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General Secretary, National and Grindlays Bank Employees' Union Vs. I. Kannan and Ors. (27.03.1978 - MADHC) - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtChennai High Court
Decided On
Judge
Reported in(1978)ILLJ453Mad
AppellantGeneral Secretary, National and Grindlays Bank Employees' Union
Respondenti. Kannan and Ors.
Cases ReferredSafire Theatre v. Commissioner
Excerpt:
.....total number of years of service put in by them in the lloyds bank as well as the first defendant-bank after the lloyds bank merged with the latter and also for a declaration that the so-called settlement entered into between the two defendants regarding branch-wise and city-wise seniority was in violation of the service conditions guaranteed to the plaintiffs and for a consequential relief that they should be considered for promotion to the post of special assistant/head clerk/sub-officers. but what is missed by the courts below as well as the counsel appearing on either side is heading 6 in the second schedule. if the plaintiffs tried to conforce their right under the above contract, i fail to see how it can be said it is one which is recognised and enforceable only under the act and..........were advanced that question of promotion is not a vested right and that, therefore, it is not a civil right based on common law or general law. in this connection, reference was made to union of india v. m.l. capoor : (1973)iillj504sc . brooke bond (india) ltd. v. their workmen 1966 1 l.l.j. 402; and brooke bond (india) ltd. v. their workmen 1963 1 l.l.j. 256, were also referred to for emphasising the contention that promotion is a function of the management and the same can be challenged only if it is mala fide or involved victimisation resulting in unfair labour practice. on behalf of the plaintiff reference was made to state of mysore v. c.r. seshadri (1974) l & i cas 362 and state of mysore v. syed mahmood (1968) 2 s.c.j. 713, contending that in cases where the rule of promotion.....
Judgment:

N.S. Ramaswamy, J.

1. These two appeals arise out of a suit for declaration regarding the plaintiffs' seniority and consequential relief. The two plaintiffs were originally working in the Lloyds Bank which ultimately merged with the National and Grindlays Bank Ltd. the first defendant in the suit. The second defendant is the National and Grindlays Bank Employees' Union represented by its general secretary. At the time of merger of the Lloyds Bank with the National and Grindlays Bank, hereinafter referred to as the first defendant, it had been agreed that the number of years of service put in by an employee in the Lloyds Bank would be counted regarding his seniority.

2. After the merger there is said to be a settlement under the Industrial Disputes Act, hereinafter referred to as the Act, between the first defendant and the second defendant union (the plaintiffs are members of the second defendant), according to which the seniority of the employees is to be fired city-wise and branch-wise It is not how in dispute that as per the terms of the abovesaid settlement the year of service put in by the plaintiffs in the Lloyds Bank before its merger with the first defendant would not be taken into account regarding seniority. The contentions of the plaintiffs have been that the said settlement and has come into effect behind their back and without their knowledge, that the same is not binding on them and that the second defendant, namely, the union, which was also a party to the original arrangement under which the seniority of the employees of the erstwhile Lloyds Bank has to be fixed by taking into account the number of years of service put in by them in that Bank, did not act in the interests of the plaintiffs in arriving at the later settlement. It is their further case that the question of fixing their seniority is an individual right under common law and not an Industrial Dispute and that, therefore, the civil Court has to deal with it. They prayed for a declaration that their seniority should be based on the total number of years of service put in by them in the Lloyds Bank as well as the first defendant-Bank after the Lloyds Bank merged with the latter and also for a declaration that the so-called settlement entered into between the two defendants regarding branch-wise and city-wise seniority was in violation of the service conditions guaranteed to the plaintiffs and for a consequential relief that they should be considered for promotion to the post of special assistant/head clerk/sub-officers. Both the defendants who filed separate written statements resisted the suit contending that the civil Court has no jurisdiction to entertain the suit inasmuch as the dispute is an industrial dispute coming within the purview of the Act, that the plaintiffs had originally elected to raise an Industrial Dispute over the same question and did raise it through another union which came to be ultimately negatived that, therefore, in any event, the plaintiffs cannot agitate the said question over again in the civil Court and that the plaintiffs who were members of the second defendant-union are bound by the settlement arrived at by the two defendants.

