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HindustanLeverLtd.vsTataOilMillsAndAllied...on14December,1995

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TheIndustrialDisputesAct,1947
Article227inTheConstitutionOfIndia1949
Section2inTheIndustrialDisputesAct,1947
Section6inTheIndustrialDisputesAct,1947
TheCodeOfCivilProcedure(Amendment)Act,1956

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CalcuttaHighCourt
HindustanLeverLtd.vsTataOilMillsAndAllied...on14December,1995

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hindustanlever
hindustanleverltd

Equivalentcitations:(1996)1CALLT178HC,1996LablC1446,(1996)IILLJ416Cal

adinteriminjunction

Author:BPanigrahi
Bench:BPanigrahi

transferofemployees
amalgamation
unfairlabourpractice
transferorder

JUDGMENTBasudevaPanigrahi,J.
1. This is an application under Article 227 of the Constitution of India for quashing of the T.S.No.
2384/1995 pending before the Learned Judge. 7th Bench, City Civil Court, Calcutta filed by the
oppositepartiesandalsoforsettingasidetheOrderNo.3datedJuly17,1995.Therelevantfacts
leadingtothepresentapplicationareasfollows:
2.TheoppositepanicsastheplaintiffsinstitutedtheTitleSuitNo.2384of1995intheVIICourtof
Judge, City Civil Court, for declaration and for permanent injunction inter alia, moved for ad
interiminjunctionagainsttheapplicantrestrainingitfromgivingeffecttoand/orfurthereffectto
their scheme and/or proposal for transferring the employees to any places where their is no
registered office and restraining it from interfering with the existing service conditions of the
employeesoftheapplicantCompanyM/s.HindustanLeverLtd.Therewasunusualslumpinthe
businessoftheoppositepartyNo.1TataOilMillsCompanyLtd.(inbriefTOMCO)since1990/91.
InthesubsequentyearTOMCOincurredlossofaboutRs.13crores.Duringnext6(six)monthsthe
loss increased to over Rs. 16 crores. Therefore, the Board of Directors of Tomco decided various
alternativesincludingitsAssociationwithHindustanLeverLtd.accordingly,theBoardofDirectors
TomcoputupaproposalbeforetheBoardofDirectorsofHindustanLeverLtd.andtheDirectorsof
both the companies at their separate meeting accepted the recommendation and approved the
schemeofamalgamation.

registeredoffice
"industrialdisputeact"
industrialdisputeact
article227constitution
hindustanleveremployees
227ofconstitution
schemeofamalgamation
"schemeofamalgamation"
transfermalafide
standingorderact
jurisdictionofcivilcourt
industrialemployment(standing
orders)act
industrialemploymentstanding
ordersact

