- 1 - IN IN IN THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORDINARY ORDINARY ORIGINAL CIVIL JURISDICTION ORIGINAL CIVIL JURISDICTION ORIGINAL CIVIL JURISDICTION WRIT WRIT WRIT PETITION NO.497 OF 2008 PETITION NO.497 OF 2008 PETITION NO.497 OF 2008 Arjun Rajaram Sawant ...Petitioner vs. M/s.Standard Industries Ltd. & Ors. ...Respondents Mr.S.N.Deshpande for the petitioner Mr.S.K.Talsania, Senior Counsel with Mr.A.S.Doctor i/b Mr.Kanga & Co. for the respondent No.1 CORAM CORAM CORAM: A.S.OKA,J. A.S.OKA,J. A.S.OKA,J. DATE DATE DATE : APRIL 8,2008 : APRIL 8,2008 : APRIL 8,2008 P.C.: P.C.: P.C.: 1. The submissions of the learned counsel for the parties were heard yesterday. With a view to appreciate the submissions made by the learned counsel for the parties, it will be necessary to refer to the facts of the case in brief. The Petitioner had filed a complaint alleging commission of unfair labour practice covered by items (a),(b),(d), (e) and (g) of Schedule IV of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act,1971. The said complaint along with other similar complaints ended in settlement. The settlement was filed before the learned Labour Court on 18th May 1993. The complaint was disposed of in terms of the settlement. 2. A Miscellaneous Application was filed by the Petitioner along with 18 other complainants who had filed a separate complaints which were disposed of by compromise recorded on - 2 - 18th May 1992. The prayer in the said Miscellaneous Application (ULP) No.16 of 1997 filed by the present petitioner was for restoration of the original complaint which was disposed of in terms of settlement by order dated 18th May 1993. The contention raised in the said application was that though the first Respondent agreed to make payment in terms of settlement, till the date of filing of the application, no payment was made by the first Respondent. It is alleged that the first Respondent was not willing to honour the settlement. It is further alleged in the application that after lapse of more than two months after recording the compromise in the complaint, not a single farthing was paid to the Petitioner. It is alleged that even a copy of calculation of the amount payable to the Petitioner under the settlement has not been supplied by the first Respondent. The said Miscellaneous application preferred by the Petitioner along with Misc. Applications filed by other complainants were rejected by a common Judgment and Order dated 15th July 2006 by the learned Judge of the Labour Court. 3. The Petitioner and some of the other complainants filed a fresh Misc.Application in November 2006 praying that the settlement dated 18th May 1993 be quashed and set aside and the complaint filed by the Petitioner be restored. To the said application the Advocates earlier appearing for the Petitioner as well as the first Respondent-company before the - 3 - Labour Court were impleaded as party-opponents. Various allegations have been made against the Advocate who represented the Petitioner. The allegation is as regards a fraud played on the Petitioner. There are certain allegations made regarding the manner in which the settlement was recorded by the Labour Court. The allegation is that the petitioner was deceived by his Advocate. The said Misc. Application along with the similar Misc.Applications were dismissed by the learned Judge of the Labour Court by order dated 22nd March 2007. Being aggrieved by the said order, a Revision Application was preferred by the Petitioner and others. The said revision application was dismissed by a Judgment and Order dated 3rd October 2007 passed by the learned President of the Industrial Court. 4. In the present petition under Article 226 of Constitution of India, the challenge is to the order dated 15th July 2006 passed by the Labour Court on the first Misc. application submitted by the Petitioner. The challenge is also to the order dated 22nd March 2007 passed by the Labour Court on the second application made by the Petitioner and lastly there is a challenge to the order passed in the revision. It must be stated here that while filing the Petition, there was no challenge to the order dated 15th July 2006. However, this court granted permission to the petitioner challenge the said order. - 4 - 5. The submission of the learned counsel for the Petitioner is that there was a specific challenge in the second application made by the Petitioner to the settlement recorded in the complaint by the Labour Court and the said challenge was on the ground of a fraud as well as misrepresentation by the Advocate for the Petitioner. His submission is that in view of the decision of the Apex Court in the case of National Engineering Industry Ltd. Vs. State of Rajasthan [(2000) 1 S.C.C. page 371), the Labour Court ought to have gone into the allegations of fraud and misrepresentation. He submitted that the case made out by the Petitioner in the second application filed in November 2006 has not been considered on merits by the learned Judge of the Labour Court. He pointed out that the second application was not