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The Management of Hukkeri and ors. Vs. S.R. Vastrad and ors. - Court Judgment

LegalCrystal Citation
SubjectConstitution;Labour and Industrial
CourtKarnataka High Court
Decided On
Case NumberWrit Petition Nos. 6717 and 32623 of 1997 and etc.
Judge
Reported inILR2005KAR3882; 2006(2)KarLJ528
ActsKarnataka Co-operative Societies Act, 1959 - Sections 70, 70(1) and 70(2); Karnataka Co-operative Societies (Amendment) Act, 1976; Industrial Disputes Act, 1947 - Sections 10 - Sections 2 and 10; Karnataka Co-operative Societies (Amendment) Act, 2000; Karnataka Cooperative Societies Rules - Rules 15, 17, 18, 18(9) and 18(12); Constitution of India - Articles 32, 141, 142 and 145(5)
AppellantThe Management of Hukkeri and ors.
RespondentS.R. Vastrad and ors.
Appellant AdvocateB.C. Prabhakar, ;Shantesh Gureddi, ;N.R. Krishnappa, ;S.V. Shastri, ;P.S. Rajagopal, ;Anant Mandgi, ;Ravi G. Sabhahit, ;C.S. Ramdas, ;M.B. Ravikumar, ;A. Gopalaiah, ;M.R.C. Ravi, ;K.M. Nataraj, ;B.B.
Respondent AdvocatePuttige R. Ramesh, Adv. and ;S.Z.A Khureshi, AGA for R1, ;K. Subba Rao, Sr. Counsel for Subba Rao & Co., ;F.V. Patil, ;G. Balakrishna Shastry, ;G.F. Hunasikattimath and ;G. Balakrishna Shastry, Ad
DispositionPetition allowed
Excerpt:
(a) karnataka co-operative societies act, 1959 (amendment act 19/1976) section 70 - industrial disputes act, 1947-section 10-constitution of india-articles 226 and 227-doctrine of 'stare decisis' and 'prospective overruling'-whether the awards passed by the labour courts after the law declared by the division bench of this court in sri padmambha large sized co-operative bank's case (ilr 1985 kar 50) till the declaration of law by this court in veerashiva co-operative bank's case (ilr 2000 kar 3743), which was affirmed by the full bench of this court, in the karnataka sugar workers's federation case (ilr 2003 kar 2531) could be saved by the application of doctrine of 'stare decisis' and 'prospective overruling'-held-the full bench when it declared the law upholding the law laid down in the.....ordern. kumar, j.1. in all these writ petitions as common question of law is involved they are taken up for consideration together and disposed of by this common order.2. the petitioners in w.p. nos. 6717 of 1997 writ petition nos. 32623 of 1997; 3371 of 1998; 20189 of 1998; 22897 of 1998; 22898 of 1998; 22899 of 1998 ; 36040 of 1998; 22925 of 1999; 24945 of 1999; 37914 of 1999; 39020 of 1999; 45731 of 1999; 44802 of 1999; 13826 of 2000; 21040 of 2000; 28946 of 2000; 31466 of 2000; 33528 of 2000; 36407 of 2000 are all cooperative societies/banks registered under the karnataka cooperative societies act, 1959 and are governed by the provisions of the said act. the petitioners in w.p. nos. 18025 of 1997; 25812 of 1997; 18191 of 1998; 29650 of 1998; 30229 of 1998; 30562 of 1998; 2542 of 1999;.....
Judgment:
ORDER

N. Kumar, J.

1. In all these Writ Petitions as common question of law is involved they are taken up for consideration together and disposed of by this common order.

2. The petitioners in W.P. Nos. 6717 of 1997 Writ Petition Nos. 32623 of 1997; 3371 of 1998; 20189 of 1998; 22897 of 1998; 22898 of 1998; 22899 of 1998 ; 36040 of 1998; 22925 of 1999; 24945 of 1999; 37914 of 1999; 39020 of 1999; 45731 of 1999; 44802 of 1999; 13826 of 2000; 21040 of 2000; 28946 of 2000; 31466 of 2000; 33528 of 2000; 36407 of 2000 are all cooperative societies/banks registered under the Karnataka Cooperative Societies Act, 1959 and are governed by the provisions of the said Act. The petitioners in W.P. Nos. 18025 of 1997; 25812 of 1997; 18191 of 1998; 29650 of 1998; 30229 of 1998; 30562 of 1998; 2542 of 1999; 7112 of 1999; 13813 of 1999; 16780 of 1999; 22928 of 1999; 29657 of 1999; 32148 of 1999; 35275 of 1999; 36461 of 1999; 38729 of 1999; 113 of 2000; 6304 of 2000; 3997 of 2001; and 47510 of 2001 are all employees of a cooperative society/bank who are also governed by the provisions of the said Act. They have challenged in all these Writ Petitions the awards passed by the Labour Court under Section 10 of the Industrial Disputes Act, 1947.

3. The State legislature enacted the Karnataka Cooperative Societies Act, 1959 with an object to consolidate and amend the laws relating to co-operative societies in the State and it generally provides for the establishment of societies, their registration, membership, rights and liabilities of members, powers of the general body, management of societies and their properties and funds, audit, winding up and dissolution and execution of awards, decrees and other matters. By Karnataka Act 19/1976 Section 70 of the Act was amended introducing Clause (d) to Sub-section (2) of Section 70 which reads as under :-

'Any dispute between a cooperative society and its employees or past employees or heirs or legal representatives of a deceased employee, including a dispute regarding the terms of employment, working conditions and disciplinary action taken by a Cooperative Society.'

