Bombay High Court
Abbott Healthcare Pvt Ltd vs Maharudra Chikane on 5 June, 2023
Bench: N. J. Jamadar
2023:BHC-OS:4323
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO.191 OF 2023
M/s.Abbott Healthcare Private Limited and Ors. ...Petitioners
vs.
Maharudra Chikane and Another ...Respondents
WITH
WRIT PETITION (ST.) NO.295 OF 2023
M/s.Abbott Healthcare Private Limited and Ors. ...Petitioners
vs.
Nitin Sharma and Another ...Respondents
WITH
WRIT PETITION (ST.) NO.407 OF 2023
M/s.Abbott Healthcare Private Limited and Ors. ...Petitioners
vs.
Santosh Kadam and Another ...Respondents
Mr. V.P. Sawant, Senior Advocate a/w. Ms. N.R. Patankar i/b. Mr.
Prabhakar Jadhav, for the Petitioners.
Ms. Jane Cox i/b. Mr. Ghanshyam Tombare, for the Respondents.
CORAM : N. J. JAMADAR, J.
RESERVED ON : MARCH 13, 2023
PRONOUNCED ON : JUNE 5, 2023
JUDGMENT :
1. Rule. Rule made returnable forthwith. With the consent of the
parties, heard finally at the stage of admission.
2. The challenge in these petitions is to the identical orders
passed by the Industrial Court at Mumbai in the Revision
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Application preferred by the petitioners against the interim order
passed by the Labour Court in the complaints under the
Maharashtra Recognition of Trade Union and Prevention of Unfair
Labour Practices Act, 1971 (the Act, 1971), filed by the employees
of the petitioners, alleging unfair labour practices, in an identical
fact situation. Hence, all these petitions were heard together and
are being decided by a common judgment.
3. The background facts leading to these petitions can be stated
as under:-
a} The petitioner No. 1 is a company incorporated under the
Companies Act and is engaged in manufacturing and marketing of
pharmaceutical products. Mr. Mahendra Chikne, respondent No. 1
in Writ Petition No. 191 of 2023 came to be appointed as a
Professional Sales Manager (PSM) in the services of the petitioner
company vide letter dated 12th October, 2018. He was posted at
Ahmadnagar and continued to be posted thereat. Mr. Nitin Sharma,
respondent No. 1 in Writ Petition (St.) No. 295 of 2023 came to be
appointed as PSM vide letter dated 6 th April, 2018 at Muzaffarnagar
(UP) and has worked at Muzaffarnagar at all times. Mr. Santosh
Kadam, respondent No. 1 in Writ Petition No. 407 of 2023 came to
be appointed as PSM at Satara vide letter dated 7 th April, 2018 and
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has worked at Satara during the entire tenure of his service with
the petitioners.
b} Respondent No. 2 is the union registered under the Trade
Unions Act and claims to represent the Professional Sales
Representatives (PSRs), Medical Representative (MRs) and
Technical Representatives (Trs).
c} The petitioners assert due to unsatisfactory performance
each of the respondents were put on notice. They were first put on a
booster plan for work improvement and thereafter on performance
enhancement plan with a view to provide an opportunity to the
respondents/employees to improve their work performance. The
employees were periodically informed that there was no
improvement in their performance despite the measures to improve
the performance by putting them on performance enhancement
plan.
4. The petitioners thus claimed to have terminated the services
of Mahendra Chikne, respondent No. 1 in Writ Petition No. 191 of
2023 by letter dated 24th February, 2021. Services of Nitin Sharma,
respondent No. 1 in Writ Petition No. 295 of 2023 were terminated
vide letter dated 20th February, 2020. Likewise, the services of
Sanotsh Kadam, respondent No. 1 in Writ Petition No. 407 of 2023
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were terminated vide letter dated 4 th March, 2021. The petitioners
assert that the services were terminated for poor work
performance and failure to meet the level of performance despite
the respondents/ employees having been provided adequate
opportunity to improve the performance.
5. The respondents approached the Labour Court with a
complaint of unfair labour practices under Item 1(a), (b), (d) and
(f) of Schedule IV of the Act, 1971. Since the allegations in all the 3
complaints are almost identical, reference is made to the allegations
in the complaint of Mr. Nitin Sharma, respondent No. 1 in Writ
Petition (St.) No. 295 of 2023, as a lead case.
6. Respondent No. 1 claimed he was initially working as a
Marketing Executive in Vertex Marketing Services, a franchise of
the petitioner No. 1 from 2nd March, 2017. Vide appointment letter
dated 6th April, 2018, the petitioner No. 1 gave him a dressed up
designation of Professional Sales Manager. Petitioner No.1 employs
about 5000 Sales Promotion Employees (SPEs) including about 120
SPEs at Respicare Division for the work of promotion of its products
of whom about 3000 are the members of respondent No. 2 union.
