{"id":93254,"date":"2006-08-21T00:00:00","date_gmt":"2006-08-20T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/electronics-corporation-of-india-vs-electronics-corporation-of-india-on-21-august-2006"},"modified":"2017-04-29T21:28:44","modified_gmt":"2017-04-29T15:58:44","slug":"electronics-corporation-of-india-vs-electronics-corporation-of-india-on-21-august-2006","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/electronics-corporation-of-india-vs-electronics-corporation-of-india-on-21-august-2006","title":{"rendered":"Electronics Corporation Of India … vs Electronics Corporation Of India … on 21 August, 2006"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Electronics Corporation Of India … vs Electronics Corporation Of India … on 21 August, 2006<\/div>\n
Author: A Pasayat<\/div>\n
Bench: Arijit Pasasyat, Lokeshwar Singh Panta<\/div>\n
           CASE NO.:\nAppeal (civil)  4573 of 2005\n\nPETITIONER:\nElectronics Corporation of India Ltd.\t\t \t\n\nRESPONDENT:\nElectronics Corporation of India Service Engineers Union\t\t\t\t\t\t\n\nDATE OF JUDGMENT: 21\/08\/2006\n\nBENCH:\nARIJIT PASASYAT & LOKESHWAR SINGH PANTA\n\nJUDGMENT:\n<\/pre>\n
J U D G M E N T<\/p>\n
ARIJIT PASAYAT, J.\n<\/p>\n
\tChallenge in this appeal is to the order passed by a
\nlearned Single Judge of the Bombay High Court allowing a
\nWrit Petition filed by the respondent.\n<\/p>\n
\tThe respondent filed a Writ Petition before the High Court
\nchallenging the award dated 18th August, 1995 passed by the
\nIndustrial Tribunal, Bombay (in short the ‘Tribunal’) rejecting
\nthe reference made to it by the Government of  Maharashtra
\nunder the Industrial Disputes Act, 1947 (in short the ‘Act’) on
\nthe ground that the respondent-Union was not able to
\nestablish master and servant relationship between the alleged
\nworkmen represented by the Union and the present appellant
\n(hereinafter referred to as the ‘Company’). The entire dispute
\narose on account of the services of the alleged workmen
\nrepresented by the Union, being terminated.\n<\/p>\n
\tStand of the Union in a nutshell is as follows:\n<\/p>\n
\tThe Reference was in respect of about 30 workmen
\ninvolved in the dispute. The Union represents the employees
\nwho are called “Retainers” by the Company. These employees
\nsought permanent absorption and other reliefs from the
\nCompany. The Company is engaged in the business of
\nmanufacturing, selling and servicing of electronic items,
\nmainly Televisions. Between the years 1972 and 1978, the
\nCompany engaged these 30 persons as Technicians initially on
\na contract basis for a period of four years. Some of these
\nTechnicians were then made permanent as either Tradesmen
\nor Scientific Assistants or Assistant Technical Officers. These
\n30 employees obtained employment after responding to an
\nadvertisement issued by the Company for engaging Service
\nEngineers on retainer basis. The employees were selected
\npursuant to a written test and oral interview. After selection,
\nthey were required to undergo practical training which was
\nimparted by the Company for a period of three months. After
\nthe training period was completed, contracts were entered into
\nbetween the Company and each of these 30 employees.
\nAccording to them, the contract which labels each of them as
\n“Retainer” was nothing but a paper arrangement between
\nthemselves and the Company who did not want to implement
\ncertain labour laws. Although the service contracts were
\ntreated as individual contracts, the Union has averred that the
\nworkmen were under the supervision of the Company and no
\nindependent decision could be taken by these employees. The
\nemployees raised a demand for permanent absorption in
\nemployment and for all other service conditions which were
\napplicable to other employees. As this was not granted by the
\nCompany, the Union approached the High Court under Article
\n226 of the Constitution of India, 1950 (in short the
\n‘Constitution’) by filing Writ Petition No.2689 of 1983. This
\npetition was dismissed as the petitioner had an alternate
\nremedy by approaching the machinery provided under the Act.
