REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 4223 OF 2008

ARISING OUT OF

SPECIAL LEAVE PETITION (C) NO. 1598 OF 2007

RAMESH CHANDRA SANKLA ETC. … APPELLANTS

VERSUS

VIKRAM CEMENT ETC. … RESPONDENTS

WITH

CIVIL APPEAL NO. 4224 OF 2008

ARISING OUT OF

SPECIAL LEAVE PETITION (C) NO. 1600 OF 2007

ASHA RAM MALVIYA ETC. … APPELLANTS

VERSUS

VIKRAM CEMENT ETC. … RESPONDENTS

WITH

CIVIL APPEAL NO. 4225 OF 2008

ARISING OUT OF

SPECIAL LEAVE PETITION (C) NO. 2237 OF 2007

RATAN SINGH RATHORE & ORS. … APPELLANTS

VERSUS

VIKRAM CEMENT … RESPONDENT

WITH

CIVIL APPEAL NO. 4226 OF 2008

ARISING OUT OF

SPECIAL LEAVE PETITION (C) NO. 2245 OF 2007

DWARKA PRASAD AGARWAL & ORS. … APPELLANTS

VERSUS

VIKRAM CEMENT & ORS. … RESPONDENTS

WITH

CIVIL APPEAL NO. 4227 OF 2008

ARISING OUT OF

SPECIAL LEAVE PETITION (C) NO. 5707 OF 2007

VIKRAM CEMENT … APPELLANT

VERSUS

HEMANT KUMAR JAIN & ORS. … RESPONDENTS

J U D G M E N T

C.K. THAKKER, J.

1. Leave granted.

2. All these appeals arise out of common

judgment and order passed by the Division Bench

of the High Court of Madhya Pradesh (Indore

Bench) on October 31, 2006 in Writ Appeal No.

2

353 of 2006 and companion matters and also

against an order dated December 11, 2006 in

Review Petition M.C.C. No. 1062 of 2006 and

cognate matters. The orders passed by the

Division Bench of the High Court have been

challenged by both the parties i.e. employees/

workmen as also by the employer/Company.

FACTUAL BACKGROUND

3. To appreciate the controversy raised

in the present appeals, few relevant facts may

be noted.

4. Vikram Cement (‘Company’ for short) is

engaged in the business of manufacturing cement

of different grades and has its plant at Vikram

Nagar, Khor, Madhya Pradesh. Appellants in one

set of appeals are employees engaged and

working in the factory of the Company. It was

the case of the Company that with a view to

rationalize its manpower, it introduced a

Voluntary Retirement Scheme (‘the Scheme’ for

3

short) on July 12, 2001 in the Cement Plant.

The said scheme provided voluntary retirement

of workmen who had either completed 40 years of

age or put in at least 10 full years of

service. They were to be paid benefits as

provided in the scheme. The scheme was

displayed on the Notice Board and widely

publicized through local press. It appears that

out of 1500 employees, about 460 employees

opted for voluntary retirement which was

accepted by the Company and they were granted

all benefits towards ‘full and final

settlement’ in terms of the scheme. This was

done during July-September, 2001. According to

the Company, the workmen received those

benefits, issued stamped receipts in token of

acceptance of the amount under the scheme and

ceased to remain ‘workmen’ of the Company. The

relationship between the ‘employer and

employee’ came to an end. According to the

Company, however, during September-October,

2001, some of the employees who had opted for

4

voluntary retirement, accepted benefits under

the scheme and who were no more employees of

the Company approached Labour Court, Mandsour

by invoking Section 31 of the Madhya Pradesh

Industrial Relations Act, 1960 (hereinafter

referred to as ‘the Act’), inter alia,

contending that they had not opted for

voluntary retirement; they continued to remain

workmen of the Company; they were pressurized,

threatened and forced to accept some amount;

though they were willing to work and continue

as employees of the Company, they were not

allowed to join duty. It was also their case

that they were not paid legal and proper

benefits to which they were otherwise entitled

even under the scheme. The so-called payment

said to have been made to them was also not

adequate and ‘full and final settlement’ of the

dues in accordance with law. It was, therefore,

contended by them that they were entitled to

reinstatement. As they were not allowed to

continue as workmen by the Company, the

5

impugned action was in the nature of an order

of ‘removal’ or termination of service and

appropriate relief, therefore, was required to

be granted to them.

ORDER OF LABOUR COURT

5. Cases were duly registered by the

Labour Court. Notices were issued. The Company

appeared and raised preliminary objection as to

the maintainability of the claim put forward by

the workmen. It was contended by the Company

that the workmen had accepted the scheme and

received the amount towards ‘full and final

settlement’ and left the Company for ever. It

was not a case of ‘removal’ or ‘termination’ of

services and the applications were liable to be

dismissed as they were no more in employment. A

prayer was, therefore, made to uphold

preliminary objections which were of legal

nature and to dismiss cases only on that

ground. The Labour Court considered objections

raised by the Company and reply of the workmen.

6

It, however, opined that there was ‘factual

dispute’ between the parties and it was not

possible to dismiss cases as being not

maintainable. It, therefore, directed the

Company by an order dated September 16, 2003 to

file written statement so that the matter may

be decided on merits. The Company challenged

the said order by approaching the Industrial

Court, Madhya Pradesh at Indore but the said

application was also dismissed by the

Industrial Tribunal vide an order dated

February 11, 2004. The Company then filed reply

contending that the applications filed by the

‘so called workmen’ were clearly an

‘afterthought’, more so, when they had accepted

the amounts/benefits under the scheme. Hence,

the claim was wholly ill-founded. It was

averred by the Company that some of the workmen

had even approached the Authority under the

Payment of Gratuity Act for increased amount of

gratuity, thus, clearly exhibiting and

admitting to the severance of relationship of

7

master and servant between the parties. It was

contended that the workmen could not be allowed

to resile from the stand taken by them earlier.

They were estopped from challenging the factum

of voluntary retirement.

6. The Company moved the Labour Court on

November 9, 2004 requesting the Court to frame

three additional issues viz., 4(a), 4(b) and 4

(c) and hear them as preliminary issues. The

said issues read as under:

4(a) Whether the application is barred by

estoppel?

4(b)Whether the application filed by the

applicant can be heard under Sections

31(3), 61 and 62 of MPIR Act?

4(c) Whether the application is time barred?

7. The Labour Court accepted the request

of the Company to frame issues 4(a), 4(b) and 4

(c). It, however, rejected the prayer to decide

those issues as ‘preliminary issues’ before

deciding other issues on merits. According to

8

the Labour Court, it was not advisable to

decide the issues as preliminary issues without

recording evidence. The application of the

Company was, therefore, dismissed.

ORDER OF INDUSTRIAL COURT

8. Being aggrieved by the said order, the

Company again approached the Industrial Court.

It was contended that the preliminary issues

raised by the Company and approved by the

Labour Court were ‘purely legal issues’ and the

Labour Court was wrong in treating them as

mixed issues of law and fact which required

leading of evidence. The order passed by the

Labour Court was, therefore, liable to be set

aside.

9. The Industrial Court, however, held

that the Labour Court was right in rejecting

the prayer of the Company to decide issues 4

(a), 4(b) and 4(c) before deciding other

issues. According to the Industrial Court, it

was the case of the employees that their

9

signatures had been taken on the applications

for voluntary retirement by exercising pressure

and under duress. It was also their case that

they had been paid ‘lesser amount’ than the

amount declared under the scheme. Moreover,

they had not accepted the amount voluntarily

and with free consent but the same was paid to

them under coercion. The Court also noted that

the employees had given undertaking that they

were ready to refund the amount received by

them. The Industrial Court, in the

circumstances, observed that the dispute could

not be resolved without recording evidence.

Accordingly, the prayer made by the Company to

decide issues of jurisdiction and

maintainability as preliminary issues was

rejected by the Industrial Court.

ORDER OF SINGLE JUDGE OF HIGH COURT

10

10. Being aggrieved by the said order, the

Company approached the High Court. The learned

Single Judge of the High Court, by an order

dated February 6, 2006, dismissed the writ

petition observing, inter alia, that the order

passed by the Labour Court and confirmed by the

Industrial Court was interlocutory in nature

and did not decide any controversy. It merely

deferred the decision on the question as to

maintainability of claim along with other

issues. Such order could not be said to be

without jurisdiction so as to interfere with it

in exercise of supervisory jurisdiction under

Article 227 of the Constitution. No finding

much less categorical finding one way or the

other had been recorded and rights of the

parties were yet to be crystallized by the

Court. It was also observed that whether a

particular issue arising from the pleading

between the parties be tried as preliminary

issue or not should be examined by the Court

keeping in view the provisions of Order XIV of

11

the Code of Civil Procedure, 1908 (hereinafter

referred to as ‘the Code’). On the facts and in

the circumstances of the case, both the Courts

were right in not deciding the issues as to

jurisdiction and maintainability of claim as

preliminary issues. No interference was,

therefore, called for. Accordingly, the writ

petition was dismissed.

