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Smart Summary

Structured Summary of the Opinion (Lentin, J.)

Factual and Procedural Background

The petitioner (Waman G. Raut) was in the employ of the first respondent-company from 1957 until the termination of his services in July 1973 (the opinion records both "terminated on 21 July 1973" and later refers to termination with effect from 31 July 1973). The petitioner sought reinstatement; conciliation failed and the dispute was referred to adjudication before the Second Labour Court, Bombay (Reference No. 668 of 1974). The petitioner filed a statement of claim; the employer filed a written statement asserting, as a preliminary defence, that the petitioner was not a "workman" within the meaning of S.2(s) of the Industrial Disputes Act, 1947, and accordingly that the reference was not maintainable as an industrial dispute.

The parties agreed that the question whether the petitioner was a "workman" should be treated as a preliminary issue. They disagreed, however, about who should lead evidence first on that preliminary issue. The Presiding Officer (respondent 2) made an order dated 16 September 1975 directing the petitioner (employee) to lead evidence first to substantiate that he was a "workman." The petitioner challenged that order by filing the present special civil application seeking to set aside the impugned order and to direct the presiding officer to record the employer's evidence first on the preliminary issue.

Legal Issues Presented

  1. Whether, when an employer raises a preliminary objection challenging the maintainability of a reference on the ground that the claimant is not a "workman" under S.2(s) of the Industrial Disputes Act, it is the employer (the party raising the challenge) who must lead evidence first to make good that preliminary objection.
  2. Whether the Presiding Officer erred in directing the employee (petitioner) to adduce evidence first on the preliminary issue of his status as a "workman."

Arguments of the Parties

Petitioner's Arguments (Sri Deshmukh)

  • The employer had taken the preliminary point prominently in its written statement challenging the maintainability of the reference; therefore the employer should lead evidence first to establish that preliminary defence.
  • It would be unfair and inequitable to place the initial onus on the employee to disprove the employer's preliminary objection when the employer was in a position to produce documentary and other material to substantiate its case.

Employer's Arguments (Sri Damania)

  • Because the petitioner had pleaded in his statement of claim that he was a "workman," the petitioner should be required to prove that fact by leading evidence first.
  • The employer relied on judicial observations (including in P.M. Murugappa Mudaliar v. P. Raju Mudaliar) that the party asserting that a dispute is an industrial dispute must establish that fact; in Swapan v. First Labour Court the court held that where employment itself is denied it is for the claimant to prove employment.
  • The employer suggested it would be burdensome or unfair to require it to establish a negative; it was argued the petitioner should show how he fell within the statutory definition of "workman."

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Newspapers, Ltd. v. State Industrial Tribunal, A.I.R. 1957 S.C. 532 That an aggrieved party may question whether a matter referred by Government is in fact an "industrial dispute" and thus the jurisdiction of the Industrial Tribunal can be challenged; the party challenging jurisdiction must be allowed to make out that challenge. The court relied on this authority to support the general proposition that a party who challenges the competence or maintainability of a reference must establish that challenge in the first instance by evidence.
State of Madras v. C.P. Sarathy, A.I.R. 1953 S.C. 53 Cited within the discussion in Newspapers, Ltd.; relates to the principle that the State's administrative reference does not preclude a party from showing the matter referred was not an industrial dispute. Referenced as part of the Supreme Court authority underpinning the proposition that jurisdiction may be questioned and the challenger bears an initial burden to prove non-existence of an industrial dispute.
Workmen of Aligarh Electricity Supply Co. Ltd. v. Aligarh Electricity Supply Co. Ltd., (1966-67) 31 F.J.R. 164 (Allahabad High Court) When Government refers a matter after concluding an industrial dispute exists, prima facie an industrial dispute exists; the party challenging that opinion (management) must show the opinion was wrong and that no industrial dispute existed. The court cited this case to reinforce that when the management challenges the existence of an industrial dispute it bears the initial burden to establish that challenge, and that burden should not be wrongly placed on the workman.
P.M. Murugappa Mudaliar, Rathina Mudaliar & Sons v. P. Raju Mudaliar, 1965 I.L.L.J. 489 (Mysore High Court) Contains observations, by one judge, that the party who contends a dispute is an industrial dispute should establish the fact; another judge commented that the question of burden is procedural and not strictly governed by the Indian Evidence Act in adjudication under the ID Act. The court observed that the Mysore decision was of limited assistance on the facts because, in that case, the Labour Court had proceeded on an assumption that a union-linked dispute was industrial and no evidence was led on that question; thus it did not control the present situation.
Swapan v. First Labour Court, West Bengal, 1976 L. & I.C. 202 (Calcutta High Court) Where the very fact of employment is in dispute (claimant says employed by company, company denies), the person asserting employment must prove it. The court distinguished this case as inapplicable here because in Swapan the employment relationship itself was contested; in the present case the employer-employee relationship was not in dispute, only the statutory status ("workman") and salary/duties were contested.

