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T. Rajaiah v. Southern Roadways, Ltd.
Summary of Legal Opinion
Factual and Procedural Background
This batch comprises 28 civil revision petitions filed by employees of respondents 1 and 2. Individually, the petitioners instituted 28 suits before the District Munsif, Tirumangalam, challenging transfers effected by the employer (Southern Roadways Ltd.) allegedly made with mala fide intention and not for administrative reasons. Alongside the suits, the petitioners moved interlocutory applications under Order 39, Rules 1 and 2, Civil Procedure Code, seeking ad interim injunctions restraining respondents 1 and 2 from giving effect to the orders of transfer pending disposal of the suits.
Respondents filed written statements in the suits and counters in the interlocutory applications. The District Munsif dismissed the interlocutory applications on the ground that the Civil Court lacked jurisdiction. The Principal District Judge, Madurai, confirmed the Trial Court's order and decree on appeal. These confirmations prompted the present civil revision petitions.
The employer, Southern Roadways Ltd., is a public limited company with several branches (Madras, Coimbatore, Bangalore, Madurai, Tiruchi, Tirunelveli, Salem, Secunderabad, Vijayawada). Petitioners allege that the company operated a management-favoured union ("T.V.S. Workers' Union"), that genuine representative trade union activity at the Bangalore branch led to victimisation of active workers, and that from mid-1989 the petitioners were transferred to various places as a result of vindictive or victimising conduct by management.
The statement filed on behalf of the petitioners lists 28 transferred employees and records the origin and destination of each transfer. The summary in the statement shows the number of transfers from various branches (for example: out of 204 members at Madras only one was transferred; out of 196 at Bangalore seven were transferred; out of 56 at Madurai eleven were transferred, etc.). Paragraph 6A records that several petitioners have since settled claims or retired; those facts were communicated to petitioners' counsel on 14 December 1990.
Legal Issues Presented
- Whether the Civil Court has jurisdiction to entertain the suits filed by the petitioners challenging transfers alleged to be mala fide, or whether the remedy lies exclusively under the Industrial Disputes Act (i.e., whether the jurisdiction of the Civil Court is ousted).
Arguments of the Parties
Petitioners' Arguments
- The petitioners argued that the right to challenge a transfer made mala fide existed as a pre-existing common-law right, and where a statute recognises a pre-existing right the jurisdiction of the Civil Court is not ousted. The jurisdiction is ousted only where a statute creates a new right and necessarily excludes the common-law remedy.
- They submitted that the right to question a mala fide transfer was a pre-existing right and later re-enacted under the Industrial Disputes Act (referred to the insertion of Section 2(ra) and the Fifth Schedule), giving the workman an election of remedies (either remedy under the Act or common-law remedy in the Civil Court).
- Counsel for petitioners relied on the Supreme Court decision in Premier Automobiles Ltd. v. Kamalakar Shantaram Wadke (to classify the case under a favourable category) and cited unreported regional decisions (T. Natarajan v. Indian Oxygen Ltd. and Indian Oil Corporation Ltd. v. S.K. Murthy) where, according to the petitioners, relief was granted to aggrieved employees under similar circumstances.
- They also contended that mere initiation of proceedings under the Act did not amount to an election such that the Civil Court jurisdiction would be barred — specifically arguing that unless they succeeded in having the matter referred under the Act, their statutory steps could not be treated as an election precluding civil remedies.
Respondents' Arguments
- The respondents pleaded that the petitioners are "workmen" within the meaning of Section 2(s) of the Industrial Disputes Act and that their remedy is to raise an industrial dispute under the Act; hence the Civil Court has no jurisdiction and such jurisdiction is impliedly barred by the statute.
