Harbans Singh vs M/S Juggat Pharma
2013 Latest Caselaw 5904 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                   Date of decision: 20th December, 2013.

+                 RFA 345/2013 & CM No.11394/2013 (for stay)

       HARBANS SINGH                                      ..... Appellant
                   Through:            Mr. Yakesh Anand, Mr. Murari
                                       Kumar, Mr. Nimit Mathur & Ms.
                                       Sonam Anand, Advs.

                                   Versus

       M/S JUGGAT PHARMA                                   ..... Respondent
                    Through:           Mr. Y. Hari Prasad & Ms. K.V.
                                       Bharathi Upadayaya, Advs.
CORAM:
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

RAJIV SAHAI ENDLAW, J.

1. The appeal impugns the judgment and decree (dated 18th April, 2013

of the Court of the Additional District Judge (ADJ)-06, West District, Tis

Hazari Courts, Delhi) of dismissal of CS No.453/2012 filed by the appellant

consequent to rejection of the plaint on the ground of the suit claim being

barred by time and the benefit of Section 14 of the Limitation Act, 1963

being not available to the appellant/plaintiff; it was also observed that the

suit was barred by res judicata.

2. The appellant/plaintiff had in or about September, 2010 instituted the

suit from which this appeal arises for the reliefs of, (i) declaration that the

termination dated 26th September, 1996 of his services by the

respondent/defendant was illegal and wrong; (ii) recovery of an amount of

Rs.11 lakhs from the respondent/defendant on account of damages and

compensation for illegal termination dated 26th September, 1996; (iii)

recovery of Rs.5 lakhs from the respondent/defendant towards legal

expenses incurred by the appellant/plaintiff; and (iv) direction to the

respondent/defendant to pay to the appellant/plaintiff the amounts due to the

appellant/plaintiff towards provident fund, performance linked bonus etc.

3. The respondent/defendant filed an application under Order VII Rule

11 of the Civil Procedure Code (CPC), 1908 on the ground of the said claim

being barred by time and the benefit of Section 14 of the Limitation Act

claimed by the appellant/plaintiff in the plaint being not available to the

appellant/plaintiff.

4. It was inter alia the case of the appellant/plaintiff, (i) that since the

respondent/defendant inspite of his legal notice refused to reinstate him into

service, the appellant/plaintiff on 17th March, 1997 initiated conciliation

proceedings by raising an industrial dispute before the Conciliation Officer;

(ii) that the Conciliation Officer could not reconcile due to adamant and

vindictive attitude of the respondent/defendant; (iii) the conciliation thus

failed and the following reference was made to the Labour Court:

"Whether services of Shri Harbans Singh had been terminated illegally and/or unjustifiably by the management, if so, what relief is he entitled and what directions are necessary in this respect."

(iv) the said reference was vide Award dated 25th April, 2009 of the

Labour Court decided against the appellant/plaintiff, holding that the

appellant/plaintiff was not a workman and the appellant/plaintiff had

accepted the full and final settlement from the respondent/defendant and had

been beneficially employed elsewhere and thus it could not be said that his

services have been terminated illegally or unjustifiably and the

appellant/plaintiff was estopped from challenging the termination of his

services by the respondent/defendant as illegal or unjustified; (v) that the

appellant/plaintiff challenged the said award of the Labour Court by filing

W.P. No.11649/2009 in this Court but which was also dismissed in limine

on 14th September, 2009; (vi) LPA No.560/2009 preferred thereagainst was

also dismissed on 16th November, 2009; and, (vii) SLP (Civil)

No.8241/2012 was also dismissed on 6th July, 2010.

5. The appellant/plaintiff thus in the plaint itself, pleaded that the time

spent by him in prosecuting his claim before the Conciliation Officer and

thereafter before the Labour Court and this Court and the Supreme Court is

liable to be excluded while computing the period of limitation for filing the

suit and the suit, by excluding the said time, is well within the period of

limitation.

6. The learned ADJ has rejected the plaint, finding/observing/holding:

(i) that the reference of the industrial dispute raised by the

appellant/plaintiff was adjudicated by the Labour Court on merits and

had become final and operates as res judicata and the

appellant/plaintiff cannot re-agitate the same issue again and again;

(ii) that the limitation for filing a suit for compensation for breach

of contract, as provided under Article 78 of the Limitation Act, is of

one year and the period of limitation begins to run from the date when

the breach of contract takes place; the services of the

appellant/plaintiff having been terminated vide order dated 26th

September, 1996, the suit filed by in the year 2010 was hopelessly

barred by limitation;

