Mohan R. Mhatre vs Udaipur Distillery Co. Ltd. And ...
2003 Latest Caselaw 635 Bom

JUDGMENT

R.M.S. Khandeparkar, J.

1. Heard the learned advocates for the petitioner and the respondent Nos. 1 and 2. Perused the records. The petitioner challenges the judgment and order dated 24-04-1998, passed by the Industrial Court, Mumbai in Complaint (ULP) No. 594/1997. The Industrial Court has dismissed the complaint filed by the petitioner on the ground that the Court at Mumbai has no jurisdiction to entertain the complaint.

2. Few facts relevant for the decision are that the petitioner was sought to be transferred from Mumbai to Delhi by order dated 17-6-1997 issued by the respondent No. 1. On receipt of the said order the petitioner filed the present complaint before the Industrial Court, Mumbai. It is the case of the petitioner that he was employed with M/s Herbertsons Limited since 1987 in their clerical cadre. By letter issued in January 1993, he was sought to be transferred to Associate company viz. the respondent No. 1 in their office at Mumbai and continued to work in their office accordingly. Even though, the petitioner was entitled to certain benefits under the agreements and settlements entered into between M/s Herbertsons Ltd. and its employees, he was denied the same and, therefore, he had filed the complaint being (ULP) No. 1285 of 1996 which was pending before the Industrial Court. The said complaint was filed in October, 1996. It was in retaliation to the said complaint, that the said transfer order was issued on 17-6-1997.

3. On the other hand, it is the case of the respondents that they have no office at Mumbai and their factory is located at Udaipur in the State of Rajasthan and they have their establishment also at Delhi where the petitioner is sought to be posted pursuant to the order of transfer. According to the respondents, no cause of action arose beyond the State of Rajasthan and, therefore, in case the petitioner is aggrieved by the order of transfer, he has to approach the Court of competent jurisdiction within the State of Rajasthan and not in the State of Maharashtra. It is their further case that the Model Standing Orders have no application to the case in hand as the respondents company has no establishment at Mumbai employing 50 or more workmen and it is open for the respondents to transfer their workmen to any other establishment of the company as the transfer is an incidence of service. It is their further case that the petitioner was employed by the respondent No. 1 by letter dated 01-09-1993 as a Clerk effective from 1-7-1993 as earlier he was working with M/s Herbertsons Ltd. on temporary basis and he was employed permanently with the respondents effective from 1-7-1993 with the hope that the company would be in a position to organize its operations in a big way, but same could not materialize in view of the change of Government policy in the State of Maharashtra and it was not possible for the respondent to commence its operation in Mumbai and consequently the respondent decided to shift the petitioner to some other location where his services could be utilized and, therefore, the order of transfer dated 17-6-1996 was issued. It is their further case that the services of the petitioner cannot be utilized in Mumbai as they have no establishment at Mumbai wherein his services can be utilized at Mumbai and, therefore, the respondents are compelled to transfer the petitioner to Delhi.

4. Assailing the impugned judgment and order, the learned advocate appearing for the petitioner submitted that there was no express term in relation to transfer in the appointment letter and in the absence of any such provision, the petitioner having been once posted at Mumbai, could not have been ordered to be transferred to Delhi by the respondents. According to the learned advocate for the petitioner, the dispute arose at Mumbai where the communication in relation to the transfer of the petitioner to Delhi was received by him and where he resides. It is further submitted that there is no inherent right in the employer to transfer the employee and in the absence of express provision in that regard in the terms of contract of service, the petitioner could not have been transferred to Delhi. Reliance is sought to be placed in the decisions in the matter of Lalbhai Tricumlal Mills, Ltd. v. Vin (D. M.) and Ors. reported in 1956(1) LLJ 557, Kundan Sugar Mills v. Ziyauddin and Ors. , Crest Communication Ltd. and Ors. v. Ms. Sheetal Shenoy reported in 2001 (4) Mh.L.J. 919 = 2001(11) CLR 1036 and Indian Cable Co., Ltd. Calcutta v. Their workmen reported in 22 FJR 267 = (1962) 1 LLJ 409. On the other hand, the learned advocate appearing for the respondents has submitted that the respondent company has no establishment at Mumbai, the salary of the petitioner was paid from Udaipur, Rajasthan, all deductions in relation P. F. etc. were made and credited in the State of Rajasthan. All the instructions to the petitioner were issued from the head office of the respondent company at Udaipur and the employment of the petitioner at Mumbai was with the hope that they would be able to have their establishment at Mumbai. It is their case that to avoid the retrenchment of the petitioner, he was ordered to be posted at Delhi where the respondent is having its subsidiary establishment. In order to decide the point of jurisdiction, what is relevant is the place where the subject matter of dispute substantially arises or where both the parties reside and in the case in hand the dispute arose at the place from where the order of transfer originated. Reliance is sought to be placed in the decisions in the matter of Shalimar Paints Ltd. v. Third Industrial Tribunal, Calcutta reported in 1971(II) LLJ 38, Association of Medical Representatives (M & V) v. Industrial Tribunal, Madhya Pradesh, Indore and Anr. reported in 7996 (II) LLJ 614, Lipton Limited and Anr. v. Their Employees , J. & J. Dechane Distributors v. State of Kerala and Ors. reported in 1974 (II) LLJ 9 and unreported decision of learned Single Judge of this Court in the matter of Glaxo Smithkline Pharmaceuticals Ltd. v. Abhay Raj Jain and Anr. in W. P. No. 760 of 2002 delivered on 9-7-2002 (reported in 2002 (4) Mh.L.J. 426).

