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PETITIONER: MESSRS. P.M. PATEL & SONS AND OTHERS, ETC.

       Vs.

RESPONDENT: UNION OF INDIA AND OTHERS, ETC.

DATE OF JUDGMENT25/09/1985

BENCH: PATHAK, R.S. BENCH: PATHAK, R.S. TULZAPURKAR, V.D. SEN, AMARENDRA NATH (J)

CITATION:  1987 AIR  447            1985 SCR  Supl. (3)  55  1986 SCC  (1)  32        1985 SCALE  (2)860  CITATOR INFO :  F          1992 SC 573  (12,14,39)

ACT:      Employees’ Provident Funds and Miscellaneous Provisions Act 1952  Section 2(f) - Workers employed- at their homes in manufacture of  beedis -  Whether entitled to benefit of the Act.      Relationship  of   Master  and  servant  -  Element  of personal service  - Of  little  significance  when  test  of control and supervision enables a right of rejection.

HEADNOTE:      The  labour  employed  in  the  manufacture  of  beedis consists of  different categories.  At  the  factory,  which constitutes   the    formal   establishment,    there    are administrative and  clerical  staff,  accountants,  packers, checkers and  bhattimen. The  work  of  rolling  the  beedis itself is  done by  one or the other of different categories of workers.  The first  category is  where the  work may  be entrusted by  the  manufacturers  directly  to  workers  who prepare the  beedis at  home after obtaining a supply of the raw material  consisting of tobacco, beedi leaves and thread from the  manufacturers. The  second  category  consists  of workers employed  by the  manufacturers through  contractors and the  manufacturers pass  on the  raw  material  to  such workers for  rolling the beedis in their dwelling houses and then supplying  beedis. There  is thus a direct relationship between the manufacturers and workers. The third category of home workers  are those  to whom  the work  is entrusted  by independent contractors  who treat  the workers as their own employees and  get the work done by them either at their own premises or in the dwelling homes of the workers in order to fulfil  and   complete  contracts   entered  into  with  the manufacturers for  the supply  of the  finished product from the raw  material  supplied  by  the  manufacturers  to  the contractors.      The home  workers attend the factories within specified hours everyday  ant collect  the raw  material for taking to their homes  for rolling beedis. In the case of home workers who hold  a direct  relationship with the manufacturers, the rolled beedis are brought by the home workers to the factory

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and the beedis which H 56 conform to  the standards envisaged by the manufacturers are accepted while those which do not are rejected. The staff at the factory maintains registers in which regular entries are made of  the raw  material supplied  to home workers, and of the rolled  beedis  which  are  delivered  by  them  at  the factory. The  payment of  wages to  such home workers may be mate directly or distributed through the contractors engaged by the  manufacturers. In  the case of contracts between the manufacturers ant  independent contractors, the manufactured product is  collected by  the contractors  from  their  home workers ant  delivered to the manufacturer. The manufacturer is concerned only with the payment under the contract to the contractors, and the payment of wages to the home workers is a matter between the contractors ant the home workers.      The  Employees’   Provident  Funds   and  Miscellaneous Provisions  Act,   1952  provides  for  the  institution  of provident  Funds   for  employees  in  factories  ant  other establishments. Originally,  it did  not extent to the beedi industry. For  the first  time, by  a Notification dated May 17, 1977  mate by Government of India the beedi Industry was added to  Schedule I  of the  Act with  effect from  May 31, 1977. This  was followed  by another  Notification dated May 23, 1977  issued by  the Central  Government amending clause (b) of  sub-paragraph 3  of paragraph  I of  the  Employees’ Provident Funds  Scheme, 1952  in order  to bring  the beedi industry within the province of that scheme with effect from May  31,   1977.  The  Central  Government  Provident  Funds Commissioner thereupon  wrote to  all the Regional Provident Funds Commissioners for the enforcement of the scheme in the beedi industry.      The petitioners  in the Writ Petitions who were engaged in the  manufacture  and  sale  of  beedis,  challenged  the constitutional validity  of the  Notifications dated May 17, 1977 ant  May 23, 1977, ant the enforcement of the Scheme in so  far   as  it  related  to  home  workers  ant  sought  a declaration that  the  Employees’  Deposit-Linked  Insurance Scheme ant the Employees’ Family Pension Scheme framed under the Employees’  Provident Funds  Act  are  unenforceable  in respect of  the beedi  industry, contenting  that: (i) while the Employees’  Provident Funds  Act ant  the Scheme  may be applicable to  the workers  employed in  the factory itself, they cannot be extended to home workers because there is no- relationship  of   employer   ant   employee   between   the manufacturers ant  the home  workers,  (ii)  the  Employees’ Provident Funds Act ant the Scheme cannot be applied to home workers in  the beedi  industry inasmuch as they are subject to no retirement age and there is no 57 power in the manufacturer to retire such home workers on the ground of  superannuation, ant  (iii) the  extension of  the Scheme to  the beedi  industry constitutes  an  unreasonable restriction on  the Fundamental  rights of  the  petitioners guaranteed by sub-cl. (g) of clause (1) of Article 19 of the Constitution and  also violates  Articles 14  and 31  of the Constitution in  as much  as the financial burden occasioned thereby is  so excessive that it is obvious that the Central Government did  not apply its mind to the paying capacity of the industry.      On the  question whether  the workers employed at their homes in  the manufacture  of beedis  are  entitled  to  the benefit  of   the  Employees’   Provident  Fund  Scheme  ant Miscellaneous Provisions  Act 1952  ant the  Schemes  framed thereunder.

