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Judgment
P. Jyothimani, J.—In all the above writ petitions, the issue involved is in respect of the claim of All Bank Appraisers'' Federation, Tamil
Nadu for regularisation of the services of Jewel Appraisers in various banks.
The first batch of eight cases in W.P. Nos. 7199 to 7204 of 2004, 8813 & 10856 of 2004 is filed by the Jewel Appraisers in Punjab National
Bank, Corporation Bank, Canara Bank, Central Bank of India, Union Bank of India, UCO Bank, Syndicate Bank and Bank of Baroda,
challenging the orders of the Union of India, Ministry of Labour, wherein the Government after considering the conciliation failure report of the
respective Labour Officers, passed uniform orders, as follows:
A similar dispute on the claims of Jewel Appraisers has been pending before the Hon''ble High Court of Madras in Writ Appeal No. 465 of 2001
filed by the management of Indian Overseas Bank. It is,therefore, considered not appropriate to refer the present dispute to the Tribunal for
adjudication as the matter is subjudice before the High Court.
The second batch of writ petitions in W.P. Nos. 10857 and 17858 of 2004 is also filed by the same Federation relating to the claim of
regularisation by the jewel appraisers of Indian Bank. In those cases, the Government of India, after considering the conciliation failure report,
passed the following order:
The claims of Jewel Appraisers has been pending before the Hon''ble High Court of Madras in a Writ Petition No. 32994 of 2002 filed by the
Indian Bank Employees'' Union arising out of the Award dated 2.8.2002 passed by CGIT-cum-LC, Chennai in ID No. 556/2001. It is, therefore,
considered not appropriate to refer the present dispute to the Tribunal for adjudication as the matter is subjudice before the High Court.
The third batch of cases in W.P. Nos. 8168 and8169 of 2004 is filed by the Jewel Appraisers of Indian Bank and Bank of Baroda respectively
and in those cases, even after the conciliation failure report was sent by the concerned Conciliation Officer on 26.11.2002 and 30.1.2003
respectively, the Government of India, has not passed any orders and therefore the prayer in these cases are for a direction against the
Government of India to pass orders.
The case of the petitioner Union in these cases is that the respective banks are advancing jewel loans, which according to the petitioners, is the
major portion of the total loan amounts advanced by the second respondent banks running to several crores of rupees. It requires the jewel
appraising work and the Jewel Appraisers are employed by the respective banks on piece-rate basis and are paid wages at the rate of Rs. 3,000/-
per month.
(a). According to the petitioners, the appraisers are to report to the bank every day and they have to be present throughout the day during banking
hours and therefore, the Jewel Appraisers are working under the control of the banks concerned and it is their duty to find out that the jewels
which are pledged are of pure quality.
(b). It is their case that in addition to that, they fill up jewel loan applications and obtain signatures from the customers. It is also stated that the
bank collects Rs. 1,000/- towards security deposit from each appraiser and therefore, according to them, their work is permanent throughout the
year and it is indispensable in the loan transaction of the banks. Even though they are permanent, they are not given other benefits given to
permanent workers of the banks.
(c). The petitioner Federation also informed the concerned banks about the award passed in I.D. No. 25 of 1977 by the Industrial Tribunal,
Chennai in respect of Jewel Appraisers employed in Indian Bank, directing their regularisation and that the award was confirmed by the High
Court in the order dated 14.2.1986 in W.P. No. 1947 of 1980 and again confirmed by the Division Bench in W.A. No. 330 of 1986 and finally
approved by the Hon''ble Supreme Court in SLP No. 10054 of 1990.
(d). It was, in those circumstances, the Federation had raised an industrial dispute before the Regional Labour Commissioner, who after giving
notice to the bank, found that there was no amicable settlement and submitted the respective failure reports. While so, the impugned orders came
to be passed by the Government of India refusing to refer the dispute to the Industrial Tribunal on the ground that in respect of Jewel Appraisers in
Indian Overseas Bank, the matter was pending before this Court in W.A. No. 465 of 2001.
(e). The case of the petitioner Federation is that the said Writ Appeal in W.A. No. 465 of 2001 filed by the Management of Indian Overseas Bank
was subsequently dismissed by the Division Bench of this Court on 18.2.2004 holding that the Jewel Appraisers of the Indian Overseas Bank are
also workmen in the line of the Tribunal award passed in I.D. No. 25 of 1977 in respect of Indian Bank Jewel Appraisers, which was confirmed
by the Supreme Court. Therefore, the writ petitions are filed challenging the respective impugned orders contending that since the writ appeal has
been dismissed in favour of the workmen viz., Jewel Appraisers, it is the duty of the Government to refer the dispute to the Industrial Tribunal.
During the course of arguments, it has been brought to the notice of this Court that as against the judgment of the Division Bench in W.A. No.
465 of 2001 dated 18.2.2004, appeal was filed in the Supreme Court by the Management of Indian Overseas Bank and the Hon''ble Supreme
Court, set aside the judgment of the Division Bench as also the award of the Industrial Tribunal relating to the Jewel Appraisers of the Indian
Overseas Bank holding that the Jewel Appraisers of the Indian Overseas Bank are not workmen within the meaning of Section 2(s) of the
Industrial Disputes Act and that was reported in General Manager, Indian Overseas Bank Vs. Workmen, All India Overseas Bank Employees
Union, .
