1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY O. O. C. J. APPEAL NO.971 OF 1997 IN WRIT PETITION NO.448 OF 1995 Kanak Industries, a proprietary concern, having its office situated at C/o. Crompton Greaves Godown, Mathuradas Mill Compound, N.M. Joshi Marg, Lower Parel, Bombay-400 013. ... Appellant. Vs. 1. General Labour Union (Red Flag), a trade Union, registered under the Trade Unions Act, 1926, having registered office situated at Sion Bandra Link Road, Kala Killa, Dharavi, Bombay-400 017. -2. Shri B. S. Bhadange, Industrial Tribunal, having his Court situated at 7th Floor, Arun Chambers, Tardeo, Bombay-400 034. ...Respondents. .... Shri J. P. Cama, Senior Advocate i/b. Mr. K.P. Anil Kumar for the appellant. Shri N.M. Ganguli for respondent No.1. ..... CORAM : R. M. S.KHANDEPARKAR & DR.D.Y.CHANDRACHUD, JJ. February 21, 2007. 2 JUDGMENT (PER DR. D.Y. CHANDRACHUD, J.) : The scope of the Appeal : The appeal before the Court arises out of a judgment of a Learned Single Judge dated 22nd July 1997. A reference was made to adjudication before the Industrial Tribunal under Section 10 of the Industrial Disputes Act, 1947. The reference was on the question as to whether a lockout declared by the management of the First Respondent with effect from 26th May 1983 was legal and justified. The Industrial Tribunal held by an award dated 12th August 1994 that the question as to the legality of the lockout had already been decided on 5th May 1983 in a judgment of the Industrial Court in a complaint of unfair labour practices under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971. (“MRTU & PULP Act, 1971”) The Tribunal held that once the issue as regards the legality of the lockout has been decided finally by a competent Court, the lockout having been held to be legal, the same issue could not be raised again in a reference under Section 10. The Tribunal thereupon considered the justifiability of the lockout and on reviewing the 3 evidence on record held that the lockout was justified. In a petition filed by the Union under Article 226 of the Constitution, the Learned Single Judge held that a finding on the legality of the lockout in a complaint under the MRTU & PULP Act, 1971, was only for the purposes of proceedings under that Act and this will not preclude the Industrial Tribunal from entering into the legality of the lockout when a reference was made under Section 10 of the Industrial Disputes Act, 1947. The Learned Single Judge, therefore held that a remand of the proceedings was warranted before the Tribunal for a fresh consideration on merits of the question as to whether the lockout was legal. On the justifiability of the lockout, the Learned Single Judge held that the award of the Tribunal was not satisfactory and the reasons furnished by the Tribunal were vague. The award of the Tribunal has been quashed and set aside and an order of remand has been passed for reconsideration of the question of legality as well as of the justifiability of the lockout on merits. 2. The submission urged on behalf of the employer in appeal is that the judgment of the Learned Single Judge overlooks the provisions of Section 59 of the MRTU & PULP Act, 1971. The 4 contention before the Court is that once a proceeding is instituted by the Union under the Act, on a complaint of unfair labour practices where the legality of the lockout was squarely placed in issue, then by virtue of the provisions of Section 59, no proceedings can be entertained by any authority in respect of that matter under the Industrial Disputes Act, 1947. 3. In order to appreciate the submission, a reference to Section 59 would be in order. The provision is to the following effect: “59. Bar of proceedings under Bombay or Central Act:- If any proceeding in respect of any matter falling within the purview of this act is instituted under this Act, then no proceeding shall at any time be entertained by any authority in respect of that matter under the Central Act or, as the case may be, the Bombay Act; and if any proceeding in respect of any matter within the purview of this Act is instituted under the Central Act, or as the case may be, the Bombay Act, then no proceedings shall at any time be entertained by the Industrial or Labour Court under this Act.” 4. Primarily, therefore, the appeal raises the issue of the interpretation which must be placed on the provisions of Section 59. Thirty five years after the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971, was 5 enacted, it is only to be expected that the interpretation of the statutory provisions is not, as it were, on a clean