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PETITIONER: SHRI BIRDHICHAND SHARMA

       Vs.

RESPONDENT: FIRST CIVIL JUDGE NAGPUR AND OTHERS.

DATE OF JUDGMENT: 09/12/1960

BENCH: WANCHOO, K.N. BENCH: WANCHOO, K.N. GAJENDRAGADKAR, P.B.

CITATION:  1961 AIR  644            1961 SCR  (3) 161  CITATOR INFO :  R          1962 SC 517  (11,31)  RF         1963 SC1591  (16)  R          1966 SC 370  (9,10,11,13)  RF         1970 SC  66  (10,11)  F          1971 SC 832  (2,6)  R          1974 SC  37  (12,14,16,19)  RF         1974 SC1832  (62,64,65,67)  R          1987 SC 447  (9)  RF         1992 SC 573  (37)

ACT: Industrial  Dispute--Workers  in bidi factory--  Liberty  to come and go when they liked-Payment on Piece-rate-Control by rejection  of work not upto the  standard--If  workmen-Test- Factories Act, 1948 (LXIII of 1948), ss. 2(1) and 79.

HEADNOTE: The  appellant employed workmen in his bidi factory who  had to  work at the factory and were not at liberty to  work  at their houses; their attendance were noted in the factory and they had to work within the factory hours, though they  were not  bound to work for the entire period and could come  and go away when they liked; but if they came after midday  they were not supplied with tobacco and thus not allowed to  work even though the factory closed at 7 p.m.; further they could be  removed from service if absent for 8 days.  Payment  was made  on piece rates according to the amount of  work  done, and  the bidis which did not come upto the  proper  standard could be rejected. The respondent workmen applied for leave for 15 days and did not go to work, for which period the appellants did not  pay their wages; in consequence the concerned workmen applied to the Payment of Wages Authority for payment of wages to them. The appellant’s contention that the respondent workmen  were not his workmen within the meaning of the Factories Act, was rejected  and  the claim for payment of wages  was  allowed. The  question  therefore  was whether  the  appellants  were workmen within the meaning of the Factories Act. Held,  that  the  nature  of extent  of  control  varies  in different  industries  and  cannot by  its  very  nature  be precisely  defined.   When  the operation was  of  a  simple nature  and  could not be supervised all the  time  and  the

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control was at the end of day by the method of rejecting the work done which did not come up to proper standard, then, it was the right to supervise and not so much the mode in which it was exercised which would determine whether a person  was a workman or an independent contractor. The  mere fact that a worker was a piece-rate  worker  would not  necessarily  take him out of the category of  a  worker within the meaning of S. 2(1) Of the Factories Act.  In  the instant case the respondent workmen could not be said to  be independent contractors and were workmen within the  meaning of s. 2(1) of the Factories Act. Held,  further, that the leave provided for under S.  79  of the  Factories Act arose as a matter of right when a  worker had put 21 162 in  a minimum number of working days and he was entitled  to it.  The fact that the workman remained absent for a  longer period had no bearing on his right to leave. State  v.  Shankar  Balaji  Waje,  A.I.R.  1960  Bom.   296, approved. Dharangadhara  Chemical Works Ltd. v. State  of  Saurashtra, [1957]  S.C.R.  152 and Shri Chintaman Rao v. The  State  of Madhya Pradesh, [1958] S.C.R. 1340, referred to.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 370 of 1959. Appeal  by special leave from the judgment and  order  dated August  6, 1957, of the Bombay High Court, Nagpur, in  Misc. Petition No. 512 of 1956. M. N. Phadke and Naunit Lal, for the appellant. Shankar  Anand  and A. G. Ratnaparkhi, for  the  respondents Nos. 2-4. N.P.  Nathvahi,  K. L. Hathi and R. H.  Dhebar,  for  the Intervener (State of Bombay). 1960.   December 9. The Judgment of the Court was  delivered by WANCHOO,  J.-This  is  an  appeal by  special  leave  in  an industrial  matter.  The appellant is the manager of a  biri factory  in Nagpur.  Respondents 2 to 4 are working in  that factory.   They  applied  for leave for  fifteen  days  from December  18,  1955, to January 1, 1956, and did not  go  to work  during that period.  The appellant did not  pay  their wages for these days and in consequence they applied to  the Payment   of   Wages  Authority  (hereinafter   called   the Authority)  for  payment  to them of wages  which  had  been withheld.   Their  claim  was that  they  were  entitled  to fifteen  days’ leave in the year under ss. 79 and 80 of  the Factories  Act, 1948.  The Authority allowed the  claim  and granted them a sum of Rs. 90/16/- in all as wages which  had been  withheld  for  the period of  leave.   Thereupon,  the appellant  filed  an  application  under  Art.  226  of  the Constitution  before  the High Court at  Nagpur.   His  main contention  was  that respondents 2 to 4  were  not  workers within  the  meaning  of the Factories  Act  and  could  not therefore claim the benefit 163 of  a. 79 thereof The respondents contended that  they  were workers  within  the meaning of the Factories Act  and  were entitled  to the sum awarded to them by the Authority.   The High  Court on a consideration of the circumstances came  to the conclusion that respondents Fir2 to 4 were workers under s. 2(1) of the Factories Act and therefore the order of  the