3. The trial Court negatived the contentions of the defendants and decreed the suit of the plaintiffs in part. The declarations prayed for had been granted but their further relief that they should be considered for promotion to certain posts enumerated was negatived. Both the defendants filed separate appeals and they were heard by the IV Additional Judge, City Civil Court, Madras. The learned Judge, though has stated that the trial Court's decree is modified, has in fact confirmed the decree in toto. The appeals have been dismissed. Now S.A. No. 1800 of 1976 is filed by the second defendant in the suit while S.A No. 1307 of 1977 is filed by the first defendant, The arguments are common in both the second appeals.

4. On the arguments on either side, the first question that arises for consideration is whether the dispute in the present case is an industrial dispute as defined in Section 2(k)of the Act and if so whether the jurisdiction of the civil Court is ousted. Section (k) is as follows:

'Industrial Dispute' means any dispute or difference between employers and employers, or between employers and workmen or between workmen and workmen, which is connected with the employment or non-employment or the terms of employment or with the conditions of labour, of any person.

The contention on behalf of the defendants is that the question raised by the plaintiffs relates to the terms of employment and, therefore, it would come within the definition quoted above. As already seen, the dispute is on the question whether in fixing the seniority of the plaintiffs the number of years of service put in by them in the Lloyds Bank before its merger with the first defendant ought to be taken into account or rot. According to the plaintiffs when the merger took place, a guarantee was given to them that their service in the Lloyds Bank would be counted for seniority. Therefore, it is contended on behalf of the defendants that the dispute raised by the plaintiffs really relates to the terms of their employment and, therefore, it satisfies the definition of Section 2(k), I think the contention of the learned Counsel for the defendants in this regard has to be accepted. But the question does not stop there. The mere fact that the dispute comes within the definition of Section 2(k) does not automatically mean that the civil Court's jurisdiction is ousted in respect of the dispute.

5. Though the reasoning of the Courts below for holding that the civil Court has jurisdiction is not altogether right, on a careful consideration, I am of the view that the civil Courts jurisdiction is not ousted. The Courts below have referred to the Second schedule and the Thud Schedule wherein matters within the jurisdiction of the Labour Court and those within the jurisdiction of the Industrial Tribunal are enumerated and have said that a dispute as in the present case is not covered by any of the items of the two Schedules This is one of the grounds on which the Courts below said that this is not a dispute which should go before the authorities under the Act and that the civil Court has jurisdiction. This reasoning is not right it should be remembered that the two Schedules came into the statute book only after the Amending Act 36 of 1956. That Amending Act substituted the present Sections 7, 7A, 7B and 7C for the original Section 7 and also amended Section 10 under which references are to be made apart from other amendments. As Sections 7 and 10 originally stood, the appropriate Government can refer a dispute to a Board for promoting a settlement, refer any matter appearing to be connected with or relevant to the dispute to a Court for enquiry (A Court of enquiry as contemplated under the Act) or refer the dispute or any matter appearing to be connected with, or relevant to the dispute to a Tribunal for adjudication. After the amendment, Section 10(1) speaks of referring a dispute to a Board for promoting a settlement or referring and matter to a Court for enquiry or refer the dispute, etc., to a Labour Court if it relates to any matter specified in the Second Schedule or refer the dispute, etc., to a Tribunal if it relates to any matter specified in the Second Schedule or the Third Schedule. It is in this connection the second and third Schedules came into the statute book by the said Amending Act Assuming that the dispute in question is not one coming under any one of the headings enumerated in the Second Schedule or the Third Schedule, that by itself would not mean that it is not an Industrial Dispute under the Act.

