Issues considered

  • Whether Lufthansa German Airlines is a necessary party to the industrial dispute proceedings under Section 10(4) of the Industrial Disputes Act, 1947.
  • Whether Lufthansa German Airlines is a proper party to the proceedings.
  • Whether the doctrine of piercing the corporate veil can be invoked to implead the parent company in this context.

Legislation cited

Subjects

Industrial Disputes Actnecessary partyproper partyimpleadmentcorporate veilparent company liabilitytribunal referencesection 10(4)labour lawshareholding

Judgment

                          [2019] 6 S.C.R. 641                             641


         GLOBE GROUND INDIA EMPLOYEES UNION                               A
                                  v.
           LUFTHANSA GERMAN AIRLINES & ANR.
                (Civil Appeal Nos. 4076-4077 of 2019)
                           APRIL 23, 2019                                 B
      [R. BANUMATHI AND R. SUBHASH REDDY, JJ.]
       Industrial Disputes Act, 1947– ss.10(4) and 25-F, 25-G, 25-
O, 25-N – Information furnished by the first respondent (holding
company of the second respondent-employer of the appellant-
                                                                          C
workers’ union) that they would stop ground handling services from
the International Airlines at Delhi – Workers of the appellant-union
were issued termination notices– Dispute referred by the Central
Government to the Industrial Tribunal – Before the Tribunal, the
appellant inter alia alleged that second respondent is a joint venture
formed by Globe Ground Deutschland GmbH and one Bird Group,               D
which floated a new company that has undertaken ground handling/
ancillary services to international airlines and was utilising the same
equipment belonging to the second respondent and in the said
company most of the employees were retained except the trade union
activists – Though, no relief was claimed against the first respondent,
                                                                          E
the appellant sought its impleadment in the industrial dispute
proceedings on the ground that it is the holding company of the
second respondent and hence a proper and necessary party–
Allowed by the Tribunal – Single Judge set aside the order –
Appellant filed intra court appeal – Dismissed – Review – Dismissed
– Held: Reference to be answered by the Tribunal was that, whether        F
the action of the management of second respondent in closing down
their establishment on 15.12.2009 and retrenching the services of
106 workmen was justified and legal – Whenever, the appropriate
Government refers the points of dispute for adjudication, the Labour
Court/the Tribunal/the National Tribunal, as the case may be, shall
                                                                          G
confine its adjudication to those points only and matters incidential
thereto – Necessary party, is one without whom no order can be
made effectively – 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 –
                                                                          H
                                 641
642            SUPREME COURT REPORTS                       [2019] 6 S.C.R.


A     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
B
      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
C     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
D     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.
E           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
F     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
G     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,

H
       GLOBE GROUND INDIA EMPLOYEES UNION v.                            643
            LUFTHANSA GERMAN AIRLINES

what is required to be considered is whether such party which is        A
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
                                                                        B
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,         C
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   D
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         E
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          F
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                 G
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.

                                                                        H
644            SUPREME COURT REPORTS                      [2019] 6 S.C.R.


A     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
B
      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]
            Balwant Rai Saluja and another v. AIR India Limited
            and others (2014) 9 SCC 407 ; Kasturi v. Iyyamperumal
C           and others (2005) 6 SCC 733 : [2005] 3 SCR 864
            – relied on.
            Hochtief Gammon v. Industrial Tribunal, and others
            AIR 1964 SC 1746 : [1964] SCR 596; Hussainbhai v.
            Alath Factory Thezhilali Union and others (1978) 4 SCC
D           257 : [1978] 3 SCR 1073 ; Grindlays Bank Ltd. v.
            Central Government Industrial Tribunal and others
            1980 (Supp) SCC 420 : [1981] SCR 341 – referred
            to.
                             Case Law Reference
E
      [1964] SCR 596                 referred to                 Para 7
      [1978] 3 SCR 1073              referred to                 Para 7
      [1981] SCR 341                 referred to                 Para 7
      (2014) 9 SCC 407               relied on                   Para 8
F
      [2005] 3 SCR 864               relied on                   Para 8
            CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 4076-
      4077 of 2019.
            From the Judgment and Order dated 24.11.2016 of the High
G     Court of Delhi at New Delhi in L.P.A. No. 107 of 2016 and order dated
      14.07.2017 in Rev. Pet. No.146 of 2017.
             Colin Gonsalves, Sr. Adv., Ms. Aditi Gupta, Satya Mitra Advs.
      for the Appellant.

