Manohar Lal Bhatia v. Indian Institute of Technology, Kanpur
1970-09-04
K.B.ASTHANA
body1970
DigiLaw.ai
JUDGMENT K.B. Asthana, J. - This application in revision has been filed by the plaintiff who brought a suit against the Indian Institute of Technology, Kanpur (hereinafter called the Institute) and its Director for a declaration that the order terminating his service was null and void and he be treated in service. He also prayed for recovery of his pay and allowances. The suit was dismissed by the learned Civil Judge as not maintainable but on appeal the order was modified by the learned Additional District judge who rejected the plaint under Order VII, Rule 11 of the C. P. Code. 2. The Indian Institute of Technology existed as a registered society under the Societies Registration Act 1868 when the Institutes of Technology Act 1961 (Herein-after called the Act) was published in the Government of India Gazette on 20-12-1961 and came into force with effect from 1st April, 1962. The plaintiff applicant got his appointment and joined his post in the Institute before the commencement of the Act. Under Section 4 of the Act the Institute became a body corporate having perpetual succession and a common seal. Sec. 5 of the Act deals with the effect of the incorporation of Institutes. It lays down, inter alia, that on and from the commencement of the Act any reference to a society in any law or in any contract or other instrument shall be deemed as a reference to the Institute and that every person employed by a society immediately before such commencement shall hold his office or service in the Institute by the same tenure, at the same remuneration and upon the same terms and conditions and with the same rights and privileges as to compensation, leave, gratuity, provident fund and other matters as he would have held the same if the Act had not been passed and shall continue to do so unless and until his employment is terminated or until such tenure, remuneration, terms and conditions, are duly altered by the Statutes.
By a proviso it was said that if the alteration made by the Statutes was not acceptable to an employee his employment would be terminated by the Institute in accordance with the terms of the contract and if no provision was made therein this behalf, then on payment to him by the Institute of compensation equivalent to three month's remuneration in the case of permanent employees and one month's remuneration in the case of other employees. Sec. 6 of the Act empowers the institute to frame Statutes and Ordinances and to alter, modify or rescind the same. By its Section 17 the Act makes the Director as the principal academic and executive officer of the Institute responsible for the proper administration of the Institute. By clause (e) of Section 26 the terms and conditions of service of teachers and other staff of the Institute can be provided for by Statutes. Sec. 30 lays down how disputes arising out of a contract between an Institute and any, of its employees are to be decided. Since the argument of the learned counsel mainly turned on Section 30 of the Act it would be convenient to quote it. "30. (1) Any dispute arising out of a contract between an Institute and any of its employees shall, at the request of the employees concerned or at the instance of the Institute, be referred to a Tribunal of Arbitration consisting of one member appointed by the Institute, one member nominated by the employee, and an umpire appointed by the Visitor. (2) The decision of the Tribunal shall be final and shall not be questioned in any court. (3) No suit or proceeding shall lie in any court in respect of any matter which is required by sub-sec. (1) to be referred to the Tribunal of Arbitration. (4) The Tribunal of Arbitration shall have power to regulate its own procedure. (5) Nothing in any law for the time being in force relating to arbitration shall apply to arbitration under this section." 3. It is not known whether any Statutes regarding terms and conditions of service of the teachers and staff of the Institute have been framed. The learned counsel for the parties at the bar proceeded on the basis as if no Statutes in that behalf have been framed.
It is not known whether any Statutes regarding terms and conditions of service of the teachers and staff of the Institute have been framed. The learned counsel for the parties at the bar proceeded on the basis as if no Statutes in that behalf have been framed. It is also not disputed by the plaintiff applicant that he is an employee of the Institute as incorporated under the Act. 4. The main question that falls for determination in this case is : whether sub-sec. (3) of Section 30 of the Act bars the suit of the plaintiff from the cognizance of the civil court ? 5. Sri S.N. Verma, learned counsel appearing for the plaintiff applicant, raised three contentions in support of the revision. His first contention was that the subject-matter of the suit as disclosed by the plaint does not relate to any dispute arising out of the contract of service between the Institute and the plaintiff, hence Section 30 of the Act will not apply. His second contention was that the plaintiff having joined service in the Institute before the commencement of the Act he continued to enjoy the same rights and privileges as he enjoyed before the commencement of the Act it not being the case that any statutes were framed by the Institute altering the terms and conditions of his service and accepted by him, therefore, no question of the applicability of Section 30 of the Act will arise. His third contention was that sub-sec. (3) of Section 30 in terms did not apply inasmuch as the suit of the plaintiff was not in respect of any matter which was required by sub-sec. (1) of Section 30 to be referred to the Tribunal of Arbitration. 6. I would now proceed to deal with the above contentions in the order in which they have been mentioned. 7. I do not find any force in the first contention.
