1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY O. O. C. J. WRIT PETITION NO.2709 OF 2006 Nashik District Co-operative Bank Employees Union ..Petitioner. Vs. Yeola Merchants Co-operative Bank Limited ..Respondent. ... Mr. V.P. Vaidya for the Petitioner. Mr. B.V. Bukhari for the Respondent. ... CORAM: DR. D.Y. CHANDRACHUD, J. 19th October, 2006. P.C. : 1. Rule, returnable forthwith. Counsel appearing for the Respondent waives service. By consent and at the request of the learned counsel taken up for final hearing. 2. The Petitioner before the Court is a trade union registered under the Trade Unions Act, 1926 and is a representative union for Yeola Taluka in Nashik District. The Petitioner filed a complaint of unfair labour practices being 2 complaint (ULP) 79 of 2006 which is pending before the Industrial Court. The subject matter of the aforesaid complaint was the stoppage of the closing allowance and the medical allowance payable to the employees of the Bank. The Industrial Court passed interim orders in the complaint after hearing the parties. The Petitioner thereupon instituted another complaint, complaint (ULP) 136 of 2006 challenging the suspension of 26 employees of the Bank. The Industrial Court passed an ad interim ex parte order on 30th August, 2006 restraining the Bank, the First Respondent herein from engaging any new employees in place of those employees who were under suspension and from getting any work done through an outside agency till further orders. The returnable date was then directed to be 8th September, 2006. Instead of moving the Industrial Court for vacating the order, the First Respondent instituted a transfer application on 11th September, 2006 before the President of the Industrial Court. The foundation of the application for transfer was that the Industrial Court at Nashik had passed an ad interim ex parte order in breach of Regulation 115 of the Industrial Court Regulations and that in the 3 earlier proceedings filed by the Petitioner, interim orders have been passed as against the First Respondent. The Petitioner appeared before the Industrial Court and opposed the application for transfer. The President of the Industrial Court allowed the application for transfer by his order dated 26th September, 2006. That order has been challenged in these proceedings under Article 226 of the Constitution. 3. While allowing the application for transfer of the proceedings, the President of the Industrial Court has observed that under Clause (3) of Regulation 115 of the Industrial Court Regulations, 1975, the Court will not ordinarily grant an ex parte ad interim injunction but, under the proviso thereto, the Court may do so in exceptional circumstances. In the present case, 26 employees were suspended by the Bank on the ground that they had stopped the business of the Bank. As a result of the ex parte order, the business of the Bank was practically stopped. The President, therefore, was of the view that the Trial Judge has not considered the provisions of Regulation 115. The impugned 4 order of the President of the Industrial Court also notes that the attention of the Court was drawn to the fact that in the earlier complaint (complaint (ULP) 79 of 2006) instituted by the union for claiming medical expenses and other monetary benefits, the same Judge of the Industrial Court has passed an ex parte ad interim order; that being aggrieved by the interim order, the Bank had moved a writ petition before this Court and it was contended before the President of the Industrial Court that as a result of the Bank having instituted a writ petition, the Member of the Industrial Court had a sense of annoyance. The Industrial Court noted that at the highest the 26 suspended employees would be entitled to subsistence allowance. The President of the Industrial Court accordingly transferred the proceedings from the Industrial Court at Nashik to the Industrial Court at Thane. 4. On behalf of the Petitioner it has been submitted that even assuming that the ad interim order dated 30th August, 2006 ought not to have been passed without notice to the Bank, an erroneous order by itself is no ground for the transfer of 5 proceedings from a competent Court of jurisdiction. It was urged that the First Respondent could have moved the Industrial Court even before the returnable date of 8th September, 2006 for vacating the order and instead of applying for modification or for vacating of the order, the First Respondent moved a transfer application on 11th September, 2006. Secondly, it was submitted that the statement of fact that in the earlier complaint of unfair labour practice (complaint ULP 79 of 2006) an ad interim ex parte order was passed by the same Learned Judge is incorrect. In the earlier complaint, the interim order was passed after hearing both the sides and it was urged that the Learned Judge in fact stayed the order for a period of one month against which the Bank instituted a writ proceeding before this Court under Article 227 of the Constitution. 