PETITIONER:
S. K. VERMA
Vs.
RESPONDENT:
MAHESH CHANDRA AND ANOTHER
DATE OF JUDGMENT02/09/1983
BENCH:
REDDY, O. CHINNAPPA (J)
DESAI, D.A.
VARADARAJAN, A. (J)
CITATION:
1984 AIR 1462 1983 SCR (3) 799
1983 SCC (4) 214 1983 SCALE (2)199
ACT
Industrial Disputes Act, 1947-S. 2(a)- Definition of ’workman’-Whether it includes Development officers in Life Insurance Corporation ?
HEADNOTE
On a reference being made to it concerning the dismissal from service of the appellant who was a Development officer in the Life Insurance Corporation, the Industrial Tribunal upheld a preliminary objection to the maintainability of the reference and ruled that Development officers in the Corporation were not workmen within the meaning of s. 2(s) of the Industrial Disputes Act, 1947. His petition under Art. 226 questioning the validity of the Tribunal’s ruling having been dismissed in limine by the High Court, the appellant approached this Court under Art. 136.
Allowing the appeal, ^
HELD: Development officers in the Life Insurance Corporation are workmen’ within the meaning of s. 2(s) of the Industrial Disputes Act, 1947
[821 B]
(i) The Act is a legislation intended to bring about peace and harmony between labour and management in industry and, for that purpose, it makes provision for the investigation and settlement of industrial disputes. It is, therefore, necessary to interpret the definitions of ’industry’, ’workman’, ‘industrial disputes’ etc., so as not to whittle down, but to advance the object of the Act. Disputes between forces of labour and management are not to be excluded from the operation of the Act by giving narrow and restricted meanings to expressions in the Act. Parliament could never be credited with the intention of keeping out of the purview of the legislation small bands of employees who, though not on the managerial side of the establishment, are yet to be denied the ordinary rights of the forces of labour for no apparent reason at all. [803 D- F]
Workmen of Indian Standards Institution v. Management of Indian Standards Institution, [1976] 2 S.C.R. 138, referred to.
(ii) The words "any skilled or unskilled manual, supervisory, technical or clerical work" in s. 2(s) of the Act are not intended to limit or narrow the amplitude of the definition of ’workman’; on the other hand they indicate and emphasize the broad sweep of the definition which is designed to coverall manner of persons employed in an industry, irrespective of whether they are 800 engaged in skilled work or unskilled work, manual work or supervisory work, technical work or clerical work. Quite obviously, the broad intention is to take in the entire ‘labour force’ and exclude the ’managerial force’. [803 B-C]
(iii) one does not have to be carried away by the appellation ’development officer’ but must look to the nature of his duties to discover what precisely a development officer is. It is seen from the Life Insurance Corporation of India (Staff) Regulations that development officers, while classified separately from ’Supervisory and Clerical Staff’ are also classified separately from ’officers’ and from the scales of pay prescribed as well as the authorities competent to appoint and take disciplinary action in respect of various categories of officers and staff mentioned therein it is clear that the appellation ’development officer’ is no more than a glorified designation. Development officers are separated from ’officers’ strictly so called and are generally placed on a par with subordinate and clerical staff. The nature of the duties of a development officer gathered from the letter of appointment issued to the appellant indicate that he is to be a whole time employee of the Corporation, that his operations are to be restricted to a defined area, that he is liable to be transferred, that he has no authority to bind the Corporation in any way, that his principal duty is to organise and develop the business of the Corporation in an area allotted to him and for that purpose to recruit active and reliable agents and to train them and that even so, he has not the authority either to appoint them or to take disciplinary action against them. Further, it was admitted that a development officer has no subordinate staff working under him. It is thus clear that a development officer cannot by any stretch of imagination be said to be engaged in any administrative or managerial work. [804 D-H, 805 A-E, 811 B]
2. Whenever an industrial dispute is referred to a tribunal for adjudication it has become a fashion with all employers to raise three preliminary objections, viz., that there is no industry, that there is no industrial dispute and that the workman is no workman. It is a pity that when the Central Government, in all solemnity, refers an industrial dispute for adjudication, a public sector corporation which is an instrumentality of the State instead of welcoming a decision by the tribunal on merits so as to absolve itself of any charge of being a bad employer should attempt to evade decision on merits by raising such objections and never thereby satisfied, carry the matter or ten-times to the High Court and to the Supreme Court, wasting public time and money. Public sector corporations must be model employers and model litigants. They should not attempt to avoid adjudication by raising needless objections or by adopting needless postures or by indulging in luxurious litigation and drag workman from court to court merely to vindicate, not justice, but some rigid technical stand taken up by them. [801 D-H]
JUDGMENT
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2659 of 1980
Appeal by Special leave from the Judgment and order dated the 15th January, 1980 of the Delhi High Court in Civil Writ Petition No. 40 of 1980. 801
Jitendra Sharma for the Appellant,
G.L. Sanghi and D.N. Mishra for the Respondent.
