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Ekambaranatha Chettiar (S.) Vs. Inspector of Factories - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtChennai High Court
Decided On
Judge
Reported in(1966)IILLJ3Mad
AppellantEkambaranatha Chettiar (S.)
Respondentinspector of Factories
Cases ReferredIn D. C. Dewan Mohideen Sahib & Sons v. United Bidi Workers
Excerpt:
- - 16-a, emperor street, tuticorin, and he failed to submit the annual returns in form 21 as per rule 100 for the period ending 31 december 1963. p. 4. before considering the decisions, it is better to notice the facts of this case. there are five or six factories like this and about 300 people would be working. 9. this apart, the definition of 'factory 'in the act itself sufficiently indicates that the liberty of the person to come or absent himself on particular day would not detract from his being a worker within the definition of the act, if otherwise he satisfied the definition: the circum-stance of fining them for spoiling the cloth was evidently not held to be sufficient to overcome the effect of the other circumstances......in all oases the relation imports the existence of power in the employer not only to direct what work the servant is to do, but also the manner in which the work is to be done.their lordships went on to observe:until the position is restated as contemplated in short v. j. & w. henderson, ltd. 62t.l.r. 427 atwe may take it as the prima facie test for determining the relationship between master and servant.they further observe:the nature or extent of control which is requisite to establish the relationship of employer and employee must necessarily vary from business to business and is by its very nature incapable of precise definition.7. now, applying the above test in this case, it seems to me that the accused controlled the work of the workers not merely in directing what work was to.....
Judgment:

Venkataraman, J.

1. This revision petition has been filed against the order of the Subdivisional Magistrate, Tirunelveli, convicting the petitioner, under Section 92 of the Factories Act, for violation of the provisions of the Act and sentencing him to pay a fine of Rs. 50. According to the prosecution, he was the occupier and manager of a factory in door No. 16-A, Emperor Street, Tuticorin, and he failed to submit the annual returns in form 21 as per Rule 100 for the period ending 31 December 1963. P.W. 1, Inspector of Factories, on receipt of an anonymous complaint that the accused was running a factory, in violation of the provisions of the Act, inspected the premises on 5 September 1963, at 10-30 a.m. and found 27 persons working. They were stitching old gunny bags and making them fit for use. The accused was present. P.W. 3 was one of the workers. He has also given evidence about the nature of the work and that will be discussed later.

2. It is not disputed by the accused now that 27 persons were working then. But he contends that the premises would not satisfy the definition of 'factory' in the Act. This again is based on the subsidiary contentions that the person who were working there would not come under the definition of ' worker ' in the Act, because they could not be said to have been employed by the accused and they were really contractors who were not amenable to control by the accused as servants, and that further the process of stitching gunnies could not be called a manufacturing process within the definition of the Act. To decide the contentions, it is necessary to quote the relevant definitions in the Act:

2 (1)' 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 or the subject of the manufacturing process.

2 (m)'factory' means any premises including the precincts thereof . . . (ii) whereon twenty 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 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 (35 of 1952), or a railway shed.

2 (k) ' manufacturing process' means any process for-(i) making, altering, repairing, ornamenting, finishing, packing, oiling, washing, cleaning, breaking up, demolishing, or otherwise treating or adapting any article or substance with a view to its use, sale, transport, delivery or disposal ...

3. The first question which will have to be considered is whether each of the 27 persons could be called a worker within the meaning of the Act, assuming for the purpose that the process in which they were engaged was a manufacturing process, and the second question will be whether the process they were engaged in was a manufacturing process. We shall confine ourselves to the first question to start with. Under the relevant portion of the definition, ' worker ' means a person employed directly or through any agency, whether for wages or not, in any manufacturing process. The controversy turns on the scope of the word ' employed.' Sri M.R. Narayanaswami, learned Counsel for the petitioner, has cited a number of decisions showing that the word ' employed ' has been uniformly construed to denote the relationship of master and servant as distinguished from a contractor for doing a piece of work, and he contends that in this case the relationship was not that of master and servant, and that each of the 27 persons was only an independent contractor doing his portion of the work. The decision which he cited are chronologically:

Smith v. General Motor Cab Co. Ltd. 1911 A.C. 188;

Annamalai Mudaliar & Bros. v. Regional Provident Fund Commissioner, Madras 1955 I L.J. 674;

A. M. Chinniah, In re 1957 I L.J. 280,

Dhrangadhra Chemical Works, Ltd. v. State of Saurashtra 1957 I.L.J. 477;

Modern Match Industries, Gudiyattam v. Labour Appellate Tribunal of India 1957 F.J.R. 202;

Chintaman Rao and Anr. v. State of Madhya Pradesh (1957) 19 F.J.R. 103;

Ratnaswami Mudaliar, In re 1959I L.J. 631;

Public Prosecutor v. Neelamegam Pillai 1964 I L.L.J. 275; and

D. C. Dewan Mohideen Sahib & Sons v. United Bidi Workers' Union, Salem 1964 I.L.J. 633.

He also cited Para. 959 at p. 498 in Halsbury's Laws of England, Vol. 25, Simonds Edition, to the effect that to distinguish between an independent contractor and a servant, the test is whether or not the employer retains the power, not only of directing what work is to be done, but also of controlling the manner of doing the work.

