Madras High Court
B.Komarapalayam Primary Agricultural vs V.Muthusamy on 29 May, 2025
W.P.No.2732 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
(Special Original Jurisdiction)
RESERVED ON : 04.04.2025
PRONOUNCED ON : 29.05.2025
PRESENT:
THE HON’BLE DR. JUSTICE A.D. MARIA CLETE
W.P.No. 2732 of 2021
and
W.M.P.No.3065 of 2021
B.Komarapalayam Primary Agricultural
Co-op. Credit Society,
Rep. by the President,
B.Kumarapalayam,
Thiruchengodu Taluk,
Namakal District. ….Petitioner
Vs.
V.Muthusamy,
Son of Varadhan,
No.1/153, Kotta Medu, Kallangattu Valasu Post,
B.Komarapalayam, Thiruchengodu Taluk,
Namakkal District. …Respondent
Prayer in WP
To issue a writ of certiorari or any other appropriate writ, order or direction in
the nature of writ calling for entire records in connection with the impugned
order passed in CP No.4 of 2014, dated 13.03.2018, by the Labour Court at
Salem and to pass such any other order as this court may deem fit and proper in
the circumstances of the case.
1/21
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W.P.No.2732 of 2021
Prayer in W.M.P.
To stay on all further proceedings by the respondent in connection with the
impugned order passed by the 1st respondent in C.P.No.4/2014 dated
13.03.2018.
Appearance of Parties:
For Petitioner : Mr.Ma.Pa.Thangavel, Advocate
For M/s. Ma.P.Thangavel, B.Devagi Thangavel,
M.Lokesh, and D.Rajendran, Advocates
For Respondent : Mr.S.V.Navin Prabhu, Advocate
For M/s.K.V.Shanmuganathan,V.Vaijayanthimala,
R.Md.BNasrullah, D.Thangapandy, S.V.Navin Prabhu,
and M.Infant Subash, Advocates
JUDGMENT
Heard.
2.The petitioner is a Primary Agricultural Co-operative Society. In the
present writ petition, the petitioner challenges the order dated 13.03.2018
passed by the Labour Court, Salem in C.P. No. 4 of 2014, by which a sum of
Rs.10,51,740/- was computed as payable to the respondent, along with interest
at the rate of 9% per annum until the date of payment, failing which the amount
would carry interest at 12% per annum. As per the endorsement on the certified
copy, the order was delivered to the petitioner-society on 16.04.2018.
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3.The petitioner initially filed the present writ petition on 27.08.2018.
However, as the impugned order annexed to the petition was illegible, the
Registry returned the papers, granting ten days’ time for compliance. The
petitioner, however, re-presented the papers along with a compliance memo
only on 08.02.2021, resulting in a delay of 867 days. To regularize the delay,
the petitioner filed W.M.P. No. 2769 of 2021 seeking condonation. By order
dated 05.02.2021, this Court condoned the delay on the condition that the
petitioner deposit a sum of Rs.1,000/- to the Chief Justice’s Relief Fund.
Following compliance, the writ petition was numbered and admitted on
08.02.2021. An interim stay was also granted. Upon service of notice, the
respondent entered appearance through counsel.
4.Learned counsel for the workman submitted that the management is
guilty of delay and laches in approaching this Court, having filed the writ
petition nearly three years after the impugned order. It was argued that the writ
petition is liable to be dismissed on this ground alone. In support of this
contention, reliance was placed on the decision of the Hon’ble Supreme Court
in Chennai Metropolitan Water Supply and Sewerage Board v. T.T. Murali
Babu, reported in (2014) 4 SCC 108, with particular emphasis on the
following passage in paragraph 16:—
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“16. Thus, the doctrine of delay and laches should not be lightly
brushed aside. A writ court is required to weigh the explanation
offered and the acceptability of the same. The court should bear
in mind that it is exercising an extraordinary and equitable
jurisdiction. As a constitutional court it has a duty to protect the
rights of the citizens but simultaneously it is to keep itself alive
to the primary principle that when an aggrieved person, without
adequate reason, approaches the court at his own leisure or
pleasure, the Court would be under legal obligation to scrutinize
whether the lis at a belated stage should be entertained or not. Be
it noted, delay comes in the way of equity. In certain
circumstances delay and laches may not be fatal but in most
circumstances inordinate delay would only invite disaster for the
litigant who knocks at the doors of the Court. Delay reflects
inactivity and inaction on the part of a litigant – a litigant who
has forgotten the basic norms, namely, “procrastination is the
greatest thief of time” and second, law does not permit one to
sleep and rise like a phoenix. Delay does bring in hazard and
causes injury to the lis.”
