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CASE NO.: Appeal (civil)  2201 of 2007

PETITIONER: Bikash Bhushan Ghosh & Ors

RESPONDENT: M/s. Novartis India Limited & Anr

DATE OF JUDGMENT: 27/04/2007

BENCH: S.B. Sinha & Markandey Katju

JUDGMENT: J U D G M E N T CIVIL APPEAL NO.       2201           OF  2007 [Arising out of S.L.P. (C) No.  10438 of 2006]

S.B. SINHA, J.

       Leave granted

       Appellants were workmen of the Respondent company.   They were  transferred to Siwan (Bihar), Farrukhabad (U.P.) and Karimganj (Assam) by  letters of transfer dated 3.10.1994.   According to them, the said orders of  transfer were violative of the  Memorandum of Undertaking dated  18.12.1989 and were issued with an ill-motive of victimizing them for their  trade union activities.   As despite requests, the purported orders of transfer  were not revoked, they sought intervention of the Labour Commissioner,  West Bengal by a letter dated 1.3.1995.  Allegedly, a conciliation proceeding  was initiated, but during the pendency thereof, their services were  terminated by Respondent Company by letters dated 15.4.1995.    Contending that the said orders of termination were unauthorized, arbitrary  and illegal, as no domestic enquiry was held prior thereto, they raised an  industrial dispute.    

       The State of West Bengal, in exercise of its jurisdiction under Section  10(1)(c)  read with Section 2A of the Industrial Disputes Act, 1947 referred  the following dispute for its adjudication to the Third Industrial Tribunal,  West Bengal.

"Whether the termination of service of (1) Shri Bikash  Bhusan Ghosh (2) Shri Pradip Kumar Mukherjee and (3)  Shri Shyama Charan Mallick is justified?   What relief, if  any, are they entitled to?"

                Before the said Tribunal, inter-alia a contention was raised that the  State of West Bengal had no jurisdiction to make the reference. Parties to the  reference, however, adduced their respective evidences on merit of the  matter.

       The question in regard to maintainability of the said reference was  determined by the Tribunal in terms of an order dated 30.3.1999 holding the  same to be maintainable.

       By reason of an Award dated 10.10.2002, the Tribunal opined that the  orders of termination passed against the appellants were illegal and they  were directed to be re-instated in service with back wages.    Aggrieved by  and dissatisfied with the said order, Respondent filed a Writ Petition before

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the Calcutta High Court which was marked as W.P. No. 2495 of 2002.    By  a Judgment and Order dated 11.7.2003, the said Writ Petition was dismissed.    On an intra-court appeal filed by the Respondents under clause 15 of the  Letters Patent of the Calcutta High Court, marked as G.A. No. 3157;   a  Division Bench of the High Court, however, without going into the merit of  the matter held that the State of West Bengal, being not the appropriate  Government in respect of the dispute raised by the appellants, had no  jurisdiction to make the reference and on that premise allowed the said  appeal and consequently set aside the Award made by the Tribunal as also  the judgment and order of the learned Single Judge.

       Mr. Pradip Ghosh, learned senior counsel appearing on behalf of the  appellant, in support of this appeal,  inter-alia would submit that the Division  Bench of the High Court committed a manifest error in passing the  impugned judgment in so far as it proceeded on the basis that no document  was brought on records to show that the appellants had raised a dispute in  regard to the orders of transfer passed against them which in fact had been  done and the same was pending before the conciliation officer.    Our  attention in this connection has been drawn to a letter dated 23.3.1995 issued  by Joint Labour Commissioner, West Bengal to the Personnel Manager of  M/s. Sandoz (I) Ltd., pre-decessor of the respondent Company which is in  the following terms;

"With reference to the above subject, you are requested to  kindly make it convenient to see the undersigned in this  office on 12.04.1995 at 3.00 p.m. for a discussion with the  concerned representatives."