The later has signed settlement with the petitioner No. 1.
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7. Petitioner No. 1 regularly organized cyclical meetings of sales
promotion employees. In the said meeting, the petitioner No. 5
apprised that the management has decided to shift all the major
branches from Respicare Division to other division and operations
of the said division would be closed within 2-3 months. Thereupon,
the respondent No. 2 union filed a complaint being Complaint (ULP)
No. 21 of 2020 before the Industrial Court, Mumbai against
apprehended termination faced by employees due to intended
closure of Respicare Division.
8. During the course of hearing of the application for interim
relief in the said complaint an allegedly false statement was made
on behalf of the management that the operations of Respicate
Division would continue with the existing six branches and no sales
promotion employee would be victimized due to shifting of the
brands. Based on the said statement, according to respondent No. 1,
the Court did not grant any interim relief. Taking undue advantage
of the said situation, according to respondent Nos. 1 and 2, the
petitioner No. 1 continued to coerce the PSR to resign. Respondent
No. 1 did not cave into coercive tactics and declined to tender the
resignation.
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9. Respondent Nos. 1 and 2 contended that the petitioner No. 1
thereupon created a bogey unsatisfactory performance. Despite the
respondent No. 1 having explained the exigency of the situation
which primarily arose on account of the shifting of the brands out of
Respicare Division. The petitioner No. 1 illegally terminated the
services of respondent No. 1 vide letter dated 20 th February, 2022.
The respondent No. 1 alleged, the petitioner No. 1 had not issued
any show cause notice or charge sheet nor conducted any inquiry
against respondent No. 1. The termination of the services of
respondent No. 1 was in flagrant violation of the statutory
provisions. Such termination was stigmatic and punitive. In
substance, the alleged unsatisfactory performance was used as a
ruse to illegally terminate the services of respondent No. 1. Hence,
the complaint.
10. The respondents moved an application for interim relief.
11. The petitioners resisted the complaint and the application for
interim relief. It was contended that the respondent No. 1 was not a
workman and, thus, the recourse to the provisions contained in the
Act, 1971 was not justifiable. Secondly, the respondent No. 1 having
been appointed to work at Muzaffarnagar, pursuant to an order
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issued from Lucknow Head Quarters, the respondent No. 1 could
not take recourse to the Labour Court at Mumbai constituted under
the provisions of the Act, 1971. Endevour of the respondents was
stated to be to have an extra territorial operation of the Act, 1971.
12. On merits it was contended that the respondent No. 1 was
terminated for unsatisfactory work performance after providing an
adequate opportunity to him under Performance Enhancement
Programme. The allegations of unfair labour practices were
categorically denied. The fact that no departmental enquiry was
held was stated to be of no consequence. At any rate, the employer
was entitled to justify the termination before the Labour Court.
Since, the interim relief claimed by the respondents, if granted,
would amount to grant of final relief, the prayer for interim relief
was unsustainable. As the respondent No. 1 was already terminated
from services, neither the relief of reinstatement nor payment of
wages in the interregnum, could be granted.
13. The Labour Court, after appraisal of the pleadings, the
documents tendered for perusal and the material on record, was
persuaded to record a finding that the petitioners, prima facie,
engaged in unfair labour practices under Item 1(a), (b), (d) and (f)
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of Schedule IV of the Act, 1971 and direct the petitioners to deposit
50% monthly salary payable to respondent No. 1 in the said Court
on or before 10th day of every month. Liberty was granted to
respondent No. 1 to apply for permission to withdraw the said
amount. In the process, the learned Presiding Officer, Labour Court
repelled the challenge to the jurisdiction of the Labour Court to
entertain, try and decide the complaint under the Act, 1971.
14. Being aggrieved, the petitioners preferred Revision
Application (ULP) No. 44 of 2022 before the Industrial Court. By
the impugned judgment and order, the learned Member, Industrial
Court at Mumbai was persuaded to dismiss the Revision
Application. The learned Member was of the view that the Labour
Court has correctly exercised the discretion to grant interim relief
in the nature of direction to deposit 50% of the wages. It was, inter
alia, held that the respondent No. 1 was terminated in violation of
the principles of natural justice and the provisions of Industrial
Disputes Act, 1947, and the challenge to the jurisdiction of the
Labour Court at Mumbai did not merit acceptance at that stage.
15. Being further aggrieved, the petitioners have invoked the writ
jurisdiction.
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16. At this juncture, it may be contextually relevant to note that
in Writ Petition No. 191 of 2023 and Writ Petition (St.) No. 407 of
2023 the facts are almost identical with the change in the date of
appointment of the respective employees and the dates of
termination. In the said petitions, the territorial jurisdiction of the
Labour Court at Mumbai was assailed on the ground that the
respondent No. 1 in Writ Petition No. 191 of 2023 was posted at
Ahmadnagar and respondent No. 1 in Writ Petition (St.) No. 407 of
2023 was posted at Satara, respectively, though the applicability of
the Act, 1971 as such, was not put in contest.
