15 March 1955
Supreme Court


Case number: Appeal (civil) 207 of 1954






DATE OF JUDGMENT: 15/03/1955


CITATION:  1955 AIR  404            1955 SCR  (1)1427

ACT: Master   and  servant-Banker-Agreement  between   Bank   and Treasurers-Treasurers,   whether  servants  or   independent contractors -Cashier appointed by Treasurer-Whether  servant of the Bank.

HEADNOTE: The  appellant  was  appointed head cashier in  one  of  the branches  of the respondent Bank by the Treasurers who  were in charge of the Cash Department of the Bank by virtue of an agreement  between them.  The question arose as  to  whether the appellant was an employee of the Bank. Held.  (i)  that the terms of the agreement  clearly  showed that  the  Treasurers  were servants of  the  Bank  and  not independent contractors; and that (ii)as the direction and control of the appellant and of the ministerial  staff in charge of the Cash Department  of  the Bank  was entirely vested in the Bank, the appellant was  an employee of the Bank. If a master employs a servant and authorizes him to employ a number  of persons to do a particular job and  to  guarantee their fidelity and efficiency for a cash consideration,  the employees  thus appointed by the servant would  be,  equally with the employer, servants of the master. The question as to whose employee a particular person is has to   be   determined  with  reference  to  the   facts   and circumstances  of each individual case, and among  the  many tests  by which to ascertain who is the employer,  the  most satisfactory  one  is  to ask who is entitled  to  tell  the employee the way in which he is to do the work upon which he is engaged. (1)  (1924] I.L.R. 51 Cal. 703. (2)  [1931] I.L.R. 59 Cal. 297, 1428 Donovan  v.  Laing, Wharton &  Down  Construction  Syndicate ([1893]  1 Q.B.D. 629) and Mersey Docks & Harbour  Board  v. Coggins & Griffith (Liverpool) Ltd. ([1947] A.C.1), referred to.



JUDGMENT: CIVIL APPELLATE, JURISDICTION: Civil Appeal No. 207 of 1954. Appeal  by special leave from the Judgment and  Order  dated the 31st day of August 1953 of the Labour Appellate Tribunal of India, Lucknow, in Appeal No. III-57 of 1953. A.   S. R. Chari (Bawa Shiv Charan’ Singh and M.  R. Krishna pillai, with him), for the appellant. Achhru Ram (Naunit Lal, with him), for the respondent. 1955.  March 15.  The Judgment of the Court was delivered by SINHA  J.-This  is an appeal by special  leave  against  the orders of the Lucknow Bench of the Labour Appellate Tribunal of  India (hereinafter to be referred to as  "The  Appellate Tribunal")  dated  the 31st August 1953, setting  aside  the award  dated  the 13th October 1952 made  by  the  Chairman, Central  Government Industrial Tribunal,  Calcutta  (herein- after  to be referred to as "The Tribunal") reinstating  the appellant  as  the head cashier with back salary  under  the Punjab National Bank (hereinafter called "The Bank"). The  facts leading up to this appeal may shortly be  stated. The appellant started his service as the head cashier in the Una  Branch  of the Bank on the 18th June  1949.   The  Cash Department  of  the Bank is in charge  of  Treasurers.   The relation between the Bank and the Treasurers is evidenced by an  agreement dated the 1st May 1944 (Ex. 1) which  will  be noticed  in  detail  hereinafter.   That  was  an  agreement between the Bank and "Messrs Rai Bahadur Karam Chand Puri  & Bros".   That firm was appointed the Treasurers at the  head office  of  the  Bank and other places in  and  outside  the Punjab.  On the 28th September 1951 the District Manager  of the Northern Circle of the.  Bank wrote a letter (Ex. 4)  to the Treasurers informing 1420 them that it had been decided to close the Una office of the Bank  with  effect  from the close of business  on  the  3rd November  1951.  In pursuance of that letter the  Treasurers intimated  by  a letter dated 2nd October 1951  enclosing  a copy  of Ex. 4 to the appellant that the Una Branch  of  the Bank  will cease to function from the close of  business  on the  3rd  November 1951 and that his services  will  not  be required  after  that date.  The Punjab  National  Bank  Em- ployees’  Union (Punjab) took up the cause of the  appellant as also that of other employees and made representations  to the  Government  of  India.  The Government of  India  by  a notification No. SRO-432 dated the 8th March 1952  published in the Gazette of India, Part II-Sec. 3, in exercise of  its powers  under section 10 of the Industrial Disputes Act  XIV of 1947 (hereinafter called the Act) referred the industrial dispute between the Bank and its workmen named in schedule 2 (concerning  workers dismissed) and schedule 3 (relating  to workers  transferred)  for adjudication  to  the  Industrial Tribunal at Calcutta constituted under section 7 of the Act. Schedule 1 in so far as it is necessary for purposes of this case  contains the following points of dispute  between  the employer and the workmen:- "1. Wrongful dismissal of the workmen mentioned in  schedule II and their reinstatement. "2.  In the event of any order for reinstatement payment  of wages and other allowances from the date of dismissal to the date of reinstatement". The  appellant  is  No.  5 in  schedule  2  aforesaid.   The ’Tribunal gave its award on the 13th October 1952 in respect of  a  number  of employees whose  cases  were  actually  in controversy before it.  It is only necessary to refer to the award  in  so  far as it  concerned  the  appellant.   After overruling  the preliminary objection of the Bank  that  the



