Nichani Hotels Corporation v. Bombay Labour Union And Others

1. This is an appeal filed by the plaintiffs against the order passed by the City Civil Court, Bombay, in S.C Suit No. 158 of 1981, holding that the City Civil Court has no jurisdiction to entertain and try the suit.

2. The plaintiffs are a partnership firm engaged in the business of running residential hotel in the name and style as Hotel Omega. Defendant 1 is a trade union registered under the Trade Unions Act and defendant 2 is its general secretary. The other defendants are the employees of the plaintiffs. The plaintiffs filed a suit for permanent injunction restraining the defendants from picketing or entering into the hotel of the plaintiffs or preventing the plaintiffs in any manner from carrying on their business or causing nuisance to them. In this suit a notice of motion was taken out by the plaintiffs seeking a relief of ad interim injunction restraining the defendants from picketing or entering the hotel except while on duty or from preventing, obstructing, intimidating and assaulting them or their managerial staff and holding meetings near the hotel premises, etc. This notice of motion was contested on behalf of the defendants and a preliminary objection was raised that the City Civil Court had no jurisdiction to entertain and try the suit in view of the provisions of S. 60 of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (hereinafter referred to as the Act). In view of this preliminary objection the City Civil Court framed a preliminary issue and after hearing both sides ultimately it came to the conclusion that the dispute involved in the suit is wholly covered by the provisions of the Act and, therefore, in view of the provisions of S. 60 of the said Act the City Civil Court has no jurisdiction to entertain and try the suit. As already observed it is this order of the City Civil Court, which is challenged in this appeal from order.

3. Sri Damania, learned counsel appearing for the appellants, contended before me that the view taken by the learned Judge of the City Civil Court is not a correct view in law. According to him ouster of jurisdiction of the City Civil Court cannot be readily assumed and only in those cases which are specifically covered by the Act it could be said that the jurisdiction of the ordinary civil Court in ousted. In its wisdom the Legislature has chosen to define as to what will constitute “unfair labour practices.” According to Sri Damania, various allegations made in the suit by the plaintiffs are not covered by the said definition. He also contented that under Sub-sec. (16) of S. 3 read with S. 26 and Sch. III to the Act the Legislature has laid down an exhaustive definition of the term “unfair labour practices.” As the definition is exhaustive in nature it cannot take in its import anything else which is not enumerated in Sch. III itself. According to Sri Damania, several acts which involve wrongful restraint and mischief are not covered by the expression “unfair labour practice” as defined by the Act. According to him, in any case, the act of the union or of the employees in demonstrating at the gate of work premises or obstructing in taking out the finished products, viz., not allowing trucks to come in and go out for this purpose and such other matters are not covered by the definition of the term “unfair labour practices.” Therefore, according to him the learned Judge of the City Civil Court committed an error in coming to the conclusion that all the averments made in the suit are covered by the expression “unfair labour practices” as defined in the Act and, therefore, the City Civil Court has no jurisdiction to entertain and try the suit in view of the provisions of S. 60 of the Act.

4. On the other hand, it is contended by Sri Menon, learned counsel appearing for the respondent-defendants, that the definition of “unfair labour practices” and particularly entry (5) in Sch. III to the Act is not exhaustive but is illustrative. The said entry will take in its import all forms of coercive actions. If the allegations made in the suit are read cumulatively and together, they clearly indicate that it is alleged by the plaintiffs that various actions of the defendant has resulted in coercion which has adversely affected its business activity. Therefore, according to him the learned Judge of the trial Court was right in coming to the conclusion that entry (5) in Sch. III which enumerates certain activities is merely illustrative one and is not exhaustive and all the allegations made in the suit are covered by Sch. III and hence the City Civil Court had no jurisdiction to entertain and try the suit.