5. Now there can be no dispute about the position in law that the Industrial Courts and the Labour Courts must be circumspect about passing ex parte orders. Regulation 115 of the Industrial Court Regulations requires that ordinarily notice should 6 be given to the other side before an ad interim order is passed and it is only in exceptional situations that an ex parte order is envisaged. This principal is reiterated in several judgments of this Court among them being a judgment of Hon'ble Mr. Justice B.N. Srikrishna (as His Lordship then was) in Dalal Engineering Pvt. Ltd. v. Ramrao Bhaurao Sawant1. The Learned Judge observed as follows while construing the provisions of Section 30 of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 : “Before concluding this judgment, I must refer to another aspect of the matter, to which my attention was drawn by Mr. Singh. That it is the practice of the Court exercising jurisdiction under the Act of passing, lightly, ex parte orders with serious consequences. Section 30 of the Act, in terms, does not empower either the Industrial or Labour Court to make any ex parte order. However, the proviso appended to sub section (2) of Section 30 gives an indication that an interim order may, perhaps, be made even ex parte and that it may be reviewed on an application made by the aggrieved party. While I am not willing to accede to the argument that there is no power to grant an ex parte interim order, I have to point out that it is necessary to remember that an ex parte order should be the exception and not the rule. As a rule, the Court should insist upon the party likely to be affected by the order being given notice, however short. If this is done as a matter of prudent practice, then the Court would be in a better position to appreciate the consequences of an 1 1991 II CLR 808. 7 ad interim order and decide whether an ad interim order needs to be made at all. It is possible that the party given notice might come before the Court, and ask for time to be able to show cause properly. Nothing prevents the Court from putting such party to terms and thereafter taking up the application for interim relief for hearing. Shooting first, and asking questions later, may be sound practice in the Wild West, but is hardly so in a Court of Law. The practice of issuing ad interim orders, ex parte, as a rule, and then repeatedly postponing applications for vacating the order, is neither just, nor equitable. Instead of rendering justice, it causes serious prejudice, hardship and injustice to parties.” The same principle has been reiterated in Maharashtra State Road Transport Corpn. v. U.S. Jagdale2 and in Sarsabai v. State of Maharashtra3. A Division Bench of this Court presided over by Mr. Justice S. P. Kurdukar (as the Learned Judge then was) expressed a note of caution to Industrial Courts and Labour Courts in Kaushlyabai w/o Ganpat Jadhav v. The State of Maharashtra4. 6. There is a considerable degree of merit in the submission that has been urged on behalf of the Bank that the 2 1999 I CLR 92. 3 1999 LAB. I. C. 897. 4 1987 II CLR 9. 8 effect of the ad interim ex parte order that was passed by the Industrial Court was to drastically affect the functioning of the Bank. The effect of the ex parte order was to restrain the Bank from engaging any new employees in place of the employees who were under suspension and to restrain the Bank from getting the work done through an outside agency. Such orders particularly in the case of a financial institution are liable to cause serious prejudice. Unquestionably the Industrial Court does have the power to interfere in an exceptional case in matters of suspension but, the ordinary rule is that an employee who is under suspension pending the disciplinary enquiry would be entitled to the payment of subsistence allowance. It is the prerogative of the management to decide as to whether a suspension is warranted pending disciplinary proceedings and the Court should be circumspect in interfering with matters relating to disciplinary proceedings. In the present case not merely did the Industrial Court interfere, but it interfered ex parte even before the Bank had an opportunity to respond to the notice. There was no exceptional reason as to why the issuance of the notice to the Bank was not observed, this 9 being an important part of procedural justice which is intended to ensure that parties do not move the Court in the absence of the other side and obtain relief which will have the effect of causing serious prejudice to the business of the party against whom the ex parte order is passed. 