1. Employees dismissed for illegal strike during period when industry was exempt from Section 16 of State Act — Application for reinstatement filed after exemption withdrawal. (Para 2 , 9 , 10 )
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1965 Supreme(SC) 313
SUPREME COURT OF INDIA
P.B. GAJENDRAGADKAR, C.J.I. K.N. WANCHOO, V. RAMASWAMI AND P. SATYANARAYANA RAJU, JJ
Jahiruddin and others, Appellants
Versus
K. D. Rathi, Factory Manager, Model Mills Nagpur Ltd. and others, Respondents.
Civil appeal No. 156 of 1965.
Advocates appeared
M/s V P Sathe and A. G Ratnaparkhi. Advocates, for appellants. Mr. M. N. Phadke, Advocate of M/s J.B. Dadachanji, O. C. Mathur and Ravinder Narain, Advocate of M/s. J. B. Dadachanji and Co. for Respondents (Nos. 1 and 3) Mr. N. S. Bindra Senior Advocate, (Mr. B. R. G. K. Achar, Advocate with him) for Respondent No. 4
Important Points
The right to reinstatement for wrongful dismissal exists independently of the statutory forum provided for its enforcement. A statutory exemption from the enforcement procedure suspends the remedy but does not extinguish the underlying right, which remains enforceable once the exemption is lifted, subject to limitation.
Subject
Labour Law - Industrial Disputes
Act Referred
BOMBAY RELIEF UNDERTAKINGS SPECIAL PROVISIONS ACT: S.3, S.4
CENTRAL PROVINCES AND BERAR INDUSTRIAL DISPUTES SETTLEMENT ACT: S.16
CENTRAL PROVINCES AND BERAR INDUSTRIAL DISPUTES SETTLEMENT ACT: S.16
Headnote
(A) Central Provinces and Berar Industrial Disputes Settlement Act, 1947 - Section 16; Bombay Relief Undertakings (Special Provisions) Act, 1958 - Sections 3 and 4 - Right to reinstatement - Distinction between the right to claim reinstatement and the statutory forum for its enforcement - Section 16 of the state act recognizes the right and provides a procedure for enforcement but does not create the right itself (Paras 12, 18).
(B) Statutory Exemption - Effect of exemption from the operation of a statutory remedy - Exemption from the operation of the act does not destroy the underlying right but only suspends the remedy prescribed for enforcing that right during the period the exemption remains in force (Paras 12, 18).
(C) Limitation - Right to enforce reinstatement after withdrawal of exemption - Once an exemption is withdrawn, the status quo ante is restored, and the employee may apply for reinstatement provided the application is made within the prescribed period of six months from the date of dismissal (Para 12).
Facts of the case:
Employees of a company were dismissed for participating in a strike. During the period of dismissal, the industry had been declared a relief undertaking and was exempt from the operation of the section of the state industrial disputes settlement act that allowed employees to apply for reinstatement. After the exemption was withdrawn, the employees applied for reinstatement within the statutory six-month period. The lower courts held that since the dismissal occurred during the exemption period, the right to reinstatement was not available and the applications were not maintainable.
Findings of Court:
The right to claim reinstatement on wrongful dismissal exists independently of the statutory forum provided for its enforcement. The exemption granted to the industry suspended the remedy but did not abrogate the right. Since the application was filed within six months of dismissal after the exemption was lifted, it was maintainable.
Issues: 1. Whether the right of a dismissed employee to claim reinstatement exists independently of the statutory provision providing the forum for such claim. 2. Whether the exemption of an industry from the operation of said provision at the time of dismissal causes the right to apply for reinstatement to cease to exist.
Ratio Decidendi: The court held that the statutory provision providing a forum for reinstatement does not create the right but merely recognizes it and provides a procedure for its enforcement. Consequently, a notification exempting an industry from such a provision suspends the remedy but does not extinguish the right. Upon withdrawal of the exemption, the right can be enforced if the application is filed within the prescribed limitation period from the date of dismissal.
Result: Appeal allowed.
(B) Statutory Exemption - Effect of exemption from the operation of a statutory remedy - Exemption from the operation of the act does not destroy the underlying right but only suspends the remedy prescribed for enforcing that right during the period the exemption remains in force (Paras 12, 18).
(C) Limitation - Right to enforce reinstatement after withdrawal of exemption - Once an exemption is withdrawn, the status quo ante is restored, and the employee may apply for reinstatement provided the application is made within the prescribed period of six months from the date of dismissal (Para 12).
Facts of the case:
Employees of a company were dismissed for participating in a strike. During the period of dismissal, the industry had been declared a relief undertaking and was exempt from the operation of the section of the state industrial disputes settlement act that allowed employees to apply for reinstatement. After the exemption was withdrawn, the employees applied for reinstatement within the statutory six-month period. The lower courts held that since the dismissal occurred during the exemption period, the right to reinstatement was not available and the applications were not maintainable.
Findings of Court:
The right to claim reinstatement on wrongful dismissal exists independently of the statutory forum provided for its enforcement. The exemption granted to the industry suspended the remedy but did not abrogate the right. Since the application was filed within six months of dismissal after the exemption was lifted, it was maintainable.
Issues: 1. Whether the right of a dismissed employee to claim reinstatement exists independently of the statutory provision providing the forum for such claim. 2. Whether the exemption of an industry from the operation of said provision at the time of dismissal causes the right to apply for reinstatement to cease to exist.
Ratio Decidendi: The court held that the statutory provision providing a forum for reinstatement does not create the right but merely recognizes it and provides a procedure for its enforcement. Consequently, a notification exempting an industry from such a provision suspends the remedy but does not extinguish the right. Upon withdrawal of the exemption, the right can be enforced if the application is filed within the prescribed limitation period from the date of dismissal.
