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Palasa Cashew Manufacturers Association, Palasa Represented by Its President Sreerama Radha Krishnayya and ors. Vs. Chief Inspector of Factories, Andhra Pradesh and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtAndhra Pradesh High Court
Decided On
Case NumberWrit Petn. No. 828 of 1961 and Criminal R.C. Nos. 234, 236 and 237 of 1961, Cri. R.P. Nos. 210, 212
Judge
Reported inAIR1964AP142; 1964CriLJ387; (1963)IILLJ483AP
ActsFactories Act, 1948 - Sections 2(1)
AppellantPalasa Cashew Manufacturers Association, Palasa Represented by Its President Sreerama Radha Krishnay
RespondentChief Inspector of Factories, Andhra Pradesh and ors.
Appellant AdvocateY. Satyanarayana, Adv.; D. Raja Rao for Public Prosecutor
Respondent AdvocateO.A. Reddy, Adv. for 3rd Govt. Pleader
DispositionPetition dismissed
Excerpt:
.....he is contractor - evidence discloses presence of control and supervision - person employed are worker within meaning of section 2 (1) and premises are factories within meaning of section 2 (m). - - the complaint against him is under section 92 of the factories act (63 of 1948) for having failed to construct the cashew-nut breaking shed in accordance with the approved plans and for having failed to frame and display notice of periods of work for adult workers in form no. 11 and to send copies of the same to the inspector of factories and for failure to provide sufficient latrine accommodation separately for men and women workers. they can come for work at any time they like and they can leave whenever they like. therefore, he found the accused guilty and convicted him under........... that was also a case of a company manufacturing bidis and the persons rolling the bidis worked at the premises of the company and they were not at liberty to work at their homes. they had to work within certain hours which were the factory hours though they were not bound to work for the entire period. their attendance was noted in the factory, but they could come and go away at any time they liked. but if any of them came after mid-day, he was not supplied with tobacco and was not thus allowed to work, even though the factory closed at 7 p.m. tinder the standingorders of the factory, a worker, who remained absent for eight days without leave, could be removed. payments were made on piece-rates according to the amount of work done, but the management had the right to.....
Judgment:
ORDER

Chandra Sekhara Sastry, J.

1. In these three criminal revision cases and the writ petition, a common question arises for decision. The facts alleged in the affidavit filed in support of the writ petition are no admitted by the respondents. But in the criminal revision cases, evidence was taken and the facts are investigated and found by the trial Magistrate and by the Sessions Court, Srikakulam in revision it is stated by the learned Counsel appearing it the cases that the decision of the writ petition will be governed by the decision in the criminal revision cases. Therefore, I shall first deal with the criminal revision cases.

2. It is also stated by the learned Counsel appearing for the petitioners that the facts in all the three revision cases are similar. So I shall first consider the Criminal Revision Case No. 2347 61 which arises out of SC. No. 1 of 1959 on the file of the Additional District Munsif Magistrate, Sompeta. The accused, Sreeram Rattayya of Palasa is the occupier of Sri Jayasankara Cashew Manufacturing Co., Palasa. The complaint against him is under Section 92 of the Factories Act (63 of 1948) for having failed to construct the cashew-nut breaking shed in accordance with the approved plans and for having failed to frame and display notice of periods of work for adult workers in Form No. 11 and to send copies of the same to the Inspector of Factories and for failure to provide sufficient latrine accommodation separately for men and women workers. The accused admitted these contraventions; but he contended that he was not liable under the Act as his was not a factory. The petitioner purchases cashew-nuts in the local markets and gets them roasted by skilled roasters in their sheds. The roasted cashew-nuts would be broken and the cashew-nut kernel would be extracted in an unbroken condition.

Each person that would be engaged for breaking the cashew-nuts and extracting the kernel would be paid remuneration at 3 annas per Kuncham. But no remuneration is paid for the quantity of the broken kernel. In this case, when P.W. 1, the Inspector of Factories inspected the premises, he found 23 women and 2 men working therein. The shed in which the cashew-nuts are broken and the kernel extracted was only 4 feet in minimum height and was straw-roofed, whereas according to the plan approved by the Chief Inspector of Factories, the shed should be of a minimum height of 14 feet with G. I. sheet roofing.

