Supreme Court Rules on Territorial Jurisdiction in Labour Disputes

The legal dispute in V G Jagdishan vs. M/s Indofos Industries Limited revolved around the issue of territorial jurisdiction in labour disputes. The Supreme Court had to determine whether the Labour Court in Delhi had jurisdiction to hear the case, given that the workman was employed and terminated in Ghaziabad but later moved to Delhi, where he served a demand notice. The decision clarifies key aspects of territorial jurisdiction in labour law cases and affirms the principle that jurisdiction is determined by the place where the cause of action primarily arises.

Background of the Case

The appellant, V G Jagdishan, was employed as a driver at Ghaziabad with Indofos Industries Limited. His employment was terminated at Ghaziabad, after which he relocated to Delhi. While in Delhi, he served a demand notice to the company’s head office in Delhi, challenging his termination. Based on this, he filed a complaint with the Conciliation Officer in Delhi, which was then referred to the Labour Court, Delhi.

The respondent company raised a preliminary objection, arguing that the Labour Court in Delhi did not have jurisdiction to hear the case since the workman was employed, worked, and terminated in Ghaziabad. The Labour Court upheld this objection, ruling that only the Labour Court in Ghaziabad had jurisdiction over the case.

Aggrieved by this decision, the workman approached the Delhi High Court. The Single Judge dismissed his petition, upholding the Labour Court’s ruling. A subsequent Letters Patent Appeal (LPA) before the Division Bench of the Delhi High Court was also dismissed. Consequently, the workman filed a Special Leave Petition (SLP) before the Supreme Court.

Arguments by the Appellant

Senior Advocate Ms. V. Mohana, representing the workman, argued:

“As the head office of the company was located in Delhi, and the demand notice was served from Delhi, a part of the cause of action arose in Delhi. Therefore, the Labour Court in Delhi had jurisdiction over the dispute.”

She relied on the Supreme Court’s previous decisions, including:

Nandram vs. Garware Polyster Limited (2016) 6 SCC 290: Where the Court ruled that part of the cause of action arising in a particular place could confer jurisdiction.
Bikash Bhushan Ghosh & Ors. vs. Novartis India Ltd. & Anr. (2007) 5 SCC 591: Emphasizing the importance of fair access to justice for workmen.
Singareni Collieries Co. Ltd. vs. Ande Lingaiah & Anr. (2000) 10 SCC 294: Recognizing the rights of workers to file cases where part of the cause of action arises.

She also contended that the Labour Court should have decided all issues together rather than ruling solely on the jurisdiction issue.

Arguments by the Respondent

The respondent company, Indofos Industries Limited, countered that:

The workman was appointed, worked, and was terminated in Ghaziabad, making it the only appropriate jurisdiction.
Only because he sent a demand notice from Delhi did not create jurisdiction.
The head office in Delhi had no role in his termination, and no administrative decisions were made there regarding his employment.
The Labour Court in Delhi correctly ruled that it lacked territorial jurisdiction.

Supreme Court’s Observations

The Supreme Court, led by Justices M. R. Shah and B. V. Nagarathna, upheld the ruling that territorial jurisdiction must be determined based on where the cause of action primarily arose. The Court stated:

“Merely because the workman sent a demand notice from Delhi, where the head office of the management is situated, does not mean that the Labour Court in Delhi has jurisdiction.”

The Court reaffirmed the principles set in Eastern Coalfields Ltd. vs. Kalyan Banerjee (2008) 3 SCC 456, holding that:

The entire cause of action arose in Ghaziabad, not Delhi.
The head office’s presence does not automatically confer jurisdiction unless administrative actions related to the dispute were taken there.
The Labour Court in Ghaziabad was the appropriate forum for adjudicating the case.

The Court also addressed the appellant’s argument regarding the Labour Court’s obligation to decide all issues together. It ruled that jurisdictional issues must be resolved first before proceeding to the merits of the case.

Final Ruling

The Supreme Court dismissed the workman’s appeal, affirming that:

The Labour Court in Delhi lacked jurisdiction to hear the case.
The Labour Court in Ghaziabad was the only appropriate forum.
Sending a demand notice from a different location does not create jurisdiction.
The workman must pursue his claim in Ghaziabad.

Conclusion

This ruling is a significant precedent in labour law and jurisdictional disputes. It clarifies that territorial jurisdiction in labour disputes is determined by the location of employment, not where a demand notice is sent. The decision upholds the importance of filing cases in the appropriate jurisdiction to avoid forum shopping and ensures that companies and workmen adhere to well-defined legal principles.

Petitioner Name: V G Jagdishan.
Respondent Name: M/s Indofos Industries Limited.
Judgment By: Justice M. R. Shah, Justice B. V. Nagarathna.
Place Of Incident: Ghaziabad.
Judgment Date: 19-04-2022.

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