Supreme Court Upholds Civil Court Jurisdiction in Fine Recovery Case: Rajasthan State Road Transport Corp. vs. Ramesh Kumar Sharma (2020)

Introduction

Date of the Judgment: 16 January 2020

Citation: [Not Available in the provided text]

Judges: Hon’ble Mr. Justice Sanjay Kishan Kaul and Hon’ble Mr. Justice K.M. Joseph

Can a civil court hear a case about a fine imposed on workers, or should such a case only be handled under the Industrial Disputes Act? The Supreme Court of India recently addressed this question in a case involving the Rajasthan State Road Transport Corporation. The core issue was whether the workers could challenge a fine imposed on them by the management in a civil court, or if they were required to pursue their remedy under the Industrial Disputes Act, 1947. The Supreme Court, in this judgment, clarified the boundaries between the jurisdiction of civil courts and industrial tribunals in such matters. The bench comprised Hon’ble Mr. Justice Sanjay Kishan Kaul and Hon’ble Mr. Justice K.M. Joseph.

Case Background

The case originated from a civil suit filed by workmen against the Rajasthan State Road Transport Corporation (RSRTC) management. The workmen were challenging a fine imposed on them by the RSRTC. They argued that the fine was in violation of Regulation 35 of the standing order, which they claimed was a breach of their contractual obligations.

The RSRTC tried to stop the suit by arguing that the civil court did not have jurisdiction and that the matter should be handled under the Industrial Disputes Act, 1947. They filed an application under Order VII Rule 11 of the Code of Civil Procedure, 1908, seeking rejection of the plaint.

The Civil Judge, Jaipur City, rejected the RSRTC’s application on 16 May 2006. A revision petition against this order was also dismissed by the High Court on 27 February 2008. The RSRTC then appealed to the Supreme Court.

Timeline

Course of Proceedings

The Civil Judge, Jaipur City, dismissed the application filed by RSRTC under Order VII Rule 11 of the Code of Civil Procedure, 1908, on 16 May 2006. The RSRTC’s revision petition against this order was dismissed by the High Court on 27 February 2008. The matter then reached the Supreme Court. The Supreme Court noted that despite the passage of time, the civil suit had not progressed because the matter was pending before the Supreme Court.

Legal Framework

The case primarily revolves around the interpretation of the Industrial Disputes Act, 1947, and its interplay with the jurisdiction of civil courts. The appellant argued that the dispute should be adjudicated under the Industrial Disputes Act, 1947, and not by a civil court. The standing order, specifically Regulation 35, was also a point of contention, as the workmen argued that the fine imposed was in violation of this regulation.

The Supreme Court referred to the principles laid down in The Premier Automobiles Ltd. v. Kamlekar Shantaram Wadke of Bombay & Ors. – 1976(1) SCC 496, which states that civil courts have jurisdiction over industrial disputes if they involve rights or obligations under general or common law, not just those created under the Industrial Disputes Act.

Arguments

The appellant, RSRTC, argued that the civil suit filed by the workmen was not maintainable. They contended that the dispute related to a fine imposed on the workmen, which should be addressed under the Industrial Disputes Act, 1947. They relied on the judgment in Rajasthan State Road Transport Corporation and Anr. v. Krishna Kant and Ors.-( 1995) 5 SCC 75, to support their argument that disputes involving rights and obligations created by the Industrial Disputes Act, 1947, or its sister enactments should be exclusively dealt with by the forums created under that Act. The RSRTC argued that the workmen should have approached the industrial tribunal instead of a civil court.

The workmen, on the other hand, argued that the fine imposed on them was a violation of Regulation 35 of the standing order, which constituted a breach of their contractual obligations. They contended that their suit was based on general law of contract and therefore maintainable in a civil court. They argued that the dispute did not solely involve rights and obligations under the Industrial Disputes Act, 1947.

Issues Framed by the Supreme Court

The core issue before the Supreme Court was whether the civil suit filed by the workmen was maintainable, considering the provisions of the Industrial Disputes Act, 1947. Specifically, the court had to determine whether the dispute regarding the imposition of a fine fell within the exclusive jurisdiction of the industrial tribunals or whether the civil court could also adjudicate on the matter.

Treatment of the Issue by the Court

The following table demonstrates how the Court decided the issue:

Authorities

The Supreme Court relied on the following authorities to reach its decision:

• The Premier Automobiles Ltd. v. Kamlekar Shantaram Wadke of Bombay & Ors. – 1976(1) SCC 496: This case established that civil courts have jurisdiction over industrial disputes if they involve rights or obligations under general or common law, not just those created under the Industrial Disputes Act.
• Rajasthan State Road Transport Corporation and Anr. v. Krishna Kant and Ors.-( 1995) 5 SCC 75: This case clarified that disputes involving rights and obligations created by the Industrial Disputes Act, 1947, or its sister enactments should be exclusively dealt with by the forums created under that Act. However, it also stated that disputes arising from general law of contract can be adjudicated by civil courts.

The Court also considered the following legal provisions:

• Section 2(k) of the Industrial Disputes Act, 1947: Defines “industrial dispute.”
• Section 2A of the Industrial Disputes Act, 1947: Relates to disputes regarding individual workmen.
• Order VII Rule 11 of the Code of Civil Procedure, 1908: Deals with the rejection of plaints.

