Devendran S. v. Managing Director, Muthoot Finance Limited

This writ petition has been filed by the employee of the first respondent, challenging the impugned award dated 31.05.2018 in ID No. 34 of 2013 passed by the Labour Court, Kollam, refusing to interfere with his dismissal from service.

2. The petitioner entered the service of the first respondent in 1998 as a Clerk. During his service, he held various positions, including Accountant and Assistant Manager, at different branches. In 2008, he was promoted and posted as Branch Manager in Poovar branch and continued there for 3½ years. During this period, the said branch got two awards; viz., state level no.1 in gold loans during 2010-2011 and district performance records up to 2011. The total business during this period was around 17.05 Crores. According to him, he acted as a clerk in executing the orders and directions of the management and had no control over the administration or decision-making in business transactions. Thereafter, he was transferred to Nellimoodu branch on 02.07.2011 as Branch Manager. While so, one Sri.Viji introduced one Sri.Girish, a financier, as regular and prompt customer having a gold loan outstanding of ₹40,00,000/-. On 28.07.2011, Sri.Girish V.K. came to the branch for releasing gold after remitting ₹50,000/-. The petitioner released the gold on being satisfied that there were hundred notes of ₹500/- denominations. However, it was later found that the bundle containing 500 notes were counterfeit notes. Immediately, an FIR was lodged before the Judicial First Class Magistrate Court, Neyyattinkara, incorporating the petitioner as the fourth accused. On 25.08.2011, he was suspended from service. Thereafter, he submitted a detailed explanation dated 05.09.2011, requesting to reinstate him in service. However, on 30.03.2012, as per Ext.P3 order, he was dismissed from service alleging that the disciplinary authority informed that it is not fair to retain the petitioner in the company. According to the petitioner, there was violation of principles of natural justice in dismissing him from service after having completed 14 years of service in the establishment. Therefore, he approached the Conciliation Officer as per letter dated 30.07.2012 to resolve the dispute and since the matter was not settled, he raised an industrial dispute, which was taken up by the Labour Court, Kollam, as ID No.34 of 2013. In ID No. 34 of 2013, he sought to set aside the order of dismissal from service issued by the first respondent management and to direct the first respondent management to reinstate him in service with continuity of service, back wages and all attendant benefits.

3. The first respondent management filed a written statement, mainly contending that the petition was not maintainable, as the petitioner did not fall within the definition of “workman” under the Industrial Disputes Act (for short, “the ID Act”). It was further contended that the petitioner had admitted that he was a manager of the management and the question of maintainability has to be decided first. According to the first respondent management, the Branch Manager concerned oversees the entire day-to-day administration of the branch and is empowered to take decisions at the branch level. The Branch Manager is solely responsible for the functioning of the branch, exercises control over the staff and makes decisions relating to gold loans and other business activities of the branch, subject to the policy decisions of the corporate-level management. It was also contended that the Zonal Office, Regional Office and other corporate offices are having their own functions and charges at respective levels; and the Branch Manager is responsible to ensure and ascertain that money loaded into strong room vaults should not contain counterfeit notes. It was also pointed out that a fake note detector was provided in the branch; and the cashier, who received the hundred notes of ₹500/- denomination, raised a suspicion over the notes as the notes were slightly thicker than the original; however, the petitioner confirmed that the notes were original and instructed the cashier to load the same to the strong room vault. According to the first respondent management, there was no proper application of mind even after the cashier made a suspicion. They pointed out that the counterfeiting of currency is a serious offence and the investigation is in progress. According to the first respondent, the petitioner was responsible for the entire administration of the branch. Though the petitioner, in his explanations dated 05.09.2011, 10.01.2012, 23.01.2012 and 26.01.2012, pleaded innocence, the disciplinary authority found that it is not fair to retain the workman in the company; and accordingly, the management issued the impugned Ext.P3 dismissal order. According to them, there was no violation of principles of natural justice.