H
        GLOBE GROUND INDIA EMPLOYEES UNION v.                                    645
             LUFTHANSA GERMAN AIRLINES

     Chander Uday Singh, Sr. Adv., Amar Dave, Bhargava V. Desai,                 A
Akshat Malpani, Alok Bhasin, Virender Mehta, Tarak Saha, Amrendra
Kumar Mehta, Advs. for the Respondents.
       The Judgment of the Court was delivered by
       R. SUBHASH REDDY, J. 1. Leave granted.
                                                                                 B
       2. These appeals are directed against the judgment and order
dated 24.11.2016 passed in L.P.A. No.107 of 2016 and order dated
14.7.2017 in R.P.No.146 of 2017 by the High Court of Delhi at New
Delhi.
       3. Necessary facts in brief for disposal of these appeals are that,       C
the appellant workers’ union raised the industrial dispute which was
referred by the Central Government to Industrial Tribunal-cum-Labour
Court by an order dated 04.02.2010. The question which was referred
for adjudication by the Industrial Tribunal reads as under:-
       “Whether the action of the Management of M/s Globe Ground                 D
       India Private Ltd., New Delhi, a subsidiary of Lufthansa German
       Airlines (Carrier), in closing down their establishment on 15.12.2009
       and retrenching the services of 106 workmen (as per annexure)
       is justified and legal? To what reliefs are the workmen concerned
       entitled?”
                                                                                 E
       4. The aforesaid reference order was sent by the Government to
the Presiding Officer of Tribunal and also to the second respondent herein.
There was no communication of such reference to, Lufthansa German
Airlines. Before the Industrial Tribunal, the appellant workers’ union
filed a statement on 10.3.2010, inter alia stating that the second
respondent company is a subsidiary of the first respondent and was               F
providing ground handling and ancillary services at the Indira Gandhi
International Airport and airports located in different places like Calcutta,
Mumbai, Bengaluru, Chennai, Hyderabad etc. The second respondent
Globe Ground Private Limited is a company, and is a joint venture formed
by Globe Ground Deutschland GmbH and the Bird Group with 51% and
                                                                                 G
49% shares respectively. In December, 2008, the Bird Group had floated
another company, Bird Worldwide Flight Services Ltd. which has
undertaken ground handling and ancillary services to international airlines.
In the claim petition filed before the Industrial Tribunal, it is the specific
case of the appellant that, the new company which has started ground
                                                                                 H
646             SUPREME COURT REPORTS                           [2019] 6 S.C.R.


A     handling services from January, 2009, is utilising the same equipment
      belonging to the second respondent. On the information furnished by
      the first respondent that they would stop ground handling services from
      the International Airlines at Delhi w.e.f. 15.12.2009, the members of the
      appellant’s union were issued termination notices and the same is in
      violation of Sections 25-F, 25-G, 25-O and 25-N and other provisions of
B
      the Industrial Disputes Act, 1947. It is the allegation of the appellant
      that the first respondent has not closed down or stopped the business in
      India. It is also specifically alleged that the new company has retained
      most of the employees who worked earlier except the trade union
      activists. As claimed before the Industrial Court, it is the case of the
C     appellant that management i.e. the second respondent should reinstate
      left out workmen in service by extending the benefit of continuity of
      service and full wages. Before the Industrial Court, the second
      respondent herein has filed reply. In the reply filed, while denying various
      allegations made by the claimant, the second respondent as a fact has
      stated that the second respondent was providing handling services to the
D
      Lufthansa German Airlines.
             5. Though, no relief is claimed against the first respondent i.e. the
      Lufthansa German Airlines, the appellant’s union has filed an application
      for impleadment of the first respondent in ongoing proceedings relating
      to industrial dispute. There was an order allowing the application filed
E     by the appellant earlier, which was set aside by the High Court in the
      Writ Petiton by remitting the matter back for fresh consideration and
      subsequently the Industrial Tribunal has passed an order dated
      12.12.2013, impleading the first respondent as a party, mainly on the
      ground that the first respondent was a holding company of the second
F     respondent. Aggrieved by the order dated 12.12.2013, the first respondent
      i.e. Lufthansa German Airlines has filed Writ Petition (Civil) No.1255 of
      2014 before the High Court of Delhi at New Delhi, which was allowed
      by the learned Single Judge by judgment dated 21.04.2014, by setting
      aside the order dated 12.12.2013 passed by the Industrial Tribunal.
      Aggrieved by the order of the learned Single Judge, the appellant
G     employees’ union has filed intra court appeal under clause X of the
      Letters Patent, in L.P.A No. 107 of 2016 which is dismissed by the
      Division Bench of the High Court by the impugned order dated
      24.11.2016. Further petition seeking review of the said order in R.P.

