2004 JTR(SC) 1177
2004 AIR(Kar)(R) 3170 ; 2004 AIR(SC) 4839 ; 2004 AIR(SCW) 5546 ; 2005 1 AllCJ 435 ; 2004 2 ApexCJ(SC) 650 ; 2004 4 AWC 3218 ; 2005 1 BBCJ(SC) 23 ; 2004 103 FLR 460 ; 2004 ILR(Kar) 5182 ; 2004 4 JCR(SC) 118 ; 2004 8 JT 436 ; 2004 LIC 4052 ; 2005 1 LLJ 1 ; 2004 4 LLN 744 ; 2004 8 Scale 313 ; 2004 8 SCC 262 ; 2004 SCC(L&S) 1097 ; 2004 Supp4 SCR 716 ; 2005 1 SCT 636 ; 2004 6 SLR 168 ; 2004 KHC 1574 ; 2004 3 KLT(Online) 1211 ; 2004 7 Supreme 302
2004(7) Supreme 302
SUPREME COURT OF INDIA
(From Karnataka High Court)
N. Santosh Hegde & S.B. Sinha, JJ.
Executive Engineer ZP Engg. Div. & Anr. -Appellants
versus
Digambara Rao etc. etc. -Respondents
Civil Appeal Nos. 1164-66 of 2002
Decided on 27-9-2004
Counsel for the Parties :
For the Appellants : Mallikarajun Reddy, Sanjay R. Hegde, Anil K. Mishra, Advocates.
For the Respondents : K. Maruthi Rao and G. Narasimhulu, Advocates.
IMPORTANT POINT
Where employment was given in a particular scheme and terminated with scheme ending, employee could not be said to have a right to be regularised in service or claim benefit of Section 25F of Industrial Disputes Act.
Act Referred :INDUSTRIAL DISPUTES ACT : S.25(f)
(A) The Industrial Disputes Act, Section 25(f), read with the principles affirmed in P. Kulothangan (supra), governs the cessation of employment and the bar on re-litigating issues already decided by a competent court. The provision contemplates that an employee engaged under a specific scheme or for a defined purpose stands terminated upon the scheme's conclusion or upon valid discharge, and any subsequent petition questioning the termination or seeking regularization is barred if the same matter has been finally adjudicated. The High Courts earlier judgment, which held that the termination under the Scheme was valid and that regularization was not legally permissible, attracted the principle of res judicata, rendering any further adjudication by a Labour Court or another forum impermissible.
(B) The core legal principles are: (i) the doctrine of res judicata applies to industrial disputes before Labour Courts and High Courts, precluding re-argument of issues already decided; (ii) cessation of a scheme-based employment does not automatically attract rights to regularization; (iii) a finding of fact that services were terminated is conclusive and ousts any claim for reinstatement or back-wages; and (iv) courts must not interfere with statutory or factual findings absent a clear legal error.
Facts of the case:
The Respondents were engaged under a rural water supply and road construction Scheme in Gulbarga, Karnataka, on daily wages from approximately 1993 until their termination in October 1996. They filed writ petitions seeking regularization, arrears of salary, and other service benefits, asserting continuous service. The Single Judge and Division Bench of the Karnataka High Court held that their services had been terminated, that they were not entitled to regularization, and dismissed the petitions. Subsequently, the Labour Court set aside the termination orders, directing reinstatement with 50% back-wages. The Appellants challenged the Labour Courts awards through writ petitions, which were dismissed by the High Court. These appeals challenge the dismissal of those writ petitions.
Findings of Court:
The High Court correctly found that the Respondents services under the Scheme ended on or about 19.10.1996, and that their claim for continued employment or regularization was legally unsustainable. The Labour Courts orders were predicated on an incorrect factual premise and a misapprehension of the Schemes duration, and they amounted to a reconsideration of matters already finally decided. Consequently, the proceedings in the Labour Court were barred by res judicata, and the High Court was justified in declining to interfere.
Issues:
Whether the doctrine of res judicata bars a fresh proceeding under the Industrial Disputes Act where an earlier writ petition by the same parties on the same cause of action has resulted in a final judgment; and whether an employee appointed under a time-bound Scheme can claim regularization after the Schemes termination.
