of Nilgiri Coop. Mkt. Society Ltd. Vs. State of Tamil Nadu & Ors  Insc 78 (5 February 2004)
Sabharwal & S.B. Sinha. S.B. Sinha, J :
is a hill district in the State of Tamil Nadu. Mettupalayam is a small town situate in Nilgiris.
villagers of the surrounding villages for their livelihood depend on growing of
vegetables and tea. With a view to see that the small vegetable growers are not
exploited by the vegetable merchants, a society known as 'Nilgiris Cooperative
Marketing Society Limited' (Society for short) was formed as far back as in
1935 with only 116 members.
Society, however, grew in course of time and at present it has about 22000
members. The memberships of the Society are of two categories. In the first
category only the vegetable or food growers, agricultural cooperative credit
societies and agricultural improvement societies are A-class members having
voting rights; whereas traders, commission agents and merchants dealing in the
commodities grown by the agriculturists are classified as B-class members. They
have no right to vote or participate in the management of the Society. The
B-class members only, however, are entitled to take part in auctions held in
the marketing yards of the Society. Any dispute between the seller member and
the purchaser member is resolved through arbitration in terms of the provisions
of the Tamil Nadu Cooperative Societies Act, 1961.
land holdings of the members of the society varies from 1/4th acre to five
acres averaging two acres per member. They mainly depend on the rainfall as
irrigational facilities are not available. The small farmers are economically
weak and have no holding power. Many of them have to take loans for their
subsistence, when the weather is not good. Many of them are illiterate. The
vegetables produced from their lands being subjected to the vagaries of the
weather, the merchants with a view to pressurize them either used to force them
to sell that at a very low price or would make them wait for days so that the
vegetables become useless. The majority of the members belong to 'Badaga'
community which had been declared to be a backward class by the Government of
Tamil Nadu. Mettupalayam is a centre for potatoes and vegetables trade.
has two big marketing yards at Mettupalayam. In the said yards, auction of
vegetables takes place. Infrastructure therefor such as offices, godowns yards,
weighing machines etc. are provided by the Society. There are two separate
yards with pucca godowns, one for potatoes and another for vegetables. The
primary members of the Society bring their agricultural produce to the yards by
hired lorries or trucks. They remain present till the agricultural produce
brought by them is auction- sold and they receive the sale price. The number of
primary members visiting the marketing yards of the Society, depending upon the
season varies from 100 to 200 members per day. The number of merchants coming
to purchase these commodities also varies from 30 to 100. The Society provides
for accommodation to the members on a nominal rent.
also provides dormitory type of accommodation free of charge. The months of
July to October of year are said to be a peak season. Whereas during the peak
season about 100 lorries arrive everyday; during the 'off season' average
number of lorries arriving at the yard would be around 10.
the purpose of bringing potatoes gunny bags are supplied by the Society free of
following main jobs are carried out in the said premises:
of the gunny bags containing potatoes from the lorries;
the gunny bags and keeping the potatoes in lots inside the godown;
the potatoes into different sorts;
the auctioned potatoes in 45 kgs. and packing them into gunny bags brought by
the gunny bags and loading them into lorries hired by the merchants.
the process, lots brought by the primary members are kept separate with clear
demarcation as regard the ownership theref. Sometimes small farmers unload the
bags of potatoes themselves; some of them bring their potatoes upon proper
grading in their farms and place it in the yard in a sorted condition. However,
if proper grading is not done by the vegetable growers, they are graded into
the different sorts.
number of persons undertaking the job varies depending upon the quantum of
an industrial dispute was raised by 407 persons; of whom 73 are potters and 335
are graders. The job of unloading, unpacking of gunny bags, stitching the gunny
bags and putting them into lorries are done by porters whereas gradation of
potatoes, weighing the auctioned potatoes in 45 kgs. and packing them into
gunny bags are done by graders. Most of them are women.
stated that the members of the Society or their authorized representatives
remain present throughout the auction. The auction is confirmed only with the
consent of the members. The member has a right to decline to sell his produce,
if he is not satisfied with the highest rate offered by the merchants and is
entitled to hold over the same till the next auction takes place.
Society contends that for doing various items of work in the yards, services of
certain third parties are made available to the members. They are always
available in the yards and any member whether producer or merchant may engage
them. The work is done through the workers of the concerned third parties.
Payment therefor is to be made by the persons engaging them to the said third
parties (contractors). However, sometimes as the producer members may not have
enough money with them, the Society makes the payment on their behalf by way of
advance, wherefor allegedly written authority is obtained. The Society further
contends that the farmers and merchants are at liberty to engage their own men
for doing these items of work and some of them do the work themselves. There is
no obligation on the part of the member to bring his produce to the Society's
yards. He is free to sell is produce in any manner thought it.
not in dispute that the Society does not maintain any attendance register or
wages register. The third parties are free to engage men of their own choice
and no working hours are fixed or insisted. Any person normally doing the job
may come on any day to work. The third parties engage more number of persons
during peak season and during lean season less number of persons are engaged.
The porters and graders may take up any other job.
BETWEEN THE PARTIES:
appellant-Union, however, on or about 19.4. 1982 served a charter of demands
upon the Society claiming, inter alia, permanency in service and other
benefits. A strike notice was also given wherefor a conciliation proceeding was
initiated. The Society thereafter filed a suit being O.S. No.2293 of 1982. A
writ petition was filed before this Court being W.P. No.23 of 1983 praying for
minimum facilities like drinking water, toilet, rest-room, maternity benefits
etc. The Society is said to have declared a lock out and a conciliation
proceeding thereupon started again.
writ petition was thereafter withdrawn. The conciliation proceeding ended in a
about 19.5.1984, the State of Tamil Nadu
issued a notification in exercise of its power under Section 10(1)(d) of the
Industrial Disputes Act, 1947 referring the following disputes for adjudication
of the Industrial Tribunal :
Whether the non-employment of the workmen referred in the reference is
what relief ?"
BEFORE THE TRIBUNAL:
aforementioned industrial reference before the Tribunal, witnesses were
examined on behalf of the parties.
were also produced. By reason of an award dated 5.9.1989, the Tribunal opined
that there did not exist any relationship of employer and employee between the
Society and the concerned persons, observing :
In view of the above finding, if we approach this case, there is no convincing
evidence placed by the petitioner to establish the master and servant relationship
to hold that the persons referred in this dispute are only workmen of the
Viewed from any angle, either on facts or on law, the petitioner-Union has not
substantiated that the persons mentioned in the Annexure are workmen and
therefore their non-employment is not justified. Hence this point is found
against the Petitioner Union." On the said findings the reference was
BEFORE THE HIGH COURT:
thereby the appellant preferred a writ petition before the High Court marked as
Writ Petition No.14659 of 1989.
the pendency of the said proceeding, other disputes also ensued resulting in
closure of the yards;
again conciliation proceedings were initiated on or about 3.8.1985. The
respondent-Society issued an advertisement in a Tamil newspaper inviting
tenders for operations. Questioning the said action on the part of the Society,
a writ petition was filed in the Madras High Court which was marked as W.P.
