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PETITIONER: S. K. VERMA

       Vs.

RESPONDENT: MAHESH CHANDRA AND ANOTHER

DATE OF JUDGMENT02/09/1983

BENCH: REDDY, O. CHINNAPPA (J) BENCH: REDDY, O. CHINNAPPA (J) DESAI, D.A. VARADARAJAN, A. (J)

CITATION:  1984 AIR 1462            1983 SCR  (3) 799  1983 SCC  (4) 214        1983 SCALE  (2)199  CITATOR INFO :  R          1984 SC1683  (1)  F          1985 SC 985  (14)

ACT:      Industrial Disputes  Act, 1947-S.  2(a)- Definition  of ’workman’-Whether it  includes Development  officers in Life Insurance Corporation ?

HEADNOTE:      On  a   reference  being  made  to  it  concerning  the dismissal  from   service  of   the  appellant   who  was  a Development officer  in the  Life Insurance Corporation, the Industrial Tribunal  upheld a  preliminary objection  to the maintainability of  the reference and ruled that Development officers in  the Corporation  were not  workmen  within  the meaning of s. 2(s) of the Industrial Disputes Act, 1947. His petition under  Art. 226  questioning the  validity  of  the Tribunal’s ruling  having been  dismissed in  limine by  the High Court,  the appellant  approached this Court under Art. 136.      Allowing the appeal, ^      HELD:  Development   officers  in  the  Life  Insurance Corporation are  workmen’ within  the meaning  of s. 2(s) of the Industrial Disputes Act, 1947                                                      [821 B]      (i) The  Act is  a legislation  intended to bring about peace and  harmony between labour and management in industry and,  for   that  purpose,   it  makes   provision  for  the investigation and  settlement of industrial disputes. It is, therefore,  necessary   to  interpret   the  definitions  of ’industry’, ’workman’, ‘industrial disputes’ etc., so as not to whittle  down, but  to advance  the object  of  the  Act. Disputes between  forces of labour and management are not to be excluded  from the  operation of the Act by giving narrow and  restricted   meanings  to   expressions  in   the  Act. Parliament could  never be  credited with  the intention  of keeping out of the purview of the legislation small bands of employees who,  though not  on the  managerial side  of  the establishment, are  yet to  be denied the ordinary rights of the forces  of labour for no apparent reason at all. [803 D-

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F]      Workmen of  Indian Standards  Institution v. Management of  Indian  Standards  Institution,  [1976]  2  S.C.R.  138, referred to.      (ii)  The  words  "any  skilled  or  unskilled  manual, supervisory, technical  or clerical  work" in s. 2(s) of the Act are not intended to limit or narrow the amplitude of the definition of ’workman’; on the other hand they indicate and emphasize  the  broad  sweep  of  the  definition  which  is designed to  coverall  manner  of  persons  employed  in  an industry, irrespective of whether they are 800 engaged in  skilled work  or unskilled  work, manual work or supervisory work,  technical work  or clerical  work.  Quite obviously, the  broad intention  is to  take in  the  entire ‘labour force’ and exclude the ’managerial force’. [803 B-C]      (iii) one  does not  have to  be carried  away  by  the appellation ’development  officer’  but  must  look  to  the nature  of   his  duties   to  discover   what  precisely  a development officer  is. It  is seen from the Life Insurance Corporation of  India (Staff)  Regulations that  development officers, while  classified separately from ’Supervisory and Clerical  Staff’   are  also   classified  separately   from ’officers’ and  from the scales of pay prescribed as well as the authorities  competent to  appoint and take disciplinary action in  respect of  various categories  of  officers  and staff mentioned  therein it  is clear  that the  appellation ’development  officer’   is  no   more  than   a   glorified designation.  Development   officers  are   separated   from ’officers’ strictly  so called and are generally placed on a par with  subordinate and  clerical staff. The nature of the duties of  a development officer gathered from the letter of appointment issued  to the  appellant indicate that he is to be a  whole time  employee  of  the  Corporation,  that  his operations are  to be  restricted to a defined area, that he is liable  to be  transferred, that  he has  no authority to bind the  Corporation in any way, that his principal duty is to organise  and develop  the business of the Corporation in an area  allotted to  him and  for that  purpose to  recruit active and  reliable agents  and to train them and that even so, he  has not  the authority  either to appoint them or to take disciplinary  action  against  them.  Further,  it  was admitted that a development officer has no subordinate staff working under  him. It  is thus  clear  that  a  development officer cannot  by any  stretch of imagination be said to be engaged in  any administrative or managerial work. [804 D-H, 805 A-E, 811 B]      2. Whenever  an industrial  dispute is  referred  to  a tribunal for  adjudication it  has become a fashion with all employers to  raise three preliminary objections, viz., that there is  no industry,  that there  is no industrial dispute and that  the workman  is no workman. It is a pity that when the  Central   Government,  in   all  solemnity,  refers  an industrial  dispute   for  adjudication,   a  public  sector corporation which is an instrumentality of the State instead of welcoming  a decision  by the tribunal on merits so as to absolve itself  of any charge of being a bad employer should attempt  to   evade  decision  on  merits  by  raising  such objections and  never thereby satisfied, carry the matter or ten-times to  the High  Court  and  to  the  Supreme  Court, wasting public  time and  money. Public  sector corporations must be model employers and model litigants. They should not attempt to avoid adjudication by raising needless objections or  by   adopting  needless  postures  or  by  indulging  in luxurious litigation  and drag  workman from  court to court

