Andhra HC (Pre-Telangana)
S.S. Zaffar vs Labour Court, Hyderabad And Ors. on 21 November, 1990
Equivalent citations: (1992)ILLJ653AP
Author: P. Venkatarama Reddi
Bench: P. Venkatarama Reddi
JUDGMENT Sardar Ali Khan, J.
1. This writ appeal is directed against the order passed by a learned single Judge in W.P. No. 12807 of 85, dated October 31, 1988, confirming the order of the Labour Court in S.A. No. 21/84 dated October 8, 1985.
2. It would be in the fitness of things to narrate a few salient facts to high-light the controversy arising in the matter.
3. The petitioner prayed for the issue of a writ of certiorari or any other appropriate writ or direction and to quash of the 1st respondent-Labour Court passed in S.A. No. 21/84 dated October 8, 1985. He also prayed for a consequential direction to the Anglo-French Drug Co. (Eastern) Ltd., 3rd respondent-employer to reinstate him into service with full back wages and other attendant benefits in accordance with the order of the 2nd respondent, the authority under Section 41 of the A.P. Shops and Establishments Act (Act 15 of 1966), herein after referred to as 'the Act' passed in S.E. No. 174/83.
4. The undisputed matrix of facts is as follows :- The petitioner joined the 3rd respondent-company in the year 1964 as a Representative. He was promoted from time to time and was appointed as a Zonal Sales Manager for the Southern Region in 1980. He was posted at Hyderabad as his Headquarters and was to discharge his functions in accordance with the terms of appointment assigned to him. His services were terminated by an order dated December 1, 1982 on the ground of loss of confidence. The petitioner preferred an appeal before the 2nd respondent, the authority under Section 41 of the Act. The said Authority, after an elaborate discussion, set aside the order of termination holding, inter alia, that the petitioner was not exercising any managerial powers in regard to his marketing zone and even though his salary was over Rs. 3,000/- per month he does not come within the category of an exempted employee under Section 64(1)(a) of the Act under which a person claiming exemption should establish that he was not working in a position of management and having control over the affairs of the establishment. It may be stated that the said authority came to this conclusion relying upon a decision of the Supreme court reported in Prem Sagar v. Standard Vaccum Oil Co., Madras, (1964-I-LLJ-47). The authority in fact propounded six tests in accordance with the specification of the above said judgment and ultimately held that the appellant failed to satisfy the six tests except the test of sanction of leave of certain staff and therefore he cannot be said to have been employed in the position of the management having control over the affairs of the establishment. It may also be stated that the Authority under Section 41 of the Act also held that termination of the services of the appellant for want of confidence for no reasonable cause and without enquiry is bad and in that view of the matter set aside the order of termination. Against the said order the matter was carried in appeal by the respondent-company before the Labour Court ion S.A. No. 20 and 21 and of 1984. S.A. No. 20/84 was filed by the petitioner under Section 41(3) of the A.P. Shops and Establishments Act, 1966 and S.A. No. 21/84 was filed by the respondent-company herein under the same section, against the said judgment of the authority ordering reinstatement of the petitioner with 50% of the back wages. The Labour Court settled four points for consideration which may be re-produced hereunder :
1. Whether the first appellate authority had the territorial jurisdiction to entertain the first appeal filed by the appellant-workman ?
2. Whether the appellant-workman comes within the scope of Section 64(1) of Act of 1966 ?
3. Whether the order of termination is illegal ?
4. To what relief ?
It may be stated that in so far as Point No. 1 is concerned, it has neither been pressed before the appellate authority nor has any argument been advanced on that aspect of the matter in the writ petition. Therefore, the only real point which has been considered by the Labour Court is the question whether the appellant-workman comes within the scope of Section 64(1) of the Act and as a conjunction of the same, Point No. 3 has been considered as to whether the order of termination is illegal. The appellate authority considered the matter in extenso and after due appreciation of the evidence and the case law applicable, came to the conclusion that the appellant herein does not come within the scope of Section 64(1)(a) of the Act and therefore ordered his reinstatement with 50% of the backwages to be granted by way of compensation. The Labour Court placed strong reliance on Ex. R. 32, which is styled as job-description of the appellant-workman. It may not be necessary to re-produce all the provisions of Ex. R-32 but it would suffice to state some of the main provisions which throw ample light on the mode of functioning of the appellant-workman. It would be necessary to reproduce only clauses 3, 4, 9, 10 and 13 to 16 which are as follows :
"Principal duties and responsibilities :-
XX XX XX (3) Control expenses and costs within the Division, approve expenses of RFRs after scrutiny, initiate measures with approval of management for cost savings, due economy and operation within the budgetary limits.
