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PREMIER AUTOMOBILES LTD.

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KAMLEKAR SHANTARAM WADKE OF BOMBAY & ORS.

August 26, 1975

(A. ALAGIRISWAMJ, P. K. GOSWAMI AND N. L. UNTWALIA, JJ.]

Industrial Disputes A ct, 1947-S. 18 ( 1 )-Agreenlent under-Dispute bet-·

ween eniployer C!lld empfoYee in relation thereto-Whether could be decided by

a Ci\·il Court.

Jurisdiction of Cil'il Court in relation to an industrial dispute-Principles .

Industrial Disputes, Act, s. IDA-Suit for enforcement of arbitration-

C Jurisdlction of Civil Court to try .

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The Industrial Disputes Act was enacted to make provEsion for the investi-­

gation and settlement of the industrial disputes. The Act envisages collective

bargaining, contracts between the workers' unions and management and the like:

which

are n1at1ers outside the realnt of the con1mo11 law or the law of contracts ..

fhe Act defines an industrial dispute and what the term "settlement" means.

Different 2uthorities have been created at different levels for settlement and

adjudication

of industrial disputes, conferring on them varied and

extensive·

powers. \Vhere a dispute between the workers and managen1ent cannot be re­

solved

by the conciliation procedure envisaged under the Act, the dispute

is.

referred bv the Government to a Labour Court or a Tribunal. the award of"

which becomes final and cannot be called :n question by any court in any manner

whatsoever. Under s. 18(1) a settlement arrived at by agreement between the

employer

and

\.vorkmcn, otherwise than in the course of conciliation proceeding.­

shall t.= binding on the parties to the agreement.

In one of the departments of the appellant there were three groups of

workers : One, the workers' union which was earlier recognised as a "trade union,

and was derecognised by the appellant, and secondly another union which was re~

cognised in its ()lace and thirdly workn1en who were members of neither union.

As a result

of a settlement entered into with the derecognised union an incentive

scheme was in force in this department of the appellant. After the

derecogn~tion

of the union, because of the increase in the strength of the workmen it became

necessary

for the company to revise the target figures of the incentive scheme.

The

company, therefore, entered into a ~ttlement with the union recognised

later. This led

to protests from; the

de-recognised union. Respondents 1 and 2 who

were members of the derecO@ised union, instituted a suit.in the Civil Court under

O. I r. 8 of the Code of Civtl Procedure in· a representative capacity alleging that

the earlier settlement was a contract of service and that the new settlement would.

bring about a change in their service conditions, that the new settlement was

arrived at without following the mandatory requ£rements of s. 9A of the Act and­

have prayed for a permanent injunction to restrain the appellant from implement­

ing the later settlen1ent. During

the-trial the plaintiffs stated that they did not

wish to enforce the first agreement as it would not be binding upon the workmen

who were the members

of the derecognised union.

This led to dropping the issue

relating to nonMcompliance with

s. 9A of the Act also.

The trial court held that it had jurisdiction

to try the suit as it was a suit of

a·

civil nature for enforcement of rights of common and general law and conse­

quently there was no question

of reliefs being

cla'.med under the Industrial Dis-·

putes Act. Treating the incentive payments made during the years when the first

agreement was in force as imolied terms

of

conditiom of service and trial court

granted a conditional decree of iniunction. On appeal, the High Court upheld

the

view of the trial court. On further appeal to

this Court it was contended by

the respondents that the remedv provided under the Industrial Disputes Act was

a misnomer

in that reference of an industrial dispute for adjudication to a tribunaf

428 SUPREME COURT REPORTS (1976] 1 S.C.R.

·would depend upon the exercise of the power by the Government under s. !O• l_l

·Of the Industrial Dispu~es Act. The Act Uid not confer any right on the suit0r.

Allowing the appeal,

HELD: The suit for a decree for pern1anent injunction was not ma:.ntC1in;:1Li!c

jn the civil court as it had no jurisdiction to grant the relief or even a te1npor.:r}

A

;relief. [448C-DJ B

(1) The principles applicable to the jurisdicEon of the civil court in relation

·to an industrial dispute are, (i) if the dispute is not an industrial dispute nor do(:-.

it relate to enforcen1ent of any other right under the Act the remedy lies. ont;.

in the civil court; (ii) if the dispute is an industrial dispute arising out of a right

or liab'.-lity under the. general or common law and not under the Act, the jurisdic-

tion of the civil court

is alternative. leaving it to the election of the suitor con­

r.cerned to

.:hoose his remedy for the relief which is competent to be granted in a

particular remedy; (iij) if the industrial dispute relates to the enforce_q1ent of a C

right or an obligation created under the Act then the only remedy available to

·the suitor is to get an adjudication under the Act; (iv) if the right which is sought

to be enforced is a right.created under the Act such as Chapter VA then Lhe

remedy for !ts enforcement is either s. 3 3C or the raising of an indtt<;tria1 di.,putc.

'as the case may be. [446A-D]

Doe v. Bridge.~ (1831) 1 B. & Ad. 847: Pas1nore and ot!r'ers v. The Os1ra!dt­

lt'ist!e

Urban

District Council (1898) Appeal Cases, 387; Cutler v. Wandsworth D

Staditun Ltd. (1949) Appeal Cases 398; Wilverhan1ption New Waterwotks Co.

v. Hawkesford (1859) 6 C.B. (N.S.) 336; Naville v. Lo1ulo11 "Express", .Vcw.1-­

paper Ltd. (1919) Appeal Cases 368; Peebles v. The Oswaldtwistle Urban Dis-

rrict Co1111cil (1897) 1 Queen's Bench, 625; Barraclough v. Brown and others

(1897) Appeal Cases, 615; Solo111011s v. Gertzenstein Ltd. and otl1ers (1954) :!

·weekly Law Reports, 823; Soutlnrark London Borough Council v. JVii!ia11B and

another (1971) 1 Chancery, 734; Ste1•e11s v. Chown (1901) 1 Chancery. 894:

)

E111peror of Austria v. Day (1861) 3 D.F. & J. 217, 253; Carlton lllustrator.1 and

another v. Co/en1a11 & Co111va11y Lin1ited (1911) 1 King's Bench 771: PYX E

Granite Co. Ltd. v. Ministry of Housing and Local Govenunent and others (1960)

Appeal Cases 260; Duchess of Aroyl/ v. Duke of Argyll and others (1967) 1

Chancery,

302;

Polland v, Photographic Con1pa11y (1889) 40 Chancery DiYhion )

345.

State of Bo111ba-y v. K. P. Krish11a11 and other.~ (1961} 1 S.C.R. 227 and Bon1-

bav TJ11io11 of Journalists & Ors. v. The State of Bo1nbav & Anr. [1964] 6 S.C.R.

'22; K. S. Venkataran1a11 & Co. v. State of Madras [1966] 2 S.C.R. 229; SecrcHary F

of State Represented hy the Collector of South Arcot v. Mask and Co111pa11y 67

Indian Appeals, 222; Raleigh I111·estn1e111 Coy. Ltd. v. Governor General in Coun-

,.cil, 74 Indian App~a]s. 50'; Fi)·n1 c•nd lllu.ri Subbayya Chetty and Sonv \". The

State of A ndhra Pradesh [1964] 1 S.C.R. 752; Finn Sethi Radha Kisha11 (de­

ceased represented by Hari Kishan and others v. The Adn1il1istrator, M1111icipaf

Co1n111i1tee, Ludhiana [1964] 2 S.C.R. 273; Bharot Kola Bha11dar Ltd. v. Muni-

cipcd Conunittee. Dlia1nangaon [1965] 3 S.C.R. 499; Kan1la Mills Ltd. v. State

of Bon1bay [1966} 1 S.C.R. 64; State of Kerala v. Rarnaswa1ni Iyer & Sons [19661

·3 S.C.R. 582; Pab·bojan Tea Co. Ltd. etc. v. The Deputy Com111issioner, Lakhiln-G

pur etc. [1968] 1 S.C.R. 260; Dhulabhai and others v. The State of Madhya Pra-

desh and a11other [19681 3 S.C.R. 662 and U11io11 of India v. A. V. ]\larasioi!uilu

(1970] 2 S.C.R. 145, referred to.

(2) Jn the present case it is c1ear that what the plaintiff, respondents \.\·antt'd

to prevent was the threatened breach of their right which flo\ved fron1 the agrct:­

-n1ent entered into be'ween the derecognised union and the company. Such a co11ec.

tive agreement is recognised and creates a right in favour of the men1bers of the

-Union

011/y

under s. 18(1) of the Act and not under the general Jaw of contrnct.