No.9333 of 1985 praying therein for issuance of writ of mandamus directing the
State to prohibit introduction of contract labour system in the Society.
writ petition being W.P. No.9334 of 1985 was also filed wherein the petitioners
prayed for issuance of a writ of or in the nature of mandamus directing the
Society not to engage contract labour purported to be on the ground that the
same is contrary to Sections 25-O and 25-T of the Industrial Disputes Act and
Sections 7 and 12 of the Contract Labour (Regulation and Abolition) Act, 1970.
interim orders were passed by the High Court and some appeals were also filed
and the matter came up before this Court also, being Civil Appeal No.5381 of
1985 on or about 26.9.1986 wherein this Court passed the following order :
behalf of the Marketing Society, Dr. Y.S. Chitale, learned Counsel assures us
that hereafter workmen will not be permitted to be employed by contractors to
work within the yard of the Society. He also assures us that the 407 workers
previously employed may come back and work in the yard without any objection.
It is open to any worker to go and seek employment, but contractors will be
excluded. The case now pending before Industrial Tribunal may be disposed of
expeditiously. Civil Misc. Petition is disposed of accordingly." By
another interim order passed in Writ Petition No.19310 and 19311 of 1986, a
learned Single Judge of the Madras High Court directed :
third respondent shall give employment directly to all the 407 workers. If,
after providing employment to these 407 workers, any more lands are required,
then the management is free to give employment to such of these persons. The
Collector of Coimbatore will see to it that the order of the Supreme Court
extracted above is implemented in its true spirit." In an appeal carried
out by the Society being W.A. No. 1372 of 1986, the High Court of Madras issued
the following directions :
it appears to us that the order made by the learned single Judge runs counter
to the order of the Supreme Court dated 4.12.1985. Therefore, the order of the
learned Single Judge is stayed. Since the order which is in controversy is that
of the Supreme Court, this is eminently a fit case where the parties are at
liberty to get necessary clarification from the Supreme Court.
the order is clarified by the Supreme Court, if the parties approach the
Supreme Court for this, the appellant will implement the order dated 4.12.1985
by way of an interim arrangement." On an application, this Court by an
order dated 13.4.1987, observed :
interim arrangement will continue till disposal of the writ petition in the
High Court. Meanwhile the trial of the industrial dispute will be stayed.
order on the application for impleading party. All the CMPs are disposed of accordingly."
Another interim order was passed on 29.8.1988 in Writ Petition NO.9334 of 1985
in the following terms :
the result, the 3rd respondent is directed to give employment directly to all
the 407 workers and pay the wages directly to them as per the order of the
Supreme Court dated 4.12.1988. This petition is ordered accordingly." On
an appeal preferred by the Society before a Division Bench marked as W.A.
No.1261 of 1988, it was directed :
give quietus to the controversy in the writ petition, we direct that W.P.
9334/85 along with the connected writ petition viz. W.P. No.9333/85 be listed
for final hearing on 26.10.1988 at the top of the list before the learned
Single Judge, who hears the date-fixed writ petitions."
the three writ petitions came up for hearing before a learned Single Judge of
the Madras High Court. The said writ petitions were dismissed observing :
writ petitions are liable to be dismissed. However, having regard to the fact
that the petitioner has made an application to the State Government as early as
on 9.8.1985 as seen from paragraph 13 of the affidavit to prohibit the
employment of contract labour under section 10 of the Act for loading,
unloading and other activities of the 3rd respondent society, a reference to
the counter affidavit filed by the government is necessary.
12 and 13 of the counter affidavit are extracted :
submit that the averments in paragraph 13 are not correct. The Union has
applied to the State Advisory Contract Labour Board to issue directions to the
Management prohibiting the employment of contract labour under Sec.10 of the
Act. I submit that after consultation with State Advisory Contract Labour Board
the Government will take a decision in this matter." This counter affidavit
has been sworn to on 5th December, 1986. Even though there was no order pending
the Government from passing orders under Sec. 10 of the Act, the Government has
not taken any action in spite of the averments contained in paragraphs 12 and
13 of the counter affidavits. It is for the Government to pass orders under
Sec. 10 of the Act as expeditiously as possible, one way or other." Three
letters patent appeals were preferred by the appellant herein being aggrieved
by and dissatisfied therewith. By reason of the impugned judgment the said
appeals were dismissed.
appellant is, thus, before us in these appeals.
Appeal No.1351-52 arise out of Writ Petition No.109 and 110 of 1989 wherein
certain interim orders were passed.
Appeal No.1353 of 2001 is the main appeal which arises out of an award of the
N.G.R. Prasad, learned counsel appearing on behalf of the appellant would take
us through the evidences adduced by the parties both oral and documentary as
also the findings of the Industrial Tribunal and would submit that it and
consequently the High Court committed a manifest error:
passing the impugned award insofar as they failed to apply the 'organisation
test' in the light of the decisions of this court;
despite having arrived at the conclusion that the respondents society exercises
supervision and control over the concerned workmen, in concluding that such
supervision and control were not on its own behalf but on behalf of its
arriving at the finding that as the society does not carry out any
not industry, inasmuch as supply of the services by an organisation would also
give rise to formation of relationship of an employer and employees.
his submissions, Mr. Prasad would contend that it is not in dispute that the
407 workmen had been working in the market yard on a daily wage basis and
although they are said to have been employed by the third parties but
indisputably, the society pays wages to them although the same is said to be
reimbursed by the members of the society. It was pointed out that the dispute
between the members and members are resolved by the society and furthermore as
the concerned persons have been given token and are given gifts during festival
season, would lead to an irresistible inference that the concerned workmen are
employees of the society.
