Holding

Development Officers in the Life Insurance Corporation are workmen within the meaning of s.2(s) of the Industrial Disputes Act, 1947.

Summary

The appellant, S.K. Verma, a Development Officer in the Life Insurance Corporation of India, was dismissed and the dispute was referred to an Industrial Tribunal. The Tribunal held that Development Officers were not "workmen" under s.2(s) of the Industrial Disputes Act, 1947, rendering the reference non‑maintainable. Verma challenged this decision via a writ petition, which the Delhi High Court dismissed, and then appealed to the Supreme Court under Art.136. The Supreme Court examined the definition of "workman" and the nature of the duties of a Development Officer, concluding that despite the title, the officer performed whole‑time, non‑managerial work without authority to bind the corporation, and thus fell within the definition of a workman. Consequently, the Court set aside the Tribunal and High Court orders, remitted the matter to the Tribunal for proper adjudication, and allowed the appeal.

Issues considered

Whether a Development Officer in the Life Insurance Corporation of India qualifies as a "workman" under section 2(s) of the Industrial Disputes Act, 1947
Whether the preliminary objection that the reference was non‑maintainable because the employee was not a workman is valid

Legislation cited

Industrial Disputes Act, 1947s. 2(s)

Subjects

Industrial Disputes Actdefinition of workmanpublic sector corporationemployment classificationdevelopment officerlabour lawindustrial disputesection 2(s)Supreme Courtspecial leaveArticle 136Article 226employment law

Judgment

799

• S. K. VERMA
A
v.

MAHESH CHANDRA AND ANOTHER

September 2, 1983
B
[D. A. DESAI, 0. CHINNAPPA REDDY AND A. VARADARAIAN;JJ.)

Industrial Disputes Act, 1947-S. 2(a}-Defini!ion of'workman'- Whe(her
it includes Development Officers in Life Insurance" Corppration_?

On a reference being made to it concerning the dismissal from service of
the appellant who was a Development Officer in the Life Insurance Corporation,
c
I
the Industrial Tribunal upheld a prelimiilary objection to the maintainability
of the reference and ruled that Development Officers in the Corporation were
not workmen within the meaning of s. 2(s) of the Industrial Disputes Act, 1947..
His petition under Art. 226 questioning the validity -Of the Tribunal's rulini
having been dismissed in lbnine by the· High Court, the appellant approached
this Court under Art. 136. · D
Allowing the appeal, •
HELr.:1: Development Officers in the Life Insurance Corporation are
workmen' within the meaning of s. 2(s) of the Industrial Disputes Act, 1947.
[821 BJ E
(i) The Act is a legislation intended to bring about peace and harmony
between labour and management in industry and, for that purpose, it makes
provision for the investigation and settlement of industrial disputes. It is
therefore, necessary· to interpret the definitions of 'industry', •workman•:
'industrial disputes', etc., so as not to whittle down, but to advance the object
of the Act. Disputes b~tween forces of labour and management are not to be
F
excluded from the operarion of the Act by giving narrow and restricted mean·
ings to expressions in the Act. Parliament could never be credited with the
intention of keeping out of. the purview of the legislation small bands of
employees who, though not on the managerial side of the establishment, are·
yet to be denied the Ordinary rights of the forces of labour for no apparent
reason at all. [803 D1FJ G
Workmen of Indian Standards Institution v. Managen1ent of Indian
Standards Institution, [1976) 2 S.C.R. 138, referred to.

(ii) The words "any skilled pr unskilled manual, supervisory, technical
or clerical work" ins. 2(s) of the Act are not intended to limit or narrow the. H
ainplitude of the definition of 'wprkman'; on the other hand they indicate and
emphasize the broad sweep of the definition Which is designed to cover all
manner of persons employed in an industry, irrespective of whether they are
••

800 SUPRI ME COURT REPORTS (1983] 3 S.C.R.
engaged in.skilled work or unskiHed work, rllanual work or supervisory work,'
A technical work or clerical work. Quite obviously, ·the broad intention is to take
in the entire 'labour force' and exclude the 'managerial force'. [80J B~CJ

