SBCW605/1996 SBCW4495/2003 SBCW1100/2005 // 1 // IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR ORDER IN 1. S.B. Civil Writ Petition No.605/1996 M/s Tarachem Laboratories Vs. The Presiding Officer, Labour Court, Jaipur and Shri S.K. Nagesh 2. S.B. Civil Writ Petition No.4495/2003 M/s Tarachem Laboratories Vs. The Presiding Officer, Labour Court, Jaipur and Shri S.K. Nagesh 3. S.B. Civil Writ Petition No.1100/2005 S.K. Nagesh Vs. Manager, Tarachem Laboratories and Others Date of Order ::: 05.10.2010 Present Hon'ble Mr. Justice Mohammad Rafiq Shri R.K. Kala with Shri Rupin Kala, Counsel for M/s Tarachem Laboratories Shri V.L. Mathur, Counsel for workman S.K. Nagesh #### //Reportable// By the Court:- Dispute involved in these three writ petitions is between common parties, namely, management of M/s Tarachem Laboratories, Jaipur and workman S.K. Nagesh and, therefore, they were all clubbed and heard together and are being decided by this common order. Genesis of dispute lies in the initiation of proceedings before Labour Court, Jaipur by Notification dated 28.02.1979 making thereby SBCW605/1996 SBCW4495/2003 SBCW1100/2005 // 2 // reference of an industrial dispute as to validity of removal of workman S.K. Nagesh. M/s Tarachem Laboratories (for short, 'the management') in Writ Petition No.605/1996 has challenged order of Labour Court, Jaipur, dated 13.08.1984 by which Shri S.K. Nagesh was held to be 'workman' within meaning of Section 2(s) of the Industrial Disputes Act, 1947 (for short, 'the ID Act'). Also under challenge in this writ petition is final award passed by Labour Court, Jaipur, dated 24.01.1995 declaring retrenchment of workman S.K. Nagesh to be illegal and holding him entitled to reinstatement with continuity of service, however, restricting payment of back wages to lump-sum amount of Rs.1.5 lac. Other two Writ Petitions are off-suit of the said award. Writ Petition No.4495/2003 was filed by the management challenging order dated 18.12.2001 passed by Prescribed Authority under Payment of Wages Act, 1936, Jaipur City, Jaipur, directing payment of consequential benefits to workman S.K. Nagesh. Writ Petition No.1100/2005 has been filed by workman S.K. Nagesh challenging order dated 04.03.2004 passed by Additional Civil Judge (Junior Division) No.8, Jaipur City, Jaipur, rejecting thereby his application seeking issuance of warrant of attachment and recovery of fine and, subsequent order dated 19.06.2004 of Judge, Special Court, (Fake Currency Note Cases) Jaipur City, Jaipur, dismissing revision petition filed there- SBCW605/1996 SBCW4495/2003 SBCW1100/2005 // 3 // against. Since order passed by Payment of Wages Authority, which is under challenge in writ petition No.4495/2003, sought to implement award of Labour Court and when operation and implementation of award was stayed in first and second writ petitions, application of workman for issuing warrant of attachment and imposition of fine was rejected, therefore decision in first of these writ petitions on merits would obviate necessity of dealing with other two writ petitions on merits. Shri S.K. Nagesh was appointed as a chemist with establishment of management on 06.08.1972. On request of management, Drug Controller of State Government, vide order dated 17.05.1973, approved his name as manufacturing chemist competent to supervise manufacturing of pharmaceutical products. Management however suddenly terminated his services by order dated 23.05.1977 making it effective from 22.05.1977. An industrial dispute was thereafter raised at the instance of workman, which was later on referred by appropriate Government for adjudication to Labour Court, vide notification dated 28.02.1979. Management raised objection about maintainability of proceedings before Labour Court asserting that S.K. Nagesh, being chief chemist, was not a workman in the meaning of Section 2(s) of the ID Act. Labour Court decided this as preliminary issue and, by impugned order dated 13.08.1984, held that S.K. Nagesh was a workman. SBCW605/1996 SBCW4495/2003 SBCW1100/2005 // 4 // Management filed writ petition against said order before this Court. A Division Bench of this Court, while deciding Writ Petition No.987/1985, observed that correctness of findings of Labour Court that S.K. Nagesh is workman, can be questioned by the management while challenging final award, if eventually passed against it. It was observed that decision in said writ petition would not create any bar for management to raise this issue subsequently. Labour Court, after evidence was adduced by both parties and arguments were made, ultimately passed award dated 24.01.1995 declaring removal of workman as illegal in the terms indicated above. Shri R.K. Kala, learned counsel for the management, has argued that main function of Shri S.K. Nagesh was to discharge his duties as per rules framed under the Drugs and Cosmetics Act, 1940, viz., to supervise manufacturing of pharmaceutical products. No factory product was allowed to go out without his permission. He