Withdrawal of the claim based upon the said agreen1ent from the trial court had

-no effect on the question of its jurisdiction to try the suit._ In so far as the suit

·was filed io. a representative capa..:ity on behalf of the members of the derecognised

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PREMJER,AUTO V. K. S. WADKE 429

. union bv hvo of its members under. 0.-I r. 8 of the Code it was clearly a suit

ill' relation to the exercise of right. created under the Act. In_ their case it 'vas

not permissible to fall back. upon: the alleged implied terms. and cond~ions of

se.rvice. The source of their right was that agreement. Even the· workmen who

v.·ere· not members of the derecognised union but were given the benefit of incen­

tive payments under

the said agreement were so _given because they tacitly agreed

to

be bound_by the agreement. __ Even accepting that in the£r case it had assumed

the character

of an imnlied term of contract of service. the alternative claim ··made in paragraph 8 of the plaint as being a .condition· of service otherwise, can

be referable to the claim Qf the. non-members only.· .The source of their right m

that event was different and a representative suit on their behalf .by the two plain­

tiffs could not be_ maintained. The nUmer()us persons must have the same inte­

rest

in one suit instituted under

0. I r. 8 of the Code. Persons having d'.fferent

interests cannot be so rep1tsented .. The better and more reasonable view. there­

for~. h that all workmep represented· by the hvo plaintiffs sought an ·Order of

injunction in the civil court to prevent an injury _,vhich was proposed to be caused

to them in relation to th~ir right under the Act. [447E-H, 448AB]

(3) The. dispute could well be "deCidcU:frorn all aspects in a reference Under

the Act. Although the issue as to the non-compliance with the requirements of

s.

9A

of the Act v.·as dropped. the trial court ·set!Il1S to have found that the pro­

posed change in the conditions of service was adverse to the interests of the work­

men. -\Vhether it was so Qr not is a matter of debate. But it is apparent tha.t ·

both th~ agreen1enls could not be s:.multaneously _given effect to. The result of

· the order of injunction made by the trial collrt was that the workmen represented

by the two plaintiffs \Vere to get incentive payments in accordance \

1ith ·. the

scheme embodied in the earlier agreement ignoring the addition to the· strength

of the workmen. On the other band, the members of the recognised un!.on who

··had entered into the second agreement were to get their incentive payments in

a.::cordance with ihat agreement taking into account the contribution made in the

r.1atter of production by the newly added workmen. This leads to an impracti-

cable result. [448C.GJ ·

(4) Section 4l(a) of the Spec!.fic Relief-Act says that an injunction cannot be

g:anted to prevent breach· of a contract "the performance of which would not be

~;:-oecifically enforced. Section 42 providing an exception to this is not attracted

in this case. Section 14(1)(c) says that a contract which is in its nature deter­

minable ca.'l.Dot be specifically enforced. The contract in question emb01.1ied in

the earlier agreement was in its nature determinable under s. 19 (2) of the Act or

could be varied by following the procedure under s. 9A. The decree or order of

injunction made _therein, is not sustainable on this account too. [4481-1, .449ADJ

(5) It cannot be said that remedy provided under the Industrial Disputes Act

:_., a misnomer. Reference of industrial disputes for adjudication in exercise of

the oower of the Government under s. 10(1) is so common that it is difficult to·

call the remedy a misnomer or insufficient or inadequate for the purpose of en­

forcement of the right or liability created under the Act.-The -eri.forcement of a

right or an obEgation under the Act. the remedy provided uno fiatu in it is the ex­

c!psive remedy. -. The le.gisl.ature in its wisdom did not think it fit and proper to

provide a very easy and smooth remedy for enforcement of the rights and obli­

gation-; created under the Act. Persons w!shing the enjoyment of such rights and

\Vanting its enforcement

must rest content to secure the remedy

pfovided by the

Act. The possibility that the Government may not ultimately refer an industrial

disput~ under. s. 10 on the ground of expediency is not a relevant consideration in -

this regard. [439C-F]

(6) The

pr:ncip.le of separate remedy only for the purpose of injunction avail-­

abie in a court of Chancery, which was kept intact even after the jUdicature Act

of 1873 is not applicable in India. In India, under.s. 9 C.P.C. courts have, sub­

ject

to certain restrictions, jurisdiction to try suits of

civil nature excepting suits

of which their cognizance is .either expressly or impliedly barred. If a suit in

rclatI.on to an industrial disoute relates to the enforcement of a right created

u:lder the Act by necessarv intendment. the jurisdiction of the civil court is

barred.

·Tuat

being so. in India. it is barred for all purposes and a suit for in-

14-L839SopCl/75

430 SUPREME COURT REPORTS [1976] 1 S.C.R.

junction -only would not lie. The jurisd:Ction of-the civil couft in India to grant

a relief of injunction is limited to cases in which there is a right at law .. that is A Jj

to.say, a right to~~ pursued. in such court._ [440C..H]

Kn"slznan· and another v. East India Distilleries and Sugar Factories.· Ltd.

Nellikuppam tlnd another (1964) 1 L"abour Law Journal 217; Madura Mills Com­

pany, Ltd. v. Guruve1n111a'l and another_ (1967) 2 Labour Law Journal 397; Nip­

nani Electriciry Con1pany (P) Ltd. (by its director, V.R. Patravali) -and an­

other v; Bhimarao Lax111an Patil and others (1969) 1 Labour La\V Joumal 268;

The Pigment Lakes and Che111iclll Afanufacturing Co. Private Ltd. v. Sitaram B

Kasliiram Konde 71 Bombay Law Reporter 452, and Nanoo Asani Jtfadhavan v.

State oJ Kerala and others (1970) 1 Labour Law Journal 272. referred to. " ·

Bidyut 'Ku1nar:,Chatterjee and others v. Commissioner for the Port of Cal­

cutta (1970) 2 Labour Law Journal. 148. over ruled.

(7) (a) The manu.er of voluntary reference of indllstrial disputes to arbitra-C

tion is prOYided in s. IOA of the Industrial Disputes Act. The reference to arbi-

tration has

to be on the basis of a written agreement between the employer

and ·

the workmen. As prov~ed in s. IOA(S) of the Industrial Disputes Act, nothing

in the Arbitration Act, 1940 shall apply to arbitrations under s. lOA of the Act.

. (b) Where a "'ritten agreement was executed,.according to .whi[:

9

=~ ;::~/~· .

agreed to refer a dispute. regarding dismissal of certain workmen to a. Board Of D

Arbitrators consisting

of three

persons and the employer tenmnates the Bettle-

ment under s. ·19(2) of the Industrial Disputes Act and later withdra\VS its nomi- . . · .

nee from the Board

of Arbitrators. a suit filed in a civil court by the

employees

challenging the action of the employer and for direction to restr<i.n the employer

from -committing a breach of the agreement and to a point its nominee in the

place

of the one

v:ho had withdrawn. such a suit is in relation to the enforce-

ment of a right created under the Act. In such a case the remedy in crvil court

is barred. The only remedy available to the workmen concerned \Yas the raising

of an industrial dispute. [450BCDJ - E

Soutli Indian Bank Ltd. v. A. R. Chacko [1964] 5 S.C.R. 625, referred to.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 922 of 1973.

Appeal by special leave from the judgment and order dated the

13th

and 15th, February, 1973 of the Bombay

Him Court in L.P.A.

No. 74 9f 1972. and · · -

Civil Appeal No. 2317 of 1972.

Appeal

by special leave from the

judgment and order dated the

27th and 28th September, 1972 of the Bombay High Court in Civil

Revision Application No. 451 of 1972.

In C. A. 922 of 1973.

S. D. Vimadalal, A; K. Sen and I. N. Shroff, for tho appellant.­

Sh. Sorabji, F. D. Damania, S. K. Dholakia, Subhash Oberai and

R. C. Bhatia, for respondents Nos. 1c2.

3

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_ F. S. Nariman, P. H. ~arek!J and S. Bhandare, for respondents

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PREMIER AUTO v. K. s. WADKE (Untwalia, !.)

Rameshwar Nath, for Respondent/Intervenor.

In C. A. No. 2317/1972.

A. K. Sm aJ\l'.l Rameshwar Nath, for the appellant.

431

Som Nath, F. D. Damania and B. R. Agarwala, for respondent

Nos. 1 to 3.

The Judgment of the Court was delivered by

UNTWALIA, J. These two appeals filed by special leave of this

Court have been heard together because an Jmportant question

of law

as to the jurisdiction of the Civil Court to entertain the suits of the

kinds

filed in the two cases

Is common. Mr. Vimadalal, learned counsel

for the appellant company in Civil Appeal No. 922 of 1973 followed

by Mr. Nariman, appearing for respondents 3 to 6 and Mr. A.

K.

Sen,

learned counsel for the appellant company in Civil Appeal No. 2317

of 1972 argued in support of the ouster

of the jurisdiction of the Civil

Court,

Mr. Sorabjee, appearing on behalf of the plaintiff respondents 1

and 2 vehemently combated the proposition. He

was followed by Mr.

