IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No.14035 of 2007 M/S MERCK LIMITED, Dr. Annie Besant Road, Worli, P.S. Worli, Mumbai- 400018 through its Director, R.L.Shenoy S/o R.Achutha Shenoy-petitioner Versus 1.THE STATE OF BIHAR, through the Secretary, Labour Resources Department, Government of Bihar, New Secretariat Building, Vikas Bhawan, Bailey Road Patna 2.The Presiding Officer, Labour Court, Patna, Labour Department, Bailey Road, Patna 3.Sri Nalin Sinha, represented by General Secretary E.Merck Field Staff Union, B-23 sector-33, Noida, U.P. 201307---------------------------respondents ----------- For the petitioner :M/S Alok Kumar Sinha Manish Kumar For respondent no.3 :M/S D.N.Pandey Ajay Kumar Sinha For the State :Mr.Nirmal Kumar Sinha ---- 7. 16.9.2009 The petitioner-Company has come to this Court for quashing/setting aside the award dated 31.7.2007 (Annexure-1) passed in Reference Case No. 5 of 2006 by the Presiding Officer, Labour Court, Patna by which he has held the order of transfer dated 21.1.2005 with respect to respondent no.3 Sri Nalin Sinha from Patna to Hissar Head Quarter w.e.f. 1.2.2005 to be perverse and not sustainable in the eye of law and directed the petitioner to allow him to join at his previous place, i.e., Patna with full back wages and other consequential benefits. Shorn of unnecessary details the facts of this case are that respondent no.3 was appointed as Medical Representative by appointment letter dated 24.6.1986 (Annexure-2) w.e.f. 1.4.1986. The 2 detailed terms and conditions of his service were enumerated in the said appointment letter. In paragraph-15 of the same it was provided that it is a condition of his appointment that his services can be utilized at any place in India as the Company may decide from time to time and further that he may be required to render service to the Company‟s sister concerns or associates as and when required. In token of acceptance of the terms and conditions the respondent no.3 signed on a copy of the appointment letter on 14.7.1986. The respondent no.3 after his appointment joined at Patna Head Quarters; thereafter he was transferred from Patna to Samastipur w.e.f. 1.1.1988 and by letter dated 19.12.1995 he was again transferred from Samastipur Head Quarters to Patna Head Quarters at his request w.e.f. 1.1.1996. By letter dated 21.1.2005 (Annexure-4) the respondent no.3 was transferred from Patna to Hissar in the State of Haryana w.e.f. 1.2.2005. Immediately on receipt of the said letter the said respondent by his letter dated 23.1.2005 (Annexure-5) wrote to the Company stating that he was holding the post of Treasurer of State Union of Medical Representative, namely, Bihar Pradesh Sales Representatives Union (in short BPSRU) and was holding the post of Vice-President of E.Merck Field Staff Union (in short EMFSU) and the said transfer would affect his basic Trade Union rights and will 3 also disturb the entire family set up and will disrupt the education of his child who is studying at Patna and for the said reasons he requested for withdrawal of the said transfer order immediately. On 29.1.2005 a dispute was raised by EMFSU vide statement of demand dated 29.1.2005 alleging that the order of transfer was malafide with a motive to break the Union and hamper the legitimate Trade Union functions of respondent no.3 by the Management Company and was thus a colorable exercise so as to punish the respondent no.3 for his lawful trade union activities and requested to withdraw the transfer order with a copy to Deputy Labour Officer-cum-Conciliation Officer, Patna. Thereafter the Assistant Labour Commissioner-cum- Conciliation Officer initiated a conciliation proceeding which ended in failure and ultimately the State Government by Notification dated 22.4.2006 (Annexure-9) referred the dispute under Section 10 of the Industrial Disputes Act to the Labour Court, Patna (which was registered as Reference Case No. 5 of 2006) in the following terms : “Whether transfer to Hisar (Haryana) from Patna of Sri Nalin Sinha, M.R. by Director, Merck Ltd., Dr.Annie Besant Road, Worli, Mumbai is justified ? if not, what relief workman is entitled to ?.” 