Jharkhand High Court
Indian Drugs And Pharmaceuticals Ltd. vs State Of Jharkhand And Anr. on 20 January, 2004
Equivalent citations: [2004(3)JCR231(JHR)], 2004 LAB. I. C. 2651, 2004 AIR - JHAR. H. C. R. 1952, 2004 LABLR 1014, (2005) 1 SCT 83, (2004) 6 SERVLR 260, (2004) 3 JCR 231 (JHA), (2005) 2 SERVLJ 60
Author: M.Y. Eqbal
Bench: M.Y. Eqbal
JUDGMENT M.Y. Eqbal, J.
1. The petitioner, M/s Indian Drugs & Pharmaceuticals Ltd. has prayed for quashing the award passed by the Presiding Officer, Labour Court, Ranchi in Reference Case No. 1/94 whereby and whereunder the Labour Court held that termination of the services of the concerned employee was neither legal nor proper and, as such, held that the concerned employee, namely, Mr. M.K. Bandopadhaya, Medical Representative of the petitioner company is entitled to be reinstated with full back wages consequential benefits and continuity in service.
2. The above reference was made to the Labour Court vide notification dated 1.12.1993 of Labour, Employment & Training Department, Government of Bihar to give an adjudication to the following dispute :
Whether transfer of M.K. Bandopadhaya Medical Representative, Indian Drugs and Pharmaceuticals Ltd. from Ranchi to some other places was made to harass Sri Bandopadhaya and whether to terminate him from services during pendency of industrial dispute conciliation proceeding regarding transfer is proper and according to law? If not, what relief Sri Bandopadhaya is entitled to?"
3. Petitioner's case is that M/s. Indian Drugs and Pharmaceuticals Ltd. (in short IDPL) is a Public School Undertaking functioning under the authority and control of Ministry of Chemical and Fertilizers, Govt. of India. The concerned employee was appointed as a Medical Representative under Patna Region looking after sales of the Company. He was transferred from Patna to Ranchi in 1974 as Medical Representative and since then he was continuously working in Ranchi. Petitioner's case was that the Company has only one office in the State of Bihar looking after sales promotion at Patna which controls the entire zone including Ranchi, Petitioner's further case is that the concerned employee was transferred from Ranchi to Bhagalpur vide office order dated 17.6.89 and was relieved from Ranchi on the same day to enable him to join at Bhagalpur. Having learnt about the transfer the employee applied for commuted leave and proceeded on 22.6.89. His action for suddenly applying for commuted leave on medical ground immediately after the transfer order, aroused suspicion and sc the Management constituted a Medical Board to verify the genuineness of the medical ground and by a telegram dated 4.7.89 directed the concerned employee to appear before the Medical Board but he did not appear before the Medical Board and as such, no leave was sanctioned and he was directed to join at Bhagalpur immediately. On 7.7.89 through Bihar State Sales Representative Union, the concerned employee raised an industrial dispute before the Deputy Labour Commissioner, Ranchi against the order 0f transfer made by the Management under which he was transferred from Ranchi to Bhagalpur. The Conciliation Officer (sic) conciliation proceeding with respect to transfer of the concerned employee and notices were issued. The Management, after notice, appeared and participated in the proceeding on various dates and took the stand that the transfer order was made in accordance with the terms and conditions of the Service Rules and it was simply an administrative order, not punitive in nature. Instead of joining at Bhagalpur the concerned employee vide letter dated 8.7.89 informed the petitioner. Company that he will continue to work at Ranchi and (sic) he had refused to abide by the transfer order. Petitioner's further case is that during the pendency of the conciliation proceeding the concerned employee, on his own, went on strike from 16.8.89. The petitioner-company despite the attitude of the employee, took a lenient view and gave one opportunity to the employee to comply with the transfer order. When the concerned employee failed to comply with the transfer order, the petitioner Company had no option but to proceed against him by issuing a charge sheet dated 27.9.89 directing the employee to submit his explanation and to face the enquiry. The concerned employee, although received the charge sheet, but did not choose to appear and file show cause. In the meantime, the Vigilance department of the Management completed the enquiry and prepared a memorandum of fresh charge on other misconduct which was issued on 29.9.89. The concerned employee, by letter dated 9.10.89, informed the petitioner-company that he was on strike and not on duty and, therefore, he can neither attend the enquiry nor make official correspondence. Since the concerned employee refused to participate in the enquiry, the Enquiry Officer submitted his report. On the basis of the enquiry report the concerned employee was found guilty of the charges contained in the charge sheet and he was terminated from service which was communicated to him vide letter dated 8.11.89.