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Authority  was  correct  and dismissed  the  petition.   The appellant  then applied for a certificate to appeal to  this Court  which  was refused.  He then obtained  special  leave from  this  Court  and that is how the matter  has  come  up before US. Sec.  2(1)  defines  a worker to  mean  a  person  employed, directly or through any agency, whether for wages or not, in any  manufacturing process, or in cleaning any part  of  the machinery or premises used for a manufacturing process or in any other kind of work incidental to, or connected with, the manufacturing  process, or the subject of the  manufacturing process.   The  main  contention of the  appellant  is  that respondents  2 to 4 are not employed in the  factory  within the  meaning  of  that word in s. 2(1).   Reliance  in  this connection is placed on two decisions of this Court, namely, Dharangadhara Chemical Works Ltd. v. State of Saurashtra (1) and Shri Chintaman Rao v. The State of Madhya Pradesh (2). In  Dharangadhara Chemical Works (1), this Court  held  with reference to s. 2 (s) of the Industrial Disputes Act,  which defined  "workman"  that the word  "employed"  used  therein implied a relationship of master and servant or employer and employee  and  it was not enough that a  person  was  merely working  in  the premises belonging to  another  person.   A distinCtion  was  also  drawn  between  a  workman  and   an independent  contractor.  The prima facie test  whether  the relationship of master and servant or employer and  employee existed  was laid down as the existence of the right in  the employer  not merely to direct what work was to be done  but also  to control the manner in which it was to be done,  the nature  or  extent  of such  control  varying  in  different industries and being (1) [1957] S.C.R. 152. (2) [1958] S.C.R. 1340. 164 by  its  nature incapable of being precisely  defined.   The correct  approach therefore to the question was held  to  be whether  having regard to the nature of the work, there  was due control and supervision of the employer.  The matter came up again for consideration in     Chintaman Rao’s  case  (1)  which  also happened  to  relate  to  biri workers,  and  s.  2(1)  of the  Factories  Act  had  to  be considered  in it.  It was held that the test laid  down  in Dharangadhara Chemical Works (2) with respect to s. 2(s)  of the  Industrial Disputes Act would also apply to s. 2(1)  of the  Factories  Act.  Finally, it was pointed out  that  the question  whether a particular person working in  a  factory was an independent contractor or a worker would depend  upon the  terms of the contract entered into between him and  the employer  and  no general proposition could  be  laid  down, which would apply to all cases.  Thus in order to arrive  at the  conclusion whether a person working in a factory  (like respondents  2  to  4  in  this  case)  is  an   independent contractor  or  a worker the matter would  depend  upon  the facts of each case. Let us then turn-to the facts which have been found in  this case.   It has been found that the respondents work  at  the factory  and  are  not at liberty to work  at  their  homes. Further they work within certain hours which are the factory hours, though it appears that they are not bound to work for the entire period and can go away whenever they like;  their attendance is noted in the factory; and they can come and go away  at any time they like, but if any worker  comes  after midday  he  is  not supplied with tobacco and  is  thus  not allowed to work, even though the factory closes at 7 p.m. in accordance with the provisions of the Factories Act and when

