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T.P. Chandra Vs. the Commissioner for Workmen's Compensation, Madras and Anr. (12.04.1957 - MADHC) - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtChennai High Court
Decided On
Case NumberWrit Appeal No. 113 of 1956
Judge
Reported inAIR1957Mad668; (1957)2MLJ9
ActsMadras Shops and Establishments Act, 1947 - Sections 4(1)
AppellantT.P. Chandra
RespondentThe Commissioner for Workmen's Compensation, Madras and Anr.
Appellant AdvocateK. Bhashyam and ;S.R. Subramaniam, Advs.
Respondent AdvocateV. Srinivasan and ;V. Thiagarajan, Advs. for Pais, Lobo and Alwares
DispositionAppeal dismissed
Cases ReferredGibson v. Barton
Excerpt:
.....we fail to see what application this decision in (1875) 10 qb 329 (a) has or boy the observations of blackbure .assist the appellant's case in any way. in our opinion, the appellant was clearly a person employed in the branch, establishment of the respondent company at madras in a position of management......with its head office at bombay. it has a branch at madras. the petitioner was appointed as the branch manager of the madras branch of the company sometime in 1950. the appellant's services were terminated with effect from 23th august, 1953.he was given a month's salary in lieu of notice and an additional payment ex gratia. the petitioner thereupon preferred an appeal to the commissioner for workmen's compensation under section 41 (2) of the madras shops and establishment act xxxvi of 1947. a preliminary objection was raised on behalf of the company that the appeal was not competent on the ground that the appellant was not entitled to the benefit of the provisions of the act as he was a person who fell within section 4 (1) (a) of the act which runs thus:'4 (1) nothing contained in.....
Judgment:

Rajamannar, C.J.

1. This is an appeal against the judgment of Rajagopalan J. dismissing a petition filed by the appellant for the issue of a writ of certiorari to quash the order of the Commissioner for Workmen's Compensation, Madras, dated 1st. November 1955. The facts necessary for disposal of this appeal may be briefly stated. Messrs. Kemp and Co. Ltd., the contesting respondent in this appeal, is a company with its head office at Bombay. It has a branch at Madras. The petitioner was appointed as the Branch Manager of the Madras Branch of the company sometime in 1950. The appellant's services were terminated with effect from 23th August, 1953.

He was given a month's salary in lieu of notice and an additional payment ex gratia. The petitioner thereupon preferred an appeal to the Commissioner for Workmen's Compensation under Section 41 (2) of the Madras Shops and Establishment Act XXXVI of 1947. A preliminary objection was raised on behalf of the company that the appeal was not competent on the ground that the appellant was not entitled to the benefit of the provisions of the Act as he was a person who fell within Section 4 (1) (a) of the Act which runs thus:

'4 (1) Nothing contained in this Act shall apply to -- (a) persons employed in any establishment in a position of management.'

The Commissioner held that the appellant is not a person who fell within that provision. He therefore overruled the preliminary objection. The company filed a petition in this court under Article 226 of the Constitution for the issue of a writ of certiorari to quash the order of the Commissioner holding that the appeal was competent. That petition was allowed by Rajagopalan J., who held that before the appellant had the right to invoke the appellate jurisdiction of the Commissioner, it was necessary for him to establish that he was a person employed within the meaning of Section 2 (12) of the Act and as that question was not decided by the Commissioner he set aside the order of the Commissioner.

The result was the whole question remained to be gone into afresh by the Commissioner. When this case went back to the Commissioner, he held that the appellant was a person employed as defined in Section 2 (12) of the Act but he was a person who was employed in a position of management and therefore the Act would not apply to him because of the provisions of Section 4 (1) (a) of the Act. As a result of his finding, he held that the appeal was not maintainable. It is to quash this order of the Commissioner that the writ petition was filed, out of which this appeal arises.

2. It was not contended before us that the appellant was not a 'person employed' within the meaning of Section 2 (12) of the Act. The only question, therefore, which fall for decision in this appeal is whether the appellant is a person who is employed in a position of management. The Commissioner held that he was such a person because he was acting in general management and control of the establishment in Madras. He apparently relied on the following facts which emerge from the evidence, namely, that the appellant was in charge of the correspondence of the Madras branch, supervised the work of the clerks employed therein, operated on the No. 2 bank account of the firm, made payments, entered into agreements with third parties on behalf of the firm and generally represented the company at Madras. He granted leave to the stall and appointed some of them. In all the correspondence, the appellant was styling himself as Manager for Madras. His name was not entered in the register of employees maintained under the Act.

He never signed in any such register; nor was his name to be found in the muster rolls where the names of all the employees of the firm were noted. The learned Judge, Rajagopalan J., held on the facts that the Commissioner was justified in coming to the conclusion that the petitioner was in a position of management. On the evidence, the learned Judge did not find himself able to set aside the finding for any reason.