Court's Reasoning and Analysis

The court began from the statutory definition of "workman" in S.2(s) of the Industrial Disputes Act, 1947, which includes an exclusion of persons employed in a supervisory capacity drawing wages exceeding Rs. 500 per mensem. The employer's written statement asserted that the petitioner functioned as a foreman (supervisory duties) and was drawing Rs. 800 per month; accordingly the employer challenged the maintainability of the reference on the ground that the petitioner was not a "workman."

The court explained the applicable legal principle: when a party challenges the competence of a forum or raises at the outset a preliminary point that an application or reference is incompetent or not maintainable, it is for that party to establish its preliminary ground of challenge in the first instance by evidence (documentary and/or oral). The court relied on the authority of the Supreme Court and the Allahabad High Court to demonstrate this allocation of initial burden.

Applying that principle to the facts, the court observed that the employer had specifically pleaded that the petitioner performed supervisory duties and drew Rs. 800 per month. Those are positive facts the employer itself asserted; therefore the employer was in a position to produce the documentary and oral material required to establish that assertion. The court rejected the employer's contention that the petitioner should lead first merely because he styled himself a "workman" in the statement of claim, noting that titles such as "foreman" do not conclusively establish supervisory status and that the actual duties and salary must be proved.

The court considered the employer's reliance on Mysore High Court and Calcutta High Court decisions, but distinguished those authorities on their facts: in Mudaliar the Labour Court had proceeded on an assumption peculiar to that case and in Swapan the primary dispute was the very fact of employment (unlike here, where the employment relationship was not in issue). The court further rejected any suggestion that the employer would be asked to prove a negative; rather, the employer was required to prove the positive facts it had pleaded (supervisory duties and salary).

Concluding its analysis, the court held that on the pleadings as they stood the employer must adduce evidence first (oral and/or documentary) to make good the preliminary objection in its written statement; if the employer succeeded, the reference would be non-maintainable, but the initial onus lay with the employer to establish that challenge.

The court expressly stated it decided the controversy on the particular facts before it and did not attempt to lay down any general proposition of law.

Holding and Implications

Holding: The special civil application was allowed and the rule was made absolute in terms of the petitioner's prayer. The court accepted the petitioner's contention and rejected the employer's contention; the impugned order directing the employee to lead evidence first was set aside and the employer was to adduce its evidence first on the preliminary issue.

Implications:

  • The immediate effect is that, on the facts of this case, the employer (who raised a preliminary objection that the petitioner was not a "workman") must lead evidence first to establish that objection by oral and/or documentary evidence.
  • No further or broader precedent was laid down: the court emphasized that its decision is confined to the facts and circumstances of this case and did not purport to announce a general rule of law governing all similar situations.
  • There will be no order as to costs.

    Waman Ganpat Raut v. Cadbury-Fry (India) (Private), Ltd., And Another

    Lentin, J.:— By this special civil application, the petitioner seeks an appropriate writ for setting aside the impugned order, dated 16 September 1975, passed by respondent 2, viz., the Presiding Officer, Second Labour Court, Bombay, and for directing respondent 2 to record the evidence of the employer, namely, respondent I, before recording the evidence of the petitioner on a certain preliminary issue.

