Sarju Prasad Ramcharan vs State of Madhya Pradesh

C.P. Sen, J.—By this Order, Criminal Revision No. 169 of 1974 (Bhakauram v. State of M.P.) and Criminal Revision No. 170 of 1974 (Radhelal v. State of M.P.) are also disposed of as common questions are involved based on similar facts. The applicants in each of these cases have been convicted u/s 22(A) of the Minimum Wages Act, 1948 for contravention of Rule 29 (2) framed under the Act and sentenced to pay fine of Rs. 50 each.

The applicants are bidi contractors and they get bidis prepared by bidi rollers and supply them to the manufacturers. On 19-8-1972 the Labour Inspector inspected the establishments of the applicants and found by enquiry on the spot that the applicants had not issued wage slips in Form 12 as required under Rule 29 (2) read with section 18 of the Act. He, therefore, charge-sheeted the applicants. The statement of the Labour Inspector has been duly corroborated by one of the employees of the applicants examined in each of the cases. His version finds further corroboration from the inspection note Ex. P-1 recorded by the Inspector at the time of inspection. The applicants abjured their guilt and submitted that they were neither employer nor the bidi rollers were their employees and so there was no question af issuing any wage slip. A defence witness was examined in support. It is not in dispute that the applicants used to supply bidi leaves and tobacco to bidi rollers who used to take the material to their home and prepare bidis there. The bidis so prepared used to be handed over to the applicants who used to reject the bidis which were not prepared according to specification. Then the applicants used to pay the bidi rollers on the basis of the number of bidis rolled by each of them. The learned trial Magistrate on appreciation of evidence came to the conclusion that the bidi rollers were the employees of the applicants and that the applicants had failed to issue wage slips as required under the provisions of the Act and the Rules. Therefore, they contravened the provisions. The conviction has been affirmed in appeal by the Sessions Judge but the sentence has been reduced from Rs. 400 to Rs. 50. The only question is whether bidi rollers can be said to be employees of the applicants.

Section 2(e) of the Act defines ''employer'' as under: --

employer means any person who employs, whether directly or through another person, or whether on behalf of himself or any other person, one or more employees in any scheduled employment in respect of which minimum lates of wages have been fixed under this Act [and includes a person deemed to be an employer u/s (22-CC)].

Section 22-CC of the Act is as under:--

(1) Subject to the provisions of Sub-section (2), where in any scheduled employment in respect of which minimum rates of wages have been fixed under this Act, any person (hereinafter in this section referred to as the principal) contracts with any other person (hereinafter in this section referred to as the contractor) for having any goods made for sale for the purposes of the trade or business of the principal either wholly or partly out of materials supplied to the contractor by such principal, then notwithstanding that the employees for making such goods are employed by the contractor, the principal shall also in addition to the contractor be deemed for all purposes of this Act to be the employer in relation to such employees.

This section was inserted by State Act No. 11 of 1959 as section 18-A and renumbered as 22-CC by State Act No. 23 of 1961.

In section 2(ee) ''employee'' has been defined as under:--

employee means any person who is employed for hire or reward to do any work, skilled or unskilled, manual or clerical, in a scheduled employment in inspect of which minimum rates of wages have been fixed, and includes an out-worker to whom any articles or materials are given out by another person to be made up, cleaned, washed, altered, ornamented, finished, repaired, adapted or otherwise processed for sale for the purpose of the trade or business of that other person where the process is to be carried out either in the home of the out-worker or in some other premises not being premises under the control and management of that other person; and also includes an employee declared to be employee by the appropriate Government; but does not include any member of the Armed Forces of the Union.

Section 18(3) provides that the appropriate Government may, by rules made under this Act, provide for the issue of wage books or wage slips to employees employed in any scheduled employment in respect of which minimum rates of wages have been fixed and prescribe the manner in which entries shall be made and authenticated in such Wage books or wage slips by the employer of his agent. Under Rule 29 (2) wage slips in form XII have to be issued by every employer to every person employed by him at least a day prior to the disbursement of wages. The schedule appended to the Act specifies the scheduled employments. Item No. 2 of this schedule is Employment in any tobacco (including bidi making) manufactory.'' It is not in dispute that minimum Wages for Workers in bidi industry were fixed for the first time by notification dated 11-1-1951 by the erstwhile State of M.P. which has been revised from time to time.

