Login
  • Bookmark
  • PDF
  • Share
  • CaseIQ

Municipal Council, Akola v. Second Labour Court, Nagpur, And Others

Bombay High Court
Feb 19, 1975
Important Paras
Please sign up to view Important Paras.
Smart Summary (Beta)

Judgment Summary: Dharmadhikari, J.

Factual and Procedural Background

This writ petition was filed by the Chief Officer, Municipal Council, Akola (petitioner) challenging an order of the Second Labour Court, Nagpur in Industrial Disputes Cases Nos. 273 to 442 of 1968 dated 23 August 1969 (and also an order dated 9 September 1969 as recorded in the opinion). The respondents were 170 employees of the Municipal Council, Akola.

The employees filed applications under S. 33C(2) of the Industrial Disputes Act, 1947 claiming minimum wages payable under a Government notification dated 14 August 1965, which had been made applicable to local authority employees. Prior to instituting the S.33C(2) proceedings, the employees had filed an application before the Minimum Wages Authority under the provisions of the Minimum Wages Act. Because of the limitation period prescribed by the Minimum Wages Act, the employees restricted that earlier claim to the period within limitation and filed a pursis stating: "The applicants do not press for condonation of delay. Claim for six months' arrears be determined as they are entitled under law."

On the basis of that pursis the Minimum Wages Authority recorded an order, described in the opinion as dated 9 December 1966, which stated that "The present application is not pressed by the applicants. The application is dismissed. The file be fixed is for W.S for six months' arrears prior to the date of application." (The opinion also later refers to an order dated 9 December 1969 when recounting events.)

The principal procedural dispute before the High Court concerned (a) whether the Labour Court's decision on a preliminary point — that the earlier proceedings before the Minimum Wages Authority did not operate as res judicata — was correct, and (b) whether the Labour Court erred in deciding the merits of the employees' S.33C(2) claims without giving the Municipal Council a reasonable opportunity to present its case. The Labour Court had fixed the cases for hearing on a preliminary point on dates recorded in the opinion as 27 June 1969 (para. 5) and 28 June 1969 (para. 6) and informed the parties that an order on the preliminary point would be passed at Nagpur on 5 July 1969; despite that, the Labour Court issued an order dated 23 August 1969 in which it not only decided the preliminary point but also decided the whole matter on merits.

Legal Issues Presented

  1. Whether the order of the Minimum Wages Authority (in the earlier proceedings under the Minimum Wages Act) operates as res judicata or otherwise bars the employees from claiming minimum wages for the same period in proceedings under S. 33C(2) of the Industrial Disputes Act.
  2. Whether the employees are estopped (including by the joint pursis or by invocation of Order 2, Rule 2 CPC principles) from pursuing claims for earlier periods in S. 33C(2) proceedings because they restricted the earlier claim before the Minimum Wages Authority to the period within limitation.
  3. Whether the Labour Court committed jurisdictional or procedural error by deciding the merits of the S.33C(2) claims without giving the Municipal Council a reasonable opportunity to put forward its case.

Arguments of the Parties

Appellant / Petitioner (Municipal Council) — as represented by Sri Mohta

  • Submitted that the employees had earlier filed an application under S. 20 of the Minimum Wages Act and that the order of the Minimum Wages Authority (dismissing the application as not pressed and limiting determination to six months) operates as res judicata against the employees in subsequent proceedings under S. 33C(2).
  • Argued that because the employees had restricted their earlier claim and did not press for condonation of delay, they were estopped from now claiming wages for the earlier period in S. 33C(2) proceedings; the joint pursis and conduct of the parties should prevent the subsequent claim.
  • Contended that principles incorporated in Order 2, Rule 2 of the Code of Civil Procedure should apply to bar the present claim (i.e., the employees' failure to pursue the earlier claim constitutes an abandonment that should preclude the later claim).
  • Also argued procedurally that the Labour Court erred by deciding the merits when the case had been fixed only for argument on the preliminary point.

