Author- Mayank, Bennett University
CASE DETAILS
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i) Judgement Cause Title / Case Name |
Security Printing & Minting Corporation of India Ltd. & Ors. vs. Vijay D. Kasbe & Ors. |
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ii) Case Number |
Civil Appeal Nos. (arising from SLP (Civil) Nos. 1891-1900 of 2019) |
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iii) Judgement Date |
April 18, 2023 |
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iv) Court |
Supreme Court of India Civil Appellate Jurisdiction |
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v) Quorum / Constitution of Bench |
Justice Pankaj Mithal, Justice V. Ramasubramanian |
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vi) Author / Name of Judges |
Justice V. Ramasubramanian |
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vii) Citation |
2023 INSC 388 |
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viii) Legal Provisions Involved |
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INTRODUCTION AND BACKGROUND OF JUDGMENT
Factories act. 1948:
- Section 59 (1):
- Introduction: it mandates overtime wages for work exceeding statutory limits.
- Relevance: Employees claimed DOTA under this provision, arguing their duties classified them as “workers.”
- Section 64 (1):
- Introduction: Allows State Government to relieve certain categories of employees from specific provisions if they perform supervisory roles.
- Relevance: checked if Supervisors were exempt from overtime payments based on this provision.
- Section 2 (m):
- Introduction: defines “factory” to include premises where manufacturing work is done and employs a prescribed number of workers.
- Relevance: Established the corporation’s workplaces as factories.
- Section 2 (l):
- Introduction: defines “workers” as someone employed for manual work.
- Relevance: Central to determining if the employees were “workers” eligible for overtime.
Maharashtra Factories Rules, 1963:
- Rule 100:
- Introduction: states exempted categories under the Factories Act, focusing on supervisors and those performing managerial duties.
- Relevance: Key to determining if the claimants’ roles excluded them from benefits under Section 59(1).
Payment of Wages Act, 1936:
- Section 1(6):
- Introduction: Limits the Act’s applicability based on wage.
- Relevance: check whether claimants fell within the act’s scope or not.
- Article 309:
- Introduction: “Authorizes the Union or State to regulate recruitment and conditions of service for persons serving in civil capacities.”
- Relevance: highlights claimants’ terms of service were governed under this article rather than in labor law.
- Article 313:
- Introduction: “Ensures continuity of laws in force before the Constitution unless expressly repealed or amended.”
- Relevance: reinforce the applicability of prior statutory rules and conditions.
FACTS OF THE CASE
Procedural Background of the Case:
- Dates
- 1988: first case instituted.
- 1995: Case transferred to Central Administrative Tribunal (CAT).
- 1997: CAT dismissed the case, due to no jurisdiction.
- 2000: New case filed by A.K. Biswas & Others (O.A. No. 26 of 2000) seeking similar reliefs.
- 2001: CAT dismissed A.K. Biswas’s case, following its 1997 ruling.
- 2005: Bombay High Court remanded the case back to CAT for fresh consideration.
- 2006: CAT again dismissed A.K. Biswas’s case but later in 2010, ruled in favour of another set of employees.
- June 28, 2018: Bombay High Court upheld CAT’s 2010 ruling, granting DOTA to supervisors.
- 2019: SPMCIL & Union of India appealed against the Bombay High Court’s decision.
- April 18, 2023: Supreme Court delivered final judgment, ruling supervisors were not entitled to DOTA.
- Place: Bombay High Court
- Case name: P. No. 3150 of 1988
- Petitioners: Supervisors, Works Engineers, Section Officers of the Currency Note Press, Nashik
- Respondents: Union of India & Security Printing & Minting Corporation of India Ltd. (SPMCIL)
- Cause of Action: Employees claimed Double Over Time Allowance (DOTA) under Section 59(1) of the Factories Act, 1948.
- When was the first case instituted: 1988
- When was the first court appearance:
- Court: Bombay High Court
- Location: Mumbai, Maharashtra
- Year: 1988
- Nature of Case: Writ Petition (WP No. 3150/1988) challenging denial of overtime allowance.
- When was the appeal filled:
- Appeal to Bombay High Court: 1997, after CAT dismissed the case for lack of jurisdiction.
