Holding

The Court held that the forum created under the Industrial Disputes Act can more effectively deal with the dispute, but it did not declare the Shops Act authority devoid of jurisdiction, and directed the State Governments to refer the matters to the Industrial Disputes Court.

Summary

The appellants, manufacturers of pharmaceutical products, dismissed several medical representatives and the employees sought relief from the appellate authority under the Andhra Pradesh Shops and Establishments Act, 1988. The employers contended that the Sales Promotion Employees (Conditions of Service) Act, 1976, being a special enactment, exclusively conferred jurisdiction on the Labour Court under the Industrial Disputes Act, 1947, thereby ousting the Shops Act forum. The High Court rejected this contention, ordered reinstatement with back wages, and the employers' subsequent writ petitions and appeals were dismissed. On appeal, the Supreme Court observed that while the Industrial Disputes Act forum can more effectively adjudicate the dispute, it did not hold that the Shops Act authority lacks jurisdiction. In the peculiar circumstances, the Court directed the concerned State Governments to refer the matters to the appropriate Industrial Disputes Court for determination, and disposed of the appeals without costs.

Issues considered

Whether the Sales Promotion Employees (Conditions of Service) Act, 1976, ousts the jurisdiction of authorities constituted under the Andhra Pradesh Shops and Establishments Act, 1988.
Whether the appellate authority under the Shops Act can entertain appeals filed by sales promotion employees challenging termination of service.

Legislation cited

Subjects

labour lawjurisdictionsales promotion employeesindustrial disputes actshops and establishments acttermination of servicereinstatementreference to appropriate forum

Judgment

A SPIC PHARMACEUTICALS DIVISION
v.
AUTHORITY UNDER SEC. 48(1) OF A.P. AND ANR.

FEBRUARY 28, 2007

B [DR. ARlJlT PASAYA T AND TARUN CHATTERJEE, JJ.]

labour Law:

Sales Promotion Employees (Conditions of Service) Act, 1976:
c
Medical representatives-Dismissal from service-Redressal of
grievances-Forum-Held, on facts, forums created under ID Act can more
effectively deal with the issues raised-In peculiar circumstances of the case,
State Governments concerned directed to make reference to appropriate
D forums under ID Act-Industrial Disputes Act, 1947-Andhra Pradesh Shops
and Establishments Act, 1988.

Appellants, manufacturers of pharmaceutical products, terminated the
services of their employees, popularly known as medical representatives. The '!'
employees approached the appellate authority under the Andhra Pradesh Shops
E and Establishments Act, 1988. Besides contesting the appeals on merits, the
employers contended that in view of the Sales Promotion Employees
(Conditions of Service) Act, 1976, only the Labour Court under the Industrial
Disputes Act, 1947 had jurisdiction in the matter and the jurisdiction of the
appellate authority under the Shops Act was ousted. The appellate aut.hority
rejected the contentions of the employers and directed reinstatement of the
F employees with back wages. Having remained unsuccessful in writ petitions
as also in writ appeals before the High Court, the employers filed the appeals.
y •
Disposing of the appeals, the Court

HELD: 1.1. The forums created under the Industrial Disputes Act, 1947
G on the facts of the case can more effectively deal with the issues raised. It is
not to be understood that this Court has said that the appellate authorities
under the Shops Act do not have jurisdiction. This Court is not really deciding_
the issue as to whether there was exclusion of the jurisdiction of authorities

428
H
429
-
SPIC PllAR~IACEUTICALS DIVISION"· AL:THORITY UNDER SEC 48(1) OF AP. {PASAYAT. J)

under the Shops Act because it specifically provided that the forum under the A
ID Act can be approached. !Para 511431-E-GI

1.2. It is made clear that the Court has not expressed any opinion on
the merits of the case and the order for reference by the State Government is
being made in view of the special features involved. Normally it is for the State
Government to decide whether reference is to be made but, in peculiar B
circumstances and in view of the conceded position by the counsel for the
parties that the industrial disputes do exist, the concerned State Governments
are directed to refer the dispute to the forum under the ID Act for adjudication
as directed. [Para 511431-H; 432-A-BI

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 766 of2004.
c
From the Judgment and final Order dated 3.9.2003 of the Andhra Pradesh
High Court at Hyderabad in W.P. No. 22735 of2001.

WITH
D
(Civil Appeal Nos. 768 of2004, 767 of2004 and 1498 of2004.)

'I S. Ganesh, B. Rana, Vikrant Rana, Amaya Singh, Sunanda Yanglem (for
Mis. S.S. Rana & Co.) Kuldeep Parihar, H.S. Parihar, S.V./ Deshpande for the
Appellant. E
R. Santhan Krishnan, K. Radha Rani, Praveen K. Pandey, Vijay Kumar,
D. Mahesh Babu, K.C. Shastri, B. Partha Sarthy, R.Y. Kameshwaran, D. Bharathi
Reddy, P. Yinay Kumar and Sneha Bhaskaran for the Respondents.

The Judgment of the Court was delivered by F
DR. ARIJIT PASAYAT, J. 1. Challenge in these appeals is to the legality
of the judgment rendered by a Division Bench of the Andhra Pradesh High
Court. By the impugned judgment several writ appeals and writ petitions, filed
by the appellants, were dismissed. The core question that arose for
consideration in the cases before the High Court was whether the provisions G
of Sales Promotion Employees (Conditions of Service) Act, 1976 (in short the
'Act') oust the jurisdiction of the authorities constituted under the Andhra
Pradesh Shops and Establishment Act, 1988 (in short the 'Shops Act') and
consequently the Authorities under the Shops Act are excluded from
entertaining appeals preferred by the aggrieved sales promotion employees H
430 SUPREME COURT REPORTS [2007] 3 S.C.R.

