DHARANGADHARA CHEMICAL WORKS LTD. v. STATE OF SAURASHTRA.
Citation: [1957] 1 S.C.R. 152; 1956 INSC 71
Court: Supreme Court of India
Bench: NATWARLAL HARILAL BHAGWATI , T.L. VENKATARAMA AIYYAR, S.K. DAS, P. GOVINDA MENON
Judgment date:
Case summary
1956 INSC 71. Supreme Court of India judgment dated 1956-11-23. DHARANGADHARA CHEMICAL WORKS LTD. v. STATE OF SAURASHTRA. Read the judgment and case details...
Judgment text
152 SUPREME COURT REPORTS (1957) DHARANGADHARA CHEMICAL WORKS LTD. "· STATE OF SAURASHTRA. (BHAGWATI, VENKATARAMA AYYAR, S. K. DAs and GoVINDA MENON, JJ) Industrial J)ispute-Workman-lndependent contractor-Test- Distinction-Agarias,, if tvorkmen-Finding by the Industrial Tribu- nal, if a question of fact-Such findinQ, if and rvhen can be set aside- lndustria/ Disfml_! s Act (XIV af 1947), s. 2(s)-Constitrition of India, Art. 226. The appellants '"'·ere lessees holding a license for the manufac- ture of salt on the demised lands. The salt was manufactured by a class of professional labourers known as agarias £Tom rain water that got mixed up with saline matter in the soil. The work was seasonal in nature and commenced in October after the rains and continued till June. Thereafter the agarias left for their own villages for cultivation \Vork. The demised lands were divided into plots called pattas and allotted to the agarias with a sum of Rs.
400/· for each patta to n1eet the initial expenses. Generally the same patta was allotted to the same agaria every year and if a patta was extensive in area, it was allotted to two agarias working in partner- ship. After the manufacture of salt the agarias were paid at the rate of 5 as. 6 pies per maund. At the end of each season the accounts were settled and the agarias paid the balance due to then1. The agarias who worked themselves with the members of their families were free to engage extra labour on their own account and the appellants had no concern therewith. No hours of work were prescribed, no muster rolls 1naintained, nor were working hours controlled by the appellants. There were no rules as regards leave or holidays and the agarias \Yere free to go out of the factory after making arrangements for the 1nanufacture of salt. The question for decision was whether in such circumstances the agarjas could be held to be workmen as defined by s.
2( s) of the Industrial Disputes Act of 1947, as found by the Industrial Tribunal and agreed with by the High Court or they were independent contrac~ tors and the reference for adjudication made by the Government com. petent under s. I 0 of the Act. Held, that the finding of the Industrial Tribunal that the agarjas were ,workmen within the meaning of s. 2(s) of the Industrial Disputes Act of 1947 was correct and the reference: was competent. The real test whether a person was a workman was whether he had been employed by the employer and a relationship of employer and employee or master and servant subsisted between them and it was well settled that the prima fade test of such ; S. C. R.
SUPREME COURT REPORTS 153 relationship was the existence of the right in the employer not merely to direct what work was to be done but also to control the manner in which it was to be done, the nature or extent of such control varying in different industries and being by its nature incapable of being precisely defined. The correct approach, therefore, was to consider whether, having regard to the nature of the work, there was due control and supervision of the employer. Mersey Docks and Harbour Board v. Coggins & Griffeth (Liver- pool) Ltd. , and Another (1947] l A. C. 1, and Simmons v. Heath Laundry Company (1910] 1 K. B. 543 referred to. The question whether the relation between the parties was :me as between an employer and employee or master and servant was a pure question of fact and where the Industrial Tribunal 1:!. aving jurisdiction to decide that question came to a finding, such finding of fact was not open to question in a proceeding under Art.
226 of the Constitution unless it could be shown to be wholly un- warranted by the evidence. Ebrahim Aboobakar v. Custodian General of Evacuee Property [1952 ]' S. C. R. 696, referred to. Performing Right, Society Ltd. etc. v. Mitchell and Booker (Plaise De Danse) [1924] l K. B. 762, not followed. A person could be a workman even though he did piece-work md was paid not per day but by the job or employed his own labour and paid for it. Sadler v. Henlock (1855) 119 E. R. 209 and Blake v. Thirst ~1863) 32 L. J. (Exchequer) 188, referred to. The broad distinction between a workman and an independent :ontractor was that while the former would be bound by agree- ment to work personally and would so work the latter was to get die work done by others. A workman would not cease to be so ! Veh though he got other persons to work with him and paid and :ontrolled them. Grainger v. Aynsley : Bromley v. Tams (1881)6 Q. B. D. 182, Weaver v. Floyd (1825) 21 L. H. , Q. B. 151 and Whitely v.
