IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED:20.10.2011 CORAM: THE HON'BLE MR.JUSTICE T.RAJA W.P.No.39896 of 2002 The Management of Kancheepuram Murugan Silk Weavers Co-operative Production and Sales Society Limited, No.79, Gandhi Road, Kancheepuram – 631 501 ... Petitioner Versus 1. The Presiding Officer, Industrial Tribunal, Tamil Nadu, Chennai – 600 104. 2. The Secretary, Kancheepuram Murugan Silk Co-operative Society Weavers Union, 50-C, T.K.Nambi Street, Kancheepuram – 631 503. ... Respondents PRAYER: Petition filed under Article 226 of the Constitution of India for the issuance of Writ of Certiorari, call for the records of the first respondent in I.D.No.25 of 1997 and quash its award dated 21.03.2002. For Petitioner : Mr.S.Ravindran for M/s.T.S.Gopalan & Co. For R1 : Tribunal For R2 : Mr.K.V.Anandhakrishnan ORDER The following five questions framed by the Division Bench of this Court are the subject matters of the present writ petition, which are given as under: https://hcservices.ecourts.gov.in/hcservices/ a) Whether the Domestic Weavers were not employees of the petitioner/society; b) Whether there was no employer/employee relationship between them; c) Whether the domestic weavers cannot be termed as workmen within the meaning of Section 2(s) of the I.D. Act; d) Whether in terms of G.O.Ms.No.723, Labour and Employment, dated 07.04.1982, registered Handloom Weavers Co-operative Societies were exempted from all provisions of the said Act including Industrial Disputes Act. e) Whether G.O.(D) No.39 dated 18.01.1994 fixing minimum wages of employment in handloom silk weaving industry was not applicable to the petitioner society as it is a co-operative society and therefore, the demand raised by the union should be rejected 2. Earlier, the Industrial Tribunal in I.D.No.25 of 1997 dated 21.03.2002 by allowing the claim made by the Kancheepuram Murugan Silk Co-operative Society Weavers Union, directed the petitioner's Management to implement the G.O.(D) No.39 dated 18.01.1994 for the purpose of revision of wages and corresponding Dearness Allowance. Further, it was held that the Dearness Allowance is revisable according to the cost of index and rise in pay. Aggrieved by the said award, when the petitioner Management preferred a writ petition, learned Single Judge of this Court, by order dated 13.08.2004, by holding that the award passed by the Industrial Disputes has to be set aside on the ground that the Tribunal has not properly determined as to whether the union has got locus standi to bring forth such an Industrial dispute, by setting aside the award, remitted the matter back to the Tribunal. Aggrieved by the said remand order, the petitioner Management went on appeal before the learned Division Bench by filling W.A.No.3334 of 2004 inter alia raising other grounds that by virtue of notification issued in G.O.Ms.No.723, Labour and Employment dated 07.04.1982, the entire provisions of Industrial Disputes including Section 52 has no application to the Society and its members. As such the weavers of the petitioner Society cannot maintain the dispute under Industrial Dispute against the Management. The Division Bench, by setting aside the order of the learned single Judge, remanded the matter back to the Industrial Tribunal, by its order dated 12.04.2007, by framing the above mentioned five questions, with direction to place the writ petition for hearing on all aspects as mentioned above. This is how, this writ petition has come before this Court. https://hcservices.ecourts.gov.in/hcservices/ 3. A brief facts leading to the filling of writ petition is given as under: (i) The petitioner Society called as Kancheepuram Murugan Silk Weavers Co-operative Production and Sales Society Limited is consisting of Handloom weavers having their own looms in their houses for weaving purpose and the society supplies them yarn on credit. The weavers, thereafter, convert it in the form of finished products and thereafter, giving credit to the value of the materials, they are paid with the conversion charges since all these weavers do not work in the premises belonging to the petitioner's Society. They do not have any fixed working hours and also, they do not work under the direct supervision and the control of the petitioner's Society and they are also free to do weaving for any master weaver or private parties engaged in the handlooms. In this way, there are 2665 members out of which only 855 members avail the facilities of supply of materials on credit for conversion. The Government have issued G.O.Ms.No.39 dated 18.01.1994 fixing the Dearness Allowance at Rs.19.55 p.a. for the members of the petitioner Society. As the petitioner society has not implemented the said G.O. and paid only 10% of the basic wages which is less than the Dearness Allowance fixed by the Government, the second respondent, Secretary of the Kancheepuram Murugan Silk Co-operative Union approached the Industrial Tribunal at Chennai by placing their claim in I.D.No.25 of 1997. The main prayer before the Industrial Tribunal was to implement the G.O.Ms.No.39 dated 18.01.1994, because, since 1993, there was no revision made on the basic wages of the workmen, even though G.O.Ms.No.39 has fixed the basic wages of the workmen and Dearness Allowance. (ii) Opposing the said claim statement, the petitioner Society in I.D.No.25 of 1997 filed a detailed counter taking various objections that the handloom weavers who are members of the petitioner Society are not employed in the services of the society. A substantial part of its members are neither members of the petitioner Union nor they have authorised the Union to raise the dispute. Therefore, the petitioner Union has no representative character. Further, it was stated that the petitioner Society was formed in the year 1957, with a view to enroll the handloom weavers having their own looms in their houses and supply them yarn on credit. When they got the conversion of yarn into the finished product, the petitioner Society pays them only the conversion charges. Therefore, when they have not employed in the petitioner society, there is no relationship between the