Municipal Corpo. of the City of Ahmedabad and anr. Vs. Jyotindra Hariprasad Mehta - Court Judgment

S.H. Sheth, J.

1. The facts of the case briefly stated are as under: The plaintiff was an employee of Ahmedabad Municipal Corporation and had been serving in its Transport Department. He was governed by the Standing Orders for workmen employed for clerical and supervisory work. Plaintiff was found to have interpolated something in a tender which was invited for printing passenger tickets. That interpolation was made after the tender was accepted. By that interpolation, wrongful loss was likely to be caused to the Corporation. The Corporation, therefore, instituted an enquiry against him. As a result of the enquiry, his services were terminated with effect from 17th October 1968. He appealed against that order to the Transport Committee of the Municipal Corporation. The appeal was dismissed.

2. Thereafter he filed the present suit in which he contended that the termination of his services was made in contravention of the Standing Orders by which he was governed and that was also made in violation of Section 33(2)(b) of the Industrial Disputes Act, 1947. He also challenged the order on the ground that it was mala fide and was made in violation of the principles of natural justice. It appears that in the course of the proceedings before the trial Court, he amended the plaint and inserted a claim for damages in the alternative. The learned trial Judge upheld practically all the contentions raised by the plaintiff. He negatived the contention that the impugned order was passed to victimize the plaintiff. As a result of the finding which he recorded he granted to the plaintiff a declaration that the order of termination of his services was illegal, null and void and not binding upon the plaintiff. He also declared that the plaintiff has been continuing in service without break. Since he granted the declaration sought for by he plaintiff which would amount to his reinstatement in service, he did not award to the plaintiff damages. It is that decree which is challenged by the Corporation in this appeal.

3. This appeal came up before Mr. Justice N.H. Bhatt on 8th July 1977. In his opinion, two questions of wide importance arose in this case. He therefore by his referring judgment referred to the Division Bench the following two questions:

(1). If a worker claims a right to continue in service by dint of the Standing Orders framed under the provisions of the Industrial Employment (Standing Orders) Act, 1946, can he be said to be claiming a right under the Industrial Disputes Act, 1947?

(2). Whether in such cases, the jurisdiction of a Civil Court to deal with such a question is expressly or by necessary implication taken away?

In order to answer the two questions which have been referred to us, it is necessary to have a look at a few sections of the Industrial Disputes Act and also a few sections of the Industrial Employment (Standing Orders) Act, 1946. Section 2 (s) defines 'workman' in the following terms:..any person (including an apprentice) employed in any industry to do any skilled or unskilled manual, supervisory, technical or clerical work for hire or reward, whether the terms of employment be expressed or implied, and for the purposes of any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute or whose dismissal, discharge or retrenchment has led to that dispute, but does not include any such person, 'x x xx x'

It is not necessary to set out four Exceptions which have been specified in Clause (s) of Section 2. Section 2A which was inserted in 1965 has a material bearing in the instant case.

Where any employer discharges, dismisses, retrenches or otherwise terminates the services of an individual workman, any dispute or difference between that workman and his employer connected with, or arising out of, such discharge, dismissal, retrenchment or termination shall be deemed to be an industrial dispute notwithstanding that no other workman nor any union of workmen is party to the dispute.

This section makes it clear that wrongful or illegal discharge, dismissal or retrenchment of the services of an individual workman or unlawful or wrongful termination of his services gives rise to an industrial dispute. Section 7 provides for the jurisdiction of the special court. Sub-section (1) provides:

The appropriate Government may, by notification in the Official Gazette, constitute cue or more Labour Courts for the adjudication of industrial disputes relating to any matter specified in the Second Schedule and for performing such other functions as may be assigned to them under this Act.

We must now turn to the second Schedule which provides the disputes upon which the Labour Court can adjudicate. Item 1 in the Second Schedule reads as under: 'The propriety or legality of an order passed by an employer under the Standing Orders.' Item 2 reads as under: 'The application and interpretation of Standing Orders.' Item 3 reads as under: 'Discharge or dismissal of workmen including reinstatement of, or grant of relief to, workmen wrongfully dismissed.' In light of the provision of Sub-section (1) of Section 7 it is clear that challenge to the propriety or legality of an order made by an employer under the Standing Orders and the application or interpretation of Standing Orders are matters which are within the jurisdiction of the Labour Court. In light of the provisions of Section 2A if any such question arises in case of an individual workman, it is also an individual dispute. Clause (b) of Sub-section (2) of Section 33 of the Industrial Disputes Act, 1947 provides as under:

(2). During the pendency of any such proceedings in respect of an industrial dispute, the employer may, in accordance with the Standing Orders applicable to a workman concerned in such dispute, or where there are no such Standing Orders in accordance with the provisions of the contract whether express or implied between him and the workman-

(a) ....

