http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 6  

PETITIONER: BASTI SUGAR MILLS LTD.

       Vs.

RESPONDENT: RAM UJAGAR AND OTHERS

DATE OF JUDGMENT: 04/04/1963

BENCH: GUPTA, K.C. DAS BENCH: GUPTA, K.C. DAS GAJENDRAGADKAR, P.B. WANCHOO, K.N. SHAH, J.C. AYYANGAR, N. RAJAGOPALA

CITATION:  1964 AIR  355            1964 SCR  (2) 838  CITATOR INFO :  F          1972 SC1598  (15)  R          1973 SC2297  (9,10)

ACT: Industrial  Dispute-Termination  of  Service-’Employer’  and ’workman’  meaning of-Infringement of fundamental  right  to carry  on trade-Uttar Pradesh Industrial Disputes Act,  1947 (U.P. XXVIII of 1947). ss. 2 (i) (iv).  s. 2 (Z).

HEADNOTE: An  Industrial Dispute arose between the appellant  and  the respondents  in  respect  of two  matters,  namely  (1)  for terminating  the  services of the respondents  (2)  and  for paying  the  respondents at a rate lower than Rs.  55/-  per month  which was the minimum prescribed wage for workmen  of Vacuum  Pan  Sugar  Factories of  Uttar  Pradesh  under  the Standing  Orders  dated  October  3,  1958,  issued  by  the Government  of Uttar Pradesh.  The dispute was  referred  to the Labour Court. The  appellant’s case was that the work of removal of  press mud had been given by the company to a contractor and  these respondents  were  employed by that contractor  to  do  that work.  Their services were terminated by the contractor  and the management had nothing to do with these workmen. Therefore  the  appellant  contended  that  the   management company  did  not come within the definition  of  "employer" under  the provisions of Uttar Pradesh  Industrial  Disputes ,Act,  1947.  The respondents succeeded in the Labour  Court and hence this appeal. Held (1) that the respondents are workmen within the meaning of  s. 2 (Z), being persons employed in the industry  to  do manual  work’ for reward, and the appellant is the  employer within  the  meaning  of sub-cl. (IV) of s.  2  (i)  as  the workman was employed by a contactor with whom the  appellant company  had  contracted  in the course  of  conducting  the industry  for  the execution by the said contractor  of  the work  of removal of press mud which is ordinarily a part  of the industry.  839

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 6  

(2)  that the imposition of restrictions on the  appellant’s right to carry on trade under the definition of employer  in sub-cl.  (iv) of s. 2 (i) of the Act is in the interests  of the  General public and as such the appellant’s  fundamental right under Art. 19 (1) (g) of the Constitution has not been contravened. (3)  that  in  the  ordinary  grammatical  sense  the  words "employed by a factory" which occur in the definition of the word  "workmen" in the Standing Orders include every  person who  Is employed to do the work of the factory and they  are wide  enough to include workmen employed by the  contractors of the factory also. The  appellant was not allowed to raise a new plea  for  the first time in this Court. Mahalakshmi Sugar Mills Company v. Their Workmen, 1961  (II) L. L.J. 623, referred to.

JUDGMENT: CIVIL APPELLATE JURISDICTION : Civil Appeal No. 225 of 1963. Appeal  by special leave from the award dated  November  26, 1962 of the Labour Court, Lucknow, in Adjudication Case  No. 68 of 1962. C.S.  Pathak  and  D.N. Mukherjee  for  the  appellant.   M. Rajagopalan and K. R. Chaudhuri for the respondents. 1963.  April 4. The judgment of the Court was delivered by DAS GUPTA J.-The twenty-one persons who are the  respondents in  this  appeal  were engaged from November  21,  1958,  to February 5, 1959, in the work of removal of press-mud in the sugar  factory belonging to the appellant.  On  February  6, 1959, their services were terminated.  It also appears  that for the period of work of November 21, 1959, to February  5, 1959, they were paid wages at rates lower than Rs. 55/-  per month which was 840 the minimum prescribed wage for workmen of vacuum pan  sugar factories  of Uttar Pradesh under the Standing Orders  dated October 3, 1958, issued by the Government of Uttar  Pradesh. On July 31, 1962, the Governor of Uttar Pradesh referred  to the   Labour  Court,  Lucknow,  a  dispute   between   these respondents  and  the Basti Sugar Mills Ltd.   In  this  the Basti  Sugar Mills Ltd., was described as the employers  and the  respondents as their workmen.  The matters  in  dispute were thus mentioned in the order of reference :-               "(1) Whether the employers have terminated the               services  of  their  workmen,  named  in   the               Annexure, will effect from February 6,   1959-               legally and/or justifiably ?   if not, to what               relief are the workmen concerned entitled ?               (2)   Whether  the action of the employers  in               paying  to the workmen, named in the  Annexure               to  issue  No.  1, at  rates  lower  than  the               minimum  prescribed wage of Rs. 55 per  month,               for  the  period  from November  21,  1958  to               February  5, 1959 is legal  and/or  justified.               If  not,  to  what  relief  are  the   workmen               concerned entitled and with what details." The  appellant  contended  that these 21  workmen  were  not employed  by  the  management  of  the  sugar  mills.    The appellant’s  case was that the work of removal of  press-mud had been given by the Company to a contractor, Banarsi  Das, and that these 21 men were employed by that contractor to do the  work.  The management of the Company, it was said,  had nothing to do with these men.  Banarsi Das left the work  on