4. In view of the judgments rendered in Cooperative Central Bank Limited and Ors. v. Additional Industrial Tribunal, Andhra Pradesh, Hyderabad : (1969)IILLJ698SC Chairman, Dharwad District Government Employees Cooperative Bank Limited v. Marthand Bhimabai Hangal and Anr. 1976(1) KLJ 102 and Kunnimellihalli Dodda Pramanada Prathami Pattin Vyavasaya Sahakari Sangh Limited v. Shivappa Guddappa Surad 1972 (2) M.L.J. 327 it was clear that before the Act was amended by Karnataka Act 19/1976 a dispute of the nature falling under Clause (d) of Sub-section (2) of Section 70 of the Act could not have been entertained under Section 70 of the Act and that the workman should have invoked the relevant provisions of the Industrial Disputes Act for adjudication of the dispute. It is in this back ground the Karnataka Legislature amended the Act and introduced Clause (d) to Sub-section (2) of Section 70 to confer jurisdiction for the first time on the Registrar or his nominee, under Section 70 to deal with the dispute of the type mentioned in Clause (d) of Sub-section (2) of Section 70 of the Act.

5. Therefore, the question arose whether after the aforesaid amendment to the Act, whether the jurisdiction of the Labour Court to adjudicate disputes which are covered by Clause (d) is taken away.

6. A Division Bench of this Court in the case of Sri Padmamba Large Sized Cooperative Society v. Labour Court and Anr. : ILR1985KAR50 held that:-

'The Industrial Disputes Act is an existing law in respect of the matters enumerated in the concurrent list. The Karnataka Co-operative Societies Act, 1959 has been enacted by the State Legislature under Entry 32 of List II (State List) of VII Schedule of the Constitution. Clause (d) of Sub-section (2) of Section 70 of that Act, which has been added by Karnataka Act 19 of 1976, confers jurisdiction on the Registrar or his nominee to decide disputes regarding wrongful termination of service between a Co-operative Society and its employee. As the provisions of the Industrial Disputes Act conferring jurisdiction on the Labour Court to decide Industrial dispute are not ultra vires, it is not possible to agree with the contention that the jurisdiction of the Labour Court under the Industrial Disputes Act gets curtailed by the State enacting Section 70(2)(d) of the Karnataka Co-operative Societies Act. Following the decision of the Supreme Court, we have no hesitation in holding that the relevant provisions of the Industrial Disputes Act cannot either be regarded as ultra vires or inapplicable, merely because the State Legislature has enacted Clauses (d) of Sub-section (2) of Section 70 empowering the Registrar or his nominee to decide the dispute between a Society and its employees. Invoking of the provisions of the Industrial Disputes Act in this case was, therefore, clearly permissible. The reference to the Labour Court under Section 10 was legal and valid.'

7. A learned single Judge of this Court in the case of Harugeri Urban Co. op. Bank v. State of Karnataka and Ors. 1981 (1) Kar.L.J. 136 held that:-

'All these factors clearly indicate that the I.D. Act is a special Act and, therefore, the employees of co-operative societies who come within the definition of the word 'workman' under S. 2(s) of the I.D. Act, have a right to have their disputes adjudicated by the appropriate authorities under the I.D. Act and their right has not been taken away by the provisions of Section 70(1)(c) read with Section 70(2)(d) of the C.S. Act.'

8. A Division Bench of this Court in the case of Veerashiva Co. Op Bank Limited v. Presiding Officer, Labour Court and Ors. ILR 2000 KAR 3743 dealing with the question whether reference under Section 10 of the Industrial Disputes Act is maintainable in view of the provisions of Section 70 of the Karnataka Cooperative Societies, 1959, after referring to the judgments of the Supreme Court in the case of R.C. Tiwari v. M.P. State Cooperative Marketing Federation Limited and Ors. : (1997)IILLJ236SC Cooperative Central Bank Limited v. Additional Industrial Tribunal, Andhra Pradesh, Hyderabad : (1969)IILLJ698SC Sagamal v. District Sahkari Kendriya Bank Limited, Mandsaur and Anr. : (1997)9SCC354 The Krishna District Cooperative Marketing Society Limited, Vijayawada v. N.V. Pumachandra Rao and Ors. : (1987)IILLJ365SC held as under:-

'By reading the above provisions, it is manifest that power is vested in the Registrar to deal with disciplinary matters relating to employees in the society or class of societies including the terms and conditions of employment where the dispute relates to the terms of employment, working conditions and disciplinary action taken by the society or arises between the society and its employees or past employees and the same can be decided by the Registrar or any Officer appointed by him to decide the dispute and his decision shall be binding on the society and its employees. Thus, the section is very comprehensive and takes in all the matters including the service conditions and disciplinary matters regarding employees. Rules 15 of the Karnataka Cooperative Societies Rules deal with remuneration payable to the Administrator and Special Officer; Rule 17 deals with qualifications of Officers and employees of the Co-operative Societies and eligibility criteria for appointment. Rule 18 deals with the conditions of service of officers and employees of co-operative Societies and also retirement age, leave, gratuity and other conditions. Rule 18(9) deals with punishment. Rule 18(12) provides an appeal against the punishment imposed on an employee. Thus, the Act provides remedy to all employees if any dispute arises. The question is whether the remedy provided under the Co-operative Societies Act excludes the jurisdiction of the Labour Court.'

