Shri Chintaman Rao & ANR Vs. The
State of Madhya Pradesh  INSC 10 (18 February 1958)
SINHA, BHUVNESHWAR P.
IMAM, SYED JAFFER
CITATION: 1958 AIR 388 1958 SCR 1340
Worker-Test for determining-Sattedars contracting
to supply bidis to bidi factory and coolies of such Sattedars-If workers in the
factory-Factories Act (LXIII of 1948), SS. 2(1), 62, 63 and 92.
The appellant was the manager of a bidi
factory which had contracts with certain independent contractors, known as
Sattedars, for the supply of bidis. The Sattedars undertook to supply the bidis
by manufacturing them in their own factories or by entrusting the work to third
parties, a' a price to. be paid by the management after delivery and approval.
The Inspector of Factories found working in the appellant's factory certain
Sattedars and their coolies who had come to deliver bides manufactured by them.
The appellant was prosecuted and convicted under s. 92, Factories Act for
violation of the provisions of ss. 62 and 63 for failure to maintain the
register of adult workers and for allowing the workers to work in the factory
without making beforehand the entries of their attendance in the register :
Held, that the Sattedars and their coolies were
not workers within the definition in S. 2(1) of the Act and, therefore, the non
inclusion of their names in the register or the absence of entries in regard to
them therein did not constitute an offence under s. 92 of the Act. To determine
whether a person employed is a worker the test is whether or not the employer
had control and supervision over the manner in which the work was to be done.
The Sattedars were not under the control of the factory management and could
manufacture the bidis wherever they pleased. The coolies were neither employed
by the management directly nor were they employed by the management through the
Dharangadhara Chemical Works Ltd. v. State of
Saurashtra,  S.C.R. 152, applied.
CRIMINAL APPELLATE JURISDICTION : Criminal
Appeal No. 93 of 1955.
Appeal by special leave from the judgment and
order dated September 16 1954, of the former Nagpur High Court in Criminal
Revision No. 295 of 1954, arising out of the judgment and order dated March 8,
1954, of the Second Additional Sessions Judge at Sagar in Criminal Appeal No.
368 of 1953, against the order dated August
5, 1953, of the Judge Magistrate, Sagar, in Criminal Case No, 146 of 1953.
1341 N. C. Chatterjee and Rameshwar Nath, for
I. N. Shroff, for the respondent.
1958. February 18. The following Judgment of
the Court was delivered by SUBBA RAO J.-This appeal by Special Leave is
directed against the Order of the High Court of Judicature at Nagpur and raises
the question of construction of some of the provisions of the Factories Act
(LXIII of 1948) (hereinafter referred to as the Act). Before posing the
questions raised it would be convenient and useful at the outset to state the
facts either found by the High Court or admitted by the parties.
Messrs. Brijlal Manilal and Company is a bidi
factory situated in Sagar. The 1st Appellant, Chintamanrao, is the
Managing-Partner of the firm while the 2nd appellant, Kantilal, is its active
Manager. The Company manufactures bidis. The process of manufacture, so far as
is relevant to the question raised, is carried out in two stages.
The first stage: The management enters into a
contract with independent contractors, known as Sattedars, for the supply of
bidis locally. The documents embodying the terms of the contract entered into
by the Sattedars were not produced in the case. But the terms of the contract
are not in dispute.