Respondents (Employees) — as represented by Sri Kukdey

  • Did not dispute the procedural fact that the case had been fixed for the hearing of the preliminary point only; conceded that the Labour Court had informed the parties that the order on the preliminary point would be passed at Nagpur.
  • No detailed counter-arguments on res judicata or estoppel are recorded in detail in the opinion; the opinion records the concession regarding the scope of the hearing date rather than an extensive affirmative argument on the merits of the S.33C(2) claim in this writ petition.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Athani Municipality v. Labour Court, Hubli [(1969) 1 SCC 873 : A.I.R. 1969 S.C. 1335] That no limitation period is prescribed for filing applications under S. 33C(2) of the Industrial Disputes Act. The Court relied on this to distinguish the jurisdictional limits of the Minimum Wages Authority (which is subject to the Minimum Wages Act limitation) from the Labour Court under S. 33C(2) (which can entertain claims irrespective of that statutory limitation).
Union of India v. Samuel Peters [1975-II L.L.N 52] (decided 15 January 1974) That a claim rejected by a statutory authority on the ground of limitation (Payment of Wages Authority) does not operate as res judicata to prevent a subsequent claim under S. 33C(2); the earlier authority was not an exclusive tribunal for the subsequent claim. The Court applied the reasoning in that case to hold that the Minimum Wages Authority's inability to entertain claims beyond its limitation does not preclude the Labour Court from entertaining the same claims under S. 33C(2); therefore res judicata did not apply.
Workmen of the Straw Board Manufacturing Company, Ltd. v. Straw Board Manufacturing Company, Ltd. [1974-II L.L.N 102] That while principles of res judicata (S. 11 CPC) apply to industrial adjudication where possible, technical and strictly civil procedural rules should not be allowed to outweigh substantial justice in industrial disputes; res judicata must be applied with regard to the real character of the controversy. The Court invoked this principle to reject the application of Order 2, Rule 2 CPC and overly technical res judicata-based bars in industrial adjudication, emphasizing that the periods claimed in the two proceedings were distinct and that the earlier proceeding did not decide the same substantial question.

Court's Reasoning and Analysis

The Court addressed two distinct aspects: (A) procedural irregularity in the Labour Court deciding the merits without giving opportunity, and (B) the legal question whether the earlier proceedings before the Minimum Wages Authority precluded the S.33C(2) claim by operation of res judicata or estoppel.

A. Procedural fairness: The opinion notes that the Labour Court had fixed the cases for hearing on a preliminary point only (the opinion records dates as 27 June 1969 and 28 June 1969). Arguments on that preliminary point were heard and the parties were told that an order on that point would be passed at Nagpur. Despite this, the Labour Court issued a later order (dated 23 August 1969) in which it not only decided the preliminary point but also disposed of the matter on merits. The High Court held that deciding the merits without giving the Municipal Council an opportunity to put forward its case was "obviously illegal" and liable to be quashed.

B. Res judicata, limitation and estoppel: The Court analyzed the interaction between S.33C(2) of the Industrial Disputes Act and the limitation regime of the Minimum Wages Act. Relying on Athani Municipality, the Court noted that S.33C(2) carries no statutory limitation, whereas the Minimum Wages Act does. Consequently the Minimum Wages Authority lacks jurisdiction to entertain claims barred by the Minimum Wages Act unless delay is condoned, but the Labour Court under S.33C(2) may entertain such claims at any time.

The Court applied the reasoning in Union of India v. Samuel Peters to conclude that a previous authority's rejection of a claim on limitation grounds does not amount to a decision on the substantive claim and therefore does not attract res judicata in the subsequent S.33C(2) proceedings. The opinion quotes the Samuel Peters passage emphasizing that the earlier authority was not an exclusive forum for the issue and that the question of limitation before the earlier forum "does not arise in the proceeding under S.33C(2)."

The Municipal Council's contention that the employees had abandoned their claim for earlier periods (by not pressing condonation and by restricting the pursis to six months) was examined. The Court found from the "bare reading" of the pursis and the Minimum Wages Authority's order that the employees had not given up the claim for the earlier period; they had merely limited the earlier application to what was within the Minimum Wages Authority's competence. Hence, the employees were not estopped from asserting the earlier period in S.33C(2) proceedings, and the earlier order did not operate as res judicata.

The Court also rejected the applicability of Order 2, Rule 2 CPC, describing those provisions as "technical and artificial" rules not apt to be mechanically applied to industrial adjudication. Citing the Straw Board decision, the Court emphasized that principles of res judicata must be applied in a manner sensitive to the real character of industrial disputes and should not let technical civil-law considerations outweigh substantial justice.

Holding and Implications

Holding:

This writ petition is partly allowed.

The Court's specific dispositional rulings are:

  • The Labour Court's decision on the preliminary point — that the order of the Minimum Wages Authority does not operate as res judicata in the S.33C(2) proceedings — is upheld.
  • The Labour Court's decision on the merits of the employees' S.33C(2) claims is set aside because the Labour Court decided the merits without giving the petitioner Municipal Council a reasonable opportunity to present its case.
  • The matter is remanded to the Labour Court, Akola, for rehearing and for deciding the employees' claims on merits after giving a reasonable opportunity to both parties to put forward their respective cases.
  • There will be no order as to costs in the circumstances of the case.

