Life Insurance Corporation Of ... vs S. Bandyopadhyay Through New ...
2004 Latest Caselaw 281 Del

JUDGMENT

1. Whether the judgment should be reported The Petitioner is aggrieved by an Award dated 18th February 1998 passed by the learned Labour Court in ID No.85/92. The sole question agitated by learned counsel for the Petitioner is with respect to the finding of the learned Labour Court that the Respondent, an employee of Tata Risk Management Services, working as a Deputy Manager (Engineering) on a salary of Rs.2700 per month, dearness allowance of Rs.1500 per month and a flat is a workman within the meaning of Section 2(s) of the Industrial disputes Act, 1947 (for short the Act).

Madan B. Lokur, J.

2.The case law on the subject of how to determine whether an employee is a workman or not has been discussed by me in considerable detail in K.H. Pandhi vs. Presiding Officer, CW No.1224 of 1978 decided on 5th February 2004. It is not necessary for me, therefore, to repeat the case law or the discussion therein.

3. The Petitioner Life Insurance Corporation of India (for short the LIC) is aggrieved by an order dated 23rd December, 1999 passed by the Chief Commissioner for Disabilities under the Persons with Disabilities (Equal Opportunity, Protection of Rights and 3.Suffice it to say that the Constitution Bench of the Supreme Court in H.R. Adyanthaya vs. Sandoz (India) Ltd., held that for an employee to be covered by the definition of "workman", he must be employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work. If he falls within these categories, it has then to be seen whether he comes within any of the four excluded categories mentioned in Section 2(s) of the Act. The Constitution Bnch noticed certain earlier decisions where the initial determination was whether an employee falls within any of the excluded categories. If he did not fall within any excluded category, then it was held that he was a workman within the meaning of Section 2(s) of the Act. The Constitution Bench found this approach to be incorrect.ase of Chorea and that he is 45% disabled.

4. So far as the present case is concerned, I find that the learned Labour Court has not followed the sequence laid down by the Supreme Court in Adyanthaya and that is why it has fallen into error's LIC. The Medical Examiner recorded a note that he had personally examined Respondent No.2 and gave his findings as under:-

5.A review of the case law undertaken in Pandhi clearly indicates that the mere designation of an employee is not of any consequence for the purposes of determining whether he is a workman or not. What is of importance is the nature of his duties, particularly his primary duties or his basic duties and the dominant purpose of his employment's and requires life long medication. (He is not taking any medication). This may respond to Haloperidol. Long term psychological support and even institutional care may be required as dementia progresses, which has already started to some extent. He is acceptable only if permanent sheltered employment is available. Has already 45% disability and is likely to increase. In my opinion unfit. However, ZMR opinion

6.Learned counsel for the parties referred me to some judgments not discussed in Pandhi. These decisions confirm rather than detract from the conclusions already arrived at in Pandhi. However, for the sake of completeness, I propose to discuss these decisions referred to by learned counsel.

7.The question that arose in T.P. Srivastava vs. M/s National Tobacco Co. of India Ltd, was whether a Section Salesman was a workman or not. The Supreme Court discussed the nature of work of a Section Salesman and concluded that since his duties require an imaginative and creative mind, his duties could not be termed as either manual, skilled, unskilled or clerical in nature. Consequently, it was held that such an employee cannot be termed as a workman. This is what the Supreme Court said in paragraph 3 of the Report:

"It is seen from the facts found that the appellant was employed to do canvassing and promoting sales for the company. The duties involve the suggesting of ways and means to improve the sales, a study of the type or status of the public to whom the product has to reach and a study of the market condition. He was also required to suggest about the publicity in markets and melas, advertisements including the need for posters, holders and cinema slides. These duties do require the imaginative and creative mind which could not be termed as either manual, skilled, unskilled or clerical in nature. The supervising work of the other local salesmen was part of his work considered by the Tribunal as only incidental to his main work of canvassing and promotion the area of his operation. Such a person cannot be termed as a workman is also the ratio of the decision of this Court in Burmah Shell Oil Storage and Distribution Company v. Burmah Shell Management and Staff, , D.S. Nagaraj v. Labour Oficer, Karnal, (1972) 42 FJR 440 (Andh Pra), J.J. Dechane Distributor v. State of Kerala, (1974) 2 Lab LJ 9 : (1974 Lab IC 379) (Kerala)."on."