(4) Organise and implement equal promotional programmes with a view to achieve several sales targets and take corrective measures after assessing competitive developments in consultation with Manager Marketing.
XX XX XX (9) Plan and implement optimum development of field staff, finalise tour programmes of RFMs and MSRs in the Zone in conformity with potentiality of each region, recommend leave forecasts, leave applications and other applications etc. if any of RFM.
(10) Assist management in selection of MSRs, undertaken performance appraisals of RFMs in the zone and review merit ratings of MSRs in the zone and identify training needs of field staff.
XX XX XX (13) Establish and maintain contacts with the medical profession, Government and drug control authorities and customers to improve the company's image in the zone.
(14) Hold regular meeting with RFMs and ensure their pursuing action plans for each cycle.
(15) Ensure compliance with statutory rules and regulations relating to Zonal Marketing.
(16) Train RFMs and MSRs on the job by working with them individually for productivity and development of managerial qualities of RFMs and productivity or calls of MSRs.
XX XX XX Therefore, relying on the above said provisions of Ex. R. 32, the Labour Court held that the appellant was in a position of management and was having control over the affairs of the establishment within the scope of Section 64(1)(a) of the Act. The Labour Court also held that the appellant was interested in the business of M/s. Premier Agencies of which his wife was the Distributor and one of the partners and therefore the appellant-workman actuated by motive, had wrongly exempted and said Premier Agencies from payment of security deposit and gave an assurance that there was no need for them to pay the security deposit amount as required under the rules of the company. In this view of the matter the Labour Court held that it is only fair and proper that the respondent-Management should lost confidence in the appellant an therefore he was rightly removed from service by the order dated December 1, 1982.
5. The appellant-workman field the writ petition assailing the order of the Labour Court on several grounds. The main thrust of the writ petition seems to be that he does not come within the category of an 'employee' exempted under Section 64(1) of the Act. The learned single Judge of this court considered the matter from all angles and held that as per Ex. R-32 the nature of the duties and responsibilities to be performed by the petitioner are supervisory and even though he had no power to take disciplinary proceedings against any employee or make payment of salaries to them or grant leave to them, the duties assigned to him are in the nature of controlling business carried on by the 3rd respondent and therefore the finding recorded by the Labour Court that the duties performed by the petitioner are managerial in nature, was not liable to be interfered with. The learned single Judge also held that unless it is shown that the order of the Labour Court is vitiated by any manifest or obvious error apparent on the face or record, it would not be proper for the High Court to disturb the findings recorded by the Labour Court which has considered all the relevant and material aspects of the matter.
6. It is in the background of the facts stated above that the matter will have to be considered in this writ appeal. The relevant provisions of the A.P. Shops & Establishments Act, 1966 (Act No. 15 of 1966), which fall for consideration, are as follows :
7. Under Section 2(8) of the Act, the term 'employee' has been defined as hereunder :
'Employee' means a person wholly or principally employed in, and in connection with, any establishment and includes an apprentice and any clerical or other staff of a factory or industrial establishment who fall outside the scope of Factories Act, 1948.
8. Under sub-section (9) of Section 2, the term 'employer' has been defined in the following manner :
'Employer' means a person having charge of or owning or having ultimate control over the affairs of an establishment and includes the manager, agent or other person acting in the general management or control of an establishment; but does not include the husband, wife, son, daughter, father, mother, brother or sister of an employer or his partner, who is living with and depending upon such employer or partner and is not in receipt of any wages.
9. Under sub-section (10) of Section 2 of the Act, the term 'establishment' has been defined thus :
'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 such other establishments as the Government may by notification declare to be an establishment for the purpose of this Act.
