Abhyudaya Co-Operative Bank Ltd. vs S.L. Mehendale And Ors.
2002 Latest Caselaw 977 Bom

JUDGMENT

R.J. Kochar, J.

1. The petitioner, a Co-operative Bank, is aggrieved by the impugned Judgment and Orders dated 21-8-1993 and 17-11-1995 passed by the Industrial Court in Complaint ULP No. 1158 of 1992 filed by the respondent No. 2 - employee under Section 28 read with Items 1(a)(b)(d)(f) and (g), 5, 9 and 10 of Schedule IV of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 as he was aggrieved by the Order of termination dated 4-6-1992 passed by the petitioner Bank alleging several acts of misconducts committed by the respondent Employee.

2. The relevant facts, briefly stated, are that the respondent employee was served with charge sheet alleging against him certain acts of misconducts which can be termed as fraud committed by him while in employment. I need not set out the details and the charges as it is not necessary for the present purpose. It further appears that a domestic enquiry was held in the said charges and the concerned employee had fully participated in the enquiry. On the basis of the report of the Inquiry Officer the petitioner Bank issued the aforesaid termination order terminating the respondent employee from employment with effect from 4-6-1992 on the grounds inter alia, that of loss of confidence.

3. The respondent employee aggrieved by the said Order of termination and, therefore, filed the complaint under Section 28 read with Section 30 of The MRTU and PULP Act, 1971 to challenge the order of termination as an unfair labour practice within the meaning of Items set out by me hereinabove. The petitioner Bank appeared before the Industrial Court and contested the complaint on the grounds including the substantial ground of jurisdiction of the Industrial Court to entertain and try the complaint under Item 1 of Schedule IV of the Act. According to the petitioner Bank the Industrial Court had no jurisdiction to entertain and try the complaint pertaining to Item 1 of Schedule IV of the Act as that jurisdiction was exclusively conferred on the Labour Court under Section 5 of the MRTU and PULP Act. The Industrial Court's jurisdiction was in respect of the other items of Schedule IV of and other Schedules. According to the petitioner Bank the respondent employee had challenged the order of termination being an unfair labour practice on various grounds, and therefore, it was for the Labour Court alone to have decided the said complaint.

4. By the first order dated 21-8-1993 the Industrial Court held that the enquiry held against the employee was fair and proper but findings were perverse. The petitioner Bank was, therefore, permitted to lead evidence to justify the order of termination before the Industrial Court. It appears that the Bank has challenged the aforesaid Order of the Industrial Court by filing a separate Writ petition which is still pending. It further appears that since the proceedings were not stayed the Bank adduced independent evidence before the Industrial Court to justify its action of termination. After recording the evidence the Industrial Court by the aforesaid impugned Order dated 17-11-1995 held that the Bank had engaged in an unfair labour practice under Item 9 of Schedule IV of the Act and also quashed and set aside the termination order dated 4-6-1992 passed against the respondent employee and further directed the Bank to reinstate him in service in his original post with full backwages and all consequential benefits from the date of termination. The petitioner Bank has filed the present Writ petition against the final order of the Industrial Court to challenge its legality and validity under Article 226 of the Constitution of India.

5. Shri S.M. Naik, the learned Advocate appearing for the Bank has strenuously submitted that the Industrial Court had committed a serious and grave error of law in holding that the Industrial Court had jurisdiction to decide a complaint which squarely fell under Item 1 of Schedule IV of the Act. According to Shri Naik, the main grievance of the respondent employee was the challenge to the legality and propriety of the order of termination dated 4-6-1992. He further pointed out that the other items such as 5, 9 and 10 were only included by the employee to try to bring in the jurisdiction of the Industrial Court. Shri Naik further submitted that the question of payment of retrenchment compensation did not arise as it was not a case of retrenchment of the concerned employee. But it was a punitive order of termination after serving a chargesheet and holding an enquiry in the chargesheet against the said employee. He further pointed out that in view of the proved acts of misconducts which amounted to fraudulent transactions which were detrimental to the interest of the Bank, the management had lost confidence in the employee and therefore, he was terminated from service. Shri Naik pointed out that there was no question of compliance of Section 25F of the Industrial Disputes Act, 1947 as it was not a case of retrenchment. In respect of the other minor point which was tried to be pushed under Item 9 was payment of four days wages by the Bank to the said employee. In this respect also Shri Naik pointed out that there was no failure on the part of the Bank to pay even four days wages. As the employee was directed to collect all his legal dues including the wages for the four days of his employment. The Industrial Court has absolved the bank from the charge of unfair labour practice under Items 5 and 10 and no submissions were rightly made by Shri Naik in this respect. Shri Naik has relied on the following judgments of this Court in support of his contention that for the matters covered under Item 1 of Schedule IV of the Act, it was the Labour Court which had jurisdiction to entertain and try such complaints and that the Industrial Court was precluded from entering into that area.

