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G.C. Sharma and Sons Vs. Shri R.K. Baweja, Presiding Officer, Labour Court and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtDelhi High Court
Decided On
Judge
Reported in(1972)IILLJ475Del
AppellantG.C. Sharma and Sons
RespondentShri R.K. Baweja, Presiding Officer, Labour Court and ors.
Cases ReferredFraser and Ross v. Sambasiva Ayyar and Anr.
Excerpt:
.....and standard that it was held' that the chartered accountants must also be treated to be a profession like that of solicitors, doctors and lawyers. the assistance of the clerks and other persons taken by the chartered accountants does not in any manner make it a co-operation in the sense of rendering material service like an industry as that help is only to enable the chartered accountant to give his advice and carry on his profession more efficiently. this case is clearly distinguishable from the present case. 14. the resume of details mentioned above clearly shows that without the co-operation of the persons like respondent no......be mentioned at once that the case of the petitioner-firm is not that of an architect or even a firm of architects whose only work may be to advise and design a plan of the building with no other work to be undertaken by it. it is not necessary, thereforee, to consider the hypothetical case of architect whose only work may be not more than to design and not to undertake any further service. whether in that case it may be open to the architect to urge that the work performed by him is only that of giving a professional advice and is of personal nature and, thereforee, he is not an industry under the act need not be gone into in these proceedings. it is not as if because an architect on particular facts may not be an industry it is determinative of the question that the activities.....
Judgment:

Rajinder Sachar, J.

1. A dispute regarding the termination of service of respondent No. 3 was referred by the Lt. Governor of Delhi in exercise of its power conferred by Ss 10(1)(c) and 12(5) of the Industrial Disputes Act 1947 (hereinafter called the Act) by order dated 1-9-1970 to the Labour Court, Delhi, respondent No. 1.

2. A preliminary issue was raised before the Labour Court as to whether the petitioner firm is not an industry under the Act. Respondent No. 1 by the impugned award dated 29-5-1971, has held that the petitioner-firm is an industry and, thereforee, the reference is competent. The petitioner-firm has come up under Articles 226 and 227 of the Constitution of India against the said award.

3. The case of the petitioner-firm thus is that it is a firm of Chartered Architects and that the nature of the work done by it is of personal service and, thereforee, it is not an industry within the Act. The respondent-workman, however, maintained that the nature of the work performed by the petitioner-firm has all the attributes of an industry within the Act and, thereforee, reference was validly made.

4. In order to determine whether the petitioner-firm is an industry or not it is necessary to know the constitution of the firm and the nature of the work performed by it because it is on the determination of these facts that further conclusion whether the petitioner-firm is an industry or not will depend.

5. A partnership deed was entered into on 30-6-1959 to be effective from 1-4-1959 between Shri G.C. Sharma, architect, and Miss M. K Sood, Shri L. C. Sharma, son of Shri G.C. Sharma and Shri Ad Ram Sharma. Out of these four persons, Shri G. C. Sharma and his son Shri L. C. Sharma are qualified architects. Miss Sood according to the partnership deed is to look after the entire business of the firm as officer in charge and is to discharge the duty of an administrator. Mr. Ad Ram Sharma is to look after the submission of bills and collection thereof and shall be responsible for the rightful use of the labour and contractors employed on the work. Mr. L.C. Sharma is to submit and prepare the designs and estimate of the work. Mr. G.C. Sharma is designated as the principal partner. The appointment and dismissal of staff is to be within the powers of Shri G.C. Sharma, principal partner. The partners other than Shri G.C. Sharma are to get apart from the profit, fixed monthly salaries also. Clause 10 of the partnership deed provides that the management of the partnership business shall be carried on by all the parties acting jointly and/or severally by themselves or with the help of employees, workmen and professionals who shall be engaged by them. In case of death of Shri G.C. Sharma, the principal partner, person appointed by him will enjoy the same rights and privileges as enjoyed by the principal partner. An important thing to note from the partnership deed is that it does not consist of the architects alone but also includes non-technical persons. As there is no prohibition on the architects from entering into partnership with non-architect, the same may not be illegal but it does show that the work that has to be carried on by the petitioner-firm is a work which will be carried on not exclusively by the qualified architects as such but as a joint work alone with the non-technical persons. One of the partners, Shri L.C. Sharma, appeared before the Labour Court and from his evidence it is apparent that the work performed by the firm is to prepare plans, estimates, working, drawing for constructions as well as for sanction by the competent authority, prepare detailed estimates, tender documents and supervise construction. Structural engineer, electrical and sanitary engineering advice are also part of the job of the petitioner-firm. It also gives advice on air conditioning and lift installation as advisory though installation work is not undertaken by it. The sanitary and electrical engineers are engaged by the petitioner-firm on salary basis. Respondent No. 3 was working with the petitioner-firm as an assistant engineer, and he is a diploma bolder in civil engineering. The work of respondent No. 3 was to help the petitioner-firm by preparing estimates, drawing and supervising the work under construction. Exhibit W-l a brochure issued by the petitioner-firm was produced before the Labour Court to show the nature of the work which was advertised to be undertaken by the petitioner-firm. This shows that amongst the services which the petitioner-firm was offering to render are to examine various properties with a view to making a proper utilisation of land and building and preparing valuation report, preparing master plan, layout plan, introducing new schemes in land and building, preparing schedules and progress charts of projects and even dealing with all types of projects, such as town and country planning, residential buildings, staff residences, educational buildings, technological buildings, medical hospitals and colleges, industrial buildings, factories, workshops and industrial developments, shopping centres, cinemas and also offering to render services in architectural and structural, electrical and sanitary and water supply. There does not seem to be any bar as in the case of professions like lawyers and doctors against soliciting work and presumably for this reason the brochure solicits trial. The effort of the respondent in showing the types of work performed by the petitioner-firm is to counter the argument of the learned Counsel for the petitioner-firm, Mr. lyangar, that the petitioner-firm which is architects, must be considered not to be an industry on the analogy of being treated as a profession like a lawyer, solicitor, doctor or chartered accountant.