H
     GLOBE GROUND INDIA EMPLOYEES UNION v.                                         647
 LUFTHANSA GERMAN AIRLINES [R. SUBHASH REDDY, J.]

No.146 of 2017, is also ended in dismissal by an order dated 14.7.2017.            A
Questioning the order dated 24.11.2016 in L.P.A No.107 of 2016 and
further order dated 14.7.2017 passed in R.P.No.146 of 2017, the appellant
is before us in these appeals.
      6. We have heard at length Sri Colin Gonsalves, learned senior
counsel appearing for the appellant and Sri Chander Uday Singh, learned            B
senior counsel appearing for respondent No.1.
       7. Learned senior counsel Sri Colin Gonsalves, appearing for the
appellant herein, has submitted that the second respondent was a
subsidiary of the first respondent and was providing ground handling and
other ancillary services to the first respondent at the Indira Gandhi              C
International Airport and other airlines. The first respondent had a
subsidiary, namely, Globe Ground Deutschland GmbH, for the ground
handling work and the second respondent herein Globe Ground India
Pvt. Ltd. is a joint venture formed by Globe Ground Deutschland GmbH
and the Bird Group with 51% and 49% shares, respectively. In December,
2008, the Bird Group had floated a new company, Bird Worldwide Flight              D
Services Ltd. to provide ground handling services by utilizing the same
equipment and vehicles which belonged to the second respondent. The
workmen of the second respondent were deployed by the new company
to operate the said equipment and provide ground handling and ancillary
services. It is submitted that only pursuant to instructions of the first          E
respondent to the second respondent on 9.12.2009 that they would stop
availing ground handling services from 15.12.2009 the workmen of the
appellant’s union were terminated. By referring to the claim-petition
filed before the Tribunal, it is stated that the first respondent is a necessary
and proper party to the proceedings. It is submitted that this Court has
to look into by lifting corporate veil, to examine whether the first               F
respondent is a necessary and proper party or not. It is submitted that
for all practical purposes the first respondent is a controlling company
and having regard to the claim made in the claim petition, the first
respondent is a necessary and proper party. It is the contention of the
learned senior counsel that the well reasoned order passed by the                  G
Industrial Tribunal is set aside by the learned Single Judge and the same
is confirmed by the Division Bench by the impugned order without
assigning valid reasons. In support of his plea, learned senior counsel
has placed reliance on the judgment in the case of Hochtief Gammon

                                                                                   H
648             SUPREME COURT REPORTS                            [2019] 6 S.C.R.


