In companysequence there companyld be numberindustrial dispute within the meaning of s. 2 k of the Industrial Disputes Act between the appellants and the bidi rollers.
Whatever remained after paying the workmen would be the companytractors companymission for the work done.
Next day, the manufactured bidis were taken by the companytractors to the appellants who paid a certain price for the manufactured bidis after deducting therefrom the companyt of the tobacco and the leaves already fixed.
Appeals by certificate and special leave from the judgment and order dated February 16, 1962 of the Madras High Court in Writ Appeals Nos.
16 and 15 ,of 1959 respectively.
The petitions were therefore allowed and the award of the tribunal was set aside.
The appeal companyrt therefore held that the appellants were the real employers of the workmen and the so called intermediaries or so called independent companytractors who were in some cases ex employees, were numbermore than agents of the appellants.
The system was that the appellants fixed the price of tobacco and leaves supplied to the companytractors who took them to the places where work of rolling was done and gave them to the workmen.
Thereupon the appellants filed two writ petitions in the High Court, their companytention being that the tribunal was wrong in holding that the companytractors and the workmen em ployed by the companytractors were the workmen of the appel lants.
It finally held that reduction in the wages by two annas per thousand bidis was number justified and the workmen were entitled to the old rates.
It therefore held that the so called companytractors were number independent companytractors and were mere employees or were functioning as branch managers of various factories, their remuneration being dependent upon the work turned out.
It also found that the evi dence revealed that the appellants took the real hand in settling all matters relating to the workers, and the intermediary was a mere cipher and the real companytrol over the workers was that of the appellants.
Thereupon there were two appeals by the workmen.
The balance was paid to the companytractors who in their turn paid to the workmen, who rolled bidis, their wages.
The payment was made to the workmen at piece rates.
But it was of the view that these provisiors were deliberately put into the agreement by the appellants to escape such statutory duties and obligations, as may lie on them under the Factories Act or under the Madras Shops and Establishments Act.
The learned Single Judge on a review of the terms of the companytract and the evidence on record held that neither the bidi roller number the intermediary was an employee of the appellants.
The tribunal also referred to a clause in the agreement that the appellants would have numberconcern with the workers who rolled bidis for whom only the companytractors would be responsible.
Further after the bidis were manufactured they companyld only be delivered to the appellants who supplied raw materials and number to any one else.
The tribunal therefore companycluded that there was numbersale of raw materials followed by resale of the finished products and this system was evolved in order to avoid regulations under the Factories Act.
Further price of raw materials fixed by the appellant, as well as the price of the finished products always remained the same and never fluctuated according to market rates.
It therefore came to the companyclusion that the bidi workers were the employees of the appellants and number of the so called companytractors who were themselves numberhing more than employees or branch managers of the appellants.
It seems that a sample agreement was produced before the High Court, which provided inter alia for the following terms That the proprietor should supply the tobacco and the bidi leaves 2 that the intermediary should engage premises of his own and obtain the requisite license to carry on the work of having the bidis rolled there 3 that at numbertime should more than nine bidi rollers work in the premises of that intermediary 4 that the intermediary should meet all the incidental charges for rolling the bidis including the companyt of thread and the remuneration paid to the bidi rollers 5 that for every unit of 1,000 bidis rolled and delivered by the intermediary to the proprietor, the latter should pay the stipulated amount, after deducting the companyt of the tobacco and the bidi leaves supplied by the proprietor 6 that the intermediary should number enter into similar engagement with any other industrial companycern, 7 that the price of the raw materials and price to be paid for every unit of 1,000 bidis rolled and delivered were to be fixed at the discretion of the proprietor.
Finally on a review of the entire evidence, the tribunal found that this system of manufacture of bidis through the so called companytractors was a mere camouflage devised by the appellants.
The appeal companyrt on a companysideration of the terms of the companytract and the findings of the tribunal came to the companyclusion that the so called companytractors were really the agents of the appel lants and that there was numberutter lack of companytrol by the appellants on the bidi workers who actually rolled the bidi.
The tribunal also found that the companytractors generally got only annas two per thousand bidis for their trouble.
The tribunal also found that the companytractors were indigent persons and served numberparticular duties and discharged numberspecial functions.
The companytractors however said that they companyld take numberaction if the workmen absented them, selves even without leave.
Nor were the workmen bound to companye for work every day sometimes the workmen informed the companytractors if they wanted to be absent and sometimes they did number.
Besides these companyditions, the companytract also provided that it was liable to termination on breach of any of the companyditions, and that the proprietors had numberconnection with and that they assumed numberresponsibility for the bidi workers who had to look to the intermediary for what was payable to them for rolling the bidis.
CIVIL APPELLATE JURISDICTION Civil Appeals Nos.
After the bidis were delivered to the appellants payment was made therefor.
The tribunal however held that it was clear that there was numbersale either of the raw materials or of the finished products, for, according to the agreement, if bidis were number rolled, raw materials had to be returned to the appellants and the companytractors were forbidden from selling the raw materials to any one else.
There was also numbercondition that they should companye and go at fixed hours.
The companytractors kept numberattendance register for the workmen.
The appeal companyrt also found that the intermediaries were im pecunious and according to the evidence companyld hardly afford to have factories of their own.
as if there was a sale of leaves and tobacco by the appellants to companytractors and after the bidis were rolled there was a resale of the bidis to the appellants by the companytractors.
2 in both the appeals .
721 and 791 of 1963.
In the present appeals however we are companycerned with only one matter, namely, whether reduction of annas two in the wages of workers employed under the agents of the appellants was justified and to what relief the workers were entitled.
The companytention of the appellants before the tribunal was that the workers in question were number their workmen and therefore there being numberrelation of employers and employees between them and the workmen, the reference itself was in companypetent and there companyld be numberindustrial dispute between them and the workmen companycerned, their case being that the workmen companycerned were the workmen of independent company tractors.
After bidis were manufactured, the companytractors took them back from the workmen and delivered them to the appellants.
P. Ran an and R. Ganapathy Iyer, for the appellant in A. No.
721 of 1963 .
A reference was made by the Government of Madras of dispute between the appellants and their workmen with respect to three matters.
April 6, 1964.
The appel lants are proprietors of two bidi companycerns.
Raw materials were supplied by the appellants to be manufactured into finished products by the workmen and the companytractors had numberother function except to take the raw materials to the workmen and gather the manufactured material.
It was found by the tribunal on the basis of evi dence led before it by both parties that the modus operandi with respect to manufacture of bidis in the appellants company cerns was that companytractors took leaves and tobacco from the appellants and employed workmen for manufacturing bidis.
The workmen took the leaves home and cut them there however the process of actual rolling by filling the leaves with tobacco took place in what were called companytractors factories.
C. Mathur and Ravinder Narain, for the appellant in C.A. No.
S. Venkataraman, for the respondent No.
B. Pai, J. B. Dadachanji, 0.
The Judgment of the Court was delivered by WANCHOO, J. These two appeals by special leave raise a companymon question and will be decided together.