(b) for any misconduct not connected with the dispute, discharge or punish, whether by dismissal or otherwise, the workman:Provided that no such workman shall be discharged or dismissed, unless he has been paid wages for one month and an application has been made by the employer to the authority before which the proceeding is pending for approval of the action taken by the employer.

It is not in dispute before us that what the plaintiff seeks to do in this suit is to vindicate his rights under the Standing Orders.

4. We now turn to the Industrial Employment (Standing Orders) Act, 1946. Clause (c) of Section 2 defines 'Certifying Officer ' so as to mean a Labour Commissioner or a Regional Labour Commissioner and includes any other officer appointed by the appropriate Government by notification in the Official Gazette, to perform all or any of the functions of a Certifying Officer under the Act. Clause (g) of Section 2 defines 'Standing Order' so as to mean rules relating to matters set out in the Schedule. Section 2A of this Act provides that:

Where this Act applies to an industrial establishment, the model Standing Orders for every matter set out in the schedule applicable to such establishment shall apply to such establishment from such date as the State Government may by notification in the Official Gazette appoint in this behalf:Provided that nothing in this section shall be deemed to affect any Standing Orders which are finally certified under this Act and have come into operation under this Act in respect of any industrial establishment before the date of the coming into force of the Industrial Employment (Standing Orders) (Bombay Amendment) Act, 1957.

The Schedule to the Act, inter alia, specifies the following matters. Items 8 and 9 may be usefully read : Item 8 reads as under:

Termination of employment and the notice thereof to be given by employer and workman.' Item 9 reads as under:Suspension or dismissal for misconduct, and acts or omissions which constitute misconduct.

Section 3 provides:

Within six months from the date on which the model Standing Orders apply to any industrial establishment under Section 2A, the employer or any workman employed therein may submit to the Certifying Officer five copies of the draft amendment for adoption in such industrial establishment:Provided that no amendment which provides for the deletion or omission of any rule in the model Standing Orders relating to any matter set out in the schedule shall be submitted under this section.

5. We now turn to the Standing Orders made by the Ahmedabad Municipal Corporation. The plaintiff has placed reliance upon Clause (7) of Rule 21 in the Standing Orders. It provides as follows:

An order relating to discharge or termination of service shall be in writing and shall be signed by the Head of the Department or any officer appointed for purpose by the Transport Manager. A copy of such order shall be supplied to the workman concerned. In cases of closing down, strikes or lockout no such individual orders need be given.

Rule 24 in Standing Orders, inter alia, provides that without prejudice to the provisions of any law for the time being in force any workman who is found to be guilty of any of the acts of misconduct in the foregoing clause of Standing Order 23 may be liable to any one of the punishments which have been specified in Rule 24. Reliance has been placed on behalf of the plaintiff on Rule 27(B)(ii) of the Standing Orders which provides:

The Transport Committee or a Sub-Committee appointed and authorised by the Transport Committee in that behalf may at any time,

(i)...

(ii) Pass such orders thereon as it deems fit, provided that before passing such Order the Committee shall give an opportunity of being heard to the person or persons who are likely to be affected by such order.

The reference in this part of Rule 27(B) is a reference to the legality or propriety of any order passed by or to the regularity of the proceedings of the Enquiry Officer referred to in Rule 27(B)(i) of the Standing Orders.