A     vs. Industrial Tribunal, and others1 and the judgment in the case of
      Hussainbhai vs. Alath Factory Thezhilali Union and others2 and
      the judgment in the case of Grindlays Bank Ltd. vs. Central
      Government Industrial Tribunal and others3.
             8. On the other hand, Sri Chander Uday Singh learned senior
B     counsel, appearing for the first respondent, has submitted that the first
      respondent was never the employer of the workmen of the appellant’s
      union. It is submitted that the termination notice to the members of the
      appellant’s union were issued by the second respondent and further, by
      taking us to the reference order which is referred for adjudication by the
      Industrial Tribunal, it is submitted that the first respondent is neither a
C     necessary nor a proper party to the proceedings before the Industrial
      Court. Further by referring to communication dated 10.12.2009 addressed
      by the appellant’s union, it is submitted that the said notice was issued
      only to the second respondent protesting against the closure of business
      and retrenchment of the employees in New Delhi International Airport.
D     Further by referring to the reference order, it is submitted that by seeking
      impleadment of the first respondent, the appellant cannot seek to expand
      the scope of the reference. Learned senior counsel by referring to
      Section 10(4) of the Industrial Disutes Act, 1947 has also submitted that
      the appropriate Government has specified the points of dispute for
      adjudication, the Tribunal shall confine its adjudication to those points
E     only and matters incidental thereto. As such, it is submitted that to answer
      the reference which is referred by the Government, the first respondent
      is neither a necessary nor proper party. He further submitted that, the
      parent company is not liable for the acts of its subsidiary. Reliance is
      placed on the judgment of this Court in the case of Balwant Rai Saluja
F     and another vs. AIR India Limited and others4 and also on the
      judgment in the case of Kasturi vs. Iyyamperumal and others5.
            9. In the rejoinder affidavit, learned counsel for the appellant, has
      submitted that if ultimately reference is ordered in favour of the appellant’s
      union, no fruitful purpose will be served to the members of the union as
G     submitted that for all practical purposes the first respondent is to be
      considered as an employer. It is submitted that in such view of the
      1
        AIR 1964 SC 1746
      2
        (1978) 4 SCC 257
      3
        1980 (Supp) SCC 420
      4
        (2014) 9 SCC 407
      5
H       (2005) 6 SCC 733
     GLOBE GROUND INDIA EMPLOYEES UNION v.                                        649
 LUFTHANSA GERMAN AIRLINES [R. SUBHASH REDDY, J.]

matter, the first respondent is to be impleaded as a party respondent in          A
the reference proceedings, before the Industrial Tribunal.
        10. Having heard learned counsel on both sides, we have perused
the material placed on record. The only question which is required to be
considered is whether, the first respondent – Lufthansa German Airlines
is to be impleaded as a party respondent or not, in adjudication proceedings      B
to answer the reference referred by the Central Government to the
Industrial Tribunal-cum-Labour Court vide order dated 4.2.2010. From
a reading of the reference, which is referred to Industrial Tribunal, it is
clear that the reference which is required to be answered by the Industrial
Tribunal is that, whether the action of the Management of M/s Globe
Ground India (Pvt.) Limited, in closing down their establishment on               C
15.12.2009 and retrenching the services of 106 workmen is justified and
legal. At this stage, it is apt to refer to Section 10 of the Industrial
Disputes Act. It is clear from the above said section, 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            D
be, shall confine its adjudication to those points only and matters incidential
thereto.
       11. 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                 E
impleadment of a party who is not a party to the proceedings, 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
expressions “necessary” or “proper” parties have been considered time
and again and explained in several decisions. The two expressions have
separate and different connotations. It is fairly well settled that necessary     F
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.
      12. Learned senior counsel Sri Colin Gonsalves appearing for the            G
appellant, in support of his argument that the first respondent is a holding
company of the employer of workmen, as such the first respondent is a
necessary and proper party, has placed reliance on the judgment in the
case of Hochtief Gammon vs. Industrial Tribunal, and others
                                                                                  H
650             SUPREME COURT REPORTS                             [2019] 6 S.C.R.


