MP HC Removes Forced Revenue Disclosure And Cross-Examination Conditions On Dainik Bhaskar’s Defence Against Employee’s Wage-Board Claim

The Labour Court proceeded ex parte against the petitioner employer in a reference concerning an employee’s claim and passed an award dated 4 December 2019 for Rs. 33,75,521.

After learning of the award, the employer applied under Order IX Rule 13 CPC, with an application under Section 5 of the Limitation Act, to set it aside.

The Labour Court allowed the application on 31 March 2021 but imposed conditions, including directions about the contents of the written statement and production of payment records, and provided that non-compliance would forfeit the employer’s right to cross-examine.

The employer challenged conditions (B), (C) and (D), arguing that they unduly restricted its defence.

Order IX Rule 13 CPC provides the procedural basis for setting aside an ex parte order or award where the applicable requirements are met; once the ex parte award is set aside, the party is entitled to participate and contest the proceedings in accordance with law.

A court or tribunal may regulate procedure and issue directions to promote expeditious adjudication, but those directions must remain within legal bounds and must not unduly curtail a party’s legitimate opportunity to defend.

Cross-examination is an important component of a fair opportunity to contest the opposing party’s evidence.

No precedent is cited in the judgment.

The High Court held that condition (B) improperly prescribed the financial position the employer had to plead, including by requiring disclosure of the newspaper group’s revenue, before the pleadings were completed.

Condition (C) imposed a specific evidentiary obligation as a prerequisite to defending the restored proceedings.

Condition (D) was particularly onerous because it made loss of the right to cross-examine an automatic consequence of non-compliance.

Although expedition was a legitimate concern, it did not justify these restrictions on the employer’s defence after the ex parte award had been set aside.

It allowed the petitioner four weeks to file its written statement, failing which its right to do so would stand closed.

The Labour Court was directed to proceed uninfluenced by the conditions set aside and to endeavour to decide the matter preferably within three months from filing of the written statement or closure of that right, as applicable.