Ratio Decidendi:
A prior final judgment by a competent court on the same cause of action between the same parties operates as a bar (res judicata) to any subsequent proceedings in another forum. The cessation of a Scheme-based engagement does not give rise to a legal right to regularization, and courts must not exercise discretion under Article 142 to grant relief that conflicts with statutory provisions or an earlier adjudicated decision.
Result:
The appeals are allowed. The impugned judgments and awards of the Labour Court and the High Court are set aside, and no costs are ordered.
(A) The Industrial Disputes Act, Section 25(f), read with the principles affirmed in P. Kulothangan (supra), governs the cessation of employment and the bar on re-litigating issues already decided by a competent court. The provision contemplates that an employee engaged under a specific scheme or for a defined purpose stands terminated upon the scheme's conclusion or upon valid discharge, and any subsequent petition questioning the termination or seeking regularization is barred if the same matter has been finally adjudicated. The High Courts earlier judgment, which held that the termination under the Scheme was valid and that regularization was not legally permissible, attracted the principle of res judicata, rendering any further adjudication by a Labour Court or another forum impermissible.
(B) The core legal principles are: (i) the doctrine of res judicata applies to industrial disputes before Labour Courts and High Courts, precluding re-argument of issues already decided; (ii) cessation of a scheme-based employment does not automatically attract rights to regularization; (iii) a finding of fact that services were terminated is conclusive and ousts any claim for reinstatement or back-wages; and (iv) courts must not interfere with statutory or factual findings absent a clear legal error.
Facts of the case:
The Respondents were engaged under a rural water supply and road construction Scheme in Gulbarga, Karnataka, on daily wages from approximately 1993 until their termination in October 1996. They filed writ petitions seeking regularization, arrears of salary, and other service benefits, asserting continuous service. The Single Judge and Division Bench of the Karnataka High Court held that their services had been terminated, that they were not entitled to regularization, and dismissed the petitions. Subsequently, the Labour Court set aside the termination orders, directing reinstatement with 50% back-wages. The Appellants challenged the Labour Courts awards through writ petitions, which were dismissed by the High Court. These appeals challenge the dismissal of those writ petitions.
Findings of Court:
The High Court correctly found that the Respondents services under the Scheme ended on or about 19.10.1996, and that their claim for continued employment or regularization was legally unsustainable. The Labour Courts orders were predicated on an incorrect factual premise and a misapprehension of the Schemes duration, and they amounted to a reconsideration of matters already finally decided. Consequently, the proceedings in the Labour Court were barred by res judicata, and the High Court was justified in declining to interfere.
Issues:
Whether the doctrine of res judicata bars a fresh proceeding under the Industrial Disputes Act where an earlier writ petition by the same parties on the same cause of action has resulted in a final judgment; and whether an employee appointed under a time-bound Scheme can claim regularization after the Schemes termination.
Ratio Decidendi:
A prior final judgment by a competent court on the same cause of action between the same parties operates as a bar (res judicata) to any subsequent proceedings in another forum. The cessation of a Scheme-based engagement does not give rise to a legal right to regularization, and courts must not exercise discretion under Article 142 to grant relief that conflicts with statutory provisions or an earlier adjudicated decision.
Result:
The appeals are allowed. The impugned judgments and awards of the Labour Court and the High Court are set aside, and no costs are ordered.
regularization - The court cites this case to support the principle that completion of 240 days of service is not alone a ground for regularization and that sympathy cannot be a basis for legal relief.
JUDGMENT
S.B. Sinha, J.-These appeals arise out of the judgments and orders dated 9.11.2000 and 20.11.2000 passed by the High Court of Karnataka at Bangalore in Writ Appeal Nos. 2756-57 of 2000 and 2759 of 2000 respectively whereby and whereunder the appeals preferred by the Appellants herein against the orders dated 14.2.2000 and 15.2.2000 passed by the learned Single Judge of the said court in several writ petitions were dismissed.