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    Dismissing the Writ Petitions, ^      HELD: 1.  The home  workers are  ’employees’ within the definition of  ’employee’ contained in clause (f) of s. 2 of the Employees’  Provident Funds  Act 1952,  and the  Schemes framed thereunder. The terms of the definition of ’employee’ in section  2(f) of  the Act are wide. They include not only persons employed  directly by  the employer but also persons employed through  a contractor.  Moreover, they  include mot only persons  employed  in  the  factory  but  also  persons employed in  connection with the work of the factory. A home worker, by  virtue of  the fact  that he  rolls  beedis,  is involved in  an activity  connected with  the  work  of  the factory. It  is therefore  mot possible to accept the narrow construction sought  by the  ’petitioners that the words ’in connection with’  in the definition of ’employee’ in section 2(f) must  be confined  to work  performed  in  the  factory itself as  a part  of the  total process of the manufacture. [67 G, 63 C-E]      2. The  conditions and  the circumstances  in which the home workers  of a  single manufacturer go about their work, including the  receiving of raw material, rolling the beedis at home  and delivering  them to the manufacturer subject to the right  Of rejection indicates sufficient evidence of the requisite degree of control and supervision for establishing the  relationship   of  master   and  servant   between  the manufacturer and the home worker. The work of rolling beedis is mot  of a  sophisticated nature,  requiring  control  and supervision at  the time  when the  work is  done. It  is  a simple operation  which has been performed satisfactorily by thousands of  illiterate workers.  It is a task which can be performed by young and old, men and women, with 58 equal facility.  It does  not require a high order of skill. The right of rejection can constitute in itself an effective degree of  supervision and control, and there is evidence to show that  the rejection  takes place in the presence of the home worker.  This factor  however plays a merely supportive role in  determining the  existence of  the relationship  of master and  servant. The  element of  personal service is of little significance when the test of control and supervision lies in the right of rejection. [67 C-F]      Shri Chintaman  Rao and  Another v. The State of Madhya Pradesh, [1958]  S.C.R.. 1340,  Shri Birdhichand  Sharma  v. First Civil  Judge, Nagpur  and Others, [1961] 3 S.C.R. 161. Shanker Balaji  Waje v. State of Maharashtra [1962] Suppl. 1 S.C.R. 249,  M/s. Orissa  Cement Ltd.  v.  Union  of  India, [1962] Suppl.  3 S.C.R.  837, D.C. Dewan Mohindeen Sahib and Sons v.  The Industrial  Tribunal, Madras,  [1964] 7  S.C.R. 646, Silver  Jubilee Tailoring  House v.  Chief Inspector of Shops &  Establishments,  [1974]  1  S.C.R.  747,  Mangalore Ganesh Beedi  Works etc.  v. Union  of India  etc. [1974]  3 S.C.R. 221, referred to.      3. Clause  (a) of  sub-para. (1)  of  Para  69  of  the Employees’ Provident  Funds Scheme  provided that  "a member may withdraw  the full  amount standing to his credit in the fund on  retiring from service after attaining the age of 55 years".  The  law  does  not  envisage  the  fixation  of  a retirement age  before that provision can apply. A worker is entitled to withdraw the amount in the Fund if he retires at any time  after attaining  the age  of 55 years. There 18 no reference to any predetermined age of superannuation. [68 A- B]      4. The expression ’retirement’ does mot, in the absence of anything  more, necessarily imply a fixed age for leaving