- The respondents relied on judicial authority (notably Kerala Rubber and Reclaims Ltd. v. P.A. Sunny) and the framework of Premier Automobiles to contend that the right asserted by the petitioners is statutory in character and, if a statutory forum exists for that right, the Civil Court is excluded.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Premier Automobiles Ltd. v. Kamalakar Shantaram Wadke (1976 I LLN 1 : 1975-II Lab LJ 445) | Sets out a four-category analysis to determine whether a right is a common-law right or a right created by the Industrial Disputes Act, and whether a statutory forum is provided; guides whether civil jurisdiction is ousted. | The court used the Premier framework to classify the present facts and concluded that the petitioners' case does not fall under category (2) of Premier Automobiles but instead falls within the category where statutory remedies apply, thus supporting exclusion of civil jurisdiction. |
| Kerala Rubber and Reclaims Ltd. v. P.A. Sunny (1989 I LLN 676) | Applied Supreme Court principles from Premier Automobiles: examines whether the right is common law or statutory and whether the Act provides a forum; considered transfer mala fide as falling within statutory unfair labour practices. | The court found the facts of the present case "squarely akin" to Kerala Rubber and Reclaims and applied the Kerala High Court's ratio on all fours to conclude that the Industrial Disputes Act provides the appropriate forum and the Civil Court lacks jurisdiction. |
| T. Natarajan v. Indian Oxygen Ltd. (Civil Revision Petition No. 956 of 1983; decided 7 Dec 1984) — (unreported) | In that case, Justice Sathiadev concluded the dispute was civil in nature and did not fall under the Industrial Disputes Act, invoking Section 9 of the Code of Civil Procedure. | The present court distinguished that case as not involving transfer for mala fide reasons; it held that the peculiar circumstances of T. Natarajan made it a civil matter, whereas the present case involves statutory prohibition against mala fide transfers. |
| Indian Oil Corporation Ltd. v. S.K. Murthy (Appeal against Order No. 204 of 1976; decided 16 Feb 1979) — (unreported) | Cited by petitioners as a decision where Justice Sathiadev (according to petitioners) granted relief to an aggrieved employee under similar circumstances. | The petitioners relied on it as supportive authority; the court considered the reliance but, on overall comparison with other authorities (Premier and Kerala Rubber), found the present facts to fall within the statutory regime rather than the civil category illustrated by that decision. |
Court's Reasoning and Analysis
The court proceeded in a series of analytical steps grounded in statutory text and precedent:
- Identification of the central legal question: whether the Civil Court has jurisdiction to entertain suits challenging transfers alleged to be mala fide.
- Examination of the factual matrix: the petitioners alleged systematic victimisation and transfers effected in mid-1989; the petitioners had initiated proceedings under the Industrial Disputes Act seeking reference by the Government, but the Government declined to refer the matter.
- Statutory analysis: the court examined the Industrial Disputes Act provisions. It identified Section 25-T (prohibition of unfair labour practice) together with the definition of "unfair labour practice" in Section 2(ra) and the Fifth Schedule (item (7): "To transfer a workman mala fide from one place to another, under the guise of following management policy") as creating a statutory right in favour of workmen against mala fide transfers.
- Characterisation of the right: the court held that the obligation not to effect mala fide transfers was not recognised at common law and that this protection is a right created by the Industrial Disputes Act (i.e., a statutory right rather than a mere common-law right).
- Forum inquiry using precedent: applying the Supreme Court's four-category approach in Premier Automobiles and the exposition in Kerala Rubber and Reclaims Ltd. v. P.A. Sunny, the court examined whether the Act also provides a forum for enforcement of this statutory right. The court noted that matters falling under mala fide transfer are within the schedules that vest jurisdiction in Labour Courts/Industrial Tribunals (Second Schedule/Third Schedule), with mala fide transfer disputes falling under the Second Schedule (i.e., matters for Labour Court).
- Effect of petitioners' prior statutory steps: the petitioners had initiated proceedings under the Act (applied for reference to the Government). The court held that such initiation constitutes a "proceeding" for the purposes of election of remedies. Therefore, having elected to pursue redress under the Act (even though the Government declined to refer the matter), the petitioners could not subsequently invoke Civil Court jurisdiction.
- Rejection of petitioners' contrary contention: the court rejected the argument that only successful reference under the Act would amount to an election; it reasoned that treating unsuccessful initiation as no "proceeding" would be contrary to reason, and initiation to obtain redress under the Act must be construed as a proceeding. Consequently, petitioners who elect the statutory route cannot later invoke civil jurisdiction.
