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NAGAR PANCHAYAT KITHORE THRU' ITS C.E.O. versus PRESCRIBED AUTHORITY, LABOUR COURT AND ANOTHER

High Court of Judicature at Allahabad

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Nagar Panchayat Kithore Thru' Its C.E.O. v. Prescribed Authority, Labour Court And Another - WRIT - C No. 6888 of 2007 [2007] RD-AH 2639 (19 February 2007)

 

This is an UNCERTIFIED copy for information/reference. For authentic copy please refer to certified copy only. In case of any mistake, please bring it to the notice of Joint Registrar(Copying).

HIGH COURT OF JUDICATURE OF ALLAHABAD

                                                     Reserved on 9.11.2004

                                                                                              Delivered on 29.11.2004

Civil Misc. Writ Petition No. 15889 of 2002

Vinesh Kumar Mehta                              ....       Petitioner

Vs.

Presiding Officer Labour Court (I) Kanpur     .....    Respondents.

and others

 

Counsel for the petitioner-     Sri P.K. Srivastava

Counsel for the respondents-  Sri V.B.Singh, Senior Advocate

                                                          Ms. Kirtika Singh

                                                         Standing counsel- Sri Vijay Sinha

Hon'ble Rakesh Tiwari, J.

1. By means of the instant writ petition, the petitioner has challenged the legality and validity of the impugned award dated 11th October, 2001 passed by the Labour Court (I), U.P., Kanpur- respondent no. 1 in Adjudication Case No. 146 of 1994 by which the following reference  with regard to termination of service has been answered by the Labour Court against the workman.

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2. The woodcut profile of the case of the petitioner before the Labour Court in his written statement was that the petitioner was appointed as Medical Representative by Ms/ Franco-Indian Pharmaceuticals Ltd- respondent no. 2  in its Branch Office at C-11, Site-1, Panki Industrial Area, Kanpur on 15th March, 1972.  He was promoted as Area Manager w.e.f. 1st August, 1988 without any change in his terms of appointment of service. It is alleged by the petitioner that he was working under direct control and supervision of one Mr. V.N. Kapoor, Regional Sales Manager who was trying to implicate him in false cases ever since 1977 and was pressurizing him to resign.  The petitioner further alleges that he also had complained against Mr. Kapoor, from time to time, to higher authorities and was called to Mumbai office on 23rd May, 1990 at the instance of Sri V.N. Kapoor in some alleged enquiry who was found guilty and was given an opportunity to improve his conduct. It is also alleged that thereafter the petitioner was again summoned to Mumbai on 30th April, 1992 and was asked to submit his resignation but he declined. He then received letter dated 16th May, 1992 informing him that his services stood terminated w.e.f. 30th April, 1992.  He pleaded that his termination was illegal, null and void as it was brought about in violation of Sections 6-I,6-N, 6-P and 6-Q of the U.P. Industrial Disputes Act, 1947.

3. The employers took a stand before the Labour Court that the matter in dispute was not an "industrial dispute" under the provisions of U.P. Industrial Disputes Act, 1947 (hereinafter referred to as the State Act) for the reasons that Sri Mehta was neither a workman under the provisions of the State Act nor under the provisions of the Industrial Disputes Act, 1947 (hereinafter referred as to as the ''Central Act'); that being employed as an Area Manager he was discharging the duties which were mainly of supervisory and administrative nature and was drawing salary @ Rs.12000/- per month which was much more than the limit prescribed in the definition of workman under the two aforesaid Acts or Sales Promotion Employees (Conditions of Service) Act, 1976. According to the employers, the reference was illegal as well as beyond the jurisdiction of the State Government to refer it for the reasons that the Government of India had already enacted the Sales Promotion Employees (Conditions of Service) Act, 1976 (hereinafter referred to as the ''1976 Act')  and the Labour Court had no jurisdiction to adjudicate the matter under reference and that the designation in the reference order showing the petitioner as ''Medical Representative' was contrary to the facts.

4. The employers also asserted that the petitioner was performing the duties of Area Manager and not that of a Medical Representative and was supervising the work of Medical Representatives working under him. The nature of duties, according to the employers' written statement, was to promote the sales of the company which has appointed and placed medical representatives all over India and to control and supervise the work of "Medical Representative" who discharged their duties. The broad functions of Area Manager were as under: -

DUTIES OF AREA MANAGER  

1. To guide and assist the Medical Representatives in his territory to enable him to achieve individual performance targets (unit-wise, product-wise and rupee-value sales targets).

