APPLICABILITY OF THE LIMITATION ACT ON INDUSTRIAL DISPUTES – A MATCH MADE BY THE COURTS OF JUSTICE?

INTRODUCTION

Equity warrants that the law denies protection to litigants who silently acquiesce to the unlawful encroachment of their rights. However, in a conflict between unequals should such a doctrine of laches be strictly applicable, considering the stark power asymmetry? The Supreme Court (‘SC’) in the case of Assistant Engineer, Rajasthan State Agriculture Marketing Board, Sub-Division, Kota v. Mohan Lal (‘Mohan Lal’) seeks to answer this precise question. The workman was neither provided one month’s notice or salary[i] nor any compensation[ii] before retrenchment. Despite this, he raised the dispute after six years. All the various forums were uniform in holding the retrenchment to be unlawful, but differed in providing relief. [iii]

The paper analyses the application of a limitation period on an industrial dispute. While evaluating this case, three major issues are addressed – firstly, should delay be considered as a ground while exercising judicial discretion? Secondly, can delay be considered only when it is raised at the earliest possible instance? Thirdly, what should be the appropriate relief?  Furthermore, the prior framework is juxtaposed with the ensuing interpretations for a holistic examination.

SHOWCASING THE OVERVIEW OF THE EXISTING FRAMEWORK

The cases of Ajaib Singh and Balbir Singh dealt with these issues previously, and hence warrant assessment.[iv] A stark difference in the approach of the SC is noteworthy.

Ajaib Singh, moved against illegal termination after seven years. The plea of delay was not argued, providing no opportunity for the workman to provide satisfactory reasons. The Court held that since the Limitation Act was not applicable to labour disputes, the argument of delay had to depict ‘real prejudice’ for the exercise of judicial discretion.  However, the Court in order to strike a rightful balance, ‘moulded’ the relief while not denying it completely, to prevent the frustration of the socio-welfare intent of the legislation by ‘technicalities of law’.

Such a move is welcome, as the Court peruses the wisdom of the Legislature to not prescribe any limitation period. The imbalance of power between a worker and the management was considered, truly enforcing the welfare objective.

The SC in Balbir Singh adopts a completely opposite viewpoint. Considering the delay, the Court denies the entire relief in the name of judicial discretion. The ratio of Ajaib Singh was restricted to cases only where the argument of delay had not been pleaded.[v] Furthermore, the Court stated that the grant of relief has to be decided considering the relevant facts and circumstances. Hence, a general principle of law could not be evolved considering the subjective nature of cases. This case misinterprets the reasoning adopted by Ajaib Singh as there, the relief was moulded and not expressly denied, considering the absence of any legislative sanction. Here, the Court substitutes its wisdom over the legislature, by implicitly prescribing limitation, hence, making law rather than interpreting it. The present case, set against this backdrop, highlights a transcendental shift towards the conclusive determination of remedies vis-à-vis rights.

DECONSTRUCTING THE SEVERAL JUDGMENTS DELIVERED BY VARIOUS COURTS

In this part, I analyse the three issues that smoothens this skewed jurisprudence and consequently alters the legal landscape.

DEFINING THE CONTOURS OF JUDICIAL DISCRETION

In Mohan Lal, the Court categorically holds that delay must be invariably considered while exercising judicial discretion. While granting relief, all factors including delay had to be evaluated.[vi] Hence, here the Court goes one step ahead from Balbir Singh, in stating that though a straight-jacketed formula cannot be applied, delay had to be considered irrespective of the circumstances.[vii] Furthermore, they confine Ajaib Singh to its facts[viii] and ignore ‘satisfactory explanations’ as an exception to the plea of delay.

However, subsequently the Rajasthan High Court  has held the ratio in Mohan Lal to be ‘only’ applicable in cases where no justifiable or reasonable reasons were provided for the delay.[ix] In order to ensure whether the litigants had not been vigilant about their rights, explanations had to be scrutinized.[x] Furthermore, the Himachal Pradesh High Court (‘HP-HC’) held that despite the objective of having a limitation period, a satisfactory explanation of delay could duly act as an exception.[xi] This has led to the creation of an exception as was propounded in Ajaib Singh and significantly moved away from Mohan Lal.

EVALUATING THE ‘CORRECT’ TIME TO ARGUE DELAY

The Court in Mohan Lal, held that the relevance of delay did not turn insignificant merely because it was not argued in the lower Courts. An objection could be raised anytime. The precedent of Ajaib Singh had conclusively determined this question, but was differentiated on the basis of facts. Ironically, the facts of Ajaib Singh and Mohan Lal are exactly similar. In both these cases, the argument of delay was not raised before the Labour Court, providing no opportunity for the workman to provide any reason. The Court completely overlooks the precedent and the line of reasoning. Thus, from this decision onwards, every Court always has to consider delay “irrespective of whether such an objection was raised by the other side”.

The High Courts have adopted varied approaches when examining the above question. The HP-HC held that the workman would be significantly disadvantaged if the plea of delay is argued at the last stage and even considered.[xii] However, the Court is mindful that the objectives of limitation would be frustrated if stale industrial claims are entertained.[xiii] Hence, the Court in order to strike a rightful balance allowed the workman to provide reasons for the delay along with imposing an additional burden to prove that despite the delay, the dispute existed.[xiv] Additionally, the Rajasthan High Court adopted a similar approach. In situations where the objection of delay was raised at a belated stage, the workman was allowed to provide justifiable explanations. These reasons had to be substantial and could not be condoned on merely pleading innocence. In order to balance this, the employer had to prove that real prejudice[xv] had been caused to him. Moreover, the Orissa High Court, has held that a ‘Court of Equity’ could not permit a strict application of the doctrine of laches. If there is a ‘delay in claiming delay’, rights of other parties could not be denied. Here, the party who had delayed, could be accordingly excused if reasonable justification was provided.

