# [1976] 1 S.C.R. 427

- **Citation:** [1976] 1 S.C.R. 427
- **Court:** Supreme Court of India
- **Decided:** 1975-08-26
- **Case number:** Civil Appeal No. 922 of 1973
- **Bench:** A. Alagiriswamj, P. K. Goswami, N. L. Untwalia
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/1976-1-s-c-r-427-6617
- **Pages:** 24

## Headnote

Industrial Disputes A ct, 1947-S. 18 ( 1 )-Agreenlent under-Dispute bet-·
ween eniployer C!lld empfoYee in relation thereto-Whether could be decided by
a Ci\·il Court.
Jurisdiction of Cil'il Court in relation to an
industrial
dispute-Principles .
Industrial Disputes, Act, s. IDA-Suit
for
enforcement of arbitrationC
Jurisdlction of Civil Court to try .
D
F
G
H
The Industrial Disputes Act was enacted to make provEsion for the investi--
gation and settlement of the industrial disputes.
The Act envisages collective
bargaining, contracts between the workers' unions and management and the like:
which are n1at1ers outside the realnt of the con1mo11 law or the law of contracts ..
fhe Act defines an industrial dispute and what the term "settlement" means.
Different 2uthorities have been created at different levels for settlement and
adjudication of industrial disputes, conferring on them varied
and
extensive·
powers.
\Vhere a dispute between the workers and managen1ent cannot be resolved by the conciliation procedure envisaged under the Act, the dispute
is.
referred bv the Government to a Labour Court or a Tribunal. the award
of"
which becomes final and cannot be called :n question by any court in any manner
whatsoever.
Under s. 18(1) a settlement arrived at by agreement between the
employer and \.vorkmcn, otherwise than in the course of conciliation proceeding.-
shall t.= binding on the parties to the agreement.
In one of the departments of the appellant there were three groups of
workers : One, the workers' union which was earlier recognised as a "trade union,
and was derecognised by the appellant, and secondly another union which was re~
cognised in its ()lace and thirdly workn1en who were members of neither union.
As a result of a settlement entered into with the derecognised union an incentive
scheme was in force in this department of the appellant. After the derecogn~tion
of the union, because of the increase in the strength of the workmen it became
necessary for the company to revise the target figures of the incentive scheme.
The company, therefore, entered into a ~ttlement with the union recognised
later. This led to protests from; the de-recognised union. Respondents 1 and 2 who
were members of the derecO@ised union, instituted a suit.in the Civil Court under
O. I r. 8 of the Code of Civtl Procedure in· a representative capacity alleging that
the earlier settlement was a contract of service and that the new settlement would.
bring about a change in their service conditions,
that the new settlement was
arrived at without following the mandatory requ£rements of s. 9A of the Act andhave prayed for a permanent injunction to restrain the appellant from implementing the later settlen1ent.
During the- trial the plaintiffs stated that they did not
wish to enforce the first agreement as it would not be binding upon the workmen
who were the members of the derecognised union.
This led to dropping the issue
relating to nonMcompliance with s. 9A of the Act also.
The trial court held that it had jurisdiction to try the suit as it was a suit of a·
civil nature for enforcement of rights of common and general law and consequently there was no question of reliefs being cla'.med under the Industrial Dis-·
putes Act. Treating the incentive payments made during the years when the first
agreement was in force as imolied terms of conditiom of service and trial court
granted a conditional decree of iniunction. On appeal, the High Court upheld
the view of the trial court. On further appeal to this Court it was contended by
the respondents that the remedv provided under the Industrial Disputes Act was
a misnomer in that reference of an industrial dispute for adjudication to a tribunaf
428
SUPREME COURT REPORTS
(1976] 1 S.C.R.
·would depend upon the exercise of the power by the Government under s. !O• l_l
·Of the Industrial Dispu~es Act.
The Act Uid not confer any right on the suit0r.
Allowing the appeal,
HELD: The suit for a decree for pern1anent inj

## Text

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427
PREMIER AUTOMOBILES LTD.
\',
KAMLEKAR SHANTARAM WADKE OF BOMBAY & ORS.
August 26, 1975
(A. ALAGIRISWAMJ, P. K. GOSWAMI AND N. L. UNTWALIA, JJ.]
Industrial Disputes A ct, 1947-S. 18 ( 1 )-Agreenlent under-Dispute bet-·
ween eniployer C!lld empfoYee in relation thereto-Whether could be decided by
a Ci\·il Court.
Jurisdiction of Cil'il Court in relation to an
industrial
dispute-Principles .
Industrial Disputes, Act, s. IDA-Suit
for
enforcement of arbitrationC
Jurisdlction of Civil Court to try .
D
F
G
H
The Industrial Disputes Act was enacted to make provEsion for the investi--
gation and settlement of the industrial disputes.
The Act envisages collective
bargaining, contracts between the workers' unions and management and the like:
which are n1at1ers outside the realnt of the con1mo11 law or the law of contracts ..
fhe Act defines an industrial dispute and what the term "settlement" means.
Different 2uthorities have been created at different levels for settlement and
adjudication of industrial disputes, conferring on them varied
and
extensive·
powers.