The Management supplies tobacco to the
Sattedars and in some cases bidi leaves. Some of the Sattedars maintain a small
factory where they get bidis manufactured by engaging coolies. Others give
tobacco and bidi leaves to outsiders who prepare bidis in their houses. After
bidis are rolled in the Sattedars collect the bidis so manufactured and take
them to the factory directly or through coolies where they are sorted and
checked by the workers in, the factory. The selected or approved bidis are
separately packed in bundles of 10 and 25 and taken by the Sattedars or the
coolies in gauze trays to tandul and left there. The rejected bidis, commonly
known as I chhant' are again rebundled by the Sattedars and delivered to the
1342 The management pays the Sattedars the
cost of the manufacture of bidis after deducting therefrom the cost of tobacco
supplied to them. Thereafter the second stage of the process of the manufacture
begins in the factory. It is carried out exclusively by the labourers employed
in the factory. It consists of warming of bidis to give taste, wrapping them in
tissue papers, labelling and finally bundling them in the 'Pudas'. The finished
product is then marketed. From the aforesaid description of the dual process of
manufacture of bidis it is manifest that a Sattedar is only an independent
contractor, who undertakes to do a specific job of work, i. e., the supply of
bidis, directly or indirectly through his coolies, by manufacturing them either
in his own factory or by entrusting the work to third parties, at a price to be
paid by the management after delivery and approval. He (Sattedar) or his
coolies neither work in the appellants' factory nor are they subject to the
supervision or control of the appellants. The coolies or the third parties, to
whom the work of making of bidis is entrusted by the Sattedars, are employed by
the Sattedars and are paid by them. None of them works in the factory though
they bring bidis to the factory for delivery in accordance with the terms of
the contract. It may also be pointed out that the factory employs workers who
are under the direct control and supervision of the factory management and who
attend to the second part of the process of manufacture described above. On
December 9, 1952, Sri B. V.
Desai, the Inspector of Factories, Madhya
Pradesh, Nagpur, visited the factory at 5-30 p. m. At the time of his
inspection he found the following persons in the factory 1. Pirbaksha, son of
2. Abdul Sagir, son of Sk. Alam.
3. Deviprasad, son of Uddam.
4. Ramshankar, son of Mulchand.
5. Gopal, son of Mulchand.
6. Nirpat, son of Bhagirath.
7. Rameband, son of Gyan.
8. Gotiram, son of Lila.
9. Basodi, son of Gulu, 1343 Of the aforesaid
persons, Deviprasad, Nirpat and Gotiram are Sattedars and the rest are coolies
employed by the Sattedars. The Inspector found the first seven persons sorting
out bidis and packing them into bundles of 10 and 25 in the premises and the
last two bringing the bidis to the room in jali for warming. The said facts are
practically admitted by some of the aforesaid persons, who gave evidence in the
case, and they explained that they came to the factory on that day for
delivering the bidis manufactured by them to the factory.
Thereafter the Chief Inspector of Factories
filed a complaint in the Court of the Judge-Magistrate, Sagar, against the
appellants for violation of the provisions of ss. 62 and 63 of the Act, under
the former for failure to maintain the register of adult workers with all the
prescribed entries duly filled in and under the latter for allowing the workers
to work in the factory without making beforehand the entries of their
attendance in the register of adult workers. The Judge-Magistrate, Sagar, held
that the appellants contravened the provisions of the aforesaid sections and on
that finding convicted them under s. 92 of the Act and directed them to pay a
fine of Rs. 50 and Rs. 25 respectively. On appeal the Second Additional
Sessions Judge, Sagar, confirmed the conviction of the 2nd appellant for
contravening the provisions of ss. 62 and 63 but set aside that of the 1st
appellant in regard to s. 62 but confirmed the conviction for contravening s. 63
of the Act.
The Revision Petition filed by the appellants
in the High Court of Judicature at Nagpur was dismissed. As aforesaid with
Special Leave of this Court, this appeal was filed against the Order of the
The conflicting contentions of the parties
may briefly be stated. The learned counsel for the appellants contends that a
Sattedar is an independent contractor, who undertakes to do a specific job of
work for other persons without submitting himself to their control, and that he
or his employee is not a worker within the definition of s. 2 (1) of the 'Act
and therefore the appellants are not under duty to 1344 comply with the
conditions of ss. 62 or 63 in respect of them. Whereas the learned Counsel for
the State argues that the definition of the word 'worker' is comprehensive
enough to take in all persons who work in the factory, whether employed by the
factory or not.