Armitage (1864) 16 W. R. 144, referred to. As in the instant case the agarias, who were professional labourers and personally worked with the members of their families in manufacturing the salt, were workmen within the meaning of the Act, the fact that they were free to engage others to assist them and paid for them, could · not affect their status as workmen. CIVll. APPELLATE JuRISDICTION: Civil Appeal No. 85 of 1956. 1956 D1-gatlhara Chemieal Works w. v. Stolt of SaurashJra 1956 Dharangadhara Clremica. l Works Lid. v. State of SQMrashlra 154 SUPREME COURT REPORTS Ll957] Appear from the judgment and order dated January 8, 1954, of the High Court of Saurashtra, at Rajkot, in Civil Misc. Application No. 70 of 1952. R. /. Kolah and A. C. Dave, for the appellant. Poms A. Mehta and R. H. Dhebar, for respondent No. 1. 1956. November 23. The Judgment of the Court was delivered by BHAGWATI J.
-This appeal with a certificate of fitness granted by the High Court of Saurashtra raises an interesting question whether the agarias working in the Salt Works at Kuda in the Rann of Cutch are workmen within the meaning of the term as defined in the Industrial Disputes Act, 1947, hereinafter referred to as the Act. The facts as found by the Industrial Tribunal are not in dispute and are as follows. The appellants are lessees of the Salt \Vorks from the erstwhile State of Dharangadhara and also hold a licence for the manufac- ture of salt on the land. The appellants require salt for the manufacture of certain chemicals and part of the salt manufactured at the Salt Works is utilised by the appellants in the manufacturing process in the Chemical Works at Dharangadhara and the remaining salt is sold to outsiders. The appellants employ a Salt Superintendent who is in charge of the Salt \Vorks and generally supervises the Works and the manufacture of salt carried on there.
The appellants maintain a ~ railway line and sidings and also have arrangements for storage of drinking water. They also maintain a grocery shop near the Salt Works where the agarias can purchase their requirements on credit. The salt is manufactured not from sea water but from rain water which soaking down the surface be- comes impregnated with saline matter. The operations are seasonal in character and commence sometime in October at the close of the monsoon. Then the entire area is parcelled out into plots called pattas and they are in four parallel rows intersected by the railway S. C. R. SUPREME COURT REPORTS 155 lines. Each agaria is allotted a patta and in general the same patta is allotted to the same agaria year after year. If the patta is extensive it is allotted to two agarias who work the same in partnership. At the time of such allotment, the appellants pay a sum of Rs. 400 for each of the pattas and that is to meet the initial expenses.
Then the agarias commence their work. They level the lands and enclose and sink wells in them. Then the densitv of the water in the wells is examined by the Salt Superintendent of the appel- lants and then the brine is brought to the surface and collected in the reservoirs called condensers and re- . tained therein until it acquires by natural process a certain amount of density. Then it. is flowed into the pattas and kept there until it gets transformed into crystals. The pans have got to be' prepared by the agarias according m certain _standards and they are tested by the Salt Superintendent. When salt crystals begin to form in the pans they are again tested by the Salt Superintendent and only when they are of a parti- cular quality the work of collecting salt is allowed to be commenced. After the crystals are collected, they are loaded into the railway wagons and transported to the depots where salt is stored.
The salt is again tested there and if it is found to be of the right quality, the agarias are paid therefor at the rate of Rs. 0.. 5-6 per maund. Salt which is rejected belongs to the appel- lants and the agarias cannot either remove the salt manufactured by them or sell it. The account is made up at the end of the season when the advances which have been paid to them from time to time as also the amounts due from the agarias to the grocery shop are taken into account. On a final settlement of the accounts, the amount . due by the appellants to the agarias is ascertained and such balance is paid by the appellants to the agarias. The manufacturing season comes to an end in June when the monsoon begins and then the agarias return to their villages and take up agricultural work. The agarias work themselves with their families on the pattas . allotted to them. They are free to engage extra labour but it is they who make the payme. nts to 1956 D! iatangadhara C/rmri&al Works Ltd. v.
State of S1J11ras! ara Bhagwati J. ~ Ltd. v. Sta# of Saurashlra Bhagwali j. 156 SUPREME COURT REPORTS [1957] these labourers and the appellants have nothing to do y. rith the same. The appellants do not prescribe any hours of work for these agarias. No muster roll is maintained by them nor do they control how many hours in a day and for how many days in a month the agarias should work. There are no rules as regards leave or holidays. They are free to go out of the works as they like provided they make satisfactory arrange- ments for the manufacture of salt. In about 1950, disputes arose. between the agarias and the appellants as to the conditions under which the . agarias should be engaged by the appellants in the manufacture of salt. The Government of Saurashtra, by its letter of Reference dated November 5, 1951; referred the disputes for adjudication to the Industrial Tribunal, Saurashtra State, Rajkot.