Som Nath Iyer, learned counsel for the respondent Union in Civil Appeal

2317 of 1972.

We shall proceed to state the facts of Civil Appeal No.

922 of 1973 first, discuss the point of jurisdiction as also the other points

involved

in that appeal and then.

brJefly refer to the facts of the other

case.

The appellant company carries on a big industry and owns several

plants. One such plant is situated at Kurla, Bombay. In this plant there

is a department known as Motor Production Department. The dispute

relates to the workmen of this department. There

seems to be three

groups of workmen in the department

aftoresaid. One group was re­

presented by Engineering Mazdoor Sabha-hereinafter ca!led the Sabha

Union which .is a registered Trade Union and was once a recognized

union of the workmen of the appellant company. Respondents 1 and

2

who instituted the suit in question in the City Civil

Court at Bombay

are members of this Union. Later on the Sabha Union was derecogniz­

ed and another registered Trade Union known as Association of Engine­

ering workers.-hereinafter called the Association Union-was recog­

nized by the appellant company. This Association Union, respondent

No. 3, was imp!eaded as defendant No. 2 in the action. Besides the

members of these two unions, there are certain workmen who are

members of neJther.

An incentive scheme providing for certain incentive payments to

the workmen ofl the Motor Production Department was introduced by

the appellant company

in pursuance of agreements entered from time t0 time between the company and the Sabha Union. The last of such

agreement executed between them

was dated the 31st December, 1966.

It appears that at the time of

11he execution of the last agreement there

were 425. workmen

in the department. Broadly

speaking the incen­

tive scheme was. to make extra payments at the rate of 3.5% over the

basic production of 650 nnits upto the target of 900 on every extra

production of 25 units.

In other words, the workmen were to get 35%

432 SUPREME COURT REPORTS [1976J 1 S.C.R;

more if they produced 900 units iu a month of 25 workiug days. The

next target

fixed was

1250 units payable at the rate of 4% per 25 units.

In other words, the workmen were to get 35% + 56% total 91 %

more if they reached the production target of 1250 per month. It

further appears that after the recognition of the Association Union, 27

more persons

who were prevJously learners were taken in as regular

temporary employees iu

ljhe Mota~ Production Department on an~

from 1st September, 1970. The strength of the workmen thus accoi:­

ding to the case of the appeilant and respondent no. 3 w~nt up from

425 to 452, naturally necessitating the revision of the norm and target

figures of, the incentive scheme. Some sort of arrangement was arrived

at between the company and the Association Union which led to a pro-

test hy the Sabha Union in October, 1970. Eventually a d~nite set­

tlement in wrJting was arrived at between the appellant and respon­

dent no. 3 on the 9th of January, 1971 making the settJement effective

from 1-9-1970. The norm figure of 650 units was raised to 725 and

the first and the second target

figures. were raised from

900 to 975·

and 1250 to 1325 respectively. The rates of incentive payment at

3.5% .in the first target and

4% in the

·se_cond target were retained.

Thus the maximum incentive payment of, 91 % was kept unaltered.

Broadly speaking, therefore, the increase of

75 units at every stage

of the productJon

was attributable

to· the addition of the ·strength ofi

2 7 workmen in the Motor Production Department. The members of

the Sabha Union, however, felt aggrieve'd by this, because, they thought

the 27 newely added workmen were merely learners and could not be

eligible for being taken in the pool of the incentive scheme.

It would

adversely affect the incentive payments

which were to be made to the

existing 425 workmen. According

ta the case of respondents 1 and

2 they for the first time learnt about the intent.ion of the company

to

bring about a change in the service conditions when the altered scheme

was put on the Notice Board on the 15th March, 71. The two work-

men who were the members of

the· Sabha Union rushed· to the court and

instituted their plaint on the 8th April, 1971 .in the City Civil Court at

Bombay seeking the permission of the court to institute the suit in a rep­

resentative capacity under Order I, Rufo 8 of the Code of Civil Proce­

dure-hereinafter called the Code-representing the workmen who were

members of the Sabha Union as also thase who were neither its mem-

bers nor members of the Association Union. On an objection being

raised consequently respondents 4 to 6 were added

as defendants 3 to

5 to represent the 27 disputed workmen.

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Respondents 1 and 2. in their plaint chiefly based their claim on the G T

Memorandum of Settlement dated· the 31st December, 1966 which on

being acted Up)n had become a condition of service not only of the

members of the Sabha Union but also of others who were not its mem-

bers. Their assertion

was that the other settlement arrived at between

,{..J

the company and the Assocfation Union under section 18 (1) of the

Industrial Disputes Act,

1947-hereiuafter referred to as the Act, was

not binding on

thase workmen who were not its members. They attacked H

the second agreement as having been arrived at without following 'the

mandatory requirement of section 9A of the Act. The first relief claJ-

med in the suit was that the set'.tlernent <fated the 91.h fanuary, 1971 was

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PREMIER AUTO \', K. s. WADKE (Untwalia, J.) 433

not binding on the plaintiff and other concerned daily rated and monthly

rated workmen of the Motor Production Department who were not

members of the Association Union. The second relief was to ask for a

decree of permanent injuct.ion to restrain the appellant from enforcing

or

implement,ing the terms of the impugned settlement

dated the 9\h Jan­

uary, 1971. The appel)ant company and the other defendant respon­

dents filed their written statements and contested the •suit. They asserted

that all the workmen of the Motor Production Department had impli­

edly accepted and acted upon the new settlement. They challanged the

jurisdiction of the Civil Court to entertain the suit in relation to the

dispute which

was an

,intlustrial dispute and further asserted that in any

view of the matter no deeree for permanent injunction could be made.

The Trial Court frame{! several issues for trial but curiously enough

dropped many issues as not surviving in view of the ·stand taken on be­

half of the plaintiffs' counsel at the time of the trial of the suit. It was

conceded on their Q.ehalf, and tightly too, that the agreement dated the

31st December, 1966

was a sett_lement under section 18(1) of the Act.

It could be binding only on

the members of the Sabha Union and not

on others. But ·since the suit was filed on beha!J! of the non-members

also

who were not meinbers

on ,either Union and in a representative

capacity.the main basis of the sUit being the agreement dated the 31st

December.1966 was given up, and it was stated on behalf of the plain­

t.iffs that they did not wish to enforce that agreement. Hence many

issues, according to the learned Trial Judge did not survive for

discus­

sion and were dropped. One such issue was issue no. 7 in relation to

the requirement of'..the notice under section 9A of the _Act for effecting

any change

in the agreement dated the 31st December, 1966. Treating

the incentive payments made on and from !lie year 1966 till

1970 as

implied terms of conditions of ·service, the Trial Judge seems to have

come to the conclusion that the change effected

in January, 1971 was

detrimental to and against the interests of the workmen. Due

to some

technical reasons the first relief. of declaration was not granted. But

holding that the court had jurisdict,ion

to try the suit as it was a suit

of a

"Civil nature for enforcement of rights of common and general law

and consequently there

is no question of the

reliefs being claimed

under the Industrial Disputes Act", it granted a sort of conditional dec­

ree of injuction restraining the appellant flt'om enforcing or implementing

the terms of agreement of the 9th January, 1971 against the workmen

of its Motor Production Department who are not members of the Asso­

ciation Union. The injunctfon, however, was not to operate in regard

to any workmen

who in writing accepted the terms of the

impugned

agreement or after .the appellant took steps in accordance with law to

make the agreement binding on workmen other than those who are not

. members of the Association Union. The decree for injunction was also

to cease to be operative if the apUellant gave any notice of change under

section 9A of the Act on exoiry of 3 months after the expiry of

21 days

notice

given under the

sail:! provisions of law.

The company filed an appeal in the Bombay High Court to challenge

the decision of the City Civil Court. The learned sincle Judge of the

High Court

who heard the appeal following his decision in the Civil

434 ' J.

SUPREME COURT REPORTS [1976] 1 S.C.R.

Revision filed by the other company which is appellant in the other ap­

peal, sustained the iurisdiction of the Civil Court to entertain the suit

and did not feel persuaded to interfere with it on merits. The company

took the matter in a letters patent but it met the same fate before a

DivJsion Bench of the High Cour. On grant of special leave, the pre-

sent appeal was

filed.

The foremost and perhaps the only

paint, undoubtedly a vexed one,

which falls for our determination is whether on the facts and in the

circumstances of this case the Civil Court had jurisdiction to entertain

the suit filed by respondents 1 and 2 against the appellant and respon­

dents 3 to

6. Various English and Indian authorities were cited on

the pcint on either side at the Bar and

we shall endeavour to answer

the question of

law on appreciation of many such authorities. It rnay

not be necessary

to refer lg all. Before we do so, we may very briefly

refer to the relevant provisions of the Act.

