Summary
Lufthansa was neither a necessary nor a proper party to the industrial reference concerning Globe Ground India’s closure and retrenchment of 106 workmen. The union sought reinstatement with Globe Ground India, not employment with Lufthansa. The reference’s limited scope and the separate corporate identities could not be displaced merely by an indirect shareholding relationship. The Supreme Court therefore upheld the High Court’s refusal to implead Lufthansa, without deciding the legality of the closure or retrenchment.
Issues
- Whether Lufthansa was necessary or proper for effective adjudication of the industrial reference.
- Whether indirect corporate ownership by itself justified impleadment of the parent company.
Held
- Adjudication must remain confined to the referred dispute and matters incidental to it. Here the reference concerned the employer company’s closure and retrenchment, and no employment relief was sought against Lufthansa. (¶¶ 10, 15–16, 19)
- A necessary party is one without whom an effective order cannot be made; a proper party’s presence is needed for complete and final resolution. Whether addition is warranted depends on the allegations, facts and nature of the particular proceeding. (¶ 11–15)
- A subsidiary’s separate corporate identity cannot be disregarded merely because another company holds shares. Piercing the veil is exceptional and requires misuse of the corporate form for wrongful purposes; the indirect ownership relationship here did not justify adding Lufthansa to this limited reference. (¶ 18–19)
Result
Civil appeals dismissed without costs. High Court orders setting aside Lufthansa’s impleadment in the industrial adjudication upheld.