1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION APPEAL FROM ORDER NO.785 OF 2006 IN NOTICE OF MOTION NO. 1168 OF 2006 IN B.C.C.C SUIT NO. 1138 OF 2006 R.V. Shetty ..Appellant V/s National Federation of General Insurance Employees & Ors. ..Respondents Mr.A.D. Shetty with Ms. Rita Joshi i/b Mr. M.D. Nagale for the Appellant. Mr.M. Shukla i/b Desai & Diwanji for Respondent No.7. CORAM : S.J. VAZIFDAR, J. DATE OF RESERVING THE JUDGMENT : 4TH JULY, 2008 DATE OF PRONOUNCING THE JUDGMENT : 15TH JULY, 2008 ORAL JUDGMENT : This is an appeal against the order of the learned Judge of the Bombay City Civil Court granting interim reliefs in terms of prayers (a), (b) and (c) of the Plaintiffs' notice of motion. 2 Respondents Nos.1 to 6 are the Plaintiffs. The Appellant is Defendant No.1 to the suit. Respondent No.7, the New India Assurance Co. Ltd., is Defendant No.2 to the suit. For convenience, I will refer to the parties as they are arrayed in the suit. 2. The suit is filed by Respondents Nos.1 to 6 for a declaration that Plaintiff No.1 as a registered Trade Union and its office bearers including Plaintiffs Nos.2 to 6 are entitled to participate in the meetings of the General Insurance Public Sector Association (GIPSA) in connection with the members of Plaintiff No.1, who are in the employment of Defendant No.2 throughout India in the categories of Class I, Class II, Class III and Class IV. The Plaintiffs have also sought an order restraining Defendant No.1 / the Appellant from obstructing etc. the functioning and management of the Plaintiffs. Lastly, the Plaintiffs have sought a declaration restraining Defendant No.2, the New India Assurance Co. Ltd., from denying the Plaintiffs their right to participate in the meetings of GIPSA in connection with the said members of Plaintiff No.1. 3 3. As stated above, the Plaintiffs' notice of motion has been made absolute in terms of prayers (a), (b) and (c) . By prayer (a), Defendant No.1 has been directed to hand over the charge of the office of Plaintiff No.1 along with the records to Plaintiff Nos.2 to 6. By prayer (b), Defendant No.2 has been restrained from denying the Plaintiffs their right to participate in the meetings of GIPSA in connection with the Plaintiffs' members. By prayer (c), Defendant No.2 has been restrained from taking any decisions regarding its employees in the meetings of GIPSA without the participation of Plaintiff No.1 as an approved and registered Trade Union and its office bearers including Plaintiff Nos.2 to 6. 4. Mr.Shetty, learned counsel appearing on behalf of the Appellant/ Defendant No.1, restricted his submissions against the impugned order on the ground of jurisdiction. He submitted that the suit is not maintainable as the Bombay City Civil Court has no jurisdiction in respect of the subject matter of the suit in view of the provisions of Section 28-1A of the Trade Unions Act, 1926. By the Trade Unions and Bombay Industrial Relations (Amendment) Act, 1967, Section 28-1A was inserted in Chapter III of the Trade 4 Unions Act, 1926 which came into force with effect from 9th February 1968. Section 28-1A reads as under :- “28-1A Power of Industrial Court to decide certain disputes.— (1) Where there is a dispute as respects whether or not any person is an office-bearer or a member of a registered trade union (including any dispute relating to wrongful expulsion of any such office-bearer or member), or where there is any dispute relating to the property (including the account books) of any registered trade union, any member of such registered trade union for a period of not less than six months may, with the consent of the Registrar, and in such manner as may be prescribed, refer the dispute to the Industrial Court constituted under the Bombay Industrial Relations Act, 1946, for decision. (2) The Industrial Court shall, after hearing the parties to the dispute, decide the dispute; and may require an office-bearer or member of the registered trade union to be appointed whether by election or otherwise under the supervision of such person as the Industrial Court may appoint in this behalf or removed, in accordance with the rules of the trade union: Provided that the Industrial Court may, pending the decision of the dispute, make an interim order specifying or appointing any person or appointing a Committee of Administration for any purpose under the Act including the purpose of taking possession or control of the property in dispute and managing it for the purposes of the union pending the decision. (3) The decision of the Industrial Court shall be final and binding on the parties and shall not be called in question in any civil court. (4) No civil court shall entertain any suit or other proceedings in relation to the dispute referred to the Industrial Court as aforesaid, and if any suit or proceeding is pending in any such court, the civil court shall, on receipt of an intimation from the Industrial Court that it is seized of the question, cease to exercise jurisdiction in respect thereof. (5) Save as aforesaid, the Industrial Court may, in deciding disputes under this section, exercise the same powers and follow the same procedure as it exercises or follows for the purpose of deciding industrial disputes under the Bombay Industrial Relations Act, 1946.” 