Holding

The employee is a workman under the Act, and while the Labour Court may review the quantum of punishment, it must do so with sufficient justification; the award is modified to grant the employee the voluntary retirement benefit.

Summary

The appellant, Anand Regional Co‑op Oil Seeds Growers Union Ltd., dismissed Shailesh Kumar Harshadbhai Shah, an Assistant Executive in its Quality Control Department, for alleged misconduct. Shah challenged the dismissal, contending that he was not a "workman" under Section 2(s) of the Industrial Disputes Act, 1947, and that the Labour Court had exceeded its jurisdiction by interfering with the quantum of punishment. The Supreme Court held that the nature of Shah's duties – supervising nine assistants and exercising control over recruitment and promotion – brought him within the definition of a workman, and that the Labour Court could only intervene in the quantum of punishment if it gave sufficient reasons, which it had not done. Consequently, the Court modified the Labour Court's award to grant Shah the benefit of the voluntary retirement scheme extended to similarly situated workmen. The appeal was partly allowed, leaving the reinstatement order and back‑wages intact but directing the additional retirement benefit.

Issues considered

Whether the employee is a "workman" within the meaning of Section 2(s) of the Industrial Disputes Act, 1947.
Whether the Labour Court exceeded its jurisdiction under Section 11‑A by interfering with the quantum of punishment without adequate reasons.
Whether the Labour Court’s award was perverse and required to be set aside.
Whether the employee is entitled to the benefit of the voluntary retirement scheme extended to other workmen.

Legislation cited

Industrial Disputes Act, 1947s. 11-A, s. 2(s)

Subjects

Industrial Disputes Actworkman definitiondisciplinary dismissalLabour Court jurisdictionvoluntary retirement schemepunishment quantumsupervisory worksection 2(s)section 11-A

Judgment

A ANAND REGIONAL CO-OP. OIL SEEDSGROWERS UNION LTD.
V.

SHAILESHKUMAR 1-IARSHADBHAI SHAH

AUGUST 8, 2006

B [S.B. SINHA AND DALVEER BHANDARI, JJ.)

Industrial Disputes Act, 1947--Section 2(a)---Workman-Disciplinary
proceedings initiated against employee for misconduct commilled by him with
C other employees-Enquiry officer found the employee guilty-Punishment of
dismissal from service imposed on the employee-Labour court and High
Court held the employee to be a 'workmen' under the Act and ordered
reinstatement with back wages--.Correctness of-Held, on facts, employee is
a 'workman' -Labour Court did not assign any reason in its award about the
perversity offindings of the Enquiry Officer-Labour Court cannot interfere
D with quantum of punishment without giving sufficient reasons-Hence, in the
interest ofjustice, benefit of voluntary retirement scheme was directed to be
made available to the employee as made available to other similarly charged
employees by the employer.

Appellant initiated a disciplinary proceeding against respondent on
E a complaint about serious misconduct committed by him along with other
employees. Enquiry Officer found the respondent guilty of alleged
misconduct. Punishment of dismissal from service was imposed upon him.
On a reference before Labour Court, the respondent contended that he
was not a 'workman' under section 2(s) of the Industrial Disputes Act,
F 1947 in view of the nature of duties performed by him. The Labour
rejected the contention of the respondent and held that th.e quantum of
punishment imposed on him was excessive. The Labour Court ordered
reinstatement of the respondent with 25% back wages. Writ Petition and
Letters Patent Appeal preferred by the appellant were dismissed by High
Court.
G
In appeal to this Court, the appellant contended that respondent was
not a 'workman' under the Act since he was not only a Head of a
Department of the appellant-company but also had been supervising the
works of the nine assistants working under him; and that the Labour
Court exceeded its jurisdiction under section 11-A of the Act by interfering
If 370
ANAND REG. CO-OPO[L SEEDSGROWERS UNION LTD."· SHAILESHKUMAR HARSHADBHAI SHAH J 7J

with the quantum of punishment. A
The respondent contended that this Court should not interfere with
the finding of fact that his is a workman; and that the jurisdiction of the
Labour Court is plenary in nature and hence it could interfere with the
quantum of punishment.
B
Partly allowing the appeal, the court

