T.P. Chandra vs The Commissioner for Workmen's Compensation, Madras and Another

Rajamannar, C.J.—This is an appeal against the judgment of Rajagopalan J. dismissing a petition filed by the appellant for the issue of a writ

of certiorari to quash the order of the Commissioner for Workmen''s Compensation, Madras, dated 1st. November 1955. The facts necessary for

disposal of this appeal may be briefly stated. Messrs. Kemp and Co. Ltd., the contesting respondent in this appeal, is a company with its head

office at Bombay. It has a branch at Madras. The petitioner was appointed as the Branch Manager of the Madras Branch of the company

sometime in 1950. The appellant''s services were terminated with effect from 23th August, 1953.

He was given a month''s salary in lieu of notice and an additional payment ex gratia. The petitioner thereupon preferred an appeal to the

Commissioner for Workmen''s Compensation u/s 41 (2) of the Madras Shops and Establishment Act XXXVI of 1947. A preliminary objection

was raised on behalf of the company that the appeal was not competent on the ground that the appellant was not entitled to the benefit of the

provisions of the Act as he was a person who fell within Section 4 (1) (a) of the Act which runs thus:

4 (1) Nothing contained in this Act shall apply to -- (a) persons employed in any establishment in a position of management.

The Commissioner held that the appellant is not a person who fell within that provision. He therefore overruled the preliminary objection. The

company filed a petition in this court under Article 226 of the Constitution for the issue of a writ of certiorari to quash the order of the

Commissioner holding that the appeal was competent. That petition was allowed by Rajagopalan J., who held that before the appellant had the

right to invoke the appellate jurisdiction of the Commissioner, it was necessary for him to establish that he was a person employed within the

meaning of Section 2 (12) of the Act and as that question was not decided by the Commissioner he set aside the order of the Commissioner.

The result was the whole question remained to be gone into afresh by the Commissioner. When this case went back to the Commissioner, he held

that the appellant was a person employed as defined in Section 2 (12) of the Act but he was a person who was employed in a position of

management and therefore the Act would not apply to him because of the provisions of Section 4 (1) (a) of the Act. As a result of his finding, he

held that the appeal was not maintainable. It is to quash this order of the Commissioner that the writ petition was filed, out of which this appeal

arises.

It was not contended before us that the appellant was not a ""person employed"" within the meaning of Section 2 (12) of the Act. The only

question, therefore, which fall for decision in this appeal is whether the appellant is a person who is employed in a position of management. The

Commissioner held that he was such a person because he was acting in general management and control of the establishment in Madras. He

apparently relied on the following facts which emerge from the evidence, namely, that the appellant was in charge of the correspondence of the

Madras branch, supervised the work of the clerks employed therein, operated on the No. 2 bank account of the firm, made payments, entered

into agreements with third parties on behalf of the firm and generally represented the company at Madras. He granted leave to the stall and

appointed some of them. In all the correspondence, the appellant was styling himself as Manager for Madras. His name was not entered in the

register of employees maintained under the Act.

He never signed in any such register; nor was his name to be found in the muster rolls where the names of all the employees of the firm were noted.

The learned Judge, Rajagopalan J., held on the facts that the Commissioner was justified in coming to the conclusion that the petitioner was in a

position of management. On the evidence, the learned Judge did not find himself able to set aside the finding for any reason.

What was strongly pressed on the learned Judge and was again pressed before us by Mr. Bhashyam for the appellant was that on an earlier

occasion the Commissioner had held that the appellant would not fall within Section 4 (1) (a) of the Act. Now, it is obvious that that order as such

had been set aside by this Court in the earlier writ petition.

Nevertheless, we agree with Mr. Bhashyam that the appellant is entitled to rely on any of the grounds or the general reasoning set out in that order

of the Commissioner. We have therefore perused the prior order of the Commissioner. On that occasion, the Commissioner was apparently

impressed by the following circumstances which influenced him to come to the conclusion that the appellant did not fall within the scope of Section

4 (1) (a), namely, that in almost all matters the head office was issuing directions to the appellant as Branch Manager and that the appellant had no

authority to meet any expenditure not sanctioned by the company, that he had no authority to appoint or dismiss all the employees of the Madras

branch and that he had no power to decide policies.

