- Bookmark
- Share
- CaseIQ
Rhone-Poulenc (India) Ltd. v. State Of U.P And Others
Factual and Procedural Background
Respondent 3 was employed as a Medical Representative with the appellant company. On 11-3-1986 the Regional Sales Manager ordered his transfer from Aligarh to Kanpur. Respondent 3 did not comply, leading to a charge-sheet dated 13-10-1986, a domestic enquiry (in which he did not participate), and ultimately dismissal on 24-6-1987.
Respondent 3 raised an industrial dispute. The State Government referred the dispute to the Labour Court, which on 22-9-1993 ruled that he was a “workman” under the Industrial Disputes Act, 1947 and that the domestic enquiry violated principles of natural justice. By an award dated 18-12-1995 the Labour Court found the misconduct unproved, declared the dismissal illegal, and ordered reinstatement with consequential benefits.
The appellant filed two writ petitions in the High Court challenging (i) the Labour Court’s preliminary order of 22-9-1993 and (ii) the award of 18-12-1995. The High Court dismissed both petitions by a common judgment. The present appeals challenge that judgment.
Legal Issues Presented
- Whether a Medical Representative is a “workman” under the U.P. Industrial Disputes Act in view of Section 6(2) of the Sales Promotion Employees (Conditions of Service) Act, 1976, and consequently whether the Labour Court had jurisdiction.
- Whether the transfer order issued by the Regional Sales Manager was made by a competent authority, and if not, whether non-compliance with that order could constitute misconduct justifying dismissal.
- Whether the High Court correctly held that Respondent 3 was entitled to salary/arrears equivalent to other medical representatives under the settlement dated 25-6-1988 and that the appellant was estopped from disputing its applicability.
Arguments of the Parties
Appellant's Arguments
- The Labour Court lacked jurisdiction because, under Section 6(2) of the 1976 Act, the deeming provision extends only to the Central Industrial Disputes Act, not to the U.P. Industrial Disputes Act; therefore Respondent 3 is not a “workman” for purposes of the State legislation.
- Reliance was placed on the Constitution Bench decision in H.R. Adyanthaya v. Sandoz (India) Ltd., (1994) 5 SCC 737, where medical representatives were held not to be workmen under a State enactment.
- The High Court erred in extending the benefits of the 25-6-1988 settlement to Respondent 3 and in applying estoppel against the appellant.
Respondent's Arguments
The opinion does not contain a detailed account of Respondent 3’s legal arguments.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| H.R. Adyanthaya v. Sandoz (India) Ltd., (1994) 5 SCC 737 | Medical representatives are not “workmen” under a State industrial law; however, this Court can treat the dispute as one under the Central Industrial Disputes Act in exercise of Article 142. | The Court adopted the same course: notwithstanding lack of status under the U.P. Act, it treated the reference as one under Section 10(1)(d) of the Industrial Disputes Act, 1947 by invoking Article 142. |
Court's Reasoning and Analysis
1. Jurisdiction and Status of Medical Representatives
Accepting the appellant’s contention, the Court held that a medical representative is not a “workman” under the U.P. Industrial Disputes Act. Nevertheless, following the approach in Sandoz, the Court exercised its powers under Article 142 of the Constitution to treat the existing reference as one made under Section 10(1)(d) of the Central Industrial Disputes Act, 1947, thereby sustaining the Labour Court’s competence.
2. Validity of the Transfer Order and Dismissal
The appellant failed to produce any evidence showing that the Regional Sales Manager had authority to transfer Respondent 3. Consequently, the Labour Court’s finding—affirmed by the High Court—that the transfer order was issued by an incompetent authority remained undisturbed. Because the dismissal was predicated on disobedience of that invalid order, the finding of wrongful termination stood.
3. Applicability of the 25-6-1988 Settlement
The High Court’s ruling that Respondent 3 was entitled to parity of salary/arrears under the settlement and that the appellant was estopped from denying its applicability exceeded the scope of the writ proceedings. Questions concerning consequential benefits were not part of the award under challenge. The Supreme Court therefore set aside that portion of the High Court’s judgment, leaving the issue open to be determined by the appropriate forum when implementation of the award is undertaken.
Holding and Implications
APPEALS PARTLY ALLOWED—The Court set aside the High Court’s pronouncement on salary/arrears and applicability of the 25-6-1988 settlement but upheld the remainder of the judgment, including reinstatement of Respondent 3.
Implications: Respondent 3’s reinstatement and the finding of wrongful dismissal remain operative. However, entitlement to benefits under the 1988 settlement will be decided in future proceedings. The decision applies the Sandoz precedent to extend Central industrial-dispute mechanisms to sales-promotion employees, but otherwise sets no new substantive precedent.
Y.K Sabharwal, J.— Respondent 3 was working as a Medical Representative with the appellant. By an order dated 11-3-1986 issued by the Regional Sales Manager of the appellant, Respondent 3 was transferred from Aligarh to Kanpur. Respondent 3, however, did not join the duties at Kanpur despite grant of various opportunities. Thus, a charge-sheet dated 13-10-1986 was issued to Respondent 3. An inquiry was held. Respondent 3 did not participate in the inquiry. The enquiry officer found the charges proved. By order dated 24-6-1987 passed by the appellant, Respondent 3 was dismissed from service.
