JUDGMENT Jahagirdar, J. This is a petition under Article 227 of the Constitution, challenging the order dated July 31, 1984 passed by the Industrial Court at Pune in Appeal (BIR/IC) No. 10 of 1983. The said appeal had been filed by the 1st respondent in this petition, which is a limited company, carrying on the business of the manufacture of sugar in Malinagar of Malshiras Taluka in Solapur District. The petitioner is a union being the representative union for the sugar industry in the area in which the factory of the 1st respondent is working. The second respondent is this petition is the State of Maharashtra through the Additional Registrar under the Bombay Industrial Relations Act, 1946 for Pune Region. The significance of adding the Additional Registrar as party respondent will be clear when we proceed to narrate the facts of this case. 2. As already mentioned above, the appeal had been preferred before the Industrial Court by the 1st respondent. For the sake of convenience, we will refer to the said respondent as 'the company' because in the course of this judgment we will have an occasion to refer to a co-operative sugar karkhana which will be referred to by us as 'the co-operative factory'. The appeal had been preferred against the refusal of the Additional Registrar appointed under the Bombay Industrial Relations Act or register an agreement dated August 25, 1981 arrived at between the petitioner and the company. 3. Now, some facts must necessarily be stated in order to understand and appreciate the points involved in this petition. The company was originally running a sugar manufacturing unit which was leased out to the Saswad Mall Sahakari Sakhar Karkhana Ltd., hereinafter referred to as 'the co-operative factory', under an agreement dated March 31, 1971, which was to come into effect from August 1, 1971. The agreement was originally to be in operation for a period of two years, but subsequently, it was extended by another year. In other words, the arrangement under what has been described as the lease-deed by the company in favour of the co-operative factory was upto August 1, 1974. The agreement was originally to be in operation for a period of two years, but subsequently, it was extended by another year. In other words, the arrangement under what has been described as the lease-deed by the company in favour of the co-operative factory was upto August 1, 1974. Subsequently, however, by another agreement dated July 30, 1976, it was agreed between the company and the co-operative factory that the co-operative factory shall continue to be the lessee of the factory for a further period of 30 years with retrospective effect from August 1, 1974. Some of the terms of these two agreements have been mentioned in the memo of the petition. Under the 1971 agreement, it had been provided that the company shall give on loan services and make available to the lessee the lessor's entire or such permanent, seasonal and temporary staff as would be mutually agreed upon between the two parties, provided however that the terms and conditions of service and the emoluments which they were drawing on July 31, 1971 would not be altered to their disadvantage. It was also provided that the co-operative factory shall contribute the employer's share to the provident fund as per the rules and regulations and also recover from the employee's salaries their provident fund contribution in the usual way. The co-operative factory also undertook to pay gratuity to the employees retiring during the term of the lease, as if such gratuity would have been payable by the company had there been no lease. Broadly speaking, these terms and conditions provided for the continuity of service under the new employer, namely, the co-operative factory. 4. Under the agreement of 1976, it was provided that the co-operative factory agreed that all members of the staff and workmen formerly in the employment of the company, whose services had been taken over by the co-operative factory with effect from August 1, 1971, had become the employees of the co-operative factory for all purposes. The co-operative factory also agreed to bear all responsibilities under the various industrial laws in respect of such employees. The co-operative factory also undertook to pay gratuity to the employees whose services were transferred to it and who would be retiring during the term of the lease. The co-operative factory also agreed to bear all responsibilities under the various industrial laws in respect of such employees. The co-operative factory also undertook to pay gratuity to the employees whose services were transferred to it and who would be retiring during the term of the lease. Here again is the reaffirmation of the acceptance of the liability in respect of the employees of the former employer by the new employer, namely, the co-operative factory. It is, thus, clear that with effect from August 1, 1974, at any rate, the employees, who were formerly working with the company, became the employees of the co-operative factory. 5. From the material on record, one can notice that the co-operative factory ran into rough weather and it thought it prudent to cease from the business. One way of doing it was to surrender the lease of the factory premises and the equipment it had taken for a period of 30 years with effect from August 1, 1974. This it did by an agreement dated July 30, 1981. The surrender itself was to take effect from August 1, 1981. A copy of the deed of surrender has been annexed to this petition as Ex. 