Allowed

M/S. Twenty First Century Printers Ltd. v. Shri K.P.Abraham and Anr.

Bombay HC23 Jul 2008WP/1978/2005

Case brief

AI extract

What is this about?

The High Court held that a Purchase Officer falls under the exclusion of 'managerial capacity' in the Industrial Disputes Act, 1947. Consequently, the defining award regarding his workman status and reinstatement was quashed.

What did the court decide?

The writ petition was allowed and the impugned award was quashed; the deposit made by the petitioner was ordered to be refunded.

M/S. Twenty First Century Printers Ltd. Vs… — Labour and Industrial Disputes | Bombay HC (2008)

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 IN THE HIGH COURT OF JUDICATURE AT BOMBAY

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 ORDINARY ORIGINAL CIVIL JURISDICTION

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 WRIT PETITION NO.1978 OF 2005

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 M/s.Twenty First Century Printers Ltd.,

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 "Shiv-Smruti"

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 49, Dr. Annie Besant Road,
 Worli, Mumkbai--400 018. : Petitioner
 V/s.

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 1. K.P.Abraham,
 G-3, Flat No.4,
 3rd floor, Sector 7,

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 Sanpada,

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 New Mumbai--400 705.

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 2. N.L. Shende,

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 Presiding Officer,

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 IVth Labour Court at Mumbai. : Respondents

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 Mr.J.P.Cama, Senior Advocate, with Mr.G. Gopalkrishnan
 i/b. Sanjay Udeshi & Co., for the petitioner.

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 Mr.K.S.Kalappura for respondent no.1.

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CORAM : S.A.BOBDE, J.

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 DATE : JULY 23, 2008.

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ORAL JUDGEMENT

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 1. The petitioner has challenged the award dated

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 28.1.2005 by which the learned Presiding Officer, 4th

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 Labour Court, Mumbai, held that the respondent no.1 is a
 workman under the Industrial Disputes Act, 1947,
 hereinafter referred to as the "Act", and that the
 termination of his services with effect from 12.8.1995 is
 illegal. The respondent no.1’s services as a Purchase
 Officer were terminated without following the procedure
 required by the Act. The learned Presiding Officer has
 directed reinstatement of the respondent no.1 with
 continuity of service and payment of full back wages with
 effect from 12.8.1995.

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 2. The petitioner is a company, engaged in the
 manufacture of printed packing material. They had
 appointed the respondent no.1 as a Purchaser Officer.
 Apparently, in the course of employment, the petitioner
 asked the respondent no.1 to carry some article from
 Mumbai to Ahmedabad. The respondent no.1 declined. The
 incident took an ugly turn and the petitioner decided to
 terminate the respondent no.1’s services. Apparently,
 some abusive language was also used and much has been said
 by both sides on the merits of the dispute. However, it
 would be appropriate to decide the controversy on the main
 issues raised in this petition i.e. whether the
 respondent no.1 was a workman, since that goes to the root
 of the matter.

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 3. The petitioner appointed the respondent no.1 as a
 Purchase Officer by an order dated 20.11.1991 on a salary
 of Rs.3,000/-. The order stated that the services of the
 respondent no.1 will be governed by the rules and
 regulations of the company and that his appointment will
 be on probation for a period of six months from the date
 of joining the duty. The order further states that after
 confirmation, his services could be terminated by either
 party by giving 30 days’ notice. The respondent no.1 in
 his bio-data accompanying his application stated that he
 has been working as an Asstt. Manager, Print Books. In
 pursuance of this application, the respondent no.1 was,
 however, appointed as a Purchase Officer. The letter of
 appointment does not disclose the nature of duties of the
 respondent no.1 which are crucial for determining whether
 the respondent was employed and working as a workman. The
 parties have led evidence on the point. The respondent
 no.1 stated that he was doing the work of a purchase
 clerk-cum-office boy of carrying certain things to various
 persons. He was doing clerical jobs in the office
 connected with purchase of materials required by the
 petitioner and was working under the supervision of the
 Commercial Manager of the petitioner. The petitioner,
 inter alia, led evidence to the contrary that the
 respondent no.1 was appointed as a Purchase Officer in the