7.In view of the conflicting medical opinion, the Chief Commissioner took a decision which he communicated to the LIC by a letter dated 5th November, 1999. The sum and substance of this communication was that Respondent No.2 was required to undergo a f

8. S.K. Verma vs. Mahesh Chandra was a case in which the question that arose was whether a "development officer" working with the Life Insurance Corporation was a workman. This decision was held to be per incuriam in Adyanthaya. Reference was also made by learned counsel to Ved Prakash Gupta vs. M/s Delton Cable India (P) Ltd. . This decision followed the ratio of S.K. Verma and even otherwise, the Supreme Court said in Adyanthaya, that the decision turned on its own fats. These decisions are, therefore, not at all helpful in deciding the controversy in the present case.cal examination by a Special Medical Board of a Govt. hospital comprising experts from the field of neuroscience, orthopedics and psychiatry.

9. Tata Risk Management Services is said to be a division of Tata Sons Ltd. and performs consultancy service in the field of risk management. While the exact nature of duties of the Respondent employee is not specifically available on record, various documents filed before the learned Labour Court indicate the nature of work done by him and these documents show that his work required imagination and creativity, as one would expect of a consultant.

10. What does the employee say about the nature of work done by him? He says in paragraph 3 of his statement of claim that he was employed with the Petitioner since 15th January, 1985 as a highly skilled workman. He was doing work with his own hands and he had no power to appoint or charge sheet any worker. He had no power to grant leave and could not take independent decisions. He was working on instructions from the management. He repeats this in his affidavit by way of evidence and adds that he was performing duties like checking with his own hands machines, buildings, electrical installations and fire fighting equipments. In other words, his case was that he was a skilled manual worker.

11.On the other hand, the case of the Petitioner in the written statement was that the employee was holding a managerial post with all privileges and facilities according to his grade. It was denied that he is a highly skilled workman or that he is doing any work with his own hands. This is repeated in the affidavit by way of evidence. In addition, it is stated that the work of the employee involved development of business for marketing purposes, which included making financial commitments on behalf of ate Risk Management Services and forwarding offers to various parties independently. It is further stated that as a person holding an executive and managerial position in a consultancy organization the employee had the final say in some matters. It is stated that the organization performs consultancy services in risk management and it is not a manufacturing division.

5. The report of the medical examination, as advised, should be submitted to the office of Chief Commissioner, Disabilities by 30th December, 1999."

12. The cross-examination of the witnesses does not add to the above or bring out the exact nature of work done by the employee. However, detailed reference was made by learned counsel for the parties to various documents on record to show the kind of work done by the employee. The more important letters in this regard need to be mentioned.

8. A medical examination of Respondent No.2 was then conducted by a duly constituted Medical Board of doctors from RML Hospital on 29th November, 1999. The Board gave its opinion as below:-

13. A letter dated 15th December, 1987 sent by the employee to Fertilizer Corporation of India (Exhibit MW1/4 also Exhibit WW1/M6) is on the subject of forwarding an offer in regard to fire safety audit of Fertilizer Corporation of India and the view expressed by the employee in relation to a tender. This document reads as follows:-left side more than right). The total percentage of disability is fifty percentage in relation to whole body. It is also ascertained that the disability is permanent in nat "Please find herewith enclosed two copies of the Tender offering the aforesaid services to Fertilizer Corporation of India Ltd. Ramagundam Unit in regard to Fire Safety Audit. This document has been submitted in duplicate for your consideration.

In this connection, we would request you to note that we have assumed that you would need a period of six months to decide on the recommendations we make. Also, in our scope of work we shall be providing basic recommendations with regard to paras 3, 4, and 6 and your Contractor/Suppliers shall be developing the detailed Engineering designs etc. Our services, however, to assist you in the matter and to evaluate these contractor's offers etc. shall be included within our scope of work. Having regard t this, we have taken item 8(c) of the Scope of Work as different and quoted for it in Annexure-V, separately."

The Board recommended that Respondent No.2 "is fit to be employed for the job of peon."

