Holding

Jewel appraisers are not workmen under the Industrial Disputes Act, 1947.

Summary

The Indian Overseas Bank employed about 767 jewel appraisers on a commission basis and the bank's employees' union claimed they were part‑time workmen under the Industrial Disputes Act, 1947. The Industrial Tribunal, relying on a prior Indian Bank decision, held them to be workmen, a view affirmed by the Madras High Court. The bank appealed, arguing that the appraisers were independent contractors without the hallmarks of employment such as fixed hours, monthly wages, disciplinary control, or recruitment through a service board. The Supreme Court examined the nature of the engagement, noting the absence of prescribed qualifications, direct recruitment by branch managers, commission‑only payment from borrowers, no supervisory control, and freedom to pursue other occupations. Concluding that the appraisers did not satisfy the definition of "workmen" in Section 2(s) of the Industrial Disputes Act, the Court set aside the tribunal award and allowed the appeal.

Issues considered

Whether jewel appraisers engaged by Indian Overseas Bank qualify as "workmen" within the meaning of Section 2(s) of the Industrial Disputes Act, 1947.

Legislation cited

Industrial Disputes Act, 1947s. 2(s)

Subjects

Industrial disputeWorkmen definitionIndependent contractorJewel appraiserPart‑time employeeEmployment relationshipCommission remunerationIndustrial Disputes Act

Judgment

GENERAL MANAGER, INDIAN OVERSEAS BANK A
v.
WORKMEN, ALL INDIA OVERSEAS BANK EMPLOYEES UNION

MARCH. J0, 2006

[ARIJIT PASAYAT AND ARUN KUMAR, .JJ.] B

- Industrial Disputes Act, 1947:

2(s)-workmen-jewel appraisers employed by the bank-Held, are not
workmen. c
Indian Overseas Bank, on the basis of contracts had employed about
767 jewel appraisers mainly in the rural branches in the States of Tamil
Nadu, Pondicherry, Andhra Pradesh, Karnataka, Kerala and few branches
in Bihar and Orissa. Bank advanced agricultural loans to its constituents
and also members of the staff. The All India Overseas Bank Employees
D
Union ('Union') raised a dispute taking the stand that the jewel appraisers
engaged by the bank are part time workers of the bank. Relying upon a
decision in Indian Bank's case, the Tribunal answered the reference in
the affirmative. Union filed writ petition claiming that the Tribunal should
have granted relief from J.4,1978 i.e. date of demand. Appellant-Bank also E
questioned legality of the award by filing a writ petition. The writ petition
was dismissed by the Single Judge and the Division Bench in the LPA.

It was contended by the respondent that the reference was made
because prima facie the Government felt that jewel appraisers were
workmen under the Act and in that context, the nature of work, which F
was the same as in the case of Indian Bank's case is relevant. It was also
contended that three forums have recorded findings of fact and, therefore,
no interference is called for. It was not a case where respondents were
asking for regularization, they were claiming to be part-time workers.
There was power of the Bank to supervise and that was the effective
G
control. The Bank has right to indicate as to in what manner the work
was to be done.
~~
Appellant, on the other hand, contended that the factual scenario in
Indian Bank's case was entirely different. One of the determinative factors
19 H
20 SUPREME COURT REPORTS [2006] 3 S.C.R.

A according to him was that the commission was paid only when the loan
was sanctioned even if the appraisal had been done by the appraiser and
the commission amount was paid out of the sanctioned loan amount and
the payment is made by the borrower and not by the Bank. In any event
after the Shastri Award there is no question of any part time clerk being
B appointed.