HELD: 1.1. For determining the question as to whether a person
employed in an industry is a workman or not, only the nature of work
performed by him but also terms of the appointment in the job performed
are relevant considerations. Supervision contemplates direction and C
control. While determining the nature of the work performed by an
employee, the essence of the matter should call for consideration. An undue
importance need not be given for the designation of an employee or the
name assigned to the class to which he belongs. What is needed to be asked
is as to what are the primary duties he performs. For the said purpose, it D
is necessary to prove that there were some persons working under him
whose work is required to be supervised. Being in charge of the section
alonee and that too it being a small one would not answer the test. A person
indisputably carries on supervisory work if he has power of control or
supervision in regard, to recruitment, promotion, etc. The work involves
exercise of tact and independence. Judging by the said standard, the E
respondent did not come within the purview of the exclusionary clause of
the definition of workman. [377-A-C; F-H[

Ananda Bazar Patrika (P) Ltd. v. Workman, (1970) 3 SCC 2248, relied
on.
F
Heavy Engineering Corporation Ltd. v. Presiding Officer, Labour Court
and Ors., [1996) 11 SCC 236, distinguished.

1.2. The allegations made against the respondent are serious in
nature. The allegations were proved against him in the departmental
proceedings. The findings of the Enquiry Officer was based not only on G
the basis of the statement made by the complainant but also by the
statements of other witnesses besides other evidences. The Labour Court,
in its award did not assign any reason as to how the findings of the Enquiry

- Officer were perverse. The Labour Court did not advert to the question
which arose for consideration as to whether an officer having enormous H
372 SUPREME COURT REPORTS (2006) SUPP. 4 S.C.R.

A responsibilities could have behaved in such a manner. Single Judge of the
High Court also without any material on record opined that the respondent
was not involved in the incident. The Division Bench of the High Court
did not consider these aspects of the matter at all. 1378-C; 379-E-GI

1.3. The Labour Court although has jurisdiction to consider the
B question in regard to the quantum of punishment but it had a limited role
to play. T!Je industrial courts do not interfere with the quantum of
punishment unless there exists sufficient reasons therefor.
1379-H; 380-A)

North Eastern Karna/aka R. T. Corpn. v. Ashappa, (2006) 6 SCALE 89;
C State of U.P. v. Shea Shanker Lal Srivastava and Ors., (20061 3 SCC 276; A.
Sudhakar v. Post Master General, Hyderabad and Anr., JT (2006) 4 SC 68;
Mahindra and Mahindra Ltd. v. N.B. Narawade, 12005) 3 SCC 135; MP.
Electricity Board v. Jagdish Chandra Sharma, [2005( 3 SCC 401; Hombe
Gowda Educational Trust and Anr. v. State of Karna/aka and Ors., (2006) 1
D SCC 430 and Chariman and MD., Bharat Pet. Coprn. Ltd. and Ors. v. T.K.
Raju, (2006) 2 SCALE 553, referred to.
1.4. Identical allegations were made against seven other persons. The
appellant did not take serious note of misconduct committed by six others
although they were similarly situated. They were allowed to take the
E benefit of the voluntary retirement scheme. Having regard to the peculiar
facts and circumstances of this case, the respondent should be treated on
a similar footing. In view of the fact that the respondent has succeeded in
the Labour Court and the High Court, having regard to the overall
situation, the interest of justice would be subserved if the award of the
Labour Court as affirmed by the High Court is substituted by a direction
F that the respondent shall also be given the benefit of voluntary scheme
from the month in which the other workmen were given the benefit
thereof. 1380-E-F)
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3417 of2006.

G From the Judgment and Order dated 5.4.2005 of the High Court of
Gujarat at Ahmedabad in Letters Patent Appeal No. 11/2005.

