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2008 DIGILAW 587 (BOM)

German Remedies v. R. D. Lotlikar

2008-04-21

A.V.NIRGUDE, R.M.S.KHANDEPARKAR

body2008
JUDGMENT [Sri R.M.S. Khandeparkar, J.] : 1. Heard. 2. Admit. Taken up for hearing forthwith. Mr.Bhatt waives service for the Respondent. 3. Present Appeal arises from the order dated 28th June, 2007 passed in the Writ Petition No.967 of 2007 by the learned Single Judge whereby the said Writ Petition filed by the appellant has been dismissed. The said Petition was filed against the Judgment and Order dated 8th November, 2006 passed by the Industrial Court, Bombay in Revision Application (ULP) No.167 of 2004. By the said order the Industrial Court had allowed the Revision Application filed by the Respondent and set aside the Judgment and Order dated 29th September, 2004 passed by the Labour Court in Complaint (ULP) No.130 of 1995, while holding that the respondent herein is the employee within the meaning of the said expression under Section 3 sub-section 5 of MRTU & PULP Act, 1971 (hereinafter called as "the said Act") and therefore the Labour Court should proceed to decide the complaint on merits. The Labour Court by its order dated 29th September, 2004 had held that the respondent is not the employee within the meaning of the said expression under the said provision of the said Act and, therefore, the complaint was not maintainable. 4. The appellant-company is a public limited company having its divisional office at Bombay and factories at Goa, Pathalganga etc. It is the case of the appellant that the respondent joined the services in the appellant-company on 1st November, 1973 as Junior Engineer at its Andheri factory. The agreement of service was executed between the parties in relation to the terms and conditions of the service in January, 1981 and on 1st January, 1990 the respondent was promoted to M-6 grade of the management and he was given managerial and supervisory duties. It is further case of the appellant that on account of misconduct on the part of the respondent, suspension order was issued on 25th October, 1993 which was followed by the charge sheet dated 9th November, 1993. An inquiry was conducted and the findings of the inquiry officer were adverse to the respondent. Consequently show cause notice came to be issued to the respondent on 12th May, 1995 and thereafter by order dated 15th May, 1995, the respondent was discharged from the services. An inquiry was conducted and the findings of the inquiry officer were adverse to the respondent. Consequently show cause notice came to be issued to the respondent on 12th May, 1995 and thereafter by order dated 15th May, 1995, the respondent was discharged from the services. A complaint came to be filed under the said Act to the Labour Court by the respondent on 6th April, 1995. The appellant raised a preliminary issue about lack of the jurisdiction of the Labour Court to deal with the matter on the ground that the respondent is not an employee within the meaning of the said expression under the provisions of the said Act. The Labour Court accordingly framed the preliminary issue as to whether the respondent was the employee under the said Act or not. Framing of the preliminary issue itself was sought to be challenged by the respondent in Revision Application No.79 of 1996, which came to be dismissed by the Industrial Court on 23rd July, 1998. The parties then led evidence in relation to the preliminary issue and by order dated 29th September, 2004, the preliminary issue was answered in favour of the appellant. Being dissatisfied, the respondent carried the matter in Revision Application No.167 of 2004 before the Industrial Court, whereupon the order of the Labour Court was set aside and thereafter the matter was challenged by the appellant in the Writ Petition No.967 of 2007 which came to be dismissed by the impugned Judgment. Hence, this Appeal. 5. The impugned Judgment of the learned Single Judge and that of the Industrial Court are sought to be assailed on behalf of the appellant on the ground that the Industrial Court could not have exercised its jurisdiction beyond the parameters of the provisions of law comprised under the section 44 of the said Act and consequently the Industrial Court could not have reappreciated the evidence to arrive at a finding different from that which was arrived at by the Labour Court on the aspect of the status of the respondent and in any case the materials on record clearly reveal that the respondent was performing supervisory and managerial functions and therefore there was no scope for holding the respondent to be the employee within the meaning of the said expression under the said Act. According to the appellant, the decision of the learned Single Judge in S.A. Sarang V/s. W.G. Forge & Allied Industries Ltd. & Ors. reported in 1996 (1) LLJ 67 has been wrongly applied to the facts of the case in hand, apart from ignoring the mandate of the Judgment of the Apex Court in Mukand Ltd. V/s. Mukand Staff and Officers’ Association reported in AIR 2004 SC 3905 . It is their further case that the principle of estoppel has also been totally misconstrued by the Industrial Court as well as by the learned Single Judge and in that regard attention is drawn to the decision of the Apex Court in the matter of Dr.Ashok Kumar Maheshwari V/s. State of U.P. and Anr. reported in [ (1998) 2 SCC 502 ]. 