17. I have heard Mr. V.P. Sawant, learned Senior Advocate for the
petitioners and Ms. Jane Cox, learned counsel for the respondents
in all the petitions. With the assistance of the learned counsel for
the parties, I have carefully perused the pleadings, documents
tendered before the Courts below and the impugned orders. I have
also considered the judgments which the learned counsels have
cited in order to lend support to their submissions.
18. Mr. Sawant, learned senior counsel for the petitioners, would
urge that though the challenge to the territorial jurisdiction of the
Courts at Mumbai is common in all the petitions yet, in Writ Petition
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(St.) No. 295 of 2023, since respondent No.1 Nitin Sharma had all
along been posted at Muzaffarnagar (UP), there is an additional
issue of extra- territorial application of the provisions contained in
the Act, 1971. Mr. Sawant strenuously submitted that a bare
perusal of the complaint in each of the petitions would indicate that
no cause of action has arisen at Mumbai. Indisputably, the
respondents employees have never ever served at Mumbai. Both
the situs of employment of the respondents-employees and the
effect of the order of termination, was outside Mumbai. The
endevour on the part of the respondents to show that the Court at
Mumbai has jurisdiction only on the ground that the termination
orders were issued from Mumbai office does not merit acceptance.
19. What is of significance is the place where the employee has
been posted and where the effect of the order under challenge is
felt. Since none of these occurred within the territorial limits of the
Court at Mumbai, the learned Presiding Officer, Labour Court as
well as the learned Member, Industrial Court committed manifest
error in assuming the jurisdiction where none exists, urged Mr.
Sawant. To bolster up this submission, Mr. Sawant placed a strong
reliance on a Division Bench judgment of this court in the case of
Glaxo Smith Kline Pharmaceuticals Limited vs. Abhay Raj Jain and
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Another1 and the judgment of a learned single Judge of this Court
in the case of Manish Ashok Badkas vs. M/s. Nobartis India Limited
and Another2.
20. Mr. Sawant would further urge that the place where the
establishment of the employer is located is of no significance in the
matter of determination of jurisdiction. To bolster up the
submission that mere issue of letter of termination does not
constitute a part of cause of action, Mr. Sawant placed reliance on a
judgment of this Court in the case of Anil Murlidharan vs. Larsen
and Toubro Limited3 wherein it was enunciated that merely because
the order of termination was issued from the Head Office at
Mumbai, that would not confer territorial jurisdiction on the Labour
Court at Mumbai. It was further submitted that it is not the
requirement of law that the employer should have an establishment
at the place of termination. To buttress this submission, reliance
was placed on a judgment of this Court in the case of Torrent
Pharmaceuticals Limited, Ahmadabad vs. Member, Industrial
Court, Chandrapur4.
21. Mr. Sawant, as a second limb of the submission, would urge
1 2008 SCC OnLine Bom 756.
3 2019 SCC OnLine Bom 8688.
4 2009(2) Mh.L.J. 331.
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that, in any event, the services of the respondents employees
having been terminated, the Courts below could not have passed an
interim order directing deposit of the 50% of the wages. Such
direction, according to Mr. Sawant, is in teeth of settled legal
position that where an order of dismissal of an employee was
passed without holding the domestic enquiry, it is open to the
employer to prove the misconduct in the Court. Thus, there can be
no justification in directing the employer to reinstate the employee
and pay him wages during the pendency of the complaint. Reliance
was placed on a judgment of the Division Bench of this Court in the
case of United Ink and Varnish Co. Ltd. vs. Chandrashekhar Kuvre
and Others5. Looked at from any perspective, according to Mr.
Sawant, the impugned order deserves to be quashed and set aside.
22. Ms. Jane Cox, the learned counsel for the respondents,
submitted that objection to the territorial jurisdiction of the Courts
at Mumbai is required to be appreciated keeping in view the settled
position in law that the test of accrual of substantive cause of action
is required to be applied. At best, the place where the respondents-
employees were posted can be said to have concurrent jurisdiction.
That, however, according to Ms. Cox, does not denude the Courts at
Mumbai the jurisdiction to entertain the complaint. Ms. Cox
5 2006 SCC OnLine Bom 1431.
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submitted that the reliance sought to be placed by Mr. Sawant on
the Division Bench judgment in the case of Glaxo Pharmaceuticals
(supra) is not of much assistance to the petitioners for two reasons.
First, in the Special Leave to Appeal (Civil) No.(s) 26000/2008
wherein the said judgment was carried in appeal, while dismissing
the said petition as withdrawn, the question of law was left to be
decided in an appropriate case before the appropriate forum.
