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CASE NO.: Appeal (civil)  4782 of 2006

PETITIONER: National Small Industries Corpn. Ltd.        

RESPONDENT: V. Lakshminarayanan                                

DATE OF JUDGMENT: 10/11/2006

BENCH: Dr.AR. Lakshmanan & Altamas Kabir

JUDGMENT: J U D G M E N T  (Arising  out of SLP (C)  No.14520/2005 WITH CIVIL APPEAL NO. 4783/2006 (Arising out of SLP ) No................/06 CC 7812/06)

ALTAMAS KABIR, J.         Leave granted.         The short point for decision in these appeals is  whether in view of  Section 18 of the  Apprentices Act,  1961 (hereinafter  called the "1961 Act") the 1st Addl.  Labour Court, Chennai, was justified in holding that the  respondent who had been  appointed as  an apprentice  by the appellant herein was a "workman" within the  meaning of  Section 2 (s) of  the Industrial  Disputes Act,  1947 (hereinafter referred to as the ’1947 Act’).  The said  question also gives rise to the issue as to whether the  Labour Court was right in holding that the termination of  the respondent’s apprenticeship was in violation  of  Section 25-F of the  1947 Act and consequently  whether  he was entitled to reinstatement with continuity in  service and all back  wages and other concessions   accruing to him.          A few facts are required to be set out  to appreciate  the  award passed by the Labour Court.         The case made out by the respondent before the  Labour Court under Section 2 (a) of the 1947 Act was  that  he  had joined the appellant herein as a casual  labourer on daily wages on 6th April, 1987.  According to  him he had continued to work in the Marketing  Development Centre of the appellant at Nungambakkam  on daily wages  at Rs. 15/- per day continuously till  2nd  May, 1990.  It was also his case that while working with  the appellant he had been called for a direct interview on  13th April, 1990 for the post of Apprenticeship Trainee  (Shop Assistant) and that he was selected as per the  Order dated 26th April, 1990.  It was asserted by the  respondent that during the 1st  year he was paid a salary  of Rs.600/- per month and during  the 2nd year he was  paid Rs.750/- per month as salary and after the training  period was over, the  appellant herein had agreed to  appoint him as  a Peon.  It is his case that on 8th July,  1991, he was transferred to the Government Purchase  Section of the  Regional Office where he was made to   perform  dispatch work.  Suddenly, on 1st May, 1992,  without any  reason or inquiry, he was removed from  service and that since he had served continuously for  more than 240 days, his removal from service should be

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treated as retrenchment since  the appellant herein had  not followed the procedure indicated in Section 25-F of  the 1947 Act.         The further case of the respondent was that while  juniors were allowed to continue in service, he was not  reinstated and his removal from  service without any   reason violates the provisions of Section 25-F of  1947  Act.         The  appellant herein had chosen  to remain silent  despite the several letters written  on behalf of the  respondent and ultimately  an application was filed  before the Labour Officer  on 30th March, 1993.  However,  since the conciliation failed, the respondent was  compelled to  pray  for reinstatement with continuity of  service and other concessions.         The case made out by the respondent was  completely denied by the appellant herein and it was  stated in its counter that the respondent  had applied to  the appellant for appointment to the   post of Staff  Assistant Apprentice Trainee and that in the interview   dated 13th April, 1990 he was selected and orders were  passid in this regard on 26th April, 1990 wherein it was  specifically mentioned that the  training period would be  for two years only.  It was also mentioned that during the   period of training in the 1st year  consolidated wages of   Rs.600/- per month would be paid and during the 2nd   year a  sum of Rs.750/- per month would be paid.   The  respondent  was directed to report for training before 3rd  May, 1990 and the training period  consequently came to  an end on 2nd May, 1992.  On 29th April, 1992, the  respondent requested the appellant to confirm him in  service and by subsequent letters dated 12th August,  1992 and 7th December, 1992, the respondent requested  the appellant to make him permanent.  Only thereafter  notices were issued by the respondent through his  advocate  indicating that  he had  been removed from  service without any reason or without holding any   inquiry in violation of Section 25F of the 1947 Act.  It was  also  contended  on behalf of the appellant that since the  two years training period of the respondent as a trainee  had come to an end, he was  not entitled to any relief as  prayed for.  In order to decide the dispute the Labour  Court framed the following issues:- "1. Whether it is correct to say that the  petitioner was employed only as  a trainee  in the respondent/Management, as  contended by the respondent?