5. The first point which arises for consideration in the matter, therefore, is that in the facts and circumstances of the case, whether the Industrial Court at Mumbai had jurisdiction to entertain the complaint Under Section 28 of M. R. T. U. and P. U. L. P. Act, 1971, (hereinafter referred to as "the said Act"). It is seen that the Industrial Court on analysis the materials on record has arrived at the findings that the respondent No. 1 company does not have its establishment in Mumbai and the petitioner was appointed at Mumbai with the hope that the respondent would be able to have its establishment also at Mumbai, but it has not been materialized and, therefore, to avoid retrenchment the petitioner has been ordered to be transferred to Delhi. The salary of the petitioner was paid from Udaipur, Rajasthan as also all deductions in relation to E. S. I. were made and deposited with the authorities in the State of Rajasthan and not in the State of Maharashtra. The appointment letter to the petitioner was issued at Udaipur and all instructions to him were issued from Udaipur, Rajasthan. The letter of transfer was also issued from Udaipur. The respondent company has its subsidiary concern at Delhi. In the background of these findings, arrived at by the Industrial Court, the point in relation to the jurisdiction has to be decided.

6. In Lalbhai Tricumlal Mills case, the Division Bench of this Court while dealing with the point of identifying the State which will have jurisdiction to make reference under Section 10 of Industrial Disputes Act, 1947, held that the Industrial Disputes Act does not deal with the cause of action, nor does it indicate what factors will confer jurisdiction upon the Labour Court, but applying the well-known test of jurisdiction, it is held that a Court or Tribunal will have jurisdiction if the parties reside within its jurisdiction or if the subject matter of the dispute substantially arises within its jurisdiction, and therefore, the correct approach is to ascertain as to where does the dispute substantially arise.

7. In M/s Kundan Sugar Mills case, the Apex Court has ruled that in the absence of an express term of contract of service between employer and employee that the later should serve in any future concerns which the former might acquire or start, a person employed in a factory cannot be transferred to some other independent concern started by the same employer at another place at a stage subsequent to the date of his employment.

8. In Crest Communication Ltd. & Ors. case the learned Single Judge of this Court while taking note of the established law that the right of the employer to frame the rules cannot be doubted, held that, it would not mean that the employer has inherent right to transfer the employee or that he can exercise such a right in the absence of any express consent/agreement in that behalf. The learned Single Judge was dealing with an issue as to whether the rules framed posterior to the date of joining of service by the employee can be binding upon the employee without his express consent for the same and in that context the above ruling was given.

9. The Calcutta High Court in Shalimar Paints case while dealing with an issue as to whether the employees are entitled to claim extra allowance for additional expenses incurred by them by way of conveyance charges as a result of their transfer from one part of the State to another, held that the expression "transfer" connotes that the employer has more than one place of business and employee is called upon to work in a different place of business from the one in which he worked previously, and that there is nothing to prevent the employees from insisting that the cost of travelling would form an express stipulation in the contract of employment, and has to be borne by the employer.