4 After hearing the parties the Presiding Officer, Labour Court, Patna by his impugned award dated 31.7.2007 held that the transfer order is perverse and not sustainable in the eye of law and further directed the Management to allow the employee to join the previous place with full back wages and other consequential benefits. On the basis of the respective cases of the parties the Labour Court framed essentially three questions for determination, namely, (i)Whether this is Industrial Dispute or individual dispute? (ii)Whether case is tanable under the S.P.E. Act? (iii) Whether the transfer order is malafide in nature? On all three points he has held against the Management-petitioner and in favour of the employee. Learned counsel for the petitioner assails the award with respect to findings on all the three issues. It is submitted by learned counsel that the specific objection of the petitioner was that on the date of Reference, i.e., 22.4.2006 the individual dispute of respondent no.3 was not supported by a substantial number of employees and therefore the Reference was bad and not maintainable. It is submitted that even earlier the letter dated 29.1.2005 raising the dispute purportedly on behalf of the EMFSU was signed only by one Anish Kumar as a Member of the Executive 5 Committee and not by either the President or Secretary of the Union and that too without attaching any Resolution of the Union along with the statement of demand. It is submitted that even the written statement was not filed by the Union but by respondent no.3 signing and preparing the same in his personal capacity and not as office bearer of the Union. It is submitted that a dispute relating to transfer can only be an industrial dispute if the same is espoused by the Trade Union supported by a substantial number of employees and in the absence of the same it can only be held to be an individual dispute and the Reference itself would not be maintainable. It is further argued by learned counsel that despite the specific stand of the Management in this regard the same has not been demolished by any evidence on behalf of the employee and the conclusion of the Labour Court that no Management witness has come forward in support of this point and therefore the same has to be decided against the Management is perverse. In support of the aforesaid proposition learned counsel relies upon several decisions; firstly, the Supreme Court decision in the case of Ram Prasad Vishwakarma vs. Chairman,Industrial Tribunal,Patna and others :AIR 1961 SC 857, in paragraph-6 of which it has been held as follows : 6 “6. It is now well settled that a dispute between an individual workman and an employer cannot be an industrial dispute as defined in section 2(k) of the Industrial Disputes Act unless it is taken up by a Union of the workmen or by a considerable number of workmen. In Central Provinces Transport Service Ltd. V. Raghunath Gopal, 1956 SCR 956 AIR 1957 SC 104), Mr.Justice Venkatarama Ayyar speaking for the Court pointed out after considering numerous decisions in this matter that the preponderance of judicial opinion was clearly in favour of the view that a dispute between an employer and a single employee cannot per se be an industrial dispute but it may become one if it is taken up by an Union or a number of workmen. “Notwithstanding that the language of Sec.2(k) is wide enough to cover disputes between an employer and a single employee”, observed the learned Judge, “the scheme of the Industrial Disputes Act does appear to contemplate that the machinery provided therein should be set in motion to settle only disputes which involve the rights of workmen as a class and that a dispute touching the individual rights of a workman was not intended to be the subject of adjudication under the Act, when the same had not been taken up by the Union or a number of workmen”. Learned counsel also relies upon a decision of the Apex Court in the case of the Bombay Union of Journalists and others vs. The „Hindu‟, Bombay and another : AIR 1963 SC 318, in paragraph-15 of which it has been held as follows : “15.------In each case in ascertaining whether an individual dispute has acquired the character of an industrial dispute the test is whether at the date of the reference the dispute was taken up as supported by the Union of the workmen of the employer against whom the dispute is raised by an 7 individual workman or by an appreciable number of workmen. If Venkateshwaran or Tiwari had prior to the date of the reference supported the cause of Salivateeswaran, by their subsequent affidavits the reference could not have been invalidated. But as we have already observed there was, in fact, no support to the cause of Salivateeswarn by Venkateshwaran or by Tiwari and therefore the dispute continued to remain an individual dispute.” He also relies upon a decision of a learned Single Judge of Madras High Court in the Nellai Coton Mills, Tirunelveli vs. Labour Court, Madurai and another :1965(1) Labour Law Journal 95 in which the similar proposition has been laid down. Learned counsel also relies upon the deposition of respondent no.3 in which he has admitted that the President and the General Secretary of the EMFSU are working actively from 2004 till that date. He thus submits that the onus lies on the workman to satisfy the court that his