Allowing the appeal, the Court

HELD: Since the Jewel appraisers were not subject to any prescribed
qualification and age, their recruitment was not through Employment
C Exchange/Banking Service Recruitment Board but was direct engagement
by the local Manager, had no fixed working hours, were not paid monthly
wages nor any guaranteed payment but only commission was paid, not
subject to disciplinary control, no control/supervision over the nature of
work to be performed, not paid wages by the Bank but got charges paid
by the borrowers, no retirement age, were not subject to transfer, were
D not barred from carrving on any avocation or occupation, the jewel
appraisers, therefore, are not employees of the Bank. (26-F-H; 27-A-DI

Puri Urban Co-operative Bank v. Madhusudan Sahu and Anr., (1992)
II LLJ 6; Silver Jubilee Tailoring House and Ors. v. Chief Inspector ofShops
and Establishments and Anr., 1197413 SCC 498; Canara's Bank case (1981)
E II LLJ 189; Dhrangadhra Chemical Works ltd v. Stale ofSaurashtra, (19571
SCR 152; Shining Tailors v. Industrial Tribunal ll. U.P., (1983] 4 SCC 464
and Chintaman Rao v. State of MP., (19581SCR1340, referred to.

Indian Bank v. Presiding Officer, Industrial Tribunal etc., (1990) I LLJ
50, distinguished.
F
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 7986 of 2004. r

From the Judgment and Final Order dated 18.2.2004 of the Madras
High Court in Writ Appeal No. 465 of 200 I.

G Dr. Rajeev Dhawan, K.V. Viswanathan, B. Raghunath, T.S. Gopalan
and Ms. Mohana for the Appellant.

Jitendra Sharma, C.R. Chandrasekaran, S. Nandakumar, P.N. Jha, Dalip
Kapoor, K. Mayilsam and V.N. Raghupathyu for the Respondents.

H
GEN. MAN .. INDIAN OVERSEAS BANK''· ll'ORKMEN. ALL INDIA OVERSEAS BANK EMP. UNION [PASAYATJ} 2J
Ms. Meera Mathur for Intervention. A
The Judgment of the Court was delivered by

ARIJIT PASA YAT, J. The Indian Overseas Bank (hereinafter referred
to as the 'Bank') calls in question legality of view expressed in a judgment
rendered by the Industrial Tribunal, Tamil Nadu, Chennai(hereinafter referred B
to as the 'Tribunal') which was affirmed by learned Single Judge of the
Madras High Court. The judgment of the Division Bench is the subject-
matter of challenge in this appeal.

The core question which falls for adjudication in this appeal is whether
"jewel appraisers for loans" are to be treated as workers and are to be absorbed C
as part time clerical staff of the Bank. Stand of the appellant is that jewel
appraisers are not employees of the bank and do not do any substantial work.

Background facts in a nutshell are as follows:

The bank on the basis of contracts had employed about 767 jewel D
appraisers mainly in the rural branches in the States of Tamil Nadu,
Pondicherry, Andhra Pradesh, Karnataka, Kerala and few branches in Bihar
and Orissa. Bank advances agricultural loans to its constituents and also
members of the staff. The All India Indian Overseas Bank Employees Union
(in short the 'Union') raised a dispute taking the stand that the jewel appraisers E
engaged by the bank are part time workers of the bank. On the basis of the
·'demand raised reference was made by the Central Government and on
19.2.1990 following dispute was referred to the Tribunal for adjudication:

"Whether the demand of All India Overseas Bank Employees Union
to treat the jewel appraisers engaged by the Bank as part time workmen F
of the Bank is justified? If so, to what relief, if any, are they entitled?"

In support of the demand the stand taken was that the jewel appraisers
employed for particular branches of the bank are also utilized for certain
clerical jobs like entering applications for jewel loans. They are also to go
other branches as to the appraisers of the jewel. These jewel appraisers are G
required to be present in the respective branches between I 0 a.m. to 2.00
p.m. as a request for jewel loan is considered and granted only during that
period. They are paid a commission of Rs.3/- for every one thousand rupees
sanctioned by way of loan. Reference was made to another dispute i.e. ID 25
of 1997 raised by jewel appraisers numbering about 353 in Indian Bank H
where a reference had been made to the Tribunal. The reference reads as
22 SUPREME COURT REPORTS [2006] 3 S.C.R.

