·~ 307 A

. "f WORKMEN OF.Mjs HINDUSTAN LEVER LTD. & ORS,.

. --t·

MANAGEMENT OF M/S ttTNtius r AN LEVER LTD.

B- January 5, 1984 .

[D . .J\. DESAI:'O. CHl, NNAPPA REDDY, AND. A. VARADARA; AN, JJ.]

Industrial Disputes Act 1947 .. . Industrial Dispitte-Jurisdiction oTindutrial trlh1nal~Deter11!i1,1ed fro1n the o.rdrr of reference-:--Status o, f person 1iot qustior1e:J hy en1ployer-TNhunal whe.tlier entit_led

 C ·

1!!...f~'o !ll()fU decide as a prelin1i11ary iSsue.

Concluded Agree1i1e11t betlt'een Ma1iage111e11t and U11ion-Manafreme11t acting on the. agl'een1ent for so1ne )-; ea.rs-Mm1agen1ent whethcir ·zater entitled to repudiate ancl, disown dgreen1ent-Dlffere11ce between unilateral rep1_rdiation -and tennination of agree1nent Indicqted.

lil[lustrial dispute.\:-:Adjudication pf-Con<;_ept of res judicata-Whth_er apj, li-. ble.

The appeJlant-UniOri and the respondcnt-Gomi, any through their communications dated January .. 24, 1951, April 24, )957 and May .1, 1957 :concluded an. agreen1ent relating to .various itms of industrial disptes which inter.Olia ptovided . that the en1ployer had agreed not to contest the issue-whether field foice including_

salesn1e11 were not '\vorkn1en' within .the meaning of the expressiop in the Tndti.strlal DiSputes Act.and that disputes of an AH-India nture cotild be raised only at t>lhi. . .

Two empioyees of the Respondentcon1pany who were salesme.n and protected workmCn with the meaning Of the explesSion ln the Tndustrial Disputes Act, 1947 and who• were office"· bearers of the union, were chaigci sheeted and fter a disCtp- Jinar.y enquiry their services ere terminated. .The appellant-union raised an industrial dispute-contending that the trmination of scrviCes of these two workn1en were ille£a! and.iil"val.id, and that the enquiry was equally illegal,"and i~Propc!,. and th"at the action of_ the. emp!Oyer w::i.s an act of reprisal. and victimiz3.tion,

Qecause of their trade union activities. The Government referred the' industrial _ dispute tO the Indi1strial Tribu.naL . .

The eployer Contended. that the two Workn1en were not 'workmen' within the rrieaning Of the exprCssioninthe Act-and "that the Government had no jurisdiction to refer the dispute to the lndust-fiii.1 -Tibunal. '1t was further co, ntCnded that, the s¢rvices of th~-wor, kmen were tern1inated not by way of p'Unishn1ent but under the contract of service and ihat the di"scip'linary enquiry \vhich was commenced was ~bsequently dropped. · , t '

. .

The -appellant-unionhowever conteitded that the employer wa~ estopped from hall_cnging fe status of the: two workplen \yitbin. the meaning of th'e expression

- \ ..

•· B

SUPREME COURT REPORTS

(1984] 2 S.C.R.

in the A_ct on account of the subsisting, valid~ conc!Uded agreement between' the parti_es and that in view of thC iward_ Of the lndµstria1 Tribunal, Delhi in 1.D. No. 46/66. The contentions about the existence of the agreement and the status of salesmen 'were res judicOta and could nOt be reopened so 109g as the agrment

ws in force and operative.

The Tribunal rejected the preliminary objections raised on behalf of the union and came to the conclusion_ that the three communications dated January 24, 1957, ·.April 24; 1957 .. and May I, 1957 Ex. W-2, W-"· W-4 respectively did.not spell out a coniplete, concluded -agreen1ent between the parties on the points mentioned therein but it was art inchoate agreement in the stage of negotiations and the employer waS not bound to stand by its Offer made in the communication dated January 24, 1957 denYing itself the right to contest the status of .the field force including salesn1en as not being workman within the meaning of the Act. The a\vard Of the Industriai Tribunal, Delhi in I.D. No. 46(66 in which it. was held that there Was a concluded agreement between theparties and therefore the industrial disputes raised therein could not be adjudicated at Delhi did not operate as .ra.s judicata because the issue in that a\vard was not directly and .ubtantially in issue: in. the present reference.' The Tribunal set dciwn the reference forfufther hearing.

 Allowing the Apeal : • HELD : 1. The Tribunal committed a serious error, apparent on record in holding that there was Ii.o concluded agreement between the parties as emerging from Exs. W,2, W-3, and W-4. [329 F] '

In .. the instant case, having meticUlously examined various refecnces pertaining to various industrial disputes between the parties at different centres in :ni.ctia since the agreement in 1957 it unquestionabiy emerges that the emPioycr till the present reference never once even whispei:ed that 'the agteefnent was not. a concluded agrOOffient or 'that it w.as an inChoate one left hanging at the s_tage of. . "'negotiations. It as only in the. present reference the contention raised was that the agreement was not a concluded agreement.

The.employer whichswore by the agreement and repeatedly succeeded in getting thown out certain reference.s at the threshold on account of the agreement contended tha'.t th_ere was no concluded agrement, and. ignoring the whole history, the Tribun; r" fell into an eiior in accep:- ting this contention. The Tribu'nal wholly ignored the fact that it was ; solel)ln

agrement~ of. which effective" aand wholesome advantage had been taken by the employer and.when ii did not suit it; it wanted to turn round and not only repudiate it but disown it.

No court of justice an ever permit sch a thing to be done.

[324 E-325 BJ .

Hindustan Lever Ltd .. v. Ram Mohan Ray & Ors., (1973] 3 S.C.R. 624; JVestern India Match Co. v. Their Workmen, [1964] 3 S.C.R. 560.at 566; and A(urniniu'!1 Factory Workers, Union v. Indian Aluminiton Co. Ltd.~ [i,962]]1 L.L.J. 210, referred. to.

The Tribun.al is directed to proceed to detern1ine the dispute on merits without conCerning itself with the consideftion of the question whether the concerned workmen were workmen w.ithin the meaning of the exp_ressiori under the Act. [332 E]

3. ·-The concept.of .. compulsory adjudication of industrial disputes was statutorily _ushered ifi. with a view to providing a. forum and comP.elling the parties

WORKMEN v. HINDUSTAN LEVER LTD. 309

to resort to the forun1 for arbitrtion so as tp avoid collfrontation and.dislocatin in industry. A developing country like'India can ill-afford dislocation in ndust~1al production. Peace and harmony in industry an~ uninterrupted producton being the demands of the time, it was considered wise to arm the Government with powr to con1pcl the parties to resort to arbitration and as a necessary coronary to void corlfrontation and trial of strength, .which were cosidered wasteful from national and--public interest point of view.

A welfare State can ill-afford to Jook askance at industrial unrest nd indUstri_al Q.isputes.' [326H-327B]

Dahyabhai Ronchhoddas Shah v. Jayanfilal Mohan/al., (1973} Lab. & Industrial Cases 96.7 .referred to.

' 4.

The Act did. not confer till the introduction of. Chapters v-A and V-B, any special or enforceable benefits On the workmen. The Act was designed to provide a self-contained Code to compel the parties to resort to industrial arbitrationfor the resolution .of existing or appreherided disputes without prescribing statutory norms for varied and variega_ted industrial ielatiO.n, so that the forUms created for resolution of disputes may ren1ain unhan1pered by any statutory control and devise rational norrris keeping place with improved industrial relations reflectfiig and imbibing socio-economic justice. If this is the underlying object behind enactni.ent of the Act, the COurt by interpretative process must strive to reduce the field of conflict and expand the area of agreeinent a:nd show its preference for upholding agreements sanctified by mutuality and consesus in larger publiC interest, namel.Y to eshew in"duStrial strife,· confrontation. and consequent wastage .. [327 C-E]

5. It is inappropriate to usher in the. technical co.ncept of res judicata pervading the "field of civil juticc "into te field of industrial arbitration. The principle analogous to res judicata can be availed of to scuttle any attempt at raisig industrial disputes repeatedly in defiance of .operative settlenients and awards. But this highly technical concePt of· civil justice may be Kept in precise confined limits in the field o.f industrial arbitr<ition whi9h must as far as possible be kept:free from such technicalities which thwart resolution of industrial disputs. [326 D-G]

6 .. Unilateral repudiation is .distini from terrriination and an agreement/ settleinttnt reniains in fOrcc and. binding till terminated and does not come to .an end by unilateral repuqiation. -[328 E]

In th~ instnt case; th~ parties enfered _intO a soi~n agreement. It s not suggested that the agreement has been tenninated. The only argument put forward on behalf of the em))lyer was that .the union has repuiated the agreement by raising disputes of an a11-India natu.re at a rgional level .and thereby committed breach .. of the agreement. This. con_t6ntion is entirely without rnetits. What has happened.is ttiat the Union raised ceriain disputes whicl! according to the Union were of a regional nature and which it was not estopped from raising in the teeth

c;>f the tenns of the binding agreement behveen the parties. : On 'the Other b:ind, the employer contended that the disputes so raisCd were of an aJl-Jndia nature.

Both sides swore by the agreement, the difference in approach being whether the dispute was of an all-India na_turc _oi of regional nature.

Th~ divergence in approach.

G •

W~· as .to the ihterPretation, _the coverage; the.ambit and the width of th_e agreh; ent' Both th~ pa.rticS sore by the agrec1n€nt but differe"d in. their aPproach and inter-.

prl:'.tation and the forun1 na1nely t, he Industrial Tribunai consisientlY upheid at tiW instance of the e1nployer that there was a biJld_ing valid agreement subsisting between the parties~ This. constitutes adherence to agrecmcrit1 pcrfOrn1an.ce of th:;: agree~

ffient, implementation of the ag'ree1ncnt and being _bound by the agreement.

This conduct in no sense c.1, n'be said tCrconstitti.te repudiation: [327 F-328 CJ . .

The Tribunl -derives_ its jurisdictin1i by the 9.rdc;. of reference and not 01_1.thc deteqninati<?O .. of a ju'risdictiOn.alfact whipji i(ryii.1st of necessity decide t9 ~'.

acquir~ jurjsdiction. [330 G]

In industrial adjudictfon, is;; ues are of two typs : (i) thosereferred b:Y tht .OOvernn1ent for adjudication a11d.s.:t Out in the order -of 'reference,' and (ii) incidental issues invol-ving miXod question<; of l11w and facts.

The Tribunal may fran1e. preliminary iSues if the. point on which. Jhe parties, are at varia, cc, go to the. foot of the matter. But the -Tribunal cannot fraver beyond the ptCadings and aTrogate

~ tO itself the pchvor -to. raise issues which the. ijarties to the refern"e~ are precludf:d

fro111 raising.

If the e"nplqyCr does not question the statu~ of the workmen, the .Tribllnal callnot suo 1notu raise the isu~ 'ai1~ proceed to adjudicate Upon. the same and throw out. the reference on the sole ground that the Concerned workman was not n workmanWithii-i-tp, e -n1:.!ani:ng or he ?xprcssion under thi;: Act. [33.l G'-332 Al.

9.· Whether aprticular pcrsn ·is a· workn1an or not depends -upan factual 1natrix. Worktnan is dfined in S0c. 2(s) of .the :Act. The ingn:dients and th~

irtddcnts of thC definition when 'satisfied, thC person satisfy.ing. the sa1ne would. be a \vorkman, Ngativcly if son1cone fails "to sati<; fy one or othr ingredient or incident of the definition, -he-may not be.hpld to be workman witiin the meaning ' of th~ exprcssi011 ln the At: [3.30 C] .