After referring to the various Supreme Court judgments referred to above held as under :-

'The above Supreme Court judgments clearly held that when a comprehensive procedural remedy is available under the Cooperative Societies Act, the jurisdiction of the Labour Court is excluded. We accordingly hold that the jurisdiction of the Labour Court is excluded and the dispute before the Labour Court is not maintainable. Writ Petition is allowed as prayed for. The respondents -employees are permitted to file an application before the Registrar of Cooperative Societies within a period of six weeks from today. On filing of such application, the Registrar shall entertain and dispose of the said application according to law.'

9. Again another Division Bench of this Court in the case of Rajajinagar Cooperative Bank Limited, Bangalore v. Presiding Officer, Bangalore and Anr. 2002 (I) LLJ 684' answering the question whether the disputes arising between the cooperative society and its employees can be subjected to the adjudicatory process under the Industrial Disputes Act, held:-

'so far as the State of Karnataka concerned, all the disputes arising between Co-operative Societies and its employees including those concerning the terms of employment working conditions and disciplinary actions can be referred for decision only to the 'Registrar' under the Co-operative Act and no dispute in relation to such matters can be raised, referred to and decided under the provisions of the I.D. Act.

10. Yet another Division Bench of this Court in the case of Devanur Grama Seva Sahakari Sangh Limited, Devanur v. Virupaxayya and Ors. : ILR2001KAR4839 though after noticing the judgment in Veerashiva Cooperative Bank's case did not disagree with the same, did not apply the law declared in the aforesaid case to the case which was under their consideration on the ground that the said point of jurisdiction was not raised either before the Labour Court or the single Judge and, therefore, they did not permit the said ground to be raised before them. It is under those circumstances, the matter was referred to the Full Bench. It was called upon to pronounce whether the judgment of the Division Bench in the Veerashiva Cooperative Bank's case requires reconsideration. After elaborate consideration of the judgments referred to, the Full Bench in the case of Karnataka Sugar Workers Federation (R) v. State of Karnataka and Ors., : (2003)IIILLJ502Kant held that the law laid down in Veerashiva Cooperative's case do not require any reconsideration. One of the additional reason given for upholding the said view was the legislature itself has amended Section 70(1)(d) and 70(2)(d) by Act 2/2000 which came into effect from 20.6.2000 where expressly the jurisdiction of the Labour Courts or Industrial Tribunal is excluded.

11. The State Legislature by Act No. 2/2000 amended Section 70(1) as well as 70(2)(d). The said amendment came into force from 20.6.2000. As per the said amendment in respect of disputes referred to in Section 70(1) no Court or Labour Court or Revenue Court or Industrial Tribunal shall have jurisdiction to entertain any suit or other proceeding in respect of such dispute. To the existing Section 70(2)(d) the following words 'notwithstanding anything contrary contained in the Industrial Disputes Act, 1947 (Central Act 14/1947) was added. Therefore, by this amendment the legislature has expressly excluded the jurisdiction of the Labour Court and the Industrial Tribunal to decide the disputes which fall within Section 70(1), 70(2)(d) of the Act, thus approving the interpretation placed by this Court in the Veerashiva Cooperative Bank's case.

12. Sri K. Subba Rao, the learned senior counsel appearing for the workmen contended from 1976 after the amendment by Karnataka Amendment Act 19/1976 till the judgment was rendered in Veerashiva Cooperative Bank's case on 9.3.2000 the law which held the field was that the Labour Court had jurisdiction to entertain an industrial dispute under the provisions of the Industrial Disputes Act notwithstanding introduction of Clause (d) to Sub-section (2) of Section 70 of the Act. Though subsequent to the judgment of Veerashiva's Cooperative Bank's case, amendment is brought about expressly excluding the jurisdiction of Labour Courts and Industrial Tribunals to decide an industrial dispute under the provisions of the Industrial Disputes Act which view has been now affirmed by the Full Bench in the case of Karnataka Sugar Workers Federation's case, the decisions rendered prior to these judgments should be saved on the principle of stare decisis. In support of his contention he relied on a judgment of the Division Bench of this Court in the case of H. Muniswamy Gowda v. Management of KSRTC and Anr. : ILR1997KAR509 where the awards passed prior to the overruling of the law was saved by applying the doctrine of stare decisis.

13. Sri M.C. Narasimhan, the learned senior counsel appearing for the workmen contended, all the awards passed by the Labour Courts prior to Veerashiva Cooperative Bank's case as well as the judgment of Full Bench could be saved by applying the doctrine of 'prospective overruling' and submits accordingly this Court should make a declaration that all the awards which are the subject matter of these Writ Petitions before this Court should be decided in terms of the law which was prior to the decision in Veerashiva Cooperative Bank's case and the Full Bench case.

