Manager, Indian Overseas Bank Vs. Workmen, All India Overseas Bank Employees Union
 Insc 129 (10
Pasayat & Arun Kumar Arijit Pasayat, J.
Indian Overseas Bank (hereinafter referred to as the 'Bank') calls in question
legality of view expressed in a judgment rendered by the Industrial Tribunal,
Tamil Nadu, Chennai(hereinafter referred to as the 'Tribunal') which was
affirmed by learned Single Judge of the Madras High Court.
judgment of the Division Bench is the subject-matter of challenge in this
core question which falls for adjudication in this appeal is whether
"jewel appraisers for loans" are to be treated as workers and are to
be absorbed as part time clerical staff of the Bank. Stand of the appellant is
that jewel appraisers are not employees of the bank and do not do any
facts in a nutshell are as follows:
bank on the basis of contracts had employed about 767 jewel appraisers mainly
in the rural branches in the States of Tamil Nadu, Pondicherry, Andhra Pradesh, Karnataka, Kerala
and few branches in Bihar and Orissa.
advances agricultural loans to its constituents and also members of the staff.
The All India Indian Overseas Bank Employees Union (in short the 'Union') raised a dispute taking the stand that the jewel
appraisers engaged by the bank are part time workers of the bank. On the basis
of the demand raised reference was made by the Central Government and on
19.2.1990 following dispute was referred to the Tribunal for adjudication:
the demand of All India Overseas Bank Employees Union to treat the jewel
appraisers engaged by the Bank as part time workmen of the Bank is justified?
If so, to what relief, if any, are they entitled?" In support of the
demand the stand taken was that the jewel appraisers employed for particular
branches of the bank are also utilized for certain clerical jobs like entering
applications for jewel loans. They are also to go other branches as to the
appraisers of the jewel. These jewel appraisers are required to be present in
the respective branches between 10 a.m. to 2.00 p.m. as a request for jewel loan is considered and granted only
during that period. They are paid a commission of Rs.3/- for every one thousand
rupees sanctioned by way of loan. Reference was made to another dispute i.e. ID
25 of 1997 raised by jewel appraisers numbering about 353 in Indian Bank where
a reference had been made to the Tribunal. The reference reads as follows:-
the action of the Management of the Indian Bank, Madras in denying to appraisers wages and other conditions of
service applicable to rural clerical "Award Staff" of the Bank is
justified? If not to what relief the workmen concerned are entitled to?"
Reference in that case was made on the ground that the jewel appraisers of
Indian Bank were workmen and they were denied only wages and other service
conditions as they were paid monthly remuneration of Rs.100/-. The said dispute
was adjudicated and an award was made on 3.12.1979 holding that the jewel
appraisers of Indian Bank are entitled to wages and other conditions of service
applicable to regular clerical staff as part time employee of the Bank and they
would be entitled to such proportionate (namely half) wages and benefits of
clerical staff w.e.f. 1.4.1977 i.e. the date of reference. The award was
questioned before the High Court which was dismissed. Letters Patent Appeal was
also dismissed by the Division Bench and S.L.P. was also dismissed by this
of the Union, therefore, was that the view
expressed in the Indian Bank's case (supra) was clearly applicable to this
case. Claim of the Union was resisted by the appellant-Bank basically on the
ground that jewel appraisers engaged by the Bank are not workmen as defined in
Section 2(s) of the Industrial Disputes Act, 1947 (in short the 'Act').
was made a decision of this Court in Management of Puri Urban Co-operative Bank
v. Madhusudan Sahu and Anr. (1992 (II) LLJ 6). Further it was submitted that
the Bank has branches in various states and, therefore, adjudication is
possible only by a National Commission under Section 17B of the Act and not by
the Industrial Tribunal to whom the dispute was referred. This point was not,
however, urged before the High Court. It was pointed out that terms and
conditions of the jewel appraisers of Indian Bank were entirely different from
the terms and conditions of jewel appraisers of the appellant Indian Overseas
Bank. The Tribunal relied upon the decision in Indian Bank's case (supra) and
answered the reference in the affirmative. It made a comparison of the terms
and conditions of the two Banks.