\Vhere a dispute between the workers and managen1ent cannot be resolved by the conciliation procedure envisaged under the Act, the dispute
is.
referred bv the Government to a Labour Court or a Tribunal. the award
of"
which becomes final and cannot be called :n question by any court in any manner
whatsoever.
Under s. 18(1) a settlement arrived at by agreement between the
employer and \.vorkmcn, otherwise than in the course of conciliation proceeding.-
shall t.= binding on the parties to the agreement.
In one of the departments of the appellant there were three groups of
workers : One, the workers' union which was earlier recognised as a "trade union,
and was derecognised by the appellant, and secondly another union which was re~
cognised in its ()lace and thirdly workn1en who were members of neither union.
As a result of a settlement entered into with the derecognised union an incentive
scheme was in force in this department of the appellant. After the derecogn~tion
of the union, because of the increase in the strength of the workmen it became
necessary for the company to revise the target figures of the incentive scheme.
The company, therefore, entered into a ~ttlement with the union recognised
later. This led to protests from; the de-recognised union. Respondents 1 and 2 who
were members of the derecO@ised union, instituted a suit.in the Civil Court under
O. I r. 8 of the Code of Civtl Procedure in· a representative capacity alleging that
the earlier settlement was a contract of service and that the new settlement would.
bring about a change in their service conditions,
that the new settlement was
arrived at without following the mandatory requ£rements of s. 9A of the Act andhave prayed for a permanent injunction to restrain the appellant from implementing the later settlen1ent.
During the- trial the plaintiffs stated that they did not
wish to enforce the first agreement as it would not be binding upon the workmen
who were the members of the derecognised union.
This led to dropping the issue
relating to nonMcompliance with s. 9A of the Act also.
The trial court held that it had jurisdiction to try the suit as it was a suit of a·
civil nature for enforcement of rights of common and general law and consequently there was no question of reliefs being cla'.med under the Industrial Dis-·
putes Act. Treating the incentive payments made during the years when the first
agreement was in force as imolied terms of conditiom of service and trial court
granted a conditional decree of iniunction. On appeal, the High Court upheld
the view of the trial court. On further appeal to this Court it was contended by
the respondents that the remedv provided under the Industrial Disputes Act was
a misnomer in that reference of an industrial dispute for adjudication to a tribunaf
428
SUPREME COURT REPORTS
(1976] 1 S.C.R.
·would depend upon the exercise of the power by the Government under s. !O• l_l
·Of the Industrial Dispu~es Act.
The Act Uid not confer any right on the suit0r.
Allowing the appeal,
HELD: The suit for a decree for pern1anent injunction was not ma:.ntC1in;:1Li!c
jn the civil court as it had no jurisdiction to grant the relief or even a te1npor.:r}
A
;relief.
[448C-DJ
B
(1) The principles applicable to the jurisdicEon of the civil court in relation
·to an industrial dispute are, (i) if the dispute is not an industrial dispute nor do(:-.
it relate to enforcen1ent of any other right under the Act the remedy lies. ont;.
in the civil court; (ii) if the dispute is an industrial dispute arising out of a right
or liab'.-lity under the. general or common law and not under the Act, the jurisdiction of the civil court is alternative. leaving it to the election of the suitor conr.cerned to .:hoose his remedy for the relief which is competent to be granted in a
particular remedy; (iij) if the industrial dispute relates to the enforce_q1ent of a
C
right or an obligation created under the Act then the only remedy available to
·the suitor is to get an adjudication under the Act; (iv) if the right which is sought
to be enforced is a right.created under the Act such as
Chapter VA then
Lhe
remedy for !ts enforcement is either s. 3 3C or the raising of an indtt<;tria1 di.,putc.
'as the case may be.
[446A-D]
Doe v. Bridge.~ (1831) 1 B. & Ad. 847: Pas1nore and ot!r'ers v. The Os1ra!dtlt'ist!e Urban District Council (1898) Appeal Cases, 387; Cutler v. Wandsworth
D
Staditun Ltd. (1949) Appeal Cases 398; Wilverhan1ption New Waterwotks Co.
v. Hawkesford (1859) 6 C.B. (N.S.) 336; Naville v. Lo1ulo11 "Express", .Vcw.1--
paper Ltd. (1919) Appeal Cases 368; Peebles v. The Oswaldtwistle Urban Disrrict Co1111cil (1897) 1 Queen's Bench, 625; Barraclough v. Brown and others
(1897) Appeal Cases, 615; Solo111011s v. Gertzenstein Ltd. and otl1ers (1954) :!
·weekly Law Reports, 823; Soutlnrark London Borough Council v. JVii!ia11B and
another (1971) 1 Chancery, 734; Ste1•e11s v. Chown (1901) 1 Chancery. 894:
)
E111peror of Austria v. Day (1861) 3 D.F. & J. 217, 253; Carlton lllustrator.1 and
another v. Co/en1a11 & Co111va11y Lin1ited (1911) 1 King's
Bench
771: PYX
E
Granite Co. Ltd. v. Ministry of Housing and Local Govenunent and others (1960)
Appeal Cases 260; Duchess of Aroyl/ v. Duke of Argyll and others (1967) 1
Chancery, 302; Polland v, Photographic Con1pa11y (1889) 40 Chancery DiYhion
)
345.