Union  bad  no locus standi to represent the  appellant  the Tribunal formulated the following point for its decision:- "On  merits  the main point involved is as  to  whether  the services of an employee of the Cash 1430 Department  can  be  terminated  on a  change  made  in  the services of the Contractor Cashier". It answered this point in these words:- "This  point has been agitated in more than one case  and  I have  also  held in Reference No. 3 of 1951 as  Chairman  of Industrial  Tribunal  (P.  N. Bank dispute)  relating  to  5 cashiers  that the employees of the Cash Department are  the employees of the Bank and not the nominees of the Contractor Cashiers  so  far service conditions are  concerned,  and  I think  it  will serve no useful purpose to discuss  all  the legal  precedents cited, more especially when the point  has been set at rest by their Lordships of the Supreme Court  in Civil  Appeal  No.  66  of 1952  in  the  matter  of  United Commercial  Bank  Ltd. v. Secretary, U. P.  Bank  EmPloyees’ Union and Others.  I am of the opinion that the dismissal of Shri  Sharma was wrongful and liable to be set  aside.   Now the normal remedy is reinstatement and I have no  hesitation in allowing the same.  He will also be paid his back  salary an  allowance  from  the date of dismissal to  the  date  of reinstatement". Whatever  may  be  the merits of the  answer  given  to  the question propounded by the Tribunal, there is no doubt  that the  question posed had been wrongly framed.  The  discharge or  dismissal  of the appellant had nothing to do  with  the change in the personnel of the Treasurers.  The  appellant’s services  were  dispensed with on the ground  that  the  Una Branch  where he was employed as head cashier being  an  un- economic  unit  had  to be closed  and  that  therefore  the appellant’s  services  were  no  more  required.   The  res- pondent’s case appears to have been that the firm. known  as Messrs R. B. Karam Chand Puri & Bros. have been  contractors for  the Cash Department of the Bank at the head office  and some  of  the other offices in the Punjab and  beyond;  that from time to time agreements were executed between the  Bank and the aforesaid firm; that the last agreement was executed on the 1st May 1954 (Ex. 1); that the appellant according to the  respondent-Bank was the -nominee of the said firm,  and that his services had been dispensed 1431 with  by the said firm whose employee he was and not by  the Bank which had nothing directly to do with the employment of cashiers and other workers in the Cash Department which  was in  charge  of  the  Treasurers  described  as   "Contractor Treasurers".  Hence the main question in controversy between the parties was whether the appellant was an employee of the Bank  or of the said "Contractor Treasurers", whom we  shall call the "Treasurers" for the sake of brevity.  The Tribunal did  not  address  itself  to  the  determination  of   that question.   This Court also did not discuss and  decide  the matter  in  Civil Appeal No. 66 of 1952,  but  assumed  that cashiers  of the Bank were its employees.  If that  question had been decided by this Court, as the Tribunal  erroneously thought this Court had, in Civil Appeal No. 66 of 1952,  the controversy  would have been at an end.  Therefore when  the respondent  preferred an appeal to the  Appellate  Tribunal, the Bank at the forefront of its attack against the award of the  Tribunal  raised the ground that the Tribunal  had  not determined  the  basic  question  which  could  have   given jurisdiction  to the Tribunal to decide the dispute  whether the  head  cashier  was an employee of the  Bank  or  was  a