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c

The object of the Act, as its preamble indicates, is to make provi-

sion for the .investigation and settlement of industrial disputes, which

means adjudication of such disputes· also. The Act envisages collective

bargaining, contracts between Union representing the workmen and D

the management, a matter which is outside the realm of the common

law or the Indian law of contract. The expression "industrial dispute"

is defined in section 2(k) to say that :

" "industrial dispJ!te" means any dispute or difference bet­

ween employers and employers, or between employers and

workmen, or between workmen and workmen, which

is connected with the employment or non-employment or the

terms of employment or with the conditions of labour, of any

person;"

Section 2(p) gives the definition of the word "settlement" thus :

"settlement" means a settlement arrived at in the course

of conciliation proceeding and includes a written agreement

between the employer and workmen arrived at otherwise than

in the course of conciliation proceeding where such agreement

has been signed by the parties thereto iu such manner as may

be prescribed and a copy th_ereof has been sent to an officer

authorised in this

beha]'f by the appropriate Government and

the conciliation officer;"

Chapter II provides for the authorities under the Act, namely, for cons­

titution of the Works Committee, Boards oti Conciliation, Courts of 10;­

quiry, Labour Courts, Tribunals and National Tribunals as also for

appointment of Conciliation Officers. Different kinds of authorities

having very varied and extensive powers in the matter of settlement and

adjudication of industrial disputes have been constituted. Since the

time of the earliest decisions of the Federal Court and the Supreme Court

of India it has been recognized fully well that the powers of the autho­

rities deciding industrial disputes under the Act are very

extensive-

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PREMIER

AUTO v. K. s. ~ADKE (Untwalia, !.) 435

much wider than the power of, a Qivil Court while adjudicating a dis1:mte ·

which may be an industrial dispute. The labour Courts and the Tribu­

nals. to whom industrial disputes are referred by the appropriate govern•

ment

9

under section 10 can create new contracts, lay down new indus­

trial policy for industrial peace, order reinstatement of dismissed work­

mel} which ordinarily a Civil Court could not do. The procedure of

raising an industrial dispute starts with the submission of a charter of

demands by the workmen concerned. The Conciliation Officer can be

and is often made to intervene in the matter first. He starts conciliation

proceeding under section 14. If a settlement is arrived at during the

course of the conciliation proceeding, it bec.omes binding on all work­

men under section 18(3) of the Act. If there is a fiai!ure of conciliation,

the appropriate government is required to make a reference under sec­

tion 10(1) of the Act. The award published under section 17(1) be­

comes final and cannot be called in question by any court in any manner

whatsoever as provided in. sub-section (2). Section 18(1) of the Act

says:

"A settlement arrived at by agreement between the employer

and workmen otherwise than in the course of conciliation pro­

ceeding shall be binding on th~ parties to the agreement."

Section 19(2) makes provision for terminating a settlement and provides

that

it shall continue to be binding until then. Section 29 provides

for penalty for breach of settlement

or award. The residuary

punish­

ing section for contravention of any provisions of the Act or the Rules

made thereunder is section

31(2). The conditions of service

appli­

cable to workmen cannot be changed to their prejudice in regard to

any matter connected with the dispute during the pendency of any

conciliation proceeding

or any proceeding before the Labour Court

or the

Trib~l as provided in section 33(1)(a). Section 33C(l)

provides for recovery of money due from an employer. The scope of

sub-section (2) as to the power of the Labour

Court for the purpose

of determination of the amount due is much wider than the power

of Government under sub-section ( 1) .

. It would thus be seen that

through the intervention of the appro­

pnate government, of course not directly, a very extensive machinery

has been provided for settlement and adjudication

of industrial

dis­

putes. But since individual aggrieved cannot approach the Tribunal

or the Labour Court directly for the redress of his grievance without

the intervention of the Governmer1t, it is legitimate to take the view

that the ~en:edy provided un~e~ he Act is n?t such as to completely

oust the 1unsd1ct10n of the Civil Court for tnal of industrial disputes.

If the dispute is not an industrial dispute within the meaning of section

2

(k) or within the me_aning of section 2A of the Act it is obvious that there is no provision for adjudication of such disp~tes under the

A_ct. Ciyil Courts will be the proper forum. But where the industrial

d~spute ts for the purpose of enforcing any right, obligation or lia­

bili!Y i;nder th_e ~~ner~ law or the common law and not a right,

obhgation or liab1hty created under the Act then alternative forums

are there giving an election to the suitor to choose his remedy of

436 SUPREME COURT REPORTS [1976] 1 s.c.R.

either moving the machinery under the Act or to approach the Civil

Court.

It is plain that he can't

have both. He has to choose the

one or the other. But

we shall presently show that the Civil Court will

have no jurisdiction

to try and adjudicate upon an industrial dispute

if it concerned enforcement of certain right

or liability created only

under the Act. In that event Civil Court will have no

jurisdicti,:>n

even to grant a decree of injun~tion to prevent the threatened injury

on account

Of the alleged breach of contract

if the contract i> one

which

is recognized by and enforceable under the Act alone.

In Dos v. Bridges

(') at page 859 are the famous and oft quoted

words of Lord Tenterden, C. J. saying :

"where an Act creates an obligation and enforces the

performance in a specified manner,

we take it to a general

rule that performance cannot be enforced in any other manner".

This passage was cited with approval by the Earl of Halsbury,

L.C. in

Pasnwre and Others v. The Oswaldtwistle

Urban District Council

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(

2

) and by Lord Simonds at paKe 407 in the case of Cutler v.

Wandsworth Stadium Ltd.(•) classic enunciation of the law and classi-D

fication of the cases in three classes was done by Willes, J "with the

precision which distinguished the utterances of that most accomplished

lawyer, in the case of Wilverhnmption New Waterworks Co. v.

Hawkesford"('A) (vide the speech of Viscount Haldane at page 391

in the case of

Neville v. London

"Express", Newspaper, Ltd.) (

4

)

The classes are enumerated thus :

"There are three classes of cases in which a liability may

be established by statute. There is that class where there is

a liability existing at common law, and which is only re-

enacted by the statute with a special form of remedy; there,

unless the statute contains words necessarily excluding the

common-law remedy, the plaintiff has his election of pro­

ceeding either under the statute or at common law. Then

there

is a second class, which consists of those cases in

which a statute has created a liability, but has given no

special remedy for

it; there the party may adopt

a11 action

of debt or other remedy

at common Jaw to enforce it. The

third class is where the statute creates a liability not existing

at common law, and gives also a particular rc1ncdy for enforcing it ........ "With respect to that class it has

alw

1ays been held, that the party must adopt the form of ·

remedy given by the statute."

The judgment of the Court of Appeal which was affirmed by the

House of Lords in

Pasmore's case (supra) is reported in Peebles v.

The Oswaldtwistle

Urban District Council.(

5

) It was pointed out

(I) [l831] I B. & Ad. 847.

(3) [1'149] Appeal Cases, 398.

(4) [1919] Appeal Cases, 368.

(2) [1898] Appeal

Cases 387,

(3A) [1859] 6

C. B. (No. S.) 336.

(5) [1897] I Queen's Bench, (625.)

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PREMIER AUTO'V, K. s. WADKE (Untwalia, J.) 437

that the duty of a local authority, under section 15 of the Public·

Health Act, 1875 to make such sewers as may be necessary for

effectually draining their district for the purposes of the Act, cannot

be enforced by action for a mandamus, the only remedy for negkct

of the duty being that given by s. 299 of the Act by complaint to

the Local Government Board. Lord Esher M. R. pointed out that

the liability to make sewers

was imposed by the statute. There was

no such liability before it. The case, therefore, comes within the

canon of construction that if a

new obligation is imposed by

;tatute,

and in the same .statute a remedy is provided for non-fulfilment of

the obligation, that is the only remedy. Lopes,

LJ. further succinctly

pointed out that section

15 did not create any duty towards any particular

individual, and section 299

gives a specific remedy

for the benefit

of the locality at large. Thus, it should be ribtic.ed, that the obligation

imposed by the statute did not result

in creation of any right in

favonr

()f any particular individual. Earl of Halsbury, LC. pointed

out in

his speech at page 394 :

"The principle that where a specific remedy is given

by a statute, it thereby deprives the person who insists upon

a remedy of any other form of remedy than that given by

the statute,

is one which is very familiar and which runs

through the

Jaw."

The matter would be different if the obligation imposed under

the statute brings into existence a right in favour of an individual but

provides

no

rem,edv for its enforcement. Supposing after providing

for awarding of certain compensation in Chapter VA of the

Act there

was no provision made in it like section

10 or section 33C

the mere penal provision for violation of the obligation engrafted

in

section 29 or section 31 would not have been sufficient to oust·

the jurisdiction of the Civil Court for enforcement of individual right

created under Chapter VA.