10. It is under the above provisions of the A.P. Shops & Establishments Act of 1966 the case of the appellant has to be considered. It is seen from the definition of the word 'employee' that it means a person wholly or principally employed in, and in connection with, any establishment. However, the contention raised by the respondents in this writ appeal is that the appellant is an 'employee' who comes within the ambit of the exemption contained in Section 64 of the Act. The relevant portion of Section 64, dealing with the question of exemption, is as follows :
"64. Exemptions :-
(1) Nothing in this Act shall apply to -
(a) employees in any establishment in a position of management and having control over the affairs of the establishment, whose average monthly wages exceed five hundred rupees.
XX XX XX We are not concerned with the other exemption granted under Section 64. But the question which has to be considered is whether the appellant herein is an 'employee' who comes within the exemption postulated under Section 64(1) of the Act. It may be stated here that the appellant was working as Zonal Sales Manager for Southern Region (including the State of Maharashtra but excluding the City of Bombay) under the 3rd respondent - The Anglo-French Drug Co. (Eastern) Ltd. He was drawing a monthly salary of Rs. 3,500/- and was removed from service by an order dated January 1, 1982, on certain charges levelled against him. It is seen from a reading of Section 64(1) of the Act that an employee in any establishment in a position of management and having control over the affairs of the establishment whose average monthly wages exceeds five hundred rupees is exempted from the purview of the Act, which, in effect, means that he cannot claim the benefit of an ordinary employee which accrues to him under the provisions of the Act. There are three vital components of Section 64(1) of the Act which will have to be considered in this matter. Firstly, in order to come within the category of an 'exempted employee' in any establishment, the employee must be in a position of management and secondly he should have control over the affairs of the establishment and thirdly his average monthly wages should exceed Rs. 500. These three components of the Section will have to be applied to the case of the appellant to see whether or not he falls within the category of an employee postulated under Section 64(1)(a) of the Act.
11. The appellate authority under Section 41 of the Act applied certain tests to determine the status of the appellant. In fact, the said authority applied not less than six tests laid down by the Supreme Court in Prem Sagar v. Standard Vaccum Oil Co., (supra). But, it must be emphasized here that the Supreme Court, while dealing with a parallel provision, viz., Section 4(1)(a) of the Madras Shops and Establishments Act (Act No. 36 of 1947) in order to determine whether a person employed is in a position of management, laid down certain tests by way of illustration. It was observed by the Supreme Court that it is difficult to lay down exhaustively all the tests which can be reasonably applied in deciding the question as to whether a person is in a position of management but certain functions discharged by the said person can be scrutinised to come to a conclusion whether any particular person is in fact in a position of management. It was mentioned by the Supreme Court that it may be inquired whether the person had the power to operate on the bank account or could he make payments to third parties and enter into agreements with them on behalf of the employer and whether he can represent the employer to the world at large in regard to the dealings of the employer with strangers and whether he had authority to supervise the work of the clerks employed in the establishment etc. As said by the Supreme Court itself, these tests are not meant to be exhaustive but are only indicative of certain features of the service performed by a person who may deem to be in a position of management. The appellate authority under Section 41 of the Act applied the six tests to the case of the appellant and eventually came to the conclusion that the appellant is not in a position of management and he does not have any control over the affairs of the establishment and therefore he cannot be deemed to be an exempted employee under Section 64(1)(a) of the Act. In so far as the salary of the appellant is concerned, it is beyond any dispute that he was drawing a salary of about Rs. 3,500/- per month. When the matter was taken up in appeal by the Labour Court in S.A. Nos. 20 and 21 of 1984, the Labour Court, on a detailed consideration of the matter, came to the conclusion that the appellant fulfills all the requirements of Section 64(1)(a) of the Act and therefore falls within the category of an 'exempted employee' under the said Act. The Labour Court considered in detail the provisions of Ex. R-32, which is styled as 'job-description of the appellant' and on scrutiny of the same held that the appellant was functioning in the responsible position of a Zonal Sales Manager for Southern Region having jurisdiction over a vast area and was definitely in the position of management having control over the affairs of the establishment. Since earlier in this judgment the relevant portions of Ex. R. 32 have already been extracted giving an idea about the nature of the duties performed by the appellant, it may not be necessary to refer to them in detail once again except to highlight the fact that the principal duties and responsibilities of the appellant under items No. 3 thereof consists of control of expenses and costs within the division, approval of expenses of RFRS after proper scrutiny, and under item No. 4 of Ex. R. 32 the appellant was charged with the responsibility of organisation and implementation of equal promotional programmes with a view to achieve several sales targets and take corrective measures after assessing competitive developments in consultation with Manager, Marketing. Similarly, under