case has been espoused by a substantial number of employees on the day of the reference and not on the Management and the finding of the Labour Court to the contrary is perverse. Learned counsel for respondent no.3, on the other hand, submits that the letter dated 29.1.2005 having been issued by the Executive Committee Member was itself sufficient to show that the dispute has been raised by the Union. He submits that even the Management witness No.1 has admitted 8 in his deposition that the dispute before Conciliation Officer was raised by the Union. He also submits that the Labour Court has taken note of the fact that the letter dated 14.10.2005 had been filed by the Union authorizing the respondent no.3 to conduct the case. It is thus submitted by learned counsel that the award of the Labour Court on this point is based on the materials on record showing that the dispute of the respondent no.3 has been espoused by the Union which is admitted by the Management witness to be the recognized Union of employees and since the order is based upon some material it is not open to this Court in exercise of its power of judicial review under Article 226 of the Constitution to look into the sufficiency of the materials on which the findings are based. In support of the said proposition learned counsel for the respondent relies upon the decision of the Supreme Court in the case of J.H.Jadhav vs. M/s. Forbes Gokak Ltd. : AIR 2005 SC 998, in paragraph-8 of which it has been held as follows : “8. The Division Bench misapplied the principles of judicial review under Article 226 in interfering with the decision. It was not a question of there being no evidence of espousal before the Industrial Tribunal. There was evidence which was considered by the Tribunal in coming to the conclusion that the appellant‟s cause had been espoused by the Union. The High Court should not have upset this finding without holding 9 that the conclusion was irrational or perverse. The conclusion reached by the High Court is therefore unsustainable.” On a consideration of the aforesaid submissions this Court finds that there is admission by the Management witness that the EMFSU is the recognized Union of workmen in the Company and in fact it is the only Union functioning in the said organization and it is that Union which has raised the dispute before the Conciliation Officer. Once it is admitted that the EMFSU is the recognized Union and the dispute has been raised by the recognized Union there is no requirement under the law to further show that the same is supported by a substantial number of employees. It is clear from the decision of the Apex Court on this point that only when a dispute is not supported by the recognized Union then it must be shown to have been supported by a substantial number of employees. In the present matter there is evidence for coming to the conclusion that the case of the respondent was supported by the Union. This Court, therefore, does not consider the said finding of the Labour Court to be either irrational or perverse and in view of the law laid down in J.H.Jadhav‟s case (supra) there can be no occasion to interfere with the award on this count. It is next urged by learned counsel for the petitioner that a Medical Representative is not 10 covered by the definition of workman under Section 2(s) of the Industrial Disputes Act and thus he cannot seek any redressal of his grievance under the Industrial Disputes Act and for the said reason the reference of the case to the Labour Court is invalid. It is contended that Section 6(2) of the Sales Promotion Employees (Conditions of Service) Act, 1976 applies the provisions of Industrial Disputes Act, 1947 for the purpose of any proceeding under that Act in relation to an industrial dispute only with respect to such a sales promotion employee who has been dismissed, discharged or retrenched and not in all matters. In support of the said proposition learned counsel relies upon the following observations of a Constitution Bench of the Supreme Court in the case of H.R.Adyanthaya vs. Sandoz(India) Ltd.: AIR 1994 SC 2608, in paragraph-6 of the said judgment :- “6.