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Ved Parkash and ors. Vs. Ram NaraIn Goyal and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial;Arbitration
CourtDelhi High Court
Decided On
Case NumberElection Appeal No. 32 of 1976
Judge
Reported inAIR1977Delhi47; 13(1977)DLT301; (1977)ILLJ101Del
ActsIndustrial Disputes Act, 1947 - Sections 10A and 18(2)
AppellantVed Parkash and ors.
RespondentRam NaraIn Goyal and ors.
Advocates: B.S. Charya,; B.S.C. Singh and; P.R. Monga, Advs
Cases ReferredPremier Automobiles Ltd. v. Kamalkar Shantaram Wadke and
Excerpt:
.....(1) as the arbitration agreement was not in compliance with the provisions of section 10-a of the industrial disputes act, it had no application.; (2) for the decision of the question of jurisdiction, it will have to be determined whether there was an industrial dispute, whether retrenchment had taken place or it was a case of abandonment of service, whether it was a case of retrenchment under sections 25. f or 25. ff and what is the pleading in the objections, and whether the judgment, decree or award has any reference to chapter va of the act; and these investigations cannot be made by an executing court hence the objections cannot be raised in the present execution proceedings.; (ii) industrial disputes act (1947) - section 18(2) & rule 58--whether settlement made..........paid in installments. though the settlement recited that it will be a binding settlement under the industrial disputes act yet it is common case of the parties that the settlement was not arrived at in accordance with the provisions of the industrial disputes act. the settlement also provided that the parties had agreed that in case of any dispute regarding payment, non-payment, fixation of liability in case of default or any other connected matter, such dispute shall be referred to the sole arbitration of shri k. l. bahal for arbitration and his award shall be binding and conclusive upon all the parties to this settlement and a separate agreement of such arbitration shall, if necessary, be executed by the respective parties under the arbitration act and the same shall be acted upon. the.....
Judgment:

Yogeshwar Dayal, J.

(1) This order will dispose of E.A. 32 of 1976 which has been filed by way of objections under Section 47 of the Code of Civil Procedure against the judgment and decree of this Court dated 25th August, 1975 for being declared a nullity and inexecutable on behalf of judgment-debtors Nos. 2, 3. 4 and 5.

(2) It appears that a tripartite agreement described as memorandum of settlement was entered into between the parties, M/s. Madhosons Stores & Services (P) Ltd. (hereinafter referred to as 'the Company'), M/s. R. S. Madhoram & Sons (NB), (hereafter referred to as 'the firm') and the 13 employees of the Firm (hereinafter referred to as 'the decree-holders'). The settlement is dated 24th day of May, 1974.

(3) The terms of the aforesaid settlement provided that the firm and the Company agreed to pay to all the decree-holders an amount shown against each in column Nos. 1 to 13 of Annexure 'A' to the Settlement, in full and final settlement of their accounts up to March 31, 1974. The Settlement also provided that the agreed amount would be paid in Installments. Though the Settlement recited that it will be a binding Settlement under the Industrial Disputes Act yet it is common case of the parties that the Settlement was not arrived at in accordance with the provisions of the Industrial Disputes Act. The Settlement also provided that the parties had agreed that in case of any dispute regarding payment, non-payment, fixation of liability in case of default or any other connected matter, such dispute shall be referred to the sole arbitration of Shri K. L. Bahal for arbitration and his award shall be binding and conclusive upon all the parties to this Settlement and a separate agreement of such Arbitration shall, if necessary, be executed by the respective parties under the Arbitration Act and the same shall be acted upon. The Settlement also contains endorsement by the Arbitrator accepting the appointment.

