1975 (8) TMI 124 - SC - Indian Laws

Supreme Court: Civil Courts lack jurisdiction over Industrial Disputes Act matters. Settlements binding parties only.

The Supreme Court held that the Civil Court lacked jurisdiction to entertain the suit or grant an injunction regarding disputes arising under the ... Jurisdiction of the Civil Court in relation to industrial disputes - industrial dispute - settlement under section 18(1) of the Industrial Disputes Act - exclusive remedy provided by the Industrial Disputes Act - alternative remedy under general law - representative suit under Order I, Rule 8 of the Code of Civil Procedure - injunction to prevent breach of rights arising under a special statute - reference for adjudication under section 10 of the Industrial Disputes ActJurisdiction of the Civil Court in relation to industrial disputes - settlement under section 18(1) of the Industrial Disputes Act - exclusive remedy provided by the Industrial Disputes Act - Civil Court's jurisdiction to entertain a suit challenging or seeking enforcement of rights arising from a settlement under the Industrial Disputes Act - HELD THAT: - The Court held that where an industrial dispute concerns enforcement of a right or obligation created under the Act (for example a settlement arrived at under section 18(1)), the Act provides the exclusive machinery for adjudication and the Civil Court's jurisdiction is ousted. The legislature created a special scheme for investigation and settlement (including reference under section 10 and remedies such as section 33C) and, when a right is conferred by the Act with the statutory remedy, that remedy is the exclusive one. Although the remedy under the Act may require governmental action (such as a reference) and may not be directly invoked by an individual without that involvement, this does not render the statutory remedy a 'misnomer' or permit civil adjudication. The Court emphasised the established classification of cases where a statutory right with a specific remedy excludes other remedies, and applied that principle to hold that the Civil Court lacked jurisdiction to try disputes that sought enforcement of rights created by the Act.Civil Court had no jurisdiction to entertain suits seeking to enforce rights created by settlements under the Industrial Disputes Act; appeals allowing such suits were set aside.Representative suit under Order I, Rule 8 of the Code of Civil Procedure - industrial dispute - alternative remedy under general law - Maintainability of a representative suit by union members on behalf of other workmen (including non-members) where the claimed rights flow from a settlement under the Act or from alleged implied terms of service - HELD THAT: - The Court found that a representative suit brought under Order I, Rule 8 by two members of the union claiming on behalf of all affected workmen was not maintainable insofar as it sought to enforce rights created by the statutory settlement. The source of the plaintiffs' asserted rights was the collective settlement recognised by the Act; a representative suit cannot be used to subsume persons who have different sources of rights or different interests into one proceeding. Even if non-members had rights by tacit acceptance or implied terms, those rights are distinct in source from the statutory settlement and could not be lawfully embraced by the same representative action instituted to enforce a settlement-based right.Representative suit by the two plaintiffs was not maintainable to enforce rights flowing from the statutory settlement; persons with different interests or sources of rights cannot be so represented.Injunction to prevent breach of rights arising under a special statute - exclusive remedy provided by the Industrial Disputes Act - Specific Relief Act - perpetual injunction and determinable contracts - Whether the Civil Court could grant (temporary or perpetual) injunctions to restrain implementation of a settlement under the Act or effecting changes governed by the Act - HELD THAT: - The Court held that the Civil Court could not grant relief by way of injunction to prevent enforcement of a settlement-based right which the Act exclusively provides should be adjudicated under its machinery. Additionally, even on independent grounds under the Specific Relief Act the injunction granted by the Trial Court was unsustainable: the collective agreement was determinable under the Act (section 19(2)) or subject to variation under statutory procedure (section 9A), and a contract in its nature determinable cannot be specifically enforced; hence a decree of perpetual injunction to preserve the earlier settlement was impermissible. The Trial Court's attempt to maintain two inconsistent schemes simultaneously (effectively enforcing the 1966 scheme for some workmen while the 1971 scheme governed others) showed impracticability and reinforced that the proper forum was the statutory reference machinery.Civil Court could not grant injunctions to enforce or preserve rights arising under the Act; the injunctions granted below were unsustainable both because the statutory