       The learned counsel would contend that in the said conciliation  proceeding, the respondents did not participate,  which was initiated on the  basis of a letter dated 1.3.1995 addressed to the Labour Commissioner,  Government of West Bengal by the appellants.  It was furthermore  submitted that the Division Bench of the High Court, in arriving at the  aforementioned decision, failed to consider the decision of this Court in  Workmen of Shri Rangavillas Motors (P) Ltd. & Anr. v. Shri Rangavilas  Motors (P) Ltd. and Ors. ([1967] 2 S.C.R 528) in its proper perspective.

       Mr.  Chander Uday Singh, learned senior counsel appearing on behalf  of the respondent, on the other hand, would contend that no conciliation  proceeding was pending in regard to the order of transfer as alleged or at all.    It was submitted that in fact, the appellants categorically stated before the  Industrial Tribunal that they would not question the orders of transfer, but  only would question the orders of termination.    Having regard to the fact  that the orders of transfer dated 3.10.1994 were given effect to by relieving  the workmen of the charges they had been holding at Calcutta, they would  be deemed to have been attached to their transferred places and as they  failed to join, their services were lawfully terminated.

       As the Division Bench of the High Court did not enter into the merit  of the matter, we do not intend to deal with the questions as to whether any  conciliation proceedings was, in relation to the orders of transfer passed as  against the appellants, in fact pending before the Deputy Labour  Commissioner, West Bengal or not.  Appellants, however, in our opinion  could not have questioned the orders of transfer in view of the nature of the  industrial dispute referred to by the State of West Bengal for determination  thereof by the III Industrial Tribunal, West Bengal.  The orders of transfer  were, thus, not in issue before the learned Tribunal.

       It is, however, not disputed that the orders of termination were served  upon the appellant at Calcutta.  The orders of termination as against them,  were passed for not obeying the orders of transfer.   The transfer of the  appellants, therefore, had some nexus with the order of their termination

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from services.  It is, therefore, not correct to contend that the State of West  Bengal was not the appropriate government.   

       In Shri Rangavillas Motors (P) Ltd. (supra), the concerned workman  was engaged as a foreman. He was transferred from Bangalore to  Krishnagiri.  He questioned the validity of the said order of transfer.  The  company initiated disciplinary proceeding against him and he was removed  from services.  State of Mysore made a reference.  The validity of the said  reference was questioned.  This Court opined;

"....This takes us to the other points.  Mr. O.P.  Malhotra strongly urges that the State Government of  Mysore was not the appropriate Government to make  the reference.  He says that although the dispute  started at Bangalore, the resolution sponsoring this  dispute was passed in Krishnagiri, and, that the proper  test to be applied in the case of individual disputes is  where the dispute has been sponsored.   It seems to us  that on the facts of this case it is clear that there was a  separate establishment at Bangalore and Mahalingam  was working there.  There were a number of other  workmen working in this place.  The order of transfer,  it is true, was made in Krishnagiri at the head office,  but the order was to operate on a workman working in  Bangalore.   In our view the High Court was right in  holding that the proper question to raise is : where did  the dispute arise ?   Ordinarily, if there is a separate  establishment and the workman is working in that  establishment, the dispute  would arise at that place.    As the High Court observed, there should clearly be  some nexus between the dispute and the territory of  the State and not necessarily between the territory of  the State and the industry concerning which the  dispute arose......"

       Referring to a decision of this Court in  Indian Cable Co. Ltd. v. Its  Workmen [1962 Supp. 3 SCR 589], it was held that the subject matter of the  dispute, substantially arose within the jurisdiction of the Mysore  Government.

       We may notice that in Paritosh Kumar Pal  v. State of Bihar and  others [1984 LAB. I.C. 1254], a full Bench of the Patna High Court held;

"13.   Now an incisive analysis of the aforesaid authoritative  enunciation of law would indicate that three clearcut principles or  tests for determining jurisdiction emerge, therefrom.   For clarity  these may be first separately enumerated as under:

(i)     Where does the order of the termination of services  operate?