(4) It appears that in spite of the Settlement, neither the Film nor the Company paid the agreed amount and the decree-holders requested the Arbitrator to enter upon the reference and give the Award. The Arbitrator entered upon the reference and the decreeholders filed a statement of claim dated October 16, 1974. The judgment-debtors, at one stage, purport to have appeared before the Arbitrator through their Manager but later on did not participate in the proceedings and the Arbitrator gave an Award dated January 16, 1975, in favor of the decree-holders for a sum of Rs. 95,124.99 against (1) Shri Ram Narain Goyal, Managing Partner/Director, (2) Shri Lachmi Narain Goyal, Managing Partner/Director, (3) Shri shiv Narain Goyal, Partner/Director, (4) against the Company and (5) against the firm. It is a non-speaking award, specifying the Amounts payable to each of the decree-holders, totalling Rs. 95,124.99. The Award having been given by the Arbitrator, the decree-holders filed a petition under Sections 14 and 17 of the Arbitration Act for directing the Arbitrator to file the Award in Court and making it a rule of the court. This application was registered as Suit No. : 164-A of 1975. After some proceedings, Shri B. P. Ghosh, Advocate, appeared for all the judgment-debtors and a consent decree was passed in favor of the decree-holders against the firm and the Company as well as the three Partners/Directors of the firm and the Company. In spite of the consent decree, neither the firm nor the Company, nor the other judgment-debtors made payment and accordingly decree-holders filed an Execution application in this Court (Execution case No. : 69 of 1975). On the filing of the Execution application, Shri Harish Chandra, Advocate appeared for judgment-debtors 1 to 5. Shri Harish Chandra tendered a cheque or Rs. 20,000 in part satisfaction of the dues of the decree-holders on behalf of the judgment-debtors but the cheque was dishonoured. Thereafter, warrants were directed to be issued for attachment of the goods detailed at 'A' and 'B' in the list filed on behalf of the decree-holders dated January 20, 1976. Some of the goods- were attached, and, thereforee, the present objections were filed along with the objections as contained in E.A. 33 of 1976. I will not be dealing, in this order, with E.A. 33 of 1976 as that purports to be an application under Section 32 of the Arbitration Act.

(5) The objections under Section 47 are stated in sub-paras (a)to (h) of paragraph 5 of the Objections. Learned counsel for the applicant-judgment-debtors submitted that the judgment-debtors seek to challenge the decree of this Court on the ground of want of inherent jurisdiction of this Court in passing the impugned decree and in this light submitted that for purposes of decision of this objection, the grounds stated in sub-paras (a), (b), (c) and (e) are not relevant and he will confine himself to the grounds contained in sub-paras (d), (f) to (h) of paragraph 5. The grounds as formulated by the learned counsel before this Court were :

(1)the arbitration clause provided in the Settlement amounted to Arbitration under Section 10-A of the Industrial Disputes Act and it could be worked out only under that Section and not under the Arbitration Act,

(2)the dispute between the parties was an Industrial dispute and the Settlement arrived at on May 24, 1974 was settlement of the said Industrial dispute and could only be implemented and enforced as provided in the Industrial Disputes Act, 1947,

(3)that the Settlement could only be enforced under Section 33C of the Industrial Disputes Act and not under the Arbitration Act,

(4)that civil courts have no jurisdiction to entertain any dispute arising out of the Industrial dispute and, thereforee, no application under Sections 14 and 17 of the Arbitration Act was maintainable. This argument was further elaborated by submitting that the Industrial Disputes Act provides for settlement of such disputes, and all other methods of settlement are forbidden.

(6) The first argument on the face of it has no force as the arbitration agreement contemplated by Section 10A of the Industrial Disputes Act has to be in a particular form and has to be signed by the parties in such manner as may be prescribed under the Act and the arbitration agreement is further required to be forwarded to the appropriate Government and the conciliation officer and the appropriate Government shall, within one month from the date of receipt of such copy, publish the same in the Official Gazette. Admittedly, the arbitration agreement in the present case was not in compliance with the provisions of Section 10A and consequently provisions of Section 10A have no application.

(7) The other three submissions are really different facets of one argument. Learned counsel for the decree-holders has submitted that the judgment and the decree based on the Award are on the face of the record such that they are for recovery of money and cannot 269 Sh. Ram Narain Goyal & Others be said to be such as having been passed by a court having no inherent jurisdiction to pass it and in any case, the present objections cannot be urged in execution proceedings.

(8) In order to substantiate the second, third and the fourth submissions, learned counsel for the objectors drew my attendon to the Settlement and Annexure 'A' attached thereto. It was submitted that the Settlement contemplated an agreement to pay retrenchment compensation and since the right to pay retrenchment compensation arises out of an obligation created under Chapter Va of the Industrial Disputes Act the only remedy available to a suitor is to get adjudication under the Industrial Disputes Act either by raising an Industrial dispute or by enforcing it under Section 33C of the Act.