6. That apart the Courts below are not right in thinking that the dispute in the present case is not covered by either the Second Schedule or the Third Schedule. The learned Counsel appearing for the defendants sought to bring the dispute under heading 4 in the Second Schedule or heading 7 of the Third Schedule. The former relates to withdrawal of any customary concession or privilege. The latter relates to classification by grades. Neither has any relevance to the present dispute. But what is missed by the Courts below as well as the counsel appearing on either side is heading 6 in the Second Schedule. That heading reads--All matters other than those specified in the Third Schedule. It is clear that the said heading brings in all the residuary matters within the jurisdiction of the Labour Court. Therefore, if a dispute is an Industrial Dispute under the Act it is not right to hold that the Second Schedule and Third Schedule do not specifically refer to the dispute and, therefore, the civil Court has jurisdiction. But as I Said the civil Court's jurisdiction is in race not ousted regarding the dispute. The dispute might be one coming under the definition of the terms 'Industrial Dispute' contained in Section 2(k). But as pointed out by the Supreme Court in Premier Automobiles v. K.S. Wadke : (1975)IILLJ445SC , even if the dispute is an Industrial Dispute, but is one arising out of a right or liability under the general common law and not under the Act, the jurisdiction of the civil Court is not ousted. The learned Counsel for the defendants referred to the above decision of the Supreme Court and contended that it supports his argument that the present dispute is outside the jurisdiction of the civil Court. But on a careful scrutiny, I am unable to see anything in the said judgment in support of the present contention of the defendant. After elaborate discussion of all the case law, their Lordships of the Supreme Court have summed up the principles applicable to the jurisdiction of the civil Court at page 2251. In the same page, it has been observed that there would hardly be a dispute which will be an industrial dispute within the meaning of Section 2(k) and yet one arising out of a right or liability under the general or common law only and not under the Act. This is the observation very much relied on by the learned Counsel for the defendants.

7. However, the judgment undoubtedly recognises cases where a dispute might be one within the definition of Section 2(k) but yet not exclusively within the jurisdiction of the functionaries under the Act. A clear distinction has been made between an industrial dispute for enforcing any right obligation or liability created under the act and such a dispute for the purpose of enforcing any right, obligation or liability under the general law or common law. If the dispute is of the former category the civil Court has no jurisdiction. But if the Industrial Dispute is of the latter category, namely, for enforcing any right, obligation or liability under the general law or the common law surely the aggrieved party can go to civil Court and the jurisdiction of the civil Court is not ousted.

8. The ouster of the civil Court's jurisdiction is based on the principle that where an act creates an obligation and enforces the performance in a spec tied manner, the rule is that performance cannot be enforced in any other manner. The above principle had been enunciated in Doe. v. Bridges [1831] 1 B & Ad. 847 by Lord Tenterden, C.J. This has been quoted with approval by the Supreme Court in the above case. After referring to the various provisions of the Act, this is what the Supreme Court observed in paragraph 9:

It would thus be seen that through the intervention of the appropriate Government of course not directly a very extensive machinery, has been provided for settlement and adjudication of industrial disputes. But since an individual aggrieved cannot approach the Tribunal or the Labour Court directly for the redress of his grievance without intervention of the Government, it is legitimate to take the view that the remedy provided under the Act is not such as to completely oust the jurisdiction of the civil Court for trial of industrial disputes. If the dispute is not an industrial dispute within the meaning of Section 2(k) or within the meaning of Section 2(A) of the Act, it is obvious that there is no provision for adjudication of such disputes under the Act, civil Courts will be the proper forum. But where the industrial dispute is for the purpose of enforcing any right obligation or liability under the general law or the common law and not a right obligation or liability created under the Act then alternative forums are there giving an election to the suitor to choose his remedy of either moving the machinery under the act or to approach the civil Court. It is plain that he cannot have both. He has to choose the one or the other. But we shall presently show that the civil Court will have no jurisdiction to try and adjudicate upon an industrial dispute if it concerned enforcement of certain right or liability created only under the Act. In that event civil Court will have no jurisdiction even to grant a decree of injunction to prevent the threatened injury on account of the alleged breach of contract if the contract is one which is recognised by and enforceable under the Act alone.