A reference to the judgment of Division Bench of this Court in W.A. No. 465 of 2001 dated 18.2.2004 reported in The General Manager,
Indian Overseas Bank Vs. The Presiding Officer, Industrial Tribunal and The Workmen, All India Overseas Bank Employees Union, . shows that
the Division Bench has taken note of the earlier judgment in respect of Jewel Appraisers engaged by the Indian Bank. It is seen from the judgment
of the learned Single Judge who has considered the case of jewel appraisers of Indian Bank reported in Indian Bank v. Workmen 1986 (2) MLJ
59, that the Jewel Appraisers of the said bank were paid monthly remuneration of Rs. 100/- and as per the terms and conditions by which they
were appointed in the Indian Bank, the Jewel Appraisers were working regularly during banking hours and the bank had disciplinary control over
the said Jewel Appraisers and certain conditions were to be fulfilled before any leave was granted to them and the Jewel Appraisers were paid a
minimum amount per month like salary. In fact, on the nature of work rendered by the Jewel Appraisers of Indian Bank, the finding of the High
Court is as follows:
...As far as Appraisers are concerned, they are paid monthly minimum of Rs. 150. A place of work is allotted for them. They are bound to be
present in Bank premises during the fore-noon for 4 hours i.e. during entirety of business hours. Without prior permission they cannot absent
themselves, and if so done, proportionately there will be deduction out of the monthly payment made. Part of the tools required for their job is
supplied by the Bank. Commission collected from customers is paid at the end of the month, depending upon the quantum of work done by them.
The duration of their service is fixed at one year at a time. All these satisfy the vital tests laid down by the Supreme Court, and hence, the Tribunal
had taken into account relevant materials, and this is not a case wherein hardly few materials are found to sustain its finding. Rather considerable
material flowed only from the witnesses of the Bank, and which strengthens the finding of the Tribunal.
It was taking note of the said distinctive factor, the award passed by the Industrial Tribunal in respect of Indian Bank Jewel Appraisers in I.D.
No. 25 of 1997 was confirmed in Indian Bank v. Workmen 1986 (2) MLJ 59, the learned single Judge''s order was again taken on appeal in
W.A. Nos. 330 and 350 of 1986 before the Division Bench of this Court, the same was dismissed on 03.03.1990 and the SLP in SLP No.
10054 of 1990 filed by the Indian Bank was also dismissed by the Hon''ble Supreme Court on 10.10.1990 and therefore, in respect of Jewel
Appraisers of Indian Bank, the award in I.D. No. 25 of 1997 has become final to the effect that as per the terms and conditions of service, they
being employed by the Indian Bank, remained workmen within the meaning of Section 2(s) of the Industrial Disputes Act, 1947.
In the dispute raised by the Jewel Appraisers of the Indian Overseas Bank, it was specifically raised by the Jewel Appraisers of the Indian
Overseas Bank that they were appointed for particular branches of Indian Overseas Bank and also utilised for certain clerical jobs like, entering
applications for jewel loan and they were asked to go for other branches for verification and appraisal of jewels and they were necessarily to be
present between 10.00 am. to 2.00 pm. and were paid commission of Rs. 3/- for every Rs. 1000/- sanctioned by way of loan. It was the
contention of the Indian Overseas Bank that the Jewel Appraisers were not workmen by relying upon the judgment of the Supreme Court in
Management of Puri Urban Cooperative Bank Vs. Madhusudan Sahu and Another, and that the terms and conditions for Jewel Appraisers of
Indian Bank were totally different from that of Indian Overseas Bank. After adjudication, the Industrial Tribunal in I.D. No. 13 of 1990 by its
award dated 7.9.1999, directed the Indian Overseas Bank to treat the Jewel Appraisers as part-time clerks from the date of their filing claim
statements. The said award was confirmed by a learned Single Judge in W.P. No. 12015 of 2004 by order dated 25.1.2001 by dismissing the
writ petition filed by the Union as well as the bank, as reported in All India Overseas Bank Employees'' Union Vs. Industrial Tribunal and Another,
. In fact, the award of the Tribunal as well as the order of learned Single Judge was confirmed by the Division Bench of this Court in W.A. No.
465 of 2001 by judgment dated 18.2.2004 by holding that the judgment of Supreme Court in Management of Puri Urban Cooperative Bank Vs.
Madhusudan Sahu and Another, is an isolated case. The Division Bench has further held as follows:
Except the difference, namely, in the case of Jewel Appraisers of Indian Bank, that they were paid a monthly wage of Rs. 100 and in the case
of Jewel Appraisers of appellant-bank they are paid commission, there is no other difference. In so far as the payment of commission, Clause (iv)
of sub Section (rr) of Section 2 of the Industrial Disputes Act describes that ""any Commission payable on promotion of sales or business or both
could be considered as wages."" Applying the definition as it is admitted that the Jewel Appraisers of the appellant-bank are paid commission of Rs.
