Rajasthan Srtc And Others v. Khadarmal ., Supreme Court Of India, Judgment, Law, casemine.com

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Case Number

Civil Appeals No. 3428 of 2003 with Nos. 3429-31 and 6584 of 2003, decided on October 6, 2005

Disposition

Judges

Justice S.N. Variava
Justice P.K. Balasubramanyan
Justice P.P. Naolekar

Acts

Industrial Disputes Act

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Smart Summary

Factual and Procedural Background

The consolidated appeals arise out of civil suits filed by employees whose services, while on probation, had been terminated. The employees obtained decrees from the civil courts ordering, inter alia, reinstatement and back wages. The employer challenged those decrees, bringing the matter before the Supreme Court. The principal procedural question is whether the civil courts possessed jurisdiction to entertain such service-related disputes or whether the employees’ sole remedy lay in raising an industrial dispute under the Industrial Disputes Act.

Legal Issues Presented

Whether a civil court has jurisdiction to adjudicate a challenge to the termination of service of a probationer, or whether such a challenge must be pursued exclusively under the Industrial Disputes Act.
If the civil courts lack jurisdiction, what consequential orders should be passed regarding reinstatement and back wages already paid pursuant to the decrees under appeal.

Arguments of the Parties

Respondents' Arguments

The suits were instituted at a time when the legal position on jurisdiction was unsettled, as reflected in portions of Rajasthan SRTC v. Krishna Kant (1995).
In view of that uncertainty, the Supreme Court should follow the approach adopted in Krishna Kant and refrain from disturbing the decrees, except possibly to withhold future back wages.

Appellants' Arguments

Reliance was placed on Rajasthan SRTC v. Zakir Hussain (2005), where the Court, after considering Krishna Kant, held that reinstatement could not be sustained once it was found that civil courts had no jurisdiction.
Accordingly, the decrees should be set aside in toto, the respondents should not be continued in service, and no further emoluments should be paid—although any back wages already disbursed need not be recovered.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Rajasthan SRTC v. Krishna Kant (1995) 5 SCC 75	Civil courts lack jurisdiction over disputes that fall within the purview of the Industrial Disputes Act; however, where the law was previously unclear, decrees were partly modified rather than entirely set aside.	Recognised as binding authority establishing want of civil-court jurisdiction. Respondents invoked its discretionary relief on back wages, but the Court decided not to follow that limited leniency on reinstatement.
Rajasthan SRTC v. Zakir Hussain (2005) 7 SCC 447	Reaffirmed absence of civil-court jurisdiction and held that reinstatement orders passed without such jurisdiction cannot be maintained; back wages already paid need not be recovered.	Adopted in full: decrees were set aside; no reinstatement ordered; back wages already paid are protected, but respondents are denied any further emoluments or service benefits.

Court's Reasoning and Analysis

1. The Court noted that the jurisdictional issue is “squarely covered” by Krishna Kant (1995) and Zakir Hussain (2005), both of which hold that civil courts have no power to adjudicate such service-termination disputes.
2. Because those precedents are binding, the Court concluded that every decree under challenge is a nullity for want of jurisdiction.
3. Addressing the respondents’ plea for equitable relief based on Krishna Kant’s partial preservation of decrees, the Court preferred the later pronouncement in Zakir Hussain, which categorically disallowed reinstatement once jurisdiction was found lacking.
4. Balancing equities, the Court followed Zakir Hussain in protecting employees from recovery of back wages already disbursed but denied any ongoing reinstatement, salary, or service benefits.
5. Finally, to avoid penalising the employees for time spent in the wrong forum, the Court directed that the period between filing of the suits and this judgment be excluded when computing limitation should the employees choose to raise an industrial dispute hereafter.

Holding and Implications

APPEALS ALLOWED; DECREES OF THE CIVIL COURTS SET ASIDE.