14. Annexure V to the aforesaid document gives the schedule of fees for conducting safety audit, the charge being Rs.2,25,000/- and if overseas associates are involved, then the charge would be Rs.22,50,000/- (Exhibit WW1/M7).

9.Based on the report of the Medical Board, the Chief Commissioner again considered the complaint made by Respondent No.2 and passed the impugned order dated 23rd December, 1999. In the impugned order, the Chief Commissioner gave three directions which

15.In a letter dated 6th October, 1989 sent by the Petitioner to M/s Premier Cables Co. Ltd. (Exhibit MW1/5) the subject is "Risk and Insurance Management Consultancy." The letter contains the observations of the employee on a fire policy and a machinery insurance policy. The relevant portion of this letter is as follows:-

"As stated in our Action Plan earlier the wire drawing carried out in your factory with a solid, dry and powdered lubricant like calcium stearate and the water based coolant used for machining. The hazard therefore, is the same as wire drawing, categorizd under item (ii) under the Engineering Workshops Tariff and carrying a rate of Rs.1.30 per mille. Please therefore ask your insurer to charge this rate instead of Rs.1.90 per mille and refund the Rs.14,000/- or so collected excess.

(b) Subject all incumbents with disabilities to a Medical Fitness Test by a properly constituted Medical Board of a Govt. Medical Hospital. Machinery insurance policy extends to cover damage to electrical machinery/equipment/installation by fire originating within the equipment/installation by short-circuiting, etc. which risk is specifically excluded under the fire policy, Thus machinery insurance policy is designed to cover wide range of damages such as burning out of coils in electrical machines like motors, fire occurring due to electrical faults in these equipment, seizure of piston, breakage of piston rod, seizure of bearings due to lak of lubrication and so on.

In order to determine whether a particular machinery/equipment should or should not be insured against breakdown risks the following aspects need to be considered:

a. For rotating machines damage due to break-down is generally reparable by replacement of parts and the machine is rarely treated as total loss. Therefore the likely costs of repairs (replacement of parts) is one of the criteria. ion was admitted for this purpose. However, the validity of direction (a) could be expeditiously considered more so since it involved the employment of Respondent No.2 which is pending since 1997. Orders in this regard were, therefore, reserved.

b. Possibility of breakdown based on your own experience of damage which to an extent depends on the maintenance of the machinery.

12.The facts that stand out in this case are that there is some doubt about whether Respondent No.2 suffers from Chorea or Dystonia. According to the Chief Medical Officer, Ghaziabad and the LIC doctors, Respondent No.2 suffers from Chorea, while the Dic. Amount recoverable under the insurance policy in the event of a total loss or constructive total loss of a particular machinery/equipment will be after taking into account certain exclusions, actual depreciation, the deductible excess and the salvage.

a person suffering from not less than 40% of any disability. There is, therefore, no dispute that Respondent No.2 is entitled to the benefit of the provisions of the Act.

With total loss claims, there is often dissatisfaction that the claim recovered is much less than the actual loss suffered by the insured. For instance, say, a transformer is badly damaged due to fire resulting from an internal cause and is therefore decared to be constructive total loss. As explained settlement of the claim will be on the basis of its replacement cost as new, less depreciation for the number of years it has been in use as compared to its anticipated life. From this will be deducted the salvage value available and the deductible excess. Therefore, whilst a machine/equipment may have been insured for its full replacement value as new, the claim recoverable may fall for short of the replacement cost.

14. Learned counsel for the LIC drew my attention to the main duties of a peon as provided in the LIC's Establishment Manual. These include, inter alia, the following:-

Finally, whilst possibility of breakdown may exist in almost all electrical equipment or rotating machinery, we would recommend you to consider generally machinery breakdown insurance cover in respect of such machinery equipment where the cost of repairs or replacement is likely to be substantial." files, table equipments, fans, lights, etc., removing and replacing of cover of machines, filling up ink pots etc.

16. For the above opinion, a bill of Rs.15,000/- (Exhibit MW 1/6 also Exhibit WW1/M4) towards professional fee was sent under the signatures of the employee.