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merely to  vindicate, not  justice, but some rigid technical stand taken up by them. [801 D-H]

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil Appeal No. 2659 of 1980      Appeal by  Special leave  from the  Judgment and  order dated the  15th January,  1980 of  the Delhi  High Court  in Civil Writ Petition No. 40 of 1980. 801      Jitendra Sharma for the Appellant,      G.L. Sanghi and D.N. Mishra for the Respondent.      The judgment of the Court was delivered by      CHINNAPPA  REDDY.   J.  The   Central  Government,  the appropriate Government within the meaning of s. 2 (a) of the Industrial Disputes  Act, referred the following dispute for adjudication to  the Industrial  Tribunal-cum-Labour  Court, New Delhi: "Whether the action of the management of the Life Insurance Corporation of India, New Delhi in dismissing Shri S.K. Verma,  Development officer  in Jullunder Branch of the Corporation, with effect from February 8,1969 is justified ? If not,  to what  relief is the workman entitled ?" The Life Insurance  Corporation   promptly   raised   a   preliminary objection regarding  the maintainability of the reference on the ground that Shri S K. Verma was not a workman.      There appears  to be three preliminary objections which have became quite the fashion to be raised by all employers, particularly  public   sector  corporations,   whenever   an industrial  dispute   is  referred   to   a   tribunal   for adjudication. One  objection is that there is no industry, a second that  there is  no industrial  dispute and  the third that the  workman is  no workman. It is a pity that when the Central Government,  in all  solemnity, refers an industrial dispute for  adjudication, a public sector corporation which is an  instrumentality of  the State  instead of welcoming a decision by  the Tribunal  on merits so as to absolve itself of any  charge of  being a  bad employer or of victimisation etc. should  attempt to  evade decision on merits by raising such objections  and  never  thereby  satisfied,  carry  the matter often  times to  the High  Court and  to the  Supreme Court, wasting  public time  and  money.  We  expect  public sector  corporations   to  be   model  employers  and  model litigants. We  do  not  expect  them  to  attempt  to  avoid adjudication or to indulge in luxurious litigation and drag: workmen  from  court  to  court  merely  to  vindicate,  not justice, but some rigid technical stand taken up by them. We hope that  public sector corporation will henceforth refrain from  raising   needless   objections,   fighting   needless litigations and adopting needless postures.      The  Industrial   Tribunal   upheld   the   preliminary objection and  ruled that  Development Officers  in the Life Insurance Corporation  of India  are not  workmen within the meaning of S. 2 (s) of the 802 Industrial Dispute, Act. The reference was therefore held to be incompetent.  Writ  Petition  filed  by  S.K.  Verma  was dismissed in  limine by the Delhi High Court. S.K. Verma has come before us under Art. 136 of the Constitution.      ’Workman’ was  originally defined  by S.  2(s)  of  the Industrial Disputes Act 1947 as meaning           "any person employed (including an apprentice)      in  any  industry  to  do  any  skilled  manual  or      clerical work  for hire or reward and includes, for