3 per every one thousand rupees sanctioned by way of loan, such payment should be considered as wages under the definition of wages. If once
the above conclusion is arrived at, we absolutely do not have any hesitation to hold that the above judgment in the case of Jewel Appraisers of
Indian Bank is applicable in all fours to the facts of the present case. We may also point out that this order of the learned single Judge was taken on
Writ Appeal in W.A. No. 330 of 1986 and the Division Bench in fact after elaborately considering the submissions and the various judgments of
the Apex Court, approved the view of the learned single Judge. In fact, it was considered in the said judgment that the Jewel Appraisers of Indian
Bank are also performing clerical jobs.
The Hon''ble Supreme Court, in General Manager, Indian Overseas Bank Vs. Workmen, All India Overseas Bank Employees Union, , while
setting aside the above said judgment of the Division Bench as well as the order of learned Single Judge and the award of the Tribunal in respect of
Jewel Appraisers of Indian Overseas Bank, has clearly noticed the distinctive instances in respect of services of the Jewel Appraisers of the Indian
Bank and the Indian Overseas Bank. Taking note of the fact that there was no evidence to show that the Jewel Appraisers have done clerical
work and even if such work was done it was by way of helping loanees, held that after Shastri Award, there is no question of any part-time clerk
being appointed.
The Supreme Court has taken note of the fact that the Jewel Appraisers were appointed as independent contractors, who were free to work
elsewhere and therefore, they are not employees, not subject to disciplinary control of the Bank, not subject to fixed working hours, not employed
based on any employment procedure and not assigned duty outside their contract except incidentally permitting them to fill up the forms. The
Supreme Court has also taken note of the circular issued by the bank dated 23.8.1975 to the effect that the Jewel Appraisers cannot be engaged
in any other work as they are not regular employees and that the said circular was reiterated by subsequent circular dated 2.1.1978 to the effect
that they are all on commission basis and they are not entitled to do any other work. The Supreme Court thus came to the conclusion that the
dispute in Indian Bank case was conceptually different by categorising the distinction as follows:
A few distinguishing facts need to be noted. In Indian Bank case (1986 (2) MLJ 59) there was evidence to show that the jewel appraisers
work regularly for four hours. It was clearly admitted in the instant case by the witnesses of jewel appraisers that there was no fixed period of
work and they could come and go at any point of time. In Indian Bank case 1986 (2) MLJ 59 the Bank had disciplinary control on the jewel
appraisers. In the instant case it was admitted by the witnesses that the Bank did not exercise any disciplinary control. In Indian Bank case 1986
(2) MLJ 59 conditions were to be fulfilled before any leave was granted. In the present case the jewel appraisers were not required to sign
attendance register and also were not required to make any leave application. The most relevant factor in Indian Bank case (1986 (2) MLJ 59)
was that the jewel appraisers were paid a minimum amount per month which was somewhat akin to salary. In the instant case, the amount was
paid on commission basis by the loanee and not by the Bank.
A few other facts need to be noted. In the present case as well as in Management of Puri Urban Cooperative Bank Vs. Madhusudan Sahu
and Another, the jewel appraisers were required to weigh the ornaments brought to the Bank for pledge and to appraise the quality, purity and
value. The jewel appraisers could be asked to do this exercise but not the manner in which it was to be done. In both the cases the respective
Banks had their lists of appraisers. It was not obligatory for the Bank to allot work to any particular jewel appraiser.
Ultimately, after analysing the distinction between the regular employees of the bank and Jewel Appraisers, it was held as follows:
At this juncture the distinction between jewel appraisers and the regular employees of the Bank can be noted.
Regular employees
Jewel appraisers
Subject to qualification and age prescribed.
No qualification/age.
Recruitment through employment exchange/Banking Service Recruitment Board.
Direct engagement by the local Manager.
Fixed working hours.
No fixed working hours.
Monthly wages.
No guaranteed payment, only commission paid.
Subject to disciplinary control.
No disciplinary control.
Control/supervision is exercised not only with regard to the allocation of work, but also the way in which the work is to be carried out.
No control/supervision over the nature of work to be performed.
Wages are paid by the Bank.
Charges are paid by the borrowers.
Retirement age.
No retirement age.
Subject to transfer.
No transfer.
While in employment cannot carry on any other occupation.
No bar to carry on any avocation or occupation.
Therefore, the jewel appraisers are not employees of the Bank.
Therefore, after the final judgment of the Hon''ble Supreme Court in respect of Indian Overseas Bank, it is clear that the terms and conditions
relating to Jewel Appraisers of Indian Bank, which were ultimately confirmed by the Apex Court to the effect that the Jewel Appraisers of Indian
Bank based on their conditions of service are to be treated as workmen as per Section 2(s) of the Industrial Disputes Act are totally different from
that of Jewel Appraisers of Indian Overseas Bank on the basis of their service and nature of work done by them, as categorised by the Apex
Court in para-18 of the said judgment in General Manager, Indian Overseas Bank Vs. Workmen, All India Overseas Bank Employees Union, .