State of Bo111ba-y v. K. P. Krish11a11 and other.~ (1961} 1 S.C.R. 227 and Bon1bav TJ11io11 of Journalists & Ors. v. The State of Bo1nbav & Anr. [1964] 6 S.C.R.
'22; K. S. Venkataran1a11 & Co. v. State of Madras [1966] 2 S.C.R. 229; SecrcHary
F
of State Represented hy the Collector of South Arcot v. Mask and Co111pa11y 67
Indian Appeals, 222; Raleigh I111·estn1e111 Coy. Ltd. v. Governor General in Coun-
,.cil, 74 Indian App~a]s. 50'; Fi)·n1 c•nd lllu.ri Subbayya Chetty and Sonv \". The
State of A ndhra Pradesh [1964] 1 S.C.R. 752; Finn Sethi Radha Kisha11 (deceased represented by Hari Kishan and others v. The Adn1il1istrator, M1111icipaf
Co1n111i1tee, Ludhiana [1964] 2 S.C.R. 273; Bharot Kola Bha11dar Ltd. v. Municipcd Conunittee. Dlia1nangaon [1965] 3 S.C.R. 499; Kan1la Mills Ltd. v. State
of Bon1bay [1966} 1 S.C.R. 64; State of Kerala v. Rarnaswa1ni Iyer & Sons [19661
·3 S.C.R. 582; Pab·bojan Tea Co. Ltd. etc. v. The Deputy Com111issioner, LakhilnG
pur etc. [1968] 1 S.C.R. 260; Dhulabhai and others v. The State of Madhya Pradesh and a11other [19681 3 S.C.R. 662 and U11io11 of India v. A. V. ]\larasioi!uilu
(1970] 2 S.C.R. 145, referred to.
(2) Jn the present case it is c1ear that what the plaintiff, respondents \.\·antt'd
to prevent was the threatened breach of their right which flo\ved fron1 the agrct:-
-n1ent entered into be'ween the derecognised union and the company. Such a co11ec.
tive agreement is recognised and creates a right in favour of the men1bers of the
-Union 011/y under s. 18(1) of the Act and not under the general Jaw of contrnct.
Withdrawal of the claim based upon the said agreen1ent from the trial court had
-no effect on the question of its jurisdiction to try the suit._ In so far as the suit
·was filed io. a representative capa..:ity on behalf of the members of the derecognised
H
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PREMJER,AUTO V. K. S. WADKE
429
. union bv hvo of its members under. 0.- I r. 8 of the Code it was clearly a suit
ill' relation to the exercise of right. created under the Act. In_ their case it 'vas
not permissible to fall back. upon: the alleged implied terms. and
cond~ions of
se.rvice. The source of their right was that agreement. Even the· workmen who
v.·ere· not members of the derecognised union but were given the benefit of incentive payments under the said agreement were so _given because they tacitly agreed
to be bound_by the agreement. __ Even accepting that in the£r case it had assumed
the character of an imnlied term of contract of service. the alternative claim
··made in paragraph 8 of the plaint as being a .condition· of service otherwise, can
be referable to the claim Qf the. non-members only.· .The source of their right m
that event was different and a representative suit on their behalf .by the two plaintiffs could not be_ maintained. The nUmer()us persons must have the same interest in one suit instituted under 0. I r. 8 of the Code. Persons having d'.fferent
interests cannot be so rep1tsented .. The better and more reasonable view. therefor~. h that all workmep represented· by the hvo plaintiffs sought an ·Order of
injunction in the civil court to prevent an injury _,vhich was proposed to be caused
to them in relation to th~ir right under the Act.
[447E-H, 448AB]
(3) The. dispute could well be "deCidcU:frorn all aspects in a reference Under
the Act. Although the issue as to the non-compliance with the requirements of
s. 9A of the Act v.·as dropped. the trial court ·set!Il1S to have found that the proposed change in the conditions of service was adverse to the interests of the workmen. -\Vhether it was so Qr not is a matter of debate. But it is apparent tha.t ·
both th~ agreen1enls could not be s:.multaneously _given effect to. The result of
· the order of injunction made by the trial collrt was that the workmen represented
by the two plaintiffs \Vere to get incentive payments in accordance
\\1ith ·. the
scheme embodied in the earlier agreement ignoring the addition to the· strength
of the workmen. On the other band, the members of the recognised un!.on who
··had entered into the second agreement were to get their incentive payments in
a.::cordance with ihat agreement taking into account the contribution made in the
r.1atter of production by the newly added workmen. This leads to an impracticable result.
[448C.GJ
·
(4) Section 4l(a) of the Spec!.fic Relief-Act says that an injunction cannot be
g:anted to prevent breach· of a contract "the performance of which would not be
~;:-oecifically enforced. Section 42 providing an exception to this is not attracted
in this case.
Section 14(1)(c) says that a contract which is in its nature determinable ca.'l.Dot be specifically enforced. The contract in question emb01.1ied in
the earlier agreement was in its nature determinable under s. 19 (2) of the Act or
could be varied by following the procedure under s. 9A. The decree or order of
injunction made _therein, is not sustainable on this account too.