23. According to Ms. Cox, the issue of jurisdiction, arose before
the Supreme Court in the case of Nandram vs. Garware Polyster
Limited6. The Supreme Court, in the backdrop and facts of the said
case where the decision to terminate the appellant, who was posted
at Pondicherry was taken at Aurangabad, held that the Labour
Court, Pondicherry may have the jurisdiction. However, that did not
mean that the Labour Court at Aurangabad within whose
jurisdiction the management was situated and where the
management had taken the decision to close the unit at
Pondicherry and pursuant to which the appellant was terminated
from services, also did not have jurisdiction.
24. Ms. Cox invited attention of the Court to an order of this Court
in Federation of Medical and Sales Representatives' Association of
6 (2016) 6 Supreme Court Cases 290.
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India (FMRAI) and Anr. vs. M/s. Sun Pharmaceuticals Industries
Limited and Ors.7 wherein a learned single Judge observed that the
Supreme Court in the case of Nandram (supra) has taken a view
which is directly contrary to the view of Division Bench in the case
of Glaxo Pharmaceuticals (supra). In the said case, the learned
single Judge observed that though the decision of Glaxo
Pharmaceuticals (supra) was not in terms referred to in the
Supreme Court decision in the case of Nandram (supra), the order
impugned in the Nandram (supra) was itself based on the judgment
of the Division Bench in the case of Glaxo Pharmaceuticals (supra).
25. Secondly, Ms. Cox would further urge that the import of the
Division Bench judgment in the case of Glaxo Pharmaceuticals
(supra) was also explained by the learned single Judge in the case
of Abbott India Limited and Ors. vs. All India Abbott Employees
Union and Ors.8 and the learned Member, Industrial Court, has
rightly relied upon the said decision to hold that the Labour Court
at Mumbai has the jurisdiction to entertain the complaint.
26. Ms. Cox made an endevour to draw home the point that the
premise of the petition that it was the individual grievance of the
7 2016 SCC OnLine Bom 8679.
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respondent employee is flawed. In fact, the respondent No. 2 union
has espoused the cause of the employees much before the
termination of the respondent employees apprehending the
consequences which would entail the downsizing of the Respicare
Division. The termination of the respondent-employees was
inextricably connected with the downsizing of the Respicare
Division and was with a design to smash the collective bargaining
power. Therefore, it can not be said that the complaint represent the
individual grievance of termination of respondent employees.
27. Ms. Cox further submitted that, in any event, having regard
to the nature of the impugned interim order which directs the
employer to deposit 50% of the wages, it does not warrant
interference in exercise of the writ jurisdiction. Ms. Cox submitted
that the respondents-employees will not withdraw the amount
deposited by the employer and all the issues can be decided by the
Labour Court.
28. I have given anxious consideration to the submissions
canvassed across the bar.
29. In the backdrop of the afore-narrated facts and the
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submissions canvassed on behalf of the parties, two questions arise
for consideration. One, whether the Courts below were justified in
recording a finding that the Labour Court, Mumbai has the
jurisdiction to entertain the complaint of unfair labour practices
based on the termination of the services of the respondent/
employees ? Two, whether the Labour Court correctly exercised
the discretion to direct the petitioner No. 1 to deposit 50% of the
wages of the terminated employees ?
30. On the aspect of the jurisdiction, by and large, there is not
much controversy over the fact that none of the terminated
employees ever worked within the local limits of the jurisdiction of
the Labour Court at Mumbai. Nor there is any controversy about
their dates of appointment and termination. Purported cause for
termination as put forth by the petitioner No. 1 is the poor work
performance. Indisputably, petitioner No. 1 employer does not claim
to have served any charge-sheet or conducted any disciplinary
proceeding against any of the terminated employees. On the
contrary, it is the bold defence of the petitioner No. 1 that petitioner
No.1 is entitled to justify the termination before the Labour Court
by adducing evidence.
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31. In the light of the aforesaid, rather un-controverted facts, the
learned Presiding Officer, Labour Court was of the view that the
Labour Court at Mumbai has jurisdiction to entertain the complaint
of unfair labour practice as the termination order qua respondent
No. 1 employee was issued form the office of petitioner No. 1
situated at Mumbai and there were other disputes between the
respondent No. 2 union and the petitioners subjudice before the
Industrial Court and the petitioners had not questioned the
jurisdiction of the Industrial Court. The learned Member, Industrial
Court elaborated the aforesaid reasoning further by adding that
various litigations regarding shifting of products from Respicare
Division to other divisions of petitioner No. 1 were subjudice before
the Industrial Court. Therefore, the Courts below took the view that
Labour Court at Mumbai had requisite jurisdiction. Whether the
aforesaid approach of the Labour Court and Industrial Court is
justifiable ?
