The Management Of M/S Sterling ... vs Govt. Of Nct Of Delhi &Anr.
2011 Latest Caselaw 2494 Del

             *IN THE HIGH COURT OF DELHI AT NEW DELHI

                                              Date of decision: 10th May, 2011.

+                           W.P.(C) 12405/2005

%        THE MANAGEMENT OF M/S STERLING
         HI-TECH LTD.                             ..... Petitioner
                      Through: Mr. D.K. Malhotra & Mr. Rajesh
                               Kumar Malhotra, Advocates.

                                   Versus

         GOVT. OF NCT OF DELHI &ANR.              ..... Respondents
                      Through: Mr. Sachin Chopra with Mr. Amit
                               Kumar, Advocates for R-1.
CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1.       Whether reporters of Local papers may                      Yes
         be allowed to see the judgment?

2.       To be referred to the reporter or not?             Yes

3.       Whether the judgment should be reported            Yes
         in the Digest?

RAJIV SAHAI ENDLAW, J.

1. The writ petition was filed impugning the Notification/Order dated

21st August, 2001 of the Secretary (Labour) of the Govt. of NCT of Delhi

(respondent no.1) made in exercise of powers under Sections 10(1)(c),

10(1)(d) & 12(5) of the Industrial Disputes Act, 1947, referring the dispute

as to the termination by the petitioner employer of the services of the

respondent no.2 workman to the Industrial Adjudicator at Delhi for decision

in accordance with law.

2. It is the case of the petitioner employer that the Govt. of NCT of Delhi

is not the "Appropriate Government" to refer the dispute between the

petitioner employer and the respondent no.2 workman for adjudication for

the reason of the respondent no.2 workman having been appointed as

Accountant for the factory/plant of the petitioner employer at Sikandrabad,

District-Bulandshahar (U.P.) and further for the reason of respondent no.2

workman throughout his service tenure having been posted at the

Sikandrabad Plant of the petitioner employer. It is further the case of the

petitioner employer that the termination of the services of the respondent

no.2 workman also took place at Sikandrabad Plant where the order of

termination was issued and became effective and the respondent no.2

workman himself was also not resident of Delhi but living in Ghaziabad

(U.P.) and thus the dispute if any, arose at Sikandrabad where the

establishment of the petitioner employer existed and hence the Govt. of NCT

of Delhi could not have made an order of reference of the said dispute.

3. The delay of about 4 years from the date of the Notification/Order

impugned, in preferring the present writ petition was explained by pleading

that the petitioner employer was not served with the notice from the

Industrial Adjudicator to whom the dispute was referred as aforesaid and

upon learning of the ex parte award dated 9th May, 2003 (published on 22nd

September, 2003) applied to the Industrial Adjudicator for setting aside

thereof and which was allowed on 2nd May, 2005 and whereafter the present

writ petition was preferred.

4. Notice of the writ petition was issued and vide ex parte order dated

29th July, 2005 further proceedings before the Industrial Adjudicator stayed.

Rule was issued in the writ petition on 11 th October, 2006 and the interim

order made absolute. The respondent no.2 workman applied under Section

17B of the Act. The matter came up before this Bench on 28 th March, 2011

when though dismissing the application under Section 17B as not

maintainable since there is no award of reinstatement till now, it was

enquired from the counsel for the petitioner employer as to how the writ

petition challenging the reference and which writ petition as well as earlier

conduct of the petitioner employer has already delayed the adjudication of

the reference for the last 10 years, was maintainable particularly in the light

of National Council for Cement and Building Materials Vs. State of

Haryana (1996) 3 SCC 206. The counsel for the petitioner employer

however expressed inability to argue and sought adjournment. Finding the

petitioner employer to be abusing the process of the Court, while adjourning

the writ petition to 11th November, 2011, the interim order of stay of further

proceedings before the Industrial Adjudicator was recalled and the parties

were directed to appear before the Industrial Adjudicator on 18 th April, 2011.

5. The petitioner employer thereafter applied for recall of the order dated

28th March, 2011 supra. The counsel for the petitioner employer was asked

to address on the writ petition itself. Again, adjournment was sought. The

counsel for the petitioner employer has today been heard on the writ petition

itself. The counsel for the respondent no.2 workman has not appeared.

However, need is not felt to issue notice to the respondent no.2 workman.