--------It was contended by Shri Sharma, appearing for the workmen that the definition of workman under the ID Act includes all employees except those covered by the four exceptions to the said definition. His second contention was that in any case, the medical representatives perform duties of skilled and technical nature and, therefore, they are workmen within the meaning of the said definition. We are afraid that both these contentions are untenable in the light of the position of law discussed above. The first contention was expressly negatived by two three-Judge Benches in May & Baker (AIR 1967 SC 678) and Burmah Shell (AIR 11 1971 SC 922) cases (supra) as has been pointed out in detail above. As regards the second contention, it really consists of two sub-contentions, viz., that the medical representatives are engaged in “skilled” and “technical” work. As regards the work “skilled”, we are of the view that the connotation of the said word in the context in which it is used, will not include the work of a sales promotion employee such as the medical representative in the present case. That word has to be construed ejusdem generis and thus construed, would mean skilled work whether manual or non-manual, which is of a genre of the other types of work mentioned in the definition. The work of promotion of sales of the product or services of the establishment is distinct from and independent of the types of work covered by the said definition. Hence the contention that the medical representatives were employed to do skilled work within the meaning of the said definition, has to be rejected. As regards the “technical” nature of their work, it has been expressly rejected by this Court in Burmah Shell case (supra). Hence that contention has also to be rejected.” Learned counsel also relies upon a decision of a learned Single Judge of Jharkhand High Court in the case of M/s. Indian Drugs and Pharmaceuticals Ltd. Vs. State of Jharkhand and another : 2004 LAB. I.C. 2651, in paragraph-16 of which it has been held as follows : “16. Taking into consideration all these facts and the discussions made hereinabove, I am of the opinion that the Labour Court has not correctly decided the issue and erroneously held that the concerned respondent who is admittedly a Medical Representative mainly engaged for promotion of sales 12 business, is a workman. Consequently, therefore, the entire proceeding in the reference case and the award are vitiated in law.” Learned counsel for the respondent, on the other hand, submits that in view of the clear provisions of Section 6(2) of the Sales Promotion Employees (Conditions of Service) Act the reference was clearly maintainable before the Labour Court under the Indistrial Disputes Act and the issue as to whether sales promotion employee was a workman is wholly irrelevant in the context of the Parliamentary enactment extending the benefit of the provisions of the Industrial Disputes Act to such employee. It is also contended that the benefit applies to all such sales promotion employees and not only merely to those who have been dismissed, discharged or retrenched. On a consideration of the rival submissions on this point this Court does not find any substance in the submission of learned counsel for the petitioner. It is true that in the case of May & Baker (India) Ltd. Vs. Their Workmen :AIR 1967 SC 78, the Apex Court has held that a medical representative/sales promotion employee was not a workman within the definition of the Industrial Disputes Act. It was on account of the said decision and subsequent decisions to the same effect that Parliament enacted the Sales Promotion 13 Employees (Conditions of Service) Act, 1976 extending the benefits of the provisions of the Industrial Disputes Act, 1947 to the sales promotion employees by Section 6(2) of the Act. Initially a sales promotion employee had been defined to cover only such of those employees drawing wages including commission not exceeding 750/- rupees per mensem or drawing wages (including commission) or commission not exceeding 9000/- rupees in the aggregate in a year but excluding those who were employees in the managerial or administrative capacity. By the Amendment Act 48 of 1986 w.e.f. 6.5.1987 definition of sales promotion employee was amended without any limit of wages except in case of such an employee employed or engaged in supervisory capacity drawing wages exceeding 1600/- rupees per mensem. The relevant provisions of Section 2(d) and Section 6(2) of the Act are quoted hereinbelow : “2. Definitions.- In this Act, unless the context otherwise requires, -(d) “sales promotion employees” means any person by whatever name called (including an apprentice) employed or engaged in any establishment for hire or reward to do any work relating to promotion of sales or business, or both, but does not include any such person,- (i) who, being employed or engaged in a supervisory capacity, draws wages exceeding sixteen hundred rupees per mensem; or (ii) who is employed or engaged mainly in a managerial or administrative capacity. 14 Explanation.- For the purposes of this clause, the wages per mensem of a person shall be deemed to be the amount equal to thirty times his total wages (whether or not including, or comprising only of, commission) in respect of the continuous period of his service falling within the period of twelve months immediately preceding the date with reference to which the calculation is to be made, divided by the number of days comprising that period of service. 