nominee  of  the "Treasurer" as contended on behalf  of  the Bank.   The Bank relied very strongly before  the  Appellate Tribunal  on  the memorandum of agreement (Ex.  1)  and  the correspondence   that  passed  between  the  Bank  and   the "Treasurers"  on  the  one  hand  and  the  latter  and  the appellant before us on the other (Exs. 2, 3, 4 and 5). The  Appellate Tribunal rightly remarked that  the  Tribunal had  recorded  no  finding on that basic  question  and  had assumed that the respondent before it was an employee of the Bank.   The  Appellate  Tribunal  took  the  view  that  the agreement  (Ex.  1) was decisive of  that  question.   After referring in great detail to the terms of the agreement  the Appellate  Tribunal came to the conclusion that the  cashier was  not an employee of the Bank but of the  Treasurers  and that therefore the Tribunal had no jurisdiction to give  any relief to the complainant before it.  The 183 1432 award by the Tribunal was, in the result, set aside and  the Bank’s appeal allowed. The appellant in this Court through his counsel Shri  Chari, argued  that the Appellate Tribunal had  misinterpreted  the provisions  of the Industrial Disputes Act in coming to  the conclusion   that  the  Tribunal  had  no  jurisdiction   to entertain  the dispute simply on the ground that one of  the parties   to  the  dispute  bad  successfully   denied   the relationship  of employer and employee; that  the  Appellate Tribunal  misconceived its functions by basing its  findings on  the interpretation of the written agreement between  the Bank  and its Treasurers when it should have gone  into  all the relevant facts to determine the substance of the matter; and finally, that the Appellate Tribunal misdirected  itself on  the question of the interpretation of the agreement  for coming  to  the  conclusion that the appellant  was  not  an employee of the Bank but was a nominee of the  "Treasurers". It  was further argued on behalf of the appellant  that  the Tribunal  having  based its decision on its  previous  award dated  the  16th September 1952 in Reference No. 3  of  1951 between  persons  more or less in the same position  as  the appellant and the respondent-Bank, in the background. of the decision  of the previous Tribunals, e.g., the award of  the Conciliation  Board presided over by Mr. Justice Bind  Basni Prasad  of  the  Allahabad  High Court,  the  award  by  the Tribunal  presided over by Mr’ K. C. Sen, and the  award  of the All India Industrial Tribunal ’(Bank Disputes), presided over  by Sri S. Panchapagesa Sastri and the award dated  the 24th  March  1951  in Reference No. 20,  the  award  of  the Tribunal was really final.  The argument was that the  award of  the  Tribunal was based on considerations of  facts  and circumstances disclosed in those earlier awards to which the Bank  and its cashiers and other employees employed  in  the Cash  Department were parties.  It was thus a final  finding of  fact which was not open to appeal before  the  Appellate Tribunal.   It  was therefore contended that  the  Appellate Tribunal bad no jurisdiction to entertain the appeal and  to reverse the award of the Tribunal. 1433 On  behalf of the respondent-Bank it was contended  that  no specific grounds had been taken either before the  Appellate Tribunal  or in the memorandum of appeal to this Court  that the Appellate Tribunal had no jurisdiction on the ground now taken  by the appellant in this Court, nor was  that  ground taken in the statement of case.  On merits it was  contended by  the  respondent’s counsel that the Tribunal is  as  much bound  by the rules of evidence and procedure as  any  other



