w w w . L a w y e r S e r v i c e s . i n



M/s. Cognizant Technology Solutions India Pvt. Ltd., rep. by its Authorized Signatory v/s The Appellate Authority under Section 48(1) of the A.P. Shops & Establishments Act, 1988 & Others


    Writ Petition No. 17453 of 2017

    Decided On, 04 May 2020

    At, High Court of for the State of Telangana

    By, THE HONOURABLE MR. JUSTICE P. NAVEEN RAO

    For the Petitioner: C.R. Sridharan, Senior Counsel for Saloori Ramesh, Advocate. For the Respondents: R1 & R3, For Labour, R2, P. Lakshmana Rao, Advocate.



Judgment Text


1. Second respondent in writ petition joined the service of the petitioner-company as Manager-Projects on 25.05.2011 on consolidated pay of Rs. 14.00 lakhs per annum, later increased to Rs. 15.00 lakhs per annum, inclusive of HRA, Special Allowance, Medical Allowance, Company Contribution to Provident Fund etc. Petitioner-company terminated his services by order dated 16.05.2013. Challenging the said termination, 2nd respondent filed appeal under Section 48(1) of the A.P. Shops & Establishments Act, 1988 (Telangana Shops & Establishments Act, 1988) (hereinafter referred to as the Act) before the Authority cum the Assistant Commissioner of Labour, Vikarabad, which was numbered as S.E.No.7 of 2016. The authority, by his order dated 06.04.2017, held that enquiry was not properly conducted and ample opportunity was not afforded to the applicant and observed that applicant is entitled to opportunity to defend his case. The authority further directed that till completion of enquiry, the applicant should be paid allowances as envisaged under Section 47(6) of the Act and further directed that such allowances should be paid from the date of termination till the date of order passed on 06.04.2017, within thirty dates of the order. Petitioner challenges the said order in this writ petition on various grounds.

2. For the present, suffice to note two principal grounds urged by the petitioner: firstly, as the petitioner-company is exempted from the purview of the Shops & Establishments Act, the authority under the Act is not competent to adjudicate the dispute with reference to the termination of service of 2nd respondent and, therefore, the order is not sustainable; and secondly, even assuming that the authority has jurisdiction to adjudicate the dispute between the petitioner-company and the 2nd respondent, the 2nd respondent does not answer the definition of ‘an employee’ for the authority to entertain the appeal against termination and adjudicate as second respondent was working in Managerial capacity and was drawing far higher salary than prescribed in the Act i.e., Rs.1,600/- per month.

3. On the issue of maintainability of the appeal under Section 48 of the Act, extensive submissions are made by learned senior counsel appearing for the petitioner-company and Dr. K.Laxmi Narasimha for P.Laxman, learned counsel for the 2nd respondent.

4. Learned senior counsel Sri Sridharan made the following submissions:

(1) According to learned senior counsel for petitioner, Authority under the Act is vested with jurisdiction to decide a dispute on termination of an employee if such employee is working in an establishment covered by the Act. The Government of the then combined State of Andhra Pradesh vide G.O.Ms.No.5, Information Technology and Communications Department dated 28.01.2002 notified its IT Policy and also resolved to exclude ITES and IT establishments from the purview of the Act. Consequently, in exercise of power vested under Section 73(4) of the Act, Government issued notification vide G.O.Ms.No.16, LET&F (Lab.II) Department, dated 30.05.2002 exempting from the provisions of Sections 15, 16, 21, 23, 31 and sub-sections (1), (2), (3) and (4) of Section 47 of the Act, to all Information Technology Enabled Services (ITES) and Information Technology (IT) establishments. This exemption is extended from time to time and in the series of such extensions, notification was issued vide G.O.Ms.No.62 Labour, Employment Training and Factories (Lab.IV) Department, dated 30.05.2012, extending the exemption for one year from 30.05.2012.

(2) He would submit that petitioner is an ITES/IT company. In view of this exemption, the authority under the Act, has no jurisdiction to go into the validity of the termination of employee working in the petitioner company. He would therefore submit that the order of the authority is not sustainable in law.

(3) Learned senior counsel would submit that an identical issue was considered by this Court in HCL Technologies Limited vs. The Appellate Authority (2015 (2) ALD 651). He would submit that no appeal was preferred against the decision of learned single Judge on the issue of exemption to ITES and IT establishments and in view of the said decision the order of the Authority impugned herein is not sustainable.

5. Learned counsel Dr. Laxmi Narsimha made the following submissions:

(i) Section 73(4) speaks of establishment/class of establishments and Section 2 (10) of the Act defines ‘establishment’. Thus, while exempting from application of any or all of the provisions of the Act, the Government has to specify which of the establishments are exempted. In the notification dated 30.05.2012, this was not specified. He would therefore submit that petitioner company is not exempted from the purview of the Act.