10. In Association of Medical Representatives (M & V) case, the Madhya Pradesh High Court considering the settled position in law that in deciding the point of identifying the State having jurisdiction to make a reference under Section 10 of the Industrial Disputes Act, 1947, held that the well-known test of jurisdiction should be applied; and that, a Court or Tribunal would have jurisdiction to entertain the reference within whose jurisdiction the parties reside or subject matter of the dispute substantially arises and that, the said test only effectuates that which is contemplated by Section 10(1) of Industrial Disputes Act, 1947 namely, that it is the Government in whose jurisdiction the industry is situated that is competent to make a reference.

11. The Apex Court in Lipton Limited's case while deciding the point raised before the Industrial Tribunal on behalf of the Lipton Ltd., to the effect that the Industrial Tribunal had no jurisdiction to make an award in respect of employees of the Delhi office who were employed outside the State of Delhi, observed that the said point of jurisdiction was decided by the Industrial Tribunal against the employer while pointing out that all the workmen of the Delhi office, whether they worked in Delhi or not, had received their salaries from the Delhi office; they were controlled from the Delhi office in the matter of leave, transfer, supervision, etc., and, therefore, the Delhi State Government was the appropriate Government under the provisions of the Industrial Disputes Act, 1947, relating to the dispute which had arisen between the Lipton Ltd. and its Workers Union, and therefore, the view taken by the Industrial Tribunal on the point of jurisdiction was correct.

12. In J. & J. Dechane Distributors' case, the Division Bench of Kerala High Court relying upon the decisions in Lalbhai Tricumlal Mitts Ltd., Lipton Ltd., Indian Cable Co. Ltd. as well as Rangvilas Motors case, held thus; "It would now appear that although on the general principles regarding the jurisdiction of Courts to take cognisance of suits, (embodied in Section 20 of the Civil Procedure Code) it is enough to show that the cause of action wholly or in part arose within the jurisdiction of the Court, for the purpose of referring an industrial dispute, it is necessary to show that the dispute "substantially arose" within the cognisance of the "appropriate Government" empowered to make the reference."

13. The Apex Court in Indian Cable Company Ltd. case while dealing with the issue of competence of the Punjab Government to make an order of reference in relation to the dispute sought to be raised by the workmen of Ambala Branch of Indian Cable Company Ltd. and considering the contention of the employer that after closure of the Branch at Ambala on 8th May 1958, it had no place of business in the State of Punjab and that consequently on 2nd February, 1959, the Government of Punjab had no jurisdiction to make the reference, and taking note of the provisions of the Industrial Disputes Act, 1947, held that the Industrial Disputes Act contains no provision relating to the question of jurisdiction, and the same must, consequently, be decided on the principle governing the jurisdiction of Courts to entertain actions or proceedings. Further, taking note of the decision the question of the jurisdiction by Shri. Chagla C. J. in Lalbhai Tricumlal Mills Ltd, v. D. M. Vin and Ors., (1955) 9 FJR 290, it was held that the said ruling lays down the principle to be applicable while deciding as to which of the States has jurisdiction to make a reference under Section 10 of the Industrial Disputes Act.

14. The learned Single Judge of this Court in Glaxo Smithkline Pharmaceuticals case has held that as there was no dispute that the order of transfer was issued by the head office at Mumbai, the cause of action had certainly arisen at the place of the seat of the Head office at Mumbai, where the petitioner company was engaged in the alleged unfair labour practice, and therefore, the Court at Mumbai had jurisdiction to entertain the complaint.

15. In Workmen of Sri Rangvilas Motors (P) Ltd. v. Sri. Rangvilas Motors (P) Ltd., and Ors., , while dealing with the similar issue it was held that there should be some nexus between the disputes and the territory of the State and not necessarily between the territory of the State and the industry concerning which the disputes arises, and ordinarily if there is a separate establishment of the industry and the workman is working in that establishment, the dispute would arise at that place.