Implications for the parties: all orders of reinstatement are annulled; respondents may retain any back wages already received but accrue no further emoluments or service benefits. The litigation period is expressly excluded for limitation purposes should they initiate proceedings under the Industrial Disputes Act.
Broader impact: the judgment reinforces the exclusivity of the Industrial Disputes Act for service-termination disputes of workmen, leaving no residual jurisdiction in civil courts for such matters.

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Rajasthan Srtc And Others v. Khadarmal .

Order

1. In all these cases one of the questions for consideration is whether a civil court would have jurisdiction or whether the termination of service of a probationer was required to be challenged by raising a dispute under the Industrial Disputes Act.

2. This question is now squarely covered by the decisions of this Court in Rajasthan SRTC v. Krishna Kant (1995) 5 SCC 75, (1995) 31 ATC 110 as well as in Rajasthan SRTC v. Zakir Hussain (2005) 7 SCC 447, (2005) 6 Scale 641. It has been held that the civil court would have no jurisdiction. As these judgments are binding on us, we also hold that in all these matters the civil court had no jurisdiction to adjudicate.

3. It is however submitted, based on the following observations in the first Rajasthan SRTC case (1995) 5 SCC 75, (1995) 31 ATC 110, that:

“36. Applying the above principles, we must hold that the suits filed by the respondents in these appeals were not maintainable in law. Even so, the question is whether we should set aside the decrees passed in their favour by the civil courts. So far as Civil Appeal No. 3100 of 1991 is concerned, this Court had, while granting leave [in SLP (C) No. 194 of 1991] ordered on 29-1-1991 that ‘insofar as respondent is concerned, he (appellants’ counsel) states that he will abide by the decree. Application for stay is rejected'. Therefore, there is no question of setting aside the decree concerned in this appeal. However, so far as the other appeals are concerned, the position is slightly different. In Civil Appeal No. 4948 of 1991 and in Civil Appeals Nos. 5386, 5387 of 1995 arising out of SLPs (C) Nos. 10902 of 1992, 13152 and 10263 of 1993, not only is there no such condition but this Court had granted stay as prayed for by the appellant Corporation. In two other matters viz. in Civil Appeal No. 9314 of 1994 and Civil Appeal No. 5389 of 1995 arising out of SLP (C) No. 14169 of 1993 the only order is to issue notice. Having regard to the facts and circumstances of these matters, we modify the decrees in these matters (except the decree concerned in Civil Appeal No. 3100 of 1991) by reducing the back wages to half. The decrees in all other respects are left undisturbed. These orders are made in view of the fact that the position of law was not clear until now and it cannot be said that the respondents had not acted bona fide in instituting the suits. Appeals disposed of accordingly.”

4. It is submitted that all the suits in these matters were filed at a time when the position of law was not clear. It is submitted that therefore even in these cases the Court should not interfere with the decrees but may direct that there shall be no payment of back wages.

5. On behalf of the appellants reliance is placed on the second Rajasthan SRTC case (2005) 7 SCC 447, (2005) 6 Scale 641 and it is pointed out that the Court had, after considering the earlier judgment, concluded that the reinstatement cannot now be maintained and directed that the respondents shall not be allowed to continue in service any further. The Court has however held that the back wages which may have been paid are not to be recovered back but clarified that the respondents will not be entitled to any further emoluments or service benefits except the amount paid to them as back wages.

6. In our view, as the civil court had no jurisdiction, the decrees which were passed have no force of law. They are accordingly set aside. In our view, there can be no direction to reinstate or to continue reinstatement. However, on the facts of these cases we also direct that if any back wages have been paid, they shall not be recovered but clarify that the respondents will not be entitled to any further emoluments or service benefits.

7. The appeals stand disposed of accordingly. There will be no order as to costs.

8. Before we part, we clarify that in the event of the respondents or any of them deeming it fit and proper to raise a dispute, the period actually spent in litigation i.e from the date of the filing of the suit till the date of this judgment, will be excluded for the purposes of considering the delay in filing the dispute.

Rajasthan Srtc And Others v. Khadarmal .

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Respondents' Arguments

Appellants' Arguments

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Rajasthan Srtc And Others v. Khadarmal .

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