The appellants contested the proceedings on the ground, inter alia, that the status of the agai·ias was that of independent contractors and not of workmen and that the State was not competent to refer their disputes for adjudica- tion under s. 10 of the Act. This question was tried as a preliminary issue and by its order dated August 30, 1952, the Tribunal held that the agarias were workmen within the meaning of the Act and that the reference was intra vires and adjourned the matter for hearing on the merits. Against this order the appellants preferred an appeal being Appeal No. 302 of 1952, before the Labour Appellate Tribunal of India, and having failed to obtain stay of further proceedings before the Industrial Tribunal pending the appeal, they moved the High Court of Saurashtra in M. P. No. 70 of 1952 under Arts. 226 and 227 of the Constitution for an appropriate writ to quash the reference dated November 5, 1951, on the ground that it was without jurisdiction.
Pending the disposal of this writ petition, the· appellants obtained stay of further proceedings before the Industrial Tribunal and in view of the same the Labour Appellate Tribunal passed an order on September 27, 1953, dismissing the appeal leaving the question raised therein to the dechiion of the High Court. By their judgment dated January 8, 1954, the learned Judges S. c. R. SUPREME COURT REPORTS 157 of the High Court agreed with the decision of the Industrial Tribunal that the agarias were workmen within s. 2(s) of the Act and, accordingly, dismissed the application for writ. They, however, granted a certi- ficate under Art. 133( I) ( c) of the Constitution and that is how the appeal comes before us. The sole point for determination in this appeal is whether the agarias working in the Salt Works of the appellants at Kuda are workmen within the definition of that term ins. 2(s) of the Act. "Workman" has been thus defined m s.
2(s) of the Act:- "(s)-'Workman' means any person employed (including an apprentice) in any industry to do any skilled or unskilled manual or clerical work for hire or reward and includes, for the purposes of any proceed- ings under this . Act in relation to an industrial dispute, a workman discharged during that dispute, but does not include any person employed in the naval, military or air service of the (Government). " The essential condition of a person being a workman within the terms of this definition is that he should be employed to do the work in that industry, that there should be, in other words, an employment of his by the employer and . that there should be the relationship between the employer and him as between employer and employee or master and servant. Unless a person is thus employed there can be no question of his being a workman within the definition of the term as contained in the Act.
The principles according to which the relationship as between employer and employee or master and servant has got to be determined arc well settled. The test which is uniformly applied in order to determine the relationship is the existence of a right of control in respect of the manner in which the work is to be done. A distinction is also drawn between a contract for services and a contract of service and that distinction is put in this way: "In the one case the master can order or require what is to be done while in the other case he can not only order or require what is to be done 1956 D! it1TtJ11gadliara CAemical WorM I. Id. v. State qf Sauras. o! r• Bliagwati J. 1956 Dharangadhara Chemical Works Ltd. •v. State ef Saurasldra Bhagu:ati J, 158 SUPREME COURT REPORTS [1957] but how itself it shall be done. " (Per Hilbery, J. in Collins v. Hertfordshire County Council( ). ) The test is, however, not accepted as universally correct. The following observations of Denning L. J. , at pp.
110, 111 in Stevenson, fordan and Harrison Ltd. v. Macdonald and Evans(~) are apposite in this context : "But in Cassidy v. Ministry of Health(•) Lord Justice Somervell, pointed out that that test is not universally correct. There are many contracts of service where the master. cannot control the manner in which the work is to be done as in the case of a captain of a ship. Lord Justice Somervell, went on to say : One perhaps cannot get much beyond this : 'Was the contract a contract of service within the meaning which an ordinary man would give under the words'? "I respectfully agree. As my Lord has said, '' 1s almost impossible to give a precise definition of the distinction. It is often easy to recognize ·a contract of service when you see it, but difficult to say wherein the defference lies.
A ship's master, a chauffeur, and a reporter on the staff of a newspaper are all employed under a contract of service ; but a ship's pilot, a taxi- man, and a newspaper contributor are employed under a contract for services. One feature which seems to run thro1,1gh the instances is that, under a contract of service, a man is employed as part of the ~siness, and his work is done as an integral part of the business ; whereas, under a contract for services, his work, although done for the business, is not integrated into it but is only accessory to it. " We may also refer to a pronouncement of the House of Lords in Short v. J. & W. Henderson, Ltd•(') where Lord Thankerton recapitulated the four indicia of a contract of service which had been referred to in the judgment under appeal, viz. , (a) the master's power of selection of his ~ervant, (b) the payment of wages or (2) [1952 1 T. L. R. IOI, III. (1) [19471 K. B. 598, 6. 15. · (3) [1951 I T. L. R. 539, 543 s. c. (1951] 2 K. B.