(ii)    Is there some nexus between the industrial dispute arising  from termination of the services of the workman and the  territory of the State?

(iii)   That the well-known test of jurisdiction of a civil Court  including the residence of the parties and the subject  matter of the dispute substantially arising therein would be  applicable."

       Referring to the provisions of the Code of Civil Procedure, it was held  that the situs of the employment of the workman would be a relevant factor  for determining the jurisdiction of the court concerned.   

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       The High Court, however, has relied upon a decision of the said Court  in Indian Express Newspaper (Bombay) Pvt. Ltd. v. State of West Bengal  [2005-II-LLJ 333], wherein it was held;

"40.  The basis of the findings of the learned single  Judge in the first writ application and that of the  Tribunal thereafter on remand and the subsequent  findings of the learned single Judge on the second  writ application is that when Mr. Sampat’s services  were terminated he was stationed in the Calcutta  office of the Newspaper company.  While Mr.  Sampat was no doubt served with the order of  termination of his service in Calcutta, we are  constrained to say that the same would not vest the  State Government in West Bengal with authority  under Section 2(a)(ii) of the Industrial Disputes Act  to make a reference under Section 10 of the said  Act.   Firstly, at the said point of time the Calcutta  office of the Newspaper company no longer had  control over Mr. Sampat whose services had been  transferred to Bombay and it was the Bombay office  which had control over his services.  That Mr.  Sampat was in Calcutta and was served with the  notice of the order of termination of his service in  Calcutta is only because of the fact that he had  chosen not to comply with the order transfer dated  August 1, 1988, by which he had been transferred to  Bombay with effect from August 5, 1988, and had  not also challenged the same before any forum.   Mr.  Sampat may have made representations to the  Bombay office with regard to such order of transfer,  but the same was never the subject-matter of any  judicial or quasi-judicial proceeding and it is only  after he was served with the order of termination of  his service that Mr. Sampat raised a dispute in  respect thereof.  In our view, notwithstanding the  fact that Mr. Sampat had been served with such  order in Calcutta, his situs of employment being  Bombay, he ought to have raised an industrial  dispute relating to the termination of his services in  Bombay and the Government of Maharashtra would  have been the appropriate Government to make a  reference under Section 10 of the aforesaid Act in  respect of such dispute."

       With respect to the Division Bench, we do not think that it has posed  unto itself a correct question of law.  It is not in dispute that the appellants  did not join their duties at the transferred places.  According to them, as the  orders of transfer were illegal, their services were terminated for not  complying therewith.  The assertion of the respondent that the appellant  were relieved from job was unilateral.  If the orders of transfer were to be set  aside, they would be deemed to be continuing to be posted in Calcutta.  The  legality of the orders of transfer, thus, had a direct nexus with the orders of  termination.   What would constitute cause of action, has recently been  considered by this Court in Om Prakash Srivastava  v. Union of India and  Another [(2006) 6 SCC 207] wherein it was held;

"12. The expression "cause of action" has acquired a  judicially settled meaning.  In the restricted sense  "cause of action" means the circumstances forming the  infraction of the right or the immediate occasion for the  reaction.   In the wider sense, it means the necessary  conditions for the maintenance of the suit, including not

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only the infraction of the right, but also the infraction  coupled with he right itself.   Compendiously, as noted  above, the expression means very fact, which it would  be necessary for the plaintiff to prove, if traversed, in  order to support his right to the judgment of the court.    Every fact, which is necessary to be proved, as  distinguished from every piece of evidence, which is  necessary to prove each fact, comprises in "cause of  action".   (See Rajasthan High Court Advocates’ Assn.  v. Union of India [(2001) 2 SCC 294] )

13.  The expression "cause of action" has sometimes  been employed to convey the restricted idea of facts or  circumstances which constitute either the infringement  or the basis of a right and no more.  In a wider and  more comprehensive sense, it has been used to denote  the whole bundle of material facts, which a plaintiff  must prove in order to succeed.   These are all those  essential facts without the proof of which the plaintiff  must fail in his suit ( See Gurdit Singh v. Munsha Singh  [(1977) 1 SCC 791] )