5. For properly appreciating the contentions raised before me it will be worthwhile if a detailed reference is made to the allegations made by the plaintiffs in the plaint and particularly in Para. 8 thereof which reads as under:

“The plaintiffs state that on 10 January 1981, all the defendants have resorted to illegal strike, demonstrations and Morcha and without any justification on their alleged plea that the plaintiffs have terminated the services of several workmen which is not a fact. The plaintiffs state that the defendants intend to dictate their terms to the plaintiffs. The plaintiffs state that the defendants and the said union and their other supporters have intensified their illegal activities on 10 January 1981. The said union and the defendant have started to obstract the lawful employees of the plaintiffs, the guests in the hotel and have started intimidating the plaintiffs by abusing, obstructions, annoyance and other illegal activities by shouting and gheraving the plaintiffs and their guests at the entrance of the hotel by collecting on or near the steps of the entrance door to the hotel premises. The plaintiffs apprehend that the defendants are likely to commit acts of violence and enter the premises of the plaintiffs and may damage the property of the plaintiffs. The said union, and their workers and the defendants have surrounded the entrance and obstructed all entries in the premises to and from the entrance at Rath Road, and have created traffic jam. They have been till late in the night on 10 January 1981, shouting, abusing, threatening, preventing the persons from coming to the premises and have created great nuisance and annoyance to the guests of the hotel and the residents of the neighboring buildings. The plaintiffs state that on 10 January 1981, a traveller who came to the hotel for booking was threatened and was compelled to go away. The plaintiffs state that their normal working and carrying of the business have been obstructed and prevented by such activities of the trade union. The loyal workers of the hotel, management personnel, staff members and visitors and the bringing of the essential commodities have been obstructed by the defendants. Looking to the mood of the said union, their workers and the defendants, the plaintiffs apprehend further acts of intimidation, assault, abuses and physical violence unless they are immediately prevented from doing so.”

The averments in this paragraph as well as elsewhere in the plaint have been summarized by the learned Judge of the trial Court in Para. 3 of the order in the following terms:

“(i) The services of defendants 9 to 16 though terminated, a dispute in regard to the validity of the termination is still pending in the Industrial Court.

(ii) Defendants 17 to 35 are still in the employment of the plaintiff.

(iii) On 21 November 1980, the defendant 1 union informed the plaintiff by letter that the majority of the plaintiffs workmen had joined defendant 1 union and asked the plaintiff to recognize defendant 1 as the sole bargaining agent.

(iv) On 29 November 1980, defendant 1 filed a complaint before the Industrial Court under S. 28(1) of the Act for declaration of unfair labour practices and reinstatement of defendants 1 to 7. The complaint is still pending.

(v) The defendants have gone on an illegal strike from 9 January 1981.

(vi) On and after 10 January 1981, the defendants have resorted to the following Act:

(a) The defendants have started obstructing the lawful employees of the plaintiffs, the guests in the hotel and have started intimidating the plaintiffs by abuses, obstructions and annoyance.

(b) The defendants are resorting to shouting at and “gheroing” the plaintiffs and their guests at the entrance of the hotel.

(c) The defendants have surrounded the entrance of the hotel and obstructed all entry to and exit from the premises.

(d) The defendants are shouting, abusing, threatening, preventing the persons from coming to the premises and have created great nuisance and annoyance to the guests residing at the hotel.”

It is not disputed before me that the allegation made in the plaint that the union and the employees have started obstructing loyal employees from entering the work place or the allegation regarding intimidation to the plaintiffs or its officers or causing obstruction or gherao to them is covered by Sch. III. However, according to Sri Damania shouting slogans, abusing, threatening and preventing patrons from coming to the hotel is not covered by any of the entries in Sch. III. He further contended that the acts and omissions on the part of the defendants, which resulted in obstruction in bringing the essential commodities into the hotel premises is also not covered by any of the entries in Sch. III and, therefore, at aleast to that extent the City Civil Court had jurisdiction to entertain the suit. Therefore, the learned Judge was not right in coming to the conclusion that the suit as filed was wholly barred under S. 60 of the Act.

6. For properly appreciating the arguments advanced before me a cursory reference will have to be made to various provisions of the Act including its preamble. The preamble of the Act reads as under:

“Whereas by Government Resolution, Industries and Labour Department No. I.D.A ???367-Lab-II, dated 14 February 1968, the Government of Maharashtra appointed a committee called ‘the committee on unfair labour practices’ for defining certain activities of employers and workers and their organizations which should be treated as unfair labour practices and for suggesting action which should be taken against employers or workers, or their organizations, for engaging in such unfair labour practices:

And whereas after taking into consideration the report of the committee, Government is of opinion that it is expedient to provide for the recognition of trade unions for facilitating collective bargaining for certain undertakings; to state their rights and obligations; to confer certain powers on unrecognized union; to provide for declaring certain strikes and lockouts as illegal strikes and lockouts; to define and provide for the prevention of certain unfair labour practices to constitute Courts (as independent machiery) for carrying out the purposes of according recognition to trade unions and for enforcing provisions relating to unfair practices; and to provide for matters connected with the purposes aforesaid…”

Then in S. 3 of the Act various words and phrases and defined. Sub-section (16) of S. 3 defines the expression “unfair labour practices” to mean unfair labour practices as defined in S. 26. Chapter VI In which S. 26 appears deals with “unfair labour practices.” Section 26 of the Act reads as under:

“26. In this Act, unless the context requires otherwise, ‘unfair labour practices’ mean any of the practices listed in Schs. II to IV.”

Then by S. 27 a prohibition is imposed upon both the parties from engaging in unfair labour practices. For dealing with compliance relating to the unfair labour practices a procedure is laid down in S. 28 of the Act. Sub-section (3) of S. 28 lays down:

“28. ***

(3) On receipt of a complaint under Sub-sec. (1) the Court may, if it so considers necessary, first cause an investigation into the said complaint to be made by the investigating officer, and direct that a report in the matter may be submitted by him to the Court, within the period specified in the direction.”

Sub-section (4) of S. 28 then empowers the investigating officer to visit the undertaking where the practice alleged is said to have occurred, and to make such inquiries as he considers necessary. The said sub-section further lays down that he may also make efforts to promote settlement of the complaint. Then by Sub-sec. (5) of S. 28 an obligation is cast upon him to submit his report setting out full facts and circumstances of the case as well as efforts made by him in settling the complaint. Then by Sub-sec. (7) a duty is cast upon the Court to give a decision in writing in the form of an order and a finality is attached to the said decision by laying down that it shall not be called in question in any civil or criminal Court. Chapter VII deals with power of the Courts. Schedules to the Act and particularly Schs. II to IV deal with the question as to what will constitute unfair labour practices either on the past of the employers or trade unions. Schedule III to the Act with which we are concerned in this appeal reads as under:

“Schedule III

Unfair labour practices on the part of trade unions

(1) To advise or actively support or instigate any strike deemed to be illegal under this Act.

(2) To coerce employees in the exercise of their right to self-organization or to join unions or refrain from joining any union, that is to say:

(a) for a union or its members to picketing in such a manner that non-striking employees are physically debarred from entering the work-place;

(b) to indulge in acts or force or violence or to hold out threats of intimidation in connexion with a strike against non-striking employees or against or aganinst managerial staff.

(3) For a recognized union to refuse to bargain collectively in good faith with the employer.

(4) To indulge in coercive activities against certification of a bargaining representative.

(5) To stage, encourage or instigate such forms of coercive actions as wilful ‘go-slow’ squatting on the work premises after working hours or ‘gherao’ of any of the members of the managerial or other staff.

(6) To stage demonstrations at the residences of the employers or the managerial staff members.”

If all these provisions are read with the aims and objects of Legislature as incorporated in the preamble, it is quite clear that by enacting this legislation the Legislature wanted to enact a complete code providing for recognition of trade union, facilities for collective bargaining, rights and obligations of the union and the employer and to define and provide for prevention of unfair labour practices on the part of both the sides and to constitute Courts as an independent machinery for dealing with the complaints covered by the Act. Then comes S. 60 which makes a provision regarding ouster of jurisdiction. Section 60 reads as under:

“60. No civil Court shall entertain any suit which forms or which may form the subject-matter of a complaint to the Industrial Court or Labour Court under this Act; or which was formed the subject of an interim or final order of the Industrial Court or Labour Court under this Act.”

From the bare reading of this section, it is quite clear that the jurisdiction of the civil Court is barred to entertain and try a suit which forms or which may form the subject-matter of a complaint or an application to the industrial Court of Labour Court under the Act or which has already formed the subject-matter of an interim or final order of the Industrial or Labour Court. Therefore, for deciding the question as to whether the jurisdiction of the civil Court is barred or not to entertain any particular suit, it will have to be seen as to whether the averments made in the suit can form the subject-matter of a complaint or an application to the Industrial or Labour Court under the Act. It is contended before me that some of the averments made in the suit are not covered by the definition of “unfair labour practices”