(1) of Section 30 to be referred to the Tribunal of Arbitration. 6. I would now proceed to deal with the above contentions in the order in which they have been mentioned. 7. I do not find any force in the first contention. A perusal of the plaint and its analysis shows that the plaintiff claims that he was a permanent employee, that his services were terminated against the terms and conditions of the service as the order in reality amounted to punishment by way of dismissal which could not be imposed without taking recourse to an enquiry; that the plaintiff was entitled to a declaration that the plaintiff always remained in service and was entitled to recover the balance of his salary and allowances on the basis of a particular scale of pay. It is clear that the plaintiff in the plaint pleads that the defendants had wrongly deprived him of his rights which he had under the terms of employment or under the contract. The plaintiff thus invites the Court to find out whether the defendants were justified in treating him as a temporary employee, terminating his services as such by one month's pay in lieu of notice and paying him a remuneration in a lower scale of pay. The court would not be able to decide any of the issues arising from the pleading of the plaintiff, if traversed, without examining the terms and conditions of the service of the plaintiff. 8. The argument of Sri Verma was that unless a written statement were filed by the defendants traversing allegations in the plaint it could not be said whether there was any dispute or not between the plaintiff and the defendants. The learned counsel submitted that it may well be that the defendants admit the fact that the plaintiff was a permanent employee; that the so-called order of termination was really an order of punishment and that the pay was wrongly calculated in a lower scale. I find no substance in this submission. Any admission by the defendants in their written statement only will absolve the plaintiff from proving the allegations in his plaint. That would not affect the nature of the dispute which the allegations and the, pleadings in the plaint show.
I find no substance in this submission. Any admission by the defendants in their written statement only will absolve the plaintiff from proving the allegations in his plaint. That would not affect the nature of the dispute which the allegations and the, pleadings in the plaint show. If there were no such admission by the defendant the plaintiff will have to prove all the allegations in the plaint in order to obtain relief from the court even if the defendants did not traverse the plaintiff's pleas by filing a written statement or if the suit proceeded ex parte. A court cannot give a decree to a plaintiff unless the plaintiff proves his case or establishes his case by legal evidence. The admission of any of the allegations and pleadings of the plaintiff does not change the nature of the case of the plaintiff or derogates from its character. The admission only establishes what the plaintiff alleged or pleaded. The mere fact that a person institutes a suit in a court of law for certain reliefs alleging wrongful acts on the part of the defendant will manifestly show that there is a dispute. It is the allegations in the plaint which have to be taken into consideration independent of the stand taken by the defendant in order to find out the subject matter of the dispute which the plaint discloses. I have already observed above that the subject-matter as disclosed by the plaint does disclose a dispute arising between the Institute and the plaintiff based on the contract of service. It has been held by the Supreme Court in the case of Union of India v. Salween Timber and Construction Co. (India), A.I.R. 1969 S.C. 488, that the test for determining whether a dispute is one "arising out of the contract" or "in connection with the contract" is whether it refers to a contract by which both the parties are bound and it is necessary to refer to its term for the purpose of determining the claim of the parties is justified or otherwise: If it is necessary to take recourse to the terms of the contract for the purpose of deciding the matter in dispute, it must be held that the matter arises out of the contract. 9.
