Basti Sugar Mills Ltd. Vs. Ram Ujagar
& Ors  INSC 85 (4 April 1963)
04/04/1963 GUPTA, K.C. DAS GUPTA, K.C. DAS
AYYANGAR, N. RAJAGOPALA
CITATION: 1964 AIR 355 1964 SCR (2) 838
F 1972 SC1598 (15) R 1973 SC2297 (9,10)
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).
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
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 (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.
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
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
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
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 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
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
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 interest 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 cannot 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 '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
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-particularly, 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 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.
(1) 1961 (II) L. L. J. 623.