L.N. Rao, Sanjay Kapur, Rajiv Kapur, Shubhra Kapur and Arti Singh
for the Appellant.

H
Ramesh P. Bhatt, Tanuja Sheel, Mukesh Kumar and Chirag M. Shroff
-
ANAND REG. CO-OP OIL SEEDSGROWERS UNION LTD. o·. SHAILESHKUMAR HARSHADBHAI SHAH [SINHA.J.] 373

for the Respondent. A
The Judgment of the Court was delivered by

,- S.B. SINHA, J. Leave granted.

The Respondent was working as an Assistant Executive in the Quality B
Control Department of the Appellant Cooperative Society. On an allegation
that he had committed a misconduct, a disciplinary proceeding was initiated
against him. The disciplinary proceeding was initiated relying on or on the
basis ofa letter dated 16.9.1993 ofShri Shreedharani, the then Chief Executive
working in the Appellant's, addressed to the Chairman complaining about the
serious misconduct committed by certain employees including the Respondent c
on 15.9.1993. In the departmental proceeding Shri Shreedharani and other
persons were examined as witnesses. The Enquiry Officer found the
Respondent guilty of the alleged misconduct on his part, holding:

(a) the respondent held a meeting in the lawns of Appellant without
permission and levelled false allegations against his Senior Officer D
Mr. Shreedharani and behaved badly with him.
(b) The respondent alongwith his other colleagues forcibly entered
into the cabin of Mr. Shreedharani who was at that point oftime
in serious discussions with his accountant despite his raising
objections to the same. E
(c) The respondent also threatened Shri Shreedharani by stating inter
alia that 'if he does not leave directly then they will show him
the way'.
(d) The respondent crushed paper into ball and threw towards Shri
Shreedharani.
F
(e) The Respondent misbehaved, shouted slogans against Shri
Shreedharani and also closed the AC switch of the room where
Shri Shreedharani was sitting.

Punishment of dismissal from service was imposed upon him. An G

-· industrial dispute was raised culminating in a reference made by the appropriate
Government to the Labour Court, Anand on 25.10.1996. Before the Labour
Court, the Appellant inter alia raised a contention that in view of the nature
of duties performed by the Respondent herein he does not fall within the
., definition of'workman' as contained in Section 2(s) of the Industrial Disputes
H
374 SUPREME COURT REPORTS [2006] SUPP. 4 S.C.R.

A Act, 1947 (for short "the Act"). The Labour Court negatived the said contention
of the Appellant.

In regard to the quantum of punishment, the Labour Court, however,
having regard to the manner in which the incident took place as also the
alleged extent of participation of the Respondent therein, opined:
B
" .... Thus, looking to the facts as aforesaid, even if the concerned
workman has committed some offence, even then the punishment
imposed on the concerned workman on the basis of the findings
recorded by the Inquiry Officer is excessive/ exorbitant. If the offence
committed was the first offence of the concerned workman, the
c concerned workman ought to have been inflicted lighter (minor)
punishment. The concerned workman could have been inflicted
punishment of non-payment of wages. If the nature of offence is
grave, he could have been inflicted punishment of stoppage of two
increments with future effect (on permanent basis). However, in the
D present case, the concerned workman has been imposed punishment
which is disproportionate to the nature of offence as he has been
suspended from service/ employment with effect from 17.09.1993.
Thus, the punishment imposed on the concerned workman of
suspending him from employment, is excessive/ exorbitant."

E He was directed to be reinstated with 25% backwages.

A writ petition was filed thereagainst by the Appellant and a learned
Single Judge of the High Court in his judgment opined that the Labour Court
having found that the workman was not involved in the incident, it did not
commit any illegality in passing the award in question and, thus, no interference
F therewith was called for.