2. To continuously train and develop the Medical Representatives to achieve better results and to prepare them to take up higher responsibilities in future when the need arises.

3. To maintain team spirit amongst the Medical Representatives in his area.

4. To help the Medical Representatives to resolve their difficulties, if any, in respect of personal booking, dealing with the chemists, distributors or with the profession.

5. To periodically forward to them head office objective performance appraisal reports about each Medical Representative in his area.

6. To act as a channel of communication and link between the head office and the field staff.

7. To communicate with management in respect of market information and intelligence etc.

8. To be responsible for correspondence with the head office in respect of monthly report and other correspondence.

9. To pass all the relevant information regarding policies, procedures etc., of the company to the representatives working under him.

10. To keep the head office informed from time to time about the stock position with the distributors in his area and ensure and follow-up regarding outstanding.

11. To maintain and develop relationship with the distributors in his area.

12. To keep the personal touch with all the institutional customers to ensure continuity of the existing business and procurement of new business.

13. Any additional duties and responsibilities as may be assigned from time to time by the superiors.

5. The duties of Medical Representative given in the written statement are :-

(i) The Medical Representative calls on 9 doctors per day to promote the company's product.

(ii) He also visits 4 chemists and enquires on the improvement of our product and competitor's products. He books orders from the chemist in the given order book.

(iii) He visits our C&F agent/Distributors and checks their stock positron and books orders.

(iv) He carries sample, visual aid and an order book in a detailing bag for promoting the products and to book orders.

(v) He follows up out standings of the distributors.

(vi) He submits reports to the office twice a week i.e. on Monday for the work done on Thursday, Friday and Saturday and for the work done on Monday, Tuesday and Wednesday, he submits the report on Thursday.

(vii) He submits expense statement for the expense incurred during the month in the statement given to him.

(viii) He attends Zonal and Regional conferences to improve his product knowledge and other aspects of marketing function.  

(ix) He will be guided by the Area Manager in the fieldwork every now and then.

(x) He has been set a target to achieve during the Marketing year, which commences from 1st May to 30th April of the subsequent year.

6. The counsel for the workman has raised the following contentions assailing the impugned award:

I.   The ''Medical Representatives' are workmen.  The counsel for the petitioner submits that Medical Representatives are workmen from 6.5.1987 in view of amending Act 14 of 1986 as has been held by a learned Single Judge of this court vide judgement dated 10.8.2004 in Civil Misc. Writ Petition no. 16160 of 2001- Anil Verma Vs. Presiding Officer Industrial Tribunal.

II. The petitioner was not discharging the duties of Area Manager in managerial and/or supervisory capacity. In support of this contention, it is submitted that the termination order dated 30.4.1992 is invalid. Admittedly, the petitioner was promoted to the post of Area Manager from 1.6.88 with same service conditions as that of Medical Representative.  The employers, in their written statement, have described the responsibilities and duties of Area Manager. It is submitted that of those responsibilities and duties would reveal that duties of the petitioner are not managerial or of supervisory character.  It is further alleged that only with a view to establish that the petitioner was carrying on administrative and supervisory duties, the employers gave, in detail, the functions of Area Manager in paragraph 10 of the written statement.  In its sub-clause 9, the words working under him has been mischievously added.  Similarly, after sub-clause 13 and in general clause in line 2, the words at the managerial level has been added. These additions are not mentioned in Annexure 12 which is the document of the employers and this conduct of the employers is mala fide and amounts to playing fraud upon the court.

P.M. Haridas- the witness of the employers before the Labour Court, stated that the Area Manager grants leave to the Medical Representatives and he also checks the tour bills of the Medical Representatives.  He further stated that Area Manager used to send appraisal report of Medical Representatives to the company.  However, in cross-examination, P.M. Haridas admitted that the petitioenr was promoted as Area Manager but his service conditions remained the same as that of Medical Representatives and the services of the petitioner were also terminated as per service condition applicable to Medical Representatives. He also admitted that there was no document on record to prove that the petitioner ever sanctioned leave to any Medical Representative or that the petitioner cheked/passed expenses statement and tour programme of Medical Representatives.  He candidly admitted that the petitioner was paid Rs. 2092 towards incentive, which is not payable to an Area Manager but is payable to a Medical Representative.  Learned counsel for the petitioner also submitted that the company pleaded settlement between the company and All India Federation of Sales Executive's Association on 6.11.1993 in pursuance whereof the petitioner was paid a sum of Rs.7231/- towards full and final settlement on 6.11.1993, which is, on the face of record, incorrect.  Company's letter dated 7.10.1992 discloses warrant dated 3.10.1992 for Rs.7231/- to have been sent towards full and final settlement.