4. The case of the concerned employee, on the other hand, was that he was appointed in the service of the IDPL as Medical Representative in 1971 and he joined at Gaya under Patna Regional Office of the Company. Subsequently he was transferred to Patna and then to Ranchi where he was working since then. It is stated that the Federation of Medical and Sales Representatives Association of India (shortly FMRAI) is a registered Trade Union and used to be the only recognised union in the Organization of the Management of IDPL. It is contended that this Union used to strive for better service conditions for the Medical Representatives and also used to fight with the Management against their highhandedness. The employee's further case is that he was an active member of the Union and also highlighted some corrupt practices prevailing in the management of the petitioner-Company. On the basis of the said complaint an enquiry was set up by the Government of Karnataka against some of the senior officers of IDPL and the said Enquiry Commission submitted its report on 6.8.88 wherein several officers of IDPL were indicated for corruption. Since the matter was highlighted by the B.S.S.R. Union and its parent organization namely (sic) management of IDPL got annoyed and took action against 23 most active union functionaries of FMRAI all over India by transferring them to distant places on 15.6.89 with the object of harassing them. The management of IDPL further illegally derecognised FMRAI and BSSR Unions and granted recognition to a pocket union. The case of the concerned employee is that he was an active member of BSSR and for that he was transferred from Ranchi to Bhagalpur in contravention of the management's commitment and declaration that they mostly transfer the Medical Representatives on their own request of on mutual basis. The concerned workman alleged that he never requested for his transfer from Ranchi and the said order was arbitrary, mala fide and illegal. Consequently the case of the concerned employee was taken up by BSSR Union and raised industrial dispute. While the conciliation proceeding was pending the petitioner-Company charge sheeted him by terms of letter dated 25.8.89 and 27.9.89 calling upon him to submit his explanation. In reply to the charge sheet he challenged the propriety and validity of the same and denied the charges. The management, however, did not conduct any proper enquiry and abruptly dismissed him from service on 8.11.89 by serving a letter of termination. It is alleged that on 8.11.89 when the management terminated the services of the workman, the conciliation proceeding was pending before the Conciliation Officer. Inspite of that the management terminated the services of the employee in contravention of the provisions of Section 33(2)(b) of the Industrial Disputes Act.
5. From perusal of the award it appears that the Labour Court formulated the following points for consideration.
(i) Whether the reference is maintainable?
(ii) Whether the transfer of Mr. M.K. Bandopadhaya, Medical Representative, IDPL from Ranchi to some other place was made to harass him?
(iii) Whether to terminate him from service during the pendency of the conciliation proceeding regarding transfer is proper and legal?
(iv) To what other relief/(s), if any, the workman is entitled?
6. On the first point the Labour Court held that by virtue of the provisions of Section 6(2) of the Sales Promotion Employees Act, 1989 the concerned workman is entitled to avail the provisions of the Industrial Disputes Act for the redressal of his grievance. The Labour Court further held that an unrecognized Union can also raise demand or dispute with regard to a member of its Union. He further held that the State Govt. was fully competent to refer the dispute for adjudication in respect of Central Government Companies also.
7. While deciding point Nos. 2 and 3 the Labour Court came to a finding that during the pendency of the conciliation proceeding the management terminated the services of the employee without obtaining the permission or approval of the Conciliation Officer. The Labour Court, therefore, held that the action of the Management in transferring the employee who was an active labour union leader and abruptly relieving him, was tainted with malice in order to harass the employee.
8. On the question of validity of the termination order, the Labour Court recorded a finding that the termination of the workman during the pendency of the Industrial dispute conciliation proceeding regarding transfer, was illegal and improper. On the basis of the aforesaid findings the Labour Court answered the reference in favour of the employee and directed for reinstatement with full backwages.