. t 0 .. There is no provision in the A.ct. -which ob11ges the r ndtistria\ Tribui1al or other forums sJt up _under the Act Ip d.;:cidc iVen in thG absence o(a :contention froin the effip\oyer, a preliminary issue. w.heth_cr th_c per<; Oll \Yh.o has_ invoked its .

ju'isdiction is. <l work1nan or not. ·There is no- such oblig.1tion cas~ sth.tutorily

on th0 Ti:i.bunal.

If the employci ~Oc~. not raise the contention about the status of.thC \Vorkm'.ln a.p.proaching the Tribunal, the Tribunal has no-obligation to decide the Statµ:s cif the person Whether he is a workman or uot. The TribHnal inust prbceed o'n the assrnnption hat n'o s\ich _conte.ntiqn ls _raised and is requirCd. to be adjudicated upon. [J30 D-F] ·

CML APPELLATE JURISDJCTfON: ivil Appc2l Ne. 1865 of 1982

Appeal by Special leave . from the Order dated the 24th . Decembcr.'19.8.1 of the Labour Court, Delhi in LD. No. 120 of i977 .

M.K Rammnuithi, VP. Choudhmoy . Jifendra Sharma and P. C, aur, for the Appellant.

 ·-G.B.. Pai, 0.C. Mathui, D.Nc Mishra, S. sukumaran and Ms. Meera. Mathur; for the Rcspndent.

' l

WORKMEN v. HINDUSTA~ ~EVER L'rU. (Desai, J.) . . . . . . . 311

. j ' . . .

The Judgment of the Court was delivered hy

DESAI, J .. Tf solemn agr_eelt)ents _proposed. by t11e employer. and readily ac.ceeded. to by .the workmeio and holding:the forte for over a quarter of a: century Ure crud~Jy .disowned .cofr1pelli:ig. the workmen to knock at the door of the apex court for removing the "roaJcblock in tJ1e access to justice set up by preliminary cbjectioi C'f

iechnioal nature>, _industrial peace and harmony chanted" by the

emploer. \ould be not merely an empty 1;1a11trl1 buf a fliti!e (, xercise df chasi, ng a mirage and unfortunately that i~ the sltuati('i1 here. ·

\'.: . . . ·. . . . . -. . ,;. ' ._Hindustan Lev.r Ld., _a muhi:riitioa! co1ripany, respodent 1 herein addressed a communication d'::ted January 24,_ 1957 1-ccordjng

the out-come .. of mutual deliberaiiors betwcrn the .Hi1•dust211 Lever Ltd_. {'employer'. for short) and.· the Hindust_an Levq' Mazdcor Sabha

;. uni-o-n' f Or' short) recognised represn"tativu1lion o_f. th~. \\'0rkn1cn employed by _the employer.

The rckvan_t portion may be extrnct(d :

"Bx. W-2 24th January, 1957

_The Presidrnt,

Hindt)Stan Lever Mazdoor Sabha,

Bomloay,

Dear Sir; .

' . •'

Rferringto: our rcCent 1neeting: abriut 'field force;- \ve \VOlfld <:, c to p:ucc. on record that ~- •

.!) . Wc."r~·:"ognise you as tJ:ic· representjtive union. for aJl -F

sctiofis of fic19foce all over In.din.

2). Yoll'-h,, tve agred to tre<:1t_all 1nat'tcrs relating to \vages/•

sitlaries and ter-1ns and cdnditions cf $ervice on an aliITidia ·

basis and not_ on a regional haSi? as far as fi.efd forct is c:_, nccrne'd. -

3f. For all -111atter~ of an .; ll~India natute re!nti1ig to field force, you will communicate ivith ihe Pcrs~1'nel Director.

We hope that all such .matters will he scttkd by dircc_l Megq!iatiOn hut.i.f at ony stage you decide to refer the matlcr to conciliation, you will. po w only at Bombay.

W::., on our part, gi.ve you the assurance that if the 1naltcr

• B

[1984) 2. S.C .. R:

is referred to a Tribuna!"in llombay then its a\vard will be applied by you to field force all.Dver India .. Fo~ thi~ !eason, you wiH agree that it will be only proper for the Tribunalto examine \he matter in an all India perspective. . . . ,

4)"· Although we do not nnticipate. any problei11s of a.purely

local nature .. i~ cas.c such probles do arise :; our rnem- ·. bers vvill first try to arrive at a solution by approaching their own managers. and if this fails, your loeal Committee should refer the matter to the local Commercial Manager nr Office Manage~. · . •

5) . Foi future disputes. vshall not coniest. issues about

field. force 911 the basis of t.hejr not being 'wo-rmcn' bLit shal! "contest issues only qn their 111erits in th.e same way a_s wego !£ir other e91ployces. ·

Please.confirm that yo~1-agree.with the points menticined above.

...

Yours faithfully,

Sd/- B.K. B; nd1ni"

. '

The union respondi:d to this con1n1unication as elated April 24, 1957 which reads as under : per its letter

"nx: w.3 ·

. The Personnel Manager>

Hindustan Lever Limited, Seindia House, R8lbrd Est.ate, Bombay-];

DarSir,

24th April; 1957

With reference to your letterPersonnl KSB/BN/49 dated 24.1.1957 and in the light of further discussions we had with you ori the subject. we would like. to sta1e as under :

We thank you for recognising u; as the Representative Union for all sections of the 'Field Force e11iployees all ovei India.

• -~ \.

. { +

• ---.i

WORKMEN'V. HINDUSTAN LEVER L'fD. (Desai, J.) 313

We agree that certain major issues such as salary wages, bonus,.provident fund, Gratuity, leave etc. will be treated as far as nossible on an all-India basis. . . . .

We agree that for all matters -of an all-India. nature, we will communicate with the Personnel Director. As for the other points raised by i•ou, we agree to follow the procedure. as far as legally permissible. '

Local matters, if .nol settled by negotiations, will have to be dealt with otherwise.

For instance .. ihe Sabha may go in for co_nciliation or may be free to resort to .>iny other legitimate and/or peaceful method. ·

We are indeed glad to note tha.t you will not contest issues about fiel_d force on the basis of their n6t being 'Workmen' but you will contest issues only an their n1erits inthe san1e \Vay 8-S you do for other emp{oyees-.

We wish to take the opportunity also to confirm your agreenlefit with us that {n. regard to deinal1ds relating to Field Force contained in Rer. N.48 of "1956, now

pniling adjuQicatie, Rtat Delhi, you will not•contest the issue on the basis Of their not being 'Worl011{'1l' b'ut you

\viii contest the is.sue on the. n1crits of the dernands as_ you do for other cmpfoyces .

Yours faitlifully, Sd/- J?, Pullat President !st May, ,1957"

A further communicatiqn ensued from th"- employer dated ' . May I, 1957. It is not necessary to reproduce the whole of it save F ahd cxc_ept that the e1nployer wanted .t~ be assured that the un.ion by its communicaiio11 dated April 24, 1957 uneguivccally intended.

t'.) CJ; ifirm th:! iten1s of.agrceincnt relating to various iten1s 6f'indi1strial

disputs b:!t\ven the parties as set out in its con1municatjon dated JanLJary 24, 1957 ai1d .further sought clarification of _the two points

t\l~d b); the uninn. • G

Tn~- substantial questio1_1 is vvhethcr there C-ft1:erged a concluded ag.ree.n12nl between thC parties and binding on the parties till it is

trrr)inated according to la\v? the question of the existence of a

c3nsluJd agrGemtnt a._1Hl its validity arises iJi the folk)\vingcircumstances. · H

.~

. SUPREME COURT REl'OR\~ [1984] 2 s.c, R .

.Shri A.K', Sircar and Shri R.L. Gupta were protected workmen 'Pi thin. th~· meaning of the expression in the Industrial Dispute~·A<:t; ·

1947 ('Ac!' for short) and were admittedly the. office-bearers of the miion a1id consequehtly leaders of the. workmen,. The employer served_ a charge-sheet on.Shri A.K. Sfrcar on April JO, 1974 and on the noxt•day. 'a charge-sheet. was served .on Shri R.T,. Gupta. There .followed .a disciplinary enquiry and ultimately the services of Shri

A.K .. Sircar nd Shri R.L, Gupta were ierminated by the employer . . The union raised an industrial dispute contending that the termination . of services of the afore'nlCiltioned. two w0rkmenwaS illegal and invalid

:and the enquiry was equally illegal and improper and that the acti.On

of the employer was an act of reprisal and victimization because.of the trade-union .actiyities of the afor.ementioned two office-bearers of the 'union. The appropriate Governfrlent referred the industrial dispute to the Industrial Tribunal on July 16, )977.

Tl; e employer in its written tatement. intet a/ia contended that .

Shrl .A.K. Sircar and Shri. R.L. Gupta .were iiot workmen within the meaning of the expression in the Act and .therefore the appropriate Government had nojurisdiction to refer the dispute to the Industrial Tribunal and consequently-the Industi"il.Tribunol had no jurisdiction to .hear and qeal' with 'the ref ereµ~~- .. _ It was urther -on_tendCd tat. in a referencebetween the employer and the union in ai1other dispute to the Industrial Tribunal in Maharashtra State, a contentio.n was

als_ed-byJh~ en1Ployr tbat sJ!e~111f!Jl, off he el'nplcY.er.i~ not~ vor!(1~2n within the 1;1eaning or the expfes>ion .in the Act and• this objection was upheld.by the Industrial.Tribunal and a petition for.special leave against the decisbn of the Jqdu'str:a1 Tr<bunal to the Supreme Court . waS' rejected o~ O:tober l, 1975. ft' was furtl'er contended that'the

-. services of.: the af~)remenJioned t\Vo _\vorktTien Were. terminated . not by way of punishment. but under the co; llract of sorvice and the dis-c; irlinary e11quify,_ WhiCh \VaS' conniienced earl:er \VOS slfbsequfntJy dropped.

.~ ,.

. ''?

.·~

\ \tf

 The union in its counter-affidavit iiiter al/a co1itcnded that .the ,. e;,, player '.was est0pped from chalhnging the Status 'of the fwo cQncerned workmen as not being \VCPknieo withfo the meaning of the :ex- . "pression in the Act on account of a subshting valid concluded agreement bet\Veeo the parties inter a/ia ]Yrovi(ling that the einploycr \Viii . nt contest the issue about statu~ .of field force (which expression includes salesman) on the basis of their not bing workmen but shall contest the issue.only on the nieri'ts ill the same way as they .do for other employees, It.· was also. contended that in view of Shri Roop,

~··

~- ' ;

WORKMEN v. HINDUSTAN LbVER LTD. (Desai, J.) 315 . . ... .

Chandra award ti1e is.sue about existence of ihe agreement and the status of salesman is res judicatq and cannot be reopend iill the agree~ n1cnt remains i1r force and operative. . . . .

• The rival pleadings led tci. the Industrial Tribunal framing the . following issues : ·

. . . •· "l) Whether the management .is estopped from challenging the status of these two concerned workmen as "workman'. within the meaning ofthe Industrial Disputes Aet.

2) .Whether -the awar<! dated 17-11-66 of the Additional Industrial Tribunal, Delhi wculd operate as res judicata between the parties ?'

3) . lf issue No. I is answered inte negative whether the concerned (sic) are 'workman' within :the meaning .of · the I.D. Act ?