Prasad would argue that the principal question which was required to be asked
was for whom do the workmen work and to whom they look up for their wages. It
was submitted that the relationship between the Society and the workmen was
required to be determined having regard to the following fact:
is being carried out in the premises belonging to the society;
are paid by the society;
Ex. W7 and W8, it would appear, that the society exercises control over the
festival occasions, the workmen look to the society for gift.
contended that the Tribunal and the High Court overlooked the evidences on
record as regard nature of the job performed by the workmen as has been
admitted by MW1 and furthermore no finding has been arrived at to the effect
that the so-called third parties are contractors.
learned counsel would submit that the Tribunal has committed a manifest error
also in holding that only because the society takes commission from its
members, it cannot be an employer. It was contended that for determining the
question as regard existence of the relationship of employer and employee what
is required to be considered is as to whether the concerned workmen are part
and parcel of the organisation. Economic reality, the learned counsel would
contend, has also some role to play.
learned counsel would urge that this Court in a large number of cases lifted
the veil so as to come to the conclusion that the engagement of third parties
or contractors may be a camouflage and there existed a relationship of employer
and employee. Determination of such relationship, Mr. Prasad would aruge, do
not depend upon the statutory liability of the employer as even in relation to
non-statutory canteens this Court has held that the so-called workmen of the
contractors are in effect and substance the workmen of the principal employer.
Menon, learned counsel appearing on behalf of the respondent society, on the
other hand, would submit that the society is a service society and having
regard to the fact that the members are both growers and merchants and as the
porters and the graders are appointed by both growers and merchants
independently, it cannot be said that the society is the employer of the
concerned workmen. The learned counsel would contend that the Industrial
Tribunal, the learned Single Judge as also the Division Bench of the High Court
having arrived at a finding of fact that there does not exist any relationship
of employer and employee, this Court should not interfere therewith.
of the vexed questions as to whether a contract is a contract of service or
contract for service and whether the concerned employees are employees of the
contractors has never been an easy task. No decision of this Court has laid
down any hard and fast rule nor it is possible to do so. The question in each
case has to be answered having regard to the fact involved therein. No single
test - be it control test, be it organisation or any other test - has been held
to be the determinative factor for determining the jural relationship of
employer and employee.
are cases arising on the borderline between what is clearly an
employer-employee relation and what is clearly the independent entrepreneurial
Bank Ltd.  1 L.L.J. 688 : AIR 1955 SC 404 and and others  1 L.L.J.
477 : AIR 1957 SC 264 observed that supervision and control test is the prima
facie test for determining the relationship of employment. The nature or extent
of control required to establish such relationship would vary from business to
business and, thus, cannot be given a precise definition. The nature of
business for the said purpose is also a relevant factor. Instances are galore
there where having regard to conflict in decisions in relation to the similar
set of facts, the Parliament has to intervene as, for example, in the case of
workers rolling bidis.
given case it may not be possible to infer that a relationship of employer and
employee has come into being only because some persons had been more or less
continuously working in a particular premises inasmuch as even in relation
thereto the actual nature of work done by them coupled with other circumstances
would have a role to play.
 2 L.L.J. 59 : AIR 1970 SC 66, this Court said that it is a question of
fact in each case whether the relationship of master and servant exists between
the management and the workmen and there is no abstract a priori test of the
work control required for establishing the control of service. A brief resume
of the development of law in this point was necessary only for the purpose of
showing that it would not be prudent to search for a formula in the nature of a
single test for determining the vexed question.
control test and the organization test, therefore, are not the only factors
which can be said to decisive.
view of elicit the answer, the court is required to consider several factors
which would have a bearing on the result :
is appointing authority;
is the pay master;
long alternative service lasts;
extent of control and supervision;
nature of the job, e.g. whether, it is professional or skilled work;
right to reject.
view to find out reasonable solution in a problematic case of this nature, what
is needed is an integrated approach meaning thereby integration of the relevant
tests wherefor it may be necessary to examine as to whether the workman
concerned was fully integrated into the employer's concern meaning thereby
independent of the concern although attached therewith to some extent.
Smith and J.C. Wood in 'Industrial Law', third edition, at page 8-10 stated:
spite of the obvious importance of the distinction between an employee and an
independent contractor, the tests to be applied are vague and may, in a
borderline case, be difficult to apply.
the solution lay in applying the 'control' test, i.e., could the employer
control not just what the person was to do, but also the manner of this doing
it - if so, that person was his employee. In the context in which it mainly
arose in the nineteenth century, of domestic, agricultural and manual workers,
this test had much to commend it, but with the increase sophistication of
industrial processes and the greater numbers of professional and skilled people
being in salaried employment, it soon became obvious that the test was
insufficient (for example in the case of a doctor, architect, skilled engineer,
pilot, etc.) and so, despite certain attempts to modernise it, it is now
accepted that in itself control is no longer the sole test, though it does
remain a factor and perhaps, in some cases, a decisive one.
search for a substitute test, ideas have been put forward of an 'integration'
test, i.e. whether the person was fully integrated into the employer's concern,
or remained apart from and independent of it. Once again, this is not now
viewed as a sufficient test in itself, but rather as a potential factor (which
may be useful in allowing a court to take a wider and more realistic view). The
modern approach has been to abandon the search for a single test, and instead
to take a multiple or 'pragmatic' approach, weighing upon all the factors for and
against a contract of employment and determining on which side the scales
eventually settle. Factors which are usually of importance are as follows - the
power to select and dismiss, the direct payment of some form of remuneration,
deduction of PAYE and national insurance contributions, the organisation of the
workplace, the supply of tools and materials (though there can still be a labour-only
sub- contract) and the economic realities (in particular who bears the risk of
loss and has the chance of profit and whether the employee could be said to be
'in business on his own account'). A further development in the recent case law
(particularly concerning atypical employments) has been the idea of 'mutuality
of obligations' as a possible factor, i.e. whether the course of dealings
between the parties demonstrates sufficient such mutuality for there to be an
overall employment relationship." Chandigarh & Ors. JT 2003 (8) SC
345) Griffith Liverpool Ltd.  A.C. 1, Lord Porter pointed out:
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.
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." If the provisions of
the contract as a whole are inconsistent with its being a contract of service,
it will be some other kind of contract and the person doing the work will not
be a servant. (See Ready Mixed Concrete (South 1  2 W.L.R. 775) The
decisions of this Court lead to one conclusion that law in this behalf is not
static. In Punjab National Bank vs. Ghulam Dastagir [(1978) 1 I.L.J. 312 =
(1978) 2 SCC 358], Krishna Iyer, J. observed "to crystalise criteria
conclusively is baffling but broad indications may be available from
case at hand, as noticed hereinbefore, poses intricate question having regard
to the facts and circumstance of the case.
endevour to find out an answer, let us at the first instance look at the object
of the Society.