items 9, 10 and 13 to 16, it can be seen that the appellant was in a fairly responsible position to carry out the policies and chalk out the programmes of the 3rd respondent-organisation. In fact, the duties assigned to him require a dynamic person with a lot of initiative to achieve the objects which have been assigned to him by the company. Any person who is having such powers in the organisation, as were assigned to the appellant, is bound to be considered as a person in the position of management having control over the affairs of the establishment. It is true that the Supreme Court has laid down the six tests which were applied meticulously by the appellate authority to arrive at a conclusion that the appellant was not in a position of management having control over its affairs but an answer to the question cannot be sought and found within the confines of the six tests as applied by the authority concerned. In order to determine whether a person is in a position of management having control over the affairs of the establishment, the totality of the circumstances under which a person is discharging his duties have to be taken into consideration. It is true that merely because a person is designated with an office of a high sounding nomenclature, he cannot be deemed to be in a position of management but the essential fact of the matter is that the question as to whether a person is in a position of management has to be decided by looking at the nature of duties and functions that he has to discharge in a particular establishment. The Labour Court, therefore, reversed the findings of the appellate authority and held that the appellant was in fact in a position of management having control over the affairs of the establishment. The learned single Judge, dealing with the writ petition filed against the order of the Labour Court, considered Ex. R. 32 which gives the job description of the appellant and held that there is no manifest error committed by the Labour Court warranting interference.
12. The conclusion arrived at by the learned single Judge seems to be based on two points. Firstly, the learned single Judge has scrutinised the duties and responsibilities assigned to the petitioner under Ex. R. 32 and came to the conclusion that they are managerial in nature giving the petitioner control over the affairs of the establishment. The second ground on which the learned single Judge has laid stress is that in the absence of an obvious error apparent on the face of the record in the order passed by the Labour Court this court cannot interfere by issuing a writ of certiorari under Article 226 of the Constitution of India.
13. Prof. H. W. R. Wade, in his classical work on 'Administrative Law' gives a common definition of the Writs of Certiorari and Prohibition in the following manner :
"Certiorari and prohibition are complementary remedies, based upon common principles, so that they can be classed together. Certiorari issues to quash a decision which is ultra vires or vitiated by error on the face of the record. Prohibition issues to forbid some act or decision which would be ultra vires. Certiorari looks to the past, prohibition to the future."
Dealing with the question of what is error apparent on the face of record, Prof. Wade writes :- "It is essential that the error should appear on the face of the record. It includes for example procedural mistakes which will also include wrong inference drawn from the facts of the case as well as any form of manifest statutory misinterpretation. There can be error of law apparent on the face of the record as well as an error of fact, for example, where the finding is based on no evidence of which a Tribunal could act or to pass findings on facts which are unsupported by any evidence will constitute an error which is apparent on the face of the record." The principle which clearly emerges from a reading of the above is that in a matter of this nature where the finding is given by a Tribunal which is essentially based on appreciation of evidence and the facts of the case, it is not open for the appellant to plead for the issue of a writ of certiorari unless he can establish an error apparent on the face of the record which can warrant such interference. We must keep it in mind that even if the conclusion arrived at by the lower authority is erroneous or is one which cannot be considered to be of a conclusive nature, still no interference can be made by virtue of a certiorari in such an order. It is only if the error is of such magnitude that it stares on the face of the record or that it is wholly unsupported by any evidence or is based upon gross misappreciation of evidence or upon facts which are non-exist or are a manifest misinterpretation of a provision of law, then, a writ of certiorari can be issued to correct the mistake committed by the lower Tribunal. In our opinion, the learned single Judge took the correct view that it is difficult to find any such error apparent on the basis of a fair appreciation of the provisions of Ex. R. 32 giving the terms of appointment of the appellant that he was in a position of a management having control over the affairs of the establishment. In Prem Sagar v. Standard Vaccum Oil Co. Madras, (supra), which has already been referred to in another context, the Supreme Court affirmed the above principle and held that a writ of certiorari can be issued when the order of an inferior Tribunal is shown to suffer from an error apparent on the face of the record. In such a case the usual course to be adopted is to correct the error and send the case back for its decision in accordance with law. In yet another decision rendered in S. K. Verma v. Mahesh Chandra, (1983-II-LLJ-429), the question which came up for consideration was whether a Development Officer in the Life Insurance Corporation of India is a 'workman' within the meaning of Section 2(s) of the Industrial Disputes Act, 1947 (Act 14 of 1947). The Supreme Court held thus (p. 432) :
" ... 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."