(ii) He would further submit that petitioner filed W.P.No.34685 of 2014 challenging the competency of the Authority to adjudicate the dispute, but it has participated in the proceedings before the Authority and on 20.03.2018 it withdrew the writ petition. Thus, having participated in the proceedings and withdrawn the writ petition, it is not permissible to petitioner to raise the plea of jurisdiction. Learned counsel invoked principle of constructive res judicata to support his contention.

(iii) He would submit that having participated in the proceedings before the Authority, petitioner ought to have availed remedy of appeal and since remedy of appeal is available, writ petition is not maintainable.

(iv) He would submit issue of exemption of an establishment from the purview of the Act is a question of fact. Petitioner did not lead evidence in support of its plea. The Authority rendered his decision based on material on record. Petitioner is seeking to rely on documents now placed before this Court, which were not marked before the Authority and the same is not permissible.

(v) He would further submit that petitioner is not an ITES/IT company, but is a real estate company and, therefore, the exemption notification is not applicable to the petitioner company and the petitioner company is amenable to jurisdiction of the authority.

6. In reply to the contentions urged by Dr. Laxmi Narasimha, learned senior counsel would submit:

(1) In paragraph 3.3.1 of policy on ITES/IT notified vide G.O.Ms.No.5, dated 29.01.2002, Government assured to grant exemption from the operation of the 1988 Act, to encourage establishment of ITES/IT related companies and in accordance with the said commitment, the exemption notification was issued for the first time in the year 2002 and continued year after year. This exemption is applicable to all the ITES/IT companies;

(2) the memorandum of articles of association of the company would clearly point out that company is an ITES/IT company. He has also relied upon the Certificate of Registration under the 1988 Act, and Certificate of Registration under the Companies Act to show that it is registered as IT company. He would further submit that the status of the petitioner company as ITES/IT company is never in dispute. The employee has not disputed on this aspect. In fact, employee described himself as a Techie and claimed vast experience in the Information Technology field and in that capacity he was taken as Manager. He would further submit that no objection was raised before the authority on the status of the petitioner as ITES company. The 2nd respondent only raised the plea that the exemption granted by the Government does not bar institution of appeal before the authority against his termination.

(3) Learned senior counsel would further submit that in the earlier writ petition, petitioner sought for writ of prohibition against continuing proceedings by the authority in view of the exemption notification, but as the interim order earlier granted was vacated and the authority passed final orders, which order was challenged in this writ petition, the earlier writ petition was withdrawn and, therefore, the principle of estoppel/constructive res judicata has no application.

7. Several precedent decisions are relied by learned counsel in support of their contentions. I have carefully considered the respective submissions and precedent decisions.

8. Issue for consideration is whether the Authority under the Act has jurisdiction to adjudicate dispute on termination of an employee working in ITES/IT establishment made when exemption notification under Section 73(4) of the Act was in operation?

9. To appreciate respective contentions, it is necessary to notice relevant statutory provisions and Government orders and notifications as under:

9.1. Sections 47 (1), (2), (3), (4), 48(1) and 73(4) of the Act to the extent relevant, read as under:

“47. Conditions for terminating the services of an employee, payment of service compensation for termination, retirement, resignation, disablement, etc., and payment of subsistence allowance for the period of suspension :-

(1) No employer shall, without a reasonable cause terminate the service of an employee who has been in his employment continuously for a period of not less than six months without giving such employee atleast one month s notice in writing or wages in lieu thereof and in respect of an employee who has been in his employment continuously for a period of not less than one year, a service compensation amounting to fifteen days average wages for each year of continuous employment:

Provided that every termination shall be made by the employer in writing and a copy of such termination order shall be furnished to the Inspector having jurisdiction over the area within three days of such termination.

(2) The services of an employee shall not be terminated by the employer when such employee made a complaint to the Inspector regarding the denial of any benefit accruing to him under any labour welfare enactment applicable to the establishment and during the pendency of such complaint before the Inspector. The services of an employee shall not also be terminated for misconduct except for such acts or omission and in such manner as may be prescribed.

(3) Every employee who has put in a continuous service of not less than one year shall be eligible for service compensation amounting to fifteen days average wages for each year of continuous employment, (i) on voluntary cessation of his work after completion of 60 years of age, (ii) on his resignation, or (iii) on physical or mental infirmity duly certified by Registered Medical Practitioner, or (iv) on his death or disablement due to accident or disease:

Provided that the completion of continuous service of one year shall not be necessary where the termination of the employment of an employee is due to death or disablement:

Provided further that in a case of death of an employee service compensation payable to him shall be paid to his nominee or if no nomination has been made to his legal heir.

(4) Where a service compensation is payable under this section to an employee, he shall be entitled to receive his wages from the date of termination or cessation of his services until the date on which the service compensation so payable is actually paid.