'4) What is the effect of the order dated.6-1-75 passed D by the l.T. Maharashtra. in reference 203 of 1973 and order dated i.10.1975 of the Supre1m; Court in Petition for special leave 1602 of .1975? -

5) Whether the reference is incomp.etent and bad iri law

.for reasons mentioned in preL qbjections (III), (IV), (V) .· a11d (Vil) and (VIII) 1

Issue Nos. 1,2, 4and 5 were directed to be he; ird as pre liminary issues. On Issue No . .J, the Industrial Tribnrtal held that the thte.communications.E~.W-2 ciated January 24, 1957, Ex. W-3. 'dated April 24, 1957 and Ex. W-4 dated May 1, 1?57 did not spell

out a complete concluded agreement between the parties on ihe points set oµt therein but it \V.as an inchoate agreement in the stage of negotiations and therefore the employer wa& not bound to stand by its offer made in the comm,; nication dated January 24, 1957 deny- , ing to itself' the right to contest the. status of the field force incfoding

salesman as not being workman within the meaning of the expression in the Aci. On Issue No. 2,.it was hied that the award of Shri Roop Chandra in LD. No. 46 of 1966 in. which it was held that there was a concluded agreement between the. parties as disclosed in Exs. W-2,

W3 & W-4 and therefore 'the industri.al dispute therein 'raised could not be adjudkated upon at Delhi, it being an AU-India dispute and ought to have been rai$e<l at Bombay, did not:opei:ate as resjuqivata

. .... 316 SUPREME COURl REfORlS

. [1984) 2 S.C.R

A because the issue in the award was not directly and s11bsta11tially in. issue in the present reference.

Parties did not advance any argument on IssuesNos.-4 .and 5 anc\ tl1erefcire with reference to Issue No. 4, .the Ttibunal observd that the same. may not be disposed of without further hearii1g the parties and no findi.ng was recorded on Issue No, 5.

The Tribunal accordingly rejected the preliminary objectiorn raised B on behalf. of the union and set down the reference for further hearing.

Hence this• appeal by special. levc by the union. .

. At the outset, we must xecord our unhappiness on the attitude adopted by the employer in eon tending as late.as .1981 tha~ the three commmiications Exs .. W-2, W-J and W-4 did not constitute a con-· eluded agreement between the parties with respect to the points settled

.. therein and the Tribunal ignoing the l1istoiy and repeated advantage taken by the employer of this conclLided agreement . on numerous. oc.casions accepted. the conte1ition of the employer. It is therefore necessary first to point out how from 1957 till as' late as. 1966 ahd even thereafter the employer non, suited the union, if that is a proper. term, by .• setting up the ., very agrce1nent which now the employer wants to. urge that it is11ot a concluded agreemeni. The three impoi- ' tant clauses of the agreement emerging 'from the correspondence relevant to the present dispute are that (i) the Hindustan Lever fyfozdoor Sabha was tecognised by tbe employer as a representative union for all sctions. of field force all over lndia in the employinent of the. employer and (ii) the union agreed to bring all matters relating . to wages/salaries and ter'rns and conditions o'r service on an All-India basis and noton regional basis as for as field force is concerned.and

(iii) that in future dispuics, the employer will not contest issue about member of the field forc.e being workmen but shall contest issues only on their .merits. in the same way as the employer would do for other employees. Freed from technical jargon, the employer agreed and undertook not to contest in any industrial dispute the status of the field. force as not being workman witl1in the meaning of the expression in the Act and that reference, if any, would M contested on tl\e meri\s of the industi-ial dispute in respect of which reference is made to the Industrial Tribunal. The out-tome of the agreement would be that if a dispute of an all-India nature in respet of the field. force . is raised at a regional level, foundi\lg its contention. on one of the terms of the agreement, the employer would be in a position to get . any regional reference rejected on the ground that there is a subsistil1g valid agre.ement between the parties that such dispute .of an all-India . nature in respect of the field force can.be raised at Bombay only and

withiµ the jurisdiction of the Industr.ial Tribunal at Bombay only .

. '

'WORKMEN I'. HINDUSTAN LdER LTD. (Desai, J.) . 3l7 .

There is no dispute between the parties that if't\1ere is_ an agreement such would bo the out-come of it. This is not only not in dispute but it is conceded 'that a settlement was arrived. at in respect of industrial disputes between the enwloyer and the 11nion concerning the field force including salesman in 1"15"1, 1959 and 1964: 'An averment to this effect is made in Paragraph 'H' of the petition for special leave and Anx .5 was annexed to the petition which purports to be the settlernent dated December 22, 1964.. Jt is signed by Shd C.J. Mahimkar, Joint Personnel Manager on . behalf of the employer and Shri A.K. Basu; General -Secretary of the union at the relevant time. The various industrial disputes 1n respect of which settlement is arrived at were between the employer and the workmen of the. company who were the members of the field fot'ce (salesmen, sales supervisors etc.) employed in any part of India. This settlement was arrived at _under the Industrial Disputes Act' and was registered according to the requirements 'of the Act. This implies ibat the status of the salesman as being workman within the meaning of the expression of the Act was not only not disputed but specifical)y conceded and that mtist obviously be pursuant to the subsisdng agreement. This is however an inference so it is better now to move on to adjudication and award by a forum with jurisdiction to decide the point.' ·

The Chief Commissioner of Delhi referred an.industrial dispute whether workmen whose names were set out in the order of reference l; Je paid compensation in addition to' the usual remuneratidn for the period they had marketed Erasmic Blades and what directions were necessary in this behalf. The reference was between the employer tl1e present respondent and the appelllnt Union.

In this reference~ the workmen whD claimed ren1uneratiun \Vere Delhi based salesmen of the employer. The_ employer appeared and

ontested the reference. The only important contention raised on behalf of the employer which must be 1ioticed reads as under :

' "That the concerned workmen are members of the field force of the company; .that the field force unit is a seperate unit known as Field Force Unit; that they are liable to .be transferred anywhere in India; that the Field Force Unit

is controlled by Company's Head Office .in Bombay; that it wa'.< agreed between the .company and the Hindustan Lever Mazdoor Sabha, Bombay that all matter.< relating to Field Force Unit would be dealt ivi_th by both parties at Bombay on all-India basis and_ if no settlement is reached; the dispute

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. SUPREME C~URT .R~PORTS [l984J 2 s.c.R.

shall be raised in Bombay in accordan.ce with Industrial Disputes Act; and. that any , sett/emen.t or Award tl; erein 1vo1dd be mde app/icaO/e and sha// (>e bindilj[5 Oil a// members of the jiefd force ail over. India." . (Emphasis supplied). . .

The employer .. also contended. that i1f view of .the agreement between the parties, the dispute. referred to the Industrial Tribunal regarding Hie field force could not be ; aised at Delhi. It was also contended ihat in view of the agreement subsisting betweeh.the paries, the employe.i had agreed not to contest the issue that its salesman were .. not lv.orkmen within tlie meaning of the expression in the. At'. . kfurther contentlo;1 was. raise.ct that the union has committed breach .

of'the agreement by ri!ising t.he dispute at Delhi. ·

' The union while conceding that there was an agreement between the parties as alleged w the employer contested the issue bysaying. that.:the dispute was)1ot of an all-fodia nature as it was concerning only some Delhi based .salesmen of the employer and therefore the dispute was not .covered by the agreement. . .

The Industrial . Tribunal. (Shri Roop Chandra) 61\ the rival contentions of the parties, raised the. following issues : .

. "I)

"ISSUES

.. Is theie any agreement between tl1e 'Cqmpany a1id its wo.rkme1i thiough the Hindustan Lever Mazdoor Sabha that all maUrs relating to members of the :field force • would be dealt with by .. both the parties in Bombay ou a:n ail India basis and that if no settlement is reached,· the dispute would be raised in Bombay.ii} accordance with the Indnsti:ial Disputes Act ? . ' -

Doe.s the said agreement preve~1t the workmen in this case from raisi11g the dispute in Delhi ?

3) Are the einployees concerned not 'w.orkmen' within the meaning of the term under tlie lndutrial Disputes Act? If so, has.the tribunal no juridiction? ·

4) Whether workmen have committed a breach of. the

agreement' alleged to have been entered .into between the. management and the µnion in 1957 and if so, is the

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WORK~1BN v .. HINDUSTAN LEVER LTD. (Desai, J.) . 319 • - . l

management not entitled .!() rai.se. the pl.ea that the salcs1nen .are not 'wofk1nen' within the: meaning of Industrial Disputes Act ? "

It would thus appear at a gl!tnce that i( was the employer who wanted the refeence t-0 be rejected on the preliminary objection .that there was a valid subsisting c01icludecl agreement between the parties : which had a direct bearing on the industfi.al dispute involved in the reference and that because• of the agrce1nent and as a 11ecessary corollary of. the agreement, the Tribunal had no jurisdktion to entertain. tlie dispute. . . • Now sec the out-coib.e of this contention o(the employer. On Issue Nos. I and 2, Shri Roop Chandra as per bis a.ward dated November 17, 1966 held that in view of Exs. W-2, W-3 and W-4marked in evide1ice_i11 the reference before him .s Exs. M-1, M-2 and M-3 pro,

duced aµd .relied upon bythe mai\agement th~!. is the employer, t.he Industrial. Tribunal at Delhi would have no jurisdiction toentertai11 it. It was never contended by the employer.beforeShri Roop Chandra that the three documents did not end in a concluded agreement. On . a contrary parties were ad idem that there was aconcluded agreement . between the parties. The difference was in their approach as to the applicability of various clauses of agreement td the dispute raised in the reference before the Tribunal., The employer contended that the dispute was of an all-India. nature and therefore could not be raised at Delhi. The union, on the ot.Jier ha11d, contended tha the dispute was of a regional nature concerning only 1.6 Delhi based salesme1i of the Company and therefore the dispute could not be styled as an

. all'lndia dispute. .

. .

The. Tribuna.1 lield .ih11t the dispute was of ari all-India nature, related to the duties and liabilities of all members of the .field force employed all over India.and it involved suh a major issue as salary and.wages. Approaching the .matter from .this angle, the Tribunal further held on the basis oLthe agreement, that the dispuie could only be taken cognizance of at Bombay: The Tribunal .. was of the opinion that the agreement was valid and did not contravene Sec. 28 of the Indian C:ontra6t Act because where the parties .choose to h.ave the matter entertained in one of the two or more courts having jurisdiction to e1itertain the matter, such an agreement does not contavene Sec. 28 .. The Tribunal further held that the agreement had the sanctity . ofa 'contract and the parties must be held.to the c.ontract'. The Tribunal concluded by observing that the union was notjustified in raising . . .

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320 .. [1984] 2 s.c.R.

SUPREME.COURT REPORTS

the dispute. in. Delhi in vi; w of its agreement' with. the emp!o; er as evidence by the three documents and that it is.not expedient in the ._ interest of justice and peace and harmony in industry that the Tribunal should _adjudicate the matter of an all-India nature. So saying the Tribunal rejected the reference. The question is who took advantage and benefit of the agreement? 'unquestionably, the employer who now decades after. successfully contending before another Tribuna) that there was a valid and concluded agreement. wants to contend that the three doeun:ients, Exs. W-1, W-2.and W-3do not spell out a concluded agreement but ail inchoate one which remained at foe stage of negotiations only. Btil that is not the end .of th~ vacillation

n the part of.the-employer. ·

Mr. Pai, learned counsel on. behalf f the employer on the "other hand contended that" the union has expressly repudiated the agreement 8.iid thrfore, it is not open no\v ro the union to take rcourse to the . agreement. It was subniiiteil that if the union has committed a breach . of the agreement, if there was any, the employer is absolved from .. observing or complying .with the. agteement. To substantiate thi& submission, our attention was invited to a reference made by the Lt. Governor, Delhi to the Addl. Industrial Tribnnal constituted for the Union Tt'1"ritory of Delhi; thcnpresided over.by Shri Hans Raj for adjudication of the following. , two issues :

·1. whethor the deduction of leave" by tlie management for" the yearI967 is illegai and/or unjustified and if so, to" what relief are the affec1, ed wo1kmen enti(led' and what directions are necessary in this respect ?