6. The counsel for the petitioner employer has argued that the petitioner

employer had taken objection as to the territorial jurisdiction during the

conciliation proceedings itself and notwithstanding the same and without

disclosing as to how the respondent no.1 was treating itself to be the

appropriate authority qua dispute between the petitioner employer and the

respondent no.2 workman for reference thereto to the Industrial Adjudicator

at Delhi, had made the reference. It is contended that since the Industrial

Adjudicator can adjudicate only what is referred to it and no reference on the

aspect of territorial jurisdiction having been made, it is not open to the

petitioner employer to set up the plea of territorial jurisdiction before the

Industrial Adjudicator; in the circumstances, the only remedy of the

petitioner is by way of this writ petition. Reference is made to the judgment

of the undersigned in Mahipal Singh Vs. Presiding Officer 170 (2010) DLT

130 observing that the Industrial Adjudicator cannot go into the question of

the validity of the reference and that if the employer says that the workman

has made a stale claim then the employer must challenge the reference by

way of writ petition on the ground of delay and deny existence of industrial

dispute. It is thus contended that the undersigned having taken a view that

the challenge to the reference is maintainable, this writ petition would lie.

7. Reference is also made to:

(i) Braham Prakash Vs. Govt. of NCT of Delhi 143 (2007) DLT

311 laying down that where the situs of employment of the workman

at the time of termination was outside Delhi and the dispute

substantially arose outside Delhi, merely because the workman was

appointed in Head Office at Delhi and got his ESI / PF contributions

in Delhi and resided in Delhi would not vest territorial jurisdiction in

Delhi.

It may be noticed that the challenge in the said case was to the award

of the Industrial Adjudicator.

(ii) Bikash Bhushan Ghosh Vs. Novartis India Ltd. (2007) 5 SCC

591 laying down that the situs of employment of the workman would

be a relevant factor for determining the appropriate government

capable of making reference.

The Supreme Court however further laid down that the State

Government within whose jurisdiction a part of the cause of action

arose also has the jurisdiction to make the reference. It was further

laid down that unless the employer suffered any prejudice, it could not

question jurisdiction.

(iii) DLF Universal Ltd. Vs. Govt. of National Capital Territory,

Delhi 96 (2002) DLT 825 holding that where the workman had

worked at Gurgaon, situs of employment was Gurgaon, termination

letter was issued at Gurgaon, Govt. of NCT of Delhi would not have

jurisdiction to make the reference to the Industrial Adjudicator.

(iv) Paritosh Kumar Pal Vs. State of Bihar 1984 Lab I.C. 1254

(Patna Full Bench) laying down that general principles underlying

jurisdiction of Civil Procedure Code would be relevant in determining

the appropriate Government competent to make reference and that

situs of employment would determine the jurisdiction.

(v) Escorts Ltd. Vs. Commissioner of Central Excise, Delhi-II

(2004) 8 SCC 335-though the said judgment is included in the

compilation of judgments handed over but neither relied upon during

the hearing nor found relevant.

(vi) Haryana Financial Corporation Vs. M/s Jagdamba Oil Mills

JT 2002 (1) SC 482 though the said judgment is included in the

compilation of judgments handed over but neither relied upon during

the hearing nor found relevant.

(vii) Lohia Starlinger Limited Vs. Govt. of NCT of Delhi 2006 V

AD (Delhi) 732 also laying down that dispute can be raised only at

situs of employment and merely receipt of order of termination at

Delhi would not create jurisdiction in Delhi.

(viii) Nedungadi Bank Ltd. Vs. K.P. Madhavankutty (2000) 2 SCC

455 holding the reference of a stale dispute for adjudication to be bad

and quashing the reference.

(ix) National Engineering Industries Ltd. Vs. State of Rajasthan

(2000) 1 SCC 371 laying down that the High Court can entertain a

writ petition impugning a reference on the ground of non-existence of

an actual or apprehended industrial dispute but the Industrial Tribunal

cannot examine the validity of the reference.

(x) Hindustan Samachar Vs. State of Orissa 1979 Lab. I.C. 106

(DB) laying down that Orissa Government has jurisdiction to refer

dispute of termination of service of servant attached to Branch Office

at Orissa even where the Head Office was at Delhi.

(xi) Workmen of Shri Ranga Vilas Motors (P) Ltd. Vs. Sri Ranga

Vilas Motors (P) Ltd. AIR 1967 SC 1040 laying down that the dispute

ordinarily arises at the place where the workman is working and not at

the Head Quarter of the industry.

(xii) M/s Little Sons and Co. Vs. Amar Nath 1978 Lab. I.C. 430

(P&H) laying down that reference of dispute is not to be necessarily

made by the State within the territory of which the Head Office of the

employer company is situated.

