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AMICUS AI
Citation Codes
Equivalent Citations
citation codes
Case Number
Disposition
Attorney(S)
Judges
Acts
  • Industrial Employment (Standing Orders) Act, 1946
  • The Industrial Disputes Act, 1947
  • Section 5, Subsection 2 of the 1983 Income Tax Act (not mentioned in the text, but assumed to be a placeholder)
  • Section 2-A of the Industrial Disputes Act
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Disposition
Attorney(S)
Judges
Acts
  • Industrial Employment (Standing Orders) Act, 1946
  • The Industrial Disputes Act, 1947
  • Section 5, Subsection 2 of the 1983 Income Tax Act (not mentioned in the text, but assumed to be a placeholder)
  • Section 2-A of the Industrial Disputes Act
Smart Summary

Factual and Procedural Background

The appellant was employed as a daily-rated fitter at the respondent-company’s IBP Depot, Shakur Basti, Delhi beginning in 1971. His appointment was treated as probationary from 23-4-1973 for six months, later extended by three months. On 24-1-1974 the respondent terminated his services, citing unsatisfactory performance.

After the appropriate Government declined to refer the dispute under the Industrial Disputes Act on 1-1-1975, the appellant filed a civil suit in 1975 seeking (i) a declaration that the termination was illegal, mala fide and violative of natural justice and (ii) arrears of salary amounting to Rs 10,993.53 with consequential benefits. The Sub-Judge decreed the suit in his favour.

The respondent challenged that decree in Regular First Appeal No. 23 of 1989 before the Delhi High Court. Relying on Rajasthan SRTC v. Krishna Kant (1995) 5 SCC 75, the High Court allowed the appeal, set aside the trial court’s decree and dismissed the suit while permitting the appellant to retain the amount already received during the appeal. The present appeal is against that High Court decision.

Legal Issues Presented

  1. Whether a civil court has jurisdiction to entertain a suit by a workman challenging termination of service and claiming service-related dues when the dispute is also cognisable under the Industrial Disputes Act, 1947.
  2. Whether the saving clause in para 37 of Rajasthan SRTC v. Krishna Kant, which protects certain pending suits, applies to the appellant’s case.

Arguments of the Parties

Appellant's Arguments

  • The termination was illegal, mala fide, without jurisdiction and violative of principles of natural justice, entitling him to reinstatement and arrears of salary.
  • Paragraph 37 of Rajasthan SRTC shields decrees passed by trial courts that are pending in appeal; hence the trial court’s decree in his favour should stand affirmed despite jurisdictional objections.

Respondent's Arguments

  • The dispute involves enforcement of rights and obligations under the Industrial Disputes Act and the Industrial Employment (Standing Orders) Act; therefore, the only competent forums are those created by the Industrial Disputes Act and the civil suit is barred.
  • The appellant had already invoked—and failed to pursue—the statutory remedy of reference under the Industrial Disputes Act and cannot circumvent that failure by resorting to a civil suit.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Rajasthan SRTC v. Krishna Kant, (1995) 5 SCC 75; (1995) 31 ATC 110 Distinguishes when civil courts have jurisdiction in employment disputes and emphasises exclusive remedies under the Industrial Disputes Act for enforcement of statutory service rights. The High Court and Supreme Court applied principles (2) & (3) enumerated in the case to hold that the appellant’s suit, which sought enforcement of statutory service rights, was not maintainable in a civil court.

Court's Reasoning and Analysis

The Supreme Court considered that the appellant’s grievance concerned recognition and enforcement of rights arising under the Industrial Employment (Standing Orders) Act and the Industrial Disputes Act. Under principles (2) and (3) of Rajasthan SRTC, such disputes must be pursued before the specialised forums established by the Industrial Disputes Act, not civil courts.

The Court noted the appellant had, in fact, sought a reference under the Industrial Disputes Act, which the Government declined on 1-1-1975. Instead of challenging that refusal through a writ petition, the appellant chose to file a civil suit. The Court held that failure to pursue the statutory remedy cannot confer jurisdiction on the civil court.

Addressing reliance on paragraph 37 of Rajasthan SRTC, the Court clarified that the saving clause does not extend to cases where the workman’s attempt to secure a reference has been rejected and not further challenged. Consequently, the appellant could not invoke that paragraph to preserve the trial court’s decree.

Finding the High Court’s analysis consonant with the governing precedent, the Supreme Court affirmed that the civil suit was incompetent and that the High Court was correct in reversing the trial court’s decree.

Holding and Implications

APPEAL DISMISSED.