EARLIER SLP

11. The Company challenged the said order

by filing Special Leave Petition in this Court.

Notice was issued and interim stay of further

proceedings was granted by this Court. The

workmen appeared. On September 1, 2006, the

matter was placed before the Court. During the

intervening period, however, an Act known as

the Madhya Pradesh Uchcha Nyayalaya (Khand

Nyayapeeth Ko Appeal) Adhiniyam, 2005

(‘Adhiniyam’ for short) came into force. This

Court, therefore, held that it was not inclined

to entertain Special Leave Petition under

12

Article 136 of the Constitution in view of

availability of intra court appeal (Writ

Appeal) under the Adhiniyam and accordingly,

Special Leave Petition was dismissed with

liberty to the Company to approach the High

Court. Interim relief granted earlier was,

however, ordered to be continued for a period

of two months. But it was expressly stated by

this Court that the question of maintainability

of intra court appeal would be decided by the

High Court in accordance with law.

ORDER OF DIVISION BENCH

12. In view of the above order passed by

this Court, intra court appeals were filed by

the Company. The Division Bench of the High

Court, as stated above, disposed of the appeals

by an order dated 31

st

October, 2006. It was

held by the Division Bench that the writ

petitions filed by the Company were under

Article 227 of the Constitution and the learned

Single Judge was exercising supervisory

13

jurisdiction and intra court appeals were not

maintainable and were liable to be dismissed.

The Division Bench, however, held that since

the respondent-workmen had received the

benefits under the scheme, pocketed the amount

and approached the Labour Court claiming that

they had not voluntarily accepted the scheme

and the benefit thereunder, it would be

equitable to direct each of the employees who

had filed a petition under Section 31(3) of the

Act to return the benefit so received to the

employer, subject to the undertaking by the

Company that in the event the Labour Court

allows the claim and grants benefits to the

workmen, the same would be restored to them by

the Company with interest @ 6% per annum.

13. The workmen are much aggrieved by that

part of the order which directed them to refund

the amount. They filed review petitions but

they were dismissed by the Division Bench on

December 11, 2006. The workmen have, therefore,

approached this Court by filing Special Leave

14

Petitions in which notices were issued and the

Company appeared. The Company, on the other

hand, felt aggrieved by the order of the

Division Bench holding intra court appeal not

maintainable as also by the order passed by the

Labour Court, confirmed by the Industrial Court

and also by the High Court not deciding issues

of jurisdiction and maintainability of

petitions filed by the employees as preliminary

issues before other issues are taken up for

consideration. Their Special Leave Petitions

were also ordered to be heard along with

Special Leave Petitions filed by the workmen

and that is how all the matters are before us.

SUBMISSIONS OF COUNSEL

14. We have heard learned counsel for the

parties.

15. The learned counsel for the workmen

vehemently contended that the order passed by

the Division Bench of the High Court was

without jurisdiction so far as it directed the

15

workmen to refund the amount received by them.

The counsel submitted that once the Division

Bench held that intra court appeals were not

maintainable, it had no power to pass any order

directing a party to do or not to do something.

Such direction is without authority of law,

there is total lack of jurisdiction and the

order is non est. No direction of refund of

amount, therefore, could have been issued by

the Division Bench. On that ground alone,

appeals filed by the workmen deserve to be

allowed. Alternatively, it was submitted that

once it was the case of the workmen that they

had not accepted the scheme voluntarily, they

were deemed to be continued in employment. If

it is so, they would be entitled to receive

wages. But they were not allowed to join duty

and to work. No payment of wages had been made

to them by the Company. The Company, for that

reason also, cannot ask for repayment of amount

paid to them. At the most, the said amount can

be adjusted towards payment of wages. The

16

counsel also submitted that being aggrieved by

the order passed by the Industrial Court, the

Company filed a writ petition which was

withdrawn. No express liberty was granted to

the Company to file fresh petition on the same

cause of action. Thereafter fresh petitions

were filed by the Company. Such petitions were

not maintainable and ought not to have been

entertained by a Single Judge of the High

Court. They were barred by the doctrine of

constructive res judicata as also on the ground

of abandonment of claim.

16. On merits, it was submitted that the

workmen were not paid the dues which ought to

have been paid to them. A meager amount was

offered which was accepted by workmen under

duress. It was less than the amount required to

be paid under the scheme. The payment was made

in remote past and at this stage, it would be

very difficult for them to refund the amount.

The High Court should not have ordered

repayment of the amount to the Company and

17

ought to have directed the Labour Court to

proceed to decide the matter on merits by

expressly clarifying that the payment would

abide by the final outcome of the cases before

the Labour Court. On all these grounds, it was

submitted that the order passed by the Division

Bench deserves to be set aside by restoring the

order of the learned Single Judge.

17. The learned counsel for the Company,

on the other hand, supported that part of the

order of the Division Bench which directed

refund of amount by the workmen to the Company.

It was, however, submitted that the Division

Bench was not right in not entertaining,

dealing with and deciding intra court appeals

on the ground that such appeals were not

maintainable. The counsel submitted that while

deciding the issue as to whether intra court

appeal is or is not maintainable, nomenclature

or reference to a particular Article of the

Constitution in the writ petition is not

material. Similarly, observations of learned

18

Single Judge that he is exercising the power

under a particular provision of the

Constitution is also not decisive. The Division

Bench was required to apply its mind

independently and to consider the nature of

controversy raised before the Single Judge.

And if it finds that the petition was under

Article 226 of the Constitution, the Division

Bench was enjoined to entertain intra-court

appeals and to decide them on merits. The

counsel alternatively submitted that even if

the Division Bench felt that the writ petitions

were under both the Articles, viz. Article 226

and Article 227 of the Constitution, as per

settled law, no party can be deprived of right

of intra court appeal merely by referring to

the other Article i.e. Article 227 of the

Constitution, over and above Article 226 of the

Constitution under which such right is

available to the party aggrieved by an order

passed by a Single Judge. It was, therefore,

submitted that the appeals of the Company

19

should be allowed and the matter may be

remitted to the Division Bench of the High

Court so as to enable the Court to decide intra

Court appeals on merits in accordance with law.

18. The learned counsel also contended

that an objection as to non-maintainability of

writ petitions on the ground of constructive

res judicata/abandonment of claim is not well-

founded. First of all, no such contention was

ever advanced either before the learned Single

Judge or before the Division Bench of the High

Court. It is also not raised in Special Leave

Petitions. Such a plea has been taken at a

belated stage as an ‘afterthought’. Even

otherwise, the contention is not well-founded

and is totally misconceived. The Company filed

a writ petition against more than 200

employees. The Registry of the High Court

raised an objection as to maintainability of

such petition. The petition was described as

‘defective’ or under an ‘office objection’

having ‘logistic problem’. The Company

20

considered the point raised by the Office and

withdrew the petition to file separate and

independent petitions. Individual petitions

were then filed which were decided by the

Court. The objection against maintainability

of writ petitions has thus no force.

19. On merits, the counsel contended that

the Labour Court, Industrial Court and the

learned Single Judge of the High Court were in

error in not deciding the issue as to

maintainability of claims as preliminary issue.

It was an admitted fact that the scheme was

introduced by the Company, it was accepted by

the workmen and payment was made to them. Once

these facts are admitted, there remained no

relationship of master and servant between the

Company and the workmen. It is not even the

case of the workmen that they have not been

paid. In view of these facts, the Company was

right in requesting the Labour Court to decide

that the question whether claim petitions filed

by the workmen were maintainable. The question

21

was pure question of law. It did not require

investigation of facts. The issue, therefore,

ought to have been heard as preliminary issue.

According to the counsel, the fact whether the

claimants were workmen or not was a

‘jurisdictional’ fact. The Labour Court was

having ‘limited jurisdiction’ under the Act. It

was, therefore, obligatory on the Labour Court

to decide whether the jurisdictional or

preliminary fact which could confer

jurisdiction on the court was present. By not

doing so, it had committed jurisdictional error

which was required to be corrected by the High

Court in certiorari-jurisdiction. But the High

Court also committed the same error. Hence,

this Court may interfere with the said order by

directing the Labour Court to decide issues 4

(a), 4(b) and 4(c) as preliminary issues. Even

if intra court appeals are held not

maintainable, the Company is before this Court

under Article 136 of the Constitution and an

22

appropriate order, therefore, may be made by

the Court.