2. An industrial dispute was raised by Respondent 3. The State Government referred the dispute for adjudication of the Labour Court to determine whether the termination of Respondent 3 was correct and legal and if not to what relief the workman was entitled to. The Labour Court by order dated 22-9-1993 came to the conclusion that Respondent 3 was a sales promotion employee as per the Sales Promotion Employees (Conditions of Service) Act, 1976 and as per Section 2(s) of the Industrial Disputes Act, 1947 he comes under the definition of workman and has a right to raise the industrial dispute. The said order also held that the inquiry conducted by the appellant against the workman was not according to the principles of natural justice. By award dated 18-12-1995 the Labour Court held that the appellant has failed to prove the charge of misconduct against Respondent 3 and termination of his services with effect from 24-6-1987 is improper and illegal and he is entitled to reinstatement in service along with consequential benefits. The plea of Respondent 3 that the transfer order had been issued by an incompetent authority and, therefore, the non-compliance thereof cannot be treated as misconduct was accepted. It was noticed in the award that the appellant did not produce any material to prove that the Regional Sales Manager was competent to pass an order of transfer or that the powers to transfer the Medical Representatives had been delegated to the Regional Sales Manager. It was admitted that the Corporate Manager had the power to pass order of transfer of Medical Representatives.
3. Two writ petitions filed by the appellant, one challenging the order dated 22-9-1993 and the other the award dated 18-12-1995 were dismissed by the High Court by a common judgment which is under challenge in these appeals.
4. Mr V.R Reddy, learned counsel for the appellant contends that the Labour Court had no jurisdiction to deal with the matter since Respondent 3, a Medical Representative, could not be held to be a “deemed workman” within the meaning of the U.P Industrial Disputes Act by virtue of Section 6(2) of the Sales Promotion Employees (Conditions of Service) Act, 1976.
The said section reads as under:
“6. (2) The provisions of the Industrial Disputes Act, 1947 (14 of 1947), as in force for the time being, shall apply to, or in relation to, sales promotion employees as they apply to, or in relation to, workmen within the meaning of that Act and for the purposes of any proceeding under that Act in relation to an industrial dispute, a sales promotion employee shall be deemed to include a sales promotion employee who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute or whose dismissal, discharge or retrenchment had led to that dispute.”
5. The contention of the learned counsel is that assuming the aforesaid provision is applicable, it still does not extend the deeming fiction to any State enactment including the U.P Industrial Disputes Act as it is apparent on reading of the section that sales promotion employees, within the meaning of Central enactment of the Industrial Disputes Act, 1947 (14 of 1947) have been treated as “workman”. Reliance has been placed by the learned counsel on a Constitution Bench decision of this Court in H.R Adyanthaya v. Sandoz (India) Ltd. (1994) 5 SCC 737. The Bench has held that since the medical representatives are not workmen within the meaning of the Maharashtra Act, the complaint made to the Industrial Court under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 was not maintainable. The acceptance of the contention of Mr Reddy that Respondent 3 in view of Sandoz case (1994) 5 SCC 737 is not a “workman” within the meaning of the U.P Industrial Disputes Act, however, does not help the appellant in substance as in the present case we propose to adopt the same course as was adopted in Sandoz case (1994) 5 SCC 737 by treating the complaint to be an industrial dispute under the Industrial Disputes Act, 1947 in exercise of the powers of this Court under Article 142 of the Constitution. More than 12 years have passed since the reference was made to the Industrial Court and in the facts and circumstances of the case, we think it appropriate to adopt the course as was adopted in Sandoz case (1994) 5 SCC 737. Thus, we treat the reference in question to be one under Section 10(1)(d) of the Industrial Disputes Act, 1947.
6. The appellant did not place any material before the Labour Court to prove the authority and competence of the Regional Sales Manager to order the transfer of Respondent 3. The appellant has been unable to make out any case for disturbing the finding recorded by the Labour Court as affirmed by the High Court that the transfer order of Respondent 3 had not been issued by a competent authority. The mere fact that after the order of transfer had been issued and when Respondent 3 had failed to report for duty, he was also asked by the Corporate Manager, who was competent to order his transfer, to join the duties at Kanpur will not validate the order of transfer issued by an authority not competent to do so.
7. The High Court has also held that Respondent 3 is entitled to the same amount of salary/arrears of salary after he was reinstated by the award of the Labour Court which his counterparts (medical representatives) in the appellant Company were receiving under the settlement dated 25-6-1988 and has further held that the said settlement is applicable to the case of Respondent 3 as well and the appellant is estopped from taking the plea of its non-applicability in case of Respondent 3. Mr Reddy contends that the aforesaid finding of the High Court deserves to be set aside. We agree. The question whether Respondent 3 is entitled or not to the benefit of settlement dated 25-6-1988 was not the subject-matter of the award which directed the reinstatement of workman in service along with consequential benefits. What consequential benefits Respondent 3 would be entitled to was not the subject-matter of the writ petitions before the High Court. According to the appellant, Respondent 3 is not entitled to the benefits under the settlement whereas Respondent 3 claims such benefits. This question may have to be adjudicated by a competent authority at an appropriate stage when the question of grant of consequential relief is raised or it is contended that full consequential reliefs in terms of the award have been denied to Respondent 3. The stage of implementation of the award had not come when the matter was pending before the High Court. The only question before the High Court was with regard to the legality of the award and the order dated 22-9-1993 whereby the two preliminary issues were decided by the Labour Court. In this view, we set aside the impugned judgment to the extent it directs that Respondent 3 is entitled to the same amount of salary/arrears of salary which his counterparts are receiving under the settlement dated 25-6-1988 as also the finding that the said settlement is applicable to Respondent 3 and that the appellant is estopped from taking the plea of its non-applicability. We leave these questions open without expressing any opinion as to the applicability or otherwise of the settlement to the case of Respondent 3 or the validity of other legal pleas including that of estoppel. It would be open to the appellant and Respondent 3 to raise such pleas as may be available to them in law at the appropriate stage and it goes without saying that the said aspects will be decided on its own merits in accordance with law.
8. For the aforesaid reasons, we partly allow the appeals to the limited extent as above and in all other aspects we maintain the impugned judgment of the High Court. The parties are left to bear their own costs.
Alert