343, 352-3. (4) [1946 62 T. L. R. 427, 429. S. C. R. · SUPREME COURT REPORTS 159 other remuneration, (c) the master's right to control the method of doing the work, and (d) the master's right of suspension or dismissal, but observed :- "Modern industrial conditions have so much affected the freedom of the master in cases in which no one could reasonably suggest that the employee was thereby converted into an indep:ndent contractor that, if and when an appropriate occasion arises, it will be incumbent on this House to reconsider and to restate these indicia. For example, (a), (b) and (d) and probably also ( c), are affected by the statutory provisions and rules which restrict the master's choice to men supplied by the labour bureaux, or directed to him under the Essential Work provisions, and his power of suspension or dismissal is similarly affected. These matters are also affected by trade union rules which are atleast primarily made for the protection of wage-earners.
" Even in that case, the House of Lords considered the right of supervision and control retained by the employers as the only method if occasion arose of securing the proper and efficient discharge of the cargo as sufficiently determinative of the relationship betw wer of controlling the work. No distinction can be drawn from the circumstances of the man being employed at so much a day or by the job. I think that here the relation was that of master and servant, not of contractor and contractee. " (See· also Blake v. T hirst( 1 ) and Halsbury's "Laws of England'', Hailsham edition, Vol. 22, page 119, para. 194, wherein it is stated that if a person is a worker and not a contractor, "it makes no difference that his work is piece-work".
) As regards the second feature relied on for the appd- lants it is contended that the agarias · are entitled to engage other persons to do the work, that these persons are engaged by the agarias and are paid by them, that the appellants have no control over them and that these facts can be reconciled only with the position that the agarias are independent contractors. This argument, however, proceeds on a misapprehension of the true legal position. The broad distinction between a workman and an inde- pendent contractor lies in this that while the former agrees himself to work, the latter agrees to get other persons to work. Now a person who agrees · . ~himself to work and does so work and is, therefore, a workman does not cease to be such by reason merely of the fact that he gets other persons to work along (1) (1855) 4 EI. & BI. 570, 578; (1855) 119, E. R. 209, 212. (2) (1863) 32 L. J. (Exchequer) 188. 1956 Dharangadluzr11 Chemi&al Works Ltd. v. Stal4 qf SIJlll'a. rhtr11 BhagwaJi ].
1956 DharoTJ. l! Odhara Chdniciil W orkl w. Y. 81111 ) 21 L. J. ,QB. 151. (31 (1804) 16 w. P.. 144. S. C. R. SUPREME COURT REPORTS 167 the manner it is used to do in the ~ase of other indus- tries where the conditions of employment and the work to be done by the employees is of a different character. These considerations would necessarily have to be borne in mind while the Industrial Tribunal is adjudi- cating upon the disputes which have been referred to it for adjudication. They . do not, however, militate against the . conclusion which we have come to above that the decision of the Industrial Tribunal to the effect that the agarias are workmen within the definition of the term contained in s. 2(s) of the Act was justified on the materials on the record. We accordingly see no ground for interfering with that decision and dismiss this appeal with costs. Appeal dismissed. LALIT MOHAN DAS fl. ADVOCATE-GENERAL, ORISSA (S. R. DAS c. J. , BHAGWATI, VENKATARAMA AYYAR, B. P. SINHA and S. K.
DAs JJ. ) Legal Practitioner-Report-Procedure-Not open to District fudge to send back report to the Subordinate Civil fudge-Report once made proceedings can terminate by-Final Order of the High Court only-Member of the Bar-Officer of the Court-Duty to client and Court-Dignity and decorum of the Court must be upheld-Con- duct-Not a mattt:t: between individual member of Bar and a member of fudicial Service-Disciplinary action-Punishment-Mitigating arcumstances-lnterference by Supreme Court-Legal Practitioners Act (XVIII of 1879), s. 14. . 11it appellant pleader who already had strained relation with the Munsif made certain objectionable remarks in open Court, suggesting partiality and unfairness on the part of the Munsif. The Munsif drew up a proceeding under ss. 13, 14 of the Legal Practitioners Act, 1879, against the pleader and submitted a ~port to the High Court through the District Judge.
An appliption to the Additional District Judge was filed by the pleader, for time to movt" the High Court to ge~ an order to have the matter heard by some Judicial Officer other than the 4-76 S. C. India/69 1956 D/uirantiadhara Chemical Works Ltd. v. Stall ~·J Saurashtr~ BhagwaJi]. . November 29
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