6. It may be mentioned at once that the case of the petitioner-firm is not that of an architect or even a firm of architects whose only work may be to advise and design a plan of the building with no other work to be undertaken by it. It is not necessary, thereforee, to consider the hypothetical case of architect whose only work may be not more than to design and not to undertake any further service. Whether in that case it may be open to the architect to urge that the work performed by him is only that of giving a professional advice and is of personal nature and, thereforee, he is not an industry under the Act need not be gone into in these proceedings. It is not as if because an architect on particular facts may not be an industry it is determinative of the question that the activities undertaken by the petitioner-firm simply because it includes an architect as partner cannot be upheld to be an industry. The Supreme Court in Management of Safdarjung Hospital v. Kuldip Singh Sethi and Ors. 1970-2 L.L.J. 266, has held that if an hospital is run as a business on commercial basis there may be found an element of industry while if this hospital has not embarked upon economic activities which can be said to be analogous to trade or business it cannot be said to be trade or industry. In the present case the evidence has been led to show the various nature of works performed by the petitioner-firm and it is, thereforee, in that context that the matter has to be examined whether the petitioner-firm can be taken to be an industry under the Act or not.

7. It may be noticed that in the case of architects there is no legislation which governs their mode of registration or their working as in the case of lawyers, chartered accountants, doctors, etc. The requirement that the plans should be certified by the qualified architect is a requirement of the local body and the corporation which have to sanction the plans. The usual mode of payment to the architects is on commission basis and it varies with the value of the building when ultimately completed. The petitioner-firm is also registered under the Delhi Shops and Commercial Establishments Act while lawyers, doctors, etc., are not governed by it. The petitioner-firm can and does solicit work as Ext. W-l clearly brings out. It also competes with others and tender for the design for particular construction in the market which element is absent in the case of professions like lawyers, chartered accountants and doctors. The petitioner-firm not only designs a building plan but also other necessary sanitary and electrical as well as other installation in the building. Employment by the petitioner-firm of sanitary engineers and civil engineers and quantity surveyors thus becomes one of the essential features without which it is not possible for its work to continue. As the supervision is to be done by the petitioner-firm, it is essential that it engages a number of persons who keep the check on the actual construction and supervise the work of the contractors executing the work. The payment to be made by the customer to the contractors has to be prepared and certified by the petitioner-firm which is dependent on the report submitted by the staff employed by the petitioner-firm who actually supervise it on the spot. Thus the calculation of the payment to the contractor and the commission payable to the petitioner-firm requires and necessitates the employment of persons like respondent No. 3 and Ors. without whose co-operation the business of the petitioner-firm cannot be carried on. The petitioner-firm renders material service to the customers by getting the designs of plan approved from the statutory bodies like the corporation and also to obtain no objection certificate from the health department and to see that they conform to the regulation of the electricity board. The payment to the petitioner-firm for rendering service is also given at the various stages like at the stage of preparation of the plan, at the time of the sanction of the plan and during the process of the construction. The supervision stage is to be carried out by the petitioner-firm with the assistance of the site supervisory staff which comprises of civil engineers, sanitary and electrical engineers. It is because of the help rendered by these persons to the petitioner-firm that the firm is able to give material service to thecustomers. My attention was drawn by Mr. lyangar to Annexures 'A' and 'B' which are issued by the Indian Institute of Architects which are 'conditions of engagement and scale of professional charges' wherein it is stated that the members of the Indian Institute of Architects are governed by the laws and code of professional conduct of the Indian Institute of Architects. The suggestion was that the Architects are also grouped together like lawyers, doctors, etc., and are governed by code of conduct and, thereforee, they should be treated as a profession. I do not see how a voluntary code of conduct entered into and which governs the architects can determine the question whether the petitioner-firm is an industry or not. It was not shown that there is any statute which regulates the conduct of the architects. The consideration, thereforee, on which the professions like lawyers, doctors, chartered accountants had been held not to be an industry would clearly not be relevant. That apart, as mentioned above, the question before me relates to the activities undertaken by the petitioner-firm and it is in that light that it has to be decided whether the petitioner-firm is an industry or not and not on any theoretical consideration. Mr. Charya, counsel for the respondent in this connection brought to my notice Clause 10 of Annexures 'A' and 'B' where it is stated that copyright in all drawings and in the work executed from them will remain the property of the architect. The counsel contended that this showed that the copyright in the drawing was treated as a property of the petitioner-firm and this also showed a vital distinction between the work performed by professionals like solicitors, doctors and architects. Industry has been held to include trade, business, manufacture or something analogous to trade or business for the production of material goods or wealth and material services. A service rendered by a professional man like teacher, lawyer, solicitor, etc, has been held not to be a material service and would thus not constitute an industry.