16. Normally, any civil proceeding is to be instituted in a Court within whose jurisdiction either the defendant resides or the works for gain or the cause of action for instituting the proceeding arises, wholly or partly, within the jurisdiction of such Court. In case of corporations suit can be instituted at a place where there exists it's principle office or any other place where the cause of action arises, provided that said Corporation has its subsidiary office at such place. Section 20 of Civil Procedure Code 1908 is very clear in that regard. However, the above decisions apparently disclose that the general principle regarding the jurisdiction of the Court to take cognizance of the suits as embodied under Section 20 of the Civil Procedure Code is not applicable to the matters relating to labour disputes or allied matters between the employer and the workmen and test to be applied to decide the issue of jurisdiction of the Court to entertain such disputes or allied matters is a test applicable to the cases of reference under the provisions of law contained in Industrial Disputes Act, 1947 and in that connection it is necessary to ascertain as to where the dispute substantially arises. It is the Court at that place where the dispute substantially arises will have jurisdiction to entertain the proceedings relating thereto. As already seen above, right from the decision in Lalbhai Tricumlal case, the consistent view taken by the Apex Court and this Court in relation to jurisdiction to entertain the disputes pursuant to its reference under the Industrial Disputes Act, 1947, is that it is not the cause of action that would confer the jurisdiction upon the Labour Court but it is the residence of the "Parties" or the place where "the dispute substantially arises". In this regard, it would be appropriate to quote the observations of Shri. Chagla C. J. in Lalbhai Tricumlal case which read thus :--

"But what we are concerned that to decide as to where did this disputes substantially arises? Now, the Act does not deal with the cause of action, nor does it indicate what factors will confer jurisdiction upon the Labour Court. But applying the well-known test of jurisdiction, a Court or tribunal would have jurisdiction if the parties reside within jurisdiction or if the subject matter of the dispute substantially arises within jurisdiction."

17. Bare reading of Section 28 of the said Act would disclose that neither the said section nor any provision in the said Act refers to any cause of action to be the decisive factor in the matter of jurisdiction to entertain the complaint filed under the said Act nor it permits either expressly or impliedly institution of the proceedings under the said Act at a place where either of the parties resides, or works for gain. The Division Bench of the Kerala High Court in J. & J. Dechane Distributors case while dealing the case wherein the petitioner had contended that the petitioner had no place of business nor any office in the State of Kerala, that the respondent therein was only a salesman or a sort of canvassing agent to promote sales of petitioner's products, that the control over the respondent and the disbursement of his salary were all from the office of Hyderabad, and the order of transfer and the termination of his service on his refusal to join duty at Banglore were issued from Hyderabad, held that the appropriate Government under Section 2(a)(c) of the Industrial Disputes Act to refer the dispute for adjudication was the Government of Andhra Pradesh and not the Kerala Government. The Division Bench observed that, there was nothing to show that the petitioner was having either a branch office or an establishment at Quilon or elsewhere in the State of Kerala and that the respondent therein was only a representative of the petitioner who used occasionally to be sent out for promoting sales of the petitioner's products. Consequently the reference at the instance of Kerala Government was quashed and set aside.

18. It is, therefore, necessary to ascertain, by applying the above test in relation to the point of jurisdiction to the facts of the case in hand, as to whether the Industrial Court at Mumbai had jurisdiction to entertain the present complaint or not? The undisputed facts in the matter, are that the petitioner was employed by the respondent No. 1 at Mumbai with the hope that the respondent No. 1 would be able to organize its operation in a big way in the State of Maharashtra, but the same has not materialized till this date and as the respondent No. 1 has lost the hope to have its operations in the State of Maharashtra, that therefore, the order of transfer of the petitioner was issued and the petitioner has been directed to report to his duties at Delhi. Apart from the petitioner's appointment at Mumbai, the respondent No. 1 has no establishment as such in Mumbai. The salary of the petitioner was being paid from the head office of the respondent No. 1 which is at Udaipur in Rajasthan and the same is revealed from the salary slip placed on record before the Industrial Court. The head office of the respondent No. 1 as well as its factory is at Udaipur in the State of Rajasthan. The deductions under E. S. I. from the salary payable to the petitioner, were effected at Udaipur and they were deposited with the authorities in the State of Rajasthan. All the instructions in relation to the duties of the petitioner were issued from the head office of the respondent No. 1 at Udaipur. The letter of transfer of the petitioner from Mumbai to Delhi was also issued from Udaipur. In these circumstances, while it is sought to be contended on behalf of the petitioner that since the petitioner's service was utilized at Mumbai and the order of transfer was sought to be effected at Mumbai, the cause of action for filing the complaint arose at Mumbai and, therefore, the Industrial Court at Mumbai had jurisdiction to entertain the complaint. Whereas the same is sought to be controverted on behalf of the respondent No. 1 contending that the respondent No. 1 has neither its establishment at Mumbai nor the decision for transfer of the petitioner was taken at Mumbai.