The Supreme Court in Dharangadhara Chemical Works Ltd. Vs. State of Saurashtra, has held that the principle Which emerges from those authorities is that the prima facie test for the determination of relationship between master and servant is the existence of the right in the master to supervise and control the work done by the servant not only in the matter of directing what work the servant is to do but also the manner in which he shall do his work. Following this decision, the Supreme Court in Chintaman Rao and Another Vs. The State of Madhya Pradesh, has held that bidi rollers employed by independent contractor are not workers of the manufacturer. It has also been held that the contractor was not under the control of manufacturer and he could manufacture bidis whenever he pleases. The management could not regulate the manner of discharge of his work. In Birdichand v. First Civil Judge A I R 1958 S C 644. the Supreme Court held that benefit of section 79 of the Factories Act for annual leave with wages is available to a bidi roller working with the contractor. It has been observed in that case as under:--

Taking the nature of the work in the present case it could hardly be said that there must be supervision all the time when biris were being prepared and unless there was such supervision there could be no direction as to the manner of work. In the present case the operation being a simple one, the control of the mariner in which the work was done was exercised at the end of the day, when biris were ready, by the method of rejecting those which did not come up to the proper standard. In such a case it was the right to supervise and riot so much the mode in which it was exercised which was important.

In Shankar Balaji Waje Vs. State of Maharashtra, . the Supreme Court has held that bidi roller has no obligation to work in factory, he has freedom to attend and leave factory at anytime. Payment on the basis of piece work, quantity to be turned out not fixed, bidi roller not ''worker'' within section 2(1) of the factories Act. in that case Birdichand''s case was distinguished because in Birdichand''s case the bidi roller was required to roll bidis in the factory of the contractor and his daily attendance was also marked, while in Shankar Balaji''s Case the bidi roller was free to prepare bidis at his home with the permission of the contractor and no attendance was marked.

In Bhikuse Yamasa Kshatriya (P) Ltd., and Another Vs. Union of India (UOI) and Another, . the Supreme Court further held that a bidi roller was entitled to benefit u/s 79 of the Factories Act of annual leave with wages, by relying on Birdichana''s case and in view of notification u/s 85 of the Act extending provisions of the Act to the factories of bidi contractors. Shankar Balaji''s case was distinguished in that case because there was no such notification extending the provisions, of the Act to the factories of the bidi contractors. Subsequently, in D.C. Dewan Mohideen Sahib and Sons Vs. The Industrial Tribunal, Madras, the Supreme Court while dealing with a case under the Industrial Disputes Act, 1947, held that the workers employed by the so-called contractors were really the workmen of the employer and they were employed through their agents of servants whom they choose to call independent contractors. It was also held that that it was hardly likely that the so-called independent contractor would accept bidis which were not up to the standard, for that was usually this system which prevailed in this trade. It was, therefore, not possible to hold in the absence of any evidence one way or the other that there was no supervision whatsoever of the Work done by the workers. In the circumstances, the relationship of master and servant between the employer and the workmen employed by the so-called independent contractors was established.

