1. This petition under Article 226 of the Constitution of India is directed against the order of the State Industrial Court, Madhya Pradesh, respondent 1, dated 21 January 1958, holding that the coal coolies were the employees of the petitioner, the Jabalpur Electric Supply Company, Ltd., Jabalpur.
2. A reference was made by the State Government under Section 39 of the Central Provinces and Berar Industrial Disputes Settlement Act, 1947, hereinafter called the local Act to the State Industrial Court in respect of a dispute between the petitioner and its employees as regards the payment of bonus. The terms of reference were the following:-
(1) what should be the principles on which payment of bonus to the employees of the said company should be determined for the years 1950-51 to 1955-56 and for future years; and
(2) what should be the quantum of bonus payable to the various categories of employees of the said company for the years 1950-51 to 1955-56
The reference was heard by Sri N.H. Majumdar who gave an award on 24 October 1956 conferring certain benefits not necessary to mention on the employees. In the proceeding's before Mm the employees were represented by their recognized union, the Jabalpur Bijlighar Karmachari Panchayat, Jabalpur, respondent 2.
3. On 13 April 1957 the President of the Jabalpur Bijlighar Karmachari Panchayat made an application to the State Industrial Court under Section 22 of the local Act read with Rule 54 of the rules made thereunder for interpretation of the award. In that application the benefits conferred under the award on the employees of the petitioner were also claimed for the coal coolies on the ground that they must be deemed to be employees of the petitioner under the local Act. That application was allowed by the State Industrial Court which held that the coal coolies were entitled to bonus in terms of the award. This order is impugned in this petition.
4. It is not in dispute that the coal coolies were employed by contractors who were liable to pay their wages and entitled to dismiss them or grant the leave. It is also not in dispute that the operations of bringing coal to the premises of the establishment were carried out by the coal coolies under the supervision of the contractors and that the attendance register was also maintained by them. The State Industrial Court however found that while putting the coal in the boiler hoppers the work of the coal coolies was supervised by the servants of the petitioner, viz., the engineer and also the foreman and the boiler attendants. To state the matter in the words of the State Industrial Court:
The control on the operations of the coal coolies for bringing the coal to the premises of the establishment is that of the contractor but the control of the operations within the premises connected with generating the electricity is that of the company.
The State Industrial Court further held that the contractors were liable to pay dearness allowances and bonus to the coal coolies as was paid by the petitioner to the employees and that in fixing the rates with the contractors, the petitioner took into consideration these items. On these facts, the State Industrial Court held that the coal coolies were actually treated by the petitioner as its employees. In that view, the claim put forward on their behalf to the grant of bonus was upheld by the State Industrial Court.
5. The conditions of coal cartage contracts on which the petitioner invited quotations from contractors are set out below:
The handling of coal will include-
(1) the unloading of coal consignments received at company's siding;
(2) stacking of coal at the siding and in company's power station compound;
(3) the supply of coal either direct from siding or from the stacks to the boiler from floor space;
(4) the feeding of coal from floor space to boiler hoppers;
(5) the removal of ash from ashpits and disposal of same at the boundary of power station compound.
The contractor must be prepared to pay all his staff working within the power station premises at the same rates of pay, dear-food allowance and bonus (when paid by the company to its employees) as is paid by the company to its workers of corresponding categories.
The quotation should be an all-in rate per ton of coal handled and should cover all activities enumerated above.
The total quantity of coal at present handled is about 28,500 tons per year.
The rates for cartage of other materials to and from goods shed or railway parcel office should be admitted as a separate and distinct item to the coal handling rates.
It will be seen from these conditions that only the feeding of coal from floor space to boiler hoppers was done under the supervision of the petitioner's servants and in other matters they were under the control and supervision of the independent contractors. The question whether this small element of supervision by the petitioner's servants is sufficient to make the coal coolies employees of the petitioner within the meaning of the local Act.
6. 'Employee' has been denned in Clause (10) and 'employer' in Clause (11) of Section 2 of the local Act. These definitions, so far as are material for the decision of this petition, are reproduced below :-
2(10) ' Employee' means any person employed by an employer to do any skilled or unskilled manual or clerical work for contract or hire or reward in any industry (and includes an employee dismissed, discharged or removed on account of any industrial disputes),
2(11) ' Employer' includes-(c) Where the owner of any industry in the course of or for the purpose of conducting such industry contracts with any other person for the execution by or, under the control of such person of the whole or any part of any work which is ordinarily carried on by the said industry the owner' of such industry.
It will appear from the above that it is the owner of the industry and not a contractor, who is the employer within the meaning of the local Act. Therefore, in order that a person must be deemed to be an employee within the meaning of the local Act he must be employed by the owner of the industry.
7. As against these definitions, the Bombay Industrial Relations Act, 1946, hereinafter called the Bombay Act, defines these terms as below :-
3(13). 'Employee' means any person employed to do any skilled or unskilled manual or clerical work for hire or reward in any industry and includes-
(a) a person employed by a contractor to do any work for him in the execution of a contract with an employer within the meaning of Sub-clause (e) of Clause (14);
(b) a person who has been dismissed or discharged from employment on account of any dispute relating to a change in respect of which a notice is given or an application made under Section 42 whether before or after his dismissal or discharge.