5. It is thus necessary for me to refer to the facts only 5 briefly. I shall refer to the facts not with a view to expressing any opinion on the merits of the rival contentions between the parties in respect thereof, but only with a view to decide the issue as to whether the jurisdiction of the Civil Courts to decide the above suit is barred under Section 28-1A of the Trade Unions Act, 1926. 6. Plaintiff No.1 is a union registered under the Trade Unions Act, 1926. Plaintiff Nos.2 to 6 are the employees of Defendant No.2 and claim to be presently the office bearers of Plaintiff No.1. Defendant No.1 / the Appellant is alleged by the Plaintiffs to be the former General Secretary of Plaintiff No.1. Defendant No.2 / Respondent No.7 is a public sector undertaking carrying on business in the field of general insurance. 7. Plaintiff No.1 represents the employees of Defendant No.2 classified under Class I, Class II, Class III and Class IV categories. Plaintiff No.1 claims to represent 26% of Class I employees, 24% of Class II employees and 71% of Class III and Class IV employees. 8. Plaintiff No.1 claims to be the only union classified in the check-off system introduced in the year 2004 for representing the 6 Class III and Class IV employees of Defendant No.2, one of three unions in the check-off system for the Class I employees and one of two unions in respect of Class II employees. 9. Plaintiff No.1 is governed by its Constitution, the relevant clauses whereof read as under :- “4 Affiliation Any trade union of general insurance employees, private companies or allied establishments shall be eligible to be affiliated as an Unit of the Federation on: i. making an application for admission on the prescribed form, accompanied by 2 certified copies of its constitution and a resolution of the body authorized to decide its affiliation; ii. payment of an Admission Fee of Rs.500/-; iii. Payment of prescribed affiliation fees for the current year. The Working Committee shall have the power to reject any application without assigning any reason. 7 10 General Council Before the end of March, every alternative year, each unit shall elect members to the General Council of the Federation on the basis of one member for every 50 members or more than 50% thereof, subject to minimum of one. A list of such members shall be forwarded to the Federation before 15th April every alternative year. 11 General Council Supreme Body The general council shall be the supreme body of the Federation. It shall lay down the policy, principles and programme to be followed by the Federation. Its decisions shall be binding on the subordinate bodies, viz. Working Committee, Central Secretariat and affiliated units. 8 13 Meetings of General Council The General Council meeting shall be held before the end of June once every three years, primarily to transact the following business: a. To receive and adopt the report of the work done by the Federation during the preceding three years. b. To pass the audited settlements of accounts and balance sheets for the preceding three years. c. To elect office-bearers and Working Committee members for the ensuing three years. d. To appoint auditor(s) for the ensuing three years and fix their remuneration, if any. e. To transact any other business with the permission of the Chair. 15 Requisition Meeting On a written requisition by at least 50% of the total number of General Council members, the General Secretary shall convene General Council Meeting within 21 days of the receipt of such requisition on a day not later than 45 days from the receipt of such requisition to discuss the specific matters contained in the requisition. In case the General Secretary fails to convene such a meeting the requisitionists may convene the meeting themselves and the proceedings of such a meeting shall be valid provided 2/3rd of general council members attend such a meeting with 3/4th of the members voting at such meeting. 9 16 Quorum at General Council Meeting 1/3rd of the total number of members shall form the quorum for general council meetings, except requisition meetings. No quorum shall be required for meetings adjourned for want of quorum. 