9. Mr. K.N. Prasad, learned Senior Counsel appearing on behalf of the petitioner-Company assailed the impugned award as being illegal and wholly perverse, learned counsel firstly submitted that the petitioner-Company being a Government of India Undertaking, the reference made by the State Govt. as (appropriate Govt.) is contrary to law and the ratio decided by the Supreme Court in the case of Air India Statutory Corporation, 1997 (9) SCC 377. Learned counsel submitted that in view of the Govt. notification dated 3rd July, 1998 delegating power under Section 39 of the Industrial Disputes Act to the State Govt. to function as appropriate Govt., any action including the conciliation proceeding, prior to the said notification is wholly without jurisdiction. Learned Counsel then submitted that although the conciliation proceeding in respect of the dispute raised by the Union against the order of transfer came to an end before the employee was terminated from service, the conciliation officer failed to perform his statutory duty in submitting the failure report within the specified time and consequently amalgamation of different disputes was wholly illegal and bad in law. Learned counsel submitted that the entire finding of the Labour Court is based on conjectures and surmises inasmuch as the finding is based on no evidence. Learned Counsel submitted that the Labour Court committed serious error of record in holding that the concerned employee was one of the office bearers of the sponsoring Union and the order of transfer was passed by way of victimization. Learned counsel further submitted that in view of the admitted fact that the concerned employee refused to obey the order of transfer and further gave in writing that he will not participate in the departmental proceeding the Labour Court has committed serious error of law in answering the reference in favour of the employee.
10. Mr. Satish Bakshi, learned counsel appearing on behalf of the concerned workman, on the other hand, submitted that till the date of judgment of Air India Statutory Corporation case the State Government was always the appropriate Govt. in respect of all the Undertakings and, therefore, the reference made by the State Govt. as an appropriate Govt. was perfectly in accordance with law. Learned Counsel then submitted that the Labour Court, after re-appreciating the entire evidence, recorded a finding of fact which needs no interference by this Court. Learned counsel submitted that the petitioner-Company had a pre-meditated vindictive attitude towards the concerned employee and, therefore, the order of transfer was issued violating the rules and their Standing Orders. According to the declared policy of the Management the impugned transfer could have been effected only on mutual basis of on request. Admittedly no request was made by the concerned employer and it was only because of exposing corruption on the part of the high ranking officials of the company, the employee was put to harassment and victimization.
11. In order to regulate the conditions of services of Sales Promotion Employees, the Parliament enacted a law, namely, Sales Promotion Employees (Conditions of Service) Act, 1976. Section 2, defines the words 'sales promotion employees' which means any person, to 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 of business, or both, but does not include any such person who is engaged in a supervisory capacity and draws wages exceeding sixteen hundred rupees per mensem or the employees engaged mainly in a managerial or administrative capacity. Section 3 of the said Act, empowers the Central Government to declare certain industries to be notified Industries, Section 3 of the said Act reads as under :
"The Central Government may, having regard to the nature of any industry (not being pharmaceutical industry), the number of employees employed in such industry to do any work relating to promotion of sales or business or both, the conditions of service of such employees and such other factors which, in the opinion the Central Government, are relevant, declare such industry to be a notified industry for the purposes of this Act."
12. By virtue of Section 6 of the said Act, the provisions* of various Acts including Workmen's Compensation Act, 1923, Industrial Disputes Act, 1947, Minimum Wages Act, 1948, Payment of Bonus Act, 1965, Payment of Gratuity Act, 1972 and Maternity Benefit Act, 1961 have been made applicable. In the mean time, the Industrial Disputes Act, 1947 was amended in 1982 by virtue of Section 24 of the Amendment Act and Section 6(2) of the Sales Promotion Employees Act has been, sought to be omitted. A controversy then arose as to whether a Medical Representative will come under the category of workman and he is entitled to avail the provisions of Industrial Disputes Act. The matter was set a rest by the Supreme Court in the case of H.R. Adyanthaya etc. etc. v. Sandoz (India) Limited, AIR 1994 SC 2608. It was held that the Medical Representatives do not perform the duties of skilled and technical nature and, therefore, they are not workmen. The work of promotion of sales of the product or services of the establishment is distinct from and in-dependent of the types of work covered by the said definition. Their Lordships of the Supreme Court have taken note of the fact that the definition of the term industry has been amended by the Amending Act 46 of 1982 by including any activity relating to promotion of sales or business or both carried on by any establishment but the said amendment has not come into force. Taking into consideration the relevant law, for the time being in force, it was held that the Medical Representatives are not workmen within the meaning of the Act and the complaint filed under the Industrial Disputes Act was not maintainable.