\nAccordingly, the Union raised a dispute against the Company
\nwhich was referred for adjudication by the Tribunal. The
\ndispute pertained to the claim of regularization as well as
\ncertain other demands including wage revision made by the
\nUnion on behalf of the employees.\n<\/p>\n
\tThe Union filed their Statement of Claim justifying the
\ndemands made by them for regularization of the employees
\nand absorption and permanency, wage rise, etc. The Union
\ndemonstrated that in fact these employees were always the
\nworkmen of the company and had wrongly been treated as
\nretainers. It was emphasized in the Statement of Claim that
\nthe Company had direct control and supervision over these
\nemployees who were not able to take any independent
\ndecisions in respect of their work. The Company in its Written
\nStatement contended that there was no contract of service
\nbetween them and the retainers claiming to be employees
\nsince they were independent persons with whom the Company
\nhad entered into a contract for servicing of Television sets sold
\nby them to the customers. It was contended that the industrial
\ndispute referred was not maintainable as there could be no
\ndispute between the Company and the Retainers. Evidence of
\none of the employee was led on behalf of all the 30 employees
\nbefore the Tribunal. No evidence, oral or documentary, was led
\nby the Company. On a consideration of the documents as well
\nas oral evidence, the Tribunal by an Award rejected the
\nReference as not maintainable. It decided as a preliminary
\nissue as to whether employee-employer relationship was
\nestablished. The Tribunal came to the conclusion that the
\nRetainers had individually entered into contracts with the
\nCompany for service of repairing  the Television sets sold by
\nthe Company and that there was no master and servant
\nrelationship between the company and the 30 persons who
\nclaimed to be employees. According to the Tribunal, the
\nevidence clearly indicated that these 30 persons were merely
\ncontractors and there was no direct nexus of master and
\nservant relationship between them. The Tribunal’s decision
\nwas assailed before the High Court by a writ petition filed by
\nthe Union. The primary stand of the Union-writ petitioner
\nwas that the evidence adduced clearly established that a paper
\narrangement was erroneously accepted by the Tribunal as the
\nreality. Master and servant relationship was clearly
\nestablished.\n<\/p>\n
\tPer contra, the Company supported the reasonings given
\nby the Tribunal.\n<\/p>\n
\tConsidering the rival submissions, High Court by the
\nimpugned judgment held that it was for the appellant to
\nestablish that there was no master and servant relationship
\nbetween the parties and the members of the Union were not
\nworkmen within the meaning of the expression “workman”
\nunder Section 2(s) of the Act. The High Court was of the
\nfurther view that the Company had not established either
\nthat the members of the Union were not workmen or that the
\nemployer employee relationship does not exist. Accordingly,
\nthe writ petition was allowed and the parties were directed to
\nappear before the Tribunal for further hearing of the reference.\n<\/p>\n
\tIn support of the appeal, it was inter alia submitted as
\nfollows:\n<\/p>\n
\tThe Corporation was entering into individual contracts
\nwith the Service Engineers\/Licencees and, there was no
\ncompulsion of whatsoever nature on them to enter into the
\ncontracts year after year. Some of the workmen also opted for
\nworking with the Company in terms of those individual
\ncontracts, as they found the same to be such more lucrative
\nand paying rather then being regular employees of the
\nCompany.\n<\/p>\n
\tThere are no regular posts like Service Engineers or the
\nLicencees or Retainers in the company and such contracts are
\nentered into by the Company to attend the additional work as
\nand when required in accordance with terms and conditions of
\nthe contracts. The regular employees are governed by the
\nService condition as applicable to the Company, whereas the
\nService Engineers\/Licencees are governed by the individual
\ncontracts signed by them with the Company.  It is quite
\nevident that service conditions under which the regular
\nemployees of the Company function are totally different and
\nincomparable and, therefore, there cannot be similar wages for
\ndifferent kind of work under different conditions applicable to
\ndifferent categories of persons. So the demand of
\nregularization of the employment of the Service Engineers is
\nnot maintainable. They were only required to attend the
\ncomplaints received in respect of T.V. sets allotted to them and
\nthey were not doing any other work in connection with the
\nsaid sets, whereas the regular employees of the company are
\nrequired to do other work in addition to the servicing of the
\nT.V. sets manufactured by the Company. The terms of the
\nemployment of the regular employees of the company are
\ngoverned by the standing orders of the Company under the
\nIndustrial Employment (Standing Orders) Act as well as the
\nprovisions of the Act whereas the terms of the employment of
\nthe Service Engineers\/Licencees are governed in terms of
\nindividual contracts entered into by the Company with them.