A     (supra). In the aforesaid judgment while considering the scope of Sections
      18(3)(b), 11(3), 10(1) of the Industrial Disputes Act, this Court has
      considered powers of the Tribunal to add necessary and proper parties.
      In the said judgment this Court has held that if the employer named in
      reference does not fully represent the interests of the employer as such,
      other persons who are interested in the undertaking of the
B
      employer can be joined. But at the same time in the very said judgment
      it is held that, the test always must be is the addition of the party necessary
      to make adjudication itself effective and enforceable?
             13. In another judgment relied upon by the learned senior counsel
      for the appellant in the case of Hussainbhai vs.Alath Factory
C     Thezhilali Union and others (supra), this Court has prescribed the
      test for determining, workmen employed by independent contractor to
      work in employer’s factory, whether such workmen are workmen of
      the factory or not. In this judgment, this Court has held that the presence
      of intermediate contractors with whom alone workers have immediate
D     or direct relationship ex contractu is of no consequence when, on lifting
      the veil or looking at the conspectus of factors governing employment.
            14. Similarly, in another judgment relied upon by the learned senior
      counsel for the appellant in the case of Grindlays Bank Ltd. vs.
      Central Government Industrial Tribunal and others (supra), this
E     Court has held that for the proceedings arising out of the Industrial
      Disputes Act, 1947, the provisions of the Evidence Act, in their strict
      sense, likewise do not apply to the proceedings. It is held that the
      authorities to whom reference is made under the Industrial Disputes
      Act, 1947, being quasi-judicial in nature, have to exercise their discretion
      in a judicial manner, without caprice, and according to the general
F     principles of law and rules of natural justice.
             15. There cannot be any second opinion on the ratio decided in
      the aforesaid cases relied on by the learned senior counsel for the
      appellant. But, whenever an application is filed for impleadment of a
      third party, who is not a party to the reference under the Industrial Disputes
G     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 which is
H     already discussed above. However, it is also clear from Section 10(4)
     GLOBE GROUND INDIA EMPLOYEES UNION v.                                      651
 LUFTHANSA GERMAN AIRLINES [R. SUBHASH REDDY, J.]

of the Industrial Disputes Act, 1947 that whenever a reference is made,         A
the Industrial Court shall confine its adjudication to the point of reference
and matters incidental thereto only.
        16. Reverting back to the facts of the case on hand it is clear that
the first respondent had a subsidiary, namely, Globe Ground Deutschland
GmbH, which was holding 51% shares along with 49% shares held by                B
the Bird Group in the second respondent company. Further, it is clear
that 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. It is the allegation of the
appellant’s union that even after the formation of a new company, such
new company is utilizing same equipment and vehicles belonging to the           C
second respondent. It is also the allegation of the appellant that after the
formation of the new company, it has retained most of the employees,
except the trade union activists. The appellant workers’ union does not
seek employment of the alleged retrenched workers in the first
respondent.                                                                     D
      17. Having regard to facts and circumstances of present case,
we are of the opinion that the case law relied on by the learned senior
counsel for the appellant would not render any assistance in support of
the appellant’s case.
       18. At the same time in the judgment in the case of Balwant Rai          E
Saluja and another vs. AIR India Limited and others (supra) relied
upon by Sri Chander Uday Singh, learned senior counsel for the
respondents, this Court has observed that the corporate veil can be
pierced and the parent company can be held liable for the conduct of its
subsidiary, only if it is shown that the corporal form is misused to            F
accomplish certain wrongful purposes. In the aforesaid case, having
regard to facts, it was opined that the doctrine of piercing veil cannot be
applied. In the aforesaid case it is held by this Court that the doctrine of
piercing veil, has been applied sparingly by the courts.
       19. The other judgment relied on by the learned senior counsel for       G
the respondents in the case of Kasturi vs. Iyyamperumal and others
(supra), this Court again considered the test to be applied while considering
the application filed under Order 1 Rule 10 of the Code of Civil Procedure,
1908. It is held that to consider the scope of application, the tests are:-
(1) there must be a right to some relief against such party in respect of
                                                                                H
652             SUPREME COURT REPORTS                           [2019] 6 S.C.R.


A     controversies involved in the proceedings; (2) no effective decree can
      be passed in its absence. Applying the aforesaid ratio laid down in the
      judgment, referred in the aforesaid cases, we are of the view that the
      said judgment relied on supports the case of the respondents. Further,
      we are of the view that even in a subsidiary company which is an
      independent corporate entity, if any other company is holding shares, by
B
      itself is no ground to order impleadment of parent company per se. In
      the case at hand, it is clear that 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
C     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. 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, we are of the view
      that the first respondent is neither necessary nor proper party, to answer
D
      the reference by the Industrial Court. Further, we do not find any error
      in the order passed by the learned 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. Thus, these civil appeals are devoid of merits
E     and the same are accordingly dismissed, with no order as to costs.

      Divya Pandey                                                Appeals dismissed.




F




G




H


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