6. On the other hand, it is the contention on behalf of the respondent that the Labour Court had totally ignored the relevant materials on record which reveal that the primary function performed by the respondent was that of the employee and not of supervisor or manager and mere nomenclature regarding the alleged status of the respondent in the services of the appellant would not be sufficient to declare the respondent’s status in the employment of the appellant. It is further contention on behalf of the respondent that the correspondence between the parties apparently discloses that the respondent was the employee within the meaning of the said expression under the said Act and the Industrial Court rightly set aside the order of the Labour Court and therefore no fault can be found with the impugned order passed by the learned Single Judge. Attention is sought to be drawn to the decision of the Apex Court in B.L. Sreedhar & Ors. V/s. K.M. Munireddy [Dead] and Ors. reported in AIR 2003 SC 578 . It is also the contention of the respondent that the decision in S.A. Sarang’s case is squarely applicable to the facts of the case in hand. 7. Attention is sought to be drawn to the decision of the Apex Court in B.L. Sreedhar & Ors. V/s. K.M. Munireddy [Dead] and Ors. reported in AIR 2003 SC 578 . It is also the contention of the respondent that the decision in S.A. Sarang’s case is squarely applicable to the facts of the case in hand. 7. The perusal of the impugned Judgment discloses that the learned Single Judge while observing that the Industrial Court was justified in placing reliance in a decision of the learned Single Judge in S.A. Sarang’s case (supra) and that the procedure followed for termination of services was in consonance with the provisions of Model Standing Orders held that the respondent No.1 is the workman for the purpose of the said Act. It has also been held by the learned Single Judge that there are catena of cases on the point that what is important is not the designation of the employee but the pre-dominant duty which is performed by him that would decide his status for the purpose of consideration of a matter under the said Act and that in the facts and circumstances of the case, the Industrial Court was justified in taking the view it has been taken and that it is not a case of reappreciation of evidence. It has also been observed that preliminary issue was framed in the year 1995 and the Revision Application preferred against the same by the appellant-company was dismissed and the matter was remanded to the Labour Court and thereafter the preliminary issue was decided in the year 2004 and in the process the period of 12 years elapsed only for the purpose of decision on the preliminary issue. 8. Perusal of the impugned Judgment apparently discloses that the learned Single Judge did not address to the main issues which were sought to be raised in the petition relating to the scope of revisional powers of the Industrial Court while dealing with the matter under Section 44 of the said Act and secondly that the finding of the Labour Court was based on reassessment of the evidence on record and the same was either perverse or arbitrary one. It is settled law that in exercise of jurisdiction under Article 226 and/or 227 of the Constitution of India against the Judgment of the Industrial Court or a Tribunal, this Court has to exercise its revisional and supervisory powers and in the process has to consider whether the Tribunal or the lower Court has exercised its jurisdiction properly or has exceeded or failed to exercise the same. The specific point which was raised before the learned Single Judge pertained to the jurisdiction of the Industrial Court to entertain the matter wherein the revisional Court was called upon to reassess the evidence on record to arrive at a finding different from the one which was arrived at by the Labour Court in relation to the status of the complainant before the Labour Court. It is settled law that the Labour Court, and for that purpose the Industrial Court under the said Act, cannot entertain the complaint unless there exists employer-employee relationship between the parties within the meaning of the said expressions under the said Act. It is also settled law that when the complainant approaches the Labour Court under the said Act, the complaint itself should disclose existence of such relationship and when such a claim is denied or disputed by the respondent, the burden lies upon the claimant to establish his claim. In fact, very jurisdiction of the Labour Court to deal with the matter depends upon existence of