14. Per contra, Sri. S.V. Shastri, the learned counsel appearing for the Societies, contended once this Court declares the law overruling an earlier binding precedent, the effect is the law declared by this Court is the law from the inception. The interpretation placed earlier is an incorrect interpretation and the later interpretation is the correct interpretation. If by a later pronouncement, it is held that the said Labour Court had no jurisdiction, it means it had no jurisdiction from the day Clause (d) of Sub-section (2) of Section 70 was introduced by way of amendment and all the proceedings initiated which culminated in the award are one without jurisdiction and as all those awards are challenged before this Court in these Writ Petitions and as the awards have not become final, the question of jurisdiction being purely a question of law not only could be adjudicated in the Writ Petition for the first time but also this Court has the jurisdiction to set aside the awards passed by the Labour Courts in view of the law declared by the Full Bench of this Court. Therefore, he submits neither the doctrine of stare decisis nor the doctrine of prospective overruling is applicable to the case on hand as the awards passed by the Labour Courts are under challenge in these proceedings and have not become final.

15. Therefore, the question for consideration in these batch of writ petitions is,

'whether the awards passed by the Labour Courts after the law declared by the Division Bench of this Court in Sri Padmambha Large Sized Co-operative Society' case till the declaration of law by this Court in Veerashiva Co-operative Bank's case, which was affirmed by the Full Bench of this Court, in the Karnataka Sugar Workers Federation case could be saved by the application of doctrine of 'stare decisis' and 'prospective overruling'.

16. To answer the said question it is necessary to know and understand what these legal doctrines of stare decisis and prospective overruling means, before applying the same to the facts of this case.

17. STARE DECISIS:

The legal effect of the previous decisions is governed by a complex set of conventions for which the Latin phrase 'STARE DECISIS' is often used. Black's new Dictionary defines stare decisis mean 'to avoid by', or adhere to decided cases. The other expressions commonly used is 'PRECEDENT'. The doctrine of stare decisis is the basis of common law. It originated in England and was used in the colonies as the basis of their judicial decisions. The genesis of the rule may be sought in factors peculiar to English legal history, amongst which may be singled out the absence of a Code. The older the decision, the greater its authority and the more truly was it accepted as stating the correct law. As the gulf of time widened, Judges became increasingly reluctant to challenge old decisions.

17.1. The principle of stare decisis is also firmly rooted in American Jurisprudence. It is regarded as a rule of policy which promotes predictability, certainty, uniformity and stability. The legal system, it is said, should furnish a clear guide for conduct so that people may plan their affairs with assurance against surprise. It is important to further fair and expeditious adjudication by eliminating the need to relegate every proposition in every case. When the weight of the volume of the decisions on a point of general public importance is heavy enough, courts are inclined to abide by the rule of stare decisis, leaving it to the legislature to change long-standing precedents if it so thinks it expedient or necessary. Stare decisis is usually the wise policy, because in most matters it is more important that the applicable rule of law be settled than it be settled right. Though the court has the power to reconsider its own decisions, that should not be done upon a mere suggestion that some or all the members of the later court may arrive at a different conclusion if the matter were res integra.

17.2. The history of the World's constitutional law shows that the principle of stare decisis is treated as having a limited application only. It is a wise policy to restrict the principle of stare decisis to those areas of the law where correction can be had by legislation. Otherwise, the constitution loses the flexibility which is necessary if it is to serve the needs of successive generations. The doctrine of stare decisis is not an imprisonment of reason. Older the standing of a decision, greater the provocation to apply the rule of stare decisis.

17.3 Our Constitution which has made detailed provision about various matters relating to the Supreme Court including a matter relating to its practice, such as, whether there can be a dissenting judgment [Article 145(5)] has not, in terms made any provision in this behalf. Article 141, no doubt, provides that the law declared by the Supreme Court shall be binding on all Courts within the territory of India. The phrase 'all Courts' refers to Courts other than the Supreme Court. In the absence, therefore, of any clear provision in the Constitution and in view of the fact that the Supreme Court of India has historically succeeded to the pre-existing Federal Court and the Judicial Committee of the Privy Council, it would not deny itself the competence to reconsider its prior decisions. But, it does not follow that such power would be exercised without restriction or limitation or that a prior decision can be reversed on the ground that, on later consideration, the Court disagreed with the prior decision and thinks it erroneous.

17.4. Stare decisis is ordinarily a wise rule of action. But, it is not a universal, inexorable command. The doctrine of stare decisis has hardly any application to an isolated and stray decision of the Court very recently made and not followed by a series of decisions based thereon. The rule of stare decisis, though one tending to consistency and uniformity of decision, is not inflexible. Whether it shall be followed or departed from is a question entirely within the discretion of the court, which again is called upon to consider a question once decided.

17.5. The necessity for certainty and continuity in the declaration of law by the highest courts in the country is recognised on all hands. That necessity is all the greater, and not the less, by reason of the Constitution itself having formally provided that the decisions of the Supreme Court are declaratory of the law. The rule as to the binding character of a judicial precedent is based on a juristic principle of universal application. The reason for its adoption is the disastrous inconvenience of subjecting each question decided by a previous judgment to reargument, thereby rendering the dealings of mankind doubtful by different decisions; so that in truth and in fact there would be no real final Court of appeal.

17.6. The Court bows to the lessons of experience and the force of better reasoning recognising that the process of trial and error, so fruitful in the physical sciences, is appropriate also in the judicial function. The Court can always listen to argument as to whether it ought to review a particular decision. The strongest reason for an overruling is that a decision is manifestly wrong, and its maintenance is injurious to the public interest. Only in case it is shown that the decision was clearly wrong and it has been followed by this Court in other cases, that it would be in the interest of the public to reverse it. The Court has never committed itself to any rule or policy that it will not bow to the lessons of experience and the force of better reasoning by overruling a mistake precedent. Stare decisis is not, like the rule of res judicata, a universal, inexorable command.