The judgment of the Court was delivered by
CHINNAPPA REDDY. J. The Central Government, the appropriate Government within the meaning of s. 2 (a) of the Industrial Disputes Act, referred the following dispute for adjudication to the Industrial Tribunal-cum-Labour Court, New Delhi: "Whether the action of the management of the Life Insurance Corporation of India, New Delhi in dismissing Shri S.K. Verma, Development officer in Jullunder Branch of the Corporation, with effect from February 8,1969 is justified ? If not, to what relief is the workman entitled ?" The Life Insurance Corporation promptly raised a preliminary objection regarding the maintainability of the reference on the ground that Shri S K. Verma was not a workman.
There appears to be three preliminary objections which have became quite the fashion to be raised by all employers, particularly public sector corporations, whenever an industrial dispute is referred to a tribunal for adjudication. One objection is that there is no industry, a second that there is no industrial dispute and the third that the workman is no workman. It is a pity that when the Central Government, in all solemnity, refers an industrial dispute for adjudication, a public sector corporation which is an instrumentality of the State instead of welcoming a decision by the Tribunal on merits so as to absolve itself of any charge of being a bad employer or of victimisation etc. should attempt to evade decision on merits by raising such objections and never thereby satisfied, carry the matter often times to the High Court and to the Supreme Court, wasting public time and money. We expect public sector corporations to be model employers and model litigants. We do not expect them to attempt to avoid adjudication or to indulge in luxurious litigation and drag: workmen from court to court merely to vindicate, not justice, but some rigid technical stand taken up by them. We hope that public sector corporation will henceforth refrain from raising needless objections, fighting needless litigations and adopting needless postures.
The Industrial Tribunal upheld the preliminary objection and ruled that Development Officers in the Life Insurance Corporation of India are not workmen within the meaning of S. 2 (s) of the 802 Industrial Dispute, Act. The reference was therefore held to be incompetent. Writ Petition filed by S.K. Verma was dismissed in limine by the Delhi High Court. S.K. Verma has come before us under Art. 136 of the Constitution.
’Workman’ was originally defined by S. 2(s) of the Industrial Disputes Act 1947 as meaning
"any person employed (including an apprentice)
in any industry to do any skilled manual or
clerical work for hire or reward and includes, for
the purpose of any proceedings under this Act in
relation to an industrial dispute, a workman
discharged during that dispute but . does not
include any person employed in the naval, military
or air service of the Crown." The definition under went a substantial amendment in 1956 and this is how it stands now:-
"Workman" means any person (including an
apprentice) employed in any industry to do any
skilled or unskilled manual, supervisory, technical
or clerical work for hire or reward, whether the
terms of employment be expressed or implied, and
for the purposes of any proceeding under this Act
in relation to an industrial dispute, includes any
such person who has been dismissed, discharged or
retrenched in connection with, or as a consequence
of, that dispute, or whose dismissal, discharge or
retrenchment has led to that dispute, but does not
include any such person-
(i) Who is subject to the Army Act, 1950, or
the Air Force Act, 1950 or the Navy
(Discipline) Act, 1934; or
(ii) Who is employed in the police service or
as an officer or other employee of a
prison; or
(iii) who is employed mainly in a managerial
or administrative capacity; or
(iv) who, being employed in a supervisory
capacity, draws wages exceeding five
hundred rupees per 803
mensem or exercises, either by the nature
of the duties attached to the office or
by reason of the powers vested in him,
functions mainly of a managerial nature. The words’ any skilled or unskilled manual, supervisory, technical or clerical work’ are not intended to limit or narrow the amplitude of the definition of workman’; on the other hand they indicate and emphasise the broad sweep of the definition which is designed to cover all manner of persons employed in an industry, irrespective of whether they are engaged in skilled work or unskilled work, manual work, supervisory work, technical work or clerical work. Quite obviously the broad intention is to take in the entire ’labour force’ and exclude the ’managerial force’. That of course, is as it should be.
