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Andhra High Court · body

2000 DIGILAW 39 (AP)

General Manager, Sales. FDC Ltd. , Bombay, Branch Manager, Hyderabad v. Deputy Commissioner of Labour, guntur

2000-01-25

B.S.A.SWAMY

body2000
B. S. A. SWAMY, J. ( 1 ) AN important question that arises for consideration in this writ petition is whether a Medical Representative governed by the provisions of The Sales Promotion employees (Conditions of Service) Act, 1976 (for short spe Act ) can approach the competent authority questioning his orders of termination under the provisions of A. P. Shops and Establishments Act, 1988. ( 2 ) THE General Manager, Sales of Fair deal Corporation Limited, Bombay (hereinafter called as fdc Limited ) filed this writ petition seeking issuance of Writ of certiorari or any direction or order to quash the order of the competent authority 2nd respondent herein passed in SC 1/95 on 24-9-1996 as confirmed by the appellate authority, 1st respondent herein in s. A, 4/1996 dated 31-3-1997 as the same is illegal, inoperative and without jurisdiction. ( 3 ) THE facts are not in dispute. The petitioner-Company is involved in production of pharmaceutical products and it is marketing the same through medical representatives who are engaged in propagating the medicines and also booking the orders for the company. In the course of its business, the company appointed 3rd respondent as Medical representative and posted him at Nellore on 1-7-1976. During 1988, the petitioner- company issued three charge-sheets against him i. e. , on 25-2-88, 26-3-88 and 7-6-88 and the 3rd respondent submitted his explanation on 11-6-1988. After holding domestic enquiry, the services of the 3rd respondent were terminated on 21-11-1988 and his terminal benefits were paid on 22-11-1988. ( 4 ) ON 29-3-1989 the 3rd respondent without noticing the deletion of the industrial Disputes Act from the Acts that are applicable, to these categories of employees seemed to have moved the labour Court. Subsequently, having come to know that I. D. Act is not applicable to him, he withdrew the petition and moved the competent authority-2nd respondent herein under the Shops and Establishments act and along with the application. He also filed an application to condone the delay of 6 years in approaching the authority concerned. Rejecting the objection raised by the petitioner-Company, the authority seemed to have condoned the delay and that order was also questioned in this Court by filing Writ Petition as well as Writ appeal, but without success. He also filed an application to condone the delay of 6 years in approaching the authority concerned. Rejecting the objection raised by the petitioner-Company, the authority seemed to have condoned the delay and that order was also questioned in this Court by filing Writ Petition as well as Writ appeal, but without success. Thereafter, the petitioner-Company mainly concentrated on the legal position, i. e. , a cqmpetent authority under Shops and Establishments act cannot entertain an application by an employee governed by the provisions of spe Act as his service conditions are governed by a special enactment. The competent authority having rejected the application and having gone into the merits of the case by appreciating the evidence, held, that the Act is applicable to the 3rd respondent and the charges levelled against him held not proved. Consequently, a direction was given to the petitioner-company to reinstate the 3rd respondent with backwages, and the same was confirmed in the appeal. Questioning the said orders, the petitioner filed the present writ petition. ( 5 ) IT is an admitted fact that SPE Act does not contain any provision as to how to deal with an employee faced with disciplinary proceedings. Sri Mohd. Imthiaz, learned counsel for the petitioner tried to substantiate the contention of the Petitioner-Company by drawing my attention to section 4 (4), Section 6 and Section 11 (a) of the Act. Section 4 of the SPE Act deals with the leave of the employees governed by the provisions of the said Act. It is useful to extract Section 4 (4) of the Act as the learned counsel for the petitioner has placed much reliance. Section 4 (4) is extracted hereunder:s. 4 (4) A sales promotion employee shall.- (a) when voluntarily relinquishes his post or retires from service, or (b) when his services are terminated for any reason whatsoever (not being termination as punishment ). be entitled to cash compensation, subject to such conditions and restrictions as may be prescribed (including conditions by way of specifying the maximum period for which such cash compensation shall be payable), in respect of the earned leave by him and not availed of. ( 6 ) FROM this it is seen that when the services of any employee were terminated for any reason, not being a termination as punishment, awarding cash compensation can compensate punishment (sic. termination ). ( 6 ) FROM this it is seen that when the services of any employee were terminated for any reason, not being a termination as punishment, awarding cash compensation can compensate punishment (sic. termination ). At the same time, this section or in fact any other section of the Act won t throw any light as to how an employee charged with misconduct can be dealt with under the provisions of the Act. The learned counsel for the petitioner contended that it has to be presumed by the language used in section 4 (4) (b) of the Act that an order of termination as a measure of punishment cannot be agitated under any of the provisions and provisions of any other Act except in