FACTS :
2. The Respondents were originally employed on daily wages in relation to a Scheme known as Kriya Scheme aimed at providing drinking water and construction of roads for the benefit of the rural poor in the District of Gulbarga in the State of Karnataka. The employment allegedly commenced in the year 1993. The services of the Respondents were terminated in 1996. They filed writ petitions before the Karnataka High Court contending, inter alia, that as they having worked for a number of years, became entitled for regularization. It was furthermore contended that they had still been in service. The prayers made in the said writ petitions which are relevant for our purpose are as under:
"a) Issue a writ of mandamus order or direction directing Respondents No.2 & 3 to regularization (sic for regularize) the service of the petitioner No.1 to the post of Assistant Engineer in the pay scale of Rs. 2050/- with allowance, the petitioners No.2 and 3 as Junior Engineers in the pay scale of Rs. 1520/- and allowance.
b) Issue a writ in the nature of mandamus order or direction not to discontinue the service of the petitioners and to direct payment of arrears of salary from September 1996 onwards and also to pay difference or arrears of salary to the petitioners from the date of completion of 240 days to grant all service benefits as are applicable to regular employees like seniority, promotion, increments, allowance etc."
3. The said writ petitions came up for consideration before a learned Single Judge of the Karnataka High Court.
4. We may further notice that along with the said writ petitions, the Respondents herein annexed two documents wherefrom it appeared that they had allegedly continued to work beyond 19.10.1996, the date of termination of their services. Upon an inquiry made in this behalf at the behest of the High Court, it was contended by the Appellants by filing an additional affidavit that no payment for daily wages had been made to the Respondents after the order of their discharge and such certificates had been procured from a Junior Engineer against whom a departmental inquiry had been initiated. It was further pointed out that author of one of the documents had himself disowned the said letter in terms of a communication annexed to the said additional affidavit.
In the said writ petitions, two questions fell for consideration:
"1) Whether the petitioners continued in employment of the Respondents beyond the 19th of October, 1996; and 2) Whether they are on the basis of the service rendered as daily wager entitled to an order of regularization?"
5. By reason of a judgment and order dated 1.12.1997, the learned Single Judge held that having regard to the fact that their services had been discontinued, the question of a direction being issued for continuance of their services does not arise having regard to the fact that the life of the Scheme had come to an end. As regard the claim for regularization even on the basis of the services rendered by the Respondents upto October 1996, it was held that they were not entitled thereto in law.
6. The writ petitions were, thus, dismissed. An appeal preferred thereagainst was also dismissed by the Division Bench of the said High Court by an order dated 19.3.1998. Despite the same, the Respondents herein filed applications before the Labour Court at Gulbarga which were marked as Reference Nos. 495 of 1998, 484 of 1998 and 498 of 1998. In the said Reference Applications, the Respondents did not disclose that the High Court had dismissed their earlier writ petitions and furthermore the appeal preferred thereagainst had also been dismissed. Written statements in the said proceedings were filed by the Appellants, wherein, inter alia, it was contended that the employment of the Respondents was for daily wages and for a specific scheme. A further contention was raised therein that having regard to the decision of the High Court in the earlier writ petitions, Respondents were not entitled to any relief.
7. By an order dated 1.10.1999, the Labour Court, however, passed two award setting aside the orders of termination, inter alia, on the ground that the Respondents having worked for more than 240 days, the provisions of Section 25F of the Industrial Disputes Act were required to be complied with. They were in terms of the said awards directed to be reinstated with 50% of the back-wages. The legality and/or validity of the said awards came to be questioned by the Appellants herein by filing two writ petitions before the Karnataka High Court which were marked as Writ Petition Nos. 3808 of 2000 and 3697-98 of 2000 which were dismissed by an order dated 14.2.2000 and 15.2.2000. The appeals thereagainst filed by the Appellants herein were also dismissed by orders dated 9.11.2000 and 20.11.2000. Hence these appeals.
SUBMISSIONS :
8. Mr. Mallikarajun Reddy, learned counsel appearing on behalf of the Appellants, would, inter alia, submit that the Reference Applications were barred under the principle of res judicata. The learned counsel would contend that the principle of res judicata would apply to a proceeding under the Industrial Disputes Act and in that view of the matter, the High Court committed a manifest error in not interfering with the awards passed by the Labour Court. Reliance in this behalf has been placed on Pondicherry Khadi & Village Industries Board vs. P. Kulothangan and Another [(2004) 1 SCC 68].
