REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 328 OF 2005

RAJASTHAN STATE ROAD TRANSPORT CORPORATION & ANR.          …. APPELLANTS

VERSUS

BAL MUKUND BAIRWA                …. RESPONDENT  

WITH

[C.A. No. 318/2005, C.A. Nos. 316-317/2005, C.A. No. 324/2005, C.A. No. 1875/2008, C.A. No. 3002/2008, C.A. No. 954  2009 (@ SLP (C) No. 22300/2007, C.A. No. 1687/2007 and C.A. No. 6892/2003]

J U D G M E N T  

S.B. SINHA, J.

1. Leave granted in Special Leave Petition (Civil) No. 22300 of 2007.

2. Reference to this Bench has been made by a Division Bench of this

Court by an order dated 22.11.2007 for resolution of a purported conflict

in  two  three-Judge’  Bench  judgments  of  this  Court  in  the  cases  of

Rajasthan State Road Transport corporation & Anr.  vs.  Krishna Kant &

Ors.     [  1995  (5)  SCC 75] and  Rajasthan SRTC & Ors.  vs.  Khadarmal

[2006 (1) SCC 59].

3. The purported conflict in the aforementioned two decisions centres

round  the  jurisdiction  of  the  civil  court  to  entertain  suits  questioning

orders of termination passed by the appellant – Corporation against the

respondents herein.  The suits were filed by the respondents, inter alia, on

the  premise  that  termination  of  their  services  was  in  violation  of  the

principles of natural justice.  

4. As this Court in this case at this juncture is only required to lay

down a principle of law, it is not necessary to state the facts of the matter

in detail.   

5. Appellant – Corporation, indisputably, was constituted in terms of

the provisions of Road Transport Corporations Act, 1950 (for short, “the

1950  Act”).   By  reason  of  the  provision  of  Section  4  thereof,  each

Corporation  is  a  body  corporate  having  perpetual  succession  and  a

common seal and can in its own name sue and be sued.   

Section  45 of  the 1950 Act provides  for  the Regulation  making

power, stating:

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“45. Power  to  make  regulations.-  (1)  A Corporation may, with the previous sanction of the  State  Government,  make  regulations,  not inconsistent  with  this  Act  and  the  rules  made thereunder, for the administration of the affairs of the Corporation.  

(2) In particular, and without prejudice to the generality  of  the  foregoing  power,  such regulations  may provide  for  all  or  any of  the following matters, namely:-  

(a) the manner in which, and the purposes for which,  persons  may  be  associated  with  the Board under Section 10;  

(b) the  time  and  place  of  meetings  of  the Board  and  the  procedure  to  be  followed  in regard  to  transaction  of  business  at  such meetings;  

(c) the conditions of appointment and service and  the  scales  of  pay  of  officers  and  other employees  of  the  Corporation  other  than  the Managing Director, the Chief Accounts Officer and the Financial  Adviser  or,  as  the case may be,  the  Chief  Accounts  Officer-cum-Financial Adviser;

(d) the  issue  of  passes  to  the  employees  of the Corporation and other persons under section 19;

(e) the grant  of refund in respect  of unused tickets  and  concessional  passes  under  section 19.”  

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6. Pursuant  to or in furtherance of the said power,  the Corporation

made  Regulations  known  as  “Rajasthan  State  Road  Transport

Corporation Employees Service Regulations, 1965”.   

Chapter  V  of  the  said  Regulations  provides  for  suspension,

termination,  dismissal,  removal  and/or  compulsory  retirement,  etc.

Indisputably, the Corporation is also an “industry” within the meaning of

Section 2(j) of the Industrial Disputes Act, 1947   

7. The  Parliament enacted Industrial  Employment (Standing Orders)

Act, 1946 (for short, “the 1946 Act”).  In the year 1965, the Corporation

framed  its  Standing  Orders  known  as  Rajasthan  State  Road  Transport

Workers and Workshop Employees Standing Orders, 1965, which were

certified under the 1946 Act.   The said Certified Standing Orders deal

with  suspension,  termination,  dismissal,  removal  and/or  compulsory

retirement, etc.

8. Indisputably, appellant- Corporation is a State within the meaning

of Article 12 of the Constitution of India that is for the purpose of Part III

and Part IV thereof.   

9. The jurisdiction of a civil  court  is  governed by Section 9 of the

Code of Civil Procedure, which reads as under:

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“9 -  Courts to try all  civil  suits unless barred:-The Courts shall  (subject to the provisions  herein  contained)  have jurisdiction to try all suits of a civil nature excepting suits of which their cognizance is either expressly or impliedly barred.”

The jurisdiction of the Civil Court in terms of the aforementioned

provision is a plenary one.  The provision relating to bar to entertain a

suit  must  therefore  be  laid  down  by  a  statute  either  expressly  or  by

necessary  implication.   An  employee  charged  with  grave  acts  of

misconduct  must  be  held  to  be  entitled  to  a  fair  hearing  in  the

departmental proceeding.  The common law principles of natural justice

must  also  be  complied  with.   Rules  laid  down  in  the  statutory  rules

indisputably should be followed.  

In Narinder Mohan Arya vs. United India Insurance Co. Ltd. & ors.

