C.W.P.No.18958 of 1996 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH C.W.P.No.18958 of 1996 Date of Decision:- 01.07.2009 Ashok Khanna ....Petitioner(s) vs. M/s TTK Pharma Limited and others ....Respondent(s) C.W.P.No.8520 of 1996 M/s TTK Pharma Limited ....Petitioner(s) vs. State of Punjab and others ....Respondent(s) *** CORAM:- HON'BLE MR.JUSTICE AUGUSTINE GEORGE MASIH *** Present:- Mr.B.R.Mahajan, Advocate, for the workman. Mr.R.C.Setia, Sr.Advocate with Mr.Vishal Garg, Advocate, for the Management. *** AUGUSTINE GEORGE MASIH, J. By this order, I propose to dispose of two Civil Writ Petitions i.e C.W.P.No.18958 of 1996 preferred by the workman and C.W.P.No.8520 of 1996 preferred by the Management, wherein the challenge is to the award dated 29.9.1995 passed by the Labour Court, Amritsar. I propose to decide the question of competence of the Government of Punjab to make a reference under Section 10 of the C.W.P.No.18958 of 1996 -2- Industrial Disputes Act, 1947 first, as it is on this issue that the award has gone against the workman wherein the Labour Court has held that the Government of Punjab is not competent to make a reference due to lack of territorial jurisdiction and accordingly, the Labour Court has no jurisdiction to try the case. The facts are not in dispute. Ashok Khanna-workman was appointed with the Management whereafter vide order dated 6.6.1989, he was transferred from Amritsar office to Madras office of the Company. As per the said transfer order, the workman was directed to join for duty at Madras office on 19.6.1989. The workman went to Madras from Amritsar and reported in the office of the company at Madras on 19.6.1989 but thereafter from 20.6.1989, he proceeded on initially sanctioned leave and then did not report for duty. It would not be out of way to mention here that the workman received journey expenses from the Company when he went from Amritsar to Madras and reported in Madras office on 19.6.1989. Subsequently, correspondence continued between the Company and the workman wherein despite various notices having been sent to him, he failed to join duty. On the other hand, the workman sought extension of leave and also submitted some medical certificates but the Management of the company did not sanction the said leave. Since the workman did not report for duty despite various letters, his services were terminated by the Management. After the termination of his services, the workman preferred a demand notice, whereupon a reference was made by the Government of Punjab, Labour Commissioner, to the Labour Court, Amritsar, for adjudication of the dispute between the workman and the Management. C.W.P.No.18958 of 1996 -3- Before the Labour Court, apart from taking other grounds, a preliminary objection with regard to the competence of the Government of Punjab to make a reference, on the ground of territorial jurisdiction, was also taken by the Management. On the basis of the pleadings of the parties, the Labour Court framed the following issues:- “i) Whether the reference is incompetent for reasons given in the preliminary objections? ii)Whether the workman himself abandoned the job? iii)Whether termination of the service of the workman is justified and in order? iv)Whether the workman remained gainfully employed after termination of his services? v) Relief.” The Labour Court proceeded to take evidence of the parties and on conclusion thereof, it proceeded to decide the matter on merits. Issue No.1 was decided in favour of the Management holding therein that the Government of Punjab was not competent to make a reference on account of lack of territorial jurisdiction. On issue Nos.2 to 4, the Labour Court gave a finding in favour of the workman and against the Management holding therein that the termination of the services of the workman is illegal. Feeling aggrieved, the workman has preferred Civil Writ Petition No.18958 of 1996 challenging the finding given on issue No.1 in the impugned award dated 29.9.1995 passed by the Labour Court, Amritsar while the Management has preferred Civil Writ Petition No.8520 of 1996 challenging the findings given by the Labour Court on issue Nos.2 to 4. As has been C.W.P.No.18958 of 1996 -4- observed above, issue No.1 which is with regard to the territorial jurisdiction, is being taken up first so that the other issues can be taken up at a subsequent stage, if need so arises. I have heard counsel for the parties and have gone through the records of the case with their able assistance. Counsel have addressed arguments on all issues so framed by the Labour Court. Mr.B.R.Mahajan, Advocate for the workman, has submitted that the finding recorded by the Labour Court on issue No.1 that the