The Bombay High Court has clarified that a retrenched worker cannot simultaneously pursue a review application under Section 25-N(6) of the Industrial Disputes Act, 1947, and an unfair labour practice complaint under the MRTU and PULP Act, 1971, when both raise substantially identical grounds. The Court emphasized legislative intent to prevent parallel proceedings and upheld the Specified Authority’s dismissal of the review application on grounds of multiplicity.
Background & Facts
The Dispute
The dispute arose from the retrenchment of 67 permanent workmen by Prism Johnson Limited, a manufacturing company operating in Raigad, Maharashtra. The company sought permission to retrench 85 workers under Section 25-N of the Industrial Disputes Act, 1947, citing reduced production and sales. The Specified Authority (Commissioner of Labour, Maharashtra) conducted hearings attended by the company, the recognized union (Respondent No. 4 - Mumbai Labour Union), and two workmen representatives. After negotiations, the union secured an enhanced separation package of 45 days’ wages per year of service - triple the statutory 15 days - and consented to the retrenchment. The Specified Authority granted permission on 7 September 2020, reducing the number of retrenched workers from 85 to 67. Termination letters were issued on 8 September 2020.
Key Facts
- The company filed its application for retrenchment permission on 10 July 2020.
- Hearings were held between July and September 2020, with participation from the recognized union and two workmen.
- On 28 August 2020, the company offered an enhanced compensation package, which the union accepted on 4 September 2020.
- The Specified Authority’s order dated 7 September 2020 explicitly noted the union’s consent and the enhanced package.
- The 67 retrenched workers received compensation ranging from Rs. 13.28 lakh to Rs. 21.81 lakh, inclusive of statutory dues and additional compensation.
- On 9 December 2020, the workers filed ULP Complaint No. 167/2020 before the Labour Court, Thane, seeking reinstatement, back wages, and continuity of service.
- On 17 December 2020, the same workers filed a Review Application under Section 25-N(6) of the ID Act before the Specified Authority.
- The workers claimed they had resigned from the recognized union (Respondent No. 4) on 21 August 2020 and joined Respondent No. 5 (Kamgar Bharati Union), producing letters dated 21 and 28 August 2020 as evidence.
- Respondent No. 4 and the company denied receiving any resignation letters before 7 September 2020. The union received purported resignation letters on 29 January 2021 - over four months after the retrenchment order.
- The court noted that one of the workers listed in the resignation letter (Sachin Mhatre) appeared before the Specified Authority on 7 September 2020 alongside the union.
- The documents submitted by the petitioners (Exhibits D, E, F, G) lacked acknowledgments, postal receipts, or corroboration.
Procedural History
- 10 July 2020: Company filed application under Section 25-N(1) for retrenchment of 85 workers.
- 28 August 2020: Company communicated enhanced compensation package to Specified Authority.
- 4 September 2020: Respondent No. 4 Union consented to retrenchment on the enhanced terms.
- 7 September 2020: Specified Authority granted permission to retrench 67 workers.
- 8 September 2020: Termination letters issued to 67 workers.
- 9 December 2020: ULP Complaint No. 167/2020 filed before Labour Court, Thane.
- 17 December 2020: Review Application filed under Section 25-N(6) before Specified Authority.
- 20 January 2023: Specified Authority rejected Review Application on grounds of multiplicity under Section 59 of MRTU and PULP Act.
- 13 March 2026: Bombay High Court dismissed Writ Petition No. 1650 of 2023.
The Parties' Positions
- Petitioners (67 retrenched workers): Argued that the Review Application and ULP complaint addressed distinct issues - the former challenged the legality of the permission order, the latter challenged the termination as an unfair labour practice. They claimed they were unaware of the retrenchment proceedings and had resigned from the recognized union before 7 September 2020.
- Respondents (Company and Unions): Contended that the two proceedings raised identical grounds - non-service of notice, failure to follow seniority, collusion with union, and procedural irregularities. They alleged the resignation letters were fabricated to undermine the union’s negotiated settlement.
Relief Sought
The Petitioners sought quashing of the Specified Authority’s order dated 20 January 2023, direction to decide the Review Application on merits, and in the alternative, referral of the matter to an Industrial Tribunal. They also sought reinstatement and back wages through the ULP complaint.
The Legal Issue
Can a review application under Section 25-N(6) of the Industrial Disputes Act, 1947, be barred by a pending complaint under Section 28 of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971, when both raise substantially identical grounds challenging the legality of retrenchment?
