Ashoka Marketing, Ltd. v. Labour Court, Delhi, And Another

V.S Deshpande, J.:— The interesting question for consideration is whether the orders “dismissed as withdrawn” passed on an application made under section 33-C (2) of the Industrial Disputes Act, 1947 and on an application made under section 19 (2) of the slum Areas (Improvement and Clearance) Act, 1956 (hereafter called “Slums Act” in short) barred a subsequent application on the same cause of action.

2. Respondent 2 workman R.K Sharma had made an application to the Labour Court under section 33-C (2) of the Industrial Disputes Act which was dismissed for default on November 11, 1970. He made an application for setting aside the said dismissal for default but did not pursue the said application. A second application on the same cause of action was made by him on January 4, 1971. The employer contested the application and the case was fixed for evidence of parties on April 27, 1971. Instead of leading evidence, the workman stated before the Labour Court that he wanted to withdraw his application with a view to filing a fresh application. The employer stated that the fresh application would be subject to the objections raised in defence to the second application, namely, that the second application was not maintainable as an earlier application had been dismissed for default. The Labour Court, however, did not proceed with the recording of the evidence and dismissed the application by making the order “application is dismissed as withdrawn”. The third application was made by the workman on April 29, 1971. The employer took up the plea that the dismissal of the first application for default and of the second application as withdrawn barred the institution of the third application. The Labour Court, however, held that there was no decision on merits between the parties and, therefore, the principle of res judicata did not apply. While the third application was pending before the Labour Court, the employer filed the present writ petition praying that the preliminary finding given by the Labour Court that the dismissal of the two earlier applications did not bar the making of the third application should be quashed. C.M (MAIN) 331/73.

3. The landlord (respondent 2 herein) had filed an application under section 19 (2) of the slums Act against the tenant (petitioner herein) praying that the Competent Authority (Respondent 1 herein) may permit the landlord to institute eviction proceedings against the tenant. This application was dismissed as withdrawn on September 26, 1967 by the Competent Authority because the landlord stated that he did not want to proceed with it. A subsequent application was made by the landlord and the requisite permission was granted by the Competent Authority on August 2, 1973. The petitioner has challenged the said order, inter alia, on the ground that the dismissal of the first application as withdrawn without obtaining a permission to file a fresh application on the same cause of action barred the landlord from making the second application.

4. Shri D.K Aggrawal and Shri M.L Rawal, learned counsel for the petitioners, urged the following contentions: —

(1) That the order dated July 24, 1971 stating “application is dismissed as withdrawn” by the Labour Court was virtually a decision on merits because the application had been fixed for recording evidence and was dismissed at that stage because the workman could not adduce evidence in support of his claim. It, therefore, bars the subsequent application on the general principle of res judicata which is applicable to proceedings before the Labour Court.

(2) The principle underlying Order XXIII rule 1 Civil Procedure Code that the withdrawal of a suit without obtaining permission for instituting a fresh suit on the same cause of action bars the institution of such a fresh suit is applicable to the proceedings before the Labour Court under the Industrial Disputes Act and before the Competent Authority under the Slums Act thus barring the institution of the fresh applications on the same causes of action before the Labour Court and the Competent Authority.

(3) The dismissal of the previous applications was, at any rate, final so far as the Labour Court and the Competent Authority were concerned and fresh applications could not be instituted before them on the same causes of action.

And (4) Assuming that the fresh applications before the Labour Court and the Competent Authority were not barred for any of the three causes listed above, the Labour Court and the Competent Authority should refuse to entertain them because they amounted to abuse of quasi-Judicial process.

5. The following considerations are relevant in deciding on the above contentions: —

(a) The principle of res judicata is not confined to section 11 Civil Procedure Code and other statutory provisions [Gulab Chand v. H.P Sharma ILR (1974) 1 Delhi 190] (1). It is a general principle of public policy and private justice which ensures firstly that a matter which is decided finally after hearing the parties should not be allowed to be re-agitated and secondly that the person in whose favour it has been decided should not be subjected to further harassment merely because his opponent has superior power, wealth or resources (Spencer-Bower and Turner on Res Judicata, Second Edition, page 10).

(b) Is Order XXIII rule 1 Civil Procedure Code prohibiting the institution of a fresh suit on the same cause of action after a previous suit on it has been withdrawn based on any such general principle ? It would appear that in the English common law the plaintiff had a right to abandon his claim by voluntary withdrawal from the contest at the trial for the express purpose of avoiding any judgment and reserving his liberty to bring a fresh action. This was called a non-suit. When the plaintiff was so non-suited, there was no decision on the merits of his case as all. This basic requirement of res judicata and finality was lacking when the plaintiff was non-suited. The plaintiff could, therefore, bring a fresh suit on the same cause of action without being barred either by the principle of res judicata or that of finality. This part of the common law was changed by Order XLI rule 6 of the Rules of the Supreme Court, 1875 in England which provided that a non-suit would be equivalent to a judgment for the defendant. Though Order LXXII rule 2 of the Rules of the Supreme Court, 1883 preserved the old practice where the new Rules were silent, Order XXVI rule 1 thereof exhaustively provided for every species of voluntary abandonment of his claim by a party and required that he could not bring a fresh suit on the same cause of action unless the Court granted a permission to him to do so on the fulfilment of certain conditions (Spencer-Bower and Turner on Res Judicata, pages 32, 33). In Fox v. Star Newspare Company, (1898) 1 Q.B 636 (2), [upheld by the House of Lords in (1900) A.C 19], it was held that the common law regarding non-suit was not revived in England by the statutory changes. The effect of section 2 Civil Procedure Code of 1859 was also to abolish the simple non-suit unless the court granted permission for the institution of a fresh suit if certain conditions were fulfilled (Robert Watson & Co. v. The Collector of Zillah Rajshahye, XIII Moore's Indian Appeals 160 (1869-70), (3).