8. The test to find out whether any activity or undertaking falls within the definition of industry under the Act has been kid down in a number of cases by the Supreme Court. It is not necessary to refer to all the previous cases as a detailed discussion of it is to be found in the judgment of Kuldip Singh Sethi's case 1970-II L.L.J. 266, a decision by six Judges. Hidayatullah, CJ. after dealing with the cases with reference to the definition of industry under the Act observed:

The definition read as a whole denotes a collective enterprise in which employers and employees are associated. It does not exist either by employers alone or by employees alone...

The definition no doubt seeks to define 'industry' with reference to employees for without the two there can be no industry. An industry is only to be found when there are employers and employees, the former relying upon the services of the latter to fulfill their own occupations.

Material services were defined to involve an activity carried on through co-operation between employers and employees to provide the community with the use of something such as electric power, water, transportation, mail delivery, telephones and the like. In providing these services there may be employment of trained men and even professional men, but the emphasis is not on what these men do but upon the productivity of a service organized as an industry and commercially valuable. Thus the service of professional men involving benefit to individuals according to their needs, such as doctors, teachers, lawyers, solicitors, etc., are easily distinguishable from an activity such as transport service. The latter is of a commercial character in which something is brought into existence quite apart from the benefit to particular individuals. It is the production of this something which is described as the production of material services.

9. What has, thereforee, to be seen in the present case is whether the activity of the petitioner-firm does not involve an element of co-operation between the employers and the employees, the former relying upon the services of the latter to fulfill their own occupation and whether as a result of material services rendered there is the production of something. In the present case by the co-operation between the employers and the employees not only the plans of the building are designed but actually the execution of the plans in the shape of the construction of a building is seen through. The checking and supervision of the contractors engaged in the building is also undertaken and advice is also given. All these are the activities really in the nature analogous to business and for their fulfillment depend upon the co-operation between the employers and employees working in the petitioner-firm. The material services that are rendered by the petitioner-firm cannot be rendered without there being a close and intimate relation between the employers and employees of the petitioner-firm. Also the material services rendered by the petitioner-firm leads to production of something like the building, etc. Mr. Iyangar sought to suggest that the petitioner-firm should be treated as a profession as it has styled itself as architect and architect must be held to be a profession. In this connection he referred me to Encyclopedia Britannica, Vol. 2, to the heading 'Architectural Education,' and to the elaboration that the functions of the architect today are manifold and of a highly technical nature and three dimensions visualising the work in plan, section and elevation in such a way that the resultant composition is expressive and beautiful.

10. I am afraid this does not in any way help the petitioner-firm. It may be that the architecture is a very fine art but that does not mean that every firm which because it has an architect as one of its partners cannot be industry within the meaning of the Act even if its activities are carried on on commercial and organized lines and its activities can only be performed because of the co-operation of architect and non-architect like the engineers and surveyors in such a case it cannot be considered to be anything but industry.

