Case: Chintaman Rao &amp; Another Vs. State of Madhya Pradesh

2. Messrs. Brijlal Manilal and Company is a bidi factory situated in Sagar. The 1st Appellant, Chintamanrao, is the Managing Partner of the firm while the 2nd appellant, Kantilal, is its active Manager. The Company manufactures bidis. The process of manufacture, so far as is relevant to the question raised, is carried out in two stages.3. The first stage: The management enters into a contract with independent contractors, known as Sattedars, for the supply of bidis locally. The documents embodying the terms of the contract entered into by the Sattedars were not produced in the case. But the terms of the contract are not in dispute. The Management supplies tobacco to the Sattedars and in some cases bidi leaves. Some of the Sattedars maintain a small factory where they get bidis manufactured by engaging coolies. Others give tobacco and bidi leaves to outsiders who prepare bidis in their houses. After bidis are rolled in, the Sattedars collect the bidis so manufactured and take them to the factory directly or through coolies where they are sorted and checked by the workers in the factory. The selected or approved bidis are separately packed in bundles of 10 and 25 and taken by the Sattedars or the coolies in gauze trays to tandul and left there. The rejected bidis, commonly known as chhant are again rebundled by the Sattedars and delivered to the factory. The management pays the Sattedars the cost of the manufacture of bidis after deducting therefrom the cost of tobacco supplied to them. Thereafter the second stage of the process of the manufacture begins in the factory. It is carried out exclusively by the labourers employed in the factory. It consists of warming of bidis to give taste, wrapping them in tissue papers, labelling and finally bundling them in the Pudas. The finished product is then marketed. From the aforesaid description of the dual process of manufacture of bidis it is manifest that a Sattedar is only an independent contractor, who undertakes to do a specific job of work i.e., the supply of bidis, directly or indirectly through his coolies, by manufacturing them either in his own factory or by entrusting the work to third parties, at a price to be paid by the management after delivery and approval. He (Sattedar) or his coolies neither work in the appellants factory nor are they subject to the supervision or control of the appellants. The coolies or the third parties, to whom the work of making of bidis is entrusted by the Sattedars, are employed by the Sattedars and are paid by them. None of them works in the factory though they bring bidis to the factory for delivery in accordance with the terms of the contract. It may also be pointed out that the factory employs workers who are under the direct control and supervision of the factory management and who attend to the second part of the process of manufacture described above.4. On December 9, 1952. Sri B. V. Desai, the Inspector of Factories, Madhya Pradesh, Nagpur, visited the factory atp. m. At the time of his inspection he found the following persons in the factory :1. Pirbaksha, son of Amir.2. Abdul Sagir, son of Sk. Alam.3. Deviprasad, son of Uddam.4. Ramshankar, son of Mulchand.5. Gopal, son of Mulchand.6. Nirpat, son of Bhagirath.7. Ramchand, son of Gyan.8. Gotiram, son of Lila.9. Basodi, son of Gulu.Of the aforesaid persons, Deviprasad, Nirpat and Gotiram are Sattedars and the rest are coolies employed by the Sattedars. The Inspector found the first seven persons sorting out bidis and packing them into bundles of 10 and 25 in the premises and the last two bringing the bidis to the room in jali for warming. The said facts are practically admitted by some of the aforesaid persons, who gave evidence in the case, and they explained that they came to the factory on that day for delivering the bidis manufactured by them to the factory.5. Thereafter the Chief Inspector of Factories filed a complaint in the Court of theSagar, against the appellants for violation of the provisions of Ss. 62 and 63 of the Act, under the former for failure to maintain the register of adult workers with all the prescribed entries duly filled in and under the latter for allowing the workers to work in the factory without makingthe entries of their attendance in the register of adult workers. TheSagar, held that the appellants contravened the provisions of the aforesaid sections and on that finding convicted them under S. 92 of the Act and directed them to pay a fine of Rs. 50 and Rs. 25 respectively. On appeal the Second Additional Sessions Judge, Sagar, confirmed the conviction of the 2nd appellant for contravening the provisions of Ss. 62 and 63 but set aside that of the 1st appellant in regard to S. 62 but confirmed the conviction for contravening S. 63 of the Act. The Revision Petition filed by the appellants in the High Court of Judicature at Nagpur was dismissed. As aforesaid with Special Laws of this Court, this appeal was filed against the Order of the High Court.