Therefore, the Supreme Court embarked upon a detailed examination of the duties and obligations of the Development Officer, the work assigned to him and the targets which he is supposed to achieve etc. As a result of the consideration of the terms of appointment, it was eventually held that a Development Officer does not even supervise the work of agents though he was required to train them and assist them. He is to be the 'friend, philosopher and guide' of the agents working within his jurisdiction and no more. He has no subordinate staff working under him and thus it cannot be held that the Development Officer was engaged in any administrative or managerial work. He has no subordinate staff working under him and thus it cannot be held that the Development Officer was engaged in any administrative or managerial work. We think that the approach of the Labour Court is in consonance with the decision of the Supreme Court, referred in extenso to the job description of the appellant. This overall approach made by the Labour Court is beyond any reproach and we find it difficult to see any error, much less an error manifest on the face of the record which can warrant interference with the order of the Labour Court as such.
14. In Ved Prakash v. M/s. Delton Cable India (P) Ltd., (1984-I-LLJ-546) the question that arose for consideration was whether the petitioner comes within the definition of a 'workman' under Section 2(s)(iii) of the Industrial Disputes Act, 1947 (Act 14 of 1947). The pertinent observation made in this case is that substantial part the work of the concerned employee consisted of looking after the security of the factory and its property by deputing the watchmen working under him to work at the factory and making entries in the visitors' register as regards the visitors and in the concerned registers as regards materials entering or going out of the premises of the factory and in those circumstances the substantial duty of the concerned employee was only that of a Security Inspector at the gate of the factory premises and it was neither managerial nor supervisory in nature. This case is also a pointer to the fact that in order to deter mine whether a person is employed in the capacity of a Manager or an ordinary workman, a scrutiny has to be made with regard to the nature of the duties discharged by him and for this it is essential to refer to the terms of the appointment of the person concerned.
15. Mr. G. Ramachandra Rao, learned counsel appearing for the 3rd respondent, invited our attention to a decision reported in Coromandal Fertilizers Ltd. v. P. Venugopal and Others (1986-I-LLJ-417) where, in a similar matter it was held that the question whether an employee is a workman or not is a jurisdictional fact and the Labour Court is a special Tribunal which has been vested by law with the power to decide. Finally the said question and the finding on the issue can be interfered with only if it is shown to be vitiated by an error apparent on the face of the record, i.e., manifest or obvious error. Thus, it is clear that the uniform judicial approach made in this regard seems to be that findings arrived at by the Labour Court which are essentially based on appreciation of evidence, are not liable to be interfered with unless it is based upon an error apparent on the face of the record. The order of the Labour Court does not suffer from any such error and is in fact based upon cogent reasoning and fair appreciation of the evidence adduced in the matter. Therefore, we are inclined to agree with the proposition that the appellant before us comes within the category of an employee exempted under Section 64(1)(a) of the Act.
16. The only other contention raised by the learned counsel for the appellant is that the Labour Court has clearly held that the appellant was in the position of management having control over the affairs of the zone of which he happened to be the Sales Manager whereas under law a person must have control over the affairs of the establishment as a whole. In other words, it is urged that a zone is only a part of establishment and cannot be deemed to be the full establishment over which an employee must exercise control to come within the category of an exempted employee under Section 64(i)(a) of the Act. This submission made by the learned counsel for the appellant does not stand the test laid down in the Act that a person must be in a position of management having control over the affairs of the establishment. We are afraid that we are not in position to appreciate the contention raised by the learned counsel for the appellant in this regard. An employee, who is working in a particular zone will exercise control over the zone also and his powers cannot transgress the limit of his authority assigned to him for the discharge of his duties as the Manager of a particular zone. It is patently clear that the appellant herein was the Zonal Sales Manager having control over the affairs of the establishment under him and this is enough to satisfy the requirement of Section 64(1)(a) of the Act.
17. For the reasons stated above, this writ appeal fails and is dismissed but in the circumstances of the case there will be no order as to costs. Government Pleader's fee Rs. 250/.