MAINTAINABILITY OF INTRA COURT APPEAL

20. So far as intra court appeals are

concerned, the learned counsel for the Company

strenuously urged that the Division Bench of

the High Court was in error in holding that

intra court appeals were not maintainable. He

submitted that Adhiniyam conferred such right

on the party aggrieved by a decision of a

Single Judge of the High Court. It was also

submitted that this Court at the time of

hearing of Special Leave Petition considered

the fact that intra court appeal was available

to the aggrieved party under the Adhiniyam and

disposed of Special Leave Petition by giving

liberty to the appellant to approach the

Division Bench of the High Court though notice

was issued and interim relief was also granted

earlier. It was also urged that the petition

filed by the petitioner-appellant was under

23

Article 226 and Article 227 of the Constitution

and, hence, a right of intra court appeal could

not be taken away. According to the counsel, a

statement by a Single Judge in the judgment

that he was exercising power of superintendence

under Article 227 of the Constitution is not

final and conclusive. It was, therefore, prayed

that the appeals be allowed by remitting all

the matters to the Division Bench of the High

Court to decide them on merits.

21. We are unable to persuade ourselves to

uphold the contention of the learned counsel.

The Madhya Pradesh Uchcha Nyayalaya (Khand

Nyayapeeth Ko Appeal) Adhiniyam, 2005 (Act XIV

of 2006) received the assent of the President

on March 28, 2006. The Act was published in the

Madhya Pradesh Gazette (Extraordinary) on April

05, 2006 and was brought into force “on the 1

st

day of July, 1981” [sub-section (2) of Section

1]. The Preamble of the Act states that it is

an Act to provide for an appeal from a judgment

or order passed by one Judge of the High Court

24

in exercise of original jurisdiction to a

Division Bench of the same High Court.

22. Section 2 is relevant and reads as

under:

2.Appeal to the Division Bench of

the High Court from a Judgment or

order of one Judge of the High Court

made in exercise of original

jurisdiction.—(1) An appeal shall lie

from a Judgment or order passed by one

Judge of the High Court in exercise of

original jurisdiction under Article

226 of the Constitution of India, to a

Division Bench comprising of two

judges of the same High Court:

Provided that no such appeal shall lie

against an interlocutory order or

against an order passed in exercise of

supervisory jurisdiction under Article

227 of the Constitution of India .

(2)An appeal under sub-section (1)

shall be filed within 45 days from the

date of order passed by a single

Judge:

Provided that any appeal may be

admitted after the prescribed period

of 45 days, if the petitioner

satisfies the Division Bench that he

had sufficient cause for not

preferring the appeal within such

period.

Explanation.—The fact that the

petitioner was misled by any order,

practice or judgment of the High Court

25

in ascertaining or computing the

prescribed period may be sufficient

cause within the meaning of this sub-

section.

(3) An appeal under sub-section (1)

shall be filed, heard and decided in

accordance with the procedure as may

be prescribed by the High Court.

23. Section 3 enables the High Court to

make Rules under the Act for carrying out

purposes of the Act. Section 4 repeals the

Madhya Pradesh Uchcha Nyayalaya (Letters Patent

Appeals Samapthi) Adhiniyam, 1981.

24. Bare reading of sub-section (1) of

Section 2 of the Act, quoted above, leaves no

room for doubt that it allows a party aggrieved

by a decision of a Single Judge of the High

Court to appeal to a Division Bench of the High

Court if a Single Judge has rendered a judgment

or passed an order in exercise of original

jurisdiction under Article 226 of the

Constitution. Proviso to sub-section (1)

expressly declares that no such appeal shall

lie against an order passed in exercise of

26

supervisory jurisdiction under Article 227 of

the Constitution.

25. It is, therefore, clear that if the

order is passed by a Single Judge of the High

Court in exercise of original jurisdiction

under Article 226 of the Constitution, an intra

court appeal would lie. If, on the other hand,

a Single Judge exercises power of

superintendence under Article 227 of the

Constitution, intra court appeal would not be

competent.

26. Precisely, this was the position under

different Letters Patents. For instance, Clause

15 of the Letters Patent as applicable to High

Courts of Calcutta, Madras and Bombay

(Chartered High Courts), conferred such right

of Letters Patent Appeal. It read as under:

15. Appeal to the High Court from

Judges of the Court.—And We do further

ordain that an appeal shall lie to the

said High Court of Judicature at

Bombay from the judgment (not being a

judgment passed in the exercise of

appellate jurisdiction in respect of a

decree or order made in the exercise

27

of appellate jurisdiction by a Court

subject to the superintendence of the

said High Court, and not being an

order made in the exercise of

revisional jurisdiction and not being

a sentence or order passed or made in

the exercise of the power of

superintendence under the provisions

of Section 107 of the Government of

India Act or in the exercise of

criminal jurisdiction) of one Judge of

the said High Court or one Judge of

any Division Court, pursuant to

Section 108 of the Government of India

Act, and that notwithstanding anything

hereinbefore provided an appeal shall

lie to the said High Court from a

judgment of one Judge of the said High

Court or one Judge of any Division

Court, pursuant to Section 108 of the

Government of India Act made on or

after the first day of February One

thousand nine hundred and twenty-nine

in the exercise of appellate

jurisdiction in respect of a decree or

order made in the exercise of

appellate jurisdiction by a Court

subject to the superintendence of the

said High Court, where the Judge who

passed the judgment declares that the

case is a fit one for appeal; but that

the right of appeal from other

judgments of Judges of the said High

Court or of such Division Court shall

be to Us, Our Heirs or Successors in

Our or Their Privy Council, as

hereinafter provided.

27. The said clause (Clause 15) came up

for consideration before this Court in several

28

cases. We may, however, refer to only one

leading judgment on the point in Umaji Keshao

Meshram & Ors. V. Radhikabai, Widow of

Anandrao Banapurkar & Anr., 1986 Supp SCC 401.

In that case, proceedings had been initiated

under the Bombay Tenancy and Agricultural Lands

(Vidarbha Region) Act, 1958. A person

aggrieved by an order passed by Appellate

Authority under the Act preferred revision

before the Revenue Tribunal which was allowed.

The order of the Tribunal was challenged in a

writ petition under Article 227 of the

Constitution before the High Court of Bombay

(Nagpur Bench). A Single Judge allowed the

petition. The order passed by the Single Judge

was then challenged by the aggrieved party by

filing Letter Patent Appeal before the Division

Bench under Clause 15 of the Letters Patent.

The Division Bench of the High Court dismissed

the appeal as not maintainable. The said

decision was challenged by the appellant in

this Court.

29

28. This Court observed that the High

Court of Judicature at Bombay was established

by Letters Patent dated June 26, 1862 issued by

the British Crown pursuant to the authority

conferred on it by the Indian High Courts Act,

1861 (24 and 25 Vict., c. 104). The Letters

Patent also conferred right to institute an

appeal to the Division Bench of the High Court

against the ‘judgment’ rendered by a Single

Judge of the same court in certain cases.

29. Considering the history, tradition and

development of Letters Patent amended from time

to time, the Government of India Acts, 1915 and

1935 and the provisions of the Constitution,

this Court ruled that in case a Single Judge of

the High Court has given a judgment or passed

an order in exercise of jurisdiction under

Article 226 of the Constitution, remedy of

Letters Patent Appeal is available to the

aggrieved party. Madon, J. who delivered the

judgment for the Court proceeded to observe

that when the facts justify the party to invoke

30

Article 226 or 227 of the Constitution and he

chooses to institute a petition under both the

Articles, he should not be deprived of right of

appeal available under Clause 15 of the Letters

Patent.

30. His Lordship stated:

“Petitions are at times filed both

under Articles 226 and 227 of the

Constitution. The case of Hari

Vishnu Kamath v. Syed Ahmad Ishaque

and Ors. (1955) 1 SCR 1104 : AIR

1955 SC 233, before this Court was

of such a type. Rule 18 provides

that where such petitions are filed

against orders of the tribunals or

authorities specified in Rule 18 of

Chapter XVII of the Appellate Side

Rules or against decrees or orders

of courts specified in that Rule,

they shall be heard and finally

disposed of by a Single Judge. The

question is whether an appeal would

lie from the decision of the Single

Judge in such a case. In our

opinion, where the facts justify a

party in filing an application

either under Article 226 or 227 of

the Constitution, and the party

chooses to file his application

under both these Articles, in

fairness and justice to such party

and in order not to deprive him of

the valuable right of appeal the

Court ought to treat the application

as being made under Article 226, and

if in deciding the matter, in the

31

final order the Court gives

ancillary directions which may

pertain to Article 227, this ought

not to be held to deprive a party of

the right of appeal under Clause 15

of the Letters Patent where the

substantial part of the order sought

to be appealed against is under

Article 226”.