entertained and was rejected on the ground that the application was not maintainable. He pointed out that another ground held by the learned Judge of the Labour Court against the petitioner is the principle of res judicata based on the order dated 15th July 2006 passed by the Labour Court on the first Application made by the Petitioner. He submitted that in the second application, specific allegations were made of fraud. His submission is that once it is alleged that the settlement and consequential order of the Labour Court accepting the settlement was vitiated by a fraud, there cannot be any occasion to apply principles of res judicata. He submitted - 5 - that even the said order could have been reviewed on the ground of a fraud. He placed reliance on the decision of the Apex court in case of A.V.Popaya Sastry and others vs. Government of Andhra Pradesh [(2007) 4 S.C.C. page 221] and submitted that the fraud vitiates all judicial actions and the order which is obtained by a fraud is non-est and nullity. He submitted that such contentions can be raised in collateral proceedings. He also placed reliance on the decision of the Apex Court in case of S.P.Chengal Varaya Jagannath Naidu vs. (A.I.R. 1994 S.C. page 853) and submitted that any stage of the proceedings,a fraud played by a litigant can be pointed out to the court and the court of law is required to consider the plea of fraud and misrepresentation as the fraud will vitiate the settlement and the order passed on the basis of the settlement. He also placed reliance on the decision of the Apex Court in case of the National Engineering Industry Ltd. (supra) and contended that while deciding the application under section 32 of the said Act of 1971, the Labour court has to consider and determine the allegations of fraud on merits. He pointed out that in the present case not even an opportunity is afforded to the Petitioner to prove the allegations of fraud. He submitted that even if in the first application made by the Petitioner the fraud may not have been alleged, at any stage a litigant can always bring it to the notice of the court of law that the earlier order was vitiated by fraud. He criticised the approach of the Labour Court of - 6 - not considering the merits of the allegations made in the second application. He submitted that the Industrial Court ought to have passed an order of remand thereby permitting the Petitioner to establish the case of fraud and misrepresentation. 6. The submission of the learned senior Counsel for the first Respondent is that in fact at the time of hearing of the first application made by the Petitioner, the allegations which are made in the subsequent application were made at the time of recording of evidence and these allegations have been dealt with by the Labour Court while passing an order dated 15th July 2006. He pointed out that on the basis of the similar allegations, a second application was made in the year 2006 which has been rightly rejected by the Labour Court. He pointed out that in the first application made by the Petitioner, there was not even an allegation of fraud or mis representation. He placed reliance on the relevant part of the decision of the Apex Court in case of National Engineering Industry (supra). The learned senior counsel for the first Respondent also relied upon the subsequent decision of the Apex Court in which the Apex Court has considered its earlier decision in the case of National Engineer Industry (supra) and submitted that the allegations which are made by the Petitioner could have been made only by filing a fresh complaint. He submitted that the Labour Court as well as the - 7 - Industrial Court was right in not interfering on the basis of the allegations made by the Petitioner. 7. I have carefully considered the submissions. It will be necessary to refer to the averments made in the Misc.Application (ULP) No. 16 of 1997. The material averments made in the said application are in paragraph 1 thereof. The case made out by the Petitioner in the said application is that ; "....The Applicant states that even though it was agreed between the parties that the non Applicant No.1 will make the payment in accordance with the terms of the settlement, till payment in accordance with the terms of the settlement, till date, no payment is made by the non Applicant No.1 Company. The Applicant states that now, the non Applicants are not willing to honour the said settlement even though the non-Applicant shows their willingness to make the payment. The Applicant states that since the matter was disposed of in the year 1993, three years are passed, however, the non Applicant has not paid a single pai to any of the workman who have settled the said complaint out of the court. The Applicant states that the Applicant has waited for three long years with the hope that the non Applicant will make the payment as agreed upon by the non-Applicant in terms - 8 - of the settlement. However, the non Applicants have neither paid the same amount nor send the said amount by post. Even they have not furnished a copy of the calculations to the Applicant. The Applicant states that the settlement is not honoured by the non Applicant and hence, it should be treated as cancelled." 