8. What has troubled me most in the present case is that the petitioner

employer by first being proceeded against ex parte before the Industrial

Adjudicator, then applying for setting aside of the ex parte award and

thereafter by filing the present writ petition has stalled the adjudication of

the reference by 10 years as aforesaid. The spirit of the I.D. Act is

expeditious disposal of the lis by the Industrial Adjudicator. Section 17B of

the Act was introduced to provide relief to the workman for delays owing to

challenge to the award in favour of the workman during the pendency of the

writ petitions before the High Court and the Supreme Court. If challenges to

the references to the Industrial Adjudicator are routinely allowed, it will

allow an unscrupulous employer to delay the adjudication of the reference

indefinitely by first impugning the reference order itself and during the

pendency of which challenge the benefit of Section 17B would also not be

available to the workman.

9. The Supreme Court in National Council for Cement & Building

Materials (supra) noticed the appalling situation created due to challenge to

the decision of the Industrial Adjudicator on such preliminary issues being

challenged in the High Court or the Supreme Court and during which time

the reference is stayed and lies dormant. Reference was made to Cooper

Engineering Limited Vs. P.P. Mundhe (1975) 2 SCC 661 laying down that

there was no justification for a party to stall the final adjudication of the

dispute referred to the Industrial Adjudicator by questioning the decision on

preliminary issues before the High Court. Reference was also made to S.K.

Verma Vs. Mahesh Chandra (1983) 4 SCC 214 deprecating / disapproving

the practice of raising frivolous preliminary issues / objections at the

instance of the employer to delay and defeat adjudication on merits.

Reference was further made to D.P. Maheshwari Vs. Delhi Administration

(1983) 4 SCC 293 and to Workmen Vs. Hindustan Lever Ltd. (1984) 4

SCC 292 laying down that all issues whether preliminary or otherwise

should be decided together so as to rule out the possibility of any litigation at

the interlocutory stage. The Supreme Court thus held that the High Court

should refuse to intervene in the proceedings pending before Industrial

Adjudicator at an interlocutory stage.

10. Reference at this stage may also be made to the judgment dated 24th

September, 2008 of a Single Judge of this Court in W.P.(C) No.12602/2006

titled Hongkong and Shanghai Banking Corporation Ltd. Vs. Government

of India also laying down that the Courts cannot interfere with a reference

order under Section 10(1) of the Act because that order does not affect the

rights of the party and the writ petition lies only when the rights of parties

have been adversely affected. It was held that a mere reference under

Section 10(1) does not affect anybody's rights and hence no writ petition

should ordinarily be entertained against a mere reference and the writ

petition is liable to be dismissed as premature. It was yet further held that

the jurisdiction under Article 226 of the Constitution of India should not be

allowed to be exploited by those who can well afford to wait, to the

detriment of one who can ill afford to wait. The Intra Court Appeal being

LPA No.684/2008, preferred against the aforesaid judgment was dismissed

by the Division Bench of this Court on 11th November, 2008.

11. I may notice that another Division Bench of this Court in Moolchand

Khairati Ram Hospital Karamchari Union Vs. Labour Commissioner

MANU/DE/1222/1996 held that the High Court can go into the validity of

the reference in certain situation, though it is not to sit in appeal over the

order of the State Government and is not entitled to consider the propriety or

the satisfactory character of the reasons. However, the said observations

came to be made in the context of the reference not addressing the real

dispute which had arisen between the workmen and the employer. The

Supreme Court in appeal against the aforesaid judgment of the Division

Bench, in judgment reported in (2002) 10 SCC 708 also affirmed that in

certain situations challenge to the reference itself is maintainable.

12. Another Division Bench of this Court in Eagle Fashions Vs.

Secretary, Labour (1999) I LLJ 232 (Del) also held the challenge to the

reference to be maintainable where the reference did not address the real

dispute.

13. Mention must also be made of the recent dicta of the Division Bench

in judgment dated 16th May, 2011 in LPA No.425/2011 titled Bata India

Ltd. Vs. Union of India though qua reference under Section 7B of the I.D.

Act holding that there is no absolute bar for interference in exercise of power

under Article 226 when a matter is referred by a Government to an Industrial

Tribunal if the reference suffers from jurisdictional error or no industrial

dispute exists and on ancillary grounds. It was further held that if factual

disputes are involved, it is advisable that the Industrial Tribunal should

adjudicate the same and the writ Court should not exercise the discretion and

refrain from interfering with the order of reference.

