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CASE NO.: Appeal (civil)  7986 of 2004

PETITIONER: General Manager, Indian Overseas Bank

RESPONDENT: Workmen, All India Overseas Bank Employees Union

DATE OF JUDGMENT: 10/03/2006

BENCH: ARIJIT PASAYAT & ARUN KUMAR

JUDGMENT: J U D G M E N T

ARIJIT PASAYAT, J.

        The Indian Overseas Bank (hereinafter referred to as the  ’Bank’) calls in question legality of view expressed in a  judgment rendered by the Industrial Tribunal, Tamil Nadu,  Chennai(hereinafter referred to as the ’Tribunal’) which was  affirmed by learned Single Judge of the Madras High Court.   The judgment of the Division Bench is the subject-matter of  challenge in this appeal.   The core question which falls for adjudication in this  appeal is whether "jewel appraisers for loans" are to be treated  as workers and are to be absorbed as part time clerical staff of  the Bank.  Stand of the appellant is that jewel appraisers are  not employees of the bank and do not do any substantial  work.

Background facts in a nutshell are as follows:

The bank on the basis of contracts had employed about  767 jewel appraisers mainly in the rural branches in the  States of Tamil Nadu, Pondicherry, Andhra Pradesh,  Karnataka, Kerala and few branches in Bihar and Orissa.   Bank advances agricultural loans to its constituents and also  members of the staff.  The All India Indian Overseas Bank  Employees Union (in short the ’Union’) raised a dispute taking  the stand that the jewel appraisers engaged by the bank are  part time workers of the bank.  On the basis of the demand  raised reference was made by the Central Government and on  19.2.1990 following dispute was referred to the Tribunal for  adjudication:

"Whether the demand of All India Overseas  Bank Employees Union to treat the jewel  appraisers engaged by the Bank as part time  workmen of the Bank is justified?  If so, to  what relief, if any, are they entitled?"

       In support of the demand the stand taken was that the  jewel appraisers employed for particular branches of the bank  are also utilized for certain clerical jobs like entering  applications for jewel loans. They are also to go other branches  as to the appraisers of the jewel.  These jewel appraisers are  required to be present in the respective branches between 10

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a.m. to 2.00 p.m. as a request for jewel loan is considered and  granted only during that period.  They are paid a commission  of Rs.3/- for every one thousand rupees sanctioned by way of  loan. Reference was made to another dispute i.e. ID 25 of 1997  raised by jewel appraisers numbering about 353 in Indian  Bank where a reference had been made to the Tribunal.  The  reference reads as follows:-

"Whether the action of the Management of the  Indian Bank, Madras in denying to appraisers  wages and other conditions of service  applicable to rural clerical "Award Staff" of the  Bank is justified?  If not to what relief the  workmen concerned are entitled to?"

       Reference in that case was made on the ground that the  jewel appraisers of Indian Bank were workmen and they were  denied only wages and other service conditions as they were  paid monthly remuneration of Rs.100/-. The said dispute was  adjudicated and an award was made on 3.12.1979 holding  that the jewel appraisers of Indian Bank are entitled to wages  and other conditions of service applicable to regular clerical  staff as part time employee of the Bank and they would be  entitled to such proportionate (namely half) wages and benefits  of clerical staff w.e.f. 1.4.1977 i.e. the date of reference.  The  award was questioned before the High Court which was  dismissed. Letters Patent Appeal was also dismissed by the  Division Bench and S.L.P. was also dismissed by this Court.

       Stand of the Union, therefore, was that the view  expressed in the Indian Bank’s case (supra) was clearly  applicable to this case.  Claim of the Union was resisted by the  appellant-Bank basically on the ground that jewel appraisers  engaged by the Bank are not workmen as defined in Section  2(s) of the Industrial Disputes Act, 1947 (in short the ’Act’).   Reference was made a decision of this Court in Management of  Puri Urban Co-operative Bank v. Madhusudan Sahu and Anr.  (1992 (II) LLJ 6).  Further it was submitted that the Bank has  branches in various states and, therefore, adjudication is  possible only by a National Commission under Section 17B of  the Act and not by the Industrial Tribunal to whom the  dispute was referred.  This point was not, however, urged  before the High Court.  It was pointed out that terms and  conditions of the jewel appraisers of Indian Bank were entirely  different from the terms and conditions of jewel appraisers of  the appellant Indian Overseas Bank. The Tribunal relied upon  the decision in Indian Bank’s case (supra) and answered the  reference in the affirmative.  It made a comparison of the  terms and conditions of the two Banks.

       Union filed writ petition claiming that the Tribunal  should have granted relief from 1.4.1978 i.e date of demand.   Appellant-Bank questioned legality of the award by filing a writ  petition.       As noted above, the writ petition was dismissed by  the learned Single Judge and the Division Bench in the LPA.