\nAssuming without admitting that the Service Engineers are
\nrequired to be absorbed by the Company, then the same also
\nis practically impossible for the Company to implement, as the
\nCompany is the Central Government Undertaking, and it is
\ngoverned by the directions of the Government. Regular
\nemployees are required to work for fixed and regular hours.
\nThe Service Engineers\/Licensees were not required to adhere
\nto follow any specific schedule or routine. The Service
\nEngineers cannot claim any regularization or absorption in the
\nCompany and, hence they are not entitled to parity of wage
\nscales and other benefits which are provided to the regular
\nemployees of the Company. The Service Engineers are required
\nto work as per their convenience without any interference of
\nwhatsoever nature from the Company. It is quite evident that
\nthe nature of duties performed by the regular employees of the
\nCompany and Service Engineers are quite different and
\ndistinct and, the same cannot be compared. It is submitted
\nthat regular employees were totally at the disposal of the
\nCompany during their duty hours and they were under its
\ndirect supervision, control and management, whereas the
\nService Engineers\/Licencees were not under any such
\nsupervision, control or management and, so also they were
\nrequired to work as per their convenience and, their services
\nwere not available to the Company during any fixed or
\nparticular hours or as per its convenience.\n<\/p>\n
\tIn response, learned counsel for the respondent
\nsubmitted that the High Court’s view was correct. It took note
\nof the relevant factors. Hence, no interference is called for.\n<\/p>\n
\tWe find that the High Court accepted that the onus was
\non the persons claiming to be workmen to prove that they are
\nworkmen as defined in the Act. It came to a peculiar
\nconclusion that since preliminary issue was raised by the
\nemployer the onus shifts to it.\n<\/p>\n
\tIt is not in dispute that the claimants were retained for a
\nvery long period of time by the appellant on the basis of a
\ncontract entered into between them and the company. Dispute
\nwas raised in respect of permanency, absorption,
\nregularization and pay scale only in 1992 and, therefore,
\nappeared to be an afterthought and a highly belated claim. No
\nreason was set out as to why such belated demand was raised.
\nThat itself was indicative of the fact that the concerned
\npersons were of the view that they were retainers and did not
\nhave any master and servant relationship with the company.