We have no hesitation in holding that even assuming all these facts are correct, they would not render the later finding of the Commissioner as well

as the finding of the learned Judge now under appeal wrong. The only question is whether the appellant was a person employed in a position of

management. Admittedly he was the manager of the Madras branch of the company.

In Madras there was no one who was superior to him in status as he was apparently in charge of the entire affairs of the Madras branch. It may

be that he was not entitled to lay down himself the policies which should govern the transactions of the company even at the Madras branch and

that he was bound to obey the directions issued by the Head office.

But these would inevitably follow from the fact that he was only a branch manager and he was bound to carry out all the directions and the policies

of the Company itself functioning from its head office. The fact that the appellant had no authority to meet any expenditure not sanctioned by the

company would not render him any-the-less a person employed in a position of management. If he was not such a person, then there was no

person in the Madras branch who could fall within that category.

Mr. Bhashyam relied upon the ruling in Gibson v. Barton, (1875) 10 QB 329 (A), in which it was held that the secretary of a company

registered under the Companies Act, 1862, who acted as the de facto manager would be liable to be punished under S. 27 of the Act for a default

in forwarding a list of the company''s shareholders to the Registrar in 1873. Mr. Bhashyam relied not so much on this decision as on the following

observations of Blackburn J., at page 336;

Section 27 enacts, if the company makes default and does not forward a list of members, the company shall incur a penalty, and every director

and manager of the company who shall knowingly and wilfully authorise or permit such default shall incur the like penalty. In what sense are the

words ''director'' and ''manager'' used in that section?

When the section says ''director'' it is plain enough a director is a director, but the words and manager we have to say who is to be considered a

manager. A manager would be in ordinary talk, a person who has the management of the whole affairs of the company; not an agent who is to do a

particular thing, or a servant who is to obey orders, but a person who is entrusted with power to transact the whole affairs of the company."" The

learned Judge went on to say that strictly speaking it is the directors who can be said to 08 really the managers of the company. In a later portion if

his Judgment the same learned Judge said thus:

But if the articles of agreement contained a clause that the business of the company should be managed by the directors, and the board of

directors should have power to appoint a salaried general manager, not one of their body who should manage the whole affairs of the company,

subject to the directors having a control, then that person being expressly authorised to act, would be a manager.

In the case before them the appellant was not appointed a manager expressly; but the evidence established that he was permitted by the board of

directors to manage the company generally. It also appeared from the evidence that he was actually in the management of the company. Therefore

he was treated as a manager decision tort, and for the purpose of the penal section he was also treated as manager.

This ruling was followed in essential v. Emperor, 43 Ind Css 791: AIR 1918 Lah 170 (B), which does not carry the matter further. We fail to see

what application this decision in (1875) 10 QB 329 (A) has or boy the observations of Blackbure .. assist the appellant''s case in any way. We do

not agree that only a person who is the manager of a company that would fall within the scope of Section 4 (1)(a) as a person employed in a

position of management.

There may be persons designated managers in certain establishments who may not be strictly speaking managers of the company but are entrusted

with the duty of management, and, therefore, occupy a position of management. In the present case, the evidence appears to us to establish

convincingly that the appellant was employed in a position of management so far as the Madras branch is concerned.

It was contended by Mr. Bhashyam that the status of the appellant has to be determined with reference to the Head office of the company at

Bombay and it was contended that the appellant was a person employed at the head office of the company. If learned counsel''s argument is right,

then it would mean that the appellant should be deemed to be an employee of the Bombay office.

If so, the Act would not obviously apply and this court would have no jurisdiction as the head office is outside the limits of the jurisdiction of this

court. Nor do we think that there is any substance in the contention on the merits. It may be that the appellant was appointed by the head office as

the manager of the branch at Madras; but from that fact it does not follow that the appellant must be deemed to be a member of the Head office.

In our opinion, the appellant was clearly a person employed in the branch, establishment of the respondent company at Madras in a position of

management. Both the Commissioner and the learned Judge were right in holding that the preliminary objection should be upheld and that the

appeal filed by the appellant should be declared to be Incompetent.

The appeal is dismissed. No costs.