SCA/6164/2008 1/27 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No. 6164 of 2008 For Approval and Signature: HONOURABLE MR.JUSTICE H.K.RATHOD ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= SARABHAI M. CHEMICALS LTD. - Petitioner(s) Versus RAJNIKANT V SHAH - Respondent(s) ========================================================= Appearance : NANAVATI ASSOCIATES for Petitioner(s) : 1, None for Respondent(s) : 1, ========================================================= CORAM : HONOURABLE MR.JUSTICE H.K.RATHOD Date : 22/04/2008 ORAL JUDGMENT 1. Heard learned Advocate Mr. Kunal Nanavati for Nanavati Associates for the petitioner. 2. Through this petition under Article 227 of the Constitution of India, petitioner is challenging SCA/6164/2008 2/27 JUDGMENT the order below Exh. 13 Annexure A page 15 dated 15.2.2008 passed by the Labour Court in Reference (LVC) No. 1060 of 1998 wherein the labour court has dismissed the application Exh.13 made by the petitioner before the labour court. 3. Learned Advocate Mr. Nanavati for the petitioner submitted that the application has been made by the petitioner stating that the Reference (LVC) No. 1060 of 1998 is bad in law on the preliminary issue and it has been contended that such contention was raised in written statement filed vide Exh. 7 and document vide Exh. 8 and the said contention is required to be decided first. According to the submission made by the learned Advocate Mr. Nanavati, application regarding maintainability of reference is relating to 547 employees. Detailed reply was filed vide Exh. 7. He submitted that the employee was dismissed as per order in award and not as per company's decision and there is no question of industrial dispute. As per his submission, the industrial dispute is pending in Court No.1, Industrial Court vide remand IT Ref. No. 102 of 1996. There is specific remand order and dispute is pending. He submitted that as per order of Parikh Saheb, Labour Court cannot decide whether the termination is legal or not. He also submitted that the labour court has no jurisdiction to scrutinize the order of Parikh Saheb. Employee had given application to join as SCA/6164/2008 3/27 JUDGMENT necessary party in IT Reference No. 102 of 1996. It is produced at mark 14/2. The application is pending. If the name of the employee had not been included in total employees 547, then, the court has power and order to reinstate him. The employee has produced his withdrawal purshis in Reference Case NO. 102 of 1996 produced at mark 21/1. He submitted that there is no order passed below said application submitted by the concerned employee and, therefore, labour court has no jurisdiction to decide the dispute of termination and he cited certain decisions and submitted that the reference made by the employee concerned must have to be dismissed. 4. I have considered the submissions made by the learned Advocate Mr. Kunal Nanavati for the petitioner before this Court. I have also perused the order passed by the labour court which is challenged before this court by the petitioner. 5. As per the case of the employee concerned, he was serving in Vitamin-C Tablet Plant whereas as per the case of the Company, employee concerned was serving in the Fine Chemical Department, therefore, labour court has observed that there is most material dispute between the parties with regard to the department because the company was seeking permission of its Fine Chemical Department and as per the case of the company, employee has been given all the benefits pursuant to the award passed by the SCA/6164/2008 4/27 JUDGMENT Industrial Tribunal. According to the case of the employee, he was serving in Vitamin C Tablet Plant and he has no concern whatsoever with the Fine Chemical Department and, therefore, labour court has observed that in view of the aforesaid disputed question of fact between the parties, it is requiring detailed evidence from both the parties and it should not have to be decided only on preliminary issue as per the application given by the employer before the labour Court. Labour Court has considered the submissions made by both the learned Advocates and given reasons that the concerned employee was not surplus but his service was terminated because of the misconduct alleged against him and, therefore, separate reference against termination is to be adjudicated by the labour court independently and it has no connection with the pending reference being Reference NO. 102 of 1996. Both the references are different and distinct and, therefore, ultimately, application filed by the petitioner below Exh. 13 has been rejected by the labour court. Relevant observations made by the labour court in para 3 of order dated 15.2.2008 Annexure A are quoted as under: “3. I am carefully gone through the evidence placed on record as well as rival contention of both the side. As per the case of the employee, he was serving in the Vitamin C Plant whereas as per case of the company, he was serving in the fine chemical department. There is most material SCA/6164/2008 5/27 JUDGMENT dispute between the parties with regard to department, because company has sought permission for closure of its fine chemical department, as per the case of the company, employee has been given all the benefits pursuant to the award passed by the IT Court. The case of the employee is that he was serving in vitamin C Tablet Plant, he has no concern whatsoever with the fine chemical department. Therefore, according to my view, this dispute is question of facts and when there is question of facts, then, it shall never be decided unless and until recording of evidence of parties. Further, if the employee was surplus employee in the fine chemical department, then, question does not arise to issue show cause notice to him and initiate departmental inquiry. As per the case