18 Working Committee The affairs of the Federation both financial and otherwise, shall be conducted by the Working Committee, consisting of a President, a Working President, not more than 30 Vice Presidents, a General Secretary, 3 Secretaries and 3 Organising Secretaries, not more than 30 Jt. Secretaries, a Treasurer, 5 Joint Treasurers, all of whom shall be elected from amongst the members of the general council. In addition, there shall be as many members of the Working Committee to be elected by the respective units of the Federation from amongst the members of the general council on the basis of one member for every fifty primary members or in excess of 25 per unit, subject to a minimum of one member per unit.” 10. Defendant No.2 has branches all over India. Its employees have formed independent unions broadly classified Zone /Region-wise as Western Zone, Eastern Zone, Northern Zone, Central Zone, Bhopal Regional Office, Rajasthan Regional Office, Chennai Regional Office, Coimbatore Regional Office , Ernakulam Regional Office, and Andhra Pradesh Regional Office. The Zones in turn comprise of Regional Offices and Head Offices. These unions are collectively referred to in the plaint as the units. 10 Plaintiff No.1 is the Federation of all the eleven units representing their respective members in the above Zones / Regions. The members of each of the units elect amongst themselves the members of the General Council as per clause 10 of the Constitution. Further, as per clause 10, the list of General Council Members is forwarded to Plaintiff No.1 by each unit. It is contended that Plaintiff No.1 has no authority to decide the eligibility of such General Council Members as forwarded by the units and is required to simply accept the same. Both the counsel stated that although clause 13 provides for a meeting to be held once every two years, as a matter of practice, it has been held once every three years. The meeting is known as `Biennial General Council Meeting'. At these meetings, the new office bearers of Plaintiff No.1 are elected / selected. Clause 15 of the Constitution provides for requisitioning meetings. 11. The last meeting of the General Council Members of Plaintiff No.1 was held on 8/9th March 2003. The next meeting was therefore due after two years, i.e. by March 2005. The Plaintiffs allege that Defendant No.1 as the then General Secretary of 11 Plaintiff No.1 failed to convene the meeting of the General Council Members for electing the new office bearers and tendering the accounts of Plaintiff No.1. For this reason and for various other reasons alleged by the Plaintiffs pertaining to the allegedly illegal and arbitrary method of working of Defendant No.1, the majority of General Council Members of Plaintiff No.1 requisitioned a meeting as per clause 15 of the Constitution. The letter requisitioning the meeting was forwarded to the General Secretary – Eastern Zone, who in turn forwarded the same to Defendant No.1 under cover of a letter dated 24th October 2005. It was stated that as the number of the General Council Members requisitioning the meeting was more than 50%, the provisions of clause 15 were satisfied. It was further stated that if the General Secretary was going to place the matter afresh before the Working Committee Meeting to be held on 28th October 2005 at Mumbai and the Working Committee decided to hold the the BGC meeting on the same dates as earlier conveyed, the requisition notice may be ignored. It was however specifically stated that if the BCG meeting was not going to be so held, the notice will stand. 12 12. The meeting of the Working Committee was convened on 28th October 2005 whereat it was, inter alia, decided that the BCG meeting would be held tentatively between 26th and 30th November 2005. Subsequently, Defendant No.1 by a letter dated 7th November 2005 informed the General Council Members that the BCG meeting would be held on 29th November 2005 and declared the agenda for the said meeting. The notice convened the BCG meeting of Plaintiff No.1 on 29th November 2005 at 10.00 a.m. to transact, inter alia, the following business :- “7. To elect office bearers for Working Committee for ensuing two years terms of the National Federation.” 13. According to the Plaintiffs, on 29th November 2005 all the General Council Members were present at the BCG meeting, but no meeting was held and conducted by Defendant No.1. Consequently, the General Council Members decided to hold the BCG meeting on 8th January 2006 as a requisition meeting pursuant to the above notice requisitioning the meeting. Intimation thereof was sent by the General Council Members to Defendant No.1 through the General Secretary, Eastern Zone by his letter 13 dated 17th December 2005. In the letter, it was contended that as at the BCG meeting on 29th November 2005 the agenda was not transacted, the meeting was “construed as NOT HELD at all”. The letter informed the President that the requisitionists were going to hold the postponed Requisition General Council Meeting on 8th January 2006 at Kolkata. 