EAST INDIA COTTON MFG. CO. LTD. vs Ram Sagar

WHETHER workers in an industrial establishment are under a contract of personal service with their employer? This has come to be the focal significant question in the present appeal.

THE facts lie in a narrow compass and are not in serious dispute. THE respondent Shri Ram Sagar preferred a representative complaint on behalf of himself and his other co-employees, who were parents of the children, seeking a preferential rate of fees and other education facilities in the Vidya Niketan Senior Secondary School run by the appellant M/s. East India Cotton Company Ltd. THE case set up was that their existed an express agreement betwixt the appellant and its employees pertaining to the preference to be given with regard to the children of the industrial workers in the schools which were under the control and management of the appellant-employer Company. THE allegation was that the appellant had deliberately refused to give the benefits of the educational service for which admittedly contribution at the rate of Rs. 50/- per head was levied on the respondent-complainant''s children as also on others employees wards. The appellants in contesting the complaint primarily took up preliminary pleas to negative the respondent''s consumer status on the ground that he had neither purchased any goods nor hired any services for consideration and, therefore, the lis did not fall within the domain of a consumer dispute. It was further the plea that the claim preferred by the respondent in pursuance of an industrial settlement dated the 27th of December, 1989 had become ineffective and unenforceable. Even otherwise, the plea was that such a representative controversy betwixt the management and the union of workers would fall exclusively within the purview of the Industrial Disputes Act.

The parties led evidence in support of their respective cases by way of affidavits and documentary testimony. The District Forum negatived the preliminary objections with regard to the consumer status of the respondent. On merits it held that the appellants were under a clear obligation to protect the interest of the children and the wards of the employees, who were admittedly contributing some amounts for the management of the school. It opined that the expiry or renewal of the original agreement or settlement deed dated the 27th of December, 1989 was irrelevant to the issue. However, it was recorded that no firm foundation for the claim for awarding huge damages or taking penal action against the appellant had been made out. Consequently, holding that the deficiency in service had been established, the relief was granted in the following terms: "In the result, this complaint is partly allowed in the manner and to the extent that the ''Opposite Party'' shall compensate the wards of its employees/workers by providing them facilities and concession in connection with education in Vidya Niketan Senior Secondary School, Faridabad in accordance with the existing arrangement and the practice followed heretofore."

MR. A.S. Chadha, the learned Counsel for the appellant had placed in the fore-front his primal submission that the respondent Ram Sagar in particular, and the employees of the appellant in general, would not come within the ambit of the definition of a consumer. Relying upon Clause (o) of Sub-section (1) of Section 2 of the Act (Defining "service"), it was contended that the relationship of the respondent worker with the appellant was one under the contract of personal service and, therefore, excluded out from the said definition. It was the stand that the right to educational services extended out by the appellant''s Vidya Niketan Senior Secondary School flowed directly from the said contract of personal service and, therefore, the industrial workers were automatically excluded out from the concept of service under the Act. It was the case that the right to preference or concession of the educational services emanated from a settlement under the Industrial Disputes Act and was beyond the ken of a consumer dispute. The submission aforesaid would bring some credit to the ingenuity of the learned Counsel for the appellant, but when closely analysed it is indeed fallacious. What first pointedly meets the eye herein is the fact that it is the appellant''s own case that its relationship with the industrial employees were governed by the Industrial Disputes Act in detail. Now once that is so, this by itself would give the lie direct to the ingenious plea that the relationship of industrial employer and his workers is one under a contract of personal service. It is not the province of this order to launch on a dissertation upon the detailed provisions of the Industrial Disputes" Act, 1947, which admittedly governs the parties. A bird''s eye view of the detailed provisions of more than 40 Sections of the statute augmented as they are by the insertion of Chapters 5-A, 5-B and 5-C therein, would leave no manner of doubt that the said provisions straddle the relationship of an industrial employer and his employees at each step and prescribes a hierarchy of specified authorities under the Act for resolving any dispute betwixt them. When the contract of employment is thus riddled at every step with the mandate of Parliamentary legislation with detailed statutory rules framed thereunder, it seems surely vain to even attempt to label such a relationship as one of a contract of personal service. Indeed it can be said without fear of contradiction that in present day time the relationship is more one of statutory status, rather than being a private contract or of a nature which in earlier times was labelled as one of a Master and servant. At the end of the 20th Century, it seems incongruous to contend that the industrial worker of today is a personal servant of his employer or Master.