slate bereft of precedent. Precedent does not preclude the Court from approaching the task of interpretation as a matter of first principle. Equally, guided as we are by the discipline of the law, we must follow binding precedent in so far as judicial pronouncement have interpreted Section 59. Among the judgments, we have the decisions of the Division Benches in Industrial Tubes Manufacturing Company Ltd. vs. S.R. Samant;1 Maharashtra State Road Transport Corporation vs. Yadao;2 Consolidated Pneumatic Tool Co. (I) Ltd. vs. R. A. Gadekar;3 and Association of Engineering Workers vs. V.K. Date.4 A Full Bench has also considered the question in C.S. Dixit vs. Bajaj Tempo Ltd.5 Submissions of the parties : 5. On behalf of the employer the submissions are to the following effect: (i) Section 59 emphasises the need for election as to which overlapping statute the litigating party would seek to proceed 1 1980 Mh. L.J. 713 2 1985 LAB. I.C. 1012 3 1986 I CLR 322 4 2006 I CLR 318 5 2000 II CLR 719 6 under – the MRTU & PULP Act, 1971, on one hand, or the Industrial Disputes Act, 1947 on the other; (ii) Once an election is made, a party can still withdraw before any further steps are taken; (iii) However where an application is moved and an order is passed, the proceedings go beyond a mere institution and must be treated as having been entertained; (iv) From the second stage onwards Section 59 will come into operation; (v) An exception has been carved out by the Full Bench where on the ground of limitation, a complaint of unfair labour practices under the MRTU & PULP Act, 1971 cannot proceed beyond the threshold. Limitation brings the complainant back to the threshold and wipes out everything in between; (vi) The other exception is where by an amendment, a subsequent event is sought to be introduced which in substance gives rise to a new cause of action. If the amendment to a pleading is denied that would warrant the filing of a fresh complaint or a reference to adjudication to that limited extent; (vii) Civil law principles must govern the interpretation of Section 59 which in substance are the guiding principles of interpretation that have been adopted by the judgments of the Division Benches and of the Full Bench; (viii) The interpretation suggested by the Union would render the employer in the case of 7 the lockout or the Union in the case of a strike liable to defend its conduct in two different proceedings merely because the complainant chooses one out of two readily available remedies and then fails. Besides having been deprecated by the Full Bench such a course would be opposed to public policy which frowns upon a multiplicity of proceedings. This would also be deeply prejudicial to the defence of a party who having successfully defended the lockout or strike is once again required to defend the action in a different Court possibly after several years. The consequence of losing in the case of a lockout may possibly give rise to a liability to pay back wages and in the case of strike a recognised Union is liable to lose its recognition. The principles of justice, equity and good conscience do not permit a party which has elected to proceed before a Court of limited jurisdiction to commence a new litigation on the same conduct of the defendant merely because it has failed in the Court of its first choice. 6. The submissions of the Union are as follows: -(i) The interpretation that a declaration under the MRTU & PULP Act, 1971 that a strike/lockout is illegal holds good in a 8 proceeding under the Industrial Disputes Act, 1947 will be fallacious; (ii) A strike/lockout may be declared as illegal under the MRTU & PULP Act, 1971 for want of notice, under clauses (a) of Sub-Section (1) or (2) as the case may be of Section 24 of the Act. There is no provision in Section 24 of the Industrial Disputes Act, 1947 of giving any notice before commencing a strike/lockout; (iii) In that case the strike/lockout commenced without notice cannot be held to be illegal under the Industrial Disputes Act, 1947; (iv) The provisions of Section 25 of the MRTU & PULP Act, 1971, of Section 24 of the Industrial Disputes Act, 1947 and other relevant provisions of the two Acts have been rightly considered by the Learned Single Judge in the judgment under Appeal. The view taken by the Division Bench in para 13 in the case of Industrial Tubes (1980 Mah. L.J. 713) is correct and justified. The two Acts viz., Industrial Disputes Act, 1947 and MRTU & PULP Act, 1971 have to be read independently for their application; (v) There was a reference made by the State Government on 