- Application of precedent: the court held that the facts fall within the ratio of the Kerala High Court decision (Kerala Rubber and Reclaims Ltd. v. P.A. Sunny) and not within the favourable category relied upon from T. Natarajan or the second category of Premier Automobiles. On this basis, the Civil Court lacked jurisdiction to entertain the suits.
Holding and Implications
Holding: The court dismissed the petitions. The core ruling is emphasized as follows:
DISMISSED
Implications:
- Direct effect on the parties: The civil revision petitions (and thereby the underlying civil suits challenging transfers in the Civil Court) were dismissed for want of jurisdiction. The petitioners are constrained to seek redress, if any, under the Industrial Disputes Act. The court directed that each party shall bear their own costs.
- Broader precedent: The opinion applies existing authorities (Supreme Court in Premier Automobiles and the Kerala High Court in Kerala Rubber and Reclaims Ltd. v. P.A. Sunny) to the facts; the judgment does not purport to create a new principle beyond applying those precedents. (The opinion reasons that the statutory right against mala fide transfer is created by the Industrial Disputes Act and the Act provides the appropriate forum for enforcement.)
1. In this batch of 28 civil revision petitions, the employees of respondents 1 and 2 are the petitioners. Individually they have filed 28 suits on the file of the District Munsif, Tirumangalam, questioning their transfer from the places where they were working to some other place, allegedly, with mala fide intention by the respondents, and not for any administrative reasons. Along with the suits, they have filed inter-locutory applications under Order 39, Rules 1 and 2, Civil Procedure Code, for an ad interim injunction restraining respondents 1 and 2 from giving effect to the orders of transfer pending disposal of the suits.
2. Respondents 1 and 2 filed their written statement in the suits as well as counter in the interlocutory applications.
3. The learned District Munsif dismissed the interlocutory applications on the ground that the Civil Court has no jurisdiction. On appeal, the order and decree of the Trial Court were confirmed by the Principal District Judge, Madurai. Hence these revisions.
4. The point that arises for consideration in these revision petitions is whether the Civil Court has got jurisdiction to entertain the suits filed by the revision petitioners?
5. Certain basic facts, which are not in dispute may first be stated. Southern Roadways Ltd. is a public limited company, of which the first respondent is the Secretary and the second respondent is the Chairman and Managing Director. The Southern Roadways Ltd. has got branches at Madras, Coimbatore, Banglore, Madurai, Tiruchi, Triunelveli, Salem, Secunderabad, Vijayawada. According to the petitioners, the Southern Roadways Ltd. operated its own trade union under the banner "T.V.S. Workers' Union" whose office-bearers were nominated by the management itself, and manipulated elections were held inside the company's premises, where the management would ensure that each branch of the Company's candidate was not opposed by any body and in the event of any opposition from any such genuine representative, the opposing candidate, as a rule, will be victimised. Under these circumstances, the petitioners and their companions individually never recognised the "T.V.S. Workers' Union'' as a union at all.
6. While so, at Bangalore, all the piece-rate loadmen, who worked for decades were converted into contract labourers by imposing fraudulent settlements, and their services were terminated. This led to the workmen of the Bangalore Branch to form a genuine representative trade union, and in that, steps to form a new union was taken in February 1987. Respondents 1 and 2 by systematic intelligence identified certain workmen, who were showing enthusiasm and taking active interest in the formation of the union, and victimised those workmen by gross abuse of disciplinary powers and within a span of two weeks, eighteen workmen were suspended by levelling false charges. In the wake of this victimisation, Southern Roadways Employees' Union, of which this revision-petitioners arc members, was formed at Bangalore. Right from the formation of the said union, the respondents have been systematically victimising the members of the Southern Roadways Employees' Union by abusing the disciplinary powers, abusing the powers of transfer and creating financial disincentives. As a matter of fact, in the middle of 1989, these petitioners were transferred to various places, in pursuance of the vindictive attitude on the part of respondents. The statement filed by learned counsel for the petitioners shows the transfer effected in respect of the petitioners, and it is as follows:
S.No.
C.R.P.No.