An intra-court appeal taken by the Appellant was also dismissed holding:

" ... In our considered opinion, when an allegation is made against the
Inquiry Officer that the findings recorded by him are perverse, then
G the Id. Labour Court is obliged to reconsider the entire evidence and
re-record the findings not as an appellate Court but as a Court having
distinct and separate jurisdiction taking into consideration that whether
the findings can validly survive as judicial finding or an administrative
-
finding based upon due appreciation of the evidence. It is also true
that the principles of Evidence Act would not apply to the inquiry
H
.ANAND REG. CO-OP OIL SEEDSGROWERS UNION LTD." SHAILESHKUMARHARSHADBHAI SHAH [SINHA,!.] J 75

proceedings but the basic principles of appreciation cannot be A
sacrificed especially in a case where the findings are lopsided, ex-
parte and without taking into consideration the say of the other side.
In the present case, we are unable to hold that the Id. Labour Court
committed any wrong in re-recording the finding. Under these
circumstances, Letters Patent Appeal No. 117 of 2005 arising out of B
Special Civil Application No. 8971 of 2003 is dismissed."

Mr. L. Nageshwara Rao, learned senior counsel appearing on behalf of
the Appellant took us through the records of the case and submitted that
having regard to his own admission in the departmental proceedings that the
Respondent was not only the Head of the Department but also had been C
supervising the works of nine assistants, the Tribunal committed an error in
opining that he was a workman. Strong reliance in this behalf has been
placed on Heavy Engineering Corporation Ltd v. Presiding Officer, Labour
Court and Ors., [ 1996] 11 SCC 236.

It was contended that in any view of the matter, the Labour Court D
committed a manifest error in exceeding its jurisdiction under Section 11-A
of the Act as having regard to the facts and circumstances of this case it
could not have interfered with the quantum of punishment.

Mr. Ramesh P. Bhatt, learned senior counsel appearing on behalf of the
Respondent, on the other hand, contended that the jurisdiction of the Labour E
Court in terms of the Act being plenary in nature, it could interfere with the
quantum of punishment awarded against the Respondent having regard to the
fact that:

(i) he had worked for 18 years;
(ii) his presence was not proved even by the Disciplinary Authority; F
(iii) except naming the Respondent as one of the seven persons
entering into his Chamber, Shri Shreedharani in his letter dated
16.9.1993 did not attribute any specific overt act against him.

It was further contended that the finding of the Labour Court that the G
Respondent is a workman being a finding of fact, this Court should not
interfere therewith.

In the disciplinary proceeding while asserting that he did not take part,
the Respondent in his evidence stated that he was the Head of the Department
H
376 SUPREME COURT REPORTS [2006] SUPP. 4 S.C.R.

A and there was no officer superior to him except the Managing Director. To
a query made, whether the employees named by him were under his control;
he, however, stated that as a senior he gives guidance He, however, did not
state that he was authorized to initiate any departmental proceedings against
his subordinates.

B Section 2(s) of the Industrial Disputes Act defines 'workman" 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
c 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-
D (i) who is subject to the Air Force Act, l 950 (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
E 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,
F 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."

The ingredients of the definition of 'workman' must be considered
having regard to the following factors:

G (i) Any person employed to do any skilled or unskilled work, but
does not include any such person employed in any industry for
hire or reward.
(ii) There must exist a relationship of employer and employee.
(iii) The persons inter a/ia excluded are those who are employed
H
ANAND REG. CO.OP OIL SEEDSGROWERS UNIONL TD.'· SHAILESHKUMARHARSHADBHAI SHAH (SINHA,J.] J 77
'~
mainly in a managerial or administrative capacity. A
For determining the question as to whether a person employed in an
industry is a workman or not; not only the nature of work performed by him
but also terms of the appointment in the job performed are relevant
considerations.
B
Supervision contemplates direction and control. While determining the
nature of the work performed by an employee, the essence of the matter
should call for consideration. An undue importance need not be given for the
designation of an employee, or the name assigned to, the class to which he
belongs. What is needed to be asked is as to what are the primary duties he
performs. For the said purpose, it is necessary to prove that there were some c
persons working under him whose work is required to be supervised. Being
incharge of the section alone and that too it being a small one and relating
to quality control would not answer the test.