The answer to the question raised turns upon
the construction of the relevant provisions of the Act. They read:
Section 62. Register of adult workers The
manager of every factory shall maintain a register of adult workers, to be
available to the Inspector at all times during working hours, or when any work
is being carried on in the factory, showing- (a) the name of each adult worker
in the factory;
(b) the nature of his work;
(e) the group, if any, in which he is
included (d) where his group works on shifts, the relay to which he is
(e) such other particulars as may be
Provided that, if the Inspector is of opinion
that any muster roll or register maintained as part of the routine of a factory
gives in respect of any or all the workers in the factory the particulars
required under this section, he may, by order in writing, direct that such
muster roll or register shall to the corresponding extent be maintained in
place of, and be treated as, the register of adult workers in that factory.
Section 63. Hours of work to correspond with
notice under Section 61 and register under Section 62.- No adult worker shall
be required or allowed to work in any factory otherwise than in accordance with
the notice of periods of work for adults displayed, in the factory and the
entries made before-hand against his name in the register of adult workers of
Section 92. General penalty for offences.
Save as is otherwise expressly provided in
this Act and subject to the provisions of section 93, if in, or in respect of,
any factory there is any contravention of any of the provisions of this Act or
of any 1345 rule made there under or of any order in writing given there under,
the occupier and manager of the factory shall each be guilty of an offence and
punishable with imprisonment for a term which may extend to three months or
with fine which may extend to five hundred rupees or with both, and if the
contravention is continued after conviction, with a further fine which may
extend to seventy- five rupees for each day on which the contravention is so
Section 2(1) worker' means a person employed,
directly or through any agency, whether for wages or not, in any manufacturing
process, or in cleaning any part of the machinery or premises used for
manufacturing process, or in any other kind of work incidental to, or connected
with, the manufacturing process, or the subject of the manufacturing process.
Section 2(m) "factory" means any
premises including the precincts thereof- (i) Whereon ten or more workers are
working, or were working on any day of the preceding twelve months, and in any
part of which a manufacturing process is being carried on with the aid of
power, or is ordinarily so carried on, or (ii) Whereon twenty or more workers
are working, or were working on any day of the preceding twelve months, and in
any part of which a manufacturing process is being carried on without the aid
of power, or is ordinarily so carried on.............. .................. .
Section 2(n) "occupier " of a
factory means the person who has ultimate control over the affairs of the
The gist of the aforesaid provisions relevant
to the question raised may be stated thus: The Manager of a factory-factory is
defined under the Act as the premises wherein a specified number of workers are
working and in any part of which a manufacturing process is carried on, with or
without the aid of power-shall maintain a register of adult workers working in
that factory, showing the necessary particulars mentioned in s. 62 of the Act.
No adult worker shall be required or allowed to work in any such 1346 factory
otherwise than in accordance with the notice of periods of work for adults
displayed in the factory and the entries made beforehand against his name in
the register of adult workers of the factory. If there is any contravention of
the said provisions, the occupier, who is defined as a person who has ultimate
control over the affairs of the factory, and the manager are guilty of offences
punishable under the Act.
Admittedly the names of the 9 persons, stated
supra, were not entered in the register of adult workers maintained by the
factory. Neither any notice of the periods of work allotted to them was
displayed in the factory nor any entries made beforehand against their names in
the register of adult workers of the factory. The appellants, therefore, would
have certainly contravened the provisions of the Act, if, in fact, the said
persons were workers in the factory as defined Under the Act.
This takes us to the consideration of the
definition of the term ' worker' under the Act. 'Worker' is defined to mean a
person employed, directly or through any agency, whether for wages or not, in
any manufacturing process. It is and it cannot be disputed that the making of
bidis is a manufacturing process. But is a Sattedar a person 'employed ',
directly or through agency, within the meaning of the definition "
employed". The concept of employment involves 'three ingredients: (1)
employer (2) employee and (3) the contract of employment. The employer is one
who employs, i.e., one who engages the services of other persons. The employee
is one who works for another for hire. The employment is the contract of
service between the employer and the employee hereunder the employee agrees to
serve the employer subject to his control and supervision. Can it be said that
a Sattedar is employed by the management of the factory to serve under it ?