'A'. The circumstances under which the co-operative factory had come in possession of the sugar factory which it was running have been set out in details in this deed of surrender. After mentioning that the lease was being brought to an end, it has been provided in the said deed of surrender that the lessor, namely, the company, agreed to take over the positions in connection with their previous services with the co-operative factory, on fresh appointment basis and that all industrial and other obligations in connection with their previous services with the co-operative shall be those of the co-operative factory itself. In other words, with effect from August 1, 1981, from which date the surrender took place, the factory has been handed over to the original lessor, namely, the company, but the employees who were in the employment of the co-operative factory on July 31, 1981 would be taken over in the employment of the company as if they were new employees. This is the recognition of the well know position in law, namely, that whenever a business changes hands from one employer to another employer, the employees of the previous employer cease to be in the employment. This is the recognition of the well know position in law, namely, that whenever a business changes hands from one employer to another employer, the employees of the previous employer cease to be in the employment. There is no provision in law, not even in the industrial law, under which the employees of the previous employer are automatically transferred to the new employer. In order to meet a situation which would thus cause hardship to the employees of the previous employer, the Parliament has thought it fit to insert a provision, namely, Section 25-FF in the Industrial Disputes Act to which we will come in a short while. 6. The company, which had ceased to be in the business of the manufacture of sugar in view of the fact that it had leased out its factory to the co-operative factory, thought it fit to make a provision for employing adequate number of persons. This was thought necessary because the employees of the co-operative factory would have to be taken, though as new employees, in the company. This could be done it under law there was provision for the sufficient number of employees to be taken up. Obviously, this was not so. Therefore, the company thought it fit to give a notice u/s 42(1) of the Bombay Industrial Relations Act, 1947 on August 1, 1981. By this notice, which was given to the petitioner, the representative union for the employees in the company, the petitioner was informed that it was the intention of the company to effect the change specified in the annexure thereto. In the annexure, it was mentioned that the co-operative factory had stopped sugar production and the machinery regarding the sugar production had come to the company. Therefore, change was taking place in the strength of the workers of the company. Hence, there shall be increase nearly upto 750 in the workers which were presently working with the company. In other words, the company sought a change, notice of which was given that the number of employees in the company shall stand increased to 750. 7. As contemplated under the provisions of the Bombay Industrial Relations Act, negotiations took place between the petitioner, i.e. the representative union and the company. In other words, the company sought a change, notice of which was given that the number of employees in the company shall stand increased to 750. 7. As contemplated under the provisions of the Bombay Industrial Relations Act, negotiations took place between the petitioner, i.e. the representative union and the company. Subsequently, on August 25, 1981, an agreement was entered into between the petitioner and the company under which provision was made for the absorption of nearly 587 employees of the co-operative factory into the company's establishment, but they were to be taken as fresh appointees as was provided in the deed of surrender itself to which we have already made reference earlier. Though this agreement provided for the absorption of the erstwhile employees of the co-operative factory in the factory now being taken over by the company, it was specifically stated that all liabilities of the prior employment of these employees in the co-operative factory will be borne by the co-operative factory itself. 