By applying the yardstick propounded by the Apex Court as stated above, to the facts of the present case, it is clear that the Federation has
not only claimed the Jewel Appraisers as workmen u/s 2(s) of the Industrial Disputes Act,1947, but also claim to regularise them into service by
treating them as regular employees of the respective banks. In fact, in the reply filed by them opposing the petitions of the Federation before the
Conciliation Officer, the respective banks have taken a clear stand that in respect of Indian Bank there was an agreement providing business hours
to the Appraisers and such agreement has not been entered into by them. The Punjab National Bank in the reply before the Conciliation Officer
has in fact stated that (i) there is no agreement between the bank and the gold appraisers; (ii) there are no fixed hours during which the appraisers
are to be present in the bank; (iii) the appraiser is called to the branch when he is required for the purpose of certifying the quality of jewels
deposited by the borrower; (iv) there is no restriction for the appraiser to do his private jewel business; (v) the payment towards professional fees
is paid to the appraiser directing the borrower about which the bank is not concerned; (vi) there is no control or supervision of the bank over the
appraiser and the appraisers are not under the disciplinary control of the bank and there is no master-servant relationship between the bank and
the appraiser who is not in the muster roll of the bank; and (vii) there is no qualification or age limit prescribed for an appraiser. The appraiser is
only asked to give a certificate in respect of quality and weight of the gold jewels assessed by him.
Likewise, the Corporation Bank has also stated in its reply before the Conciliation Officer that the bank has no supervision or control over the
work of Jewel Appraisers and they are not having definite working hours and they have no place of work in the bank and they are not provided
with any instrument. It is also stated that the Indian Bank Service Condition for appraisers is not applicable to the Corporation Bank as they are
paid appraising charges by the customers and not by the bank. It is also stated that there is no minimum qualification required for appointment of
jewel appraiser and the only requirement is that he should be proficient in his related trade and he is at liberty to pursue his business. It is also
stated that the work of an appraiser is contingent in nature and there is no control or supervision of the bank required and the relationship is purely
contractual and no employer-employee relationship exists.
In the counter affidavit filed by the bank before this Court in W.P. No. 7200 of 2004, in respect of service conditions of appraisers, it is stated
as follows:
This respondent submits that the jewel appraisers cannot be treated as workmen by any stretch of imagination. In this connection, this
respondent submits the following vital factors:
(i) No educational qualification or age is prescribed for jewel appraisers;
(ii) Several of the jewel appraisers are advanced in age and are over 60 years of age;
(iii) The service of the jewel appraisers is purely a matter of contract;
(iv) The jewel appraisers have no fixed working hours and their services are utilised intermittently whenever required;
(v) They do not function under the supervision or control of the bank and they are not subject to any disciplinary control of the bank;
(vi) They are always at liberty to do their own business and in fact all of them are carrying on their independent business as Goldsmith, which is
their principal avocation;
(vii) The only work they perform for the Bank is the evaluation of the quality of gold and its weight, thus the least of the skill professed by a
Goldsmith is utilized by the bank; they are free to do other work and are not borne on the rolls of the bank and are not subject to the rules and
regulations of the bank including service conditions and transferability;
(viii) The appraisers fee/commission collected from the loanees is paid to them on piece rate basis and there is no minimum wage guarantee;
(ix) No minimum experience or minimum educational qualification is fixed and no minimum or maximum age limit is fixed.
Again, the Canara Bank in its reply before the Conciliation Officer, while reiterating the above averment that there is no relationship of
employer and employee between the bank and the appraisers, has also stated that they cannot make a claim of permanent status under the Tamil
Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981. In the counter affidavit filed in the writ petition also, the
Canara Bank has stated as follows:
In distinction from the Regular Employees of the Bank, the jewel appraisers inter alia:
(i) do not require any qualification or any specific age limit;
(ii) are directly employed by the local manager without any reference to Employment Exchange, Banking Service Recruitment Board;
(iii) have no fixed working hours;
(iv) have no guaranteed payment, only commission is paid;
(v) are not subject to any disciplinary control;
(vi) are not controlled or supervised over the nature of work to be performed;
(vii) are paid charges by the borrowers;
(viii) have no retirement age;
(ix) cannot be transferred by the Bank &
(x) have no bar to carry on any avocation or occupation.
That was also the stand of the Central Bank of India before the Conciliation Officer which is as follows:
The services of Jewel Appraisers is purely a matter of contract between the Bank and the said appraisers.
They do their job without any control or supervision of Bank.
No qualification or age is prescribed by our Bank for jewel appraisers and many of them are well advanced in age.
No disciplinary action can be taken against them.
They are in no way required to submit themselves to the general discipline of the Bank as is applicable to regular employees.
Jewel appraisers are engaged for doing the work of appraising the jewels and they can also do their own trade or business.
The remuneration for the work done by an appraiser (paid as appraiser''s charges) is collected from loanees and paid to the appraisers.
The contract between the Bank and appraiser can be terminated by either of them by giving to the other one month''s notice.
The same has been reiterated in the counter affidavit filed in the writ petition.
The Union Bank of India in W.P. No. 7203 of 2004 has also raised objection before the Conciliation Officer stating that gold appraisers are
professional goldsmith and their duty is to assess the quality of jewels in the presence of bank officials in the bank premises only to ascertain as to
whether the assessment has been made in respect of a particular jewel pledged for which amount is advanced and it is akin to the professional legal
opinion in respect of immovable properties and the appraisers are not engaged for all days in a week or continuously and there is no prohibition for
them to do their occupation as goldsmith and some of the appraisers are having jewellery shops and there is no minimum guaranteed remuneration
for them.