(9) Learned counsel for the decree-holder in reply to this submission pointed out as many as nine objections as under :

(1)that it is nowhere stated in the objections filed under Section 47 that any claim of the decree-holder fell under Section 25F or Section 25FF of the Industrial Disputes Act which were settled by the aforesaid memorandum of settlement;

(2)that in the reference to arbitration, no computation of any benefit under Chapter Va of the Industrial Disputes Act was claimed before the Arbitrators and, thereforee, Section 33C(2) did not apply, nor was any amount claimed under Chapter Va of the Industrial Disputes Act to which Section 33C(1) could apply;

(3)that even looking at the settlement it could not be said that the amount was being claimed in view of Section 25F or 25FF. In fact, it was by way of contract;

(4)that there was no Industrial dispute as there was no demand and/or rejection of the demand to constitute an Industrial dispute as held by this Court in Fedders Lloyd Corporation (Pvt.) Ltd. v. Lt. Governor, Delhi. 1970 Lab. I.C. 42;

(5)that not only it was not an Industrial dispute it also did not relate to enforcement of any other right under the Industrial Disputes Act and, thereforee, remedy lay only in the civil court;

(6)that the petition under Sections 14 and 17 of the Act filed in this .court nowhere talks of Industrial dispute having arisen between the parties or that the reference to arbitration was made for enforcement of any rights under Chapter Va of the Industrial Disputes Act;

(7)the reference to Arbitrator was not for computation of any benefit or decision of any dispute arising under the Industrial Disputes Act;

(8)even the terms of the Settlement do not show that the claims of the decree-holders were covered under Chapter Va of the Industrial Disputes Act. The recital of the settlement shows that the decree-holders wanted to have settlement of their accounts. The firm did not terminate the services of the employees but the. employees relinquished their jobs on certain terms and conditions;

(9)lastely, it was submitted that since the objections involved determination of facts on the decision of which the question as to the inherent jurisdiction of this Court depends, the objections do not appear on the face of the record and, thereforee, the executing court cannot entertain and inquire into those facts.

(10) It was submitted that for decision of the question whether the Court had jurisdiction to entertain the application under Sections 14 and 17 of the Arbitration Act it will have to be determined (a) whether there was an Industrial dispute, (b) whether retrenchment had taken place or it was a case of abandonment of service, (c) was it a case of retrenchment under Section 25F or 25FF and further what is the pleading about it in the Objections (d) whether the judgment, the decree or the Award have any reference to Chapter Va of the Industrial Disputes Act It is submitted that these questions require investigation and before these questions are answered it cannot be said that the Court lacked inherent jurisdiction and in any case these investigations cannot be made by the executing court.

(11) The principles applicable to the jurisdiction of civil court in relation to an Industrial dispute have been stated in the latest pronouncement of the Supreme Court in the Premier Automobiles Ltd. v. Kamalkar Shantaram Wadke and others: : (1975)IILLJ445SC of the judgment as under'

'(1)If the dispute is not an Industrial dispute, nor does it relate to enforcement of any other right under the Act the remedy lies only in the civil court.

(2)If the dispute is an industrial dispute arising out of a right or liability under the general or common law and not under the Act, the jurisdiction of the civil court is alternative, leaving it to the election of the suitor concerned to choose his remedy for the relief which is competent to be granted in a particular remedy.

(3)If the industrial dispute relates to the enforcement of a right or an obligation created under the Act, then the only remedy available to the suitor is to get an adjudication under the Act.

(4)If the right which is sought to be enforced is a right created under the Act such as Chapter Va then the remedy for its enforcement is either Section 33C or the raising of an industrial dispute, as the case may be'.

(12) The question which arises is whether the proceedings in this Court fell under the first or the second category or the third or the fourth category, as held by the Supreme Court. If the matter fell within the ambit of the first two principles the decree would be perfectly valid and if it fell within the third or the fourth category the decree may be a nullity. The other question which arises is how far the present objections can be gone into by the executing court and to what extent they can be inquired into.

(13) I may state at the outset that for determining this question as to in which category the matter in dispute will fall. the following points are necessarily to be investigated :

(I)was there an Industrial dispute ?

(II)whether the retrenchment had taken place or it was a case of abandonment of service ?