       In support of the appeal learned counsel for the  appellant-Bank submitted that in the year 1975 the appellant  started the process of sanctioning loans on deposit of jewellery  and security for which jewel appraisers were engaged who  were paid on commission basis. On 20.1.1983 Government  declined reference because independent contracts covered the  arrangement. The Union filed writ petition before the High  Court which by its judgment dated 22.11.1989 directed the  Central Government to refer the dispute to the Tribunal. The

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Tribunal instead of assessing the evidence and very vital  admissions made by the witnesses examined to further the  case of the jewel appraiser based its conclusions on Indian  Bank’s case (supra).  It did not take note of the features  highlighted by this Court in Puri Urban Co-operative Banks’  case (supra). It also referred to a decision in Indian Bank v.  Presiding Officer, Industrial Tribunal etc. (1990(I) LLJ 50),  which had no relevance.  Accordingly, the conclusions are  vitiated of non-application of mind.  It is pointed out that  though the learned Single Judge held that the Tribunal not  decided the real issues had proceeded to determine the case  himself and upheld the award passed. In the appeal before the  Division Bench it was categorically held in the impugned  judgment that the Tribunal had not adjudicated the correct  issue and for achieving substantial justice the learned Single  Judge rightly adjudicated the matter which was pending for  nearly 26 years. It was held that jewel appraisers are  indispensable for proper functioning of the Bank and also deal  with the clerical job.   

It was submitted by learned counsel for the appellant  that the factual scenario in Indian Bank’s case (supra) was  entirely different. Some of the distinguishing features make  Indian Bank’s case (supra) inapplicable. One of the  determinative factors according to him was that the  commission was paid only when the loan was sanctioned even  if the appraisal had been done by the appraiser and the  commission amount was paid out of the sanctioned loan  amount and the payment is made by the borrower and not by  the Bank. On comparison of the works done the Tribunal held  that the work was similar so far as Indian Bank’s case (supra)  is concerned, without noticing that condition no.9 was  conceptually and contextually different. There was no evidence  to show that jewel appraiser did any other work as clerk.   Even if it is conceded for the sake of arguments that some  work was done by the appraiser, it was by way of help to the  loanee.  In any event after the Shastri Award there is no  question of any part time clerk being appointed.  If the order of  the Tribunal as maintained by learned Single Judge and the  Division Bench is to be maintained, a separate cadre has to be  created to give effect to the orders.  The Tribunal referred to  the Tiny Deposit Scheme of Indian Bank’s case without  indicating as to how the same was relevant.  The Tribunal  quoted from the judgment of the Madras High Court in great  detail and referred to Ex. "M-3" which relied on some  conclusions of Tiny Deposits Scheme which was not the case  of the jewel appraisers before the High Court.  The Tribunal  appears to have quoted from the said judgment of the Madras  High Court and without applying the conditions which were  the subject-matter of adjudication in the said case to the facts  of the present case drew parallel. It was submitted that the  factual scenario in the Puri Co-operative Bank’s case (supra)  was almost akin to the facts of the present case. Therefore, the  ratio has full application in the present case. Reference was  also made to a Full Bench judgment of Kerala High Court in   Canara’s Bank case (1981 (II) LLJ 189) where for the purpose  of the Shop and Commercial Establishment Act jewel  appraisers were held to be not employees.   

It was, however, submitted by learned counsel for the  respondent that this was done for the purpose of finding out  the parameters.            It was submitted that the reference was made because  prima facie the Government felt that jewel appraisers were

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workmen under the Act and in that context nature of work,  which was the same as in the case of Indian Bank’s case  (supra), is relevant. The Tribunal has compared the duties and  has given findings of fact regarding nature of duties. It was  held that the jewel appraisers are also doing some clerical  work relating to the job entrusted. Three forums have recorded  findings of fact and, therefore, no interference is called for.  This is not a case where jewel appraisers were asking for  regularization, they were claiming to be part time workers.   There was power of the Bank to supervise and that was the  effective control. The Bank has right to indicate as to in what  manner the work was to be done.  In Puri Cooperative Bank’s  case (supra) this Court did not notice an earlier three-judge  Bench decision in Silver Jubilee Tailoring House and Ors. v.  Chief Inspector of Shops and Establishments and Anr. (1974  (3) SCC 498) where the relevance of the end-product was  highlighted.  As the bank had the right to reject the report of  the appraiser, that itself was indicative of element of control  and supervision.  Therefore, the Puri Co-operative Bank’s case  (supra) should not be followed. Additionally, the said case  related to an individual and issue of workman did not arise  directly.   