    2. The petitioner was an employee of the first respondent-company from 1957 till his services were terminated on 21 July 1973. The petitioner's demand for reinstatement having been rejected by the employer, and conciliation proceedings having resulted in a failure report, the petitioner's demand for reinstatement was referred for adjudication to the second respondent and was taken on file as Reference No. 668 of 1974. Thereafter the petitioner filed his statement of claim setting out his case for reinstatement and in due course the employer, viz., the first respondent-company, filed its written statement. The preliminary defence taken up in the written statement was a challenge to the maintainability of the reference on the ground that the petitioner was not a “workman” under S. 2 (s) of the Industrial Disputes Act, 1947 (referred to hereafter as the Act), with the result that the dispute referred for adjudication was not an industrial dispute. As a result of an agreement between the petitioner and the employer, the second respondent ordered that the question whether the petitioner is a “workman” should be decided as a preliminary issue. As, however, the parties were not ad idem as to who should lead evidence first, the second respondent, after hearing the parties, passed his impugned order, dated 16 September 1975, directing the employee, namely, the petitioner, to adduce evidence to substantiate that he is a “workman” within the meaning of the definition of the term “workman” in S. 2 (s) of the Act. Hence the present special civil application for the reliefs set out in the opening part of the judgment.

    3. Challenging the impugned order Sri Deshmukh, the learned counsel appearing on behalf of the petitioner, urged that it was for the employer, viz., the first respondent-company, to lead evidence first in order to establish the preliminary point taken, in the forefront in the written statement. On the other hand, Sri Damania, the learned counsel appearing on behalf of the employer, urged to the contrary, on the ground that the petitioner having alleged in his statement of claim to be a “workman” it was for him to substantiate the same by first leading evidence on that aspect.

    4. In order to appreciate the rival contentions of the parties, it would be appropriate to recapitulate the definition of the term “workman” appearing in S. 2 (s) of the Act. The relevant excerpts of S. 2 (s) are as under:

    “‘workman’ means any person … employed in any industry to do any skilled or unskilled manual, supervisory, technical or clerical work for hire or reward … but does not include any such person—

    (iv) who being employed in a supervisory capacity, draws wages exceeding Rs. 500 per mensem …”

    5. With this definition in the foreground it would be pertinent to allude to the relevant portions of the statement of claim and the written-statement of the petitioner and the employer respectively. The statement of claim, in so far as the present controversy is concerned, starts with the usual introductory line, namely:

    “Waman G. Raut, hereinafter referred to as ‘the workman’ begs to state as follows:”

    Paragraph 1 recites, that the petitioner joined the services of the employer in 1957 as a machine operator on various machines. With effect from 1 January 1958, when revised gradings and pay-scales were introduced by the company, the petitioner was graded as a grade I worker. In view of his capacity to operate efficiently machines of various types, the petitioner was upgraded from grade I to a foreman with effect from 26 August 1968, and he continued to work on various types of machines. To this averments the reply of the company is to be found at Para. 1 of the written statement, namely, at the very outset the company has contended that the present dispute is not an industrial dispute, inasmuch as the petitioner is not a workman as defined in S. 2 (s) of the Act. It is further contended by the company that the petitioner was working as a foreman in the production department of the company's factory with effect from 26 August 1968, till his services were terminated with effect from 31 July 1973. As a foreman, the petitioner's main duties were supervisory and at the material time when his services were terminated, he was drawing a salary of Rs. 800 per month. His duties were, inter alia, to allocate work to workmen and get the work done by giving guidance wherever necessary. He was also responsible for the maintenance of discipline and ensuring that the manpower was utilized to the maximum. The company has elaborated the petitioner's duties under several different heads, inter alia, to wit, assigning work to workmen and supervising their work, allocation of labourers to various departments, maintaining discipline among workmen, arranging production, inspection of quality and quantity of raw materials and packaging materials and issuing daily work orders in the event of a major break down of machines. Paragraph 1 of the written-statement concludes with the assertion that:

    “In the above circumstances, the company submits that having regard to the nature of duties performed by the employee, he cannot be considered to be a workman under the Industrial Disputes Act and, therefore, the present reference is not maintainable in law. It is prayed that the above point that he is not a workman under the Industrial Disputes Act, 1947, may be decided first as a preliminary issue.”

    On these pleadings one need only ask oneself: What is it that the parties seek? The answer is obvious. The employee desires reinstatement on the ground that the termination of his service is illegal, invalid and improper on the other hand, what the employer desires is that the petitioner's claim to reinstatement be rejected on the preliminary ground set forth at the very outset in the written-statement. Thereby the employer has challenged the very competence of the Court in deciding the question of the petitioner's reinstatement on the ground that the employee is not entitled to raise an industrial dispute as he does not fall within the definition of “workman” under S. 2 (s) of the Act. In order to substantiate this ground of challenge, the company has stated in terms that the employee was working in a supervisory capacity drawing a salary amounting to Rs. 800 per month. In other words, according to the company, the petitioner squarely falls within the exclusion of the term “workman” as defined in S. 2 (s) of the Act.