11. Reference may also be made to the case of Management of the Federation of Indian Chambers of Commerce and Industry v. Their Workman, Shri R.K. Mittal 1971 2 L.L.J. 630, where it has been held that the Federation of Indian Chambers of Commerce and Industry is an industry within the meaning of the Act. In that case it was even accepted that though the object of federation is really carrying on an activity of general public utility and subserves a charitable purpose but nevertheless it was an activity which was held to be commercial so as to satisfy the definition of an industry. Explaining the activities it was observed:

These extracts have been given in some extenso to show that the Federation carries on systematic activities to assist its members and other businessmen and industrialists and even to non-members as for instance in giving them the right to subscribe to their bulletin, in taking up their cases and solving their difficulties and in obtaining concessions and facilities for them from the Government. These activities are business activities and also material services not necessarily confined to the illustration given by Hidayatullah, C.J., in the Gymkhana case : (1967)IILLJ720SC by way of illustration only, rendered to businessmen, traders and industrialists who are members of the constituents of the Federation. There can in our view be no doubt that the Federation is an industry within the meaning of Section 29(j) of the Act.

12. Thus if the activities of the federation which concern only in helping and assisting those members and businessmen is held to be material service rendered to the community, can it be suggested with any seriousness that the material service rendered by the petitioner-firm to the customers in the construction of buildings, etc., is not a material service and that the activities undertaken by it will not constitute industry. It cannot be seriously suggested that a contractor engaged in the construction of buildings is not an industry within the meaning of the Act. I do not see any difference between the case of a firm of contractors engaged in buildings and the case of the present petitioner-firm which is doing all the work excepting that they are not themselves directly engaged in the building construction, though it is associated with every detail of it right from the design stage to the ultimate stage of payment to contractors and encompasses activities wider than that of building contractors. When professions like solicitors are held to be excluded from the definition of industry the same are excluded on the ground that the service performed by them is purely personal and the assistance that they may be seeking from their employees is only incidental and plays very minor part in the service rendered by them. As observed in National Union of Commercial Employees and Anr. v. Meher (Industrial Tribunal, Bombay) and Ors. 1962 -I L.L.J. 241:

There is, no doubt, a kind of co-operation between the solicitor and his employees, but that co-operation has no direct or immediate relation to the professional service which the solicitor renders to his client and a person following a liberal profession does not carry on his profession in any intelligible sense with the active co operation of his employees and the principal, if not the sole, capital which he brings into his profession is his special or peculiar intellectual and educational equipment.

13. The crucial question in each case is whether the help rendered by the employees is only incidental or is unessential for the rendering of service that is performed by the petitioner-firm. In the present case the help and co-operation rendered by the employees is essential and it is only by relying on the work performed by the employees that the petitioner-firm is able to properly and adequately carry out his occupation. The decision holding that the firm of chartered accountants is not an industry as held in Fraser and Ross v. Sambasiva Ayyar and Anr. 1968-2 L.L.J. 682, is of no assistance to the petitioner-firm. The reason for arriving at that decision is that 'the pursuit of the profession' (chartered accountancy) not merely involves a high code of ethics and very considerable responsibility, but it also involves essentially value-decisions and judgments, which cannot possibly be derived from clerical assistance, or the performance of routine or arithmetical duties by subordinate staff. Moreover 'the obligations and the professional ethics limitation of the chartered accountants as governed by the Chartered Accountants Act, 1949 and the Chartered Accountants Regulations, 1949, and because of the peculiar status given to the chartered accountants and to their individual contribution and standard that it was held' that the chartered accountants must also be treated to be a profession like that of solicitors, doctors and lawyers. The assistance of the clerks and other persons taken by the chartered accountants does not in any manner make it a co-operation in the sense of rendering material service like an industry as that help is only to enable the chartered accountant to give his advice and carry on his profession more efficiently. This case is clearly distinguishable from the present case.

14. The resume of details mentioned above clearly shows that without the co-operation of the persons like respondent No. 3 and other engineers and surveyors the work of the petitioner-firm could not possibly be carried out. It is again important to stress that the work of the petitioner-firm is not that of only drawings, but plans are prepared and advice is given to the customers and thereafter the firm has nothing to do further with it. The work of the petitioner firm starts with the plans and encompasses the whole activities ending right up to the completion of construction, supervision of it and checking it. Even engagement of building contractors is a work performed by the petitioner-firm. All these things necessarily require the co-operation of various staff employed by the petitioner-firm without whose active and essential co-operation it is not possible for the petitioner-firm to carry on its activities and work. The help and co-operation that is given by the employees cannot be said to be amounting to incidental to the performance of the activities of the petitioner firm.

15. Thus I find no patent illegality in the order of the Labour Court and finding no merit in the petition I would dismiss it with costs. Counsel's fee Rs. 150.


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