Messrs. Burmah Shell v. Labour Appellate Tribunal Of India

One of the questions referred under the provisions of the Industrial Disputes Act, as an industrial dispute between the petitioner company and its employees was the quantum of bonus payable to the workmen for 1952. The Workers' Union claimed that three categories of employees, the Depot superintendent, the Assistant Depot Superintendent and and the Lady Secretary, were also entitled to participate in the award of bonus as they were also “workmen” as defined by S. 2(s) of the Industrial Disputes Act. The company resisted that claim and pleaded that these three categories of employees were not workmen as defined by the Act, and that any claim on behalf of those employees would not be an “industrial dispute” within the cognizance of the Industrial Tribunal.

That identical question arose for determination with reference to an industrial dispute, in 1951 in I.D No. 2 of 1952, between the same parties, the company and the Workers' Union. The Industrial Tribunal held then that these three categories of employees, the Depot Superintendent, the Assistant Depo Superintendent and the Lady Secretary, fell outside the scope of the definition of “workmen” in the Industrial Disputes Act. The Appellate Tribunal reversed that finding. The correctness of the decision of the Appellate Tribunal was upheld by the High Court in W.P No. 405 of 1953, preferred by the company under Art. 226 of the Constitution for the issue of a writ of certiorari: Burma Shell Oil Storage and Distribution Co. of India Ltd. Madras v. Labour Appellate Tribunal of India and two others (1). The appeal preferred against that decision in W.P No. 405 of 1953 is still pending in this Court.

With reference to the claim of bonus for 1952, the company sought an opportunity to place all the evidence it had on record in support of its contention that these three categories of employees were not workmen as defined by the Industrial Disputes Act. The plea of the Union, that the principle of res judicata should apply and that the company should not be permitted to reopen the question, was upheld by the Industrial Tribunal, and on appeal by the Labour Appellate Tribunal.

The Company applied under Art. 226 of the Constitution for the issue of a writ of certiorari to set aside the order of the Labour Appellate Tribunal, W.P No. 936 of 1955. The company followed it up with presenting W.P No. 138 of 1956, in substance for the issue of a writ of mandamus to direct the Appellate Tribunal to hear and determine afresh the appeal preferred to it by the company against the award of the Industrial Tribunal.

What the Industrial Tribunal had to decide was the industrial dispute referred to it for adjudication under S. 10(1)(c) of the Industrial Disputes Act. The industrial dispute was the claim for bonus preferred by the employees. It is not every claim of an employee or even a group of employees that can be an industrial dispute within the meaning of the Industrial Disputes Act. The dispute should be between the employer and his workmen, workmen as defined by S. 2(s) of the Act. As incidental to the determination of the industrial dispute referred to it for adjudication the Industrial Tribunal had to decide whether the three categories of employees mentioned above were workmen as defined by the Act. In Burmah Shell Oil Storage and Distributing Co. of India Ltd., Madras v. Labour Appellate Tribunal of India Rajagopala Aiyangar, J. observerd:

“…………those who assail the validity of the award passed by the Tribunals functioning under the Industrial Disputes Act must prove before the Court that this preliminary basis for their jurisdiction exists; in other words that unless the Court is satisfied that the parties to a dispute stand in the relation of an employ er and workman as defined in the Act, the award is null and void as lacking in an essential preliminary to the jurisdiction of the Tribunal,”

The learned Judge observed:

“The contention raised on behalf of the petitioners that there should be an ‘industrial dispute’ falling within the definition of that expression in S. 2(k) of the Industrial Disputes Act, before the Government can make a reference under S. 10(1)(c), or the Industrial Tribunal can acquire jurisdiction by reason of such reference, is well founded. I also agree with the further submission………that the Court has the power to determine, whether this pre-requisite to the jurisdiction of Government and the Industrial Tribunal is satisfied.”

I respectfully agree with these observations. In fact, it was not disputed before me that the question whether these three categories of employees were workmen as defined by the Industrial Disputes Act, was what could be called a jurisdictional issue which it was within the competence of the Statutory Tribunals to decide. The correctness of the finding of the Statutory Tribunal on Such a jurisdictional issue is open to examination by this Court to proceedings under Art. 226 of the Constitution for the issue of a writ of certiorari. It was that well settled principle that Rajagopala Aiyangar, J. re-stated in the passage I have extracted above: see also Maharashtra Sugar Mills v. State of Bombay (2).