Although the above passage aptly supports the rejection of the petitioner’s case
on the ground of delay, the issue cannot be revisited, as this Court has already
condoned the delay upon imposing a cost of Rs.1,000/-.
5.When the matter was taken up on 23.04.2024, this Court directed that it
be placed before the National Lok Adalat scheduled for 08.06.2024. However,
as no settlement was reached, the matter was returned for regular adjudication.
The petitioner’s case is that the respondent was engaged as a Clerk in the
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society with effect from 01.08.1973, though his initial entry into service was
allegedly irregular. Nevertheless, he was promoted as Secretary of the society
on 29.09.1990 and attained the age of superannuation on 31.08.2009.
6.The respondent was initially suspended on 05.07.1995 by the Deputy
Registrar of Cooperative Societies, Namakkal, on the allegation that he had
caused a loss of Rs.5,09,305.45 to the society. However, the newly elected
Board of Directors subsequently reinstated him, treating the period of
suspension as a punishment, without awarding back wages. He was also
demoted from the post of Salesman to Clerk with effect from 09.11.1996.
Thereafter, on 04.06.1997, the Joint Registrar once again placed him under
suspension, citing the irregularity in his initial appointment, and proceeded to
dissolve the Board of Management.
7.After a lapse of three years, the respondent filed W.P. No. 18140 of
2000, challenging the suspension order dated 04.06.1997, and obtained an
interim stay. He continued to keep the writ petition pending until he attained the
age of superannuation. Meanwhile, on 20.06.1998, a criminal case was
registered against him by the CCIW wing of the police. Additionally, surcharge
proceedings under Section 87 of the Tamil Nadu Cooperative Societies Act
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were initiated against the respondent and two other employees, culminating in
an order directing them to pay a sum of Rs.18,20,813.61, after adjusting
amounts already recovered from them. However, the appeal filed by the
respondent against the surcharge order was allowed by the Cooperative
Tribunal (Principal District Judge, Namakkal) by judgment dated 19.03.2010 in
C.M.A. C.S. No. 34 of 2002. In contrast, the appeal filed by one of the other
surcharged employees, S. Kathirvel, in C.M.A. C.S. No. 33 of 2002, was
dismissed by the Tribunal, and his subsequent challenge before this Court in
W.P. No. 14161 of 2011 was also dismissed by order dated 17.03.2020.
8.The respondent filed a claim petition before the Labour Court, Salem
on 02.01.2014 under Section 33C(2) of the Industrial Disputes Act, seeking
back wages to the tune of Rs.10,51,740/- for the period from 01.07.1997 to
31.08.2009. The petition was taken on file as C.P. No. 4 of 2014, and notice
was issued to the petitioner-society. In response, the society filed a counter
statement dated 20.04.2015. During the enquiry before the Labour Court, the
respondent did not examine himself as a witness but filed six documents, which
were marked as Exs. P1 to P6. On behalf of the petitioner-society, one S.
Prabakaran was examined as RW1, and five documents were filed and marked
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as Exs. R1 to R5.
9.The defence put forth by the petitioner-society was that the amounts
due to the respondent had already been settled through a compromise recorded
before the Lok Adalat in C.P. No. 119 of 2009 on 23.11.2013, marked as Ex.P6,
and therefore, the respondent was not entitled to claim any further amount.
However, the Labour Court held that the amount received under C.P. No. 119 of
2009 pertained solely to the claim raised in that particular petition, and the
settlement was confined to the subject matter of that case. There was no
averment or clause in the order indicating that the respondent had waived or
settled all future claims. As such, the principle of estoppel could not be invoked
to defeat the respondent’s present claim.