6. Application of certain Acts to sales promotion employees.-(2) The provisions of the Industrial Disputes Act, 1947 (14 of 1947), as in force for the time being, shall apply to, or in relation to, sales promotion employees as they apply to, or in relation to, workmen within the meaning of that Act and for the purposes of any proceeding under that Act in relation to an industrial dispute, a sales promotion employee shall be deemed to include a sales promotion employee who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute or whose dismissal, discharge or retrenchment had led to that dispute.” It is evident from the provisions of Section 6(2) of the Act that the provisions of the Industrial Disputes Act have been made applicable in relation to sales promotion employees in the same manner as they apply to workmen within the meaning of Industrial Disputes Act and it is further provided that for the purposes of a proceeding under the Act in relation to an industrial dispute a sales promotion employee shall be deemed to include such employee who has been dismissed, discharged or retrenched in connection with or as a consequence of that dispute or whose 15 dismissal, discharge or retrenchment had led to that dispute. It is thus evident that the provisions of the Industrial Disputes Act have been made applicable to the sales promotion employees while still in their service by deeming fixation which has been extended also to such a sales promotion employee who has been dismissed, discharged or retrenched in connection with or as a consequence of the industrial dispute for which the proceeding relates or where the industrial dispute arises out of such dismissal, discharge or retrenchment. The effect of the deeming fiction is to the extent of the entire provisions of the Industrial Disputes Act and it does not limit the same only to such sales promotion employees who have been dismissed, discharged or retrenched. The submission of learned counsel for the petitioner is contrary to and not at all borne out by Section 6(2) of the Act. In fact the same deeming fiction is to be found in the definition of workman under Section 2(s) of the Industrial Disputes Act for the same purpose so as to apply the definition not only to the existing workmen but also those who have been dismissed, discharged or retrenched. Since the first part of the provisions defines a workman as any person employed in any industry, in the same manner as Section 2(d) of the Sales Promotion Employees Act as a person employed or engaged in 16 any establishment engaged in pharmaceutical industry or in any notified industry, it is for the purpose of including dismissed, discharged or retrenched employees that the deeming fiction has been provided in both. The aforesaid proposition is also borne out by the decision of the Apex Court in H.R.Adyanthaya‟s case (supra), in the relevant part of paragraph-4 of which it has been held as follows : “4.------It will be noticed that under the SPE Act, the sales promotion employee was firstly, one who was engaged to do any work relating to promotion of sales or business or both, and secondly, only such of them who drew wages not exceeding Rs.750/- per mensem (excluding commission) or those who had drawn wages (including commission) or commission not exceeding Rs.9,000/- per annum whether they were doing supervisory work or not were included in the said definition. The only nature/type of work which was excluded from the said definition was that which was mainly in managerial or administrative capacity………………………… “In other words, on and from 6th March, 1976 the provisions of the ID Act became applicable to the medical representatives depending upon their wages up to 6th May, 1987 and without the limitation on their wages thereafter and upon the capacity in which they were employed or engaged.” The decision of the Jharkhand High Court in Indian Drugs and Pharmaceuticals Ltd. case (supra) does not appear to have correctly appreciated this aspect of the matter although the decision of the 17 Apex Court in H.R.Adyanthaya‟s case (supra) has been considered therein. In any case the said decision has only persuasive value and is not binding on this Court and with due respect to the learned Judge this Court is not in a position to accept the proposition laid down therein. The main submission of learned counsel for the petitioner relates to the merits of the case. It is contended that the ground of malafide has not been proved by specific evidence. It is submitted that the entire findings of the Labour Court are based upon extraneous