32. Section 6 of the Act, 1971 empowers the State Government to
constitute one or more Labour Courts having jurisdiction in such
local areas, as may be specified in the notification to be published in
official gazette and to appoint persons having the prescribed
qualifications to preside over such Courts. In exercise of the power
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under section 6 of the Act, 1971 the State Government has issued a
notification on 6th September, 2012 designating the territorial
jurisdiction of the various Labour Courts in the State of
Maharashtra.
33. Under section 7 of the Act, it shall be the duty of the Labour
Court to decide complaints relating to unfair labour practices
described in Item 1 of Schedule IV and to try offences punishable
under the Act. Under section 26, unless the context requires
otherwise, 'unfair labour practices' mean any of the practices listed
in Schedules II, III and IV. Section 27 proscribes employer, union
and employees from engaging in any unfair labour practice. Section
28 prescribes the procedure for dealing with complaints relating to
unfair labour practices.
34. It would be contextually relevant to note Item 1 of Schedule
IV, under which, in the case at hand, the petitioner No. 1 is alleged
to have indulged in unfair labour practices.
Schedule IV
General Unfair Labour Practices on the part of employers
1] To discharge or dismiss employees -
(a) by way of victimization;
(b) not in good faith, but in the colourable exercise of the
employer's rights.
(c) by falsely implicating an employee in a criminal case
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on false evidence or on concocted evidence;
(d) for patently false reasons;
(e) on untrue or trumped up allegations of absence
without leave;
(f) in utter disregard of the principles of natural justice in
the conduct of domestic enquiry or with undue haste;
(g) for misconduct of a minor or technical character,
without having any regard to the nature of the particular
misconduct or the past record of service of the employee,
so as to amount to a shockingly disproportionate
punishment.
35. The Act, 1971 does not, in terms, circumscribe the
jurisdiction of the Labour Court. The test which is thus required to
be applied is whether a substantial cause of action arose within the
jurisdiction of the Labour Court. The cause of action, it is trite, is a
bundle of facts which give rise to right to relief. Whether any such
facts which gave right to relief occurred within the territorial limits
of the Court, whose jurisdiction is questioned, is required to be
examined, where the matter is in the realm of territorial
jurisdiction as distinguished from subject matter jurisdiction.
36. In the case of Glaxo Pharmaceuticals (supra) the
jurisdiction of the Industrial Court, was sought to be assailed on the
ground that the transfer order was issued by the employer at
Mumbai, though it was served on the employee at Delhi and was to
take effect outside the State of Maharashtra. The Division Bench
considered the following question.
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6} The point which arise for determination in the case
in hand is that:
Q. Whether the Industrial Court and the Labour Court
under the MRTU & PULP Act have jurisdiction to
entertain a complaint solely on the ground that an
order allegedly having effect of unfair [11] labour
practice is issued from a place situated within the
territory of the State of Maharashtra even though the
effects and/or consequences of such an order are to
take place outside the territory of the State of
Maharashtra and the person against whom such an
order is issued for all purpose is employed in an area
situated outside the State of Maharashtra?
37. After adverting to a number of judgments, which were cited in
support of rival submissions, the Division Bench enunciated the
legal position as under:-
30} It is thus clear that it is the situs of the employment
which would be the relevant factor to decide the place of
cause of action for initiating any legal proceedings. Once
it is not in dispute that the respondent, at the relevant
time, was employed at Udaipur and he was sought to be
transferred from Udaipur to Imphal (Manipur), it is
obvious that the situs of employment of the respondent
was sought to be changed from Udaipur to Imphal, both
the places beyond the territory of the State of
Maharashtra.
31} In the case of unfair labour practice, which is
sought to be employed by the employer on account
transfer of the employee from one place to another, the
actual adoption of the unfair labour practice would be at
the place from where the employee is either sought to be
transferred or at the place where the employee is sought
to be transferred. It cannot, by any stretch of
imagination, be said to have resulted at the place from
where mere order of transfer of the employee is issued.
It is not the issuance of the order but it is the
consequence of the order issued that would result in
unfair labour practice to the employee. Being so, in case
of alleged harassment consequent to the transfer
resulting into unfair labour practice to the employee can
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result either at the place where the employee had been
working prior to the issuance of the order of transfer or
at the place where is actually transferred under such
order. Being so, the cause of action on account of alleged
unfair labour practice would arise only at one of these
two places and not at any third place. Undoubtedly, in a
case where an employee is merely sent to ascertain the
possibility of having an establishment of the employer,
till and until such establishment commences at any
such place, it could not be said that the unfair labour
practice would result at any place other than from
where the employment of the employee is controlled.
Considering the same, therefore, in Mohan Mhatre's
case it was held that 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
jurisdiction of the Court to entertain the proceedings
relating to such dispute.