10.The petitioner-society also raised the plea that the respondent had
been surcharged by the Deputy Registrar, Namakkal. However, the Labour
Court noted that the respondent’s appeal in C.M.A. C.S. No. 34 of 2002 was
allowed by the Cooperative Tribunal on 13.09.2010, and the judgment of the
Tribunal was produced as Ex.P5. The Labour Court further observed that the
respondent had challenged his suspension by filing W.P. No. 18141 of 2000
before this Court and had obtained an interim stay, pursuant to which he was
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reinstated as Clerk with effect from 08.12.2000. It was also found that when a
vacancy arose and no substitute was available as of 18.05.2005, the respondent
was appointed as Secretary in-charge. The Labour Court concluded that the
interim stay granted by this Court continued to remain in force until the
respondent attained superannuation on 31.08.2009.
11.The Labour Court further held that the terms of the settlement dated
28.07.1999 under Section 12(3) of the Industrial Disputes Act (marked as
Ex.P2 = Ex.R3) were applicable to the respondent. The Court also referred to
the admission made by RW1, the society’s witness, who confirmed that the
settlement was based on G.O. Ms. No. 131 and G.O. Ms. No. 258 issued by the
Co-operative Department. Although the settlement terms were applicable to all
employees, RW1 admitted that arrears were not paid at the relevant time. He
further acknowledged that while the respondent was under suspension when the
settlement was implemented, the arrears were subsequently paid to all
employees under a later settlement dated 08.05.2010, executed under Section
18(1) of the Act and marked as Ex.R4.
12.Based on the above factual findings, the Labour Court proceeded to
compute the amount due and payable to the respondent, as already noted. In
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opposing the claim, learned counsel for the petitioner relied on the decision of
the Supreme Court in Commissioner of Income Tax, Bombay v. T.P.
Kumaran, reported in (1996) 10 SCC 561. It was contended that, in light of
the Lok Adalat award dated 23.11.2013 in C.P. No. 119 of 2009, the respondent
was barred from making any further monetary claims. In support of this
submission, reliance was placed on the following passage from paragraph 4 of
the judgment:—
“The Tribunal has committed a gross error of law in directing
the payment. The claim is barred by constructive res judicata
under Section 11, Explanation IV, CPC which envisages that
any matter which might and ought to have been made ground of
defence or attack in a former suit, shall be deemed to have been
a matter directly and substantially in issue in a subsequent suit.
Hence when the claim was made on earlier occasion, he should
have or might have sought and secured decree for interest. He
did not seek so and, therefore, it operates as res judicata. Even
otherwise, when he filed a suit and specifically did not claim the
same, Order 2, Rule 2, CPC prohibits the petitioner to seek the
remedy separately. In either event, the OA is not sustainable”
13.Counsel also placed reliance on another decision of the Supreme
Court in State of U.P. v. Nawab Hussain, reported in (1977) 2 SCC 806,
which reiterated the principle of constructive res judicata. Particular emphasis
was laid on the following passage from paragraph 8 of the judgment:—
“…. As is obvious, the High Court went wrong in taking that
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view because the law in regard to the applicability of the
principle of constructive res judicata having been clearly laid
down in the decision in Devilal Modi's case (supra), .it was not
necessary to reiterate it in Gulabchand's case (supra) as it did not
arise for consid- eration there. The clarificatory observation of
this Court in Gulabchand's case (supra) was thus misunderstood
by the High Court in observing that the matter had been "left
open"' by this Court.
It is not in controversy before us that the respondent did not raise
the plea, in the writ petition which had been filed in the High
Court, that by virtue of clause (1) of article 311 of the Constitution
he (1) [1962] 1 S.C.R. 574. (2) [1963] Supp. 1 S.C.R.172 could not
be dismissed by the Deputy Inspector General of Police as he had
been appointed by the Inspector General of Police. It is also not in
controversy that that was an important plea which was within the
knowledge of the respondent and could well have been taken in
the writ peti- tion, but he contented himself by raising the other
pleas that he was not afforded a reasonable opportunity to meet the
Case against him in the departmental inquiry and that the action
taken against him was mala fide. It was there- fore not permissible
for him to challenge his dismissal, in the subsequent suit, on the
other ground that 'he had been dismissed by an authority
subordinate to that by which he was appointed. That was clearly
barred by the principle constructive res judicata and the High
Court erred in taking a contrary view.”