[4481-1, .449ADJ
(5) It cannot be said that remedy provided under the Industrial Disputes Act
:_., a misnomer. Reference of industrial disputes for adjudication in exercise of
the oower of the Government under s. 10(1) is so common that it is difficult to·
call the remedy a misnomer or insufficient or inadequate for the purpose of enforcement of the right or liability created under the Act.-
The -eri.forcement of a
right or an obEgation under the Act. the remedy provided uno fiatu in it is the exc!psive remedy. -. The le.gisl.ature in its wisdom did not think it fit and proper to
provide a very easy and smooth remedy for enforcement of the rights and obligation-; created under the Act. Persons w!shing the enjoyment of such rights and
\Vanting its enforcement must rest content to secure the remedy pfovided by the
Act. The possibility that the Government may not ultimately refer an industrial
disput~ under. s. 10 on the ground of expediency is not a relevant consideration in -
this regard.
[439C-F]
(6) The pr:ncip.le of separate remedy only for the purpose of injunction avail--
abie in a court of Chancery, which was kept intact even after the jUdicature Act
of 1873 is not applicable in India. In India, under.s. 9 C.P.C. courts have, subject to certain restrictions, jurisdiction to try suits of civil nature excepting suits
of which their cognizance is .either expressly or impliedly barred. If a suit in
rclatI.on to an industrial disoute relates to the enforcement of a
right created
u:lder the Act by necessarv intendment. the jurisdiction of the civil court is
barred. ·Tuat being so. in India. it is barred for all purposes and a suit for in14-L839SopCl/75
430
SUPREME COURT REPORTS
[1976] 1 S.C.R.
junction -only would not lie. The jurisd:Ction of- the civil couft in India to grant
a relief of injunction is limited to cases in which there is a right at law .. that is
A
Jj
to.say, a right to~~ pursued. in such court._ [440C..H]
Kn"slznan· and another v. East India Distilleries and Sugar Factories.· Ltd.
Nellikuppam tlnd another (1964) 1 L"abour Law Journal 217; Madura Mills Company, Ltd. v. Guruve1n111a'l and another_ (1967) 2 Labour Law Journal 397; Nipnani Electriciry Con1pany (P) Ltd. (by its director, V.R. Patravali) - and another v; Bhimarao Lax111an Patil and others (1969) 1 Labour La\V Joumal 268;
The Pigment Lakes and Che111iclll Afanufacturing Co. Private Ltd. v. Sitaram
B
Kasliiram Konde 71 Bombay Law Reporter 452, and Nanoo Asani Jtfadhavan v.
State oJ Kerala and others (1970) 1 Labour Law Journal 272. referred to.
" ·
Bidyut 'Ku1nar:,Chatterjee and others v. Commissioner for the Port of Calcutta (1970) 2 Labour Law Journal. 148. over ruled.
(7) (a) The manu.er of voluntary reference of indllstrial disputes to arbitraC
tion is prOYided in s. IOA of the Industrial Disputes Act. The reference to arbitration has to be on the basis of a written agreement between the employer and ·
the workmen. As prov~ed in s. IOA(S) of the Industrial Disputes Act, nothing
in the Arbitration Act, 1940 shall apply to arbitrations under s. lOA of the Act.
.
(b) Where a "'ritten agreement was executed,.according to .whi[:
9
=~ ;::~/~·.
agreed to refer a dispute. regarding dismissal of certain workmen to a. Board Of
D
Arbitrators consisting of three persons and the employer tenmnates the Bettlement under s. ·19(2) of the Industrial Disputes Act and later withdra\VS its nomi-
. .
· .
nee from the Board of Arbitrators. a suit filed in a civil court by the employees
challenging the action of the employer and for direction to restr<i.n the employer
from -committing a breach of the agreement and to a point its nominee in the
place of the one v:ho had withdrawn. such a suit is in relation to the enforcement of a right created under the Act. In such a case the remedy in crvil court
is barred. The only remedy available to the workmen concerned \Yas the raising
of an industrial dispute. [450BCDJ
-
E
Soutli Indian Bank Ltd. v. A. R. Chacko [1964] 5 S.C.R. 625, referred to.
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 922 of 1973.
Appeal by special leave from the judgment and order dated the
13th and 15th, February, 1973 of the Bombay Him Court in L.P.A.
No. 74 9f 1972. and
·
·
-
Civil Appeal No. 2317 of 1972.
Appeal by special leave from the judgment and order dated the
27th and 28th September, 1972 of the Bombay High Court in Civil
Revision Application No. 451 of 1972.
In C. A. 922 of 1973.
S. D. Vimadalal, A; K. Sen and I. N. Shroff, for tho appellant.-
Sh. Sorabji, F. D. Damania, S. K. Dholakia, Subhash Oberai and
R. C. Bhatia, for respondents Nos. 1c2.
3_6_ F. S. Nariman, P. H. ~arek!J and S. Bhandare, for respondents
-~ ........
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PREMIER AUTO v. K. s. WADKE (Untwalia, !.)
