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2012 Supreme(Cal) 397
High Court of Judicature at Calcutta
TAPEN SEN
M/s. Ranbaxy Laboratories Limited
Versus
The State of West Bengal & Others
WP No. 400 of 2010
Decided On : 03-05-2012
For the Petitioner:N.K. Mehta, Soumya Majumdar, Advocates.
For the Respondents:Jayanta Dasgupta, Balaram Patra, Advocates.
A term in an employment agreement specifying a particular court or jurisdiction for dispute resolution may be struck down as unreasonable and illegal if it deprives the employee of choice and causes injustice or inequality before the law.
Headnote:
Industrial Dispute - Jurisdiction - Termination of Service - Clause in Employment Agreement Specifying Courts within Delhi Territory for Dispute Resolution - Unreasonable Term - State Government's Authority to Refer Dispute - Cause of Action Arising in Kolkata - Jurisdiction of West Bengal Industrial Tribunal Upheld.
Fact of the Case:
Ranbaxy Laboratories Limited challenged an award by the Industrial Tribunal (5th Court), West Bengal, holding that the company was not justified in terminating the services of Subrata Bagchi (Respondent No. 3) and directing reinstatement and payment of back wages. The company contended that the Tribunal lacked jurisdiction as the employment agreement specified Delhi courts for dispute resolution and that the cause of action arose in Bhubaneswar, Odisha, where Bagchi was transferred.
Finding of the Court:
The court held that the clause in the employment agreement specifying Delhi courts for dispute resolution was unreasonable and arbitrary, as it deprived Bagchi of his choice and expected him to travel to Delhi from Bhubaneswar to fight his case. Such a term was struck down as illegal.
Issues: 1. Whether the Industrial Tribunal, West Bengal, had jurisdiction to adjudicate the dispute despite the clause in the employment agreement specifying Delhi courts for dispute resolution. 2. Whether the State of West Bengal had the authority to refer the dispute to the Tribunal considering the cause of action arose in Bhubaneswar.
Ratio Decidendi: 1. The court relied on the principle that courts will not enforce and will strike down unfair and unreasonable clauses in contracts, especially when there is inequality of bargaining power between the parties. The employment agreement in question was signed by Bagchi as a condition of employment, depriving him of any choice. 2. The court found that part of the cause of action arose in Kolkata, as the termination letter was received by Bagchi at his Kolkata address and the Kolkata office controlled and maintained his leave record. The Regional Sales Manager in Kolkata also approved his tour programme when he was posted in Bhubaneswar.
Final Decision: The court held that the West Bengal Industrial Tribunal had the necessary authority to refer the dispute for adjudication. The preliminary objection raised by the company challenging the Tribunal's jurisdiction was dismissed.
Tapen Sen, J.
1. In this Writ Petition, the Petitioner (M/s. Ranbaxy Laboratories Limited) challenges the award dated 10.12.2009 as contained in Annexure-P/30 passed by the Industrial Tribunal (5th Court), West Bengal pertaining to Reference No. 222-I.R./IIL-190/04 dated 04/16.3.2005 whereby and whereunder it was held that the management was not justified in drawing an inference that the concerned workman (Respondent No. 3, Subrata Bagchi) had abandoned his job and therefore the management was also not justified in terminating his service which was also bad for non-compliance of Section 25 (F) of the Industrial Disputes Act, 1947. Consequently, the Petitioner was directed to pay 50% of the back wages from the date of the absence of the concerned workman till the period of his reinstatement. The Petitioner Company was further directed to reinstate the concerned workman within a period of one month from the date of receipt of the award.
2. The private Respondent No. 3 (concerned workman, Subrata Bagchi), according to the Petitioner, was appointed as a Sales representative on 14.1.1982 by an appointment letter issued from the Office of the Company at New Delhi. Pursuant to the letter of appointment, an Agreement was entered upon containing terms and conditions of service.
3. Mr. Mehta, learned Senior Counsel appearing for the Petitioner and referring to the said Agreement at Clause 13 thereof (Annexure-P/1 at page 45), stated that the said Clause clearly stipulated that any dispute pertaining to appointment, termination or dismissal or any dispute with regard to any claim or payment of damages shall be dealt with or adjudicated upon by Courts within the Territory of Delhi and therefore, the finding of the Tribunal holding that since the cause of action arose within the jurisdiction of the State of West Bengal, the said State had the right to refer the dispute to the said Tribunal for adjudication, is a finding, which is wholly without jurisdiction. Learned Counsel submits that the concerned workman, while deposing before the Tribunal had clearly stated on 21.4.2009 in his cross-examination (at page 159 of the Writ Petition) that he had not raised any dispute at Delhi and at the time of his termination of service, he was at Bhubaneswar but he did not raise any dispute at Bhubaneswar also. Learned Counsel therefore raised the jurisdiction of the Tribunal as a preliminary issue. The same is taken up accordingly as a preliminary issue.
4. According to the Petitioner, the concerned workman was transferred from the Consumer Products Division to the Generics and Hospital Products Division designating his as Hospital Service Representative, with Headquarters at Burdwan. Thereafter, he was again transferred on 1.11.1987 from the said Generics Division to Curadia Division designating him as a Professional Sales Representative with Headquarters at Curadia reportable to the Regional Sales Manager, Curadia east of the Kolkata Office. Thereafter, on 17.6.1991, he was again transferred to the Stancare Division with Headquarters at Malda and reportable to Regional Sales Manager, Kolkata Office.
5. The performance of the Respondent No. 3 was found to be unsatisfactory and a show-cause Notice was issued to him in 2001. He replied on 27.1.2001. The reply was not found to be satisfactory and a domestic enquiry was conducted in which allegations pertaining to negligence and insubordination were enquired into. The Enquiry Officer submitted his Report finding the Respondent No. 3 guilty of the charges. The Disciplinary Proceeding ultimately ended with the imposition of the penalty of warning since the management wanted to give a further opportunity to him. The suspension was revoked on 21.2.2002 but in spite of revocation of suspension, the Respondent No. 3 did not pursue his work diligently and as a result of which, another show-cause Notice was given to him on 1.3.2003. A second letter was also issued on 21.3.2003 vide Annexure-P/4 and