3.TheScheme,interalia,providedfortransferandvestinginHindustanLeverLtd.oftheunder
taking and the business together with the assets and liabilities excluding certain assets and/or
licence rights to use certain premises. Subsequently, the employees of the Hindustan Lever
challengedtheschemeofamalgamationandultimatelythematterwentuptotheHon'bleSupreme
Court and the Apex Court by its judgment dated October 24, 1994 dismissed the appeals of the
union.WhiledismissingtheappealstheApexCourtheldthattheclauses11.2and11.3safeguarding
the terms and conditions of the transferor employees shall prevail. In the said judgment, it is
further highlighted that the service conditions of the employees of Hindustan Lever Ltd. shall be
applicabletotheerstwhileemployeesofTomco.Itistheapplicantsstandthatduetoexigencyof
workdeployedsomeofitsemployeestodifferentstationsassigningspecificwork.Theemployees
havingbeenaggrievedbysuchorderfiledasuitbeforethe7thCourtofJudge,CityCivilCourtfor
thefollowingreliefs.
"(a) Declaration that the order of transfer of the employees to clearing and forwarding agent's
godownoranyotherplacewherethecompany'sregisteredofficeisnotexistingisillegal,malafide
andnotbindingupontheemployees
(b)Forpermanentinjunctionrestrainingthedefendantsfromgivingeffectand/orfurthereffectto
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theirschemeand/orproposalsfortransferringthe"employeesofthedefendantNo.1toanyother
place
(c) Permanent injunction restraining the defendants from interfering with the existing service
conditionoftheemployeesofthedefendantNo.1:
(d)Costofthesuit
4. The opposite parties had further filed an application praying for ad interim injunction. The
learned Trial Court had been pleased to pass an order directing the applicants to maintain status
quoastotheserviceoftheoppositepartytillthedisposaloftheinjunctionpetition.Theapplicants
having been aggrieved by the said order has complained before this Court by filing the instant
application.
5.Mr.TapasBanerjeethelearnedcounselappearingforthepetitioners,M/s.HindustanLeverLtd.
hasadvancedaformidablepleaagainsttheoppositepartiesregardingousterofjurisdictionofthe
CivilCourttotrythisissue.Attheoutsetheindicatedthatthedisputenotbeingcognisablebefore
the Civil Court and the respondent/opposite party instead of filing dispute before the Industrial
TribunalhadwronglyapproachedtheCivilCourtbyfilingthissuitchallengingtheorderoftransfer.
Fromhisfurthercontentionitappearsthatthesuithavingbeenfiledbytheofficebearersofthe
union challenging the action of the management regarding the transfer of the workmen, such
disputecouldhavebeencognizbleonlyintheIndustrialTribunal.
6.Mr.Chatterjee,thelearnedcounselappearingfortheoppositeparties,hasraisedaninteresting
pleathattheapplicantHindustanLeverLtd.withoutfilingwrittenstatementorwrittenobjection
totheinjunctionapplicationinthetrialcourtcouldnothavechallengedaboutthemaintainabilityof
thesuit.Itisfurthercontendedthatsincethejurisdictionalissuecouldonlybeconsideredbythe
LowerCourt,fromwhichanappealcouldlie,suchcontentionshouldnotbeentertainedbeforethis
court,particularly,intheapplicationunderArticle227oftheConstitution.'
7.ThemanagementoferstwhileTomcohadvestedintheHindustanLeverLtd.aftertheSchemeof
amalgamationwasaccepted.ThesaidschemewaschallengedbytheHindustanLeverEmployees
Union before the Apex Court but the said scheme was upheld and the employees of Tomco were
ordered to continue on the same terms and conditions as before. For this, it cannot be said that
prejudice had been caused to Hindustan Lever Ltd. Employees. As per the said scheme, the
employeesoftheerstwhileTomcoweretocontinuewiththesametermsandconditionsasbefore.
Tomco had set out certain service Rules regarding its employees . Provision of Rule 11 is quoted
hereunder:
"11.Employeesshallbeliabletobetransferredtoanyotherdepartment,establishmentorfactory
oftheCompany,whereversituated,andshallalsobeliabletobetransferredfromonedepartment