14. Defendant No.1 filed S.C. Suit No.127 of 2006 in the Bombay City Civil Court against one Swapan Bhattacharjee, the General Secretary, Eastern Zone in his individual capacity contending that he had retired from his services and, therefore, had no authority to hold any meeting of the General Council Members. The Plaintiffs' contention is that the plaint contained several false allegations and contentions. For the purpose of the question to be decided in this Appeal from Order, it is not necessary to deal with these contentions either. By an order dated 3rd January 2006, the said Bhattacharjee was restrained from holding and/or conducting the meeting of the General Council of Plaintiff No.1 till further orders. There is no dispute that a copy of this order was received by the said Bhattacharjee on 6th January 2006. There is a dispute 14 as to whether the said Bhattacharjee was properly served with the notice of the ad-interim application. It is not necessary for me to deal with this point either. On receipt thereof, the said Bhattacharjee issued a common letter to the General Council Members who had assembled for the requisitioned meeting scheduled on 8th January 2006 and stated that he could not attend and/or hold the said meeting in view of the order. The General Council Members, however, held the meeting on the basis that the order dated 3rd January 2006 was against the said Bhattacharjee in his individual capacity and there was no order restraining them from holding the meeting. Nor was there any order restraining the holding of the meeting per-se. 15. At the meeting held on 8th January 2006, a new body / office bearers of Plaintiff No.1 was elected. Plaintiff Nos.2 to 6 / Respondent Nos.2 to 6 are the newly elected office bearers of Plaintiff No.1 / Respondent No.1. The resolutions were passed unanimously by 127 Council Members who were present at the meeting. 16. Thereafter the Plaintiffs called upon Defendant No.1 to 15 hand over the record and the charge of the office of Plaintiff No.1 which Defendant No.1 refused to do. It is contended in the Plaint that Defendant No.1 siphoned substantial amounts of revenue of Plaintiff No.1 and was contemplating tampering with the records of Plaintiff No.1 thereby disabling the newly elected committee from working. It is submitted that Defendant No.1 has no locus standi to retain the records and the charge of the office of Plaintiff No.1. The main grievance of the Plaintiffs is that there are four public sector undertakings engaged in the business of general insurance including Defendant No.2 / Respondent No.7; that for the purpose of regulating uniform employment facilities among the employees of these four general insurance companies, there is a coordinating body known as GIPSA. Major decisions regarding the employment conditions of the employees of these companies are discussed and decided by GIPSA. Plaintiff No.1 and the other unions and Defendant No.2 participated in the meetings of GIPSA. It appears that Defendant No.1 informed Defendant No.2 about the said Suit No.127 of 2006 and the ad-interim order dated 3rd January 2006. On the basis thereof, Defendant No.2 by a letter dated 10th 16 February 2006 addressed to Plaintiff No.3 stated that in view of the ad-interim order dated 3rd January 2006, it was not releasing GIPSA's letter for a meeting scheduled to be held on 13th February 2006. It is contended that Plaintiff No.1 being the only representative in the Class III and Class IV categories and further having a substantial representation in Class I and Class II categories, Defendant No.2 desired to prevent Plaintiff No.1 from participating in the meeting of GIPSA and had taken the said stand in collusion with Defendant No.1. This was despite the fact that in the said letter dated 10th February 2006, Defendant No.2 itself expressed an opinion that the meeting held on 8th January 2006 was properly convened. The Plaintiffs contend that it is essential that the new body be permitted to function especially by participating in the meetings of GIPSA which have a crucial bearing on the rights of the employees in all four categories. 17. It is in these circumstances that the above suit was filed. 