4. The evidence consisted of the oral testimony of WW1 and Exts. W1 and W2 on the side of the petitioner, and the oral testimony of MW1 and Exts. M1 to M8 on the side of the first respondent management. The Labour Court, after an elaborate consideration of the issue, though found that the petitioner was not a “workman” as defined under the ID Act, proceeded to decide the issue on merits, and found that the dismissal of the petitioner from service was not liable to be set aside, and that the petitioner, who was an irresponsible Branch Manager, was not entitled to be reinstated in service. Aggrieved by this, the petitioner has approached this Court with the above writ petition.

5. I have heard Mr.Gopakumar R. Thaliyal, the learned counsel for the petitioner; Mr.E.K.Nandakumar, the learned Senior Counsel appearing for the first respondent-management, assisted by Ms.Parvathi Menon, the learned counsel; and Mr.Lalu Mathew, the learned Government Pleader.

6. The learned counsel for the petitioner submitted that there was violation of principles of natural justice and that there was no disciplinary inquiry conducted or no charge memo issued. Further, it was submitted that after issuing the suspension order on 25.08.2011, without conducting any proper enquiry, the first respondent management issued Ext.P3 order of dismissal on 30.03.2012. It was argued that the finding of the Labour Court that as a Branch Manager, the petitioner was the sole and responsible person to verify the currency with a currency detective machine before loading into the strong room vault, is not correct; and it is the duty of the cashier to verify the same. The learned counsel also raised several arguments regarding the merits of the case. According to him, the petitioner had no control over the administration or decision-making in business transactions and he was doing only clerical works and hence, the finding of the Labour Court that he was not a workman, is not correct. In support of the contentions, the learned counsel relied on the judgments in Arunkumar V. v. Information Kerala Mission (IKM), Tvm & Others [2015 (5) KHC 549], D.K.Yadav v. J.M.A. Industries Ltd. [1993 KHC 1176], Novartis India Ltd. v. State of West Bengal & Others [(2009) 3 SCC 124] and Sharad Kumar v. Government of NCT of Delhi & Others [(2002) 4 SCC 490]. Contending that the entire issue was not properly appreciated by the Labour Court, the learned counsel sought a remand of the matter back to the Labour Court.

7. Per contra, the learned Senior Counsel for the first respondent management, submitted that the tribunal had considered the issue in detail on merits and rightly found that the dismissal of the petitioner from service was in order and that, there is no scope for any remand since the Labour Court has already found that the petitioner was not a workman. The learned Senior Counsel further submitted that the petitioner had admitted that he was working as the Branch Manager of the Poovar Branch and that, being a Branch Manager, he would not fall within the definition of “workman” under Section 2(s) of the ID Act. According to the learned Senior Counsel, the remedy available to the petitioner is before the civil court. It was further argued that the burden was on the petitioner to prove before the Labour Court that he was a workman and that he had failed to discharge the same, and that despite finding that the petitioner is not a “workman”, the Labour Court considered all the aspects in detail and found that he is not entitled to reinstatement. The learned Senior Counsel also argued that the scope of interference in the matter by this Court is very limited and this Court has no authority to interfere with the finding of the facts by the Labour Court. In support of the contentions raised, the learned Senior Counsel relied on the judgments in The United Planters Association of Southern India v. K.G.Sangameswaran & Another [1997 (4) SCC 741], Pepsico India Holding Pvt. Ltd. v. Krishna Kant Pandey [(2015) 4 SCC 270], Bharti Airtel Ltd. v. A.S.Raghavendra [2024 KHC 6180], Lenin Kumar Ray v. Express Publications (Madurai) Ltd. [2024 KHC 6579], Regional Manager, Rajasthan State Road Transport Corporation v. Sohan Lal [(2004) 8 SCC 218] and Managing Partner, Subaida Cloth Stores, Kottacherry v. Labour Court, Kozhikode & Others [OP No.1915/1988 (HC)].