48. Appointment of authority to hear and decide appeals arising out of termination of services :-

(1) (a) The Chief Inspector may, by notification, appoint for any area as may be specified therein, any authority to hear and decide appeals arising out of the termination of service of employees under Section 47:

Provided that the Chief Inspector may on administrative grounds transfer any appeal arising in the territorial jurisdiction of any authority to the file of another authority for disposal, and such authority to whom the appeal is transferred by the Chief Inspector shall dispose of the appeal so transferred.

(b) Any employee whose services have been terminated may, appeal to the authority concerned within such time and in such manner as may be prescribed.

73. Exemption:-

(1) to (3) xxxxxx

(4) The Government may, by notification, exempt either permanently or for any specified period, any establishment or class of establishments, or persons or class of persons, from all or any of the provisions of this Act, subject to such conditions as they may deem fit.

10. In Section 48(1), the Act creates a forum for an employee to seek redressal against termination by his employer, which is an ‘establishment’ as defined in Section 2(10) of the Act. The Authority has to consider all aspects leading to termination and assign reasons in support of the decision. Aggrieved by the decision made by the Authority, remedy of second appeal is available under Section 48(3) of the Act. Section 73(4) of the Act vests power in the State Government to exempt any or all of the provisions of the Act. Such exemption can be to an individual establishment or class of establishments; can be permanent or for specified period; can be to a person or class of persons; can be from all or any of the provisions of the Act; and can impose conditions for application of such exemptions. In exercise of this power, Government issued notification vide G.O.Ms.No.16 dated 30.05.2002 exempting ITES & IT (class of establishments) from application of Sections 15, 16, 21, 23, 31 and sub-section (1), (2), (3) and (4) of Section 47 of the Act to all employees for a period of five years. This exemption was extended from year to year. On the date of termination of 2nd respondent, exemption notification dated 30.05.2012 was in force.

11. G.O.Ms.No.16, dated 30.05.2002 reads as under:

“In exercise of the powers conferred by sub-section (4) of section 73 of the Andhra Pradesh Shops and Establishments Act, 1988 (Act 20 of 1988) the Governor of Andhra Pradesh, hereby exempts from the provisions of Sections 15, 16, 21, 23, 31 and sub-sections (1) (2) (3) and (4) of Section 47 of the Andhra Pradesh Shops and Establishments Act, 1988 to all Information Technology Enabled Services (ITES) and Information Technology (IT) Establishments in the State of Andhra Pradesh that are defined in G.O.Ms.No.5, Information Technology and Communication Department, dated 28.01.2002, for a period of 5 years.”

12. Vide G.O.Ms.No.62, dated 30.05.2012, this exemption was extended for a further period of one year i.e., till 30.05.2013. It reads as under:

“3. On the request of the Information Technology & Communications department, and the recommendations thereon of the Addl. Commissioner of Labour, Andhra Pradesh, Hyderabad Government have decided to extend the exemption for a further period of one year with effect from 30.05.2012.”

13. In HCL Technologies Limited, learned single Judge of this Court disposed W.P.Nos.2404 and 5601 of 2014 and 24065 of 2013 by a common order. These writ petitions were dealing with three different aspects. In W.P.no.24065 of 2013 issue of jurisdiction of the Authority under the Act against ITES and IT establishments was considered. On considering the exemption notification issued by the Government, in exercise of powers vested under Section 73(4) of the Act, exempting ITES and Information Technology Establishments from the operation of certain provisions of the Act, learned single Judge observed that the employer therein being an Information Technology establishment, it is entitled to benefits of the said G.O., and the provisions of subsections (1) to (4) of Section 47 of the Act would not be made applicable to the said establishment. Learned Judge further held as under:

“31. In my opinion, the question "whether the resignation of the employee is voluntary or was obtained under duress and is to be considered as termination of his services?" can be gone into by the Asst. Commissioner of Labour under Section 48 of the Act only if sub-sections (1) to (4) of Section 47 of the Act can be applied to the employer. Since this cannot be done in view of the said G.O., the very application of the employee under Section 48 of the Act before the Asst. Commissioner of Labour (i.e. S.E. No. 7 of 2011) was not maintainable and could not have been entertained by the Asst. Commissioner of Labour. So I hold that he had rightly rejected S.E. Case No. 7 of 2011 as not maintainable by applying the said G.O.

32. Consequently it has to be held that the Dy. Commissioner of Labour, in the appeal S.A. No. 1/2013 filed by the employee against order dt. 5.11.2012 in S.E. Case No. 7/2011, erred in holding that, notwithstanding the exemption granted to the employer in G.O.M. No. 53 referred to above, it is open to the Asst. Commissioner of Labour to go into the question whether resignation of the employee was obtained under duress or voluntarily and decide it. By merely invoking the goal of the statute and rendering of social justice, the Dy. Commissioner of Labour cannot refuse to apply the exemption granted to the employer by the said G.O. and cannot ignore it.”

14. Writ Appeal Nos. 1508 and 1600 of 2014 were preferred against first two writ petitions and no appeal was preferred against decision in W.P.No.24065 of 2013 and this decision has become final. I am in respectful agreement with the view expressed by this Court in W.P.No.24065 of 2013.

