Summarize the following court judgment. Civil Appeals Nos. 324 and 325 of 1957. Appeals by special leave from the judgment and order dated April 10	 1953	 of the former Hyderabad High Court in E.P.T. References Nos. 45215 and 453/5 of 1358 F. A.V. Viswanatha Sastri	 section N. Andley	 J. B. Dadachanji	 Rameshwar Nath and P. L. Vohra	 for the appellant. K.N. Rajagopal Sastri and D. Gupta	 for the respondent. April 18. The Judgment of the Court was delivered by S.K. DAS	 J. These are two appeals with special leave from the Judgment and Order of the High Court of Hyderabad dated April 10	 1953	 in two references under section 48(3) of the Hyderabad Excess Profits Tax Act. The question which the High Court answered against the assesses in the said references was 548 " Whether in the circumstances of the case	 the officers of the Excess Profits Tax Department were right in treating the income of the assessee or the Industrial Trust Fund as income from business." 	 The High Court answered the question in the affirmative. The point for decision before us is if the High Court correctly answered the question. The relevant facts which led to the question and answer are these. There were two cotton mills in the State of Hyderabad (as it was then known) called Azamjahi mills and Osmanshahi mills. They were public joint stock companies. By a Firman e Mubarak of 1929 issued by the then Ruler of the State was formed an institution called the Industrial Trust Fund	 the purpose of which was to help large and small industries on behalf of the Government of the State. The management of the Trust was entrusted to a Committee which consisted of three members of the Government	 who were called Trustees. By two agreements dated April 12	 1934	 and July 27	 1934	 made between the Trustees of the one part and the two mills of the other	 the Trustees were appointed secretaries	 treasurers and agents of the said mills. Under these agreements the Trustees were given the general conduct and management of the business and affairs of the mills and they were entitled to appoint employees and were also entitled to delegate to other persons all or any of the powers	 authorities	 discretions	 etc.	 under the agreements subject to the approval of the Board of Directors of the respective mills. By two other agreements also dated April 12	 1934	 and July 27	 1934	 the Trustees were appointed selling agents of the mills. By two agreements both dated October 16	 1938	 which were supplemental to the selling agency agreements mentioned above	 the Trustees were given power to delegate all or any of their powers	 authorities	 etc.	 to other persons subject to the approval of the Board of Directors of the respective mills. Till October	 1938	 the Trustees exercised their powers and performed their functions under the agreements aforesaid through an Advisory Board	 and Quamar Shaffi Tyabji	 appellant before us	 was appointed chairman of the Advisory Board on a remuneration of Rs. 1	500 549 per month plus a certain commission. Sometime in 1938 the Advisory Board was dissolved	 and on December 6	 1938	 an agreement was entered into between the Trustees and the appellant. Clause 11 of the preamble of this agreement recited: " The said Trustees are desirous of delegating such of the powers	 authorities and discretions as such secretaries	 treasurers and agents as also as such selling agents of the said two mills as aforesaid as are hereinafter mentioned to and appointing the said Quamar Shaffi Tyabjee as the managing agent of the business of the said trustees as such secretaries and treasurers and agents as also as such selling agents of the said two mills as aforesaid in and for the matters and purposes hereinafter mentioned." The agreement then recited that the approval of the Board of Directors of the two mills having been obtained	 the appellant was appointed managing agent of the business of the Trustees as secretaries	 treasurers and agents and also as selling agents of the two mills. Clause 2 of the agreement detailed the powers of the appellant which were the same as those of the Trustees to conduct and manage the business of the two mills	 subject however to the general control of the Trustees. In other words	 the full powers of management and of the selling agency in relation to both the mills were delegated to the appellant. Clause 3 said inter alia that the appellant would hold the office of managing agent and selling agent for the remaining period of the original managing agency and selling agency agreements. The remuneration of the appellant for the managing agency was fixed at Rs. 2	000 per month and a commission of 21 per cent. out of the commission of 121 per cent. per annum on the annual profits payable to the Trustees	 subject to the condition that Osmanshahi mills made an annual profit of Rs. 1	50	000 and the Azamjahi mills made an annual profit of RE;. 