 According to learned counsel, this version of the company is absolutely false and concocted which is apparent from the mere fact that on the one hand the company alleges that alleged settlement took place on 6.11.1993, on the other hand, the aforesaid amount of Rs.7231/- towards full and final settlement was paid to the petitioner as early as on 3.10.1992, which is not possible.

III. The termination order dated 3.4.1992 is invalid. Counsel for the petitioner contends that the employers have admitted in paragraph 10 of their rejoinder statement before the Labour Court that they paid salary for the Month of May and June 1992 to the petitioner but pleaded that the same was paid because of interim  order passed by High Court but a bare perusal of the interim order dated 19.6.1992 makes it crystal clear that the claim of the employers is absolutely false.

7. Since the pivotal point of the petitioner is whether Sri V.K. Mehta was a workman as defined in the U.P. Industrial Disputes Act, 1947 as well as in the Industrial Disputes (Central) Act, 1947, or in Sales Promotion Employees (Conditions of Service) Act, 1976 it would be necessary to refer to the definition of ''workman' in the said Acts.  Workman has been defined in Section 2(s) of the Industrial Disputes Act (Central), as under: -

"Workman" means any person (including an apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express 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 Air force Act, 1950 (45 of 1950), or the Army Act, 1950 (46 of 1950), or the Navy Act, 1957 (62 of 1957); 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 one thousand six hundred rupees per 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.  

8. The definition of ''workman' as contained in Section 2(z) of the U.P. Industrial Disputes Act, 1947 is as under :-

" 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 express 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 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."

9. The definition of ''Sale Promotion Employee' is contained in Section 2(d) of the Sales Promotion Employees (Conditions of Service) Act, 1976, which runs as under :-

"(d) ''Sale promotion employees' means any person by whatever name called (including an apprentice) employed or engaged in any establishment for hire or reward to do any work relating to promotion of sales or business, or both, but does not include any such person-

(i) who, being employed or engaged in a supervisory capacity, draws wages exceeding sixteen hundred rupees per mensem; or

(ii) who is employed or engaged mainly in a managerial or administrative capacity;

Explanation- For the purposes of this clause, the wages per mensem of a person shall be deemed to be the amount equal to thirty times his total wages (whether or not including, or comprising only of, commission) in respect of the continuous period of his service falling within the period of twelve months immediately preceding the date with reference to which the calculation is to be made, divided by the number of days comprising that period of service;"

10. The contention of the employers before the Labour Court was that Sri V.K. Mehta was not a Medical Representative but an Area Manager which was higher post than that of Medical Representative. He was not a workman as his nature of duties was administrative and supervisory; that the Labour Court has given a categorical finding that there was no evidence on record to establish that the nature of duties of Sri Mehta were administrative or supervisory and that the termination order dated 30.4.1992 was legal and justified.

11. The petitioner examined himself before the Labour Court.  He did not describe nature of his duties.  He admitted that he was initially appointed as Medical Representative and was promoted as Area Manager on 1.6.1988 and was performing the duties of Area Manager as contained in paper no.18-D. He also admitted that company had appointed eight Medical Representatives, who used to send their reports directly to the company with carbon copy to him and that he used to submit report regarding their work whenever required by the company.    

12. The question whether a Medical Representative was a workman under the Industrial Disputes Act, 1947  or not came up for consideration before the Supreme Court in the case of Management of May and Baker (India) Ltd. Vs. The Workman -(A.I.R. 1967 S.C.-678.  Hon'ble Supreme Court held that the definition of workman in Section 2(s) of the Industrial Disputes Act, 1947 did not include a Medical Representative, as defined at that time.  It further held in para 9 of the Report that ''designation of the employee was not of great moment and what was important was the nature of his duties.  If the nature of the duties is manual or clerical work, the person must be held to be a workman.  On the other hand, if manual of clerical work is only a small part of duties of the person concerned and incidental to his main work which is not manual or clerical, then such a person would not be a workman.  It is, therefore, to be seen in each case from the nature of duties whether a person employed is a workman or not as defined then.