was the only authorized chief chemist of factory and it was his duty to issue gate passes. He being a qualified chemist was approved as such by Drug Controller because manufacturing license was granted and renewed to authorized chemist on that basis inasmuch as his name was indicated in the license itself issued by Drug Controller. He was empowered to act as production manager, whose work SBCW605/1996 SBCW4495/2003 SBCW1100/2005 // 5 // was almost administrative and supervisory in nature. He never did any manual, skilled or clerical work. In fact, he was overall in-charge of manufacturing unit of the management. No other employee with the management was senior or superior to him in the sphere of his duties, rather they were all working under his control and supervision. It was he who used to prescribe various drug components for manufacturing of parental medicines according to standardization approved by Drug Controller. If any manufactured item was found substandard, he could, at his own level, get the same destroyed without permission of the management. It was he who used to get the analytical report from approved laboratories and thereafter sent the products to various customers. In fact, he was negligent in discharge of his duties and allowed defective and substandard products to go out of factory. Management received number of complaints from customers regarding vitamin-B complex injunction leading to losses of Rs.65,000/- to the management. Since S.K. Nagesh was not workman within meaning of Section 2(s) of the ID Act, the management decided to remove him from service by a simple order and therefore his services were terminated by order dated 22.05.1977. Shri R.K. Kala, learned counsel for management, further argued that termination of S.K. Nagesh did not attach any stigma and, since he was SBCW605/1996 SBCW4495/2003 SBCW1100/2005 // 6 // not a workman, compliance of Section 25-F of the ID Act was not necessary. Learned Labour Court has erred in law in holding that S.K. Nagesh was a workman. It has not correctly evaluated the evidence produced on behalf of management. As per affidavits and statements of management witnesses, S.K. Nagesh was the only approved chemist. Another Assistant Chemist working under him was not approved. Shri S.K. Nagesh was also empowered to act as production manager whose work was administrative and supervisory in nature. He never did any manual, skilled, unskilled, technical or clerical work. It was he who used to issue gate pass for allowing exit of manufactured drugs out of factory. Learned counsel also referred to affidavit/statement of another witness Bhanwar Lal, an employee of the management, who stated that S.K. Nagesh never did any manual, clerical or technical work. He did not himself make any components for making medicines but was rather helped by assistant chemist. He was getting highest monthly salary of Rs.1400/- from management. Shri S.K. Nagesh was supervisor under whom this witness was working. Shri S.K. Nagesh used to sit in the office and the entire manufacturing was actually being got done by active involvement of assistant chemist and other employees, and there were thirty employees working under his supervision. Whenever such employees wanted to go on leave, leave would be sanctioned by SBCW605/1996 SBCW4495/2003 SBCW1100/2005 // 7 // Shri S.K. Nagesh. Learned counsel further referred to affidavit/statement of another witness B.N. Agarwal, an employee of the management, who stated that S.K. Nagesh never did any manual, clerical or technical work. The partner of the firm had no office in the factory premise and it was Shri S.K. Nagesh who effectively worked as their manager. Learned counsel also relied on the statement of Shri Ashwini Kumar, the assistant Drug Controller, who stated that Shri S.K. Nagesh was competent person, approved and authorized by Drug Controller to supervise manufacturing of medicines. It was further argued by Shri R.K. Kala that even the workman himself admitted his signatures on number of documents, which proved that his duties were supervisory in nature and he was the only in-charge of entire factory. In this connection, reference was made to number of complaints with regard to substandard drugs which were manufactured under supervision of Shri S.K. Nagesh. Shri Ramesh J. Dadhia, partner of the firm, stated that workman admitted his guilt. In fact Shri S.K. Nagesh himself prepared a draft letter to be sent to various customers as to why particular drugs got decomposed. It was also argued that the workman was later gainfully employed because he joined services of M/s. Elfos Laboratories during the period 14.12.1977 to 15.01.1979 and thereafter he himself started manufacturing of drugs and got SBCW605/1996 SBCW4495/2003 SBCW1100/2005 // 8 // license on 07.05.1980 in the name of Bright Laboratories, Amer, which continued up-to 1993. It was further argued that his duties were not to merely supervise production but also to take active part in the process of manufacturing of