Non-applicability of Limitation Act to monetary claims under labour laws is a matter of general ignorance. In the case of Nityanand M. Joshi v. Life Insurance Corporation of India & others, 1969 II LLJ 711(FB), the Supreme Court decisively held that Limitation Act, 1963, is not applicable to claims arising under labour laws or Labour courts adjudicating the same. However, there have been several distinguishing judgments of Supreme Court as well as various High Courts, that has unsettled an otherwise settled position.
Usually a workman/employee files application under Section 33C of the Industrial Disputes Act, if he has to recover any money due from his employer. There are two clauses under Section 33C, each of which is for different purposes. Clause (1) of Section 33C deals with recovery of any money under a settlement or an award, by an application to appropriate government; while clause (2) of Section 33C deals with any money which is capable of being computed by the Labour Court.
In Nityanand Joshi’s case, the claim was raised under Section 33C(2) of the ID Act. The Supreme Court held that “Article 137 of the Limitation Act [provision which prescribes 3years limitation period for recovery of money] only contemplates application to Courts. In the Third Division of the Schedule to the Limitation Act, all the other applications mentioned in the various articles are applications filed in a Court. Further Section 4 of the Act provides for the contingency when the prescribed period for any application expires on a holiday and the only contingency contemplated is ‘when the court is closed’. Again under Section 5, it is only a Court which is enabled to admit an application after the prescribed period has expired if the Court is satisfied that the applicant has sufficient cause for not preferring the application. It seems to us that the scheme of the Indian Limitation Act is that it only deals with applications to Courts, and the Labour Court is not a Court within the Indian Limitation Act, 1963.” Therefore, according to aforesaid decision of the Supreme Court, a case for recovery of money due from an employer can be filed by the employee, at anytime without fear of limitation, even after lapse of 10 or 20 years from the date of inception of the cause of action.
This exclusion of period of limitation for recovery of money caused various practical difficulties for the employer so far as preservation of documents were concerned. Therefore, various courts tried to distinguish the ratio of Nityanand Joshi’s Case, on the basis of Principle of Equity and another decision of Supreme Court viz. KSEB v. T.P Kunhaliumma, AIR 1977 SC 282, which concerned with applicability of Limitation Act to special laws. In Kunhaliumma’s case, the court after affirming Nityanand Joshi’s Case, however, held that “definition of ‘applicant’ and ‘application’ in Section 2(a) & (b) of Limitation Act indicates the object of the Limitation Act is to include petitions, original or otherwise, under special laws.”
One of the initial decisions to strike a distinguishing note against Nityanand Joshi’s Case, was the case of Nanoo Ram v. Mahesh Chandra & another [K. Jagannatha Shetty & R.M. Sahai JJ.; 1990(Supp) SCC 752]. In that case, a bench of lesser strength of Supreme Court held that a claim filed after delay of six years was rightly refused by labour court on ground of laches. Later on, several High Courts started rejecting belated claims based on equity and decision in Nanoo Ram’s case. One such case is that of Joseph v. Pierce Leslie India Ltd. [Justice Pareed Pillay J; 1992 (1) KLT SN 6] wherein the court held that “Even though there is no period of limitation under Section 33C(2), stale claims should not be allowed, as it would lead to undesirable results including financial anarchy and chaos in industrial field.”
However, by a later decision of Supreme Court rendered without reference to Nityanand Joshi’s Case, by a bench of equal strength, the position regarding limitation of monitory claims under labour laws was overturned into actual chaos. The Supreme Court in Co-operative Stores Ltd v. K.S. Khurana & oths [A.M. Ahmadi, S.P Bharucha, K.S. Paripoornan JJ.; 1996 II LLJ 682 (FB)], held that maintainability of a claim under Section 33C(2) would depend upon facts and circumstances of each case. In that case, a claim time-barred by Section 21 of Delhi Shops and Establishments Act, was raised under Section 33C(2) of the Industrial Disputes Act, before the Labour Court. The Supreme Court held that “If an application is filed after the period of limitation and the applicant satisfies the authority that he had sufficient cause for not making the application within the prescribed period, the authority may condone the delay and admit the application. Therefore, ultimately, the question would be whether in facts and circumstances of the case that delay beyond the period of limitation deserves to be excused. But at the same time, if the claim is made after gross delay, it would cause considerable hardship to the employer and it has to be borne in mind while deciding the question.”
Although, the decision in Khurana’s case is only a watered down version of Nityanand Joshi’s case, it is has unsettled the legal position regarding the subject of limitation in labour law and has created uncertainty in the field. Presently, the courts are forced to choose/elect among the two not so compactable ratios. Therefore, there is an urgent need to settle the issue by a competent bench of the Supreme Court. In my opinion, the ratio of Pierce Leslie India’s Case that ‘stale claims should not be allowed’ ought to be the right approach while deciding monitory claims under labour laws.
This article was written for mylaw.net