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A.M. Mazdoor Biri Co. Vs. Industrial Tribunal Iii and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtAllahabad High Court
Decided On
Case NumberCivil Misc. Writ No. 2764 of 1961
Judge
Reported inAIR1967All568; (1969)IILLJ598All
ActsUttar Pradesh Industrial Disputes Act, 1947 - Sections 2; Constitution of India - Article 226
AppellantA.M. Mazdoor Biri Co.
Respondentindustrial Tribunal Iii and ors.
Appellant AdvocateS.C. Khare and ;K.N. Singh, Advs.
Respondent AdvocateK.P. Agarwal, Adv.
DispositionPetition dismissed
Excerpt:
labour and industrial - meaning of 'workman' - section 2(z) of u.p. industrial disputes act, 1947 - definition of 'workman' includes workman on monthly basis as well as those working on piece rate connected with manufacture of biris. - - he was free to go to the factory at any time he liked and was equally free to leave the factory whenever he liked. 3. he could be absent from work on any day he liked. w-5. these facts clearly show that control was exercised by the company over the biri makers concerned with the present dispute. there were other discrepancies also in the two sets of accounts under these circumstances the tribunal was perfectly justified in rejecting the accounts of the company as being unreliable......mazdoor pari-shad. rae bareli appeared before the tribunal and stated that.'the mazdoors of this factory work on piece rates and are the permanent employees of the factory. the proprietors exrecise full control over the mazdoors even in details'.22. sri khare urged that this was no evidence and it was only the opinion of mohd. shafiq. the statement, according to the learned counsel, was not a statement of fact and was only an inference drawn by mohd. shafiq. he, therefore, contended that there was no evidence on record that the workmen in the instant case were the kind of workmen on whom the employers exercised any control- this is not correct23. it is admitted that a charge-sheet ex. w-4 was issued by the employers to four workers under the signature of the proprietor himself. the.....
Judgment:
ORDER

D.D. Seth, J.

1. By this ptition under Article 226 of the Constitution the petitioner company (hereinafter called the company' prays for the quashing of the award dated 26th April 1961 of the Industrial Tribunal III. U P Allahabad.

2. The facts of the case in brief as contained in the petition, are that the company carries on the business of manufacture of biris. The company suffered some losses in the years 1958-59 and 1959-60 The company did not, therefore, distribute any bonus to the workmen for these two years. The workmen raised a dispute and claimed that bonus be paid to them

3. The State Government by an order dated 25th October 1960 referred the following dispute to the Industrial Tribunal III. U. P.. Allahabad (hereinafter called the Tribunal):

'Matter of Dispute. Should the employers be required to pay any bonus to their workmen for the years 1958-59 and 1959-60? If so at what rate and with what other details'?'

4. The dispute was registered and the parties filed their written statements and also led oral evidence before the Tribunal The Tribunal gave its award on 26th April 1961 and held that the biri makers concerned with the present dispute are 'workmen' within the meaning of the U. P. Industrial Disputes Act (hereinafter called the Act) and rejected the accounts of the company as inaccurate and calculated the available surplus in a tabular form for the two years in dispute. The Tribunal, therefore, allowed bonus to the workmen for each of the two years. i.e. 1968-59 and 1959-60 at the rate of their one month's average earning during those years. The Tribunal further ordered that the workmen who had put in less than three months in either year will not be entitled to any bonus in that year and that the workmen who worked for more than three months but less than 12 months in any year will get proportionate bonus in that year. Itwas further ordered that the workmen who were dismissed for misconduct in any of these two years will not get any bonus for the year in which they were dismissed. This award was published in the U. P Gazette dated 17th June 1961

5. Feeling aggrieved by the award the company has come to this Court under Article 226 of the Constitution and prays that the award be quashed.

6. Two counter-affidavits have been filed, one by Sukhbir Singh Rawal, Additional Regional Conciliation Officer and the second by Mohd Shafiq. Secretary of the Biri Mazdoor Parishad. Rai Bareilly. The company has filed its rejoinder-affidavit.

7. I have heard Sri S. C. Khare the learned counsel appearing for the company and Sri K. P Agarwal the learned counsel appearing for the workmen.

8. Sri Khare contended that the persons who manufacture biris for the company am not workmen within the meaning of the Act but are independent contractors over whom the company has no control and they were not entitled to any bonus. The learned counsel also submitted thai the Tribunal erred in rejecting the company's accounts and in calculating available surplus on purely speculative basis without deducting necessary prior charges such as depreciation, rehabilitation charges, profit on capital investment etc Sri Khare. therefore, urged that the award suffers from an error apparent on the face of the record and is without jurisdiction and is liable to be quashed.

9. Sri K. P. Agarwal on the other hand, contended that the persons who manufacture biris for the company are workmen and are, therefore, entitled lo gel bonus and further that the Tribunal rightly rejected the company's accounts and that the Tribunal was also correct in calculating available surplus and had deducted necessary prior charges

10. Workman is defined in Section 2(z) of (be Act as follows:

'Workman means any person (including an apprentice) employed in any industry to do any skilled or unskilled manual, supervisory, technical or clerical work for hire or reward, whether the terms of employment be express or implied, and for the purposes of any proceeding under this Act in relation to an industrial dispute includes any such person who has been dismissed discharged or retrenched in connection with, or as a consequence of that dispute, or whose dismissal discharge or retrenchment has led to that dispute, but does not include any such person:

(i) .........