9. Sri Verma then contended that in fact and in truth the case of the plaintiff as presented in the plaint was not based upon the breach of any terms of the contract of service but was based on the tortuous acts of the Director of Institute and other officers who by bringing a false charge against the plaintiff got him beaten by the police and then without waiting for the result of the criminal case terminated his services; that this termination was on account of suspicion against him and amounted to punishment, thus the dispute did not arise out of the contract but the cause of action was based on a tortuous act. It was further submitted on this part of the case that what the plaintiff really set up as his case was that he was in the service of the plaintiff; that the contract of service still subsisted, the plaint, therefore, did not relate to any matter arising out of contract of service. There is no substance in this line of argument. The plaintiff will always have to establish that the termination of service was not in accordance with the terms and conditions of his service and it is only then that the court will be able to hold that the contract of service still subsisted as claimed by the plaintiff. 10. As regards the claim for recovery of the balance of the pay and allowance on the basis of a particular scale of pay, the plaintiff will have to establish that under the terms and conditions of service he was entitled to a particular salary. It would thus seen that none of the reliefs claimed by the plaintiff in his plaint are reliefs for any loss or damage on account of any tortuous act on the part of the defendants. The suit is not one for recovery of damages. 11. As regards the submission that the defendant having terminated the contract would no longer be bound by it, the dispute in the suit cannot be said to be arising out of a binding contract between the parties as it transcends the contract itself and the plaintiff wants a declaration that the contract still subsists, again the real issue between the parties would be whether the contract subsists or not.
I am of the opinion that, the attitude of the defendant is irrelevant in finding out whether on the allegations in the plaint any dispute arising out of the contract is revealed. There can be no other answer except that on the allegations and the pleas raised in the plaint the plaintiff raises a dispute arising out of the contract of service. Pleadings in the plaint alleged that the defendants wrongfully terminated the contract. Therefore, the dispute arising in the suit would be whether under the terms and conditions of the contract the defendants could legally terminate the services of the plaintiff in the manner in which they had done. This would be nothing but a dispute arising out of a contract. Learned counsel referred to a decision of the Supreme Court, Union of India v. Virla Cotton Spinning and Weaving Mills Ltd., A.I.R. 1967 S.C. 688. I do not think the learned counsel can derive any assistance from the ratio of the decision in that case. On the facts in the case cited, the learned judges of the Supreme Court found that the Union of India did not dispute the amount due to the plaintiff under the contract but they claimed a set-off on the allegation that the plaintiff owed some money to them under some other transaction. On those facts the learned judges held that the dispute between the parties was not then under the contract or arising out of the contract on the basis of which the plaintiff claimed recovery of the money due to him. I think on the facts and circumstances of the instant case the ratio of the decision in the case of Union of India v. Salween Timber and Construction Co., A.I.R. 1967 S.C. 688, fully applies. Thus there is no force in the first contention of the learned counsel. 12.
I think on the facts and circumstances of the instant case the ratio of the decision in the case of Union of India v. Salween Timber and Construction Co., A.I.R. 1967 S.C. 688, fully applies. Thus there is no force in the first contention of the learned counsel. 12. The second contention raised in support of the revision is to the effect that the application of the provisions of Section 30 of the Act is excluded as the plaintiff continued to enjoy the old privileges on every matter regarding his service as the terms and conditions of service have not been altered by the Statutes and accepted by him therefore it should be deemed that as far as he is concerned the Act was not passed and he has a right to approach the Civil Court as he would have done if the Institute had remained a registered society. The argument does appear to be attractive at first sight, but on a closer examination of the relevant provisions of the Act and on a proper appreciation of the provisions of Section 5 of the Act, I am inclined to agree with Sri Shanti Bhushan, appearing for the defendants opposite parties, that clause (d) of Section 5 preserves to the employee of the erstwhile society which became incorporate as an Institute under the Act on the commencement of the Act only his contractual rights. It is difficult to accept the submission of Sri Verma appearing for the applicant that the right to file a suit before a civil court for redress of the wrongs of the employer was implicit in the contract of service and was a term thereof. I think the right to approach a court of law for redress does not flow from any contract between the parties. It is a right conferred by law. It is permissible to the legislature to pass a law curtailing that right. It could not have been the intention of the legislature while enacting clause (d) of Section 5 of the Act that it was preserving to the employee all other rights apart from the contract which by law vested in him as that would mean that in perpetuity no law could be passed by the legislature affecting the right to obtain redress in a civil court.