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service. It  has a  wide connotation.  In a context where no age of  superannuation has  been fixed,  the expression must take on  its ordinary  meaning of  the normal  cessation  of service by  an act  of the employer or of the worker. That a person may  retire even before reaching any specified age 18 exemplified by  cl. (b)  of sub-para  (1) of  para 69  which speaks of  "retirement on  account of  permanent  and  total incapacity for  work due to bodily or mental infirmity." [68 C]      Delhi Cloth  & General  Mills Co.  Ltd. v. Workmen  and other etc. [1969] 2 S.C.R. 307, referred to.      Regional Provident Fund Commissioner, Andhra Pradesh v. Shri   T.S.    Hariharan,   [1971]    Suppl.   S.C.R.   305, distinguished. 59      5.  The   Beedi  and   Cigar  Workers   (Conditions  of Employment) Act,  1966 and  the Rules made thereunder by the Maharashtra Government  have been framed specifically on the basis that  in certain  matters home  workers enjoy a status akin to  the general category of workers. In the Maharashtra Beedi ant  Cigar Workers  (Conditions of  Employment)  Rules 1968, there  is specific provision in respect of the payment of wages to home workers. The contention that the provisions of the  Employees Provident Funds Act and the Schemes cannot be implemented  at all  in respect of the beedi industry has therefore to be rejected. [69 C, E, F]

JUDGMENT:      ORIGINAL JURISDICTION  : Writ  Petitions Nos.  3605  to 3609 of 1978 etc.      (Under Article 32 of the Constitution of India.)      M.N. Phadke,  B. Kanta Rao, M.Q. Qazi, V.N. Ganpule and Mrs. Veena Khanna for the Petitioners.      Abdul Khader, Girish Chander and Miss A. Subhashini for the Respondents.      Mr. Rameshwar Nath for the Interveners.      The Judgment of the Court was delivered by      PATHAK, J.  This and  the  connected  cases  raise  the important question  whether the  workers employed  at  their homes in  the manufacture  of beedis  are y  entitled to the benefit of  the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 and the & heme framed thereunder.      The  question  for  consideration  is  surrounded‘by  a welter  of   facts,  many  of  which  are  disputed  through affidavits filed  on the record, and it has not been an easy task  to   pick  our  way  through  them  to  arrive  at  an intelligent and coherent picture for the purpose of deciding these cases.  We propose to take Writ Petitions Nos. 3605 to 3609 of  1978 filed  by Messrs. P.M. Patel & Sons and others as  the  leading  group  of  cases,  because  the  principal arguments on  the several points arising in these cases were argued by learned counsel in those writ petitions.      The petitioners are engaged in the manufacture and sale of beedis.  The labour employed in the manufacture of beedis consists of  different categories.  At  the  factory,  which constitutes  the   formal   establishment.   there   is   an administrative ant clerical 60 staff, accountants,  packers, checkers  and  bhattimen.  The work of   rolling  the beedis  itself is  done by one or the other of  different categories  of workers.  The work may be entrusted by  the  manufacturers  directly  to  workers  who prepare the  beedis at  home after obtaining a supply of the