14.   The expression "cause of action" is generally  understood to mean a situation or state of facts that  entitles a party to maintain an action in a court or a  tribunal; a group of operative facts giving rise to one or  more bases of suing; a factual situation that entitles one  person to obtain a remedy in court from another person  (see Black’s Law Dictionary).  In Stroud’s Judicial  Dictionary a "cause of action" is stated to be the entire  set of facts that gives rise to an enforceable claim; the  phrase comprises every fact, which if traversed, the  plaintiff must prove in order to obtain judgment.  In  Words and Phrases (4th Edn.) the meaning attributed to  the phrase "cause of action" in common legal parlance  is existence of those facts, which give a party a right to  judicial interference on his behalf.  (See Navinchandra  N. Majithia v. State of Maharashtra [(2000) 7 SCC 640  : 2001 SCC (Cri) 215]"

       Judged in that context also, a part of cause of  action arose in Calcutta  in respect whereof, the State of West Bengal was the appropriate  government.   It may be that in a given case, two States may have the  requisite jurisdiction in terms of clause (c) of sub-section (1) of Section 10  of the Industrial Disputes Act.  Assuming that other State Governments had  also jurisdiction, it would not mean that although a part of cause of action  arose within the territory of the State of West Bengal, it would have no  jurisdiction to make the reference.   

       There is another aspect of the matter which cannot be lost sight off.  If  the provisions contained in the Code of Civil Procedure are given effect to,  even if the Third Industrial Tribunal, West Bengal had no jurisdiction, in  view of the provisions contained in Section 21 of the Code of Civil  Procedure, unless respondent suffered any prejudice, they could not have  questioned the jurisdiction of the Court.  In Kiran Singh and others v.  Chaman Paswan and others   [A.I.R. 1954 SC 340], this Court held;  

(6) ... If the question now under consideration fell to  be determined only on the application of general  principles governing the matter, there can be no  doubt that the District Court of Monghyr was  ’coram non judice’ and that its judgment and decree  would be nullities.   The question is what is the  effect of section 11 of the Suits Valuation Act on

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this position.

(7) Section 11 enacts that notwithstanding anything  in section 578 of the Code of Civil Procedure an  objection that a Court which had no jurisdiction over  a suit or appeal had exercised it by reason of over- valuation or under-valuation, should not be  entertained by an appellate Court, except as  provided in the section.  Then follow provisions as  to when the objections could be entertained, and  how they are to be dealt with.   The drafting of the  section has come in \026 and deservedly \026 for  considerable criticism; but amidst much that is  obscure and confused, there is one principle which  stands out clear and conspicuous.  It is that a decree  passed by a Court, which would have had no  jurisdiction to hear a suit or appeal but for over- valuation or under-valuation, is not to be treated as,  what it would be but for the section, null and void,  and that an objection to jurisdiction based on over- valuation or under-valuation, should be dealt with  under that section and not otherwise.

The reference to section 578, now section 99, C.P.C.  in the opening words of the section is significant.   That section, while providing that no decree shall be  reversed or varied in appeal on account of the  defects mentioned therein when they do not affect  the merits of the case, excepts from its operation  defects of jurisdiction.  Section 99 therefore gives no  protection to decrees passed on merits, when the  Courts which passed them lacked jurisdiction as a  result of over-valuation or under-valuation.  It is  with a view to avoid this result that section 11 was  enacted.   It provides that objections to the  jurisdiction of a Court based on over-valuation or  under-valuation shall not be entertained by an  appellate Court except in the manner and to the  extent mentioned in the section.   It is a self- contained provision complete in itself, and no  objection to jurisdiction based on over-valuation or  under-valuation can be raised otherwise than in  accordance with it.

