Place of Issuing Transfer/Termination Order Confers Jurisdiction on Labour Court Under MRTU & PULP Act: Bombay High Court - 2025-09-25

Bombay HC: Mumbai Industrial Court Can Hear Transfer Dispute of Employee Posted Outside Maharashtra

Mumbai: The Bombay High Court, in a significant ruling on labour law, has held that the Industrial Court at Mumbai has the territorial jurisdiction to entertain an unfair labour practice complaint challenging a transfer order, even if the employee has never worked in Maharashtra, provided the order was issued from the company's corporate office in Mumbai.

Justice Sandeep V. Marne dismissed a writ petition filed by pharmaceutical company Raptakos Brett & Co. Ltd., which had challenged the jurisdiction of the Mumbai Industrial Court in a case filed by its employee, Pawan Sharma. The court upheld the Industrial Court's order, emphasizing that the place where the decision to transfer is taken and from where the order is issued constitutes a part of the 'cause of action'.

The court also imposed costs of Rs. 25,000 on the company for its "volte face" in challenging the jurisdiction of Mumbai courts despite including an exclusive jurisdiction clause in the employee's appointment letter.

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Background of the Case

The case revolves around a transfer order issued to Mr. Pawan Sharma, who was appointed as a Medical Representative in 1990 and was posted in Sriganganagar, Rajasthan, for his entire tenure. In November 2019, the company's corporate office in Mumbai issued an order transferring him to Shahjahanpur, Uttar Pradesh, citing business reasons.

Mr. Sharma challenged this transfer by filing an unfair labour practice complaint under the Maharashtra Recognition of Trade Unions & Prevention of Unfair Labour Practices Act, 1971 (MRTU & PULP Act) before the Industrial Court in Mumbai. The company contested this, arguing that since Mr. Sharma's employment was based entirely outside Maharashtra, the Mumbai court lacked territorial jurisdiction. The Industrial Court rejected the company's objection in May 2022, prompting the company to file the present writ petition in the High Court.

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Key Arguments

Petitioner's Contentions (Raptakos Brett & Co. Ltd.): * Senior Advocate Mr. V.P. Sawant, representing the company, argued that the "situs of employment" is the determining factor for jurisdiction. Since the employee worked in Rajasthan and was transferred to Uttar Pradesh, the cause of action arose there, not in Mumbai. * He contended that the mere issuance of the transfer order from Mumbai is irrelevant; what matters is where the order takes effect and impacts the employee's service conditions. * Reliance was placed on previous Bombay High Court judgments, including Glaxo Smith Kline Pharmaceuticals Ltd. vs. Abhay Raj Jain , which prioritized the situs of employment.

Respondent's Contentions (Pawan Sharma): * Mr. R.D. Bhat, counsel for the employee, argued that a part of the cause of action arose in Mumbai because the decision to transfer him was taken there, and the order was dispatched from the corporate office. * He highlighted a clause in Mr. Sharma's 1990 appointment letter which explicitly stated that any dispute would be adjudicated "solely in the legal courts of Bombay, State of Maharashtra." * He cited recent Supreme Court judgments, including Nandram vs. Garware Polyster Ltd. and Rakesh Kumar Verma vs. HDFC Bank Ltd. , which recognized that the place where a termination/transfer decision is made can confer jurisdiction.

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High Court's Analysis and Precedents

Justice Marne conducted a detailed analysis of conflicting judicial precedents. While acknowledging earlier High Court judgments that favoured the "situs of employment" test, he found that recent Supreme Court rulings have broadened the scope of jurisdiction in industrial disputes.

The Court distinguished the older precedents and relied on three key Supreme Court judgments:

1. Nandram vs. Garware Polyster Ltd.: The Apex Court held that where the decision to terminate an employee (posted in Pondicherry) was taken at the head office in Aurangabad, the Labour Court in Aurangabad had jurisdiction as part of the cause of action arose there.
2. Bikash Bhushan Ghosh vs. Novartis India Ltd.: The Supreme Court recognized that two different states could have concurrent jurisdiction if a part of the cause of action arose in each.
3. Rakesh Kumar Verma vs. HDFC Bank Ltd.: The Supreme Court recently held that factors like where the employment decision was taken, the appointment letter was issued, and the termination decision was made are relevant for establishing jurisdiction.

Applying this rationale, Justice Marne observed:

"The judgments recognise the principle of conferring jurisdiction on Court where part of cause of action arises... The Apex Court judgment in Nandram is in respect of industrial adjudication where Labour Court’s jurisdiction to entertain complaint of unfair labour practice at a place where termination order was issued has been upheld by the Apex Court."

The court also noted the company's contradictory stance. Having contractually bound the employee to Mumbai's jurisdiction, it was now arguing against it. The judgment stated:

"Petitioner itself has itself incorporated a clause in the appointment order that only Courts at Mumbai will have jurisdiction... It has now taken a volte face and has contended that Industrial Court at Mumbai does not have territorial jurisdiction... This Court does not appreciate Petitioner’s conduct in doing so."

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Final Decision and Implications

The High Court dismissed the company's petition, affirming that the Industrial Court at Mumbai has the jurisdiction to hear the complaint. It directed that the complaint, pending since 2019, be decided expeditiously. The court rejected the company's request to stay the order, noting the long delay in the proceedings.

This judgment clarifies that in labour disputes under the MRTU & PULP Act, jurisdiction is not solely determined by the employee's place of work. The location of the employer's decision-making authority and the origin of the impugned order are crucial factors that can establish a "cause of action," allowing employees to seek remedies in the state where the corporate or head office is located.