A challenging the termination of their services. The further question was whether
the Authorities constituted under the Shops Act have no jurisdiction to
-
...
entertain any appeal preferred by the sales promotion employees challenging
action of the employees in terminating their services. Several writ petitions
filed were dismissed by learned Single Judge of the High Court and therefore,
B writ appeals were filed. The orders of the Authorities under the Shops Act
directing the reinstatement of the employees into service together with back
wages which were challenged in the writ petitions came to be dismissed by
learned Single Judge. The appellant in each case is involved in the manufacture
of pharmaceutical products. It has engaged the services of employees for the
purpose of marketing its manufactured products. In common parlance the
C employees appointed by the pharmaceuticals companies are known as medical
representatives. Charge sheets were issued against the concerned employees
and after holding inquiries, services of the employees were terminated. The
employees invoked the jurisdiction of the Labour Court challenging the orders
of termination but later on they withdrew them and moved the authority under
D the Act along with, in some cases, condonation for delay in approaching the
Authorities concerned. Notwithstanding serious objections raised by the
employer, the concerned Authority condoned the delay. Writ Petitions filed
and writ appeals preferred were rejected.

2. In the present appeals the stand of the appellants was that the
E · authority under the Shops Act had no jurisdiction to entertain the so called
appeals preferred by the employees as the service conditions of the employes
were governed and regulated by the provisions of the Act which is a special
enactment. The competent authority rejected the objections raised by the
employer. As regards the jurisdiction it was held that the cause of action
F arose within the territorial jurisdiction of the concerned appellate authority
and, therefore, the plea of the employer could not be entertained. Both the
learned Single Judge and the Division Bench in the writ appeal held that the
appellate authorities' orders were in order. It did not accept the stand that the
forum created under the Industrial Disputes Act, 1947 (in short the 'ID Act')
G was the only forum and the disputes cannot be raised in any other forum.

3. In support of the learned counsel appearing for the appellant submitted
that the Parliament enacted the Act as it thought that it would be more
appropriate to have a separate legislation for governing service conditions of
H the Sales Promotion Employees and accordingly made the provisions of the
-
SPIC PHARMACEUTICALS DIVISION" AUTHORJTY UNDER SEC. 48(1)0F AP [PASAYAT, J]
431
ID Act applicable conferring rights on the Sales Promotion Employees to A
; ~ challenge the orders of dismissal, discharge or retrenchment in the forum
.., created and constituted under the provisions of the ID Act. The Parliament
specified application of certain Acts to Sales Promotion Employees which
include Workmen's Compensation Act, 1923, Minimum Wages Act, 1948,
Maternity Benefit Act, 1961, Payment of Bonus Act, 1965 and Payment of
B
Gratuity Act, 1972. Except these Acts no other Act including the Shops Act
shall be applicable.

4. In response learned counsel for the respondent-employees submitted
- l that two forums are available to the employees i.e. under the provisions of
ID Act and the Shops Act. It is for the employee to choose the remedy c
available to him in law either by approaching the forums created i.e. one
constituted under the ID Act or the Authorities constituted under the Shops
Act.

5.The High Court accepted that the Act which makes the provisions of
the ID Act applicable providing remedy to Sales Promotion Employees is a D
special enactment dealing with service conditions of sales promotion employees
employed in the establishment engaged in pharmaceutical industries. The
Shops Act deals with specific rights created under that Act and it has been
1
indicated that these provisions provided for some more measures for protecting
interest of the employees. They are beneficial in nature. The High Court held E
that the jurisdiction conferred under the Shops Act cannot be said to have
been taken away in respect to enforcement of rights conferred under the Act.
We think it is unnecessary to go into these broader issues. We find that the
forums created under the ID Act, on the facts of the case can more effectively
deal with the issues raised. It is not to be understood that we have said that
F
the Appellate authorities under the shops Act do not have jurisdiction. We
are not really deciding the issue as to whether there was exclusion of the
. --(
jurisdiction of authorities under the Shops Act because it specifically provided
that the forum under the ID Act can be approached. In the peculiar
circumstances, therefore, we direct that the concerned State Governments i.e.
Kamataka, Tamil Nadu and Maharashtra shall mi:ke reference to the appropriate G
forum under the ID Act within a month from today. The concerned forum shall
make an effort to dispose of the reference to be made within three months
from the date of receipt of the reference. If the respondent employees are
entitled to any payment because of the pendency of the disputes, the same
shall be paid within two months from today. We make it clear that we have H
432 SUPREME COURT REPORTS [2007] 3 S.C.R.

A not expres:ied any opinion on the merits of the case and the order for
reference by the State Government is being made in view of the special
features involved. Normally it is for the State Government to decide whether
; . -
reference is to be made but in view of the conceded position by the learned
counsel for the parties that the industrial disputes do exist, we direct the
B concerned State Governments to refer the dispute to the forum under the ID
Act for adjudication as directed above.

Appeals are accordingly disposed of with no orders as to costs.

RP. Appeals disposed of.

"" .