toanotherorfromonejobtoanother."
ItenvisagesthattheemployeesworkingunderTomcoshallbeliabletobetransferredtoanyother
department,establishmentorfactoryoftheCompany,whereversituated,andshallalsobeliableto
betransferredfromonedepartmenttoanotherorfromonejobtoanother.Themanagementhas
deployedsomeoftheemployeestodifferentstationsassigningtoparticularjobtothem.Fromthe
factsembodiedintheapplicationitishighlightedthatthemanagementhasnevermeanttransferof
any employee to the outlying stations but simply directed them for performance of a specific job.
The opposite parties through their Union filed the suit in T.S. 2384 of 1995 where it is indicated
thatsomeoftheemployeeshadbeenillegallytransferredwithamalafidemotive.Therefore,the
EmployeesUnionhavefiledthesuitfordeclarationthattheorderoftransferoftheemployeesto
clearning and forwarding Agent's godown or to any other place where the Company's registered
officeisnotexistingisillegal,malafideandnotbindingontheemployees.
8.Mr.BanerjeestronglycontendedthatthisissuitbroadlybytheEmployeesUnionchallengingthe
ordersoftransferbymanagement.Itishowever,indicatedthatsuchmattersquarelycomeswithin
thedefinitionofSection2(k)oftheIndustrialDisputesActwhichdefinesasfollows:
"IndustrialDisputemeansanydisputeordifferencebetweenemployersandemployersorbetween
employersandworkmenandbetweenworkmenandworkmen,providedsuchdisputeisconnected
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withtheemploymentornonemployment,termsofemploymentorwiththeconditionsoflabourof
anyperson"
9.InthisconnectionadecisionoftheApexCourtreportedin(1995IILLJ728)inthecaseofThe
RajasthanStateTransportCorporationv.KrishnaKanteecanbereliedon.Itisheldasfollows:atp
741742"1.Wherethedisputearisesfromgenerallawofcontracti.e.wherereliefsareclaimedon
the basis of the general law of contract, a suit filed in Civil Court cannot be said to be not
maintainable,eventhoughsuchadisputemayalsoconstitutean"Industrialdispute"
withinthemeaningofSection2(k)orSection2A,oftheIndustrialDisputesAct,1947.
2.Where,however,thedisputeinvolvesrecognition,observanceorenforcementofanyoftherights
or obligations created by the Industrial Disputes Act, the only remedy is to approach the forum
createdbythesaidAct.
3. Similarly, where the dispute involves the recognition, observance or enforcement of rights and
obligationscreatedbyenactmentslikeIndustrialEmployment(StandingOrders)Act,1946which
can be called sister enactments to Industrial dispute Act and which do not provide a forum for
resolution of such disputes, the only remedy shall be to approach the forum created by the
IndustrialDisputeswithinthemeaningofSection2(k)andSection2AofIndustrialdisputesActor
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 forum created by the Industrial Disputes Act.
Otherwise,recoursetoCivilCourtisopen.
4. It is not correct to say that 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
appropriateGovernment.ThepowertomakeareferenceconferredupontheGovernmentistobe
exercisedtoeffectuatetheobjectoftheenactmentandhencenotunguided.Theruleistomakea
referenceunless,ofcourse,thedisputeraisedistotallyfrivolousoneexfacie.Thepowerconferred
isthepowertoreferandnotthepowertodecide,thoughitmaybethattheGovernmentisentitled
toexaminewhetherthedisputeisexfaciefrivolousnotmeritinganadjudication.
5.Consistentwiththepolicyoflawaforesaid,theSupremeCourtthoughtitfittocommandtothe
Parliament and the State Legislatures to make a provision enabling a workmen 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 2A of the Industrial Disputes Act.
This would go a long way in removing the misgivings with respect to the effectiveness of the
remediesprovidedbytheIndustrialDisputesAct.
6. The Certified Standing Orders framed under and in accordance with Industrial Employment
(StandingOrders)Actarestatutorilyimposedconditionsofserviceandarebindingbothuponthe
employer and employees, though they do not amount to "statutory provisions". Any violation of