1. 1995 II CLR 897 - Dilip s/o Indrabhanji Wawande v. Industrial Court, Nagpur and Ors. 2. 2002(1) Mh.L.J. 626 = 2001 II CLR 982 - R, P. Sawant and Ors. v. Bajaj Auto Ltd. and Anr. 3. 2001(4) Mh.LJ. 706 = 2001 CLR 299 - Supertex (India) Corporation v. Radheshyam K. Pandey and Anr.

The aforesaid Judgments relied on by Shri Naik fully support his contention.

6. Shri Raja Hegde, the learned Advocate appearing for the employee has strongly supported the judgments and submitted that the Industrial Court had jurisdiction to entertain the complaint and that the Industrial Court rightly held that it has jurisdiction to entertain and try the complaint against the Order of termination under Item 1 of Schedule IV of the Act.

7. The Industrial Court, proceeded to decide the complaint regardless of the question whether it had jurisdiction to decide the complaint or not. In fact he ought to have decided the said question of jurisdiction which was specifically pleaded and raised by the Bank. It was very obvious that the orders of discharge, dismissal or termination are covered by Item 1 of Schedule IV of the Act and there was no Item under Schedule IV of the Act which substantively covered the issue of discharge, dismissal or termination of an employee. The issue of jurisdiction was ex-facie clear and the Industrial Court therefore ought to have concentrated on the said point of jurisdiction which was going to the root of the matter. Had the Industrial Court applied its mind to the said issue at the outset it would have saved lot of time, energy and stationery. Besides, the respondent employee has also lost valuable period from 1992 till this date. Had the Industrial Court decided the said question which was obvious as a preliminary question both the parties would have known where they stood in the corridors of the Courts. However, the Industrial Court persisted to decide the complaint and finally held that the domestic enquiry which preceded the order of termination was procedurally fair and proper and that the respondent employee was given reasonable and adequate opportunity of hearing and that all the principles of natural justice were complied with in the conduct of the enquiry. The Industrial Court however held that the findings were perverse as they did not flow from the material on record of the enquiry. Having held so it was incumbent on the part of the Industrial Court to have given an opportunity to the Bank to justify its action of termination by adducing independent evidence before the Industrial Court. The Bank was bound to obey the said orders and accordingly adduced oral and documentary evidence before the Industrial Court in support of its termination order. Even at this stage Shri S. M. Naik the learned Advocate for the Bank was at pains to argue that the Industrial Court had no jurisdiction to entertain and try the complaint regarding dismissal, discharge or termination of an employee which squarely and specifically falls under Item 1 of Schedule IV of the Act. The Industrial Court however, continued to persist to decide the entire matter even on merits including, of course, the question of jurisdiction. On the point of jurisdiction the Industrial Court has held that the Industrial Court has jurisdiction to entertain the complaint under Items 1(a) (b) (d) (f) and (g) of the Act. It further appears that as far as the Items 5, 9 and 10 are concerned the Industrial Court has held that the employee had not proved the case under the said items except to the extent under Item 9 where it was alleged that he was not paid four days wages and the amount of retrenchment compensation and therefore his complaint under Item 9 was held maintainable to that extent.

8. The impugned judgments of the Industrial Court do not stand scrutiny of this Court even for a minute. The Industrial Court was wholly wrong in usurping the jurisdiction of the Labour Court to entertain and try the complaints of unfair labour practices which squarely fell under Item 1 of Schedule IV of the Act. It is the exclusive jurisdiction of the Labour Court under Section 7 of the Act. The Legislature has specifically enacted the said Item and has specifically vested jurisdiction and power to entertain all such complaints relating to Item 1 of Schedule IV of the Act in the Labour Court. The Industrial Court is vested under Section 5 the jurisdiction to decide all other matters which do not fall under Item 1 of Schedule IV of the Act. It is very well established that if the legislature has enumerated several items and if there are specific items in that case those specific items have to be excluded from any other general items which are enumerated in the list. The question of discharge, dismissal or termination of employees is squarely and specifically covered by Item 1 of Schedule IV of the Act, and therefore, no question of termination can be decided by the Industrial Court under the general items such as Items 5, 9 and 10 of Schedule IV of the Act. In the present case the substantive grievance of the employee was against the order of termination and therefore the Industrial Court ought not to have entertained the complaint which clearly lied before the Labour Court under Section 28 of the Act. The Industrial Court had no jurisdiction to decide it by overstretching the Item 9 which possibly may be attracted only when there is a case of violation of mandatory statutory provisions of law, such as Section 25F of the Industrial Disputes Act. Even in such a case, justification of retrenchment cannot be decided which will require decision under Item 1 of Schedule IV of the Act. The Legislature has specifically assigned the duties to decide the unfair labour practices to the two separate forums which cannot take away the mutually assigned jurisdiction of each other. When all the questions of unfair labour practice of discharge or dismissal orders are specifically assigned to the jurisdiction of the Labour Court, nothing is left or carved out for the Industrial Court under this specific item which would excluded the general expression.