There is a well understood distinction between a contractor and a workman and
between contract for service and contract of service. In Stroud's Judicial Dictionary
(Third Edition, Volume 1, Page 616) the distinction 1347 between a contractor
and a workman is brought out in bold relief in the following manner:
" Of course, every person who makes an
agreement with another for the doing of work is a contractor, in a general
sense; but as used in Workmen's Compensation Act, 1897 (60 & 61 Vict., c.
37), s. 4 "contractor" and "WORKMAN" "have come to
have a more restricted and distinctive meaning," and "contractor
" means 'one who makes an agreement to carry out certain work specified,
but not on a contract of service'." The same idea is repeated in a
different terminology thus..
" A 'contractor' is a person who, in the
pursuit of an independent business, undertakes to do specific jobs of work for
other persons, without submitting himself to their control in respect to the
details of the work ".
There is, therefore, a clear-cut distinction
between a contractor and a workman. The identifying mark of the latter is that
he should be under the control and supervision of the employer in respect of
the details of the work. This Court in Dharangadhara Chemical Works Ltd. v. State
of Saurashtra (1) in the context of the definition of " workman "
under the Industrial Disputes Act (XIV of 1947) made the following observations
at page 157:
" The essential condition of a person
being a workman within the terms of this definition is that he should be
employed to do the work in that industry, that there should be, in other words,
an employment of his by the employer and that there should be the relationship
between the employer and him as between employer and employee or master and
Unless a person is thus employed there can be
no question of his being a workman within the definition of the term as
contained in the Act." Elaborating the point further, Bhagwati J. who (I)
 S.C.R. 152.
171 1348 delivered the judgment on behalf of
the Court proceeded to state:
"The test which is uniformly applied in
order to determine the relationship is the existence of a right of control in
respect of the manner in which the work is to be done." After considering
the Case-law on the subject the learned Judge restated the principle at page
" The principle which emerges from these
authorities is that the prima facie test for the determination of the
relationship between master and servant is the existence of the right in the
master to supervise and control the work done by the servant not only in the
matter of directing what work the servant is to do but also the manner in which
he shall do his work, or to borrow the words of Lord Uthwatt at page 23 in
Mersey Docks and Harbour Board v. Coggins & Griffith (Liverpool ) Ltd., and
another ( 1 A. C. 1, 23), "The proper test is whether or not the
hirer had authority to control the manner of execution of the act in
question." After noticing the subsequent trend of decisions wherein it is
observed that the test of control is not one of universal application, the
learned Judge expresses his view thus:
" The correct method of approach,
therefore, would be to consider whether having regard to the nature of the work
there was due control and supervision by the
employer............................. " There is no reason why the test
laid down by this Court in the context of the definition of 'workman' under the
Industrial Disputes Act of 1947, cannot be invoked or applied for ascertaining
whether a person is a 'worker' under the Act. If the test be applied, it is not
possible to hold that Sattedars in the present case, having regard to the
nature of the work under. taken by them and the terms whereunder their services
were engaged, are " workers " within the meaning of the definition
under the Act. It has been established in the present case that the Sattedar is
only an independent contractor and the agreement 1349 between the management
and the Sattedar is only that the Sattedar should receive tobacco from the
management and supply them rolled in bidis for consideration. He is not under
the control of the factory management and he can manufacture bidis wherever he
pleases. It is immaterial to the management whether he makes the bidis in his
own factory or distributes tobacco to different individuals for making bidis
under a separate agreement entered into by him with them. The management cannot
regulate the manner of discharge of his work. His liability is discharged by
his supplying bidis and delivering them in the Factory. The terms of the
contract between the management and the Sattedar, as disclosed in the evidence,
do not enjoin on the latter to work in the factory. His only obligation is to
deliver bidis at the factory. That would be an obligation imposed on any
contractor who undertakes to supply and deliver the goods to the other party.