such relationship and the status of the complainant that of an employee within the meaning of the said expression under the said Act and, therefore, the question of any presumption as such regarding such status would not arise unless the initial burden in that regard is discharged by the complainant. Viewed from this angle contention on behalf of the respondent that merely because the procedure for termination of the services which were adopted were akin to the rules provided regarding the termination of services of a workman under Model Standing Orders that itself would not attract the principle of estoppel against the appellant nor it would disentitle the appellant from denying the claim of the respondent being the employee. Once it is settled law in view of the statutory provisions comprised under the said Act read with judicial pronouncements on that subject by the Apex Court to that effect that the Labour Court or the Industrial Court or the Tribunal would not get jurisdiction to deal with the matter under the said Act unless there exists relationship of employer-employee between the parties within the meaning of the said expressions under the said Act and that the complainant is required to establish his status of being employee before proceeding with the matter when such a claim is disputed by the respondent. It is needless to say that there could be no question of respondent being estopped from denying the claim of the complainant to be an employee merely because the employer had issued the notice before termination of services or grants subsistence allowance during inquiry or follows the procedure which is followed for termination of services of a workman in terms of the Model Standing Orders. Besides the rule of estoppel is not a matter of right but it is a rule of evidence. 9. The decision of this Court in S.A. Sarang’s case (supra) was in the peculiar facts of that case. Paragraph No.6 of the said decision clearly observed that "uniformly, in each Show Cause Notice and charge-sheet, it has been alleged that the act imputed to the Petitioner was a misconduct under the Model Standing Orders. It is not possible to ignore the cumulative effect of this conduct on the part of the First Respondent Employer". The said observation was made after taking note of the evidence led by the complainant in relation to four show cause notices and the charge sheet issued to the complainant. It was specifically held in that case that "if an employer continuously and consistently proposes and takes action against its employee on the footing that he is covered by the Model Standing Orders (thereby implying that the employee is a "workman" within the meaning of the Act), then such employer must be estopped from denying the said fact when a dispute regarding to the dismissal of the employee finally lands up before an industrial adjudicator." The expression "estoppel" used in the said ruling has nothing to do with the rule of estoppel. The said expression has been used specifically to disclose the procedure to be adopted by the industrial adjudicator while assessing the evidence led by the parties. In a case where the complainant places sufficient material on record which would disclose a consistent conduct on the part of the employer to treat the complainant as his employee and this is revealed from the materials placed by such employee before the Court, in that case the contention raised on behalf of the employer denying the status of the complainant has to be rejected. It is in that context the expression "estoppel" has been used in paragraph No.6 of the said decision and it has nothing to do with the rule of estoppel as is to be found under section 115 of the Evidence Act. It is settled law that the expressions used in a judgment are not to be read as the statutory provisions. They are to be understood bearing in mind the context in which they are used. 10. The perusal of the Judgment of the Labour Court in the case in hand discloses that after taking into consideration the entire evidence placed on record by the parties and on proper analysis thereof, it had held that the respondent was in-charge of utility section and he was looking after the maintenance, preparation of boilers, air-conditioning plants, water supply systems, lifts and electrical installations, waste water filtration plant. It has been further held that the complainant used to decide about the shift schedule of workmen and he was sanctioning leave, making the change in the shifts and he was looking after other work of the contractor assigned by the company. He used to decide whether extra work is to be given to a particular worker or not as per the requirement of the work. Obviously all these duties and functions disclose that they were of managerial or supervisory nature. It is undisputed fact and it is clearly established by evidence on record that the salary drawn by the respondent was Rs.4,485/- per month in addition to house rent allowance of 15% of his consolidated salary. Indeed