Name of workman transferred from to
1. 3443/90 T.Rajaiah Bangalore Vijayawada
2. 3444/90 A. Ruban Bangalore Vijayawada
3. 3445/90 R.Dhamodaran Madras Vijayawada
4. 3446/90 T. V.Narayanan Madurai Bangalore
5. 3447/90 R.Dhamodaran Tiruchi Mangalore
6. 3448/90 V. Santhanam Madurai Secunderabad
7. 3449/90 C.Palanikumar Bangalore Mangalore
8. 3450/90 K.Palaniappan Madurai Vijayawada
9. 3451/90 A.Rajagopal Bangalore Secunderabad
10. 3452/90 V.S.Raju Coimbalore Vijayawada
11. 3453/90 G.Ramadas Madurai Secunderabad
12. 3454/90 G. Subramaniam Tirunelvcli Madurai
13. 3455/90 S. Devanathan Tiruchi Vijayawada
14. 3456/90 K. Mcenakshisundaram Madurai Vijayawada
15. A. Santhanam Coimbatorc Secunderabad
16. A.Kangaraj Madurai Vijayawada
17. S. Selvapcrumal Madurai Bangalore
18. R. Shanmugasundaram Bangalore Secunderabad
19. N. Sivanupandian Tirunelvcli Secunderabad
20. R. Karuppusamy Tiruchi Secunderabad
21. S.Jcyaraj Madurai Vijayawada
22. R.PahulayanNair Madurai Mangalore
23. N R. Krishnamurthi Bangalore Secunderabad
24. V. Muthuswami Madurai Salem
25. S.Sundarajan Bangalore Vijayawada
26. R. Ravisankar Salem Secunderabad
27. K.Subbiah Vijayawada Mangalore
28. N. Gopalkrishnan Madurai Vijayawada From the statement filed by learned counsel for revision petitioners, it is seen out of 204 members of the Southern Roadways Trade Union at Madras only one was transferred from Madras; out of 150 at Coimbatore, two were transferred; out of 196 at Bangalore, seven were transferred; out of 56 at Madurai, eleven were transferred; out of 58 at Tiruchi, three were transferred; out of 20 at Tirunelveli, two were transferred; and out of 48 at Salem, one was transferred. Out of 47 from Secundcrabad, none was transferred and out of 3 7 at Vijayawada, one was transferred. 6A. Totally 28 employees have been transferred to various places. Out of these 28, the petitioners in Civil Revision Petition Nos. 24 and 28 of 1991, 3443, 3446, 3447, 3448, 3450 of 1990 and 34 of 1991 and 3453 and 3456 of 1990 have settled their claims. The petitioners in Civil Revision Petition Nos. 3455 of 1990 and 29 of 1991 have retired. The aforesaid facts were communicated to the learned counsel for the petitioners on 14 December 1990.
7. The respondents in their written statement as well as in the counter filed in the interlocutory applications, pleaded that the petitioners are "workmen" within the meaning of Section 2(s) of the Industrial Disputes Act (hereinafter referred to as the Act) and their remedy is only to raise an industrial dispute under the Act, that the Civil Court has no jurisdiction to entertain the suits and that the jurisdiction of the Civil Court is impliedly barred.
7-A. The learned counsel for the petitioners contended that where a statute recognises a pre-existing right, the jurisdiction of the Civil Court is not ousted, and the jurisdiction of the Civil Court will be ousted only in cases where a new right is created under the statute. According to him, the right to question a transfer by an employee on the ground of mala fide is a right that existed under the general and common law and not under the Act, and in case, 5 it is re-enacted by a statute with a special remedy, unless the statute contains the words ne cessarily excluding the common law remedy, the workman has his choice of proceeding either under the statute or under common law. In that view of the matter, according to him, the right to question a transfer was a pre-existing right prior to the coming into force of the Act, and later on, re-enacted by inserting Section 2(ra) and Fifth Schedule.