(iii) One does not have to be carried away by the appellation 'develop-
ment officer' but must look to the nature or his duties to dircover what precisely
a development officer is. It is seen from the Life Insurance Corporation of
India (Staff) Regulations that development officers, while classified separately
B from 'Supervisory· and Clerical Staff• are also classified separately from
"officers' and from the scales of pay prescribed as well as the authorities compe~
tent to appoint and take disciplinary action in respect of various categories of
officers and staff mentioned therein it is clear that the appellation 'devlopment
officer'-is no more than a· glorified designation. De-velopment Officers are
separated from 'officers' strictly so called and are generally placed on a par
c with subordinate and clerical staff. The nature of the duties of a developn1ent
officer gathered from the letter of appointment issued to the appellant indicate
that he is to be a whole time employee of the Corporation, that his operations
are to be restricted to a defined area, that he is liable to be transferred, that he
has no authority to bind the Corporation in any way, that hiS principal duty is
to organise and develop the business of the Corporation in an area allotted to
him and for that purpose to recruit active and reliable agents and to train
D them and that even so, he has not the authority either to appoint them or to
take disciplinary actiOn against them. Further, it was admitted that a develop~
meat officer has no subordinate staff working under him. It is thus clear that
a development officer cannot by any stretch of imagination be said to be
engaged in any administrative or managerial work. [804 D-H; 805 A-E, 811 B]

2. Whenever an industrial ~ispute is referred to 3. tribuual for adjudi-
E cation it has become a fashion with all employers to raise three preliminary
·objections, viz., that there.~s no industry, that there is no industrial dispute
and that the workman is no workm!ln· It is a pily that when the Central
Government, in all solemnity, reiers an industrial dispute for adjudication, a
public sector corporation which is an instrumentality of the State instead of
welcoming a decisioh by the tribunal on merits so as to absolve itself of any
F charge of being a bad employer should attempt to evade decision on merits by
raising such objections and never thereby satisfied, carry the matter"often-times
to th'e High Court and to the Supren1e Court, wasting public time and money•
. Public sector corporations must be model employers and model litigants.
They should not attempt to_ avoid adjudication by raising needless objections
or by adopting needless postures or by indulging in luxurious litigation and
·drag workman from court to court merely to vindicate, not justice, but some
G rigid technical stand taken up by them. [801 D-H]

CIVIL APPELLATE JURISDICTJON : Civil Appeal No. 2659 of
1980

H
Appeal by Special leave from the Judgment and Order dated the
15th January, 1980 of the Delhi ·High Court in Civil Writ Petition
No. 40 of 1980,
S.K. VERMA v. MAHESH CHANDRA (Chinnappa Reddy, J.) 801

Jitendra Sharma for the Appellant,
A
G.L. Sanghi and·D.N. Mishra for the Respondent .

.The judgment of the Court was delivered by

CHINNAPPA REDDY. J. The Central Government, the appropriate
Government witliin the meaning of s. 2 (a) of the Industrial 8
Disputes Act, referred the following dispute for adjudication to the
Industrial Tribunal·cum·Labour Court, New Delhi : "Whether the
action of the management of the Life Insurance Corporation Of India,
New Delhi in dismissing Shri S.K. Verma, Development Officer in
Jullunder Branch of the Corporation, with effect from ·February 8,
1969 is justified ? If not, to what relief is the workman eµtitled ?"
The Life Insurance Corporation promptly raised a preliminary
objection regarding the maintainability of the reference on the ground
.that Shri S.K. Verma was not a workman.

There appears to be three preliminary objections which have D
. became quite the fashion to he raised .by all employers, parlicularly
public sector corporations, whenever an industrial dispute is
referred to a. tribunal for adjodication. One objection is that ·there
is no industry, a second that there is no industrial dispute and the
third that the workman is no workman. It is a pity that when the
Central Government, in all solemnity, refers an industrial dispute
E
for adjudication, a public sector corporation which is an instrumen-
tality of the State instead of welcoming a decision by the Tribunal
on merits so as to absolve itself of any charge of being a· bad
employer or of victimisation etc. should attempt to evade · decision
on merits by · raising such objections and. never thereby .satisfied,
carry the matter often times to the High Court and to the Supreme
Court, wasting public time· and money. We expect public sector
corporations to be model employers and model litigants. We do
not expect them to attempt to avoid adjudication or to indulge in '
luxurious litigation and drag : workmen from court to court merely
to vindicate, not justice, but some rigid technical stand taken up by· G
them. We hope that public sector ·corporation .will henceforth
refrain from raising needless objections, fighting needless litigations
and adopting needless postures.
H
, Tl:te Industria· Tribunal upheld the preliminary. objection and
ruled that Development Officers in the Life Insurance Corporation
of India are not workmen withiq the meaning of S. 2 (s) of the
802 SUPREME COURT REPORTS (1983) 3 S.C,R.