all these findings by the Labour Court are clearly borne out from the record. It is undisputed fact and it is clearly established by evidence on record that the salary drawn by the respondent was Rs.4,485/- per month in addition to house rent allowance of 15% of his consolidated salary. Indeed all these findings by the Labour Court are clearly borne out from the record. The letter dated 20th December, 1989, copy of which is filed at Exhibit-C on record by the appellant company addressed to the respondent clearly reads thus:- "With effect from 1st January, 1990, your salary will be Rs.4,485/- per month. We are pleased to inform you that with effect from 1.1.90, you will be entitled to House Rent Allowance of 15% of your Consolidated Salary. In the existing Management grades, you will now be promoted to M-6." 11. The terms of agreement between the parties in relation to the service conditions undisputedly disclose that the termination of services of the respondent could have been done in terms of clause 12 thereof and the said clause reads thus:- "The service of the employee shall be liable to be terminated for any act of proved misconduct or wilful neglect or dereliction in duty or moral turpitude." 12. The learned senior Advocate appearing for the appellant is justified in contending that the clause clearly required misconduct to be proved before the employer decides to terminate the services of the employee. It is also not in dispute that the services of the respondent were sought to be terminated on account of the misconduct stated to have been proved pursuant to the inquiry conducted in the matter. 13. It is, however, sought to be argued on behalf of the respondent that the termination of the services and the procedure followed in that regard has been in accordance with the Model Standing Orders. The fact that the termination of service was pursuant to the procedure of issuance of notice, granting of subsistence allowance and holding of inquiry as such, and that the same was not different from the procedure prescribed for termination of services of an employee under the Model Standing Orders, is not disputed by the appellant. The fact that the termination of service was pursuant to the procedure of issuance of notice, granting of subsistence allowance and holding of inquiry as such, and that the same was not different from the procedure prescribed for termination of services of an employee under the Model Standing Orders, is not disputed by the appellant. However, it is the case of the appellant and it is sought to be contended on behalf of the appellant that merely because the procedure adopted for terminating the service of the respondent happened to be similar to one provided for the termination of the service of an employee in terms of the Model Standing Orders, that itself will not be sufficient to hold that the respondent was the employee of the appellant within the meaning of the said expression under the said Act. Even for the purpose of proving the misconduct on the part of the person employed in supervisory capacity, it would be necessary for the employer to decide the procedure to be followed for the said purpose. Undoubtedly it has to be a just and fair procedure. In order to follow such procedure, obviously the employer will have to give an opportunity to the employee of being heard in the matter even though the such employee is not "an employee" within the meaning of the said expression under the said Act. Even in that case, termination of services on the ground of misconduct will have to be by following basic principles of natural justice and it would obviously include an opportunity of being heard to such person. Hence, mere similarity between the procedure followed by the appellant for termination of the services of the respondent with the procedure prescribed under the Model Standing Orders that by itself would not be a justification to hold that the respondent was the employee within the meaning of the said expression under the said Act nor it would preclude the appellant from denying the status of the respondent to be that of an employee under the said Act. The learned Single Judge does not seem to have considered this aspect at all while dealing with the matter. 14. Perusal of the Judgment passed by the Industrial Court undoubtedly discloses reference to the various Judgments of the Supreme Court and this Court as also reference to the Judgment in S.A. Sarang’s case (supra). The learned Single Judge does not seem to have considered this aspect at all while dealing with the matter. 