We, therefore, hold that the Sattedars in this case were not employed by the
management as workers but were only independent contractors who performed their
part of the contract by making bidis and delivering them at the factory.
If the Sattedars, i. e., three out of the
nine persons found at the factory, were not workers within the meaning of the
Act, can it be said that the other persons, who were coolies employed by the
Sattedars to enable them to keep up their contract with the management of the
factory, were workers as defined under the Act? A "worker" under the
definition means a person employed, directly or through any agency.
The words I directly or through any agency
indicate that the employment is by the management directly or through some kind
of employment agency and in either case there is a contract of employment
between the management and the per.
sons employed. Admittedly the coolies were
not employed by the management; there was DO privity of contract between them
and the management. It is not disputed that the coolies were not employed by
the Sattedars for or on behalf of the management of the factory. They were
employed by the Sattedars on 1350 their own account and they paid them for the
work extracted from them. On the aforesaid facts it is obvious that the coolies
were not employed by the management directly nor were they employed by the
management through the agency of Sattedars. If so, it follows that coolies
employed by the Sattedars are not workers within the meaning of the definition
in the Act.
The evidence discloses a third category of
persons who took some part in the manufacturing process of bidis. They were the
persons to whom the Sattedars distributed tobacco for making bidis in their
respective homes. It does not appear from the evidence that any one of the nine
persons found in the factory belongs to that category. That apart those persons
cannot, in any sense of the term, be called the persons employed by the
management directly or through any agency.
That that should be the construction of the
provisions of s. 2 (1) of the Act is reinforced by other relevant provisions of
the Act. Chapter 6 is headed " Working hours of Adults".
Section 51 prescribes the weekly hours of
work for a worker.
Section 52 provides that no adult worker
shall be required or allowed to work in a factory on the first day of the week
and if he is made to work on that day for the substitution of another holiday
in its place. Section 53 gives compensatory holiday to a worker who is made to
work on a regular holiday. Section 54 fixes the daily hours of work and s. 55
intervals for rest. Section 56 limits the spread over of period of work for an
adult worker to 10 1/2 hours in a day, including the intervals for rest.
Sections 57, 58, and 59 deal with night shifts prohibition of overlaping shifts
and extra wages for overtime. Section 60 prohibits double employment, i. e.,
employment of the same worker in a factory on any day on which he has already
been working in any other factory. Section 61 enjoins on the management of the
factory to display and maintain the notice of periods of work for adults,
showing clearly for every day the periods during which the adult workers may be
required to work and directs 1351 that the said notice shall be such that the
workers working for those periods would not be working in contravention of any
of the provisions of ss. 51,52, 54, 55, 56 and 58 of the Act. Section 62, for
breach of which provisions the prosecution was launched in the present case,
imposes a duty on the manager of every factory to maintain a register of adult
workers, showing the name of each adult worker in the factory, the nature of
his work, the group, if any, in which he is included, where his group works on
shifts, the relay to which he is allotted and such other particulars as may be
prescribed. Section 63 directs that the hours of work of an adult worker should
correspond with the particulars given in the notice under s. 61 and the
register under s. 62.
Section 92 constitutes the contravention of
any of the provisions of the Act or any rules made there under an offence
punishable with imprisonment or fine or with both.
The scheme of the aforesaid provisions
indicates that the workmen in +,he factory are under the direct supervision and
control of the management. The conditions of service are statutorily regulated
and the management is to conform to the rules laid down at the risk of being
penalised for dereliction of any of the statutory duties. The management
obviously cannot fix the working hours, weekly holidays, arrange for night
shifts and comply with other statutory requirements, if the persons like the
Sattedars, working in their factories and getting their work done by others or
through coolies, are workers within the meaning of the Act.