Government of Punjab was not competent to make a reference due to lack of territorial jurisdiction, cannot be sustained, for the reason that the workman never joined his duties at Madras on his transfer from Amritsar to Madras. He submits that the workman had only gone to Madras but not with an intention to join duties but to explain his difficulty in taking up the assignment at Madras. Counsel further submits that since the order of termination was conveyed to the workman in Amritsar, a part of cause of action arose within the territorial jurisdiction of State of Punjab and, therefore, the Government of Punjab would be the appropriate Government to make a reference of an industrial dispute under Section 10 of the Act. He submits that in view of this fact, the Labour Court at Amritsar had jurisdiction to adjudicate upon the reference made by the Appropriate Government and the finding of the Labour Court deserves to be set aside. On the other hand, Mr.R.C.Setia, learned Sr.Advocate, appearing for the Management, submits that the workman was admittedly an employee of the Company and as per the terms and conditions of his appointment letter, Exhibit M-3, he was liable to be transferred anywhere by the Management. In exercise of the said powers, the workman, who was C.W.P.No.18958 of 1996 -5- employed at Amritsar, was transferred to Madras vide order dated 6.6.1989 Exhibit M-9 and as per Exhibit M-10, he was directed to report for duty on 19.6.1989. The workman reported for duty at Madras on 19.6.1989 and it stands admitted by him in his cross-examination before the Labour Court that he had gone to Madras and also received the journey expenses. It is also an admitted position that the workman proceeded on leave and thereafter had all through been seeking extension of leave on one pretext or the other. It has also come on record that the leave, the extension of which was sought by the workman, was not granted by the Competent Authority and he was on various occasions called upon to join duties. The workman gave in writing vide Exhibit M-4 that he was willing to join duty at Madras but did not thereafter report for duty. The Management vide their letter dated 17.10.1989 asked the workman to report for duty on or before 1.11.1989 failing which, he was informed, that the Management would be legitimate in presuming that he was no longer interested in his employment with them. The said letter was served upon the workman on 21.10.1989. However, he again sought extension of leave which was again not granted. Thereafter, the workman was informed by the Management through a telegram dated 21.12.1989 that the business exigencies require his presence at Madras and failure on his part to report for duty will be at his own risk. Despite receipt of said telegram, the workman did not report for duty at Madras and accordingly, since the workman failed to report for duty, his services stood terminated from 19.2.1990. On this basis, counsel submits that firstly, the transfer of the workman from Amritsar to Madras was as per terms and conditions of his appointment letter; secondly, he had already joined duty on 19.6.1989 and thereafter, proceeded on leave but failed to C.W.P.No.18958 of 1996 -6- rejoin despite the various reminders; thirdly, the order of termination was passed at Madras and fourthly, he was employed at Madras, all this shows that the appropriate Government to make a reference was the Government of Tamil Nadu alone. Counsel submits that merely because the order of termination was conveyed to the workman as mandated under the Act at his permanent address available with the company, would not confer territorial jurisdiction upon the Government of Punjab to make a reference under Section 10 of the Act. Counsel submits that although the Industrial Disputes Act is silent on the issue of territorial jurisdiction with regard to the competence of the appropriate Government to make a reference of the industrial dispute and the Code of Civil Procedure is not applicable to the proceedings under the Act, but nevertheless the general principles and the value of tests underlying the jurisdiction of the Civil Court are not entirely alien to the matter in question for an appropriate Government to have jurisdiction to make a reference under the Act and at least some cause of action would have accrued within the territorial jurisdiction of that Government which would confer it with a right to refer the matter under the Act. The basic principles which will determine the jurisdiction have been culled out on consideration of the law on this issue by a Full Bench judgment of the Patna High Court in the case of Paritosh Kumar Pal vs. State of Bihar and others, 1984 Labour Industrial