9. Mr. K. Maruthi Rao, learned counsel appearing on behalf of the Respondents, on the other hand, would submit that the principle of res judicata has no application in the instant case inasmuch as in the writ petitions the prayer made by the Respondents herein was for regularization of their services, whereas before the Labour Court the legality or otherwise of the orders of termination came to be questioned. In any event, Mr. Maruthi Rao would contend that having regard to the fact that the Respondents herein are qualified Junior Engineers and have already crossed the age of forty, this Court may not, in its discretion, interfere with the impugned judgments.
ANALYSIS :
10. The said writ petitions were filed by the Respondents on the following premise : (1) The Respondents had been appointed in the year 1993; (2) When the writ petitions were filed they were still in service; (3) They were appointed as Daily Wages Graduate Engineers; (4) They were not being paid the regular scale of pay, although they had been doing the same work as was being done by the regular employees; (5) Having regard to the fact that they had rendered about four years of continuous service and being under threat of termination of service, they were entitled to be regularized in their service as also other benefits attached thereto, having completed 240 days of continuous service in a year.
11. We have noticed hereinbefore that the factual premise that the Respondents had still been in service at the time of filing of the writ petitions had been found to be incorrect, as in fact their services had been terminated on or about 19.10.1996. It was further held that as they were appointed against a Scheme, the question of their continuance in service beyond the life thereof does not arise. The High Court was furthermore of the opinion that their services cannot be directed to be regularized.
12. We have noticed hereinbefore the although the principal plea of the Respondents in the said writ petition was for regularization of their services but they had also prayed for issuance of a writ of mandamus or for a direction not to discontinue their services as also payment of arrears of salary from September 1996 onwards, difference or arrears of salary from the date of completion of 240 days and to grant all service benefits as applicable to regular employees like seniority, promotion, increments, allowance etc.
13. The said prayer in the said writ applications had a direct nexus with the orders of termination of their services. A finding of fact having been arrived at that their services had been terminated and they were not entitled to continue in service, in our opinion, the legality or otherwise of the said purported orders of termination could not have been the subject-matter of proceedings under the Industrial Disputes Act; for the reason that if the Respondents herein were not entitled to continue in their services by reason of the judgment of the High Court, the question of their reinstatement with back-wages would not arise.
14. The Respondents herein approached the High Court with full knowledge that their services had been terminated. Their attempt to show that they were still in service had been disbelieved and it was found as of fact that their services had been terminated on 19.10.1996. The Respondents, therefore, while filing the writ application were bound to lay their whole claim having regard to the provisions contained in Order II Rule 2 of the Code of Civil Procedure or the principles analogous thereto. The very basis upon which the writ petitions were based was found to be incorrect. It was, thus, obligatory on the part of the Respondents herein to question their orders of termination upon placing correct facts before the High Court. They did not choose to do so. They did not pray for and obtain any leave of the court to raise the contention about the legality or otherwise of the orders of termination before an appropriate forum. Furthermore, their plea to the effect that they were entitled to continue in service was specifically rejected. In that view of the matter, the proceedings initiated before the Labour Court questioning the orders of termination passed against them by the Appellants praying for their reinstatement will full back-wages, in our opinion, was wholly misconceived. Such a plea was barred under the principle of Res Judicata. It is now well-settled that the general principle of Res Judicata applies to an industrial adjudication.
15. In P. Kulothangan (supra), this Court held:
"The principle of res judicata operates on the court. It is the courts which are prohibited from trying the issue which was directly and substantially in issue in the earlier proceedings between the same parties, provided the court trying the subsequent proceeding is satisfied that the earlier court was competent to dispose of the earlier proceedings and that the matter had been heard and finally decided by such court. Here the parties to the writ petition filed by the respondent in the Madras High Court and the industrial dispute were the same. The cause of action in both was the refusal of the appellant to allow the respondent to rejoin service. The Madras High Court was competent to decide the issue which it did with a reasoned order on merits and after a contested hearing. This was not a case where the earlier proceedings had been disposed of on any technical ground as was the case in Workmen v. Board of Trustees of the Cochin Port Trust [(1978) 3 SCC 119)] and Pujari Bai v. Madam Gopal [(1989) 3 SCC 433]. The "lesser relief" of reinstatement which was the subject-matter of the industrial dispute had already been claimed by the respondent in the writ petition. This was refused by the High Court. The correctness of the decision in the writ proceedings has not been challenged by the respondent. The decision was, therefore, final. Having got an adverse order in the writ petition, it was not open to the respondent to reagitate the issue before the Labour Court and the Labour Court was incompetent to entertain the dispute raised by the respondent and redecide the matter in the face of the earlier decision of the High Court in the writ proceedings."