Latrine accommodation was not provided and notice of periods of work in Form No. n was not displayed and the copy of the same was not sent to the Inspector of Factories. The main plea is that those working in this shed are not workers within the meaning of Factories Act and that, therefore, their sheds would not be factories within the meaning of that Act. It is claimed that the cashew breakers are not in any way bound to coma for work regularly or at any particular time. There is not any contract of service with them. They can come for work at any time they like and they can leave whenever they like. There is no manner of control or supervision over their work except to see that they do not pilfer the goods, and this supervision is done by women, who are employed to see that the sheds are kept clean. The cashew breakers would receive the remuneration every day when they leave the shed, though some of them may receive their remuneration once a week or in ten days.

The trial Magistrate, on a consideration of the evidence in the case found that this is a clear case of contract of service and not a contract of work and that the company itself is a factory within the meaning of the Act. Therefore, he found the accused guilty and convicted him under Section 92 read with Section 6 and Rule 3 (3) and also under Section 92 read with Section 19 and Rule 40 as well as under Section 92 read with Section 61 and Rule 79 and sentenced to pay a fine of Rs. 30/- under each count and in default to undergo imprisonment for one week under each count. In revision, the learned Sessions Judge, Srikakulam also was of the opinion that the persons working is the accused company are workers within the meaning of Section 2(i) of the Act and that, as the workers employed in the accused company were more than twenty in number the petitioner's company is a factory as defined by the Act and that, as the accused immediately contravened the rules framed under the Act, there is no reason to recommend to the High Court for interference with the conviction and sentence. Hence this criminal revision case was filed questioning the legality of the conviction and sentence,

'Worker' is defined in Section 2, Clause (i) as follows:

' 'Worker' means a person employed, directly or through any agency, whether for wages 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.'

'Factory' is defined in Clause (m) of the same section as follows:

'(m) '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 preceding twelvemonths and in any part of which a manufacturing, process is being carried or without the aid of power, or is ordinarily so carried on,--but does not include a mine subject to the operation of the Mines Act, 1952 (XXXV of 1952) or a railway running shed;'

This case is concerned with Sub-clause (ii) of Clause (m) above quoted. Therefore, it has to be determined whether the persons engaged in breaking cashew-nuts and for extracting the kernel are 'workers' within the meaning of Section 2, Clause (1). If it to be held that they are workers, then since admittedly more than twenty persons are working on any day in this company, this premises will be a 'factory' within the meaning of Section 2, Clause (m), Sub-clause (ii). It is not denied that the petitioner is an occupier within the meaning of Section 2, Clause (n) of the Act.

3. Now, it is necessary to refer to the facto found by the tria Magistrate on a consideration of the evidence in the case. The company maintains muster-rolls marked as Exs. D-1 to D-3. The same workers had continuously been working on almost all the days in the week during the season. They were also working between fixed hours i.e., from about 7 A. M. till about 4.30 or 5 P.M. They were receiving wages once a week'. The workers engaged to break the cashew-nuts have to wait till the evening before they could hand over the kernels to the clerk in charge. There is some sort of control and supervision by the management over the workers. It is in evidence that there are two women supervisors in each shed. Any worker indulging in breaking the cashew-nuts into pieces continuously is liable to be removed.

4. On the above facts, the question is whether the persons engaged in breaking the roasted cashew-nuts and extracting the kernel are workers within the meaning of Section 2(i) of the Factories Act. The scope of the definitions of 'worker' and 'factory' in the Act came to be considered by the Supreme Court in Chintaman Rao v. State of M.P., : 1958CriLJ803 . The case related to a company manufacturing becdies. The management enters into a contract with independent contractors, known as Sattedars, for the supply of beedies locally. The management supplies tobacco to the Sattedars, and in some cases bidi leaves. Some of the Sattedats maintain a small factory where they get bidis manufactured by engaging coolies. Others give tobacco and bidi leaves to outsiders who prepare bidis in their houses. After bidis are rolled, the Sattedars collect the bidis so manufactured and take them to the factory directly or through coolies where they are sorted and checked by the workers in the factory. The company selects the bidis and rejects 'chhant' which are not upto the standard. The management pays the Sattedars the cost of the manufacture of bidis after deducting therefrom the cost of tobacco supplied to them. It was also found that the Sattedars or his coolies neither work in the company's factory nor are they subject to the supervision or control of the management of the company.