remedy is exclusive and because the agreements were determinable or subject to statutory variation.Reference for adjudication under section 10 of the Industrial Disputes Act - voluntary reference to arbitration under section 10A - exclusive remedy provided by the Industrial Disputes Act - Jurisdiction of Civil Court to entertain a suit arising out of a voluntary arbitration agreement under the Act and subsequent termination of that agreement - HELD THAT: - In the second appeal the Court found that the dispute-including questions about appointment of arbitrator nominees and payment obligations under the agreement-was governed by the Act's provisions for voluntary reference to arbitration (section 10A) and the statutory scheme for settlements and their termination (section 19). The company had lawfully terminated the agreement under section 19(2) and the union's remedy was to raise an industrial dispute; shortly thereafter the Government in fact referred the matter to the Industrial Tribunal. Because the rights asserted arose under the statutory arrangement, the Civil Court's jurisdiction was barred and the suit was not maintainable in the civil forum.Civil Court lacked jurisdiction to try disputes arising from voluntary statutory arbitration agreements or their termination under the Act; statutory remedy and tribunal reference were the appropriate course.Final Conclusion: The appeals were allowed: the judgments and orders of the courts below upholding Civil Court jurisdiction were set aside because the disputes sought to enforce rights created by or governed under the Industrial Disputes Act, for which the Act provides the exclusive remedy; consequently the Civil Courts had no jurisdiction to grant the reliefs claimed, including injunctions, and no costs were ordered. Issues Involved:1. Jurisdiction of Civil Court to entertain the suit.2. Binding nature of settlements under the Industrial Disputes Act.3. Validity of the settlement dated January 9, 1971.4. Grant of injunction by Civil Court.Detailed Analysis:1. Jurisdiction of Civil Court to entertain the suit:The primary issue was whether the Civil Court had jurisdiction to entertain the suit filed by the respondents. The Supreme Court held that if the dispute is an industrial dispute arising out of a right or liability under the general or common law and not under the Industrial Disputes Act, the jurisdiction of the Civil Court is alternative. However, if the industrial dispute relates to the enforcement of a right or an obligation created under the Act, then the only remedy available is to get an adjudication under the Act. The Court emphasized that the jurisdiction of Civil Courts is barred for disputes concerning rights or liabilities created under the Industrial Disputes Act.2. Binding nature of settlements under the Industrial Disputes Act:The respondents argued that the settlement dated December 31, 1966, was binding on all workmen, including those who were not members of the Sabha Union. The Court clarified that a settlement under Section 18(1) of the Industrial Disputes Act is binding only on the parties to the agreement. The Court noted that the agreement dated December 31, 1966, was a settlement under Section 18(1) and thus binding only on the members of the Sabha Union. The respondents conceded this point, and the main basis of their suit was given up.3. Validity of the settlement dated January 9, 1971:The respondents challenged the validity of the settlement dated January 9, 1971, between the appellant company and the Association Union. They argued that the settlement was not binding on workmen who were not members of the Association Union and that the mandatory requirement of Section 9A of the Act was not followed. The Court found that the settlement dated January 9, 1971, was arrived at in accordance with the provisions of the Act and was binding on the parties involved. The Court also noted that the settlement was acted upon by the workmen, indicating their acceptance.4. Grant of injunction by Civil Court:The Trial Court had granted an injunction restraining the appellant from enforcing the terms of the settlement dated January 9, 1971, against the workmen who were not members of the Association Union. The Supreme Court held that the Civil Court had no jurisdiction to grant such an injunction as it related to the enforcement of a right created under the Industrial Disputes Act. The Court emphasized that the remedy for enforcement of such rights lies exclusively within the machinery provided under the Act. The Court also noted that the injunction granted by the Trial Court was impractical as it attempted to enforce two conflicting settlements simultaneously.Conclusion:The Supreme Court allowed the appeals, setting aside the judgments and orders of the lower courts. The Court held that the Civil Court had no jurisdiction to entertain the suit or grant the injunction, as the dispute related to the enforcement of rights created under the Industrial Disputes Act. The Court emphasized that the appropriate remedy for such disputes lies within the machinery provided under the Act.