8. Thereafter, this agreement was sent for registration to the Additional Registrar appointed under the Bombay Industrial Relations Act, having his office at Pune. In the meantime, the petitioner, by its letter dated October 2, 1981, to the Registrar, set out what it regarded as unsatisfactory features of the agreement and called upon the Registrar not to register the agreement. By the communication dated August 12, 1982, the Additional Registrar appointed under the Bombay Industrial Relations Act, Pune, informed the company that the agreement was being returned, obviously without registration, because the date of the actual arrival of the parties to the agreement was August 25, 1981, the notice of change had been given from August 1, 1981 and hence the agreement had not been entered into within seven days from the date of notice of change as contemplated u/s 44(1) of the Bombay Industrial Relations Act. 9. Against this, the company preferred an appeal, being Appeal (BIR/IC) No. 10 of 1983, which was heard and allowed by the learned Member of the Industrial Court at Pune by her judgment and order dated July 31, 1984. By this order, the learned Member of the Industrial Court directed the company to sent the agreement again to the Additional Registrar, who was directed to register the said agreement. This is the subject-matter of challenge in this petition on behalf of the representative union. 10. Mr. By this order, the learned Member of the Industrial Court directed the company to sent the agreement again to the Additional Registrar, who was directed to register the said agreement. This is the subject-matter of challenge in this petition on behalf of the representative union. 10. Mr. Patankar, the learned Advocate appearing in support of the petition, has assailed the judgment and order of the Industrial Court by contending that the judgment discloses a patent error of law, inasmuch as the Industrial Court held that there was no time limit for entering into the agreement after notice of change was given. There is some merit in the criticism made by Mr. Patankar against the reasons given in the judgment of the Industrial Court. The Industrial Court does not say that there is no time limit for entering into the agreement after the notice of change is given. In paragraph 4 of the judgment, however, the Industrial Court proceeded to state that there was stipulated time as such for sending such memorandum of agreement to the Additional Registrar. Undoubtedly, the Industrial Court misunderstood the reasons given by the Additional Registrar for refusing to register the agreement. The Additional Registrar merely looked at the date of the agreement. He also looked at the date of the notice of change concluded that it was beyond the period of seven days as contemplated u/s 44(1) of the Bombay Industrial Relations Act. Therefore, he thought that the agreement was not in accordance with law. Looking merely from this point of view, these is substance in the criticism of Mr. Patankar when he says that the Industrial Court did not notice what the Additional Registrar himself had noticed, namely, that the agreement had not been signed within the time contemplated by Section 44(1) of the Bombay Industrial Relations Act. 11. This criticism, however, in our opinion, is mechanical, as indeed the order of the Additional Registrar itself was mechanical. Section 44(1) of the Bombay Industrial Relations Act does not fix an inflexible period of seven days for entering into the agreement by the parties after the notice of change has been given. 11. This criticism, however, in our opinion, is mechanical, as indeed the order of the Additional Registrar itself was mechanical. Section 44(1) of the Bombay Industrial Relations Act does not fix an inflexible period of seven days for entering into the agreement by the parties after the notice of change has been given. Section 44(1) says that if within seven days from the date of service of a notice u/s 42, or within such further period as may be mutually fixed by the employers affected and the representative of the employees affected, an agreement is arrived at in regard to the proposed change, a memorandum of such agreement signed by the employer or employers as well as by the representative of employees shall be forwarded in the prescribed manner to the Registrar. In other words, Section 44(1) itself contemplates that if an agreement is not arrived at within seven days from the date of the notice of change, the parties are not necessarily to retreat to their original position. They are free to continue the negotiations and they also free to sign the agreement after the end of the negotiations. If the parties sign the agreement beyond the period of seven days mentioned in Section 44(1), there is implicit in this act an acknowledgment on the part of the parties that they had agreed to continue the negotiations for a period beyond the period of seven days mentioned in Section 44(1) of the Bombay Industrial Relations Act. 12. That apart, in the instant case, there is a clear mention in the agreement itself that the parties had detailed discussions on August 8, 1981 and during those discussions there was consensus between the parties about the terms and conditions which were to be incorporated in the agreement which itself was to be entered into. This has been so stated in the second paragraph of the agreement itself. In other words, the agreement is not one of August 8, 1981. On August 8, 1981, there were discussions between the parties and during those discussions, certain terms and conditions, which were to be incorporated in an agreement which was to be entered into, had been agreed upon. So the agreement itself was entered into and signed on August 25, 1981. On August 8, 1981, there were discussions between the parties and during those discussions, certain terms and conditions, which were to be incorporated in an agreement which was to be entered into, had been