[(2006) 4 SCC 713], , this Court held:

“26. In our opinion the learned Single Judge and consequently  the  Division  Bench  of  the  High Court did not pose unto themselves the correct question.  The  matter  can  be viewed  from two angles. Despite limited jurisdiction a civil court, it  was entitled to interfere in a case where the report  of  the  Enquiry  Officer  is  based  on  no evidence.  In  a  suit  filed  by  a  delinquent employee in a civil court as also a writ court, in the  event  the  findings  arrived  at  in  the departmental proceedings are questioned before it  should  keep  in  mind  the  following:  (1)  the

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enquiry officer  is  not  permitted to  collect  any material  from  outside  sources  during  the conduct of the enquiry. [See State of Assam and Anr. v.  Mahendra Kumar Das and Ors. [(1970) 1 SCC 709] (2) In a domestic enquiry fairness in the  procedure  is  a  part  of  the  principles  of natural  justice  [See  Khem Chand v.  Union  of India  and Ors. (1958 SCR 1080)  and  State of Uttar  Pradesh v.  Om Prakash  Gupta  (1969)  3 SCC 775]. (3) Exercise of discretionary power involve  two  elements  (i)  Objective  and  (ii) subjective  and existence  of  the  exercise  of  an objective  element  is  a  condition  precedent  for exercise  of  the  subjective  element.  [See  K.L. Tripathi v.  State  of  Bank  of  India  and  Ors. (1984) 1 SCC 43]. (4) It is not possible to lay down any rigid rules of the principles of natural justice  which  depends  on  the  facts  and circumstances  of  each case but  the concept  of fair play in action is the basis. [See Sawai Singh v. State of Rajasthan (1986) 3 SCC 454] (5) The enquiry officer is not permitted to travel beyond the charges and any punishment imposed on the basis  of  a  finding  which  was  not  the  subject matter  of  the  charges  is  wholly  illegal.  [See Director (Inspection & quality Control) Export Inspection Council of India and Ors. v.  Kalyan Kumar Mitra and Ors. 1987 (2) Cal. LJ 344. (6) Suspicion or presumption cannot take the place of proof even in  a domestic enquiry. The writ court is entitled to interfere with the findings of the fact  of  any tribunal  or  authority in  certain circumstances. [See  Central Bank of India Ltd. v.  Prakash  Chand  Jain  (1969)  1  SCR  735, Kuldeep Singh v.  Commissioner of Police and Ors. (1999) 2 SCC 10].”

{See also Roop Singh Negi vs. Punjab National Bank [2009 (1) SCALE

284]}

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Section  9  of  the  Code  is  in  enforcement  of  the  fundamental

principles  of  law  laid  down  in  the  maxim  Ubi  jus  Ibi  remedium.  A

litigant, thus, having a grievance of a civil nature has a right to institute a

civil  suit  in  a  competent  civil  court  unless  its  cognizance  is  either

expressly  or  impliedly  barred  by  any  statute.    Ex  facie,  in  terms  of

Section  9  of  the  Code,  civil  courts  can  try  all  suits,  unless  bared  by

statute, either expressly or by necessary implication.

10. The civil court, furthermore, being a court of plenary jurisdiction

has  the  jurisdiction  to  determine  its  jurisdiction  upon  considering  the

averments made in the plaint but that would not mean that the plaintiff

can circumvent the provisions of law in order to invest jurisdiction on the

civil court although it otherwise may not possess.  For the said purpose,

the court in given cases would be entitled to decide the question of its

own jurisdiction upon arriving at a finding in regard to the existence of

the jurisdictional fact.  It is also well settled that there is a presumption

that  a civil  court  will  have  jurisdiction  and the  ouster  of  civil  court’s

jurisdiction is not to be readily inferred.  A person taking a plea contra

must establish the same.  Even in a case where jurisdiction of a civil court

is  sought  to  be  barred  under  a statute,  the  civil  court  can  exercise  its

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jurisdiction  in  respect  of  some matters  particularly  when  the  statutory

authority or Tribunal acts without jurisdiction.   

11. In  Dhulabai  vs.  State of M. P. [(1968) 3 S.C.R. 662], this Court

held as under:

“(1) Where the statute gives a finality to the orders of the special  tribunals the civil  court’s jurisdiction must be held to be excluded if there is adequate remedy to do what the civil  courts would  normally  do  in  a  suit.  Such  provision, however,  does  not  exclude  those  cases  where the  provisions  of  the  particular  Act  have  not been complied with or the statutory tribunal has not  acted  in  conformity  with  the  fundamental principles of judicial procedure.

(2)  Where  there  is  an  express  bar  of  the jurisdiction of the court, an examination of the scheme  of  the  particular  Act  to  find  the adequacy  or  the  sufficiency  of  the  remedies provided may be relevant but is not decisive to sustain the jurisdiction of the civil court.

Where  there  is  no  express  exclusion  the examination of the remedies and the scheme of the  particular  Act  to  find  out  the  intendment becomes necessary and the result of the inquiry may be decisive. In the latter case it is necessary to see if the statute creates a special right or a liability  and provides  for  the  determination  of the right or liability and further lays down that all  questions  about  the  said  right  and  liability shall  be  determined  by  the  tribunals  so constituted,  and  whether  remedies  normally associated  with  actions  in  civil  courts  are prescribed by the said statute or not.

(3)  Challenge  to  the  provisions  of  the particular Act as ultra vires cannot be brought before  Tribunals  constituted  under  that  Act. Even  the  High  Court  cannot  go  into  that question  on  a  revision  or  reference  from  the decision of the Tribunals.

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(4)  When  a  provision  is  already  declared unconstitutional  or  the constitutionality  of any provision is to be challenged, a suit is open. A writ  of  certiorari  may  include  a  direction  for refund  if  the  claim is  clearly  within  the  time prescribed by the Limitation Act but it is not a compulsory remedy to replace a suit.

(5)  Where  the  particular  Act  contains  no machinery for refund of tax collected in excess of  constitutional  limits  or  illegally  collected  a suit lies.

(6)  Questions  of  the  correctness  of  the assessment  apart  from its  constitutionality  are for the decision of the authorities and a civil suit does not lie if the orders of the authorities are declared  to  be  final  or  there  is  an  express prohibition in the particular Act. In either case the  scheme  of  the  particular  Act  must  be examined because it is a relevant enquiry.