(emphasis supplied)
38. The case of Manish Badkas (supra) was of termination of the
employee, who was at the Head Quarters at Sagar (MP), till his
termination, on the ground of loss of confidence. After following the
Division Bench decision in the case of Glaxo Pharmaceuticals
(supra), a learned single judge of this Court held that the Labour
Court cannot be said to have committed error in coming to the
conclusion that the termination of the services of the petitioner who
was employed in Madhya Pradesh would not give rise to a cause of
action for instituting a complaint of unfair labour practices in the
State of Maharashtra under the Act, 1971. It was expounded that
the Division Bench in Glaxo Pharmaceuticals (supra) held that it is
the situs of the employment which would be the relevant factor to
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decide the place of cause of action for initiating any legal
proceedings. Though the judgment in Glaxo Pharmaceuticals
(supra) was in the context of an order of transfer, the principles of
law laid down therein would be applicable to the case of termination
also.
39. In the case of Anil Murlidharan (supra) the question of
jurisdictional competence of Labour Court at Mumbai arose in the
light of the fact that the employee therein, who was working at
Silchar was terminated by an order issued from Mumbai office of
the employer. A learned single Judge of this Court after referring to
the judgment of the Supreme Court in the case of Workmen of Shri
Rangvilas Motors (P) Limited vs. Shri Rangvilas Motors (P)
Limited9 held that there should be some nexus between the dispute
and the territory of the State and not necessarily between the
territory of the State and the industry concerning which the
dispute arose. It was thus concluded that, in the facts of the said
case, since the petitioner therein was working at Silchar in a
separate establishment of the employer the dispute would arise at
that place and the mere fact that the order of termination was
issued from Head Quarters at Mumbai would not confer territorial
jurisdiction on Labour Court at Mumbai to entertain and decide the
9 AIR 1967 SC 1040.
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complaint of unfair labour practices filed by the petitioner at
Mumbai.
40. The aforesaid pronouncements, as is evident, proceed on the
premise that the jurisdiction of the Court would depend upon the
situs of the employment and if the effect of the impugned order is
felt at a place other than situs of the employment, e.g. where the
employee is sought to be transferred to another place, the Court
exercising jurisdiction over the said area would also have
jurisdiction. Conversely, the mere fact that the impugned order is
issued from a place, which is neither the situs of employment nor
the place where the effect of the impugned order is felt, would not
confer jurisdiction on the Court within whose local limits such office
is located.
41. As noted above, the binding efficacy of aforesaid line of
decisions was sought to be assailed on the ground that the Supreme
Court had kept the question of law decided in Glaxo
Pharmaceuticals (supra) open for a decision in an appropriate case.
An endevour was made to draw home the point that the decision of
the Supreme Court in the case of Nandram (supra) sets the
controversy at rest.
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42. In the case of Nandram (supra) the facts were that the
appellant therein was employed initially at Aurangabad, in 1983.
Post promotion, the appellant continued to be posted at Aurangabad
till the year 2000. He was transferred first to Silvassa, in Gujrat,
and then to Pondicherry. The appellant was terminated from
services w.e.f. 15th April, 2005 on account of closure of the
establishment at Pondecharry. It was not disputed that the
registered office of the company was in Aurangabad and the
decision to close the establishment at Pondicherry was taken by the
company at Aurangabad.
43. Aggrieved by the termination, the appellant had moved the
Labour Court at Aurangabad. The issue of jurisdiction was decided
in favour of the appellant by the Labour Court. The Industrial Court
ruled against the appellant. High Court concurred with the view of
the Industrial Court holding that the situs of employment of the
appellant being Pondicherry, the Labour Court at Aurangabad did
not have territorial jurisdiction to act on the complaint filed by the
appellant.
44. In the backdrop of the aforesaid facts, the Supreme Court held
as under:-
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4} Though, the learned counsel on both sides had
addressed in detail on several issues, we do not think it
necessary to go into all those aspects mainly because in
our view they are only academic. In the background of
the factual matrix, the undisputed position is that the
appellant was employed by the Company in
Aurangabad, he was only transferred to Pondicherry,
the decision to close down the unit at Pondicherry was
taken by the Company at Aurangabad and consequent
upon that decision only the appellant was terminated.
Therefore, it cannot be said that there is no cause of
action at all in Aurangabad. The decision to terminate
the appellant having been taken at Aurangabad
necessarily part of the cause of action has arisen at
Aurangabad. We have no quarrel that Labour Court,
Pondicherry is within its jurisdiction to consider the
case of the appellant, since he has been terminated
while he was working at Pondicherry. But that does not
mean that Labour Court in Aurangabad within whose
jurisdiction the Management is situated and where the
Management has taken the decision to close down the
unit at Pondicherry and pursuant to which the
appellant was terminated from service also does not
have the jurisdiction.
(emphasis supplied)
45. It would be appropriate to immediately notice that in the
case of Sun Pharmaceuticals (supra), a learned single Judge of this
Court found substance in the submission on behalf of the employees
that the Supreme Court in the case of Nandram (supra) has taken a
view which is directly contrary to the view of the Division Bench in
the case of Glaxo Pharmaceuticals (supra).
