Civil Court Lacks Jurisdiction for Suits Based on Industrial Disputes Act, Compensation Awarded for Wrongful Termination: Punjab & Haryana High Court - 2025-05-21

Civil Court Lacks Jurisdiction in ID Act Claims, Worker Awarded Compensation After 36-Year Battle: Punjab & Haryana High Court

Chandigarh: The Punjab and Haryana High Court, in a significant ruling, has reiterated that Civil Courts lack jurisdiction to entertain suits fundamentally based on the provisions of the Industrial Disputes Act, 1947 (ID Act). However, in a long-pending case dating back to 1987, Justice AnilKshetarpal , while allowing an appeal by the Punjab State Electricity Board (PSEB), awarded a lumpsum compensation of ₹1,50,000 to a workman, Nirmal Singh , whose termination was found to be in violation of Section 25-F of the ID Act.

The judgment, delivered on July 21, 2023, in the case of PSEB ETC vs Nirmal Singh ETC (RSA 2891 / 1994) , modified the concurrent findings of the lower courts that had ordered Nirmal Singh 's reinstatement.

Background of the Decades-Long Dispute

The case originated when Nirmal Singh and another employee, Rajinder Singh , challenged their termination by the PSEB effective June 1, 1987. They contended that their removal violated Section 25-F of the ID Act, as they were 'workmen' who had completed over 240 days of continuous service in the preceding 12 months, and the mandatory procedures for retrenchment were not followed.

The Trial Court, in its judgment dated June 3, 1988, found that Nirmal Singh had indeed completed 240 days of service and his termination was illegal. It decreed his suit, ordering reinstatement with all consequential benefits. Rajinder Singh 's suit was dismissed as he failed to prove 240 days of service, a decision that attained finality as he did not appeal. The First Appellate Court, on January 10, 1994, upheld the Trial Court's decision concerning Nirmal Singh , dismissing PSEB's appeal.

PSEB then approached the High Court in a Regular Second Appeal (RSA) in 1994, where the execution of the reinstatement decree was stayed.

Key Contentions Before the High Court

The PSEB, represented by its counsel, primarily argued: 1. The Civil Court lacked jurisdiction to try the suit as the claims were rooted in the ID Act, citing the Supreme Court's decision in Milkhi Ram Vs. Himachal Pradesh State Electricity Board (2021). 2. Even if the termination was flawed, the relief of reinstatement with full back wages was excessive for a daily wager, referencing the Supreme Court's stance in Assistant Engineer, Rajasthan Development Corporation and another Vs. Gitam Singh (2013), where compensation was favored.

Counsel for Nirmal Singh countered that: 1. The concurrent findings of fact by the lower courts regarding 240 days of service and non-compliance with Section 25-F should not be disturbed. 2. The Civil Court had jurisdiction, relying on an earlier High Court judgment in Municipality Jagadhri Vs. Ved Parkash Aggarwal (1988). 3. Considering the prolonged litigation and hardship, and drawing parallels with the Milkhi Ram and Gitam Singh cases, substantial compensation should be awarded if reinstatement was not deemed appropriate.

High Court's Rationale and Decision

On Jurisdiction: Justice Kshetarpal extensively analyzed the issue of Civil Court jurisdiction. The Court placed significant reliance on the Supreme Court's judgment in Milkhi Ram , observing:

> "In the present matter, the appellant has clearly founded his claim in the suit, on the provisions of the ID Act and the employer therefore is entitled to raise a jurisdictional objection to the proceedings before the civil 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." (Excerpts from Milkhi Ram as quoted in the judgment).

The High Court noted that Nirmal Singh 's plaint was "based upon the non-compliance of mandatory provisions of Section 25-F of the 1947 Act." Consequently, it held: "...the law laid down by the Hon’ble Supreme Court in Milkhi Ram ’s case (supra) would fully apply in the present case... it is held that Civil Court had no jurisdiction to try the suit in question." The findings of the lower courts on this issue were thus set aside.

On Relief and Compensation: Despite finding that the Civil Court lacked jurisdiction, the High Court acknowledged the "dilemma" given the long duration of the litigation (since 1987) and the concurrent findings that Nirmal Singh 's termination was, in fact, illegal for non-compliance with Section 25-F of the ID Act.

The Court noted: > "The said plaintiff has been litigating since 1987 and thus, to not grant him any compensation would be gross injustice to him."

Drawing from the Supreme Court's approach in Milkhi Ram (where recovery of arrears already paid was not ordered due to hardship) and Gitam Singh (where compensation was awarded to a daily wager), the High Court decided to grant monetary compensation. Considering that in Gitam Singh , ₹50,000 was awarded in 2013 for a termination in 1991 where the employee worked for 6 months, and that over 12 years had passed since that judgment, the High Court deemed a compensation of ₹1,50,000 appropriate for Nirmal Singh .

Final Order

The High Court partly allowed PSEB's appeal and modified the judgments of the lower courts. Nirmal Singh 's suit was partly decreed, and the PSEB was directed to pay him a lumpsum compensation of ₹1,50,000 within eight weeks from the date of the judgment (July 21, 2023). Failure to pay within this period would attract interest at 7% per annum from the date of the judgment.

This ruling underscores the established legal principle regarding the ouster of Civil Court jurisdiction in matters specifically covered by the Industrial Disputes Act, while also demonstrating the judiciary's discretion to mould relief to prevent gross injustice in long-drawn litigations.