Union filed writ petition claiming that
the Tribunal should have granted relief from 1.4.1978 i.e date of demand.
questioned legality of the award by filing a writ petition. As noted above, the
writ petition was dismissed by the learned Single Judge and the Division Bench
in the LPA.
support of the appeal learned counsel for the appellant-Bank submitted that in
the year 1975 the appellant started the process of sanctioning loans on deposit
of jewellery and security for which jewel appraisers were engaged who were paid
on commission basis. On 20.1.1983 Government declined reference because
independent contracts covered the arrangement. The Union filed writ petition before the High Court which by
its judgment dated 22.11.1989 directed the Central Government to refer the
dispute to the Tribunal. The Tribunal instead of assessing the evidence and
very vital admissions made by the witnesses examined to further the case of the
jewel appraiser based its conclusions on Indian Bank's case (supra). It did not
take note of the features highlighted by this Court in Puri Urban Co-operative
Banks' case (supra). It also referred to a decision in Indian Bank v. Presiding
Officer, Industrial Tribunal etc. (1990(I) LLJ 50), which had no relevance.
Accordingly, the conclusions are vitiated of non-application of mind. It is
pointed out that though the learned Single Judge held that the Tribunal not
decided the real issues had proceeded to determine the case himself and upheld
the award passed. In the appeal before the Division Bench it was categorically
held in the impugned judgment that the Tribunal had not adjudicated the correct
issue and for achieving substantial justice the learned Single Judge rightly
adjudicated the matter which was pending for nearly 26 years. It was held that
jewel appraisers are indispensable for proper functioning of the Bank and also
deal with the clerical job.
submitted by learned counsel for the appellant that the factual scenario in
Indian Bank's case (supra) was entirely different. Some of the distinguishing
features make Indian Bank's case (supra) inapplicable. One of the determinative
factors according to him was that the commission was paid only when the loan
was sanctioned even if the appraisal had been done by the appraiser and the
commission amount was paid out of the sanctioned loan amount and the payment is
made by the borrower and not by the Bank. On comparison of the works done the
Tribunal held that the work was similar so far as Indian Bank's case (supra) is
concerned, without noticing that condition no.9 was conceptually and
contextually different. There was no evidence to show that jewel appraiser did
any other work as clerk.
if it is conceded for the sake of arguments that some work was done by the
appraiser, it was by way of help to the loanee. In any event after the Shastri
Award there is no question of any part time clerk being appointed. If the order
of the Tribunal as maintained by learned Single Judge and the Division Bench is
to be maintained, a separate cadre has to be created to give effect to the
orders. The Tribunal referred to the Tiny Deposit Scheme of Indian Bank's case
without indicating as to how the same was relevant. The Tribunal quoted from
the judgment of the Madras High Court in great detail and referred to Ex.
"M-3" which relied on some conclusions of Tiny Deposits Scheme which
was not the case of the jewel appraisers before the High Court. The Tribunal
appears to have quoted from the said judgment of the Madras High Court and
without applying the conditions which were the subject-matter of adjudication
in the said case to the facts of the present case drew parallel. It was
submitted that the factual scenario in the Puri Co-operative Bank's case
(supra) was almost akin to the facts of the present case. Therefore, the ratio
has full application in the present case. Reference was also made to a Full
Bench judgment of Kerala High Court in Canara's Bank case (1981 (II) LLJ 189)
where for the purpose of the Shop and Commercial Establishment Act jewel
appraisers were held to be not employees.
was, however, submitted by learned counsel for the respondent that this was done
for the purpose of finding out the parameters. It was submitted that the
reference was made because prima facie the Government felt that jewel
appraisers were workmen under the Act and in that context nature of work, which
was the same as in the case of Indian Bank's case (supra), is relevant. The
Tribunal has compared the duties and has given findings of fact regarding
nature of duties. It was held that the jewel appraisers are also doing some
clerical work relating to the job entrusted. Three forums have recorded
findings of fact and, therefore, no interference is called for. This is not a
case where jewel appraisers were asking for regularization, they were claiming
to be part time workers.
was power of the Bank to supervise and that was the effective control. The Bank
has right to indicate as to in what manner the work was to be done. In Puri
Cooperative Bank's case (supra) this Court did not notice an earlier
three-judge Bench decision in Silver Jubilee Tailoring House and Ors. v. Chief
Inspector of Shops and Establishments and Anr. (1974 (3) SCC 498) where the
relevance of the end-product was highlighted. As the bank had the right to
reject the report of the appraiser, that itself was indicative of element of
control and supervision. Therefore, the Puri Co-operative Bank's case (supra)
should not be followed. Additionally, the said case related to an individual
and issue of workman did not arise directly.