Tribunal and as the Tribunal had not addressed itself to the question  whether the cashier-appellant was an  employee  of the  Bank,  the  question  was  open  before  the  Appellate Tribunal  which  was competent to pronounce  on  that  basic question.  Finally it was argued that on a true construction of the provisions of the agreement (Ex. 1) this Court should accept  the  finding  of the  Appellate  Tribunal  that  the appellant  was not an employee of the Bank and that on  that account the Tribunal had no jurisdiction to grant any relief to the appellant. On behalf of the respondent the case was practically  rested on  the  construction  of  the  agreement  (Ex.  1).    With reference to the terms of the agreement the learned  counsel for  the  respondent  argued that the  Treasurers  were  not servants  or  employees of the Bank  but  were  "independent contractors"  and that the appellant and other employees  in the Cash Department having been nominees of the "independent contractors" there could not be any relation of employer and employee  between  the  Bank  and  the  appellant.   It   is therefore  necessary to examine in some detail the terms  of the  agreement  aforesaid.  We set  out  below,  underlining important  words,  the terms of the agreement in so  far  as they are relevant for the determination of the true relation between the Bank and the Treasurers.  Though this  agreement is dated the 1st May 1944, cl. (1) provides that it will  be deemed  to have commenced and come into force from the  15th March 1942, the date of the death of R. B. Karam Chand  Puri and will take the place of the previous agreement dated  the 26th  July  1941,  thus maintaining the  continuity  of  the relationship between the 1434 Bank  and the Treasurers’.  The agreement provides that  the Treasurers shall diligently and faithfully serve the Bank at the  Head  Office  and  its  various  offices  mentioned  in schedule A attached to and forming part of the agreement and at  other  offices  where they may  hereafter  be  appointed treasurers   and  shall  in  all  respects  diligently   and faithfully   obey   and  observe  all  lawful   orders   and instructions of the Bank or the person placed by the Bank in authority  over  them in relation to the  due  discharge  of their  duties as Treasurers.  The Treasurers in addition  to the duties, liabilities and responsibilities devolving  upon them by virtue of the provisions of the agreement shall also be  liable  to  perform  such  duties  and  discharge   such responsibilities as by custom usually devolve on  treasurers in  the employ of a bank.  The Treasurers shall be paid  for their  services  a remuneration as mentioned in  schedule  A aforesaid  or  such  remuneration as the  General  Board  of Directors of the Bank may determine from time to time.   Out of the remuneration paid to them by ’the Bank the Treasurers shall  pay salaries to their nominees employed by  them  for performing  the  duties of a cashier in the  Bank  on  their behalf  or  other functionaries of a  similar  nature.   The salaries of such nominees employed by them will be fixed  by the  Treasurers themselves but the same will be  subject  to the   approval  of  the  Bank.   The  remuneration  of   the Treasurers will be the net amount which will be left to them after paying salaries to their nominees employed by them for working  as cashiers, etc.  The Treasurers  themselves  will not  be entitled to any kind of allowances besides  the  net remuneration  as  aforesaid but their  nominees  or  working cashiers   will  be  entitled  to  allowances   which   ,the authorities  of  the Bank may sanction for  members  of  the -staff  from time to time.  The Treasurers shall employ  the number  of  men at each office as mentioned  in  schedule  A