       The stress of learned counsel for the appellant was that  the Bank had always the practice of appointing jewel  appraisers as independent contactors who were free to work  elsewhere and as such are not employees, not subject to  discipline, are not subject to fixed working hours, are not  employed by following any employment procedure and are not  assigned duty outside of their contract, except may be  incidentally filing of form and the like.   

       Reference to the circular dated 23.8.1975 clearly shows  that the Bank had clearly stipulated that the jewel appraisers  cannot be engaged in other work as they were not regular  employees. On 2.1.1978 another circular was issued by the  Bank that jewel appraisers act on commission basis and hence  are not entitled to do any other work. It appears that the  Tribunal did not analyse the evidence which was produced by  the parties. It merely referred to the factual background in  Indian Bank’s case (supra). The decision of this Court in Puri  Co-operative Bank’s case (supra) was distinguished by  comparing job of the jewel appraisers of the Indian Bank.  It  should be noted that the dispute in Indian Bank’s case (supra)  was conceptually different. After accepting that the real issues  were not focused by the Tribunal, learned Single Judge held  that a substantial portion of the Bank’s business was because  of the contribution made by the jewel appraisers without  indicating as to how same was relevant for the purpose of  adjudication. The Division Bench in a very cryptic manner  observed that it had perused the evidence and the documents  which substantiated nature of the job of the jewel appraisers  and they were also doing the clerical job.  The circulars issued  by the Bank were not considered relevant and it was noted  that the ratio in Indian Bank’s case (supra) applies.                         A few distinguishing facts need to be noted.  In Indian  Bank’s case (supra) there was evidence to show that the jewel  appraisers work regularly for four hours.  It was clearly  admitted in the instant case by the witness of jewel appraisers  that there were no fixed period of work and they could come  and go at any point of time.  In Indian Bank’s case (supra) the  bank had disciplinary control on the jewel appraisers.  In the  instant case it was admitted by the witnesses that the Bank  did not exercise any disciplinary control. In Indian Bank’s case

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(supra) conditions were to be fulfilled before any leave was  granted. In the present case the jewel appraisers were not  required to sign attendance register and also were not required  to make any leave application. The most relevant factor in  Indian Bank’s case (supra) was that the jewel appraisers were  paid a minimum amount per month which was somewhat akin  to salary. In the instant case, the amount was paid on  commission basis by the loanee and not by the bank.

       A few other facts need to be noted.  In the present case as  well as in Puri Co-operative Bank’s case (supra) the jewel  appraisers were required to weigh the ornaments brought to  the Bank for pledge and to appraise quality, purity and value.   The jewel appraisers could be asked to do this exercise but not  the manner in which it was to be done.  In both the cases the  respective banks had their lists of appraisers.  It was not  obligatory for the Bank to allot work to any particular jewel  appraiser.  

       Strong reliance was placed by learned counsel for the  respondent in Dhrangadhra Chemical Works Ltd. v. State of  Saurashtra (1957 SCR 152), Silver Jubilee’s case (supra),  Shining Tailors v. Industrial Tribunal II, U.P. (1983 (4) SCC  464), Chintaman Rao v. State of M.P. (1958 SCR 1340).                                       The inferences culled out from the reading of those  judgments can be summed up as follows:-

(a)     Where the contactors were substantially responsible for  the main and sole business, they would be treated as workers.  (b)     One exception is that in such cases flexibility of the  contract was at variance with normal worker’s contract the  contractors would not be treated as workers. (c)     Where the contractor is in the nature of supplier of goods  and services, they are to be treated as supplier contractors  and not workmen.

       At this juncture the distinction between jewel appraisers  and the regular employees of the bank can be noted.

Regular Employees  Jewel Appraisers  1. Subject to qualification and  age prescribed  1. No qualification/age 2. Recruitment through  Employment  exchange/Banking  Service  Recruitment Board. 2. Direct engagement by the  local Manager 3.  Fixed working hours 3. No fixed working hours. 4. Monthly wages 4. No guaranteed payment,  only commission paid. 5. Subject to disciplinary  control 5. No disciplinary control. 6. Control/supervision is  exercised not only with regard  to the allocation of work, but  also the way in which the  work is to be carried out. 6. No control/supervision over

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the nature of work to be  performed. 7. Wages are paid by the  Bank.  7. Charges are paid by the  borrowers. 8. Retirement age 8. No retirement age. 9. Subject to transfer 9. No transfer 10. While in employment  cannot carry on any other  occupation.  10. No bar to carry on any  avocation or occupation.                      Therefore, the jewel appraisers are not employees of the  Bank.

       Above being the position, the judgment of the Division  Bench affirming the views of the learned Single Judge and the  Tribunal is clearly indefensible, deserves to be set aside which  we direct.

       The appeal is allowed with no order as to costs.