Rameshwar Nath, for Respondent/Intervenor.
In C. A. No. 2317/1972.
A. K. Sm aJ\l'.l Rameshwar Nath, for the appellant.
431
Som Nath, F. D. Damania and B. R. Agarwala, for respondent
Nos. 1 to 3.
The Judgment of the Court was delivered by
UNTWALIA, J.
These two appeals filed by special leave of this
Court have been heard together because an Jmportant question of law
as to the jurisdiction of the Civil Court to entertain the suits of the
kinds filed in the two cases Is common. Mr. Vimadalal, learned counsel
for the appellant company in Civil Appeal No. 922 of 1973 followed
by Mr. Nariman, appearing for respondents 3 to 6 and Mr. A. K. Sen,
learned counsel for the appellant company in Civil Appeal No. 2317
of 1972 argued in support of the ouster of the jurisdiction of the Civil
Court, Mr. Sorabjee, appearing on behalf of the plaintiff respondents 1
and 2 vehemently combated the proposition. He was followed by Mr.
Som Nath Iyer, learned counsel for the respondent Union in Civil Appeal
2317 of 1972. We shall proceed to state the facts of Civil Appeal No.
922 of 1973 first, discuss the point of jurisdiction as also the other points
involved in that appeal and then. brJefly refer to the facts of the other
case.
The appellant company carries on a big industry and owns several
plants. One such plant is situated at Kurla, Bombay. In this plant there
is a department known as Motor Production Department. The dispute
relates to the workmen of this department. There seems to be three
groups of workmen in the department aftoresaid. One group was represented by Engineering Mazdoor Sabha-hereinafter ca!led the Sabha
Union which .is a registered Trade Union and was once a recognized
union of the workmen of the appellant company. Respondents 1 and
2 who instituted the suit in question in the City Civil Court at Bombay
are members of this Union. Later on the Sabha Union was derecognized and another registered Trade Union known as Association of Engineering workers.-hereinafter called the Association Union-was recognized by the appellant company.
This Association Union, respondent
No. 3, was imp!eaded as defendant No. 2 in the action. Besides the
members of these two unions, there are certain workmen who
are
members of neJther.
An incentive scheme providing for certain incentive payments to
the workmen ofl the Motor Production Department was introduced by
the appellant company in pursuance of agreements entered from time
t0 time between the company and the Sabha Union. The last of such
agreement executed between them was dated the 31st December, 1966.
It appears that at the time of 11he execution of the last agreement there
were 425. workmen in the department. Broadly speaking the incentive scheme was. to make extra payments at the rate of 3.5% over the
basic production of 650 nnits upto the target of 900 on every extra
production of 25 units. In other words, the workmen were to get 35%
432
SUPREME COURT REPORTS
[1976J 1 S.C.R;
more if they produced 900 units iu a month of 25 workiug days. The
next target fixed was 1250 units payable at the rate of 4% per 25 units.
In other words, the workmen were to get 35% + 56% total 91 %
more if they reached the production target of 1250 per month.
It
further appears that after the recognition of the Association Union, 27
more persons who were prevJously learners were taken in as regular
temporary employees iu ljhe Mota~ Production Department on an~
from 1st September, 1970. The strength of the workmen thus accoi:-
ding to the case of the appeilant and respondent no. 3 w~nt up from
425 to 452, naturally necessitating the revision of the norm and target
figures of, the incentive scheme. Some sort of arrangement was arrived
at between the company and the Association Union which led to a protest hy the Sabha Union in October, 1970. Eventually a d~nite settlement in wrJting was arrived at between the appellant and respondent no. 3 on the 9th of January, 1971 making the settJement effective
from 1-9-1970. The norm figure of 650 units was raised to 725 and
the first and the second target figures. were raised from 900 to 975·
and 1250 to 1325 respectively.
The rates of incentive payment at
3.5% .in the first target and 4% in the ·se_cond target were retained.
Thus the maximum incentive payment of, 91 % was kept unaltered.
Broadly speaking, therefore, the increase of 75 units at every stage
of the productJon was attributable to· the addition of the ·strength ofi
2 7 workmen in the Motor Production Department. The members of
the Sabha Union, however, felt aggrieve'd by this, because, they thought
the 27 newely added workmen were merely learners and could not be
eligible for being taken in the pool of the incentive scheme. It would
adversely affect the incentive payments which were to be made to the
existing 425 workmen.
According ta the case of respondents 1 and
2 they for the first time learnt about the intent.ion of the company to
bring about a change in the service conditions when the altered scheme
was put on the Notice Board on the 15th March, 71. The two workmen who were the members of the· Sabha Union rushed· to the court and
instituted their plaint on the 8th April, 1971 .in the City Civil Court at
Bombay seeking the permission of the court to institute the suit in a representative capacity under Order I, Rufo 8 of the Code of Civil Procedure-hereinafter called the Code-representing the workmen who were
members of the Sabha Union as also thase who were neither its members nor members of the Association Union.
On an objection being
raised consequently respondents 4 to 6 were added as defendants 3 to
5 to represent the 27 disputed workmen.
