Adverse Inference Against Management For Withholding Relevant Records Establishes Employer-Employee Relationship In Industrial Disputes

The respondent (workman) claimed he was employed as a ‘Delivery Man’ by the petitioner (management) from June 1, 2008, at a salary of Rs. 6,500 per month.

He alleged that on April 9, 2014, he was assaulted by the Manager and subsequently terminated by a partner of the firm for demanding legal entitlements and minimum wages.

The management denied the existence of an employer-employee relationship.

During the Labour Court proceedings, the workman moved an application for the production of biometric attendance records; however, the management filed an affidavit stating the records were old and unavailable.

Consequently, on March 23, 2023, the Labour Court passed an Award (LIR No. 1947/2017) granting the workman Rs. 1.50 lakhs as lump-sum compensation in lieu of reinstatement.

The petitioner challenged this Award via the present writ petition.

1. Whether an employer-employee relationship existed between the workman and the management and whether his services were terminated illegally.

2. Whether the Labour Court was justified in drawing an adverse inference against the management for non-production of records.

3. Whether the High Court should interfere with the Award under the limited scope of writ jurisdiction under Article 226.

Section 11 of the Industrial Disputes Act, 1947, regarding the production of documents and the power of the Labour Court.

The principle of "adverse inference" where a party withholds the best evidence in its possession.

The scope of judicial review under Article 226, as established in Syed Yakoob v. K.S. Radhakrishnan, International Airport Authority of India v. International Air Cargo Workers Union, and Ritz Theatre Pvt. Ltd. v. Ramesh Chandra, warrants interference only if an order is without jurisdiction, perverse, or violates principles of natural justice.

The Court observed that the workman had taken all proactive steps to establish the relationship, including summoning witnesses and seeking production of records.

The management, despite being directed by the Labour Court, failed to produce biometric attendance records, citing their unavailability due to age.

Because the management held the "best evidence" and failed to lead any evidence to rebut the workman’s claim or disprove the relationship, the Court found that the Labour Court rightly drew an adverse inference against them.

Under Article 226, the Court noted its role is not to re-appreciate evidence but to check for perversity; since the Labour Court’s findings were based on the management’s failure to produce records and the workman's consistent testimony, no jurisdictional error or perversity was found.

The Court directed that the amount deposited by the petitioner be released to the workman with accrued interest, and all pending applications were disposed of.