The finding of the Appellate Tribunal, the correctness of which is challenged by the petitioner was:

“………in our opinion in order to achieve finality of judgment and in the interest of industrial peace, the same question should not be permitted to be vexed twice over except for any substantial or material change in the circumstances. If as conceded before us there has been no material change in the duties since after the previous decision, it should stand as binding and the company is precluded to deny the categories concerned to be workmen within the meaning of the Act.”

Thus, the jurisdictional issue, whether the three categories of employees were workmen as defined by S. 2(s) of the Industrial Disputes Act, was decided by the Appellate Tribunal wholly on the application of the principle of res judicata. If that basis failed, it would be a case of the exercise of the jurisdiction by the Appellate Tribunal being vitiated by failure to take all the relevant evidence into consideration. It would even amount, in the circumstances of this case, to a refusal to exercise jurisdiction. Was the Appellate Tribunal right in deciding the issue on the sole basis of res judicata is the limited question I have to consider.

Which was the decision which the Appellate Tribunal held concluded the question at issue as a matter already adjudged: Res judicata? The plea of res judicata could be founded only on the decision of the Appellate Tribunal in the appeal preferred to it against the award of the Industrial Tribunal in I.D No. 2 of 1952. Learned Counsel for the respondents urged that what the Appellate Tribunal held in this case was that the decision of the High Court in W.P No. 405 of 1953 was conclusive of the question at issue. The Appellate Tribunal recorded in paragraph 16 of its judgment:

“The award of the Industrial Tribunal that these categories were not workmen was to this extent set aside………Against this decision of the Appellate Tribunal the company filed the Writ Petition No. 405 of 1953 in the High Court of Judicature at Madras where on a thorough examination of the case it has been held by an order dated 20th April 1954, in dismissing the writ petition, that the decision of the Appellate Tribunal is perfectly correct.”

Then followed a discussion on the question whether the principle of res judicata could be invoked and the Appellate Tribunal concluded in paragraph 17 of its order that the contention should be upheld. There was no express finding recorded by the Appellate Tribunal that it was the decision of the High Court in W.P No. 405 of 1953 that was final, and it was that decision that barred any further investigation in the subsequent proceedings of the claim of the company that those three categories of employees were not workmen.

The learned Advocate General, who appeared for the company, was well founded in his contention, that as an industrial dispute itself is not within the jurisdiction of the High Court to decide, the decision on one of the collateral issues, whether the dispute is between an employer and workmen, to constitute that dispute an industrial dispute within the meaning of the Industrial Disptes Act, is also within the jurisdiction of the Statutory Tribunals created by the Industrial Disputes Act and by the Industrial Disputes Appellate Tribunal Act. The High Court had no exclusive or even concurrent jurisdiction to decide an industrial dispite or the issues incidental thereto. No doubt the correctness of the decision of the Appellate Tribunal, that the three categories of employees were workmen, came up for consideration in W.P No. 405 of 1953. But it was a limited jurisdiction that the High Court exercised in those proceedings under Art. 226 of the Constitution, in which the relief asked for was the issue of a Writ or certiorari. The scope of that jurisdiction was explained by the Supreme Court in Bari Vishnu Ramath v. Syed Ahmed Ishaque . The learned Judge observed:

“According to the common law of England, certiorari is a high prerogative writ issued by the Court of the King's Bench or Chancery to inferior Courts or Tribunals in the exercise of supervisory jurisdiction with a view to ensure that they acted within the bounds of their jurisdiction. To this end, they were commanded to transmit the records of a cause or matter pending with them to the superior Court to be dealt with there, and if the order was found to be without jurisdiction it was quashed. The Court issuing certiorari to quash however, could not substitute its own decision on the merits, or give directions to be complied with by the Court or the Tribunal. Its work was destructive; it simply wiped out the order passed without jurisdiction, and left the matter there.”