A follows:-
"Whether the action of the Management of the Indian Bank, Madras
in denying to appraisers wages and other conditions of service
applicable to rural clerical ·'Award Staff' of the Bank is justified? If
not to what relief the workmen concerned are entitled to?"
B
Reference in that case was made on the ground that the jewel appraisers
of Indian Bank were workmen and they were denied only wages and other
service conditions as they were paid monthly remuneration of Rs. I00/-. The
said dispute was adjudicated and an award was made on 3.12.1979 holding
that the jewel appraisers of Indian Bank are entitled to wages and other
c conditions of service applicable to regular clerical staff as part time employee
of the Bank and they would be entitled to such proportionate (namely half)
wages and benefits of clerical staff w.e.f. 1.4.1977 i.e. the date of reference.
The award was questioned before the High Court which was dismissed. Letters
Patent Appeal was also dismissed by the Division Bench and S.L.P. was also
D dismissed by this Court.

Stand of the Union, therefore, was that the view expressed in the Indian
Bank's case (supra) was clearly applicable to this case. Claim of the Union
was resisted by the appellant-Bank basically on the ground that jewel appraisers
engaged by the Bank are not workmen as defined in Section 2(s) of the
E Industrial Disputes Act, 1947 (in short the 'Act'). Reference was made a
decision of this Court in Management of Puri Urban Co-operative Bank v. ----
Madhusudan Sahu and Anr., (1992) II LU 6. Further it was submitted that
the Bank has branches in various states and, therefore, adjudication is possible
only by a National Commission under Section l 7B of the Act and not by the
Industrial Tribunal to whom the dispute was referred. This point was not,
F however, urged before the High Court. It was pointed out that terms and
conditions of the jewel appraisers of Indian Bank were entirely different from
the terms and conditions of jewel appraisers of the appellant Indian Overseas
Bank. The Tribunal relied upon the decision in Indian Bank's case (supra)
and answered the reference in the affirmative. It made a comparison of the
G terms and conditions of the two Banks.

Union filed writ petition claiming that the Tribunal should have granted
relief from 1.4.1978 i.e date of demand. Appellant-Bank questioned legality
of the award by filing a writ petition. As noted above, the writ petition was
dismissed by the learned Single Judge and the Division Bench in the LPA .
..J H
I~

GEN. MAN., INDIAN OVERSEAS BANI('" WORKMEN, ALL INDIA OVERSEAS BANK EMP. UNION [PASAYATJJ 23

In support of the appeal learned counsel for the appellant-Bank submitted A
that in the year 1975 the appellant started the process of sanctioning loans on
deposit of jewellery and security for which jewel appraisers were engaged
who were paid on commission basis. On 20.1.1983 Government declined
reference because independent contracts covered the arrangement. The Union
filed writ petition before the High Court which by its judgment dated B
22.11.1989 directed the Central Government to refer the dispute to the
Tribunal. The Tribunal instead of assessing the evidence and very vital
admissions made by the witnesses examined to further the case of the jewel
appraiser based its conclusions on Indian Bank's case (supra). It did not take
note of the features highlighted by this Court in Puri Urban Co-operative
Banks' case (supra). It also referred to a decision in Indian Bank v. Presiding C
Officer, Industrial Tribunal etc., (1990) I LLJ 50, which had no relevance.
Accordingly, the conclusions are vitiated of non-application of mind. It is
pointed out that though the learned Single Judge held that the Tribunal not
• decided the real issues had proceeded to determine the case himself and
upheld the award passed. In the appeal before the Division Bench it was D
categorically held in the impugned judgment that the Tribunal had not
adjudicated the correct issue and for achieving substantial justice the learned
Single Judge rightly adjudicated the matter which was pending for nearly 26
years. It was held that jewel appraisers are indispensable for proper functioning
of the Bank and also deal with the clerical job.
E
It was submitted by learned counsel for the appellant that the factual
scenario in Indian Bank's case (supra) was entirely different. Some of the
distinguishing features make Indian Bank's case (supra) inapplicable. One of
the determinative factors according to him was that the commission was paid
only when the loan was sanctioned even if the appraisal had been done by
the appraiser and the commission amount was paid out of the sanctioned loan F
amount and the payment is made by the borrower and not by the Bank. On
comparison of the works done the Tribunal held that the work was similar so
far as Indian Bank's case (supra) is concerned, without noticing that condition
no.9 was conceptually and contextually different. There was no evidence to
show that jewel appraiser did any other work as clerk. Even if it is conceded G
for the sake of arguments that some work was done by the appraiser, it was
by way of help to the Ioanee. In any event after the Shastri Award there is
no question of any part time clerk being appointed. If the order of the Tribunal
as maintained by learned s,ii:rgle Judge and the Division Bench is to be
maintained, a separate cad;e has to be created to give effect to the orders. H
The Tribunal referred to/the Tiny Deposit Scheme of Indian Bank's case