aforesaid.   The Board of Directors shall have the power  to increase  or decrease the number of their nominees  for  any particular  office and the amount of remuneration fixed  for that  office.  The Treasurers shall be responsible  for  the due safety, both within and outside the premises of the Bank at any 1435 office  placed  under their charge, of  all  money,  specie, ornaments,  bullion,  cash,  etc.  and  of  other   valuable documents received by them for and on behalf of the Bank  or from  the Bank and shall be answerable to the Bank  for  all losses  occurring either inadvertently or by or through  the negligence  or misconduct of the Treasurers or any of  their nominees.   The Treasurers shall be entitled to  resign  the services of the Bank by giving three calendar months’ notice to  the Bank.  The Bank shall also be entitled  to  dispense with  the  Treasurers’  services  on  giving  three  months’ notice  In case of gross negligence or misconduct or of  any fraud, misappropriation or embezzlement by the Treasurers or any  of  the nominees in the discharge of ,their  duties  as such  Treasurers, no notice shall be necessary and the  Bank shall  have  the  right  to  dispense  with  their  services forthwith.   The  Bank  shall have the  right  to  take  the Treasurers into the service of the Bank after settlement  of remuneration  with  the Treasurers at any  other  office  or offices  of  the Bank.  The Treasurers  and  their  nominees shall obey all the orders, rules and regulations  prescribed by the Bank with regard to the discharge of their duties  by the cashiers as well as with regard to the amount of balance they are allowed to keep with them.  It shall be the duty of the  cashiers to inform the manager of the Bank as  soon  as the balance in hand exceeds the prescribed limit and to  ask for  orders on the point.  The Treasurers shall  not  engage any person as their assistant or peon about whose character, conduct or reliability the manager of the Board of Directors of  the Bank may have any objection.  The  Treasurers  shall also arrange that no person under employment absents himself from duty without the written permission of the manager  for the  time  being.  If any such employee  is  absent  without leave, or he is turned out on the objection of the Board  or the  Manager,  the  Treasurers  shall  forthwith  appoint  a substitute   in   his  place.   The  Treasurers   shall   be responsible for the acts and defaults of all their nominees. The  Treasurers  and  their nominees shall  be  entitled  to traveling  allowance  according to rates sanctioned  by  the Board 1436 of  Directors  of the Bank.  The Treasurers  have  deposited security of the value of Rs. 15,000/- on which they shall be entitled to receive interest at the rate of 31 per cent. per annum.  As a further security for the due performance of the terms  and conditions of the agreement as a cover  for  loss that  may be caused to the -Bank by any act or  omission  of themselves  or  any one of their  nominees,  the  Treasurers hypothecated  properties as per schedule C attached  to  and forming  part  of  the  agreement.   Schedule  A   aforesaid contains the names of the offices, the monthly  remuneration of  the Treasurers in respect of each one of  those  offices separately,  net savings of the Treasurers after paying  the salaries  of  the total number of  men  including  cashiers, etc., as stated against each one of the offices. Apart  from the terms set out above bearing on the relation between  the Bank  and  the Treasurers, some of which  apply  equally  to their  nominees, the following terms of the  agreement  bear directly  on  the  relation  between  the  nominees  of  the



Treasurers,  like  the  appellant, and the  Bank.   In  this connection   the  agreement  provides  that  the  Board   of Directors  shall have the power to increase or decrease  the number of the Treasurers’ nominees for any particular office and the amount of remuneration fixed for that office.   Such nominees  shall be entitled as servants of the Bank  to  any bonus  which  may  from time to time  be  declared  for  the members of the staff.  The bonus of the Treasurers shall  be limited  to the amount of their own net remuneration and  no further.   They shall not be entitled to any bonus to  which their cashiers are not eligible under the rules of the Bank. The  nominees  of  the  Treasurers  shall  be  entitled   to participate  as  ordinary  members  of  the  staff  in   the provident fund constituted by the Bank.  Such nominees shall also  be entitled to traveling allowance according to  rates sanctioned  by the Board of Directors of the  Bank  whenever they are required to go to out-stations on bank business. From  the  terms of the agreement aforesaid  set  out  above almost  verbatim omitting such clauses and words as are  not relevant to this case, it will appear 1437 that the Treasurers are under the employment of the Bank  on a  monthly  basis for an indefinite term, that  is  to  say, until such time as either party to the agreement  terminated it  in  accordance with the terms quoted  above.   They  are under the complete control and direction of the Bank through its manager or other functionaries.  The Treasurers have  to take  their  orders  from day to day  as  regards  the  cash balance  or  other  cognate matters  relating  to  the  safe custody  of cash, valuable documents, etc. belonging to  the Bank or its constituents.  The Treasurers receive in respect of each office under the incharge a certain name sum out  of which  they  have to pay the salary of a  stated  number  of their  assistants  who may be head cashiers or  cashiers  or assistant  cashiers and other such functionaries.  They  are entitled to receive bonus on the net amount secured to  them as  their remuneration, being the lump sum fixed in  respect of  each office, minus the salary of the assistants.  It  is true that these Treasurers are not and cannot be expected to be  personally present to discharge their onerous duties  at each  one  of the large number of offices  spread  over  the Punjab and outside.  Naturally they had to be authorized  to engage  head cashiers, or assistant cashiers in  respect  of each  of  the offices placed in their charge.  They  had  to guarantee  the fidelity of the persons so employed as  their assistants.   Those  assistants had to be persons  in  whose reliability,  ’honesty and efficiency both the Bank and  the Treasurers had confidence.  The Treasurers have the right to nominate  those assistants but the Bank had the final  words in the choice.  The Bank Manager has -complete control  over such nominees in the matter of leave of absence,  discipline and  conduct in the discharge of their duties as  assistants managing the cash and other valuables in the custody of  the Bank.   From the very nature of things it bad to be  a  dual control in the sense that the Treasurers had to nominate the assistants who are to discharge those responsible  functions in connection with cash and other valuables of the Bank  and the Bank could not abdicate its powers of full control  over the day to day working of 1438 the  Cash  Department.  The nominees of the  Treasurers  are treated  on  the same footing as the other servants  of  the Bank  in  the  matter of  bonus’  travelling  allowance  and provident  fund, etc.  It is true those nominees are  to  be paid by the, Treasurers but it is out of the money  provided