14.To reinforce the same principle, learned counsel further relied on the
judgment of the Hon’ble Supreme Court in Chairman and Managing
Director, Fertilisers and Chemicals Travancore Limited v. General
Secretary, Fertilisers and Chemicals Travancore Employees Association,
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reported in (2019) 11 SCC 323. Attention was drawn to paragraphs 30 and 31
of the judgment, which read as follows:—
“30. In our opinion, no judicial forum at the instance of any
party to the Lis had jurisdiction to try these issues again on its
merits. It was barred for being tried again by virtue of principles
of res judicata contained in Section 11 of the Code, which has
also application to the labour/industrial proceedings.
31. In our opinion, the State had, therefore, no jurisdiction to
make a reference(s) to the Labour Court under Section 10 of the
ID Act to reexamine the question of age reduction made by the
appellant(PSU). A fortiori, the Labour Court had no jurisdiction
to entertain the reference(s) to adjudicate the question(s) referred
in the reference(s).”
15.In response, learned counsel for the respondent relied on the judgment
of the Hon’ble Supreme Court in Prem Kishore v. Brahm Prakash, reported
in 2023 SCC OnLine SC 356, and specifically referred to the following
passage from paragraph 34:—
“34. The general principle of res judicata under Section 11 of
the CPC contain rules of conclusiveness of judgment, but for res
judicata to apply, the matter directly and substantially in issue in
the subsequent suit must be the same matter which was directly
and substantially in issue in the former suit. Further, the suit
should have been decided on merits and the decision should
have attained finality. Where the former suit is dismissed by the
trial court for want of jurisdiction, or for default of the
plaintiff’s appearance, or on the ground of non-joinder or mis-
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joinder of parties or multifariousness, or on the ground that the
suit was badly framed, or on the ground of a technical mistake,
or for failure on the part of the plaintiff to produce probate or
letter of administration or succession certificate when the same
is required by law to entitle the plaintiff to a decree, or for
failure to furnish security for costs, or on the ground of
improper valuation, or for failure to pay additional court fee on
a plaint which was undervalued, or for want of cause of action,
or on the ground that it is premature and the dismissal is
confirmed in appeal (if any), the decision, not being on the
merits, would not be res judicata in a subsequent suit.”
16.Since the claim in the earlier C.P. was confined to a limited period and
there was no full and final settlement of all claims made by the respondent, the
award passed by the Lok Adalat in C.P. No. 119 of 2009 cannot operate as
constructive res judicata, as contended by the petitioner-society. The further
argument that the respondent ought to have included all claims in the earlier
petition is also untenable, and the principles of Order II Rule 2 of the CPC are
not attracted to the present case. There is no legal bar to filing successive claim
petitions for distinct periods or causes of action.
17.The Supreme Court, in its recent judgment in Cuddalore Powergen
Corporation Ltd. v. Chemplast Cuddalore Vinyls Limited, reported in 2025
INSC 73, reviewed the earlier precedents and succinctly summarised the legal
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position under Order II Rule 2 of the Code of Civil Procedure as follows:—
“47. On a conspectus of the aforesaid discussion, what follows
is that:
i. The object of Order II Rule 2 is to prevent the multiplicity of
suits and the provision is founded on the principle that a person
shall not be vexed twice for one and the same cause.
ii. The mandate of Order II Rule 2 is the inclusion of the
whole claim arising in respect of one and the same cause of
action, in one suit. It must not be misunderstood to mean
that all the different causes of action arising from the same
transaction must be included in a single suit.
iii. Several definitions have been given to the phrase “cause of
action” and it can safely be said to mean – “every fact which
would be necessary for the plaintiff to prove, if traversed, in
order to support his right to the judgment of the Court”. Such a
cause of action has no relation whatsoever to the defence that
may be set up by the defendant, nor does it depend upon the
character of the relief which is prayed for by the plaintiff but
refers to the media upon which the plaintiff asks the Court to
arrive at a conclusion in his favour.
iv. Similarly, several tests have been laid out to determine the
applicability of Order II Rule 2 to a suit. While it is
acknowledged that the same heavily depends on the particular
facts and circumstances of each case, it can be said that a correct
and reliable test is to determine whether the claim in the new
suit is in fact founded upon a cause of action distinct from that
which was the foundation of the former suit. Additionally, if the
evidence required to support the claims is different, then the
causes of action can also be considered to be different.