17.7. Reconsideration of the earlier decisions should be confined to questions of great public importance. Legal problems should not be treated as mere subjects for mental exercise. An earlier decision may therefore be overruled only if the Court comes to the conclusion that it is manifestly wrong, not upon a mere suggestion that if the matter were res integra, the members of the later court may arrive at a different conclusion. It is impossible to maintain as an abstract proposition that the Court is either legally or technically bound by previous decisions. Indeed, it may in a proper case be its duty to disregard them. But the rule should be applied with great caution, and only when the provision is manifestly wrong. Otherwise there would be grave danger of a want of continuity in the interpretation of the law. It is not possible to say that it is not open to the Court to review its previsions decisions on good cause. The question is not, whether the Court can do so, but whether it will, having due regard to the need for continuity and consistency in judicial decisions. The doctrine of stare decisis is not an inflexible rule of law and cannot be permitted to perpetuate errors to the detriment to the general welfare of the public or a considerable section thereof.

[Refer:- : [1953]4SCR1069 , : [1954]1SCR674 , : [1955]2SCR603 , : AIR1981SC271 , 348 US 236(1958), 362 US 572 (1946), 264 US 219 (1924)].

18. 'PROSPECTIVE OVERRULING'

This doctrine of prospective overruling is borrowed from American Law. There are two doctrines familiar to American Jurisprudence, one is described as Blackstonian theory and the other as 'prospective overruling'.

18.1. Blackstone in his Commentaries, 69 (15th Edition 1809) stated the common law rule that the duty of the Court was 'not to pronounce a new rule but to maintain and expound the old one'. It means the Judge does not make law but only discovers or finds the true law. The law has always been the same. If a subsequent decision changes the earlier one, the latter decision does not make law but only discovers the correct principle of law. The result of this view is that it is necessarily retrospective in operation.

18.2. Doctrine of prospective overruling as expounded by other Jurists suggest that it as 'a useful judicial tool'. In the words of Canfield the said expression means,'... a Court should recognize a duty to announce a new and better rule for future transactions whenever the court has reached the conviction that an old rule (as established by the precedents) is unsound even though feeling compelled by stare decisis to apply the old and condemned rule to the instance case and to transaction which had already taken place.'

18.3. Justice Cardozo while addressing the Bar Association of New York said thus:-

'The rule (the Blackstonian rule) that we are asked to apply is out of tune with the life about us. It has been made discordant by the forces that generate a living law. We apply it to this case because the repeal might work hardship to those who have trusted to its existence. We give notice however that any one trusting to it hereafter will do at his peril'.

18.4. The Supreme Court of United States of America in the case of Great Northern Railway v. Sunburst Oil and Ref. Co., (1932) 287 US 358, 366 : 77 Law Ed 360 held as under: -

'This is not a case where a Court in overruling an earlier decision has come to the new ruling of retroactive dealing and thereby has made invalid what was followed in the doing. Even that may often be done though litigants not infrequently have argued to the contrary .... This is a case where a Court has refused to make its ruling retroactive, and the novel stand is taken that the Constitution of the United States is infringed by the refusal. We think that the Federal Constitution has no voice upon the subject. A state in defining the elements of adherence to precedent may make a choice for itself between the principle of forward operation and that of relation backward. It may be so that the decision of the highest courts, though later overruled, was law nonetheless for intermediate transactions. On the other hand, it may hold to the ancient dogma that the law declared by its Courts had a platonic or ideal existence before the act of declaration, in which event, the discredited declaration will be viewed as if it had never been and to reconsider declaration as law from the beginning. The choice for any state may be determined by the juristic philosophy of the Judges of her Courts, their considerations of law, its origin and nature'.

18.5 The opinion of Justice Cardozo tried to harmonize the doctrine of prospective overruling with that of stare decisis.

18.6 In 1940 Hughes C.J., in Chicot County Drainage District v. Baxter State Bank (1940) 308 US 371 stated thus, 'the law prior to the determination of unconstitutionality is an operative fact and may have consequences which cannot justly be ignored. The past cannot always be erased by a new judicial declaration.'

18.7 Frankfurter. J in the case of J. Graffin v. Peoples of The State of Illionis (1956) 351 U.S. 12, 20 observed that, in arriving at a new principle, the judicial process is not important to define its scope and limits. Adjudication is not a mechanical exercise nor does it compel 'either/or' determination.'

18.8 In short, in America the doctrine of prospective overruling is now accepted in all branches of law, including constitutional law. But the carving of the limits of retrospectivity of the new rule is left to courts to be done, having regard to the requirements of justice.

18.9 Though English Courts in the past accepted the Blackstonian theory and though the House of Lords strictly adhered to the doctrine of 'precedent' in the earlier years, both the doctrines were practically given up by the 'Practice State (Judicial Precedent)' issued by the House of Lords recorded in (1966) 1 WLR 1234. Lord Gardiner L.C., speaking for the House of Lords made the following observations, 'Their Lordships nevertheless recognise that too rigid adherence to precedent may lead to injustice in a particular case and also unduly restrict the proper development of the law. They propose, therefore, to modify their present practice and, while treating former decisions of this House as normally binding, to depart from a previous decision when it appears to do so.'