by the Bank. It  is  not always easy to determine  whether  the  relation between  two parties, in the present case of the  Treasurers vis-a-vis  the Bank, is that of servants to a master  or  of independent   contractors  who  have  undertaken  to  do   a particular  job  for  their  employer.   The  question   has generally  arisen  in connection with the  determination  of vicarious  liability of an employer in respect of acts  done by  his  agent  (using  a neutral  word  which  includes  an independent contractor as also a servant).  The  distinction between a servant and an independent contractor has been the subject matter of a large volume of case-law from which  the text-book  writers on torts have attempted to lay down  some general tests.  For example, in Pollock’s Law of Torts,* the distinction has thus been brought out: "A master is one who not only prescribes to the workman  the end of his work, but directs or at any moment may direct the means  also, or, as it has been put, ’retains the  power  of controlling the work’, a servant is a person subject to  the command of his master as to the manner in which he shall  do his  work........  An  independent  contractor  is  one  who undertakes  to  produce a given result but so  that  in  the actual  execution of the work he is not under the  order  or ,control of the person for whom be does it, and may use  his own    discretion   in   things   not   specified    before- hand......................." Clerk & Lindsell on Torts (11th Edn.) at p. 135 have adopted the  description  of  an  independent  contractor  given  by Pollock as quoted above. In the 11th Edn. of Salmond’s Treatise on the Law of  Torts, the  same  distinction  has been clearly  indicated  in  the following passage at p. 98 *Pages 62 & 63 of Pollock on Torts, 15th Edn. 1439 "what  then,  is  the test of  this  distinction  between  a servant  and  an independent contractor?  The  test  is  the existence of a right of control over the agent in respect of the manner in which his work is to be done.  A servant is an agent  who works under the supervision and direction of  his employer; an in- dependent contractor is one who is his  own master.   A  servant  is a person engaged to  obey  his  em- ployer’s orders from time to time; an independent contractor is a person engaged to do certain work, but to exercise  his own  discretion  as to the mode and time of doing  it-he  is bound by his contract, but not by his employer’s orders". Those  learned authors have discussed in great detail  cases illustrative   of   those   distinctions,   indicating   the circumstances in which the general rule has been applied  to individual  cases with such modifications as the  facts  and circumstances  of a particular case required.  We  are  here not  concerned with those nice distinctions which have  been drawn in connection with the rule of vicarious liability  in torts.  We are here concerned only with the question how far the  test laid down by the standard authors as quoted  above can be applied to determine the present controversy  whether the Treasurers of the Bank were its servants as contended on behalf  of  the  appellant  or  independent  contractors  as claimed  on  behalf of the respondent-Bank.   The  agreement between  the  parties, as summarised above, is  a  composite transaction constituting the Treasurers agents of the  Bank, the former agreeing to indemnify the latter against any loss occasioned  to  the  Bank due to the lack  of  fidelity  and efficiency  of  the  ministerial staff  entrusted  with  the charge  of  the  Bank’s cash and  valuable  documents.   The Treasurers  have  been charged with the duty  of  nominating