6. When we read Section 2A and Section 7 of the Industrial Disputes Act along with the Schedule appended to the Act in light of the provisions of The Industrial Employment (Standing Orders) Act, 1946 to which we have referred and the relevant Standing Orders made by the Ahmedabad Municipal Corporation to which also we have referred, no doubt is left in our minds that the challenge by the plaintiff to the legality of the order terminating his services is founded solely and principally upon the Standing Orders made by the Ahmedabad Municipal Corporation and that therefore the jurisdiction under Section 7 of the Industrial Disputes Act is attracted. The rights which the plaintiff claims in the suit, apart from the right to recover damages, are the rights which flow directly from the relevant rules in the Ahmedabad Municipal Corporation's Standing Orders to which we have referred. If these Standing Orders were not in the field, the plaintiff could not have contended, as he has done, that the impugned order terminating his services was illegal and unlawful.

7. Now, when the claim which the plaintiff has made is founded upon the Standing Orders made by the Ahmedadad Municipal Corporation, is the jurisdiction of the Civil Court ousted by virtue of the provisions of Section 7 of the Industrial Disputes Act, 1947? This question is not required to be decided by us afresh. In the Premier Automobiles Ltd. v. Kamlakar Shantaram Wadke and Ors. : (1975)IILLJ445SC the Supreme Court has settled the law. The principles which have been laid down in regard to the jurisdiction of the Civil Court in relation to industrial disputes have been stated thus. The first principle is that if the dispute is not an industrial dispute or if it does not relate to enforcement of any other right under the Act the remedy lies only in the Civil Court. The second principle which has been laid down by the Supreme Court is that if the dispute is an industrial dispute arising out of a right or liability under the general common law and not under the Act, the jurisdiction of the Civil Court is alternative, leaving it to the election by the suitor concerned to choose his remedy for the relief which is competent to be granted in a particular case. The third principle which has been laid down by the Supreme Court is that if the industrial dispute relates to the enforcement of a right or an obligation created under the Act, then the only remedy available to the suitor is to get an adjudication under the Act. The fourth and last principle which the Supreme Court has laid down is that if the right which is sought to be enforced is a right created under the Act such as Chapter VA, then the remedy for its enforcement is in either Section 33C or the raising of an industrial dispute, as the case may be. We now apply these principles to the facts of the instant case. The analysis of the claim which the plaintiff has made clearly shows, as stated by us, that the plaintiff has founded his claim on rights accruing to him under the Standing Orders made by the Ahmedabad Municipal Corporation under the Industrial Employment (Standing Orders) Act, 1946. Those Standing Orders have been referred to in Item 1 of the Second Schedule to the Industrial Disputes Act, 1947. In fact, it is Item I in the Second Schedule to the Industrial Disputes Act, 1947 which appears to us to be linking that Act with the Industrial Employment (Standing Orders) Act, 1946. Therefore, the claim which the plaintiff has made arises solely and exclusively out of the rights conferred upon him by the Standing Orders made by the Ahmedabad Municipal Corporation. A claim based on those Standing Orders is a claim made under the Industrial Disputes Act. We have no doubt in our minds about this proposition. Therefore, the third principle which has been laid down in the Premier Automobiles' case by the Supreme Court governs this case. We may, however, add that the plaintiff's claim to recovery of damages for the wrongful termination of his services based purely upon the relationship of master and servant if he has made any such claim, would be within the jurisdiction of the Civil Court. This decision of the Supreme Court has been followed by Calcutta High Court in Hindustan Steel Ltd. v. K.S. Nair 81 C.W.N. 236. It has been observed by the learned Single Judge of that High Court that the Industrial Disputes Act creates a special machinery under Section 33C to enforce specially created rights and the parties cannot therefore approach the Civil Courts for relief in so far as enforcement of those rights is concerned. To the extent to which the dispute falls within the jurisdiction of the special forum created by the Act the jurisdiction of the Civil Court is ousted. However, he has observed in that decision that the suit for damages for wrongful dismissal would be maintainable in a Civil Court. The last mentioned proposition, in our opinion, cannot be put so widely as the learned Single Judge of the Calcutta High Court has done. Claim for damages arising out of wrongful dismissal and based only upon the relationship of master and servant would be within the jurisdiction of the Civil Court. If the claim for damages arises out of wrongful dismissal under the Standing Orders made under the Industrial Employment (Standing Orders) Act, 1946 or under the Industrial Disputes Act, 1947, it will, in our opinion, not be within the jurisdiction of the Civil Court. In First Appeal No. 40 of 1973 decided on September 20, 1976 by Mr. Justice A. D. Desai a similar question arose. After-having referred to the decision of the Supreme Court in the Premier Automobiles Ltd. v. Kamlakar Shantaram Wadke and Ors. (supra) he has observed that the industrial dispute relating to the enforcement of a right or an obligation created under the Industrial Disputes Act will not be open to be decided by the Civil Court and in such a case the suitor must obtain an adjudication under the Industrial Disputes Act. It was this unreported decision of the learned Single Judge which gave rise to this reference. Mr. Justice N.H. Bhatt who referred the matter to the Division Bench felt that the law on the point should be settled by a Division Bench and should not be left to be culled out from the unreported decision of the learned Single Judge. It is needless for us to say that as late as in 1975 in the Premier Automobiles* case (supra), the Supreme Court has settled the law. In this case we are doing nothing more than applying the principle laid down by the Supreme Court in that case.