F The decision of the House of Lords in the case of Barraclough

v. Brown and others(') is very much to the point. The special

statute under consideration there gave a right to recover expenses

in a court of Summary Jurisdiction from a person

who was not other­

wise

liable at common law. It was held that there was no right to

come to the High Court for a declaration that the applicant had a

right to recover the expenses in a court of Summary Jurisdiction. He

G could take proceedings only in the latter court. Lord Hei'schell after

referring to the right conferred under the statute

"to rec0vcr such

expenses from the owner of such vessel

in a court of summarv Juri­sdiction" said at page 620 .

"I do not think the appellant can claim to recover by

virtue of the statute, and at the same time insist uoon

II <loin[ so by means other than those prescribed by the statute

which alone confers the right."

(I) [1897] AppealCases,615.

438 SUPREME COURT REPORTS [1976] 1 S.C.R.

Lord Watson said at page 622 :

"The right and the remedy are given uno flatu, and the

one cannot be dissociated from the other."

In other words if a statute confers a right and in th;: same breach

provides for a remedy for enforcement of such right the remedy

provided by the statute is an exclusive one. But

as noticed by Lord

Simonds in Cutler v. Wandsworth Stadium Ltd. (supra) at page 408

from the earlier English cases, the scope and purpose of a statute

and in particular for whose· 'benefit it is intended has got to be

considered. If a statute :

"intended to compel mine owners to make due pro­

vision for the safety of the man working in their mines, and

the persons for

whose

. benefit all these rules are to be

enforced are the persons exposed to danger,"

there arises at common Jaw :

"a co-relative right in those persons who may be injured

by its contravention."

Snch a type of case was under consideration before Lord Goddard,

C.J. in the case of

Solomons v. R. Gertzenstain Ltd. and other

('I) vide

page 831. Lord Denning

M. R. relied upon the

principks enunciated

by Lord Tenterden in Doe v. Bridges approved in Pasmore's case

(supra) at page

743 in

the case of Southwark London Borough

Council v. Williams and another('). The celebrated and learned

Master of

the Rolls said at page 743.

·

"Likewise here in the case of temporary accommodation

for those in need.

It cannot have been intended by

Parliament that every person

who was in need of temporary

accommadation should be able to sue

~he local authority

for it : or

to take the Jaw into his own hands for the purpose."

Mr. Sorabjee endeavoured to take his case out of the well established

and succinctly enunciated principles

of law by the English courts on

two grounds

:-·-

( 1) That the remedy pro~ided under the Act is no

remedy in the eye of

law. It is a misnomer.

Reference to the Labour Court or an Industrial

Tribunal for adjudication of the Industrial dispute

was dependant upon the exercise of the power of

the

Government under section 10 (I), it did not confer

any right on the suitor.

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(2) Even if the Civil Court had no jurisdiction to enter- H

tain a suit

for enforcement of a right created

un\icr

------

(I) [1954] 2 Weekly Law Reports, 823. (2) [1971] 1 Chancery, 734.

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PREMIER AUTO v. K. s. WADKE (Untwalia, J.) 439

the Act, as in England, Courts in India also could

make an order or decree for injunction to prevent

the threatened injury

on breach of the right.

We do not

find much force in either of the contentions. It is

no doubt true that the remedy provided under the Act under section

33C, on the facts and in

the circumstances of this case involving

dispme;; in relation to the two settlements arrived at between the

management and the workmen,

was not the appropriate

remedy. It

is also true that it was not open to the workmen concerned to approach

the Labour Court or the Tribunal directly for adjudication

of the dispute. It is further well-established on the authorities of this

Court that the Government under certain circumstances even 011 the

ground

of expediency ( vide

State of Bombay v. K. P. Krishnan and

others(') and Bom'bay Union of M11rnalists & Ors. v. The State of

Bombay & Anr. (

2

)

can refuse to make a reference. If :the

ref~<aI

is not rnstaiuable in law, appropriate directions can be issued by the

High Court in exercise of its writ jurisdiction. But it does not follow

. from all this that the remedy provided under the Act is a misnomer.

Reference of industrial disputes for adjudication in exercise of the

power

of the Government under section

10(1) is so common that

it is difficult to call the remedy a misnomer or insufficient or inadequate:

for the purpose of enforcement of the right or liability created under

the Act. The remedy suffers from some handicap but is well com­

pensated on the making of the reference by the

wide powers of

the:

Labour Court ·or the Tribunal. The handicap leads only to this

conclusion that for adjudication of an industrial dispute in connection

with a right or obligation under the general or commou law and not

created under the Act, the remedy

is not

exclusive. It is aiternative.

But surely for the enforcement

of a right or an obligation under

the·

Act the remedy provided uno flatu in it is the exclusive remedy.

The legislatnre in its

wisdom did not think it fit and proper to provide

a very easy and smooth remedy for enforcement of the rights and

obligations created under the Act.

Persons wishing the enjoyment

of such rights and wanting its enforcement must rest content to secure

the remedy provided by the Act. The possibility that the Govern­

ment may not ultimately refer an industrial dispute under section 10

on the ground of expediency is not a relevant consideration in this

regard.

Mr. Sorabjee very emphatically reliecj upon the judgment of

FarweH. J. in the case of StPvPns v. Chown(

3

) in support of his sub­

mission that even if a suit could not lie in a civil court for enforcement

of the right, still the remedy

of injunction by a suit was not lost.

The learned Judge at

µage 903 in the first instance pointed out that

the case before him fell within the first of the three classes enumerated

by

Willes, J in the case of Wolverhemption (supra).

On the true

construction of

the Act under consideration it was opined that it had

simply reenacted the old common law right to the market. But then

(I) [1961] 1

S. C. R. 227. C) [1964] 6 S. C.R. 22,

(3) [1901] l Clw.ncery 894,

440 SUPREME COURT REPORTS [1976] 1 S.C.R.

the learned Judge proceeded to say at page 904 that the remedy

in chancery,

as a separate remedy, was wider than

the old common

law remedy. Says the learned Judge further at page 904 :

"In my opinion, there was nothing to prevent the old

Court of Chancery from granting an injunction to restrain

the infringement of a newly created statutory right, unless

the Act of Parliament creating the right provided a remedy

which it enacted should be the only

remedy-subject only

to this that the right so created was such a right

as the

Court under its original jurisdiction would take cognizance

of."

On a close scrutiny, however, it would be noticed that the

principle of separate remedy only for the purpose of injunction avail­

able in a court of Chancery, which

was kept intact even after the

Judicature Act of 1873

is not applicable in India. Historically the

Chancery Court had assumed

certain special jurisdiction under its

original jurisdiction

to take cognizance of a special kind of right even

though the common law court may not

have such jurisdiction. In

India under section 9 of the Code. the Courts have subjecfto certain

restrictions, jurisdiction to try suits of civil nature excepting suits

of which their cognizance

is either expressly or impliedly barred.

There are no different systems

<>f civil courts for enforcement of

different kinds of rights. In the instant case taking cognizance of a

suit in relation

to an industrial dispute for the enforcement of any

kind of right

is not expressly barred. But if it relates

io the enforce­

ment of a right created under the Act, as stated above, by necessary

intendment, the jurisdiction of the

Civil Courts is barred. That being s<>. in India, it is barred for all purposes. except in regard to. matters

which will be alluded to hereinafter. The position

will be further

clear on reference to the quotation from the decision

of Lord

Turner

in the judgment of Farwell, J at pages 904 and 905 from the case

of Emneror of Austria v. Day(

1

). The great Master of Equity in

rclntion to the remedy in the Chancery Court said :

"I do not agree to the propos!tion, that there is no remedy

in this Court

if there be no remedy at law, and still less do

I agree to

the proposition that this Court is bound to send

a matter of this description to be tried at law ......... .

. . . . . . It is plain therefore, that, in the opinion of Lord

Rcdecdale.· who was pre-eminently distinguished for his

knowledge of the principles of this CCYUrt, the jurisdiction of

the Court

is not limited to cases in which

there is a right at

Jaw."

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It will bear repetition to say that the jurisdiction of the Civil

Court in India

is limited to

cases in which there is a right at law. that H

is to say, a right to be pursued

in such Court.

(I) [1861] 3 D. F. & J. 217, 253.

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l'REMIER AUTO v. K. s. WADKE (Untwalia, J.) 441

The distinction afore-mentioned also finds ample support from the

speech of Lord Davey

in

Barraclough v. Brown and 01/iers (supra).

At page 623 the noble and learned Lord has pointed out that the power

of the Court

or Chancery to make declarations of right without

giving consequential relief was introduced by section

50 of th.e

Chancery Procedure Act 1852. After some decisions of the EnglJSh

courts some additional words were introduced in order to "enlarge

the power of the Court to make declarations in cases where from

the nature or the circumstances of the case

no substantive relief could

be given by the

Court." When we proceed to deal with certain

decisions of the Privy Council and of this Co(rt in relation to a taxing

statute it will be pointed out uuder what circumstances an action in

a Civil Court can lie to challenge the decisions of the taxing authorities.