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raw material  consisting of tobacco, beedi leaves and thread from the manufacturers. Another category consists of workers employed by  the manufacturers  through contractors, and the manufacturers pass  on the  raw material to such workers for rolling the  beedis in  their dwelling houses, and there is, in a  sense, a direct relationship between the manufacturers and those  workers. m  e third  category of home workers are those  to   whom  the   work  is  entrusted  by  independent contractors who treat the workers as their own employees and get the work done by them either at their own premises or in the dwelling  homes of  the workers  in order  to fulfil and complete contracts  entered into  with the manufacturers for the supply  of the  finished product  from the  raw material supplied by  the manufacturers to the contractors. A cording to  the   manufacturers  the  home  workers  attend  at  the factories within  specified hours  every day and collect the raw material  for taking  to their homes for rolling beedis. While that  is true of home workers employed directly by the manufacturers or  who have been placed in employment through contractors with  the manufacturer,  in  the  case  of  home workers employed  by independent contractors that may not be so.  In   the  case  of  home  workers  who  hold  a  direct relationship with  the manufacturers,  the rolled beedis are brought by  the home  workers to  the factory and the beedis which  conform   to  the     standards   envisaged  by   the manufacturers are  accepted while  those which  do  not  are rejected. m  e acceptance  or rejection  is effected  in the presence of  the home worker to whom the work was entrusted. The staff  at  the  factory  maintains  registers  in  which regular entries  are made  of the  raw material  supplied to home workers,  and of  the rolled beedis which are delivered by them  at the  factory. m  e payment of wages to such home workers may  be made  directly or  distributed  through  the contractors engaged  by the manufacturers for engaging them. In the  case of  contracts  between  the  manufacturers  and independent  contractors,   the  manufactured   product   is collected by  the contractors  from their  home  worker  and delivered to  the  manufacturer.  It  is  evident  that  the manufacturer  is  concerned  only  with  payment  under  the contract to the contractors, and the payment of wages to the home workers is a matter between the contractor and the home workers.      The  employees’   Provident  Funds   and  Miscellaneous Provisions  Act,   1952  (hereinafter  referred  to  as  the Employees’  Provident   Funds  Act   )  provides   for   the institution of provident funds for 61 employees in factories and other establishments. Originally, it   did not  extend to  the beedi  industry. For  the first time, by  Notification No.  GSR. 660 dated May 17, 1977 made by the  Government of India under sub-s. (1) of s. 4 of that Act, the  beedi industry  was added to Schedule I of the Act with  effect  from  May  31,  1977.  This  was  followed  by Notification No.  GSR. 677  dated May 23, 1977 issued by the Central Government amending clause (b) of sub-paragraph 3 of paragraph 1  of the  Employees’ Provident Funds Scheme, 1952 (hereinafter referred to as the "Scheme") so as to bring the beedi industry  within the  province  of  that  Scheme  with effect from  May 31,  1977. Closely  thereafter, the Central Government Provident  Funds Commissioner  wrote to  all  the Regional Provident  Funds Commissioners  about the extension of the Scheme to the beedi industry with effect from June 1, 1977. By  these writ petitions the petitioners challenge the constitutional validity  of the  Notifications dated May 17, 1977 and  May 23,  1977 and  the proceedings  taken  by  the

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respondents against  the  petitioners  for  the  purpose  of enforcing the  employees’ Provident Funds Act and the Scheme so far  as they relate to home workers. The petitioners also seek  a   corresponding  declaration   that  the  Employees’ Deposit-Linked Insurance  Scheme and  the Employees’  Family Pension Scheme  framed under  the Employees’ Provident Funds Act are unenforceable in respect of the beedi industry.      The  principal   grounds  on   which  the   petitioners challenge  the   impugned  Notifications   may  be   shortly enumerated:-           (1) While  the Employees’  Provident Funds Act and           the  Scheme  may  be  applicable  to  the  workers           employed in  the factory  itself, they  cannot  be           extended to  home  workers  because  there  is  no           relationship of  employer and employee between the           manufacturers  and   the  home   workers.  It   is           submitted that  a home  worker cannot be described           as an  "employee" within  the definition set forth           in clause  (f) of 8. 2 of the Employees’ Provident           Funds Act.           (2) The  Employees’ Provident  Funds Act  and  the           Scheme cannot  be applied  to home  workers in the           beedi industry  inasmuch as they are subject to no           retirement age  and  there  is  no  power  in  the           manufacturer to  retire such  home workers  on the           ground of  superannuation. Having  regard  to  the           peculiar features  of the arrangements under which           home workers 62           manufacture beedis,  it is not reasonably possible           to apply  and  implement  the  provisions  of  the           Employees Provident  Funds Act  and the  Scheme in           relation to them.           (3) The  extension  of  the  Employees’  Provident           Funds Act  and the  Scheme to  the beedi  industry           constitutes an  unreasonable  restriction  on  the           Fundamental Rights  of the  petitioners guaranteed           by sub-cl.  (g) of  clause 1  of Article 19 of the           Constitution and  also violates Articles 14 and 31           of the  Constitution  inasmuch  as  the  financial           burden occasioned  thereby is so excessive that it           is obvious  that the  Central Government  did  not           apply its  mind to  the  paying  capacity  of  the           industry. Moreover,  the  burden  imposed  on  the           industry-bears no  nexus  to  the  object  of  the           statute,  namely,   to  provide   post  retirement           benefits.      Having considered  the material on the record before us in this leading group of writ petitions it appears that some of the  home workers have been working regularly for several years exclusively  for a single manufacturer, and depend for their livelihood  on this work, that they attend the factory during specified  hours to  secure raw  material for  making beedis at home and for delivering the manufactured beedis to the staff  at the  factory, that  the quantity of leaves and tobacco supplied  is   fixed by  the manufacturer,  and that registers of  the raw  material and  of payment of wages are maintained at  the factory,  that a  record is maintained of the manufactured  beedis received  from the home workers and the quantity rejected, and that a log book or a wage card is issued to the home workers.       In order to organise the conditions in which the beedi workers  worked   and  to  give  them  greater  security  of employment Parliament  enacted the  Beedi and  Cigar Workers (Conditions  of   Employment)  Act,   1966  and   the  State