of the company, his name was included in the list whereas as per the case of the employee and evidence placed on record, the list of the surplus employees who have rendered service in the fine chemical department were produced lateron. At the time of passing the award by the IT Court, the list was not on the record, this fact divulged itself from the record. Further, the deposition of the employee had been recorded vide Exh. 12 in the year 2001 and his cross examination was adjourned pursuant to the request of the Ld. Advocate for the Company. Thereafter, this application has been given. Further, the dispute involved in the case of IT Ref. 102/96 remanded and in the case on hand, is quite different and distinct. There is no question to scrutinize the award passed by the IT Court and this contention on the part of the Ld. Advocate for the company SCA/6164/2008 6/27 JUDGMENT is apparently not tenable. The dispute raised by the company is not touching the root of the matter which is required to be decided without leading evidence of the parties. Further, the employee has given application to join him as partyi n IT Ref. 102/96 which is pending. It does not mean that this court has no jurisdiction to try and decide the dispute by and between the parties. Further, as and when the Asstt. Labour Commissioner has referred the dispute to this court for adjudication, then, company is not satisfied with the same being bad in law, company ought to have preferred petition before the Hon'ble High Court against the order of referred matter to this court for adjudication. The Ld. Advocate for the company has relied upon the citation GLR 1997 (1) 93 Gujarat High Court and in the case of Chemical Labour Union v/s. Ambalal Sarabhai and Anr. But looking to the facts of the citation and principles of maintainability therein, has no relevancy to the facts of the present case on hand and it is not applicable to the present case. Therefore, considering overall evidence placed on record, the dispute by and between the parties is required to be decided by leading an evidence and there is no substance in argument canvassed by the Ld. Advocate for the Company.” 6. Legal harassment made by the company to the workman which has been visualized by this court is necessary to be noted. Reference NO. 102/96 is pertaining to closure of fine chemical department and reference no. 1060 of 1998 filed SCA/6164/2008 7/27 JUDGMENT by the workman is challenging termination before the labour court which was referred to by the appropriate Government for adjudication. After about nine years or some more period, application Exh. 13 has been made by the petitioner company that the reference no. 1060 of 1998 is bad in law. Petitioner has not challenged the order of reference directly before this court. If at all the petitioner company was aggrieved by the order of reference made by the appropriate Government, then, petitioner ought to have challenged the order of reference. At the time when this reference against termination was made by the appropriate Government being Reference No. 1060 of 1998, original reference IT NO. 102 of 1996 was pending before the Industrial Tribunal, Baroda. Merely raising contention in written statement that this reference is bad, then, it will be decided by the labour court finally but after 10 years but all of a sudden, application Exh. 13 is moved which is going to suggest about some legal harassment caused by petitioner company to the concerned employee or to avoid final adjudication under the pretext of issue of termination raised by the workman. Such harassment is not permissible as per the law decided by the apex court in number of cases. Recently in SPECIAL CIVIL APPLICATION No. 20826 of 2006 With SPECIAL CIVIL APPLICATION No. 20827 of 2006 decided by this Court on SCA/6164/2008 8/27 JUDGMENT 19.3.2008,similar question was examined and it has been observed by this court as under: “ I have perused the order passed by Industrial Tribunal in both the references in respect to both the petitions, wherein, interim order is challenged by the petitioner. I have considered the submissions made by both the learned advocates. Now, question is that whether it is must for the Tribunal to decide preliminary issue if it is raised by employer. The law on this subject is decided by Apex Court that normally, in an ordinary circumstances, preliminary issue cannot be examined by Tribunal, but, same can be examined along with final adjudication. The reason given by Apex Court that if Industrial Tribunal decides preliminary issue, then, either party can challenge before higher forum and obtained the stay, which, ultimately, adjudication process had been stalled while obtaining the stay from higher forum, therefore, main purpose to have quick adjudication by the Tribunal is frustrated. The Tribunal is having the discretionary powers to decide that whether preliminary issue is to be decided or not or it can be decided along with final adjudication. In these both the petitions, vide Exh.110 application and vide Exh.67 application, the Tribunal has come to conclusion that such issue which has been raised by petitioner as a preliminary issue will be considered by Tribunal at the time of final adjudication. When such a discretionary power exercised by Tribunal, High Court cannot be SCA/6164/2008 9/27 JUDGMENT interfered in writ proceedings. The view taken by Apex Court in case of National Council for Cement and Building Materials v. State of Haryana & Ors. reported in 1996-II- LLJ 125. The relevant discussion of the aforesaid decision of Apex Court are made in Para 11 to 16, therefore, the same are quoted as under : “ 11. Usually, whenever a reference comes up before the Industrial Tribunal, the Establishment, in order to delay the proceedings, raises the dispute whether it is an “industry” as defined in Section 2(j); or whether the dispute referred to it for adjudication is an “industrial dispute” within the scope of Section 2(k) and also whether the employees are “workmen” within the meaning of Section 2(s). A request is made with that these questions may be determined as preliminary issues so that if the decision on these questions are in the affirmative, the Tribunal may proceed to deal with the real dispute on merit. 