Industrial Dispute, Act. The reference was therefore held to be incom•
A petent. A Writ Petition filed by S.K. Verma was dismissed in limine
by the Delhi High Court. S.K. Verma has come before us under·Art.
136 of the Constitution.

'Workman' was originally defined by S. 2 (s) of the Industrial
Disputes Act 1947 as meaning
B
"any person employed (including an apprentice) in
' any industry to do any skilled manual or clerical work for ·
hire or reward and includes, for the purpose of any
proceedings under this Act in relation to an industrial
c dispute, a workman discharged during that dispute but
does not include any person employed in the naval,
military or air service of the Crown."

The' definition under went a substantial amendment in 1956 and this
is how it stands now :-
D
"Workman" means any person (including an
apprentice) employed in any industry to do any skilled or
unskilled manual, supervisory, technical or clearical work
for hire or reward, whether the terms of employment
E be expre~sed or implied, and for the purposes of any
proceeding under this Act in relation to an industrial
dispute, includes any such person who has been dismissed,
discharged or retrenched in connection with, or as a
consequence of, that dispute, or whose dismissal, discharge
or retrenchment has led to that dispute, but does not
F include any such person -

(i) Who is subject to the Army Act, 1950, or the
, Air Force Act, 1950 or the Navy (Discipline)
Act, 1934: or
G
(ii) Who is employed in the police service or as an .
officer or other employee of a prison; or
I
(iii) who Is employed mainly in a managerial or
administrative capacity; or
H
(iv) who, being employed in a supervisory capacity,'
draws wages exceediQg five hundred rupees per
$,IC. VERMA v. MAHESH CHANDRA ( Chinnappa Reddy, J.) 803
mensem or exercises, either by the nature of
· the duties attached to the office or. by reason of A
the powers vested in him, functions mainly of
a managerial nature ..

The words' any skilled or unskilled manual, .supervisory, technical
or clerical work' are not intended to limit or narrow the
amplitude of the definition of workman'; on the other hand they
B
indicate and emphasise the broad sweep of the definition which is
designed to cover all manner of persons employed in an industry,
irrespective of whether they are engaged in skilled work or unskilled,
work, manua 1 work, supervisory work, technical work or clerical
work. Quite obviously the broad intention is to take in the entire c
'labour force' and exclude the 'managerial force'. That of course, is
as it should be .

. It is trite to say that Industrial Disputes Act is ·a: legislation
intended to bring about peace and harmony between labour and
management in an industry and for that purpose, it makes provision D
for the investigation and settlement of industrial disputes. It is, there-
fore, necessary to interPret the definitions of 'illdustry9, 'workm~n,'
'industrial dispute', etc. so as not to whittle down, but to advance
the object of the Act. Disputes between the forces of labour and
management are not to be excluded from the operation of the Act E
by giving narrow and restricted meanings to expressions in the Act.
The Parliament could never be credited with t.he intention of keeping
out of the purview of the legislation small bands of employees who,
·though not on the managerial side of the establishment, are yet to be
denied the 0rdinary rights of the forces of labour for no apparent
reason at all. In Workmen of Indfan Standards Institution v. Manage- F
ment of Indian Standards Institution.(') this Court had occasion to
point out :

" It is necessary to remember that the
Industrial Dispuies Act, 1947 is a legislation intended to G
bring about peace and harmony:oetween·management and
labour in an 'industry' so that production does not suffer
and at the same time, labour is not exploited and discon-
tended •nd, therefore; the tests must be so applied as to
give the widest possible connotation to the term 'industry'. H