(III)was it retrenchment under Section 25F or Section 25FF of the Industrial Disputes Act

(14) These facts have to be investigated for the simple reason that the Award and the consequent decree are challenged by learned counsel for the Objectors, inter alia, on the ground that the reference involved payment of retrenchment compensation and since the retrenchment compensation could be paid under Chapter Va of the Industrial Disputes Act no such dispute could be referred to arbitration. Section 25F of the Act provides the conditions precedent to retrenchment. It contemplates that no workman who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until the workman has been given one month's notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of notice. Then, we have Section 25FF where compensation is payable to a workman in case of transfer of undertakings and several questions have to be decided there under. It is neither pleaded in the Objections that it was a case of retrenchment nor it is stated that it was a case of transfer of business or its closure or termination of employment. Again, it is not even pleaded that there was any demand by the workmen for any benefits arising under the Industrial Disputes Act which was rejected by the Management to constitute an Industrial dispute.

(15) Since these facts would have to be investigated in order to determine whether the Court passing the decree had jurisdiction to entertain and try the suit, the objections cannot be raised in the present execution proceedings.

Since the question has been argued at length by learned counsel for the parties on merits that the Court had no inherent jurisdiction to pass the decree, I have decided to go into it also.

(16) I am doubtful if, as an Executing court, the court can at all look into the Settlement. However, for the purpose of deciding the objection as to the decree being nullity. I am assuming that the Settlement could be so looked into. The relevant recital in the Settlement is as under:

'THEemployer had served notices dated 25th March, 1974 on the workmen informing them that the Management of the Company was being transferred to M/s. Madhosons Stores & Services Pvt. Ltd., New Delhi, with effect from 25th April, 1974. The workmen of both/All the branches of the Company at Delhi & 23, Regal Building, New Delhi & Branches, approached the Management to settle their accounts respecting their previous services with the Company. Discussions were held from time to time and as a result thereof a settlement was reached by 24th May, 1974 on the following terms:

Termsof Settlement

1(a). That the Management agrees to pay to all the workmen an amount shown against each in column No. 1 to 13 of Annexure 'A' to the settlement in full and final settlement of their accounts, including unpaid earned wages up to 31-3-1974, up to date wages in lieu of earned leave, compensation (retrenchment), medical benefits, bonus, gratuity, after making deductions on account of Provident Fund contribution and Income Tax etc.

(B).The above payment agreed to would be paid in the following Installments :

(I)The entire amount as due to each of the employee? shall be payable from September 1974 to May 1975 in eight equal Installments and subsequent Installments shall accordingly be payable by 30th of each succeeding calendar month. In case of default in payment of any of the Installments, the balance amount shall become payable at once.

(II)Until payment to the workmen, as mentioned in Annexure 'A' to the settlement, is fully discharged in accordance with Clause (i) above, M/s. Madhosons Stores & Services Pvt. Ltd., agree to take on their rolls all the workmen mentioned in the aforesaid Annexure with effect from 25-5-74 on fresh appointment basis and also undertake to ensure payment in the manner detailed in Clause (i) and in case of default in payment by M/s. R. S. Madhoram & Sons (NB), M/s. Madhosons Stores & Services Pvt. Ltd. will be liable to make payment of the unpaid balance to the workmen. After the full payment stipulated in this settlement to any or all the workmen has been made M/s. Madhosons Stores & Services Pvt. Ltd., shall be at liberty to terminate the services of the concerned workmen or these workmen without any further notice or any payment in lieu thereof and the concerned workman or workmen shall not raise any dispute relating to the termination of his/ their services. Similarly, the workmen after they have got full payment, as mentioned herein above, will be at liberty to leave employment of M/s. Madhosons Stores & Services Pvt. Ltd. without any notice or any payment in lieu thereof. The employees shall, however, be entitled to claim retrenchment compensation and notice or pay in lieu of notice in case of M/s. Madhosons Stores & Services Pvt. Ltd., chooses to terminate the services of the employees after full and final payment or Installments by M/s. R. S. Madhoram & Sons (NB).