Result: Appeal allowed.
Legal Category Hierarchy
Advocates:
A.G.Ratnaparkhi, B.R.G.K.Achar, J.B.DADACHAN, M.N.Phadke, N.S.BINDRA, O.C.MATHUR, Ravindra Narayan, V.P.Sathe
A.G.Ratnaparkhi, B.R.G.K.Achar, J.B.DADACHAN, M.N.Phadke, N.S.BINDRA, O.C.MATHUR, Ravindra Narayan, V.P.Sathe
Table of Contents
2. Whether right to reinstatement is created by Section 16 of State Act and if exemption from said section precludes claims for reinstatement for dismissals occurring during exemption. (Para 6 , 11 , 12 , 14 , 16 )
3. Section 16 provides a forum for enforcement but does not create the right to reinstatement, which exists independently; exemption suspends the remedy, not the underlying right. (Para 11 , 12 , 13 , 14 , 15 , 16 , 17 )
4. The right to claim reinstatement on wrongful dismissal exists independently of statutory procedural forums; statutory exemptions from such forums suspend the remedy without extinguishing the right. (Para 12 , 18 )
5. Appeal allowed — High Court and Industrial Court orders set aside — Award for reinstatement with back wages restored. (Para 19 )
6. Does Section 16 of the State Act create the right to reinstatement?
No. Section 16 only recognizes the right of a dismissed employee to claim reinstatement in appropriate cases and provides the procedure for enforcing that right; it does not confer or create the right itself. (Para 12 , 18 )
7. What is the legal effect of a statutory exemption from a procedural remedy like Section 16?
An exemption from the operation of the section does not destroy the underlying right to reinstatement but merely suspends the specific remedy prescribed for enforcing that right during the exemption period. (Para 12 , 18 )
8. Can an employee apply for reinstatement after an exemption is withdrawn if the dismissal occurred during the exemption?
Yes, once the exemption is withdrawn, the status quo ante is restored, and the employee may apply for reinstatement provided the application is made within the prescribed six-month period from dismissal. (Para 12 , 18 )
9. Does the withdrawal of a statutory exemption operate prospectively or retrospectively?
The court held that there is no question of a notification withdrawing an exemption being prospective or retrospective; the focus is whether the dispute exists and the application is timely. (Para 15 , 16 )
Judgement
SATYANARAYANA RAJU J.; This is an appeal, by special leave, against the judgment of a Division Bench of the Bombay High Court dismissing an application for the issue of a Writ of certiorari under Art 226 of the Constitution to quash the order of the State Industrial Court at Nagpur.
2. For a proper appreciation of the questions that have been raised in the appeal it would be necessary to state the material facts. That Model Mills, Nagpur (hereinafter referred to as the Mills) is a public limited company incorporated under the Indian Companies Act . On July 18, 1959 in exercise of the power conferred by S. 18-A of the Industries (Development and Regulation) Act 1951 the Central Government took over the management of the Mills and appointed the 3rd respondent as the authorised Controller of the Mills. On March 25, 1960 the State of Bombay (now the State of Maharashtra) in exercise of the powers conferred by Ss. 3 and 4 of the Bombay Relief Undertakings (Special Provisions) Act 1958 (hereinafter referred to as the Bombay Act) made a notification declaring the Mills to be a "relief undertaking" for a period of one year commencing from March 26, 1960 and ending with March 25, 1961 . The appellants eight in number, were at the relevant time, the permanent employees of the Mills. It would be convenient to refer to them as "employees". On December 15,1960 when the notification made by the State Government under the Bombay Act was in force, the employees abstained from work. There upon, the 1st respondent who is the Factory Manager of the Mills issued notices to the employees to show cause why they should not be dismissed from service for joining an "illegal strike" On January 6, 1961 the Factory Manager passed orders dismissing the employees from service. On January 12, 1961 the employees filed an application the High Court of Bombay for the issue of a writ of mandamus directing the employees to be reinstated in service. On April 4, 1961 the exemption of the Mills from the application of S. 16 of the CENTRAL PROVINCES AND BERAR INDUSTRIAL DISPUTES SETTLEMENT ACT (XXIII of 1947 ) (hereinafter called the State Act) was made (sic). On April 25, 1961 the employees filed applications before the Assistant Commissioner of Labour claiming reinstatement with back wages. The High Court dismissed the Writ Petition filed by the employees with liberty to file a fresh petition, if necessary, since they were prosecuting their applications for relief of reinstatement before the Assistant Commissioner of Labour. In and by his order dated September 29, 1961, the Assistant Commissioner allowed the applications filed by the employees. He held that as there was no illegal strike the orders of dismissal were unsustainable and should be set aside. He directed that the employees should be reinstated with back wages
3. Against the orders passed by the Assistant Commissioner, the Mills preferred applications in revision to the State Industrial Court by its order dated February 16, 1962, the Industrial Court allowed the revision applications filed by the Mills on the ground that the applications before the Assistant Commissioner were not maintainable . On the merits the Industrial Court agreed with the Assistant Commissioner that there was no illegal strike.
4. Aggrieved by the orders of the Industrial Court, the employees filed an application under Arts. 226 and 227 of the Constitution for the issue of a writ of certiorari to quash the orders of dismissal passed by the Factory Manager and to direct their reinstatement with back wages. By its judgment dated August 12, 1963 the High Court dismissed the Writ Petition filed by the employees.
5. The High Court has held that the right to claim reinstatement is not a right which is available to an employee under the Common Law and that the relief of reinstatement is a special right which has been conferred on an employee under S. 16 of the State Act. In the opinion of the High Court. The essential pre-conditio