    6. We would not be far wrong in reiterating what has been laid down times out of number by the Supreme Court and various High Courts that where a party challenges the competence of a forum to decide a particular matter, or where a party urges at the very outset as a preliminary point that an application or a reference is incompetent, invalid and not maintainable (as the employer has done in the present case), it is for that party to make good in the first instance such ground of challenge. It may well be that thereafter the burden may shift to the other side. That is altogether a different matter. However, the subsequent shifting of the burden does not absolve the party raising such a preliminary issue from establishing in the first instance, by evidence, either documentary and/or oral, what it initially set out to do. In this connexion, it would be pertinent to note the observations of the Supreme Court in Newspapers, Ltd. v. State Industrial Tribunal A.I.R 1957 S.C 532]. In that case a lino-typist was dismissed from service by the appellant-company on the ground of incompetence. On a reference of his case to the Industrial Tribunal, it was held that the dispute did not fall within the definition of an industrial dispute, with the result that the reference of that dispute by Government was bad. In Para. 38, at page 539 of the report it was observed as under:

    “In spite of the fact that the making of a reference by the Government under the Industrial Disputes Act is the exercise of its administrative powers, that is not destructive of the rights of an aggrieved party to show that what was referred was not an ‘industrial dispute’ at all and, therefore, the jurisdiction of the Industrial Tribunal to make the award can be questioned, even though the factual existence of a dispute may not be subject to a party's challenge State of Madras v. C.P Sarathy [A.I.R 1953 S.C 53].

    In Workmen of Aligarh Electricity Supply Company, Ltd. v. Aligarh Electricity Supply Company, Ltd. [(1966-67) 31 F.J.R 164], it was held by the Allahabad High Court that when Government has arrived at the opinion that an industrial dispute exists and refers it for adjudication, it is Government which invokes the jurisdiction of the Tribunal and that, prima facie, an industrial dispute exists, and it would be for the party which challenges the opinion of the Government and contends that there is no industrial dispute, to establish its case. At page 166 of the report it was observed as under:

    “It is, therefore, evident that the State Government had come to the opinion that an industrial dispute existed in respect of the matter of dispute referred for adjudication. It was the management who raised the objection before the Labour Court that the dispute referred was not an industrial dispute …, it was for the management to show that the opinion of the State Government was wrong and that in fact no industrial dispute existed. The burden of showing, in these circumstances, that the dispute referred was not an industrial dispute was on the management and was wrongly placed by the Labour Court upon the workmen.”

    The decision of the Supreme Court and the observations of the Allahabad High Court, with which we are in respectful agreement, reveal in no uncertain terms that it is not on the petitioner but on the company, having raised its preliminary issue challenging the maintainability of the reference and the competence of the Labour Court to try it, that must lie in the first instance, the burden to establish its preliminary ground of challenge. It is for the company to prove in the first instance that petitioner's case falls within the exception to S. 2 (s). Unless it does so, the averments contained in Para. 1 of the statement of claim would be deemed to be accepted. Thus the net result of this discussion is that the company having raised its preliminary issue and having challenged the competence, validity and maintainability of the reference itself, it is for the company to make good its challenge in the first instance, by evidence, oral and/or documentary. Thereafter, if at all, the burden would shift on the other side. What also cannot be lost sight of is that, in the facts and circumstances of this case it can hardly be said that any prejudice or detriment would be caused to the company in leading evidence in the first instance, looking to the fact that it is in possession of documentary evidence and all other material which would be of assistance to the Labour Court in coming to its conclusion. In the circumstances of this case, it would be unfair, unjust and inequitable to throw an onerous burden on the employee, and which burden in this case is basically and essentially on the employer to discharge in the first instance.

    7. On the other hand, on behalf of the company. Sri Damania relied on certain observations of Hedge, J., in the decision of the Division Bench of the Mysore High Cour in P.M Murugappa Mudaliar, Rathina Mudaliar and Sons v. P. Raju Mudaliar [1965-I L.L.J 489], that it is for the party who contends that the dispute is an industrial dispute to establish that fact. On the other hand, in the same case, it was observed by Govinda Bhat, J., at page 499 of the report:

    “The question of burden of proof is a matter of procedure resting on the Indian Evidence Act, which is not applicable to adjudication under the Act. In my opinion, the issue, if the management raises, has to be decided on the material on record without placing too much reliance on the questing of burden of proof.”