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 6  

February  6,  1959, and the termination of the  services  of these  workmen  was made by him.   The  respondents  through their  841 Union  contended,  on  the  contrary,  that  they  had  been employed directly by the management of the Company. On a consideration of the evidence the Labour Court accepted the  appellant’s case that the work of removal of  press-mud was being done through the contractor Banarsi Das and it was Banarsi  Das under whom these 21 persons were employed.   It further held that in view of the definition of "employer" in sub-cl.  (iv)  of s. 2 (i) of the Uttar  Pradesh  Industrial Disputes Act, 1947, the appellant was in law the employer of these  21  persons.   It held  accordingly  that  they  were entitled  to  the benefit of the Standing  Orders  regarding minimum  wages and were also entitled to reinstatement.   In that  view  the  Labour Court ordered, (a)  payment  to  the Workmen  at the rate of Rs. 551 per month from  February  6, 1959  upto  the end of the crushing season of 1958  59;  (b) reinstatement of the workmen if not already employed by  the Company  in the crushing season of 1962-63; and (c)  payment of difference’ of wages computed at the rate of Rs. 55/- per month  and Re. I/- per day in the case of Ram Ujagar and  14 annas  per day in the case of other workmen for  the  period November 21, 1958 to February 5, 1959. Against  this order of the Labour Court the  present  appeal has been filed by the Company with the special leave of this Court. Three  points  are raised by Mr. Pathak in  support  of  the appeal.   The first is that the definition of "employer"  in sub-cl.  (iv)  of  s. 2 (i) of the Act  does  not  make  the appellant, the employer of these workmen.  The second point, urged rather faintly, is that if the above definition be  so construed as to make the contractor’s labourers, workmen  of the  company  the definition should be held to  violate  the provisions of Art. 19 (1) (g) of the Constitution. 842 The third point urged is that, in any case, the  respondents are not entitled to the benefit of the Standing Orders which fixed  the  minimum wage for the workmen of the  Vacuum  Pan Sugar Factories of Uttar Pradesh. Section 2 (i) of the Act contains an inclusive definition.of employer.   The effect of sub-cl. (iv) of s. 2 (i)  is  that where the owner of any industry in the course of or for  the purpose of conducting the industry contracts with any person for  the execution by or under such person of the  whole  or any  part  of  any work which is ordinarily a  part  of  the industry, the owner of such industry is an- employer  within the  meaning of the Act.  Mr. Pathak’s suggestion  that  the effect of this definition is that the owner of the  industry becomes  the employer of the contractor is wholly  untenable and  can even be described as fantastic to  deserve  serious consideration.    The  obvious  purpose  of  this   extended definition  of the word "employer" is to make the  owner  of the  industry., in the circumstances mentioned in  the  sub- clause,  the  employer of the workmen engaged  in  the  work which is done through contract.  The words used in the  sub- clause are clearly sufficient to achieve this purpose. It  is  true,  as  pointed  out  by  Mr.  Pathak,  that  the definition  of the word "workmen" did not contain any  words to show that the contract labour was included.  That however does  not affect the position.  The words of the  definition of  workmen in s. 2 (z) to mean ""any person  (including  an -apprentice)  employed in any industry to do any skilled  or unskilled,  manual, supervisory, technical or clerical  work