8. In the said application, the parties were permitted to lead evidence. In paragraph 8 of the Judgment and Order dated 15th July 2006, the learned Judge of the Labour Court has dealt with the evidence of the present Petitioner. While referring to the oral evidence of the Petitioner, the learned Judge of the Labour Court has observed thus : "8...It is very strange to note down that affidavit of the Applicant is entirely contradictory to the original pleadings. The affidavit is also full of improvement covering the different story that during the pendency of the complaint there was settlement between their Advocate and opponent Mill. According to applicant the Respondent mill had agreed to give substantial amount of compensation. The Applicant has also categorically stated that their Advocate informed them that they would receive about 3.5 to 4.5 lakhs rupees as a compensation. It is further stated that, in fact matter was settled on - 9 - lesser amount by earlier Advocate Shri Barge. The story is further improved by the Applicant that they told to the court that they did not agree for the said settlement but both advocates were agreed to the settlement. It is further stated that their earlier advocate told them that they would get substantial amounts and signatures had been obtained on withdrawal pursis. It is specifically stated by the Applicant that none of the Applicant received the letter from Opponent mill dated 2.7.1993." 9. In paragraph 9 of the said Judgment and Order, the learned Judge has noted that at the time of recording the evidence, the petitioner tried to develop a new story and blame the court as well as the Advocates. The Labour court dealt with the contention raised by the Petitioner that in fact it was agreed to pay a larger amount to the tune of Rs.3.5 to 4.5 lakhs. After considering the material on record, the learned Judge held that each and every applicant had understood the contents of the common settlement. 10. In paragraph 10 of the said Judgment, the learned Judge of the Labour Court found that out of 19 complainants, who had made similar applications, 14 had received a written notice from the first Respondent on 2nd July 1993 by which an offer was made by the first Respondent to pay the amount in terms of consent order passed in the complaint. In view of bald denial - 10 - by the concerned applicants of their signatures, the learned Judge of the Labour Court did the exercise of the comparing of admitted signatures and disputed signatures. On the basis of material on record, a finding was recorded by the learned Judge that out of 29 complainants, 10 complainants received amounts payable under the settlement and the said amounts were received by them on 28th June 1993. The learned Judge held that out of remaining 19 complainants who had filed application for setting aside the compromise, 14 received an intimation from the first Respondent to collect the dues and 5 applicants have either not claimed the notice or have refused to accept the notice. The learned Judge of the Labour Court further observed that from 30th June 1993 till the filing of the applications in the year 1997, the Petitioners and other complainants kept mum and no steps were taken by them. 11. After considering all the aspects the learned Judge of the Labour Court came to the conclusion that no case was made out for setting aside the order passed in terms of the compromise. 12. The Petitioner did not choose to challenge the order dated 15th July 2006 and came out with a fresh application in November 2006. In the said application, similar prayer for restoration of the complaint was made on the basis of the allegations which do not form part of the earlier application - 11 - made under section 32 of the said Act of 1971. The allegations made in the said application are of mis representation and fraud practised by the Petitioner’s Advocate as well as by the Advocate who was representing the first Respondent. 13. The learned Judge of the Labour Court rejected the said second application made by the Petitioner by holding that the second application will not be maintainable. In a revision, the learned President of the Industrial Court has referred to the conduct of the Petitioner. The learned President upheld the order of the learned Judge of the Labour Court summarily dismissing the application made by the Petitioner. 