If the proposed action of the taxing authority is of· a kind which

.when taken would be amenable to be challenged in a Civil Court

the remedy for the relief of injunction to prevent the action would

also lie but not otherwise. As for example, in accordance with the.

majority decision of this Court in the case of

K.

S. V enkataraman &

Co. v. State of Madras(

1

)

if tax is imposed under a provision of the

statute which

is ultra vires, the imposition can only be challenged

by pursuing a remedy in a Civil Court

or in High Court.

Suppose

a case where a proceeding is initiated by issuancl) of a notice for

imposing a tax on person under a provision -0f law which is ultra

vires,

a suit for injunction would lie to prevent the threatened action.

But

a suit, unlike the remedy in a Chancery Court, merely for the

purpose of

injuncti6n would not lie to prevent an action which when

completed cannot be challenged in a Civil Court.

' Reliance was placed on behalf of the contesting respondents on

the case of

Carlton Illustrators and another v.

Coleman & Company

Limited(

2

l. This case merely illustrates the distinction already made

by

us. Channell, J has said at page 782 :

"The -plaintiff also asks for an injunction to prevent the

future commission of breaches of this statutory enactment.

It was argued, though not very strenuously, that the o.11y re­

medy

was the recovery of the penalty. I think that this case

comes within

the rule that, where there is a statutory enact­

ment' ;n favour of a person, and there is a penalty for the

breach of the statutory enactment which goes to the

peFson aggrieved, in such a case the penalty is the only remedy for

the breach. That principle, however, only applies to remedies

for the breach whjlllJ .has ]:>een committed, and an injunction

is not a remedy for the past breach, but is a means for pn·­

venting further breaches."

Reliance was also placed on behalf of the contesting respondents

on the decision

of the Honse of Lords in

PYX Granite Co. Ltd v

Ministry of, Housing and Local Government and others(&) but,. th;

(I) [!966J2 S. C.R. 229. (2) [1911 J I King's Bench, 771.

(3) [1960] Appeal Cases, 260.

442 SUPREME COURT REPORTS [1976] 1 S.C.R.

decision is of no help to them. Viscount Simonds at pages 286 "nd 287

has said with refereiace to the Act of 194 7 which was under consi·

deration before the House that the Act provides a person with another

remedy and then the question posed is-"Is it, then, an alternative or

an exclusive remedy ?" Answer given is :

"There is nothing in the Act to suggest that, while a new

remedy, perhaps cheap and expeditious,

is given, the old and.

as

we like to call it, the

inalielaable remedy of Her Majesty's

subjects to seek redress in her courts

is taken away. And it

appears to me that the case would be unarguable but for the

fact that in

Barraclough v. Brown (supra) upon a

considera­

tion of the statute there under review it was held that the

new statutory remedy

was exclusive. But that case

differs

Vitally from the present case."

The well-known distinction is brought about in these terms :

"The appellant company are give11 no new right of quarry­

ing by the Act of 194 7. Their right is a common law right

ruid the only question is how for it has been taken away. They

do not uno flatu claim under the Act and seek a remedy else­

where. On the contrary, they deny that they come within

its purview and seek a declaration to that effect. There is.

in

my opinion, nothing in Barraclough v. Brown (supra)

which denies them that remedy, if it

is otherwise appro-

priate." - -::.:·,

Mr. Sorabjee cited the case of Duchess of Argyll v. Duke of Argyll

and others(') to strengthen his argument further in support of the dicta

of Farwell,

J in the case of Stevens v. Chown (supra). But we think

the very relevant and pertinent distinction pointed out by us above has

again been missed by the

lea1«1ed counsel. The special jurisdiction of

the Court of Chancery is further emphasisell in a passage quotod with

approval at page 345 of the report from the judgment of North,

J in

the

case of Pollard v. Photographic Company(

2

). It is worthwhile to

quote a portion of that passage which reads thus :

"But it is quite clear that, independently of any question

as to the right at law, the Court of Chancery always had an

original and independ~nt jurisdiction to prevent what that

court considered and treated as a wrong, whether arising from

a violation of an unquestionable right or from breach of con­

tract

or confidence, as was pointed out by Lord Cottanham

in

Prince Albert v.

Stra11e-l H. & T. l ".

Cngood Thomas, J has thereafter said at page 345 :

"But these were cases dealing not with interlocutory in­

junctions but with final injunctions and it was the practice

of the Court of Chancery to exercise a jurisdiction, which

(1) [1967] I Chancery,

302. (2) (1889] 40 Chancery Division, 34

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PREMIER AUTO V. K. s. WADKE (Untwalia, J.) 443

A was not limited to the considerations governing final fojunc­

tions, for the purpose of granting interlocutory injunctions

pending· the trial of a legal right."

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No such thing is permissible in India. As far back as 1952 it was

pointed out by this Court ra the case of The State of Orissa v. Madan

Gopa/ Rungta and others(') that the High Court,cannot make a direc­

tion under Article 226 of the Constitution for the purpose of granting

interim relief only pending the institution of a suit merely because tire

suit could not be illstituted until after the expiry of 60 days from the

date of a notice under section

180 of the Code. Much less it can be so

done by a Civil Court.

Mr. Sorabjee very strongly relied upon the Full Bench decision of

the Lahore High Court in Municipal Committee, Montgomery v. Mas­

ter Sant Singh(') in support of the plaintiff-respondents' right to have

an order of injunction in this case. But a passage occurring at page

380 column I negatives his contentions and squarely supports the dis­

tinction draw,1 by us above. The passage runs thus :

"If therefore a demand made by a Committee is not autho­

nsed Ly the Act and the person affected thereby objects to

the payment on the ground that in making the demand the

Committee was exercising a jurisdiction not vested in it

by

law, it can, by no stretch of language, be said that he is

ob­

jecti11g to his liability to be taxed under the Act. Any spe­

cial piece of legislation may provide special remedies arising

therefrom and may debar a subject from having recourse to

any other remedies, but that bar will be confined to matters

covered by the legislation and not to any extraneous matter."

We now proceed to consider the cases creating special liability,

mostly tax liability, and providing for procedures and remedies for de­

termination of the amount of tax and relief against the assessment of

such liability.

In the well-known decision of the Privy Council in

Secretary of State, Represented by the Collector of

South Arcot v.

Mask and Company(•) Lord Thankerton delivering the judgment of

the Board alluded to the third class of cases to be found in the judg­

ment of Willes, J in Wolverhampton's case. The order of the Collec­

tor of Customs passed on the appeal ui,1der section 188 of the Sea Cus­

toms Act, 1378 was held to be an order within his exclusive junsdiction

excluding the jurisdiction of the Court to challenge it. The other well­

known decision of the Privy Council is the case of Raleigh Investment Cov. Ltd. v. Governor General in Council('). Both the decisions

aforesaid were noticed by Gajendragadkar.

J. as he

thea was, deliverini:i

the judgment on behalf of the Constitution Bench of this Court in

Firm and l//uri Subbavva Chettv and Sons v. The State of Andhra

Prai.esh("). At page 763 the circumstances under which the decision

(l) [1952] S. C.R. 28. (2) A.I.R.1940Lahore,377.

(3) 67 Indian Appeals, 222. . (4) 74 Indian_ Appeals, 50-.

(5) [1964] 1 S. C.R. 752.

444 . SUPREME COURT REPORTS [1976] 1 s.c.R.

of the taxing authority under the Madras General Sales Tax Act,

1939 could be challe''1ged in a Civil Court were pointed out in these

terms:

"Non-compliance with the provisions of the statute to which

rclercncc is made by the Privy Council must, we think, be

non-compliance with such fundamental provisions of the sta­

tute

as would make the entire proceedings before the appro­

priate authority illegal and without jurisdiction. Simtlarly,

if an appropriate authority has acted in

violatio'" of the fun­

damental principles of judicial procedure, that may also tend

to make the proceedings illegal and void and this infirmity

may affect the validity

of the order passed by the authority

in question. It is cases of this character where the defect or

the infirmity in the order

goes to the root of the order and

makes it

in law invalid and void that these observations may

perhaps be invoked in support of the plea that the civil court

can exercise

its jurisdiction notwithstanding a provision to

the contrary contained in the relevant statute.

In what cases

such a plea would succeed it

is unnecessary for us to decide

in the present appeal because

we have no doubt that the con­

tention

of the appellant that on the merits the decision of

the assessing authority

was wrong, cannot be the subject­

matter of a suit because

s. 18-A clearly bars such a claim in

tho civil courts."

lt wonld be noticed on appreciation of the above dicta that the issue

to

be tried in the suit instituted in a civil court to challenge the decision

of the taxing authorities

is quite distinct and different from the

on~

which is within their exclusive jurisdiction. The issues in the two

proceedings are different and exclusive in their respective spheres.