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 6  

for  hire  or reward, ’Whether the terms  of  employment  be express  or implied" are by themselves sufficiently wide  to bring  in  persons  doing work in an  industry  whether  the employment  was  by the management or by the  contractor  of the,  843 management.   Unless  however  the definition  of  the  word "’employer"  included  the management of the  industry  even when  the  employment  was by  the  contractor  the  workmen employed by the contractor could not get the benefit of  the Act  since a dispute between them and the  management  would not be an industrial dispute between "employer" and workmen. It  was with a view to remove this difficulty in the way  of workmen  employed  by  contractors that  the  definition  of employer has been extended by sub-cl. (iv) of s. 2 (i).  The position  thus  is:  (a) that the  respondents  are  workmen within  the meaning of s. 2 (z), being persons  employed  in the industry to do manual work for reward, and (b) they were employed by a contractor with whom the appellant company had contracted in the course of conducting the industry for  the execution  by the said contractor of the work of removal  of press-mud  which is ordinarily a part of the  industry.   It follows therefore from s. 2 (z) read with sub-cl. (iv) of s. 2  (i)  of the Act that they are workmen  of  the  appellant company and the appellant company is their employer.   There is  no substance therefore in the first point raised by  the learned counsel for the appellant. The  second point, viz., that ’this  definition  contravenes the appellant’s fundamental rights under Art. 19 (l) (g)  is equally  devoid of substance.  Assuming that the  result  of this  definition of employer in sub-cl. (iv) of s. 2 (i)  is the imposition of some restrictions on the appellant’s right to  carry on trade or business, it cannot be doubted  for  a moment  that the imposition of such restrictions is  in  the insterest of the general public.  For, the interests of  the general public require that the device of the engagement  of a contractor for doing work which is ordinarily part of  the industry should not be allowed to be availed of by owners of industry  for  evading  the  provisions  of  the  Industrial Disputes Act.  That these provisions are in the interests of the general 844 public cannot be and has not been disputed.  That being  the position, the impugned definition which gives the benefit of the  provision  of the Act to the workmen  engaged  under  a contract  in  doing  work which is ordinarily  part  of  the industry  cannot but be held to be also in the interests  of the general public. This  brings us to Mr. Pathak’s main contention that in  any case the respondents are not ’workmen’ within the meaning of the  Standing  Orders and so cannot get the benefit  of  the minimum wage prescribed thereby.  In the standing Orders the word "workmen" is defined to mean "any person (including  an apprentice)  employed  by a factory, to do  any  skilled  or unskilled  manual, supervisory, technical or  clerical  work for  hire  or  reward whether the  terms  of  employment  be express  or  implied"  but  does  not  include  any   person mentioned  in  cls. (i) and (ii).  We are not  concerned  in this case with these clauses.  Mr. Pathak argues that on  a. reasonable  construction, the words "employed by a  factory" in this definition can only mean "employed by the management of  the factory" and can not include persons employed  by  a contractor  of  the  factory.   He  points  out-  that  this definition  of  ’workmen’ in the Standing  Orders  uses  the words  "employed  by  a factory" though  the  definition  of

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 6  

’workmen’ in the Act itself uses the words ",employed in any industry"  and contends that the words "by a  factory"  were deliberately  used  instead  of words  ,’in  a  factory"  to exclude persons other than those employed by the  management of  the  factory from the benefit of  the  Standing  Orders. Neither grammar nor reason supports this argument. On the ordinary grammatical sense of the Words ",employed by a factory" they include, in our opinion, every person who is employed to do the work of the factory.  The use of the word "by" has  845 nothing  to  do  with  th  question  as  to  who  makes  the Appointment.  The reason why "by" was used instead of  "’in" appears  to be to ensure that if a person has been  employed to  do  the work of the industry, whether the work  is  done inside  the factory or outside the factory, he will get  the benefit of the Standing Orders. We  can also see no reason why the Government in making  the Standing  Orders  would  think of denying  to  some  of  the persons who fall within the definition of workmen under  the Act,  the  benefit  of the Standing  Orders.   The  Standing Orders  were made under s. 3 (b) of the Act under which  the State   Government   may  make  provision   "for   requiring employers, workmen or both to observe for such period as may be  specified  in  the order such terms  and  conditions  of employment  as  may  be determined in  accordance  with  the order." The purpose of the order was thus clearly to require employers  to  observe  certain  terms  and  conditions   of employment  of their workmen as defined in the Act.   It  is unthinkable  that in doing so the Government would  want  to exclude  from its benefits-particulary, that of the  minimum wage -a class of workmen who would otherwise get the benefit under  the  definitions of workmen and employer in  the  Act itself.  No reason has been suggested and we cannot think of any. We  have  therefore  come  the  conclusion  that  the  words "employed by a factory" are wide enough to   include workmen employed by the contractors   of factory also. Mr.  Pathak  wanted  to  raise a  new  point  based  on  the provisions  of cl. (K) of the Standing Orders.  That  clause provides that a seasonal workman who has worked or, but  for illness  or any other unavoidable cause, would  have  worked under a 846 factory  during  the whole of the second half  of  the  last preceding  season  will be employed by the  factory  in  the current  season.  In view of this Mr. Pathak wants  to  urge that  it will be difficult for the appellant to give  effect to  the order of reinstatement of these 21 workmen  as  that would  mean  getting rid of at least some  workmen  who  are entitled to be employed by the factory under the  provisions of  cl. (K). if the facts were known to be as  suggested  by the learned Counsel we would have felt obliged to take  note of these provisions of cl. (K) and would have thought fit to make  an  order  as  was  made  by  this  Court  in  similar circumstances  in  Mahalakshmi Sugar Mills Company  Ltd.  v. Their  Workmen  (1), making it clear that there  21  workmen should be re-employed in the crushing season of 1962-63 only in so for as it was possible to do so without breach of  the provisions of cl. (K) of the Standing Orders.  There are  no materials  on  the record however to show how  many  of  the workmen  already  employed by the Company  in  the  crushing season of 1962-63 had actually worked in the latter half  of 1961-62 season.  In the written statement of the Company  no such  point about the difficulty of reinstatement of any  of

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 6  

these  21 workmen because of the provisions of cl.  (K)  was raised.   In  these circumstances, we have not  allowed  Mr. Pathak  to  raise this new plea for the first time  in  this Court. As  all the points raised in the appeal fail, the appeal  is dismissed with costs. Appeal dismissed. (1) 1961 (II) L. L. J. 623.  847