(ii) ........

(iii) ......

(iv) ...

11. This definition is exhaustive and lays down who is included as a workman in the definition and who is excluded. The definition quoted above does not say that only a work man on monthly basis will be a workman andthat piece raters such as the workmen connected with the manufacture of biris as in the instant case, will not be workmen.

12. Sri Khare relied upon Chintaman Rao v. State of Madhya Pradesh. AIR 1958 SC 388 In this case there was an agreement between the management of a bidi factory and an independent contractor that the contractor should receive tobacco from the management and supply them rolled in biris for consideration. He was not under the control of the factory management and he could manufacture bidis wherever he pleased. The management could not regulate the manner of discharge of his work His liability was discharged by his supplying bidis and delivering them in the factory. The terms of the contract between the management and the contractor did not enjoin on the latter to work in the factory. On these facts it was held:

'That the contractor in this case was not employed by the management as worker but was only Independent contractor who performed his part of the contract by making bidis and delivering them at the factory'.

13. The following facts were established from the evidence on record in Shankar Balajl v. State of Maharashtra. 1962 (11 Lab LJ 119 = (AIR 1962 SC 517):

1. There was no agreement or contract of nervice between the owner of the factory and the concerned person.

2. The concerned person was not bound to attend the factory for the work of rolling bidis 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.

3. He could be absent from work on any day he liked.

4. There was no actual supervision of the work done by the said person in the factory.

5. He was paid at fixed rates on the quantity of bidis turned out.

6. Leaves used to be suplied to the said person for being taken home and cut there. He was not hound to roll the bidis at the factory.

7 At the close of the day, the bidis used to be delivered to the owner and bidis not upto the standard, used to be rejected.

14. On the above facts their Lordships of the Supreme Court came to the conclusion that there was no relationship of master and servant between the owner of the factory and the concerned person who used to roll bidis in the factory

15. It may be noted that both the cases relied upon by Sri Khare were under the Factories Act.

16. Sri Khare contended that the definition of worker in the Factories Act. 1948 is similar to the definition of a workman in the Act. The learned counsel, therefore, submitted that the above two cases of the Supreme Court cannot be distinguished on the ground that they were under the Factories Act.

17. A worker is defined in Section 2(1) in the Factories Act 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.'

18. Sri Khare urged that the crucial words in the two definitions are 'person employed' and, therefore, the two definitions am similar. I cannot agree to this argument. The two definitions quoted above are not similar and, therefore, the two cases on which reliance was placed by Sri Khare can be of no help to the petitioner.

19. In Dharangadhra Chemical Works Ltd. v State of Saurashtra, AIR 1957 SC 264 it was held at page 268 that:

'The principle which emerges from these authorities is that the prima facie test for the: determination of the relationship between master and servant is the existence of the right in the master to supervise and control the work done by the servant not only in the matter of directing what work the servant is to do but also the manner in which he shall do his work or to borrow the words of Lord Uthwatt at page 23 in Mersey Docks and Harbour Board v. Coggins and Griffith (Liverpool) Ltd.. 1947-1 AC 1, a! p. 23. The proper test is whether or not the hirer had authority to control the manner of execution of the act in question.'

20. The above case arose out of the Central Industrial Disputes Act. The definition of a workman in Section 2(s) of the Central Industrial Disputes Act is exactly similar to the definition of workman in Section 2(z) of the Act. Sri Khare, therefore, contended that the principle of Dharangadhra's case, AIR 1957 SC 264 has been applied to cases under the Factories Act also For this reliance was placed by Sri Khare on Birdhichand Sharma v. First Civil Judge Nagpur, AIR 1961 SC 644. In this case it was observed by their Lordships of the Supreme Court thus:

'The matter came up again for considera tion in Chintaman Rao case, 1958-2 Lab L.I 252= (AIR 1958 SC 388) (supra), which also happened to relate to biri workers, and Section 2(1) of the Factories Act had to be considered in it. It was held that the test laid down-in Dharangadhra Chemical Works case, AIR 1957 SC 264 (supra) with respect to Section 2(s) of the Industrial Disputes Act would also apply in Section 2(1) of the Factories Act'

21. Sri Khare. therefore, contended that a workman can be said to be in the employment of a employer under the two definitions of 'worker' and 'workman' in the Factories Act and in the Act only if the employer exercises control over him. The learned counsel urged that each case has to be decided on its own facts and there cap be no general law that biri workers can be or cannot be workers with in the definition of a workman in the Act. Sri Khare contended that there is no evidence, on record in the instant case to show that the employers exercised any kind of control over the workmen' according to the test laid down by the Supreme Court in the above decisions. Mohd. Shafiq, Secretary, Biri Mazdoor Pari-shad. Rae Bareli appeared before the Tribunal and stated that.