Court's reasoning:
12. There is no reason why the test laid down by this Court in the context of the definition of workman under the Industrial Disputes Act of 1947, cannot be invoked or applied for ascertaining whether a person is a worker under the Act. If the test be applied, it is not possible to hold that Sattedars in the present case, having regard to the nature of the work undertaken by them and the terms whereunder their services were engaged, are "workers" within the meaning of the definition under the Act.It has been established in the present case that the Sattedar is only an independent contractor and the agreement between the management and the Sattedar is only that the Sattedar should receive tobacco from the management and supply them rolled in bidis for consideration. He is not under the control of the factory management and he can manufacture bidis wherever he pleases.It is immaterial to the management whether he makes the bidis in his own factory or distributes tobacco to different individuals for making bidis under a separate agreement entered into by him with them.The management cannot regulate the manner of discharge of his work. His liability is discharged by his supplying bidis and delivering them in the factory. The terms of the contract between the management and the Sattedar, as disclosed in the evidence, do not enjoin on the latter to work in the factory.His only obligation is to deliver bidis at the factory. That would be an obligation imposed on any contractor who undertakes to supply and deliver the goods to the other party.We, therefore, hold that the Sattedars in this case were not employed by the management as workers but were only independent contractors who performed their part of the contract by making bidis and delivering them at the factory.13.If the Sattedars, i.e., three out of the nine persons found at the factory, were not workers within the meaning of the Act, can it be said that the other persons, who were coolies employed by the Sattedars to enable them to keep up their contract with the management of the factory, were workers as defined under the Act?A "worker" under the definition means a person employed, directly or through any agency.The words directly or through any agency indicate that the employment is by the management directly or through some kind of employment agency and in either case there is a contract of employment between the management and the persons employed. Admittedly the coolies were not employed by the management; there was no privity of contract between them and the management.It is not disputed that the coolies were not employed by the Sattedars for or on behalf of the management of the factory. They were employed by the Sattedars on their own account and they paid them for the work extracted from them.On the aforesaid facts it is obvious that the coolies were not employed by the management directly nor were they employed by the management through the agency of Sattedars. If so, it follows that coolies employed by the Sattedars are not workers within the meaning of the definition in the Act.14. The evidence discloses a third category of persons who took some part in the manufacturing process of bidis. They were the persons to whom the Sattedars distributed tobacco for making bidis in their respective homes. It does not appear from the evidence that any one of the nine persons found in the factory belongs to that category. That apart those persons cannot, in any sense of the term, be called the persons employed by the management directly or through anyscheme of the aforesaid provisions indicates that the workmen in the factory are under the direct supervision and control of the management. The conditions of service are statutorily regulated and the management is to conform to the rules laid down at the risk of being penalised for dereliction of any of the statutory duties. The management obviously cannot fix the working hours, weekly holidays, arrange for night shifts and comply with other statutory requirements, if the persons like the Sattedars, working in their factories and getting their work done by others or through coolies, are workers within the meaning of the Act. It is well nigh impossible for the management of the factory to regulate their work or to comply with the mandatory provisions of the Act.The said provisions, therefore, give a clear indication that a worker under the definition of the Act is a person who enters into a contract of service under the management and does not include an independent contractor or his coolies or servants who are not under the control and supervision of the employer.The decision in State v. Shri Krishna Prasad, AIR 1954 All 44   (E), need not be considered in detail as the learned Judges therein accepted the same interpretation that we have placed on the provisions of S. 2 (1) of the Act and came to the conclusion, on the facts of that case, that the persons therein were workers of the factory.19. We, therefore, hold that neither the Sattedars nor the coolies found by the Inspector to be working in the factory were workers, as they were not employed by the factory.20. As they were not workers, theof their names in the register of adult workers or the absence of any entries in regard to them in the said register would not constitute an offence under S. 92 of the Act.