13. In the case of A.P. and Co., Ltd. Assistants' Association v. Industrial Tribunal, Madras, 1994 LIC 1779, a similar question arose whether the sales representatives whose main work is to do canvassing for promotion of sales of the product, his employment will come within the definition of 'workman'. It was held by a Bench of Madras High Court that such sales representatives doing the aforesaid nature of work, are not workmen. The Court observed :
"From the principles laid down in the decisions referred to above, it is clear that an employee engaged in any industry to become a 'workman' as defined in Section 2(s) of the Act must be employed to do the types of work, namely, manual, unskilled, skilled, and clerical or supervisory work enumerated in Section 2(s) of the Act and a Sales Representative whose main work is to do canvassing for promotion of sales of the products of his employer and who is not doing any type of work enumerated in Section 2(s) of the Act would be out of the scope of the word "workman" coming under Section 2(s) of the Act prior to its amendment by Act 46 of 1982. Therefore, it has to be held that a sales representative is not a 'workman' coming under Section 2(s) of the Act prior to its amendment by Act 46 of 1982 Consequently point No. 1, is answered in the negative."
14. In the case of Anant Awadhani v. Presiding Officer, Labour Court, Gulbarga and Anr., reported in 2001 (2) LLJ 1618, a Bench of Karnataka High Court, following the ratio decided by the Supreme Court in the case of H.R. Adyanthaya, (supra) held that, the Sales Promotion Employees are at liberty to move the Labour Court under the Industrial Disputes Act. Since the Labour Court in the impugned award has followed and relied upon the judgment of the Karnataka High Court, it would be useful to quote herein below the full text of the judgment and order of the Karnataka High Court which reads as under :
"1. The writ petition is taken up with the consent of the parties.
2. The Supreme Court in the case of H.R. Adyanthaya v. Sandoz (India) Ltd., AIR 1994 SC 2608 : 1994 (5) SCC 737 : 1995-I LLJ 303, has held as follows at p. 313 of LLJ :
"29. ... Section 6, of that Act, made the Workmen's Compensation Act, 1923, Industrial Disputes Act, 1947 (I.D. Act), Minimum Wages Act, 1948, Maternity Benefit Act, 1961. Payment of Bonus Act, 1965 and Payment of Gratuity Act, 1972 applicable forthwith to the Medical Representatives. Sub-section (2) of the said section while making the provisions of Industrial Disputes Act, as in force for the time being, applicable to the Medical Representatives stated as follows :
"2. The provisions of the Industrial Disputes Act, 1947 (14 of 1947), as in force for the time being, shall apply to or in relation to sales promotion employee as they apply to, or in relation to, workmen within the meaning of that Act and for the purpose of any proceeding under that Act is relation to an industrial dispute, a sales promotion employee shall be deemed to include a sales promotion employee who has been dismissed, discharged or retrenched in connection with, or as a consequence of that dispute or whose dismissal, discharge or retrenchment had led to that dispute.
3. Following the observation of the Supreme Court the people who come under the category of sales promotion employees are at liberty to move the Labour Court under the Industrial Disputes Act.
4. The impugned award is set-aside. The matter is remitted to the Labour Court for fresh disposal in accordance with law after giving an opportunity to the parties.
5. The writ petition is disposed of accordingly."
15. With due respect the Karnataka High Court has not passed a reasoned judgment, rather, taking into consideration the part of the observation made in paragraph-4 of the judgment of the Supreme Court in H.R. Adyanthya case, decided the issue. The relevant portion of the observation quoted in the aforesaid judgment by the Karnataka High Court has lost sight of the fact that the consequences of Sub-section (2) of Section 6, having been omitted the Supreme Court further observed as under:
"Section 6 of that Act made the Workmen's Compensation Act, 1923. Industrial Disputes Act, 1947 (I.D. Act), Minimum Wages Act, 1948, Maternity Benefit Act, 1961, Payment of Bonus Act, 1965 and Payment of Gratuity Act, 1972 applicable forthwith to the Medical Representatives. Sub-section (2) of the said section while making the provisions of Industrial Disputes Act, as in force for the time being, applicable to the Medical Representates stated as follows. "The provisions of the Industrial Disputes Act, 1947 (14 of 1947), as in force for the time being, shall apply to, or in relation to, sales promotion employees as they apply to, or in relation to, workmen within the meaning of that Act and for the purposes of any proceeding under that Act in relation to an industrial dispute a sales promotion employee shall be deemed to include a sales promotion employee who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute or whose dismissal, discharge or retrenchment had led to that dispute.