(emphasis supplied)

31. (We may observe at this stage that

Chinnappa Reddy, J. expressed his inability to

opine on the issue being ‘unfamiliar’ with the

history, tradition and the law of the city of

Bombay).

32. In our judgment, the learned counsel

for the appellant is right in submitting that

nomenclature of the proceeding or reference to

a particular Article of the Constitution is not

final or conclusive. He is also right in

submitting that an observation by a Single

Judge as to how he had dealt with the matter is

also not decisive. If it were so, a petition

strictly falling under Article 226 simpliciter

can be disposed of by a Single Judge observing

that he is exercising power of superintendence

32

under Article 227 of the Constitution. Can such

statement by a Single Judge take away from the

party aggrieved a right of appeal against the

judgment if otherwise the petition is under

Article 226 of the Constitution and subject to

an intra court/Letters Patent Appeal? The reply

unquestionably is in the negative [see Pepsi

Foods Ltd. & Anr. v. Special Judicial

Magistrate & Ors., (1998) 5 SCC 749].

33. In our considered opinion, however, on

the facts and in the circumstances of the

present case, the petitions instituted by the

Company and decided by a Single Judge of the

High Court could not be said to be original

proceeding under Article 226 of the

Constitution. We are clearly of the view that

the learned Single Judge had decided the

petitions in exercise of power of

superintendence under Article 227 of the

Constitution.

34. We have already referred to the facts

of the case. According to the Company,

33

voluntary retirement was accepted by the

employees. They thereafter challenged the

action on the ground that the acceptance was

not voluntary but they were compelled to opt

for the scheme and were paid some amount which

was not in consonance with law and the action

of not allowing them to continue in the

employment amounted to removal from service.

They, therefore, approached Labour Court for an

appropriate relief. The Labour Court

entertained complaints and issued notice. The

Company appeared and raised preliminary

objections. Issues were framed and a prayer was

made by the Company to decide ‘issues of law’

as preliminary issues which prayer was rejected

by the Labour Court. The Company approached

Industrial Court which also did not interfere

with the order of the Labour Court. That order

was again challenged by the Company by filing

petitions in the High Court and the learned

Single Judge dismissed the petitions. In

view of the aforesaid facts, we have no doubt

34

that the learned Single Judge was

exercising power of superintendence over a

Court/Tribunal subordinate to it under Article

227 of the Constitution. Obviously, a remedy of

intra court appeal was not available. We,

therefore, hold that the Division Bench was

right in coming to the conclusion that

intra court appeals filed by the Company

were not maintainable. We see no

infirmity in that part of the order. The

contention of the appellant Company is,

therefore, rejected.

MAINTAINABILITY OF WRIT PETITIONS

35. It was urged on behalf of the workmen

that the writ petitions filed by the Company

for quashing and setting aside the orders

passed by the Labour Court and confirmed by the

Industrial Court were barred by constructive

res judicata as also under Order XXIII, Rule 4

of the Code. The argument proceeds thus: The

Company filed a Writ Petition No. 3471 of 2005

35

under Article 227 of the Constitution in the

High Court for quashing and setting aside an

order dated March 14, 2005 passed by the Labour

Court and an order dated August 8, 2005 passed

by the Industrial Court. On December 14, 2005,

the Company withdrew the petition. It, however,

filed fresh petition in respect of the same

cause of action. No permission or leave of the

Court was sought, nor it was granted by the

Court when the writ petition was withdrawn to

file fresh petition by the petitioner in

respect of the same cause of action. Fresh

petitions were, therefore, not maintainable.

36. The learned counsel for the Company,

however, submitted that the objection raised by

the workmen is not well-founded. Firstly, it

was urged that no such contention was raised by

the workmen in reply to the writ petitions

filed by the Company, nor it was taken before

the learned Single Judge at the time of hearing

of petitions. Nor such argument was raised in

this Court when earlier Special Leave Petition

36

was filed by the Company in this Court. It was

also not taken when the Company filed intra

court appeals before the Division Bench of the

High Court after disposal of Special Leave

Petition by this Court. Even in Special Leave

Petition filed in this Court by the workmen, no

such point has been raised. A question whether

a petition is barred by res judicata or under

Rule 4 of Order XXIII of the Code is not a

‘pure’ question of law. It is a question of

fact or at any rate, a mixed question of law

and fact. In absence of pleadings and necessary

materials in support of such plea, petitions

cannot be dismissed on the bald assertion by a

party that they were not maintainable.

37. Let us consider legal position on this

issue.

38. In the leading case of Daryao v. State

of U.P., (1962) 1 SCR 574, a Constitution Bench

of this Court was called upon to decide whether

withdrawal of a writ petition would operate as

res judicata. The Court held that an order of

37

withdrawal would not constitute res judicata

inasmuch as there is no decision on the merits

by the Court. The Court, however, proceeded to

observe that when a petition is withdrawn by

the party without obtaining liberty from the

Court to file fresh petition on the same

subject matter, as a general rule, the

petitioner is precluded from filing a fresh

petition or an appeal against such an order

because “he cannot be considered to be a party

aggrieved by the order passed by the Court

permitting withdrawal of the petition”.

39. In Sarguja Transport Service v. State

Transport Appellate Tribunal, (1987) 1 SCC 5,

the Appellate Tribunal set aside permit granted

in favour of the petitioner by the Regional

Transport Authority to run a stage-carriage.

The petitioner filed a writ petition under

Article 226 of the Constitution in the High

Court of Madhya Pradesh against the order of

the Tribunal but withdrew it. Then he filed a

fresh petition. The High Court dismissed it

38

holding that after the withdrawal of the first

petition, the second petition was not

maintainable. The aggrieved appellant

approached this Court.

40. Dismissing the appeal and considering

the ambit and scope of Order XXIII of the Code

and distinguishing it from the doctrine of res

judicata under Section 11 of the Code, this

Court observed:

“The law confers upon a man no rights

or benefits which he does not desire.

Whoever waives, abandons or disclaims

a right will loose it. In order to

prevent a litigant from abusing the

process of the Court by instituting

suits again and again on the same

cause of action without any good

reason the Code insists that he should

obtain the permission of the Court to

file a fresh suit after establishing

either of the two grounds mentioned in

Sub-rule (3) of Rule 1 of Order XXIII.

The principle underlying the above

rule is founded on public policy, but

it is not the same as the rule of res

judicata contained in Section 11 of

the Code which provides that no court

shall try any suit or issue in which

the matter directly or substantially

in issue has been directly or

substantially in issue in a former

suit between the same parties, or

between parties under whom they or any

39

of them claim, litigating under the

same title, in a Court competent to

try such subsequent suit or the suit

in which such issue has been

subsequently raised, and has been

heard and finally decided by such

Court. The rule of res judicata

applies to a case where the suit or an

issue has already been heard and

finally decided by a Court. In the

case of abandonment or withdrawal of a

suit without the permission of the

Court to file a fresh suit, there is

no prior adjudication of a suit or an

issue is involved, yet the Code

provides, as stated earlier, that a

second suit will not lie in Sub-rule

(4) of Rule 1 of Order XXIII of the

Code when the first suit is withdrawn

without the permission referred to in

Sub-rule (3) in order to prevent the

abuse of the process of the Court ”.

(emphasis supplied)

41. In A.K. Bhattacharya v. Union of

India, 1991 Supp (2) SCC 109, the petitioner

filed a writ petition in the High Court of

Gauhati under Article 226 of the Constitution

seeking Selection Grade in Tripura Civil

Service and also promotion to the IAS cadre. A

statement was made by the Advocate General that

the case of the petitioner would be considered

40

for Selection Grade in Tripura Civil Service.

The petitioner, in view of the said statement,

did not press the second relief. Subsequently,

however, the petitioner prayed for that relief

by filing a petition in this Court under

Article 32 of the Constitution.

42. Dismissing the petition, this Court

commented:

“He (petitioner) cannot, in this

petition under Article 32 of the

Constitution, ask for the same relief

which he had himself given up in the

High Court”.

[see also State of Gujarat v.

