Civil court lacks jurisdiction to entertain suit based on Industrial Disputes Act: Supreme Court

The Supreme Court recently held that civil courts lack jurisdiction to entertain a suit structured on the provisions of the Industrial Disputes Act (ID Act) [Milkhi Ram v Himachal Pradesh State electricity Board]..A Bench of Justice R Subhash Reddy and Justice Hrishikesh Roy said that though civil courts may have limited jurisdiction in service matters, such jurisdiction may not be available to such courts to adjudicate on orders passed by disciplinary authority under the ID Act. "This Court is unable to accept the view propounded by the courts below and is of the considered opinion that the civil court lacks jurisdiction to entertain a suit structured on the provisions of the Industrial Disputes Act," the apex court ruled.The Court, therefore, upheld a judgment of the Himachal Pradesh High Court which had held that civil courts lack jurisdiction to entertain a civil suit based on the Industrial Disputes Act, 1947. The matter pertained to a daily wage employee under the Himachal Pradesh State Electricity Board, whose services were terminated by an order dated January 1, 1985 issued by the Executive Engineer.The employee challenged the order by filing a civil suit, and claimed to have rendered uninterrupted service for 2,778 days. He also asserted the 'right to be regularized' after completion of 240 days of continuous service.The defendant, however, contended that the plaintiff never worked for a continuous period of 240 days and was, therefore, not entitled to claim regularization..The civil court framed two main questions in the matter: - Whether it has jurisdiction? - Whether the plaintiff had completed 240 days of uninterrupted service?Both the questions were answered in favour of the plaintiff-employee.The civil judge relied on Sections 25B and 25F of the ID Act and noted that the plaintiff had rendered service for well above 240 days in one year and therefore, his service cannot be terminated without complying with the statutory requirement.The defendant was directed to regularise and reinstate the petitioner in service with back wages..The decision was challenged by the Electricity Board before the District Judge, Dharamshala. The jurisdiction of civil court was again questioned but the appellate court observed that the question of jurisdiction is a mixed question of law and facts and since the litigation is continuing for long, it would not be proper to relegate the plaintiff to the labour court.The appellate court said that the workman was entitled to choose the remedy either before the civil court or before the Industrial Court. As the service of a daily wager was terminated, the same was treated to be a retrenchment without compliance with Section 25F of the ID Act. The decree favouring the plaintiff was accordingly, upheld by rejecting the jurisdictional objection raised by the Board.The judgment debtor’s further challenge to the decree was not entertained and then the Board made the offer to appoint the terminated daily wager to the post of LDC in the regular pay scale, with effect from September 1, 2001. Responding to the appointment offer, the appellant gave a joining report on September 1, 2001 but since the same was hedged with various conditions, the joining report was not acted upon by the management. Following the above, the decree holder applied for execution of the decree. The Electricity Board raised a preliminary objection on the maintainability of the application that all back wages were paid to the decree holder and he was also offered the post of LDC on August 22, 2001.It was further submitted by the Board that since the decree holder gave a conditional joining report and was required to re-submit a joining report as per rules, nothing further is required to be done for execution of the decree.The executing court negated the Board’s objection and the Board was directed to give effect to the decree of the civil court..The Electricity Board challenged this order before High Court of Himachal Pradesh. It was contended by the Board before the High Court that the civil court had no jurisdiction to adjudicate a claim arising out of the ID Act and relief for the aggrieved employee could have been granted only by the industrial court.It was further contended that plea of absence of jurisdiction can be raised at any stage and the present decree is a legal nullity.The High Court held that the civil court lacked inherent jurisdiction to entertain the suit based on the ID Act and the judgment and decree so passed, are nullity. High Court further held, that the plea of decree being a nullity can also be raised at the stage of execution. Therefore, the decree passed by the civil court was set aside. This led to the appeal before the Supreme Court..Appearing for the workman, advocate Ajit Singh Pundir submitted that the appellant rendered service as a daily wager since December 11, 1976 and his service could not have been terminated without following the due process.He further contended that even when relief is claimed based on the provisions of the ID Act, the jurisdiction of the civil court is not entirely barred..Advocate Naresh K Sharma, appearing for the Electricity Board, argued that jurisdiction of the civil court is ousted when claimed relief is founded on the ID Act.In order to demonstrate the bonafides of the employer, Sharma highlighted the letter dated August 22, 2001, offering the post of LDC and how the said offer did not fructify only because of the adamant stand of the appellant, who failed to furnish a proper joining report..The Supreme Court after examining the rival contentions observed that the authorities specified under the ID Act including the appropriate government and the industrial courts perform various functions and the ID Act provides for a wider definition of “termination of service”, the condition precedent to termination of service. The consequence of infringing those, are also provided in the ID Act, the Court noted.When a litigant opts for common law remedy, he may choose either the civil court or the industrial forum.In the present matter, the appellant clearly founded his claim in the suit, on the provisions of the ID Act and the employer was, therefore, entitled to raise a jurisdictional objection to the proceedings before the civil court.Hence, the apex court upheld the findings of the High Court "This Court is unable to accept the view propounded by the courts below and is of the considered opinion that the civil court lacks jurisdiction to entertain a suit structured on the provisions of the ID Act. The decree favouring the plaintiff is a legal nullity and the finding of the High Court to this extent is upheld."Accordingly, the appeal was dismissed. However, considering the hardship to the terminated employee, the Court directed that that arrear sum paid to the petitioner/workman pursuant to the court’s decree, should not be recovered..[Read Judgment]