(7)  An exclusion  of  the  jurisdiction  of  the civil court is not readily to be inferred unless the conditions above set down apply.”

{See  also  Church  of  North  India  vs.  Lavajibhai  Ratanjibhai  &  ors.

[(2005) 10 SCC 760],  United India Insurance Co.Ltd.  vs.  Ajay Sinha &

Anr. [2008 (8) SCALE 509]}

12. The word “industrial dispute” is defined in Section 2(k) of the 1947

Act to mean:

“(k) “industrial dispute” means any dispute or difference between employers and employers, or between  employers  and  workmen,  or  between workmen  and  workmen,  which  is  connected with the employment or non-employment or the terms of employment or with the conditions of labour, of any persons;”

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The  expression  ‘workman’  has  been  defined  in  clause  (s)  of

Section 2 to mean any person (including an apprentice) employed in any

industry  to  do  any  manual,  unskilled,  skilled,  technical,  operational,

clerical  or  supervisory  work  for  hire  or  reward,  whether  the  terms of

employment  be  express  or  implied,  and  for  the  purposes  of  any

proceeding under this Act in relation to an industrial dispute, includes any

such  person  who  has  been  dismissed,  discharged  or  retrenched  in

connection with, or as a consequence of, that dispute, or whose dismissal,

discharge or retrenchment has led to that dispute,  but does not  include

any such person- (i)  who in subject  to the Air Force Act,  1950 (45 of

1950), or the Army Act, 1950 (46 of 1950), or the Navy Act, 1957 (62 of

1957); or (ii) who is employed in the police service or as an officer or

other  employee  of  a  prison;  or  (iii)  who  is  employed  mainly  in  a

managerial or administrative capacity; or (iv) who, being employed in a

supervisory capacity, draws wages exceeding one thousand six hundred

rupees per mensem or exercise, either by the nature of the duties attached

to the office or by reason of the powers vested in him, functions mainly of

a managerial nature.

Clause (g) of Section 2 defines ‘employer’ to mean:

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“(g) “employer” means- (i) in  relation  to  any industry carried

on by or under the authority of any department  of  the  Central Government  or  a  State Government,  the  authority prescribed in this behalf, or where no authority is prescribed, the head of the department;

(ii) in relation to an industry carried on by or on behalf of a local authority, the  chief  executive  officer  of  that authority;”

13. Indisputably,  the  1947  Act  provides  for  the  forum  for

determination  of  an  industrial  disputes  raised  between  workmen  and

workmen; workmen and employer; and employer and employer inter alia

if any reference is made by an appropriate Government in exercise of its

power conferred upon it under Section 10 thereof.  Section 11 of the 1947

Act  provides for procedure and power of conciliation officers,  Boards,

Courts and Tribunal while Section 11A confers extensive power on the

labour  court  or  the  Industrial  Tribunal  to  interfere  with  an  order  of

punishment imposed upon a workman including a power to substitute the

punishment awarded by the employer upon holding a domestic enquiry.  

14. Section 3 of the 1946 Act obligates every industrial establishment

to frame Standing Orders in respect  of matters  set out  in the Schedule

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appended thereto and submit the same to the certified officer who shall

certify  the  same upon  arriving  at  its  satisfaction  that  they  have  been

framed  in  accordance  of  the  1946  Act.   Upon  such  certification,  the

Standing Orders become binding upon the employer and employees.  

15. The question in regard to the jurisdiction of a Civil Court vis-à-vis

adjudication of rights/obligations created by or under the 1947 Act came

up  for  consideration  in  The  Premier  Automobiles  Ltd.  vs.  Kamlekar

Shantaram  Wadke  of  Bombay  &  ors. [(1976)  1  SCC  496],  wherein

following the dicta laid down in  Wolverhampton New Waterworks Co.

vs. Hawkesford [(1859) 6 CB (NS) 336: 28 LJ CP 242: 141 ER 486], law

was laid down in the following terms:

“23. To sum up, the principles applicable to the jurisdiction of the civil  court in relation to an industrial dispute may be stated thus:

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

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

(3) If the industrial dispute relates to the enforcement  of  a  right  or  an  obligation created under the Act, then the only remedy

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available  to  the  suitor  is  to  get  an adjudication under the Act.

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

16. The question came up for consideration again before a three Judge

Bench of this Court in  Krishna Kant  (supra) wherein, inter alia, it  was

held:

“29. Now  let  us  examine  the  facts  of  the appeals before us in the light of the principles adumbrated  Premier  Automobiles.  The  first thing to be noticed is the basis upon which the plaintiffs-respondents  have claimed the several reliefs in the suit.  The basis is the violation of the  certified  Standing  Orders  in  force  in  the appellant-establishment.  The  basis  is  not  the violation  of  any  terms  of  contract  of  service entered into between the parties governed by the law of  contract. At  the  same time,  it  must  be said,  no  right  or  obligation  created  by  the Industrial Disputes Act is sought to be enforced in the suit. Yet another circumstance is that the Standing Orders Act does not itself provide any forum  for  the  enforcement  of  rights  and liabilities  created by the Standing Orders.  The question that arises is whether such a suit falls under Principle  No. 3 of  Premier  Automobiles or under Principle No. 2? We are of the opinion that  it  falls  under  Principle  No. 3.  The  words “under the Act” in Principle No. 3 must, in our considered opinion,  be understood as referring not only to Industrial  Disputes Act but also to all  sister  enactments  —  [like  Industrial Employment (Standing Orders)  Act] which  do not  provide  a  special  forum of  their  own  for enforcement of the rights and liabilities created by  them.  Thus  a  dispute  involving  the enforcement of the rights and liabilities created by the certified Standing Orders has necessarily got to be adjudicated only in the forums created