    There is nothing in this judgment of the Mysore High Court which can be of particular assistance to the present company before us inasmuch as in Mudaliar case (vide supra), the Labour Court proceeded on the basis that once an individual dispute is taken up by a labour union, it automatically becomes an industrial dispute and no evidence was led by either side on the question whether the dispute was an industrial or individual dispute. Sri Damania also relied on the decision of the Calcutta High Court in Swapan v. First Labour Court, West Bengal [1976 L. & I.C 202], where it was held that where a person asserts that he was a workman of the company and it is denied by the company, it is for him to prove the fact. It is not for the company to prove that he was not an employee of the company but of some other person. That decision can also be of no assistance to Sri Damania for the simple reason that in that case the very factum of employment was in dispute, the workman contending that he was an employee of the company and the company contending that he was not. Thus in that case the very relationship of employer and employee was in issue, with the result that it was held that it was for the person claiming to be an employee of the company to prove that he was in fact in the employment of that company. No such thing can be said in the present matter where the relationship of employer and employee has never been in dispute.

    8. It is equally futile for the company to urge that it cannot be expected to establish a negative. On its preliminary objection, the company is not expected to do anything of the kind. It is in fact required to establish a positive, namely, that the petitioner was in fact employed in a supervisory capacity drawing a salary exceeding Rs. 500 per month which is the case of the company itself to establish its preliminary objection.

    9. On behalf of the company, it was, however, urged by Sri Damania that it was incumbent upon the petitioner to show how he fell within the definition of “workman.” This contention is fallacious and does not take into account the observations of the Supreme Court and the Allahabad High Court (vide supra). According to Sri Damania, the word “foreman” has acquired a particular connotation, namely, the duty to supervise over others. This dictionary meaning, however, may, in a given set of circumstances, have no relevance to the duties actually performed by the employee. Merely because in his statement of claim the petitioner has stated that he was upgraded from grade I to foreman with effect from 26 August 1968, would not by itself necessarily confer upon him the status of exercising powers in a supervisory capacity. The word “foreman” as an elastic word, depending upon the concern where the person is employed, the number of persons employed in that concern and the various duties which such person is actually required to perform. The word “foreman” by itself has no charm of its own. It must be established by the party asserting it, that such a person was in fact working in a supervisory capacity. The company has listed in its written-statement the petitioner's duties to show that he was working, in a supervisory capacity. It is, therefore, for the company to so establish by leading evidence, oral and/or documentary, in the first instance. If the company is in a position to establish that such were the duties of the petitioner, the ground of challenge advanced by it as to the maintainability of the reference would necessarily succeed. However, that is for the company to do and the onus cannot be initially thrust upon the employee as urged by Sri Damania. What also cannot be lost sight of is that in his statement of claim the petitioner has not mentioned the salary drawn by him. On the other hand, the company has stated in terms in Para. 1 of its written-statement that the main duties of the petitioner were supervisory and that at the time of the termination of his service his salary was Rs. 800 per month, viz., more than Rs. 500 per month as required by S. 2 (s). This is yet another reason that the onus of establishing the petitioner's salary would initially fall on the company if it expects its preliminary objection to be upheld by the Labour Court. Hence it would be for the company to first establish by evidence, oral/or documentary, its ground of challenge as to the maintainability, validity, of the reference and the competence of the Court to entertain it.

    10. To summarize, on the pleadings as they stand, we are of opinion that in this case it is for the company to adduce its evidence, oral/or documentary in the first instance in order to make good the preliminary objection raised by it in Para. 1 of its written-statement. The burden may thereafter shift which is entirely a different matter and which, however would not absolve the company from establishing what in the first instance by evidence, oral and/or documentary, it has set out to do by way of raising its preliminary objection.

    11. We conclude this judgment by observing that we have decided the present controversy between the parties in the facts and circumstances of this particular case without attempting to lay down any general proposition of law.

    12. In the result, the ground of challenge urged by Sri Deshmukh, for the employee, must be accepted and the contentions of Sri Damania to the contrary on behalf of the company must stand rejected.

    13. The special civil application is allowed in terms of prayer (a) and the rule is made absolute accordingly. There will be no order as to costs.

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    Waman Ganpat Raut v. Cadbury-Fry (India) (Private), Ltd., And Another
    (Mar 13, 1980)