2	00	000. For the selling agency a separate commission was payable on the sale of different kinds of goods subject again to the condition that the annual profits of the two mills did not fall below a particular figure. Clause 6 of the agreement related to the appointment and duties of a mill expert	 Clause 7 72 550 provided for the termination of the agreement and said that the agreement shall terminate on the Trustees terminating the earlier agreements in their favour	 provided however that in the event of the said Trustees deciding to transfer the said respective agreements and the rights thereunder to any one they shall in the first instance offer the same to the said managing agent on the same terms and conditions as may have been offered to them and on the further term that the managing agent shall make arrangement to the satisfaction of the said Trustees for the payment to them in cash or otherwise of the moneys they have spent in purchasing the managing agency rights of the said two mills as also the balance then due of the unsecured loans (i.e.	 other than first debenture loan) they have and may hereafter advance to the said two mills	 so that the said managing agent shall have the first refusal thereof in the manner aforesaid	 provided always that the said managing agent shall intimate to the said Trustees his acceptance of the said term within six weeks of the communication to him of the said offer and in the event of his omission to do so he shall be deemed to have not accepted the same. Clause 9 of the agreement is also important. It said : " The managing agent shall not assign the benefit of this agreement	 the same being personal to himself." Clauses 10 and II related to the eventuality of winding up of the mills and its effect on the appellant 's right	; under the agreement. Under the terms of the agreement dated December 6	 1938	 the appellant conducted the business of the mills	 both as to management and selling. He was assessed to excess profits tax for the two chargeable accounting periods 1351F and 1352F	 corresponding to October 1	 1941	 to September 30	 1942	 and October 1	 1942	 to September 30	 1943	 respectively. The total income assessed for 1351F was Rs. 2	37	451	 which included a sum of Rs. 2	11	230 representing the appellant 's managing agency allowance and commission. The total income for 1352F was Rs. 4	90	027 which included Rs. 4	45	775 being the managing agency commission and allowance of the appellant. 551 Before the Excess Profits Tax authorities the appellant contended that he was only an employee of the Industrial Trust Fund and his remuneration under the agreement dated December 6	 1938	 was merely salary and not income derived from business and therefore not liable to excess profits tax. The Excess Profits Tax authorities negatived this contention	 and as required by the High Court the Commissioner of Income tax	 Hyderabad	 referred the question of law which we have set out at the beginning of this judg ment to the High Court for decision. On behalf of the appellant it has been submitted that on a true construction of the relevant agreements the Industrial Trust Fund was the managing agent as also the selling agent of the two mills; the Trustees employed the appellant on certain terms and gave him certain powers	 and therefore the appellant		 an individual and not a firm	 was not carrying on an independent business of his own; be was just carrying out the duties of an employee of the Trustees in spite of his being described as managing agent in the agreement of December 6	 1938. His income	 therefore	 was not income derived from business. We are unable to accept this line of argument a.	; correct. In Lakshminarayan Ram Gopal and Son Ltd. V. The Government of Hyderabad (1) this Court had occasion to explain the position of an agent	 a servant and an independent contractor. It was there pointed out that the difference between the relations of master and servant and of principal and agent lay in this: a principal has the right to direct what work the agent has to do; but a master has the further right to direct how the work is to be done. An agent has to be distinguished on the one hand from a servant and on the other from an independent contractor. A servant acts under the direct control and supervision of his master	 and is bound to conform to all reason. able orders given in the course of his work. An agent though bound to exercise his authority in accordance with all lawfull instructions which may be given to him from time to time by his principal	 is not subject in its exercise to the direct control or supervision of the principal. Indeed	 learned counsel for the appel (1) ; 552 lant accepts as correct the distinction made above and also accepts that the true relation between the Mills and the Trustees was that of principal and agent; but be contends that as between the Trustees and the appellant the relation was one of master and servant. We consider that this contention is wholly unsound. We have examined the original agreement between the Mills and the Trustees dated April 12	 1934. Clause 9 of that agreement said that "the agents may regulate and conduct their proceedings in such manner as they may from time to time determine and may delegate all or any of their powers	 authorities and discretions as secretaries	 treasurers and agents of the company to such person or persons and on such terms and conditions as they may think fit	 subject to the approval of the Board of Directors of the company. " The delegation in favour of the appellant was made under this clause. The position was therefore this: the Trustees as agents had express authority to name another person to act for the principal in the business of the agency	 and they named the appellant with the approval of the Board of Directors. Therefore	 the appellant	 was neither a servant nor a mere sub agent. He was an agent of the principal for such part of the business of the agency as was entrusted to him. The position in law was as laid down in section 194 of the Indian Contract Act. In similar circumstances this Court has held that managing agency is business (see Lakshminarayan Ram Gopal and Son Ltd. vs The Government of Hyderabad (1) and J. K. Trust	 Bombay vs The Commissioner of Income tax Excess Profits Tax	 Bombay (2 ). A consideration of the terms of the agreement of December 6	 1938	 also leaves no manner of doubt	 in the matter. Full powers of the Trustees as managing agents were delegated to the appellant under cl. 2 of the agreement	 subject only to the general control of the Trustees and the clause stated that the appellant was to conduct and manage the business and affairs of the two mills. Clause 3 relating to the tenure of the managing agency	 cl. 4 relating to remuneration	 cl. 7 relating to termination of business and the clauses (1) ; (2) [1958] S C.R. 65. 