Bhaterdevi Ramnivas Sanwalram, (2002)

7 SCC 500]

43. In Murtujakhan v. Municipal Corpn. Of

Ahmedabad, (1975) 16 Guj LR 806, a petition was

filed under Article 226 of the Constitution

challenging the constitutional validity of the

Bombay Town Planning Act, 1954. The respondents

appeared, filed affidavits and contested the

petition on merits. Ultimately, however, the

petition was withdrawn by the petitioner since

the point raised in the petition as to validity

41

of the Act was covered by the decisions of this

Court and as such nothing survived. Then again

a fresh petition was filed by the petitioner

challenging the validity of the Act.

44. Dismissing the petition and applying

the general principle of res judicata, the

Court observed:

“The consequence of the withdrawal of

the said writ petition in the eye of

law was that it stood dismissed on

merits albeit on a concession made by

or on behalf of the petitioner to the

effect that the question of the

constitutional validity of the Act was

no longer open in view of the

decisions of the Supreme Court. In

other words, the effect of the

dismissal by withdrawal was that the

challenge of the petitioner to the

actions of the respondents under the

Act on the ground that the said Act

itself was ultra vires stood concluded

by an adverse decision of this Court

based on his own concession. …

45. The Court proceeded to state;

[T]he petitioner having himself

abandoned without reservation the

previous writ proceeding initiated in

this very Court with eyes open and

after due deliberation cannot now be

allowed to pick up the thread after a

lapse of five years and to start a

fresh proceeding to re-agitate the

very point which he expressly gave up

42

in the previous proceeding. He had set

the machinery of law in motion but

solemnly brought it to an abrupt halt,

indeed forsaken it in midstream, in

proclaimed obeisance to the decisions

of the Supreme Court. He cannot be

permitted to resume it now after a

number of years and be heard to say

that despite his earlier proclamation,

he still wishes to persist in raising

the same point in this litigation.

Courts moved upon a prerogative writ

are not the forum to flog a dead horse

or to resuscitate a ghost already laid

to rest”. (emphasis supplied)

46. In Bakhtawar Singh & Anr. v. Sada Kaur

& Anr., (1996) 11 SCC 167, this Court observed

that if the plaintiff withdraws the suit and

there is no evidence to show that the suit was

bound to fail by reason of some ‘formal’ defect

or there were sufficient grounds for allowing

the plaintiff to institute a fresh suit in

respect of the same subject matter and for the

same relief, after the withdrawal of the

earlier suit, the action of filing fresh suit

would be barred under Order XXIII of the Code.

47. In K.S. Bhoopathy & Ors. V. Kokila &

Ors., (2000) 5 SCC 458, this Court stated that

43

the Court has to discharge the duties mandated

under the provisions of the Code in taking into

consideration all relevant aspects of the

matter including the desirability of permitting

the party to start a fresh round of litigation

for the same cause of action.

48. We may also refer to a recent decision

of this Court in Sarva Shramik Sangathan (KV),

Mumbai v. State of Maharashtra & Ors., (2008) 1

SCC 494. In that case, an application under

Section 25-O of the Industrial Disputes Act,

1947 was filed by the employer for closure of

undertaking. The application was, however,

withdrawn since attempts were made for

settlement of the matter. The efforts were not

successful and hence, the management filed

fresh application. It was contended by the

Union that since earlier application filed by

the employer was withdrawn, the second

application was hit by Order XXIII of the Code.

The Union relied upon Sarguja Transport

Service.

44

49. Negativing the contention, holding the

application maintainable and distinguishing

Sarguja Transport Service, this Court held that

the action of the Management of withdrawal of

first petition was bona fide. It was not a case

of Bench-hunting with a view to avoid an

adverse order likely to be passed against it.

Sarguja Transport Service had, therefore, no

application. It was also observed that

provisions of the Code of Civil Procedure do

not strictly apply to industrial adjudication.

The second application was, therefore, held

maintainable.

50. From the above case law, it is clear

that it is open to the petitioner to withdraw a

petition filed by him. Normally, a Court of Law

would not prevent him from withdrawing his

petition. But if such withdrawal is without the

leave of the Court, it would mean that the

petitioner is not interested in prosecuting or

continuing the proceedings and he abandons his

claim. In such cases, obviously, public policy

45

requires that he should not start fresh round

of litigation and the Court will not allow him

to re-agitate the claim which he himself had

given up earlier.

51. In Sarguja Transport Service,

extending the principles laid down in Daryao,

Venkataramiah, J. (as His Lordship then was)

concluded;

“[W]e are of the view that the

principle underlying Rule 1 of Order

XXIII of the Code should be extended

in the interests of administration of

justice to cases of withdrawal of writ

petition also, not on the ground of

res judicata but on the ground of

public policy as explained above. It

would also discourage the litigant

from indulging in bench-hunting

tactics. In any event there is no

justifiable reason in such a case to

permit a petitioner to invoke the

extraordinary jurisdiction of the High

Court under Article 226 of the

Constitution once again. While the

withdrawal of a writ petition filed in

a High Court without permission to

file a fresh writ petition may not bar

other remedies like a suit or a

petition under Article 32 of the

Constitution of India since such

withdrawal does not amount to res

judicata, the remedy under Article 226

of the Constitution of India should be

deemed to have been abandoned by the

46

petitioner in respect of the cause of

action relied on in the writ petition

when he withdraws it without such

permission”.

(emphasis supplied)

52. On the facts of the case, however, we

are unable to uphold the argument on behalf of

the workmen that the Company did not want to

prosecute the petitions and had given up its

claim against the order passed by the Labour

Court and confirmed by the Industrial Court.

The record reveals that the Company filed one

writ petition against one employee which was

registered as Writ Petition No. 3060 of 2005.

It also filed another petition against the

remaining employees (236) which was registered

as Writ Petition No. 3471 of 2005. Since the

other petition was against several employees,

the Registry of the High Court raised an

objection that it was under ‘defect’. It was,

therefore, not placed for admission-hearing. In

an order, dated October 3, 2005, the Court

noted that the learned counsel for the Company

47

prayed for time “to remove the defects pointed

by the office”. The prayer was granted. It also

appears that according to the Registry, there

were practical difficulties and logistic

problems since the petition was against more

than 200 employees. The learned counsel for the

Company, therefore, on December 14, 2005, did

not ‘press’ the petition and petition was

accordingly dismissed ‘as not pressed’. The

said order was passed on December 14, 2005.

Immediately thereafter, in January, 2006,

separate petitions were filed by the Company

against the workmen. It is thus clear that it

was not a case of abandonment or giving up of

claim by the Company. But, in view of office

objection, practical difficulty and logistic

problem, the petitioner Company did not proceed

with an ‘omnibus’ and composite petition

against several workmen and filed separate

petitions as suggested by the Registry of the

High Court.

48

53. There is an additional reason also for

coming to this conclusion on the basis of which

it can be said that the Company was prosecuting

the matter and there was no intention to leave

the matter. As is clear, Writ petition No. 3060

of 2005 which was filed against one employee

was very much alive and was never

withdrawn/’note pressed’. If really the Company

wanted to give up the claim, it would have

withdrawn that petition as well. Thus, from the

circumstances in their entirety, we hold that

the objection raised by the learned counsel for

the workmen has no force and is rejected.

MAINTAINABILITY OF CLAIM PETITIONS

54. The learned counsel for the Company

contended that the courts below committed an

error in not deciding the issue as to

maintainability of claim petitions as

preliminary issue and in rejecting the prayer

of the Company. It was submitted that the

workmen accepted the scheme, received the

49

payment thereunder and separated from the

Company. The relationship of master and servant

came to an end on acceptance of voluntary

retirement and payment of dues thereunder. It

was thereafter not open to them to invoke the

provisions of the Act by instituting claim

petitions. The relationship of master and

servant is sine qua non or condition precedent

for the exercise of power under the Act by the

Labour Court. It is thus a ‘jurisdictional

fact’ or ‘preliminary fact’ which must exist

before a Court assumes jurisdiction to

entertain, deal with and decide the claim.

55. A ‘jurisdictional fact’ is one on

existence of which depends jurisdiction of a

Court, Tribunal or an Authority. If the

jurisdictional fact does not exist, the Court

or Tribunal cannot act. If an inferior Court or

Tribunal wrongly assumes the existence of such

fact, a writ of certiorari lies. The underlying

principle is that by erroneously assuming

existence of jurisdictional fact, a subordinate

50

Court or an inferior Tribunal cannot confer

upon itself jurisdiction which it otherwise

does not possess.