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    the purpose  of any  proceedings under  this Act in      relation  to   an  industrial  dispute,  a  workman      discharged during  that  dispute  but  .  does  not      include any  person employed in the naval, military      or air service of the Crown." The definition  under went  a substantial  amendment in 1956 and this is how it stands now:-           "Workman"  means   any  person  (including  an      apprentice) employed  in any  industry  to  do  any      skilled or unskilled manual, supervisory, technical      or clerical  work for  hire or  reward, whether the      terms of  employment be  expressed 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-           (i)   Who is subject to the Army Act, 1950, or                the Air  Force  Act,  1950  or  the  Navy                (Discipline) Act, 1934; or           (ii) Who is employed in the police service or                as an  officer or  other 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  five                hundred rupees per 803                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. The words’  any skilled  or unskilled  manual,  supervisory, technical or  clerical work’  are not  intended to  limit or narrow the  amplitude of  the definition of workman’; on the other hand  they indicate  and emphasise  the broad sweep of the definition  which is  designed to  cover all  manner  of persons employed  in an  industry, irrespective  of  whether they are  engaged in  skilled work or unskilled work, manual work, supervisory  work, technical  work or  clerical  work. Quite obviously the broad intention is to take in the entire ’labour force’  and exclude  the ’managerial force’. That of course, is as it should be.      It is  trite to  say that  Industrial Disputes Act is a legislation  intended  to  bring  about  peace  and  harmony between labour  and management  in all industry and for that purpose,  it  makes  provision  for  the  investigation  and settlement  of   industrial  disputes.   It  is,  therefore, necessary  to   interpret  the  definitions  of  ’industry’, ’workman,’ ’industrial  dispute’, etc.  so as not to whittle down, but to advance the object of the Act. Disputes between the forces  of labour  and management are not to be excluded from the  operation of  the  Act  E  by  giving  narrow  and restricted  meanings   to  expressions   in  the   Act.  The Parliament could  never be  credited with  the intention  of keeping out of the purview of the legislation small bands of employees who,  though not  on the  managerial side  of  the establishment, are  yet to  be denied the ordinary rights of the forces  of labour  for no  apparent reason  at  all.  In Workmen of  Indian Standards  Institution v.  Management  of Indian Standards  Institution.(1) this Court had occasion to point out:

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         "..... It  is necessary  to remember  that the      Industrial Disputes  Act,  1947  is  a  legislation      intended to  bring about  peace and harmony between      management and  labour in  an  ’industry’  so  that      production does  not suffer  and at  the same time,      labour  is  not  exploited  and  discontended  and,      therefore, the  tests must be so applied as to give      the  widest   possible  connotation   to  the  term      ’industry’. 804      Whenever a  question arises  whether a  particular      concern is  an ’industry’  the  approach  must  be      broad and liberal and not rigid or doctrinaire. We      cannot  forget   that  it   is  a  social  welfare      legislation we  are interpreting and we must place      such an interpretation as would advance the object      and purpose  of  the  legislation  and  give  full      meaning and effect to it in the achievement of its      avowed social objective." So we  adopt a  pragmatic and  a pedantic  approach  and  we proceed, in  considering the  question  whether  development officers in  the Life  Insurance Corporation are workmen, to first consider  the broad question on which side of the line they fall,  labour  or  management,  and  then  to  consider whether there are any good reasons for moving them over from one side to the other.      One does not have to be carried away by the appellation ’development officer’  as the Industrial Tribunal appears to have been.  After all,  what is  in a name ? Notwithstanding the glorified designation, we must look to the nature of his duties to  discover what precisely a development officer is? The Life  Insurance Corporation of India (Staff) Regulations classifies the staff into four categories as follows:-      "Class I - officers      Class II-Development officers      Class III-Supervisory and Clerical Staff      Class IV-Subordinate Staff." It  is  seen  that  development  officers  while  classified separately from  ’Supervisory and  Clerical Staff’  are also classified separately  from ’officers’.  Schedule-I  of  the Staff Regulations  shows  the  appointing  and  disciplinary authorities against  the various  posts. Tn the case of even the lowest posts of Class-I, it is the Zonal Manager that is the appointing and disciplinary authority, while in the case of Development  officers. It is the Divisional Manager (that is, the officer next below in rank to Zonal Manager) that is the appointing  and disciplinary authority. Even in the case of Superintendents  of Class  III. it  is the  Zonal Manager that  is   the  appointing   and   disciplinary   authority. Development officers and employees of 805 Class III and Class IV other than Superintendents are placed on par  and in their case, it is the Divisional Manager that is the  appointing and  disciplinary authority.  Schedule-II gives the  pay scales  of the  employees of the Corporation. The scale  of pay  of the lowest paid class-I officer is Rs. 530-40-1050. The  scale of pay of a Superintendent in class- IlI  is   Rs.  330-25-680-30-740.   The  scale   of  pay  of development officer  Grade-I is RS. 230-15-320-20-360-EB-20- 400-25-550-EB-30-760. The  scale of  pay  of  a  development officer Grade-II is Rs. 170-10-220. The scale of pay as well as  the   authorities  competent   to   appoint   and   take disciplinary   action    indicate   that   the   appellation ’development  officer’   is  no   more  than   a   glorified designation.  Development   officers  are   separated   from

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’officers’ strictly  so called and are generally placed on a par with subordinate and clerical staff.      Shri  G.L.   Sanghi,  learned   counsel  for  the  Life Insurance Corporation, told us that development officers are also entitled to be paid a certain commission in addition to the  salary  and  that  in  the  case  of  some  development officers, quite fantastic sums have been paid to them by way of commission.  It may  be so.  A  few  of  the  development officers may  have been  very fortunate  in that  the agents working  within   their  jurisdiction   had  done  excellent business and  that entitled  them to earn a good commission. But we are told there are more than six thousand development officers  and  nothing  has  been  said  about  the  average commission earned  by them  or the  commission earned by the present petitioner himself.      The nature  of the duties of ’development officers’ are to be  gathered from the letter of appointment issued to the petitioner. We have set out below some of the more important terms of employment:-      "3.  Whole-Time Employment           You shall devote your full time and energy to      a organise  the Life  Insurance  business  of  the      Corporation.           You shall  not be  a member  of any political      organisation and stand for election as a candidate      to any  of the Elective Bodies such as Panchayats,      Municipalities, District  Local Boards, University      Senate  or   other  similar   bodies,  Legislative      Assemblies or Parliament or as a 806      Director of  any of  the Joint  Stock Companies or      Banking Institutions  (including Corporative Banks      except  Corporation’s  Staff  Co-operative  Credit      Societies).      4. Headquarters & Area:           Your Headquarters  will be  at Jullunder City      and the  area  in  which  you  will  confine  your      operations is stated hereinbelow:-           Jullunder City,  Cantt &  Thana Sadar on non-      exclusive basis:           The Corporation  may in  its sole  discretion      curtail or  enlarge the area of your operations or      may appoint  one or  more other  Field officers in      the area allotted to you.      5. Transfer;           You will  be liable  to  transferred  to  any      place in India. From the date of your transfer you      will not  receive credit of the business canvassed      by agents  introduced by you or allotted to you as      mentioned hereinafter.  Subject to such conditions      as may  be stipulated  you will  receive credit of      business convassed  by the aforesaid agents before      the date of your transfer.      6. Duties & obligations:           Your  duties   are  mainly  to  organise  and      develop the  business of  the Corporation  in  the      area allotted  to you,  and for  that  purpose  to      recruit active  and  reliable  agents  drawn  from      different communities  and walks  of life  on such      terms as may be stipulated by the Corporation from      time to  time and to train them up both canvassing      new business  and  for  rendering  such  post-sale      services as  the policy-holders may be in need of.      In addition  to this,  the existing agents who may      be  allotted  to  you  hereafter  should  be  well