15. Following the above decision and exemption notification, it is thus apparent that for ITES and IT establishments, Section 47(1) (2), (3), (4) of the Act was not applicable as on 16.05.2013.

16. However, matter does not rest here. Three ancillary issues require consideration:

i) Whether petitioner is an ITES/IT company to rely on exemption notification issued vide G.O.Ms.No.16, dated 30.05.2002 and extended from time to time ?

ii) Even if petitioner comes under the exempted category, having participated in the proceedings before the Authority, and invited an adverse finding, whether the petitioner company can raise plea of jurisdiction and competence in the writ petition filed against the decision of the Authority ?

iii) Whether the withdrawal of W.P.No.34685 of 2014 by the petitioner would operate as res judicata/would petitioner’s conduct amounts to constructive res judicata and, therefore, debarred from filing another writ petition ?

(i) First Ancillary issue:

17. The Memorandum of Association of the company, would reflect the goals to be pursued by the company on its incorporation. The three objectives listed out cover all aspects of ITES/IT, such as, design, development, implementation, installation, operation, maintenance, licensing of computer software, databases, computer systems, programmes, products and services and to carry on the business as data processing systems provider, network telecommunications service provider, etc. A cumulative reading of these objectives/goals would show that petitioner company is involved in Information Technology Enabled Services/ Information Technology. The Certificate of Incorporation of the Company, when originally registered and on subsequent change of the name, under the Companies Act, would show that the petitioner is registered as Software company/company dealing with Technology Solutions. Under the Act, it was registered as IT industry. These assertions are not denied and validity of these documents are not disputed. On the contrary, a vague assertion was made, based on some other documents, to contend that petitioner is a real estate company and not an I.T. company. No such inference can be drawn when certificate of incorporation under the Companies Act and registration under the Act would show petitioner as IT/ITES industry and Memorandum of Association delineate the goals of the company to work in ITES/IT field. Thus, petitioner satisfies the parameters of ITES/IT establishment as per the IT policy of the Government notified vide G.O.Ms.No.5 Information Technology and Communications Department dated 29.01.2002 and exemption GOs issued from time to time are applicable to the petitioner. Thus, the objection of the learned counsel Mr. Laxmi Narsimha that petitioner company is not ITES/IT company and that exemption from operation of some provisions of the Act is stated to be rejected.

(ii) Second Ancillary issue :

18. It was vehemently contended that petitioner did not take the plea of exemption granted to the petitioner in exercise of power vested in the Government under Section 73(4) of the Act before the Authority.

19. In response to the notice issued by the Authority on appeal preferred by the 2nd respondent against his termination, petitioner raised preliminary objection on maintainability of appeal. In the averments, in I.A.No.1 of 2013 filed on behalf of the petitioner, objection was raised on maintainability of appeal under Section 48(1) of the Act and prayed the Authority to decide the maintainability of appeal as preliminary issue, but this aspect was not elaborated. Even, the reply was not specific. However, in the rejoinder filed by the 2nd respondent, in response to the counter filed by the petitioner in S.E.No.7 of 2016, he has referred to G.O.Ms.No.22 in paragraphs-8 and 10. He has contended that said notification is contrary to the judgment of Full Bench of the High Court. In the cross-examination of the appellant, this issue was also raised. On the suggestions put to him, he deposed that he was aware of G.O.Ms.No.22, and stated that said G.O. was stayed by the High Court and also stated that it has no application because his termination was on 16.04.2013. He deposed that he was not aware of G.O.Ms.No.62, dated 30.05.2012, but was aware that G.O.Ms.No.62 is pre-closure of G.O.Ms.No.22 dated 21.06.2013 and the said G.O. granted exemption from 30.05.2012 to 30.05.2013. The relevant portion of deposition reads, “it is not true to suggest that since my termination letter dated 16.04.2013, the G.O.Ms.No.62 is applicable to my termination and witness adds that the above GOs exempting IT establishments are not applicable to me as per the Vishakha guidelines in apex Court judgment. It is not true to suggest that the IT establishments are exempted as per G.O.Ms.No.62, dated 30.05.2013 as such my application under Section 48 is not maintainable”. From these averments, two things are apparent. Firstly, the issue of exemption of ITES/IT from the operation of Section 47 (1), (2) (3), (4) was never given up by petitioner and subjected itself to the jurisdiction of the Authority, and was put in issue; and secondly, all the concerned GOs were referred to during the course of the trial and exemption of petitioner from the application of the Act was put in issue. Therefore, I see no merit in the objection of learned counsel Dr. Laxmi Narasimha that petitioner is trying to raise the issue for the first time in the writ petition and that petitioner is relying upon Government Orders, which were not considered before the Authority under the Act.