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by  the  Industrial  Disputes  Act  provided,  of course,  that  such  a  dispute  amounts  to  an industrial  dispute  within  the  meaning  of Sections 2(k) and 2-A of Industrial Disputes Act or such enactment says that  such dispute shall be either treated as an industrial dispute or shall be adjudicated by any of the forums created by the  Industrial  Disputes  Act.  The  civil  courts have no jurisdiction  to entertain  such suits.  In other  words,  a  dispute  arising  between  the employer and the workman/workmen under, or for  the  enforcement  of  the  Industrial Employment  Standing  Orders  is  an  industrial dispute,  if  it  satisfies  the  requirements  of Section 2(  k  ) and/or Section 2-A of the Industrial   Disputes  Act  and  must  be  adjudicated  in  the forums created  by the  Industrial  Disputes  Act alone. This  would  be  so,  even  if  the  dispute raised  or  relief  claimed  is  based  partly  upon certified Standing Orders and partly on general law of contract.”

[emphasis supplied]

It was, however, noticed:

“33. Coming to the order dated 18-10-1989 in SLP (C) No. 9386 of 1988 made by a Bench of two  learned  Judges,  the  important  fact  to  be noticed  is  that  in  that  suit,  no  allegation  of violation  of  the certified  Standing Orders  was made. The only basis of the suit was violation of principles  of  natural  justice.  It  was,  therefore, held that it was governed by Principle No. 2 in Premier  Automobiles.  In  this  sense,  this  order cannot  be  said  to  lay  down  a  proposition contrary to the one in Jitendra Nath Biswas. We may  also  refer  to  a  decision  of  this  Court rendered by Untwalia, J., on behalf of a Bench comprising himself and A.P. Sen, J., in Sitaram Kashiram  Konda  v. Pigment  Cakes  and Chemicals  Mfg.  Co.  That  was  a  case  arising from  a  suit  instituted  by  the  workman  for  a declaration  that  termination  of  his  service  is illegal and for reinstatement. In the alternative, he  claimed  compensation  for  wrongful termination.  The jurisdiction  of  the civil  court was sustained by this Court on the ground that he  has  made  out  a  case  for  awarding compensation though the civil  court  could not

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decree  reinstatement.  Though  the  report  does not  indicate  the  basis  put  forward  by  the workman-plaintiff therein, the court found on an examination of all  the facts  and circumstances of the case that “it is not quite correct to say that the  suit  filed  by  the  appellant  is  not maintainable at all in a civil court”. Obviously it was  a  case  where  the  dispute  related  to enforcement of rights flowing from general law of  contract  and  not  from  certified  Standing Orders.  This  decision  cannot  also  be  read  as laying  down  a  different  proposition  from Premier Automobiles.”

The principles flowing from the discussions in the said decisions

were summarized thus:  

“35. We may now summarise the principles flowing from the above discussion:

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

(2) Where, however, the dispute involves recognition,  observance  or  enforcement  of any of the rights or obligations created by the Industrial  Disputes Act,  the only remedy is to  approach the forums created by the said Act.

(3) Similarly, where the dispute involves the  recognition,  observance  or  enforcement of  rights  and  obligations  created  by enactments  like  Industrial  Employment (Standing Orders) Act, 1946 — which can be called  “sister  enactments”  to  Industrial Disputes Act — and which do not provide a forum  for  resolution  of  such  disputes,  the only remedy shall be to approach the forums created  by  the  Industrial  Disputes  Act provided  they  constitute  industrial  disputes

15

within  the  meaning  of  Section  2(k)  and Section  2-A  of  Industrial  Disputes  Act  or where such enactment says that such dispute shall be either treated as an industrial dispute or says that it shall be adjudicated by any of the forums created by the Industrial Disputes Act.  Otherwise,  recourse  to  civil  court  is open.

(4)  It  is  not  correct  to  say  that  the remedies provided by the Industrial Disputes Act are not equally effective for the reason that  access  to  the  forum  depends  upon  a reference  being  made  by  the  appropriate Government. The power to make a reference conferred  upon  the  Government  is  to  be exercised  to  effectuate  the  object  of  the enactment and hence not unguided. The rule is to make a reference unless, of course, the dispute  raised  is  a  totally  frivolous  one  ex facie.  The power conferred is  the power to refer and not the power to decide, though it may be  that  the  Government  is  entitled  to examine  whether  the  dispute  is  ex  facie frivolous, not meriting an adjudication.

(5)  Consistent  with  the  policy  of  law aforesaid,  we  commend  to  Parliament  and the  State  Legislatures  to  make  a  provision enabling a workman to approach the Labour Court/Industrial  Tribunal  directly  —  i.e., without the requirement of a reference by the Government — in case of industrial disputes covered  by  Section  2-A  of  the  Industrial Disputes Act. This would go a long way in removing the misgivings with respect to the effectiveness of the remedies provided by the Industrial Disputes Act.

(6) The certified Standing Orders framed under and in accordance with the Industrial Employment  (Standing  Orders)  Act,  1946 are statutorily imposed conditions of service and are binding both upon the employers and employees,  though  they  do  not  amount  to “statutory  provisions”.  Any  violation  of these Standing Orders  entitles  an employee to appropriate relief either before the forums created by the Industrial Disputes Act or the civil  court  where  recourse  to  civil  court  is open  according  to  the  principles  indicated herein.

16

(7)  The  policy  of  law  emerging  from Industrial  Disputes  Act  and  its  sister enactments  is  to  provide  an  alternative dispute-resolution  mechanism  to  the workmen,  a  mechanism  which  is  speedy, inexpensive, informal and unencumbered by the plethora of procedural laws and appeals upon  appeals  and  revisions  applicable  to civil courts. Indeed, the powers of the courts and  tribunals  under  the  Industrial  Disputes Act are far more extensive in the sense that they  can  grant  such  relief  as  they  think appropriate in the circumstances for putting an end to an industrial dispute.”