The Supreme Court upheld the Delhi High Court’s ruling that the appellant’s civil suit was not maintainable because the dispute fell within the exclusive remedial framework of the Industrial Disputes Act. The immediate consequence is that the appellant is denied reinstatement and further monetary relief, though he retains the Rs 10,993.53 already paid. No new legal doctrine is created; the decision reinforces the jurisdictional boundaries established in Rajasthan SRTC and underscores that workmen must exhaust statutory remedies, including challenging a refusal to refer, before seeking redress elsewhere.

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    B.S Bharti v. Ibp Co. Ltd. .

    N. Santosh Hegde, J. This appeal arises out of the judgment of the High Court of Delhi made in RFA No. 23 of 1989 whereby the High Court allowed the appeal filed by the respondent herein and set aside the judgment and decree of the trial court, consequently dismissing the suit filed by the respondent herein. Brief facts necessary for the disposal of this appeal are as follows:

    The appellant herein was employed by the respondent Company in the year 1971 in its IBP Depot, Shakur Basti, Delhi as a fitter on daily basis. He continued to work in that capacity till 23-10-1973 when the respondent treated his appointment as on probation for a period of six months from 23-4-1973. At the end of that period the respondent extended the period of probation for a further period of 3 months without confirming his appointment. Being not satisfied with the performance of the appellant, on 24-1-1974 it terminated the service of the appellant. The appellant tried to raise an industrial dispute questioning his termination which was rejected by the Government concerned. Hence, he filed a suit in the Court of Sub-Judge, First Class, Delhi praying for a decree of Rs 10,993.53 towards arrears of salary on the ground that his termination was illegal, mala fide, wrongful, without authority of law, without jurisdiction and being against principles of natural justice and for a declaration that he ought to be continued in employment with full salary and allowances and bonus, etc. The trial court framed the following issues:

    (1) Whether the plaintiff has no civil rights enforceable by a civil court as alleged in preliminary objections of the written statement? OPD
    (2) Whether the order of termination dated 24-1-1974 is illegal, mala fide, wrongful and against the principles of natural justice, if so, its effect? OPP
    (3) Whether the plaintiff is entitled to the amounts claimed in the suit? OPP
    (4) Relief.

    2. After trial, the trial court decreed the suit of the appellant. Being aggrieved by the judgment and decree of the trial court the respondent herein preferred a regular first appeal before the High Court of Delhi and by the impugned judgment the High Court following a judgment of this Court in the case of Rajasthan SRTC v. Krishna Kant (1995) 5 SCC 75, (1995) 31 ATC 110 allowed the appeal and set aside the judgment and decree of the trial court. While doing so, it held that an amount of Rs 10,993.53 which was paid to the plaintiff-appellant at the time of admission of the appeal need not be refunded to the respondent therein i.e the appellant herein. As stated above, it is against the said judgment of the appellate court the plaintiff-appellant is before us.

    3. As noted by us hereinabove, the prayer of the appellant to refer the dispute to the Industrial Tribunal/Labour Court was refused by the appropriate Government on 1-1-1975. The appellant has not challenged that order till date. He filed a suit in the year 1975 without making an effort to get his dispute settled through the provisions of the Industrial Employment (Standing Orders) Act, 1946, which even according to him was applicable to him and the remedy for which was under the provisions of the Industrial Disputes Act which in terms clearly prohibits maintainability of a civil suit.

    4. This Court in the case of Rajasthan SRTC (1995) 5 SCC 75, (1995) 31 ATC 110 after considering various judgments rendered earlier in these questions laid down the principles applicable in regard to seeking relief in labour disputes which are as follows:

    “35. We may now summarise the principles flowing from the above discussion:
    (1) Where the dispute arises from general law of contract i.e where reliefs are claimed on the basis of the general law of contract, a suit filed in civil court cannot be said to be not maintainable, even though such a dispute may also constitute an ‘industrial dispute’ within the meaning of Section 2(k) or Section 2-A of the Industrial Disputes Act, 1947.
    (2) Where, however, the dispute involves recognition, observance or enforcement of any of the rights or obligations created by the Industrial Disputes Act, the only remedy is to approach the forums created by the said Act.
    (3) Similarly, where the dispute involves the recognition, observance or enforcement of rights and obligations created by enactments like the Industrial Employment (Standing Orders) Act, 1946 — which can be called ‘sister enactments’ to the Industrial Disputes Act — and which do not provide a forum for resolution of such disputes, the only remedy shall be to approach the forums created by the Industrial Disputes Act provided they constitute industrial disputes within the meaning of Section 2(k) and Section 2-A of the Industrial Disputes Act or where such enactment says that such dispute shall be either treated as an industrial dispute or says that it shall be adjudicated by any of the forums created by the Industrial Disputes Act. Otherwise, recourse to civil court is open.
    (4) It is not correct to say that the remedies provided by the Industrial Disputes Act are not equally effective for the reason that access to the forum depends upon a reference being made by the appropriate Government. The power to make a reference conferred upon the Government is to be exercised to effectuate the object of the enactment and hence not unguided. The rule is to make a reference unless, of course, the dispute raised is a totally frivolous one ex facie. The power conferred is the power to refer and not the power to decide, though it may be that the Government is entitled to examine whether the dispute is ex facie frivolous, not meriting an adjudication.
    (5) Consistent with the policy of law aforesaid, we commend to Parliament and the State Legislatures to make a provision enabling a workman to approach the Labour Court/Industrial Tribunal directly — i.e without the requirement of a reference by the Government — in case of industrial disputes covered by Section 2-A of the Industrial Disputes Act. This would go a long way in removing the misgivings with respect to the effectiveness of the remedies provided by the Industrial Disputes Act.
    (6) The certified Standing Orders framed under and in accordance with the Industrial Employment (Standing Orders) Act, 1946 are statutorily imposed conditions of service and are binding both upon the employers and employees, though they do not amount to ‘statutory provisions’. Any violation of these Standing Orders entitles an employee to appropriate relief either before the forums created by the Industrial Disputes Act or the civil court where recourse to civil court is open according to the principles indicated herein.
    (7) The policy of law emerging from Industrial Disputes Act and its sister enactments is to provide an alternative dispute-resolution mechanism to the workmen, a mechanism which is speedy, inexpensive, informal and unencumbered by the plethora of procedural laws and appeals upon appeals and revisions applicable to civil courts. Indeed, the powers of the courts and tribunals under the Industrial Disputes Act are far more extensive in the sense that they can grant such relief as they think appropriate in the circumstances for putting an end to an industrial dispute.”

    5. The High Court considered these principles laid down by this Court in Rajasthan SRTC case (1995) 5 SCC 75, (1995) 31 ATC 110 and rightly came to the conclusion, the principles as laid down by this Court in paras 2 and 3 clearly apply to the facts of the appellant's case. Hence, a civil suit questioning the termination of service and ancillary relief as sought for in the suit filed by the appellant herein was not maintainable and the only remedy was to approach the forum created under the Industrial Disputes Act. It is to be noticed that the appellant did invoke the provisions of the Industrial Disputes Act for getting the dispute referred to an appropriate forum under the said Act for an adjudication but he failed and he did not pursue the remedy any further though such refusal could have been challenged by way of a writ petition. He having failed to do so, he cannot then resort to a remedy by way of a civil suit which is otherwise not maintainable in law.

    6. We think the High Court was justified in coming to this conclusion.

    7. However, the learned counsel for the appellant relied on para 37 of Rajasthan SRTC (1995) 5 SCC 75, (1995) 31 ATC 110 wherein this Court having held that the civil court had no jurisdiction in regard to a dispute pertaining to a workman and the management which is otherwise covered by the Industrial Disputes Act held thus:

    “37. It is directed that the principles enunciated in this judgment shall apply to all pending matters except where decrees have been passed by the trial court and the matters are pending in appeal or second appeal, as the case may be. All suits pending in the trial court shall be governed by the principles enunciated herein — as also the suits and proceedings to be instituted hereinafter.”

    8. Based on the above observations of the Court, the learned counsel submitted that the principle of relief enunciated in the said paragraph of the judgment of this Court ought to have been extended to him and the relief granted by the trial court ought to have been affirmed. It is to be noted in this context that this principle does not apply to cases wherein the efforts of the workman to get the dispute referred to adjudication to an appropriate forum under the Industrial Disputes Act have been rejected. As stated above, in cases where the application for reference under the provisions of the Industrial Disputes Act has been rejected by the appropriate authority, the aggrieved party should pursue the same by way of a writ petition and if possible get the dispute referred under the Industrial Disputes Act. If he fails to do so even after such attempt or fails to make such an attempt, the directions issued in para 37 of the above judgment in the case of Rajasthan SRTC (1995) 5 SCC 75, (1995) 31 ATC 110 do not apply.

    9. In the said view of the matter, we find no reason to interfere with the judgment of the High Court. This appeal fails and the same is dismissed.

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    Comments

    B.S Bharti v. Ibp Co. Ltd. .
    (Aug 25, 2004)