master and weavers of the petitioner Society and as such they are not working as "Workmen" within the meaning of Section 2 (s) of the Industrial Disputes Act. Even though the petitioner Society is functioning under the control of the Director of Handloom and Textiles and the charges payable to the domestic weavers for the various types of handlooms are fixed and https://hcservices.ecourts.gov.in/hcservices/ they are being revised periodically, the petitioner Society exists only for its members to provide sustained gainfull occupation by way of providing conversion charges and the members earn together with bonus i.e. being paid for the last five years and this will show that the earnings of the members of the petitioner Society were fair and reasonable with the rate of wages paid to workmen employed in the handloom society. Therefore, the demands of the respondent Union cannot be countenanced as G.O.No.39 dated 18.01.1994 has no application to them. On this basis, the Industrial Tribunal has framed a issue as to whether the demand with regard to Basic Pay is justified. If so, to fix the pay and whether the demand of the union to give Dearness Allowance to the workmen is valid. 4. Before addressing the said issue, the Industrial Tribunal has given a finding on the issue whether the dispute raised by the weavers union is maintainable or not? by merely saying that as long as there is relationship of employer and employee, the dispute is maintainable. Whether holding that the relationship of employer and employee is based on the proper evidence produced by the weavers union are matter of discussion which I will deal with after some time. Secondly, the Industrial Tribunal by going into another question that the weavers are members of the petitioner Society and provided yarns by the petitioner Society is only circulated among the weavers. Further, it proceed to hold that the petitioner society has to pay the weavers for their work. After holding that the profits of the petitioner society are properly circulated among the members, namely, the weavers, the learned Tribunal again went on further on the applicability of G.O.Ms.No.39, Labour and Employment dated 18.01.1994 to fix the rate of wages by holding that the petitioner society is also bound by the G.O. and the G.O.Ms.No.39 has to be implemented on the only ground that the counsel appearing for the management failed to clarify as to how the above G.O.Ms.No.39 is not applicable. Finally, on the objection raised by the petitioner management that the weavers union had no representative capacity, because, substantial section of its members are neither members of the co-operative Union nor they have authorised the union to raise any dispute, on presumption, without leading any evidence or relying upon any evidence and on the only ground that it is a registered union; that the beneficiaries of the demand is of the entire workmen of the society union, by overlooking the contention of the management that the petitioner union is incompetent to refer the cause of workmen, the Tribunal erroneously allowed the claim of the Union. With this background, let me deal with the arguments advanced by both sides. The learned counsel appearing for the petitioner management submitted that whether the domestic weavers are not employees of the petitioner society. It is proper to see what is the meaning of the word domestic weaver. Therefore, it is necessary to extract Section 2(e), (f), (g), (k) of the Tamil Nadu Handloom Workers (Conditions of https://hcservices.ecourts.gov.in/hcservices/ Employment and Miscellaneous Provisions) Act and the same are extracted hereunder: 2(e) 'Domestic Weaver' means any person who gets the raw materials from a master weaver or employer and attends to any operation connected with handloom weaving, whether such operation is carried on in the home, in which such workers works or in any other place but does not include an independent weaver; (f) 'employee' means any person employed in any work connected with handloom industry under an employer and includes a domestic weaver, but excludes an independent weaver, to do any work, skilled, unskilled, manual or clerical; (g) 'employer' means a person who has the ultimate control over the affairs of any industrial premises or who has, by reason of his advancing money, supplying goods or otherwise, a substantial interest in the control of the affairs of any industrial premises and includes. (k) 'industrial premises' means any place or premises (not being a private dwelling house) including the precincts thereof, in which or in any part of which any type of work relating to handloom industry is carried on; A reading of Section 2(e) goes to show that any person who gets the raw materials from a master weaver or employer and attends to any operation that is carried on in the home, is a domestic weaver and an independent weaver cannot be called as domestic weaver. A word employee also means any person including a domestic weaver to do any work. Similarly, the word employer also shows that a person who has the ultimate control over the affairs of the industrial premises is called as employer. But, in the present case, the learned counsel appearing for the petitioner management argued that the dispute referred to the Tribunal for adjudication is not valid under the industrial Disputes for three reasons. Firstly, these weavers do not work in the premises of the petitioner management. Secondly, they do not have any fixed working hours and thirdly, they do not work under the direct supervision and control of the petitioner management. When they failed to carry on any other occupation and when they are also free to weave for any master weaver or private parties engaged in handlooms, this has to be controverted by the weavers union by producing sufficient evidence before the Industrial Tribunal. But, it is not in dispute that no evidence has been produced from the weavers Union to establish that there has been relationship of employer and employee between the weavers and the petitioner management. In the absence of any evidence produced by the weavers union, the Industrial Tribunal