'In this connection they will bear in mind the danger of disturbing retrospectively the basis on which contracts, settlements of property and fiscal arrangements have been entered into and also the especial need for certainty as to the criminal law.'

'The announcement is not intended to affect the use of precedent elsewhere than in this House.'

18.10. The decision rendered in a given case and making it prospective in operation cannot be termed as obiter what the court in effect does is to declare the law but on the basis of another doctrine restricts its scope. Stability in law does not mean that injustice shall be perpetuated. An illuminating article on the subject is found in Pennsylvania Law Review.

'It is a modern doctrine suitable for a fast moving society. It does not do away with the doctrine of stare decisis, but confines it to past transactions. It is true that in one sense the court only declares the law, either customary or statutory or personal law. While in strict theory it may be said that the doctrine involves making of law, what the court really does is to declare the law but refuses to give retroactivity to it. It is really a pragmatic solution re-conciling the two conflicting doctrines, namely, that a court finds law and that it does make law. It finds law but restricts its operation to the future. It enables the court to bring about a smooth transition by correcting its errors without disturbing the impact of those errors on the past transactions. It is left to the discretion of the Court to prescribe the limits of the retrospectivity and thereby it enables it to mould the relief to meet the ends of justice'.

19. On consideration of the aforesaid legal position the Supreme Court in the case of Golak Nath and Ors. v. State of Punjab and Anr. : [1967]2SCR762 held as under:

'In India there is no statutory prohibition against the court refusing to give retrospectivity to the law declared by it. Indeed the doctrine of res judicata precludes any scope for retroactivity in respect of a subject matter that has been finally decided between the parties. Further, Indian Courts by interpretation reject retroactivity to statutory provisions though couched in general terms on the ground that they affect vested rights.'

'Our Constitution does not expressly or by necessary implication speak against the doctrine of prospective overruling. In deed, Articles 32, 141 and 142 are couched in such wide and elastic terms as to enable this Court to formulate legal doctrines to meet the ends of justice. The only limitation thereon is reason, restraint and justice. Under Article 32, for the enforcement of the fundamental rights the Supreme Court has the power to issue suitable directions or orders or writs. Article 141 says that the law declared by the Supreme Court shall be binding on all Courts; and Article 142 enables it in the exercise of its jurisdiction to pass such decree or make such order as is necessary for doing complete justice in any cause or matter pending before it. These articles are designedly made comprehensive to enable the Supreme Court to declare law and to give such directions or pass such orders, as are necessary to do complete justice. The expression 'declared' is wider than the words 'found or made'. To declare is to announce opinion. Indeed, the latter involves the process, while the former expresses result. Interpretation, ascertainment and evolution are parts of the process, while that interpreted, ascertained or evolved is declared as law. The law declared by the Supreme Court is the law of the land. If so, we do not see any acceptable reason why it, in declaring the law in suppression of the law declared by it earlier, could not restrict the operation of the law as declared to future and save the transactions, whether statutory or otherwise that were effected on the basis of the earlier law. To deny this power to the Supreme Court on the basis of some outmoded theory that the Court only finds law but does not make it is to make ineffective the powerful instrument of justice placed in the hands of the highest judiciary of this country.'

As this Court for the first time has been called upon to apply the doctrine evolved in a different country under different circumstances, we would like to move warily in the beginning. We would lay down the following propositions:

(1) The doctrine of prospective overruling can be invoked only in matters arising under our Constitution;

(2) it can be applied only by the highest court of the country, i.e., the Supreme Court as it has the constitutional jurisdiction to declare law binding on all the courts in India;

(3) the scope of the retrospective operation of the law declared by the Supreme Court superseding its 'earlier decisions' is left to its discretion to be moulded in accordance with the justice of the cause or matter before it.

(underlining by me)

20. This principle was applied by the Supreme Court in the case of Union of India and Ors. v. Mohd. Ramzan Khan : (1991)ILLJ29SC It held that the law laid down in the aforesaid judgment shall have a prospective application and no punishment imposed shall be open to challenge on the ground laid down in the aforesaid judgment. But, after laying down the law and making it prospective, that law was applied in that case and relief was given to the petitioner setting aside the orders passed against him which orders were perfectly legal in view of the law which was in operation till the judgment in the said case. Therefore, several High Courts applied the law laid down in Ramzan Khan's case even to the order of dismissal passed before the said judgment on the ground by giving relief to Ramzan Khan the Supreme Court had applied the law declared by them which is made prospective to dismissal orders passed before the said case. Because of the conflicting view the matter was referred to a Constitution Bench.

21. A Constitution Bench of the Supreme Court in the case of Managing Director, ECIL, Hyderabad and Ors. v. B. Karunakar and Ors. : (1994)ILLJ162SC has further clarified the position. Justice Sawant speaking on behalf of the other three Judges held the law which is expressly made prospective in operation in Mohd. Ramzan Khan's case, cannot be applied retrospectively on account of the Supreme Court granting the relief in that case which is an error and it is obviously per incuriam. It is now well settled that the Courts can make the laws prospective in operation to prevent unsettlement of the settled positions, to prevent administrative chaos and to meet the ends of justice. After referring to Golak Nath and various other cases they affirmed the aforesaid legal position.