14. In so far as plea of fraud is concerned, there cannot be any dispute as regards the proposition of law incorporated in the decisions of the Apex Court relied upon by the learned counsel appearing for the Petitioner. It is true that if the fraud is established, it will vitiate the judicial act of recording settlement. However, in the present case, while filing the earlier application in the year 1997, there is no allegation whatsoever made by the Petitioner of any fraud or misrepresentation. On the contrary, the only ground on which the prayer for restoration of the complaint was made is that the first Respondent has not abided by the settlement and the first Respondent had not shown readiness and willingness to - 12 - pay the amount in terms of the order passed by the consent of the parties on 18th May 1993. On plain reading of the assertions made in the said application which are quoted in the earlier part of the Judgment, it is obvious that the said application proceeds on the footing that the compromise as well as the order passed on the compromise was otherwise legal and valid. Perusal of the averments made in the said first application shows that even the Petitioner accepted that the order passed on the basis of the settlement was valid and that is why a grievance was made regarding non compliance of the said order by the first Respondent. As pointed out earlier, an attempt was made by the Petitioner herein at the time of recording of evidence in the earlier application to make allegations against his Advocate as well as the Advocate representing the first Respondent. A case was sought to be made out in the evidence that a representation was made by the Advocate for the Petitioner that if the Petitioner and other complainants sign the settlement they would get substantial amounts. The Petitioner and other complainants tried to make out a case regarding non receipt of the letter/intimation dated 2nd July 1993 from the first Respondent which has been specifically discarded by the learned Judge of the Labour Court on the basis of documentary evidence produced by the first Respondent as regards the service of the said intimation. - 13 - 15. If this is the conduct of the Petitioner, it is obvious that the allegations made in the subsequent application filed by him alleging fraud and mis-representation against the Advocates were clearly by way of an afterthought. 16. Merely because the allegations of fraud and misrepresentation were made by a party to the litigation, it is not necessary that in each and every case, the court and the tribunal should give an opportunity to the parties for leading evidence for establishing the allegations made of fraud and misrepresentation. In the present case, the conduct of the petitioner is so glaring that the learned Judge of the Labour Court was justified in not entertaining the allegation made by the Petitioner. There was every justification for the learned Judge of the Labour Court for not entertaining the allegations of fraud and misrepresentation in an application made by the Petitioner in November 2006. As pointed out earlier, the fraud and the misrepresentation alleged in the said application relates to the year 1993 when the consent order was passed. 17. Apart from this fact, the law laid down by the Apex Court in case of National Engineering (supra) is that the allegations such as allegations made by the Petitioner that the settlement was arrived by fraud and misrepresentation can be a subject matter of a dispute under section 10 of the - 14 - Industrial Disputes Act,1947. Therefore, the learned Member was justified in not entertaining the application made by the Petitioner. 18. Now coming the challenge to the order dated 15th July 2006, it must be noted that the conduct of the Petitioner shows that he accepted the said order. In fact, as pointed out earlier, he filed a fresh application in November 2006 claiming relief of restoration of complaint by setting aside the settlement. The very fact that the second application was made by the petitioner alleging the fraud and mis-representation shows that the petitioner accepted the earlier order dated 15th July 2006. Moreover, an opportunity was granted to the parties to lead evidence while dealing with the said earlier application. The first Respondent produced material on record as regards service of notice/intimation dated 2nd August 1993 to the petitioner and other complainants. On the other hand, the petitioner made an attempt to improve his case by making allegations against the Advocates who appeared in the complaint. It will not be out of place to mention that even the first application was filed after lapse of 4 to 5 years alleging non compliance with the order by the first Respondent. As pointed out earlier, there is a finding of fact recorded regarding service of notice/intimation by the first Respondent by which the first Respondent offered to comply with the compromise/settlement. - 15 - At this stage, it must be noted that the first Respondent has deposited with the Labour Court a sum of Rs.4,16,014/- in compliance with Award which was passed by the consent of the parties to the complaint. The said amount was deposited along with an application giving brake up of the amounts payable to the complainants. A copy of the said application is placed on record which shows that a sum of Rs.23,148/- payable to the petitioner has been deposited by the first Respondent. 19. Considering the aforesaid circumstances, no case is made out for entertaining the writ petition under Article 226 of the Constitution of India. There is no merit in the Petition and the same is rejected. JUDGE JUDGE JUDGE