Arguments Presented
For the Petitioner
Mr. S.C. Naidu argued that Section 59 of the MRTU and PULP Act applies only when the subject matter and cause of action are identical. He contended that the Review Application under Section 25-N(6) is a statutory remedy to review the legality of the permission order, while the ULP complaint challenges the termination as an unfair labour practice under Schedule II and IV of the MRTU and PULP Act. He emphasized that the Specified Authority lacks jurisdiction to adjudicate unfair labour practices, which are exclusively within the domain of Labour Courts. He further argued that the bar under Section 59 cannot apply to proceedings under a Central Act (ID Act) when the remedy sought is review of an administrative order, not adjudication of misconduct.
For the Respondent
Mr. Avinash Jalisatgi and other counsel argued that Section 59 of the MRTU and PULP Act operates as a statutory estoppel, akin to Section 10 of the Code of Civil Procedure, to prevent multiplicity of proceedings. They demonstrated that 80 - 90% of the grounds in both proceedings were identical: non-service of notice, failure to follow seniority, collusion with the union, and illegality of the retrenchment order. They relied on Maharashtra State Road Transport Corporation v. Yadao to show that the legislature intended to prevent contradictory findings and judicial waste. They further argued that the petitioners’ conduct - including fabricated resignation letters and acceptance of enhanced compensation - disentitled them from invoking the Court’s extraordinary jurisdiction under Articles 226 and 227.
The Court's Analysis
The Court undertook a detailed comparative analysis of the ULP complaint and the Review Application. It found that both proceedings raised identical allegations: failure to serve notice of retrenchment, non-compliance with seniority, collusion with the recognized union, and illegality of the permission order. The Court noted that the Review Application, while framed as a challenge to the permission order, was functionally a challenge to the termination - the very relief sought in the ULP complaint.
"In both cases, the applicants contended that the procedure under Section 25(N) of the ID Act, 1947 was not followed. And that copy of application seeking permission for retrenchment was not served upon the applicant workmen and that an opportunity of being heard was not given to the applicant workmen."
The Court held that Section 59 of the MRTU and PULP Act was squarely applicable. It affirmed the view in Maharashtra State Road Transport Corporation v. Yadao that the bar under Section 59 is analogous to Section 10 of the CPC, designed to prevent multiplicity, contradictory verdicts, and judicial inefficiency. The Court rejected the petitioners’ argument that the two forums operate in distinct spheres, noting that the subject matter - legality of retrenchment - was the same.
The Court further emphasized the petitioners’ conduct. The resignation letters were uncorroborated, lacked acknowledgments, and were received by the union four months after the retrenchment order. The appearance of Sachin Mhatre before the Specified Authority alongside the union on 7 September 2020 directly contradicted the claim of resignation. The Court concluded that the petitioners had adopted a strategy to benefit from the union’s negotiated settlement and then repudiate it.
"Petitioners have apparently raised almost same grounds in both the proceedings... They have approached this Court with false story of resignations from the recognised unions solely for the purpose of wriggling out of consequences of being governed by the terms of settlement."
The Court invoked the doctrine of clean hands, holding that petitioners could not invoke the extraordinary jurisdiction of the High Court under Articles 226 and 227 when their conduct was tainted by fabrication and bad faith.
The Verdict
The Writ Petition was dismissed. The Bombay High Court upheld the Specified Authority’s order dated 20 January 2023, which rejected the Review Application under Section 25-N(6) of the ID Act on grounds of multiplicity of proceedings under Section 59 of the MRTU and PULP Act. The Court held that the petitioners’ ULP complaint remains pending and may be adjudicated on its merits. No costs were awarded. The petitioners’ acceptance of enhanced compensation of up to Rs. 21.81 lakh per worker, along with their fabrication of documents, disentitled them to any relief.
What This Means For Similar Cases
Parallel Remedies Are Not Permissible for Identical Grounds
- Practitioners must choose one forum - either a review under Section 25-N(6) or an unfair labour practice complaint - when challenging retrenchment on grounds of procedural illegality, non-service of notice, or seniority violation.
- Filing both remedies invites dismissal on grounds of multiplicity, even if the remedies are technically distinct.
- The doctrine of election of remedies applies strictly when the core allegations overlap.
Fabricated Evidence Disentitles Petitioners from Judicial Relief
- Courts will not entertain writ petitions where petitioners submit forged documents or false affidavits to undermine legitimate settlements.
- The doctrine of clean hands is strictly applied in labour disputes involving union negotiations and compensation acceptance.
- Any attempt to repudiate a negotiated settlement after receiving benefits will be viewed as mala fide.
Section 59 MRTU and PULP Act Is a Broad Bar
- Section 59 is not limited to identical causes of action but extends to substantially overlapping grounds.
- The term ‘matter’ under Section 59 is interpreted expansively to include all pleadings challenging the legality of termination.
- Employers and unions may rely on Section 59 to resist repetitive litigation, especially where a recognized union has negotiated a settlement.