theseStandingOrdersentitlesanemployeetoappropriatereliefeitherbeforetheforumcre
ated by the Industrial Disputes Act. or the Civil Court where recourse to Civil Court is open
accordingtotheprinciplesindicatedabove.
7.ThepolicyoflawemergingfromIndustrialDisputesActanditssisterenactmentistoprovidean
alternative dispute resolution mechanism to the workman, 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
reliefastheythinkappropriateinthecircumstancesforputtinganendtoanindustrialdispute."
10.TheApexCourtinthecaseofBombayUnionJournalistv.TheHindureportedin(1964ILLJ
351)heldthatwherethedisputeconcernsthebodyoftheworkersasawholeortoasectionthereof,
it is an industrial dispute. It is precisely for this reason that Section 2A was inserted by
AmendmentAct,35of1965.Intheinstantcaseindisputably,theEmployees'Unionhadfiledthe
suitvindicatingtheirrightagainstthemanagement.Therefore,inthelightoftheabovedecisionno
otherinferencecouldbedrawnthanthepresentdisputeraisesan'IndustrialDispute'asenvisaged
underSection2(k)oftheIndustrialDisputesAct.Thecaseoftherespondentsisthattheactionof
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the management is in contravention of the scheme of amalgamation which was approved by the
Supreme Court. While carefully considering the contention raised by the respondent who
challengedonlytheorderoftransferpasedbytheapplicantwouldonlyraiseareasonableinference
thatitisanindustrialdispute.Inthisconnection,Dr.Banerjeehasfiledadecisionreportedin1990
ILLN453 in the case of T. Rajaian v. Southern Road ways Ltd In the decision cited (supra) the
transferred employees filed a suit challenging their transfers as mala fide and not for any
administrative reasons. They also filed interlocutory applications for ad interim injunction
restrainingemployersfromgivingeffecttotransfer.Itwasheldthatthedisputesoraisedcomes
within the purview of the Industrial Disputes Act. The employees are not entitled to invoke the
jurisdictionoftheCivilCourtunderSection2(ra)and25TofScheduleV,ItemNo.7intheaforesaid
decision,Ithasbeenheldasfollows:
"TheIndustrialdisputesActhascreatedaforumforenforcingthestatutoryrightinthematterof
transferasdefinedinSection2(ra)readwithSection25ToftheAct.Section7Adealswithmatters
that can be dealt with by Industrial Tribunals. The matters that can be dealt with by Industrial
Tribunals are enumerated in Third Schedule and the matters that can be dealt with by a Labour
CourtareenumeratedintheSecondSchedule.Item(6)ofsecondScheduledealswithallmatters
otherthanthosespecifiedintheThirdSchedule.Inthatviewofthematter,disputesthatariseasa
result of mala fide transfer squarely fall under the Second Schedule, and in fact, the petitioners
haveinitiatedproceedingsasanindustrialDispute.However,theGovernmentdeclinedtoreferthe
matter.ThepetitionershaveonceagainappliedtotheGovernmentforreviewoftheirdecision.In
these circumstances, even if the facts of this case give a right to election to the petitioners, the
petitioner having elected to get redress of their grievance by initiating proceedings under the
provisionsoftheIndustrialDisputesAct,theyarenotentitledtoinvokethejurisdictionoftheCivil
Court."
11.AnidenticalquestioncroppedupforconsiderationinthecaseofRegionalManagerS.B.Iv.Ajoy
SharmabeforeHimachalPradeshHighCourtreportedinServiceLawReports(SLR)1993(8)page
284.ItisheldthattheCivilCourtnotbeingcompetenttograntinjunctionasthematterlaywithin
the jurisdiction of the Labour Courts and therefore, the prayer could not be granted. In SLR
1992(7) 640 in the case of The management of Tamil Nadu Mercantile Bank Ltd. v. T.N.
Venkatesan,similarquestionhadbeenansweredanditwasheldthatsuchissuesbeingcognisable
beforetheIndustrialtribunal,thosecouldnotbedecidedbytheCivilCourtandthereforetheCourt
declinedtogranttheinterimorderofinjunction.Inthiscase,onperusaloftheplaint,itshowsthat
only ground on which the order of transfer is challenged on account of malafide act, victimisation