The UCO Bank also, while raising its objection before the Conciliation Officer, reiterated the same in the counter affidavit that the appraisers in
UCO Bank are totally different from the appraisers of Indian Bank and as per the agreement entered into with the appraisers there is no
undertaking by the bank to pay any monthly salary or weekly salary and there is also no agreement to recruit them as staff of the bank. It is also
stated in the counter affidavit that the jewel appraisers used to approach the bank to appraise the quality of jewels after their regular work is over
and after assessment they leave the bank and there needs no permission for the appraisers to leave the bank and they are not under the control or
supervision of the bak and they are not paid any wages or salary and there is no process of recruitment of appraisers and it is only the branch
manager who obtained the appraisal work from the appraisers and they are not supposed to be transferred from one branch to another branch.
Similarly, the Syndicate Bank has also reiterated the above said points in its reply to the Conciliation Officer. It is stated that the jewel
appraisers are only given permission to enter into the bank for appraising the jewels and they do not get any right against the bank. It is also stated
that they are not offered any permanent employment in the bank at any point of time. It is also stated that the jewel loan constitutes a very small
part of total domestic advances given by the bank. It is also specifically stated that the engagement of appraiser in the syndicate Bank is different
from the Indian Bank and therefore, the award passed in respect of appraisers of Indian Bank by the Tribunal is not applicable to the Syndicate
Bank.
The same has also been reiterated in the counter affidavit filed by the Syndicate Bank in the following words:
Sl. Regular Employees Jewel Appraisers
No.
Subject to qualification No qualification/age.
and age prescribed.
Recruitment through employment Direct engagement by the
exchange/Banking Service local Manager.
Recruitment Board.
Fixed working hours. No fixed working hours.
Monthly wages. No guaranteed payment, only
commission paid.
Subject to disciplinary control. No disciplinary control.
Control/supervision is exercised No control/supervision over
not only with regard to the the nature of work to be
allocation of work, but also performed.
the way in which the work is to
be carried out.
Wages are paid by the Bank. Charges are paid by the borrowers.
Retirement age. No retirement age.
Subject to transfer. No transfer.
While in employment cannot No bar to carry on any avocation
carry on any other occupation. or occupation.
It is also stated that since as per the conditions of their engagement, they are not workmen, no useful purpose would be served in referring the
dispute for arbitration and therefore, the decision of the Government of India in the impugned order does not require any interference.
Again, the Bank of Baroda in its reply to the Conciliation Officer has reiterated the same stand, by distinguishing the agreement of appraisers in
the Indian Bank. In the counter affidavit also, in respect of payment of fees to appraisers and control and supervision over them, it is stated as
follows:
The FEES paid to appraisers also, is based on their work/value of the jewel.
The appraisers are engaged against an undertaking in specific format and the appraisers receive commission at Rs. 2.50per Rs. 1000/- of assayed
value of gold/jewel with a minimum of Rs. 5/- and maximum of Rs. 50/- per account. The Commission is paid by borrowers or collected by bank
from the borrower and given to the Appraisers. The appraisers are required to appraise the quality, purity and value of the jewels and see that the
bank does not suffer any loss due to wrong valuation done by them.
Naturally, the amount of fees paid to the appraiser cannot be the same, for appraisal of, 10 bangles of one borrower and only two bangles of
another.
CONTROL and SUPERVISION.
So far as control is concerned, the bank has absolutely NO control over these skilled professionals.
(i) There is no attendance register for them at any branch as they are not employees.
(ii) They have no specific timings or any other terms and conditions of engagement, unlike regular employees;
(iii) There are no regular working days or fixed hours of work for them at any branch. They can come at any time, that too only if there is work for
them, unlike regular employees.
(iv) They can go to any or every branch, unlike regular employees;
(v) There is no fixed salary for them payable by any given/specific branch;
(vi) They are requested to come only when there is work;
(vii) Their presence cannot be insisted upon. An appraiser may not come or may refuse to come;
(viii) If one does not come, another appraiser can be requested to come;
(ix) They cannot be insisted upon to remain at any branch for any specified period. They are not confined to any branch.
(x) They are free to take up any number of such appraisal or other work;
(xi) They are also free to discontinue at will rendering of such casual work;
(xii) There is no question of sanctioning any leave as they are free to work as they like and can refuse to come when requested;
(xiii) The manner in which they appraise the jewel is left to their discretion;
(xiv) The bank cannot insist on the completion of work within any fixed period per article/jewel. They are at liberty to take their own time, though
not inordinately long.
Thus the bank has NO CONTROL over their attendance, presence, time of work, length of time of work, manner of work etc., and there is fair
element of freedom though coupled with only a little responsibility.
It is further stated that the presence of appraiser is required either for one or two days in a week and the jewel loans given during 2003-04 in Tamil
Nadu branches were for Rs. 56.8 lakhs which was only 3.53% of total advances which were given to the extent of Rs. 1608 lakhs.
As stated above, W.P. Nos. 10857 of 2004 and 17858 of 2004 relate to the claim of appraisers of Indian Bank against the reasons given by
the Government of India in the impugned orders in those two cases which were passed due to the pendency of W.P. No. 32994 of 2002. That
writ petition is stated to have been filed relating to the claim of jewel appraisers in Indian Bank.