Society had a humble beginning but it had a laudable object, as would appear
from its bye-laws. The objects of the Society are stated as under :
To encourage self help, thrift and cooperation among members;
purchase seeds, manure, implements and other agricultural requirements for sale
or distribution to members or members of the affiliated cooperative societies
or to other cooperative societies;
arrange for sale of potatoes, other vegetables and fruits of the members and
the members of affiliated cooperative societies to their best advantage;
advance loans to members and members of affiliated cooperative societies on the
pledge of their agricultural produce and for the purchase of manure to
deserving members of primary societies provided the loans are given to such
members through the societies concerned;
act as agents of the cooperative institutions in marketing their produce;
act as agents for the joint purchase of the domestic and other requirements of
its members and members of affiliated cooperative societies;
act as agent of those members which are affiliated societies in the matter of
disbursing and receiving loans sanctioned to individual members of such societies;
act as the agent of those members which are affiliated societies in the matter
of receiving for safe custody in its godowns or elsewhere the produce pledged
to such societies by their individual members;
propagate and supply pure seeds;
own and hire lorries whenever necessary for the use of the members, members of
affiliated cooperative societies and other public for hire, for the transport
of manure, potatoes, other vegetables, fruits, implements etc.;
disseminate among the members and members of the affiliated cooperative
societies a knowledge of the latest improvement in agriculture by arranging
actual demonstration carried out by each individual member in his own land
according to the advice of the agricultural department;
process raw material belonging to the members and members of affiliated
cooperative societies or purchased by the society; and
arrange for packing and grading of agricultural produce of the members and
members of the affiliated cooperative societies.
Economically weak and small farmers having no holding power, thus, subjected to
exploitation of the trading community are the beneficiaries.
Clause 34 of the bye-laws states :
the Board of Directors may arrange for the sale of produce of members and
members of affiliated cooperative societies pledged to or deposited with the
society and disburse sale proceeds to them immediately after such lots are
sold. In arranging for the sale they shall act only as the agent of the members
and members of affiliated cooperative societies concerned and shall not do the
business as owner on behalf of the society. Any loss arising out of the
business shall be borne by the members of the affiliated cooperative societies
concerned and not by the society." It is not in dispute that the Society
is not a trading society. It cannot buy or sell the agricultural produce or the
fruits except in a case where the proviso appended to bye-law 34 is attracted
which is in the following terms :
the society enters into a contract with the Government of Military Department
of cooperative institutes or with any firm which has entered into a contract
with the Government or military department for supply of produce, the Board may
purchase the produce outright whenever necessary and sell it as owner on behalf
of the society."
a well-settled principle of law that the person who sets up a plea of existence
of relationship of employer and employee, the burden would be upon him.
Establishment Workers' Union and Others [1973 Lab. I.C. 398], the Kerala High
burden of proof being on the workmen to establish the employer- employee
relationship an adverse inference cannot be drawn against the employer that if
he were to produce books of accounts they would have proved employer-employee
relationship." Court of West Bengal and Others [1975 Lab. I.C. 202] it has
a person asserts that he was a workmen of the Company, and it is denied by the
Company, it is for him to prove the fact. It is not for the Company to prove
that he was not an employee of the Company but of some other person." The
question whether the relationship between the parties is one of the employer
and employee is a pure question of fact and ordinarily the High Court while
exercising its power of judicial review shall not interfere therewith unless
the finding is manifestly or obviously erroneous or perverse.
OF LAW IN THE PRESENT CASE:
regard to the materials on records, we may at the outset notice the findings of
the Industrial Tribunal which are :
regard to the object of the Society, there is no need to employ labourers far
less giving continuous employment to them. Exs.W-7, W-8 and W-12 do not show
that superintendence control in respect of grading, weighing etc. is absolute. The
memo. dated 27.8.1982 appears to have been issued having regard to a complaint
made by traders who participate in the auction to the effect that the staff are
not showing proper care in grading, weighing and stacking the goods in the
Society and they have to purchase the under-quality and under-weight vegetables
resulting in continuous loss to them. It is in that situation a direction was
issued. A further complain was made that the Society employs small boys in
grading, weighing and stacking of goods. In that situation the Godown
Assistants were directed to see that no person who is less than 18 years is
engaged for unloading, grading and stacking of cabbage and the workmen should be
classified into two groups, one for unloading and another for grading, weighing
Tribunal in this behalf observed :
it is also significant to note that the society has been formed to protect the
interest of the members.
society cannot keep quiet by stating it is the contractors job and it has no
responsibility. In my opinion nothing is wrong in issuing the circular Ex.W-8,
only to pull up the irresponsible of the staff and other workers. Therefore it
would not amount to that the Respondent- Society has exercised its powers on
their own workers and therefore they are employees." Although in the said
letter, the word 'workmen' of the Society had been used, in all probability,
the said expression had been used loosely. The Office Order dated 22.8.1963
provides for the job assigned to their regular staff.
job of the Marketing Supervisor is as under:
should attend to the speedy disposal of the potato stocks of the members to
their best advantage. He *should see that all the stocks purchased by the
Merchants are taken delivery of without delay. He should control the staff
working in the potato godowns and see that no complaints are received from
members and merchants etc., regarding purchase or sale of potatoes. He should
supervise grading, weighing and packing of potatoes promptly and
properly." The job of the Marketing Supervisor, therefore, do not show
that complete control and supervision is upon the society. The Marketing
Supervisor was allotted the job to see that the work is carried out smoothly so
that neither the purchaser members nor the merchant members are put to any
regard to the interest of the farmers as also the merchants, the Marketing
Supervisor was asked to supervise grading, weighing and packing of potatoes
promptly and properly.
purported decision of the Society to give certain benefits to the workmen too
is not decisive as the same had become a conciliation proceeding. The said
conciliation proceeding, as noticed hereinbefore, had to be initiated having
regard to the consequence upon a strike notice given by the workmen which could
be averted due to conciliatory efforts. It would appear from the same that the
conciliation efforts were made by the concerned Conciliation Officer. However,
despite conciliation, graders and porters went on strike on 19.10.1982 whereafter
again a conciliation proceeding was held pursuant whereto or in furtherance
whereof certain advises and suggestions had been given by the conciliation
officer based on agreement between the parties.
finding of the Tribunal in respect of Ex.W-12 is in the following terms :
under Ex.W-12 it has been stated to pay the festival advance to the graders
through the representatives.