20. Further, Section 73(4) vests power in the State Government to exempt operation of any or all of the provisions of the Act. In exercise of such power, if a notification is issued, published vide G.O.s, the notifications have the same force as a law made by the legislature and is binding on a quasi-judicial Authority whose existence is constrained by the provisions of the Act. It cannot plead ignorance of such notifications.

21. In Union of India vs. Nihar Kanta Sen, Supreme Court faulted the approach of the High Court in not taking note of the notifications. Supreme Court observed,

“7. ….. The High court refused to consider this question on the ground that copies of relevant notifications issued under Section 4 were not on record. The State had filed copies of relevant notifications before the High Court as additional evidence but the High Court refused to accept the same. The notifications issued are published in the gazette, the High Court should have take judicial notice of the same. ……”

22. The quasi-judicial Authority is a creature of the Act. He has limited jurisdiction. He has to act within the four corners of the Act under which he was created. Under the Act, the ‘Authority is required to adjudicate dispute on termination of an employee by the employer, who answers the description of ‘establishment’. If the employer, like the petitioner does not answer the description of ‘establishment’, albeit on account of exemption notification under Section 73(4), the Authority under the Act is ousted of jurisdiction to adjudicate the dispute. As the issue of jurisdiction and competence to decide dispute on termination of an employee by the establishment goes to the root of the matter, there can be no bar to raise the said issue in a writ petition filed under Article 226 of the constitution of India, even for the first time, assuming that such plea was not raised before the Authority.

23. It is not in dispute that the petitioner was registered as an establishment under the Act and ordinarily, the authority is vested with the jurisdiction to adjudicate the dispute raised by employee of the petitioner. However, if application of the provisions of the Act are exempted to an establishment/class of establishments by the State in exercise of powers vested in the State under Section 73(4) of the Act, the jurisdiction of the authority gets excluded and the authority would be no more competent to decide the dispute. His jurisdiction to decide the dispute gets ousted. ITES/IT establishments are exempted from the purview of Section 47(1) to (4) of the Act.

24. The first notification exempting ITES/IT was issued on 30.05.2002 vide G.O.Ms.No.62 initially for a period of five years and extended from time to time. At the relevant point of time, exemption notification dated 30.05.2012 was in force. Thus, on the date of termination of service of 2nd respondent, the authority was ousted of jurisdiction to adjudicate disputes of termination from ITES/IT establishment. Petitioner is one such establishment. It is apparent from the record that on the day 2nd respondent was terminated, the Act was not applicable and, therefore, the authority had no jurisdiction to adjudicate the dispute. It is a case of inherent lack of jurisdiction, and thus his decision is void ab intio.

25. Further, it is settled principle of law that parties do not confer jurisdiction on a quasi judicial Authority, for that matter even on the Court. The Authority created by the statute has to work within four corners of that statute and would have jurisdiction only if matter arises under the Act. Though the Authority has jurisdiction to adjudicate the dispute on termination of service of an employee of ITES/IT establishment, but in view of the exemption of operation of provisions of the Act to ITES/IT companies, by way of exemption notification issued by the Government in exercise of power vested under Section 73(4) of the Act, the jurisdiction of the authority was ousted.

26. The opinion expressed by the Hon’ble Supreme Court in the following decisions bolster my view on second ancillary issue:

26.1. In Harpal Singh vs. State of Pubjab (2007) 13 SCC 387), Supreme Court extracted how world ‘jurisdiction’ is defined. Paragraph-10 reads as under:

“10. At this stage it will be useful to refer to the dictionary meaning of the word “jurisdiction”:

Black's Law Dictionary:

“A court's power to decide a case or issue a decree.” Words and Phrases — Legally defined, Third Edition (p. 497):

“By ‘jurisdiction’ is meant the authority which a court has to decide matters that are litigated before it or to take cognizance of matters presented in a formal way for its decision. The limits of this authority are imposed by the statute, charter, or commission under which the court is constituted, and may be extended or restricted by similar means. If no restriction or limit is imposed the jurisdiction is said to be unlimited. A limitation may be either as to the kind and nature of the actions and matters of which the particular court has cognizance, or as to the area over which the jurisdiction extends.”

Law Lexicon by P. Ramanatha Aiyar, 2nd Edn., Reprint 2000:

“An authority or power, which a man hath to do justice in causes of complaint brought before him. (Tomlin's Law Dictionary) The power to hear and determine the particular case involved; the power of a court or a Judge to entertain an action, petition, or other proceeding; the legal power of hearing and determining controversies. As applied to a particular claim or controversy, jurisdiction is the power to hear and determine that controversy.” Jurisdiction, therefore, means the authority or power to entertain, hear and decide a case and to do justice in the case and determine the controversy. In absence of jurisdiction the court has no power to hear and decide the matter and the order passed by it would be a nullity.”

(emphasis supplied)

26.2. It is well settled principle that by agreement the parties cannot confer jurisdiction on a quasi-judicial authority, where none exists (Modi Entertainment Network vs. W.S.G. Cricket Pvt. Ltd (2003) 4 SCC 341); and New Moga Transport co. vs. United India Insurance Co. Ltd (2004) 4 SCC 677).