17-3-1983 under Section 10(1) of the Industrial Disputes Act, 1947 regarding the demand of the Respondent Union for reinstatement of a large number of workmen who were terminated from service between April 1982 and October 1982. The lockout related to the said 9 reference and, therefore, the same is hit by Section 23(b) of the Industrial Disputes Act, 1947 and is consequently illegal under Section 24(1)(a) of the said Act. The lockout is even otherwise illegal under Section 24(1)(a) of the Industrial Disputes Act, 1947; and (vi) As held by the Hon'ble Supreme Court of India in the case of Syndicate Bank Vs. Umesh Nayak,6 an illegal lockout is per se unjustified without requiring any other reasons for the unjustifiability. The lockout is even otherwise unjustified. Section 59 of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 : 7. Section 59 of the MRTU & PULP Act, 1971 consists of two parts. In the first part the section imposes a bar on any authority entertaining proceedings under the Central Act (the Industrial Disputes Act, 1947) or the Bombay Act (The Bombay Industrial Relations Act, 1946). The bar arises where any proceedings in respect of any matter falling within the purview of the MRTU & PULP Act, 1971 are instituted under the Act. In that case, no proceedings can be entertained at any time by any authority in respect of that matter under the Central Act or the 6 1994-II LLJ 836 10 Bombay Act. In the second part of the Section, the prohibition is on a proceeding being entertained by the Industrial or the Labour Court under the MRTU & PULP Act, 1971. That prohibition applies where any proceeding in respect of a matter within the purview of the MRTU & PULP Act, 1971 is instituted under the Central Act or the Bombay Act. 8. By the first part of Section 59, the interpretation of which would determine the outcome of the present case, the following ingredients have to be fulfilled before an authority under the Industrial Disputes Act, 1947 or the Bombay Industrial Relations Act, 1946 is precluded from entertaining a proceeding: (i) A proceeding must be instituted under the MRTU & PULP Act, 1971; and (ii) The proceeding must be in respect of any matter falling within the purview of the Act of 1971. In such an eventuality no proceedings can be entertained “in respect of that matter” by an authority under the Central Act and the Bombay Act. As a matter of first principle, the subject matter of the proceedings under the MRTU & PULP Act, 1971 has to be in respect of a matter which falls within the purview of that Act. Obviously, where the proceeding that is instituted relates to a matter which cannot be 11 comprehended within the purview of the MRTU & PULP Act, 1971, the bar would not be attracted. The words “proceeding in respect of any matter” adverts to the subject matter of the proceedings and, it is the subject matter of the proceedings which must fall within the scope and purview of the MRTU & PULP Act, 1971. 9. The MRTU & PULP Act, 1971, has received the assent of the President. In interpreting the provisions of Section 59, the Court must effectuate the object of the Legislature in enacting the provisions and a purposive interpretation must be adopted in order to ensure that the object is not rendered nugatory. The plain language of the provision indicates that the Legislature had within its contemplation the serious consequences that would ensue if a multiplicity of proceedings were adopted by a litigating party on the same subject matter particularly in a field as sensitive as industrial relations. If one of the parties to an industrial dispute chooses a forum prescribed by the MRTU & PULP Act, 1971 for ventilating its grievance on a matter falling within the purview of that Act, the policy of the Legislature is clearly to preclude an authority under the Central Act or the Bombay Act from entertaining a proceeding in respect of the very same matter. The expression “any matter” 12 and the words “in respect of that matter” clearly evince an intention of the Legislature to ensure that a multiplicity of the proceedings should not be adopted with respect to the same matter, once a duly constituted proceeding has been instituted under the Act of 1971. The Legislature had, within its contemplation, the serious hardship that may be occasioned both to the workman on the one hand, and to the employer on the other if litigating parties were to be permitted to approach different fora under various pieces of industrial legislation in respect of the same subject matter. The policy of the law is based on a sound rationale and the underlying logic is that there must be repose in litigation. 