13. Similar view was taken by the apex court in Western India Match Company Limited V. workman -(A.I.R.1964 S.C-472) and Burmah Shell Storage and Distribution Co. Ltd. Vs. Burmah Shell Staff Association) (A.I.R. 1971 S.C-922).  Thereafter a Division Bench of the apex court in S.K.Verma V. Mahesh Chand (A.I.R. 1984 S.C-1462) took a contrary view.  The question then came up before a constitution Bench in H.R. Adhyanthaya and others Vs. Sendoz (India) Ltd. (A.I.R. 1994 S.C-2608) wherein it was observed by the Supreme Court that May and Baker''s case (supra) was a ''binding precedent' which was not noticed in other cases. After considering all the earlier case on the point, it held as follows :-

"17. Considering the decision in May and Baker ((supra)) Western India Match Co. ((supra)) Burmah Shell Oil Storage ((supra)) as also S.K.Verma ((supra)) and other decisions following the same, the court in H.R. Adyantha ((supra)) observed :

"However, the decision in the later cases, viz. S.K. Verma (1983) 4 Supreme Court Cases -214; (1983 Supreme Court Cases  (L&S) 510: (11983)3 SCR 799); Delton Cable (1984)2 SCC  569: 1984 SCC  (L&S)281: (1984)3 SCR 169 and Ciba Geigy (1985)3 SCR 371: 1985 SCC  (L&S)808: 1985 Supp. (1) SCR 282 cases did not notice the earlier decisions in May & Baker (1961) 2 LIJ94; AIR 1967 SC 678: (1961)2 FLR 594) WIMCO (1964)3 SCR  560: AIR 1964SC 472; ((1963)2 LLJ459) and Burmah Shell (1970)3  SCC  378: (1971)2 SCR 758; AIR 1971SC 922: (1970) 2 LLJ 590) cases and the very same contention, viz., if a person did not fall within any of the categories of manual, clerical, supervisory or technical, he would qualify to be workman merely because he is not covered by either of the four exceptions to the definition, was canvassed and though negatived in the earlier decisions, was accepted.  Further, in those cases the Development Officer of the LIC the Security Inspector at the gate of the factory and Stenographer-cum-Accountant respectively, were held to be workmen on the facts of those cases.  It is the decision of this court in A Sundarambal case (1998)4  SCC  42;(1988) SCC  (L&S)892 which pointed out that the law laid down in May and Baker case (1961)2 LLJ 94: AIR 1968 SC 678; (1961)2 FLR 594) was still good and was not in terms disowned.

18. The Constitution Bench although noticed the distinct cleavage of opinion in two lines of cases and held :

" These decisions are also based on the facts found in those cases. They have, therefore, to be confined to those facts. Hence the position in law as it obtains today is that a person to be a workman must be employed to do the work of any of the categories, viz., manual, unskilled, skilled, technical, operational, clerical, or supervisory.  It is not enough that he is not covered by either for the four exceptions to the definition.  We reiterate the said interpretation."

19. The said reasonings are, therefore, supplemental to the ones recorded earlier via; (I) They were rendered per incurium and (ii) May and Baker ((supra) is still a good law"

14. The Sales Promotion Employees (Conditions of Service) Act, 1976 was enacted by the parliament as a result of the Supreme Court Judgment rendered in the case of May & Baker (India) Limited Vs Their Workmen (1961)-II LLJ page 94 in order to regulate conditions of service of Sales Promotion Employees particularly the medical representatives in Pharmaceutical Industry who do not come within the purview of the definition of "Workman" under the Industrial Disputes Act, 1947 and had no protection regarding security of employment and other benefits under that Act. The 1976 Act provides that reference of any dispute of employees can only be made under the provisions of the Central Act and not under the provisions of the State Act.

15. The ratio of Management of May and Baker (India) Ltd. (supra) and other cases following the same had been reiterated though 1976 Act was passed to dilute the case of May & Baker but definition of Sale Promotion Employee still excludes persons performing supervisory or administrative duties.

16. The apex court in Mukesh K. Tripathi Vs. Senior Division Manager L.I.C- 2004 AIR Supreme Court Weekly-4974 noted the arguments of petitioner's counsel in paragraph 22 that though the case of S.K.Verma (supra) had not been expressly overruled in H.R. Adhyanthaya's case but held to be per incurium. The apex court did not accept the argument and held that the constitution Bench had taken notice of subsequent amendment and has held that "even the legislature impliedly did not accept the interpretation of this court in S.K.Verma (supra) and other decisions". It further held that the decision in S.K.Verma (supra) cannot be said to have laid down a good law and that the court is bound by the judgement of the constitution Bench, which had held that ''even if a person does not perform a managerial or supervisory duties, with a view to hold that he is a workman, it must be established that he performs skilled or unskilled, manual, supervisory, technical work for higher or reward and as it has not been established that the appellant herein performed any of the jobs enumerated in Section 2(s) of the Act, he is not a workman.'  Case of Mukesh K. Tripathi (supra) is a three Judge recent decision. In paragraphs 35 and 36, it has been categorically laid down that in case any person raises a plea that his status has been changed from workman, he must plead and prove the requisite facts.  In absence of any pleading or proof that either by novation of the contract or by reason of the conduct of the parties, such a change has been brought about,  cannot be held to be a workman.