In such circumstances, unless and until the said writ petition is disposed of, there is no possibility to take any decision by the Government. As
per the conditions stipulated in the agreement regarding appointment of Appraisers, as held by this Court earlier which was confirmed by the
Hon''ble Supreme Court, the Appraisers of the Indian Bank stand entirely on a different footing, especially when they are appointed on a specific
monthly salary, they are accountable to the bank, etc., as enumerated by the Hon''ble Apex Court in the judgment reported in General Manager,
Indian Overseas Bank Vs. Workmen, All India Overseas Bank Employees Union, . In such view of the matter, as correctly submitted by the
learned Counsel for the Bank, unless and until the said writ petition is decided, the Government cannot be compelled to make a reference to the
Labour Court. There is certainly justification on the part of the Government in stating that the matter is pending and decision can be arrived at after
the disposal of the above said writ petition. In such view of the matter, the said writ petitions viz., W.P. Nos. 10857 of 2004 and 17858 of 2004
are to be closed, however with liberty to take appropriate action after the writ petition in W.P. No. 32994 of 2002 is disposed of.
In respect of W.P. Nos. 8168 and 8169 of 2004 which relate to the jewel appraisers of the Indian Bank and the Bank of Baroda respectively,
it is seen that the Conciliation Officers concerned have sent the failure reports dated 26.11.2002 and 30.1.2003 respectively. The first respondent,
Government of India has not passed any order in respect of reference u/s 12(5) of the Industrial Disputes Act,1947. Therefore, the said writ
petitions have been filed by the Federation for direction against the first respondent to refer the dispute based on the failure reports issued by the
Conciliation Officers concerned.
It is the contention of Mr. Muthupandian, learned Counsel appearing for the petitioner in all these cases that even assuming that the writ appeal
has been disposed of and ultimately the Supreme Court has passed the judgment in General Manager, Indian Overseas Bank Vs. Workmen, All
India Overseas Bank Employees Union, , the Government has to necessarily refer the dispute under the Industrial Disputes Act, since in respect of
each of the batch cases, the issue has to be decided on its own merits and merely because the Supreme Court has held in respect of Indian
Overseas Bank that the facts are different from the Indian Bank jewel appraisers, it cannot be presumed that all other banks would be covered by
the above ratio. The Government cannot pass orders on such assumption, especially in the circumstance that the issue has to be decided on merits
with respect of each of the banks.
It is the contention of learned Counsel for various banks viz., Mr. C. Karthick for M/s. T.S. Gopalan & Co., Mr. S. Jayaraman, Mr. S.
Sethuraman, Mr. P.R. Raman, Mr. T.M. Hariharan, Mr. Gowtham Narayan, Mr. K. Vijayan for M/s.King and Partridge, Mr. K.S.V. Prasad and
Mr. Venkatraman that the facts about the engagement of Appraisers as stated in the petitions filed by the respective banks before the Conciliation
Officer are not in dispute and in such circumstances, no useful purpose would be served in making a reference to the Industrial Tribunal for further
adjudication. It is their contention that the reference u/s 12(5) of the Act is not an empty formality and the Government is entitled to prima facie
decide as to whether the reference should be done or not. According to them, after the judgment of the Supreme Court in General Manager,
Indian Overseas Bank Vs. Workmen, All India Overseas Bank Employees Union, , especially when the position of appraisers in all banks in these
cases is similar to that of appraisers in Indian Overseas Bank and it is not even the case of petitioners that the service conditions of appraisers are
like that of Indian Bank, there is no need to direct the Government to make a fresh reference to the Industrial Tribunal for adjudication.
Section 12 of the Industrial Disputes Act,1947, contemplates that, in cases where an industrial dispute exists or is apprehended, the
Conciliation Officer may, or where the dispute relates to a public utility service and a notice u/s 22 has been given, shall, hold conciliation
proceedings in the prescribed manner. The conciliation is for the purpose of settlement of dispute and in the conciliation, if a settlement is not
reached, the Conciliation Officer u/s 12(4) of the Industrial Disputes Act has to send a report to the appropriate Government with facts and
reasons about failure. On receipt of such report, u/s 12(5) of the Act, the appropriate Government if it is satisfied that there is a case for reference,
it may make a reference to the Labour Court, Tribunal or National Tribunal and if reference is not made, it must be communicated with reasons
and there is also a time limit given for sending of such report by the Conciliation Officer. Section 12 of the Industrial Disputes Act,1947, is as
follows:
Section 12. Duties of conciliation officers.- (1) Where any industrial dispute exists or is apprehended, the conciliation officer may, or where the
dispute relates to a public utility service and a notice u/s 22 has been given, shall, hold conciliation proceedings in the prescribed manner.
(2) The conciliation officer shall, for the purpose of bringing about a settlement of the dispute, without delay investigate the dispute and all matters
affecting the merits and the right settlement thereof and may do all such things as he thinks fit for the purpose of inducing the parties to come to a
fair and amicable settlement of the dispute.
(3) If a settlement of the dispute or of any of the matters in dispute is arrived at in the course of the conciliation proceedings, the conciliation officer
shall send a report thereof to the appropriate Government or an officer authorised in this behalf by the appropriate Government together with a
memorandum of the settlement signed by the parties to the dispute.