drugs. Shri R.K. Kala, learned counsel then argued that Shri S.K. Nagesh, was 50 years old when writ petition was filed in the year 1996, and by now he has already attained the age of 65 years; there can be now no question of his reinstatement, particularly when factory of the management has been closed down on 31.01.1997. Shri R.K. Kala, learned counsel for management, relied on judgment of Supreme Court in S.K. Maini Vs. M/s Carona Sahu Company Limited and Others – (1994) 3 SCC 510, wherein a shop manager was held to be not a workman. He also relied on Division Bench judgment of Bombay High Court in Somnath Tulshiram Galande Vs. Presiding Officer, 2 nd Labour Court, Pune and Others – 2008 (117) FLR 149, wherein it was held that a Quality Assurance In-charge, having supervisory and managerial duties, is not a workman. Reliance was also placed on judgment of Supreme Court in Workmen of the Indian Leave Tobacco Development Co., Ltd., Guntur v. The Management of Indian Leaf Tobacco Development Co. Ltd., Guntur – AIR 1970 SC 860, to argue that when an establishment has been closed down and closure is real and genuine, workman in SBCW605/1996 SBCW4495/2003 SBCW1100/2005 // 9 // that event would not be entitled to reinstatement. For same proposition of law, reliance was placed on recent Supreme Court judgment in District Red Cross Society v. Babita Arora and Others – (2007) 7 SCC 366. Reliance has also been placed on Supreme Court judgment in Principal, Ayurvedic College and Others v. Sushil Chandra Misra and Another – 2006 (8) SLR 727, wherein it was held that when workman has reached age of retirement, court cannot order his reinstatement. To the same effect, he also cited judgment of Division Bench of this Court in Union of India and Another Vs. Asraf Ali and Another – 2004 WLC (Raj.) UC 248 and earlier judgment of Single Bench of this Court in M/s Mewar Textiles Mills Limited v. I.T., Rajasthan, Jaipur & Others – 1985 RLR 171. It was, therefore, argued that writ petitions No.605/1996 and 4495/2003 filed by the management be allowed and writ petition No.1100/2005 filed by Shri S.K. Nagesh, chemist, may be dismissed. Per contra, Shri V.L. Mathur, learned counsel appearing for workman S.K. Nagesh, argued that Labour Court was perfectly justified in holding him to be a workman in the meaning of Section 2(s) of the ID Act. It was argued that evidence produced by management as also workman, has to be read in its entirety and, if it is so read, it would be clearly evident that duties of SBCW605/1996 SBCW4495/2003 SBCW1100/2005 // 10 // Shri S.K. Nagesh were neither supervisory nor managerial in nature. Learned counsel referred to affidavit of S.K. Nagesh in this behalf. It was argued that S.K. Nagesh was required to perform all skilled, technical and clerical work and had to manufacture and supervise manufacturing process of drug. Apart from supervisory work, he used to perform duties of actual weighing and measuring of components, preparing injunction solutions and measuring or weighing filled injunctions from each machine after every 30 minutes and recording time and measured quantity and sending samples to laboratories to test reaction. In fact, workman had prepared all manufacturing records and entered all details in such record and signed. It was denied that he used to allot duties to other employees engaged in manufacturing activities. Appointment of this workman was made as manufacturing chemist and not as chief chemist, which has been sought to be conveyed by management before labour court. Learned counsel, in this connection, referred to Annexure- 16, letter dated 12.05.1973 sent to the management by Drug Controller describing Shri S.K. Nagesh as manufacturing chemist. Reference was made to the failure report sent by Analytical Officer in which reference was made to letter of the management dated 26.05.1977 describing Shri S.K. Nagesh as manufacturing chemist. It was argued that action of SBCW605/1996 SBCW4495/2003 SBCW1100/2005 // 11 // the management in terminating services of workman was punitive in nature inasmuch as they have been throughout maintaining that workman was removed on the charge of negligence leading to losses to the management; services of the workman could not be terminated without holding regular domestic enquiry and without making compliance of Section 25-F of the ID Act. His termination was, therefore, void ab-initio. Nomenclature of the post held by workman has been deliberately changed by twisting the facts and he has wrongly been described as chief chemist, whereas he was actually appointed as manufacturing chemist. It is denied that the workman was gainfully employed. In fact he worked on honorarium basis only from 14.12.1978 to 15.01.1979 with M/s. Elfos Laboratories. Although, it is correct that he got license for manufacturing medicines from 07.05.1980 and applied for loan from Rajasthan Finance Corporation. He, however, suffered heavy losses and therefore closed down factory. Rajasthan Finance Corporation had initiated