Whether .the management was obliged to grant. _special increment to all of its workineil. in .Delhi Branch and if so, to what relief the affected workmen are 'entitled and what directions are necessary in this 1:espect ?"

The. union filed a statement of claim and sulisequently filed an" additionai or amended written statement in which inte1 alia it was. .-contended- 'that the .workmen of the concern "throughout India were agitated becasue of this measure .and its wholly illegal implementation . and the applicant Sabha led the opposition of the scheme and the resistence of the workmen to it.' This averment was relied npon to urge that the unlon raised a dispute of ail all-India nature at Delhi

which was the regional centre .und this would imply intentional breac.h or repudiation of the areeinent. Before we examine !his contention,

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 WORKMEN v. HINDUSTAN. LEVER LTD. (Desai, J.) 321

it is. necessary to refer to p'ara IO of the amended st(ttement of claim in \vhich the union statesas under : ·

"That th.e binding natre of the agreement has been flagrantly flou<ed by the Management and. the very basis of collective bargaining for industrial peace ha; been attac)<ed.":

This would show that the unioi1 .accused the employer of breach of agreement. On the. other hand, the employer in its written state-· mcnt contended as under : ·

,. "No claim on behalf of the employees of the Field Force ca'il .be taken up by Hind\1sta1i Lever Mazdoor Sabha, Delhi Centre and this Hon'ble Tribunal has no jurisdiction to entertain the same in view of an agreement arrived ai and between the. Company and the Hindustan Lever Mazdoor Sabha in )957." (emphasis supplied) ·

It would be crystai clear that the employer wanted the reference to be rejected at the threshold on the preliminary objection that in view of the concluded binding agreement betwee11 the parties, the dispute referred to for adjudication being of an all-India nature,' the . union was precluded from raising lne same at a regional level and the Tribunal had no jurisdiction to entertain the same. Apart frem the extracted specific contention i11 paragraphs 5 and 6, the contentio1i is elaborated by the employer and it was specifically contended that in the award dated Nov. 17, 1966 by Sh; i Roop Chandra, Addi.

Industrial Tribunal, Delhi, it' was held that a valid agreeme1it was in existence between the parties and no dispute pertainfog to the members of the Field Force can be raised anywhere except in the State of Maharashtra. It was further contended that the award of Shri Ro-0p Chandra was confirmed by the High Court of Delhi by summarily dismissing the Writ Petition No. 1163/67 filed by the union against the award and when the union approached the Supreme Court in Appeal . No. 42/68, the same was rejected thereby affirming the existence and : binding character of the agreement.. These assertions by the employer

fiow from the ple. ad.ings. To. revert to the. narration, Shri Hans .Raj . proceed on leave and then retired and when a new Presiding Officer • was appointed, the reference with one application: filed by the union to summon certain documents ca!Jle up before. the Tribunal. . 'By a laconic order, unsupported by any. reasoning, the Tribunal observed that the salesmen are not w-0rkmen and so the documents neeu not be .summoned. lt was this order on the application which was cha\-

32~. . •

. SUPREME ~OUR~ REPORTS

. [1984}2 S.C.R,

lenged i1rihe writ petition filed by the unicin .. It is difficult to appreciate what permitted the Tribunal 'to hold thar the salesmen are not

workmen.within the.meaning o!the qpression int.he Act and why it did not consider the specific contention that the .employer was estopped ·

from caising the contention as to the status of the salesmen in view of the. i°nding agreemeit between tle paries. Bt, it forthe present purpose, it is sufficient to .notice that tlie employer and the UJiion both swore by the agreement and at any rate the employer mover contended that there was no concluded agnoe\nent between 'the parties covering . one of the points in the dispute namely,:the status of the members of the Field Force including salesmen. ·

 Mr. Pal. next turned to another' round of litigation between the panics. It appears that <:ffective from September u, 1966, 'the employer J'e.organised its marketing organisation into .tivo divisions, the Main Liries Division and the Spe;:iality Lines Division. The Calcutta' Branch of the employer was coi1cerned only with marketing.·· The workmen at Calcutta were directlv. affected by 'the reorganiszation.

On a di°spute raise.cl by the union: the Governinent of West Bengal refei'red .the {allowing disJl.ute for adjudication to the Industrial Tribunal · ·

"Is' the liun1an rarionttlisation as a n1easure of econon1ic ·

' ' reorganisation. of the company : reflected through job-integration that. have either' been. effected or pro.posed to be effected justified ?" .

" Pending adjudication of the dispute, some workmen filed applica- 1 lions under Sec. 33A of the Industrial Disputes Act before the Tribunal alleging .that during the pendency of the adjudication their service cdnditionshad been altered adversely and their salary for. the month of October, 1966 had not been paid. The Tribunal granted the applicaj tions of the workmen. and the employer approac)led the Supreme Court by special leave,. The main refer.!i1c~ was finally disposed of . infavo.ur of the employer upholding the reorganiatioil of marketing organisation. The union questioned the correctness of this award before the Supreme Court. Both the groups of appeals came up for hearing together and the decision of this Court is reported in Hindustan

Leer Ltd. v. Ram Mohan Ray & Ors.'" T[lis Conrt upheld the r.ight' of tlle employer to organise and reorganise its work)~ the mamier it

 I pleases. 'Accordingly the appeals 'filed by the union wern rejected.

(I) [1973] 3 SCR 624 . ..

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WORKMEN v. HINDUSTAN LEVER LTD. (Desai, .J.) ' 32~ ..

The appeals:filed by the employr againstthe award in favour of the workmen in the applications under Sec. 33A were eqally rejected by . . this.Court holding that: non-payment of wages in the circumstances of the case amounts to an alteration in thecoi1ditions of service. Frankly,. this decision sheds no light o.n the point:under discussion because neither: side refo:d unon the agree.men! ncir did the agreement figure into the dispute. However, it is interesting to note that when the · main refejence was be.fore the Trlbui1al, a. prelminary objech011 was raised cin behalf of the employer to the effect that 'by an agreement entered into in January 1957 by and between the employer and union, it was agreed that all matters relafo; g to die matters of the "'utdoor ' mal'keting staff, to wit members of' the field force can be raisd al Bombay only and as uch the company as well 0sthe Sal)ha are bouri.d by the aforesaid agreement. Therefore, 1iot only the employer affirmed the agreement, did not contend that it was an inchoate one but . specifically placed that it,'is a ncluded bindingagreement between the partie-s. · - ·

 It appears that .J.ttere was .one 1i10re reference I.D. No. 43/72 between the parties at Delhi. Following the. decision of this_ Court in the case just herein discussed, the !'cf.er.:nc; e \Vas rejcled .

. Mr. Pai nexi referred io an order in Refrp1ce (I.D}No. 203/70 by the :Indtistriai' Tribunal Maharnshtra bctwtci1 the.employer and the \Vork1nenefnployeeS under -it: The clcLtland \vhich "'1as refei-red for' adjudicatin incfoded rvis, ion of pay sales with adjustment, re_visiof1 _of the y.:age-sale of sUb-cle-r-ial grade, gratuity disturbance allowance/and settling-in-al)o\vance fo the Office staff,· allo\\'.ance t? office st.aff. whi-Ic 01r tOur, acting alloance,. ov.ertin1e. ages, caSh allowance and. leave tt'avel facilities. The. employer raised number of prelin1inary o.bjcetions, one SU!.lr being that Salesn1e11, Marl<eting Research Investigators, Market Research Supervisors, Sales' SupervisOrs, Trade Marks Jnv(;~HigQtors; Seed Byers and -Supervisors Or c:ler{caI staff arc no~· .\vortnen.· within 'the 1neanig 9t' the Cxpression in, the ACt, and hence nO indl1strial dispute 3311 be rnisCd on their

behalf and consequently the .. Ti'ibunal had no'jurisdio.tion to adjudicate upon the sanie. ·The .un'ion ·counterQd this_ preliminary objection by asserting that the cDntentiori about the status <if the aforementioned

.ctegorie.s is barred by the principle of resfudiat.a in view of.the "'ard ·

dated April 13,' 1967 made by .the 3rd Industrial Tribunal, Wc5t Bengal The Tribunal rcj 'cted the contention of the u'nion observing thai the dispute bei,;, een them is .not of ati all-In'dia nature and therefore, the employer is entitled to raise the question , about the status of the work- . - ' . . . . .

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324 SUPREME COURT liTIPORTS

[\ 984] 2 S.C.R. •

men included in lh~ aforemntioned c'ategories. This. woul\! imply that the reference was rejected not Oil the ground lhai there was no agreement but 011°the ground that the dispute involved ii1 the reference was not covered by the agreement.

In the same reference, a plea of estbppel rnised on behalf of the union to the effect that the company was precluded in view .of the subsisting agreCIJlCnt from quetioning the status f the salesmen and allied categories as workmm was . overruled bv the Tribunal observing that Exs. W-2, W-J and .W~4. . .. ' . . . . leave no :doubt thot the employers' agreement not to dispute the status of the Field Force was only on the clear undcrstandi1ig that it will be so, if' dispute. is raised on all India basis. The Tribunal tlien 'observed that the .dispute atlmittedlywas not an all-Tndia dispute and therefore, rejected the plea of cstoppcl.

It is at this stage necessary to refer to 6ne more reference between the parties being LT. No. 233}67. The dispute referred to was a demand by the .workmen to withdraw the reorganisation integration imposed on the Suporvisors attached to the Sales Department arid impending in the case of Field Force (Salesmeniand otherstaff attache.d to the Sales, Accounts, .Transport and alhed department. TlllS demand \\'as rejected by ihe Tribunal fol lowing the decision in Hindustan

Lever Ltd. v. Ram Mohmi Ray & Ors .. (supra) The rejection of the demand has no impaci at ali on the point under discussion.

Having rneticnlousl)r eXamined various references pertaining to various industrial disputes between the' parties al different centres

in.lndia since the' agreement i.n 1957, it unquestionablyemeiges that' the employer till the present reference never once even whispered that the agreement was not. a concluded i1greemcnt or that it. was an inchoate one left hanging at the stage of: negotiations. But in the pr_esent reference the contention raised was that the agrement \\1s not a concluded agreern.ent because tha( is hdw the Tribunal 'has approache.d the pr0b:cm .. The Tribimal has ohserved in this behalf as under:

"Accordin-' to the inanage1nent the -three letters do ot constitute an agreement because in an agree1nent there should be an offer and the offer must be accepted as such.

They have.argued.that the offer. made in Ex. W-2'havc 'not

beenaccept~as.., uch in Ex. W-3 .. . -..... -....... "

' ' The employer hich swore by the agreement and repeatedly succeeded in getting thrown out certain references at the threshold on. [:ccou.nt of the' ag(ec1nent, no\v \VantS tO coritend that there \vas no

WORKMEN v. HINDUSTAN LEVER"L'ID. (Desai, J.) ., 325 ..

concluded agreement, arid ignoring the whole history, the Tribunal falls into an error in accepting this corytention. The weight of evidence not only not at all referred to by the Tribunal but frankly wholly ignored clearly _and unmistakably leads to one and one conclusion alone that according to the employer there was .the concluded agreement between the parties. Tt is a solemn agreement, tht agreement of which effective and wh.cilesome advantage has been taken by the employer and when it now does not suit i_t, it in breach of the solerrrn agreement wants to turn round and not only repudiate it but disown it as having never been entered into. No Court of justice can ever permit such a thing to be done.