9. This point has been squarely dealt with by the aforesaid three judgments of our High Court. In the first Judgment of Dilip Wawande (supra) the learned Single Judge of this Court (G. D. Patil, J.) in paragraph 7 has observed as under :

"7. There is no dispute that the jurisdiction to try the dispute as regards the termination is with the labour Court, having regard to the provisions of Section 7 of the MRTU and PULP Act. This Court has already held and I cope up with the same that if the Industrial Court has no jurisdiction to give any direction in the matter of termination, it cannot have any jurisdiction even to grant interim relief in relation to that. The instant one is a case where a direction in the matter of termination was sought in the complaint and an interim relief was sought in relation to that. Since, it is for the Labour Court to entertain the complaint in relation to the termination, the Industrial Court could not have passed any order even at the time of final disposal of the complaint as regards the termination. Resultantly, it could not have granted any relief by way of the interim order under Section 30(2) of the MRTU and PULP Act, in relation to the termination of the complaint's services. The impugned order passed by the Industrial Court in the instant matter, therefore, has to be held as being without jurisdiction and, therefore, it is liable to be quashed and set aside."

Further the Division Bench of this Court (Srikrishna and Mrs. Desai, JJ.) in the case of R. P. Sawant (supra) in paragraph 48 has observed as under :

"48. A conjoint reading of Sections 5, 7 and 32 of the 1971 Act would make it clear that, though, for the purpose of exercising initial jurisdiction in to a substantive Complaint, the jurisdictions have been compartmentalised inasmuch as the Labour Court has no jurisdiction to entertain Complaints other than Complaints falling under Item 1 of Schedule IV of the 1971 Act and conversely, the Industrial Court has been given powers to entertain Complaints in all other matters, it does not mean that the Industrial Court, while exercising jurisdiction within the sphere legitimately assigned to it, cannot pass an order which is required to be done in the interest of justice. It cannot be forgotten that Section 32 starts with a non-obstante clause "Notwithstanding anything contained in this Act" and provides that the Court trying the matter shall have the power to decide "all matters arising out of any Application or Complaint referred to it for the decision under any of the provisions of this Act." In our judgment, the decision in National General Mazdoor Union (supra) does not recognize and give full effect to the amplitude of the non-obstante clause in Section 32. In our judgment, the enumeration of the respective jurisdictional limits of the Industrial Court and Labour Court, provided in Sections 5 and 7 of the 1971 Act, when read with the non-obstante provision in Section 32 of the 1971 Act, means this : A substantive Complaint can be entertained by the Court (Labour Court or Industrial Court) only with regard to the matters provided in Section 5 or 1. If a complaint is substantively made to the Industrial Court, then by reason of Section 5(b), it has no jurisdiction to entertain a Complaint relating to unfair labour practices falling under Item 1 of Schedule IV of the 1971 Act; conversely, a Complaint of unfair labour practice falling only under Item 1 of Schedule IV can be entertained by the Labour Court, but not any other Complaint This does not, however, mean that while trying a substantive Complaint legitimately falling within its jurisdictional purview, the Labour Court or Industrial Court is precluded from moulding the relief as required by the facts of the case."

In the third Judgment in the case of Supretex (India) (supra) the learned Single Judge of this Court (Chandrachud, J.) has taken the same view as under ;

"The first issue is, with respect incomprehensible. The second issue which was raised was under Item 9 of Schedule IV. The Industrial Court, in the body of its Judgment has initially dealt with the issues with reference to Item 9. However, in the operative part of the order the Court has found that the employer was guilty of unfair labour practices besides Item 9, under Item 1-a and 1-b as well. That part of the Order of the Industrial Court is clearly without jurisdiction because the Industrial Court had no jurisdiction to investigate into a complaint under Item 1 of Schedule IV."

10. From the above law laid down it is very clear that there is an unanimity of the judicial opinion that the Industrial matters enumerated in Item 1 of Schedule IV of the Act is the exclusive area left by the Legislature specifically for the Labour Court. The Industrial Court cannot usurp or encroach upon the jurisdiction of the Labour Court by deciding the complaints in respect of discharge, dismissal or termination of the employees. In the present case the substantive question was that of order of termination and challenge was on the basis of the violation of principle of natural justice in conduct of enquiry. All these questions squarely fall within the jurisdiction of Item 1 of Schedule IV of the Act. It was therefore not proper and right for the Industrial Court to have proceeded with the complaint to decide the question of termination being an unfair labour practice under Item 1 of Schedule IV of the Act. The Industrial Court has acted clearly without jurisdiction, and therefore, both the Orders of the Industrial Court are hereby quashed and set aside being without jurisdiction. The petition succeeds. Rule is made absolute in terms of prayer Clause (a). No orders as to cost.