3(14) ' Employer' includes-(c) Where the owner of any undertaking in the course of or for the purpose of conducting the undertaking contracts with any person for the execution by or under the contractor of the whole or any part of any work which is ordinarily part of the undertaking, the owner of the undertaking.
The definition of the word 'employee' within the meaning of the Bombay Act therefore specifically includes contract labour, if the labourers are engaged by a contractor to do work for him in the execution of a contract with an employer within the meaning of Sub-clause (e) of Clause (14) of Section 3. Subject to this condition therefore a workman employed by a contractor would be an employee within the meaning of the Bombay Act.
8. On a comparison of the definitions of the words 'employee' and 'employer' in the local and the Bombay Acts, it would appear that unless a workman is employed by the owner of the industry, he cannot be deemed to be an employee within the meaning of the local Act. This is a vital difference between the two enactments and determines the reason why under the Bombay Act, workmen employed by a contractor are, if Clause (14) of Section 3 is satisfied, held to be the employees of the owner of the undertaking. This feature of the Bombay Act has been specially mentioned in the State of Bombay v. Maharashtra Sugar Mills 1950 L.L.J. 1235 which was affirmed in appeal by the Supreme Court in Maharashtra Sugar Mills v. State of Bombay 1951-II L.L.J. 299, T.B. Vichara and Ors. v. Elphinstone Spinning and Weaving Company, Ltd. 1953-I L.L.J. 752 and Patel Mills, Ltd. and Anr. v. Ratilal Dayabhai and Ors. 1957-I L.L.J. 675 are also cases in which workmen employed by a contractor were held to be employees of the owner of the undertaking by virtue of the definition of the term ' employee' in the Bombay Act. These decisions, therefore do not establish the contention that the workmen employed by an independent contractor should be deemed to be the employees of the owner of the industry within the meaning of the local Act.
9. Chintaman Rao and Ors. v. State of Madhya Pradesh 1958-II L.L.J. 252 gives the concept of the word 'employee.' According to their lordships it involves three ingredients :
(3) Contract of employment.
The employer is one who employs, i.e., one who engages the services of other persona. The employee is one who works for another for hire. The employment has been held to be contract of service between the employer and the employee wbereunder the employee agrees to serve the employer subject to his control and supervision. Here the coal coolies entered into a contract of service with the contractor and not with the petititioner. By that contract they also agreed to serve the contractors subject to their control and supervision. The mere fact that the work of putting coal in boiler hoppers was done under the supervision of the petitioner's servants would not bring them under their control because they would not be able to punish them in any manner. The coal coolies cannot therefore be said to be employed by the petitioner either on a contract for service or on a contract of service, the distinction between which has been explained in Dharangdhra Chemical Works, Ltd. v. State of Saurashtra and Ors. 1957-I L.L.J. 477 (S.C.). On the facts as found by the State Industrial Court, therefore, the coal coolies could not be deemed to be the employees of the petitioner within the meaning of the local Act.
10. It was however contended that since the State Industrial Court had jurisdiction to decide the question whether the coal coolies were the employees of the petitioner, the order passed by it cannot be impugned under Article 226 of the Constitution. Reference was made to E.V. Medical Appeal Tribunal (1958) 2 All E.R. 374] in which it was held that since the Medical Appeal Tribunal was an expert investigating body on the question of disablement, its proceedings were not to be limited by applying rules of practice adopted by appellate courts in litigation between adverse parties. In that view it was held that it had jurisdiction to make even a new determination and certiorari did not lie. In Re Gilmore's application (1957) 1 All E.R. 796, however, it was held that a decision of the Medical Appeal Tribunal was open to certiorari on an error of law on face of the decision. Similarly in E.M. Patents Appeal Tribunal (1957) 1 All E.R. 227 certiorari was issued to the Patents Appeal Tribunal which also was an expert investigating body. Here the jurisdiction of the State Industrial Court depended upon the determination of the question whether the coal coolies were 'employees' within the meaning of the local Act. Since its jurisdiction was thus conditioned, this Court has power under Article 226 of the Constitution to decide whether its assumption of jurisdiction was rightful. On the facts found by the State Industrial Court, its conclusion that the coal coolies were the employees of the petitioner was erroneous on face of the decision. Accordingly the decision is open to certiorari as was held in Be Gilmore's application (supra).
11. As a matter of fact the question decided by the State Industrial Court did not involve any interpretation of the award. There was no reference to the coal coolies in the proceedings before N.H. Muzumdar neither in the decision nor in the documents of evidence. As held in Ganesh Flour Mills v. employees of Ganesh Flour Mills : (1961)ILLJ415SC in dealing with the question of bonus it is necessary that the employer should be shown in possession of surplus which is actually available for distribution. To decide the amount of bonus therefore it is not only the surplus with the employer but also the number of employees has to be determined. Since there was nothing in the terms of reference or in the proceedings before Sri N.H. Muzumdar to show that the case of coal coolies was for consideration the State Industrial Court must be deemed to have assumed wrongful jurisdiction by treating the case as one of interpretation of the award. On this ground also the order of the State Industrial Court is liable to be set aside.
12. The result is that the petition is allowed and consequently the order of the State Industrial Court dated 21 January 1958 is set aside. The parties however shall bear their costs. The outstanding amount of the security shall be refunded to the petitioner.