(iii) that the benefit of Section 14 of the Limitation Act claimed by

the appellant/plaintiff is not available to the appellant/plaintiff

because Section 14 is not applicable when the earlier case has been

decided after adjudication on its merits, as was done by the Labour

Court in the award which was confirmed till the Supreme Court;

reliance in this regard was placed on Deena Vs. Bharat Singh AIR

2002 SC 2768 and Corporation of Calcutta Vs. Pulin Chandra Daw

AIR 1977 Calcutta 443;

(iv) that Section 14 of the Limitation Act is applicable only when

the previous Court is unable to entertain the case due to defect of

jurisdiction or other cause of like nature; however the claim of the

appellant/plaintiff was not rejected by the Labour Court for lack of

jurisdiction but was adjudicated on merits; hence the

appellant/plaintiff cannot take benefit of provisions of Section 14 of

the Limitation Act;

(v) that one of the essential requirements for application of Section

14 of the Limitation Act as spell out in Consolidated Engineering

Enterprises Vs. Principal Secretary, Irrigation Department (2008) 7

SCC 169 is that the earlier proceedings and the later proceeding must

relate to the same matter in issue; however the appellant/plaintiff

himself, in reply to para 2 of the preliminary objections, in his

replication, had pleaded that the issue involved in the suit is entirely

different from that before the Labour Court--that the issue involved

in the suit was with respect to the compensation and damages whereas

the issue before the Labour Court was whether the appellant/plaintiff

was a workman or not and if yes, then the effect thereof on the

termination of his services; thus the benefit of Section 14 of the

Limitation Act is not available to the appellant/plaintiff.

7. The appeal came up before this Court first on 29th July, 2013, when

notice of the appeal was issued being prima facie of the opinion that once

the Labour Court had held that the appellant/plaintiff was not a workman, it

lacked jurisdiction and its findings on other issues would not constitute res

judicata. The Trial Court record was also requisitioned. The counsels have

been heard.

8. The question for adjudication, is twofold. Firstly, whether the suit

could be said to be barred by res judicata ; and, Secondly whether in the

facts and circumstances, the benefit of Section 14 of the Limitation Act was

available to the appellant/plaintiff or not. It is not in dispute that if the said

benefit were to be available, then the suit was within time.

9. As far as the aspect of res judicata is concerned, though the Labour

Court, whose award was upheld till the Supreme Court, while answering the

reference in the industrial dispute raised by the appellant/plaintiff, besides

holding the appellant/plaintiff to be not a workman, also held that the

termination by the respondent/defendant of the services of the

appellant/plaintiff was not illegal and unjustified for the reason of the

appellant/plaintiff having accepted full and final settlement of his accounts

from the respondent/defendant and the appellant/plaintiff thus being

estopped from challenging the termination, but the question which arises

and which has not been addressed by the learned ADJ and not raised by the

counsel for the appellant/plaintiff in the memorandum of appeal also, is,

whether the finding of the Labour Court of the appellant/plaintiff having

accepted full and final settlement of accounts from the respondent/defendant

and being thus estopped from challenging the termination of his

employment, can constitute res judicata, once it had been held that the

Labour Court had no jurisdiction for the reason of the appellant/plaintiff

being not a workman. It needs no elaboration that the Labour Court has

jurisdiction only over the disputes between workman and the employer and

not if the employee is not a workman within the meaning of the Industrial

Disputes Act, 1947.

10. The question is no longer res integra. Reference in this regard can be

made to:

(a) Shankarlal Patwari Vs. Hiralal Murarka AIR1950 PC 80;

(b) Mangharam Chuharmal Vs. B.C. Patel AIR 1972 Bombay

46;

        (c)      Ram Kishan Vs. Bharat Bhushan 1979 FLR 194;

        (d)      UOI Vs. Ranchi Municipal Corporation, Ranchi (1996) 7

                 SCC 542;

        (e)      Rajinder Parshad Jain Vs. Bal Gopal Das 77 (1999) DLT

                 478 (DB);

        (f)      Savitri Devi Vs. Fashion Linkers 95 (2002) DLT 893;

        (g)      Nirmal Jeet Singh Hoon Vs. Irtiza Hussain (2010) 14 SCC

                 564; and,

        (h)      Fida    Hussain     Vs.     Moradabad Development Authority

(2011) 12 SCC 615 holding that where the previous proceeding

is dismissed as not maintainable, any observations on merits of

the controversy are not res judicata.

11. It thus has but to be held that once the Labour Court had come to the

conclusion that the appellant/plaintiff was not a workman and the Labour

Court thus had no jurisdiction over the dispute between the

appellant/plaintiff and his employer i.e. the respondent/defendant, the

findings given by the Labour Court on merits inter se the dispute between

the appellant/plaintiff and the respondent/defendant cannot be res judicata

in the claim of the appellant/plaintiff against the respondent/defendant

before the appropriate fora.