553 relating to the eventuality of winding up of the mills all these were appropriate to a business undertaking only and quite inappropriate to a relation of master and servant. The extent of the delegation of powers was also indicated by cl. 5 which said inter alia that the managing agent (meaning the appellant) must observe and perform ail the terms and conditions of the earlier managing agency and selling agency agreements in favour and on the part of the Trustees; in other words	 the entire managing agency business was handed over to the appellant. Learned counsel for the appellant emphasised el. 9 which we had quoted earlier and said that it showed that the appellant could not assign any of the benefits under the agreement	 which was personal to himself. We do not think that el. 9 changed the quality of the relation between the Trustees and the appellant. The managing agency agreement must be read as a whole	 and so read the conclusion which clearly emerges is that the appellant was undertaking a business of his own in accepting the duties and responsibilities of a managing agent of the two mills under the general control of the Trustees. The appellant was a man with previous business experience and held an agency of the Eastern Federal Union Insurance Co.	 which brought him a substantial income. Learned counsel for the appellant has relied on the decision in Inderchand Hari Ram vs Commissioner of Income tax	 U. P. & C. P. (1)	 where the distinction between the definitions of managing agent and manager under the Indian Companies Act	 1913	 was pointed out. We do not think that that decision gives any help to the appellant. The question really is one of construction of the relevant agreements; what do their terms show a relation of master and servant or an agency business ? We have no doubt in our minds that what clearly emerges from the terms of the agreement of December 6	 1938	 is a business of managing agency accepted and undertaken by the appellant. Therefore	 the High Court correctly answered the question in the affirmative. The appeals fail and are dismissed with costs. As the appeals have been heard together	 there will be one set of costs. Appeals dismissed.

By an order of the Ruler of the erstwhile State of Hyderabad an institution was formed for the development of industries on behalf of the Government	 called the Industrial Trust Fund	 to be managed by a committee called Trustees. In 1934 the Trustees entered into agreements with two cotton mills situated in the State by virtue of which they were appointed secretaries	 treasurers and agents of the said mills. They were given the general management of the mills including the power to appoint employees and were also appointed selling agents of the mills. By separate agreements the Trustees were given power to delegate to other persons all or any of the powers under the agreements subject to the approval of the Board of Directors of the respective mills. On December 6	 1938	 the Trustees entered into an agreement with the appellant whereby they delegated their powers in his favour and appointed him as the managing agent of their business as secretaries	 treasurers and agents	 as also selling agent of the two mills	 subject to their general control. The appellant was to hold the office of managing agent and selling agent for the remaining period of the original managing agency and selling agency agreements. The remuneration of the appellant for the managing agency was fixed at Rs. 2	000 per month and a commission of 2 1/2 per cent. out of the commission of 12 1/2 per cent. per annum on the annual profits payable to the Trustees. For the selling agency a separate commission was payable on the sale of different kinds of goods. Clause 9 of the agreement provided 547 that the managing agent shall not assign the benefit of the agreement	 the same being personal to himself. For the accounting years 1941 42 and 1942 43 the appellant was assessed to excess profits tax	 but he contended that the Trustees of the Industrial Trust Fund were the managing agents as also the selling agents of the two mills	 that the Trustees employed him on certain terms and gave him certain powers	 and that he was not carrying on an independent business of his own but was just carrying out the duties of an employee of the Trustees. He claimed that his remuneration under the agreement dated December 6	 1938	 was merely salary and not income derived from business and therefore not liable to excess profits tax : Held	 (1) that under the agreements of 1934 the Trustees as agents had express authority to name the appellant to act for the principal in the business of agency and that therefore the appellant was neither a servant nor a mere sub agent	 but an agent of the principal for such part of the business of agency as was entrusted to him	 within the meaning of section 194 of the Indian Con tract Act	 1872. (2)that on the true construction of the agreement dated December 6	 1938	 the appellant was undertaking a business of his own in accepting the duties and responsibilities of a managing agent of the two mills under the general control of the Trustees	 and that	 therefore	 the income derived by him as remuneration and commission was liable to excess profits tax. Lakshminarayan Ram Gopal and Son Ltd. vs The Government of Hyderabad	 ; and 1. K. Trust	 Bombay vs The Commissioner of Income tax excess Profits Tax	 Bombay	 [1958] S.C.R. 65	 relied on.