- Appeal to the Supreme Court: 2019, after the Bombay High Court ruled in the favour of employees.
- Case converted to civil appeal Nos.: 1891-1900 of 2019.
- When Did the Case Reach the Supreme Court of India:
- Date: 2019
- The Bombay High Court (2018 ruling) upheld the CAT’s 2010 order, granting DOTA to supervisory employees.
- Security Printing & Minting Corporation of India Ltd. (SPMCIL) & Union of India challenged this ruling before the Supreme Court.
Factual Background of the Case:
The case involved supervisory employees of SPMCIL who claimed double overtime allowance under section 59(1) f the Factories Act, 1948. They argued that they were workers under the act and thus entitled to extra wages
The appeal was filed by SPMCIL against CAT and Bombay High Court which had ruled in favour of employees, granting them double overtime allowance.
LEGAL ISSUES RAISED
- Whether supervisory employees of the Security Printing & Minting Corporation of India Ltd. (SPMCIL) were entitled to Double Over Time Allowance (DOTA) under Section 59(1) of the Factories Act, 1948.
- Whether Government Servants Were Governed by the Factories Act or Service Rules Under Article 309 of the Constitution.
PETITIONER / APPELLANT’S ARGUMENTS
- The counsels for Petitioner submitted that “respondents performed supervisory duties over 50-100 workers and were not engaged in regular manual work, disqualifying them as “workers” under the Factories Act, 1948.”
- The counsels for Petitioner submitted that “Rule 100 of the Maharashtra Factories Rules exempts supervisory staff from benefits under Chapter VI of the Factories Act if their duties are supervisory in nature.”
- The counsels for Petitioner submitted that the “tribunal and High Court erred in applying the Factories Act to supervisory personnel contrary to legislative intent.”
- The counsels for Petitioner submitted that “As former Central Government servants, respondents were governed by Article 309 rules, not the Factories Act, prior to 2006.”
RESPONDENT’S ARGUMENTS
- The counsels for Respondent submitted that the Burmah Shell case precedent under the Industrial Disputes Act was inapplicable as it differed from the Factories Act in defining “workman.”
- The counsels for Respondent submitted that “they performed significant manual or clerical duties, making them eligible for overtime allowances under Section 59(1) of the Factories Act.”
- The counsels for Respondent submitted that “exemptions for supervisors in Rule 100 did not apply to them due to their wage category under Section 64(1) proviso of the Factories Act.”
- The counsels for Respondent submitted that “tribunal’s factual findings, backed by evidence, should not be overturned lightly.”
RELATED LEGAL PROVISIONS
- “309. Recruitment and conditions of service of persons serving the Union or a State: Subject to the provisions of this Constitution, acts of the appropriate Legislature may regulate the recruitment, and conditions of service of persons appointed, to public services and posts in connection with the affairs of the Union or of any State”[1]
- “313. Transitional provisions: Until another provision is made on this behalf under this Constitution, all the laws in force immediately before the commencement of this Constitution and applicable to any public service or any post that continues to exist after the commencement of service or post under the Union or a State shall continue in force so far as consistent with the provisions of this Constitution.”[2]
- “Section 1(6), The Payment Of Wages Act, 1936: This Act applies to wages payable to an employed person in respect of a wages period if such wages for that wage period do not exceed six thousand five hundred rupees per month or such other higher sum which, on the basis of figures of the Consumer Expenditure Survey published by the National Sample Survey Organisation, the Central Government may, after every five years, by notification in the Official Gazette, specify.”[3]
- “Section 3(q), the Administrative Tribunals Act, 1985: the Central Government shall, by notification, establish an Administrative Tribunal, to be known as the Central Administrative Tribunal.”[4]
- “Section 100, Maharashtra Factories Rules, 1963: person defined to hold positions of supervision or employed in a confidential position.”[5]
- “Section 59(1), The Factories Act, 1948: Where a worker works in a factory for more than nine hours in any day or for more than forty-eight hours in any week, he shall, in respect of overtime work, be entitled to wages at the rate of twice his ordinary rate of wages.”[6]