/
24 SUPREME COURT REPORTS (20061 3 S.C.R.

A without indicating as to how the same was relevant. The Tribunal quoted
from the judgment of the Madras High Court in great detail and referred to
Ex. "M-3" which relied on some conclusions of Tiny Deposits Scheme which
was not the case of the jewel appraisers before the High Court. The Tribunal
appears to have quoted from the said judgment of the Madras High Court and
B without applying the conditions which were the subject-matter of adjudication
in the said case to the facts of the present case drew parallel. It was submitted
that the factual scenario in the Puri Co-operative Bank's case (supra) was
almost akin to the facts of the present case. Therefore, the ratio has full
application in the present case. Reference was also made to a Full Bench
judgment of Kerala High Court in Canara 's Bank case ( 1981) II LLJ 189
C where for the purpose of the Shop and Commercial Establishment Act jewel
appraisers were held to be not employees.

It was, however, submitted by learned counsel for the respondent that
this was done for the purpose of finding out the parameters.

D It was submitted that the reference was made because prima facie the
Government felt that jewel appraisers were workmen under the Act and in
that context nature of work, which was the same as in the case of Indian
Bank's case (supra). is relevant. The Tribunal has compared the duties and
has given findings of fact regarding nature of duties. It was held that the
E jewel appraisers are also doing some clerical work relating to the job entrusted.
Three forums have recorded findings of fact and, therefore. no interference
is called for. This is not a case where jewel appraisers were asking for
regularization, they were claiming to be part time workers. There was power
of the Bank to supervise and that was the effective control. The Bank has
right to indicate as to in what manner the work was to be done. In Puri
F Cooperative Bank's case (supra) this Court did not notice an earlier three-
judge Bench decision in Silver Jubilee Tailoring House and Ors. v. Chief
Inspector of Shops and Establishments and Anr., [1974] 3 SCC 498 where
the relevance of the end-product was highlighted. As the bank had the right
to reject the report of the appraiser, that itself was indicative of element of
G control and supervision. Therefore, the Puri Co-operative Bank's case (supra)
should not be followed. Additionally. the said case related to an individual
and issue of workman did not arise directly.

The stress of learned counsel for the appellant was that the Bank had
always the practice of appointing jewel appraisers as independent contactors
H who were free to work elsewhere and as such are not employees, not subject
/

GEN. MAN, INDIAN OVERSEAS BANK"· WORKMEN, ALL INDIA OVERSEAS BANK EMP. UNION [PASAYAT, J.] 25

to discipline, are not subject to fixed working hours, are not employed by A
following any employment procedure and are not assigned duty outside of
their contract, except may be incidentally filing of form and the like.