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Governments framed  rules under  that statute.  The said Act applied to  home workers, as is clear from the definition of "employee" in clause (f) of 8. 2 of  that Act and provides for the application of certain labour laws.       There is  no dispute  that pursuant  to  the  impugned Notification dated  May 17, 1977 the beedi industry has been brought within  the scope  of the Employees’ Provident Funds Act and  that the  impugned Notification  dated May 23, 1977 has made the Scheme applicable to the beedi industry. Clause (a) of sub-s. 63 (3) of  8. 1  of the  Employees’ Provident Funds Act applies that Act  to every  establishment which is a factory engaged in any  industry specified in Schedule I and in which twenty or  more  persons  are  employed.  Admittedly,  the  factory belonging to  the manufacturer  is, therefore,  drawn within the compass  of the  Employees’ Provident  Funds Act and the Scheme. It  is also  admitted by  the petitioners  that  the workers  employed  within  the  factory  premises  would  be covered by  the Act  and the  Scheme. The  real question  is whether the  home workers  are  entitled  to  that  benefit. Clause (f) of s. 2 of that Act defines an "employee" to mean "any person  who is  employed for wages in any kind of work, manual or otherwise, in or in connection with the work of an establishment, and who gets his wages directly or indirectly from the  employer, and  includes any  person employed by or through a  contractor in  or in  connection with the work of the establishment." It will be noticed that the terms of the definition are  wide. They include not only persons employed directly by the employer but also persons employed through a contractor, Moreover, they include not only persons employed in the  factory but also persons employed in connection with the work  of the factory. It seems to us that a home worker, by virtue  of the  fact that he rolls beedis, is involved in an activity  connected with  the work of the factory. We are unable to  accept the  narrow  construction  sought  by  the petitioners that  the words  "in  connection  with"  in  the definition of  "employee" must be confined to work performed in the  factory itself as a part of the total process of the manufacture.      Now  to  be  an  employee  it  is  necessary  that  the relationship of  master and  servant should  exist with  the employer.  The   principal  question   is  whether   such  a relationship exists  between the  manufacturer  and  a  home worker. Several  cases were  placed before us by the parties in this  connection, and  reference may  be made to them. In Shri Chintaman  Rao and  Another  v.  The  State  of  Madhya Pradesh,  [1958]   S.C.R.  1340,   this  Court   held   that independent contractors,  known as  Sattedars, with  whom  a manufacturer contracted  for the  supply of beedis could not be described  as workers within the definition of sub-8- (1) of 8-  2 of  the Factories  Act, nor  could  their  collies, because the  Sattedars undertook  to supply  the  beedis  by manufacturing them  in their  own factories or by entrusting the work to third parties. The Sattedars were not subject to a right  of control  by the  manufacturer in  respect of the manner in  which the  work was to be done. The Court applied the principle that the test for determining the relationship of master and servant lay in the 64 existence of  the right  in  the  master  to  supervise  and control the  A work  done by  the servant  not only  in  the matter of directing what work the servant was to do but also the manner  in which  he should do it. In passing, the Court