Applying the said principles  to the fact of the cases wherein the

plaintiffs  alleged that  the enquiries  were conducted in  violation  of  the

Standing Orders whereas the stand taken by the Corporation was that the

requirements contained in the Standing Orders were complied with, the

Bench,  however,  noticed  that  no  Regulation  had  been  framed  by  the

Corporation in terms of Section 45 of the Act insofar as the employees

answering the description of ‘workman’ as defined in Section 2(s) of the

1947 Act are concerned.

It appears that therein no dispute was raised that the provisions of

the Standing Orders were applicable.  The question, therefore, which inter

alia arose for consideration was as to whether in holding the departmental

proceeding the provisions of the Certified Standing Orders were violated

17

or not.  While holding that Civil Court’s jurisdiction to entertain the suit

was bared, it was held:

“37. It  is  directed  that  the  principles enunciated  in  this  judgment  shall  apply  to  all pending  matters  except  where  decrees  have been passed  by the trial  court  and the  matters are pending in appeal or second appeal, as the case may be. All suits pending in the trial court shall  be governed by the principles enunciated herein — as also the suits and proceedings to be instituted hereinafter.”

With greatest  of  respect  to the learned judges,  if  a statute  while

creating rights and obligations did not constitute a forum for enforcing

the  same,  plenary  jurisdiction  of  the  civil  court  in  view  of  Premier

Automobiles  Ltd.(supra)  could  not  be  held  to  have  been  taken  away.

There was also no occasion to extend the scope of the dicta laid down

therein.  Certified Standing Orders lay down the terms and conditions of

service.  It did not create any new right such as Section 25F, 25G or 25H

of  the  Industrial  Disputes  Act,  1947.  Any  new  right  created  under  a

statute  would ordinarily be a right  in favour  of an employee over and

above the general law.  

Let  us,  however,  proceed  on  the  basis  that  the  dicta  laid  down

therein is correct.  

18

17. A similar question, however, came up for consideration before a

two-Judge  Bench  of  this  Court  in  Rajasthan  State  Road  Transport

Corporation & Ors. vs.  Zakir Hussain  [(2005) 7 SCC 447], wherein this

Court following the seven-Judges Bench decision of this Court in  A.R.

Antulay vs.  R.S. Nayak [(1988) 2 SCC 602] opined that if the court has

no jurisdiction, it cannot be conferred by an order of the court.  Therein

the order of termination was a simpliciter one which was passed during

the  period  of  probation  and,  thus,  did  not  entail  any  stigma  or  civil

consequences visiting him.  In the facts of the case, Krishna Kant (supra)

was not followed, stating:

“35. Learned counsel for the respondent placing strong  reliance  on  the  judgment  in  Rajasthan SRTC v.  Krishna Kant submitted that since the decree has been passed by the trial court on 28- 7-1989 and the appeal filed by the Corporation was dismissed on 27-9-1989 which was pending prior to the judgment reported in Krishna Kant, the respondent is right in approaching the civil court. This contention has no force. This Court has  very  explicitly  summarised  the  principles flowing from the discussion in the judgment in para 35 and applying the above principles this Court has categorically held that the suits filed by  the  employees  in  those  appeals  were  not maintainable  in  law.  But,  however,  granted certain reliefs by reducing the back wages, etc. etc.  in  the peculiar  facts  and circumstances  of the case.  Therefore,  in  our  opinion,  the  above judgment will not be of any assistance or aid to the claim of the respondent.”

19

18. The question came up for consideration again before a three-Judge

Bench  of  this  Court  again  in  Khadarmal (supra)  wherein  referring  to

Krishna Kant (supra) and Zakir Hussain (supra), it was held that the civil

court has no jurisdiction to adjudicate.  However, without noticing Para

37 in Krishna Kant (supra), this Court held:

“4. It  is  submitted  that  all  the  suits  in  these matters were filed at a time when the position of law was not clear. It is submitted that therefore even  in  these  cases  the  Court  should  not interfere  with  the  decrees  but  may direct  that there shall be no payment of back wages.

5. On  behalf  of  the  appellants  reliance  is placed on the second Rajasthan SRTC case and it  is  pointed  out  that  the  Court  had,  after considering the earlier judgment, concluded that the reinstatement cannot now be maintained and directed  that  the  respondents  shall  not  be allowed to continue in service any further. The Court  has  however  held  that  the  back  wages which  may  have  been  paid  are  not  to  be recovered  back  but  clarified  that  the respondents  will  not  be entitled to  any further emoluments  or  service  benefits  except  the amount paid to them as back wages. 6. In  our  view,  as  the  civil  court  had  no jurisdiction,  the  decrees  which  were  passed have no force of law. They are accordingly set aside. In our view, there can be no direction to reinstate or to continue reinstatement. However, on the facts of these cases we also direct that if any back wages have been paid, they shall not be  recovered  but  clarify  that  the  respondents will not be entitled to any further emoluments or service benefits.”

Para  37  of  Krishna  Kant  (supra),  however,  was  noticed  in

Rajasthan SRTC & Anr. vs. Ugma Ram Choudhary [(2006) 1 SCC 61] to

hold:

20

“4. Paragraph 37  of  Krishna  Kant  case has been  considered  by  this  Court  in  para  35  of Zakir Hussain case. It has been held that once it is  held that  the civil  court  has no jurisdiction, the  consequences  must  follow.  This  view has been reiterated by this Court in the unreported [now  reported  in  (2006)  1  SCC  59,  infra] judgment  in  Khadarmal  case.  Therefore,  it  is not possible to accept this submission.”

19. In view of somewhat different conclusions arrived at by this Court

in different cases as noticed hereinbefore whereas the contention of Mr.