IN the relatively summary consumer jurisdiction, it is inapt to overly elaborate the matter. It would perhaps suffice to say that where admittedly the relationship is governed at every steps in detail by the statutory provisions of the INdustrial Disputes Act and its rules, it would be wholly vain to even attempt to project it as one under a contract of personal service. The primal submission of the learned Counsel for the appellant, therefore, must founder on this bed-rock alone. However, altogether apart from the above, Mr. Anupam Gupta the learned Counsel for the respondent in an erudite and incisive argument had highlighted that the Master-Servant theory in this context is now a mere pipe-dream. Placing reliance on the authoritative treatises of Pallock and Anson on the Law of Contract, and equally relying on the persuasive English, and the binding precedent of the Supreme Court, it was forcefully contended by him that by no stretch of imagination, the respondent now stands in the shoes of a servant to his industrial Master. There is patent merit in the stand taken on behalf of the respondent both on principle and precedent. Without entirely slipping into what has been called the dictatorship of dictionaries one may still begin with the legal meaning attributed to a ''personal contract'' in the authoritative Black''s Law Dictionary. This merits notice in extenso: "Personal Contract:-A contract relating to personal property or one 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."

TESTING the stand of the appellants on the anvil of the aforesaid authoritative enunciation can it be said that the contract of industrial service is one, which involves the element of personal knowledge or skill or personal confidence of the employer? It is somewhat obvious that the answer must be rendered in the negative.

SINCE, we are inclined to the view that the matter is equally governed by the binding precedents of the Apex Court, we would refrain form examining it on principle any further. In the land-mark case of ''Sukhdev Singh v. Bhagat Ram'' AIR 1975 Supreme Court 1331, Mathew, J. with great erudition traced the history of the Master and Servant rule from early Roman times to conclude as follows: "Such a philosophy of the employer''s dominion over his employee may have been in tune with the rustic simplicity of by-gone days. But that philosophy is incompatible with these days of large, impersonal, corporate employers. The conditions have now vastly changed and 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."

The aforesaid enunciation would perhaps conclude the matter on this aspect, but it stands further buttressed by the subsequent judgment in AIR 1976 Supreme Court 888'' Executive Committee of Vaish Degree College, Shamli and Others v. Lakshmi Narain and Others. 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 the contract of employment in such cases as a contract of personal service save in exceptional cases."

Without burdening this judgment any further, we must in fairness notice that Mr. Anupam Gupta had also relied on the provisions of the Specific Relief Act and the English Precedents in 1971 (3) All England Law Reports 1345 ''Hill v. C.A. Parsons & Co. Ltd.; 1978 (3) All England Law Reports 193 ''Thomas Marshall (Exports) Ltd. v. Guinle'' and 1980 (3) All England Law Reports 577 ''Gunton v. London Borough of Richmond upon Thames''.

IN the light of the aforesaid somewhat exhaustive discussion, the answer to the question posed at the out-set has to be rendered in the negative. It is held that the workers in an industrial establishment are not at all under a contract of personal service with their employer. Once the aforesaid conclusion is arrived at, it necessarily follows that the primal argument raised on behalf of the appellant must fall to the ground. However, in all fairness we must notice an attempted ancillary submission of Mr. Chadha as well. It was contended that herein no consideration was paid by the respondents for the educational services extended out to the wards of the employees. On that score the submission was that the respondents would go out of the ambit of the consumer under the Act. It was also faintly argued that education is not a service within the meaning of the statute.

WITHIN this jurisdiction, the aforesaid contention has only to be noticed and rejected. Way back in I (1992) CPJ 76 ''Tilak Raj of Chandigarh v. Haryana School Education Board it was held that the imparting of education was squarely within the ambit of service. That view "was again elaborated and reiterated in II (1992) CPJ 807 ''APJ School v. K.L. Galhotra, wherein it was concluded as follows: "To finally conclude on this aspect, the answer to the question posed at the out-set has to be rendered in the affirmative. It must be held that on principle precedent and the language of the statute education would squarely come within the area of service under the Act."

Once it has been held as above, it is established beyond cavil that the respondents were paying consideration specifically for the educational service at the rate of Rs. 50/- per head for the wards of the employees of the appellant. This stands in terms noticed by the order under appeal. Therein in paragraph 6 of the order, the District Forum has recorded that the fact that the respondents are contributing some amount from their salary for the management of the school had not at all been disputed before it. Lastly what appears to us as an argument of desperation it was contended that Ram Sagar respondent had ceased to be an employee and, therefore, the District Forum was not entitled to give the relief which it has accorded.

IT bears repetition that the District Forum has rightly noticed that the complaint was a representative one and .Ram Sagar, respondent had preferred it as a spokesmen of the other parents and employees of the appellant. The relief accorded by the District Forum has already been quoted earlier as extending to those who were covered by the industrial settlement. This apart Mr. Anupam Gupta pin-pointed that the relationship of the employer and the employee betwixt the appellants and Ram Sagar has not at all achieved severance and is the subject matter of the reference still pending before the concerned authorities under the Industrial Disputes Act. The last submission on behalf of the appellant, therefore, must also fail.

FOR the foregoing reasons, this appeal is without merit and is hereby dismissed and the order of the District FORum is affirmed without any order as to costs. Appeal dismissed.