Furthermore, it is necessary for the causes of action in the two
suits to be identical in substance and not merely technically
identical.
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v. The defendant who takes shelter under the bar imposed by
Order II Rule 2(3) must establish that (a) the second suit was in
respect of the same cause of action as that on which the
previous suit was based; (b) in respect of that cause of action,
the plaintiff was entitled to more than one relief; and (c) being
thus entitled to more than one relief, the plaintiff, without any
leave obtained from the Court, omitted to sue for the relief for
which the second suit had been filed.
vi. The defendant must also have produced the earlier plaint in
evidence in order to establish that there is an identity in the
causes of action between both the suits and that there was a
deliberate relinquishment of a larger relief on the part of the
plaintiff.
vii. Since the plea is a technical bar, it has to be established
satisfactorily and cannot be presumed merely on the basis of
inferential reasoning.” [Emphasis added]
18.The second principle outlined by the Supreme Court squarely applies
to the present case. The earlier claim petition and the subsequent claim petition
now under challenge arise from two distinct causes of action. Therefore, the
reliance on Order II Rule 2 CPC to reject the present claim, as contended in
paragraph 11(f) of the affidavit, is wholly misconceived.
19.Similarly, the plea of estoppel raised by the petitioner is devoid of
merit in view of the clarification provided by the Hon’ble Supreme Court in
Baini Prasad v. Durga Devi, reported in 2023 SCC OnLine SC 101. In
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paragraph 12 of the judgment, the Court observed as follows:—
“12. Now, what remains to be considered is whether the appellant
herein/defendant has pleaded and proved his plea of estoppel. The
appellants would contend that non- framing of the question of
estoppel as an issue is not fatal in the facts and circumstances as also
in view of the evidence available on record, in the case on hand. To
buttress the contention, the appellants rely on the decision of this
Court in (AIR 1963 SC 884). The relevant recital in the paragraph 5
of the said decision reads thus:-
“5. …No doubt, no issue was framed, and the one, which was
framed, could have been more elaborate; but since the parties
went to trial fully knowing the rival case and led all the
evidence not only in support of their contentions but in
refutation of those of the other side, it cannot be said that the
absence of an issue was fatal to the case, or that there was that
mistrial which vitiates proceedings. We are, therefore, of
opinion that the suit could not be dismissed on this narrow
ground, and also that there is no need for a remit, as the
evidence which has been led in the case is sufficient to reach
the right conclusion.”
The position of law revealed from the afore-extracted recital from the
said decision cannot be disputed. In fact, for the very same reason
despite the non-framing of the issue of estoppel we are inclined to
consider the contentions founded on the principle of estoppel. We
may hasten to add that indubitably the position is that to invoke the
concept of estoppel the defendant has to specifically plead each and
every act or omission, as the case may be, that constitutes
representation from the plaintiff. Before delving into the said
question it is only appropriate to refer to the enunciation of the settled
position in respect of the concept of estoppel.
12.1 In the decision in R.S. Madanappa v. Chandramma (AIR 1965
SC 1812), this court considered the object of estoppel. It was held
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that its object is to prevent fraud and secure justice between the
parties by promotion of honesty and good faith. It was therefore,
further held that when one party makes a representation to the other
about a fact he would not be shut out by the rule of estoppel if that
other person knew the true state of facts and must consequently not
have been misled by the misrepresentation.
12.2 In the decision in Pratima Chowdhury v. Kalpana Mukherjee
(AIR 2014 SC 1304) , while considering Section 115 of the Evidence
Act, this Court held that four salient conditions are to be satisfied
before invoking the rule of estoppel. Firstly, one party should make a
factual representation to the other party. Secondly, the other party
should accept and rely upon the aforesaid factual representation.