2. Whether the removal of the petitioner  from service is justifiable?

3. If not, what is the relief for which the  petitioner is entitled.?"  

       After examining the evidence  which had been  adduced on behalf of the parties, the Labour Court  recorded that the respondent herein  had joined as a  casual labourer on 6th April, 1987 in the Marketing  Development Centre under the management of the  appellant in the  Eldorado Building at a daily wage of  Rs.12/- which was subsequently enhanced to Rs.15/-.  It  was also recorded that the respondent herein was  performing  dispatch work, remitting money by going to  the regional office, cleaning articles and delivering goods  sold to customers and in this background he was offered

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the post of Apprentice Trainee (Shop Assistant) for which  he was selected on 26th April, 1990 and was paid a sum  of Rs.600/- per month during the 1st year of training,  which amount was increased to Rs.750/- per month  during the 2nd year of training.  It was also recorded that  although the respondent was appointed as  Apprentice  Trainee (Shop Assistant), he continued to do the same  work.  It was also recorded that while perusing Ex.W-7, it  was noticed that the appellant had agreed to engage the  respondent as a Peon in ’D’ Category or as  a shop  assistant.  It was also seen from letters exchanged  between the parties that the respondent who had been  serving as a casual labourer had been recommended for  appointment to a permanent post by the General  Manager.   Basing its judgment  on the aforesaid material, the  Labour Court accepted the case  made out by the  respondent and held  that  the case made out on behalf  of the appellant that after the period of apprenticeship,  the respondent’s connection  with the appellant had  ended,  was not acceptable.  The Labour Court also came  to the conclusion  that even after    joining as    apprentice and shop assistant on 3rd May, 1990, the  respondent had served in the show room  and performed  the  same work which he had performed previously and  had been performing a full-time job and hence his  dismissal from service was not at all justified.  In view of   its aforesaid findings, the Labour Court ordered that the  respondent be reinstated in service with continuity,  together with back wages  and all other concessions  accruing to him.   On 23rd  June, 1997, the appellant challenged the  award passed by the Labour Court by way of   a Writ  Petition before the Madras High Court, being    No.9462/1997.  On the said petition, the learned Single  Judge stayed the award and such stay was confirmed on  4th September, 1998 by the learned  Single Judge with a  direction upon the appellant to deposit  a sum of  Rs.63,000/- before the Labour Court within 12 weeks  and further directed that the said sum be invested in  fixed deposit in a nationalized bank and the interest of  the same be released to the respondent once in six  months.  There was a further direction upon the  appellant to pay  Rs.750/- per month to the respondent  and to pay  all the arrears within 12 weeks from the date  of the order. The said order of the learned Single Judge dated 4th  September, 1998 was challenged by the appellant in  appeal being Writ Appeal No.1364/1998.  On 25th April,  2002, the Division  Bench stayed the operation of the  order of the learned Single Judge dated 4th September,  1998 and modified the interim order in so far as it related  to payment of  wages under Section 17B of the 1947 Act.    A direction was given that such payment was to be made  under Section 12B of the said Act from October, 1998 till  the disposal of the Writ Appeal.  The arrear of wages  under Section 17B up to April 2002 was also required to  be paid on or before 15th May, 2002 and future monthly  wages on or before the 10th of every succeeding month,  failing which the stay would stand  automatically  vacated.      On 16th September, 2004, the Writ Appeal  was disposed of with the following directions:-

"The appellant (NSIC) shall pay to second  respondent (Shri V. Lakshmi Narayanan)

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directly by way of cheque a sum of  Rs.15,000/- which represents the interest  on Rs.63,000/- from the date of the  impugned order till date, within a period of  4 weeks from today and in future, the  appellant shall pay to the second  respondent interest @ 4% p.a. on  Rs.63,000/- every quarter till the disposal of   the Writ Petition No.9462 of 1997."

The  writ petition itself came up for hearing on 20th  September, 2004 before the learned Single Judge who  dismissed the same and confirmed the award of the  Labour Court dated 20th March, 1997.   A restoration  petition was also dismissed on 3rd January, 2005.  The  appellant thereupon filed another Writ Appeal against the  order of the learned Single Judge dismissing  the writ  petition and the subsequent order dismissing  the  restoration petition, being Writ Appeal No.539/2005.    On 28th March, 2005, the Division Bench dismissed the  Writ Appeal upon holding that although the respondent  was designated as an apprentice, in fact, he was not an  apprentice but an employee doing full time work in the  establishment.         The present appeal is directed against the said  judgment and order of the Division Bench dated 28th  March, 2005. The  other appeal is directed against the order of the  learned Single Judge of the Madras High Court dated  20th September, 2004 dismissing the appellant’s Writ  Application. Since the same set of facts  will be relevant for a  decision in both the appeals, they have been taken up   together for disposal and are being disposed of by this   judgment. The entire dispute centers round the question as to  whether  the respondent was, in fact, a workman within  the meaning of Section 2 (s) of the 1947 Act or an    apprentice trainee within the meaning of  Section 18 of  the 1961 Act. Section 2 (s) of the 1947 Act defines "workman" in  the following terms:- "2 (s). ’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 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 \026

i ) who  is subject to the Air Force Act,  1950     (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 employee of a  prison ; or

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(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, 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."    

From the above, it will be seen that a  "workman"  includes  an "apprentice".  However, Section 18 of the  1961 Act defines that apprentices are trainees and not  workers in the following terms:- "18. Apprentices are trainees and not  workers.\027Save as otherwise provided in this  Act,--  (a)    every apprentice undergoing      apprenticeship training in a designated trade  in an establishment shall be a trainee and not  a worker; and

(b)     the provisions of any law with  respect to  labour shall not apply to or in relation to such  apprentice."