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    enthused and  assisted by  you. You will, whenever      called upon to do so, assist the Branch Manager or      the Assistant  Branch Manager in the investigation      of claims.           We   are    enclosing   herewith   for   your      information and study a draft letter which will be      issued by the Corpora- 807      tion to new agents who may be selected by you. You      should also  study the  leaflet entitled "Hints to      Agents" referred  to therein,  a copy  of which is      also enclosed herewith. The Corporation has issued      a Manual for Agents and you should make it a point      to study the Manual carefully.           After an  agent has  continuously worked  for      the Corporation  for a  period of S years and over      and the Branch Manager feels he is no more in need      of the  services of  a Field  officer  he  may  be      treated as  a Direct  Agent even  if he  has  been      recruited and trained by you.      7. Tours:           If  you   are  required  by  your  Branch  to      undertake tours,  you should chalk out a programme      of the  same and  get it  approved by  your Branch      Manager two months in advance. When you proceed on      tour, you  should adhere  to the tour programme as      far  as   possible,  and  if  any  change  becomes      necessary you should advise about it to the Branch      Manager, stating the reasons for the change in the      tour programme.           The main  object of  the tours  shall  be  to      procure New  Business  to  activise  the  existing      agents,  to   appoint  new   agents   where   such      appointments  are   necessary  and   to  tap   the      potentiality of  the area.  You will  also contact      the policy-holders who have allowed their policies      to lapse and help them to revive their policies.           You should  see that  the average cost of the      tour does  not work  out to  more than  Rs. 2  per      thousand sum assured of completed business.           The travelling  expenses will  be paid to you      in accordance  with the  Rules of  the Corporation      framed from  to time governing the payment of such      allowances. You  will  be  intimated  the  current      rules in this behalf Separately.           Immediately  on  completion  of  a  tour  and      within a  period not exceeding three days you will      submit your 808           report, in  the prescribed  manner, with  the      relevant statements  and the  will of  expenses to      the Branch office.-      8. Advances Deposits:           In respect of business procured by you during      the tour  you should see that advance deposits, at      least equal  to full instalment of first premiums,      are collected  from the  proponents and  that  all      such amounts  are remitted  to the  Branch  office      immediately  by   M  o.,   or  if   there   is   a      Corporation’s collection  Account in the town with      any  Bank,   you  should   deposit   the   amounts      immediately to  the  credit  of  the  Corporation,      giving full  details to  the  Bank  regarding  the      manner in  which these amounts are to be credited.      If you  collect any  amount as deposit towards the