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 management cadre and that his duties were to interact with
 suppliers, meeting them and placing orders. He was also
 passing bills for payment and was co-ordinating with
 factory for procurement of materials. He was visiting
 suppliers for deciding various quality material and
 delivery schedule. The respondent no.1 in the course of
 his deposition categorically accepted the suggestion that
 before the present employment, he was working as an Asstt.
 Manager in Print Production. Orally he denied that he was
 raising purchase orders on behalf of the company and
 affixing his signatures thereon. However, the petitioner
 confronted him with documents on which he had affixed his
 signatures which he admitted. Those documents are in the
 nature of quotations from suppliers and purchase orders
 placed by him in his capacity as Purchase Officer. It is
 true that some of the documents are also signed by one
 Naronha, who was the Purchase Manager of the Company. It
 is clear from the documents that the respondent no.1 has

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 been making inquiries from various suppliers for the
 purchase of equipments such as a crane and the parties
 have sent quotations to the petitioner in his capacity as
 Purchase Officer. Similarly, there are documents which

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 show that the respondent no.1 has passed bills by
 approving them. In some cases, there are two approvals,
 the other by one Naronha. There is no doubt that the
 respondent no.1 was not working as an office boy or a

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 clerk, but was functioning, according to his designation,
 as a Purchase Officer and responsible for procurement of
 material for the petitioner-company. The question that,
 however, arises is whether such work qualifies the
 respondent no.1 for the status of "workman" as defined by
 section 2(s) of the Act which reads as under:-

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 "(s) "workman" means any person (including

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 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--

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 (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,

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 1957 (62 of 1957; or

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 (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

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 or administrative capacity; or

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 (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."

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 The definition includes within its scope a person
 employed to do any manual, unskilled, skilled, technical,
 operational, clerical or supervisory work and excludes
 categories mentioned in clauses (i) to (iv) from amongst
 those excluded. Apart from persons employed in the armed
 forces and police, etc., covered by clauses (i) and (ii),
 the exclusion is mainly of those who are employed in a
 managerial or administrative capacity.

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 4. Mr.Cama, the learned counsel for the petitioner,
 contended that the respondent was employed as a Purchase
 Officer and, therefore, not employed to do any manual,
 technical, operational, clerical or supervisory work and,
 therefore, there is no question of even considering
 whether he was excluded by virtue of the fact that he was
 performing a function of a managerial or administrative
 capacity under clause (iii).

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 5. The submission of Mr.Cama is as follows:-

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 That section 2(s) is both inclusive and exclusive
 i.e. it includes an employee who does technical,
 clerical, etc., work within the definition of a "workman"
 and then excludes any such person who belongs to any of
 the four categories i.e. (i) subject to the Air Force
 Act or the Army Act or the Navy Act; (ii) employed in
 the police service; (iii) employed mainly in a
 managerial or administrative capacity; or (iv) employed
 in a supervisory capacity exercising managerial
 functions. The learned counsel, however, submits that
 the inclusive categories are not exhaustive i.e. to say
 there could well be an employee who does not belong to
 any of the categories which are excluded and, therefore,
 there would be no question of considering whether he is

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 excluded subsequently by any of the four categories. The
 learned counsel relies on the example of a Sales
 Representative and the judgement of the Supreme Court in
Burmah Shell Oil Storage & Distributing Co. Ltd. v.
Burmah Shell Management Staff Association(A.I.R. 1971
 SC 922) followed by this Court in C. Gupta v.
Glaxosmithklin Pharmaceutical Ltd. & Anr. (2004 II CLR

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 23). The Supreme Court has observed as follows:-

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 "If every employee of an industry was to be
 a workman except those mentioned in the

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 four exceptions, these four classifications

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 need not have been mentioned in the
 definition and a workman could have been
 defined as a person employed in an industry
 except in cases where he was covered by one
 of the exceptions. The specification of
 the four types of work, obviously is
 intended to lay down that an employee is to
 become a workman only if he is employed to
 do work of one of those types, while there
 may be employees who, not doing any such
 work, would be out of the scope of the word
 "workman" without having to resort to the
 exceptions."

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 There is no doubt that the submission on behalf of the
 petitioner is correct. However, what must be seen is
 whether it applies to the present case. It is,
 therefore, necessary to see whether the duties of a
 Purchase Officer in the present case are either
 technical, operational, clerical or supervisory before
 seeing whether the duties are such that the respondent
 no.1 can be exempted under any of the four exceptions.

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 6. The function of purchasing i.e., acquiring from the

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 market, materials and machinery, sometimes of
 considerable value, necessary for carrying out
 manufacture is clearly not operational, clerical or
 supervisory. The work involves having knowledge of
 machinery or material which are required to be purchased
 and the market. This knowledge is specialised and
 necessary to enable the employee to carry out purchases
 which may be of considerable value. It is not necessary

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 that the knowledge must have been acquired by training,
 but may also come by experience of that particular work.
 In Bombay Dyeing & Manufacturing Co. Ltd. v. R.A.