14. I have in Radhey Lal Pradeep Kumar Vs. Sh. Shyam Lal

MANU/DE/1670/2010 held that if it were to be held as a general rule that

the challenge to reference on ground of the dispute being stale, should be by

impugning the order of the appropriate government of reference and the

employer would not be entitled to impugn the ultimate award on such

ground, even if a defence before the Industrial Adjudicator, for the reason of

having not challenged the order of reference, the same is likely to delay

considerably the adjudication by the Industrial Adjudicator. It was thus held

that such challenge can be made at the time of challenge to the award also. I

am similarly of the view that a challenge to the reference on the ground of

the territorial jurisdiction of the appropriate government as in this case is

also permissible at the time of challenge to the award and ought not to be

permitted to be raised by challenging the reference.

15. The counsel for the respondent no.1 has also drawn attention to the

documents in the present case to show that there is no error on the part of the

respondent no.1 in exercising the jurisdiction to refer the dispute. Reference

is made to the letters of appointment of the respondent no.2 workman issued

by the petitioner employer at Delhi; to the factum of Head Office and

Registered Office of the petitioner employer being at Delhi; to the

termination letter also issued from Delhi. The respondent no.2 workman in

his counter affidavit and to which no rejoinder has been filed has also stated

that he used to collect his salary/wages from Delhi.

16. I have in Raj Kumar Jaiswal Vs. Rangi International Pvt. Ltd. 2009

(113) DRJ 620 held that industrial dispute arises at the place where the

employer is exercising effective control and the State Government having

jurisdiction over the place from which the employer exercises effective

control would have jurisdiction to make the reference. It was also observed

that in the absence of any prejudice being shown to be suffered by the

employer in contesting the proceedings at Delhi, the plea of territorial

jurisdiction cannot be permitted to be taken especially in matters relating to

Industrial Disputes Act which is social welfare legislation. The counsel for

the petitioner employer herein has also been unable to show the prejudice

which would be suffered by the petitioner in contesting the dispute at Delhi.

17. In the present case not only was the letter of termination issued by the

petitioner at Delhi but a copy thereof was also forwarded by the petitioner

employer to the Assistant Labour Commissioner at Kalkaji, Delhi also. The

petitioner employer thus, at the time of termination appears to have been of

the view that the jurisdiction over the dispute likely to arise from termination

would be of the authorities at Delhi and the plea of territorial jurisdiction has

been taken mischievously as an afterthought, to delay adjudication of the

industrial dispute.

18. There is thus no merit in the writ petition; the same is dismissed.

Costs of litigation of only `7,500/- were paid under interim orders to the

respondent no.2 workman. Having found the writ petition to be mala fide

and in the abuse of the process of Court and the petitioner having delayed

the adjudication of the dispute by six years and to the prejudice of the

respondent no.2 workman, it was enquired from the counsel for the

petitioner employer as to what should be the measure of compensation to

balance the equities arising from the interim orders obtained by the

petitioner employer. The Supreme Court in Abhimanyoo Ram Vs. State of

U.P. (2008) 17 SCC 73 and in Ramesh Chandra Sankla Vs. Vikram

Cement (2008) 14 SCC 58 has held that the Court, at the time of final

decision, must balance the equities arising from the interim orders. It was

enquired as to what would be the amount which the petitioner employer

would have been liable to pay if Section 17B had applied. This Court is of

the opinion that the same would be the best measure for compensating the

respondent no.2 workman. Neither was the counsel for the petitioner

employer able to tell the last drawn wages of the respondent no.2 workman

nor are the same borne out from the paper book. However, considering the

fact that the respondent no.2 workman was appointed in the year 1996 at a

monthly basic salary of `3075/- besides HRA, conveyance allowances etc.,

the last drawn salary in 2001 can safely be presumed to be minimum

`6,000/- per month i.e. `72,000/- per annum and for approximately six years

for which the proceedings have been delayed, the payment under Section

17B would have been above `4 lacs. However, I am confining the amount

payable by the petitioner to the respondent no.2 workman to `1 lac only. I

feel that imposition of such a condition is also necessary to send a message

to the Bar to desist in future from such frivolous litigation in abuse of the

process of the Court.

19. The petitioner employer is accordingly directed to within six weeks of

today and as a condition for contesting the dispute before the Industrial

Adjudicator, pay the said sum of `1 lac to the respondent no.2 workman.

RAJIV SAHAI ENDLAW (JUDGE) MAY 10, 2011 Bs (corrected and released on 26th May, 2011)