(4) If no such settlement is arrived at, the conciliation officer shall, as soon a practicable after the close of the investigation, send to the appropriate
Government a full report setting forth the steps taken by him for ascertaining the facts and circumstances relating to the dispute and for bringing
about a settlement thereof, together with a full statement of such facts and circumstances, and the reasons on account of which, in his opinion, a
settlement could not be arrived at.
(5) If, on a consideration of the report referred to in Sub-section (4), the appropriate Government is satisfied that there is a case for reference to a
Board, Labour Court, Tribunal or National Tribunal, it may make such reference. Where the appropriate Government does not make such a
reference, it shall record and communicate to the parties concerned its reasons therefor.
(6) A report under this section shall be submitted within fourteen days of the commencement of the conciliation proceedings or within such shorter
period as may be fixed by the appropriate Government.
[Provided that, subject to the approval of the conciliation officer, the time for the submission of the report may be extended by such period as may
be agreed upon in writing by all the parties to the dispute.]
While construing the powers of the appropriate Government u/s 12(5) of the Industrial Disputes Act,1947, in making reference of a dispute for
adjudication, it has been held that the normal rule is to make reference of dispute for adjudication and in certain cases, the Government may refuse
to make such reference. The principle in this regard has been enunciated by the Division Bench of this Court in Shaw Wallace & Co., Ltd. v. State
of Tamil Nadu rep. by the Commissioner and Secretary, Labour Department and Ors. 1987 (I) LLJ 177, as follows:
On a final analysis, the following principles emerge:
(1) The Government would normally refer the dispute for adjudication;
(2) The Government may refuse to make reference, if-
(a) the claim is very stale;
(b) the claim is opposed to the provisions of the Act;
(c) the claim is inconsistent with any agreement between the parties;
(d) the claim is patently frivolous;
(e) the impact of the claim on the general relation between the employer and the employees in the region is likely to be adverse;
(f)the person concerned is not a workman as defined by the Act;
(3) The Government should not act on irrelevant and extraneous considerations;
(4) The Government should act honestly and bona fide;
(5) The Government should not embark on adjudication of the dispute; and
(6) The Government should not refuse reference on the ground that domestic enquiry was fairly and properly held and punishment awarded as
appropriate.
Therefore, if the claim is frivolous or the person concerned is not a workman as defined in the Act, it is always open to the Government to refuse
reference for adjudication. It is true that while refusing to refer an issue for adjudication, the Government cannot itself adjudicate the issue and give
findings on merits. It is also equally true that the Conciliation Officer himself u/s 12(1) of the Act, when attempts to settle the dispute between the
parties cannot adjudicate the claim of parties, since the adjudication before the Labour Court or Industrial Tribunal is judicial process, which
cannot be usurped by the Government or the Conciliation Officer. But, in cases where on the face of it, the claim is frivolous, certainly the
Government, without going into the merits of the matter, can refuse to refer the dispute for adjudication. It has been held consistently that if the
dispute relates to a question of law, the appropriate Government cannot give any conclusion on the said question of law since it is for the Industrial
Tribunal to take such a decision.
In Bombay Union of Journalists and Others Vs. The State of Bombay and Another, the Supreme Court has laid down the principles to be
followed by the appropriate Government while exercising jurisdiction u/s 10(1) of the Industrial Disputes Act. In that case, while referring to
Sections 10(1) and 12(5) of the Act, the Apex Court, headed by Gajendragadkar,J (as he then was) has held that it is open to the Government to
make a prima facie examination on the merits of the case while making a reference of dispute for adjudication. The relevant portion of the judgment
is as follows:
...It is true that if the dispute in question raises questions of law, the appropriate Government should not purport to reach a final decision on the
said questions of law, because that would normally lie within the jurisdiction of the Industrial Tribunal. Similarly, on disputed questions of fact, the
appropriate Government cannot purport to reach final conclusions, for that again would be the province of the Industrial Tribunal. But it would not
be possible to accept the plea that the appropriate government is precluded from considering even prima facie the merits of the dispute when it
decides the question as to whether its power to make a reference should be exercised u/s 10(1) read with Section 12(5), or not. If the claim made
is patently frivolous, or is clearly belated, the appropriate government may refuse to make a reference. Likewise, if the impact of the claim on the
general relations between the employer and the employees in the region is likely to be adverse, the appropriate government may take that into
account in deciding whether a reference should be made or not. It must, therefore, be held that a prima facie examination of the merits cannot be
said to be foreign to the inquiry which the appropriate government is entitled to make in dealing with a dispute u/s 10(1), and so, the argument that
the appropriate Government exceeded its jurisdiction in expressing its prima facie view on the nature of the termination of services of appellants 2
and 3, cannot be accepted.
That was also the view of the Supreme Court in M.P. Irrigation Karamchari Sangh Vs. State of M.P. and Another, wherein the Supreme
Court while holding that the general rule is to refer for adjudication, has explained the exceptional cases where the Government can refuse
reference like, the cases where the demand is perverse or frivolous and do not merit reference. The Supreme Court has held as follows:
...Therefore, while conceding a very limited jurisdiction to the State Government to examine patent frivolousness of the demands, it is to be
understood as a rule, that adjudication of demands made by workmen should be left to the Tribunal to decide. Section 10 permits appropriate
Government to determine whether dispute ''exists or is apprehended'' and then refer it for adjudication on merits. The demarcated functions are (1)
reference, (2) adjudication. When a reference is rejected on the specious plea that the government cannot bear the additional burden, it constitutes
adjudication and thereby usurpation of the power of a quasi-judicial Tribunal by an administrative authority namely the appropriate government....