22. Justice K. Ramaswamy rendering a separate but a concurrent judgment held that, adherence to precedents and retrospective overruling has its legacy from the declaratory theory of precedent propounded by Blackstone that the duty of the court is not to 'pronounce a new law but to maintain and expound the old one' and that 'if it is to be found that the former decision is manifestly unjust or absurd, it is declared, not that such sentence was bad law, but that it was not the law'. Steadfast adherence to stare decisis is being advocated for stability, consistency and certainty as inherent values on the premise that it is much more conducive to the laws' self-respect and it provides greatest deterrence to judicial creativity tampering with the restraining influence of certainty.

23. Prospective overruling, therefore, limits to future situations and excludes application to situations which have arisen before the decision was evolved. Supreme Court of United States of America in interpretation of the Constitution, statutes or any common law rights, consistently held that the Constitution neither prohibits nor requires retrospective effect. It is, therefore, the court to decide, on a balance of all relevant considerations, whether a decision overruling a previous principle should be applied retrospectively or not. Further it was held that, Supreme Court of USA has consistently, while overruling previous law or laying a new principle, made its operation prospective and given the relief to the party succeeding and in some cases given retrospectively and denied the relief in other cases. As a matter of constitutional law retrospective operation of an overruling decision is neither required nor prohibited by the Constitution but is one of judicial attitude depending on the facts and circumstances in each case, the nature and purpose the particular overruling decision seeks to serve. The court would look into the justifiable reliance on the overruled case by the administration: ability to effectuate the new rule adopted in the overruling case without doing injustice: the likelihood of its operation whether substantially burdens the administration of justice or retards the purpose. All these factors are to be taken into account while overruling the earlier decision or laying down a new principle. The benefit of the decision must be given to the parties before the Court even though applied to future cases from that date prospectively would not be extended to the parties whose adjudication either had become final or matters are pending trial or in appeal. The crucial cut-off date for giving prospective operation is the date of the judgment and not the date of the cause of action of a particular litigation giving rise to the principle culminating in the overruling decision. There is no distinction between civil and criminal litigation. Equally no distinction could be made between claims involving constitutional right, statutory right or common law right. It also emerges that the new rule would not be applied to ex post facto laws nor acceded to plea of denial of equality. This Court would adopt retroactive or non-retroactive effect of a decision not as a matter of constitutional compulsion but a matter of judicial policy determined in each case after evaluating the merits and demerits of the particular case by looking to the prior history of the rule in question, its purpose and effect and whether retroactive operation will accelerate or retard its operation. The reliance on the old rule and the cost of the burden of the administration are equally germane and be taken into account in deciding to give effect to prospective or retrospective operation.

24. The Supreme Court in Lily Thomas and Ors. v. Union of India and Ors. : 2000CriLJ2433 held, we are not impressed by the arguments to accept the contention that the law declared in Sarla Mudgal case cannot be applied to persons who have solemnised marriages in violation of the mandate of law prior to the date of judgment. This Court had not laid down any new law but only interpreted the existing law which was in force. It is a settled principle that the interpretation of a provision of law relates back to the date of the law itself and cannot be prospective from the date of the judgment because concededly the court does not legislate but only gives an interpretation to an existing law.

25. Following the aforesaid judgment, the Supreme Court in the case of Sarwan Kumar and Anr. v. Madan Lal Aggarwal 2003 SAR (CIVIL) 226 held, the doctrine of 'prospective overruling' was initially made applicable to the matters arising under the Constitution but we understand the same has since been made applicable to the matters arising under the statutes as well. Under the doctrine of 'prospective overruling' the law declared by the Court applies to the cases arising is future only and its applicability to the cases which have attained finality is saved because the repeal would otherwise work hardship to those who had trusted to its existence. Invocation of doctrine of 'prospective overruling' is left to the discretion of the court to mould with the justice of the case or the matter before the court.

26. In Sushil Kumar Mehta v. Govind Ram Bohra : (1990)1SCC193 it is held, thus it is settled law that normally a decree passed by a court of competent jurisdiction, after adjudication on merits of the rights of the parties, operates as res judicata in a subsequent suit or proceedings and binds the parties or the persons claiming right, title or interest from the parties. Its validity should be assailed only in an appeal or revision as the case may be. In subsequent proceedings its validity cannot be questioned. A decree passed by a court without jurisdiction over the subject matter or on other grounds which goes to the root of its exercise or jurisdiction, lacks inherent jurisdiction. It is a coram non judice. A decree passed by such a court is a nullity and is nonest. Its invalidity can be set up whenever it is sought to be enforced or is acted upon as a foundation for a right, even at the stage of execution or in collateral proceedings. The defect of jurisdiction strikes at the authority of the court to pass a decree which cannot be cured by consent or waiver of the party.

27. From the examination of the aforesaid two legal doctrines it is clear both the doctrines are inter connected. They are overlapping. The doctrine of stare decisis is a rule of policy which promotes predictability, certainty, uniformity and stability, which has to be kept in mind by the Judge or the Court before reversing the settled legal position. However, doctrine of stare decisis is not an imprisonment of reason. It is not inflexible. But, if it is shown that the decision was clearly or manifestly wrong and it has been followed by the Court in other cases and its maintenance is injurious to public interest, then not only it has the power to declare the earlier law as wrong but it becomes its duty to reverse the said law as otherwise it amounts to permitting to perpetuate errors to the detriment of the general welfare or a considerable section thereof. If after taking into consideration all these aspects if the Court reverses the earlier decision and declares the law, the said declaration does not lay down any new law. It only corrects an earlier wrong interpretation of the law and, therefore, it dates back to the date of the law itself. Once such a law has been declared, reversing the earlier law, it is not open to another Court to hold that this law declared is not applicable to the decrees and orders passed following the law prior to such declaration. The doctrine of stare decisis does not confer any such power on a Judge or a Court to make such declaration. It would be wholly outside the jurisdiction of such Judge or Court and would be one without jurisdiction.