should not have entertained the claim petition for the reason that they have not established the fact that https://hcservices.ecourts.gov.in/hcservices/ they are workmen falling under Section 2(s) of the Industrial Disputes Act. 5. In view of the above admitted position, unless the relationship of employer and employee is decided on the basis of oral and documentary evidence, the claim petition cannot be taken on record. Accordingly, the first point is answered against the Union by holding that the weavers union failed to establish the relationship of employer and employee. In the absence of any substantial and accepted evidence to prove that the members of the weavers union are domestic weavers, that the domestic weavers are employees of the petitioner society; that there was a relationship of employer and employee between them, the Industrial Tribunal should not have taken on record the claim petition, as the Tribunal has committed material irregularity without deciding whether there are relationship of employer and employees, the Award is legally not maintainable. Accordingly, issues No. (a) and (b) are answered against the weavers union. 6. Coming back to the first issue whether the domestic weavers were not employees of the petitioner society, Mr.S.Ravindran, learned counsel appearing for the petitioner heavily submitted that the petitioner's society was formed in the year 1957 and it has enrolled the handloom weavers having their own looms in their houses and the petitioner society supplied them yarn on credit. The weavers, after carrying the yarn, converted the same in the form of finished products. They carried their works in their house by having their own looms without fixing any working hours, because, they are free to carry their house hold works along with weaving works. Moreover, they were also free to weave any yarn supplied by any other private master weaver. Therefore, the petitioner society have no control over the method of working hours, whether they are working in one hour or 10 hours. For the simple reason that there has been no relationship of employer and employee, they cannot be called as workmen within the meaning of Section 2(s) of the Industrial Disputes Act. 7. On the contrary, the learned counsel appearing for the second respondent, as a reply to the said argument, by relying upon the land mark judgment of the Bangalore Water Supply and Sewerage Board vs. A.Rajappa and others, reported in 1978 (2) SCC 213 submitted by relying upon Para 124 of the said Judgment for a proposition that the petitioner's Society is an Industry, which is extracted hereunder: "124. We are intrigued by this reason. The ingredients necessary for an industry are present here and yet it is declared a non-industry because the club belongs to members only. A company belongs to the shareholders only; a co- operative belongs to the members only; a firm of experts https://hcservices.ecourts.gov.in/hcservices/ belongs to the partners only. And yet, if they employ workmen with whose co-operation goods and services are made available to a section of the community and the operations are organized in the manner typical of business method and organisation, the conclusion is irresistible that an 'industry' emerges. Likewise, the members of a club may own the institution and become the employers for that reason. It is transcendental logic to jettison the inference of an 'industry' from such a factual situation on the ingenious plea that a club "belongs to members for the time being and that is what matters". We are inclined to think that that just does not matter. The Gymkhana case, we respectfully hold, is wrongly decided." 8. According to him, the ingredients necessary for an industry are present here in the petitioner society, because they employ workmen with whose co-operation goods and services are made available to a section of the community and the operations are organised in the manner typical of business method and organisation, hence, the conclusion is irresistible that an 'industry' emerges. Para 124 in fact makes the issue unambiguously clear showing that a Company belonging to share holder and a Co-operative Society belonging to the members can still be brought under the ambit of industry, provided the employee/workmen with whose Co-operation goods and services are made available to a section of the community and the operations are organized in the manner of typical of business method and organization. But the position as available in the present society is completely different. Admittedly, the petitioner society does not take any steps to keep any handlooms to employ any workmen in their establishment. It is also an admitted fact that the enrolled handloom weavers are having their own looms in their own houses, for them the society supplies yarn on credit basis. After receiving the yarn, the members of the weavers union get their yarn converted in the form of finished product in their own houses. Later on, after giving credit to the value of the materials, the petitioner society pay them the conversion charges alone. This goes to show that the weavers do not work in the premises of the petitioner society. Further, when they are working in their houses, naturally, they are free to carry on any other occupation, including, to carry on the weaving work for any other master weaver or private parties, engaged in handlooms. It may be two or three or more than five. Therefore, when the employee is having relationship with one employer, he cannot be legally employed with another employee. Therefore, in this context, if we apply para 124 of the Bangalore Water supply case which shows that if the working operations are organized in the manner typical of business method and organization, then the conclusion is irresistible that the operation shall be an industry. Since in the present case, there is no systematic method of work https://hcservices.ecourts.gov.in/hcservices/ supervision, organized and supervised by the petitioner society by regulating the hours of work or method of work or identifying any particular person to carryout the conversion work in the form of finished product, it is not possible to hold that the members of the weavers union are workmen of the petitioner's society. One more vital aspect comes to my mind shows that when the yarn is supplied to the members of the society, they do not insist upon the members of the weavers union alone to weave that it should not be converted in the form of finished product either by the elders or adults or by old people. Therefore, when there is no supervisory control for converting the yarn in the form of finished product, the argument advanced by the learned counsel appearing for the weavers union has to fail, accordingly the same is answered in respect of Issue Nos.