4. Before considering the decisions, it is better to notice the facts of this case. They have to be primarily gathered from the evidence of P.W. 3. He had been working in the accused's factory for about six months prior to 5 September 1963. He says:

The factory works daily. Daily about 30 to 40 people are employed in the factory. We repair the old gunnies there. The accused pays to each cooly Rs. 2-12-0 to Rs. 3 per day. On coming Saturday he will pay the wages ... If work for half-a-day I will get wage for half-a-day. No pay on leave days. Before we go on leave we must orally inform the accused. We can come and join the work on any day. If we goon leave for one week we will settle the account and go. There are five or six factories like this and about 300 people would be working. Some people work in any shop. I will also work in any factory as the work is available. Each worker must stitch at least 100 gunnies. If that is not done, he will be stopped from work. His wage will be paid. There is a supervisor to watch our work. The working hours are 8 to 10-30, 11 to 1-30 and 2-30 to 4-30 and 5 to 6 p.m.

5. It was elicited from P.W. 1 in his cross-examination as follows:

In attendance register only three names were noted. The salary register also was only for three workers.

6. It is unnecessary to discuss the cases cited by the learned Counsel in detail, because the case-law has been reviewed by their lordships of the Supreme Court in D. C. Dewan Mohideen Sahib & Sons v. United Bidi Workers' Union, Salem 1964 I.L.J. 633 (vide supra), where their lordships reltorated the principles which had been laid down by the Supreme Court itself in Dhrangadhra Chemical Works, Ltd. v. State of Saurashtra 1957 I .L.J. 477 (vide supray The Supreme Court referred in that case to the pronouncement of the House of Lords in Short v. J. & W. Henderson, Ltd. 62 T.L.R. 427 at 429, where Lord Thankerton recapitulated the four lndicia of a contract of service which had been referred to in the judgment under appeal, namely-

(a) the master's power of selection of his servant,

(b) the payment of wages or other remuneration,

(c) the master's right to control the method of doing the work, and

(d) the master's right of suspension or dismissal,

and observed that modern industrial conditions had so much affected the freedom of the master in oases in which no one could reasonably suggest that the employee was thereby converted Into an Independent contractor, that, if and when an appropriate occasion arose, it would be incumbent on the House to reconsider, and restate those lndicia and that for example (a), (b) and (d) and probably also (c) were affected by the statutory provisions and rules which restricted the master's choice to men supplied by the labour bureau or directed to him under the essential work provisions and his power of suspension or dismissal was similarly affected. But even in that case the House of Lords considered the right of supervision and control retained by the employees as the only method if occasion arose of securing the proper and efficient discharge of the cargo as sufficiently determinative of the relationship between the parties. Their lordships of the Supreme Court again approved the following summary given in Halsbury's Laws of England, Hail-sham Edition, Vol. 22, p. 112, Para. 191:

Whether or not, in any given case, the relation of master and servant, exists Is a question of fact; but in all oases the relation imports the existence of power in the employer not only to direct what work the servant is to do, but also the manner in which the work is to be done.

Their lordships went on to observe:

Until the position is restated as contemplated in Short v. J. & W. Henderson, Ltd. 62T.L.R. 427 atwe may take It as the prima facie test for determining the relationship between master and servant.

They further observe:

The nature or extent of control which Is requisite to establish the relationship of employer and employee must necessarily vary from business to business and is by its very nature incapable of precise definition.

7. Now, applying the above test in this case, it seems to me that the accused controlled the work of the workers not merely in directing what work was to be done but also the manner in which the workers should do the work. I state this because of the evidence of P.W. 3. Each worker must stitch at least 100 gunnies and if that is not done, he will be stopped from work. There is a supervisor to watch the work. The working hours are 8 to 10-30.11 to 1-30 and 2-30 to 4-30 and 5 to 6 p.m. This evidence of P.W. 3 can only mean that for a day each worker must stitch at least 100 gunnies, if he has to earn his full wage of Rs. 2-12-0 or Rs. 3 per day. Further, he is found to work from 8 to 10-30, 11 to 1-30, and 2-30 to 4-30 and 5 to 6 p.m. There is also a supervisor to with his work. No doubt if he does not stitch 100 gunnies, his wages will be paid; but then he will be stopped from work apparently from the next day. Thus sufficient control was exercised by the accused to extract the necessary quantum of work from each worker. The nature of the work was such that we cannot expect a more detailed control over the manner of doing the work. It must be presumed that each worker would have to stitch the gunnies properly, since the gunnies have to be useful, and beyond that we cannot expect detailed control over his doing' the work. The control over the manner of work will necessarily vary from case to case and so far as this case is concerned, I think the control disclosed by the evidence of P.W. 3 is sufficient to show that the relationship of master and servant existed.