stress of learned counsel for the appellant was that the Bank had always the
practice of appointing jewel appraisers as independent contactors who were free
to work elsewhere and as such are not employees, not subject to discipline, are
not subject to fixed working hours, are not employed by following any
employment procedure and are not assigned duty outside of their contract,
except may be incidentally filing of form and the like.
to the circular dated 23.8.1975 clearly shows that the Bank had clearly
stipulated that the jewel appraisers cannot be engaged in other work as they were
not regular employees. On 2.1.1978 another circular was issued by the Bank that
jewel appraisers act on commission basis and hence are not entitled to do any
other work. It appears that the Tribunal did not analyse the evidence which was
produced by the parties. It merely referred to the factual background in Indian
Bank's case (supra). The decision of this Court in Puri Co-operative Bank's
case (supra) was distinguished by comparing job of the jewel appraisers of the
Indian Bank. It should be noted that the dispute in Indian Bank's case (supra)
was conceptually different. After accepting that the real issues were not
focused by the Tribunal, learned Single Judge held that a substantial portion
of the Bank's business was because of the contribution made by the jewel
appraisers without indicating as to how same was relevant for the purpose of
adjudication. The Division Bench in a very cryptic manner observed that it had
perused the evidence and the documents which substantiated nature of the job of
the jewel appraisers and they were also doing the clerical job. The circulars
issued by the Bank were not considered relevant and it was noted that the ratio
in Indian Bank's case (supra) applies.
distinguishing facts need to be noted. In Indian Bank's case (supra) there was
evidence to show that the jewel appraisers work regularly for four hours. It
was clearly admitted in the instant case by the witness of jewel appraisers
that there were no fixed period of work and they could come and go at any point
of time. In Indian Bank's case (supra) the bank had disciplinary control on the
jewel appraisers. In the instant case it was admitted by the witnesses that the
Bank did not exercise any disciplinary control. In Indian Bank's case (supra)
conditions were to be fulfilled before any leave was granted. In the present
case the jewel appraisers were not required to sign attendance register and
also were not required to make any leave application. The most relevant factor
in Indian Bank's case (supra) was that the jewel appraisers were paid a minimum
amount per month which was somewhat akin to salary. In the instant case, the
amount was paid on commission basis by the loanee and not by the bank.
other facts need to be noted. In the present case as well as in Puri
Co-operative Bank's case (supra) the jewel appraisers were required to weigh
the ornaments brought to the Bank for pledge and to appraise quality, purity
jewel appraisers could be asked to do this exercise but not the manner in which
it was to be done. In both the cases the respective banks had their lists of
appraisers. It was not obligatory for the Bank to allot work to any particular
reliance was placed by learned counsel for the respondent in Dhrangadhra Chemical
Works Ltd. v. State of Saurashtra (1957 SCR 152), Silver Jubilee's case
(supra), Shining Tailors v. Industrial Tribunal II, U.P. (1983 (4) SCC 464), Chintaman
Rao v. State of M.P. (1958 SCR 1340).
inferences culled out from the reading of those judgments can be summed up as
contactors were substantially responsible for the main and sole business, they
would be treated as workers.
One exception is
that in such cases flexibility of the contract was at variance with normal
worker's contract the contractors would not be treated as workers.
contractor is in the nature of supplier of goods and services, they are to be
treated as supplier contractors and not workmen.
this juncture the distinction between jewel appraisers and the regular
employees of the bank can be noted.
Employees Jewel Appraisers
qualification and age prescribed
through Employment exchange/Banking Service Recruitment Board.
Direct engagement by the local
No fixed working hours.
No guaranteed payment, only
No disciplinary control.
is exercised not only with regard to the allocation of work, but also the way
in which the work is to be carried out.
No control/supervision over the
nature of work to be performed.
Wages are paid
by the Bank.
Charges are paid by the borrowers.
No retirement age.
While in employment cannot carry on
any other occupation.
No bar to carry on any avocation or
the jewel appraisers are not employees of the Bank.
being the position, the judgment of the Division Bench affirming the views of
the learned Single Judge and the Tribunal is clearly indefensible, deserves to
be set aside which we direct.
appeal is allowed with no order as to costs.