       With reference to objections relating to  territorial jurisdiction, section 21 of the Civil  Procedure Code enacts that no objection to the place  of suing should be allowed by an appellate or  revisional Court, unless there was a consequent  failure of justice.  It is the same principle that has  been adopted in section 11 of the Suits Valuation  Act with reference to pecuniary jurisdiction.  The  policy underlying sections 21 and 99, C.P.C. and  section 11 of the Suits Valuation Act is the same,  namely, that when a case had been tried by a Court  on the merits and judgment rendered, it should not  be liable to be reversed purely on technical grounds,  unless it had resulted in failure of justice, and the  policy of the legislature has been to treat objections  to jurisdiction both territorial and pecuniary as  technical and not open to consideration by an  appellate Court, unless there has been a prejudice on  the merits.  The contention of the appellants,  therefore, that the decree and judgment of the  District Court, Monghyr, should be treated as a

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nullity cannot be sustained under section 11 of the  Suits Valuation Act."

                {See also MD. Army Welfare Housing Organisation v. Sumangal  Services (P) Ltd [(2004) 9 SCC 619] }

       Yet again appellants being workmen, their services were protected in  terms of the Industrial Disputes Act, 1947.   If their services were protected,  an order of termination was required to be communicated.  Communication  of an order of termination itself may give rise to a cause of action.  An order  of termination takes effect from the date of communication of the said order.    In State of Punjab v. Amar Singh Harika [ A.I.R. 1966 SC 1313], this Court  held;

"(11) ... It is plain that the mere passing of an order of  dismissal would not be effective unless it is published  and communicated to the officer concerned.    If the  appointing authority passed an order of dismissal, but  does not communicate it to the officer concerned,  theoretically it is possible that unlike in the case of a  judicial order pronounced in Court, the authority may  change its mind and decide to modify its order.    It may  be that in some cases, the authority may feel that the  ends of justice would be met by demoting the officer  concerned rather than dismissing him.  An order of  dismissal passed by the appropriate authority and kept  with itself, cannot be said to take effect unless the  officer concerned knows about the said order and it is  otherwise communicated to all the parties concerned.    If it is held that the mere passing of the order of  dismissal has the effect of terminating the services of  the officer concerned, various complications may arise.    If before receiving the order of dismissal, the officer  has exercised his power and jurisdiction to take  decisions or do acts within his authority and power,  would those acts and decisions be rendered invalid after  it is known that an order of dismissal had already been  passed against him?   Would the officer concerned be  entitled to his salary for the period between the date  when the order was passed and the date when it was  communicated to him?   These and other complications  would inevitably arise if it is held that the order of  dismissal takes effect as soon as it is passed, though it  may be communicated to the officer concerned several  days thereafter.   It is true that in the present case, the  respondent had been suspended during the material  period; but that does not change the position that if the  officer concerned is not suspended during the period of  enquiry, complications of the kind already indicated  would definitely arise.   We are therefore, reluctant to  hold that an order of dismissal passed by an appropriate  authority and kept on its file without communicating it  to the officer concerned or otherwise publishing it will  take effect as from the date on which the order is  actually written out by the said authority; such an order  can only be effective after it is communicated to the  officer concerned or is otherwise published.   When a  public officer is removed from service, his successor  would have to take charge of the said office; and except  in cases where the officer concerned has already been  suspended, difficulties would arise if it is held that an  officer who is actually working and holding charge of  his office, can be said to be effectively removed from  his office by the mere passing of an order by the

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appropriate authority.  In our opinion, therefore, the  High Court was plainly right in holding that the order of  dismissal passed against the respondent on the 3rd June  1949 could not be said to have taken effect until the  respondent came to know about it on the 28th May  1951."

       {See also Ranjit Singh  v. Union of India [(2006) 4 SCC 153] }

       For the reasons aforementioned, the impugned judgment of the  Division Bench of the High Court cannot be sustained.  It is set aside  accordingly.  The matter is remitted back to the High Court for consideration  of the Letters Patent Appeal on merit.  Appeal is allowed.  However, in the  facts and circumstances of the case, there shall be no order as to costs.