From the above, it will be seen that on the one hand  while an apprentice is also treated to be a workman for  the purposes of the 1947 Act, by virtue of Section 18 of  the 1961 Act, it has been categorically provided that  apprentices are not workers and the provisions of any  law with respect to labour shall not apply  to or in  relation to such apprentice.     We have been taken though the letter issued on  behalf of the appellant to the respondent on 26th April,  1990 with reference to  the interview  held on 13th April,  1990, for being engaged as Apprentice   Trainee (Shop  Assistant).  From the said order it is very clear that the  respondent was appointed as an  apprentice and that the  duration of his apprenticeship  training would be  two  years from the date  on which  he reported for such  training.   It was also indicated that he would be paid a  consolidated stipend of Rs.600/- per month during the   first  year and on satisfactory completion of the first   year, he would be paid at the rate of Rs.750/- per month  during the second year.  It was further stipulated that  the respondent would be entitled to  15 days leave every  year during the  period of apprentice  training.     Paragraph 5 of the aforesaid letter, which seems   to be   in consonance with Section 22 of the 1961, Act states as  follows:- "On completion   of  your apprentice  training satisfactorily,  you will be eligible  to apply for consideration for recruitment  to any post in Group ’D’ Category  (present Scale 196-290) subject to  availability of vacancies and recruitment  rules of the Corporation."

It also appears from the letter dated 3rd May, 1990,   written by the respondent to the Joint  Manager

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(Marketing) of the  appellant-corporation  that pursuant  to the letter of 26th April, 1990, he reported for duty on  3rd May, 1990 as Apprentice Trainee (Shop Assistant) in  the Marketing Development Centre.   We have also been  shown  a letter dated 29th April,  1992, written by the respondent to the Regional General  Manager of the appellant-corporation indicating that he  had been appointed as Sales Assistant (Apprentice) for  a    period of two years with effect from  3rd May, 1990  and  the period was to  expire on 2nd May, 1992.  In his said  letter, the respondent requested  the authorities of the  appellant-corporation to consider absorbing  him on a  permanent  basis in view of the fact that he had been  working in the organization for six years.    It is only on  5th February, 1993, that the respondent’s lawyer wrote to  the appellant-corporation indicating that at the interview  held  on 13th April, 1990 for appointment to the post of  Apprentice Trainee (Shop Assistant), it had been agreed  to absorb  him in a Group ’D’ Category after completion  of his  apprenticeship.  It was also alleged that the  termination of the respondent’s service would amount to  retrenchment.  From the aforesaid documents it would  be evident  that even  if the  respondent had been working on a  daily-wage basis prior to his appointment as Apprentice  Trainee (Shop Assistant), at least from  3rd May, 1990 till   2nd May, 1992, he was working as an apprentice on  a  consolidated  salary  and the respondent himself was  conscious of such fact since he had  requested the  corporation and its authorities to absorb his services on  a permanent basis purportedly on the basis of a promise  held out at the time when he was  interviewed for  appointment to the post of Apprentice Trainee (Shop  Assistant).  Other than the assertion made on behalf of  the respondent that the appellant had agreed to absorb  the respondent in Group ’D’ Category as  Peon/Shop  Assistant after completion of apprenticeship and the  recommendation said to have been made by the General  Manager indicating that the respondent could be  appointed and taken as a permanent worker, there is no  other material on record to support the case made out by  the respondent. In the absence of any such  material, it is difficult to  understand  the reasoning of the Labour Court that the  respondent was not an "apprentice trainee" but a  "workman" who was made to perform a full-time job  under the guise of an Apprentice  Trainee.  The High  Court appears to have been impressed by the reasoning  of the Labour Court with regard to the finding that  although designated as an apprentice, the respondent  was not undergoing training, but  was an employee doing  full time work in  the establishment.  Such a view, in our  judgment, is not supported by the materials on record  and is completely contrary  to the appointment letter   issued to the respondent on 26th April, 1990 and the  respondent’s own letter  dated 29th April, 1992, in  admission of such fact.  Had such a letter of appointment  not been available, the Labour Court and/or the High  Court could justifiably have  embarked on an exercise as  to whether the respondent was in effect  a "trainee"  under the Apprentices Act, 1961, or a  "workman"  within the meaning of Section 2 (s) of the 1947 Act.   There is nothing on record to indicate that the  respondent’s services had ever been regularized or that  he was brought on the rolls of the permanent

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establishment. Even if it is accepted that the respondent was a  workman within the meaning of the 1947 Act, on account  of his contractual tenure, his case would come within the  exception of clause (bb) of Section 2(oo) thereof.  In such  a case also, the provisions of Section 25F of the said Act  would have no application to the respondent’s case. In the aforesaid circumstances, we are of the view  that the respondent’s case was covered by the provisions  of Section 18 of the 1961 Act and both the Labour Court  as well as the High Court erred in proceeding on the  basis that the respondent was a workman to whom the  provisions of  the 1947 Act would be applicable. The appeals are accordingly allowed and the  judgment and orders under appeal are set aside.  This  order will not affect the payments already made to the  respondent from time to time under the orders of the  Courts. Having regard to the facts involved there will,  however, be no order as to costs.