27. Remedy under Article 226 of the Constitution of India is very wide. In exercise of power of judicial review Court reaches out a victim of injustice and extends the long arm of law and justice. Exercise of this jurisdiction does not depend on availability of other remedies to a litigant. However, writ Court exercises restraint in entertaining a writ petition if the petitioner has an effective and efficacious remedy, be it administrative or quasi-judicial and relegates the party to avail the said remedy before knocking the doors of the writ Court. However, such remedy must be efficacious remedy. If the authority whose decision is sought to be assailed demonstrably lacks jurisdiction to decide the dispute in issue, writ Court need not compel the party to avail remedy of appeal against such decision.

28. One of the parameters of judicial review to test the validity of a decision of quasi-judicial authority is on the competence and jurisdiction to decide the dispute in issue. Thus, when the petitioner raises plea of jurisdiction of quasi-judicial authority to adjudicate the dispute in issue, the Court is bound to consider the said objection to test the validity of the order under challenge. In such a case, petitioner need not be relegated to avail remedy of second appeal under Section 48(3) of the Act.

29. In State of U.P., vs. Mohammed Nooh (AIR 1958 SC 86), Supreme Court held as under:

“10. ….. If, therefore, the existence of other adequate legal remedies is not per se a bar to the issue of a writ of certiorari and if in a proper case it may be the duty of the superior court to issue a writ of certiorari to correct the errors of an inferior court or tribunal called upon to exercise judicial or quasi-judicial functions and not to relegate the petitioner to other legal remedies available to him and if the superior court can in a proper case exercise its jurisdiction in favour of a petitioner who has allowed the time to appeal to expire or has not perfected his appeal, e.g., by furnishing security required by the statute, should it then be laid down as an inflexible rule of law that the superior court must deny the writ when an inferior court or tribunal by discarding all principles of natural justice and all accepted rules of procedure arrived at a conclusion which shocks the sense of justice and fair play merely because such decision has been upheld by another inferior court or tribunal on appeal or revision ?

11. On the authorities referred to above it appears to us that there may conceivably be cases - and the instant case is in point - where the error, irregularity or illegality touching jurisdiction or procedure committed by an inferior court or tribunal of first instance is so patent and loudly obtrusive that it leaves on its decision an indelible stamp of infirmity or vice which cannot be obliterated or cured on appeal or revision. ….”

[emphasis supplied]

29.1. In Whirlpool Corporation vs. Registrar of Trade Marks, Mumbai and Ors. (1998) 8 SCC 1), Supreme Court held,

“15. …..But the alternative remedy has been consistently held by this court not to operate as a bar in at least three contingencies, namely, where the Writ Petition has been filed for the enforcement of any of the Fundamental rights or where there has been a violation of the principle of natural justice or where the order or proceedings are wholly without jurisdiction or the vires of an Act is challenged……”

30. The Authority formulated three issues for consideration. The second issue is with reference to the exemption notification dated 30.05.2012. The objection on maintainability of appeal, apparently, over-ruled by referring to interlocutory order passed by this Court in W.V.M.P.No.2582 of 2015 in WPMP No.4338 of 2014 in W.P.No.34685 of 2014. By this order, the High Court vacated the earlier interlocutory order staying the proceedings before the authority and suspended the operation of G.O.Ms.No.22, dated 21.06.2013. With reference to application of relevant notifications, the authority holds that having raised plea before the High court that G.O.Ms.No.22 was issued, it was not permissible to petitioner to now contend that G.O.Ms.No.62 is relevant, but not G.O.Ms.No.22. Further on the day when the appeal was filed by the 2nd respondent, G.O.Ms.No.22 was in force and as said Government Order was suspended, Authority is competent to decide the appeal.

31. The said view of the authority is clearly erroneous. The Authority misdirected itself in appreciating the issue of jurisdiction. On the day when second respondent was terminated, exemption notification published vide G.O. Ms No. 62 dated 30.05.2012 was in force. Sub Sections (1), (2), (3) & (4) of Section 47 of the Act stipulate procedural safeguards against termination of service of employee by the establishment. Under Section 48 of the Act, the Authority is vested with jurisdiction to decide validity of termination of employee under Section 47 of the Act. Thus, Authority acquires jurisdiction only if termination of employee attracts provisions of Section 47 and not otherwise. As on the date of termination of second respondent, application of Section 47 of the Act was exempted to petitioner, such termination of service was outside Section 47 of the Act. While testing the validity of an order of termination of an employee by an ‘establishment’, what is relevant is date of order of termination and not the date of filing of appeal. Even otherwise, even on the date of filing of appeal exemption notification published vide G.O. Ms No. 22 was in force. Further suspension of G.O. Ms No. 22 would ultimately abide the result of the writ petition and once writ petition was dismissed, vacating the interim order made in the WVMP, the interlocutory order gets dissolved. Thus, even otherwise exemption was in operation. Therefore, decision taken by the Management of an establishment exempted from the purview of the Act was not amenable for challenge before the Authority.