10. However, while defining the ambit of Section 59, it would become necessary for the Court to have regard to the object of the MRTU & PULP Act, 1971, the scope of its provisions and the canvass of the challenge that is contemplated in the MRTU & PULP Act, 1971. The bar to proceedings under the Central Act must be confined to the extent to which the legislature has enacted such a mandate. Absent a clear mandate or one which follows by necessary implication, the Court will not presume an ouster of jurisdiction on an ipse dixit. The role of the Court is to interpret a 13 legislative provision and implement the object which underlies it. The Court will not legislate by creating new grounds. Precedents on the subject : 11. The parameters of Section 59 came up for decision before a Division Bench of this Court in Shri Shivaji Agricultural College vs. Mukhtyar Ahmed.7 A complaint under Section 28 of the MRTU & PULP Act, 1971 filed by an employee of a college whose services were terminated by the management, was dismissed on the ground of limitation. Upon a reference thereafter made to adjudication under the Industrial Disputes Act, 1947, the order of termination was set aside. A Division Bench of this Court, in a challenge by the management accepted the plea that the reference was barred by Section 59 of the MRTU & PULP Act, 1971. This Court held thus : “True it is, as argued by .. counsel for Mukhtyar Ahmed, that the earlier decision under the Act of 1971 is not on merits, but that seems to make no difference in the applicability of section 59. Use of the word “instituted” is significant specially when it is contrasted with the use of the word “entertained” in that very section. In India, institution means presentation of the mater. That is the first stage, second being its entertaining, the third being the trial and the fourth being the decision. In the instant case, even the fourth stage was over. If bar operates 7 1987 Mh. L.J.646 14 even if the first stage is reached, it is difficult to see how it will cease to operate only because at the last final stage, the matter is decided only on limitation. It is wrong to assume that section 59 is based only on the principles of res judicata. Legislative policy seems to restrict the choice of remedy and forum. The Act of 1971 on the one hand and the ID Act and the BIR Act on the other have many overlapping provisions and hence legislature mandated to choose at the very threshold any one of the remedies for such overlapping matters. Once a choice is made and the matter is presented, the other remedy is lost and proceedings under the other set of Acts cannot be “entertained”.” In Consolidated Pneumatic Tool Co.(I) Ltd. vs. R.A. Gadekar,8 on a complaint of unfair labour practices the management raised the plea that the complaint was barred by Section 59 inasmuch as when the complaint was pending, conciliation proceedings had already been initiated under the Industrial Disputes Act, 1947. Subsequently, references were made under the Industrial Disputes Act, 1947 covering 57 employees whereas the complaint of unfair labour practices related to 53 employees. Upon the references being made, the Union withdrew the complaint since the references related to the dismissal of the workers. The management then contended that the references were not maintainable, an objection which the Industrial Tribunal overruled. In a petition by the 8 1986 I CLR 322 15 management, the Division Bench was of the view that no general rule applicable to all cases could be laid down on the amplitude of Section 59 and to some extent, the outcome must depend upon the facts of each case. The Court noted that when the Union had initially filed a complaint, the objection of the management was that conciliation proceedings were already pending under the Industrial Disputes Act, 1947 attracting the bar of Section 59. When the complaints were withdrawn upon references being made, the management sought to challenge the maintainability of the references on the ground that the complaints had been withdrawn. The Court held that the management was estopped from its conduct in doing so. The Division Bench considered the ambit of the expression “institute” in Section 59 and declined to accept the broad proposition urged on behalf of the employer that the Industrial Tribunal would lose jurisdiction to entertain the references under the Central Act, the moment proceedings in respect of the same were instituted under the MRTU & PULP Act, 1971. In that context, the Court held as follows: “The word “institute” as used under Section 59 can be taken as meaning “setting on foot an enquiry” which means something more than mere filing of complaint. 