56. The counsel referred to a recent

decision of this Court in Arun Kumar v. Union

of India, (2007) 1 SCC 732. Speaking for the

Court, one of us (C.K. Thakker, J.) observed:

“A ‘jurisdictional fact’ is a fact

which must exist before a Court,

Tribunal or an Authority assumes

jurisdiction over a particular matter.

A jurisdictional fact is one on

existence or non-existence of which

depends jurisdiction of a court, a

tribunal or an authority. It is the

fact upon which an administrative

agency’s power to act depends. If the

jurisdictional fact does not exist,

the court, authority or officer cannot

act. If a Court or authority wrongly

assumes the existence of such fact,

the order can be questioned by a writ

of certiorari. The underlying

principle is that by erroneously

assuming existence of such

jurisdictional fact, no authority can

confer upon itself jurisdiction which

it otherwise does not posses”.

57. It was further observed:

“The existence of jurisdictional fact

is thus sine qua non or condition

precedent for the exercise of power by

a court of limited jurisdiction”.

51

58. Drawing the distinction between

‘jurisdictional fact’ and ‘adjudicatory fact’,

the Court stated:

“[I]t is clear that existence of

‘jurisdictional fact’ is sine qua non

for the exercise of power. If the

jurisdictional fact exists, the

authority can proceed with the case

and take an appropriate decision in

accordance with law. Once the

authority has jurisdiction in the

matter on existence of ‘jurisdictional

fact’, it can decide the ‘fact in

issue’ or ‘adjudicatory fact’. A wrong

decision on ‘fact in issue’ or on

‘adjudicatory fact’ would not make the

decision of the authority without

jurisdiction or vulnerable provided

essential or fundamental fact as to

existence of jurisdiction is present”.

59. The principle was reiterated in Carona

Ltd. v. Parvathi Swaminathan & Ors., (2007) 1

SCC 559.

60. The learned counsel for the workmen,

on the other hand, supported the view taken by

the Courts below. He submitted that the issues

sought to be raised by the Company are mixed

issues of law and fact. It is the allegation of

52

the workmen that they had not voluntarily

accepted the scheme but they were compelled to

accept it under duress and coercion. Moreover,

it is their case in the claim petitions that

they were not paid full amount even under the

scheme. They, therefore, did not cease to be

workmen of the Company and the relationship of

master and servant between the parties

continued. If it is so, an action not allowing

them to work would amount to termination of

service or removal from employment. In that

eventuality, remedy under Section 31 of the Act

is available and accordingly they had filed

claim petitions. The question will have to be

decided by the Labour Court on the evidence

adduced by the parties and the issue as to

maintainability cannot be decided in isolation

and as preliminary issue as suggested by the

Company.

61. It was also submitted that this Court

has held that statutory Tribunals must decide

all issues raised by the parties. This is

53

particularly true to industrial disputes.

Strong reliance was placed on D.P. Maheshwari

v. Delhi Administration, (1983) 4 SCC 293.

Dealing with a similar argument, this Court

said:

“There was a time when it was thought

prudent and wise policy to decide

preliminary issues first. But the time

appears to have arrived for a reversal

of that policy. We think it is better

that tribunals, particularly those

entrusted with the task of

adjudicating labour disputes Where

delay may lead to misery and

jeopardise industrial peace, should

decide all issues in dispute at the

same time without trying some of them

as preliminary issues. Nor should High

Courts in the exercise of their

jurisdiction under Article 226 of the

Constitution stop proceedings before a

Tribunal so that a preliminary issue

may be decided by them. Neither the

jurisdiction of the High Court under

Article 226 of the Constitution nor

the jurisdiction of this Court under

Article 136 may be allowed to be

exploited by those who can well afford

to wait to the detriment of those who

can ill afford to wait by dragging the

latter from Court to Court for

adjudication of peripheral issues,

avoiding decision on issues more vital

to them. Article 226 and Article 136

are not meant to be used to break the

resistance of workmen in this fashion.

Tribunals and Courts who are requested

to decide preliminary questions must

54

therefore ask them selves whether such

threshold part-adjudication is really

necessary and whether it will not lead

to other woeful consequences. After

all tribunals like Industrial

Tribunals are constituted to decide

expeditiously special kinds of

disputes and their jurisdiction to so

decide is not to be stifled by all

manner of preliminary objections

journeyings up and down. It is also

worth while remembering that the

nature of the jurisdiction under

Article 226 is supervisory and not

appellate while that under Article 136

is primarily supervisory but the Court

may exercise all necessary appellate

powers to do substantial justice. In

the exercise of such jurisdiction

neither the High Court nor this Court

is required to be too astute to

interfere with the exercise of

jurisdiction by special tribunals at

interlocutory stages and on

preliminary issues”.

(emphasis supplied)

62. Reference was also made to S.K. Verma

v. Mahesh Chandra & Anr., (1983) 4 SCC 214. In

that case, this Court commented that there

appears to be three preliminary objections

which have become quite the fashion to be

raised by all employees. Firstly, there is no

55

industry. Secondly, there is no industrial

dispute. Thirdly, the workman is ‘no workman’.

63. The attention of the Court was also

invited to National Council for Cement &

Building Materials v. State of Haryana, (1996)

3 SCC 306, wherein the Court deprecated the

practice of the management to raise preliminary

issues with a view to delay adjudication of

industrial disputes.

64. In our considered opinion, in the

present case, it cannot be said that the Courts

below have committed any error of jurisdiction

in not deciding the issue as to the

maintainability of claim-petitions as

preliminary issue. It is well settled that

generally, all issues arising in a suit or

proceeding should be tried together and a

judgment should be pronounced on those issues.

65. Before more than hundred years, the

Privy Council in Tarakant v. Puddomoney, (1866)

10 MIA 476, favoured this approach.

56

66. Speaking for the Judicial Committee,

Lord Turner stated:

“The Courts below, in appealable

cases, by forbearing from deciding on

all the issues joined, not

infrequently oblige this Committee to

recommend that a cause be remanded

which might otherwise be finally

decided on appeal. This is certainly a

serious evil to the parties litigant,

as it may involve the expense of a

second appeal as well as that of

another hearing below. It is much to

be desired, therefore, that in

appealable cases the Courts below

should, as far as may be practicable,

pronounce their opinions on all the

important points”. (emphasis supplied)

67. The above principle has been

consistently followed. This Court dealing with

the provisions of Order XIV Rule 2 (prior to

the amendment Act of 1976), in Major S.S.

Khanna v. Brigadiar F.J. Dillion, (1964) 4 SCR

409, stated;

“Under Order 14 Rule 2, Code of Civil

Procedure, where issues both of law

and of fact arise in the same suit,

and the Court is of opinion that the

case or any part thereof may be

disposed of on the issues of law only,

it shall try those issues first, and

for that purpose may, if it thinks

57

fit, postpone the settlement of the

issues of fact until after the issues

of law have been determined. The

jurisdiction to try issues of law

apart from the issues of fact may be

exercised only where in the opinion of

the Court the whole suit may be

disposed of on the issues of law

alone, but the Code confers no

jurisdiction upon the Court to try a

suit on mixed issues of law and fact

as preliminary issues. Normally all

the issues in a suit should be tried

by the Court; not to do so, especially

when the decision on issues even of

law depend upon the decision of issues

of fact, would result in a lop-sided

trial of the suit”.

(emphasis supplied)

68. The Law Commission also considered the

question and did not favour the tendency of

deciding some issues as preliminary issues.

Dealing with Rule 2 of Order XIV (before the

amendment), the Commission stated;

“This rule has led to one difficulty.

Where a case can be disposed of on a

preliminary point (issue) of law,

often the courts do not inquire into

the merits, with the result that when,

on an appeal against the finding on

the preliminary issue the decision of

the Court on that issue is reversed,

the case has to be remanded to the

Court of first instance for trial on

the other issues. This causes delay.

58

It is considered that this delay

should be eliminated, by providing

that a court must give judgment on all

issues, excepting, of course, where

the Court finds that it has no

jurisdiction or where the suit is

barred by any law for the time being

in force”. (emphasis supplied)

69. Apart from the fact that the

provisions of Code do not stricto sensu apply

to ‘industrial adjudication’, even under the

Code, after the Amendment Act, 1976, the normal

rule is to decide all the issues together in a

civil suit. In the case on hand, the contention

of the workmen is that the acceptance of the

scheme was not with free consent, and even

otherwise they were not given all the benefits

to which they were entitled under the scheme.

Therefore, they continued to remain employees

of the Company. The Labour Court felt that the

controversy raised by the workmen can only be

decided in the light of the evidence before it.