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Respondents 1 and 2. in their plaint chiefly based their claim on the
G
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Memorandum of Settlement dated· the 31st December, 1966 which on
being acted Up\)n had become a condition of service not only of the
members of the Sabha Union but also of others who were not its members. Their assertion was that the other settlement arrived at between
,{..J
the company and the Assocfation Union under section 18 (1) of the
Industrial Disputes Act, 1947-hereiuafter referred to as the Act, was
not binding on thase workmen who were not its members. They attacked
H
the second agreement as having been arrived at without following 'the
mandatory requirement of section 9A of the Act. The first relief claJmed in the suit was that the set'.tlernent <fated the 91.h fanuary, 1971 was
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PREMIER AUTO \', K. s. WADKE (Untwalia, J.)
433
not binding on the plaintiff and other concerned daily rated and monthly
rated workmen of the Motor Production Department who were not
members of the Association Union.
The second relief was to ask for a
decree of permanent injuct.ion to restrain the appellant from enforcing or
implement,ing the terms of the impugned settlement dated the 9\h January, 1971. The appel)ant company and the other defendant respondents filed their written statements and contested the •suit. They asserted
that all the workmen of the Motor Production Department had impliedly accepted and acted upon the new settlement.
They challanged the
jurisdiction of the Civil Court to entertain the suit in relation to the
dispute which was an ,intlustrial dispute and further asserted that in any
view of the matter no deeree for permanent injunction could be made.
The Trial Court frame{! several issues for trial but curiously enough
dropped many issues as not surviving in view of the ·stand taken on behalf of the plaintiffs' counsel at the time of the trial of the suit. It was
conceded on their Q.ehalf, and tightly too, that the agreement dated the
31st December, 1966 was a sett_lement under section 18(1) of the Act.
It could be binding only on the members of the Sabha Union and not
on others. But ·since the suit was filed on beha!J! of the non-members
also who were not meinbers on ,either Union and in a representative
capacity.the main basis of the sUit being the agreement dated the 31st
December.1966 was given up, and it was stated on behalf of the plaint.iffs that they did not wish to enforce that agreement.
Hence many
issues, according to the learned Trial Judge did not survive for discussion and were dropped. One such issue was issue no. 7 in relation to
the requirement of'..the notice under section 9A of the _Act for effecting
any change in the agreement dated the 31st December, 1966. Treating
the incentive payments made on and from !lie year 1966 till 1970 as
implied terms of conditions of ·service, the Trial Judge seems to have
come to the conclusion that the change effected in January, 1971 was
detrimental to and against the interests of the workmen. Due to some
technical reasons the first relief. of declaration was not granted. But
holding that the court had jurisdict,ion to try the suit as it was a suit
of a "Civil nature for enforcement of rights of common and general law
and consequently there is no question of the reliefs being claimed
under the Industrial Disputes Act", it granted a sort of conditional decree of injuction restraining the appellant flt'om enforcing or implementing
the terms of agreement of the 9th January, 1971 against the workmen
of its Motor Production Department who are not members of the Association Union.
The injunctfon, however, was not to operate in regard
to any workmen who in writing accepted the terms of the impugned
agreement or after .the appellant took steps in accordance with law to
make the agreement binding on workmen other than those who are not
. members of the Association Union.
The decree for injunction was also
to cease to be operative if the apUellant gave any notice of change under
section 9A of the Act on exoiry of 3 months after the expiry of 21 days
notice given under the sail:! provisions of law.
The company filed an appeal in the Bombay High Court to challenge
the decision of the City Civil Court. The learned sincle Judge of the
High Court who heard the appeal following his decision in the Civil
434
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SUPREME COURT REPORTS
[1976] 1 S.C.R.
Revision filed by the other company which is appellant in the other appeal, sustained the iurisdiction of the Civil Court to entertain the suit
and did not feel persuaded to interfere with it on merits.
The company
took the matter in a letters patent but it met the same fate before a
DivJsion Bench of the High Cour. On grant of special leave, the present appeal was filed.
The foremost and perhaps the only paint, undoubtedly a vexed one,
which falls for our determination is whether on the facts and in the
circumstances of this case the Civil Court had jurisdiction to entertain
the suit filed by respondents 1 and 2 against the appellant and respondents 3 to 6.
Various English and Indian authorities were cited on
the pcint on either side at the Bar and we shall endeavour to answer
the question of law on appreciation of many such authorities.
It rnay
not be necessary to refer lg all.
Before we do so, we may very briefly
refer to the relevant provisions of the Act.
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The object of the Act, as its preamble indicates, is to make provision for the .investigation and settlement of industrial disputes, which
means adjudication of such disputes· also. The Act envisages collective
bargaining, contracts between Union representing the workmen and
D
the management, a matter which is outside the realm of the common
law or the Indian law of contract. The expression "industrial dispute"
is defined in section 2(k) to say that :
" "industrial dispJ!te" means any dispute or difference between employers and employers, or between employers and
workmen, or between workmen and workmen, which
is connected with the employment or non-employment or the
terms of employment or with the conditions of labour, of any
person;"
Section 2(p) gives the definition of the word "settlement" thus :
"settlement" means a settlement arrived at in the course
of conciliation proceeding and includes a written agreement
between the employer and workmen arrived at otherwise than
in the course of conciliation proceeding where such agreement
has been signed by the parties thereto iu such manner as may
be prescribed and a copy th_ereof has been sent to an officer
authorised in this beha]'f by the appropriate Government and
the conciliation officer;"
Chapter II provides for the authorities under the Act, namely, for constitution of the Works Committee, Boards oti Conciliation, Courts of 10;-
quiry, Labour Courts, Tribunals and National Tribunals as also for
appointment of Conciliation Officers.