16 Where the applicant does nothing more than filing a complaint under the Act, and withdraws it before any effective steps are taken, then in our view the provisions of Section 59 of the MRTU & PULP Act will not apply. Obviously as to what could be termed as effective steps will again depend upon the facts and circumstances of the case.” The principle enunciated by the Division Bench, therefore, is that where a complainant had done nothing more than to file a complaint under the MRTU & PULP Act, 1971 which is withdrawn before any effective steps are taken, it could not then be said that proceedings were instituted under that Act. This, the Court held, was the interpretation necessary to avoid “palpable injustice and absurd inconvenience”. The Court held that the complaint was withdrawn in view of the references under the Central Act and with the consent of the management after which an objection under Section 59 was raised to the maintainability of the references. The Court held that the references were not barred under Section 59. 12. In Maharashtra State Road Transport Corporation vs. Yadao,9 the Appellant had initiated proceedings under Section 33 9 1985 LAB. I.C. 1012 17 (2)(b) of the Industrial Disputes Act, 1947 seeking approval to the action of dismissal against certain employees. Approval not having been granted, the management had filed a petition before the Court under Article 226 of the Constitution. The employee moved a complaint under the MRTU & PULP Act, 1971 complaining of an unfair labour practice which was allowed and an order of reinstatement was passed. The decision of the Labour Court was challenged by the management. In another batch of cases, approval was granted under Section 33(1) and the complaint filed under Section 28 of the MRTU & PULP Act, 1971 was allowed. The preliminary objection raised by the management was that the complaint under Section 28 was barred inasmuch as proceedings had been initiated under Section 33 of the Industrial Disputes Act, 1947. The Division Bench adverted to the object underlying Section 59 in the following observation: “We find that the philosophy behind the bar of S.59 of the ULP Act is akin to that of S. 10 or S.11 of the Civil Procedure Code which enjoins upon a court not to proceed with trials of suits where similar issues were also directly and substantially in issue in another suit. The intention is to prevent the multiplicity of proceedings, possibility of contradictory verdicts and wastage of judicial time.” 18 The Division Bench held that Section 33 placed restrictions on the common law power of the employer to hire and fire at will and where an industrial dispute was pending, the Legislature had introduced a requirement of approval. The Court was of the view that proceedings under Section 33 were not of a judicial nature and that the complaint under the MRTU & PULP Act, 1971 was accordingly not barred. 13. A Full Bench of this Court came to be constituted in C. S. Dixit vs. Bajaj Tempo Limited,10 to consider the conflict between the views expressed by the Division Benches in Yadao's case (supra) on the one hand, and in Shivaji Agricultural College on the other. In Yadao's case, the Division Bench had noted that the underlying rationale of Section 59 was akin to Sections 10 and 11 of the Code of Civil Procedure, 1908 which enjoined upon the Court not to proceed with the trial of a suit where similar issues were directly and substantially in issue in an earlier suit. The intention of the Legislature was to prevent a multiplicity of proceedings, the possibility of contradictory verdicts and waste of judicial time. On the other hand, the view in Shivaji Agricultural 10 (2000) II CLR 719 19 College (supra) was that Section 59 was not based only on the principle of res judicata and the legislative policy was to restrict the choice of remedy and forum. Once the choice was made and matter was presented, the other remedy was held to have been lost. The Full Bench noted the view in Consolidated Pneumatic (supra) where the expression “institute” under Section 59 was construed to mean, the setting on foot of an enquiry. In the case before the Full Bench, an application was filed for amendment of a complaint under the MRTU & PULP Act, 1971. The application for amendment was dismissed, upon which a reference was made to adjudication under the Industrial Disputes Act, 1947. The Full Bench held that in such a case, mere institution of the complaint would