(c) “Section 11 (1) of the Industrial Disputes Act leaves it to the Industrial Tribunal and the Labour Court to follow such procedure as it thinks fit for the purpose of its functions under the Act. The Slums Act does not make any provisions as to the procedure to be followed thereunder. In interpreting such statutory provisions it is permissible to imply such powers in the statutory tribunals as are essential for them to possess to discharge their statutory functions” (See Craies on Statute Law, 7th Edition, page 111 and Assistant Collector of Central Excise, Calcutta v. National Tobacco Co. of India Limited, AIR 1972 S.C 2563) (4). It cannot be said that such statutory tribunals must have the power either to non-suit a petitioner with the result that he would be free to bring a fresh petition or the power to prevent him from bringing a petition on the same cause of action if the previous petition is dismissed as withdrawn. In favour of the principle of the non-suit, it may be argued that this was the rule in the common law and in the absence of a statute to the contrary, the statutory tribunals ought to be governed by it. In favour of the principle underlying Order XXIII rule 1 Civil Procedure Code, it may be said that such a principle ought to apply to the statutory tribunals to prevent an abuse of their quasijudicial process. The power to prevent the abuse of its process is inherent in a court of law but not in a statutory tribunal. The statutory tribunal has only such inherent powers as are essential for the discharge of its functions. The principle underlying Order XXIII rule 1 cannot be said to be essential for the discharge of the functions of any of the two statutory tribunals. It would appear, therefore, that the principle of non-suit would apply to the procedure of these two tribunals.

6. The Industrial Disputes Act, 1947, is meant to provide for adjudication of labour disputes in a simple manner free from legal technicalities. In Guest, Keen, Williams Private Limited v. P.J Sterling and other (1960 — 1 S.C.R 348) (5) the Supreme Court observed that in industrial disputes legal technicalities should be avoided as far as it was reasonably possible to do so and industrial tribunals should be cautious in applying even such otherwise solitary principles such as estoppel and acquiescence in proceedings before them. The same reason may operate against the application of the principle underlying Order XXIII rule 1 of the Code of Civil Procedure to such proceedings as also to the proceedings under the Slum Areas (Improvement and Clearance) Act, 1956.

(d) There are three ways in which a suit or an application may be dismissed. Firstly, it may be dismissed on merits after hearing. This would mean that the decision is res judicata and also final. This prevents a fresh suit or application to re-agitate the matters which have been once decided. Secondly, it may be dismissed for default without any decision on the merits. A dismissal for default will not amount to res judicata. But the provisions of Order IX Civil Procedure Code prevent the fresh suit being filed and the proper remedy is to get the order of dismissal set aside for sufficient cause. But this is not a general principle of law unlike the principle of res judicata. Where the Civil Procedure Code or its principles do not apply, therefore, there is nothing to prevent a fresh application being filed if the previous one is dismissed for default unless statutory provisions have adopted the principle of Order IX. The dismissal for default outside Civil Procedure Code does not, therefore, operate either as res judicata or as a final order.

7. Between these two categories where does the order “dismissed as withdrawn” stand ? Unlike the first category of res judicata, it is not a decision on merits. The very words used by the court or the tribunal would show that the dismissal is not on merits but just because the plaintiff or the petitioner has withdrawn the suit or application. This would mean that an appeal cannot be filed against such an order because the plaintiff or the petitioner has prevented the court or the tribunal from deciding the suit or the application. Nor can such an order be final. For, such an order is in the nature of non-suit which is no decision at all. If there is no decision, there is no finality.

8. Shri D.K Aggarwal, learned counsel for the petitioner, tried to draw a distinction between the dismissal of an application as withdrawn at an early stage and the dismissal at an advance stage when the application is fixed for trial or recording evidence. He relied upon Robert Watson & Co.'s case (3), referred to above, for the proposition that the dismissal at the stage of evidence amounted to a dismissal on merit. That decision is distinguishable. The dismissal in that case was expressly on the ground that the plaintiff had failed to produce his evidence. It is true that the court, nevertheless, gave him liberty to bring a fresh suit for the same matter. That could not change the nature of the dismissal. It was not a dismissal because the suit was withdrawn but rather because the plaintiff did not produce evidence. This was why the permission to bring a fresh suit was held to be void. At page 164 of the report it is stated that the suit was dismissed for want of evidence. Once that was done, it was beyond the power of the court to say that the order did not bar the plaintiff from instituting the fresh suit.