Clause (d) of Section 5 shows that its ambit extends only to the preservation of contractual rights of the employee. The proviso makes it clear that the employee will enjoy all the rights and privileges arising out of the contract between the employer and the erstwhile society till they are altered by a Statute. Thus in clause (d) those rights and privileges are contemplated which could be altered by the Institute by making a Statute. I am, therefore, of the view that on a proper construction of clause (d) of Section 5 what is preserved to the employee are the terms and conditions, rights and privileges relating to pension and other matters of his service but the right to get redress from a court cannot be said to be a term or condition or a right or privilege flowing from the contract of service. Thus the second contention of the learned counsel is found to be without force. 13. The third contention, however, raised by Sri Verma appears to have some force. It involves a difficult question of interpretation. I have heard the learned counsel for the parties at great length on the points arising on this contention and I would prefer the interpretation and construction sought to be put by Sri Verma for the applicant on the meaning and effect of sub-sec. (3) of Section 30 of the Act. I have already quoted above the contents of Section 30 of the Act. Sub-sec. (3) bars a suit or proceeding in any court in respect of any matter which is required (italicized mine) by sub-sec. (1) to be referred to the Tribunal of Arbitration. The key to the interpretation of this clause is the meaning to be given to the Verb "is required". The dictionary meaning of the word Verb 'required' is : to ask or request, or demand as necessary or essential, to seek for, to need for some end or purpose. Now the meaning of any matter which is required by sub-sec. (1) to be referred to the Tribunal of Arbitration grammatically would be a matter which has been demanded or asked for to be referred to the Tribunal of Arbitration under that sub-section. When sub-sec.
Now the meaning of any matter which is required by sub-sec. (1) to be referred to the Tribunal of Arbitration grammatically would be a matter which has been demanded or asked for to be referred to the Tribunal of Arbitration under that sub-section. When sub-sec. (1) is considered it would be found that after a request is made by an employee or the Institute moves, for that is the import of "at the instance of the Institute" in sub-sec. (1) then the dispute arising out of contract between the Institute and its employee shall be referred to the Tribunal of Arbitration consisting of one member appointed by the Institute, one member nominated by the employee and an umpire appointed by the Visitor. The Visitor is the President of India vide Section 9 of the Act. A dispute arising out of a contract between the institute and any of its employee does not, by virtue of sub-sec. (1) of Section 30, automatically go to the Tribunal of Arbitration. Unless a request or a demand is made by the employee or the institute at its initiative demands it to be referred, no question will ever arise of referring the dispute. The language of sub-sec. (1) of Section 30 is unlike the language generally found in arbitration clauses under various contracts that any dispute arising out of a contract will be referred to an arbitrator or a Board of Arbitrators appointed by so and so. Had the language of sub-sec., (1) of Section 30 been like the general language indicated by me, certainly sub-sec. (3) would have kept outside the purview of the civil court any dispute arising out of a contract between an institute and any of its employee and it would have been sufficient for the legislature to frame sub-sec. (3) in a simpler form, that is, no suit or proceeding shall lie in any court in respect of a matter referred to in sub-sec. (1) or in respect of any dispute arising out of a contract between an Institute and any of its employees. But the legislature deliberately used the words in sub-sec. (3) "no suit or proceeding shall lie in any court in respect of any matter which is `required' by sub-sec. (1) to be referred to the Tribunal of Arbitration". In my judgment a matter can only be said to be required by sub-sec.
But the legislature deliberately used the words in sub-sec. (3) "no suit or proceeding shall lie in any court in respect of any matter which is `required' by sub-sec. (1) to be referred to the Tribunal of Arbitration". In my judgment a matter can only be said to be required by sub-sec. (1) to be referred to the Tribunal of Arbitration, when acting under sub-sec. (1) the employee has called for or demanded an arbitration or the Institute has called for or demanded an arbitration. So long as neither of the party has called for any dispute arising out of the contract to be referred to Tribunal of Arbitration, it cannot be said that any matter has been required or is required by sub-sec. (1) to be referred to the Tribunal of Arbitration. The argument of Sri Shanti Bhushan for the defendant opposite party over simplifies the problem arising out of the interpretation or construction. Sri Shanti Bhtishan's argument loses sight of the phrase used in sub-sec. (3), "is required" and his argument substitute something in the reading of that sub-section. To accept his construction one will have to read sub-sec. (3) like this : "No suit or proceeding shall lie in any court in respect of any matter which can be `required' by sub-sec. (1) to be referred to the Tribunal of Arbitration". It is not permissible in law to add or substitute words for interpreting any Statute unless the court finds it utterly impossible to give any sensible meaning to the Statute without adding or substituting some words consistent with the object and principles of the Statute. The submission of Sri Verma that it being no........case that any of them called for, demanded or requested the dispute arising out of the contract to be referred to a Tribunal of Arbitration, sub-sec. (3) will not come into play, is acceptable to me as that would avoid the difficulties discussed below which will arise if the construction convassed by Sri Shanti Bhushan for the opposite party is accepted. 14. It would be seen that by its sub-sec. (5) Sec. 30 excludes the applicability of the Arbitration Act 1940 to the arbitration under Sec. 30.