(I) A.l.R. 1976 S.C. 145= [1976) 2 S.C.R. 138.
864 SUPREME COURT REPORTS [!983l 3 s.c.R.
Whenever a question arises whether a particular concern
A is an 'industry' the allproach must be broad and liberal
and not rigid or doctrinaire. We cannot forget that it is
a social welfare legislation we are interpreting and we -T ·,
must place such an interpretation as would advance the
object and purpose of the legislation and give full
meaning and effect to it in the achievement of its avowed
B
social objective."
'
So we adopt a pragmatic and a pedantic approach and we proceed,
in considering the question whether development officers in the Life
Insurance Corporation are workmen, to first consider the broad
C question onwhich side of the line they fall, labour or management,·
and then to consider whether there are any good reasons for moving
them over from one side to the other.

One does not have to be carried away by the appellation
D 'development officer' as the Industrial Tribunal appears to have been.
After all, what is in a ·name ? Notwithstanding the glorified
designation, we must look to the nature· of his duties to discover·
what precisely a development officer is? The Life Insurance
Corporation of India (Staff) Regulations classifies the staff into four
categories as follows :-
E
"Class I - Officers

Class II - Development Officers

Class III ~ Supervisory and Clerical Staff
F
Class IV - Subordinate Staff."

It is seen that development officers while classified separately from
'Supervisory and Clerical Staff' are also classified: separately from
G 'Officers'. Schedule-I of the Staff Regulations shows the appointing
and disciplinary authorities ag~inst the various posts. Ill the case of
even the lowest posls of Class-I, it is the Zonal Manager that is
the app'o.inting and ·disciplinary authority, while in the case of
Development Officers. It is the Divisional Manager (that is, the
H officer next below in rank to Zonal . Manager) that is the
appointing and disciplinary an!'iority. Even in the case of Superin-
tendents of Class III, it is the Zonal Manager that is the appointing
and ~isciplinary authority. Dev'elopment Officers and. employees of
S.K. VERMA v. MAHESH CHANDRA (Chinnappa Reddy, J.) 80.5
_.; - Class III and Class IV other than Superintendents are placed on par
and in their case, it is the Divisional Manager that is the appointing A
and disciplinary authority. Suchedule-II gives the pay scales of the
t employees of the Corporation. The scale of pay of the lowest paid
class-I officer is Rs. 530-40-1050. The scale of pay of a Superin-
tendent in class-III is Rs. 330-25-680-30-740. · The scale of pay of
development officer Grade-I is Rs. 230-15-320-20-360-EB-20·400-25- B
550-EB-30-760. The scale of pay of a development officer Grade·II is
Rs. 170-10-220. The scale of pay as well as the authorities competent -
to appoint and take disciplinary action indicate that the appellation
'development officer' is no more than a glorified designation.
Development Officers are separated from 'officers' strictly so called
and are generally placed .on a ·par with subordinate and clerical C
staff. -

Shri G.L. Sanghi , learned counsel for the Life Insurance
Corporation, told us that development officers are also entitled to be
paid a certain commission in addition to the salary . and that in the D
case of some development officers, quite fantastic sums have been
paid to them by way of commission. It may be so. A few of the
development officers may have been very fortunate in that the agents
working within their jurisdiction had done excellent business and
that eniitled them to earn a good commission. But we are told there
are more thari six thousand development officers and nothing has E
been said about the average commission earned by them or the
commission earned by the present petitioner himself.

The nature· of the duties of 'development officers' are toJibe
gathered from the letter of appointment issued to the petitioner. We F
have set out. below some of the more important terms of
employment :-

" 3. Whole-Time Employment"

y oli shall devote your full time and energy to c'
organise the Life Jnsuran_ce business of the Corporaiion.

You shall not be a member of- any political
organisation and stand _for election as a candidate to any
of the Elec_tive Bodies such as Panchayats, Municipalities,
District Local Bo1rds, University Senate or othe.r similar
bodies, Legislative Assemblies or Parliament or as a
.806 . SUPREME COURT REPORTS

Director of any of the Joint Stock. Companies or Bank-
A ing Institutions (including Corporative Banks except
Corporation's Staff Co-operative Credit Societies).