proceedings against him for recovery of one lac forty thousand rupees. Labour Court, taking into consideration all these facts, had restricted claim of the back wages only up to Rs.1.5 lac. Learned counsel referred to cross-examination of witness Shankar Lal to argue that this witness admitted that he was metric fail and that he hardly knew english language. He signed on affidavit prepared by Advocate. He neither saw SBCW605/1996 SBCW4495/2003 SBCW1100/2005 // 12 // appointment order of Shri S.K. Nagesh nor described him as production in-charge. Components of various drugs used to be made by Shri S.K. Nagesh. Shri V.L. Mathur, learned counsel for workman has relied on judgment of Supreme Court in Andhra Scientific Company Limited Vs. Seshagiri Rao (A.) and Another – AIR 1950 SC 572, to argue that question as to what functions were actually being performed by employees is based on facts and when Labour Court has, on consideration of adduced evidence, come to a conclusion as regards these functions and on the basis thereof hold that employee comes within definition of 'workman', the High Court would not interfere under Article 226 of the Constitution except in cases where there is clear error on the face of the record. Reliance was also placed on judgment of Supreme Court in Burmah Shell Oil Storage and Distribution Company of India Limited Vs. Burmah Shell Management Staff Association – 1970 (3) SCC 378, wherein it was held that to mean a workman in Section 2(s) of the Act, he must be employed to do skilled or unskilled manual work, supervisory work, technical work or clerical work; therein the Supreme Court held a chemist to be a workman. Learned counsel also relied on judgment of Supreme Court in Harjinder Singh Vs. Punjab State Warehousing Corporation – 2010 CDR 401 (SC), wherein parameters for exercising jurisdiction SBCW605/1996 SBCW4495/2003 SBCW1100/2005 // 13 // under Article 226 and/or 227 of the Constitution while considering challenge to an award of Labour Court were laid down. It is therefore prayed that writ petitions of management may be dismissed and writ petition of S.K. Nagesh may be allowed. I have given my anxious consideration to rival submissions and perused the material on record. Question whether Shri S.K. Nagesh was workman within meaning of Section 2(s) of the ID Act would have to be decided on the basis of evidence adduced before labour court. However, it is not quantity of evidence or multiplication of number of witnesses that would determine this issue but what is of significance is quality of evidence. Apart from oral evidence, documentary evidence shall also have to be given due credence. Surprisingly, management has not produced on record copy of appointment order of Shri S.K. Nagesh. Although, in Para 1 of statement of claim workman has asserted that he was appointed as chemist on 06.08.1972 and this plea has not been denied by the management in its reply to the statement of claim. In additional pleas, however, management has referred Shri S.K. Nagesh as a chemist but subsequently word “chief” in Hindi has been prefixed by handwriting and it has been stated that said workman also used to discharge administrative duties and that he was not required to do manual, SBCW605/1996 SBCW4495/2003 SBCW1100/2005 // 14 // skilled, unskilled, supervisory, technical or clerical work. Word 'no' (in Hindi 'nahi”) also appears to have been added subsequently by overwriting. Even if much significance is not attached to this hand written addition, the most important document i.e. letter of Drug Controller for Rajasthan dated 12.03.1973 whereby name of Shri S.K. Nagesh was approved as competent person to supervise manufacturing of parental preparation, describing him as manufacturing chemist cannot be overlooked. Shri Ashwini Kumar, Assistant Drug Controller, in his affidavit produced before Labour Court, stated that every pharmaceutical industry has to have a qualified chemist for obtaining manufacturing license and that Shri S.K. Nagesh was its chemist in-charge and competent person to supervise manufacturing process responsible for quality of the durg. This witness in answer to a query put in cross-examination whether such competent person should be a full time employee, answered in affirmative. When a further query was made whether every batch of medicine was subjected to test, his answer was that it was responsibility of manufacturing chemist and he has to send the drug to laboratories for analytical test. Reading of cross-examination of this witness clearly shows that Shri S.K. Nagesh was throughout referred to as manufacturing chemist. Even in the termination SBCW605/1996 SBCW4495/2003 SBCW1100/2005 // 15 // letter, his designation was mentioned as manufacturing chemist, which fact has been admitted by partner of the management firm Shri R.K. Patni too, in his cross-examination. Coming now to evidence of management, I find that Shri R.K. Patni, one of the partners of firm, has throughout in his affidavit referred Shri S.K. Nagesh as chief