Employer’s non-production of attendance registers justifies adverse inference regarding the existence of an employer-employee relationship.

The Opposite Party-Workman was engaged as a daily wager by the Petitioner-Management in 1984 and later appointed as a Watchman on a consolidated salary in 1993

In 1999, the Workman approached the Labour Authority regarding non-payment of arrears and bonus, during which the Management alleged his services had been terminated

The Workman claimed he was refused employment effective 14.02.1999 without notice or compensation

Following a failed conciliation, the State Government referred the dispute to the Labour Court, Bhubaneswar

The Management contested the reference, denying the existence of an employer-employee relationship and alleging the Workman’s documents were forged

The Labour Court, vide award dated 31.03.2018, found the termination illegal and, noting the factory's closure and the Workman's age, awarded a lump sum compensation of ₹4,00,000

The Management challenged this award via the present writ petition

1. Whether an employer-employee relationship existed between the Management and the Workman so as to attract the Industrial Disputes Act, 1947

2. Whether the Labour Court was justified in drawing an adverse inference against the Management for the non-production of attendance and wage registers

3. Whether the reference made by the State Government was invalid because the initial complaint allegedly did not mention "refusal of employment"

4. Whether the High Court, in its supervisory jurisdiction under Article 227, can re-appreciate the findings of fact recorded by the Labour Court

The court applied Section 2(s) of the Industrial Disputes Act, 1947, defining a "Workman"

Regarding the burden of proof and adverse inference, the court relied on Sita Ram & Ors. v. Moti Lal (2008 LLR SC), which allows adverse inference when an employer withholds records in their exclusive custody

Director Fisheries and Terminal Division v. Bhikubhai (AIR 2010 SC 1236)

On the scope of judicial review, the court applied the principles from Sayed Yakub v. K.S. Radha Krishna (AIR 1964 SC 477), establishing that a writ of certiorari cannot be used to correct errors of fact unless they are perverse or based on no evidence

per National Engineering Industries Ltd. v. State of Rajasthan (2000) 1 SCC 371, an industrial adjudicator cannot decide upon the legality of the reference made to it

The High Court observed that the Management’s own witness (MW-1) admitted that while registers were maintained and inspected, they were not produced before the Labour Court

Consequently, the Labour Court’s decision to draw an adverse inference was legally sound, as the Management withheld the best evidence regarding the Workman's employment

Furthermore, the Management failed to prove its allegation of forgery, having taken no steps to verify the documents with the purported signatories or file an FIR

Regarding the challenge to the reference, the Court noted that the Management had not raised this issue before the Labour Court and could not challenge the validity of the reference for the first time in a writ proceeding

Even otherwise, the industrial adjudicator is a creature of statute and lacks the jurisdiction to invalidate a reference

The Court found that the Labour Court’s findings were based on a thorough appreciation of oral and documentary evidence (Exhibits 1-6), and since no gross illegality or perversity was demonstrated, the findings of fact were immune from interference under Article 227

The Court upheld the finding that the termination was illegal and the award of ₹4,00,000 compensation was justified

Due to the Workman’s advanced age (72 years) and the 26-year duration of the litigation, the Court directed the Petitioner-Management to implement the award and pay the compensation with 6% accrued interest within one month