(III)THATbesides the fact that this settlement shall constitute, consider or term as a valid and binding settlement under the Industrial Disputes Act and the employees collectively or individually or the Union namely New Delhi Trade Employees Association (Regd.) New Delhi through its Secretary or other responsible office bearer shall be entitled to have this settlement implemented in accordance with the provisions of the said Act, the parties also agreed that in case of any dispute regarding payment, non-payment, fixation of liability in case of default or any other connected matter, such dispute shall be referred to the sole arbitration of Shri K. L. Bahal for arbitration and his award shall be binding and conclusive upon all the parties to this settlement. The separate agreement of such arbitration shall be, if necessary, exected by the respective parties under the Indian Arbitration Act and the same shall be acted upon.

(IV)INcase of default in payment by M/s. R. S. Madhoram & Sons (NB) and M/s. Madhosons Stores & Services Private Ltd., shall have no right to dispense with the service of the employees as stated in sub-clause (iii) above arid in case it is so done the employees shall be entitled to claim reinstatement and such other relief as available under the law for wrongful termination, this would be applicable even if recovery of dues is from M/s. R. S. Madhoram & Sons (NB) is done.

2.THEworkmen accept the amount mentioned in clause l(a) above in full and final settlement of their account in respect of their entire period of service with the employer, M/s. R. S. Madhoram & Sons (NB), and acknowledge that they have no other claim, due or dispute whatsoever against the said employer nor will they prefer any against the Management.'

(17) Admittedly, it is not a case of settlement under Section 18(2) of the Industrial Disputes Act as it is not in the form prescribed by rule 58, nor any other provision of the statute to make it a settlement under the Industrial Disputes Act. The question of payment of retrenchment compensation arises only if the retrenchment is in accordance with i.e. retrenchment is made in accordance with the provisions of section 25F of the Act. There is no reference in the settlement of any such conditions being complied with, namely, termination of service on one month's notice or wages being paid in lieu thereof. thereforee, no right accrues for retrenchment compensation under Chapter Va of the Act. The procedure for retrenchment is provided in Section 25G and the right of re-employment is conferred on the retrenched workman under Section 25H of the Act. The settlement is just to the contrary. Again, there was no computation to be done by the Arbitrator. The amount had already been settled and, thereforee, the question of application being made under Section 33C(1) or Section 33C(2) did not arise. Again, the petition filed; under Sections 14 and 17 of the Arbitration Act nowhere talked of the rights under Chapter Va of the Industrial Disputes Act. No objection has been taken as to in what form the matter became an Industrial dispute or a claim under (chapter VA. In fact, there is no averment in the objection petition as to whether it was a case of closure or transfer of business or retrenchment under Chapter VA. Further, even as per the settlement, it does not appear that the claims were covered under Chapter VA.

(18) The law does not debar any employer from paying anything by way of contract. Merely because such payment could under certain circumstances be claimed under the Industrial Disputes Act, does not mean that the rights claimed or the settlement of payment is in view of the obligations created by the Industrial Disputes Act. It is true that the terms of settlement talked of retrenchment compensation, but this straightaway does not lead to the conclusion that it was retrenchment compensation which was being claimed by the workmen in view of the obligations of the employer under Chapter Va of the Act. It also appears that the employees wanted to leave their services with the Firm after settlement of accounts. The Management of the Firm also agreed to the same. Instead of its terminating the services of the workmen and, thereafter, the employees claiming retrenchment compensation, the employees agreed to have their services on certain terms and conditions. It was again not a case under Section 25FF for compensation to workmen in case of transfer of undertaking as contemplated by this Section. It is clear from the settlement hat he services of the decree-holders were to start afresh with effect from May 25, 1974 whereas the workmen ceased to be employees of the firm with effect from March 25, 1974 and liberty was given to the company to terminate the services of the decree-holders as soon as the full payment was received by the decree-holders.

(19) The cause of action for reference of dispute to the Arbitrator was the agreement of settlement and not retrenchment.

(20) The recitals in the settlement do not show that there was any Industrial dispute whatsoever and, thereforee, the present case falls within the ambit of principle No. 1 as laid down by the Supreme court in case of the Premier Automobiles Ltd. (Supra) (2), and, thereforee, the Civil Court had the inherent jurisdiction to pass the decree.

(21) For all these reasons, 'I find that there is no force in the objection petition, and E. A. 32 of 1976 is dismissed with costs. Counsel fee Rs. 300.

(22) In view of the dismissal of the objections, E. A. 31 of 1976 which was for stay of execution during the pendency of the present application, also merits dismissal. Ordered accordingly.


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