their  assistants who are to be responsible in their day  to day  work  to the Bank which all the time has  full  control over them in the matter of their leave of absence, as to how they  shall keep the cash and other valuables and as to  how they  shall  be under the general direction  of  the  Bank’s manager or, some 184 1440 other  functionary  who  may be nominated  by  the  Bank  to supervise  the work of the Cash Department.  The Bank  makes itself  answerable  to the employees thus appointed  by  the Treasurers with the concurrence of the Bank for their bonus, provident fund and travelling allowance.  For those purposes these assistants are to be on the same footing as the  other employees of the Bank. It  was contended on behalf of the respondent Bank that  its agreement with the Treasurers shows that the latter bad  the fullest responsibility for the appointment and dismissal and payment  of salary of the employees in charge of  the,  Cash Department  of  the Bank and that therefore  the  Treasurers could  not but be independent contractors.  It  has  already been noticed that the appointment of such assistants as  are entrusted with the work of the Cash Department is not  under the  absolute power of the Treasurers.  The  appointment-has to  be  approved  by  the Bank  and  the  Treasurers  cannot continue  to  employ  those workmen in  whose  fidelity  and efficiency  the Bank has no confidence.  Hence both  in  the matter  of  appointment and dismissal of the  employees  the Bank reserves to itself the power to’ give direction to  the Treasurers.   Similarly  in  the matter of  the  payment  of salary  the  money  comes out of the coffers  of  the  Bank, though  it  may be paid by the hand of the  Treasurers.   In this connection it was contended on behalf of the  appellant that  payment  of  salary  of  the  employees  in  the  Cash Department is made through the Ban].,, itself but we have no tangible evidence in this case beyond the bare assertion  at the  Bar.  But, in our opinion, the situation in respect  of the  appointment,  dismissal and payment of  salary  of  the employees of the Cash Department is analogous to that of the employees of a particular department of Government, in which appointment and dismissal of ministerial staff may rest with an  authority  so empowered by the head of  the  department. Payment  of  salary  may  also be  made  by  the  appointing authority  but  the  money  comes  out  of  the   Government treasury.   In  those  circumstances,  can  it  be   rightly asserted that 1441 those  employees  are not the servants of  Government?   The analogy  may not be perfect, because, in the  present  case, the  appointment and dismissal of the employees of the  Cash Department  is the joint responsibility of the Bank and  its Treasurers.  It has got to be so because the Treasurers  are the  guarantors  of  the  fidelity  and  efficiency  of  the employees and the Bank has to exercise complete control over the  day to day discharge of their functions because  it  is the Bank which is vitally and immediately concerned with the efficient  and  honest  discharge  of  the  duties  of   the assistants in the Cash Department, the efficient running  of which is the most important of a bank’s functions. It  will further be noticed with reference to the  terms  of the agreement set out above that whereas the Treasurers  and their  nominees  have  to take their orders  from  the  Bank Manager  or  other such functionary, there  is  no  specific provision  that those nominees shall discharge their day  to day functions under the direct control of the Treasurers  or