Implications: The direct effect is that the employees may pursue their S.33C(2) claims afresh before the Labour Court despite earlier proceedings before the Minimum Wages Authority which were limited by statutory limitation; however, the merits must now be decided only after affording both parties a fair opportunity to be heard. The opinion reiterates established principles that S.33C(2) is not subject to the Minimum Wages Act's limitation and that technical civil procedural bars (such as Order 2, Rule 2 CPC) are not to be mechanically applied in industrial adjudication. The Court did not purport to lay down a novel precedent beyond applying and following the authorities it cited.

Show all summary ...

Dharmadhikari, J.:— The present writ petition has been filed by the Chief Officer, Municipal Council, Akola, against the order passed by the Second Labour Court. Nagpur, in Industrial Disputes Cases Nos. 273 to 442 of 1968, dated 23 August 1969, as also the order, dated 9 September 1969. In all 170 employees of the Municipal Council, Akola, filed an application under S. 33C (2) of the Industrial Disputes Act, 1947, referred to hereinafter as the Act, claiming minimum wages from the petitioner-municipal council as per the Government notification, dated 14 August 1965, which was made applicable to the employees of the local authorities. Prior to the filing of the present applications the employees had also filed an application before the Minimum Wages Authority. However, because of the period of limitation prescribed by the Minimum Wages Act, they restricted their claim to the period which was within limitation and filed a pursis in the following terms:

“The applicants do not press for condonation of delay. Claim for six months' arrears be determined as they are entitled under law.”

In view of this pursis, the Minimum Wages Authority parsed an order, dated 9 December 1966, in the following terms:

“The present application is not pressed by the applicants. The application is dismissed. The file be fixed is for W.S for six months' arrears prior to the date of application.”

It seems thereafter the matter was settled between the parties so far as the claim within limitation was concerned. In the present proceedings, apart from the contentions raised on behalf of the municipal council on merits of the claim, a preliminary objection was raised that the present applications are not maintainable because the employees had already filed an application under S. 20 of the Minimum Wages Act and the said order operates as res judicata.

2. From the record it seems that the Second Labour Court fixed the cases for hearing on 27 June 1969, for hearing on preliminary point. The arguments were heard only on the preliminary point and the Court informed the parties that the order on the preliminary point would be passed at Nagpur on 5 July 1969. However by an order, dated 23 August 1969, the Labour Court not only decided the preliminary point, but decided the whole matter on merits.

3. It is not disputed by Sri Kukdey, the learned counsel for the employees, before us that the case was fixed for hearing on 28 June 1969, for hearing the arguments of the parties on the preliminary point only. On that date the arguments were heard on the preliminary point and the learned Judge informed the parties that the order on the preliminary point would be passed at Nagpur. From this it is clear that without giving any opportunity to the petitioner municipal council to put forward their case, so far as the merits of the claim are concerned, the matter was decided by the Labour Court. Therefore, so far as the decision of the Labour Court on merits of the claim is concerned it is obviously illegal and is liable to be quashed.

4. However, it is contended by Sri Mohta, the learned counsel for the petitioner, that the decision given by the Labour Court on the preliminary point is also illegal. It is contended by the learned counsel that the employees had filed an application under S. 20 of the Minimum Wages Act before the Minimum Wages Authority making a claim for the whole period. With the said application they had also filed an application for condonation of delay. The said application was resisted on behalf of the municipal council. Ultimately the employees did not press their application for condonation of delay and passed a pursis claiming arrears for six months only to which they were entitled under law. On the basis of the pursis the Minimum Wages Authority passed an order, 9 December 1969, and dismissed the application filed by the employees for condonation of delay. In this view of the matter, it is not open for the employees now to make a claim relating to the same period in the proceedings under S. 33C(2) of the Act. According to Sri Mohta, the order passed by the Minimum Wages Authority, dated 9 December 1969, operates as res judicata or, in any case, in view of the conduct of the employees in not pressing their application for condonation of delay and in view of the joint pursis filed by the parties relating to the claim made by the employees, which was within the period of limitation, was concerned, the employees are now estopped from claiming the minimum wages in these proceedings under S. 33C(2) of the Act. It is not possible for us to accept these contentions.