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it  is said that they can return at any time, it is  subject to  the condition that they cannot remain later than 7  p.m. There  are standing orders in the factory and  according  to those standing orders a worker who remains absent for  eight days (presumably without leave) can be removed.  The payment is made on piece-rates according to the amount of work  done but the management has the (1) [1958] S.C.R. 1340. (2) [1957] S.C.R. 152. 165 right  to reject such biris as do not come up to the  proper standard.   It is on these facts that we have to decide  the question  whether  respondents 2 to 4 were employed  by  the appellant. It  will be immediately noticed that the facts in this  case are substantially different from the facts in Shri Chintaman Rao’s  case  (1).   In that case the  factory  entered  into contracts   with   independent  contractors,   namely,   the Sattedars,  for  the supply of biris.   The  Sattedars  were supplied  tobacco  by the factories and in some  cases  biri leaves  also.  The Sattedars were not bound to work  in  the factory nor were they bound to prepare the biris  themselves but  could get them prepared by others.  The Sattedars  also employed  some coolies to work for them and payment  to  the coolies  was made by the Sattedars and not by  the  factory. The Sattedars in their turn collected the biris prepared  by the  coolies  and took them to the factory where  they  were sorted and checked by the workers of the factory and such of them as were rejected were taken back by the Sattedars to be remade.  The payment by the factory was to the Sattedars and not to the coolies.  In these circumstances it was held that the  Sattedars were independent contractors and the  coolies who worked for them were not the workers of the factory. The  facts  of  the present case,  however,  are  different. Respondents  2 to 4 have to work at the factory and that  in itself  implies  a  certain amount  of  supervision  by  the management.   Their attendance is noted and they cannot  get the  Work  done by others but must do it  themselves.   Even though  they  are not bound to work for  the  entire  period during  which the factory is open it is not in dispute  that if they come after midday, they are not given any work  and thus  lose wages for that day, the payment being  at  piece- rates.  Further though they can stay away without asking for leave,  the management has the right to remove them if  they so stay away for a continuous period of eight days.  Lastly, there  is  some  amount  of  supervision  inasmuch  as   the management has the right of rejection of the biris  prepared if they do not come up to the proper standard. (1)  (1958) S.C.R. 1340. 166 The  question  therefore  that arises is  whether  in  these circumstances  it can be said whether the  appellant  merely directs  what  work  is to be done but  cannot  control  the manner in which it has to be done; of course, the nature  or extent of control varies in different industries and  cannot by its very nature be precisely defined.  Taking the  nature of  the work in the present case it can hardly be said  that there must be supervision all the 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

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which  it  is  exercised  which  is  important.   In   these circumstances, we are of opinion that respondents 2 to 4 who work  in this factory cannot be said to be independent  con- tractors.  The limited freedom which respondents 2 to 4 have of coming and going away whenever they like or of  absenting themselves  (presumably  without leave) is due to  the  fact that  they are piece-rate workers; but the mere fact that  a worker is a piece-rate worker would not necessarily take him out  of  the category of a worker within the meaning  of  s. 2(1)   of  the  Factories  Act.   Considering   the   entire circumstances and particularly the facts that if the  worker does  not  reach the factory before midday he  is  given  no work,  he  is to work at the factory and cannot  work  else- where,  he  can be removed if lie is absent for  eight  days continuously  and finally his attendance is noted and  biris prepared by him are liable to rejection if they do not  come up to the standard, there can be no doubt that respondents 2 to  4  are  workers within the meaning of  s.  2(1)  of  the Factories  Act.  This is also the view taken by  the  Bombay High  Court in State v. Shankar Balaji Waje (1)  in  similar circumstances and that we think is the right view. Then it was urged that even if the respondents are (1)  A.I.R. 1960 Bom. 296. 167 workers  under s. 2(1), s. 79 should not be applied to  them as  they can absent themselves whenever they like.  In  this very  case it is said that the respondents  remained  absent for  a  longer  period than that provided  in  the  Act  and therefore they do not need any leave.  This argument has  in our opinion no force.  The leave provided under s. 79 arises as  a  matter of right when a worker has put  in  a  minimum number  of working days and he is entitled to it.  The  fact that  the  respondents remained absent for a  longer  period than that provided in s, 79 has no bearing on their right to leave,  for if they so remained absent for such period  they lost  the  wages  for  that period  which  they  would  have otherwise  earned.   That however does not  mean  that  they should  also lose the leave earned by them under s. 79.   In the  circumstances  they were entitled under s.  79  of  the Factories  Act to proportionate leave during the  subsequent calendar  year  if  they  had  worked  during  the  previous calendar year for 240 days or more in the factory.  There is nothing on the record to show that this was not so.  In  the circumstances the appeal fails and is hereby dismissed  with costs.  One set of hearing costs. Appeal dismissed.