Cases 1254. The said judgment and the principles are fully applicable to the facts of the present case. Counsel further relies upon a judgment of a Division Bench of this Court in the case of Pritam Singh vs. Presiding Officer, Labour Court, U.T., Chandigarh and another, 2004 (3) RSJ 726, to contend that the appropriate C.W.P.No.18958 of 1996 -7- Government would have territorial jurisdiction to make a reference under Section 10(1) of the Act where the substantial cause of action arises in a territory in relation to the dispute. Reliance has further been made to a Division Bench judgment of the Calcutta High Court in the case of Indian Express Newspaper (Bombay) Pvt.Ltd. vs. State of West Bengal and others, 2005 (II) LLJ 333, as also on the judgment of the Hon'ble Supreme Court in the case of Bikash Bhushan Ghos & Ors. vs. M/s.Novartis India Limited & Anr, JT 2007 (6) SC 432. It has been conceded by the counsel for the parties that the Industrial Disputes Act is silent on the issue of the territorial jurisdiction as to which would be the appropriate Government to make a reference under Section 10 of the Industrial Disputes Act. It has also been conceded by the counsel for the parties that the Code of Civil Procedure has not been made applicable to the proceedings specifically under the Act and accordingly the provisions thereof in strict sense do not govern the issue. In such a situation, the Court has to fall back upon the general principles as applicable and the normal practice which is being followed by the Civil Courts underlying the jurisdiction of the Court, would be applicable as well as the judicial precedents. The broad general principles underlying the tests of jurisdiction of the Civil Court are, thus, not entirely alien to the issue and are therefore, undoubtedly relevant and can be taken into consideration for determination of the territorial jurisdiction. In Paritosh Kumar Pal's case (supra), the Full Bench of the Patna High Court has culled out these principles or tests for determining the jurisdiction and the same have been spelt out in para 13 of the said C.W.P.No.18958 of 1996 -8- judgment which reads as under:- “13. Now an incisive analysis of the aforesaid authoritative enunciation of law would indicate that three clearcut principles or tests for determining jurisdiction emerge, therefrom. For clarity these may be first separately enumerated as under: (i)Where does the order of the termination of services operate? (ii)Is there some nexus between the industrial dispute arising from termination of the services of the workman and the territory of the State? (iii)That the well-known test of jurisdiction of a civil Court including the residence of the parties and the subject matter of the dispute substantially arising therein would be applicable.” Applying all these three principles to the present case, none of them would be of any help to the workman. The order of transfer was passed at Madras. The workman had given in writing that he was willing to join duty at Madras. The workman had reported for duty at Madras. His transfer order, is not in dispute nor a subject matter of challenge in any proceedings, was passed at Madras and that too as per the terms of his appointment letter. The place where the workman was thus required to perform his duties on his transfer was at Madras. The order of termination was passed at Madras. The dispute with regard to the termination arose at Madras. The only thing which the workman can claim to go in his favour and has been highlighted by his counsel is that the order of termination was served upon the workman at Amritsar but that alone would not confer C.W.P.No.18958 of 1996 -9- territorial jurisdiction on the Government of Punjab to make a reference under Section 10 of the Act. The Calcutta High Court in the case of Indian Express Newspaper (Bombay) Pvt.Ltd.'s case (supra) in para 40 thereof held as follows:- “40. The basis of the findings of the learned single Judge in the first writ application and that of the Tribunal thereafter on remand and the subsequent findings of the learned single Judge on the second writ application is that when Mr. Sampat's services were terminated he was stationed in the Calcutta office of the Newspaper company. While Mr. Sampat was no doubt served with the order of termination of his service in Calcutta, we are constrained to say that the same would not vest the State Government in West Bengal with authority under Section 2(a)(ii) of the Industrial Disputes Act to make a reference under Section 10 of the said Act. Firstly, at the said point of time the Calcutta office of the Newspaper company no longer had control over Mr. Sampat whose services had been transferred to