3. What was strongly pressed on the learned Judge and was again pressed before us by Mr. Bhashyam for the appellant was that on an earlier occasion the Commissioner had held that the appellant would not fall within Section 4 (1) (a) of the Act. Now, it is obvious that that order as such had been set aside by this Court in the earlier writ petition.

Nevertheless, we agree with Mr. Bhashyam that the appellant is entitled to rely on any of the grounds or the general reasoning set out in that order of the Commissioner. We have therefore perused the prior order of the Commissioner. On that occasion, the Commissioner was apparently impressed by the following circumstances which influenced him to come to the conclusion that the appellant did not fall within the scope of Section 4 (1) (a), namely, that in almost all matters the head office was issuing directions to the appellant as Branch Manager and that the appellant had no authority to meet any expenditure not sanctioned by the company, that he had no authority to appoint or dismiss all the employees of the Madras branch and that he had no power to decide policies.

We have no hesitation in holding that even assuming all these facts are correct, they would not render the later finding of the Commissioner as well as the finding of the learned Judge now under appeal wrong. The only question is whether the appellant was a person employed in a position of management. Admittedly he was the manager of the Madras branch of the company.

4. In Madras there was no one who was superior to him in status as he was apparently in charge of the entire affairs of the Madras branch. It may be that he was not entitled to lay down himself the policies which should govern the transactions of the company even at the Madras branch and that he was bound to obey the directions issued by the Head office.

But these would inevitably follow from the fact that he was only a branch manager and he was bound to carry out all the directions and the policies of the Company itself functioning from its head office. The fact that the appellant had no authority to meet any expenditure not sanctioned by the company would not render him any-the-less a person employed in a position of management. If he was not such a person, then there was no person in the Madras branch who could fall within that category.

5. Mr. Bhashyam relied upon the ruling in Gibson v. Barton, (1875) 10 QB 329 (A), in which it was held that the secretary of a company registered under the Companies Act, 1862, who acted as the de facto manager would be liable to be punished under S. 27 of the Act for a default in forwarcing a list of the company's shareholders to the Registrar in 1873. Mr. Bhashyam relied not so much on this decision as on the following observations of Blackburn J., at page 336;

'Section 27 enacts, if the company makes default and does not forward a list of members, the company shall incur a penalty, and every director and manager of the company who shall knowingly and wilfully authorise or permit such default shall incur the like penalty. In what sense are the words 'director' and 'manager' used in that section?

When the section says 'director' it is plain enough a director is a director, but the words and manager we have to say who is to be considered a manager. A manager would be in ordinary talk, a person who has the management of the whole affairs of the company; not an agent who is to do a particular thing, or a servant who is to obey orders, but a person who is entrusted with power to transact the whole affairs of the company.' The learned Judge went on to say that strictly speaking it is the directors who can be said to 08 really the managers of the company. In a later portion if his Judgment the same learned Judge said thus: 'But if the articles of agreement contained a clause that the business of the company should be managed by the directors, and the board of directors should have power to appoint a salaried general manager, not one of their body who should manage the whole affairs of the company, subject to the directors having a control, then that person being expressly authorised to act, would be a aneger.'

In the case before them the appellant was not appointed a manager expressly; but the evidence established that he was permitted by the board of directors to manage the company generally. It also appeared from the evidence that he was actually in the management of the company. Therefore he was treated as a manager decison tort, and for the purpose of the penal section he was also treated as manager.

This ruling was followed in essential v. Emperor, 43 Ind Css 791: AIR 1918 Lah 170 (B), which does not carry the matter further. We fail to see what application this decision in (1875) 10 QB 329 (A) has or boy the observations of Blackbure .. assist the appellant's case in any way. We do not agree that only a person who is the manager of a company that would fall within the scope of Section 4 (1)(a) as a person employed in a position of management.

There may be persons designated managers in certain establishments who may not be strictly speaking managers of the company but are entrusted with the duty of management, and, therefore, occupy a position of management. In the present case, the evidence appears to us to establish convincingly that the appellant was employed in a position of management so far as the Madras branch is concerned.

6. It was contended by Mr. Bhashyam that the status of the appellant has to be determined with reference to the Head office of the company at Bombay and it was contended that the appellant was a person employed at the head office of the company. If learned counsel's argument is right, then it would mean that the appellant should be deemed to be an employee of the Bombay office.

If so, the Act would not obviously apply and this court would have no jurisdiction as the head office is outside the limits of the jurisdiction of this court. Nor do we think that there is any substance in the contention on the merits. It may be that the appellant was appointed by the head office as the manager of the branch at Madras; but from that fact it does not follow that the appellant must be deemed to be a member of the Head office.

In our opinion, the appellant was clearly a person employed in the branch, establishment of the respondent company at Madras in a position of management. Both the Commissioner and the learned Judge were right in holding that the preliminary objection should be upheld and that the appeal filed by the appellant should be declared to be Incompetent.

7. The appeal is dismissed. No costs.


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