The precise question came up for consideration in Ananda Bazar Patrika
(P) Ltd. v. Workmen, (1970) 3 SCC 248 wherein it was held:
D

"The question, whether a person is employed in a supervisory capacity
or on clerical work, in our opinion, depends upon whether the main
and principal duties carried out by him are those of a supervisory
character, or of a nature carried out by a clerk . If a person is mainly
E
doing supervisory work, but, incidentally or for a fraction of the time,
also does some clerical work, it would have to be held that he is
employed in supervisory capacity; and, conversely, if the main work
done is of clerical nature, the mere fact that some supervisory duties
are also carried out incidentally or as a small fraction of the work
done by him will not convert his employment as a clerk into one in F
supervisory capacity"

A person indisputably carries on supervisory work if he. has power of
control or supervision in regard to recruitment, promotion, etc. The work
involves exercise of tact and independence.
G
Judging by the said standard, we are of the opinion that the First
Respondent did not come within the purview of the exclusionary clause of
the definition of workman. Ananda Bazar Patrika (supra) was followed by
the court in a large number of cases.
_,.,
H
378 SUPREME COURT REPORTS [20061 SUPP. 4 S.C.R.

A The ratio in Heavy Engineering Corporation Lid. (supra) to which our
attention was drawn by Mr. Nagewhwara Rao must be held to be confined
to the fact of the said case. In that case the Respondent No. 2 was not only
supervising the work of the sweeper, etc .. he had also been counter-signing
on the casual leave register. The ingredients of a workman as deliberated
upon in Ananda Ba::.ar Patrika (supra) had not been taken into consideration
B therein. The ratio of the said decision, therefore, cannot be said to be attracted
in the present case.

The First Respondent, however, was working as Assistant Executive in
the Quality Control Department. Allegations against him made by Shri
C Shreedharani are serious in nature. The allegations were proved against him
in the departmental proceedings.

The Enquiry Officer found:

"That on 15.9.1993, Shri Shaileshbhai Shah, in collusion with his co-
employees Shri Rameshbhai Gokalbhai Patel, Rajendrakumar N. Shah,
D
Rajendrasingh, Rashmibhai M. PateL Manubhai B. Patel, Gulam
Haider A. Pathan, held meeting at 11.00 A.M. in the garden which is
situated just adjacent to the office building. In the said meeting, staff
members were called. No permission was obtained from the
management for convening the said meeting.
E
In the said meeting Shri Shaileshbhai Shah made allegations against
the Chief Executive of the Institution Shri Shreedharani and stated
that "Shreedharani does not know anything in oil business. By making
non-technical persons as Chief Executive, reputation of the Institution
has been spoiled/ tarnished. He is issuing every day now orders. He
F i~ not doing the work which he is required to do. He is not bringing
any business. If he leaves, then Institution will prosper/ progress and
so he should leave at the earliest opportunity. We will not take rest
without obtaining his resignation,"

On the date of incident, at about 12.00 noon, Shri Shaileshbhai Shah
G alongwith his co-employees/ co-workers Shri Rameshbhai Patel,
Rajendrakumar Shah, Rashmibhai, Manubhai, Pathan all of them
rushed into the cabin of Shreedharani when discussion on some
important aspects was going on between Shreedharani and Shri R.N.
Shah, Account Consultant of the Institution and so Shreedharani
H objected to their entry in the manner in the cabin by all of them and
·--
ANAND REG. CD-DP OIL SEEDSGROWERS UNION LTD.•·. SHAILESHKUMAR HARSHADBHAI SflAH [SINHA. J.] ) 79