agreed upon. So the agreement itself was entered into and signed on August 25, 1981. When this agreement speaks of the discussions held on August 8, 1981, in which discussions it was agreed to enter into an agreement at a later date, obviously the parties agreed to extend the time within which the agreement, as contemplated u/s 44(1) of the Bombay Industrial Relations Act, was to be entered into. The refusal of the Additional Registrar to register the agreement mechanically by looking at the dates of the notice of change and of the agreement discloses his refusal to exercise the jurisdiction vested in him by law. If he had looked at the agreement, we are sure, it would have been clear to him that the agreement dated August 25, 1981 was an agreement which had been entered into by the parties by extending the time as contemplated u/s 44(1) of the Bombay Industrial Relations Act. The refusal of the Additional Registrar to register the agreement on the ground that it was not entered into within seven days from the date of the notice of change is, therefore, untenable. 13. Mr. Shrikrishna, the learned Advocate appearing for the company, has also pointed out an additional reason as to why this refusal of the Additional Registrar is unsustainable. We have already mentioned that the petitioner union had addressed a letter dated October 2, 1981 to the Registrar, calling upon him not to register the agreement. In this letter, which is of three pages and which has been annexed to this petition as Ex 'D', there is not even a word of complaint on the part of the union that the agreement had not been entered into within the period contemplated u/s 44(1) of the Bombay Industrial Relations Act. It was nobody's case that the agreement was not signed within the period contemplated u/s 44(1). The Additional Registrar refused to register the agreement without even giving a chance to the company to show cause why the agreement, which has been sent by it for registration, should be registered. It was nobody's case that the agreement was not signed within the period contemplated u/s 44(1). The Additional Registrar refused to register the agreement without even giving a chance to the company to show cause why the agreement, which has been sent by it for registration, should be registered. We are satisfied, on the examination of the facts and circumstances of the case and on the clear language of the agreement itself, that the agreement has not been signed beyond the period contemplated u/s 44(1) of the Bombay Industrial Relations Act. The Additional Registrar could not have refused the registration on the ground mentioned by him. 14. Mr. Patankar, thereafter, insisted that the agreement itself is illegal, inasmuch as it deprives the employees of the rights and privileges to which they were entitled under the law. This was not the ground on which the Additional Registrar refused the registration. It is possible to leave the whole matter at large to be decided by the Additional Registrar, but since it involves a pure question of law, we have naturally thought it necessary to answer this question so that this litigation, which is pending over eight years, will come to an end. Mr. Patankar suggested that the agreement is illegal because, the agreement deprives the employees of the several benefits and privileges to which they are entitled under the law. Mr. Patankar thought that there is a transfer of the running business from the co-operative factory to the company and therefore, the employees, who will now be working in the company, must get the benefits of the continuity of service. In other words, they cannot be employed as new employees in the company. Their terminal benefits, when their services come to an end, must be, calculated on the basis that they are continuously in service from the dates on which they were in service of the co-operative factory. In short, all the benefits, which are available to the employees on the basis of the continuity of service, must be made available to them. The agreement provides that such benefits shall not be available to them. Hence, according to him, the agreement is illegal. 15. There is, in our opinion, a misconception of the law on the part of Mr. Patankar in this respect. The agreement provides that such benefits shall not be available to them. Hence, according to him, the agreement is illegal. 15. There is, in our opinion, a misconception of the law on the part of Mr. Patankar in this respect. When the business of A is transferred to B, all the business equipment and other things necessary for the running of the business are transferred for consideration. When such transfer of business takes place, obviously the employees are not transferred for the simple reason that the employees are not transferable commodity. No consideration for the transfer can be contemplated. The employment of the employees is with the previous employer. When he stops his business, he is no longer in a position to offer employment to his employees, with the result that employment of those employees comes to an end. Neither on facts nor in law the services of the employees can be transferred. This factual situation and the legal effect of this factual situation have been recognised in law and that is why a provision has been