8. Before we deal with the arguments, raised by Mr. Solanki in reply, we may state that adjudication of a claim for damages arising out of wrongful dismissal and based upon master and servant relationship will be governed by the first principle laid down by the Supreme Court in the Premier Automobiles' case. A large number of arguments which Mr. Solanki has raised are totally misconceived. The principal trend of his arguments is that once there is a breach of a statutory provision in making a particular order, it is open to the aggrieved party to seek a declaration under Section 34 of the Specific Relief Act, 1963 (Section 42 of the Specific Relief Act, 1877). This argument is thoroughly misconceived because the plenary jurisdiction of a Civil Court to grant a declaration under Section 34 can be exercised if it has not been ousted by any other law. Once the jurisdiction of the Civil Court is ousted in a particular matter, the question of bringing into play Section 34 does not arise. The repeated arguments which Mr. Solanki has raised on this aspect are conveniently trying to ignore the question whether the jurisdiction of the Civil Court under Section 34 of the Specific Relief Act is ousted by the provisions of the Industrial Disputes Act, 1947 as interpreted by the Supreme Court in the Premier Automobiles 'case (supra). We are, therefore, unable to accede to his contention that the dispute which the plaintiff has raised is not a dispute under the Industrial Disputes Act. It does not lie in the mouth of the plaintiff to say it because he has challenged the legality and propriety of the impugned order on the basis of the rights which he claims under the Standing Orders made by the Ahmedabad Municipal Corporation under the Industrial Employment (Standing Orders) Act, 1946.

9. He has next argued that the plaintiff is claiming relief in the suit on the ground of violation of the principles of natural justice. Principles of natural justice are unconfined principles. It is difficult to think that Civil Court alone has jurisdiction to grant relief where principles of natural justice have been violated. The competent Court which has jurisdiction to adjudicate upon the present dispute can also examine the contention based upon the violation of the principles of natural justice and grant relief, if it upholds it.

10. He has next argued that the impugned order was mala fide made. Whether an order is made mala fide or not can be determined only after having had a look at the Standing Orders. Now an order is mala fide if it purports to have been made under a law but has been made not for the purpose of achieving the object of the Act but for achieving an ulterior object. In fact, a mala fide order flows from gross abuse of the statute. The statutory provision is used only as a camouflage to hide or conceal the real object. Such an order defeats the law and effectuates arbitrariness and capriciousness. Now, whether the impugned order is mala fide or not cannot be examined unless Standing Orders made by the Municipal Corporation are brought into play. Both are interconnected. It is therefore not open to the Civil Court to deal with (his allegation made by the plaintiff. The competent Court under the Industrial Disputes Act can examine this contention as well and grant relief if it upholds it. Therefore, the argument that sines the impugned order is challenged on the ground of mala fides it is for the Civil Court to examine it is thoroughly misconceived. It is not as if the Civil Court alone has jurisdiction to deal with the question of mala fides. He has indeed cited before us about half a dozen decisions, all of which are either irrelevant or inapplicable. In order to be fair to him, we shall refer to all those decisions in one sentence each.