It is trite to say that Industrial Disputes Act is a legislation intended to bring about peace and harmony between labour and management in all industry and for that purpose, it makes provision for the investigation and settlement of industrial disputes. It is, therefore, necessary to interpret the definitions of ’industry’, ’workman,’ ’industrial dispute’, etc. so as not to whittle down, but to advance the object of the Act. Disputes between the forces of labour and management are not to be excluded from the operation of the Act E by giving narrow and restricted meanings to expressions in the Act. The Parliament could never be credited with the intention of keeping out of the purview of the legislation small bands of employees who, though not on the managerial side of the establishment, are yet to be denied the ordinary rights of the forces of labour for no apparent reason at all. In Workmen of Indian Standards Institution v. Management of Indian Standards Institution.(1) this Court had occasion to point out:
"..... It is necessary to remember that the
Industrial Disputes Act, 1947 is a legislation
intended to bring about peace and harmony between
management and labour in an ’industry’ so that
production does not suffer and at the same time,
labour is not exploited and discontended and,
therefore, the tests must be so applied as to give
the widest possible connotation to the term
’industry’. 804
Whenever a question arises whether a particular
concern is an ’industry’ the approach must be
broad and liberal and not rigid or doctrinaire. We
cannot forget that it is a social welfare
legislation we are interpreting and we must place
such an interpretation as would advance the object
and purpose of the legislation and give full
meaning and effect to it in the achievement of its
avowed social objective." So we adopt a pragmatic and a pedantic approach and we proceed, in considering the question whether development officers in the Life Insurance Corporation are workmen, to first consider the broad question on which side of the line they fall, labour or management, and then to consider whether there are any good reasons for moving them over from one side to the other.
One does not have to be carried away by the appellation ’development officer’ as the Industrial Tribunal appears to have been. After all, what is in a name ? Notwithstanding the glorified designation, we must look to the nature of his duties to discover what precisely a development officer is? The Life Insurance Corporation of India (Staff) Regulations classifies the staff into four categories as follows:-
"Class I - officers
Class II-Development officers
Class III-Supervisory and Clerical Staff
Class IV-Subordinate Staff." It is seen that development officers while classified separately from ’Supervisory and Clerical Staff’ are also classified separately from ’officers’. Schedule-I of the Staff Regulations shows the appointing and disciplinary authorities against the various posts. Tn the case of even the lowest posts of Class-I, it is the Zonal Manager that is the appointing and disciplinary authority, while in the case of Development officers. It is the Divisional Manager (that is, the officer next below in rank to Zonal Manager) that is the appointing and disciplinary authority. Even in the case of Superintendents of Class III. it is the Zonal Manager that is the appointing and disciplinary authority. Development officers and employees of 805 Class III and Class IV other than Superintendents are placed on par and in their case, it is the Divisional Manager that is the appointing and disciplinary authority. Schedule-II gives the pay scales of the employees of the Corporation. The scale of pay of the lowest paid class-I officer is Rs. 530-40-1050. The scale of pay of a Superintendent in class- IlI is Rs. 330-25-680-30-740. The scale of pay of development officer Grade-I is RS. 230-15-320-20-360-EB-20- 400-25-550-EB-30-760. The scale of pay of a development officer Grade-II is Rs. 170-10-220. The scale of pay as well as the authorities competent to appoint and take disciplinary action indicate that the appellation ’development officer’ is no more than a glorified designation. Development officers are separated from ’officers’ strictly so called and are generally placed on a par with subordinate and clerical staff.