17. Finally, there is a reference to a memo issued some time in 1987, which is Exhibit MW1/8 (also Exhibit WW1/M3). This memo is signed by a superior (Mr. Bilimoria) of the employee and the same is marked to the employee for further action, if necessary . The employee put a note thereon indicating that he has discussed the matter and no further action is needed. This memo relates to a settlement of claims of Simbhaoli Sugar Mills. It reads as follows:-

(iv) Serving drinking water to employees and to visitors.

"In the 4th para of your letter you have explained the basis of claims settlement in case of fire damage to stocks in godown.

(v) Carrying typewriters, franking machines etc. within the building and franking machines and other such portable items from one place to another.

It is stated that the "basis of calculating the indemnity in case of raw materials shall be value declared on the policy and prevailing market rates on the date of loss, and for finished goods shall be cost of product only excluding profits". We would eplain that claim for damage to raw materials will be settled on the basis of market value on the date of the loss subject to adequacy of the sum insured calculated on that basis. If the sum insured is less, the condition of average would apply.

As far as finished goods are concerned, claim could be made on the basis of insured's sale value of the product not of all discounts after deducting any unincurred cost. To quote an example, if say the finished goods are still in unpacked condition wheras the sale value agreed is for packed material all packing charges not yet incurred at the time of the loss should be deducted from the sale value for the purpose of the claim."

(viii) Affixing stamps, sticking or sealing envolopes or wrappers, typing of packets or packing up of parcels etc.

18.None of these documents have been controverter by the employee and these really form the basis for determining the nature of duties performed by him. Even a cursory reading of these documents suggests that the employee was highly educated (as per hisvisiting card, he is a chartered engineer) and was certainly not doing any manual work as claimed by him. Manual work (or inspection) may have been incidental to his primary duties as a consultant in risk management, but that will not make him a workman or the purposes of the Act. The nature of work clearly involved a considerable amount of mental inputs related to creativity and imagination. It can hardly be said that the employee was someone doing manual work.

19.The word "skilled" as in Section 2(s) of the Act has to be construed ejusdem generis, as held in Adyanthaya. So construed, it means skilled work, whether manual or non-manual, which is of a genre of the other types of work mentioned in the definition.

The documentary evidence on record clearly shows that the work of the employee was that of a highly qualified and specialized consultant, in the field of risk management. By no stretch of imagination can he be called a skilled workman doing manual or no-manual work.ouple of tasks, but it is not as if he is going to be the only peon working with the LIC. There will be other peons also and surely they can chip in once in a while so that all the main tasks of peons are carried out. It is not LIC's case hat each peon is insulated and has no concern with the work of another peon.

20. The learned Labour Court has referred to some communications to conclude that the employee was required to report to his superior Mr. Bilimoria. All that these communications show is that he was not doing much supervisory work. This does not lead te Respondent employee anywhere, because he may still be performing managerial or administrative functions. In any hierarchy an employee is always answerable to a superior and in this case the employee was answerable to Mr.Bilimoria. The fact that he was to doing supervisory work does not put him in the category of workman within the meaning of Section 2(s) of the Act; rather it takes him out of that definition. employment today.

21. I am aware that a writ court should not normally interfere with a finding of fact arrived at by the learned Labour Court. But, as discussed in Pandhi, the question whether an employee is a workman or not is a mixed question of law and fact. In thee present case, the learned Labour Court having followed an approach not approved by the Supreme Court in Adyanthaya, a clear question of law does arise. A misunderstanding of the legal position caused the learned Labour Court to commit an error in concludng that the employee is a workman within the meaning of Section 2(s) of the Act. Under these circumstances, it has become necessary to interfere with the conclusion arrived at by the learned Labour Court, which is based on an incorrect appreciation of the law and facts.ara 7 it is submitted that the medical report of Dr. S.S. Bedi was totally incorrect in so far as it declared the answering respondent unfit for employment. Petitioner has not filed the report of the Zonal Medical referee as part of the Anexure B(colly) to the petition. It may be relevant to note that Dr. S.S. Bedi is MBBS MD(Med) has not specialisation in the field of Neurology etc. He did not put answering respondent to any test. He only carried out physical examination of the answe

22. Consequently, there is no option but to hold that the Respondent employee is not a workman. Accordingly, the impugned Award is set aside and the writ petition is allowed. No costs.rom their own doctors at divisional and zonal level on papers eve without asking the answering respondent to appear before them and under go any physical or medical examination."