Tapas  Ray, learned Senior Counsel appearing on behalf of the appellant

– Corporation is  that  despite the fact  that  the suits were instituted and

decrees were passed prior to the date of pronouncement of judgment in

Krishna  Kant  (supra),  we  should  opine  that  the  civil  court  had  no

jurisdiction and, thus, dismiss the suit; the contention of Ms. Aishwarya

Bhati and other learned counsel appearing on behalf of the respondent is

that as doctrine of prospective overruling was applied in  Krishna Kant

(supra) and furthermore as in this case the suit is based on the allegations

of violation of principles of natural justice, this Court should not interfere

with the decrees passed by the learned trial court.   

20. Before  us,  however,  the  statutory  Regulations  framed  by  the

appellant – Corporation under Section 45 of the Act had been placed.  We

do not find that any distinction has been made in regard to the matters

relating to holding of the departmental proceedings against an employee

21

for  commission  of  a  misconduct  vis-à-vis  the industrial  workers.   The

question as to whether in a case of this nature where violation is alleged

as regards compliance of principles of natural justice either on common

law principles  or  in  terms  of  the  statutory  Regulations  framed by the

appellant – Corporation, which is a fundamental right in terms of Article

14 of the Constitution of India, a civil suit will be maintainable or not,

thus, have not been taken into consideration in any of the aforementioned

decisions.   

The  legal  principles,  namely,  presumption  in  regard  to  the

jurisdiction of  the Civil  Court  and interpretation of  a statute involving

plenary  jurisdiction  of  a  civil  court  had  also  not  been  taken  into

consideration.   

In  Wolverhampton  New  Waterworks  Co.  (supra),  it  has

categorically been laid down:

“There are three classes of cases in which a liability may be established by statute. There is that  class  where  there  is  a liability existing  at common law, and which is only re-enacted by the statute with a special form of remedy; there, unless  the  statute  contains  words  necessarily excluding the common law remedy, the plaintiff has his election of proceeding either under the statute  or  at  common  law.  Then  there  is  a second class,  which consists  of those cases in which a statute has created a liability,  but  has

22

given no special remedy for it;  there the party may adopt an action of debt or other remedy at common  law  to  enforce  it.  The  third  class  is where the statute creates a liability not existing at  common  law,  and  gives  also  a  particular remedy for enforcing it…. With respect to that class it has always been held, that the party must adopt the form of remedy given by the statute.”

It  was  on  the  aforementioned  principle,  the  question  of

applicability of  principles  1, 2 and 3 laid  down in Para 23 in  Premier

Automobiles Ltd. (supra) will have to be taken into consideration.   

21. A dispute  arising in between an employer and employee may or

may not be an industrial dispute.  The dispute may be in relation to or

arising out of a fundamental right of the employee, or his right under a

Parliamentary Act and the Regulations framed thereunder, and/or a right

arising under the provisions of the Industrial Disputes Act or the sister

laws and may relate to same or similar rights or different rights, or even

may be based on common law right or contractual right.  The question in

regard to the jurisdiction of the civil court must, therefore, be addressed

having regard to the fact as to which rights or obligations are sought to be

enforced for the purpose of invoking or excluding the jurisdiction of a

civil court.  

23

22. Appellant, as noticed hereinbefore, is a State within the meaning of

Article 12 of the Constitution of India.  If an act on its part is found to be

wholly unreasonable or arbitrary, the same would be violative of Article

14 of the Constitution of India.  In certain situations, even gross violation

of the principles of natural justice has been held to come within the ambit

of Article 14.  

{See also Satyavir Singh & ors. vs. Union of India & ors. [(1985) 4 SCC

252],  Delhi Transport Corporation  vs.  D.T.C. Mazdoor Congress & ors.

[1991  Supp  (1)  SCC 600],  Union  of  India  & Anr.  vs.  Tulsiram Patel

[(1985) 3 SCC 398], Central Inland Water Transport Corporation Limited

& Anr. vs. Brojo Nath Ganguly & Anr. [(1986) 3 SCC 156]}

Any order passed in violation of the principles  of natural  justice

save and except  certain contingencies of cases,  would be a nullity.  In

A.R. Antulay (supra), this Court held:

“No prejudice need be proved for enforcing the fundamental rights. Violation of a fundamental right itself renders the impugned action void. So also  the  violation  of  the  principles  of  natural justice renders the act a nullity.”

23. If an employee intends to enforce his constitutional rights or a right

under  a  statutory  Regulation,  the  civil  court  will  have  the  necessary

jurisdiction  to  try  a  suit.   If,  however,  he  claims  his  right  and

24

corresponding obligations only in terms of the provisions of the Industrial

Disputes Act or the sister laws so called, the civil court will have none.

In this  view of the  matter,  in  our  considered opinion,  it  would  not  be

correct  to  contend that  only because the employee concerned is  also a

workman within the meaning of the provisions  of the 1947 Act or the

conditions of his service are otherwise governed by the Standing Order

certified  under  the  1946  Act  ipso  facto  the  Civil  Court  will  have  no

jurisdiction.  This aspect of the matter has recently been considered by

this  Court  in  Rajasthan  State  Road  Transport  Corporation  &  ors.  vs.

Mohar Singh [(2008) 5 SCC 542].  The question as to whether the civil

court’s jurisdiction is barred or not must be determined having regard to

the fact of each case.   

If the  infringement  of  Standing Order  or  other  provisions  of  the

Industrial Disputes Act are alleged, the civil court’s jurisdiction may be

held to be barred but if the suit is based on the violation of principles of

common law or constitutional provisions or on other grounds, the civil

court’s jurisdiction may not be held to be barred.  If no right is claimed

under a special statute in terms whereof the jurisdiction of the civil court

is barred, the civil court will have jurisdiction.   

