S. K. Verma Vs. Mahesh Chandra & ANR
 INSC 111 (2 September 1983)
REDDY, O. CHINNAPPA (J) 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)
Industrial Disputes Act, 1947-S. 2(a)-
Definition of 'workman'-Whether it includes Development officers in Life
Insurance Corporation ?
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.
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- F] Workmen of Indian Standards Institution v. Management of
Indian Standards Institution,  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 cover all 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 merely to vindicate,
not justice, but some rigid technical stand taken up by them. [801 D-H]
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
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
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 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 underwent 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:
"..... 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. In
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 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 '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
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
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.
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
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
In addition to this, the existing agents who
may be allotted to you hereafter should be well 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.
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
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
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
If you collect any amount as deposit towards
the 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
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
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.
You are required as outlined in your Plan
(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
(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 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.
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.