19. It is apparent that the cause for dispute between the parties is the order of transfer. The materials on record disclose the decision for transfer was taken by the respondent at Udaipur in the State of Rajasthan. Undoubtedly it was communicated to the petitioner at Mumbai. It is not the communication of the order of transfer but the decision to transfer which itself is the cause for the dispute. The communication of the decision is an act subsequent to the decision for transfer and the cause which has given rise to the dispute between the parties is not communication of such decision but the decision itself. Therefore, the learned Advocate for the respondents is justified in contending that the cause for dispute has arisen at Udaipur in the State of Rajasthan. Undoubtedly, applying common theory of cause of action embodied under Section 20 of Civil Procedure Code it can be said that the Court at the place where the decision is communicated will also have jurisdiction. However, as already observed above, theory of normal rule in relation to the cause of action giving jurisdiction to the Court to entertain the civil proceedings in terms of Section 20 of Civil Procedure Code is not applicable to the disputes which are to be dealt with under the provisions of labour laws. It is the place where the dispute substantially arises or where both the parties reside that is the test to be applied to decide the issue of the jurisdiction of the Court to entertain the proceedings relating to such dispute. Undoubtedly, the dispute can arise at the place other than the one where the industry has its principal office. In the case in hand, there is nothing on record to disclose that the respondent No. 1 has its any subordinate office or establishment at Mumbai. Being so, the materials on record, nowhere disclose that the dispute having substantially arisen in any part of Mumbai so as to give jurisdiction to the Industrial Court at Mumbai to entertain the complaint filed by the petitioner. On the contrary, as the decision for transfer having been taken at Udaipur and there being no establishment of the respondent No. 1 in any part of the State of Maharashtra, including Mumbai, the question of any dispute arising between the parties within the limits of State of Maharashtra does not arise at all. As already observed above, the appointment of the petitioner at Mumbai was with the hope to commence the establishment by the respondent No. 1 in the State of Maharashtra and the respondent No. 1 till this date has not been able to have its establishment in any manner either in Mumbai or in any part of the State of Maharashtra.

20. The Madhya Pradesh High Court while dealing with the similar issue in relation to the Medical Representatives case has held that mere activity of pushing of sales of the products of the company in the areas within the State of Madhya Pradesh would not amount to the company running an undertaking in the State of Madhya Pradesh. In the case in hand also, the company did not have any establishment in the State of Maharashtra. Certainly, the company who has not started its operation in any manner in the State, cannot be said to have its establishment in the State of Maharashtra, merely because the petitioner was appointed at Mumbai with the hope that the respondent No. 1 would be able to organize its operations in the State of Maharashtra. Had the respondent No. 1 been successful in commencing its operations in the State of Maharashtra, perhaps the position would have been different. But it is not in dispute that the respondent No. 1 has no establishment for any purpose either at Mumbai or in any other part of the State of Maharashtra. In the background of these facts, the contention of the petitioner that the Industrial Court at Mumbai had jurisdiction to entertain the complaint cannot be accepted. It is to be noted that in Lipton Limited case the Apex Court had clearly ruled that the workmen were controlled from their Delhi Office in relation to the leave, transfer, supervision etc. and their salaries were received from the Delhi Office and, therefore, the decision of the Industrial Tribunal about the jurisdiction to entertain the proceeding at Delhi even at the instance of the person working outside Delhi, was approved by the Apex Court. In Indian Cable Co. Ltd. 's case, the Apex Court had approved the decision of the Division Bench of this Court in Lalbhai Tricumlal Mills case and further in Rangvilas Motors (P) Ltd. case, the Apex Court on merits held that the Labour and Industrial Court outside the territory wherein the industry is situated may also have jurisdiction to entertain the dispute provided such industry has separate establishment outside the territory and the dispute arises in such separate establishment. Considering the law laid down by this Court as well as the Apex Court on the point of jurisdiction of the Industrial Court to entertain the dispute under labour laws, therefore, decision arrived at by the Industrial Court, Mumbai regarding lack of jurisdiction to entertain the complaint in the case in hand cannot be found fault with.

21. Once it is held that the Industrial Court at Mumbai had no jurisdiction to entertain the complaint, it could not have dealt with the matter on merits and, therefore, needless to say that the observations and findings of the Industrial Court regarding the merits of the case are to be considered as not binding upon the parties, as the said observations and findings have been arrived at without jurisdiction by the Industrial Court at Mumbai. With these observations, the petition deserves to be dismissed and accordingly the same is dismissed. Rule discharged with no order as to costs.