4. Headquarters & Area :

Your Headquarters will be at Jullunder City and the
B area in which you will confine your operations is stated
hereinbelow :- '

Jul/wider City, Cantt & Thana Sadar on non-exclusive
basis :
C The Corporation may in its sole discretion curtail or
enlarge the area of your operations of may appoint one
_or more other Field Officers in the area alloted to you.

5. Transfer ;
D You will be liable to transferred to any place in
India. From the date of your transfer you will not receive
credit of the business canvassed by agents introduced by
you or allot.led to you as mentioncil hereinafter. Subject
to such conditions as may be stipulated you will receive
E credit of business convassed by the aforesaid agents before
the date of your transfer.

6. Duties & Obligations : ,

Your duties are mainly to organise and develop the
.: business of the Corporation in the area ·allotted to you,
F and for that purpose to recruit active and reliable agents
drawn from different communities and walks of life ·on
such terms as may be stipulated by the Corporation from
tinie to time and .to train them up both canvassing new
business and for rendering such post-sale services as the
G policy-holders may be in need of. In addition to this, the
existing agents who may be allotted to you -hereafter
should be well enthused and assisted by you. You will,
whenever called upon to do so, assist the Branch Manag<r
or the Assistant Branch Manager in the investigation of
H claims.

We are enclosing herewith for your information and
srudy a 'draft letter which will be issued by the Corpora-
S.IC. VERMA V. MAHESii CHANDRA (Chinnappa Ready. J.) 807

tion to new agents who may be selected by you. You
should also study the leaflet entitled "Hints to Agents" A
referred to therein, a copy of which is also enclosed here-
with. The Corporation has issued a Manual for '}.gents
and you should make it a point to study the Manual
carefully.

After an agent has continuously worked for the B
Corporation for a period of 5 years and over and the
Branch Manager feels be is no more in nee<} of the
services of a Field Officer he may be treated as a Direct
Agent even if he has been_ recruited and trained by
you. c
7. Tours:
If you are required by your Branch to undertake
'tours, you should chalk out a programme of the same and
get it approved by your Branch Manager two months. in D
advance. When you proceed on tour, you should adhere
to the tour progra,Dlme as far as possible, and if any
change becomes necessary you should advise about it to
the Branch Manager, stating the reasons for the change in
the tour programme.
E
The main object of the tours shall be to procure New
Business to activise the existing agents, to appoint new
agents where such appointments are necessary and to tap
the potentiality of the area. You will also contact the
' policy-holders who have allowed their policies to lapse
and help them to revive their policies. •
F
•
You should sec that the average cost of the tour
· does not work out to more than Rs. 2 per thousand sum
assured of completed business.
G
The travelling expenses will be paid ·to you in
accordance with the Rules of the ·Corporation framed
from to time governing the payment of such allowances.
You will be intimate<\ the current rules in this behalf
Separately. H
Immediately, on completion of a tour and within a
period not ,exceeding three days you will submit your
SUPREME COURT REPORTS [ 19sj) 3 s.c.i\.
report, in the prescribed manner, with the relevant
A statements and the bill of expenses · to the Branch
Office.

8. Advances Deposits:

B' In respect of business procured by you during the
tour you should see that advance deposits, at least equal
to full instalment of first premiums, are collected from.
the proponents and that all such amounts are remitted to
the Branch Office immediately_ by M.O., or if there is a
Corporation's collection Account in· the town with any
c Bank, you should deposit the amounts immediately to the
credit of the Corporation, giving full details to the Bank
regarding the manner in which these amounts are to be
credited. If you colloect any amount as deposit towards
the first premium you should always. issue receipts there
for in prescribed form to the parties concerned. If you
D
permit any of your agents either rercuited by yon or
allotted to you to conduct the medical examination of a
proponent without first realising an advance. deposit and
if such a proposal does not result in a policy the medical
fees unnecessarily incurred will be debited to your
E account.

9. Record of Daily Work :

You are required to make daily entries in the
F prescribed form which shall give a complete record as well
• as the results "of your daily buisness calls. This record
must be presented to the Assistant Branch Manager
(Administration) or the Branch Manager or to the Assis·
tant Branch Manager. (Development) for inspection at
·least once a week or at more frequent intervals, if called
G upon to do so.