it cannot be said they have been asked to pay directly the festival advance
amount. That apart, it is relevant to note at this stage that this document has
not been signed by any party. Considering these above facts and mianly taking
into account the object of the society coupled with the duties envisaged under
Clause 34 under Ex.M-22 bye-laws, it is impossible to come to a conclusion that
the society has exercised these powers under Ex.W-7, Ex.W-8 and Ex.W-12 as an
employer..." The Tribunal has further come to the conclusion that token
number had been given to the porters during emergency to save them from police
harassment and no such token was issued after cessation of emergency.
true, as contended by Mr. Prasad, that the Tribunal sought to distinguish
certain cases relied upon by the learned counsel for the parties holding that
in those cases, the employers were manufacturing units and were doing regular
work but the observation of the Tribunal must be understood having regard to the
totality of the circumstances as it has observed that in such cases employers
being manufacturing units and were doing regular work and the nature of
business was such which required continuous supervision and furthermore the
workmen who were required to work on fixed hours which was not the case in the
learned Tribunal has further found that the volume of job as also the number of
persons working depend upon the season inasmuch in the peak season a large
number of persons would be appointed whereas in the off season the number of
appointments would be less. The Tribunal had further held that the Society acts
as a commission agent. The submission of Mr. Prasad to the effect that the
Tribunal has ignored the question of employment of contractor, some of whom may
be under a legal incapacity to do so but the same again would not be decisive.
Furthermore, even in terms of Section 21 of the Contract Labour (Regulation and
Abolition) Act, the principal employer has a statutory obligation to see that
the concerned employees are paid their wages and deduct the same from the bills
of the contractors. It has also come on records that the remuneration paid by
the Society on behalf of its members are done through Maistry and not directly
to the concerned workers. We have noticed hereinbefore in details the nature of
the services rendered by the Society to the different categories of its
members, as also the right of the members to approach the third parties to take
the services of the workmen working under them for unloading, grading and
nutshell, the following can be deduced :
Growers and merchants are free to engage their own porters and graders or can
do the work by themselves. There is, thus, no obligation on the societies godown
or engage service of the workers, waiting in the yard.
attendance registers or wage registers are maintained in respect of graders and
society has no control as who should do the work and the members are free to
engage any worker available in the yard.
working hours are fixed for porters and graders. They are free to come and go
workmen have no obligation to report to work everyday.
Society has no control regarding the number of workers to be engaged and the
work to be turned out by the porters and graders.
appointment order is issued by the society.
disciplinary control over the porters and graders is exercised by the Society.
Total supervision or control is not exercised by the Society over the work done
by porters or graders.
Porters and graders can go for other work and there is no obligation to work
only in the yards.
Payment is normally made to a worker by the member. No direct payment is made
to workers by the society. The society makes payment only on the authorization
on behalf of that member.
Under the price guarantee scheme introduced by the society if the prices
offered by the merchants are not acceptable to the members then the society
guarantees the minimum price. If the produce sold by the society fetches more
than the minimum guaranteed price excess is passed on to the member, if the
price is less than the minimum price, the loss therefor is borne by the
Porters and graders also work under the supervision of members and merchants.
paid by the society to a worker/authorized by a member is distributed by him to
other workmen and the Society is not concerned with the number of workers
engaged and amounts distributed to them.
farmers themselves are indigent persons. It is not a case where the concerned
workmen are without any master.
third parties employ and pay them their salary or wages invariably. They have
the right to appoint or not to appoint and the little amount of supervision made
by the officers of the Society are for the purpose of overseeing the smooth
transactions and not for its own benefit. The contract is entered into by
different parties for different purposes. The services of the workmen by the
farmers or traders may or may not be taken. There may be disputes between one class
of members with the other which incidentally may have some bearing on the
performance of job by the concerned workmen.
further notice that the learned counsel appearing on behalf of the respondents
has drawn our attention to the statements made in the counter affidavit to the
effect that the President of Petitioner Association runs the biggest private mundy
in Mettupalayam and adopts the same procedure of engaging workers and the job
of unloading, cleaning, sorting, grading etc. is done by the Respondent
society. It has further been stated that there are about 60 such private mundies
at Mettupalayam and although every mundy adopts the same pattern of engaging
workers but except in the case of the respondent no industrial dispute had been
raised in respect of any other mundy.
and non-employment indisputably is a matter which is specified in the Second
and the Third Schedules of the Industrial Disputes Act. The concept of
employment involves three ingredients, which are :
Employer - one who employs, i.e. engages the services of other persons;
Employee - one who works for another for hire; and
Contract of employment - the contract of service between the employer and the
employee whereunder the employee agrees to serve the employer subject to his
control and supervision. On the other hand, non-employment being negative of
the expression "employment" would ordinarily mean a dispute when the workmen
is out of service. When non-employment is referable to an employment which at
one point of time was existing would be a matter required to be dealt with
differently than a situation where non-employment would mean a contemplated
of non-employment in the later category would arise only when the employer
refuses to give work to a person who pleads and proves to the satisfaction of
the management that he was entitled thereto. However, the dispute regarding the
refusal to employ the persons who were promised to be employed is not connected
with the employment or non-employment within the meaning of Section 2(k) of the
Act. (See Workers of Sagar Talkies VS. Odean Cinema  1 L.L.J. 639) The
reference made by the State of Tamil Nadu was absolutely vague. The very fact
that reference suggests that the workmen are not being employed by the Society
is itself a pointer to the fact that it is not the case where the State
Government has proceeded on the basis that there existed such a relationship.
Save and except in certain situations, as for example when there exists a
provision in the standing order certified under Industrial Employment (Standing
Orders) Act, 1946 or a memorandum of settlement require the employer to employ
certain persons, directions ordinarily cannot be issued by the Tribunal
directing the employer to give employment.
a contract is a sham or camouflage is not a question of law which can be
arrived at having regard to the provisions of Contract Labour (Regulation and
Abolition) Act, 1970. It is for the industrial adjudicator to decide the said
question keeping in view the evidences brought on records.
Sangh and Others [(2002) 4 SCC 609], non- maintenance of records by the
contractors was held to be not conclusive for determination as to whether the
workmen were working under the contractor. The Court held that such disputed
questions of fact cannot be gone into in a civil proceeding.
Shramik Sangh vs. M/s Indian Smelting & Refining Co. Ltd. & Ors. [JT
2003 (8) SC 243], this Court observed :
jurisdictional fact is one on the existence or otherwise of which depends
assumption or refusal to assume jurisdiction by a court, tribunal or the
authority. Said fact has to be established and its existence proved before a
Court under the Maharashtra Act can assume jurisdiction of a particular case.