Mr. Pai, however, raised a very technical contention that the preliminary objection raise~ by the union that the employer is cstopped • from questioning the status of the salesmen or members of the Field ·

Force being not workmen \vith(n tho 1;, caning of the expression in the Actmust be rejected either on the princi pie of ·es judicata or pr!nciples analago1is to res judicata or 011 the pdncipic of isue of . estoppel or promissory. estoppel and neither of the three contentions is available to the union notwithstanding the foct whether the agreemeiit .exists or stands repudiated and therefore,. the Trihnnal was justified in .rejecting_the contention of thC union.

Mr. Pai in support.

C?f the s.ub1nission urgd hat at no timC as the staus of the salesmen as not being \Vork1nell or otherwise was ever directlv and stibstaritiallv !11 issue in c; rlier referc.nc_es, _the i.Ssue.cann_ot be rejcted on the grou.nd of res J1.1dicata and at any rate there:: \vas no dee.is ion on tllis issue and therefore the principle of.issue "st6Jl'pel cannot. preclude. the employer froi11 raising the contention. Mr. Ra1nan1urthi, on the Other hand, contended that' it is not the contention. of the union that the issue about tile status of thi; salesi11e_n is res judic<ita but ·, vJ1at is res judicata _is"thc existence and bindin!! ·-character of the iigree1nent . . . . . ' . ., wb1ch was directly and st\bstantially in issue .between the patties in the award given by Shri Roop Chandra and in various other awards.

In order to tlppfect-ate rival contentions it iS necessaiy to' focUs attention on the issue; framed by. Industrial Tribu.nal presided over G by Shri Roop Chandra in f. D. No. 46 of _1966.

These issues have been extracted earlier.

The most important issue was Issue No. J about the existence of a binding agreement between the parties which would preclude . the employer from ever guestioning the ; tatus of the salesmen till the airee1nent reinains subsisting and till it is tern1inUted. ; ff . The issue \Vas : "is there any agrcen1ent bet\vcen the co111pany ·.and

A .. ..

SUPREME COURT REPORTS [1984] 2 s.c.R . . . its worklneu coyering inter a/la the question aboi1t tlie status 'of sales- . meii ?' And the answer was : 'there is such a valid and subsisting . agreeinent and that posiffdn was adopted by noneother than the employerand the employer succeeded in getting the reference thrownout at tlie threshold on .the ground. that in view of the subsisting . valid agreement betw<; en the parties, the union was est0pped fro1n raising a dispnte of a0 all-India nature at.a regional level and it can . : only be raised i1t Bombay and .therefore the Tnd11strial Tribunal at

Delhi had no.jurisdiction to entertain the same ... Even if the-teclinicaJ ·

priciple .of res Judicta is imported In the field of industrial adjudication, the issue about the existence of an .agreemen(was substant, ially and directly in issue between the pa;:ties .in the earlier proceedings and was decided in the offirrnative that there exists.such an agreement.

In the reference fi:om \vhich tlie present a.l.'pe3l arises, the employer • contended that theie is no such concluded' agreement as pleaded bji the union; and therefore, the issue that arises is: whether there is such an -agreement as piea"ded on behalf ni1eunio11. But that was the specific issu.e in Reference I D. No; 46 of l966"between the .same. p-arties. To. that extent, one.casay that unless Change f Circumstances are established, the issue would be res ; udlcata. But" we consider it i1; appropriate. to usher in this techn.ical concept. of res judiqata pervading the field of aivil justice. into.the field of industrial arbitration.· The apprc\lons; on' :vas voiced by this .Court in Slwhdara (Delhi) Saharanpur Light Raf/.ivay Co. Ltd. v. Shahdara (Delhi) Saharanp111 Railwav. Wor/.:crs Union'!) when it said that it is doubtful whether the w.' - • . principles anaJC, gous to resjudicaid C<ln properly be applied _to industfial

'.ldjuicai-on: We are not una\varof the legal pqtion that pr_inciplC: of res judicatri was invoked and applied by this --Court in Workmen of . Straw Board Mnufacturing. Co. Ltd. v, M/s Straw ·}Jom:d Manufac-.

_turin"ft Co. Ltd.(2> One can safely Say that prilicipte analogous tO res

judicta can be aviled ; r to scuttel any atte; npt at raising' industrial

- . disputes repeat"'dly in deance uf Operative &ettlernens a1_id a\vards.

But this hig'1'y technical concept of civil justice may be kept ia precise

conlilld limits in the fild of -industrial arbitration \vhich n1ust as.far as pOs.Sibie: be hept free from 'such t!'.lchni_caJities whiCh th\vart resolu- tion _of industri{tl disputes. We however proceed on the assumption . that an industrial dispute may be rejected. on the principle ai:alogous to res ji1dicata. The matter however, may be fooked at from a s1ightly difforent angle.

The_ concept of compulsory adjuditation of industrial disputes "''a.s .sttutqrily uShered in with .. a vic\V to pro.viding a. forun1

. .

(1) [i%9] I L.L, j,734 at 742 .

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, WORKMEN l'. HINDUSTAN LEVER LTD" (DesAI, J,) '327

. arid compelling .the parties to resort to the forum for arbitration so as to avoid. confrontation and dislocation in industry. A developing country like India. can ill-afford dislocation h1 industrial production . . Peace and harmony in industry and uninterrupted production being

the demands of the time, it was considered wise to arm the Govern- . rnent with power to compel the parties to re5ort to arbitr,, tion a.rid ' as a necessary corollary to avoid confrontation at; d trial of strength, which were considered wasteful from national and public interest .poini of view. A welfre State can ill-afford. to 16.ok askance at industrhl unrest and industrial . disputes. (See 'JJahyabhai Ranch.· hoddas Shah v. Jayanti/a/ Mohanlat."l The . .Act die! not confer till the introduction of Chapters V-A and V-B, a1w special' benefits or enforce• able benefits on. the workmen.

The Att was designed to provide a self-contained Code to copcl . the. parties to resort to industrial arbitration 'for the resolution of existing or 'apprehended disputes without prescribing statutory norms for varied and variegated industrial relation norms so that the forums created tor resolution of disputes may remain unhampered by any statutory control and devise rational norms keeping pace .. with i, mproved industrial relations .reflecting and imbibing .socio-economic'justice. If this is the underlying object behind enactment of the Act, the Court by interpretative process mlist strive.to reduce the field of.conflict and expand the area of agreement and show its preference for uphcilding agreements sanctified by mutuality and consensus in larger public interest; namely,' to eschew industrial strife, confrontation and consequent wasfrge. . .

The parties fo .this case .entered into a solemn agreement. It is hot for a moment suggested that the agreement has been terminated.

The only argument put forward on behalf f fhe .employer was th.at the union has repudiated the agreement by raising disputes of an all, India. nature at a regional level and thereby committed breach of the. agreement This contention is entirely wiihout merits. What has happened is. that the union raised certain dispµtes which according to the 4nion we're of a,.regional nature and which it was not estopped froin raising in the teeth of the, terms of the binding agreement between the parties.

On the other hand, the employer contended that the disputes so raised were of an all-India nature; Both sides swore by the agreement, the ,<:iitfereiice in.approach being: whether the dispute was of an all, India:

nature 'or of \egional nature .. The emerging situation .would be th.at neiteer tile union repudiated the agreement nor the employer and till .the present dispute, both swore by the agreement. The divergence in·

 (I) [1'B] Lab; & Industrial C.ases 967, ·

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[J 984]2 S.C R.

the approach was as to the interpretation. the coverage, the ambit . and the width of the agreement. Both the parties swore by .the agreement but differed in their approach and interpretation and .the forum namely the fndustrial Tribunal cimsistenly upheld at the instance of the employer that there was a binding valitl agreement subsisting between the parties forbidding the union from raising a dispute of an all-India nature at the regional level and .succeeded in getting the reference thrown out at the threshold on the ground that the tlispute was of an all-fndia nature and not of a regional level as contended by the'union .. This constitutes adherance to ag.reement., performance of tbe agreement, implementation of.the agreement and being bound by the agreement. This cond, uct in no sense can be said. to constitute . repudii\lion of agreement by tbe union. Unilateral repudiation of an agreement, as contended by Mr. Pai, does not result in termination of;· solemn agreement because the. wrongful repudiation can be corrected by enforcement of agreement through machinery provided by the statute. And that.is what the employer has succeeded in achieving.

The employer relying on' the agreement got a number of refeiences rejected 'on the pr<liminary objection founded on the agreement. The employer cannot therefore be heard to say that the attempted repudiation by the union, if any, permits the employer to disown the sa1ne. when it sui.s it.

Unilaterai' repudiation is.distinct fron1 terminrition .and an agree1nent/settlen1ent r.e1nains. In force :-ind binding till' terminated and does .not come to an end by unilatera 1 repudiation .

But it mlist be 1nade clear that there is no st1bstance in t11c contention of Mr. Pai that the union repudiated the agreement. If thus; the employer swore by Ilic' agreement, rdied upon it '1nd succes.sfully contested the clai1n 'of the inion, it cannnt now be penn; tted to back out from such solemn abgreement and apart from the technicality of the issue being res judicata or issue estojJpel, industrial peace and <harmony, good. behaviour and fair rel_atiofi \vith \Vorkn-!en estOpes

the _employer fr0m either repudiating the agreement or contending. that tl; e agreement as not a concluded agreement but <fn incl1oate one.

Jn this connectinn, we may profitably refer to Western India Match Co. v. Their Workmen'" w'herein this . Court observed ; s

urider :

"It is nqt out of place to 1nentioi1 in-this connection that l1n soe i)revious occasions the 1nanagement itself has treated. these categories as workmen within the meaning of the U.P.

Industrial Disputes Act. The management's contention that

'r-'

i ...

..,-

-<(.

WORK'IBN v. HINDUSTAN. LEVER LTD. (Desai, J.) 329

the Tribunal has erred in thinking that the inspectors, sales-· men and retail salesmen are work1nen musttherefore be 'rejected."

•• Same view was ado'ptcd in Alluminhm1 Factor)/ Workl's' Union v.

Indian A!'.1111iniuin Co. Lfd. 11 > Jn. fRat case. Certain corresrnndcnce which passed before rnd after the awards betwec1i \he parties as referred to.

Thi'> corre<; po:ide; ic(' sh,_, wed that the ar:~1Jlant/urti611 and the steff associetion of the "'""µqny foily accepted the principle that Supervisors wo<.ilcl no lr.nger be regarded as workmen and that Supervisors had resigned from-1ncmbership of.the wor-krnen's unions. . ' .

These ave.rtments in the correspondence regarding the status of the Supervisors being not workmen was held binding between the parties and both ihe Industrial Tribunaland this Court declined to examin.e . the. contention about the status on merits. If the union can be held bound to .such an inferred agreement from correspondence, the employer conceding the statUS or to be preCise concedii}g not t.o contest the status of salesmen would. equally be binding on the e1n']Jloyer.

It would thus appear that the employer/management was held hound

not y any speific agreemen.t but an agrcen1ent 5pclt-out of its con~· duct in Western India Matr;:h Co. case and asserti-Ons in correspondence in [ndia Alun1inium Co. case trcati'ng certain categorics ofthi:: workmen as. workmen or not as \\'Orkrne1} respctively \Vithjn the meaning or the expression in the Act. then at a later stage, the employer and the

- uion respectively \Vere estopped frnn1 contendifig to the contrary.