In T.C Basappa v. Nagappa , Mukherjea J. dealing with this question observed:

“In granting a writ of certiorari the superior Court does not exercise the power of an Appellate Tribunal. It does not review or reweigh the evidence upon which the determination of the inferior Tribunal purports to be based. It demolishes the order which it considers to be without jurisdiction or palpably erroneous but does not substitute its own view for those of the inferior Tribunal. The offending order or proceeding so to say is put out of the way as one which should not be used to the detriment of any person. Vide per Lord Cairns in Walsall's Overseers v. Land N.W Railway Co. (3).”

Thus, though the High Court held in W.P No. 405 of 1953 that the decision of the Appellate Tribunal in the appeal preferred to it against the award in I.D No. 2 of 1952 was correct, that did not result in the substitution of the finding of the High Court for that of the Appellate Tribunal. The learned Advocate General also referred to the decision of the Privy Council in Toronto Railway Co. v. Corporation of the City of Toronto (4). The relevant observations were at page 815. Nor did the order of the Appellate Tribunal with its finding merge in the order of the High Court in W.P No. 405 of 1953. It was not the High Court that was the Court of competent jurisdiction to decide an issue in an industrial dispute. That jurisdiction was vested only in the Statutory Tribunals. The proceedings in the High. Court under Art. 226 of the Constitution were not proceedings for adjudication of an industrial dispute. The plea of res judicata in this case, therefore, must be rested only on the decision of the Appellate Tribunal in the appeal against the award in I.D No. 2 of 1952.

In the view I have taken for the basis for the plea of res judicata, it may not be necessary to discuss the scope of Sankaralinga Nadar and Bros v. Commissioner of Income-tax, Madras (5), or that of any of the other decisions under the Income-tax Acts of England and India where the limitations on the application of res judicata with reference to the proceedings under the Income-tax Act were considered. The position was summed up with reference to England in Konstam's Income-tax Act (12th Edn.), para 410. The learned author observed:

“The determination of an appeal against an assessment for one year does not prevent the making of an additional assessment for the same year, if new facts are discovered; nor, on the other hand, does it create an estoppel by res judicata so as to prevent a point that has already been raised in one appeal from being raised on appeal against the assessment for a subsequent year.”

These observations were based on Inland Revenue Commissioners v. Sneath . In para 413 the learned author with reference to Sneath's case and Hoystead v. Commissioner of Taxation , summed up:

“It seems very doubtful whether a decision on a case stated with regard to a former assessment is conclusive with regard to an assessment for a later year on the same person, except, perhaps, where the question of liability depends on personal status—it clearly is not so if the facts are in any way different.”

But, as I stated, it is not these principles that can apply to a decision of High Court called upon to grant a writ of certiorari.

I have held that the question before the Appellate Tribunal, whether the three categories of employees were workmen as defined by the Industrial Disputes Act was a jurisdictional issue, on the determination of which depended the jurisdiction of the Industrial Tribunal to which the industrial dispute had been referred under S. 10(1)(c) of the Industrial Disputes Act. The finding of the Appellate Tribunal was that they were workmen as defined by the Act. S. 16 of the Industrial Disputes Appellate Tribunals Act, XLVIII of 1950, results in substituting the finding of the Appellate Tribunal, for that of the Industrial Tribunal. That was the effect in the appeal arising from the award in I.D No. 2 of 1952. Does such a finding on a collateral issue attract the principle of res judicata in subsequent proceedings under the Industrial Disputes Act before the same Statutory Tribunals is the question.

The answer to the question, in my opinion, should be in the negative.

The learned Advocate General cited the decision of the Privy Council in Heptulla Bros. Ld. v. Thakore . In that case one set of proceedings between the plaintiff and the defendants ended before the Rent Control Board, constituted under the Ordinances in Kenya, where the defendants claimed they were the tenants of the plaintiff. The plaintiff then commenced the action in the Supreme Court of Kenya, which eventually led to the appeal to the Privy Council. The trial judge overruled the plea of the defendants, that their status as tenants was res judicata as a result of the earlier proceedings before the Rent Control Board, and the learned Judge held that the relationship between the plaintiff and the defendant was not that of landlord and tenants but that of licensor and licensee. The Court of Appeal sustained the plea of res judicata. Their Lordships of the Privy Council reversed the decision of the Court of Appeal. Dealing with the scope of the proceedings before the Rent Control Board their Lordships observed at page 296:

“It [S. 5(1)(n) of the Ordinance of 1949 does not give to the Board the power to determine what civil matters and questions arise under the Ordinance. The Board have in any particular case to be satisfied that a relationship of landlord and tenant does exist as a preliminary to bringing the Ordinance into operation, but that is a function merely incidental to the application of any section of the ordinance that is invoked and not a power conferred by any section of the Ordinance.”