- “Section 64(1), The Factories Act, 1948: The State Government may make rules to define supervisory, managerial, or confidential employees in a factory or authorize the Chief Inspector to declare such employees. The provisions of Chapter VI of the Factories Act, 1948 (except Section 66(1)(b) and its proviso) will not apply to them. However, if their wages do not exceed the limit specified in Section 1(6) of the Payment of Wages Act, 1936, they will still be entitled to overtime wages under Section 59.”[7]
- “Section 2(l), The Factories Act, 1948: “worker” means a person employed, directly or by or through any agency (including a contractor) with or without the knowledge of the principal employer, whether for remuneration or not, in any manufacturing process, or in cleaning any part of the machinery or premises used for a manufacturing process, or in any other kind of work incidental to, or connected with, the manufacturing process, or the subject of the manufacturing process but does not include any member of the armed forces of the Union.”[8]
- “Section 2(m), The Factories Act, 1948: “factory” means any premises including the precincts thereof—(i)whereon ten or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power, or is ordinarily so carried on, or(ii)whereon twenty or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power, or is ordinarily so carried on”[9]
JUDGEMENT
RATIO DECIDENDI:
- Entitlement to Double Overtime Allowance (DOTA): The Supreme Court reversed the High Court and CAT’s ruling that the supervisory employees were entitled to DOTA under Section 59(1) of the Factories Act.
- Applicability of the Factories Act, 1948: The Supreme Court held that even if the establishments were “factories” under Section 2(m), supervisory staff do not automatically become workers under Section 2(l).
- Rule 100 of Maharashtra Factories Rules, 1963: Rule 100 exempts supervisors from the Factories Act unless they perform manual or clerical work regularly.
- Government Servants vs. Industrial Workers: the court emphasized that government servants are bound by service rules, not the factories act.
- Inconsistency in Tribunal’s Findings: The Supreme Court noted that CAT had given contradictory rulings in similar cases, undermining judicial consistency.
GUIDELINES:
- “Distinguish between government service vs. industrial employment”
- “Applicability of statutory rules over general claims under factories act.”
OBITER DICTA:
- The Court remarked on the distinction between employees governed by the Factories Act and those employed in government services, implying that the statutory rules governing government employees (under the Fundamental Rules and other related regulations) take precedence over general provisions like those of the Factories Act.
- The Court also noted that claims for allowances such as overtime should be grounded in specific statutory provisions, rather than general claims based on similar conditions in industrial establishments.
CONCLUSION & COMMENTS
This case revolves around the issue of whether supervisory employees of the SPMCIL were entitled to DOTA under section 59(1) of the Factories Act,1948. In which the court ruled in favor of the appellant, SPMCIL, setting aside the earlier judgment of the high court that had affirmed the entitlement of the supervisory staff to double DOTA.
- Clarification on employment categories: the distinction between different types of employment.
- Supervisory exemptions: clarity on the exemption of supervisors from overtime provisions under rule 100.
- Impact of statutory rules: claims for additional allowances such as overtime must be grounded in statutory rules
- Legal Precedents and Their Limits: there court did not apply the precedent from the Burmah Shell case, where the dominant nature test was applied to determine whether someone was a “workman.” The Court distinguished this case by noting the differences between the definitions of “worker” and “workman”
REFERENCES
Important Cases Referred:
- Burmah Shell Oil Storage and Distribution Co. of India Ltd. v. The Burma Shell Management Staff Association and Ors.
- K. Biswas and Ors.
Important Statutes Referred:
- Factories Act, 1948: section 54(1), section 64(1), section 2(m), section 2 (l).
- Maharashtra Factories Rules, 1963: Rule 100.
- Payment of Wages Act, 1936: section 1(6).
- Administrative Tribunals Act, 1985: section 3(q).
[1] Article 309, constitution of India
[2] Article 313, constitution of India
[3] Section 1(6), The Payment of Wages Act, 1936
[4] Section 3(q), the Administrative Tribunals Act, 1985
[5] Section 100, Maharashtra Factories Rules, 1963
[6] Section 59(1), The Factories Act, 1948
[7] Section 64(1), The Factories Act, 1948
[8] Section 2(l), The Factories Act, 1948
[9] Section 2(m), The Factories Act, 1948