The case before u.s is much_stronger. in that there is a conclude4 binding . agreement b2-tween th>;! parties neither repudiaj:ed nor. terminated till today which .provides that the "employer on its part will not contest the.status of the membership of the Field Force including the salesmen em.ployed by the .Cmpany as workmen within the meaning of the

expession in the Act.

Therefore, the Tribunal cnimitted a seriQus error, apparent on record i1~ holding that there .\vas no ~Oncluded agr,:cmont between. the parties as. emerging from Exs. W-2, W-3 and

 W-4.

Th.e Tribunal 1egaived the contention of the union that the employer was estopped from challenging the status of the workmen also. Oil the gr..ound that 'there Cbn be 110 estoppeJ against the Sat.ute.

We must confess th0-t ven.Mr. Pai 9id not appear to be very enthusiastic to support the finding of the Tribunal that even if there is a binding agreement etween the parties and th.erefore, the employe 1s estopped

(1) [1962] 1 L.L.J. 210.

, 'D

G •

H . .

H ..

.SUPREME. COURT REPORTS

[1984] 2 S.C.R, "

from questioni1, g the status of salesmen as being. workmen, it cannot

be availed of by the union because there can be no estoppel.against • a statute. We. find it very difficult not only to unnderstand but to appreciate the approach and the finding of the Tribunal in this behalf.• .

There is no statutory proision that a status of a person invoking . . . , . .· . the jurisdiction of the Tribunal must be adjudicated upon notwithstanding that no contention io t!iaf effect is. raised.. No statutory pro- vis{on was brought to our notice which would. be rendered nugatory or ineffective if the. status of workman is not questioned. Nor it can he sid that the employer has contracted out of the. benef)tsof a statute. Whether a particular, person is a workman or not dependsupon factua.1 matrix .. Workman is defined ·; n Sec. 2(s) of the Act. The ingredients and the incidents of the definiti"on when .satisfied, the . person sati; fying the same would be a workman. Negaiively, if someone fails to s

0atisfy 6ne or other ingredient. or incident of the definiti'on, he may not be held to be workman within the meaning of the expression in ihe Act. The.re is no provision in the Act. which obilges the Industrial Tribunal or other forums set up under the Act . to. decide even in the absence of a contention from the employer, a

preliminary issue w!iether the pcrson who has invoked its jurisdiction is a workman or not. There is no such obligation cast statutorily on the Tribu11al. , If the employer .does not .arise the contention , about the status of the workman approacliing the Tribunal, the Tribunal

, hs no obligation, to ccide the status .of the persq11 whether' he , is a

workman or not. . Conversely, if the employer agrees not to ques!fon . the status in future it would only imply that such a contention would not only be not raised but if raised it would not bepressed and if pressed 'should be negatived in view o.f the binding agreement: The .. resultant situation would be that the Tribunal must proceed on the assumption that no such conten.tion is raised and required to be adjudicated upon: .lf the contention is not raised, the Tribunal is u.nder no. obligation, st10 1notil or on its own to raise and decide such a contention tci clothe itself with jurisdiction to.adjudicate. upon the . dispute. The Tribunal derives its.jurisdiction by the order of reference and not on the determination of a jurisdictional fact which it must of 1; ocessity decide to acquire jurisdjctioh.· Therefore, the Tribunal was clearly in error in holding that the contention canvassed o'n behlf of the union would permit it to taise estoppel against' a . statute. Undoubtedly,. it is true that there cari be no estoppel againsf

the Jaw of the land .. If a party is. estopped by doinga thing which it is under a legal disability to perform or forbearing to do something. which fr is his duty to do; the result would be an enlargement of the contractual or other rights ailowed by law or the'.r alteratio~: The

't·

.. '

WORKMEN v .. HINDUSTAN LEVER LTD. (Desai. J-)' 331

Court e11forces 'the performance of statutory duty and declines to

.• interfere

0 for the assistance of persons who seek its aid to relieve the~ . aga, inst the express statutory provision. Approving the dicta Jn.

Maddison v. Alderson(", this Court observed in K. Romadas Shenoy . v; The Chief Officers, Town Municipal .Council, Udipi and Ors., t•l

that an excess of statutory power could not be validated by acquiescenc; e. in Or by the operation of stoppel. Is. that the -situation here ? The Tribunal observed. that notwithstanding the fact that the employer has agreed' to recognise the .union as representative of the Field Force including the salesmen, agreement between . the parties cannot override the statute and if th\'refore Shri A.K.

Basu is not . workman under the Act, the agreement between the union. and the emoloyer. cannot confer on the Tribunal any jurisdic- . lion to give anyrelief to him under the Act. Tb.c Tribunal. completely misdirected itself when it assumed and arrogated to itself tj:le . . obligatory duty in the absence of an impermissible contention, to .raise one and proceeded . to adjudicate upon, notwithstanding the fact if Hie agreement. is .subsisting no such contention can be raised and if raised has. to be ignored as an irrelevant pleading. In this. connection, it may be. recalled ihat when a reference ismade under

Sec. 10 of the Act; Rule .10-B of the Industrial Disputes (Central) Rutes, 1957 obliges the workman involved in the reference to file. with tl1e Tribunal a statement of demands relating only to the issues as are included fo the order of reference and simultaneously serve a copy ofthe same to the employer. Sub-rule (2) enjoins the employer within two weeks .ohhe receipt of the statemeritof claim to file its rejoinqer aud simultaneously serve a copy ofthe same on the workman.

Ordinarily,, the Tribunal after ascertaining on what issue the parties .· are at variance rais.es i.ssues to focus aitention on points in dispute.

In industrial adjudication,: issues are of two typ_es : (i)· those referred by the Governmei; it for adjudication aud set oat in the order of reference. and (ii) incidental issues which are sometimes the issues of law or . issues of mixed law and fact. The' Tribunal may.'as well frame pre~

liminary issues if the poiut on which the parties are ai varia11ce, as . reflected in the preljffiinary issue, o/OU!d go to the root of the matter.

But the Tribun&l cannot travel beyond the pleadings and arrogate to itself the power to raise issues which the parties to the reference are

precluded or prohibited from r11ising; to wit if the employer. does riot q11estion the status of the worken, (he Tribunal cannot suo inotu raise the issue and proceed to adjudicate upoil the same and throw out

(l) [18831 8 A.C. 467.

(2) [19751 1 S.C.R 680.

B·

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SUPREME COURT REPORTS [1984] 2 ~.Cll.

the reference on the sole ground that the concerned -workman was . not .a workman .w; thin the meaning of the expression of the Act. And

it is' not obligatory upqn the employer i1ecessarily to raise \he conten- "tion that the co.ncerned workman was not a workma1i within the.

meaning of "the expression .under the Act. Therefore, the Tribunal was wholly in error in holding that if the contention of the union

ere to prevail, the well laid rnle of no estoppel against a statute would be violate<).

Having examined all the diniensions of the matter, it is crystal clear and is indisputably established that the agreement relied upon by the union is a valid subsisting agreement. It is in force.

It is neither . repudiated. nor terminated.

Tt is binding upon both the parties. Once the agreen:ient is held to be binding, the employer is estopped fro;,, contending that the workmen involved in the dispute wbo were sales1ncn wen~ not work1nen within the nleaning. of the expression undei the Act. Therefore, the Tribunal was in error in undertaking to examine that contention and answer it. That part of the order/award of the Tribunal is unsustainable and must be quashed and set aside. ·

We accordingly, direct the Tribui1al to proceed to deteni1inc . the dispute on merits without concerning itself with .the consideration of the question whether the concerned workmen were workmei1 within the meaning of the expression under the Act.. This appeal accordingly succeeds-and' the award of the Tribunal to the extent indicated herein is quashed and set aside' and the matter is remitted to the lndustri_al Tribunal with a direction lo proceed further in the light of the observations made in thi.• judgment. The respondent shall pay to the appellant cosis quantified at Rs; 3,000. ·

N.V; K.

Appeal allowed.

. \

\.~'-. . '

WORKMEN OF M/s HINDUSTAN LEVER LTD. & ORS

DESAI

NNAPPA REDDY

Industrial Disputes Act 1947

Delhi

(1973] 3 S.C.R. 624

[1964] 3 S.C.R. 560

HINDUSTAN LEVER LTD

M.K Rammnuithi

Jifendra Sharma

P. C

-G.B.. Pai

0.C. Mathui

D.Nc Mishra

S. sukumaran

Meera. Mathur

HINDUSTA~

Desai

DESAI

The Judgment of the Court was delivered hy

DESAI, J .. Tf solemn agreelt)ents proposed.

WORKMEN'V. HINDUSTAN LEVER

SUPREME COURT REl'OR\~ [1984] 2 s.c, R

A.K', Sircar

R.L. Gupta

A.K. Sfrcar

R.T,. Gupta

A.K .. Sircar

R.L, Gupta

July 16, )

.A.K. Sircar

R.L. Gupta

Roop

WORKMEN

HINDUSTAN LbVER LTD

January 24, 1957

Roop Chandra

Bombay

Hindustan Lever fyfozdoor Sabha

Industr.ial Tribunal at Bombay

December 22, 1964

C.J. Mahimkar

A.K. Basu

India

Industrial Disputes Act

Hindustan Lever Mazdoor Sabha, Bombay

Industrial Disputes Act

Industrial Disputes Act

Sec. 28

Sec. 28

Pai

Hans Raj

Hindustan Lever Mazdoor Sabha

Nov. 17, 1966

Industrial Tribunal, Delhi

Maharashtra

Ro-0p Chandra

High Court of Delhi

Supreme Court

Hans .Raj

Pal

Calcutta

Sec. 33A

Industrial Disputes Act

[1973] 3 SCR 624

Sec. 33A

Pai nexi

Roop Chandra

Tnd11strial Tribunal at

Delhi

DesAI

HINDUSTAN LEVER LTD" (DesAI, J,) '327

.

Industrial Disputes Act

Pai

Sec. 2(s)

s

0

A.K.

Basu

Sec. 10


~· ,

VINEET KUMAR

, ' V, , . ~

MANGAL SAIN WADHERE • January, s, !984 •

[A, P. SEN AND.R, B. MISRA: JJ.j

Uttar Pradesh Urban Buildings ·(Regulation of 1,, etting, Rent aud. Eviction.) , Act, l 972 Section 2---:-lnterpretation of-fVhethel the pretnises which was not ten

years did' on the date of the suit and wus exen1pted fro111 the operadon of t!te new

Rent Act can he goierned by it, if ten yeilrs e.\pircd during the pe11de11c_v of the litiga- lion so a.s: to._ attract the be1iefit of S.39'fo the tentiut-Caue of action ", w1bsequen1 e1•C111s"

and "a111end11rent" explained

 Section 2 of the Uttar Pradesh Urban Buildings '(Regulation of Letting, Rent and EViction) Act, 1972 exempts fro1n operation of the ;\ct various .kinds of buil

dings 'specified in sub section (1).

Sub section (2) of SectiOn 2 co:rite1nplritcs .that the new Re.n( Act \viii. nOt apply to a building during a prfod of ten years, fron1 thC ct'ate On \Vhich its cOnsLruction is completed.

Explanation I to ub Glause (2) e1uunerates the dates on which the.building shall be dcen1ed to.have been completed , viz., (1) the date of which the con1pletion thereof is reported to or othenvisc re

c"ord, ed by .the local authority having jurisdiction; (ii) in the case of building subject to assessment that date on which the first assessment thereof comes into. effect.