On those facts, the question arose whether the Sattedars are workers within the meaning ofthe Act or are only independent .contractors. To decide this question, the Supreme Court had to consider the meaning of the work 'employed' in Section 2(1) of the Act. It was pointed out that:

'The concept of employment involves three ingredients; (1) employer (2) employee and (3) the contract of employment. The employer is one who employs, i. e., one who engages the services of other persons. The employee is one who works for another for hire. The employment is the contract of service between the employer and the employee whereunder the employee agrees to serve the employer subject to his control and supervision. Can it be said that a Sattedar is employed by the management of the factory to serve under it? There is a well understood distinction between a contractor and a workman and between contract for service and contract of service.'

5. It was further pointed out that there is a clear-cut distinction between a contractor and a workman and that the identifying mark of the latter is that he should be under the control and supervision of the employer in respect of the details of the work. The Supreme Court then referred to the earlier decision in Dharangadbra Chemical Works Ltd. v. State of Saurashtra, : (1957)ILLJ477SC and referred to the following statement made therein:

'The correct method of approach, therefore, would be to consider whether having regard to the nature of the work there was due control and supervision by the employer .....'

On the facts stated above, the Supreme Court finally held in that case that the Sattedar is only an independent contractor as he is not under the control of the factory management and he can manufacture bidis wherever he pleases. Therefore, the Sattedars in that case were not employed by the management as workers but were only independent contractors who performed their part of the contract by making bidis and delivering them at the factory. It is clear that the facts in the case are entirely different from the facts in the cases now to be decided.

6. The learned Counsel for the petitioner next placed reliance on another decision of the Supreme Court in Shankar Balaji v. State of Maharashtra, : (1962)ILLJ119SC . That was also a case of a company manufacturing bidis. After referring to the earlier decision in : 1958CriLJ803 , they proceeded to state that the employment is the contract of service between the employer and the employee wherein the employee agrees to serve the employer subject to his control and supervision. In that case, the facts are as follows: There was no agreement or contract of service between the company and the workers. The worker was not bound to attend the factory for the work for any fixed hours of work or for any fixed period. He was free to go to the factory at any time he liked and was equally free to leave the factory whenever he liked. The payment was on the basis of piece work; but the quantity to be turned out per day was not fixed. There was no actual supervision of work. The worker could be absent from work on any day he. liked. But if he was

to be absent for more than 10 days - he had to inform the management, not ror the purpose o obtaining leave but only for the purpose of intimating that he had no intention to give up work. He could also do work at his place on taking permission of the management for taking tobacco home. Such permission was necessary in view of the Excise Rules and not on account of any condition of alleged service. At the close of the day, the bidis used to be delivered to the company and those not upto the standard would be rejected. The worker's attendance was not noted though the days he worked could be found out from the work register.

On these facts, the Supreme Court held that the persons engaged in the work of rolling bidis were not employed by the company in the manufacturing process and hence are not 'workers' within the meaning of Section 2, Clause (1) of the Act. But at the same time, it was pointed out by the Supreme Court as follows:

'ft is true, as contended for the State, that persons engaged to roll bidis on job work basis could be workers, but only such persons be workers who work regularly at the factory and are paid for the work turned out during their regular employment on the basis of the work done. Piece rate workers can be workers within the definition of 'worker' in the Act, but they must be regular workers and not workers who come and work according to their sweet will. It is also true, as urged for the State, that a worker, within the definition of that expression in the Act, need not be a whole-time worker. But, even then, the worker must have, under his contract of service, an obligation to work either for a fixed period or between fixed hours. The whole conception of service does not fit in well with a servant who has full liberty to attend to his work according to his pleasure and not according to the orders of his master.'

On question whether it could be said in that case that the management was exercising the power of supervision over the persons rolling the bidis the Supreme Court pointed out that:

'The mere fact that the person rolling bidis has to roll them in a particular manner cannot be said to give rise to such a right in the management as can be said to be a right to control the manner of work. Every worker will have to turn out the work in accordance with the specifications. The control of the management, which is a necessary element of the relationship of master and servant, is not directed towards providing or dictating the nature of the article to be produced or the work to be done, but refers to the other incidents having a bearing on the process of work the person carries out in the execution of the work. The manner of work is to be distinguished from the type of work to be performed.' In my view, the decision of the Supreme Court in that case cannot govern these cases in which the facts are entirely different.