The said decision has been confirmed by the

Industrial Court as well as by the learned

59

Single Judge. We find no illegality in this

approach which deserves interference under

Article 136 of the Constitution. We, therefore,

see no substance in the contention of the

Company.

OPTION FOR RETIREMENT : WHETHER VOLUNTARY?

70. The learned counsel for the Company

contended that the workmen had opted for and

accepted voluntary retirement under the scheme

floated by the employer and had received all

the benefits thereunder. Thereafter it was not

open to them to turn round and challenge the

action of the Company. The workmen cannot ‘blow

hot and cold’, ‘fast and loose’ or ‘approbate

and reprobate’. The counsel, in this

connection, referred to a number of decisions

on the general principle of estoppel as also

cases relating to acceptance of voluntary

retirement by employees.

71. The learned counsel for the workmen

urged that the case of the employees was that

60

they had not opted for the scheme and the ‘so

called’ voluntary retirement is no retirement

in the eye of law. The phrase ‘voluntary

retirement scheme’ itself presupposes that

acceptance of retirement should be voluntary

and must have been opted by employees with

‘free consent’. The counsel submitted that the

workmen never accepted the scheme with free

consent but it was thrust upon them and under

compulsion, duress and coercion, they were

forced to submit to the illegal action of the

Company. That was the reason for the workmen to

approach Labour Court by filing claim

petitions.

72. We would have gone into the larger

question had it been decided by the Courts

below in the light of the decisions of this

Court. But as stated above, in the present

appeals, we are not called upon to consider the

merits of the matter. The claim petitions are

pending before the labour Court. The present

proceedings are against interlocutory orders.

61

Any observation, one way or the other, may

cause prejudice to one or the other party. We,

therefore, refrain from entering into

allegations and counter-allegations by granting

liberty to both the parties to raise all

contentions available in law. We also direct

the Labour Court to consider the matter on

merits and pass an appropriate order in

consonance with law.

ORDER TO REFUND AMOUNT

73. The learned counsel for the workmen

contended that the order passed by the Division

Bench of High Court directing refund of amount

received by the workmen to the Company was

illegal, unlawful and without jurisdiction. It

was submitted that once the Court held that

intra court appeals instituted by the Company

were not maintainable, it ought to have

dismissed them without passing any order as to

refund.

62

74. The Division Bench, in paragraph 7,

stated;

“Learned counsel has further submitted

that the respondent-employee is

estopped from challenging the VRS and

seeking reinstatement as the employee

has already pocketed the money and

received the other benefits in

accordance with the said Scheme. Since

the employees who have approached the

Labour Court claiming that by

deceitful means or coercion, they were

made to accept the voluntary

retirement and received the benefit

thereunder, it would be equitable to

direct that any employee who wants to

maintain a petition under Section 31

(3) of the M.P.I.R. Act against the

said VRS and to seek reinstatement,

should return the benefits received to

the employer, subject to the condition

and undertaking as offered by the

learned counsel fort he appellant,

that in the event, the Labour Court

refund of the amount and other

benefits to the employee concerned,

the same would be restored to the

employee with interest at the rate of

six per cent per annum. It is made

clear that the Labour Court shall

decline to proceed with the

application of the employee who does

not refund the amount to the employer

as hereinabove directed. The learned

counsel for the respondents has no

objection to the benefits being

refunded to the employer during the

pendency of the case before the Labour

Court subject to the result of the

case”.

63

75. The learned counsel in this connection

referred to a leading decision of this Court in

Kiran Singh v. Chaman Paswan, (1955) 1 SCR 117.

Dealing with the provisions of Code of Civil

Procedure, 1908 and jurisdiction of Civil

Courts, this Court stated;

“It is fundamental principle well

established that a decree passed by a

court without jurisdiction is a

nullity, and that its invalidity could

be set up whenever and wherever it is

sought to be enforced or relied upon,

even at the stage of execution and

even in collateral proceedings. A

defect of jurisdiction ...strikes on

the very authority of the court to

pass any decree, and such a defect

cannot be cured even by consent of

parties.” (emphasis supplied)

76. Reference was also made to a recent

decision of this Court in Harshad Chiman Lal

Modi v. DLF Universal Ltd. & Anr., (2005) 7 SCC

791. Referring to Kiran Singh as also several

other decisions, it was held by this Court that

if the Court has no jurisdiction to entertain a

particular claim or matter, neither

acquiescence nor express consent of the parties

64

can confer jurisdiction upon it. An order

passed by a Court having no jurisdiction is

nullity and non est. It was submitted that

even otherwise the learned Single Judge was

right in not issuing an order for refund of

amount.

77. The learned counsel for the Company,

submitted that the direction of refund of

amount is proper, fair and in consonance with

principles of justice, equity and good

conscience. If the case of the workmen is that

they had never accepted retirement voluntarily;

that it was imposed upon them under duress and

they were forced to receive payment under

Voluntary Retirement Scheme under pressure,

compulsion or coercion and were constrained to

approach Labour Court asserting that they

continued to be workmen of the Company, it was

expected of them even in absence of any order

or direction to refund the amount received by

them. They could not have resiled from the

position by retaining the benefits which they

65

never wanted but were thrust upon them against

their will. The workmen could not have best of

both the worlds, i.e. to contend that they are

still workmen of the Company but at the same

time, they would not part with the amount

received by them for leaving the Company for

ever. The High Court, balancing equity between

the parties, issued direction to return the

amount received under the scheme which calls

for no interference by this Court in exercise

of equitable jurisdiction under Article 136 of

the Constitution.

78. It was also submitted that even if it

is held that Letter Patent Appeals were not

maintainable, the Company has approached this

Court and considering that circumstance also,

the direction may be upheld if the Court is of

the view that Claim Petitions filed by the

workmen should be considered on merits and

should be decided by Labour Court in accordance

with law. The counsel also submitted that when

the claims were lodged by the workmen, they

66

themselves had stated that they were ready and

willing to refund the amount which they had

received under the ‘purported’ Voluntary

Retirement Scheme. It was, therefore, submitted

that the order as to refund of amount needs no

interference.

79. Since we have held that the decision

of the Labour Court, confirmed by the

Industrial Court as well as by the High Court

in not deciding issues Nos. 4(a), 4(b) and 4(c)

as preliminary issues cannot be said to be

illegal or contrary to law and those issues

will be decided by the Labour Court along with

other issues on merits, the Labour Court will

consider whether the Company was right in

contending that the workmen accepted retirement

voluntarily and there was cessation of

relationship of master and servant between them

and the Claim Petitions were not maintainable.

In the circumstances, it would not be proper

for this Court to express any opinion at this

stage on merits. A short question which remains

67

to be considered is whether on the facts and in

the circumstances of the case, the direction of

the High Court can be said to be unjust, unfair

or unreasonable?

80. Now, it is well settled that

jurisdiction of High Courts under Articles 226

and 227 is discretionary and equitable. Before

more than half a century, the High Court of

Allahabad in the leading case of Jodhey v.

State, AIR 1952 All 788 observed;

“There are no limits, fetters or

restrictions placed on this power of

superintendence in this clause and the

purpose of this Article seems to be to

make the High Court the custodian of

all justice within the territorial

limits of its jurisdiction and to arm

it with a weapon that could be wielded

for the purpose of seeing that justice

is meted out fairly and properly by

the bodies mentioned therein .”

(emphasis supplied)

81. The power of superintendence under

Article 227 of the Constitution conferred on

every High Court over all courts and tribunals

throughout the territories in relation to which

68

it exercises jurisdiction is very wide and

discretionary in nature. It can be exercised

ex debito justitiae, i.e. to meet the ends of

justice. It is equitable in nature. While

exercising supervisory jurisdiction, a High

Court not only acts as a court of law but also

as a court of equity. It is, therefore, power

and also the duty of the Court to ensure that

power of superintendence must ‘advance the ends

of justice and uproot injustice’.

82. In Roshan Deen vs. Preeti Lal, (2002)

1 SCC 100, dealing with an order passed by the

High Court setting aside an order of

Commissioner for Workmen’s Compensation, this

Court stated;

“Time and again this Court has

reminded that the power conferred on

the High Court under Article 226 and

227 of the Constitution is to advance

justice and not to thwart it. The very

purpose of such constitutional powers

being conferred on the High Courts is

that no man should be subjected to

injustice by violating the law. The

look out of the High Court is,

therefore, not merely to pick out any

error of law through an academic angle

69

but to see whether injustice has

resulted on account of any erroneous

interpretation of law. If justice

became the byproduct of an erroneous

view of law the High Court is not

expected to erase such justice in the

name of correcting the error of law ”.