5. As observed by the Supreme Court in Athani Municipality v. Labour Court, Hubli [(1969) 1 SCC 873 : A.I.R 1969 S.C 1335], no limitation is prescribed for filing application under S. 33C(2) of the Act. However, a period of limitation has been prescribed by the Minimum Wages Act. Therefore, so far as the Authority constituted under the Minimum Wages Act is concerned, it has no jurisdiction to entertain the claim made by the employees which is barred by limitation, unless the delay in filing the application is condoned by the Authority. That is not the case so far as the Labour Court constituted under the Industrial Disputes Act is concerned. As no period of limitation is prescribed for filing an application under S. 33C(2) of the Act, it is open for the Labour Court to entertain the claims made by the employees which are barred by limitation under the provisions of the Minimum Wages Act. This aspect of the matter has been considered by this Court in Union of India v. Samuel Peters [1975-II L.L.N 52], decided on 15 January 1974. In that case the employee Samuel Peters, had filed an application under the Payment of Wages Act for his wages which were beyond the period of limitation prescribed by the Payment of Wages Act. The Payment of Wages Authority held that the part of the claim made by the employee was barred by limitation. The appeal filed by the employee before the Assistant Judge was dismissed and the writ petition on the same point was also dismissed by the High Court. Having failed to recover his wages for the period which was beyond limitation, the employee in that case filed an application for recovery of the amount under S. 33C(2) of the Act. In view of this fact, a contention was raised that the decision of the Payment of Wages Authority operates as res judicata and the Labour Court could not award the claim of the employee which was made by him before the Payment of Wages Authority and was rejected by it on the ground of limitation. While dealing with the question, the Division Bench of this Court observed in 1975-II L.L.N 52 at 55 (in para. 9):

“The claim prior to January 1962, was rejected by the Payment of Wages Authority on the ground that the said claim could not be entertained as it was beyond a period of six months which was within the period of limitation and on that ground that claim was rejected. It is contended that since that claim has been rejected by the Payment of Wages Authority, the Industrial Court could not go into that question. Here no question of any res judicata can arise. The Payment of Wages Authority could not entertain a claim which was beyond the period of six months and could not exercise any jurisdiction so far as that claim was concerned unless it thought fit to condone the delay. Under S. 33C (2) of the Industrial Disputes Act, there is no question of any limitation. Such a claim could be entertained at any time and in a proceeding under S. 33C (2) do issue could arise as to whether a particular claim is barred by limitation or not. The issue in the earlier case before the Payment of Wages Authority was whether the claim prior to January 1962, was barred by limitation. Such an issue could not be entertained in a proceeding under S. 33C (2). Therefore, there is no question of trying the same issue as was tried and decided in the earlier proceeding, even assuming that that prior Court was a Court of exclusive jurisdiction. In the first place in order that a decision of an authority which is not the same as a subsequent authority, (sic) that earlier authority must be the exclusive authority of competent jurisdiction. This is not the case here. As we have said earlier the Payment of Wages Authority is not the exclusive authority but is an alternative and independent authority, but the Labour Court is an authority under S. 33C (2) of the Industrial Disputes Act.

Secondly, the issue which was tried in the proceeding before the Payment of Wages Authority does not arise in the proceeding under S. 33C (2) and in such a case the question of operation of the principles of res judicata cannot also arise.”

In our opinion these observations will apply to the present case also. In the present case the employees did not press their claim which was beyond the period of limitation under the provisions of the Minimum Wages Act. They restricted their claim to a period of six months which could be determined by the Minimum Wages Authority, as they were entitled to claim the same under the Minimum Wages Act. From the bare reading of the pursis filed before the Minimum Wages Authority and the order passed thereon it is quite clear that the employees had not given up their claim for the earlier period. Even the joint pursis which was filed later on by the parties was restricted to the period which was within limitation. The claim made by the employees which was beyond the period of limitation was not given up by them and, therefore, it cannot be said that they are now estopped from claiming the said amount in the proceedings instituted under S. 33C(2) of the Act, nor the order passed by the Minimum Wages Authority in those proceedings can operate as res judicata in the present proceedings. Before the Minimum Wages Authority a claim was restricted to a period of six months which was within limitation. In the present proceedings under S. 33C (2) of the Act the employees are not claiming wages for the said period, but they are claiming their wages for the period different from the one for which a claim was made before the Minimum Wages Authority. In this view of the matter in our opinion, the question of res judicata will not arise having regard to the facts and circumstances of the present case.