12. It may be noticed that the award of the Labour Court being subject to

judicial review by this Court, the Labour Court could not have after holding

the appellant/plaintiff to be not a workman and consequently the Labour

Court having no jurisdiction refused to decide the reference. The Supreme

Court in D.P. Maheshwari Vs. Delhi Administration (1983) 4 SCC 293 and

in M/s Cipla Ltd. Vs. Ripu Daman Bhanot (1999) 4 SCC 188 and this

Court in Ram Avtar Vs. Delhi Flour Mills Co. Ltd. MANU/DE/8820/2007

have held that the Courts/Tribunals particularly those adjudicating labour

disputes ought to decide all the issues at the same time without trying some

of them as preliminary issues so that in the event of the finding on the

preliminary/jurisdictional issue being interfered with in appeal/judicial

review, there is no need to remand the matter for adjudication on merits.

13. That brings me to the second aspect, of the applicability of Section 14

of the Limitation Act. The same, in computing the period of limitation for

any suit, allows to be excluded the time during which the plaintiff has been

prosecuting with due diligence another civil proceeding, whether in a Court

of first instance or of appeal or revision, against the defendant shall be

excluded, where the proceeding relates to the same matter in issue and is

prosecuted in good faith in a Court which, from defect of jurisdiction or

other cause of a like nature, is unable to entertain it.

14. The first question which arises is whether the proceeding before the

Labour Court will qualify as a civil proceeding and whether the Labour

Court will qualify as a Court. I find the said question also to be no longer

res integra. The Supreme Court in P. Sarathy Vs. State Bank of India

(2000) 5 SCC 355 was concerned with a civil suit for declaration that the

removal of the plaintiff from service was illegal, ultra vires and invalid and

for a direction for reinstatement with consequential benefits. The period

during which the plaintiff was challenging his removal before the Local

Board of the Bank and in appeal under the Tamil Nadu Shops and

Establishments Act, 1948 was sought to be excluded in computing the

period of limitation in such a suit. It was the contention of the employer

that the benefit of Section 14 of the Limitation Act can be given only if the

proceedings were civil proceedings and were pending in a Court; it was

further contended that an Authority under the Shops Act was not a Court

and therefore the benefit of Section 14 could not be given to the plaintiff.

The Supreme Court, finding that the Authority constituted under the Shops

Act had the jurisdiction to adjudicate whether the order of dismissal passed

by the employer is valid or not and that the order passed by the said

Authority is binding on the employer as well as the employee, held that the

said Authority though may not be a "Civil Court" within the meaning of

CPC but is definitely a "Court". It was noticed that Section 14 of the

Limitation Act does not speak of a "Civil Court" but speaks only of a

"Court". It was held that any Authority or Tribunal having the trappings a

Court would be a Court within the meaning of Section 14. Further, finding

that the Authority under the Shops Act had dismissed the claim of the

plaintiff for the reason of the Shops Act being not applicable to Nationalized

Banks, it was held that the time spent by the plaintiff before the Authority

under the Shops Act will have to be excluded as the proceedings before the

said Authority were civil proceedings.

15. Though the aforesaid judgment is in the context of the Shops and

Establishments Act but the position of the Labour Court is the same, if not

identical.

16. Once it is found that the Labour Court, notwithstanding having found

that it had no jurisdiction, owing to the appellant/plaintiff being not a

workman, was required to render findings on merits as per the dicta

aforesaid, it cannot be said that the Labour Court was not unable to entertain

the proceedings for the reason of defect of jurisdiction. Merely because the

Labour Court also returned findings on merits, would not dilute the said

aspect.

17. As far as the learned ADJ has relied upon the admission of the

appellant/plaintiff in replication in reply to para 2 of the preliminary

objections, a careful perusal of the reply to para 2 of the preliminary

objections shows that what the appellant/plaintiff pleaded was that since he

in the suit had also claimed damages for harassment and mental agony

subsequent to termination, the issue involved in the suit was different from

that before the Labour Court. Moreover, the question, whether the

proceedings before the Labour Court and in the instant suit relate to the

same mater in issue, is not a question that can be decided on the averments

of the parties or on admissions but has to be adjudicated by the Court after

pursuing the pleadings in the two proceedings. There can be no doubt that

the proceedings relate to the same matter in issue i.e. the legality and

validity of the termination of the services of appellant/plaintiff by the

respondent/defendant. The appellant/plaintiff in the suit from which this

appeal arises has claimed damages/compensation for wrongful termination

of his employment. The controversy before the Labour Court also was of

legality/validity of termination of employment and in which proceedings the

Labour Court, if had jurisdiction, could have, if had found the termination to

be illegal, granted relief either of reinstatement or of compensation.