(emphasis supplied)

83. In Gadde Venkateswara Rao v.

Government of Andhra Pradesh & Ors., (1966) 2

SCR 172, a Primary Health Centre was formerly

inaugurated at village ‘A’ subject to certain

conditions. Since those conditions were not

satisfied, it was resolved by Panchayat Samithi

to shift it to village ‘B’. The Government set

aside the said resolution without giving notice

to the Samithi. Subsequently, however, the

Government reviewed the said order without

giving opportunity of being heard to the

affected persons. The action was challenged in

the High Court. The High Court held that the

order passed by the Government on review was

bad. It, however, did not interfere with the

order on merits. In this Court it was

70

contended that an order passed on review by the

Government was illegal since no opportunity of

hearing was afforded and the High Court was

wrong in not setting aside the said order.

This Court, however, did not interfere with the

order passed by the High Court observing that

“if the High Court had quashed the order passed

by the Government, it would have restored an

illegal order and would have given the Health

Centre to a village contrary to the valid

resolutions passed by the Panchayat Samithi”.

In the opinion of this Court, therefore, the

High Court was right in refusing to exercise

discretionary power in the circumstances of the

case.

84. In Commissioner of Income Tax, Madras

v. Vinod Kumar Didwania, AIR 1987 SC 1260,

certain prohibitory orders under the Income Tax

Act, 1961 were passed against the assessee in

connection with removal of goods. By filing a

petition under Article 226 of the Constitution,

the assessee challenged the legality of those

71

orders. He obtained ex parte interim

injunction, removed the goods and thereafter

withdrew the petition. The Revenue challenged

the said action by approaching this Court. The

Court held that the assessee had abused the

process of law and he could not be allowed to

retain undue benefit received by him.

85. In Chief Settlement Commissioners v.

Ram Singh, (1987) 1 SCC 612, this Court held

that an order of allotment of land in excess of

lawful entitlement does not allow such allottee

to insist that excess land should not be taken

away from him.

86. In Mohammad Swalleh v. Third Additonal

District Judge, Meerut, (1988) 1 SCC 40, an

erroneous order was passed by the Prescribed

Authority refusing to grant eviction of the

tenant under the relevant law. It was set

aside by the District Court in appeal though no

such appeal was maintainable. When the matter

reached this Court, the Court refused to

interfere with the order since justice had been

72

done “though technically the appellant had a

point that the order of the District Judge was

illegal and improper”.

87. The learned counsel for the Company

placed heavy reliance on Shangrilla Food

Products Ltd. v. Life Insurance Corporation of

India, (1996) 5 SCC 54. In a suit by A, an

order was passed by the Estate Officer against

B holding that it was in unauthorized

occupation and was liable to be evicted under

the Public Premises (Eviction of Unauthorised

Occupants) Act, 1971. He also ordered B to pay

damages of Rs. 12 lakhs. An appeal was filed by

B against the order and the Appellate Authority

confirmed the order of eviction. The High

Court, however, felt that an opportunity ought

to have been afforded to B to prove that it was

a lawful sub-tenant. The matter, therefore,

required remand. At that stage, A prayed that

in that case, the matter be remanded as a whole

to be decided afresh considering the question

of payment of rent/damages also. The High

73

Court upheld the plea, negativing the

contention of B that A had never challenged the

order setting aside the direction as to payment

of damages. B approached this Court.

88. Dismissing the appeal, confirming the

order of the High Court and adverting to

substantial justice, this Court stated;

“It is well-settled that the High

Court in exercise of its jurisdiction

under Article 226 of the Constitution

can take cognizance of the entire

facts and circumstances of the case

and pass appropriate orders to give

the parties complete and substantial

justice. This jurisdiction of the High

Court, being extraordinary, is

normally exercisable keeping in mind

the principles of equity. One of the

ends of the equity is to promote

honesty and fair play. If there be any

unfair advantage gained by a party

priorly, before invoking the

jurisdiction of the High Court, the

court can take into account the unfair

advantage gained and can require the

party to shed the unfair gain before

granting relief. What precisely has

been done by the learned Single Judge,

is clear from the above emphasised

words which be re-read with advantage.

The question of claim to damages and

their ascertainment would only arise

in the event of the Life Insurance

Corporation, respondent, succeeding to

prove that the appellant Company was

an unlawful sub-tenant and therefore

74

in unauthorised occupation of public

premises. If the finding were to go in

favour of the appellant Company and it

is proved to be a lawful sub-tenant

and hence not an unauthorised

occupant, the direction to adjudge the

claim for damages would be rendered

sterile and otiose. It is only in the

event of the appellant Company being

held to be an unlawful sub-tenant and

hence an unauthorised occupant that

the claim for damages would be

determinable. We see therefore no

fault in the High Court adopting such

course in order to balance the

equities between the contestants

especially when it otherwise had power

of superintendence under Article 227

of the Constitution in addition. We

cannot be oblivious to the fact that

when the occupation of the premises in

question was a factor in continuation

the liability to pay for the use and

occupation thereof, be it in the form

of rent or damages, was also a

continuing factor. The cause of

justice, as viewed by the High Court,

did clearly warrant that both these

questions be viewed inter-dependently.

For those who seek equity must bow to

equity”. (emphasis supplied)

89. From the above cases, it clearly

transpires that powers under Articles 226 and

227 are discretionary and equitable and are

required to be exercised in the larger interest

of justice. While granting relief in favour of

75

the applicant, the Court must take into account

balancing interests and equities. It can mould

relief considering the facts of the case. It

can pass an appropriate order which justice may

demand and equities may project. As observed

by this Court in Shiv Shankar Dal Mills v.

State of Haryana, (1980) 1 SCR 1170, Courts of

equity should go much further both to give and

refuse relief in furtherance of public

interest. Granting or withholding of relief

may properly be dependent upon considerations

of justice, equity and good conscience.

90. In our considered opinion, taking into

account facts and circumstances in their

entirety, the order passed and direction issued

by the Division Bench of the High Court was in

furtherance of justice. Not only it has not

resulted in miscarriage of justice, in fact it

has attempted to put status quo ante by

balancing interests and leaving the matter to

be decided by a Competent Authority in

accordance with law.

76

91. Even otherwise, according to the

workmen, they were compelled to accept the

amount and they received such amount under

coercion and duress. In our considered opinion,

they cannot retain the benefit if they want to

prosecute Claim Petitions instituted by them

with the Labour Court. Hence, the order passed

by the Division Bench of the High Court as to

refund of amount cannot be termed unjust,

inequitable or improper. Hence, even if it is

held that a ‘technical’ contention raised by

the workmen has some force, this Court which

again exercises discretionary and equitable

jurisdiction under Article 136 of the

Constitution, will not interfere with a

direction which is in consonance with the

doctrine of equity. It has been rightly said

that a person “who seeks equity must do

equity”. Here the workmen claim benefits as

workmen of the Company, but they do not want to

part with the benefit they have received

towards retirement and severance of

77

relationship of master and servant. It simply

cannot be permitted. In our judgment,

therefore, the final direction issued by the

Division Bench needs no interference,

particularly when the Company has also

approached this Court under Article 136 of the

Constitution.

92. For the foregoing reasons, in our

opinion, the order passed by the Division Bench

of the High Court deserves to be confirmed and

is hereby confirmed. The payment which is

required to be made as per the said order

should be made by the applicants intending to

prosecute their claims before the Labour Court,

Mandsour. In view of the fact, however, that

the said period is by now over, ends of justice

would be served if we extend the time so as to

enable the applicants to refund the amount. We,

therefore, extend the time up to December 31,

2008 to make such payment. We may, however,

clarify that Claim Petitions will not be

proceeded with till such payment is made. If

78

the payment is not made within the period

stipulated above, the Claim Petitions of those

applicants will automatically stand dismissed.

The Labour Court will take up the claim

petitions after December 31, 2008.

93. Before parting with the matter, we may

clarify that we have not expressed any opinion

on the merits of the case one way or the other.

And as and when the matter will come up before

the Labour Court, Mandsour, (if the conditions

referred to above have been complied with and

refund of payment is made), the Labour Court

will consider the Claim Petitions on their own

merits without being influenced by any

observations made in this judgment. All

contentions of all parties including the

contention as to maintainability or otherwise

of Claim Petitions are kept open. Civil Appeals

stand disposed of accordingly. On the facts and

in the circumstances of the case, however,

there shall be no order as to costs all

throughout.

79

…………………………………………………J.

(C.K. THAKKER)

…………………………………………………J.

(D.K. JAIN)

NEW DELHI,

JULY 08, 2008.

80