11. Sirsi Municipality by its President, Sirsi v. Cecelia Kom Francis Tellis : (1973)ILLJ226SC is a case upon which he has placed reliance. That case dealt only with Section 46 (g) of the Bombay District Municipal Act (3 of 1901) and Rule 143 of the Sirsi Municipality. It has nothing to do with the industrial law. We are here examining the effect of Section 7 of the Industrial Disputes Act, 1947, which was not brought Adhavaryu, A.I.R. into play in that case. Tata Chemicals Ltd. and Ors. v. Kailash C. 1964 Gujarat 265 : V G.L.R. 649 is another case on which he has placed reliance. It was decided by Mr. Justice P.N. Bhagwati (as he then was) on 23rd November 1963, long before Section 2A was inserted in the Industrial Disputes Act. It is this section which imparts to an individual dispute of a workman the character of an 'industrial dispute'. Since Section 2A of the Industrial Disputes Act, 1947 was not enacted at that time, the decision recorded by Mr. Justice Bhagwati cannot be applied to the facts of the instant case. Rasiklal Chandulal Shah v. The New Shorrock Spinning & . 17 G.L.R. 749 is the third case upon which he has placed reliance. All that has been held by Mr. Justice Thakkar in that case is that the Civil Court has jurisdiction to interpret the real content of a stipulation in the contract of service. No one can gainsay that proposition but it cannot be said that a statutory condition of service resulting from the Standing Orders can also be made a subject-matter of interpretation by a Civil Court in face of the provision Section 7 of the Industrial Disputes Act, 1947. The fourth decision upon which he has relied is in Dhulabhai v. State of Madhya Pradesh and Anr. : [1968]3SCR662 It was a case under Madhya Bharat Sales Tax Act (30 of 1950). It has been laid down in that decision that the exclusion of the jurisdiction of the Civil Court is not to be readily inferred unless the conditions set out in that decision are satisfied. The question arose in the context of the statute having given a finality to the orders of special Tribunals. This decision was referred to by the Supreme Court in the case of Premier Automobiles Ltd. (supra) to which we have referred. Therefore, so far as industrial disputes governed by the Industrial Disputes Act, 1947 are concerned, it is the decision of the Supreme Court in Premier Automobiles' case which governs the field. It is, therefore, not necessary to bring into play the decision of the Supreme Court in Dhulabhai's case (supra) which was under Madhya Bharat Sales Tax Act (30 of 1950). Vohara Abbasali Mohamadali Lakhawala v. The State of Gujarat : AIR1971Guj241 is the next decision upon which Mr. Solanki has placed reliance. In that decision to which I was a party we have only interpreted Section 42 of the Specific Relief Act, 1877 and have not done so in light of the provision of any other law. The last decision to which we have been referred is in A.K. Subraraman v. Union of India (1975) 1 Labour Law Journal 338. It was a service case and the dispute was between the direct recruits and the promotees. No question of ousting the jurisdiction of the Civil Court by the express provision made in some other law arose in that case.

12. The last argument which he has raised is based upon Section 11A of the Industrial Disputes Act, 1947 which was enacted in 1971. The argument which he has raised is that the present suit was filed in 1969 while the section was enacted in 1971 and that therefore the present suit would not be governed by it. Section 11A deals with the procedural aspect of a case before the Labour Court, the Tribunal or the National Tribunal, as the case may be. We are concerned in the instant case with Section 2A read with Section 7 and Section 10 in light of Item 1 in the Schedule to the Industrial Disputes Act, 1947 and the relevant provisions of the Industrial Employment (Standing Orders) Act, 1946 to which we have referred.

13. We therefore do not find any substance in any of the arguments which Mr. Solanki has raised.

In light of the reasons which we have given, our answers to the two questions referred to us by the learned single Judge are as follows:

The answer to the first question is:

If a worker claims a right to continue in service by virtue of the Standing Orders framed under the provisions of the Industrial Employment (Standing Orders) Act, 1946, he is claiming a right under the Industrial Disputes Act, 1947.The answer to the second question is:The jurisdiction of the Civil Court to deal with such a question is by necessary implication barred except where the plaintiff claims damages for wrongful termination of his services by his employer arising out of the relationship of master and servant between him and his employer.

14. The appeal shall now be placed before the learned single Judge for final disposal in light of the answers which we have given to the two questions referred to us.

Mr. Solanki orally applies for leave to appeal to the Supreme Court against this decision under Article 133(1) of the Constitution. We have not finally decided the appeal and therefore this is not a final order. Therefore, Article 133(1) has no application to the instant case. We have therefore no jurisdiction to grant the oral request made by Mr. Solanki in that behalf. The request is therefore rejected.