7. The question, however, that arises for consideration before the Court is whether the mere passing of an erroneous order can be held to be a valid ground for transfer of judicial proceedings. A party who is aggrieved by an erroneous order is entitled to take recourse to such remedies as are available in law for challenging the order. In the present case, it was open to the First Respondent to move the Industrial Court for vacating the ex parte order which was not done. Allowing applications for transfer because a Judge of the Labour or Industrial Court has passed an erroneous order is liable to set a wrong precedent and may affect the independent functioning of the judiciary. Another circumstance which is necessary for the Court to bear in mind is that the Industrial Court took note of the submission that was urged before 10 it to the effect that in an earlier complaint also (complaint (ULP) 79 of 2006) the same member of the Industrial Court had passed an ad interim ex parte order against the Bank. In ground (e) of the Petition it has been stated that in Complaint (ULP) 79 of 2006 the interim order was passed after hearing both the parties and in ground (f) it has been stated that the interim order has in fact been challenged by the Bank before this Court in a proceeding which was lodged in September 2006. The submission which was urged on behalf of the Bank before the President of the Industrial Court was that the Learned member of the Industrial Court was “annoyed” as a result of the Bank having moved this Court. On the other hand, it has been stated in the Petition that the order of the Industrial Court in the present case was passed in August 2006 whereas the Bank moved its petition before this Court against the order passed in the earlier complaint only in September 2006. Be that as it may, counsel appearing for the Bank has fairly not disputed that the order that was passed in complaint (ULP) 79 of 2006 was not an ex parte order, but was passed after hearing the parties. The President of the Industrial Court has noted the 11 submission that was urged on behalf of the Bank in paragraph 9 of the judgment. It is impossible to determine as to what effect, if any, a statement on a material question that was made on behalf of the Bank had on the mind of the Learned President in deciding to transfer the proceedings. The statement of fact, it is common ground, was erroneous. 8. In these circumstances, I was of the view that an order of remand is warranted for enabling the Learned President of the Industrial Court to consider the transfer application afresh. At the same time, it would be appropriate if parties agreed to some working arrangement in so far as the application for interim relief is concerned, so that in the meantime the application moved on behalf of the Petitioner can be heard and disposed of after hearing both the parties. Fairly before this Court Counsel appearing for the Petitioner and for the First Respondent have agreed that the ex parte order of the Industrial Court dated 30th August, 2006 may be quashed and set aside. Counsel appearing for the First Respondent stated that in view of the fact that 26 out of 30 12 employees have been suspended, the First Respondent only intends to make a temporary arrangement for ensuring that the business of the Bank is facilitated in the meantime and that this would be without prejudice to the rights and contentions of the parties in the pending complaint. 9. In these circumstances the Petition is disposed of with the following directions : i) By consent the impugned order of the Industrial Court dated 30th August, 2006 is quashed and set aside. The statement of the First Respondent is recorded to the effect that the First Respondent shall, during the subsistence of the orders of suspension, make temporary arrangements so as to facilitate the work of the Bank being carried out but, this should be without prejudice to the rights and contentions of the parties in the pending complaint; ii) The Industrial Court at Nashik shall hear and dispose of the application for interim relief moved by the Petitioner in 13 complaint (ULP) 136 of 2006 after hearing the parties. Since the First Respondent has filed a reply to the application for interim relief in the complaint, the Industrial Court shall endeavour an expeditious disposal preferably within a period of four weeks from the date on which a certified copy of this order is produced before the Court by either of the parties; iii) The impugned order of the President of the Industrial Court dated 26th September, 2006 is quashed and set aside. Transfer Application 65 of 2006 is restored to the file of the Industrial Court. The parties shall appear before the President of the Industrial Court for receiving directions thereon on 4th December, 2006. The President of the Industrial Court will be at liberty to take an appropriate decision thereon after having due regard to all the facts and circumstances of the case; iv) It will be open to the Petitioner to move the Industrial Court at Nashik for such further and other reliefs as the Petitioner may be advised to pursue. 14 There shall be no order as to costs.