Case: Management of D.C. Dewan Mohideen Sahib &amp; Sons &amp; Another Vs. Secretary, United Beedi Workers' Union Salem &amp; Another

under the so-called independent contractors in these cases are workmen of the appellants. It has been found by the tribunal and this view has been confirmed by the appeal Court that the so-called independent contractors were mere agents or branch managers of the appellants. We see no reason to disagree with this view taken by the tribunal and confirmed by the appeal Court on the facts of these cases. We are not unmindful in this connection of the view taken by the learned Single Judge when he held that on the agreements and the facts found the so-called intermediaries were independent contractors. We are, however, of opinion that the view taken by the appeal Court in this connection is the right one. As the appeal Court has rightly pointed out the so-called independent contractors were indigent persons who were in all respects under the control of the appellants. There is in our opinion little doubt that this system has been involved to avoid regulations under the Factories Act. Further there is also no doubt from whatever terms of agreement as available on the record that the so-called independent contractors have really been independent at all. As the appeal Court has pointed out they are impecunious persons who could hardly afford to have factories of their own. Some of them are even ex-employees of the appellants. The contract is practically one sided in that the proprietor can at his choice supply the raw materials or refuse to do so, the so-called contractors having no right to insist upon the supply or raw materials to him. The so-called independent contractor is even bound not to employ more than nine persons in his so-called factory. The sale of raw materials to the so-called independent contractor and resale by him of the manufactured bidis is also a mere camouflage, the nature of which is apparent from the fact that the so-called contractor never paid for the materials. All that happens is that when the manufactured bidis are delivered by him to the appellants, amounts due for the so-called sale of raw materials is deducted from the so-called price fixed for the bidis. In effect all that happened is that the so-called independent contractor is supplied with tobacco and leaves and is paid certain amounts for the wages of the workers employed and for his own trouble. We can, therefore, see no difficulty in holding that the so-called contractor is merely an employee of an agent of the appellants as held by the appeal Court and as such employee or agent he employs workers to roll bidis on behalf of the appellants. The work is distributed between a number of so-called independent contractors who are told not to employ more than nine persons at one place to avoid regulations under the Factories Act. We are not, however, concerned with that aspect of the matter in the present appeals. But there can be no doubt that the workers employed by the so-called contractors are really the workmen of the appellants who are employed through their agents or servants whom they choose to call independent contractors.13. It is, however, urged that there is no control by even the agent over the bidi workers. Now the evidence shows that the bidi workers are permitted to take the leaves him in order to cut them so that they might be in proper shape and size for next days work; but the real work of filling the leave with tobacco (i.e. rolling the bidis) can only be done in the so-called factory of the so-called independent contractor. No tobacco is ever given to the workers to be taken home to be rolled into bidis as and when they liked. They have to attend the so-called factory of the so-called independent contractor to do the real work of rolling bidis. As was pointed out by this Court in Birdhichand Sharmas case, 1961-3 SCR 161 : (AIR 1961 SC 644 ), the work is of such a simple nature that supervision all the time is not required. In Birdhichand Sharmas case, 1961-3 SCR 161 : (AIR 1961 SC 644 ), supervision was made through a system of rejecting the defective bidis, at the end of day. In the present cases we have not got the full terms of the agreement and it is, therefore, not possible to say that there was no kind of supervision or control over the workers and that the so-called independent contractors had to accept all kinds of bidis whether made upto standard or not. It is hardly likely that the so-called independent contractor will accept bidis which are not upto the standard; for that is usually the system which prevails in this trade as will be apparent from the facts of the many bidi manufacturing cases to which we have referred. We are, therefore, not prepared to hold in the absence of any evidence one way or the other that there is no supervision whatsoever of the work done by the workers. In the circumstances we are of opinion that the relationship of master and servant between the appellants and the workmen employed by the so-called independent contractors is established. As the appeal Court has pointed out whatever there was a dispute in connection with the manufacture of bidis the workers looked to the appellants for redress. In one of the cases the manager of one of the appellants sent a letter to the labour officer that the factory was agreeable to increase the wages of the workers from Rs. 1-14-0 to Rs. 2 per thousand bidis. In the other case also a similar letter was addressed showing that whenever there was increase or decrease in wages of the workers who work under the so-called independent contractors the real decision was taken by the appellants. This conduct on the part of the appellants is clearly inconsistent with their plea that the workers are not their employees and there is no privity between them and the said workers.