It is Well nigh impossible for the management
of the factory to regulate their work or to comply with the mandatory
-provisions of the Act. The said provisions, therefore, give a clear indication
that a worker under the definition of the Act is a person who enters into a
contract of service under the management and does not include an independent
contractor or his coolies or servants who are not under the control and
supervision of the employer.
There is a conflict of decisions between the
Allahabad and the Nagpur High Courts on the construction of s. 2 (1) of the
Act. A Divisional Bench of the 1352 Nagpur High Court in Provincial Government,
Central Provinces and Berar v.Robinson (1) considered the scope of the
definition of the word " worker " in the Factories Act.
There the facts were: On November 10, 1943, a
new battery of boilers was being erected on the premises of the Jubbulpore
Electric Supply Co. in order to supply energy to the New Ordnance Factory at
Khamaria. The work of erection was entrusted to Messrs. Babcock and Wilcox of
Calcutta. The persons who were employed by Messrs. Babcock and Wilcox were
found working in the premises of the Electric Supply Co. in contravention of
the provisions of the Factories Act.
The question was whether the employees of an
independent contractor were workers as defined under s. 2 (1) of the Act.
Pollock J. who delivered the judgment of the Division Bench stated at page 44
" The definition of " worker "
is a very wide one, and it is wide enough, in our opinion, to include per. sons
employed in repairing machinery or putting up new machinery, even if such a
machinery is not in actual use at the time. " It may be noticed that no
contention was raised in that case that the persons found in the factory were
not the employees of Jubbulpore Electric Supply Co. The only question raised
and decided was whether the persons employed in repairing the machinery or
putting up new machinery were persons engaged in any manufacturing process or
any work incidental to or connected with it. The question now raised was not
before the learned Judge and therefore there was no occasion for them to
express any opinion thereon. The fact that if this question was raised and
decided in the way we did, the conclusion of the learned Judges would have been
different cannot make the said decision an authority on a point not raised or
decided upon by the learned Judges.
Another Bench of the Nagpur High Court in The
Jiwabhai (2) gave a wide connotation to the
word" employed" under s. 66(1)(b) of the Factories (1) I.L.R. 
(2) I.L.R.  Nagpur 67.
1353 Act. The learned Judges observed that
the word " employed ", in their opinion, did not only connote
employed on wages but also being occupied or engaged in some form of activity.
If the learned Judges meant by that observation
that if a person is found, engaged in some form of activity in a factory,
irrespective of whether there was any contract of employment or not between him
and the employer, he is a worker, we should express our respectful dissent from
the said observation. But, on the other hand, if they had only emphasized on
the fact, which is obvious from the provisions of s. 2(1), that the employment
need not be for wages, the statement is unobjectionable.
The decision in State v. Shri Krishna Prasad
Dar need not be considered in detail as the learned Judges therein accepted the
same interpretation that we have placed on the provisions of s. 2(1) of the Act
and came to the conclusion, on the facts of that case, that the persons therein
were workers of the factory.
We, therefore, hold that neither the
Sattedars nor the coolies found by the Inspector to be working in the factory
were workers, as they were not employed by the factory.
As they were not workers, the non-inclusion
of their names in the register of adult workers or the absence of any entries
in regard to them in the said register would not constitute an offence under s.
92 of the Act.
Before leaving this case we would like to
make one observation. Our decision is not intended to lay down a general proposition
that under no circumstances a Sattedar can be considered to be a worker within
the meaning of its definition in the Act. Whether a particular person, under
whatever designation he may be known, is a worker or not under the Act depends
upon the terms of the contract entered into between him and the employer. In
the case before us no attempt has been made by the prosecution to establish
that the Sattedars were employed by the (1) A.I.R.  Allahabad 44.
1354 management for doing work in the factory.
The un- contradicted evidence is that they were independent contractors who
came to the factory to deliver the bidis or sent their coolies to do the same.
Our decision is, therefore, confined to the facts of this case.
In the result we allow the appeal and set
aside the convictions of the appellants under B. 92 of the Act and the
sentences imposed upon them. The fines if paid, will be refunded.