7. I am also referred to the two decisions of the Madras High Court in Palaniatpa Mudaliar v. Addl. 1 Class Magistrate, Quell) Kulittalai, (1958) Mad LJ Cri 699: (AIR 1958 Mad 602) and Ratnaswami Mudaliar, In re, : (1959)ILLJ631Mad . The first was a decision of Balakrishna Ayyar, J., who held that:

'Where the persons cannot be asked to work between particular hours or to attend on particular days and where they can work on any day and as long as they like and where they cannot be prevented from working for any other manufacturer, such persons cannot be said to be 'employed' within the meaning of Section 2(1) of the Factories Act.' The Learned Judge pointed out that: 'In between lie infinite grades of control and supervision. But a certain amount of supervision or control is necessarily implied in the connotation of the word 'employed'.

The facts of that case were summarised by the learned Judge as follows:

'......the petitioner here cannot require anyof the persons using the facilities On his premises to work between particular hours. He cannot require any one of them even to attend on any particular days. The worker can come any day he likes, work as long as he likes or as short as he likes and go away. He may work fast or he may work slow. The petitioner cannot tell him that he should work on towels and not on bed-sheets or vice versa. If the worker so pleases he can work on towels though the petitioner would prefer him to work on bed-sheets. And, more important of all, the petitioner cannot prevent anybody from working for a competing manufacturer. Come when you like, go when you like, work when you like, stop when you like, work as fast as you like, work as slow as you like work on what yon like or not at all that is the position of the workers vis-a-vis the petitioner. Such persons cannot, in my opinion, be said to be ''employed' by the petitioner within the meaning of Clause (1) of Section 2 of the Factories Act.'

This decision also cannot have any application to the facts of these cases. The second case is a decision of the Division Bench of the Madras High Court which held that where the persons cannot be asked to work between particular hours or to attend on particular days and where they can work on any day and as long as they like and where they cannot be prevented from working for any other manufacturer, such persons cannot be said to be 'employed' within the meaning of Section 2(1) of the Factories Act. This case is similar to the one decided by Balakrishna Ayyar, J. in 1958 Mad LJ Cri 699: (AIR 1958 Mad, 602). The learned Government pleader placed reliance upon another decision of the Supreme Court in Birdhichand v. First Civil Judge, Nagpur, : (1961)IILLJ86SC . That was also a case of a company manufacturing bidis and the persons rolling the bidis worked at the premises of the company and they were not at liberty to work at their homes. They had to work within certain hours which were the factory hours though they were not bound to work for the entire period. Their attendance was noted in the factory, but they could come and go away at any time they liked. But if any of them came after mid-day, he was not supplied with tobacco and was not thus allowed to work, even though the factory closed at 7 P.M. Tinder the standingorders of the factory, a worker, who remained absent for eight days without leave, could be removed. Payments were made on piece-rates according to the amount of work done, but the management had the right to reject such bidis as did not come up to the proper standard.

The Supreme Court pointed out that in order to arrive at the conclusion whether a person working in a factory is an independent contractor or a worker the matter would depend upon the facts of each case. The nature or extent of control varies in different industries and cannot by its very nature be precisely denned. It was further pointed out that it was the right to supervise and not so much the mode in which it is exercised which is important. On the facts in that case, the Supreme Court held that the persons, who were engaged in rolling the bidis were workers within the meaning of Section 2(1) of the Act and that the company in question was a factory within the meaning of Section 2(m). The facts of the above case are very similar to the facts in the cases before me which I have already mentioned earlier in this judgment. The evidence discloses that there are two women supervisors, who exercise some sort of control over the persons engaged in breaking the nuts and extracting the kernel. If any person continues in breaking the kernel into pieces, he or she is pulled up and is directed to extract the kernel without breaking it into pieces. The same set of workers are continuously working almost for the entire season though they are paid or the basis of the work turned out. They have to work between specified hours. Attendance registers are maintained as is evidenced by Exs. D.1, D.2 and D.3. The workers cannot take the roasted cashew-nuts to their homes and extract the iternel there. They have to do the work in the sheds belonging to the company.

As regards the contract of employment, such a contract has to be necessarily implied from the fact that those persons are permitted to work in the sheds to extract the cashew-nut kernel. On these facts, I agree with the view taken by the Courts below that in these cases the persons employed to break the roasted cashew-nuts and to extract the kernel are workers within the meaning of Section 2(1) of the Factories Act and the premises where the work is done are factories within the meaning of Section 2(111) of the Act. The convictions and sentences passed by the trial Magistrate are correct and these Criminal Revision Cases are dismissed.

8. It follows that the writ petition also failsand is dismissed with costs. Advocate's feeRs. 100/-.


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