If the complaint is made prima facie accepting existence of the contractor in
such a case what has to be first established is whether the arrangement or
agreement between the complainant and the contractor is sham or bogus. There is
an inherence admission in such a situation that patently the arrangement is
between the complainant and the contractor and the claim for a new and different
relationship itself is a disputed fact.
it differently, the complainant seeks for a declaration that such arrangement
is not a real one but something which is a fagade. There is no direct agreement
between the complainant and the principal employer and one such is sought to be
claimed but not substantiated in accordance with law. The relief in a sense
relates to a legal assumption that the hidden agreement or arrangement has to
be surfaced..." It was also observed :
common thread passing through all these judgments is that the threshold
question to be decided is whether the industrial dispute could be raised for
abolition of the contractor labour system in view of the provisions of the Maharashtra
Act. What happens to an employee engaged by the contractor if the contract made
is abolished is not really involved in the dispute. There can be no quarrel
with the proposition as contended by the appellants that the jurisdiction to
decide a matter would essentially depend upon pleadings in the plaint. But in a
case like the present one, where the fundamental fact decides the jurisdiction
to entertain the complaint itself the position would be slightly different. In
order to entertain a complaint under the Maharashtra Act, it has to be
established that the claimant was an employee of the employer against whom
complaint is made, under the ID Act.
there is no dispute about such relationship, as noted in paragraph 9 of CIPLA's
case (supra) the Maharashtra Act would have full application. When that basic
claim is disputed obviously the issue has to be adjudicated by the forum which
is competent to adjudicate..." CASE LAWS:
aforementioned backdrop, let us take note of certain decisions operating in the
field vis-`-vis the factual matrix obtaining therein.
Mohideen Sahib & Sons vs. The Industrial Tribunal, Madras [(1964 (7) SCR
646 = 1964 (2) LLJ 633] is a case which involved workers who used to take
leaves home for cutting them in proper shape. However, the actual rolling by
filling the leaves with tobacco took place in places what were called
contractors' factories. The bidis so rolled would be delivered to the appellant
price of the raw-material as also the finished product would remain the same as
fixed by the appellant therein.
Court having regard to the materials on records arrived at a finding of fact
that the intermediaries were mere agents or branch managers appointed by the
management and the relationship of employer and employee subsisted between the
appellant and the bidis rollers, inter alia, on the ground that the so-called
independent contractors served no particular duties and discharged no special
functions and had no independence at all. They were impecunious persons who
could hardly afford to have any factory of their own and in fact some of them
were ex-employees of the appellant.
Silver Jubilee Tailoring House and Others vs. Chief Inspector of Shops and
Establishments and Another [(1974) 3 SCC 498], the job required to be performed
was skilled and professional in nature. Mathew, J. speaking for the Bench
observed that the test of right to control the manner of doing the work as
traditionally formulated cannot be treated as an exclusive test. The court
applied organization test in the fact situation obtaining therein laying
importance on the fact that the employer provides the equipment and stating
that where a person hires out a piece of work to an independent contractor, he
expects the contractor to provided all the necessary tools and equipments,
whereas if he employs a servant he expects to provide the same himself.
supply of machine was highlighted having regard to that fact that the sewing
machine on which the workers do the work generally belong to the employer is an
important consideration for deciding the relationship of master and servant.
Besides the same the right of the employer to reject the end product and
directing the worker to restitch it also led this court to conclude that the
element of control and supervision was also present.
in a slightly different fact situation where a person working as a part-time
accountant for a long number of years who used to look after his own
partnership business after working hours, was held to be not a workman. (See (Ker.))
In M/s Shining Tailors vs. Industrial Tribunal II, U.P., Lucknow and Others
[(1983) 4 SCC 464], payments used to be made to the workmen on piece-rates in a
big tailoring establishment. Desai, J. in the facts and circumstances of the
case observed that right of removal of the workmen or not to give the work had
the element of control and supervision which had been amply satisfied in that
question which arose for consideration was as to whether only because the
concerned workman was paid on piece rate was itself indicative of the fact that
there existed a relationship of principal employer and independent contractor.
however, relevant to note that therein also an observation was made to the
effect that the method of payment in various occupations is different in
Indian Overseas Bank vs. I.O.B. Staff Canteen Workers' Union and Another
[(2000) 4 SCC 245], this Court observed :
standards and nature of tests to be applied for finding out the existence of
master and servant relationship cannot be confined to or concretized into fixed
formula(e) for universal application, invariably in all class or category of
cases. Though some common standards can be devised, the mere availability of
any one or more or their absence in a given case cannot by itself be held to be
decisive of the whole issue, since it may depend upon each case to case and the
peculiar device adopted by the employer to get his needs fulfilled without
rendering him liable.
being the position, in order to safeguard the welfare of the workmen, the veil
may have to be pierced to get at the realities. Therefore, it would be not only
impossible but also not desirable to lay down abstract principles or rules to
serve as a ready reckoner for all situations and thereby attempt to
compartmentalize and peg them into any pigeonhole formulae, to be insisted upon
as proof of such relationship. This would only help to perpetuate practicing
unfair labour practices than rendering substantial justice to the class of persons
who are invariably exploited on account of their inability to dictate terms
relating to conditions of their service. Neither all the tests nor guidelines
indicated as having been followed in the decisions noticed above should be
invariably insisted upon in every case, nor the mere absence of any one of such
criteria could be held to be decisive of the matter. A cumulative consideration
of a few or more of them, by themselves or in combination with any other
relevant aspects, may also serve to be a safe and effective method to
ultimately decide this often agitated question. Expecting similarity or
identity of facts in all such variety or class of cases involving different
type of establishments and in dealing with different employers would mean
seeking for things, which are only impossible to find." Having regard to
the fact that therein a cooperative canteen was promoted with the consent of
the management by serving members of the Bank staff, which was running within
the bank's premises and with the funds, subsidy and infrastructural facilities
provided exclusively by the Bank, it was held that there existed a relationship
of master and servant.
we may notice that almost in a similar situation in Employers in relation to
the Management of Reserve Bank of India vs. Workmen [(1996) 3 SCC 267], it was
held that in the absence of statutory or other legal obligations and in the
absence of any right in the Bank to supervise and control the work or details
there in any manner regarding the canteen workers employed in the three types
of canteens, it cannot be said that relationship of master and servant existed
between the Bank and the various persons employed in the three types of
canteens and in that situation, the demand for regularization was considered to
opinion, the statutory canteen or other canteen run by the employer in his
premises stands absolutely on a different footing. In determining the
relationship of employer and employee, as has been noticed by this Court in
Steel Authority of India Ltd. & Others vs. National Union Waterfront
Workers and Others [(2001) 7 SCC 1], the said question has no relevance.