18. The averments made by Respondent No.2 in his counter affidavit have not been specifically denied by the LIC. There is only a general denial (if it can be said to be so) in the following words:

"Para No.7 of the reply is not correct and of the petition is correct and reaffirmed. The entire material has been placed on record. As per the rules the respondent No.1 was required to undergo a medical examination and can be offered appointment only in the event he is found medically fit by the Corporation. Dr. Bedi is the Authorised Medical Examiner of the Corporation and he is MBBS and MD in Medicine. He is competent to examine and give his report in the field of neurology. It is wrong that the respondent No.2 was not put to any test by the doctor. The report of the Divisional Medical Referee and the Zonal Medical Referee was obtained on the report of the Medical Examiner itself."

19.Whatever be the position, whether Respondent No.2 was examined by the Divisional and Zonal Medical Referees of the LIC, the fact still remains that the Chief Commissioner preferred to accept the view of the Director, VIMHANS and the Medical Board of RML Hospital that Respondent No.2 was capable of performing the duties expected of a peon.

20.Learned counsel for the LIC has not been able to show anything to suggest that the decision taken by the Chief Commissioner in accepting the view of the Director, VIMHANS and the Medical Board of RML Hospital is irrational or perverse. At best, it may be an erroneous, though a possible, view but that is not sufficient to set it aside. Consequently, the decision taken by the Chief Commissioner that Respondent No.2 is fit to perform the duties of a peon has to be accepted and cannot be interfered wih under Article 226 of the Constitution.

21.Learned counsel for the LIC finally contended that the report of the Medical Board of RML Hospital was not in the form or manner prescribed by the Chief Commissioner. This cannot, with respect, be termed as a material irregularity which vitiates the report of the Medical Board. What was essentially required of the Medical Board of RML Hospital was to opine whether Respondent No.2 was capable of performing the duties of a peon. This opinion was rendered in the affirmative. If, however, the LIC believes that the view of the Medical Board may vary if it gives its report in the manner required by the Chief Commissioner, it can always approach the RML Hospital for doing the needful. But, it is necessary to note that the impugned order is silent about his perhaps because even the Chief Commissioner did not seem to lay much emphasis on form and formality.

22.The Act, being a beneficial legislation, required some affirmative action to be taken on the part of LIC and other authorities. V. Finkelstein and S. French, as quoted in "Disability: Challenges vs Responses" by Ali Baquer and Anjali Sharma have said that:-

"Disability is the loss or limitation of opportunities that prevents people who have impairments from taking part in the normal life of the community on an equal level with others due to physical and social barriers."

23. It is for this reason that one of the great world leaders, Nelson Mandela said (as quoted in Disability: Challenges vs Responses):-

"All countries today need to apply affirmative action to ensure that the women and the disabled are equal to all of us."

24.That affirmative action is required to be taken in some form or the other is also recognized by the Act particularly Chapter VII thereof. Needless to say, it would have been more befitting of LIC to have accepted the report of the Medical Board of RML Hospital and employed Respondent No.2. In fact, during the pendency of the writ petition, an opportunity was granted to LIC to take Respondent No.2 on probation to see if he was capable of working (if nothing else) as a peon, but learned counsel of LIC regretted the inability of his client to accept the suggestion. It is for this reason that the case was required to be argued on the employability of Respondent No.2 when it could more appropriately have been settled amicably out of Court.

25.Be that as it may, since I have come to the conclusion that there does not appear to be anything wrong with the order passed by the Chief Commissioner in so far as it directed LIC to engage Respondent No.2, there is no reason for me to interfere with the order impugned by the LIC to this extent.

26.Accordingly, direction (a) issued by the Chief Commissioner is affirmed. LIC will issue a letter appointing Respondent No.2 to the post of a peon, as already directed by the Chief Commissioner, within a period of two weeks from today and in any case before 1st October, 2002.

27. LIC will pay litigation expenses of Rs.5,000/- to Respondent No.2 before 1st October, 2002.