Shri G.L. Sanghi, learned counsel for the Life Insurance Corporation, told us that development officers are also entitled to be paid a certain commission in addition to the salary and that in the case of some development officers, quite fantastic sums have been paid to them by way of commission. It may be so. A few of the development officers may have been very fortunate in that the agents working within their jurisdiction had done excellent business and that entitled them to earn a good commission. But we are told there are more than six thousand development officers and nothing has been said about the average commission earned by them or the commission earned by the present petitioner himself.
The nature of the duties of ’development officers’ are to be gathered from the letter of appointment issued to the petitioner. We have set out below some of the more important terms of employment:-
"3. Whole-Time Employment
You shall devote your full time and energy to
a organise the Life Insurance business of the
Corporation.
You shall not be a member of any political
organisation and stand for election as a candidate
to any of the Elective Bodies such as Panchayats,
Municipalities, District Local Boards, University
Senate or other similar bodies, Legislative
Assemblies or Parliament or as a 806
Director of any of the Joint Stock Companies or
Banking Institutions (including Corporative Banks
except Corporation’s Staff Co-operative Credit
Societies).
4. Headquarters & Area:
Your Headquarters will be at Jullunder City
and the area in which you will confine your
operations is stated hereinbelow:-
Jullunder City, Cantt & Thana Sadar on non-
exclusive basis:
The Corporation may in its sole discretion
curtail or enlarge the area of your operations or
may appoint one or more other Field officers in
the area allotted to you.
5. Transfer;
You will be liable to transferred to any
place in India. From the date of your transfer you
will not receive credit of the business canvassed
by agents introduced by you or allotted to you as
mentioned hereinafter. Subject to such conditions
as may be stipulated you will receive credit of
business convassed by the aforesaid agents before
the date of your transfer.
6. Duties & obligations:
Your duties are mainly to organise and
develop the business of the Corporation in the
area allotted to you, and for that purpose to
recruit active and reliable agents drawn from
different communities and walks of life on such
terms as may be stipulated by the Corporation from
time to time and to train them up both canvassing
new business and for rendering such post-sale
services as the policy-holders may be in need of.
In addition to this, the existing agents who may
be allotted to you hereafter should be well
enthused and assisted by you. You will, whenever
called upon to do so, assist the Branch Manager or
the Assistant Branch Manager in the investigation
of claims.
We are enclosing herewith for your
information and study a draft letter which will be
issued by the Corpora- 807
tion to new agents who may be selected by you. You
should also study the leaflet entitled "Hints to
Agents" referred to therein, a copy of which is
also enclosed herewith. The Corporation has issued
a Manual for Agents and you should make it a point
to study the Manual carefully.
After an agent has continuously worked for
the Corporation for a period of S years and over
and the Branch Manager feels he is no more in need
of the services of a Field officer he may be
treated as a Direct Agent even if he has been
recruited and trained by you.
7. Tours:
If you are required by your Branch to
undertake tours, you should chalk out a programme
of the same and get it approved by your Branch
Manager two months in advance. When you proceed on
tour, you should adhere to the tour programme as
far as possible, and if any change becomes
necessary you should advise about it to the Branch
Manager, stating the reasons for the change in the
tour programme.
The main object of the tours shall be to
procure New Business to activise the existing
agents, to appoint new agents where such
appointments are necessary and to tap the
potentiality of the area. You will also contact
the policy-holders who have allowed their policies
to lapse and help them to revive their policies.
You should see that the average cost of the
tour does not work out to more than Rs. 2 per
thousand sum assured of completed business.
The travelling expenses will be paid to you
in accordance with the Rules of the Corporation
framed from to time governing the payment of such
allowances. You will be intimated the current
rules in this behalf Separately.
Immediately on completion of a tour and
within a period not exceeding three days you will
submit your 808
report, in the prescribed manner, with the
relevant statements and the will of expenses to
the Branch office.-
8. Advances Deposits:
In respect of business procured by you during
the tour you should see that advance deposits, at
least equal to full instalment of first premiums,
are collected from the proponents and that all
such amounts are remitted to the Branch office
immediately by M o., or if there is a
Corporation’s collection Account in the town with
any Bank, you should deposit the amounts
immediately to the credit of the Corporation,
giving full details to the Bank regarding the
manner in which these amounts are to be credited.