9. Shri Aggarwal then relied upon the decision of Mehar Singh, C.J, in Ram Partap v. Indian Electric Works Limited, 1965 Punjab Law Reporter, Supplement, 225 (6). That decision is also distinguishable because the dismissal was of an application made under the Delhi Rent Control Act to which the principles underlying the Civil Procedure Code (including Order XXIII rule 1) have been made applicable as far as possible by section 37 of the said Act. It is true that the learned Chief Justice says that when the petitioner does not wish to proceed and says that his petition may be dismissed as withdrawn he is really admitting that he has no case and such a dismissal really means that the petition was dismissed because it had no merits. Nevertheless, the decision is based on the principle underlying Order XXIII rule 1 Civil Procedure Code. It cannot be applied to a proceeding under the Industrial Disputes Act or under the Slums Act inasmuch as the principles of Civil Procedure Code have not been made applicable to the proceedings under these Acts.

10. Shri Aggarwal then relied on the decision of a learned Single Judge in Super Surgical Company v. S. Desikan, AIR 1969 Madras 406 (7). The petition in that case had been dismissed as not pressed. It was held that such a dismissal was on merits. A fresh petition could not, therefore, be filed on the same cause of action. It would appear that there is a distinction between a dismissal of a petition as not pressed which means that the petitioner does not believe that it has any substance and a dismissal as withdrawn which means that the petitioner does not wish that the merits should be decided. This is how the Madras decision was understood by this Court in Management of Natraj Cottage Industries v. The Presiding Officer, Labour Court, 1972 Labour and Industrial Cases 390 (8).

11. Reference was then made to a Division Bench decision of this Court in Metal Fabricators v. B.D Gupta, (Civil Writ 1286 of 1973 decided on November 5, 1974) (9) in which it was held that the Labour Court can set aside an ex parte order on the ground that there was sufficient cause for the non-appearance of the party aggrieved by it. The reason was that such a power had to be implied in the Labour Court for the performance of its functions. If an order is passed against a person who for sufficient cause could not be present on the date of hearing, it would work injustice to him if the Labour Court is held not to possess the power to set aside the ex parte order. It cannot be said that the power to dismiss a second or a third application on the principle underlying Order XXIII rule 1 Civil Procedure Code must be implied in a Labour Court as being essential to the discharge of its functions.

12. In the light of the above legal position, the contentions of the petitioners may be disposed of as below: —

CONTENTION NO. 1: —

Whatever may be the stage at which the petition is withdrawn, the effect of the order dismissing the petition depends upon the order passed by the court or the tribunal and not the stage of its withdrawal. The court or the tribunal would be free to dismiss the petition on merits. If the order were simply “dismissed” then it would be a dismissal on merits. If the order does not give reasons, the order may not act as res judicata on the principle underlying the decision of the Supreme Court in Daryao v. The State of U.P, (1962) 1 S.C.R 574 at 592-595 (10). But nevertheless it would be a final order which is appealable on the principle of Ramesh v. Gendalal, AIR 1966 S.C 1445 (11). But if the court chooses not to decide the merits and expressly passes the order “dismissed as withdrawn”, the order is neither res judicata nor final. No appeal lies from it. On the contrary, a fresh petition would be maintainable in the absence of a provision like Order XXIII rule 1 Civil Procedure Code.

CONTENTION NO. 2: —

The principle underlying Order XXIII rule 1 is contrary to the common law principle of non-suit. It cannot be said, therefore, that such a principle must necessarily be held to be a part of the procedure of the Labour Court under the Industrial Disputes Act or the Competent Authority under the Slums Act. For, the implication of such a power is not essential to the discharge of the functions of either of these tribunals.

CONTENTION NO. 3: —

The order “dismissed as withdrawn” cannot be regarded as final for the simple reason that the dismissal was only because the petition was withdrawn obviously because the petitioner did not wish the merits to be decided and wanted to file a fresh petition on the same cause of action. As the court or the tribunal did not choose to bar the filling of a fresh petition, no such power can be implied. The court or the tribunal contemplated the possibility of a fresh suit or petition being filed when it allowed the withdrawal of the earlier suit or petition. It was not necessary for the court or the tribunal to expressly grant permission to file a fresh suit or petition. “The argument that such a power is not conferred on the court or the tribunal is, therefore, out of place”.

CONTENTION NO. 4: —

It may be that repeated applications amount to an abuse of the quasijudicial process of the tribunal. But the power to refuse to entertain an application on the ground of abuse of its process which is inherent in a court of law cannot be implied in a tribunal unless it can be shown that the implication of such a power is essential for the very discharge of its functions by such a tribunal.

13. In Civil writ 1059 of 1972 no other ground was urged in attacking the order of the Labour Court dated 19-8-1972. As the only ground urged was found against the petitioner, the writ petition is dismissed without any order as to costs.

14. In C.M (Main) 331 of 1973 the dismissal of the previous application as withdrawn was urged only as one of the grounds against the maintainability of the petition. As we have negatived this ground, the petition will now go before a Single Bench for consideration of the other grounds averred by the petitioner.

Order accordingly.