25

Where  the  relationship  between  the  parties  as  employer  and

employee  is  contractual,  right  to  enforce  the  contract  of  service

depending on personal volition of an employer, is prohibited in terms of

Section 14(1)(b) of the Specific Relief Act, 1963.  It has, however, four

exceptions,  namely,  (1)  when  an  employee  enjoys  a  status,  i.e.,  his

conditions of service are governed by the rules framed under the proviso

appended  to  Article  309  of  the  Constitution  of  India  or  a  statute  and

would otherwise be governed by Article  311(2)  of  the  Constitution of

India;  (2)  where  the  conditions  of  service  are  governed  by statute  or

statutory Regulation and in the event mandatory provisions thereof have

been  breached;  (3)  when  the  service  of  the  employee  is  otherwise

protected  by  a  statute;  and  (4)  where  a  right  is  claimed  under  the

Industrial Disputes Act or sister laws, termination of service having been

effected in breach of the provisions thereof.   

Appellant  – Corporation is bound to comply with the mandatory

provisions of the statute or the regulations framed under it.  A subordinate

legislation  when validly  framed becomes a part  of  the  Act.   It  is  also

bound to follow the principles of natural justice. In the event it is found

that  the  action  on  the  part  of   State  is  violative  of  the  constitutional

provisions or the mandatory requirements of a statute or statutory rules,

26

the civil court would have the jurisdiction to direct reinstatement with full

back wages.  

In  Praga Tools Corpn.  Vs.  C.A. Imanual [(1969) 1 SCC 585], it

was held:-

“6.   … Therefore,  the  condition  precedent  for the  issue  of  mandamus  is  that  there  is  in  one claiming it a legal right to the performance of a legal duty by one against whom it is sought. An order  of  mandamus  is,  in  form,  a  command directed to a person, corporation or an inferior tribunal requiring him or them to do a particular thing therein specified which appertains to his or their office and is in the nature of a public duty.  It  is,  however,  not  necessary  that  the person or the authority on whom the statutory duty is imposed need be a public official or an official  body.  A  mandamus  can  issue,  for instance,  to  an official  of  a society to  compel him to carry out the terms of the statute under or by which the society is constituted or governed and also to companies or corporations to carry out  duties  placed  on  them  by  the  statutes authorizing  their  undertakings.  A  mandamus would also lie against a company constituted by a  statute  for  the  purposes  of  fulfilling  public responsibilities.”

[See also  Rajasthan State Road Transport Corporation & ors.  vs.

Mohar Singh (supra)]

27

24. There  is  another  aspect  of  the  matter  which  cannot  also  be  lost

sight  of, namely, where the conditions of service are governed by two

statutes,  the  effect  thereof  on  an  order  passed  against  an

employee/workman in violation of  a rule which would attract  both the

statutes.  An attempt shall be made in a case of that nature to apply the

principles of ‘Harmonious Construction”.   

When there is a doubt as to whether civil court has jurisdiction to

try a  suit  or  not,  the courts  shall  raise  a  presumption that  it  has  such

jurisdiction.  

In  Mahendra L. Jain & ors.  vs.  Indore Development Authority &

ors. [(2005) 1 SCC 639], this Court held:

“31. The  Standing  Orders  governing  the terms and conditions of service must be read subject  to  the  constitutional  limitations wherever  applicable.  Constitution  being  the suprema  lex,  shall  prevail  over  all  other statutes.  The  only  provision  as  regards recruitment of the employees is  contained in Order  4  which  merely  provides  that  the manager shall  within a period of six months, lay  down  the  procedure  for  recruitment  of employees and notify it on the notice board on which Standing Orders are exhibited and shall send  copy  thereof  to  the  Labour Commissioner.  The  matter  relating  to recruitment is governed by the 1973 Act and the 1987 Rules. In the absence of any specific directions contained in the Schedule appended to  the  Standing  Orders,  the  statute  and  the statutory rules applicable to the employees of the respondent shall prevail.

28

xxx xxx xxx

33. For the purpose of this matter, we would proceed  on  the  basis  that  the  1961 Act  is  a special statute vis-à-vis the 1973 Act and the Rules framed thereunder. But in the absence of any conflict in the provisions of the said Act, the  conditions  of  service  including  those relating to recruitment as provided for in the 1973 Act and the 1987 Rules would apply. If by  reason  of  the  latter,  the  appointment  is invalid,  the  same  cannot  be  validated  by taking  recourse  to  regularisation.  For  the purpose of regularisation which would confer on  the  employee  concerned  a  permanent status,  there  must  exist  a  post.  However,  we may  hasten  to  add  that  regularisation  itself does not imply permanency. We have used the term  keeping  in  view  the  provisions  of  the 1963 Rules.”

In  M.P.  Housing Board  & Anr.  vs.  Manoj  Shrivastava [2006(2)

SCC  702],  this  Court  almost  in  a  situation  of  this  nature  where  the

appellant was constituted under a statute and the conditions of service of

its employees were governed thereunder as also Certified Standing Order,

held:

“8. A person with a view to obtain the status of a “permanent employee” must be appointed in terms of the statutory rules. It is not the case of the respondent that he was appointed against a vacant post which was duly sanctioned by the statutory authority or his appointment was made upon  following  the  statutory  law operating  in the field. 9. The  Labour  Court  unfortunately  did  not advert  to  the  said  question  and  proceeded  to pass  its  award  on  the  premise  that  as  the respondent  had  worked  for  more  than  six months satisfactorily in terms of clause 2(vi) of

29

the Standard Standing Orders,  he acquired the right of becoming permanent. For arriving at the said  conclusion,  the  Labour  Court  relied  only upon the oral statement made by the respondent. 10. It  is  one thing to  say that  a person was appointed on an ad hoc basis or as a daily-wager but it is another thing to say that he is appointed in  a  sanctioned  post  which  was  lying  vacant upon  following  the  due  procedure  prescribed therefor. 11. It has not been found by the Labour Court that  the  respondent  was  appointed  by  the appellant  herein,  which  is  “State”  within  the meaning of Article 12 of the Constitution, upon compliance with the constitutional requirements as also  the  provisions  of  the  1972 Act  or  the Rules and Regulations framed thereunder.”