There may be exceptional cases in which the State Government may, on a proper examination of the demand, come to a conclusion that the
demands are either perverse or frivolous and do not merit a reference. Government should be very slow to attempt an examination of the demand
with a view to decline reference and courts will always be vigilant whenever the government attempts to usurp the powers of the Tribunal for
adjudication of valid disputes. To allow the government to do so would be to render Section 10 and Section 12(5) of the Industrial Disputes Act
nugatory.
The above view of the Supreme Court was affirmed in a subsequent decision in V. Veerarajan and others Vs. Government of Tamil Nadu and
others, , even though on the facts of that case, a direction was issued to the State Government to make reference to the Labour Court within one
month.
It was after discussing the above said judgments, the Division Bench in 1987 I LLJ 177 , as stated supra, has formulated the principles. By
applying the said broad principles in respect of the powers of appropriate Government u/s 12(5) of the Act as crystalised above, to the facts and
circumstances of the case, it is no doubt true that the Government under the impugned orders has referred to the pendency of writ appeal in W.A.
No. 465 of 2001 at that relevant point of time which was ultimately disposed of by the Hon''ble Apex Court as stated above in General Manager,
Indian Overseas Bank Vs. Workmen, All India Overseas Bank Employees Union, holding that the Jewel Appraisers are not employees of the
bank.
On the facts of each and every one of the banks in these writ petitions as stated above, it has been the categorical stand of the respective
banks before the Conciliation Officer that the appraisers were appointed in the banks, not on regular process of appointment, but without any rule
of recruitment, without any specific time of employment and there was no disciplinary control or administrative control over them and there was no
age of retirement and transfer. Those points raised by way of objection by the banks remain uncontroverted even as on date, as it is seen in the
affidavits filed by the Federation in the above writ petitions. Even the statements made to that effect are reiterated in the counter affidavits filed by
the respective banks in the writ petitions. In such circumstances, there is no difficulty to conclude that the judgment of the Supreme Court in the
case of Indian Overseas Bank that the Jewel Appraisers are not employees of the bank is certainly applicable in respect of the banks who are the
respondents in these writ petitions.
It is not even the case of the petitioner Federation that there has been any agreement between the appraisers and the respective banks
regarding the nature and performance of their function and nature of control over them by the bank and in such circumstances, after the judgment
of the Supreme Court as stated above, any direction, if given to the Government to refer the issue for adjudication, will not serve any purpose and
it has to be necessarily concluded that when prima facie the Jewel Appraisers are not workmen as per the judgment of the Supreme Court, the
Claim of Federation can only be deemed to be frivolous and therefore, no useful purpose would be served in giving direction to the Government of
India even to pass a fresh order, after taking into consideration the judgment of the Supreme Court in General Manager, Indian Overseas Bank
Vs. Workmen, All India Overseas Bank Employees Union, referred to above.
Further, even if the power of the Government to refer for adjudication u/s 12(5) on its prima facie satisfaction is approved, any vexatious
demand for such reference would only make the said provision an empty formality. While it is true that generally the Government has to make a
reference, but in cases where the claims have become vexatious or frivolous or in cases where such reference is of no consequence, certainly it is
open to the Government not to make such a reference.
Considering the above said fact that any direction to the Government to make reference for adjudication would be again amounting to directing
the Government to refer a frivolous issue, I am of the considered view that the writ petitioner Federation is not entitled for any relief claimed.
Accordingly, W.P. Nos. 7199 to 7204 of 2004, 8813 of 2004 and 10856 of 2004 are liable to be dismissed and W.P. Nos. 10857 and 17858
of 2004 are to be closed with liberty to the petitioner federation to work out its remedy after disposal of W.P. No. 32994 of 2002. As far as W.P.
Nos. 8168 and 8169 of 2004 are concerned, even after the failure reports by the Conciliation Officer, the Government has not exercised its
functions in passing orders as per Section 12(5) of the Act. In fact, as elicited above, u/s 12(5) of the Act even if the Government decides not to
make any reference, it should record its reasons and communicate the same to the parties concerned and in these two cases, the non-passing of
any order would amount to failure of the first respondent Government in performing its statutory functions u/s 12(5) of the Act. Therefore, these
two writ petitions are to be allowed with necessary directions.
Accordingly,
(a) W.P. Nos. 7199 to 7204 of 2004, 8813 of 2004 and 10856 of 1984 stand dismissed;
(b) W.P. Nos. 10857 and 17858 of 2004 stand closed with liberty to the petitioner federation to work out its remedy after disposal of W.P. No.
32994 of 2002 on the file of this Court;
(c) W.P. Nos. 8168 and 8169 of 2004 are allowed with direction to the first respondent Government of India to pass orders in accordance with
Section 12(5) of the Industrial Disputes Act, based on the reports of Conciliation Officer dated 26.11.2002 and 30.1.2003 respectively and such
orders shall be passed within a period of 30 days from the date of receipt of a copy of this order.
(d) No costs.