7. In my opinion, it will be neither fair nor proper to lay down a general rule which will be applicable to all the cases while deciding the question as to whether any particular act on the part of the employer or employee will constitute an unfair labour practice. Obviously, it must depend upon the facts and circumstances of each case. In Sub sec. (16) of S. 3 while defining the term “unfair labour practices” the Legislature has used the word “means.” In S. 26 also the word used is “means,” which normally connotes that the Legislature has followed a method of enumerating the practices in the schedule attached to the Act. Schedule III with which we are concerned in this appeal deals with unfair labour practices on the part of trade unions. As already observed, the intention of the Legislature seems to be to have a complete code qua matters covered by the enactment. This enactment primarily deals with the disputes arising between the trade union and the employer. Such disputes normally stand on a different footing. It is not the form of the suit or the allegations which will decide the question as to whether civil Court has jurisdiction but is the substance of the matter which must prevail. In this enactment by Chap. VI special procedure is laid down for dealing with complaints relating to unfair labour practices. Section 28 provides for an assistance to the Court for deciding the dispute raised in the complaint. Apart from the fact that S. 28(2) lays down that such a complaint should be decided as far as possible within the period of six months from the date of the receipt, Sub-sec. (3) thereof confers discretion upon the Court, if it is so considers necessary, first to cause an investigation to be made into such a complaint to be carried cut by an investigating officer who is obliged to make efforts to promote settlement of the complaint and submit a report. Therefore, the Legislature has provided for a some what different procedure for settlement of these complaints than the one which is normally followed by the ordinary civil Courts. In the ultimate analysis settlement of just demands is the only solution to the industrial dispute and not litigation. The development of strong, independent and responsible trade unions and an orderly, rational environment free from unfair labour practices are the two prerequisites for effective collective bargaining as well as for the industrial peace. Though apparently there are only two sides to an industrial dispute, namely, employer and employee, it is the common man or the consumer who is the ultimate sufferer. It may be a go-slow or an illegal strike or lockout it is the poor consumer or common citizen who is the silent sufferer. It is the public peace or public order which is adversely affected by the unfair labour practices. Therefore, it was thought necessary that the rights conferred upon the union in the matter of collective bargaining should carry with it corresponding obligations. For this purpose tripartite committee was constituted, and as per the recommendations of this committee that this Act has been enacted for fulfilling the dual purpose, namely, according recognition to the unions and for enforcing provision relating to unfair labour practices, through an independent machinery. Therefore, to protect healthy trade unionism from being polluted by unfair labour practices this piece of legislation is enacted in the interest of general public. Apart from ensuring healthy trade union activity, this enactment also serves a social purpose. With this avowed intention the Legislature has enacted this complete code by defining the expression “unfair labour practices” and also providing for an independent and speedy machinery for dealing with the complaints in that behalf. It is in this back-ground that the entries in the schedule will have to be construed and interpreted. If the Legislature intended that the activities enumerated in entry (5) of Sch. III should alone constitute “unfair labour practices,” then the said entry would have been worded in different words.

8. If wilful go-slow, squatting on the work premises after working hours or gherao of any of the members of the managerial or other staff alone was to constitute unfair labour practices covered by entry (5) of Sch. III, then the words “such forms of coercive action as” were wholly redundant. In that case, the entry would have been worded like this:

“to stage encourage or instigate wilful go-slow, squatting on the work premises after working hours or gherao by any of the members of the managerial or other staff.”

If the intention of the Legislature was to make enumeration exhaustive, then the words “such forms or coercive action as” were wholly unnecessary. Therefore, in my opinion, these words clearly indicate that the practices enumerated are only illustrative and not exhaustive. The word “as” further clearly indicates that what followed are examples or mere illustrations. By Sch. III the Legislature has defined unfair labour practices on the part of the trade unions. If entry (5) to Sch. III is treated as wholly exhaustive, then the absurd results are likely to follow. Could it be said that a coercive action of squatting on the working premises after working hours is an unfair labour practice, whereas squatting on the work premises within working hours will not constitute an unfair labour practice? The forms of “coercive actions” are merely enumerated in this entry and the list is not exhaustive. Obviously it is not possible for any body to give exhaustive list of such coercive actions because of the ingenuity of the employees to invent new forms of coercive actions every day and this is the reason why the Legislature in its wisdom has used the expression “as” before enumerating some of the coercive actions. Therefore, apart from the forms of coercive actions enumerated in the said entry, the entry takes in its import other forms of coercive actions also and the word “as” if read in its context only means “such as” and is not exhaustive in nature. The key or basic words are “forms of coercive actions.”

