National Engineering Industries Ltd. v. Kishan Bhageria

Introduction 

The case of National Engineering Industries Limited vs. Shri Kishan Bhageria & Others (1987) addresses a fundamental question in labor law: whether an Internal Auditor qualifies as a “workman” under Section 2(s) of the Industrial Disputes Act, 1947. The Supreme Court of India examined the nature of supervisory roles versus clerical or checking duties to determine employee classification, ultimately holding that an employee who primarily performs checking and reporting functions without independent decision-making authority falls within the definition of a “workman.” The case also clarifies that when two labor laws (the Industrial Disputes Act and the Rajasthan Shops and Commercial Establishments Act) operate in the same field but without repugnancy, they can be considered supplementary rather than conflicting.

Facts of the case 

Shri Kishan Bhageria was employed as an Internal Auditor with National Engineering Industries Limited on a monthly salary of Rs. 1,186.60. The company alleged that Bhageria began unauthorized absences from January 28, 1978, and subsequently suspended him on March 30, 1978. On May 4, 1978, Bhageria filed an application under Section 33C(2) of the Industrial Disputes Act claiming Rs. 4,746.40 as salary from January to April 1978. The company objected, contending that Bhageria was not a “workman” under the Act. Bhageria was dismissed from service on November 9, 1978, after which he filed an application under Section 28A of the Rajasthan Shops and Commercial Establishments Act, which was dismissed on limitation grounds. The Labor Court ruled in Bhageria’s favor on August 2, 1979, holding that he performed clerical duties and qualified as a workman entitled to salary for part of the disputed period. Following multiple writ petitions from both parties, a Single Judge of the Rajasthan High Court ruled that Bhageria was not a workman, but this decision was later reversed by a Division Bench, which prompted the company’s appeal to the Supreme Court.

Facts of the case 

Shri Kishan Bhageria was employed as an Internal Auditor with National Engineering Industries Limited on a monthly salary of Rs. 1,186.60. The company alleged that Bhageria began unauthorized absences from January 28, 1978, and subsequently suspended him on March 30, 1978. On May 4, 1978, Bhageria filed an application under Section 33C(2) of the Industrial Disputes Act claiming Rs. 4,746.40 as salary from January to April 1978. The company objected, contending that Bhageria was not a “workman” under the Act. Bhageria was dismissed from service on November 9, 1978, after which he filed an application under Section 28A of the Rajasthan Shops and Commercial Establishments Act, which was dismissed on limitation grounds. The Labor Court ruled in Bhageria’s favor on August 2, 1979, holding that he performed clerical duties and qualified as a workman entitled to salary for part of the disputed period. Following multiple writ petitions from both parties, a Single Judge of the Rajasthan High Court ruled that Bhageria was not a workman, but this decision was later reversed by a Division Bench, which prompted the company’s appeal to the Supreme Court.

Arguments of the parties 

Arguments by National Engineering Industries Limited (Appellant):

1. The respondent, Shri Kishan Bhageria, was not a “workman” as defined under Section 2(s) of the Industrial Disputes Act, 1947, as he was employed in a supervisory capacity.

2. The Internal Auditor’s role involved supervisory functions that placed him outside the definition of a “workman.”

3. Since the respondent had already filed an application under Section 28A of the Rajasthan Shops and Commercial Establishments Act (which was dismissed on grounds of limitation), he was barred from seeking relief under the Industrial Disputes Act due to principles of repugnancy between the two statutes.

4. The Rajasthan Act, being a later law that received presidential assent, should prevail over the Industrial Disputes Act under Article 254(2) of the Constitution if both laws operate in the same field.

Arguments by Shri Kishan Bhageria (Respondent):

1. His primary duties were checking and reporting on behalf of the company, which were essentially clerical in nature rather than supervisory.

2. He lacked independent decision-making authority or power to bind the company, which are essential characteristics of supervisory roles.

3. The Rajasthan Act and the Industrial Disputes Act were not repugnant to each other but supplementary, and Section 37 of the Rajasthan Act explicitly protected rights and privileges available under other laws.

4. The dismissal of his application under the Rajasthan Act on technical grounds of limitation should not bar his entitlement to relief under the Industrial Disputes Act, which did not impose similar limitations.

Judgment of the case 

The Supreme Court dismissed the appeals, affirming the Division Bench’s ruling that Bhageria qualified as a “workman” under the Industrial Disputes Act. The Court held that determining whether an employee performs supervisory functions is a question of fact, and a supervisor must have decision-making authority that binds the company. The Court found that Bhageria’s duties primarily involved checking and reporting without independent authority, making him a workman rather than a supervisor. On the question of repugnancy between the Industrial Disputes Act and the Rajasthan Shops and Commercial Establishments Act, the Court determined that while both acts operated in the same field of labor rights, they were not inconsistent with each other but rather supplementary. The Court emphasized that the limitation period under the Rajasthan Act could not curtail workers’ rights under the Industrial Disputes Act, consistent with Section 37 of the Rajasthan Act which protected more favorable rights under other laws. Justice Mukharji notably observed that “social welfare and labour welfare broadens from legislation to legislation in India,” establishing an important principle for progressively interpreting labor laws.