made in Section 25-FF of the Industrial Disputes Act. When such a transfer takes place, technically the erstwhile employer does not retrench the employees employed by him, but the practical effect is the cessation of the employment of those employees. Section 25-F of the Industrial Disputes Act did not take into consideration such a situation. Hence, the Legislature stepped in and provided in Section 25-FF of the Industrial Disputes Act that whenever the ownership or management of an undertaking is transferred, whether by agreement or by operation of law, from one employer to a new employer, every workman who has been in continuous service for not less than one year in that undertaking immediately before such transfer shall be entitled to notice and compensation in accordance with this provision of Section 25-F of the Industrial Disputes Act, as if the workmen had been retrenched. Whenever there is a transfer of ownership of an undertaking, the fact that the employment of the employees of the previous employer comes to an end is recognised by this legal provision. Whenever there is a transfer of ownership of an undertaking, the fact that the employment of the employees of the previous employer comes to an end is recognised by this legal provision. Since Section 25-F did not take care of such a situation, special provision was made in Section 25-FF to the effect that a situation created by such a transfer shall be treated as if it is a case of retrenchment and compensation may be accordingly awarded to the employees of the erstwhile employer. 16. The rationale behind the enactment of Section 25-FF of the Industrial Disputes Act has been explained in great details in Anakapalla Co-operative Agricultural and Industrial Society Limited Vs. Workmen, . It was accepted in that judgment that the first part of Section 25-FF postulates that on a transfer of the ownership or management of an undertaking, the employment of workmen engaged by the said undertaking comes to an end, and, therefore, it provides for the payment of compensation to the said employees because of the said termination of their services. It is also mentioned that no claim can be made against the transferee of the said concern. In other words, the employees of the erstwhile employer can make claims only against the said employer and if they have been taken over by the transferee of the concern, they cannot maintain any action against the transferee of the concern, except, of course, as provided in the proviso to Section 25-FF of the Industrial Disputes Act. 17. The propositions, which were discussed in the case of Anakapalle Co-operative Agricultural and Industrial Society Ltd. (supra), were briefly summarised by the Supreme Court in its later judgment, namely, Central Inland Water Transport Corporation Limited Vs. The Workmen and Another, (1974) 4 SCC 696 . It has been mentioned in paragraph 18 of this judgment as follows : "The effect of Section 25-FF which is explained by this Court in Anakapalla Co-operative Agricultural and Industrial Society Limited Vs. The Workmen and Another, (1974) 4 SCC 696 . It has been mentioned in paragraph 18 of this judgment as follows : "The effect of Section 25-FF which is explained by this Court in Anakapalla Co-operative Agricultural and Industrial Society Limited Vs. Workmen, 1963 SC 1489 is, so far as it is relevant, as follows : (i) the first part of the section postulates that on a transfer of the ownership or management of an undertaking, the employment of workmen engaged by the said undertaking comes to an end, and compensation is made payable because of such termination (p. 629); (ii) in all cases to which Section 25-FF applies, the only claim which the employees of the transferred concern can legitimately make is claim for compensation against their employers. No claim can be made against the transferee of the said concern, (p. 629); (iii) By the present Section 25-FF the Legislature has made it clear that if industrial undertakings are transferred, the employees of such transferred undertakings should be entitled to compensation, unless, of course, the continuity in their service or employment is not disturbed and that can happen, if the transfer satisfies the three requirements of the proviso. (p. 629-630) and (iv). Since Section 25-FF provides for payment of benefit on the basis that the services of the employees stand terminated, neither fair play nor social justice would justify the claim of the employees that they ought to be re-employed by the transferee (p. 630). That being the position in law u/s 25-FF, the Corporation can hardly make out a claim against the transferee Corporation either for compensation on termination of their service following the transfer or for re-employment. The claim at any rate of the employees in List II as against the Corporation u/s 25-FF was clearly misconceived." In view of this legal position clearly explained by the Supreme Court, all the arguments of Mr. Patankar based upon assumption that after the transfer of the undertaking from the co-operative factory to the company, there was in fact and in law continuity in service, are misplaced and we have not thought it necessary to examine these arguments in detail. 