EAST INDIA COTTON MANUFACTURING CO. LTD. vs RAM SAGAR

THIS is a Revision Petition against the order dated 12.5.1994 in Appeal No. 17/94 of the State Commission, Haryana in which they held that the relationship between an industrial worker and his employer has a statutory status and is not of a master and servant. Based on this finding, the State Commission, agreeing with the decision of the District Forum, Faridabad allowed the appeal of the Respondent herein by ordering that "the petitioners herein shall compensate the wards of its employees/workers by providing them facilities and concessions in connection with education in Vidyaniketan Senior Secondary School, Faridabad in accordance with the existing arragements and the practice followed heretofore.

THE brief facts of the case are: That the Petitioners herein-M/s. East India Cotton Manufacturing Co. Ltd. allowed the facility of education to the wards of their employees in the Vidyaniketan Senior Secondary School, Faridabad on a preferential basis on payment of Rs. 50/- per month per ward. However, on the termination of the services of Shri Ram Sagar, who is the Respondent herein, this facility was withdrawn in his respect as well as some other employees whose services have been alleged to have terminated by the Petitioners herein. Shri Ram Sagar, who is one of the affected employees preferred a representative complaint on behalf of himself and his co-employees, who were parents of the children enjoying a preferential rate of fees and other educational facilities, in the Vidyaniketan Senior Secondary School, Faridabad run by the Petitioner herein-M/s. East India Cotton Manufacturing Co. Ltd. The main contention of the petitioners which has been repeated both before the State Commission and before us is that a worker in an industrial establishment is under a contract of personal services with his employer and therefore any dispute between them as regards their conditions of service, is beyond the purview of the Consumer Protection Act, 1986. In this regard, the petitioners have relied on Section 2(o) and 2(d) of the Consumer Protection Act, 1986 stating that a combined reading of both these provisions leaves no room for doubt that although a consumer of a service can maintain a consumer dispute, availing of such a service free of charge or under a contract of personal service is excluded from the purview of these provisions. It is also contended that the provision for educational facilities on a preferential basis was the result of a settlement between the Petitioners and his employees under Section 12(3) of the Industrial Disputes Act, 1947. Admittedly, the petitioner agrees that his relationship with his employees is governed by the Industrial Disputes Act, 1947. If that is so, it has to be decided as to whether such a relationship, governed by a statute, can come under the category of a relationship of master and servant. The State Commission has dealt with this question at length and in detail. Quoting from the Black''s Law Dictionary, the State Commission has pointed out that a master-servant relationship is a result of personal contract which has been defined as: "A contract relating to personal property or on which so far involves the element of personal knowledge or skill or personal confidence that it can be performed only by the person with whom made and therefore is not binding on his executor."

The State Commission drew support in holding that a relationship governed by a statute cannot be categorised as Master-Servant relationship, from the judgment in the case of ''Sukhdev Singh v. Bhagat Ram, AIR 1975Sui preme Court 1331 wherein it was held that: "It is difficult to regard the contract of employment with large scale industries and government enterprises conducted by bodies which are created under special statutes as mere contract of personal service."

This judgment has been further elaborated in the subsequent judgment in AIR 1976 Supreme Court 888 in the case of Executive Committee of Vaish Degree College, Shamli and Others v. Lakshmi Narain and Others. It would, be appropriate here to reproduce the relevant extract from this judgment as quoted in the order of the State Commission. Therein, Bhagwati, J. in his concurring judgment observed as follows: "This rationale obviously can have application only where the contract of employment is a contract of personal service, involving personal relations. It can have little relevance to conditions of employment in modern large scale industry and enterprise or statutory bodies or public authorities where there is professional management of impersonal nature. It is difficult to regard tike contract of employment in such cases as a contract of personal service save in exceptional cases."

ADMITTEDLY , the petitioners herein"M/s. East India Cotton Manufacturing Co. Ltd., being a public limited company are the creation under a statute and the company has an entity of its own under the Companies Act. The employment with this company, and the service conditions of the employees are governed by the Industrial Disputes Act, 1947. It was under the provisions of this Act that the preferential concession to the wards of the employees was agreed between the company and the employees in a school run by the petitioners herein. Although the management of the petitioner company may be the same as that of the management of this school, the relationship between the Respondent and the Petitioners cannot be termed as that of a master and servant and in this regard we are fully in agreement with the view taken by the State Commission.

THE contention that a concessional and preferential treatment is meant only for the active employees governed by the Industrial Disputes Act, 1947 and not for those whose services have been terminated as they are no more the employees of the Petitioners has to be scrutinised. On this aspect of the case, the State Commission has pointed out that the question of the termination of the services of the Respondent herein is still the subject matter of a reference before the concerned authorities under the Industrial Disputes Act, 1947. In any case, the District Forum, Faridabad held that the Petitioners herein shall compensate the wards of its employees/workers by providing them facilities and concessions in connection with education in the said school in accordance with the existing arrangements and the practice followed heretofore. Also, that the question of the termination of the service of Shri Ram Sagar, who filed the complaint in a representative capacity is still a subject matter of a reference before the concerned authorities under the Industrial Disputes Act, 1947. On all counts, this Revision Petition is dismissed as we do not see either any error of jurisdiction or of facts in the order of the State Commission. There is no order as to costs.