8. On this point, both the parties relied on the decision in Premier Automobiles Ltd, v. Kamalakar Shantaram Wadke 1976 I LLN 1:1975-II Lab LJ 445. According to the learned counsel for the petitioners, the facts of the case on hand will fall under the second category out of the four categories enumerated in the deci sion, whereas according to the learned counsel for the respondents, the facts of the case will fall under the third category. Learned counsel for the petitioners also cited two unrcported ju dgments of this Court rendered in T. Natarajan v. Indian Oxygen Ltd. (Civil Revision Petition No. 956 of 1983 decided on 7 December 1984 and Indian Oil Corporation Ltd. v. S.K. Murthy (Appeal against Order No. 204 of 1976 decided on 16 February 1979), wherein Sathiadev, J., according to the petitioner granted relief to an aggrieved employee under similar circumstances.
9. Learned counsel for the respondents, on the other hand, relied upon the judgment in Kerala Rubber and Reclaims Ltd., v. P.A. Sunny 1989 I LLN 676.
10. Since the rival contentions reduces itself to the aforesaid point, one has to go through these judgments and see to which category the petitioners belong.
11. Justice Sri Sathiadev granted relief in Appeal against Order No. 204 of 1976 solely on the ground that the plaintiff therein could not have raised an industrial dispute under Section 2-A of the Act and the same would have blossomed out as an industrial dispute if union has chosen to expouse the plaintiff s cause therein. But, as the Act now stands, to transfer a workman mala fide from one place to another under the guise of administrative or management policy is stated to be an "unfair labour practice" by virtue of Section 2(ra) of the Act. In the Civil Revision Petition No. 956 of 1983, the plaintiff filed the suit for declaration that defendants are not entitled to withhold or stop the wages of the plaintiff on the alleged disobedience of not doing work from a particular day onwards or any other day without providing necessary materials, tools, helpers, etc., for carrying out the work and in contravention of the standing orders. It is not a case of transfer for mala fide reasons. From the peculiar circumstances of that case, the learned Judge came to the conclusion that the dispute therein involved is one of civil nature and that would come within Section 9 of the Code of Civil Procedure and would not fall under the Industrial Disputes Act. But that is not the case here. The facts of the case in Kerala Rubber and Reclaims Ltd. v. P. A. Sunny 1989-I LLN 676, are squarely akin to the facts of this case, wherein the learned Chief Justice, Mahmath, after summarising the law as enunciated by the Supreme Court in Premier Automobiles case 1976 I LLN 1,: 1975-II Lab LJ 445 referred to above, observed as follows in Paras 4 to 7, at pages 678 and 679:
".. .In the light of the principles laid down by the Supreme Court what is required to be examined is as to whether the right claimed by the respondent to enforce which he has filed the suit is a common law right or a right created by the Industrial Disputes Act. If the right claimed is not a common law right but a right created by the Industrial Disputes Act, the further question for examination is as to whether the statute which has created the right has itself provided for a forum for enforcement of such a right. If the right sought to be enforced is the creature of the Industrial Disputes Act and the forum is also created by that Act for enforcing that right, the Civil Court will have no jurisdiction to entertain the suit. If, however, the right sought to be enforced by the respondent is a common law right and the same is also recognised under the Industrial Disputes Act, then one can avail of the remedy either of approaching the Civil Court for relief or the remedy available under the Industrial Disputes Act. If, however, the right is only a common law right and is not recognised by the Industrial Disputes Act, the remedy would be only to approach the Civil Court. If, however, the right which the respondent seeks to enforce is a creature of the Industrial Disputes Act and the Industrial Disputes Act does not provide a remedy for enforcing that right, then also the respondent would be entitled to seek his remedy in the ordinary Civil Court.
5. So far as the frame of the suit is concerned, the order of transfer is challenged on the ground that the transfer of the respondent by the petitioners is mala fide and the result of victimisation and unfair labour practice and is, therefore, illegal and unjust. It is not pleaded that the respondent is claiming any right recognised by the common law as such. Learned counsel for the respondent was also not in a position to point out if the right claimed is recognised as a common law right. Common law does not recognise any limitation on the power of the master to transfer his employees on grounds of ma/a fides, victimisation or unfair labour practice. We must also bear in mind that a contract of service is not specifically enforceable under the ordinary common law. If the master is not willing to employ the servant, he cannot be compelled to employ him. But, after the Industrial Disputes Act was enacted, new rights and liabilities have been created restricting the unfettered common law rights of the master in dealing with the workmen in this behalf. Under the Industrial Disputes Act, notwithstanding the unwillingness of the master, he can be forced to continue the servant in his service.