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    first premium  you should  always  issue  receipts      there  for  in  prescribed  form  to  the  parties      concerned. If you permit any of your agents either      requited by  you or allotted to you to conduct the      medical examination  of a  proponent without first      realising  an   advance  deposit  and  if  such  a      proposal does  not result  in a policy the medical      fees unnecessarily  incurred will  be  debited  to      your account.      9. Record of Daily Work:           You are required to make daily entries in the      prescribed form which shall give a complete record      as well  as the  results of  your  daily  business      calls.  This  record  must  be  presented  to  the      Assistant Branch  Manager (Administration)  or the      Branch Manager  or to the Assistant Branch Manager      (Development) for  inspection at least once a week      or at  more frequent  intervals, if called upon to      do so.           When you  are  on  tour  you  will  make  the      entries in  the Daily Record and on your return to      the headquarters  you will  submit such record for      inspection as stated above.           If your  headquarters are not the same as the      Branch office  headquarters, you  will submit  the      Daily Records 809      in such  manner as  you may  be asked  to  by  the      Branch Manager.           You are  also requested  to fill in your Plan      Book in  consultation with  your Branch Manager or      Assistant Branch  Manager  (Development)  and  see      that the  targets of  work you  set  for  yourself      therein are reached.      10. Collection of Premiums:           Unless you  are expressly  authorised by  the      Corporation, you  have  no  authority  to  collect      premiums  save  the  deposits  towards  the  first      premium as stated hereinabove.      11. Targets:           You are  required as  outlined in  your  Plan           Book:           (a)   to secure  through agents  recruited by                you and  allotted to  you a minimum life                business of  Rs. 5  lacs yielding  first                year’s schedule  premium income  of  not                less than  Rs. 30,000  through at  least                100 policies:           (b)  to recruit and train 25 new agents;           (c)   to supervise  and motivate  the  agents                allotted to  you if any and see that the                average output  of these agents allotted                to you  is increased  progressively from                year to year and,           (d)  to open 6 new centers for development.           We hope  you will  be able  to  exceed  these      targets as  your actual  categorisation to be made      after  the  expiry  of  probationary  period  will      depend upon  the fulfilment  of these  targets and      your record  of post-sales service rendered to the      Corporation’s policy  holders in the area allotted      to you.           On the  basis of the targets outlined in your      Plan Book  and your  achievements in  terms of new      business, the  recruitment and  training of agents

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    and motivating old 810      agents  to  increased  activity,  the  Corporation      reserves the  right to  review the results of your      efforts any time and to take such action as may be      called for in the circumstances.      12. General:           You have  no authority  to accept risks or to      bind the  Corporation in  any  way.  You  are  not      permitted to  advance premiums  on behalf  of  the      policy holders or to have policies assigned to you      or to  any member  of your  family  (i.  e.  wife,      parents and  children) by  policy holders  who are      not related  to you. You are strictly forbidden to      have any financial dealings with the agents of the      Corporation.           It is  understood that  your wife,  your son,      brother or  any close  relation of  yours  or  any      other member of your family living with you is not      eligible  for  appointment  as  an  agent  of  the      Corporation If  you operate  any benami  agency in      the name of any person or if you are found to pass      on any  business to  any of your agents and derive      any financial benefit for yourself from this, your      services will be liable to be terminated.           You are  not permitted  to work  directly  or      indirectly for  any Insurer  carrying  on  general      Insurance business  you are  also not permitted to      work  as   an  agent   for  the  National  Savings      organisation."      A perusal  of the  above extracted terms and conditions of appointment  shows that  a development officer is to be a whole time  employee of  the Life  Insurance Corporation  of India. that his operations are to be restricted to a defined area and  that he  is liable  to be  transferred. He  has no authority whatsoever  to bind the Corporation in anyway. His principal duty  appears to  be to  organise and  develop the business of  the Corporation in the area allotted to him and for that  purpose to  recruit active and reliable agents, to train them  to canvass  new business and to render post-sale services to  policy-holders. He  is expected  to assist  and inspire the  agents. Even  so he  has not  the authority  to appoint agents  or to take disciplinary action against them. He does  not even supervise the work of the agents though he is required to train them and assist them. He is to be the 811 ’friend, philosopher and guide’ of the agents working within his jurisdiction  and no  more. He  is expected to stimulate and  excite   tho  agents   to  work,  while  exercising  no administrative control  over them.  The agents  are not  his subordinates. In  fact,  it  is  admitted  that  he  has  no subordinate staff  working under  him. It is thus clear that the development officer cannot by any stretch of imagination be said  to be  engaged in  any administrative or managerial work. He  is a workman within the meaning of s. 2 (s) of the Industrial, Disputes Act.      The order  of the  Industrial Tribunal and the judgment of the  High Court  are set aside and the matter is remitted to the  Industrial Tribunal  for disposal  according to law. The Industrial  Tribunal may dispose of the reference within three months  from the  date of  receipt of  this order. The respondent workman is entitled to his costs. H.L,C.                                       Appeal allowed. 812

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