chemist and has maintained that entire manufacturing process of drugs used to take place under his supervision; apart from that, he was empowered to act as a production manager whose work was almost administrative and supervisory in nature. He never did skilled, unskilled, technical or clerical work. In fact, he was overall in-charge of factory and supposed to assign duties to employees and to take work from them. Shankar Lal, another employee of management, has made a similar statement but in cross- examination he stated that he knew little english and that he had made a statement in Hindi and affidavit on that basis was prepared in english language by Advocate of the management. He stated that components of various drugs, which were costly, were measured and weighed by Shri S.K. Nagesh. However, when he was confronted with Register exhibit M-4 and entries made therein, he feigned ignorance whether this register was maintained in handwriting of Shri S.K. Nagesh. Shri Ramesh J. Dadhia, another partner of the SBCW605/1996 SBCW4495/2003 SBCW1100/2005 // 16 // management, has described Shri S.K. Nagesh as chief chemist responsible for maintaining quality of drugs. Shri B.N. Agarwal, Liaison Officer of management firm, in his statement, stated about substandard drugs supplied by S.K. Nagesh to various government departments. Apart from this, Shri S.K. Nagesh, in his own affidavit, stated that the drugs got decomposed because management was not maintaining proper refrigeration standards. In his cross-examination, he has denied that he was responsible for issuing gate pass for exit of drugs, yet stated that he used to issue gate pass as per instructions of his employer. He was also doing clerical work like making entries in register etc., and used to send samples of drugs for analytical test. In his affidavit, he has stated that manufacturing of drugs used to be manually done by him and he used to make various components of drugs in his own hands and used to store them in different bottles/tubes for the purpose of testing. He has denied that he used to assign duties to other employees of management. In fact, this being a technical work, he needed their assistance but he never supervised their working. When this witness was subjected to cross-examination, he even stated that due to his continuous involvement in manufacturing of drugs by manually doing the works, his body was adversely affected by chemical effects SBCW605/1996 SBCW4495/2003 SBCW1100/2005 // 17 // which occurred because he came in contact with various ultra-violate rays and antibiotic drugs for which he had to take prolonged treatment. Reference was made by witness S.K. Nagesh to written orders issued by management asking him to make more production of Ovalgin and Oxytetracycline injunctions. In fact, he also requested the management for increase of his salary by application dated 18.04.1977 stating therein that apart from work of manufacturing chemist, he was also doing various other clerical and manual works. Labour Court, on the basis of evidence adduced by both the parties, by its order dated 13.08.1984, held Shri S.K. Nagesh as workman within meaning of Section 2(s) of the ID Act. Labour Court has given reasons for its this view and findings recorded by it are supported by evidence on record. Although, all witnesses of the management have described Shri S.K. Nagesh as chief chemist but it would not make any difference because initially he was appointed as manufacturing chemist, which clearly denotes active involvement in the work of manufacturing. Assertion that he was merely supervising manufacturing process of drugs cannot be accepted in the light of evidence that has come on record, which indicates that Shri S.K. Nagesh was not merely supervising manufacturing of drugs but was himself involved in manufacturing work and while doing so, he was also provided assistance of SBCW605/1996 SBCW4495/2003 SBCW1100/2005 // 18 // other staff. Nature of evidence on record does not show that other employees of management were manufacturing drugs and S.K. Nagesh used to only orally give them instructions as to quantity of various components and formula of manufacturing without his actual involvement. Manufacturing of such drugs was not possible without the help of supporting staff and even as per management, he had certain other staff to assist him. Shri S.K. Nagesh himself admitted that there were other staff members, who used to assist him. In this process, though some element of supervision was involved, but then predominant nature of work discharged by Shri S.K. Nagesh was not entirely supervisory or administrative in nature, which is the determinative factor to hold whether or not he was workman. In National Engineering Industries Private Limited (supra) it was held by Supreme Court that when an employee was working as internal auditor and his duties were mainly reporting and checking up on behalf of the management but he had no independent right or authority to take decision and his decision did