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referred to  home workers  employed  by  the  Sattedars  for making beedis  in their  respective  homes,  and  the  Court observed that they could not be regarded as persons employed by  the   manufacturer  directly   or  through  any  agency. Thereafter, in Shri Birdhichand Sharma v. First Civil Judge, Nagpur  and   Others,  [1961]   3  S.C.R.  161,  this  Court considered  a  case  where  the  manufacturer  had  employed workmen in his beedi factory and who were at liberty to work at their  homes, and  the Court  held that the conditions in which they  worked made them "workers" within the meaning of clause (1)  of s.  2 of  the Factories  Act. The significant feature of  the judgement  lies in  the observation  of  the Court that  in the  case of  the beedi industry the right of rejection of  the beedis  if they  did not  come up  to  the proper standard  was evidence of the supervision and control exercised by  the manufacturer.  Noting that  the nature and extent  of  supervision  and  control  varied  in  different industries. the Court said :-           "Taking the nature of the work in the present case           it  can   hardly  be   said  that  there  must  be           supervision all time when biris are being prepared           and unless  there is such supervision there can be           no direction  as to  the manner  of work.  In  the           present case the operation being a simple one, the           control of the manner in which the work is done is           exercised at  the end  of the  day, when biris are           ready, by  the method  of rejecting those which do           not come up to the proper standard. In such a case           it is  the right  to supervise and not so much the           mode in which it is exercised which is important." Reference may  be made  next to Shankar Balaji Waje v. State of Maharashtra,  [1962] Suppl.  1 S.C.R.  249. The  majority view taken on the particular facts of that case was that the workers were  not subject  to the control and supervision of the  manufacturer.   The  learned  Judges  constituting  the majority appear  to  have  overlooked  the  observations  in Birdhichand Sharma  (supra) that  the right  of rejection of the beedis  prepared by  the workers in itself constituted a sufficient element of supervision and control. Our attention was also  invited by the petitioners to . Orissa Cement Ltd. v. Union  of India [1962] Suppl. 3 S.C.R. 837, but this is a case where  the question  was whether  a   notification  was valid which made the employer liable to pay into 65 the provident  fund, constituted  under the  provident Funds Act, 1952,  the share  of  workers  who  were  in  fact  the employees of  A independent  contractors. The  Court drew  a careful  distinction   between  labour   employed   by   the manufacturer and that employed by an independent contractor. Most of these cases were considered thereafter by this Court in D.C.  Dewan Mohideen  Sahib and  Sons v.  The  Industrial Tribunal, Madras,  [1964] 7  S.C.R. 646, and while reviewing the law  the Court  rejected the  plea of  the manufacturers against the  application of  the Industrial  Disputes Act on the ground  that the workers ostensibly employed by the "so- called  contractors"   were  in  fact  the  workmen  of  the appellants who  had employed  them through  their agents  or servants. It  may be  pointed out,  however, that  the Court reiterated the  view expressed  in Birdhichand Sharma’s case (supra) that the rolling of beedis was work of such a simple nature that supervision was not required all the time and it was sufficient  if supervision  was exercised  at the end of the day  through the  system of  rejecting defective beedis. The law took a major shift in Silver Jubilee Tailoring House and others  v. Chief  Inspector of  Shops and establishments

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and another  [1974] 1  S.C.R. 747,  as to the criteria which determined the  relationship of  master and servant. Mathew, J., who  spoke for the Court, reviewed the earlier decisions of this  Court as  well as some of the decisions rendered in England, and  pointed  out  that  the  test  of  control  as traditionally  formulated   was  no  longer  treated  as  an exclusive test. He observed -           "It is  exceedingly  doubtful  today  whether  the           search for  a formula  in the  nature of  a single           test to  tell a  contract of service from contract           for service  will serve  any useful  purpose.  The           most that profitably can be done is to examine all           the factors  that have  been referred  to  in  the           cases on  the topic.  Clearly, not  all  of  these           factors would  be relevant  in all  these cases or           have the  same weight  in all cases. It is equally           clear that  no magic  formula  can  be  propounded           which factors  should in  any case  be treated  as           determining ones.  The plain  fact is  that  in  a           large number  of cases, the court can only perform           a balancing  operation  weighing  up  the  factors           which point  in one  direction and  balancing them           against those pointing in the opposite direction.           During the  last two  decades the  emphasis in the           field has  shifted and no longer rests so strongly           upon the question of control. Control is obviously           an 66           important factor and in many cases it may still be           the decisive  factor. But  it is wrong to say that           in every  case it  is decisive.  It is now no more           than a factor, although an important one He was  dealing with  a case  where  the  workers  who  were tailors went  to tailoring  shops and were given work as and when work  was available,  and  when  cloth  was  given  for stitching to  a worker  he was told how he should stitch it, and if  the instructions  were not  carried out the work was rejected and  he was  asked to  restitch  it.  Some  of  the workers were allowed to take the clothes home for stitching. The Court  held that  there was a relationship of master and servant because  of the  right in the employer to reject the work done, and it reiterated that "the degree of control and supervision would  be different in different types of work". In the  present cases,  the right of rejection can similarly be said  to represent  the control and supervision exercised by the  manufacturer over  the beedis  prepared by  the home workers.  Quite  obviously,  while  in  the  Silver  Jubilee Tailoring House  case  (supra)  it  was  possible  for,  the employer to  direct re-stitching  of the  garment,  no  such direction can  be reasonably  envisaged in  the case of sub- standard beedis.  A Constitution  Bench of  this  Court  had occasion to consider the law in Bangalore Ganesh Beedi Works etc. v.  Union of  India etc.  [1974] 3  S.C.R.  221,  which questioned the  validity of  the  Beedi  and  Cigar  Workers (Conditions of  Employment) Act, 1966. The Court adopted the test  of  rejection  of  defective  beedis  for  determining whether  the   beedi  workers  were  the  employees  of  the manufacturer  or  the  independent  contractors.  The  Court observed:-           "...the manufacturers  or trade  mark holders have           liability in  respect of  workers who are directly           employed by  them or  who  are  employed  by  them           through contractors.  Workers  at  the  industrial           premises  do   not  present   any   problem.   The           manufacturer or trade mark holder will observe all