6. However, it was then contended by Sri Mohta that as the employees have failed to make a claim for the earlier period in the proceedings instituted under the Minimum Wages Act, they are now estopped from claiming the wages for the said period and their claim is barred by the principles incorporated in order 2, rule 2 of the Code of Civil Procedure. In our opinion, there is no substance in this contention also.

7. The provisions of order 2, rule 2, Code of Civil Procedure, are not applicable to proceedings instituted under S. 33C (2) of the Act or to the proceedings instituted under the Minimum Wages Act. It is a technical and artificial rule which should be restricted to the proceedings which are governed by the principles of the Code of Civil Procedure. Though the principles of res judicata are made applicable to the industrial adjudication in contradistinction to civil proceeding, extremely technical considerations, usually invoked in civil proceedings, may not be allowed to outweigh substantial justice to the parties in an industrial adjudication. This aspect of the matter has been considered by the Supreme Court in Workmen of the Straw Board Manufacturing Company, Ltd. v. Siraw Board Manufacturing Company, Ltd. [1974-II L.L.N 102]. In this context the Supreme Court observed as under (in Paras. 28 to 30 at pages 112 and 113):

“28. It is now well established that, although the entire Civil Procedure Code is not applicable to industrial adjudication, the principles of res judicata laid down under S. 11 of the Code of Civil Procedure, however, are applicable, wherever possible, for very good reasons. This is so since multiplicity of litigation and agitation and re-agitation of the same dispute at issue between the same employer and his employees will not be conducive to industrial peace which is the principal object of all labour legislation bearing on industrial adjudication. But, whether a matter in dispute in a subsequent case had earlier been directly and substantially in issue between the same parties and the same had been heard and finally decided by the Tribunal will be of pertinent consideration and will have to be determined before holding in a particular case that the principles of res judicata are attracted.

29. The learned counsel faced with the problem drew our attention to rule 18 of the Uttar Pradesh Industrial Tribunal and Labour Courts Rules of Procedure, 1967, which provides that after the written statements and rejoinders, if any, of both the parties are filed and after examination of parties, if any, the Industrial Tribunal or Labour Court may frame such other issues, if any, as may arise from the pleadings. It is clear that these issues are framed by the Tribunal to assist in adjudication. While it cannot be absolutely ruled out that in a given case such an additional issue may sometimes attract the principle of res judicata, the heart of the matter will always be:

What was the substantial question that came up for decision in the earlier proceeding?

Some additional issues may be framed in order to assist the Tribunal to better appreciate the case of the parties with reference to the principal issue which has been referred to for adjudication and on the basis of which, for example, as to whether it is an industrial dispute or not, the jurisdiction of the Tribunal will have to be determined. The reasons for the decision in connexion with the adjudication of the principal issue cannot be considered as the decision itself to attract the plea of res judicata. The earlier question at issue must be relevant and germane in determining the question of res judicata in the subsequent proceedings. The real character of the controversy between the parties is the determining factor and in complex and manifold human relations between labour and capital giving rise to diverse kinds of ruptures of varying nuances no cast iron rule can be laid down.

30. Some distinction, of whatever shade or magnitude, may have to be borne in mind in application of the principles of res judicata in industrial adjudication in contradistinction to civil proceeding. Extremely technical considerations, usually invoked in civil proceeding, may not be allowed to outweigh substantial justice to the parties in an industrial adjudication.”

If this principle is applied to the present proceedings it is obvious that the matter in dispute in the present proceedings is not the same as was before the Minimum Wages Authority. The period for which the claim is made is distinct and separate. So far as the claim made before the Labour Court in the proceedings under S. 33C (2) is concerned, the same was not directly or substantially in issue between the same parties in the previous proceedings, nor it had been heard and finally decided by the Minimum Wages Authority. In this view of the matter, in our opinion, the Labour Court was right in coming to the conclusion that the order passed by the Minimum Wages Authority will not operate as res judicata in the present proceedings'. However, as already observed by us, the matter was decided by the Labour Court on merits without giving a reasonable opportunity to the petitioner municipal council to put forward their case. In this view of the matter, this writ petition will have to be partly allowed.

8. In the result, this writ petition is partly allowed and the order passed by the Labour Court on the preliminary point is upheld. However, the order passed by the Labour Court on the merits of the claim is set aside and the case is remanded back to the Labour Court, Akola, for deciding the claim of respondents-employees on merits after giving a reasonable opportunity to both the parties to put forward their respective case. However, in the circumstances of the case, there will be no order as to costs.