Bombay and it was the Bombay office which had control over his services. That Mr. Sampat was in Calcutta and was served with the notice of the order of termination of his service in Calcutta is only because of the fact that he had chosen not to comply with the order of transfer dated August 1,1988, by which he had been transferred to Bombay with effect from August 5, 1988, and had not also C.W.P.No.18958 of 1996 -10- challenged the same before any forum. Mr. Sampat may have made representations to the Bombay office with regard to such order of transfer, but the same was never the subject-matter of any judicial or quasi-judicial proceeding and it is only after he was served with the order of termination of his service that Mr. Sampat raised a dispute in respect thereof. In our view, notwithstanding the fact that Mr. Sampat had been served with such order in Calcutta, his situs of employment being Bombay, he ought to have raised an industrial dispute relating to the termination of his services in Bombay and the Government of Maharashtra would have been the appropriate Government to make a reference under Section 10 of the aforesaid Act in respect of such dispute.” The above reproduced facts and conclusions of the Calcutta High Court would be fully applicable to the facts of the present case. These observations have also been approved by the Hon'ble Supreme Court in the case of Bikash Bhushan Ghosh and Ors.'s case (supra). Further, a Division Bench of this Court in the case of Pritam Singh's case (supra) has in para 13 held as follows:- “13. What emerges from the quoted case law is that like in civil law where occurrence of the cause of action can be determined by tracing out the bundle of facts which entitle the plaintiff the legal claims sought for, so would be the search for those factual events which constitute an C.W.P.No.18958 of 1996 -11- “industrial dispute” capable of reference for adjudication by the appropriate government. Obviously, the facts and circumstances of each case would determine the existence or apprehension of an “industrial dispute” between the parties. Going into the facts of the present case, there can hardly be any dispute that the decision to terminate the services of the petitioner was taken by the Respondent-Corporation at Chandigarh. The said decision culminated into passing of a formal termination order 24.2.1983 (Annexure P-1) from the Head Office of the Respondent-Corporation at Chandigarh. While deciding to retrench the Appellant from service, the decision to pay retrenchment compensation including the quantum thereof was also decided by the Head Office at Chandigarh. The Head Office of the Respondent- Corporation is actually situated in Chandigarh and the competent authority to take the aforesaid decision with regard to discontinuation of employment of the petitioner is also located in Chandigarh only. Thus, all the ingredients of an “industrial dispute” in the context of section 2(k) of the Act took place in the Union Territory of Chandigarh only. It is merely an incidence of service that the Appellant was posted at Tarn Taran at the relevant time, therefore, the order was sent to him through the District Manager of the Respondent- Corporation at Tarn Taran. It is equally well settled that C.W.P.No.18958 of 1996 -12- once an order of termination of service is passed and despatched, it becomes operative notwithstanding the formal receipt thereof by the affected employee. We have, therefore, no hesitation in our mind to hold that the “industrial dispute” in the present case had actually arisen at Chandigarh only.” The law as laid down in these judgments when applied to the facts of the present case leads to an irresistible conclusion that the Government of Punjab did not have the territorial jurisdiction to make a reference under Section 10 of the Act and the Government of Tamil Nadu only has the jurisdiction to make a reference to Labour Court at Madras for adjudication. In view of the above, the finding as recorded by the Labour Court on the question of competence of the State of Punjab to make a reference due to lack of territorial jurisdiction is upheld and as such, the finding recorded by the Labour Court, Amritsar, to the effect that it did not have the jurisdiction to try the case is affirmed. Now coming to the submission of the counsel for the Management wherein he asserts that the Labour Court should have refrained itself from returning findings on issues No.2 to 4 in the light of the finding recorded by the Court that it did not have the jurisdiction to try the case due to lack of territorial jurisdiction of the appropriate Government to make a reference. Counsel for the Management relies upon a judgment of