Facts:
The appellant, Dushyant Janbandhu, was employed by M/S Hyundai AutoEver India Pvt. Ltd. as an Assistant Manager starting March 15, 2019. Amid the COVID-19 pandemic, the appellant was asked to work from home but was later required to attend office physically. Following his refusal, disciplinary proceedings were initiated, culminating in his termination on January 21, 2021, citing absenteeism and non-cooperation. The appellant sought unpaid wages under the Payment of Wages Act, 1936 (PW Act) and challenged his termination under the Industrial Disputes Act, 1947 (ID Act). Meanwhile, the respondent-initiated arbitration under the Arbitration and Conciliation Act, 1996, which the appellant contested.
Contentions of the Appellant:
The appellant argued that the disputes related to his unpaid wages and termination were governed exclusively by statutory remedies under the PW Act and ID Act. He contended that these matters were non-arbitrable. He also claimed that invoking arbitration and adding allegations under the non-disclosure clause (Clause 19) of his employment contract were baseless and an abuse of process, as these allegations were not part of the initial disciplinary actions or termination.
Contentions of the Respondent:
The respondent sought arbitration for disputes related to unpaid wages and the legality of termination. They also introduced allegations under the non-disclosure clause, asserting that the appellant had breached confidentiality obligations, necessitating arbitration.
Issues:
- Whether the disputes related to unpaid wages and termination of employment are arbitrable.
- Whether invoking Clause 19 of the employment contract concerning non-disclosure obligations was justified.
- Whether the respondent’s invocation of arbitration was an abuse of process.
Observations/Findings by the Supreme Court:
The Supreme Court observed that the disputes concerning unpaid wages and termination fell under the exclusive jurisdiction of the statutory authorities established under the PW Act and ID Act, rendering them non-arbitrable. The Court further noted that the non-disclosure clause was not referenced during disciplinary proceedings or in the termination order, making the allegations baseless and non-existent. It held that the respondent’s attempt to invoke arbitration under these circumstances was an abuse of process intended to pressure the appellant for seeking statutory remedies.
Principle of the Case:
Statutory remedies under laws such as the PW Act and ID Act are exclusive and cannot be overridden or bypassed by arbitration. Furthermore, introducing baseless claims during arbitration proceedings constitutes abuse of process.
Final Order:
The Supreme Court allowed the appeal, set aside the High Court’s order appointing an arbitrator, and dismissed the respondent’s petition under Section 11(6) of the Arbitration and Conciliation Act. The appellant was awarded costs of ₹5 lakhs, to be paid within three months.
Impact on Public Law and Order:
This judgment reinforces the primacy of statutory remedies in employment disputes and discourages misuse of arbitration to bypass established legal frameworks. It ensures that employees can seek redress under protective labor laws without fear of coercion through unwarranted arbitration.
Case Citation:
Supreme Court of India, Dushyant Janbandhu v. M/S Hyundai AutoEver India Pvt. Ltd., Civil Appeal No. 14299 of 2024 (Arising out of SLP(C) No. 29929 of 2024), Decided on December 11, 2024.