8. Learned Counsel relied on the facts that the worker is not bound to come on every day, that he could come and join the work on any day, that he could go on leave after informing the accused, and that he could work In any other factory. But these facts are not material in determining the relationship of master and servant and they will not detract from the relationship of master and servant. In none of these decisions have such facts been taken as destroying the relationship of master and servant. Indeed, In D. C. Dewan Mohideen Sahib & Sons v. United Bidi Workers' Union, Salem 1964 I.L.J. 633 (vide supra) the facts were similar on this aspect and still it was held that the relationship of master and servant existed. The case of the appellants there was that independent contractors took leaves and tobacco from the appellants and employed workmen for manufacturing bidis, and that after the bidis were manufactured, the contractors took them back from the workmen and delivered them to the appellants. In other words, the contention of the appellants was that no relationship of master and servant existed directly between the workmen and the appellants because of the interposition of the contractors. The Bench of the High Court upheld the finding of the tribunal that the so-called contractors were really the agents of the appellants, and that finding was upheld by their lordships of the Supreme Court. A further contention of the appellants was that the contractors did not exercise control over the workers. That contention was also repelled by their lordships observing:

We are, therefore, not prepared to hold in the absence of any evidence one way or the other, that there is no supervision whatsoever of the work done by the workers. In the circumstances, we are of opinion that the relationship of master and servant between the appellants and the workmen employed by the so-called independent contractors is established.

The passage which is relevant for the aspect stressed by Sri Narayanaswami, learned Counsel for the petitioner, is at p. 634 of the report:

The contractors took leaves and tobacco from the appellants and employed workmen for manufacturing bidis. After bidis were manufactured, the contractors took them back from the workmen and delivered them to the appellants. The workmen took the leaves home and cut them there; however the process of actual rolling by filling the leaves with tobacco took place in what were called contractors' factories. The contractors kept no attendance register for the workmen. There was also no condition that they should come and go at fixed hours. Nor were the workmen bound to come for work every day; sometimes, the workmen informed the contractors if they wanted to be absent and sometimes, they did not. The contractors said that they could take no action if the workmen absented themselves even without leave. The payment was made to the workmen at piece-rates.

Thus there also the contractors kept no attendance register, and there was not even a condition as in this case that they should come and go at fixed hours. That was because they were paid on piece-rates. They were not bound to come to work on every day. They did not invariably inform the contractors if they wanted to be absent and no action was taken against them if they absented themselves. In spite of these facts, it was held that there was sufficient control over the manner of doing the work and that the relationship of master and servant existed.

9. This apart, the definition of ' factory ' in the Act itself sufficiently indicates that the liberty of the person to come or absent himself on particular day would not detract from his being a worker within the definition of the Act, if otherwise he satisfied the definition: for the definition of 'factory' which I have quoted is

any premises whereon twenty or more workers are working on any day of the preceding twelve months.

I lay emphasis on the words ' on any day,' They show that it is not necessary that the employment should be continuous and that the employer should be able to insist on the labcurer attending on any particular day. The Act is a piece of beneficial legislation Intended to secure benefits for persona working in such premises and that object would be lost if we are to hold that there should be continuous employment or that the owner should be able to insist on the labourer attending on any particular day. At that rate it will be the easiest thing for the owner to avoid his liabilities under the Act by saying that the workers are casual or keeping on the permanent staff only less than twenty workers.

10. The learned Counsel referred to Ratnaswami Mudaliar, In re 1959 I L.J. 631 (vide supra). There towels and bedsheets were manufactured by casual piece-workers with the yarn supplied by the cwnera of the weaving concerns. When they spoiled the cloth, they were fined and the fines were deducted out of the amounts due to them for the cloth woven by them. The learned Counsel stresses that circumstance and point out that nevertheless it was held that there was no control over the manner of doing work, and that the relationship of master and servant did not exist. He wants that in this case also it should be held that there was no control over the manner of doing the work, merely because the worker would be stopped from work, if he does not stitch at least 100 gunnies in a day. But, there were numerous other circumstances in that case on the basis of which mainly the learned Judges held that there was no supervision over the kind of work done by the workers. The circum-stance of fining them for spoiling the cloth was evidently not held to be sufficient to overcome the effect of the other circumstances. It may also be pointed that even an independent contractor may be liable to pay for damaged cloth and that would not detract from his position of an independent contractor. In other words, that is not a necessarily relevant criterion on the question of control and the relationship of master and servant.

11. Thus on the first point I hold that the 27 persons who were working were each of them employed directly by the accused. The next question is whether the process in which they were employed could be called a manufacturing process within the definition of the Act, I have already quoted the relevant provision, and for our purpose it is sufficient to invoke the portion of that definition, namely, ' altering, repairing, or adapting any article with a view to its use.' That portion of the definition covers the repair of the gunnies with a view to their use.

12. Thus it is clear that the premises were a factory and the 27 persons were workers. Once those findings are reached, it is not disputed that the conviction has to be sustained. The sentence is not excessive. Accordingly, the petition is dismissed.


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