When you are on tour you will make the entries in the
.•
Daily Record and on your return to the headquarters you
will submit such record for inspection as stated above. ·
H
If your headquarters are not the same as the Branch
Office headquarters, you will submit the· Daily Records
s.k. VERMA v. MARESH CHANDRA (Chinnappa Reddy, J.) 809

in such manner as you may be asked to by the Branch
l'vfanager. .A.

You· are also requested to fill in your Plan Book in
consultation with your Branch l'vfanager or Assistant
Branch l'vfanager (Development) and see that the targets
of work you set for yourself therein are reached. B
10. Co//ectio11 of Premiums : ·
Unless you arc expressly authorised by tlie
Corporation, you have no authority to collect premiums
save the· deposits towards the first premium as stated C
hereinabove.

11. Targets:
You are required as .outlined in your Plan Book:
D
(a) to secure through agents recruited by you and
allotted to you a minimum life business o{ Rs. 5
l.acs .Yielding first year's schedule premium
income of not less than Rs. 30,000 through at
least JOO policies :
E
(b) to recruit and train 25 new agents;

· (c) to supervise and motivate the agents allotted to
you if any and see that the average output of
these agents allotted to you is increased
progressively from year to year and,
F

(d) to open 6 new centres for development.

We hope you will be able to exceed 'these targets as
your actual categorisation to be made after the expiry· of
G
probationary period will depend upon the fulfilment
.. of these targets and your record of post-sales service
rendered to the Corporation's policy holders in the area
allotted to you.
H
On the basis of the targets outl.ined in your Plan
Book and your achievements in terms of new business,
· the recruitment and training of agents and motivating old
810 .SUPREME COURT REPORTS (1983] 3 s.C.!l.

agents to increased activity, the Corporation reserves the
rightto review the results of your efforts any time and to
take such action .as may be called for in - the
circumstances. t
12. General :
B You have no authority to accept risks or to bind the
Corporation in any way. You are not permitted to
advance premiums on behalf of the policy holders or to
have policies assigned to you or to any member of your
family (i. e.' wife, parents and childern) by policy holders
c who are not related to you. You are strictly · forbidden
to have any financial dealings with the agents of the
Corporation.

It is understood that your wife, your son, brother or

D
any close relation <if yours or any other member of your
family living with you is not eligible for appointment• as
an agent of the Corporation. If you operate any bena.mi
-
agency in the name of any person ·or if you are found
to pass on-any business to any of your agents and derive
any financial benefit for yourself from this, your services
will be liable tO be terminated.
E
You are not permitted to.work directly or indireclty
for any Insurer . carrying on general· Insurance business
you are also not permitted to work as an agent for the
National Savings Organisation."
F
A perusal of thea bove extracted terms and conditions of appoint·
ment shows that a development officer is to be a whole time employee
of the Life Insurance Gorporation of India, that his operations are
to be restricted to a defined area and that he is liable to be transfer·
red. He·has rio authority whatsoever to bind the Corporation in any
G way. His principal duty appears to be to organise and develop the
business of the Corporation in the area allotted to him and for that
'purpose to recruit active and reliable agents, to train them to canvass
new business and to render post-sale services to policy-holders. He
'is expected· to assist and inspire the agents. Even so he 'has not the
authority to appoint agents or to take disciplinary action against
them. · He does not even supervise the work of the agents though
be is required tq train them and assist them. He is to be the
S.K. VERMA v. MAHESH CHANDRA (Chinnappa Reddy, J.) 8H

'friend, philosopher and guide' of the agents working within hls
jurisdiction and no more. He is expected to stimulate and excite fb.e A
agents to work, while exercising no administrative control over them.
The agents are not liis subordinates. In fact, it is admitted .that he
has no subordinate staff working under him. It is thus .clear that
the development officer cannot by any stretch of imagination be
said to be engaged in any administrative or managerial work.
He is a workman within the meaning of s. 2 (s) of the ·Industrial
B
Disputes Act. · ·

The order of the Industrial Tribunal and the judgment of the
High Court are set aside and the matter is remitted to the Industrial
' Tribunal for disposal according to law. The Industrial Tribunal
may dispose of the reference within three months from the date of
c
receipt of this order. The respondent workman is entitled to his
costs .
•
H.L.C. Appeal allowed.