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         the provisions  of the  Act by reason of employing           such labour  in the  industrial premises. When the           manufacturer engages labour through the contractor           the  labour   is  engaged   on   behalf   of   the           manufacturer,  and   the  latter   has   therefore           liability to such contract labour. It is only when           the contractor  engages labour  for or  on his own           behalf and  supplies the  finished product  to the           manufacturer  that   he  will   be  the  principal           employer  in  relation  to  such  labour  and  the           manufacturer will not be responsible 67           for implementing  the provisions  of the  Act with           regard  A   to  such   labour  employed   by   the           contractor. If  the right  of rejection rests with           the manufacturer  or trade  mark holder, in such a           case  the   contractor  who  will  prepare  beedis           through the contract labour will find it difficult           to  establish   that   he   is   the   independent           contractor-       In the context of the conditions and the circumstances set out  earlier in  which the  home  workers  of  a  single manufacturer go about their work, including the receiving of raw material, rolling the beedis at home and delivering them to the  manufacturer subject to the right of rejection there is sufficient  evidence of  the requisite  degree of control and supervision  for establishing the relationship of master and servant between the manufacturer and the home worker. It must be  remembered that  the work of rolling beedis is  not of a sophisticated nature, requiring control and supervision at the  time when the work is done. It is a simple operation which,  as   practice  has   shown,   has   been   performed satisfactorily by  thousands of  illiterate workers. It is a task which can be performed by young and old, men and women, with equal  facility and it does not require a high order of skill. In  the circumstances,  the right  of  rejection  can constitute in  itself an effective degree of supervision and control. We  may point  out that  there is  evidence to show that the  rejection takes  place in the presence of the home worker. That factor, however, plays a merely supportive role in determining  the existence  of the  relationship  of  the master and  servant. The petitioners point out that there is no element of personnel service in beedi rolling and that it is open  to a home worker to get the work done by one or the other member  of his family at home. The element of personal service, it  seems to us, is of little significance when the test of  control  and  supervision  lies  in  the  right  of rejection.      In our opinion, the home workers are "employees" within the  definition  contained  in  cl.  (f)  of  s.  2  of  the Employees’ Provident Funds Act.        The  next question  is whether  having regard  to the peculiar features  of the home workers’ system of employment the provisions  of the  Employees’ Provident  Funds Act  and Scheme can  be applied  on their  terms to home workers. The principal  contention   in  this   connection  is   that  no retirement age is fixed in the case of home 68 workers and,  therefore, the Scheme cannot be implemented in respect of  them. Cl. (a) of sub-para (1) of Para. 69 of the Employees’ Provident  Funds Scheme  provides that  "a member may withdraw  the full  amount standing to his credit in the Fund on  retirement from  service after attaining the age of 55 years". It seems to us that the law does not envisage the fixation of  a retirement  age  before  that  provision  can