32. After the vacation of interim order in W.P. No. 34685 of 2014 petitioner has no option, but to participate in the proceedings before the authority. However, petitioner raised the plea of maintainability of the appeal under the Act. As noted above, the reply affidavit of the 2nd respondent and the cross-examination would point out that the petitioner has relied on exemption granted by the Government. The order of the authority also would refer to the specific contention urged by the petitioner on maintainability of the appeal, in view of exemption of ITES/IT companies. Therefore, petitioner did not waive his right to raise objection on maintainability of appeal under the Act.

33. From the cumulative assessment of above aspects, two things are palpable. Firstly the parties cannot confer jurisdiction on a quasi-juridical Authority who is a creature of the Statute whose application is expressly exempted to petitioner company. Even if parties do not raise objection on jurisdiction and subject themselves to the jurisdiction, the decision cannot be legal and valid as the Authority was not competent to adjudicate the dispute. It is a case of inherent lack of jurisdiction and the same cannot be cured merely because parties subject to its jurisdiction. Secondly, the petitioner did not waive his right to raise objection on maintainability and said issue was contested and merely because petitioner participated in the proceedings before the authority, does not amount to waiving his right to raise objection on the jurisdiction of the Authority. Further, and more importantly jurisdictional fact is a core issue and question of waiver/ acquiescence does not arise.

(iii) Third ancillary issue:

34. It was vehemently contended that petitioner having subjected himself to jurisdiction of the Authority, invited a finding on merits and withdrawn W.P.No.34685 of 2014, it is not open to petitioner turn around and file another writ petition and the principle of res judicata is applicable to the case on hand. Further, by his conduct petitioner’s cause is also hit by the principle of constructive res judicata.

35. To appreciate this contention, it is necessary to look into the prayer in the earlier writ petition. The prayer reads as under:

“to issue a Writ of Prohibition or any other appropriate writ restraining the 15th Respondent from proceeding any further with the adjudication of the Appeal numbered as IA No.1 of 2013 filed under Section 48(1) of the Andhra Pradesh Shops and Establishments Act 1988 on the file of the Assistant Commissioner of Labour Vikarabad Itanga Reddy District and direct the Respondent not to initiate any further action against the Petitioner under Section 48(1) of the of the Andhra Pradesh Shops and Establishments Act 1988 and pass such other order or orders as this Honble Court may deem fit and proper in the circumstances of the case.”

36. Petitioner sought for writ of prohibition and to restrain the authority from proceeding with adjudication in appeal filed by the 2nd respondent. By order dated 14.11.2014 made in WPMP No.43388 of 2014, Court granted interim suspension as prayed. In W.V.M.P.No. 2582 of 2015, the said interim order was vacated and the court also stayed the operation of G.O.Ms.No.22. After vacation of the interim order, the appeal was disposed of finally. Decision of appellate authority is against the petitioner. Section 48(3) provides for remedy of appeal. Without availing remedy of appeal, challenging the order of the Authority under the Act, this writ petition is filed, primarily on the ground that, he is not competent to decide the issue. In view of the subsequent developments, petitioner sought withdrawal of earlier writ petition.

37. While considering the request to withdraw W.P. No. 34685 of 2014 the Court noticed how litigation progressed. It is useful to extract paragraphs-6 & 7 of the order dated 20.3.2018 permitting withdrawal of the writ petition. It reads as under:

“6. In that view of the matter, this writ petition, which is filed seeking a relief not to further adjudicate the appeal, has become infructuous and, therefore, no cause survives for adjudication in this writ petition. In that view of the matter, this Court is of the considered view that permission, as sought for, can be accorded.

7. Accordingly, the Writ Petition is dismissed as withdrawn. As a sequel to this order, the interim orders staying the G.O.Ms.No.22, Labour Employment Training and Factories (Labour –IV) MSRM, J W.P.No.34685 of 2014 dt.21.06.2013, stand automatically vacated. There shall be no order as to costs.”

38. Res judicata is a latin term and means ‘a matter already judged’. ‘Judged’ means decided on an issue, judgment rendered. Essential requirements of a judgment are, (i) it puts an end to the proceedings before the Court; and (ii) it involves determination of some right or liability inter-parties to the litigation. If these ingredients are satisfied between the parties, it is final in that Court and a party to the said litigation cannot be permitted to urge the same issue again in that Court in the forum of fresh litigation. Thus, to apply the principle of res judicata, there must be a final judicial determination of issue in controversy. In other words, principle of res judicata is based on two fundamental concepts of law, (i) there should be finality to litigation, and (ii) no person should be vexed twice for the same cause.