16. It is no doubt true, as has been contended by Mr. Maruthi Rao, that the burden of proof that the Respondents were employed against a particular Scheme was on the Appellants but such a burden stood discharged and in any event the said question was no longer alive having regard to the decision of the Karnataka High Court in the earlier writ petitions.
17. The plea raised before us by the Respondents to the effect that their termination of employment fell within sub-clause (bb) of clause (oo) of the Industrial Disputes Act, apart from having not been raised before the Labour Court and the High Court, in our opinion, is not available to them having regard to the decision of the High Court in the writ petitions filed by the Respondents.
18. The decision of a Division Bench of this Court in S.M. Nilajkar and Others vs. Telecom District Manager, Karnataka [(2003) 4 SCC 27], upon which reliance was placed by Mr. Maruthi Rao, therefore, cannot be said to have any application whatsoever in the instant case.
19. It may not be out of place to mention that completion of 240 days of continuous service in a year may not by itself be a ground for directing an order of regularization. It is also not the case of the Respondents that they were appointed in accordance with the extant rules. No direction for regularization of their services was, therefore, could be issued. [See A. Umarani vs. Registrar; Cooperative Societies and Ors. [2004 (6) SCALE 350 = (2004) 7 SCC 112] and Pankaj Gupta & Ors. etc. vs. State of Jammu & Kashmir & Ors. [2004 (7) SCALE 682] Submission of Mr. Maruthi Rao to the effect that keeping in view the fact that the Respondents are diploma-holders and they have crossed the date of 40 by now, this Court should not interfere with the impugned judgment is stated to be rejected.
20. In A. Umarani (supra), this Court rejected the similar contention upon noticing the following judgments:
"In a case of this nature this court should not even exercise its jurisdiction under Article 142 of the Constitution of India on misplaced sympathy.
In Teri Oat Estates (P) Ltd. Vs. U.T., Chandigarh and Others [(2004) 2 SCC 130], it is stated:
"We have no doubt in our mind that sympathy or sentiment by itself cannot be a ground for passing an order in relation whereto the appellants miserably fail to establish a legal right. It is further trite that despite an extra-ordinary constitutional jurisdiction contained in Article 142 of the Constitution of India, this Court ordinarily would not pass an order, which would be in contravention of a statutory provision.
As early as in 1911, Farewell L.J. in Latham vs. Richard Johnson & Nephew Ltd. [1911-13 AER reprint p.117] observed:
"We must be careful not to allow our sympathy with the infant plaintiff to affect our judgment. Sentiment is a dangerous Will O the Wisp to take as a guide in the search for legal principles."
Yet again recently in Ramakrishna Kamat & Ors. Vs. State of Karnataka & Ors. [JT 2003 (2) SC 88], this Court rejected a similar plea for regularization of services stating:
"...We repeatedly asked the learned counsel for the appellants on what basis or foundation in law the appellants made their claim for regularization and under what rules their recruitment was made so as to govern their service conditions. They were not in a position to answer except saying that the appellants have been working for quite some time in various schools started pursuant to resolutions passed by zilla parishads in view of the government orders and that their cases need to be considered sympathetically. It is clear from the order of the learned single judge and looking to the very directions given a very sympathetic view was taken. We do not find it either just or proper to show any further sympathy in the given facts and circumstances of the case. While being sympathetic to the persons who come before the court the courts cannot at the same time be unsympathetic to the large number of eligible persons waiting for a long time in a long queue seeking employment..."
21. For the foregoing reasons, we are of the opinion that the Labour Court and the High Court committed a manifest error in passing the impugned judgments and awards and as such they are liable to be set aside.
22. These appeals are allowed and the impugned judgments and award are set aside. No costs.
Appeal allowed.
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