12. We, however, cannot shut our eyes to the appalling situation created by such preliminary issues which take long years to settle as the decision of the Tribunal on the preliminary issue is immediately challenged in one or the other forum including the High Court and proceedings in the reference are stayed which continue to lie dormant till the matter relating to the preliminary issue is finally disposed of. 13.This Court in Cooper Engineering Ltd. v. P. P. Mundhe (1975-II- LLJ-379) in order to obviate undue delay in the adjudication of the real dispute, observed that the Industrial Tribunal SCA/6164/2008 10/27 JUDGMENT should decide the preliminary issues as also the main issues on merits all together so that there may not be any further litigation at the interlocutory stage. It was further observed that there was no justification for a party to the proceedings to stall the final adjudication of the dispute referred to the Tribunal by questioning the decision of the Tribunal on the preliminary issue before the High Court. 14. Again in S.K. Verma V. Mahesh Chandra (1983-II-LLJ-429) this Court strongly disproved the practice of raising frivolous preliminary objections at the instance of the employer to delay and defeat the purpose of adjudication on merits. 15. In D. P. Maheshwari V. Delhi Administration (1983-II- LLJ-425) this Court speaking through O. Chinnappa Reddy, J. observed that the policy to decide the preliminary issue required a reversal in view of the “unhealthy and injudicious practices resorted to for unduly delaying the adjudication of industrial disputes for the resolution of which an informal forum and simple procedure were devised with avowed object of keeping them from the dilatory practices of Civil Courts”. The Court observed that all issues whether preliminary or otherwise, should be decided together so as to rule out the possibility of any litigation at the interfered stage. To the same effect is the decision in Workmen employed by Hindustan Lever Ltd. V. Hindustan Lever Ltd. 1984-LLC-1573. 16. The facts in the instant case indicate that the appellant adopted the old tactics of raising a preliminary dispute so as to prolong the SCA/6164/2008 11/27 JUDGMENT adjudication of industrial dispute on merits. It raised the question whether its activities constituted an “industry” within the meaning of the Industrial Dispute Act and succeeded in getting a preliminary issues framed on that question. The Tribunal was wiser. It first passed an order that it would be heard as a preliminary issue, but subsequently, by change of mind, and we think rightly, it decided to hear the issue along with other issues on merits at a later stage of the proceedings. It was at this stage that the High Court was approached by the appellant with the grievance that industrial Tribunal, having once decided to hear the matter as a preliminary issue, could not change its mind and decide to hear that issue along with other issues on merits. The High Court rightly refused to intervene in the proceedings pending before the Industrial Tribunal at an interlocutory stage and dismissed the petition filed under Art 226 of the Constitution. The decision of the High Court is fully inconsonance with the law laid down by this Court in its various decisions referred to above and we do not see any occasion to interfere with the order passed by the High Court. The appeal is dismissed, but without any order as to costs.” The petitions have been filed by petitioners challenging the interlocutory order that preliminary issue where the Tribunal has rejected the applications vide Exh.110 and vide Exh.67 by order dated 1st August 2006. In such petitions, whether High Court should interfere or not is examined by this Court in case of Cadila Healthcare Limited v. Union of India & Ors. reported in 1998 (2) GLH 513. This Court has made the observations in Para 9 and SCA/6164/2008 12/27 JUDGMENT 11, which are quoted as under : “9. This petition has been filed by the petitioner under Article 226 of the Constitution of India. Speaking for the Division Bench of this Court, Mr.Justice K.G.Balakrishnan, in the case of Chhagan Ranchod Kukava v. General Manager, Western Railway, Bombay & Anr., reported in 1998(1) GLH 461, observed that an order passed by the Tribunal can be challenged under Articles 226 or 227 of the Constitution of India only if there is a jurisdictional error or procedural error apparent on the face of the record. Under the impugned interlocutory order, the respondent No.2 has decided that it is not the case where the opposition of the respondent No.3 should be deemed to have been abandoned. So, the matter has not been decided finally. Only the action of respondent No.2 taking on record of these proceedings, the evidence filed by respondent No.3 has been held to be justified. That evidence has been taken on record by extending the period of filing evidence and the petitioner has been given opportunity to produce its evidence in support of its application. So by this impugned order, the proceedings are not finally culminated in favour of the respondent No.3 The matter has to be decided on merits. An interlocutory order is always subject to challenge after the proceedings in which it has been passed are finally terminated while challenging the final order passed by the authority before the appropriate forum. One of the cardinal principles of exercising extra ordinary powers