(iii) Where the said dates are different, the earlie.st of the said .dates and (iv) in the -absence of any report recorcl. or asscss1nent, the date on which it: is actually occuPied for the first time: •

:rhe respondent lftndlord filed a. sUit for eviction afid for arrears of rent and da1nages for use and" occupation p"e'ndent iite and future on the allegation that the appellant was inducted as a tenant of the premises i.1i sult on a monthly rent of . Rs. 250 on 7th .February 1972, ihat the building in suit was con.structed 'in 1971 under the Cooperative Housing Scheme of the State Bank of India for whih ihe bank-adVanced loan. that the building was assessed to house,. and \.vatcT tax on 1st of October 1971 and as such the bU:ilding was not covered by the u.P. Urban .

Buiidings (Regulatiori of Letting, Rent arid Eviction) Act, 1972 and that the appellri.nt . defau'lted in the payn1ent of rent despite notice dated 24th March 1977.

The appellant' resisted the si.iit and coritended. that the new Act applied as the buildin_g in question \Vas constructed in 1968, that he' had cleared rent upto 6th Apiil 77 and th<!-t as a n1.atter of fact a sun1 of Rs. •ODO spent by hi1n towards repairs etc was due fron1 the Respondent landlord. ,

The Third Additional District Judge negatived' the defence and decreed the suit for cfiction as also for recovery of arre<lrs of 1:ent and damags for use and , occupation. The Trial court found that not .only both the conditions stated in

'.Section, 2(2) but also the 1 S years' exe1nption applied to the instanJ case.

Th~ High Court in revision acCepted the finding of the trial judge that the

building in quesJion will be deen1ed to .have been co1npleted on 1st 0ctober 1971, the date of assessment of house tax and water tax and caiculating frOn1 that date the building .\vas not. ten years old on the date Of the suit an<l there'forc, the RC'1 rCnt- Act' had no' application to the building. in suit and the appellant cannot get any proteciori of the Rent Control Act.

The .High Court confirmed the fi_ndihgs of .the'trial court on aU-other point~ except the fihding -about the amOunts 'of rent .and the allowe_d the aI,>peal in part'.'t.

Allowing the appeal partialfy~ the Court • • ' HELD: 1 ~1. The_provision ofthe Uttar Pradesh Urban Building{R.egllla~ tion of Letting, Rent and EViction) Act_ 1972 will be attractd, .if the building coni- f>letes "ten years during the couse Or litigation. [340 0-Hl .

1 :2. 'In the instant" case, tli:e bui.ldirtg will be deemed to.have beeRcompleted on the date of assessment which "".as.1st OCto.ber, 1971. Reckoning frm this dit.te oLcompletion, the new Rent A.ct woul.d become applicable. Admittedly the bui1dng was not ten yeitrs old on the date of sUit. But during the pendeiicy of t.he litigation it co1npleted. ten years by 23rd February l 982 wheri-the Additibnal pistrict Jll; dge decide.d the case; entitling the appellant tO claim the benefit of Section .39 of the Act. [340 B'DJ .

' I ·~ . ' ....

D 0111 Prakash Gupta v. Dii Vijendra1; al Gupta, [1982] '2 S.C.C. 61; ditinguished ·

G.··

ff'.

and held in applicable- .

1 :3. In the present cae, the benefit' of the .ne~ Ret Act sh0u1d be given to the app~Jlii.nt who only .seeks the protettion .of the new Rent Act which became :(l; pplicable to the preiniscs in question during the .pendency of thC litigation~ ~

• [340 C-D) .

Section 20 of the New Rent Act .provides a bar to a suit for eVictiOn of a.-tenant eXcept on the specified _grounds as: provided in the section. Subsection (4) of s.20 stipuJateS that in any_ suit fof viCtion On the grourids mentioned in Cl.(a) tO subs.(2), viz. the arrears of ren't, if at the first hearing of th'e suit the tenant in default Pays all arrears of rnt tothe landlord or .deposits in court the erttire arhount of rent an~ damages for us~ and occupation of.the building due from him, such dam.agCs . for use and occupation being calculated at the san1e rate as renr.together with interest thereon at the rate of nine per cent per annum: and the .Jandloi'd's.cost of the suit . ..,.- . '

....

.. in respect thereof after deducting therefrom any amount ii.lready deposited bY the tenant under , sub-s. (l) of s.30, the court n1ay, in lieu Of passing a decr~'for eviction on that ground, pass on order relieving thetenarit agairist his liability for evictfon oll that 8:round. Sections 39 and 40 of thii: nev.' Rent Act.also indicate that the benefit Or the new Act' will be given to the tencint if the conditions contemplated in those sections are satisfied. Section 39 also indicates that the paities' are entitled to make necessary amendment in their pleadings and to adduce additional evid.c1tce .

w1'ere necessary. [342 D-0] ..

. ' 2:1. Normally the Court has to decide the case on the basis of cause of ac.t-io_n that accrued prior. to the date .of filing the suit and not on a rie\v causC of ac)-iop.

But it can a:nd in many case~ must, take into acebunt events and developh1clits

ubscquent to the institution of the proceeding provided the rles of fairness to both . sides are scropidouslr obeyed". [341 A; ~] · .· 11\· . '' " -, ........ ·. c .; •• .. ! ·~

~·.,

~·,' ~·

.. ..._

'..· I • -.,

VINEET KUMAk i'. MANGAL SAIN (Misra, J.) 335

Pasupati Ve~1kateswarlu. v. MOtor qnd General Traile; j~ [t97SJ 1 S.C.C. 110; applied. ·

' ' ' 2 :2. Normally amendn1ent_ is not allowed, i( it changes the cause df aCtion.

But it is well recognised that where the amendment does not constitute an addtion ' of a new cause of action, or raise a new case,. bt .amounts' to no tporc than adding to the. facts already on. record, the amendment would be' allowed even iiftet the ·

stutory period .. -'of iimitation. [341 GJ . . , ··

A.K. Gupta & Sons v Da1nodar vai!ey. Co1pora~1'on, '[1966] 1.S.C.R. 796;; referred 'to.

C1v1t APPELLATE. JURISJJICTION: Civil Appeal No .. 10144 of 1983.

Appeal by Special leave froin the Judgment and Order dated the 20th July, 1983 of the Allahabad High Court in Civil Revision No. 237 of 1983. ·

• G.L. Sanghi, K.K. Jain, A.b. Sanger and' Pramod Dayal for the Appellant..·

'.!.D. Jain, Mrs.' Kawaljit Kochar and S.J{. Yadav for the Resp0ndent. ..

The Judgment of the Court was delivered b.Y

., ' MISl\A, J. The present appeal by special ·!eave.is.directed against the jugnient of the High' C'ourt of Aliaha'!iad dated 20th July, 1983 disposing of a revisin under s.25 of the Small Causes Curt Act arising out of suit for eviction of the appellant from the premises in suit. ' - · ·

The respondent filed a suit for viction and for arrears of rent and damages for use and occupation pendente lite and future.on.the allegation that the appellant was inducted as a tenant of the premises in suit on a monthly rent of Rs. 250 on. 7fh Fbruary, 1972, that the building .in suit was constructed in 1971 under the co-operative housing scheme of the State Bank of India for whkh the Bank advanced . Joan. T.he building in suit was assessed to house'artd water tax 'on !st October, !,971 and as such the buildin, g was ilot covered. by the U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 (hereinafter referred to as the New Rent Act for short), :and that the defendant defaulted in the payment of rent despite notice . dated 24th March, 1977. The Respondent therefore terminated the. ·

tenancy of the appellant.

The clai111 was resisted by the appellant on the ground that the building in question was constructed in J968 and that it wa.s covered by the new Rent Act. His•flirther stand was th.at rent. had been cleared upto 6th April, 1977 and thre was no default in ihe payment of rent.

He also challenged the service and the validity of the notice . termiilati11g his tenancy. Tlie appellani also claimed; he adjustment

of Rs. 1000 spent by him towards the repairs of the premises. By a later amend.men! it was further pladed that the plaint having not been amended so as to bring the uit under the provisions of1he new Rent Act the suit was barrnd by s.20 of the Act.

The. Third Additional District Judge negatived the defence and decreed the suit for eviction as also foT recovery of arrears of rent and damages for use and oceur.ation. Ti1e learned Judie held that thebuilding was exempt from the o-peration of the nrw Re.nt Act on two grounds. The first ground was based upon sub-s.(2) of s.2 which provides th, it nothing in this Act shall apply to. a building durii1g the period. of ten. years. from the date on which its construction is completed. The second ground. wJs based upon the proviso to sub-s.

(2) .of s.2,' which contemplates that where a huildii1g has been constructed substantially out of funds by way of loan or advance from the. State Government, or. Life Insurance Corporation of India or a bank or a co-operative society,· and the period or repayment' of such loan or advance.exceeds the aforesaid period of ten years, then reference in this sub-section to a period of ten years shall be deemed to be a reference to a period of fifteen years or the period ending .with the date of actual repayment of . each loan or advance,. including° interest, whichever is shorter. As the last instalment of the loan was paid in Ma.rch 1981. instead of ten years the building should be fifteen years old to attract the provisions bf the new Rent Act. He also held th'!t the appeUant !md failed to prove that he spent Rs. 1000 towards repairs of the premises. The learned Judge overruled the other pleas of the appellant and decreed .the suit as prayed for.

The appellant feeling aggrieved preferred a revision in the Hig

0 h Court. It was contended for the appellant that th.e building in question had been constructed by a co-operative society and the landlord had purchased it from the society and, therefore, the view taken by the learned Judge that the building was constructed substantial!y out of funds obtained rr; m. the sources mentioned in the proviso to s.2(2) of. the new Rent Act was manifestly erro11eous. The High Court, however, did not express any concluded opinion . and rest contended . by observing that it was not 1iecessary to examine the suqmission

...

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VJNEET KUMAR v. MAN(lALSAJN (Misra. J.)' 337

in any detail or to express any cllncluded opinion abo.ut it for disposal of the present revision. The High Court, however, accepting the finding or' the learned Additional Distric\ Judge that. the. building in question wiU be dec; ncd to have been completed on I st October, 1971, the date of assessment of house tax and water tax held that the building was not ten years old on. the date.of the suit and. therefore, the new Rent Act had n.o applica\ion to the building iii suit and the appellant cannot get any protection of tlle new Rent Act.

The High Co.urt confirmed the findings of the trial Court on all other points except the finding about the arrears of rent. In the 9pinion of the High Court admittedly a sum of Rs. 1000had been paid by the appellant to the landlord through a crossed cheque dated !6th August, 1976 which was received by the landlord on .15th September, 1976.. 13ut when the plaintiff was in the witness box payment by cheque was not specifically plit lo him and it has noc been esta~

blished as to for which period the payment by cheque was made.

The counter-foil of the cheque book also didnot specify the period for which this payment by cheque was made. The High Court, however, did not endorse the fir1ding of the Additional District Judge that the payment through the cheque may have been made by the appellant towards rent for some period. prior to April 7; 1976 and held it to be manifestly erroneous and •without any . basis.

In the result High Court allowed the 'appeal in part and set aside.the decree of the trial court relating to the recovery of Rs. '3158-30 as arrears of rent for the period between.AJ?ril 7, 1976 and April 25, 1977 and remanded the case to _the trial court for redetern1ination of the amount of rent in arrears payable by the appellant after affording opportunity to 'the plaintiff to explain the .payment of the amount of Rs. 1000- .through cl1eque dated A.ugust 16, 1976. The-trial court was further directed to afford opporiuuity to the parties to adduce further evidence in regard to this aspect. ·

. E.

The appellant has now approached this Court with an pplication G for special leave to appeal.

On the date of summary hearing of the applicati6i1 under Art .. 136 of the Constitution.we granted special leave and with the consent of the coup.sel for t\te parties ., ye finally :heard the appeal to obviate . further delay. • H

'. . .

338 SUPREME couR.t REPORTS

. [1984] 2 S.C.R.