common law. I do not understand the logic behind this argument for the simple reason that when the Counsel himself admits that the order of termination can be questioned in a common law Court, how he can be debarred from questioning the same when a special enactment is made governing a particular category of employees when it is beneficial to him. Admittedly, the A. P. Shops and establishments Act - Act 20 of 1988 is a comprehensive piece of legislation governing the workmen not governed by the Industrial Disputes Act and Factories act. Accordingly, this submission of the counsel is rejected. ( 7 ) NEXTLY, the Counsel contended that the Acts that are applicable to the employees governed by the provisions of this Act are enumerated in Section 6 of the spe Act. As no mention was made about the applicability of Act 20 of 1988 it has to be presumed that by implication the application of the Act is deleted. This argument also cannot stand for the simple reason that while SPE Act is of the year 1976; Act 20 of 1988 came into force on 18-7-1988. Hence, this contention is also rejected. ( 8 ) NEXTLY, the learned Counsel contended that in view of the non-obstante clause employed in Section 11 (a) of the Act, the provisions of the Act and the rules made thereunder shall have overriding effect over any other law or the terms of any wage, agreement, settlement, contract of service made before or after coming into force of this Act which are repugnant. The counsel drew my attention to the Judgment rendered by the Supreme Court in h. R. Adyanthaya vs. Sandoz (India) Limited. It is true in this Judgment their Lordships held that, as Medical Representatives are not workmen they cannot fall under the definition of the workmen as defined in section 2 (f) of the Industrial Disputes Act. For this proposition there cannot be any dispute as Medical Representatives are governed by the provisions of the SPE Act. But, the Counsel drew my attention to the observations made by their Lordships in para 5 of the Judgment. It is useful to extract the same which is as follows:"the legislature, however, considered it more appropriate to have a separate legislation for governing the conditigns of services of the sales promotion employees instead of amending the ID Act, and hence the SPE act". Basing on this observation, the learned Counsel contends that as the services of the 3rd respondent is governed by a special enactment, the question of applying provisions of Act 20 of 1988 does not arise. In this Judgment their Lordships were considering the question whether the medical Representatives will fall under the definition of workmen as defined in section 2 (f) of the Industrial Disputes Act and in the course of discussion such an observation was made. But, at the same time, Their Lordships did not declare in so many terms that another Act except the provisions of the SPE Act can be made applicable to the employees governed by the provisions of the said Act. Admittedly, in this case as pointed out supra, the SPE act does not contain any provision with regard to the conduct of the employees and imposing of punishment. When no provision was made in that Act, it cannot be said that the employee is left with no remedy. On the other hand, it is the case of the Counsel that the employee can question the correctness or otherwise of the termination order by approaching the common laws Court. When once that position is conceded, I am not in a position to accede to the contention of the learned counsel for the petitioner that Act 20 of 1988 which is intended to render speedy justice to workman and beneficial to him cannot be made applicable in a situation of this nature. When once that position is conceded, I am not in a position to accede to the contention of the learned counsel for the petitioner that Act 20 of 1988 which is intended to render speedy justice to workman and beneficial to him cannot be made applicable in a situation of this nature. The Counsel placed reliance on an unreported Judgment of this Court in w. P. 1455 of 1995 dated 25-1-1995. It is true that in this case the learned Judge by relying on the judgment of the Supreme court in H. R. Adyanthaya (supra) held that the petitioner therein, a medical representative cannot be treated as workman and as such he does not fall within the category of employee mentioned under Section 77 of Shops and establishments Act. But, as stated supra their Lordships of the Supreme Court never have gone to the extent of holding that the provisions of Act 20 of 1988 are not applicable moreso in a case of this nature where no provision was made to deal with the disciplinary cases relating to the employees. Further, the learned Judge did not consider any provisions of the SPE Act or the binding nature of the Act 20 of 1988 in the light of Article 254 (2) of the constitution of India. Hence, this judgment won t come to the help of the petitioner-Company. On the other hand, the learned judge having relied on the Judgment of the supreme Court in Inland Water Transport corporation Ltd. vs. Brojo Nath wherein their Lordships of the Supreme Court considered the validity of the Rule 9 (1) of the Corporation Rules and declared that "clause (1) of Rule 9 is against right and reason. It is wholly unconscionable. It has been entered into between parties between whom there is gross inequality of bargaining power. . . . A clause such as R 9 (1) in Contract of employment affecting large sections of the public is harmful and injurious to the public interest for it tends to create a sense of insecurity in the minds of those to whom it applies and