Judgment

The Supreme Court considered the authorities as follows:

• The Premier Automobiles Ltd. v. Kamlekar Shantaram Wadke of Bombay & Ors. – 1976(1) SCC 496: The Court relied on this case to reiterate that civil courts have jurisdiction over industrial disputes if they involve rights or obligations under general or common law.
• Rajasthan State Road Transport Corporation and Anr. v. Krishna Kant and Ors.-( 1995) 5 SCC 75: The Court distinguished this case, stating that while it mandates disputes under the Industrial Disputes Act to be adjudicated under that Act, it also allows civil courts to hear disputes arising from general law of contract.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the nature of the dispute. The Court emphasized that the dispute arose from a violation of the standing order (Regulation 35), which was a contractual obligation. This meant that the dispute was not solely about rights and obligations created by the Industrial Disputes Act, 1947. The Court also noted the delay in the adjudication of the matter and the fact that the workmen had been waiting for fifteen years for a decision on their claims. The court was also mindful of the fact that the Industrial Disputes Act, 1947, is an alternative dispute resolution mechanism for the benefit of the workmen to provide “speedy, inexpensive, informal and unencumbered by the plethora of procedural laws. The object is thus, to protect the workmen.

The Court’s reasoning can be summarized as follows:

The Court considered the argument that the dispute should be exclusively under the Industrial Disputes Act, 1947, but rejected it because the dispute was rooted in a contractual obligation. The Court also considered the fact that the matter had been pending for a long time and that the workmen had not had their claims adjudicated on merits.

The Court’s decision was based on the principle that civil courts have jurisdiction over disputes arising from general law of contract, even if they also constitute an industrial dispute. The court emphasized that the Industrial Disputes Act, 1947, is an alternative dispute resolution mechanism for the benefit of the workmen to provide “speedy, inexpensive, informal and unencumbered by the plethora of procedural laws. The object is thus, to protect the workmen. The Court also noted that the fine amount was not covered by Section 2-A of the Industrial Disputes Act, 1947.

The Court quoted from The Premier Automobiles Ltd. v. Kamlekar Shantaram Wadke of Bombay & Ors. – 1976(1) SCC 496:

“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 the 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.”

The Court also quoted from Rajasthan State Road Transport Corporation and Anr. v. Krishna Kant and Ors.-( 1995) 5 SCC 75:

“Where the dispute arises from general law of contract, i.e., where reliefs are claimed on the basis of the general law of contract, a suit filed in civil court cannot be said to be not maintainable, even though such a dispute may also constitute an “industrial dispute” within the meaning of Section 2(k) or Section 2-A of the Industrial Disputes Act, 1947.”

The Court stated:

“The present case involves recovery of certain fine amount which cannot be said to be covered by Section 2-A of the Industrial Disputes Act.”

Key Takeaways

• Civil courts can hear disputes related to fines imposed on workmen if the dispute arises from a breach of contractual obligations, such as a violation of standing orders.
• The Industrial Disputes Act, 1947, does not have exclusive jurisdiction over all disputes involving workmen.
• The Industrial Disputes Act, 1947, is an alternative dispute resolution mechanism for the benefit of the workmen to provide “speedy, inexpensive, informal and unencumbered by the plethora of procedural laws. The object is thus, to protect the workmen.
• Workmen can approach civil courts for disputes arising from general law of contract, even if such disputes may also constitute an industrial dispute.
• The Supreme Court directed the Civil Judge to expedite the trial and complete it within six months.

Directions

The Supreme Court directed the Civil Judge to proceed with the trial of the civil suit and to endeavor to complete it within six months from the date of receipt of the order.

Development of Law

The ratio decidendi of this case is that civil courts have jurisdiction to entertain disputes arising from general law of contract, even if such disputes also constitute an industrial dispute under the Industrial Disputes Act, 1947. This judgment clarifies that the Industrial Disputes Act, 1947, does not have exclusive jurisdiction over all disputes involving workmen. The Court reiterated the principles laid down in The Premier Automobiles Ltd. v. Kamlekar Shantaram Wadke of Bombay & Ors. – 1976(1) SCC 496 and distinguished the case of Rajasthan State Road Transport Corporation and Anr. v. Krishna Kant and Ors.-( 1995) 5 SCC 75, to clarify the boundaries between civil court jurisdiction and industrial dispute resolution mechanisms. This judgment reinforces the principle that workmen have the option to approach civil courts for disputes arising from general law of contract.

Conclusion

The Supreme Court dismissed the appeals filed by the Rajasthan State Road Transport Corporation, upholding the decision of the High Court and the Civil Judge. The Court held that the civil suit filed by the workmen was maintainable as the dispute arose from a breach of contractual obligations, not solely from rights and obligations created by the Industrial Disputes Act, 1947. The Court directed the Civil Judge to expedite the trial and complete it within six months. This judgment clarifies the jurisdiction of civil courts in cases involving disputes related to fines imposed on workmen, where such disputes arise from a breach of contractual obligations.