CIVIL COURTS ARE NOT COMPETENT TO ADJUDICATE SUITS UNDER INDUSTRIAL DISPUTES ACT, 1947

[Mr. M. GOVINDARAJAN]

Industrial Dispute

Section 2(k) of Industrial Disputes Act, 1947 (‘Act’ for short) defines the expression ‘industrial dispute’ as any dispute or difference between employers and employers, or between employers and workmen, or between workmen and workmen, which is connected with the employment or non-employment or the terms of employment or with the conditions of labour, of any person.

The Act provides various methods of settling the industrial dispute such as through works committee, conciliation, courts of inquiry, labour courts, Tribunals and National Tribunals.  The Act also contains provisions for strike by trade union, lay off, lock out by employers and the method of redressal by the employees as well as the management.

Barring of civil jurisdiction

Section 9 of the Code of Civil Procedures provides that the jurisdiction of Civil Court with regard to a particular matter can be said to be excluded if there is an express provision or by implication it can be inferred that the jurisdiction is taken away. 

The Supreme Court, in PREMIER AUTOMOBILES LTD VERSUS KAMLEKAR SHANTARAM WADKE OF BOMBAY & ORS [1975 (8) TMI 124 - SUPREME COURT], held that, if the issue squarely falls within the ambit of the provisions of the Industrial Disputes Act, enforceable under that Act, then the remedy will be only under the said Act and Civil Court jurisdiction will be completely ousted.

In R.S.R.T.C. & ANR. VERSUS UGMA RAM CHOUDHRY [2005 (10) TMI 604 - SUPREME COURT] the Supreme Court opined that the civil court did not have jurisdiction to entertain a claim based on the Industrial Disputes Act and if any decree is passed by the court without jurisdiction, the same shall have no force of law.

In MILKHI RAM VERSUS HIMACHAL PRADESH STATE ELECTRICITY BOARD [2021 (10) TMI 478 - SUPREME COURT] the appellant was a daily wage employee under the Himachal Pradesh State Electricity Board (‘Board’ for short).  The Executive Engineer, vide his order dated 01.10.1985 dispensed with the services of the appellant.  Thus arised an industrial dispute in this case.  The appellant, instead of approaching the proper forum under the Industrial Disputes Act filed a civil suit before the Civil Court challenging the order of the Executive Engineer. 

The appellant, in the original civil suit, claimed that he had worked for 2778 days and he is eligible for regularization in the Board since he completed more than 270 days required for absorption in an establishment as per the provisions of industrial laws.  The Board contended that the appellant has not completed the number of days of continuous service as required for regularization.  The Civil Court has not considered the submissions put forth by the Board.  The Civil Court held that the appellant had rendered service for well above 240 days in one year and therefore his service could not have been terminated without complying with the statutory requirement.  The Civil Court, therefore, ordered for the reinstatement of the appellant along with the back wages payable by the Board.  The Civil Court also directed to Board to regularize the services of the appellant.

Being aggrieved by the judgment of Civil Court, the Board filed an appeal before the District Judge.  The jurisdiction of civil court was again questioned by the Board before the appellate court.  The District Judge observed that the question of jurisdiction is a mixed question of law and facts.  Since the litigation is continuing for long it would not be proper to relegate the case to the labor court.  The District Judge held that the workman is entitled to choose the remedy either before the Civil Court or before the Industrial Court.  The services of a daily wages was terminated, the same was treated to be a retrenchment without compliance of section 25F of the Act.  The District Judge upheld the judgment of Civil Court and it rejected the submissions of the Board on the question of jurisdiction.

Therefore the Board made the offer to appoint the terminated appellant to the post of Lower Division Clerk with effect from 01.09.2001.  The appellant report for duty but for various reasons the Board has not given effect to the joining of the appellant.   Therefore the appellant filed for execution of the decree before the Civil Judge.  The Board here also raised the jurisdictional issue.  The Board informed that all back wages were given to the appellant and he was also offered the post of Lower Division Clerk.  The Board informed that the appellant gave a conditional joining report for the reason that the same was not acted upon.  Therefore nothing is to be done for the execution of the decree.  The Civil Judge negated the contentions of the Board and directed the Board to execute the decree.

The Board filed a revision petition before the High Court against the order of Civil Judge.  The Board contended before the High Court that the Civil Court has no jurisdiction to adjudicate a claim arising out of the Industrial Dispute Act and the relief of the aggrieved employee could have been given granted only by the Industrial Court.  The decree awarded to the appellant is a nullity.  The appellant contended before the High Court that the Civil Court has ordered in his favor and also held that the Civil Court has jurisdiction to entertain the claim under the Act.    The High Court held that the civil court lacked inherent jurisdiction to entertain the suit based on the Act and the judgment and decree so passed, are nullity. It was further observed that the plea of decree being a nullity can also be raised at the stage of execution.  The High Court allowed the revision petition and set aside the decree passed in favor of the appellant.

Aggrieved against the revision order of the High Court, the appellant filed the present appeal before the Supreme Court.  It was argued by the appellant before the Supreme Court that-

• The appellant has rendered service as a daily wager since 11.12.1976 and his service ould not have been terminated without following the due process.
• Even when relief is claimed based on the provisions of the ID Act, the jurisdiction of the civil court is not entirely barred.

The Board submitted the following before the Supreme Court-

• The jurisdiction of Civil Court is ousted when claimed relief is founded on the Act.
• Since the Civil Court has no jurisdiction to entertain the claim of the appellant the decree passed is a nullity.
• No relief on the void decree can be claimed by the appellant.
• The appellant is adamant by not giving proper joining report when he was offered the post of Lower Division Clerk.
• The Board has already remitted the arrear of salary to the appellant.

The Supreme Court considered the submissions put forth by the parties to the appeal.  The only question to be decided by the Supreme Court is as to whether the suit before the Civil Court at the instance of terminated employee was maintainable. 

The Supreme Court observed that the appellant has founded his claim in the Civil Court on the provisions of the Act and therefore the employer is entitled to raise a jurisdictional objection to the proceedings before the Civil Court.  Although the jurisdictional objection was raised by the Board and a specific issue was framed against the employee, the issue was answered against the Board.  The Supreme Court did not accept the view propounded by the Courts below.  The Supreme Court opined that the Civil Court lacks jurisdiction to entertain suit structured on the provisions of the Act.  The decree in favor of the appellant is a legal nullity.  The Supreme Court upheld the order of the High Court.  The Supreme Court dismissed the appeal filed by the appellant.  However the Supreme Court directed the Board not to recover the arrears of the appellant already paid by the Board.