\nThe agreements indicate that they were entered into for a
\nperiod of few months. A minimum 250 sets in a year was
\nallotted to each retainer.  The agreement to appoint as Service
\nEngineers\/Licensees as retainer contains some clauses which
\nthrow considerable light.\n<\/p>\n
“1. .On successful completion of the
\ntraining, the retainer will be allotted ECTV sets
\nto be maintained by him. This agreement
\nexpires 12 months from the date of allotment
\nof TV sets.\n<\/p>\n
xxx<\/p>\n
5..the Licensor shall pay to the Retainer at
\nRs.90\/- per set year for ECTV sets allotted to
\nhim out of those covered by warranty and
\nAnnual Service Contract with
\nECTVHowever the allotment will be so
\narranged that any point of time, a minimum of
\n250 ECTV sets will be maintained by the
\nretainer.\n<\/p>\n
xxx<\/p>\n
9. The retainer should nominate alternative
\nretainer authority by ECIL to attend
\ncomplaints pertaining to the TV sets allotted to
\nhim and inform the ECIL office in writing of
\nsuch an arrangement before absenting himself
\nfrom work. In the absence of such
\narrangement, the Licensor will arrange to
\nattend such pending complaints and charge
\nthe Retainer at Rs.10\/- per complaint plus the
\nvalue of spares used.\n<\/p>\n
xxx<\/p>\n
15..During the subsistence of this contract
\nin regard to the construction or interpretation
\nof the terms and provisions hereof or otherwise
\nhowsoever in relation thereto or in any way
\ntouching on this agreement, such dispute or
\ndifference shall be referred to the decision of
\ntwo arbitrators one each to be named by either
\nparty and thereupon all the provisions of the
\nIndian Arbitration Act (Act X of 1940) or any
\nother statutory modification thereof for the
\ntime being in force shall be applicable.”\n<\/p>\n
\tIt is to be noted that this Court had occasion to deal with
\na similar issue. By order dated 16.8.1989 in SLP (Civil)
\n5169\/1989, it was observed as follows:\n<\/p>\n
\t“After hearing the learned counsel for
\nboth the parties and on a consideration of the
\nfacts and the circumstances of this case we
\ndirect that the contracts which have been
\nterminated already should be renewed on the
\nsame terms and the petitioners will be
\npermitted to work on the basis of this contract.
\nAs regards other whose contracts are yet to
\nand their contracts will be renewed as soon as
\nthe present terms ends and they will also be
\npermitted to work on the basis of the same
\nterms of the contract. We do not find any basis
\nfor the contention that the Agreement-in-
\nquestion are contracts of service.\n<\/p>\n
\tIf there is any shortage of work then the
\navailable work will be equally distributed
\namongst the service engineers. Fresh
\nappointments may be considered if the
\nquantum of work justifies.\n<\/p>\n
\tThe writ petition pending before the High
\nCourt are disposed off.\n<\/p>\n
\tThe special leave petition is disposed of
\naccordingly.”\n<\/p>\n
\tThough clarification was later on sought for and this
\nCourt clarified that where the contracts are different and
\ncontain clauses which exclude the application of the decision
\nin the earlier batch, they should not be held to be bound by
\nthe original decision.  It is accepted that against the decision
\nin writ petitions filed by almost similarly situated persons
\nbefore the Delhi High Court, which dismissed the claim by
\norder dated 15.3.1989 in C.W.No.2855\/88 this Court was
\nmoved and order dated 16.8.1989  was passed. Though the
\nHigh Court in the present judgment referred to a decision of
\nthe learned Single Judge of the Calcutta High Court to hold
\nthat employer employee relationship existed, the Division
\nBench of the said High Court set aside the order of the learned
\nSingle Judge by its order dated 26.4.2004 in M.A.T.No.1427 of
\n1998. It is fairly accepted by learned counsel for the
\nrespondent that there has been no further challenge to the
\norders passed by the Division Bench of the Calcutta High
\nCourt. The Tribunal rightly noted the relevant features and
\nobserved after making a comparison of the duties of claimants
\nand the regular employees that employer employee
\nrelationship did not exist.\n<\/p>\n
\tA very important conclusion of the Tribunal was that
\nthere are no regular posts like Service Engineers or Licencees
\nor retainer in the company and such contracts are entered
\ninto by the Company to attend to additional work as and when
\nrequired. It was further noted that there is a definite
\nprocedure for appointment of personnel of the appellant-
\nCompany.  It was pointed out that the question of designating
\nthe claimants as Tradesmen or Technical Officer on
\npermanent basis in the Company does not arise as they have
\nneither requisite qualifications for holding any of the above
\nposts nor were they employees of the Company and they have
\nnot been employed after following the procedure required for
\nappointment of the personnel of the Company. Further,
\ntechnical officers cannot claim to be workmen under the Act
\nas they did mainly supervisory duties and drew wages
\nexceeding Rs.1600\/-p.m. The Company was entering into
\nindividual contracts with its retainers and there was no
\ncompulsion whatsoever to enter into the contract year after
\nyear. As a matter of fact, it was note that some of the workmen
\nof the Corporation opted for working in terms of those
\nindividual contracts as they found the same to be more
\nlucrative and paying rather than being regular employees.
