Adverse Inference Against Employer Only After Workman Proves Prima Facie Case:Supreme Court 2014 in BSNL v. Mahavir Singh Explains Section 114(g) Evidence ActThe Supreme Court in BSNL v. Mahavir Singh clarified that Labour Courts cannotdraw adverse inference under Section 114(g) Evidence Act against employer for notproducing muster rolls unless workman first discharges burden of proving 240 daysservice. The Court on 03.01.2014 set aside CGIT award granting reinstatement toalleged daily wage Lineman, holding self-serving diaries C-1 to C-14 and documents C-15 to C-40 insufficient. BSNL denied direct employment, produced agreement dated18.01.2002 with M/s Haryana Securities for security personnel. Practically, what wehave seen is that Labour Courts shift burden to employer if workman merely assertsservice. Supreme Court said CGIT erred. This blog explains Municipal Corpn., Faridabadv. Siri Niwas (2004) 8 SCC 195, why R.M. Yellatti (2006) 1 SCC 106 distinguished, andhow BSNL v. Mahavir Singh restricts adverse inference in Section 25-F cases.
Facts: CGIT Drew Adverse Inference From Non-Production of Records, Supreme CourtSays Workman Did Not Discharge Initial BurdenMahavir Singh claimed daily wage Lineman at Saidpur Exchange Oct 2001-Apr2002, suffered shock, denied duty. Produced diaries and certificates. CGIT held Section25-F violated, drew adverse inference as BSNL did not produce attendance/wagerecords, awarded reinstatement + 50% back wages. BSNL argued respondent neveremployed; may be contract labour of M/s Haryana Securities per agreement18.01.2002. The Supreme Court in Range Forest Officer v. S.T. Hadimani (2002) 3 SCC25 held filing affidavit that workman worked 240 days not enough; burden on workmanto prove by cogent evidence. The Supreme Court in Rajasthan State Ganganagar S. Millsv. State (2004) 8 SCC 161 held mere non-production of muster rolls not ground foradverse inference without workman’s prima facie proof. The Supreme Court in Manager,RBI Bangalore v. S. Mani (2005) 5 SCC 100 held self-serving evidence by workman notsufficient. In BSNL, no appointment letter, wage slip, PF/ESI, or co-worker testimony.Only diaries. The Supreme Court in Surendranagar District Panchayat v. DahyabhaiAmarsinh (2005) 8 SCC 750 held workman’s diary not reliable. A common mistakeclients make is thinking employer must disprove case. BSNL says workman must firstprove. For workmen, summon records via witness. For employers, produce contractagreement if plea taken.
Section 114(g) Evidence Act: Adverse Inference Conditional on Workman LeadingCogent Evidence First Supreme Court held: “Adverse inference cannot be drawn against the employer onthe ground that it did not produce the muster roll or other documents when theworkman has not been able to prove his case that he had worked for 240 days.” Courtexplained R.M. Yellatti v. Asst. Executive Engineer (2006) 1 SCC 106 where adverseinference drawn because workman produced appointment letter and employer failed toproduce muster rolls despite direction. In BSNL, workman had no appointment letter;initial burden not discharged. The Supreme Court in Municipal Corpn., Faridabad v. SiriNiwas (2004) 8 SCC 195 held adverse inference only if workman calls upon employer toproduce and employer fails without reason, after workman leads evidence. TheSupreme Court in Krishna Bhagya Jala Nigam Ltd. v. Mohammed Rafi (2006) 9 SCC 697held burden never shifts to employer unless workman proves prima facie case. TheSupreme Court in Bhavnagar Municipal Corpn. v. Jadeja Govubha Chhanubha (2014) 14SCC 184 followed BSNL v. Mahavir Singh to deny relief. In our experience, LabourCourts apply Yellatti mechanically. BSNL restricts Yellatti to cases with somedocumentary proof by workman. For workmen, get at least one official document. Foremployers, if no document by workman, no need to produce records.Contract Labour Defence: Agreement With M/s Haryana Securities Shifts Onus, NoDirect Employment Proved
BSNL produced agreement dated 18.01.2002 with M/s Haryana Securities forsecurity personnel. Argued respondent, if at all, contract employee of contractor. TheSupreme Court in Steel Authority of India v. National Union Waterfront Workers (2001) 7SCC 1 held contract labour cannot claim direct employment unless contract sham. TheSupreme Court in International Airport Authority v. International Air Cargo Workers’Union (2009) 13 SCC 374 held burden on workman to prove contract camouflage. InBSNL, respondent did not implead contractor or prove supervision by BSNL. TheSupreme Court in General Manager, ONGC Silchar v. ONGC Contractual Workers Union(2008) 12 SCC 275 held mere working in premises not direct employment. CGIT ignoredagreement. Supreme Court said CGIT wrongly drew adverse inference when contractproved. The Supreme Court in Haldia Refinery Canteen Employees Union v. Indian OilCorpn. (2005) 5 SCC 51 held canteen workers of contractor not IOC employees. Acommon mistake clients make is not impleading contractor. BSNL says withoutcontractor, no case. For PSUs, keep contractor agreements. For workmen, challengesham contract with evidence of direct control.
BSNL v. Mahavir Singh establishes that adverse inference employer records burdenof proof BSNL Mahavir Singh Supreme Court Section 114(g) jurisprudence requiresworkman to first prove 240 days with cogent evidence before adverse inference drawn.Supreme Court 03.01.2014 set aside reinstatement, distinguishing R.M. Yellatti (2006) 1SCC 106, applying Range Forest Officer v. S.T. Hadimani (2002) 3 SCC 25. Contractlabour agreement shifted onus. As the law stands, diaries not enough; appointmentletter/wage slip/co-worker evidence needed. For Labour Courts, don’t draw adverseinference mechanically. For employers, produce contractor agreement if defence taken.For workmen, summon records after prima facie proof. The Supreme Court’s ruling inBSNL rebalances burden of proof in Section 25-F cases and prevents misuse of adverseinference.