18. Indeed in the deed of surrender itself, it is mentioned that the original lessor, namely, the company, would take over in its employment of the employees of the co-operative factory as only new employees. 18. Indeed in the deed of surrender itself, it is mentioned that the original lessor, namely, the company, would take over in its employment of the employees of the co-operative factory as only new employees. Therefore, in fact there is no continuity of service. By operation of law, there is no continuity of service as explained by the Supreme Court in the two judgments referred to above. The employees who are represented by the petitioner union have, therefore, neither in law nor on facts any right to be treated as the employees being in continuous service. 19. Mr. Patankar's reliance upon N. J. Chavan v. P. D. Sawarkar 1958 (I) LLJ 36 , is also, in our opinion, misplaced. Mr. Patankar thought that this judgment lays down that upon the transfer of an undertaking from one employer to another, the continuity of service of the employees exists if the same employees continue to work under the new employer. This is not the ratio of this judgment. What was before the Division Bench in N. J. Chavan's case was the question of jurisdiction of the tribunal to direct, if it thought it necessary, that the employees who have been taken over in employment by the new employer should be given continuity of service. That it how in the latter part of the judgment, the Division Bench noted that the tribunal had wrongly proceeded by merely relying upon the doctrine of sanctity of contract. Proceeding further, the Division Bench said (p. 40) : "This doctrine governed the relations of employer and employees in the 19th Century but is now obsolete; and it is the duty of an Industrial Court or Tribunal to modify the contractual rights and obligations, if it becomes necessary to do so in the light of industrial legislation and legal decisions relating thereto." There is nothing in this judgment, as indeed there could not be, to indicate that merely because the employees of a previous employer continue to work for the subsequent employer on the transfer of an undertaking, there is continuity of service. If it were so, compensation provided in Section 25-FF would have been wholly redundant. That it is not so is recognised by the fact that the Parliament thought it fit to enact a provision like Section 25-FF of the Industrial Disputes Act. 20. The third criticism made by Mr. If it were so, compensation provided in Section 25-FF would have been wholly redundant. That it is not so is recognised by the fact that the Parliament thought it fit to enact a provision like Section 25-FF of the Industrial Disputes Act. 20. The third criticism made by Mr. Patankar is that the agreement ultimately arrived at is not in accordance with the notice of change. We will accept the proposition that the agreement which is arrived at must be in accordance with the notice or change, but we refuse to accept in the present case that the agreement arrived at is not in accordance with the notice of change. The notice of change only mentions that the strength of the employees of the company shall stand increased to 750. The agreement provides that the company shall employ 587 employees of the previous employer on fresh employment. The agreement also provides certain incidental matters. We do not see how it could be legitimately suggested that this agreement is not in accordance with the notice of change. It has not been argued by Mr. Patankar that the employment of 587 employees will result in the employment beyond the number of 750 contemplated in the notice of change. One criticism which Mr. Patankar levelled against this agreement, namely, that it deprives the employees of their rights and privileges under the law, has already been rejected by us earlier. We are, therefore, satisfied that this agreement is in accordance with the notice of change and is not illegal on the ground that it is not in accordance with the notice of change. 21. Before parting with the judgment, one cannot but be disturbed by the practical effect of the acceptance of the argument made by Mr. Patankar. If it had been held by us that the agreement was illegal, the employment of the persons under the agreement would have amounted to an illegal change and all the consequences of such declaration would have followed. Those consequences would have been totally to the detriment of the employees. It has not been shown that the agreement is in any manner detrimental to the employees. But for the agreement, the persons who have been employed by the company would not have found any employment. At the maximum, they would have been entitled to compensation u/s 25-FF of the Industrial Disputes Act. It has not been shown that the agreement is in any manner detrimental to the employees. But for the agreement, the persons who have been employed by the company would not have found any employment. At the maximum, they would have been entitled to compensation u/s 25-FF of the Industrial Disputes Act. To that compensation they were entitled despite this agreement with the company. Fortunately, on the correct interpretation of the facts and law, the agreement is not found to be illegal. 22. In the result, the petition fails and rule is discharged, but there will be no order as to costs.