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apply. A  worker is entitled to withdraw the amount standing to his  credit in  the fund  if he retires at any time after attaining the  age of 55 years. There is no reference to any pre-determined  age   of  superannuation.   The   expression "retirement" does  not, in  the  absence  of  anything  more necessarily imply  a fixed age for leaving service. It has a wide  connotation.   In  a   context   where   no   age   of superannuation has  been fixed,  the expression must take on its ordinary  meaning of  the normal cessation of service by an act  of the  employer or of the worker. That a person may "retire"  even   before  reaching   any  specified   age  is exemplified by  cl. (b)  of sub-para.  (1) of Para. 69 which speaks of  "retirement on  account of  permanent  and  total incapacity for  work due  to bodily or mental infirmity". We may point  out that in Delhi Cloth & General Mills Co. Ltd., V. Workmen  and others  etc. [1969] 2 S-C-R. 307, this Court has held  that a  gratuity scheme could be effective even if no age  of superannuation was fixed. Learned counsel for the petitioners had  referred  us  to  Regional  Provident  Fund Commissioner, Andhra  Pradesh v.  Shri T.S. Hariharan [1971] Suppl. S.C.R.  305, where  this Court observed in respect of the Employees’ Provident Funds Act:-           "The Act  was brought  on  the  statute  book  for           providing for  the institution of a provident fund           for  the   employees  in   factories   and   other           establishments. The basic purpose of providing for           provident funds  appears to  be to  make provision           for the  future of the industrial worker after his           retirement or  for his  dependants in  case of his           early death.  To achieve  this ultimate object the           Act is  designed to  cultivate among the workers a           spirit of  saving something regularly, and also to           encourage stabilisation  of a  steady labour force           in the industrial centres," and it  is pointed out that the Court rejected the plea that the Act  could apply to short term employees also. The case, in our opinion, is distinguishable because the workers there were taken  in employment on account of an emergency and for a very short period necessitated by an abnormal contingency. That is not the 69 position here.  In the  present cases,  the  employment  was entered A  into in  the regular  course of business. We hold that  there  is  no  substance  in  the  contention  of  the petitioners that  the provisions of the Employees’ Provident Funds Act  and the  Scheme cannot  be applied at all to home workers. There  is no  reason why  the provisions of the Act and Scheme  should not  apply where  their terms permit such application-       We may also point out that the Beedi and Cigar Workers (Conditions of  Employment) Act,  1966 and  the  rules  made thereunder by  the Maharashtra  Government have  been framed specifically on  the basis  that  in  certain  matters  home workers enjoy  a status  akin to  the  general  category  of workers. Not  only do  these provisions apply to "industrial premises" as defined under clause (i) of s.2 of that Act but also to  an "establishment" as defined in clause (i) of s. 2 of the  Act. There  are several  provisions which  apply  to employees  in   establishments  and   are  not  confined  to industrial premises. An "establishment", by the terms of its definition is wide enough to include the dwelling house of a home worker.  A home worker would be entitled, therefore, to annual leave  with wages and wages during leave period among other things.  In the  Maharashtra Beedi  and Cigar  Workers (Conditions of  Employment) Rules,  1968 there  is  specific

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provision in  respect  of  the  payment  of  wages  to  home workers. The  Rules relating to the issue of raw material by the employer would extend to home workers also.         Accordingly,  we  reject  the  contention  that  the provisions of  the Employees  Provident Funds  Act  and  the Schemes cannot be implemented at all in respect of the beedi industry.        The  last  contention  of  learned  counsel  for  the petitioners is  that the  financial  burden  which  will  be suffered  by  the  beedi  industry  in  consequence  of  the Employees’ Provident  Funds Act and the Schemes envisaged by it being  extended  to  the  industry  will  be  beyond  the financial capacity  of the  beedi industry and will severely handicap it  in competing  with the  cigarette manufacturing industry. There  is no nexus, it is said, between the burden imposed on  the industry  and the  object of  the statute of providing postretirement  benefits. It  is urged  that  this aspect  did   not  engage   the  attention  of  the  Central Government when the impugned Notifications were promulgated. On the basis of this submission the petitioners contend that their Fundamental  Rights under  Article 14,  sub-cl. (g) of cl. (1)  of Article  19 and  Article 31  of the Constitution have been violated. We have 70 carefully examined the record before us and we are unable to find adequate  material in  support of  this submission.  We need say nothing more. The contention is rejected.      In the result, we see no force in these writ petitions, the connected writ petitions and the connected special leave petitions, and  they are all accordingly dismissed. There is no order as to costs. N.V.K.                                   Petitions dismissed 71