Recently, while dealing with tailoring establishment, the Supreme Court in Silver Jubilee Tailoring House and Others Vs. Chief Inspector of Shops and Establishments and Another, . has held that "but so far as tailoring is concerned, the fact that sewing machines on which the workers do the work generally belong to the employer is an important consideration for deciding that the relationship is that of master and servant. Apart from this when the employer has the right to reject the end product if it does not conform to the instructions of the employer and direct the worker to restitch it, the element of control and supervision is also involved." Relying on this decision, the Supreme Court in Mangalore Ganesh Beedi Works and Others Vs. Union of India (UOI) and Others, . has upheld the provisions of the Beedi and Cigar Workers (Conditions of Employment) Act, 1966 and held that the Act is intended to achieve welfare benefits and amenities for the labour. That is why the manufacturer or trade-mark holder becomes the principal employer though he engages contract labour through the contractor. He cannot escape liability imposed on him by the statute by stating that he has engaged the labour through a contractor to do the work and therefore he is not responsible for the labour. The contractor employs the labour only for and on behalf of the principal employer. The contractor being an agent of the principal employer for manufacturing beedis is amenable to the control of principal employer. It has also been held that the provisions of the Act are not unworkable simply because the bidi rollers make bidis at their homes and not in the factories of the contractors.

There are two decisions of this Court dealing with bidi rollers under the Minimum Wages Act. A single Bench of this Court in Loknath Nathulal Vs. State of Madhya Pradesh, . has held:

The word ''employment'' as used in item No. 3 of the schedule to the Minimum Wages Act must be construed in the context of the definition of the word ''employee'' as contained in section 2(i) of the Minimum Wages Act. If an out-worker prepares goods at his own residence and then supplies them to the employer, he has for the purposes of the Minimum Wages Act to be treated as an employee, if such a person has to be treated as an employee, then the person who engages him in a scheduled employment for reward or wages must comply with the provisions of section 18 of the Act and the Rules made thereunder.

A Division Bench of this Court in Narottamdas V. P.B. Gowarikar 10 while dealing with a case of Sattedar vis-a-vis the manufacturer has held: --

Proprietor of bidi manufactory giving raw material to sattedar who by employing bidi rollers preparing bidis and selling them back to proprietor--Sattedar free to employ labour as he liked and pay them--No control of any sort over labour by proprietor--Sattedar is not employee but independent contractor.

But it has to be remembered that both these cases were pertaining to the provisions of the Act before its amendment in 1959. By introduction of section 18-A (new section 22-CC) by Act No. 11 of 1959, the manufacturer and contractor both have been made employers of persons who make goods out of the material supplied to the contractor by the principal. This change in the provision has been noted by the Division Bench and it has held:--

A notification making section 18-A as inserted by Minimum Wages (Madhya Pradesh Amendment) Act, 1959 applicable to employment in any tobacco (including bidi making) manufactory was published by the M.P. State Govt, in the Gazette of 21st August 1959 (Notification No. 5140-XVI dated the 31st July 1959). The result of this notification is that the new section 18-A and the amended definition of the word ''employer'' in section 2(e) apply to bidi making manufactory after 21st August 1959 and not before.

So in view of the changes in the enactments brought out by the State amendments, the bidi roller, making bidis at his home out of the material supplied to the contractor by the manufacturer is an employee both of the manufacturer and also of the contractor. In view also of the extended definition given by the Supreme Court now, a bidi roller will be included within the definition of ''employee'' because the manufacturer and the contractor both have the supervision and control over the bidi rollers as they have right to reject the bidis not prepared according to specifications. In order to provide for the welfare of workers in Bidi and Cigar establishments and to regulate the conditions of their work and for matters connected therewith, the parliament had enacted Beedi and Cigar (Conditions of Employment) Act, 1968 bringing bidi and cigarette rollers within the perview as employees of the manufacturer and the contractor. Therefore, the applicants being contractors and employers of the bidi rollers, they were bound to issue wage slips to the bidi rollers. It is said that since there was no fixed time of working and the bidi rollers were free to work to the extent they liked and it was not possible to issue wage slips at least a day prior to the date of disbursement of wages because possibly they could not be contacted a day earlier in the absence of any control over their working. Clearly, disbursement is made after the bidi rollers have handed over the bidis prepared by them and therefore it is not possible to understand as to what difficulties that can arise in directing bidi rollers to take their wage slips a day prior to the date of disbursement. Payment is not made at the time the bidis are handed over but on a fixed date. As such, there can arise no difficulty in issuing wage slips.

The revisions therefore fail and they are dismissed.