46. Ms. Cox would urge with tenacity that in the face of the
decision in the case of Sun Pharmaceuticals (supra), the learned
single Judge of this Court in the case of Anil Murlidharan (supra)
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could not have taken a view that the issue of termination order
from the office at Mumbai could not have conferred jurisdiction on
Labour Court at Mumbai.
47. The correct question to pose is where does the dispute
substantially arose ? By its very nature, answer to this question is
rooted in facts. The answer which the Court arrives, in a given set of
facts, in my view, cannot be imported to another set of facts. It is
well recognized, an additional fact or absence thereof makes a world
of difference. To put it in other words, where the Court has to find
out as to where the dispute substantially arose, the facts of the case
play a decisive role.
48. I find it rather difficult to accede to the broad submission on
behalf of employees that the decision of the Supreme Court in the
case of Nandram (supra) holds that the Court where the registered
office of the employer is situated will also have concurrent
jurisdiction in all the situations. If this Court correctly appreciates
the factual backdrop in which the decision in the case of Nandram
(supra) was delivered, two crucial factors assumed significance.
One, appellant therein had all along been posted at Aurangabad till
he was transferred to Silvassa and then to Pondicherry. And, two,
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the termination of the appellant was on account of the closure of the
unit at Pondicherry and the decision to close the unit was taken at
Aurangabad. Therefore, in my considered view, the aforesaid
decision in the case of Nandram (supra) is required to be
considered in the totality of the facts of the said case and not as
laying down a broad proposition that the Court where the
registered office of the employer is situated will also have the
concurrent jurisdiction for that reason only.
49. The reliance on the decision of this Court in the case of Abbott
India Limited (supra) to assume the jurisdiction does not seem to be
well founded. A learned single Judge of this Court distinguished the
import of the decision in the case of Glaxo Pharmaceuticals (supra)
as the fact-situation, with which the learned single Judge was
confronted with, was completely distinct. The observations of the
learned single Judge in paragraphs 33 and 34 in which the decision
in the case of Glaxo Pharmaceuticals (supra) was distinguished, in
the context of the facts of the case in Abbott India Limited (supra),
make the position explicitly clear.
33} It is, therefore, apparent that the situs of
employment would be relevant factor to decide the
accrual of cause of action for any legal proceedings is
a finding that the Division Bench reached in the
backdrop of the allegations in the complaint of
respondent No.1 Abhay Raj Jain and that is how
paras 28 and 29 so also the ultimate and final
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conclusion in para 30 must be read. In my view, the
reliance placed by the petitioners on this decision is
clearly misplaced.
34} In the instant case, the decision of the Division
Bench cannot be of any assistance to the petitioners
because what the petitioners are alleging is, that the
Industrial Court at Mumbai lacked territorial
jurisdiction to entertain and try a complaint of unfair
labour practice, which complaint does not only
project and raise the issue of transfer. The complaint
has been referred to by me in details. The allegations
in the complaint have been reproduced by me, with a
view to appreciate the rival contentions. If the
complaint is perused as a whole, it projects that the
service conditions of the petitioners' employees are
determined and decided by it at Mumbai. All policy
decisions in relation thereto, are taken at Mumbai.
Whenever such policy decisions are taken at Mumbai
and they are known to all the member employees of
the petitioners through the medium of the respondent
No.1-Union, which is a recognised Union and the
Undertaking of the petitioners and its registered
office is at Mumbai, that the complaint has been filed
at Mumbai. Each of the issues in relation to the
service conditions have been raised by the
respondent No.1-Union at Mumbai. There is a
reference to the Charter of Demands and the prior
settlement, each one of which is a event taking place
at Mumbai. It is alleging breach of the terms of the
settlement and the essential foundation of collective
bargaining, that the unfair labour practice on the part
of the petitioners have been extensively set out. The
allegations in the complaint refer to Items 9 and 10 of
the MRTU and PULP Act. These Items 9 and 10 in
Schedule IV read thus:
"9. Failure to implement award, settlement or
agreement.
10. To indulge in act of force or violence."
50. This leads me to the thrust of the submission on behalf of the
respondents that the termination of the services of respondents-
employees is a part of a larger scheme of unfair labour practices.
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The terminations cannot be viewed in isolation. The terminations
have their genesis in the transfer of the brands from Respicare
Division to other divisions of petitioner No. 1.
51. Indisputably, proceedings are pending before the Industrial
Court. In Complaint (ULP) No.01 of 2022, consent terms were
executed between the complainant and petitioner No. 1 and others
wherein it was, inter alia, settled that the shifting of all products
and sale and/or disposal of the existing products of the Respicare
Division due to business needs and requirement will not result in
termination, or shall adversely affect the service conditions of any
of the Medical Representative (MRs) affiliated to complainant union
and the employer would make endevour to provide sufficient work
to the MRs of Respicare Division.