Dhatu Nigam Ltd., etc. vs. M. Venkataiah & Ors. etc. etc. [JT 2003 (7) SC
95], as the appellants were required by the Factories Act to provide canteen
facilities and since the workers engaged through the contractors had been held
to be the employees of the principal employers, this Court held that the
workers engaged through contractors were entitled for regularization of their
we have reservation about the correctness or otherwise of the said decision but
we need not go into the said question inasmuch even therein, the court noticed
that the decision in Steel Authority of India Ltd. (supra) stands on a
Indian Banks Association vs. Workmen of Syndicate Bank and Others [(2001) 3 SCC
36], the question which arose for consideration was as to whether the deposit
collectors who received commission is in reality a wage which would depend on
the productivity. Such commission was paid for promoting the business of the
bank. Having regard to the fact that the banks have control over the deposit
collectors, they were considered to be their own workers.
Indian Banks Association (supra) the reference which was made for adjudication
of the Industrial Tribunal was as follows :
the demands of the Commission Agents or as the case may be Deposit Collectors
employed in the banks listed in the annexure that they are entitled to pay
scales, allowances and other service conditions available to regular clerical
employees of those banks is justified ? If not, to what relief are the workmen
concerned entitled and from which date ?" Having regard to the evidences
both oral and documentary led by the parties, the Tribunal directed :
those Deposit Collectors and Agents who are below the age of 45 years on
3.10.1980 (the date of the first reference of this industrial dispute) shall be
considered for regular absorption for the post of clerks and cashiers if they
are matriculates and above including qualified graduates and postgraduates.
They may be taken to banks services as regular employees if they pass the
qualifying examinations conducted by the banks. Those who are absorbed shall be
treated on a par with regular clerical employees of the Bank.
who have qualified 8th class and below matriculation shall be considered for
absorption as sub-staff by conducting qualifications examination.
regards the Deposit Collectors and Agents who are above 45 years of age on the
date 3.10.1980 and also those who are unwilling to be absorbed in regular banks
service shall be paid the full back wage of Rs.750.00 per month linked with a
minimum deposit of Rs.7500.00 per month and they should be paid incentive
remuneration at 2% for collection of over and above 7500.00 per month and they
should also pay uniform conveyance of Rs.50 per month for deposit of less than
Rs.10,000.00 and Rs.100.00 per month for deposits of more than Rs.10,000.00 up to
or above Rs.30,000.00 per month they should be paid gratuity of 15 days'
commission for each year of service rendered." Thus in that decision, a
scheme was formulated.
we may notice that in Union of India and Others vs. K.V. Baby and Another [(1998)
9 SCC 252], this Court observed :
persons who are engaged on the basis of individual contracts to work on a
commission basis cannot, by the very nature of their engagement, be equated
with regular employees doing similar work..." In Bharat Heavy Electricals
Ltd. vs. State of U.P. & Others [(2003) 6 SCC 528], the concerned workmen
were engaged as gardeners to sweep, clean, maintain and look after the lawns
and parks inside factory premises and campus of the residential colony of the
appellant through the agencies of the Respondent Nos.3 to 5; therein their
services were terminated pursuant whereto an industrial dispute was raised
before the Tribunal, the employer did not produce any records. Having applied
the control test and in view of the fact that the records of the concerned
workmen had not been produced, this Court did not interfere with the award of
the Tribunal and the judgment of the High Court.
Chintaman Rao and Another vs. The State of Madhya Pradesh [1958 SCR 1340], this
Court observed :
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.
employment is the contract of service between the employer and the employee whereunder
the employee agrees to serve the employer subject to his control and
supervision..." Following the decision of this Court in Shri Chintaman Rao
(supra), this Court in Shankar Balaji Waje vs. The State of Maharashtra [AIR
1962 SC 517], held:
brings in the contract of service between the employer and the employed. We
have mentioned already that in this case there was no agreement or contract of
service between the appellant and Pandurang. What can be said at the most is
that whenever Pandurang went to work, the appellant agreed to supply him
tobacco for rolling bidis and that Pandurang agreed to roll bidis on being paid
at a certain rate for the bidis turned out. The appellant exercised no control
and supervision over Pandurang" Saurashtra & Ors. [AIR 1957 SC 264],
this Court upon noticing several authorities held :
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., [ 1 A.C. 1, at p. 23.], "The proper test
is whether or not the hirer had authority to control the manner of execution of
the act in question".
nature or extent of control which is requisite to establish the relationship of
employer and employee must necessarily vary from business to business and is by
its very nature incapable of precise definition. As has been noted above,
recent pronouncements of the Court of Appeal in England have even expressed the
view that it is not necessary for holding that a person is an employee, that
the employer should be proved to have exercised control over his work, that the
test of control was not one of universal application and that there were many
contracts in which the master could not control the manner in which the work
was done (Vide observations of Somervell, L.J., in Cassidy v. Ministry of Health
(supra), and Denning, L.J., in Stevenson, Jordan and Harrison Ltd. v. MacDonald
and Evans (supra).) 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 or to use the words of Fletcher Moulton, L.J.,
at page 549 in Simmons v. Health Laundry Company [ 1 K.B. 543 at pp. 549,
550] :- "In my opinion it is impossible to lay down any rule of law
distinguishing the one from the other. It is a question of fact to be decided
by all the circumstances of the case. The greater the amount of direct control
exercised over the person rendering the services by the person contracting for
them the stronger the grounds for holding it to be a contract of service, and
similarly the greater the degree of independence of such control the greater
the probability that the services rendered are of the nature of professional
services and that the contract is not one of service." In Management of
M/s Puri Urban Cooperative Bank vs. Madhusudan Sahu and Another [AIR 1992 SC
1452], this Court observed :
stands established that Industrial Law revolves on the axis of master and
servant relationship and by a catena of precedents it stands established that
the prima facie test of relationship of master and servant is the existence of
the right in the master to supervise and control the work done by the servant
(the measure of supervision and control apart) 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..." However, we may note that in Workmen of the Canteen of
Coates of India Ltd. vs. Coates of India Ltd. (Civil Appeal No.3479/1987
disposed of on 28.8.1996, this Court observed :
requirement under the Factories Act of providing a canteen in the industrial establishment,
is by itself not decisive of the question or sufficient to determine the status
of the persons employed in the canteen.