consequently is against public good. . . . A clause such as R 9 (1) in Contract of employment affecting large sections of the public is harmful and injurious to the public interest for it tends to create a sense of insecurity in the minds of those to whom it applies and consequently is against public good. Such a clause, therefore, is opposed to public policy and being opposed to public policy, it is void under Sec. 23 of Contract Act, "held that the termination notice given to the petitioner therein is void and it offends Article 14 of the Constitution of India. Consequently, the termination order of the petitioner therein was set aside by the learned Judge. As the finding recorded by the learned Judge i. e. , a medical Representative won t fall within the category of the employees mentioned in section 73 of Act 20 of 1988 is not supported by any reasons or even by the judgment of the Supreme Court on which he placed reliance, the observations made by the learned Judge are not binding on me in the light of the reasons given by me in the judgment. ( 9 ) NEXTLY, the learned Counsel did not show how the provisions of Act 20 of 1988 are repugnant to the provisions of SPE Act more so in the absence of any provision in the said Act dealing with disciplinary cases of the employees governed by the SPE Act. ( 10 ) FURTHER it is seen that the A. P. State legislature passed Act 20 of 1988 in exercise of the legislative powers conferred on it under Entry 24 of List III Concurrent List which states "welfare of Labour including conditions of work, provident funds, employers liability, workmen s compensation, invalidity and old age pensions and maternity benefits". The legislation passed by the State Legislature received the assent from the President of india on 18-7-88 and under Art. 254 (2) of the Constitution, any law made by the legislature of the State with respect to one of the matters enumerated in the concurrent List containing any provision repugnant to the provision of an earlier law made by the Parliament or an existing law with respect to that matter, the law made by the Legislature shall prevail over other laws after receiving the assent of the President and the same will prevail in that State. For clarity Art. 254 (2) is extracted herein:"where a law made by the Legislature of a State with respect to one of the matters enumerated in the Concurrent list contains any provision repugnant to the provision to an earlier law made by Parliament or an existing law with respect to that matter, then, the law so made by the Legislature of such State shall, if it has been reserved for the consideration of the President and has received his assent, prevail in the state: provided that nothing in this clause shall prevent Parliament from enacting at any time any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by the legislature of the State". ( 11 ) EVEN assuming for arguments sake that any of the provisions of Act 20 of 1988 is repugnant to the provisions of SPE Act, 1976, the earlier being latter in point of time and having received the assent of the president Will prevail in the State of Andhra pradesh over the provisions of SPE Act. Hence, this ground also holds no weight. ( 12 ) NEXTLY, the Counsel strenuously contended that the provisions of the Shops and Establishments Act apply only to the establishment established and registered in the State of Andhra Pradesh. As the petitioner-Company s office is neither registered nor established or either located in the State of Andhra Pradesh was registered under the provisions of the Act 20 of 1988, the provisions of the Act cannot be extended to an employee of the petitioner-Company whose, registered office is at Bombay. His contention is that the medical Representative only canvasses for the sale of pharmaceutical products manufactured by the company in Bombay and is only promoting the sales of the company in the State of Andhra Pradesh. His contention is that the medical Representative only canvasses for the sale of pharmaceutical products manufactured by the company in Bombay and is only promoting the sales of the company in the State of Andhra Pradesh. It is useful to extract the definitions section 2 (5) commercial establishment and section 2 (10) establishment, which are extracted hereunder: 2 (5) commercial establishment means an establishment which carries of any trade, business, profession or any work in connection with or incidental or ancillary to any such trade, business or profession or which is a clerical department of a factory or an industrial undertaking or which is a commercial or trading or banking or insurance establishment and includes an establishment under the management and control of a co-operative society, an establishment of a factory or an industrial undertaking which fall outside the scope of the factories Act, 1948, arid such other establishment as the Government may, by notification, declare to be a commercial establishment for the purposes of this Act but does not include a shop. 2 (10) establishment means a shop, restaurant, eating house, residential hotel, lodging house, theatre or any place of public amusement or entertainment and includes a commercial establishment and other establishments as the Government may, by notification; declare to be an establishment for the purpose of this act. ( 13 ) FROM the above provisions, it cannot be contended that the petitioner-Company is not carrying on any trade or business within the territorial jurisdiction of the State of Andhra Pradesh. When once the activity of the establishment is admitted to be a trade, business, profession