14. Perusal of the Judgment passed by the Industrial Court undoubtedly discloses reference to the various Judgments of the Supreme Court and this Court as also reference to the Judgment in S.A. Sarang’s case (supra). However, apart from referring to those Judgments and quoting the rulings from those Judgments, the Industrial Court before arriving at the finding that the evidence on record clearly disclose the respondent to be the workman within the meaning of the said expression under the said Act, has nowhere referred to any material on record nor has discussed anything about the decision of the Labour Court to ascertain whether any finding arrived at by the Labour Court was either contrary to the materials on record or was perverse or arbitrary in any manner. The provisions of law comprised under section 44 of the said Act clearly provide that the powers of the Industrial Court thereunder are that of the revisional Court and being so, before arriving at any finding on the status of the respondent by the Industrial Court in Revision Application, it was necessary for the revisional Court to ascertain whether the Labour Court had erred in arriving at the finding regarding status of the respondent in a sense that the finding was either contrary to the materials on record or was perverse or arbitrary. Failure to exercise its jurisdiction in that manner would apparently disclose improper exercise of jurisdiction by the Industrial Court as also having exceeded it its jurisdiction while setting aside the finding of the Labour Court, for no reason whatsoever. Mere observation that the evidence on record is clear to the effect that the respondent cannot be excluded from the definition of the "workman" is neither here nor there. Before arriving at such a finding, the Court and for that matter an appellate adjudicating authority has to analyse the materials on record. In order to enable the Revisional Court to analyse material on record it is a pre-condition for exercise of such jurisdiction that the finding arrived at by the lower authority should be either contrary to the materials on record or perverse or arbitrary and has resulted in failure of justice. In order to enable the Revisional Court to analyse material on record it is a pre-condition for exercise of such jurisdiction that the finding arrived at by the lower authority should be either contrary to the materials on record or perverse or arbitrary and has resulted in failure of justice. In the facts and circumstances, the learned Single Judge clearly failed to exercise its jurisdiction while refusing to interfere in the order passed by the Industrial Court. 15. The Apex Court in Mukand’s case (supra) after taking into consideration the facts of that case held thus:- "48. In our view, the material that was placed before the Tribunal was not considered or discussed and that there was, as such, no adjudication by the Tribunal. The whole award of the Tribunal, in our view, is liable to be set aside on the ground of non-application of mind by the Tribunal to the material on record. In the first place, the Tribunal has no jurisdiction to entertain and decide a dispute which covered within its fold "persons who are not workmen". That the material on record before the Tribunal as regards the comparable concerns was admittedly "sketchy" and incomplete as observed by the learned single Judge of the High Court and that the award based on such material could not have been sustained. 49. In the instant case, the employer and the employees by their conduct in concluding settlements in the past could not create for, or confer upon, an adjudicating authority jurisdiction, where none existed, in respect of employees to whom the provisions of the Act are not applicable. This apart, the employer had not waived his right to raise the issue of the status of the employees under the Act in any of these settlements. The employer cannot held to have waived his rights regarding the issue of the status of the employees under the Act in the absence of any of the settlements concluded by them with their employees. The High Court has come to the conclusion that there are grave and fundamental errors, including the errors in assessing financial capacity, burden etc. into he award of the Tribunal. In the instant case, the Tribunal did not have the jurisdiction to adjudicate the present dispute in as much as it pertains to the conditions of service of non-workmen. The High Court has come to the conclusion that there are grave and fundamental errors, including the errors in assessing financial capacity, burden etc. into he award of the Tribunal. In the instant case, the Tribunal did not have the jurisdiction to adjudicate the present dispute in as much as it pertains to the conditions of service of non-workmen. The Division Bench has erred in holding that there is a community of interest between the workmen and the non-workmen and holding further that the workmen can raise a dispute regarding the service conditions of non-workmen. This reasoning, in the absence of any pleading regarding the community of interest, is fallacious." . Above ruling clearly discloses that there is no question of any waiver of right as such by an employer in relation to the issue of the status of the complainant. Indeed it would be absurd to hold that the respondent before the Labour Court or Industrial Court under the said Act is not entitled to deny the status of the complainant to be an employee