Different kinds of authorities
having very varied and extensive powers in the matter of settlement and
adjudication of industrial disputes have been constituted.
Since the
time of the earliest decisions of the Federal Court and the Supreme Court
of India it has been recognized fully well that the powers of the authorities deciding industrial disputes under the Act are very extensiveE
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PREMIER AUTO v. K. s. ~ADKE (Untwalia, !.)
435
much wider than the power of, a Qivil Court while adjudicating a dis1:mte ·
which may be an industrial dispute. The labour Courts and the Tribunals. to whom industrial disputes are referred by the appropriate govern•
ment9 under section 10 can create new contracts, lay down new industrial policy for industrial peace, order reinstatement of dismissed workmel} which ordinarily a Civil Court could not do. The procedure of
raising an industrial dispute starts with the submission of a charter of
demands by the workmen concerned. The Conciliation Officer can be
and is often made to intervene in the matter first.
He starts conciliation
proceeding under section 14. If a settlement is arrived at during the
course of the conciliation proceeding, it bec.omes binding on all workmen under section 18(3) of the Act. If there is a fiai!ure of conciliation,
the appropriate government is required to make a reference under section 10(1) of the Act. The award published under section 17(1) becomes final and cannot be called in question by any court in any manner
whatsoever as provided in. sub-section (2).
Section 18(1) of the Act
says:
"A settlement arrived at by agreement between the employer
and workmen otherwise than in the course of conciliation proceeding shall be binding on th~ parties to the agreement."
Section 19(2) makes provision for terminating a settlement and provides
that it shall continue to be binding until then.
Section 29 provides
for penalty for breach of settlement or award. The residuary punishing section for contravention of any provisions of the Act or the Rules
made thereunder is section 31(2). The conditions of service applicable to workmen cannot be changed to their prejudice in regard to
any matter connected with the dispute during the pendency of any
conciliation proceeding or any proceeding before the Labour Court
or the Trib~l as provided in section 33(1)(a). Section 33C(l)
provides for recovery of money due from an employer. The scope of
sub-section (2) as to the power of the Labour Court for the purpose
of determination of the amount due is much wider than the power
of Government under sub-section ( 1) .
. It would thus be seen that through the intervention of the appropnate government, of course not directly, a very extensive machinery
has been provided for settlement and adjudication of industrial disputes.
But since individual aggrieved cannot approach the Tribunal
or the Labour Court directly for the redress of his grievance without
the intervention of the Governmer1t, it is legitimate to take the view
that the ~en:edy provided un~e~ he Act is n?t such as to completely
oust the 1unsd1ct10n of the Civil Court for tnal of industrial disputes.
If the dispute is not an industrial dispute within the meaning of section
2 (k) or within the me_aning of section 2A of the Act it is obvious
that there is no provision for adjudication of such disp~tes under the
A_ct. Ciyil Courts will be the proper forum. But where the industrial
d~spute ts for the purpose of enforcing any right, obligation or liabili!Y i;nder th_e ~~ner~ law or the common law and not a right,
obhgation or liab1hty created under the Act then alternative forums
are there giving an election to the suitor to choose his remedy of
436
SUPREME COURT REPORTS
[1976] 1 s.c.R.
either moving the machinery under the Act or to approach the Civil
Court. It is plain that he can't have both.
He has to choose the
one or the other.
But we shall presently show that the Civil Court will
have no jurisdiction to try and adjudicate upon an industrial dispute
if it concerned enforcement of certain right or liability created only
under the Act.
In that event Civil Court will have no jurisdicti,:>n
even to grant a decree of injun~tion to prevent the threatened injury
on account Of the alleged breach of contract if the contract i> one
which is recognized by and enforceable under the Act alone.
In Dos v. Bridges (') at page 859 are the famous and oft quoted
words of Lord Tenterden, C. J. saying :
"where an Act creates an obligation and enforces the
performance in a specified manner, we take it to a general
rule that performance cannot be enforced in any
other
manner".
This passage was cited with approval by the Earl of Halsbury,
L.C. in Pasnwre and Others v. The Oswaldtwistle Urban District Council
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( 2 ) and by Lord Simonds at paKe 407 in the case of Cutler v.
Wandsworth Stadium Ltd.(•) classic enunciation of the law and classiD
fication of the cases in three classes was done by Willes, J "with the
precision which distinguished the utterances of that most accomplished
lawyer, in the case
of Wilverhnmption
New Waterworks Co. v.