18. In my view, the suit is maintainable. Section 28-1A does not bar the jurisdiction of the Civil Court in the present matter. I will presume that the nature of the dispute raised in the plaint and the 17 nature of the reliefs claimed therein fall within the ambit of Section 28-1A of the Trade Unions Act. However, Section 28-1A would apply only where the action is initiated by “any member of such registered Trade Union”. Plaintiff No.1 is not a member of any registered Trade Union. Plaintiff No.1 is the union itself. Had the suit been instituted by a member / affiliated unit of Plaintiff No.1, it would have been a different matter for that would be an action initiated by “any member of such registered Trade Union”, namely Plaintiff No.1. Indeed, the procedure prescribed under section 28- 1A would not be available to Plaintiff No.1 for that reason. 19. Mr.Shetty relied upon the following observations from the judgment of a learned Single Judge of this Court in the case of Regl. Man. M.S.R.T.C. v. Civil Judge – 1992 (65) F.L.R. 710 :- “The Act of 1926 as per the preamble came into being to provide registration and in certain respects to define the law, as regards the Trade Unions. It provides the “authority for registration, effect of registration, right to property of the Registered Union, immunity from civil and criminal liabilities etc.” Section 11 provides for an appeal against the order of the Registrar refusing or cancellation of registration to the Industrial Court. However, the Act did not provide any forum for redressal of grievance as regards the dispute relating to office-bearer, the member of the Union or their wrongful expulsion or relating to property including the registers of accounts. The parties, therefore, occasionally took resort to the Civil Court. Such a measure however could not be in consonance with an industrial 18 jurisprudence. It also could not promote the object of the Act. The State Legislature it appears, therefore, though it expedient to incorporate Section 28 (1-A) in the Act, 1926. For such a dispute as described therein, Section 28 (1-A) has provided a forum and also prescribed the procedure. As per sub-section (2) the Industrial Court being the forum is invested with a power to decide the dispute and further to pass any interim order during the pendency of the proceedings. Sub-section (3) attaches the finality to the order of the Industrial Court. It specifically grants immunity to the order from being questioned in any proceedings before the Civil Court. The suggest such a dispute could however be looked into by the Civil Court earlier to reference to the Industrial Court would completely be irrational and fallacious. The Scheme creates bar to the jurisdiction of the Civil Court by necessary implication to entertain any dispute covered by sub-section (1) at any stage. The term the dispute referred to the Industrial Court as aforesaid as appeared in sub-section 4 of Section 28(1-A) cannot acquire a meaning of “the dispute” actually referred to the Industrial Court in pursuance of sub-section (1) as suggested by the Counsel. It definitely conveys the dispute which is required to be referred to the Industrial Court in terms of sub-section (1). Moreover, the term “the dispute” in sub-section 4 connotes a particular dispute as described in sub-section 1. To mean it otherwise as canvassed would bring very serious anomaly and at any rate would defeat the purpose and object of the Act. It would further permit the parties to the dispute to choose their forum according to their personal vagaries. I, therefore, record that sub-section 4 of Section 28-(1A) expressly and unequivocally provides complete ouster to the jurisdiction of a Civil Court to entertain a dispute, which is covered by sub-section 1 of Section 28(1-A).” 20. The judgment is of no assistance to the Appellant. There is no quarrel with the proposition that sub-section (4) of Section 28- 1A ousts the jurisdiction of a Civil Court to entertain a dispute 19 which is covered by sub-section (1) thereof. However, before the jurisdiction of the Civil Court is ousted, it is necessary to ascertain whether the dispute falls within the ambit of Section 28-1A (1) and further whether the Plaintiff therein is a member of the registered Trade Union. The second ingredient is necessary as Section 28- 1A(1) in terms enables only “any member of such registered Trade Union for a period not less than six months” to refer the dispute upon compliance of the requirements of the section. The facts of that case which are narrated at page 710 of the Report indicate that the Plaintiff therein was a member of the union and the nature of the clause was also within the ambit of Section 28-1A(1). The question before me did not arise for consideration in that case. Non-Applicant No.2 who had filed the suit was a union of the employees engaged in the Applicants' establishment. It was registered under the Trade Unions Act. However, non-Applicant No.2 was affiliated as a member of non- Applicant No.3 Federation which was also a registered union. In