'• . The only point argued before this Court is. whether the. premises which was not ten years' old on the date of the suit and was exempted from the oper.ation of the new .Rent AC!, ca'n be governed by it if ten years. expired during the pendency of the litigation. In order -to appreciate the cote'htion of the parties it will be relevent at this stage_ to refer to s. 2 of the new rent Act.

It pertinently reads : • ,

"2. Exemption fr'Om opertion of Act.-(1) nothing in this.

Act shall apply to--

(a) . . . . ; .. ' ....

(b) . . . . . . . .....

(c) .. . . . . . . . . . .

(d) ............

(e) . . . . . . . . . . . . . .

(f) ·any building built and held by' a society registered under the Societies registration Ac( 1860 (Act No. LVIIT of

1860) or by a co-operative society, company orfi.rm and intended solely for its own occupation or for the occupation of any of its officers or servants, whether on rent ot free. of rent, or as a guest house, by whatever. name

cad, for the occupation of persons having dealings with it in the ordinary course of business.· ·

(2) Except as provided in sub-sectin (5) of Section. 12, sub-section.(IA-) of section 21; sub'section (2) of Section 24, Sections 2.4-A, 24-B, :>4-C or su_b-section (3) of Section 29,

n<; ithing in this Act .shall apply to a building during a period of ten years froin the date .on which its construction is completed : ·

Provided that where any· building is constructed substantially out of funds obtained by way of 10an or advance froin the Stae Government or the Life Insurance Corporation oflndia or a bank or a co-operative society or the Uttar Pradesh Avas Evam Vika:s Parishad, and 'the , period of repayment of such _loan or advance exceeds the aforesaid period .. of ten years then the referenc; e in this sub-section to the period often years shan be deemed to be a reference to the period of fifteen years or the -period ending with the date of

actuarepayment of each loan or advance(including interest),. whichever. is shorter. ·

...

...

VINEET .. KUMAR v . . MANGAL SAIN (Misra, J.) . 339

Explanation J.-For the purposes of this sub-section,-

(a) the construction of a building shall be deemec! to have been completed on the date. on which the completion thereof is reported to or otherwise recorded by the local authority having jurisdiction and in, the case ofa buiJ-· . ding subject to assessment; the date on which th.e first

assessrnent thereof .comes into effect and where the said dates are different, the earliest f the said dates, and in the ab's.ence of any such 'report, record _or assessment, the date on. which it. is actually occupied (not . including occupation merely for the purposes of supervising the. construction or guarding the building under c constructtion) for th~ first time :

Provided that there may be different dates of completio.n of construction .. in respec.t of different parts of a building which are .either designed as separate units or are occupied

~ . . ·. separately by the landlord and one or more tenants or by. different tenants ;

Explanation IL- .................................... .

Explanation Jil.-A building shall be qeemeci to be con. structed substantiaJly out of funds obta.ined from sources mentioned in the p1:oviso, if the funds obtain.ed from one or more of such .sources account for more than one-half of the cost of construction."

~ Section 2 of tlie Act provides various kinds of buildings. to which the new Rent Act has no application. Sub-sectio'n (2) of s.2 contemplates tha.fthe new Rent Act.will not apply to a building during. a period of ten years from the date oti. which its construciion is com- . pleted. Explanation I to sub-s. (2) enumerate~ the dates o~ which the building shall be deemed to have been completed :-

(i) The date on which the completion thereof. is reported to or otherwise recorded by' the local authority having G

(ii)

. jurisdiction. . .

In case of °building subject to assessment, that date on which. the first assessment there~.f eornes into effect.

(iii) Where ihe said date~ are different, the earliest of the said. .

H . dates.

.. •

. 340

(iv)

SUPRfiME COURT REPORTS

[I 984] 2 S.C.R.

Tn the absence of any such report, record or asse.ssment the date on which it is actually occupied for the first .. time:

Tn the case in hand thebuilding was subject to assessment therefore it will be deemed.to have been completed on the.date of assessment

which was lst October, 1971.· The Additional District Judge has found that the building will be deemed'to have been completed. on the date of assessment of the house \vhich ha....- been accepted by the High Court. ' •

The moment a building becomes ten years old .. to be reckoned from the date of completion. the. new Rent Act wot1ld become applicable. Admittedly the building was not. ten years old on the date of suit. But during th2. pendenc:y of the litigation it complet'd ten years .. Then the question arises whether the new Rent Act will be attracted i_f the building completes ten years during the course of litigation. The Additional District Judge decided tlic case .on 23rd February 1982: By that time the building in question had completed ten years.

. The trial court. however, relying on a recent decision of this Court -in Om Prakash Gupta. v .. Dig Vijandrapa!. Gupta"' refused to apply the new Rent Act to ihe building in question.

Tn that case a contention was raised that the building will be deemed to have been constructed on the date of occupation on 16th June, 1967 and not on the date . of the first assessment and if that be so, the appellant would be entitled to the bei1efit of s.39 of the Act on the. date when the revision came

to b~ decided by the High Cofot on 23rd March, 1978. This cot1rt, 1 however, held that it is the date of the first assessme11t which will be deemed to be the date of completion of the c6nstruction in the circumstances of the case and in that view of the matter tile buildirtg had not becom' more than ten years old on the date when the revision '1 came to be decided by the. High Court and, therefore, there was no question of giving the benefit of s.3? of the Act to the appellant .It

was not al'.all necessary in .that case. to deal -WtJy the question \Vhe1her _the appellant would be entitled to the benefit of s.39 as the building

had not beco1ne ten years old on .'the date when the reviSion petition was heard.

Jn the insta1lt case, however, the bniJding had become more thah _ten yea)"s old durii1g the pendency of the l_igitation_ and, t!1erefo_re, th~ questio1~ assumes importance 111 the present case,

. (I) [1982t 2 S.C.C. 61.

VINEET KUMAR v. MANGAL SAIN (Misra, J.) 341 ' .

It may be argued that the Court had to decide the case on the A basis of cause of actwn that accrued prior to the date .of filing .the suit and not on a new. cause of action, bui this question need nc5t detain us as it is coveted by decision of this Cour! in Pasupati

Venkates1ar/11 v. Motor and General T'rades01 Dealing with a similar question this Court observed :

 "It is basic to our processual jurisprudence that the right to relief .must be judged to exist as on the date a suitor ins titutes the legal proceeding. Equally clear is the principle that procedure is th,. ha.ndmaid and not the mistress of the judicial process. ff .a fact, arising after the /is has come to

eourt and has a fundamental impact on the right to relief or the manner of moulding it, if brought diligently to the J10tice of the tribunal, it cannot blink at it or be blind to events which stultify or render 'inept the decretal remedy. Equity justifies bending the rules of procedure, where no specific provision or fairplay is not violated, with aview to pomote substirntial justice'-; subject, of course to the absence of.other disentitling . factors or just Circun1stances. Nor can 1.ve. conteniplate any 'limitation .ori this power to take note of updated facts to confine it to the friaI Court.. Tf the litigation pends, the power exists, absent . other special cirCu1nstances epeliing r1JSort to that course in law or ju_stice. Rulings on this point are 1egiC?n, even as situations for applications of this equitable ·

rule are myriad. We affirm the' propositi.on that for maki1rnthc, right or remedy claimed ".by the party just and meaningful as also legally and. factually in accord with the current realities. the Court can, and in many cases must. take cautious cong"' n.i.sancc of events and developments subseq,, uent to the institu-. tion of the proceeding provided the rles of fairness to both

sids are scrupulously o.beyd. "·

Normally amendment is not allo;,.ed if it changes the cause o( action. But it is well reco.gnised that where th.e aine~1dment .does not COllStitute an addition of a llC\V cause of action, or raise a new , case; but amounts to no more than adding to the facts already on the record the amendment, would be allowed even after the statutory period of lin1itation.

Th~ questiqn in the present case is .whether by seeking the benefit of s,39 or the new Aci there . is a Change in the cause of action. 111 A.K. Gupta & Sons. v." Da111odar

0). [1975] l s.c.c. 770.

E •

Valley C; rporiion 10 this Court dealing with the observed as foilows : catis.e of action

"The expression "cause of action" il) the present context does llOt mean" every fae\ which it is material to be proved to entitle the plaintiff to .succeed". as was said in Cooks v .

. Gi/l12 ' in a differentcontext,. for if it were so. no material fact could evei: be amended or added and, of course, no one would want to. cha.nge or add an immaterial allegation by amendment. That 'expression for the. present purpose only means, a new clai, m made on a new liasi~ co.nslituteci by new . facts. Such a .view was taken in Rabinson v. Unicos Property Corporation LtJ.<3l and it seems to us to be the only possible view t~ take. Any oth~.r view would make. the rule futile."

The appellant' in th~ present case only seeks the protedion of the new Rent .Act whith becanie applicable to the premises in question during .the pendency of the litigation:· We. see no reason why the benefit of the new Rent Act be not given to the a ppelJant. Section 20 . of the new 'Rent Act provides a bar to a suit for .eviction of'a tenant except on the specified grounds as provided in. the sect.ion. Sub section (4) of s.20 stipulates that in a; ny suit for eviction on the grounds .. mep'tioned in cl, (a) to subS. {2),•.viz. the arrears of n; nt, if af the first hearing of the suit the tenant in default pays all arrears of rent .to the landlord or deposits. in court the entire. an1ount of rent and damages for use and occupation oft.he building due from him, such domages for use and occupation being calculated at th.e same rate as rent together with interst' thereon at the rate of nine per cent per 'tnnum and the land.lord's. cost of the suit in rcspeet thereof after . deducting there froin any amount al<eady deposited by the tenant under subs .. (I) of s.30, the court' may, in lieu of passing a decree for eviction on that ground, pass ail order relieving the tenant against his Fab'iity for eviction on. that' ground .. Sections 39 and 40.of the new rent Act. also indicate that the.-bcnefit of the new Act will be given to. the. tenant' if the conditions contemplated in. those sections are satisfied. Section 39 also indicates that 'the parties are entitled to make necessary arriendment in thei:r pleadings and to adduce addi~ . tional evidence where necessary.' . ' . .

For the reasons given above the appeal must' succeed, It is accordingly allowed in par\ and_ the judgment and 'decree of the High ..

(1) [1966] I S.C.R. 796. ,

(2) [1873] LR B C.P. 107, 117

(3) [1962] 2. All. E.R. 24.

VINEBt KUMAR v. MANGAL SAIN (Misra, J.) 343

Court is set aside in so far as it relates io eviction but ihe judgment A of the High Court setting aside the decree for arrears of rent and remanding the case to the trial court remains intact, and the case is sent back to th.e III Additional District Judge who will apply the new Rent Act and give the protection of the new Act to .the appellant and wi11 give him an opportunity to deposit the dues contemplated by s.39 of the new rent Act after firsi determining whether any amoµnt

• B is due from the appellant towards rent as directed by the High Court. The costs here will abide the result.

S. R.

Appeal alfowed in part.

VINEET KUMAR

MANGAL SAIN WADHERE

P. SEN

B. MISRA

Section 2

Section 2

Section 20

Sections 39 and 40

Section 39

VINEET KUMAk

MANGAL SAIN

G.L. Sanghi

K.K. Jain

A.b. Sanger

Pramod Dayal

Kawaljit Kochar

S.J{. Yadav

State Bank of India

6th April, 1977

Life Insurance Corporation of India

April 7; 1976

s. 2

section 21

Section 24

Sections 2

Section 29

Uttar Pradesh Avas Evam Vika

Section 2

23rd February 1982

23rd March, 1978

Section 20

Sections 39 and 40

Section 39