andpunishment.Therefore,insuchsituation,itcansafelybeconcludedthatthedisputeraisedby
the respondent/opposite party being an 'Industrial dispute' the civil Court has no jurisdiction to
entertain the suit for the challenge made by the respondents relating to their transfer. Similar
questionhadalsoariseninthereporteddecisioninSLR1989(3),359inthecaseofKeralaRubber
&ReclaimsLtdandOrs.v.P.A.Sunnyitwasheldthatthequestionoftransfercomeswithinthe
scope of Section 25T in Chapter VC of the Industrial Disputes Act which contains a prohibition
againstUnfairLabourPractice.Itismentionedhereinafter:
"25T prohibition of Unfair Labour Practice No employer or workmen or a trade Union, whether
registered under the Trade Unions Act, 1926 (16 of 1926) or not, shall commit any unfair labour
practice."
To transfer a workman mala fide from one place to another, under the guise of following
managementpolicy."
Therefore, considering the scope and ambit of the respondent/opposite party claim in the Trial
Court it can very well raise an issue regarding the challenge of transfer on the ground of
administrativeexigencywhichraisedanIndustrialDisputecognisableundertheAct.
12. Mr. Chatterjee, the learned counsel appearing for the respondent/opposite party took an
inexorablepleathatsuchpleaisoneofjurisdictionwhichcouldbeverywelltakenbytheapplicant
intheTrialCourt,anditwillhavetobeproperlyadjudicated.InanapplicationunderArticle227of
theConstitution,thisCourtbyinvokingthesupervisorypowersneednottransgressthejurisdiction
oftheTrialCourt.Itisfurthercontendedthatfromtheimpugnedordernopatenterrorapparent
onthefaceoftherecordcouldbemadeoutbytheapplicant.ThisCourtshouldscarcelyentertain
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such prayer. He has cited a long catena of decisions. In 1995(1) C.L.J. 124 in the case of United
Bank of India v. Hirak Mukherjee, facts are quite distinguishable from the present case. In the
decision cited supra the moot question was regarding alternative remedy by way of appeal'. The
mainthrustoftheargumentofDr.BanerjeeisthatsincethefundamentalquestionofCivilCourts
jurisdiction is in disputed such question could be only considered by filing an application under
Article227oftheConstitutionofIndiaandinthatevent,thepleaofavailabilityofthealternative
remedyisnotbar.
13. Dr. Banerjee, learned Advocate appearing for the petitioner, has placed utmost reliance on a
decision(StateofBiharv.DhirendraKumarandOrs.)itisheld:
"2A.Thequestioniswhetheracivilsuitismaintainableandwhetheradinteriminjunctioncouldbe
issuedwhereproceedingsundertheLandAcquisitionActwastakenpursuanttothenoticeissued
underSection9oftheActanddeliveredtothebeneficiaryTheprovisionsoftheActaredesignedto
acquirethelandbytheStateexercisingthepowerofeminentdomaintoservethepublicpurpose.
TheStateisenjoinedtocomplywithstatutoryrequirementscontainedinSection4andSection6of
the Act by proper publication of the notification and declaration within limitation and procedural
stepsofpublicationinpapersandlocalpublicationsenvisagedundertheActasamendedbyAct68
of1984.InpublicationofthenotificationsanddeclarationunderSection6,thepublicpurposegets
crystallised and becomes conclusive. Thereafter, the State is entitled to authorise the Land
AcquisitionOfficertoproceedwiththeacquisitionofthelandandtomaketheaward.Section11A,
now prescribes limitation to make the award within 2 years from the last date of publication
envisagedunderSection6oftheAct.Inanappropriatecase,wheretheGovt.needspossessionof
thelandurgentlyitwouldexercisethepowerunderSection17(4)oftheActanddispensewiththe
enquiry under Section 5A. Thereon, the State is entitled to issue notice to the parties under
Section8andonexpiryof15days,theStateisentitledtotakeimmediatepossessionevenbefore
the award could be made. Otherwise, it would take possession after the award under Section 12.
ThusitcouldbeseenthattheActisacompletecodeinitselfandismeanttoservepublicpurpose.