so at that time, Shri Shaileshkumar Shah told Shreedharani that "you A
are a bogus Chief Executive. After your joining the Institution has
progressed towards bottom. If you leave, then, only the Institution
will prosper/ progress. You have thrown the Institution into loss.
From where such non-sense people arise. If you do not leave straight
way, we will show you the way (to leave). You are enjoying cooling B
by sitting here and so you are showing power." By telling so, Shri
Shai leshbhai Shah switched off the switch of A.C. machine and by
preparing small ball from piece of papers, he threw it at Shreedharani.
,_
After said incident, by raising fists and by shouting slogans
"Shreedharani Hai. .... Hai", he took the staff with him outside the
cabin. c
Thus, without obtaining permission from the management, meeting
was held in the lawn on 15.9.1993. That by making allegations against
and behaving in an impolite I rude manner with his superior officer
i.e. Chief Officer Shri Shreedharani r.e has committed misconduct.
D
Thus, all the misconducts enumerated in the show cause notice dated
16.10.1993, issued to Shri Shaileshbhai Shah, have been established
and proved beyond doubt."

The said findings inter alia were based not only on the basis of the
statement of Shri Shreedharani but also on the basis of the statements of Shri E
Ramanlal Nathjidas Shah, Shri Nirbhaykumar Rana, Shri Babubhai Mangalbhai
Patel besides other evidences.

The learned Presiding Officer, Labour Court in his award did not assign
any reason as to how the findings of the Enquiry Officer were perverse.
There may or may not be any specific allegation. The question which arose F
for consideration before the Labour Court was as to whether an officer having
enormous responsibilities could have behaved in such a manner. The Labour
Court did not advert to the said question.

The learned Single Judge of the High Court also without any material
on record opined that the Respondent - workman was not involved in the G
incident. The Division Bench of the High Court did not consider these aspects
of the matter at all.

The Labour Court although has jurisdiction to consider the question in
regard to the quantum of punishment but it had a limited role to play.
H
380 SUPREME COURT REPORTS (2006] SUPP. 4 S.C.R.

A It is now well-settled that the industrial courts do not interfere with the
quantum of punishment unless there exists sufficient reasons therefor. [See
North Eastern Karnataka R. T. Corpn. v. Ashappa. (2006) 6 SCALE 89; State
of U.P. v. Sheu Shanker la/ Srivastava and Ors., [2006] 3 SCC 276, A.
Sudhakar v. Post Master General, Hyderabad & Anr., JT. (2006) 4 SC 68,
B Mahindra and Mahindra ltd. v. N.B. Narawade, [2005] 3 SCC 135, M.P.
Electricity Board v. Jagdish Chandra Sharma, [2005] 3 SCC 401, Hombe
Gowda Educational Trust and Anr. v. State of Karnataka and Ors., [2006]
1 SCC 430 and Chairman & M.D., Bharat Pet. Corpn. ltd. & Ors. v. T.K.
Raju, (2006) 2 SCALE 553].

C A wrong test was applied herein by the Labour Court in observir.g "If
the nature of the offence is grave he could have been inflicted punishment
of stoppage of the increments". On what premise the said observations were
made is not known.

There is, however, another aspect of the matter which cannot be lost
D sight of. Identical allegations were made against seven persons. The
Management did not take serious note of misconduct committed by six others
although they were similarly situated. They were allowed to take the benefit
of the voluntary retirement scheme.

The First Respondent might not have opted therefor. However, having
E regard to the peculiar facts and circumstances of this case, he should be, in
our opinion, treated on a similar footing. In view of the fact that the First
Respondent has succeeded in the Labour Court and the learned Single Judge
as also the Division Bench; we are of the opinion that having regard to the
overall situation, the interest of justice would be subserved if the award of
F the Labour Court dated 31.1.2003 as affirmed by the High Court is substituted
by a direction that the First Respondent shall also be given the benefit of
voluntary retirement scheme from the month in which the other workmen
were given the benefit thereof.

The impugned judgment is modified to the aforementioned extent. This
G appeal is allowed in part and to the extent mentioned hereinbefore. There
shall be no order as to costs.

B.S. Appeal Partly allowed.