18. I am therefore not able to agree with the reasoning of the learned

ADJ. The suit filed by the appellant/plaintiff cannot be said to be barred by

the principles of res judicata or being barred by time if the benefit of

Section 14 of the Limitation Act is to be given to the appellant/plaintiff.

19. I may also notice that the learned ADJ has wrongly relied on Article

78 of the Schedule to the Limitation Act which provides limitation of one

year for a suit for compensation for inducing a person to break a contract

with the plaintiff, commencing from the date of the breach. The case of the

appellant/plaintiff is not of anyone having induced the respondent/defendant

to terminate the services of the appellant/plaintiff. The limitation for the

suit filed by the appellant/plaintiff would be, as held by the Supreme Court

in P. Sarathy supra, of three years.

20. However, this order should not be understood as ipso facto entitling

the appellant/plaintiff to the benefit of Section 14 of the Limitation Act. To

be entitled to the said benefit, the appellant/plaintiff has also to establish and

prove that he was prosecuting the proceedings before the Labour Court with

due diligence and in good faith. The said questions of due diligence and

good faith cannot be decided without evidence. If after trial, it is held that

the appellant/plaintiff was so prosecuting the proceedings, the

appellant/plaintiff would be entitled to the benefit and not otherwise.

21. Before parting with the judgment, notice may be taken of the

following judgments referred to by the counsel for the respondent/defendant

and against each of which, I have given my reasons for the same, either

being not applicable or not relevant at this stage:

(I) Deena Vs. Bharat Singh AIR 2002 SC 2768. In this case,

Section 14 was held to have no application because the suit was found

to have been dismissed on its merits and not because the Court was

unable to entertain it. Such is not the position here.

(II) M/s. Jupitor Chit Fund (P) Ltd. Vs. Sri Shiv Narain Mehta

AIR 2000 SC 1295. In this case exclusion under Section 14 of the

Limitation Act of time spent in an arbitration was held to be not

applicable owing to the specific language of Section 37 of the

Arbitration Act, 1940 and on a finding that the arbitration had not

been commenced as provided in the said Section 37. On the contrary,

in the present case, on industrial dispute being raised by the

appellant/plaintiff, reference was made by the State Government and

which reference was decided after full trial. This has no applicability.

(III) Corporation of Calcutta Vs. Pulin Chandra Daw AIR 1977

Calcutta 443, Zafar Khan Vs. Board of Revenue, U.P. AIR 1985 SC

39. Both on, the words "or other cause of a like nature" in Section 14

being required to be read ejusdem generis to the preceding words

"from defect of jurisdiction". The same are not applicable.

(IV) S.M. Iqbal Vs. Firdous Ahmad Shah AIR 1994 J&K 83, on

what is due diligence and good faith and holding that action of taking

recourse to review petition and special leave petition, despite it being

held that the proceeding was not maintainable, shows lack of due

diligence and good faith. The stage to determine this will come after

trial.

(V) Ajab Enterprises Vs. Jayant Vegoiles and Chemicals Pvt. Ltd.

AIR 1991 Bombay 35, where time spent in a winding up petition was

held not liable to be excluded in a subsequent suit for recovery of

money. This has no applicability to the present situation.

(VI) Gajadhar Shaw Vs. Union of India AIR 1959 Calcutta 21,

holding that where the initial filing is attributable to carelessness--

subsequent prosecution cannot be said to be in good faith. The stage

for determining this will arise after trial.

(VII) Madhavrao Narayanrao Patwardhan Vs. Ram Krishna

Govind Bhanu AIR 1958 SC 767, laying down that the burden of

proof to show good faith is on the party claiming benefit of Section

14 of the Limitation Act; and,

(VIII) Consolidated Engineering Enterprises Vs. Principal

Secretary, Irrigation Department (2008) 7 SCC 169, again on the

aspect of good faith and due diligence.

22. The appeal thus succeeds; the judgment and decree of dismissal of the

suit and the order of rejection of the plaint is set aside. The suit is remanded

back to the Trial Court for adjudication further in accordance with law.

23. The parties to appear before the learned ADJ-06 and/or District

Judge, West District, on 27th January, 2014.

24. The Trial Court file requisitioned to this Court be returned forthwith.

No costs. Decree sheet be drawn up.

RAJIV SAHAI ENDLAW, J.

DECEMBER 20, 2013 Bs..