Many authorities were reviewed by Subba Rao, J as he then wac,

in the case of Firm Seth Radha K ishan (deceased) represented by

Hari K1shan and others v. The Administrator, Municipal Conmdttee,

Ludhiana Cl including the principles enunciated by Willes, J in Wolver­

hampton's

case. The decision of the Full Bench of the Lahore High

Court (supra)

was also referred, and the final

priilciple enunciated

is to be found at page 284 in these terms : ·

"Under s. 9 of the Code of Civil Procedure the Court shall

have jurisdiction to try all suits of civil nature excepting smts

ol which cognizance is either expressly or impliedly barred.

A statute, therefore, expressly or

by necessary

implication,

can bar the jurisdiction of civil Courts in respect of a parti­

cular matter. The mere conferment of special jurisdiction

dil a tribunal in respect of the said matter does not in itself

exclude the jurisdiction of civil Courts. The statute may

specifically provide for ousting the jurisdiction of civil

Courts; even if there

was no such specific exclusion, . if it

creates a liability not existing before and gives a special and

partic:i[ar remedy for the aggrieved party, the remedy no­

vided by it must be followed. The same principle would

(1) [1964] 2 S. C. R. 273.

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PREMIER AUTO v. K. s. WADKE (Untwalia, !.)

apply if the statute had provided for the particular forum

in which the said remedy could

be had. Even in such cases,

the Civil Court's jurisdiction

is not completely ousted. A

suit in a civil court will always lie to question the order of a

tribuaal created by a statute, even if its order is, expressly

or

by necessary implication, made final, if the said tribunal

abuses its power or does not act under the Act but in vio­

lation of its

provisions."

I ! 5

The principles aforesaid were reiterated in the decision of this

Court in Bharat Kala Bhandar Ltd.

v. Municipal Committee,

Dhaman­

gaonC) albeit the learned Judges by 3 : 2 differed in the application

of the principle to the facts

of the case.

The unanimous decision of a Bench of 7 Judges of this Court was

given by Gajendragadkar, C.J. in the case

of Kamala Mills Ltd. v.

State of Bomb1'v<'l. The decision of the House of Lords in the case

of PYX Granite Co. Ltd. (supra) was referred to at page 81 after re­

ferring to the decisions of the Privy Council in the case of Mask & Co.

and the priaciples were reiterated at page 82. A doubt which was be­

ing cast in the full application of the ratio of the Privy Council in

Raleigh Investment Co.'s case was crystalised

in the majority decision

of

Subba Rao, Jin the case of K. S. Venkataraman & Co. v. State of

Madras (supra). The minority decision

of

Shah, J was fo the cont­

rary. The majority view made a departure from the dicta of the Privy

Council

in case of a challenge to

assessmeat of tax made under ultra

vires provisions of the law. The decision of this Court in State of

Kera/a v. Ramaswami Iver & Sons(') is again in connection with the

challenge to sales tax assessment by institution of a suit in civil court.

Mitter, J reviewed many decisions of this Court Pa the rnse of Pab­

bojan Tea Co. Ltd. etc v. The Deputy Commissioner, Lakhimpur

etc.(

4

)-a case arising out of a challenge to the orders of the authority

under the Minimum Wages Act. Sub-section 6 of section

20 of the

Act was held not to exclude the jurisdictiC',1 of the Civil Court when

the order of the authority

is challenged on the ground of non-applica­

bility of the Act to a certain class of workers. Hidayatullah, C. J.

delivering the judgment on behalf of Constitution

BencB-·o'f this Court

took pains to discuss many authorities in the case of Dhulabhai and

others

v. The

State of Madhva Pradesh and another('), culled out as -

ma·ay as 7 propositions of law at pages 682 and 683. But the princi­

ples enunciated were relevant to

find out the jurisdiction of the Civil

Court and its scope to challenge the assessments made under a taxing

statute. Nothing contrary to what

we have

said above is to be found

in any of the 7 principles enunciated by the learned Chief Justice. The

case

of Union of India v. A.

V. Narasimhalu(") was again in regard

to exclusion of jurisdiction of the civil court in a suit to challenge an

order under section 188 of the Sea Customs Act, 1878.

(1) [1965]3 S. C.R. 499.

(3) [1966]3 S. C.R. 582.

(5) [196S] 3 S. C.R. 6'2.

(2) [1966] 1 S. C. R. 64.

(4) [1968] J, S. C.R. 260.

(6) [1970] 2 S. C. R. 145.

15-L 839 Sup, CI/75

446 SUPREME COURT REPORTS [1976] 1 S.C.R.

To sum up, the principles applicable to the jurisdiction of the Civil A

Court in relation to an industrial dispute may be stated thus : j

(1 l If the dispute is not an industrial dispute, nor does

it relate to enforcement of any other right under the

Act the remedy lies only in the civil court.

( 2) If the dispute is an industrial dispute arising out of a

right

or liability under the general or common law

and not under the Act, the jurisdiction of the Civil

Court

is alternative, leaving it to the election of the

suitor concerned to

choose his remedy for the relief

which

is competent to be granted in particular remedy.

B

( 3)

If the industrial dispute relates to the enforcement of a C

right

or an obligation creuted under the Act, then

the only remedy available to the suitor

is to get an

adjudication under the Act.

( 4)

If the right which is sought to be enforced is a right

created under the Act such as Chapter VA then the

remedy for its enforcement

is either

section 33C or D

. the raising of an industrial dispute, as the case may be.

We may, however, in relation to principle 2 stated above hasten

to

add that there will hardly be a dispute which will he an industrial

dispute within the meaning of section

2(k) of the Act and yet will be

one arising out of a right

or liability under the

general or common law

only and not U'ader the Act. Such a contingency, for example, may

arise in regard to the dismissal of

an unsponsored workman which in

view of the provision of law contained

in Section 2A of the Act will

be an industrial dispute

eve·,1 though it may otherwise be an individual

dispute. Civil Courts, therefore, will have hardly an occasion to deal

with the type of cases falling under principle

2. Cases of industrial

disputes by and large, almost invariably, are bound to be convered

by

principle 3 stated above.

Some of the decisions of the High Courts in India cited at the Bar

m;iy now be briefly noticed. They fell in one category or the other

and have expressed divergent views. Those \Vhich have taken any

view contrary to the one expressed by us above must be deemed to

have been over-ruled in that regard a·ad those falling in line with our

E

F

views arc

being affirmed. G

In th,.:: c1se of Kri~hnan aud another v. East India Dis1illeries and

Su11ar Factories, Ltd. Nellikuppam, and another('), the learned single

Jndge of the Madras High Court has held that the jurisdiction of the

Civil Court

is ousted impliedly to try

a ease which could form subject

matter of un industrial dispute collectively between the workmen and

their employer. One of us ( Alagiriswami, J) as a Jndge of the Madras H

High Court in the case

of Madura Mills Company, Ltd. v. Guruvammal

(I) [1964] i. L L. J, 217.

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PREMIER AUTO v. K. s. WADKE (Untwa/ia, J.) 447

and another(

1

') has pointed out th•at the Act creates a special machi­

nery under section 33C(2)

to enforce specially created rights. The

parties could not, therefore, approach the ordinary civil court. We

affirm the aforesaid two decisions of the Madras High Court. A si·agle Judge of the Mysore High Court took the same view in the

case of

Nippani Electricity Company (Private) Ltd, (by its director, V. R. Patravali) and another v. Bhimarao Laxman Patil and others(")

and a Bench of the Bombay High Court in The Pigment Lakes and

Chemical Manufacturing Co. Private Ltd. v. Sitaram Kashiram

Konde(

3

)

held that the jurisdiction of the civil court to deal with

matters mentioned in Chapter VA read with schedules 2 to 4 to the

Act

is impliedly barred.

SimiJoar opinio»1 was expressed by a learned

single Judge of the Keral•a High Court in the case of Nanoo Asan

Madhavan

v. State of Kera/a and others.(') A leamed single Judge of

the Calcutta High Court seems to have taken a

somewhoat different view

in the case of

Bidyut Kumar Chatterjee and others v. Commissioners

for the

Port of Ca/cutta.(

5

)

The ratio of the case in so far as it

goes against the principles enunciated by us is not correct. We

approve what has been said by a Bench of the Calcutta High Court

in the case of Ml s Austin Distributors

Pvt. Ltd. v. Nil Kunwr Das(')

that a suit for recovery of damages for wrongful dismissal, on the

grounds which are clearly entert~inable in Civil Court, would lie in that

court even though a special remedy

is provided in the Act in respect of

that matter. This would be so on the footing that the dismissal was in

violation of the contract of service recognized under the general law.

More or less to the same effect is the view taken by a

learned single

Judge of the Mysore High Court in the case of

Syndicate Bank v.