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Bidoo (1989 II CLR 248), a Division Bench of this Court
 while expounding on the words "technical" and "technical
 work" observed as follows:-

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 "Technical work requires a training or

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 knowledge or expertise of a particular art
 or science to which that work pertains. It
 is not difficult to infer from this that a

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 person engaged in a technical capacity must
 have some knowledge imparted to him or must
 have acquired some knowledge either by
 training or by experience to do that
 particular work. A person who has not been
 so trained or who has not so acquired the
 knowledge naturally cannot perform, at
 least satisfactorily, the work to which he
 has been assigned. The word technical
 embraces within itself not only the
 expertise and competence of a person, but
 also knowledge and experience relating to
 the particular work which may be said to be
 technical work."

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 7. In this view, the work of purchase cannot be held to
 be technical. In the present case, it is clear that the
 respondent no.1 not only made inquiries into the market
 for purchasing the appropriate machinery or material, but
 also placed orders under his signature, which were
 capable of binding the company. The parties also
 addressed quotations to him as a representative of the
 company purchasing the materials. All this involved

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 specialised knowledge on the part of the petitioner for
 procurement of materials and machinery and his function
 may be categorised as technical.

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 8. What remains to be seen is whether the respondent
 falls within any of the four exceptions in section 2(s).
 Clearly the first two exceptions are not relevant. It
 was contended on behalf of the petitioner that the
 respondent no.1 was employed mainly in a managerial or
 administrative capacity and, therefore, falls within the
 third exception. Primarily, it appears that the work of
 purchasing materials or machinery cannot be said to be
 the work pertaining to manufacture or production. Works
 and functions in an industry may be hardly divided into
 managerial, administrative or supervisory at one level
 and manufacture, productions, etc., at another. It
 involves the exercise of good judgement as to the cost,
 quality and reliability of the things that are purchased
 or procured. In this sense, the function is managerial
 or administrative in nature. The work depends on special
 mental training or technical knowledge which is part of
 the management of the company. "Management" in the sense
 of an organisation means regulation of an activity.

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 Such a person could be said to be involved in the

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 operation of a company which is regarded as a managerial
 function.

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 9. Black’s Law Dictionary (Eighth Edition) defines
 "management" as the people in a company who are
 responsible for its operation. In Lloyds Bank Ltd. v.
Panna Lal Gupta(AIR 1967 SC 428), the Supreme Court held
 that a manager or administrator generally occupies a
 position of command or decision and is authorised to act
 in certain matters within the limits of his authority.
 This decision was subsequently referred to by their
 Lordships of the Supreme Court in S.K. Mainiv. Carona
Sahu Co. Ltd. (1994 II CLR 359) wherein the Supreme
 Court observed that a manager’s duty generally involves
 supervision as distinguished from the stereotype work of
 a clerk. Having regard to the duties and powers of the
 Purchase Officer in question, I am of view that the
 respondent performed mainly a managerial function and is,
 therefore, excluded from the definition of "workman".

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 10. It was, however, argued that the respondent could
 not be said to be part of the management because he had
 no one working under him. The true test must depend on
 the nature of the function and not whether the person has
 any other employee working under him. Indeed, an
 employee can be at the lowest managerial post and could
 still be said to perform managerial function. Having
 regard to the nature of the activity of purchase, it

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 appears that the function must be classified as
 managerial being part of the controlling and regulating
 functions of the industry. In this view of the matter,
 the respondent no.1 must be held to be an employee mainly
 in a managerial capacity and is, therefore, excepted from
 the meaning of "workman" by virtue of section 2(s)(iii)
 of the Act.

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 11. In the result, the Writ Petition is allowed and the
 rule is made absolute in terms of prayer clause (a).
 There shall be no order as to costs. The amount of
 Rs.2,60,000/- deposited by the petitioner in this Court
 pursuant to the order dated 26th July, 2005, be refunded
 to the petitioner with accrued interest, if any.

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 S.A. BOBDE, J.

M/S. Twenty First Century Printers Ltd. v. Shri K.P.Abraham and Anr.

Case brief

What is this about?

What did the court decide?

M/S. Twenty First Century Printers Ltd. v. Shri K.P.Abraham and Anr.

Case brief

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What did the court decide?

What the court decided

A compact analysis

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