Their Lordships continued:

“On this view it is unnecessary to deal with various aspects of the plea of res judicata which were canvassed before their Lordships' Board. The matter is really ruled by the following passage in the judgment of Lord Esher M.R in Regina v. Commissioners for Special Purposes of the Income-tax, , ‘When an inferior Court or Tribunal or body, which has to exercise the power of deciding facts, is first established by Act of Parliament, the legislature has to consider what powers it will give that Tribunal or body. It may in effect say that, if a certain state of facts exists and is shown to such Tribunal or body before it proceeds to do certain things, it shall have jurisdiction to do such things, but not otherwise. There it is not for them conclusively to decide whether that state of facts exists, and, if they exercise the jurisdiction without its existence, what they do may be questioned, and it will be held that they have acted without jurisdiction. But there is another state of things which may exist. The legislature may entrust the Tribunal or body with a jurisdiction, which includes the jurisdiction to determine whether the preliminary state of facts exists as well as the jurisdiction, on finding that it does exist, to proceed further or do something more. When the legislature are establishing such a Tribunal or body with limited jurisdiction, they also have to consider, whatever jurisdiction they give them, whether there shall be any appeal from their decision, for otherwise there will be none. In the second of the two cases I have mentioned it is an erroneous application of the formula to say that the Tribunal cannot give themselves jurisdiction by wrongly deciding certain facts to exist, because the legislature gave them jurisdiction to determine all the facts, including the existence of the preliminary facts on which the further exercise of their jurisdiction depends; and if they were given jurisdiction so to decide, without any appeal being given, there is no appeal from such exercise of their jurisdiction’.”

Their Lordships held that the case before them fell within the first of the two types of cases mentioned by Lord Esher. Their Lordships held:

“The question of the relationship of landlord and tenant cannot, therefore, be made res judicata by a finding of the Rent Control Board if a superior Court decides that the facts to constitute that relationship do not exist. The finding of the Rent Control Board in these circumstances can never be anything more than a collateral finding which cannot raise a plea of res judicata.”

The principle laid down by the Privy Council in Heptulla Bros. Ld. v. Thakore , should, in my opinion, apply to negative the plea of res judicata put forward by the Union and accepted by the Appellate Tribunal. The decision of the Appellate Tribunal in the prior proceedings, that the three categories of employees, the Depot Superintendent, the Assistant Depot Superintendent and the Lady Secretary, came within the scope of “workmen” as defined by S. 2(s) of the Act, was a decision which fell within the first category of cases to which Lord Esher referred, the principle of which decision was approved of by their Lordships of the Privy Council in Heptulla Bros Ltd. v. Thakore . That in the present case it was before the same Statutory Tribunal but in subsequent proceedings that the plea of res judicata was advanced does not affect the principle to apply. There was no doubt the statutory finality accorded to the award of the Industrial Tribunal in I.D No. 2 of 1952 as modified by the Appellate Tribunal; see S. 16 of Act XLVIII of 1950. But that statutory finality is not enough to sustain the claim, that a decision on every one of the collateral issues decided in I.D No. 2 of 1952 or in the appeal therefrom will operate as res judicata when the question arises again as a collateral issue in subsequent proceedings, even in subsequent industrial disputes. The prior decision is relevant in the subsequent proceedings but it is not conclusive.

The learned Advocate General pointed out that in Shivnandan Sharma v. Punjab National Bank Ltd. , a similar question was raised as to the scope of earlier decisions of Statutory Tribunals; see the observations at page 410. But that question was left undecided. Their Lordships of the Supreme Court examined the evidence and came to the conclusion, that the Tribunal was right in holding that the appellant in that case was an employee of the Bank. The learned Advocate General relied on this decision to support his contention that the correctness of the finding of a Statutory Tribunal on a jurisdictional issue is open to correction. But it must be observed that the proceedings before the Supreme Court in that case were by way of appeal by special leave granted by the Supreme Court.