9. As to which other forms of coercive actions are within the import of this entry must obviously ???nd upon the facts and circumstances of each case including the result and consequences of the action.

10. It is no doubt true that a trade union has a right to carry on its legitimate trade union activities. I had an occasion to consider this aspect of the matter in Appeal from Order No. 65 of 1981 — Federation of Western India Cine Employees v. Filmalaya (Private), Ltd.— decided on 28 March 1981. As observed by the Supreme Court in Himmatlal Shah v. Commissioner of Police, Ahmedabad, [(1973) 1 SCC 227 : A.I.R 1973 S.C 87], in India a citizen had, even before the Con situation, a right to hold meetings etc., obviously subject to the rules and regulation, as well as consideration of public order. Peaceful demonstration by the employees is also protected under Art. 19 of the Constitution of India. A question as to the right of citizen to demonstrate fell for consideration of the Supreme Court in Kameshwar Prasad v. State of Bihar [A.I.R 1962 S.C 1166]. The scope and import of the term “agitation” was also considered by the Supreme Court in Ram Bahadur v. State of Bihar [(1975) 2 SCC 508 : A.I.R 1975 S.C 223]. Then in Rohtas Industries, Ltd. v. Rohtas Industries Staff Union [1976 — I L.L.N 165], the Supreme Court had also recognized the worker's right as to association, etc. However, as well said “your liberty to swing your hands ends where the tip of my nose begins.” Therefore, depending upon the facts and circumstances of each case if demonstrations are carried out by the trade union in such a manner which results in coercion so as to adversely affect the safety or trade or business by the employer, then depending upon the nature and gravity as well as the form of demonstration it can be held that it is one of the form of coercive action which could be covered by entry (5) of Sch. III. Stopping supplies of essential material or taking out finished products will also be covered by the said entry if it is adopted or used as a coercive action. Nothing will turn on the label attached to an action and it is the nature and the effect of the action which will be a decisive factor for coming to the conclusion as to whether it is a form of coercive action covered by entry (5) of Sch. III. It is not the label or mere averment but the substance of the action which will have to be taken into consideration coupled with the surroundings and attending circumstances, for deciding the said question.

11. In the book “words and phrases legally defined” second edition, Vol. IA-C, ???utterworths, the judicial interpretation of word “coercion” is given in these words:

“Coercion takes an infinite number of forms, but it may properly be thus defined: the moment that the person who influences the other does so by the threat of taking away from that other something he then possesses or of preventing him from obtaining an advantage he could otherwise have obtained, then it becomes coercion and it ceases to be persuation or consideration.

‘Coercion’ is a word of ambiguous import. In one sense anyone is covered who under pressure does that which be would prefer not to do; but a reluctant debtor who pays under stress of proceedings is not coerced within the legal meaning of the word … ‘coercion’ involves something in the nature of the negation of the choice … An employer cannot properly be said to be coerced if, having two alternative courses presented to him, be follows that course which he considers conducive to his own interests.”

The expression “coercive action” as used in entry (5) will take its colour from the other provisions of the Act, as well as the rights and obligations of the trade union. Even from the dictionary meaning it is quite clear that as to what could be termed as coercive action must obviously depend upon the facts and circumstances of each case. As already observed an action apparently appearing as innocuous might in a given case result in coercion. The coercion contemplated by entry (5) must be qua the employer, members of the staff or his business activity. If demonstrations are carried out in such a way and very close to the work premises which result in obstruction and/or coercion, then also it could be termed as unfair labour practice within the meaning of entry (5) to Sch. III. As already observed it is not possible to lay down any hard and fast rule in this behalf and it must depend upon the facts and circumstances of each case. In the present case, if averments made in the plaint are read in the context of surrounding circumstances, as well as the evidence placed on record in the form of affidavit and correspondence, then in my opinion the learned Judge of the trial Court was right in coming to the conclusion that the said actions could form the subject-matter of a complaint under the Act and, therefore, the suit was barred under S. 60 of the said Act.

12. In the result, therefore, appeal fails and is dismissed. However, in the circumstances of the case there will be no order as to costs.