9. The question now is whether the right which the plaintiffs want to enforce is one recognised by and enforceable under the Act alone. I am quite clear that it is not so.

10. Some arguments were advanced that question of promotion is not a vested right and that, therefore, it is not a civil right based on common law or general law. In this connection, reference was made to Union of India v. M.L. Capoor : (1973)IILLJ504SC . Brooke Bond (India) Ltd. v. Their Workmen 1966 1 L.L.J. 402; and Brooke Bond (India) Ltd. v. Their Workmen 1963 1 L.L.J. 256, were also referred to for emphasising the contention that promotion is a function of the management and the same can be challenged only if it is mala fide or involved victimisation resulting in unfair labour practice. On behalf of the plaintiff reference was made to State of Mysore v. C.R. Seshadri (1974) L & I Cas 362 and State of Mysore v. Syed Mahmood (1968) 2 S.C.J. 713, contending that in cases where the rule of promotion is one of sheer seniority it is a matter of course and not a function of the management liable to be challenged only if there was unfair labour practice. All these contentions, in my opinion, are irrelevant for the present question. As already seen, the Courts below have negatived the plaintiff's prayer for an injunction that they may be considered for promotion to certain posts. The only relief that has been granted is declaration which is to the effect that the number of years put in by the plaintiffs in the Lloyds Bank be taken into account in fixing their seniority. That has nothing to do with the question of actual promotion.

11. I am unable to hold that the right which the plaintiffs want to enforce is one recognised and enforceable only under the Act. It is not in dispute that the first defendant gave a guarantee to the plaintiffs at the time of the merger that their services in the erstwhile Lloyds Bank would be taken into account in fixing their seniority. All that the plaintiffs want to enforce is their right under such guarantee. It cannot be disputed that there was an offer by the first defendant's Bank and an acceptance by the plaintiffs making a concluded contract regarding the question of seniority at the time when the two Banks merged. As pointed out by the Courts below, the offer to take the plaintiffs as employees of the first defendant (after merger) on the basis that the number of years of service put in by them in the Lloyds Bank would be taken into account for seniority was made under Ext. A.2 and there was acceptance of the said offer by the plaintiffs as seen from Ext, A 3. Therefore, there was a concluded contract between the parties. If the plaintiffs tried to conforce their right under the above contract, I fail to see how it can be said it is one which is recognised and enforceable only under the Act and not under the common law. The mere fact the dispute comes under the definition of Section 2(k) does not automatically mean that the right sought to be enforced is one created or recognised and enforceable only under the Act. I hold, therefore, that the civil Court's jurisdiction is not ousted.

12. It is contended on behalf of the defendants that the plaintiffs who were members of the second defendant-union were bound by the settlement between the two defendants. It is not in dispute that when the two defendants agreed that seniority of the employees are to be fixed city-wise and branch-wise (this arrangement undoubtedly affects the rights of the plaintiffs regarding their seniority) the plaintiffs were members of the second defendant-union. The contention is that the said settlement, though had not complied with Rule 23 of the Tamil Nadu Industrial Disputes Rules, 1958, still it is a settlement under the Act and if that be so, only the Labour Court can go into the question whether such a settlement is illegal or valid. In this connection reference is made to the judgment of Veeraswami, J., as he then was, in Krishnan v. East India Distilleries Sugar Factories 1964 I L.L.J. 217.