Weare,thereforeinclinedtothink,aspresentlyadvised,thatbynecessaryimplicationthepowerof
theCivilCourttotakecognizanceofthecaseunderSection9ofC.P.C.standsexcludedandaCivil
Courthasnojurisdictiontogointothequestionofthevalidityorlegalityofthenotificationunder
Section4,anddeclarationunderSection6exceptbytheHighCourtinaproceedingunderArticle
226oftheConstitution.So,thecivilsuititselfwasnotmaintainable.Whensuchisthesituationthe
finding of the trial Court that there is a prima facie triable issue is unsustainable. Moreover,
possession was already taken and handed over to Housing Board, So, the order of injunction was
withoutjurisdiction.
14.Insupportofthiscontentionhehascitedadecisionreportedin1990ILLN119para7.
"Further it has also been held that whenever any such order is passed when the Court itself had
heldthatithasnojurisdictiontotrythematterinquestion,thisCourtsittinginrevisioncaneven
suomotureviseitunderSection115,CivilProcedureCode.Inthisconnection,thefollowingpassage
inthedecisioninS.SundaramPillaiv.P.Govindaswamimaybeusefullyseen.
"In any cause, the High Court, in the exercise of its revisional jurisdiction cannot allow an order,
which amounts to an abuse of the powers vested in the trial Court, to stand once such an order
comestothenotice,oftheHighCourt.
EvenunderArticle227oftheConstitutionofIndia,suchanordercanbesetaside.Furtherwhen
court exercises jurisdiction under Article 227 of the Constitution of India, even the restrictions
embodiedunderSection115(2)ofCivilProcedureCodewillnotbeattracted.Thelearnedcounsel
fortherespondent,however,contendsthatevenwhentheCourtholdsthatithasnojurisdictionto
tryaproceedingbeforeityet,itcanpassanysuitableorderunderitsinherentpowerunderSection
151 of Civil Procedure Code. This contention has no merit. The power under Section 151 of Civil
ProcedureCodecanbeexercisedonlywhenthereisaproceedinglawfullybeforetheCourt.InRaja
SoapFactoryv.S.P.S.HantharaitheSupremeCourtheldasfollows:
"Section151preservesthatinherentpoweroftheCourtasmaybenecessaryfortheendsofjustice
or to prevent abuse of the process of the Court. That power may be exercised where there is a
proceedinglawfullybeforetheHighCourt.Itdoesnothowever,authorisetheHighCourttoinvest
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itselfwithjurisdictionwhereitisnotconferredbylaw".
The learned counsel also sought to rely on the decision in Shankar v. Krishnji . But the merger
spoken to therein has absolutely no application at all to the facts of the present case. The civil
miscellaneousappealssaidtohavebeenfiledbytherespectiverespondentshereinagainstClause
(1) of the above said respective orders are against the decision holding that the Court has no
jurisdictiontotrythesaidinterlocutoryapplications.Buttheserevisionpetitionersareagainstthe
injunctions granted under Clause (2) of the above said respective orders. So , has no application.
Furthertheobservationswillalsonotaffectthehearingoftheappeals.
15.Onaseriouscogitationofthefactsandcircumstancesofthecase,itemergesthatwhenthereis
wantofjurisdictiontotryaproceedingbeforeacourtwhichpassanorder,suchsaidordercanbe
questionedeitherbyfilinganapplicationunderArticle227oftheConstitutionofIndiaoreven,can
bequestionedbyfilingacivilrevision.Sincetheimpugnedorderwaspassedbyanauthorityhaving
no competent jurisdiction it can be agitated by filing an application under Article 227 of the
Constitution of India and this Court can examine its correctness by invoking its supervisory
jurisdiction.
16. In the result, the suit in T.S. No. 2384 pending before VII Bench City Civil Court as well as
interlocutory application filed by the respondent/opposite parties be returned to them for
presentationbeforethecompetentauthority.
17.Accordingly,theapplicationsucceedsandtheimpugnedorderdatedJuly13,1995isherebyset
asideandpartiesaredirectedtobeartheirowncosts.

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