\nThere is no denial of this position by learned counsel for the
\nrespondent <\/p>\n
\tWith reference to the evidence of the witness examined
\nby the claimants it is clear that even he (Mr. Kasbekar) agreed
\nthat the service engineers and the licencees were independent
\ncontractors. The agreement signed by them makes the position
\nclear.  He accepted that no appointment letter was ever given
\nby the company. They have not enrolled their names with the
\nEmployment Exchange. The first agreement was signed in
\n1978. He joined the company along with others in view of the
\nadvertisement regarding retainership. He also accepted that
\nseven persons as noted above were previously working in the
\ncompany, but left the service and joined as retainers. They
\nwere aware at the time of signing the agreement about the
\nservice conditions, salary, benefits given to regular workers.\n<\/p>\n
\tIt was fairly accepted and admitted that taking into
\nconsideration that retainership was more beneficial than the
\nregular service employees, all the seven employees left the
\nservice of the company and accepted the retainership. It was
\nalso accepted that there were several retainers who were
\nworking in several places like Delhi, Calcutta, Lucknow. One
\nsignificant admission was that complaints of T.V. sets were
\nmade by the customers to the appellant company. The
\nretainers used to visit the company for collecting complaints,
\ncollecting components, for receiving payments and for
\nrepairing the calledback sets.  Except for these reasons, they
\nwere not required to go to the company.\n<\/p>\n
\tA further significant admission was that there were
\nseveral types of employees working in the company whose
\nwork cannot be compared with that of the retainers. Whenever
\nthe retainers went on leave they used to provide a substitute
\nto the company. The Tribunal also noted that the witness has
\nadmitted that the scheme was for retainership and there was
\nno question of his asking for absorption as regular employees.
\nTill 1989-90 they were getting more income than the regular
\nemployees and, therefore, had not sought for regularization.
\nBut since 1989-90 they found the regular employees were
\ngetting more salary than their income, and, therefore, they
\nclaimed regularization. Further 2.24% deduction towards
\nIncome tax was made from the bills of the retainers in view of
\nthe contract and that was not applicable to the case of salaries
\nof the regular employees. He accepted that he did not know
\nabout the nature of work and working hours of the regular
\nemployees. Factually, it was found that the retainers were
\ngetting Rs.90\/- per set. The agreement was on job contract
\nbasis. In Clause 15 of the agreement, there was a provision for
\narbitration under the Indian Arbitration Act, 1940.\n<\/p>\n
\tIn view of what has been stated, the Tribunal was right in
\nits view that no employer employee relationship existed.
\nObservations of the High Court to the contrary are clearly
\nuntenable because the findings and the reasons given by the
\nTribunal have not been discussed. No reason has been given
\nby the High Court as to how these conclusions were erroneous
\nand perverse.  The inevitable conclusion is that the impugned
\njudgment of the High Court deserves to be set aside and that
\nof the Tribunal to be restored and we direct accordingly.\n<\/p>\n
The appeal is allowed. No costs.\n<\/p>\n
27956<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Electronics Corporation Of India … vs Electronics Corporation Of India … on 21 August, 2006 Author: A Pasayat Bench: Arijit Pasasyat, Lokeshwar Singh Panta CASE NO.: Appeal (civil) 4573 of 2005 PETITIONER: Electronics Corporation of India Ltd. RESPONDENT: Electronics Corporation of India Service Engineers Union DATE OF JUDGMENT: 21\/08\/2006 BENCH: ARIJIT […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-93254","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nElectronics Corporation Of India ... vs Electronics Corporation Of India ... on 21 August, 2006 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/electronics-corporation-of-india-vs-electronics-corporation-of-india-on-21-august-2006\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Electronics Corporation Of India ... vs Electronics Corporation Of India ... on 21 August, 2006 - 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