39. At this stage, it is apt to note few precedent decisions on the aspect of what constitutes ‘res judicata’.

40.1 The principle was exhaustively considered by the Supreme Court in Daryao and Ors. Vs. The State of U.P. and Ors. (AIR 1961 SC 1457)

“26. We must now proceed to state our conclusion on the preliminary objection raised by the respondents. We hold that if a writ petition filed by a party under Article 226 is considered on the merits as a contested matter and is dismissed the decision thus pronounced would continue to bind the parties unless it is otherwise modified or reversed by appeal or other appropriate proceedings permissible under the Constitution. It would not be open to a party to ignore the said judgment and move this Court under Article 32 by an original petition made on the same facts and for obtaining the same or similar orders or writs. If the petition filed in the High Court under Article 226 is dismissed not on the merits but because of the laches of the party applying for the writ or because it is held that the party had an alternative remedy available to it, then the dismissal of the writ petition would not constitute a bar to a subsequent petition under Article 32 except in cases where and if the facts thus found by the High Court may themselves be relevant even under Article

32. If a writ petition is dismissed in limine and an order is pronounced in that behalf, whether or not the dismissal would constitute a bar would depend upon the nature of the order. If the order is on the merits it woul

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d be a bar; if the order shows that the dismissal was for the reason that the petitioner was guilty of laches or that he had an alternative remedy it would not be a bar, except in cases which we have already indicated. If the petition is dismissed in limine without passing a speaking order then such dismissal cannot be treated as creating a bar of res judicata. It is true that, prima facie, dismissal in limine even without passing a speaking order in that behalf may strongly suggest that the Court took the view that there was no substance in the petition at all; but in the absence of a speaking order it would not be easy to decide what factors weighed in the mind of the Court and that makes it difficult and unsafe to hold that such a summary dismissal is a dismissal on merits and as such constitutes a bar of res judicata against a similar petition filed under Article 32. If the petition is dismissed as withdrawn it cannot be a bar to a subsequent petition under Article 32, because in such a case there has been no decision on the merits by the Court. We wish to make it clear that the conclusions thus reached by us are confined only to the point of res judicata which has been argued as a preliminary issue in these writ petitions and no other. It is in the light of this decision that we will now proceed to examine the position in the six petitions before us.” 40.2. In Gulabchand Chhotolal vs. State of Gujarat (AIR 1965 SC 1153), Supreme Court summarized the views expressed in Daryao. To the extent relevant to this case, the summation reads as under: “53. In Daryao case [(1962) 1 SCR 574] this Court had again dealt with the question of the applicability of the principle of res judicata in writ proceedings. The matter was going through very exhaustively and the final conclusions are to be found at p. 592. We may summarise them thus: 1. If a petition under Article 226 is considered on the merits as a contested matter and is dismissed, the decision would continue to bind the parties unless it is otherwise modified or reversed by appeal or other appropriate proceedings permissible under the Constitution. (2) TO (4) XXXXX 5. If a writ petition is dismissed in limine and an order is pronounced in that behalf, whether or not the dismissal would constitute a bar would depend on the nature of the order. If the order is on the merits, it would be a bar. 6. If the petition is dismissed in limine without a speaking order, such dismissal cannot be treated as creating a bar of res judicata. 7. If the petition is dismissed as withdrawn, it cannot be a bar to a subsequent petition under Article 32 because, in such a case, there had been no decision on the merits by the Court.” [emphasis supplied] 41. In the earlier writ petition, petitioner sought writ of prohibition to restrain the authority under 1988 Act from hearing the appeal preferred by the 2nd respondent. Initially Court stayed proceedings before the Authority. Subsequently, interim order granted in his favour was vacated. After vacation of the interim order, Authority heard and decided the appeal finally. Petitioner challenged the final decision of the Authority in this writ petition. Therefore, he sought to withdraw the earlier writ petition. The leave to withdraw was granted holding that cause does not survive for adjudication. There was no adjudication of the issue on merits. Further, the cause of action to institute this writ petition is final order passed by the Authority under Section 48 of the Act. It is an independent cause of action. In the facts of this case, neither the principle of res judicata nor the principle of constructive res judicata are attracted. Further, this Court granted leave to withdraw Writ Petition No. 43388 of 2014. Therefore, this writ petition is maintainable. 42. Having cleared three ancillary issues and as the petitioner establishment was not amenable to the jurisdiction of the Authority under the Act, the decision of the Authority under Section 48(2) of the Act dated 06-04-2017, impugned herein, on the order of termination from service of 2nd respondent by the petitioner, is without jurisdiction, ex-facie illegal and unsustainable. It is liable to be set aside. It is accordingly set aside. The Writ Petition is allowed. Consequently, all pending Interlocutory Applications are closed. However, it is made clear that the right of the 2nd respondent to work out his legal remedies against alleged illegal termination are preserved and it is open to him to work out remedies as available in law. It is also made clear that there is no expression of opinion on merits. Miscellaneous petitions, if any pending, are closed.
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