28. Similarly, the doctrine of prospective overruling is a doctrine which could be invoked only by the Supreme Court of India. As held in the Golak Nath's case the said principle could be applied only by the highest court of a country, i.e., the Supreme Court and it has the constitutional jurisdiction to declare law binding on all the Courts in India. Such a power in view of the aforesaid judgment is not conferred on the High Court. No such power could be located in the constitutional provisions.

29. Therefore, rightly the Full Bench when it declared the law upholding the law laid down in the Veerashiva Cooperative Bank's case did not make the law declared by it prospectively as it had no jurisdiction to do the same. If that is so this Court cannot hold that the law declared either in the case of Veerashiva Cooperative Society Bank's case or by the Full Bench affirming the same as prospective in operation only and does not apply to the awards which are impugned in these Writ Petitions which are passed in pursuance of the law which held the field for more than two decades prior to the aforesaid declaration. No such power is conferred on this Court either under the Constitution or otherwise. The effect is the law declared by the Full Bench is the law in reality which is in force from the day Karnataka Act 19/1976 came into force. When the Court interprets a provision of law it does not lay down any new law, but the Court interpret the existing law which was in force. It is settled principle that the interpretation of a provision of law relates back to the date of the law itself and cannot be prospective from the date of the judgment because concededly the Court does not legislate but only give an interpretation to an existing law. Therefore, any award passed during this period is one without jurisdiction and it cannot be sustained/saved either on the principle of stare decisis nor on the principle of prospective overruling.

30. A Division Bench of this Court in the case of D.P. Sharma v. State Transport Authority : ILR1987KAR3255 had held that mere reversal or overruling of the judgment does not have the effect of uprooting a quasi judicial determination made in another case relying upon that decision at a time when it was a binding precedent. It is trite proposition that even inter parties, if the law laid down in a pronouncement is later over-ruled, as distinguished from it being reversed, its binding effect inter parties is not set at naught. The decision itself has to be assailed and got rid of in a manner known to or recognised by law. Therefore, those persons who are aggrieved by the awards passed by the Labour Courts during this interregnum have to assail them and get rid of them in the manner known to or recognised by law.

31. In all these Writ Petitions the persons who are aggrieved by an award passed by the Labour Court during that interregnum period have challenged the legality of the said order before this Court. Now when the matters are listed for final hearing, in view of the law declared by the Full Bench of this Court they are urging an additional ground to get rid of the awards in addition to the grounds which they have urged on merits. This was a ground which was not available to them when the matter was pending before the Labour Court. Therefore, they have not taken that contention. At the earliest point of time after the pronouncement of the judgment of the Full Bench they are urging this ground to assail the award. As this ground goes to the very root of the matter and a jurisdiction point, this Court has to entertain the said ground and consider the same on merits. In the aforesaid judgment in the case of Devanur Grama Seva Sahakari Sangh Limited the Division Bench declined to entertain the said ground on the ground that the ground was not urged either before the Labour Court or before the learned single Judge, thereby meaning if the said contention had been urged before the learned single Judge they would have considered the said ground on merits. In the Writ Petition this ground is urged. Therefore, this Court is bound to consider the said ground, as it is not only a question of jurisdiction but is also purely a question of law. It is well settled that a pure question of law could be urged in appeal, revision or in a Writ Petition for the first time though the same is not urged in the earlier proceedings. In view of the law declared by the Full Bench and the Amendment Act No. 19/1976 came into force on 20.1.1976, the Labour Court has no jurisdiction to entertain the dispute between the employee of a cooperative society and the bank. Therefore, all these awards which are passed by the Labour Courts subsequent to 20.1.1976 which are under challenge before this Court as they have not reached the finality yet, are liable to be quashed on the short ground that the Labour Court which passed these awards had no jurisdiction to pass the same.

32. Under these circumstances, I pass the following order:-

(a) All these Writ Petitions are allowed.

(b) The impugned awards passed in each of these cases by the respective Labour Courts are hereby quashed, as having been passed without jurisdiction.

(c) The findings recorded on merits by the Labour Court also would become a finding without jurisdiction and consequently the finding on merits also is hereby quashed.

(d) Liberty is reserved to the parties to approach the Registrar of Cooperative Societies or such other appropriate forum for challenging the orders passed by the Cooperative Societies imposing penalty on them. If such applications are made within eight weeks from today the authorities shall entertain those applications on merits without going into the question of limitation as all these petitioners were agitating their grievances in a wrong forum because of the law which was prevailing then.

(e) However, it is open to both the parties to make use of the pleadings, evidence, documents, produced in the course of enquiry subject to the law of admissibility and relevancy before the Registrar of Cooperative Societies and the authorities shall consider the same on its merits and in accordance with law.

(f) As these claims are pending for sufficiently long time the authorities should make every endeavor to take up these applications or claim petitions out of turn and dispose of the same within one year from the date of appearance of both the parties before them.

33. In the circumstances, parties to bear their own costs.


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