17. The petitioner did not give any evidence that he was performing unskilled, manual or supervisory or technical work. During his tenure of service as an Area Manager. Sri Mehta approached this Court by filing a writ petition, which was dismissed vide order dated 7.9.92 by this Court.  Thereafter Sri Mehta preferred an application under Section 33 C(2) of the Industrial Disputes Act, 1947 before the Labour Court which has been registered as Misc. Case No. 124/93 claiming certain amounts alleged to be due to him, which is being contested by the management of the company. Then Sri Mehta approached the management of the company directly through the representative of All Indian Federation of Sales Executive and Associative of which the petitioner was member to settle the dispute. After having negotiations at length a settlement was arrived at through Union  on 6.11.93. The relevant paras of said settlement are as under:  

(i)Mr. V.K.Mehta will now accept full and final settlement of his dues upto 7th September 1992 offered by Franco Indian Pharmaceuticals Ltd.

(ii) Mr. V.K.Mehta will withdraw all litigations from different courts including the criminal proceedings initiated by him against the company and its Directors and officers and a certified true copy of the order from the respective courts will be given to the company.

CONCLUSIONS

18. The petitioner  has failed to prove that he was discharging duties of a workman.  It was obligatory upon him to establish that he was employed in the establishment for the purpose of doing any work contemplated in the definition. In case any person raises a contention that his status is of workman, he must plead and prove the requisite facts.  In absence of any pleading or proof that either by novation of the contract or by reason of the conduct of the parties, no change in his duties and status has been brought about by promotion to a higher post, he cannot be held to be workman after change in his status by promotion.

19. Sri Mehta received in terms of the said settlement an amount of Rs. 7231/- in full and final settlement of his dues from the company on 6.11.93 at Bombay. In view of the above, it is amply clear that the dispute stood already settled vide settlement dated 6.11.93 in between the parties, the dispute in question is being pressed by Sri Mehta.

20. After going through the facts stated above, the action of the management in termination the services of Sri Mehta as per terms of the contract of his appointment is legal and justified and the same has also been confirmed and agreed upon by Sri Mehta as per terms of the settlement dated 6.11.93 therefore, Sri Mehta is not entitled to any relief whatsoever.

21. Admittedly, the petitioner was promoted as Area Manager w.e.f. 1.8.1988. The designation of employee as Medical Representative in the reference made to the Labour Court would not make it as the petitioner was discharging the duties of Area Manager. The duties of Area Manager are supervisory and the Medical Representatives work under the direct supervision and control of Area Manager.

22. Learned counsel for the petitioner has wrongly placed reliance in judgement of a learned Single Judge of this court in Anil Verma's case (supra).  As stated earlier, the apext court in Mukesh K. Tripathi's case (supra) has overruled the ratio laid down in S.K.Verma's case (supra).  The petitioner was discharging the duties of Area Manager in managerial and supervisory capacity which finding of fact has been held by the Labour Court.  Findings of facts have been recorded by the Labour Court on the basis of pleadings and appraisal of evidence.

23. Apart from the above, in case of Area Manager is not covered under the Sales Promotion Employees (Conditions of Service) Act, 1976. It is the Central Government which could have referred the matter if he would have been a workman. Since he is not a workman the question of reference by State Government or Central Government would not have any effect.  In any case, he had accepted the settlement and had also received the payment towards full and final settlement offered by the employers and had further agreed to withdraw all litigations from different courts. In order to decide as to whether the petitioner was workman or not, the Labour Court had to see the nature of duties and the work performed by the petitioner, as such, the contention of the learned counsel that the Labour Court has travelled beyond the scope of reference holding that the petitioner is not workman, has no merit.

24.   For the reasons stated above, no interference is required in the findings recorded by the Labour Court. The writ petition fails and is accordingly dismissed without any order as to costs.

Dated: November 29, 2004

kkb


Copyright

Reproduced in accordance with s52(q) of the Copyright Act 1957 (India) from judis.nic.in, indiacode.nic.in and other Indian High Court Websites

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