25. We may also notice that there is nothing to show that rights were

created under the Certified Standing Orders.  It has not been stated that

the conditions of service in respect of an employee are different under

1950 Act and 1946 Act.  The matter might have been different if a statute

was brought into force later than the earlier statute which would attract

the provisions of Article 254 of the Constitution of India one being in

direct conflict with the other as was noticed in  M.P. Vidyut Karamchari

Sangh vs. M.P. Electricity Board [(2004) 9 SCC 755].   

Thus,  the  rights  and  obligations  of  the  employer  having  arisen

under two Parliamentary Acts, the question of invoking the provisions of

30

Article 254 (1) of the Constitution of India would also not arise herein.

Provisions of both the statutes must be given effect to  

26. Mr. Ray, however, would submit that the application of principles

of natural justice may be different keeping in view, (i) the common law

principles;  (ii)  the  statutory  provisions;  and  (iii)  the  constitutional

provisions.  The principles  of natural justice ensure fairness.  It means

that a result or process should be just.  It is a harmless, though it may be a

high-sounding expression; in so far as it  attempts to reflect the old jus

naturale, it is a confused and unwarranted transfer into the ethical sphere

of a term employed for other distinctions; and, in so far as it is resorted to

for other purposes, it is vacuous, so said LORD SHAW of Dunfermline in

Local Government Board v. Arlidge [1915] AC 120 at p. 138 (HL).

27. The  purpose  of  principles  of  natural  justice  is  prevention  of

miscarriage of justice and hence the observance thereof is the pragmatic

requirement of fair play in action.  

{See  Sawai Singh  vs.  State of Rajasthan [(1986) 3 SCC 454],  Narinder

Mohan Arya  vs.  United India Insurance Co. Ltd. & ors.  [(2006) 4 SCC

713]}

31

28. In a case where no enquiry has been conducted,  there would be

violation  of  the  statutory  Regulation  as  also  the  right  of  equality  as

contained in Article 14 of the Constitution of India.  In such situation, a

civil  suit  will  be  maintainable  for  the  purpose  of  declaration  that  the

termination  of  service  was  illegal  and  the  consequences  flowing

therefrom.  However,  we may hasten  to  add if  a  suit  is  filed  alleging

violation of a right by a workman and a corresponding obligation on the

part of the employer under the Industrial  Disputes Act or the Certified

Standing Orders, a civil suit may not lie.   However, if no procedure has

been followed as laid down by the statutory Regulation or is otherwise

imperative even under the common law or the principles of natural justice

which  right  having  arisen  under  the  existing  law,  sub-para  (2)  of

paragraph 23 of the law laid down in Premier Automobiles Ltd. (supra)

shall prevail.   

29. An assumption on the part of this Court that all such cases would

fall only under the Industrial Disputes Act or sister laws and, thus, the

jurisdiction of the civil court would be barred, in our opinion, may not be

the  correct  interpretation  of  Premier  Automobiles  Ltd. (supra)  which

being  a  three-Judge  Bench  judgment  and  having  followed  Dhulabhai

(supra), which is a Constitution Bench judgment, is binding on us.   

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30. We may also observe that the application of doctrine of prospective

overruling in  Krishna Kant  (supra) may not be correct because either a

court has the requisite jurisdiction or it does not have.  It is well settled

principle of law that the court cannot confer jurisdiction where there is

none  and  neither  can  the  parties  confer  jurisdiction  upon  a  court  by

consent.  If a court decides a matter without jurisdiction as has rightly

been pointed  out  in  Zakir  Hussain (supra)  in  view of  the seven-Judge

Bench decision of this Court in A.R. Antulay (Supra), the same would be

nullity and, thus, the doctrine of prospective overruling shall not apply in

such  cases.   Even  otherwise  doctrine  of  prospective  overruling  has  a

limited application.  It ordinarily applies where a statute is declared ultra

vires  and  not  in  a  case  where  the  decree  or  order  is  passed  by  a

court/tribunal in respect whereof it had no jurisdiction.   

[See  C.  Golak  Nath  & ors. vs.  State  of  Punjab & anr. (AIR 1967 SC

1643)]

In  M.A.  Murthy v.  State  of  Karnataka  and  Ors.  [(2003)  7  SCC

517], this Court held:

“…It is for this Court to indicate as to whether the  decision  in  question  will  operate prospectively. In other words, there shall be no prospective overruling, unless it is so indicated in the  particular  decision.  It  is  not  open to  be held that the decision in a particular case will be

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prospective in its application by application of the doctrine of prospective overruling.  …..”

(See also Ashok Kumar Sonkar vs. Union of India & ors. [(2007) 4 SCC

54]

As has been pointed by Justice Cardozo, in his famous compilation

of lectures – The Nature of the Judicial Process – that in the vast majority

of cases, a judgment would be retrospective.  It is only where the hardship

is too great that retrospective operation is withheld.  A declaration of law

when made shall ordinarily apply to the facts of the case involved.

31. We, therefore, answer the question of law referred before us and

the matters be placed before the Division Bench for consideration of the

facts of each case.  

…..……………………………… …..J.

    ( S.B. SINHA )

…..……………………………… …..J.

    (DR. MUKUNDAKAM SHARMA)

…..…………………………………..J.

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    (ASOK KUMAR GANGULY)

New Delhi JANUARY 12, 2009

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