by this Court under Article 226 of the Constitution is that even if the order impugned in the writ SCA/6164/2008 13/27 JUDGMENT petition appears to be illegal, in case it does not result in failure of justice to the party concerned or in denial of any right of challenging the same, this Court will not interfere in the matter under Article 226 of the Constitution of India. A reference in this respect may have to the two decisions of the Apex Court in the case of A.M.Allison v. B.L.Sen, reported in AIR 1958 SC 227 and in the case of Balvant Rai v. M.N.Nagrashna, reported in AIR 1960 SC 407. In the present case, if ultimately the matter is decided against the petitioner by the respondent No.2, then while challenging the final order, the petitioner has all the right to challenge this interlocutory order also, if it is worthy of challenge, before the appropriate forum available to challenge the final order. Normally, the matters are to be decided on merits by affording to the contesting parties all the opportunities to produce their evidence, but even if it is taken that the respondent No.3 could not have been permitted to produce evidence in support of its notice of opposition, as what the petitioner contends, still the extension of time granted to respondent No.3, for filing the evidence, by respondent No.2 will not result in failure of justice as, as stated earlier, that order is always subject to challenge, but not at this stage. The petitioner has to wait for adjudication of the matter as well as for final termination of proceedings. There are all possibilities that the petitioner may succeed in the case and in that eventuality, there may not be any necessity of challenging this order. This is another point which favours the view which I am taking that against an interlocutory order, SCA/6164/2008 14/27 JUDGMENT normally, the petitions are not maintainable. It is not gainsay that the present problem with the Courts is of heavy pendency of the matters and if the petitions are entertained against interlocutory orders, which can always be challenged while challenging the final orders passed in the proceedings, it will be nothing but only an act of injury which the litigants are suffering on account of delay in disposal of their matters by the Courts. Moreover, nor it can be justified at this stage to challenge this order when it will not result in failure of justice to the petitioner. The petitioner will have all the opportunity to submit its evidence upon the application and still if it feels that this order could not have been passed, it has all the right to challenge the same at the appropriate stage, for which it has to wait till the matter is finally decided. 11. The matter is yet to be examined from another angle. From the scheme of the Act, 1958, it transpires that the application for registration of trade marks has to be disposed of expeditiously. Otherwise also, leaving apart the scheme of the Act aforesaid, whether it is a proceeding before the Civil Court or Criminal Court or before this Court or even before any quasi-judicial authority or administrative authority, the same has to be disposed of expeditiously. This object, as well in some of the cases the mandate of the statute, can only be achieved or attained where the Courts which are having powers of superintendence or extra ordinary powers under Article 226 of the Constitution of India, do not SCA/6164/2008 15/27 JUDGMENT permit the parties to stall the final adjudication of the matter by questioning the decision of the authorities with regard to interlocutory matters when the matter if worthy, can be agitated even after final orders are passed. I consider it to be fruitful here to make reference to the decision of the Apex Court in the case of The Cooper Engineering Ltd. v. P.P. Mundhe, reported in AIR 1975 SC 1900. The Apex Court, in this case, held: "10. In Management of Ritz Theater (P) Ltd. v. Its Workmen (AIR 1963 SC 295) this Court was required to deal with a rather ingenious argument. It was contended in that case by the workmen, in support of the tribunal's decision that since the management at the very commencement of the trial before the Tribunal adduced evidence with regard to the merits of the case it should be held that it had given up its claim to the propriety or validity of the domestic enquiry. While repelling this argument this Court made some significant observations: "In enquiries of this kind, the first question which the Tribunal has to consider is whether a proper enquiry has been held or not. Logically, it is only where the Tribunal is satisfied that a proper enquiry has not been held or that the enquiry having been held properly the findings recorded at such an enquiry are perverse, that the Tribunal derives jurisdiction to deal with the merits of the dispute...... If the view taken by the Tribunal was held to be correct, it would lead to this anomaly that the employer would be precluded from justifying the dismissal of his SCA/6164/2008 16/27 JUDGMENT employee by leading additional evidence unless he takes the risk of inviting the Tribunal to deal with the merits for itself, because as soon as he asks for permission to lead additional evidence, it would follow that he gives up his stand based on the holding of the domestic enquiry. Otherwise, it may have to be held that in all such cases no evidence should be led on the merits unless the issue about the enquiry is tried as a preliminary issue. If the finding on that preliminary issue is in favour of the employer, then, no additional evidence need be cited by the employer: if the finding on the said issue is against him, permission will have to be given to the employer to cite additional evidence." The relevant observations made by Apex Court in case of S.K. Verma v. Mahesh Chandra and Another reported in 1983-II-LLJ 429 in Para