If you collect any amount as deposit towards the
first premium you should always issue receipts
there for in prescribed form to the parties
concerned. If you permit any of your agents either
requited by you or allotted to you to conduct the
medical examination of a proponent without first
realising an advance deposit and if such a
proposal does not result in a policy the medical
fees unnecessarily incurred will be debited to
your account.
9. Record of Daily Work:
You are required to make daily entries in the
prescribed form which shall give a complete record
as well as the results of your daily business
calls. This record must be presented to the
Assistant Branch Manager (Administration) or the
Branch Manager or to the Assistant Branch Manager
(Development) for inspection at least once a week
or at more frequent intervals, if called upon to
do so.
When you are on tour you will make the
entries in the Daily Record and on your return to
the headquarters you will submit such record for
inspection as stated above.
If your headquarters are not the same as the
Branch office headquarters, you will submit the
Daily Records 809
in such manner as you may be asked to by the
Branch Manager.
You are also requested to fill in your Plan
Book in consultation with your Branch Manager or
Assistant Branch Manager (Development) and see
that the targets of work you set for yourself
therein are reached.
10. Collection of Premiums:
Unless you are expressly authorised by the
Corporation, you have no authority to collect
premiums save the deposits towards the first
premium as stated hereinabove.
11. Targets:
You are required as outlined in your Plan
Book:
(a) to secure through agents recruited by
you and allotted to you a minimum life
business of Rs. 5 lacs yielding first
year’s schedule premium income of not
less than Rs. 30,000 through at least
100 policies:
(b) to recruit and train 25 new agents;
(c) to supervise and motivate the agents
allotted to you if any and see that the
average output of these agents allotted
to you is increased progressively from
year to year and,
(d) to open 6 new centers for development.
We hope you will be able to exceed these
targets as your actual categorisation to be made
after the expiry of probationary period will
depend upon the fulfilment of these targets and
your record of post-sales service rendered to the
Corporation’s policy holders in the area allotted
to you.
On the basis of the targets outlined in your
Plan Book and your achievements in terms of new
business, the recruitment and training of agents
and motivating old 810
agents to increased activity, the Corporation
reserves the right to review the results of your
efforts any time and to take such action as may be
called for in the circumstances.
12. General:
You have no authority to accept risks or to
bind the Corporation in any way. You are not
permitted to advance premiums on behalf of the
policy holders or to have policies assigned to you
or to any member of your family (i. e. wife,
parents and children) by policy holders who are
not related to you. You are strictly forbidden to
have any financial dealings with the agents of the
Corporation.
It is understood that your wife, your son,
brother or any close relation of yours or any
other member of your family living with you is not
eligible for appointment as an agent of the
Corporation If you operate any benami agency in
the name of any person or if you are found to pass
on any business to any of your agents and derive
any financial benefit for yourself from this, your
services will be liable to be terminated.
You are not permitted to work directly or
indirectly for any Insurer carrying on general
Insurance business you are also not permitted to
work as an agent for the National Savings
organisation."
A perusal of the above extracted terms and conditions of appointment shows that a development officer is to be a whole time employee of the Life Insurance Corporation of India. that his operations are to be restricted to a defined area and that he is liable to be transferred. He has no authority whatsoever to bind the Corporation in anyway. His principal duty appears to be to organise and develop the business of the Corporation in the area allotted to him and for that purpose to recruit active and reliable agents, to train them to canvass new business and to render post-sale services to policy-holders. He is expected to assist and inspire the agents. Even so he has not the authority to appoint agents or to take disciplinary action against them. He does not even supervise the work of the agents though he is required to train them and assist them. He is to be the 811 ’friend, philosopher and guide’ of the agents working within his jurisdiction and no more. He is expected to stimulate and excite tho agents to work, while exercising no administrative control over them. The agents are not his subordinates. In fact, it is admitted that he has no subordinate staff working under him. It is thus clear that the development officer cannot by any stretch of imagination be said to be engaged in any administrative or managerial work. He is a workman within the meaning of s. 2 (s) of the Industrial, Disputes Act.
The order of the Industrial Tribunal and the judgment of the High Court are set aside and the matter is remitted to the Industrial Tribunal for disposal according to law. The Industrial Tribunal may dispose of the reference within three months from the date of receipt of this order. The respondent workman is entitled to his costs. H.L,C. Appeal allowed. 812