8. I have considered the rival contentions raised on both sides. It is an admitted fact that after raising an industrial dispute, in the written statement filed by the first respondent management, they had raised a specific contention that the petitioner was not a “workman” as defined under Section 2(s) of the ID Act. In this context, it is relevant to extract Section 2(s) of the ID Act, which reads as follows:

“2. Definitions. – In this Act, unless there is anything repugnant in the subject or context,-

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

(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, 1957 (62 of 1957); 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 [ten thousand 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.”

It is also not in dispute that the petitioner was the Branch Manager of Poovar Branch at the time of the incident which occurred on 28.07.2011. The workman had submitted explanations, which were produced before the Labour Court as M4 to M6. He had also produced M2 Letter of Authorization dated 02.07.2011, authorizing the petitioner to operate the Current/Overdraft Account, which reveals that he was appointed as the Branch Manager. The petitioner did not have a case that there were no other staff in the branch. From the evidence on record, it is seen that there was a Cashier, Accountant, Assistant Manager etc., in the branch where he was the Branch Manager. Hence, it cannot be said that he was doing any clerical work in the branch. It is discernible from Section 2(s) of the ID Act that a person who is employed mainly in a managerial or administrative capacity does not fall within the definition of “workman”. In Lenin Kumar Ray (supra), it was held that the onus of proving the nature of employment rests on the person claiming to be a “workman” within the definition of Section 2(s) of the ID Act. As revealed from the documents on record, the petitioner was the Branch Manager of the Poovar Branch, and there is nothing on record to show that he was performing clerical duties there. Other than the petitioner, no one was examined on his behalf to prove that the predominant duties performed by him were clerical in nature.

9. In Sonepat Cooperative Sugar Mills Ltd. v. Ajit Singh [2005 KHC 463], it was held that the question as to whether the employee has been performing clerical work or not is required to be determined upon arriving at a finding as regards the dominant nature thereof. Here, the dominant nature of the work of the petitioner, as reflected in the documents produced and the evidence adduced, is that of a Branch Manager. Further, in Sonepat Cooperative Sugar Mills Ltd. (supra), it was held that to fall within the definition of “workman”, the job of employees concerned must fall within one or the other categories enumerated in said expression. Merely showing that employees concerned had not been performing any managerial or supervisory duties does not ipso facto make him a workman. Here, in the present case also, the petitioner failed to prove that he is a workman. Hence, I find that the petitioner herein will not fall within the definition of “workman” under Section 2(s) of the ID Act.

10. The next question to be considered is whether the Labour Court, after finding that the petitioner is not a workman, has power to consider the issue on merits. The Labour Court failed to raise an issue whether the petitioner is a workman or not. However, in paragraph 9 of the impugned award, the Labour Court has considered the issue and found that the petitioner is not a “workman” under Section 2(s) of the ID Act. It is trite law that once the Labour Court finds that the petitioner is not a “workman”, its jurisdiction is ousted, and it has no power to adjudicate the matter on merits. Then, the remedy of the petitioner lies elsewhere and not before the Labour Court. Having found that the petitioner is not a “workman” under Section 2(s) of the ID Act, it was not appropriate for the Labour Court to decide the issue on merits. The apex court, in Dwarka Prasad Agarwal (D) by LRs. And Anr. v. B. D. Agarwal and Ors.(2003 KHC 1473), held that an order passed by a court without jurisdiction is a nullity. Since this Court has also found that the petitioner does not fall within the definition of “workman” under Section 2(s) of the ID Act, the findings of the Labour Court on the facts of the case are null and void, and are liable to be set aside.

Therefore, the writ petition is disposed of as follows:

a) The impugned award dated 31.05.2018 in ID No. 34 of 2013 passed by the Labour Court, Kollam, is hereby set aside insofar as it relates to the findings on the merits of the case, except for the finding that the petitioner is not a workman.

b) The petitioner will be at liberty to approach the appropriate authority for redressal of his grievance, in accordance with law, if so advised.