Thirdly, having relied on the aforesaid factual representation, the
second party should alter his position. Fourthly, the instant altering a
position, should be such, that it would be iniquitous to require him to
revert back to the original position. After holding so, it was further
held that the doctrine of estoppel would apply only when, based on a
representation by the first party, the second party alters his position,
in such manner, that it would be unfair to restore the initial position.
12.3.In the decision in B.L. Sreedhar v. K.M. Munireddy (AIR 2003
SC 578), this Court held that when rights are invoked estoppel may
with equal justification be described both as a rule of evidence and as
a rule creating or defeating rights. The appellant relies on this
decision, more particularly paragraph 30 of the said decision and it
reads thus :-
“30. If a man either by words or by conduct has intimated that
he consents to an act which has been done and that he will not
offer any opposition to it, although it could not have been
lawfully done without his consent, and he thereby induces
others to do that which they otherwise might have abstained
from, he cannot question the legality of the act he had
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sanctioned to the prejudice of those who have so given faith to
his words or to the fair inference to be drawn from his
conduct.”
It is to be noted that in the said decision this Court clarified that a
legal status expressly denied by a statute could not be conferred on
the basis of estoppel.”
20.Once the technical objections raised by the petitioner-management is
rejected, the only issue that remains to be determined is whether the respondent
had a pre-existing right warranting computation of dues by the Labour Court
under Section 33C(2) of the Industrial Disputes Act. The management
contended that the settlement under Section 12(3) was superseded by a
subsequent settlement under Section 18(1) of the Act. However, in so far as the
respondent workman is concerned, he continued to be governed by the terms of
the Section 12(3) settlement—an aspect that was admitted by MW1 during his
testimony. Even if the said settlement had lapsed, its terms would still bind the
parties as a matter of contractual obligation. In support of this position, learned
counsel for the respondent placed reliance on the decision of this Court in
Thanthai Periyar Pokkuvarathu Kazhagha Oozhiyar Sangam v.
Management of Tamil Nadu State Transport Corporation, reported in 2005
(2) LLN 860 (Mad), wherein at paragraph 10, the Court referred to a judgment
of the Karnataka High Court and applied the same principle. The relevant
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portion reads as follows:—
“10. The judgment in 1999-1-LLJ-849 (Kant) (supra), is relevant
and is extracted hereunder at p. 859:
"16. It has also to be kept in view that even assuming that
settlement of 1988 had thereby come to an end, its
binding effect as contractual obligation continued till it
was replaced by other settlement as ruled by this Court in
the Life Insurance Corporation of India v. D.J. Bahadur
and Ors. (supra). It is also difficult to appreciate how the
case of check-off facility is not termed as condition of
service as by the said facility the management has agreed
to deduct from the wages of the employees the requisite
amount to be paid to the Union by way of subscription of
the employees. Such permissible deduction from the
wages cannot but be treated as condition of service. The
contention that from September 21, 1993 check-off
facility has been given up by the Corporation cannot be of
any assistance to the Corporation for the simple reason
that it would amount to violation of a binding settlement
by the Corporation which as per Section 29 of the
Industrial Disputes Act would be penal.”
21.Learned counsel for the respondent further contended that a settlement
continues to remain binding unless it is expressly replaced by a subsequent
settlement. In support of this proposition, reliance was placed on the Division
Bench judgment of this Court in C. Paranthaman v. The Appellate Authority,
in W.A. No. 2697 of 2012 dated 28.06.2022. The Labour Court, having taken
into account these settled principles and having assessed the evidence on
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record, rightly concluded that the respondent workman was entitled to the
computed amount. The impugned order, having been passed on a sound
appreciation of facts and law, does not warrant interference by this Court on the
grounds urged by the petitioner-society. Accordingly, the writ petition stands
dismissed. The connected miscellaneous petition is closed. However, there shall
be no order as to costs.
29.05.2025
ay
NCC : Yes / No
Index : Yes / No
Speaking Order / Non-speaking Order
To
The Presiding Officer,
Labour Court
Salem.
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DR. A.D. MARIA CLETE, J
ay
Pre-Delivery Judgment made in
and
29.05.2025
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