'The mazdoors of this factory work on piece rates and are the permanent employees of the factory. The proprietors exrecise full control over the mazdoors even in details'.

22. Sri Khare urged that this was no evidence and it was only the opinion of Mohd. Shafiq. The statement, according to the learned counsel, was not a statement of fact and was only an inference drawn by Mohd. Shafiq. He, therefore, contended that there was no evidence on record that the workmen in the instant case were the kind of workmen on whom the employers exercised any control- This is not correct

23. It is admitted that a charge-sheet Ex. W-4 was issued by the employers to four workers under the signature of the proprietor himself. The charge-sheet was followed by a notice of termination of their services by Ex. W-5. These facts clearly show that control was exercised by the company over the biri makers concerned with the present dispute. It cannot, therefore, be said that there was no evidence on record to prove that the company exercises any control over its workers. It follows, therefore, that the workmen in the instant case were workmen within the definition contained in Section 2(z) of the Act and were entitled to receive bonus if there was profit in the concern. I am supported in my view by a decision reported in D. C. Dewan Mohideen Sahib and Sons v. United Beedi Workers' Union, 1964-2 Lab LJ 633=(AIR 1966 SC 370). Moreover the finding whether the employees, in the instant case were workmen within the definition contained in Section 2(z) of the Act is a finding of fact and when the Tribunal has given a finding that the employees In the instant case are workmen that finding would normally be conclusive and the High Court would be loath to interfere under Article 226 of the Constitution except in cases where there is a clear error on the face of the record. See Andhra Scientific Co. Masuljpatam v. Seshagiri Rao, AIR 1960 Andh Pra 526 and S. I. E. L. R. Organisation v. Madras State. AIR 1955 Mad 45.

24. There is no substance in the argument of Sri Khare that the Tribunal was not justified in rejecting the accounts of the company and in arriving at an available surplus for distribution of bonus Two sets of accounts were filed by the company before the Tribunal, one in vernacular and the other English profit and loss account. The Tribunal found that in the vernacular profit and loss account for 1958-59 the loss was shown as Rs. 11,036.39 nP as against Rs 3,013.96 shown in the English profit and loss account while in the vernacular profit and loss account for 1959-60 the loss was shown as Rs 20,092.50 nP. against Rs 21.80950 nP shown in the English profit and loss account. There were other discrepancies also in the two sets of accounts Under these circumstances the Tribunal was perfectly justified in rejecting the accounts of the company as being unreliable. The Tribunal had, therefore, no other choice but to come to its own conclusions regarding profits.

25. Regarding the argument that the Tribunal had calculated available surplus without deducting necessary prior charges such as depreciation, rehabilitation charges, profit on capital investment etc Sri Khare placed reliance on the Indian Hume Pipe Co. v. Their Workmen. AIR 1959 SC 1081. It was observed in this case that:

'The formula evolved by the Full Bench of the Labour Appellate Tribunal in 1950 Lab LJ 1247 (LATI-Bom) (FB) is based on this idea that 'as both labour and capital contribute to the earnings of the industrial concern. it is fair that labour should derive some bene-fit if there is a surplus after meeting 'prior or necessary charges'. The following were prescribed as the first charges on gross profits, viz. (1) provision for depreciation; (2) reserves for rehabilitation; (3) a return at 6 per cent on the paid up capital; (4) a return on the working capital at a lesser rate than the return on paid up capital and (5) an estimated amount in respect of the payment of income-tax. The surplus that remained after making the aforesaid deductions would be available for distribution among the three shares, viz., the share-holders, the industry and the workmen'.

26. To the same effect is the decision of the Supreme Court in AIR 1959 SC 967.,

27. In both these cases the concerns were limited concerns and their accounts were duly maintained and duly audited. Such is not the case before me and so the principles laid down in these two cases cannot apply to the facts of the instant case The award of the Tribunul shows that the Tribunal did make deductions of income-tax Regarding other prior charges it was for the company to make a claim for those charges As no machinery is used in the manufacture of biris it was not necessary of allow any amount for depreciation Rehabilitation charges are also allowed in respect of machineries because other machineries have to be purchased The Tribunal has taken into account the formula discussed by the Supreme Court. It was held in AIR 1959 SC 967 at p. 992:

'In dealing with the employer's claim for rehabilitation, tribunals have always placed the onus of proof on the employer He has to prove the price of the plant and machinery its age. the period during which it requires replacement the cost of replacement the amount standing in the depreciation and reserve fund, and to what extent the funds at his disposal Would meet the cost of replacement. If the employer fails to lead satisfactory evidence on these' points, tribunals have on occasions totally rejected his claim For rehabilitation'.

28. In the instant case the company did not lead any evidence regarding prior chargesand further did not make any claim in respect of them. The award of the Tribunal, therefore, does not suffer from any infirmity or any error apparent on the face of the record.

29. No other point was raised by the learned counsel for the petitioner.

30. The result, therefore, is that this petition is dismissed with costs.


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