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]12. It is in the light of these decisions that we have to decide whether the workmen who work under the so-called independent contractors in these cases are workmen of the appellants. It has been found by the tribunal and this view has been confirmed by the appeal Court that the so-called independent contractors were mere agents or branch managers of the appellants. We see no reason to disagree with this view taken by the tribunal and confirmed by the appeal Court on the facts of these cases. We are not unmindful in this connection of the view taken by the learned Single Judge when he held that on the agreements and the facts found the so-called intermediaries were independent contractors. We are, however, of opinion that the view taken by the appeal Court in this connection is the right one. As the appeal Court has rightly pointed out the so-called independent contractors were indigent persons who were in all respects under the control of the appellants. There is in our opinion little doubt that this system has been involved to avoid regulations under the Factories Act. Further there is also no doubt from whatever terms of agreement as available on the record that the so-called independent contractors have really been independent at all. As the appeal Court has pointed out they are impecunious persons who could hardly afford to have factories of their own. Some of them are even ex-employees of the appellants. The contract is practically one sided in that the proprietor can at his choice supply the raw materials or refuse to do so, the so-called contractors having no right to insist upon the supply or raw materials to him. The so-called independent contractor is even bound not to employ more than nine persons in his so-called factory. The sale of raw materials to the so-called independent contractor and resale by him of the manufactured bidis is also a mere camouflage, the nature of which is apparent from the fact that the so-called contractor never paid for the materials. All that happens is that when the manufactured bidis are delivered by him to the appellants, amounts due for the so-called sale of raw materials is deducted from the so-called price fixed for the bidis. In effect all that happened is that the so-called independent contractor is supplied with tobacco and leaves and is paid certain amounts for the wages of the workers employed and for his own trouble. We can, therefore, see no difficulty in holding that the so-called contractor is merely an employee of an agent of the appellants as held by the appeal Court and as such employee or agent he employs workers to roll bidis on behalf of the appellants. The work is distributed between a number of so-called independent contractors who are told not to employ more than nine persons at one place to avoid regulations under the Factories Act. We are not, however, concerned with that aspect of the matter in the present appeals. But there can be no doubt that the workers employed by the so-called contractors are really the workmen of the appellants who are employed through their agents or servants whom they choose to call independentthe present cases we have not got the full terms of the agreement and it is, therefore, not possible to say that there was no kind of supervision or control over the workers and that the so-called independent contractors had to accept all kinds of bidis whether made upto standard or not. It is hardly likely that the so-called independent contractor will accept bidis which are not upto the standard; for that is usually the system which prevails in this trade as will be apparent from the facts of the many bidi manufacturing cases to which we have referred. We are, therefore, not prepared to hold in the absence of any evidence one way or the other that there is no supervision whatsoever of the work done by the workers. In the circumstances we are of opinion that the relationship of master and servant between the appellants and the workmen employed by the so-called independent contractors is established. As the appeal Court has pointed out whatever there was a dispute in connection with the manufacture of bidis the workers looked to the appellants for redress. In one of the cases the manager of one of the appellants sent a letter to the labour officer that the factory was agreeable to increase the wages of the workers from Rs. 1-14-0 to Rs. 2 per thousand bidis. In the other case also a similar letter was addressed showing that whenever there was increase or decrease in wages of the workers who work under the so-called independent contractors the real decision was taken by the appellants. This conduct on the part of the appellants is clearly inconsistent with their plea that the workers are not their employees and there is no privity between them and the said workers.are, however, of opinion that the view taken by the appeal Court in this connection is the right one. As the appeal Court has rightly pointed out theindependent contractors were indigent persons who were in all respects under the control of the appellants. There is in our opinion little doubt that this system has been involved to avoid regulations under the Factories Act. Further there is also no doubt from whatever terms of agreement as available on the record that theindependent contractors have really been independent at all. As the appeal Court has pointed out they are impecunious persons who could hardly afford to have factories of their own. Some of them are evenof the appellants. The contract is practically one sided in that the proprietor can at his choice supply the raw materials or refuse to do so, thecontractors having no right to insist upon the supply or raw materials to him. Theindependent contractor is even bound not to employ more than nine persons in hisfactory. The sale of raw materials to theindependent contractor and resale by him of the manufactured bidis is also a mere camouflage, the nature of which is apparent from the fact that thecontractor never paid for the materials. All that happens is that when the manufactured bidis are delivered by him to the appellants, amounts due for thesale of raw materials is deducted from theprice fixed for the bidis. In effect all that happened is that theindependent contractor is supplied with tobacco and leaves and is paid certain amounts for the wages of the workers employed and for his own trouble. We can, therefore, see no difficulty in holding that thecontractor is merely an employee of an agent of the appellants as held by the appeal Court and as such employee or agent he employs workers to roll bidis on behalf of the appellants. The work is distributed between a number ofindependent contractors who are told not to employ more than nine persons at one place to avoid regulations under the Factories Act. We are not, however, concerned with that aspect of the matter in the present appeals. But there can be no doubt that the workers employed by thecontractors are really the workmen of the appellants who are employed through their agents or servants whom they choose to call independent