as even in case where factually the complainant is not at all an employee would be entitled to pursue a false claim in the Court in the absence of such right to the opponent. In fact provisions of section 28 of the said Act clearly specifies that it is only in case of unfair labour practice viz-a-viz the employee or employer that a complaint under the said Act is maintainable and not otherwise. The expressions "employee", "employer" and "Union" are all defined under the said Act in sections 3(5), (6) and (17) of the said Act. Considering the same, it leaves no room for doubt that no person can approach before the Labour Court under the said Act unless such person is able to establish his status as the employee within the meaning of the said expression under the said Act. 16. The decision of the Apex Court in B.L. Sreedhar’s case (supra) which is sought to be relied upon by the respondent, rather than supporting the case of the respondent, supports the contention sought to be raised on behalf of the appellant. In paragraph No.25 of the said decision it has been clearly held that "though estoppel is described as a mere rule of evidence, it may have the effect of creating substantive rights as against the person estopped. In paragraph No.25 of the said decision it has been clearly held that "though estoppel is described as a mere rule of evidence, it may have the effect of creating substantive rights as against the person estopped. An estoppel which enables a party as against another party to claim a right of property which in fact he does not possess is described as estoppel by negligence or by conduct or by representation or by holding out ostensible authority" and in further paragraph No.27 it has held "of course, an estoppel cannot have the effect of conferring upon a person a legal status expressly denied to him by a statute. But where such is not the case a right may be claimed as having come into existence on the basis of estoppel and it is capable of being enforced or defended as against the person precluded from denying it." 17. It obviously mean that when the complainant is able to place before the Court sufficient material which would reveal admission either express or implied on the part of the respondent regarding the status of the complainant to be the employee within the meaning of the said expression under the said Act, the rule of estoppel will apply and in that case the contention sought to be raised on behalf of the respondent denying the status of the complainant would be rejected. In the case in hand as already stated above no material was placed before the Court below apart from referring to the procedure adopted for termination of services. 18. It was also sought to be contended on behalf of the appellant that the Industrial Court accepted the contentions on behalf of the respondent without even ascertaining whether they are borne out from the record. Referring to the contention on behalf of the respondent which was advanced before the Industrial Court that the appellant had undisputedly paid suspension allowance to the respondent during the course of the inquiry, attention was sought to be drawn to the letter dated 25th October, 1993, by which the respondent was suspended, and it was sought to be contended that what was paid to the respondent was in fact half of its salary. Undoubtedly it was paid as subsistence allowance but that itself would not lead to conclusion that it was in terms of the Model Standing Orders. Undoubtedly it was paid as subsistence allowance but that itself would not lead to conclusion that it was in terms of the Model Standing Orders. Indeed letter dated 25th October, 1993 specifically refers to payment of half of the salary as subsistence allowance but it nowhere states that it was in terms of Model Standing Orders. Since the terms of the agreement between the parties clearly required misconduct to be proved before the termination of service, as already observed above, it was necessary for the appellant to hold the necessary inquiry and obviously during the period of inquiry the respondent was required to be paid subsistence allowance. Merely because he was required to pay subsistence allowance it cannot be said that it was in terms of Model Standing Orders. Therefore the impugned Judgment passed by the learned Single Judge nor the one by the Industrial Court can be sustained and are liable to be set aside and the order passed by the Labour Court to be restored. 19. The Appeal therefore succeeds. The impugned order passed by the learned Single Judge and the one by the Industrial Court are quashed and set aside. The order passed by the Labour Court is hereby restored. There shall be no order as to costs. 20. At this stage, the learned Counsel for the appellant request for stay of this order. Considering the reasons for which the orders passed by the learned Single Judge and the Industrial Court are set aside, we find no justification for stay of this order. The request for stay is therefore rejected.