In other words, on and from 6th, March, 1976 the provisions of the I.D. Act became applicable to the Medical Representatives depending upon there wages up to 6th May, 1987 and without the limitation on their wages thereafter and upon the capacity in which they were employed or engaged."
[Emphasis given]
16. Taking into consideration all these facts and the discussions made hereinabove, I am of the opinion that the Labour Court has not correctly decided the issue and erroneously held that the concerned respondent who is admittedly a Medical Representative mainly engaged for promotion of Sales business, is a workman. Consequently, therefore, the entire proceeding in the reference case and the award are vitiated in law.
17. Besides the above, the finding of the Labour Court that the action of the Management in transferring the employee was tainted with malice in order to harass him, is also perverse in law in as much as the finding is based on conjectures and surmises. As noticed above, vide office order dated 17.6.89, the employee was transferred from Ranchi to Bhagalpur and on the same day he was relieved and immediately after the order of transfer the employee applied for commuted leave and proceeded on 22.6.89. His action aroused suspicion and the Management directed him to join at Bhagalpur. Instead of obeying the order the employee raised industrial dispute. Curiously enough instead of joining at Bhagalpur the concerned employee, by letter dated dated 8.7.89, refused to abide by the transfer order and informed the Management that he will continue to work at Ranchi. Not only that while the conciliation proceeding was pending the employee went on strike from 16.8.89. Even then the Management took a lenient view and gave one more opportunity to the employee to comply with the transfer order. When the concerned employee failed to comply with the transfer order, the Management petitioner had no option but proceeded against him by issuing charge sheet dated 27.8.89 directing him to submit his explanation and to face enquiry. The concerned employee, although received the charge sheet, but did not choose to appear and file show cause, rather, by letter dated 9.10.89 informed the Management that he was on strike and not on duty and, therefore, he cannot attend the enquiry.
18. Mr. Satish Bakshi, learned counsel appearing on behalf of the concerned employee put heavy reliance on the letter of the Joint Chief Labour Commissioner to show that the transfer of Medical Representatives could have been done only on request or on mutual basis. The letter reads as under :
"Transfer is the conditions of service of appointment to all ranks of employees in our Organisation, including Medical Representatives. Transfers are effected based on Company's policy and for the larger interest of the Company. While effecting the transfers the Company takes proper care to avoid any untoward hardship to the concerned employee. Mostly we agree to transfer our Medical Representatives only on own request or on mutual basis."
19. From the aforesaid letter it does not appear that it is the mandatory requirement for the Company to transfer Medical Representatives only on request or mutual basis, rather, it clearly says that transfer is the condition of service of appointment to all ranks of employees including Medical Representatives. Even if there is such provision the employee cannot, as a matter of right, refuse to join the transferred post and insist to continue in the same place. It is well settled that an order of transfer is part of service condition and it cannot be interfered with unless it is mala fide or the Service Rule prohibits such transfer, by the authorities who issued the order are not competent to pass such order. In this regard reference may be made to the decision of the Supreme Court [2000 AIR SCW 1674]. It is equality well settled that the employees have no right to be posted at a particular place and the order of transfer cannot be evaded on the ground of difficulties. Such order of transfer cannot be interfered with unless it is violative of any mandatory statutory rule or mala fide. Even if transfer order is passed in violation of executive instructions or orders, the aggrieved party, instead of challenging the same, should approach the higher authority. Reference may be made to the decision of the Supreme Court in the case of Gujarat Electricity Board and Anr. v. Atmaram Sungomal Posham, 1989 (2) SCC 602, and in the case of Mrs. Shilpi Bose and Ors. v. State of Bihar and Ors. AIR 1991 SC 532.
20. In the instant case, as noticed above, the concerned employee, instead of approaching the Management and making representation expressing his difficulty to join the transferred post, applied for commuted leave and, thereafter, refused to join the transferred post. The Labour Court, therefore, has committed serious illegality in holding that he action of the Management in transferring the employee was tainted with malice. Such finding is based on conjectures and surmises. The concerned employee, as noticed above, has gone to the extent even to submit the explanation to the charge sheet and refused to participate in the enquiry and further raised industrial dispute treating himself as a workman. The conduct of the employee in the manner he behaved with the Management, cannot be appreciated.
21. Having regard to the entire facts and circumstances of the case, the impugned award passed by the Labour Court is bad in law and is liable to be set aside.
22. For the aforesaid reasons this writ application is allowed and the impugned award passed by the Labour Court in Reference Case No. 1 of 1994 is set aside.