14. It would be seen that by its sub-sec. (5) Sec. 30 excludes the applicability of the Arbitration Act 1940 to the arbitration under Sec. 30. Now, let us envisage a case where an employee requests for referring a dispute arising out of a contract that it be referred to a Tribunal of Arbitration and by a notice to the Institute calls upon it to nominate its arbitrator. The Institute just keeps mum and does not take any steps. The employee cannot take recourse to the provisions of the Arbitration Act 1940 under which the civil court can call upon the Institute to nominate an arbitrator failing which the court will nominate an arbitrator and then the arbitration shall proceed after the Visitor appoints an umpire. There is no machinery available to the employee in such an, impasse as he cannot take recourse to the provisions of the Arbitration Act 1940. If the construction put by Sri Shanti Bhushan is given to sub-sec. (3) then the employee will be left without any remedy whatsoever. I think it is no answer when Sri Shanti Bhushan suggested that the employee could approach the High Court under Article 226 of the Constitution for a writ of mandamus asking the Institute to appoint an arbitrator or file a suit in the civil court for injunction for the same kind of relief. This suggestion of the learned counsel with due deference to him to a novel one. Why should I attribute an intention to the legislature that the employee in order to seek redress has to take recourse to circuitous remedies, expensive and time-consuming. It is also difficult for me to agree with Sri Shanti Bhushan that under sub-sec. (1) in so far as the request for arbitration is concerned or the appointment of an arbitrator is concerned a party is under a compulsive duty in case it desires redress to ask for arbitration. I do not find any validity in this suggestion. I think I would be justified in preferring the construction given to sub-sec. (3) by Sri Verma for the applicant as that would at least leave the door open to the employee for redress of the wrongs done to him by the Institute in respect of his service.
I do not find any validity in this suggestion. I think I would be justified in preferring the construction given to sub-sec. (3) by Sri Verma for the applicant as that would at least leave the door open to the employee for redress of the wrongs done to him by the Institute in respect of his service. No doubt once a request has been made and the Tribunal of Arbitration is constituted the proceedings in civil court would, be barred as the aggrieved party will have a Tribunal to look into his grievances, adjudicate upon the rights and give appropriate relief. It would then be a substitute for the court but to bring about by interpretation a situation in which the employee will remain hanging in the air without redress of his grievance would be against all canons of justice. Sub-sec. (3) contemplates the factual state of affairs, that is to say, when a party has moved under sub-sec. (1) for referring the dispute arising out of the contracts to a Tribunal of Arbitration. Only then the jurisdiction of the civil court would become barred. So long as no party has moved I do not see any reason why the civil court should not take cognizance. As pointed out earlier there is no compulsion in sub-sec. (1) of Section 30 that an employee must get redress of his grievances arising out of the dispute relating to terms and conditions of service before a Tribunal of Arbitration, he may or he may not. That will not mean that if he does not make a request for reference to a Tribunal of Arbitration he cannot approach the regular civil courts which has jurisdiction. Likewise, if the Institute seeks a reference of the dispute to the Tribunal of Arbitration and when that occasion arises the employee cannot take recourse to a civil suit as the machinery for adjudicating upon the rights would then be found within the frame work of sub-sec.(1). 15. For these reasons I accept the third contention raised by the learned counsel for the applicant and hold that the suit of the plaintiff was not barred by sub-sec. (3) of Section 30 of the Act. 16. Accordingly I allow this revision, set aside the judgment and order of the courts below and direct that the suit of the plaintiff shall proceed and be decided in accordance with law.
(3) of Section 30 of the Act. 16. Accordingly I allow this revision, set aside the judgment and order of the courts below and direct that the suit of the plaintiff shall proceed and be decided in accordance with law. The applicant shall be entitled to his costs for this revision.