effect, if any, relating to compliance of the provisions of Factories Act is a
different matter which does not arise for consideration in the present
case." [See also Bombay Canteen Employees' Association vs. Union of India, [(1997)
6 SCC 723].
aforementioned backdrop of legal principles, We may now consider the
Constitution Bench judgment of this Court in Steel Authority of India Limited
(supra). The principal question which arose for consideration therein was as to
whether having regard to the provisions contained in Section 10 of the Contract
Labour (Regulation and Abolition) Act, the workmen employed by the contractors
in the event of abolition of contract labour were entitled to be automatically
absorbed in the services of the principal employer. While answering the
question in the negative the court reversed the earlier decision of this Court
in Air India Statutory Corporation and Others vs. United Labour Union and
Others [(1997) 9 SCC 377]. This Court referring to a large number of decisions
and tracing the history of the Contract Labour (Regulation and Abolition) Act,
noticed that the Industrial Tribunal although prior to coming into force could
issue directions for such regularization but such directions could not be
issued after coming into force of the Act. In view of the Constitution Bench decision
in M/s Gammon India Ltd. and Others etc. vs. Union of India and Others [(1974)
1 SCC 596], the Court held that although the principle that a beneficial
legislation needs to be construed liberally in favour of the class for whose favour
it is intended, the same would not extend to reading in the provisions of the
Act what the legislature has not provided whether expressly or by necessary
implication, or substituting remedy or benefits for that provided by the
legislature. Upon analyzing the case law, the categories of cases were
sub-divided into three stating :
analysis of the cases, discussed above, shows that they fall in three classes :
where contract labour is engaged in or in connection with the work of an
establishment and employment of contract labour is prohibited either because
the industrial adjudicator/court ordered abolition of contract labour or
because the appropriate Government issued notification under Section 10(1) of
the CLRA Act, no automatic absorption of the contract labour working in the
establishment was ordered;
where the contract was found to be a sham and nominal, rather a camouflage, in
which case the contract labour working in the establishment of the principal
employer were held, in fact and in reality, the employees of the principal
employer himself. Indeed, such cases do not relate to abolition of contract labour
but present instances wherein the Court pierced the veil and declared the
correct position as a fact at the stage after employment of contract labour
in discharge of a statutory obligation of maintaining a canteen in an
establishment the principal employer availed the services of a contractor the
courts have held that the contract labour would indeed be the employees of the
principal employer." The instant case although was sought to be put in
category (ii) as referred to Steel Authority (supra) by Mr.
he, as noticed hereinbefore, took us also to the case law falling in Class (i)
and Class (iii) aforementioned.
cannot be any doubt whatsoever that where a person is engaged through an
intermediary or otherwise for getting a job done, a question may arise as the
appointment of an intermediary was merely sham and nominal and rather than
camouflage where a definite plea is raised in Industrial Tribunal or the Labour
Court, as the case may be, and in that event, it would be entitled to pierce
the veil and arrive at a finding that the justification relating to appointment
of a contractor is sham or nominal and in effect and substance there exists a
direct relationship of employer and employee between the principal employer and
decision of this Court in Hussainbhai, Calicut vs. The Allath Factory Thezhilali Union, Kozhikode and Others [(1978) 4 SCC 257] will fall in that category.
regard to the aforementioned findings, we are of the opinion, the High Court
has rightly affirmed the award of the Industrial Tribunal. The Tribunal as also
the High Court further rightly arrived at a finding to the effect that the
concerned workmen were not able to discharge their burden of proof that they
were employed by the Society.
decisions referred to hereinbefore are indicative of the fact that the
different tests have been applied in different cases having regard to the
nature of the problem arising in the fact situation obtaining therein. Emphasis
on application of control test and organization test have been laid keeping in
view the question as to whether the matter involves a contract of service vis-`-vis
contract for service; or whether the employer had set up a contractor for the
purpose of employment of workmen by way of a smoke screen with a view to avoid
its statutory liability.
present case we are faced with a peculiar situation. The society is a service
society which has been formed with the object of protecting the growers from
being exploited at the hands of the traders.
been found that the employment of the workmen for doing a particular piece of
work is at the instance of the producer or the merchants on an ad hoc basis or
job to job basis and, thus, the same may not lead to the conclusion that
relationship of employer and employee has come into being. Furthermore, when an
employee has a right to work or not when an offer is made to him in this behalf
by the producer or by the merchants will also assume significance.
the purpose of earning livelihood, a person has to involve himself into certain
kinds of activities wherefor, he must subject himself to some sort of
discipline or control, which is even otherwise implicit.
findings arrived at by the learned Tribunal as well as the High Court would
clearly go to show that the concerned workmen are engaged both by the growers
as also the traders. Only on some occasions, payment is made to the concerned
workmen through the third parties only in a case where the grower is not
immediately in a position to pay the same as he was yet to receive the price of
the vegetables to be auctioned. We must bear in mind that the Society deals
with small and marginal farmers who themselves look after the Society for
obtaining such assistance as may be necessary from not being exploited by the
traders and had been facing the problem of a forced sale of their produce at
the throw away price. The totality of the circumstances as opined by the
Tribunal and affirmed by the High Court would clearly go to show that although
certain activities are carried out in the market yards wherefor requisite
infrastructures are provided, the Society in general does not have the
necessity of employing any workman either for the purpose of loading, unloading
or grading. Ultimately, the remuneration to the concerned workmen are borne
either by the farmers or by the merchants. Presumably the amount paid to the
loaders, unloaders and the graders would vary, as for example whereas there
would be cases where the growers themselves would unload their merchandise
either from trucks or carts. In case growers take the assistance of the
concerned persons for unloading after the auction is held the payment would be
made by the traders. In a situation of this nature and particularly having
regard to the fact that the respondent is a cooperative society which only
renders services to its own members and despite the fact that in relation
thereto it receives commission at the rate of one per cent both from the
farmers as also the traders; it does not involve in any trading activity.
rendition of such service may amount to carrying out an industrial activity
within the meaning of the provisions of the Industrial Disputes Act, 1947 but
we are in this case not concerned with the said question. What we are concerned
with is as to whether the concerned workmen have been able to prove that they
are workmen of the Society. They have not.
view of what has been found hereinbefore, we are of the opinion that the
decision of the Tribunal as affirmed by the High Court cannot be said to be
perverse warranting our interference.
the reasons aforementioned, we do not find any merit in these appeals which are
dismissed accordingly. No costs.
before parting with the matter, we may observe that we have no doubt in our
mind keeping in view the assurances given to the High Court by the Society, as
recorded in its order dated 12.12.2000, the Respondent will continue to see
that the concerned employees are provided with employment.