Hawkesford"('A) (vide the speech of Viscount Haldane at page 391
in the case of Neville v. London "Express", Newspaper, Ltd.) ( 4)
The classes are enumerated thus :
"There are three classes of cases in which a liability may
be established by statute. There is that class where there is
a liability existing at common law, and which is only reenacted by the statute with a special form of remedy; there,
unless the statute contains words necessarily excluding the
common-law remedy, the plaintiff has his election of proceeding either under the statute or at common law. Then
there is a second class, which consists of those cases in
which a statute has created a liability, but has given no
special remedy for it; there the party may adopt a11 action
of debt or other remedy at common Jaw to enforce it. The
third class is where the statute creates a liability not existing
at common law, and gives also a particular
rc1ncdy for
enforcing it ........ "With respect to that class it has
alw1ays been held, that the party must adopt the form of ·
remedy given by the statute."
The judgment of the Court of Appeal which was affirmed by the
House of Lords in Pasmore's case (supra) is reported in Peebles v.
The Oswaldtwistle Urban District Council.( 5 )
It was pointed out
(I) [l831] I B. & Ad. 847.
(3) [1'149] Appeal Cases, 398.
(4) [1919] Appeal Cases, 368.
(2) [1898] Appeal Cases 387,
(3A) [1859] 6 C. B. (No. S.) 336.
(5) [1897] I Queen's Bench, (625.)
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437
that the duty of a local authority, under section 15 of the Public·
Health Act, 1875 to make such sewers as may be necessary
for
effectually draining their district for the purposes of the Act, cannot
be enforced by action for a mandamus, the only remedy for negkct
of the duty being that given by s. 299 of the Act by complaint to
the Local Government Board. Lord Esher M. R. pointed out that
the liability to make sewers was imposed by the statute.
There was
no such liability before it.
The case, therefore, comes within the
canon of construction that if a new obligation is imposed by ;tatute,
and in the same .statute a remedy is provided for non-fulfilment of
the obligation, that is the only remedy. Lopes, LJ. further succinctly
pointed out that section 15 did not create any duty towards any particular
individual, and section 299 gives a specific remedy for the benefit
of the locality at large. Thus, it should be ribtic.ed, that the obligation
imposed by the statute did not result in creation of any right in
favonr ()f any particular individual.
Earl of Halsbury, LC. pointed
out in his speech at page 394 :
"The principle that where a specific remedy is given
by a statute, it thereby deprives the person who insists upon
a remedy of any other form of remedy than that given by
the statute, is one which is very familiar and which runs
through the Jaw."
The matter would be different if the obligation imposed under
the statute brings into existence a right in favour of an individual but
provides no rem,edv for its enforcement.
Supposing after providing
for
awarding of certain
compensation in
Chapter VA of the
Act there was no provision made in it like section 10 or section 33C
the mere penal provision for violation of the obligation engrafted
in section 29 or section 31 would not have been sufficient to oust·
the jurisdiction of the Civil Court for enforcement of individual right
created under Chapter VA.
F
The decision of the House of Lords in the case of Barraclough
v. Brown and others(') is very much to the point.
The special
statute under consideration there gave a right to recover expenses
in a court of Summary Jurisdiction from a person who was not otherwise liable at common law.
It was held that there was no right to
come to the High Court for a declaration that the applicant had
a
right to recover the expenses in a court of Summary Jurisdiction. He
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could take proceedings only in the latter court. Lord Hei'schell after
referring to the right conferred under the statute "to rec0vcr such
expenses from the owner of such vessel in a court of summarv Jurisdiction" said at page 620 .
"I do not think the appellant can claim to recover by
virtue of the statute, and at the same time insist uoon
II
<loin[ so by means other than those prescribed by the statute
which alone confers the right."
(I) [1897] AppealCases,615.
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SUPREME COURT REPORTS
[1976] 1 S.C.R.
Lord Watson said at page 622 :
"The right and the remedy are given uno flatu, and the
one cannot be dissociated from the other."
In other words if a statute confers a right and in th;: same breach
provides for a remedy for enforcement of such right the remedy
provided by the statute is an exclusive one. But as noticed by Lord
Simonds in Cutler v. Wandsworth Stadium Ltd. (supra) at page 408
from the earlier English cases, the scope and purpose of a statute
and in particular for whose· 'benefit it is
intended has got to be
considered. If a statute :
"intended to compel mine owners to make due provision for the safety of the man working in their mines, and
the persons for whose . benefit all these rules are to be
enforced are the persons exposed to danger,"
there arises at common Jaw :
"a co-relative right in those persons who may be injured
by its contravention."
Snch a type of case was under consideration before Lord Goddard,
C.J. in the case of Solomons v. R. Gertzenstain Ltd. and other ('I) vide
page 831. Lord Denning M. R. relied upon the principks enunciated
by Lord Tenterden in Doe v. Bridges approved in Pasmore's case
(supra) at page 743 in the case of Southwark London Borough
Council v. Williams and another(').
The celebrated and learned
Master of the Rolls said at page 743.
·
"Likewise here in the case of temporary accommodation
for those in need. It cannot have
been intended by
Parliament that every person who was in need of temporary
accommadation should be able to sue ~he local authority
for it : or to take the Jaw into his own hands
for
the
purpose."
Mr.