Learned Counsel for the respondent referred to the observations of Bhagwati, J., in Manibhai Hathibhai v. C.W.E Arbutnot , in support of his contention, that the decision of the Appellate Tribunal was at the worst an erroneous decision, and that such an erroneous decision was not open to correction in proceedings for the issue of a writ of certiorari. The learned Judge observed:

“A point as to res judicata is one which does not go to the root of jurisdiction. The Tribunal may have and can have jurisdiction to determine the disputes between the parties. Nonetheless, it may be barred from entertaining certain points of dispute or issues between the parties as being barred by res judicata whether the particular point in dispute or issue is res judicata or not lies to be determined by the Tribunal itself. A wrong decision by the Tribunal as to a certain point of dispute or issue being res judicata does not oust the jurisdiction of the Tribunal. It only amounts to a wrong decision on a point which falls to be determined by the Tribunal itself. A Tribunal which has jurisdiction to decide a particular matter is entitled to decide it rightly or wrongly, and if it decides it wrongly, the proper remedy is to file an appeal against the decision of the Tribunal. The remedy is by way of an appeal against that decision and not by way of challenging the jurisdiction of the Tribunal itself. This, in my opinion, is the correct position as regards this point of res judicata which has been urged by the petitioners.”

The learned Judge pointed out that the decision of the Tribunal in question there could have been corrected by way of appeal. I have already referred to the principles laid down by Lord Esher, M.R, in Regina v. Commissioners for Special Purposes of the Income-tax , which were approved of by the Privy Council in Heptulla Bros Ltd. v. Thakore . If the observations of Bhagwati, J., applied to the second of the two classes of cases discussed by Lord Esher, M.R, there will be nothing further to be said. But, if the learned Judge intended that the principles he laid down should apply to the first class of cases also, with all respect to the learned Judge, I beg leave to differ. Where the jurisdiction of a Statutory Tribunal depends on the correct determination of a jurisdictional issue, the Tribunal cannot give itself jurisdiction by deciding that issue wrongly, unless, as pointed out by Lord Esher, M.R, that jurisdiction also is specifically conferred on the statute which created the Tribunal. I have already pointed out that a decision of an Industrial Tribunal or Appellate Tribunal on a collateral issue, whether what was referred to the Industrial Tribunal was an industrial dispute at all, would fall within the first class of cases referred to by Lord Esher, M.R If that be the real position, the basis on which the wrong decision was reached may not be material. Whether it was an appreciation of all the relevant factors or the single factor of res judicata that led to the wrong decision, if the decision on the jurisdictional issue is wrong, it is open to correction, in proceedings under Art. 226 of the Constitution. That such a decision on a jurisdictional issue is open to correction may be taken as well settled law: See State of Bombay v. Maharashtra Sugar Mills . The principle laid down by the High Court in that case was affirmed on appeal by the Supreme Court in Maharashtra Sugar Mills v. State of Bombay . I have already referred to Shivnandan Sharma v. Punjab National Bank Ltd., (6).

The Appellate Tribunal, in my opinion, was wrong in deciding the question at issue, whether the three categories of employees, Depot Superintendent, Assistant Depot Superintendent, and Lady Secretary, were workmen as defined by S. 2(s) of the Industrial Disputes Act, on the sole ground that the decision of the Appellate Tribunal in prior proceedings between the same parties attracted the principle of res judicata and barred a further investigation of the question. The petitioner company should have been given the opportunity it sought to place all the relevant evidence on record before the Statutory Tribunal, in this case the Appellate Tribunal, decided the issue.

The rule nisi Issued in W.P No. 936 of 1955 will be made absolute and that part of the judgment of the Labour Appellate Tribunal, which dealt with the claim in question will be set aside. That by itself should result in the appeal preferred to the Appellate Tribunal by the petitioner company having to be disposed of afresh. That specific relief is sought by the petitioner in W.P No. 138 of 1956. The rule nisi issued in W.P No. 138 of 1956 will also be made absolute to the extent indicated above, and a writ of mandamus will issue to direct the Appellate Tribunal to hear and determine afresh the appeal preferred to it by the petitioner.

No order as to costs.

V.C.S