that  they will be subject to the immediate control  of  the Treasurers in the discharge of their daily duties and in the matter of the grant of leave of absence.  There could not be such  a  provision, as a dual control of that  kind  in  the daily  work of the employees would lead to a great  deal  of confusion  and  lack of discipline amongst  the  ministerial staff.   The  employees  of  the  Cash  Department  have  of necessity to be under the direct control of the Bank Manager or  of some other functionary appointed by the Bank.  It  is the  Bank  which has undertaken the  responsibility  in  the matter  of  their  pay  and prospects  in  the  service  and naturally therefore, such employees, even as other employees of  the Bank, have to take their orders from the  Bank.   It must therefore be held that the Treasurers are the  servants of the Bank and that their nominees must equally be so. The Appellate Tribunal held that on a reading-as a whole  of the clauses of the agreement aforesaid the appellant was  an employee  of the Treasurers and not of the Bank, It did  not address itself pointedly 1442 to  the question as to what was the exact  relation  between the  Bank and the Treasurers.  It did not also consider  the question  as to what would be the position of the  employees of  the Cash Department vis-a-Vis the Bank if it  were  held that the Treasurers Id. themselves were the servants of  the Bank and not independent contractors.  Before the  Appellate Tribunal  both  parties appear to  have  concentrated  their attention on the question as to whether the employees of the Cash  Department  were  servants  of  the  Bank  or  of  the Treasurers.  In our opinion, that was not a correct approach to the determination of the controversy between the parties. If the Treasurers’ relation to the Bank was that of servants to a master, simply because the servants were authorized  to appoint  and  dismiss  the ministerial  staff  of  the  Cash Department  would  not  make  the  employees  in  the   Cash Department  independent of the Bank.  In that situation  the ultimate  employer would be the Bank through the  agency  of the  Treasurers.  It was argued on behalf of the  respondent that  even  if  it were held that the  Treasurers  were  the servants  of the Bank and not independent  contractors,  the legal  position  of  the employees of  the  Cash  Department vis-a-vis the Bank would be the same, namely, that they will be  in law the servants of the Treasurers.  In our  opinion, there  is  no  substance in that contention.   If  a  master employs  a servant and authorizes him to employ a number  of persons  to  do  a particular job  and  to  guarantee  their fidelity  and  efficiency  for a  cash  consideration.,  the employees  thus  appointed by the servant would  be  equally with the employer, servants of the master.  It is not always correct  to  say  that persons appointed and  liable  to  be dismissed   by   an  independent  contractor  can   in.   no circumstances  be  the employees of the third  party.   This would  be  clear  from the following  observations  of  Lord Esher, M.R., in the case of Donovan v. Laing, Wharton & Down Construction,Syndicate(1):- "It  is true that the’ defendants selected the man and  paid his  wages,  and these are circumstances which,  if  nothing else intervened, would be strong to show (1)  (1893] 1 Q.B.D. 629 at 632, 1443 that  he was the servant of the defendants.  So, indeed,  he was as to a great many things- but as to the working of  the crane  he  was no longer their servant, but  bound  to  work under  the orders of Jones & Co., and, if they saw  the  man misconducting  himself  in working the crane  or  disobeying



their orders, they would have a  right to discharge him from that employment". Those observations have been approved in the latest decision of the House of Lords in the case of Mersey Docks &  Harbour Board  v. Coggins & Griffith (Liverpool) Ltd.(1). The  House of  Lords  distinguished that ruling on facts  but  did  not depart  from  the  general rule laid  down  in  the  earlier decision that the determinative factor is as to which  party had  control over the workers as to how they would do  their job from day to day.  Lord Macmillan in his speech at p.  14 has observed as follows:- "Many  reported  cases  were cited to  your  Lordships-  but where,, as all agree, the question in each case turns on its own  circumstances,  decisions  in other  cases  are  rather illustrative  than determinative.  So far as  attempts  have been  made to formulate a criterion of general  application, it  cannot  be  said  that these  attempts  have  been  very successful". It would thus appear that the question as to whose  employee a particular person was has to be determined with  reference to  the  facts and circumstances of  each  individual  case. Lord Porter in the course of his speech in the reported case (supra) at p. 17 has observed as follows:- "Many  factors  have  a  bearing  on  the  result.   Who  is paymaster, who can dismiss, how long the alternative service lasts,  what machinery is employed, have all to be  kept  in mind.   The  expressions used in any  individual  case  must always  be considered in regard to the subject matter  under discussion but amongst the many tests suggested I think that the  most  satisfactory, by which to ascertain  who  is  the employer at any particular time is to ask who is entitled to tell the employee the way in which he is to do the work upon which he is engaged". (1)  [1947] A.C. 1, 1444 As  indicated above, in the present case the  direction  and control  of  the appellant and of the ministerial  staff  in charge  of  the  Cash Department of the  Bank  was  entirely vested  in  the Bank through its manager or  other  superior officer.   We have therefore      no hesitation in differing from the conclusion arrived at by the Appellate Tribunal and in  holding that the appellant was an employee of the  Bank. That being so, the Tribunal had the jurisdiction to make the directions  it  did  in  respect  of  the  appellant.    The respondent did not at any stage of the proceedings challenge the  orders of the Tribunal on its merits.  That  conclusion being  reached,  there  is no difficulty  in  upholding  the orders  of the Tribunal in respect of the appellant.  It  is therefore  not necessary to pronounce upon the other  points raised  by the parties.  The appeal is  accordingly  allowed wit costs throughout.                                  Appeal allowed.