Reference to the circular dated 23.8.1975 clearly shows that the Bank
had clearly stipulated that the jewel appraisers cannot be engaged in other
work as they were not regular employees. On 2.1.1978 another circular was B
issued by the Bank that jewel appraisers act on commission basis and hence
are not entitled to do any other work. It appears that the Tribunal did not
analyse the evidence which was produced by the parties. It merely referred
to the factual background in Indian Bank's case (supra). The decision of this
Court in Puri Co-operative Bank's case (supra) was distinguished by C
comparing job of the jewel appraisers of the Indian Bank. It should be noted
that the dispute in Indian Bank's case (supra) was conceptually different.
After accepting that the real issues were not focused by the Tribunal, learned
Single Judge held that a substantial po._-tion of the Bank's business was because
of the contribution made by the jewel appraisers without indicating as to how
same was relevant for the purpose of adjudication. The Division Bench in a D
very cryptic manner observed that it had perused the evidence and the
documents which substantiated nature of the job of the jewel appraisers and
they were also doing the clerical job. The circulars issued by the Bank were
not considered relevant and it was noted that the ratio in Indian Bank's case
(supra) applies.
E
A few distinguishing facts need to be noted. In Indian Bank's case
(supra) there was evidence to show that the jewel appraisers work regularly
for four hours. It was clearly admitted in the instant case by the witness of
jewel appraisers that there were no fixed period of work and they could come
and go at any point of time. In Indian Bank's case (supra) the bank had F
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's case (supra) 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's case (supra) was that G
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 no~ed. In the present case as well as in H
Puri Co-operative Bank's case (supra) the jewel appraisers were required to
26 SUPREME COURT REPORTS [2006] 3 S.C.R.

A weigh the ornaments brought to the Bank for pledge and to appraise 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.

B Strong reliance was placed by learned counsel for the respondent in
Dhrangadhra Chemical Works ltd v. State of Saurashtra, [ 1957) SCR 152,
Silver Jubilee's case (supra), Shining Tailors v. Industrial Tribunal II, U.P.,
[1983) 4 SCC 464, Chintaman Rao v. State of MP., [1958) SCR 1340.

The inferences culled out from the reading of those judgments can be
C summed up as follows:-
(a) Where the contactors were substantially responsible for the main
and sole business, they would be treated as workers.

(b) One exception is that in such cases flexibility of the contract was
D at variance with normal worker's contract the contractors would not be treated
as workers.

(c) Where the contractor is in the nature of supplier of goods and
services, they are to be treated as supplier contractors and not workmen.
E At this juncture the distinction between jewel appraisers and the regular
employees of the bank can be noted.

Regular Employees Jewel Appraisers

F 1. Subject to qualification and age I. No qualification/age
prescribed

2. Recruitment through 2. Direct engagement by the local
Employment exchange/Banking Manager
Service Recruitment Board.
G 3. No fixed working hours.
3. Fixed working hours

4. Monthly wages 4. No guaranteed payment, only
commission paid.

H 5. Subject to disciplinary control 5. No disciplinary control.
GEN. MAN .. INDIAN OVERSEAS BANK"· WORKMEN. ALLINDIA OVERSEAS BANK EMP. UNION [PASA VAT.I] 27

6. Control/supervision is exercised 6. No control/supervision dver the A
not only with regard to the nature of work to be performed.
allocation of work, but also the
way in which the work is to be
carried out.

7. Wages are paid by the Bank. 7. Charges are paid by the borrowers. B
8. Retirement age 8. No retirement age.

9. Subject to transfer 9. No transfer

10. While in employment cannot 10. No bar to carry on any avocation C
carry on any other occupation. or occupation.

Therefore, the jewel appraisers are not employees of the Bank.

Above being the position, the judgment of the Division Bench affirming
the views of the learned Single Judge and the Tribunal is clearly indefensible, D
deserves to be set aside which we direct.

The appeal is allowed with no order as to costs.

B.K. Appeal allowed.