13. It is common ground that the agreement between the two defendants which is not in the course of conciliation proceedings has not complied with Rule 25(3). That sub-rule contemplates sending of copies of the proceedings to the conciliation officer concerned, the Commissioner of Labour, Madras and the Secretary to the Government of Madras in charge of Labour. It is stated that such copies had not been for-warded to the concerned officers. The learned Counsel contends that in spite of breach of Rule 25(3) still it is a settlement and binding as suck between the parties to the same as contemplated under Section 18(1) of the Act. As already seen, the further contention is that even if there is any illegality about the settlement due to the fact that copies had not been forwarded to the concerned officers, the forum which could declare the settlement so is not the civil Court but only the Labour Court. This contention is not acceptable, What is overlooked is that it is not a ease of mere breach of the above said Rule 25(3). The word 'settlement' is defined in Section 2(p) of the Act and it is as follows:

'Settlement' meats a settlement arrived at in the course of conciliation proceedings and includes a written agreement between the employer and workman arrived at otherwise than in the course of conciliation proceeding where such agreement has been signed by the parties thereto in such manner as may be prescribed and a copy thereof has been sent to an officer authorised in this behalf by the appropriate Government and the conciliation officer.

14. It is in view of the latter part of the above definition which contemplates sending of copies to an officer authorised by the appropriate Government Rule, 25(3) has been made. From the above definition it is clear if that there is an agreement between an employer and the workmen arrived at otherwise than in the course of conciliation proceedings unless a copy thereof had been sent to an officer authorised by the appropriate Government, it would not fee a 'settlement' as per the definition. Therefore, it is no good saying that there is only a breach of Rule 25(3) and even if the settlement is illegal on that score it can be so declared not by the civil Court but only by the Labour Court.

15. In the present case, it is not even necessary for the plaintiffs to have a declaration that the agreement between the two defendants is not binding on them. As the agreement does not squarely fall within the definition of the word 'Settlement' under Section 2(p) of the Act, the plaintiffs are entitled to treat it as nonest. It is enough if they get a declaration that the numbers of years of service put in by them in the Lloyds Bank before its merger with the first defendant-Bank have to be reckoned in fixing their seniority. Such a declaration cannot be granted only if there is a 'settlement'' which is binding on the plaintiffs. As already indicated, the agreement between the two defendants is not a settlement as per the definition contained in Section 2(p) referred above.

16. The only other contention is that even if the dispute is not regarding enforcement of a right or liability created only under the Act, it is still an industrial dispute, even though one for the purpose of enforcing the right under the general law or the common law and that being so, the plaintiffs who have a right to elect the forum had already done so by going to the Labour Court and, therefore, they cannot file a suit in the civil Court. It is pointed out that as held by the Supreme Court in Premier Automobiles v. K.S. Wodke 1973 II L.L.J. 445, if the dispute is an industrial dispute arising out of a right or liability under the general 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.

17. What is said is that another union, namely, the All India Bank Employees' Federation, raised an industrial dispute over this very question and that the same had been negatived. It is contended that the plaintiffs through the abovesaid union, having elected to raise an industrial dispute over the question they cannot come to the civil Court again, on the score that they cannot approach both the Courts. In the above said case, the Supreme Court has pointed out that when the suitor has to choose his remedy of either moving the machinery under the Act or to approach the civil Court he cannot have both.

18. The argument of the learned Counsel would be sound if the industrial dispute had been validly raised by the other union, namely, the All India Bank Employees' Federation, and if it is either pending or disposed of one way or the other. It is; common ground that the move of the other union was infructuous. The industrial dispute had not been validly raised inasmuch as the said union had no representative capacity. Under such circumstances, it cannot be said that the plaintiffs had elected to choose the remedy provided under the Act. The decision reported in Safire Theatre v. Commissioner for Workmen's Compensation 1977 II L.L.J. 112, would not help the defendants. That decision speaks of a valid reference having been made under the Act, if relief under Section 14 of the Tamil Nadu Shops and Establishments Act is to be denied. But as already seen, in the present case there was no valid reference at all under the Act inasmuch as the union which sought to raise the dispute had no representative capacity.

19. The result is the appeals fail and they are dismissed; but in the circumstances. I direct the parties to bear their respective costs.


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