The judicial incorporation of these safeguards highlights the imperative need to move away from the judgment of Mohan Lal. The sheer failure of the Court to consider the inexplicable burden casted on the unsuspecting party against whom a plea of delay is raised at the last stage of adjudication, must be re-examined. Although, the party is at fault, atleast an opportunity to defend themselves through explanations must be provided. Such a relief becomes essential, considering the inherent inequality present between the parties.

ANALYSING THE APPROPRIATE RELIEF

While considering the relief, the Court in Mohan Lal is mindful of the fact that in Ajaib Singh, denial of reliefs was advised against. Hence, the relief was moulded to suit both the parties. However, here the Court ignores Balbir Singh, that had an opposite line of reasoning. The reliefs were denied citing the subjective nature of cases, leaving it to the discretion of the Court.

After Mohan Lal, a large number of cases have moulded reliefs instead denying. [xvi] However, a few cases have misinterpreted Mohan Lal to hint at the denial of reliefs. The Rajasthan High Court in a dispute, delayed over seventeen years, denied the relief.[xvii] The Court differentiated the ratio of Mohan Lal to disputes that were not ‘enormously delayed’ carving out an exception through reading-down the case.[xviii] The fact that mere technicalities of law cannot now dictate the denial of reliefs, is welcome. Both, the workman is also reprimanded for the delay and the need for a limitation period is also not frustrated, paving the way for an equilibrium to be created.

CONCLUSION

The Court in Mohan Lal circumscribes the limits of judicial discretion which could have been extended in unimaginable ways. They direct the lower Courts to always consider delay irrespective of it being argued and, hence mould the relief accordingly. Several interpretations of these issues by subsequent Courts showcase the imperative need to move away from such a paradigm. Though the Court seems to be mindful of the challenges faced by the workman, it has implicitly punished them for not being vigilant enough. Along with such a sanction, the Court refuses to even entertain any possible justification for the delay. The non-consideration of the power imbalance between the parties coupled with the non-recognition of the objective of the beneficial legislation, lays down a dangerous precedent.

Successive Courts have laid down several ways through which a balance can be rightfully struck. Such approaches need to be permanently imbedded into our jurisprudence. The gradual shift by the Court from the previous cases highlight a significant alteration to the existing law. Though the ends of Mohan Lal is celebrated, the means of reaching such a conclusion must be scrutinised. The manner in which the Court has handpicked binding precedents to accentuate several arguments, goes against the basic principle of judicial discipline. This partisan view of the Court, warrants criticism, particularly in a common law jurisdiction.


[i] Section 25F (a), The Industrial Act, 1957.

[ii] Section 25F (b), The Industrial Act, 1957.

[iii] Id at ¶ 5,6 and 7. (The Labour Court ignored the delay and granted reinstatement and back-wages, which was upheld by the Division Bench of the High Court. The Single Judge on the other hand, substituted the order of reinstatement with mere compensation.)

[iv] Both of these cases were from the Supreme Court and were presided over by Judges of equal strength.

[v] Id at ¶ 6.

[vi] Ibid; (The Court follows the proposition laid down in Assistant Engineer, Rajasthan Development Corporation v. Gitam Singh, (2013) 5 SCC 136, where the Court enumerates the relevant factors that need to be considered. These include the “length of service, mode of appointment, ground of termination, nature of employment and delay in raising the industrial dispute” et al.)

[vii] Assistant Engineer, Rajasthan State Agriculture Marketing Board, Sub-Division, Kota v. Mohan Lal 2013 Indlaw SC 511, ¶ 19.

[viii] Id.

[ix] State of Rajasthan v. Udai Singh, MANU/RH/1678/2015, ¶ 11.

[x] Raghubir Singh v. General Manager, Haryana Roadways, 2014 (9) SCJ 91.

[xi] Roop Singh v. The Executive Engineer, H.P.P.W.D, 2019 (2) Shim LC 645, ¶ 8.

[xii] Id.

[xiii] Id.

[xiv] Id.; Prabhakar v. Sericulture Department, (2015) 15 SCC 1.

[xv] Id.; Uttar Pradesh State Road Transport v. Babulram, 2000 SCC (L&S) 1113.

[xvi] Raghubir Singh v. General Manager, Haryana Roadways, 2014 (9) SCJ 91; Surendra Kumar Verma v. CGIT-cum-Labour Court, Delhi, 1980 SCC (4) 443; Sapan Kumar Pandit v. Uttar Pradesh State Electricity Board, (2001) 6 SCC 222; SM Nilajkar v. Telecom District Manager, Karnataka, (2003) 4 SCC 27; Ratan Chnadra Sammanta v. Union of India, 1993 AIR SCW 2214; Reliance Communication Limited v. Abhijeet Singh, 2016 (1) ABR 459; The State of Maharashtra v. Santosh Gorakh Patil, 2015 (5) ALL MR 529.

[xvii] Dan Singh v. Union of India, 2017 (1) SLR 575, ¶ 2.

[xviii] Id at ¶ 4.


Anshul Dalmia, a fifth-year student at the WB National University of Juridical Sciences.

Picture credits: Times of India


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