(a) and (b) against them. 9. In regard to issue No.(c) whether the domestic weavers cannot be termed as workmen within the meaning of Section 2(s) of the Industrial Disputes Act, when the learned counsel appearing for the petitioner management specifically brought before this Court through their counter statement stating clearly that the weavers belonging to the weavers union do not work in the premises belonging to the petitioner society and the petitioner society also has not fixed their working hours, they are free to carry on any other occupation in their homes. More than that they are equally free to do weaving work for any other master weaver. On this basis, he further submitted that when the petitioner society does not have any control in supervising whether they are weaving the yarn supplied by the petitioner society or they are busy in weaving yarn supplied by other master weaver or private parties, the weavers union again failed to produce any evidence to say that the members of the union are completely supervised by the petitioner society. But, no such evidence whatsoever has been let in before the Industrial Tribunal and the Industrial Tribunal also have not given any finding whatsoever as to whether there was any relationship of master and servant between the weavers and the petitioner society. On this basis, when there is no finding that the members of the weavers union are workmen within the meaning of Section 2(s) of the Industrial Disputes Act, the Industrial Tribunal should have held that the claim petition was not maintainable. As it did not do so, the third question whether the domestic weavers can be termed as Workmen within the meaning of Section 2(s) of the Industrial Disputes Act is answered against the weavers union. In fact, the learned counsel appearing for the weavers union has not even shown before this Court any documents filed before the Industrial Tribunal to substantiate their case that there has been relationship of master and servant to bring their claim for its maintainability. However, in Paragraph 17 of the award, it was held that fixation of revised pay has to be done in accordance with G.O.(D) No.39, Labour and Employment Department https://hcservices.ecourts.gov.in/hcservices/ dated 18.01.1994 and he also fairly agreed that the said finding is wrong because their claim was not for fixation of revised pay. On the contrary, their claim was only for direction to issue the revision of pay demanding 50% increase in basic wages. Again on that, when the respondent weavers union have not shown before the Industrial Tribunal any documents with regard to what was the basic pay paid by the petitioner society and received by the members of the society, it will be highly impossible for the Industrial Tribunal to give a direction to the petitioner Society in this regard. In fact, the claim petition filed by the weavers union does not even mention clearly what was their claim for giving direction to the petitioner society to increase the basic pay. I am also unable to make out what was the basic pay given to each members of the petitioner society. In fact, in the claim statement it has not even mentioned how many members are part of the union and how long they are working and no such information has been furnished either in the claim petition or by way of any affidavit or document before the Industrial Tribunal. That apart, the learned Industrial Tribunal eventhough has come to the conclusion that the registered Handlooms Weavers Co-operative Societies in the state are exempted from the provisions of the Industrial Disputes Act by virtue of power conferred under Section 52 of the Act, erroneously, it has held that the dispute is maintainable. 10. Further, if there is any complaint of misappropriation of the yarn, the question of initiation of disciplinary proceedings for dismissal of member or suspension of member has not been provided in the Act, for the reason that there is no relationship of employer and employee between them. At the most maximum, if the yarn is taken on credit from the petitioner society and not returned, further supply of yarn will not be continued to the said default member, therefore, it will be highly untenable to say that there has been a relationship of employer and employee between them so as to bring them under disciplinary jurisdiction of the petitioner Management. Further, the question whether the relationship between the parties i.e. the employer and employee, is a pure question of fact. The burden of proof to establish the employer and employee relationship by producing all available evidence is on the petitioner. 11. It is well settled proposition of law that a person who asserted a plea of existence of relationship of employer and employee, the burden would be upon him to prove it. It is not in dispute that the said burden has not been discharged by the members of the weavers union before the Industrial Tribunal. A bald claim statement has been filed before the Industrial Tribunal without mentioning as to how many members were working under the petitioner society and how long they are working on the date of filing the claim petition. Equally, the Industrial Tribunal also has not given any https://hcservices.ecourts.gov.in/hcservices/ finding as to whether there was any relationship of employer and employee between the petitioner society and the members of the weavers union. Therefore, in my opinion, when the petitioner society has no control as to who should