the Hon'ble Supreme Court in the case of Athmanathaswami Devasthanam vs. K.Gopalaswami Ayyangar, AIR 1965 (SC) 338 wherein the Hon'ble Supreme Court has held that when the Court comes to a conclusion that it C.W.P.No.18958 of 1996 -13- had no jurisdiction over the case, the Court cannot decide any question on merits. On this basis, he submits that the findings recorded on issues No.2 to 4 by the Labour Court deserve to be set aside and in any case, since the Labour Court has come to the conclusion that it did not have the jurisdiction to try the case, it should have left it open to the Court which has the territorial jurisdiction to determine the said issues. On the other hand, counsel for the workman submits that the Labour Court had no option but to record its findings. He submits that once a reference has been made, then all issues which arise, whether jurisdictional or on merits, must be decided together. He submits that it is the discretion of the Court whether to treat the issue with regard to the territorial jurisdiction as a preliminary issue and decide it first or to proceed and decide the case as a whole. On this basis, counsel submits that the Labour Court has rightly returned its findings on issues No.2 to 4. While going into and deciding the case on merits, no fault can be found with the approach of the Labour Court in proceeding to decide the other issues also along with the issue of territorial jurisdiction. In support of his submissions, he relies upon a Full Bench judgment of the Allahabad High Court in the case of M/s. Swarup Vegetable Product Industries Limited vs. Labour Court-II, Meerut, 1998 (2) SCT 158 as also a Single Bench judgment of this Court in the case of Escorts Mahila Ltd. Bahadurgarh, Patiala vs. Presiding Officer, Labour Court, Patiala, 2002 (3) SCT 581. He further relies upon a judgment of the Hon'ble Supreme Court in the case of D.P.Maheshwari vs. Delhi Administration and others, AIR 1984 SC 153, to contend that the preliminary issues, if taken up by the Labour Court, cannot be allowed to be misused by resorting to the C.W.P.No.18958 of 1996 -14- remedy under Articles 226 and 136 of the Constitution of India to delay the process of decision on merits. The judgments which have been relied upon by the counsel for the workman gives the discretion to the Labour Court to take up any of the issues as a preliminary issue and decide the same. The same further give the Labour Court a discretion to proceed and decide the matter as a whole on merits. There can be no dispute with regard to this proposition of law and it goes without saying that the process of the Court should not be misused by any of the parties to delay the decision on merits of the case. However, when the issue goes to the root of the jurisdiction of the Court to try the case, especially on the question of the territorial jurisdiction, the Court should avoid to proceed and decide the case on merits. While deciding the question of jurisdiction to try the case, if the Court comes to a conclusion that it does not have the jurisdiction over the subject-matter of the case, it should not decide any question on merits as it would not be just and appropriate for the Court to give a finding on that issue and return the plaint for presentation to the proper Court. The Hon'ble Supreme Court in the case of Athmanathaswami Devasthanam's case, (supra) in para 13 thereof held as follows:- “13. The last point urged is that when the civil court had no jurisdiction over the suit, the High Court could not have dealt with the cross-objection filed by the appellant with respect to the adjustment of certain amount paid by the respondent. This contention is correct. When the Court had no jurisdiction over the subject matter of the suit it cannot decide any question, on merits. It can C.W.P.No.18958 of 1996 -15- simply decide on the question of jurisdiction and coming to the conclusion that it had no jurisdiction over the matter had to return the plaint.” In the present case, since the Court dealing with the matter is a Labour Court and it has come to a conclusion that the Government of Punjab did not have the territorial jurisdiction to make a reference under Section 10 of the Industrial Disputes Act, 1947, it did not have the jurisdiction to try the case. The Labour Court ought not to have proceeded to decide the other issues on merits, rather should have left it open for the workman to seek his remedy before the appropriate Government, if he so chose. The principle as laid down by the Hon'ble Supreme Court in the case of Athmanathaswami Devasthanam's case, (supra) would be applicable to the present case and, therefore, the findings returned by the Labour Court on issues No.2 to 4