6. So far as the question of transfer is concerned , the Legislature has made express provision to safeguard the interests of workmen. Section 25-T in Chap. V-C of the Industrial Disputes Act contains a prohibition against unfair labour practice and reads as follows:
"25-T. Prohibition of unfair labour practice. - No employer or workman or a trade union, whether registered under the Trade Unions Act, 1926 (16 of 1926), or not, shall commit any unfair labour practice,"
7. The expression 'unfair labour practice' has been defined in Section 2(ra) of the Act to mean any of the practices specified in the Fifth Schedule to the Act. The Fifth Schedule enumerates the various unfair labour practices statutorily recognised. Item (7) of the Fifth Schedule, which is relevant, may be extracted as follows:
"7. To transfer a workman mala fide from one place to another, under the guise of following management policy."
11A. Thus, it becomes clear that there is a statutory prohibition engrafted in the Industrial Disputes Act prohibiting transfer of a workman mala fide from one place to another under the guise of following managment policy. Thus, a valued right has been created by the statute in favour of the workman from being subjected by his employer to transfers mala fide under the guise of following a management policy. This is a right which has been created by the Industrial Disputes Act in favour of the workman restricting the unfettered right of the management in the matter of effecting transfer of his employees. The obligation not to transfer a workman mala fide from one place to another under the guise of management policy was not recognised under the common law. That right is now created by the statute. The right which the petitioners claim to enforce in the suit flows from Section 25-T of the Industrial Disutes Act read with item (7) of Fifth Schedule.
12. The next question for examination is as to whether the Industrial Disputes Act has created a forum for enforcing this statutory right in the matter of transfer as defined in Section 2(ra) read with Section 25-T of the Act. Section 7-A deals with matters that can be dealt with by Industrial Tribunals. The matters that can be dealt with by Industrial Tribunals are enumerated in the Third Schedule and the matters that can be dealt with by a Labour Court are enumerated in the Second Schedule. Item (6) of Second Schedule deals with all matters other than those specified in the Third Schedule. In that view of the matter, disputes that arise as a result of mala fide transfer squarely fall under the Second Schedule, and in fact, the petitioners have initiated proceedings as an industrial dispute. However, the Government declined to refer the matter. The petitioners have once again applied to the Government for review of their decision. In these circumstances, even if the facts of this case gives a right to election to the petitioners, petitioners having elected to get redress of their grievance by initialing proceedings under the provisions of the Act, I find, they are not entitled to invoke the jurisdiction of the Civil Court.
13. Learned Counsel for the petitioners contended that unless they succeed in getting the matter referred, it cannot be brought under the doctrine of election. Initiation of proceedings, according to him, under the Act will not be a step-in-aid. I do not agree with the learned counsel for the petitioners. If his contention is accepted, that only if he succeeds in getting the matter referred to the forum created by Act it can be construed as initiation of proceedings and in case if they fail in their attempt it will not be taken as a "proceeding." it will be opposed to reason. Any initiation to get redress under the provisions of the Act should be construed as a "proceeding" and having elected to initiate a proceeding, the petitioners cannot be permitted to say that the initiation made by them is not a "proceeding" since they failed in their attempt to get the matter referred to the forum created under the Act. I find even if the contention of the learned counsel for the petitioners is accepted, having elected to get redress under the provisions of the Act and having failed in their attempt, they have no right to invoke the jurisdiction of the Civil Court. Apart from this, I find the facts of the case will not fall under category (2) out of the four categories stated by the Supreme Court in Premier Automobile's case 1976 I LLN 1 : 1975-II Lab LJ 445 referred to above. The facts of the case squarely fall within; the facts of the case referred to in the judgment of the Kerala High Court in 1989 I L.L.N.676 and the ratio decidendi laid down by the Kerala High Court will apply to the facts of this case on all fours. As such I find the Civil Court has no jurisdiction to entertain the suits.
14. In the result, all the civil revision petitions are dismissed. However, I directe each party to bear their own costs.
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