or any work in connection with or incidental or ancillary to any such trade or business falls under the definition of commercial establishment. Hence, it is futile to contend that the petitioner-Company did not engage the 3rd respondent in the course of its trade or business in promoting the sales of its pharmaceutical products, ( 14 ) THE only question to be decided is whether such an establishment should have a registered office in the State of Andhra pradesh and it has to be registered under the provisions of this Act. A Division Bench of this Court in Bayer (India) Ltd. vs. Commissioner of Labour answered these two issues dealing with the contention that to make the provisions of the Act applicable the company should have an establishment within the territorial jurisdiction of the State observed as hereunder:"it is clear from these two definitions that the dominant characteristic of a commercial establishment is its activity in trade, business or a profession or any work in connection therewith and any defined premises or fixed place is not a desideratum for such activity. The essential attributes of business and trade are systematic and habitual activity undertaken for production or for rendering material services to the community or any part of the community with the help of employees and not the existence of any fixed premises. The emphasis in the definition under Section 2 (5) of the act is not on the place from which the trade or business is carried on but the emphasis is really on the nature of the activity and that activity must be a business or trade activity. That this is so is also apparent from the definition of shop in Section 2 (21) which defines shop to mean any premises where any trade or business is carried on while the Legislature omitted the word premises in the definition of commercial establishment in section 2 (5)". ( 15 ) WITH regard to the other contention that unless the establishment is registered under Section 3 (1) of the Act 20 of 1988 the provisions cannot be made applicable, Their lordships having extracted the relevant provisions in the Act and the Rules in para 19 held as follows:". . . . . . . . THE question, therefore, is whether mere non-registration under the Act in contravention of Section 3 read with Rule 3 takes an establishment outside the ambit of the act. The statute itself enacts a penal provision for non-registration in section 54 for contravention of section 3. We have no hesitation in holding that an establishment which satisfied the criteria laid down under the statute does not cease to be an establishment merely because the employer evaded registration under section 3 and thereby deprive an employee of the benefit of the provisions of the Act which is intended to provide security of tenure, payment of wages and hours of work, leave etc. To hold otherwise would be against the spirit and reason of the statute. The statute is designed to suppress the evil of insecurity of tenure to employees in establishments and the object of the statute would be frustrated if an employer who evades registration of an establishment tinder the provisions of Section 3 of the Act is allowed to avoid the implementation of the provisions of the Act". ( 16 ) I am in respectful agreement with the two above findings recorded by the division Bench of this Court. The Counsel for the petitioner contends that the judgment was rendered under the old enactments in A. P. Shops and Establishments act, 1966 (Act 15 of 1966 ). It is true the said act was replaced by the present Act and is more comprehensive in nature. The learned counsel did not bring to my notice any decision, which has taken a contra view on these two issues. Further a look at the judgment reveal that the definitions of the commercial establishment and establishment are in pari materia the same and there is no difference in the language implied in these two definitions. Hence, the objection raised by the Counsel cannot be sustained. ( 17 ) NEXTLY, it is contended that when a particular Act deals with a situation in a particular manner, the general rule of interpretation of statute implies the exclusion of similar provisions in another act and in support of his contention he relied on Bindra sr Interpretation of statutes, 5th Edition 1970 under the caption enabling Statutes in Chapter 21 which reads as follows:"where a statute directs the performance of certain things in a particular manner it forbids by implication every other manner of performance. Crawford in his "statutory Construction writes. " As a general rule, in the interpretation of statutes, the mention of one thing implies the exclusion of another thing". Absolutely, there cannot be any quarrelwith the proposition. But, in the instant case, the SPE Act did not deal with the disciplinary proceedings of the employees governed by the statute and the punishment to be imposed following the disciplinary enquiry. The Act is completely silent on that aspect. Hence, it cannot be said that there is anything in this Act dealing with the situation, which implies the exclusion of provisions of other Acts. The Act is completely silent on that aspect. Hence, it cannot be said that there is anything in this Act dealing with the situation, which implies the exclusion of provisions of other Acts. ( 18 ) AS far as the merits of the orders of the authorities are concerned, the petitioner could not assail the findings of the authorities on any grounds. For all the above reasons and in the light of the view I have taken, the writ petition is liable to be dismissed and it is accordingly dismissed. No costs.