Vincent Robert Lobo('). It is not necessary to refer to some unre­

ported decisions of the Bombay High Court taking one

view or the

other.

Applying the principles afore-mentioned to the

facts of the instant

case, it

is clear that what the plaintiff-respondents wanted to prevent

was, by and large,

thre•atened breach of their right which flowed from

the agreement dated the 31st December, 1966 entered into between

the Sabha Union and the Company. Such a collective agreement is

recognized and creates a right in favour of the members of the Union

only under section 18 (1) of the Act and not under the g~aeral law of

contract. Withdrawal of the claim based upon the said agreement by

their learned counsel in the Trial Court had no effect on the question of

its jurisdiction to try the suit. In so far

as the suit was filed in a re­

presentative capacity

on behalf of

the members of the Sabha. Union

by two of its members under Order I, Rule 8 of the Code it was clearly

a suit in relation to the exercise of right created under the Act. In

their case it was not permissible to fall back upon the allegedly implied

terms and conditions

of service. The source of their

right was the

agreement entered from time

to time under section 18 ( 1) of the Act

(I) [1967] 2 Labour Law Journal, 397.

(3) 71 Bombay Law Reporter, 452.

(5) [1970] 2 Labour Law Journal, 148.

(7) [19711 2 Labour Law Journal 46.

(2) [1969] 1 Labour Law Journal 268.

(4) [1970] l Labour Law Journal, 272.

(6) [1970] 3 Labourand Industrial

Cases,

323.

448 SUPPREME COURT REPORTS [1976] 1 S.C.R.

culminating iu the agreement dated the 31st December, 1966. It is

reasonable to take the view that even the workmen who were not

members of the Sabha Union but were given the benefit of incentive

payments under the said agreement were so given because they tacitly

agreed to be bound by the said agreement. Even accepting that in their

case it had assumed the character of an implied term of contract of

service, the alternative claim made in paragraph 8 of the plaint

as being

a condition of service otherwise, can be referable to the claim of the

non-members only. The source of their right

In that event was different

and a representative suit on their behalf

by the two plaintiffs could not

be maintained. The numerous

persons must have the same interest in

one suit instituted under Order I, Rule 8 of the Code. Persons having

different interests cannot

be so represented. The better and more rea-

·

sonable view, therefore, to take is that all workmen represented by the

two plaintiffs sought an order of injunction in the civil court to pre­

vent

an injury which was proposed to be caused to them in

relatio>,1

to their right under the Act. Hence a suit for a decree for perma­

nent injunction

was not maintainable in the civil

court as it had no

jurisdiction to grant the relief or even a temporary relief.

Although the issue

as to the non-compliance with the requirements

of section 9A of the Act

was dropped, the learned Trial Judge seems

to have found that the

proposed change in the conditions of service

was adverse to the interests of the workmen. Whether it was so or

not

is a matter of debate. But one thing was apparent that both the

agreements could not

be

simult:meously given effect to. It was im­

practicable-almost impossible to do so. The result of the order of

injunction made by the Trial Court

was that the workmen represented

by the two plaintiffs were to get incentive payments in accordance with

the scheme embodied in the agreement dated the 3

lst December, 1966

ignoring the addition to the strength of the workmen of the Motor

Production Department in the shape of the 27 persons. On tho

other hand the members of the Association Union who had entered

into the second agreement dated the 9th January, 1971 were to get their

inceative payments in accordance with that agreement taking into

account the contribution made

in the matter of production by the newly

added 27 persons.

On the face of it, it was an attempt to put two

swords

in one sheath. That it was not only difficult but almost im­

possible to do so

was conceded on all hands, including Mr. Sorabjee,

learned counsel for the plaintiff-respondents. Apart from the ques­

tion of jurisdiction the decree for injunction

\Vas not sustainable on

this account too. The dispute could well be decided from all aspects

in a reference under the Act.

One more difficulty in the way of the sustainability of the order

of injunction may also

be indicated. Temporary

i'.1junction can be

granted under sub-section ( 1) of section 3 7 of the Specific Relief Act,

1963 but a decree for perpetual injunction

is made

uader sub-section

(2). Grant of perpetual injuaction is subject to the provision con­

tained in Chapter

8.

Under section 38(1) a perpetual injunction may

be granted to the plaintiff to prevent the breach of an obligation existing

in his favour irrespective of the fact whether the obligation arises at

common

Jaw, under a

cohtract or under a special statute (subject to

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PREMIER AUTO v. K. s. WADKE (Untwalia, J.) 449

A the point of jurisdiction). But sub-section (2)' provides that when

any such obligation arises out of contract the courts shall be guided by

the rules and provisions contained in Chapter 2. Section 14(1) (c) oc­

curring in that Chapter

says that a contract which is in its nature

deter­

minable cannot be specifically enforced. The contract in question

embodied in the written agreement dated the 31st December, 1966

was in its nature determinable under

sectiO'a 19(2) of the Act or could

B be varied by following the procedure under section 9A. Section

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41 (a) of the Specific Relief Act says that an injunction cannot

be

granted to prevent the breach of a contract the performance of which

would not

be specifically enforced.

Section 42 providing an excep­

tion to this

is not attracted in this case. The decree or order of

in­

junction made therein, therefore, is not sustainable on this account too.

We now proceed to briefly state the facts of Civil Appeal No.

2317/1972. During the pendency

of an industrial dispute

ia l.T.No.

139 of 1965, 46 workmen of the appellant company were sought to

be dismissed and

an application for according approval to the dismissal

was made under section 33(2) of the Act. On 14.3.1968 a settle­

ment was reached between the Engi

1aeering Mazdoor Sabha Union,

plaintiff no. I, the same Sabha Union, as in the other case, and the

company. A written agreement was executed according to which the

parties agreed

to refer their cases to a Board of Arbitrators consisting

of 3 persons. During the

pendeacy of the arbitration the 46 work­

men were to remain suspended from work till its decision. They were

to

be paid from the date of resumption of work by the other workmen,

50% of their wages which they would have normally earned had they

not been

so suspended.

On 14.11.1971 the appellant company served

a notice o'a the union, plaintiff no. I in writing seeking to terminate

the settlement

in accordance with section 19(2) of the

Act. There­

upon the union, and two of their members instituted the suit on

14.12.1971 challenging the action

of the company on several grounds

and praying for an order of

injunction to restrain the company from

committing a breach of the agreement dated the 14th March, 1968

including the breach

as regards the payment of

50 % wages to the

46 workmen.

It may be stated that the company's nominee on the

Board of

Arbitrators had withdrawn. A prayer, therefore, was

made in the plaint to direct the company to appoint its nominee in

place of Mr. Karnik

who had withdrawn. The company asked the

City Civil Coµrt

of Bombay, where the suit was instituted, to decide

the question of jurisdiction of the court to entertain the suit

as a

preliminary issue. The court held against the company.

It went up

in revision before the Bombay High Court. The same learned

Judge sitting singly

who later on decided the otheL case

up

11cld the

jurisdiction of the civil court to try the suit. The company filed this

appeal by special leave.

On the facts of this case it is all the more cleoar that the civil court

has no jurisdiction

to try it. The manner of voluntary reference of

industrial disputes to arbitration

is provided in

section lOA o! the Act.

The reference to arbitration has to be on the basis of a written agree­

ment between the employer and the workman. As provide~ in sub-

450 SUPREME COURT REPORTS [1976] 1 S.C.R.

.section ( 5) nothing in the Arbitration Act, 1940 shall apply to arbitra­

tion,s under section JOA of the Act. There is no provision in the Act

to compel a party

to the agreement to nominate another arbitrator

if its nominee has withdrawn from arbitration. The company had

terminated the agreement dated the 14th March, 1968 under section

19(2) of the Act.

On the authority of this Court in South Indian

Bank Ltd. v. A. R. Chacko(') Mr. Iyer endeavoured to argue that

in spite of the termination of the agreement it still continued to be

in force. Apart from the fact that the decision of this Court was

with reference to the termination of the award under section 19,

it

is clear that the termination of the agreement in this case was

accepted

by the unio,n. It sought to challenge it by the insti'ution

of a suit.

It is clear that the suit was in relation to the enforcement

of a right created

Ull\der the Act. The remedy in Civil Court was

barred. The only remedy available to the workmen concerned was

the raising of an industrial dispute. It was actually raiSed, and, as

a matter of fact, shortly after the institutio'a of the suit the disputes

were referred by the Government to the Industrial Tribunal

in LT.No.

33 of 1972

on the 25th January, 1972.

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For the reasons stated above both the appeals are allowed, the D

judgments and orders of the courts below are set aside. But in the

circumstances

we shall make no order as to costs in either of the

appeals.

P.B.R. Appeals allowed.

(I) [1964] 5. S. C. R. 625.

)

)