52. In the complaint, there are allegations that with a design to
close the Respicare Division PSEs were coerced to tender the
resignation and those who did not toe the line, have been
victimized.
53. Undoubtedly, the proceedings revolving around the shifting
of brands/products from Respicare Division to other divisions of the
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petitioner No.1, premised on apprehended adverse effect on the
service conditions of the employees affiliated to respondent No. 2
union are subjudice. However, that by itself may not be a surer
foundation to assume jurisdiction unless it could be demonstrated
that the action against the individual employees emanates from the
said dispute.
54. Prima facie the nexus between the action against individual
employees and the larger dispute between the union and the
employer over shifting of brands or for that matter the closure of
Respicare Division, is required to be established. Mere fact that the
offices of petitioner No. 1 and that of respondent No. 2 union are
situated within the local limits of the jurisdiction of the Labour
Court at Mumbai would not by itself be also sufficient unless such
nexus between the larger dispute and the impugned action is prima
facie established.
55. In the circumstances, in my view, since the challenge in the
instant petition is to an interim order, it may not be permissible to
delve deep into this issue in these petitions. It would therefore be
appropriate to direct Labour Court to frame and decide the issue of
jurisdiction as a preliminary issue, as the question is rooted in facts.
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56. On the second point of the grant of interim relief, it is trite
that in the event of termination of the services of an employee,
without holding a disciplinary proceeding, the employer is entitled
to justify the termination before the Court by adducing evidence.
This Court, in the case of United Ink (supra) has, in terms, ruled
that the Court in exercise of power under section 30(2) of the Act,
1971 would not be justified in directing the employer to reinstate
the employee and pay him wages during the pendency of the
complaint. The observations in paragraph 8, read as under:-
8} The legal position is no more res integra that
interalia where an order of dismissal of an employee
on the ground of misconduct is passed without holding
the domestic enquiry, it is open to the employer to
prove the misconduct in the court. That being the
legal right available with the employer, we hardly find
any justification in the order of the Industrial Court
directing the employer to reinstate the complainant
and pay him wages during the pendency of the
complaint. That order, in our view, is not justified even
in exercise of the power under section 30(2) of the
MRTU & PULP Act. The order passed by the Industrial
Court, if allowed to stand, would occasion in failure of
justice in as much as despite the right having been
given in law to the employer to prove the misconduct
in the court in a case where the order of dismissal was
not preceded with by the domestic enquiry, such legal
right would be seriously prejudiced. On the other
hand, if ultimately, the employer fails to establish the
misconduct and the complaint is allowed; the order of
dismissal is set aside, obviously, an appropriate
consequential order shall be passed by the court.
(emphasis supplied)
57. In the case at hand, the Labour Court was alive to the position
in law that reinstatement in services which would partake the
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character of final relief could not be granted at an interim stage.
Thus, the Labour Court directed the petitioners to deposit 50%
monthly salary of the respondent-employees.
58. The justifiability of the aforesaid direction is required to be
tested in the backdrop of the facts that the termination of none of
the employees is on account of any misconduct. Neither was it
preceded by any show cause notice. Nor is it the case that the
employees have been paid retrenchment compensation. Instead, the
bold case of the petitioner No. 1 employer was that the services of
the employees have been terminated for poor work performance.
59. The aforesaid ground is, in its very nature, fraught with
subjective elements. Were the performance standards reasonable ?
How the performance was measured ? Whether the performance
was appraised on a uniformly applied measurable standard ? Were
there extraordinary or extenuating circumstances affecting
performance in a given situation ? Whether the explanation for
poor performance was justifiable ? All these and like questions may
bear upon the justifiability of termination on the ground of poor
performance.
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60. From this stand point, in my view, the interim order of
deposit of 50% of the wages does not deserve interference. However,
equities would intervene if the respondent-employees are permitted
to withdraw the amount to be deposited by the petitioners. I am,
therefore, persuaded to direct that the amount to be deposited shall
abide the order which may be eventually passed by the Labour
Court.
61. The conspectus of the aforesaid consideration is that the
petitions deserve to be partly allowed.
Hence, the following order.
ORDER
1] The petitions stand partly allowed.
2] The learned Presiding Officer, Labour Court shall
frame and decide the issue of jurisdiction as preliminary
issue, as expeditiously as possible.
3] The impugned direction to deposit 50% of the wages of
the respondent employees stand affirmed. The
respondent-employees shall not, however, be permitted
to withdraw the said amount.
4] The amount to be deposited shall be invested in an
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interest bearing account. It would abide the final decision
of the Labour Court.
5] Rule made absolute to the aforesaid extent.
6] In the circumstances, there shall be no order as to
costs.
(N. J. JAMADAR, J.)
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