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Judgment
Hon''ble Mr. S. Obul Reddi, Chief Justice
The petitioner is the Anakapalle Co-operative Marketing Society Ltd., Anakapalle represented by its person-in-charge, herein after referred to as the Society. The Society has filed this Writ petition for quashing the award of the Industrial. Tribunal dated 12-1-1972. By and under the award, the claim of the workmen of the Society for the payment of bonus for the years 1967-68 and 1968-69 in accordance with the provisions of the Payment of Bonus Act was up-held and the Society was directed to pay as bonus a sum of Rs. 3, 322 for the year 1967-68 and Rs. 2,081/- for the years 1968-69. The society was also directed to pay the said sums within a month from the date of the publication of the award. The society seeks quashing of the award on the ground that Kolagaris" are not employers of the Society and therefore the provisions of the Payment of Bouns Act are not applicable. It is also the case of the society that the agreements, Exs. W-1 and W-2 are not enforceable under the provisions of the Andhra Pradesh Co-operative Societies Act and the "Kolagaris" being licensed weighmen or hamalis under the provisions or the Andhra Pradesh (Agricultural Produce and Livestock) Markets Act, they are debarred to work for the Society or any other person. It is on these grounds that the award is assailed in this Writ Petition. Mr. M.B. Rama Sarma, appearing for the Society contended that "Kollagaris" are not workmen or employees of the Society and when they are not employees of the Society reference of the Disputes for adjudication under the Industrial Disputes Act, is bad and consequently, the Tribunal has no jurisdiction to answer the reference ;
The facts necessary for determining the questions raised in this Writ petition are these: The society is in existence for over decades. Its primary business is to auction jaggery and other agricultural produce belonging to its members and non-members on commission basis. Jaggery groundnuts, chillies, onion, gingili seeds and jute are all notified agricultural produce. The society under the provisions of the Andhra Pradesh (Agricultural Produce and Livestock) Markets Act took out a licence from the Visakhapatnam Market Committee. The Kolagaris have also to take out licenses under the bye-laws of the society as among the various duties of Kolagaris, they have also to weigh agricultural produce brought to the market yard. The society acts as Commission Agents under the provisions of the Andhra Pradesh (Agricultural Produce and Livestock) Markets Act. It arranges the sale and purchase of agricultural produce. There are 27 Kolagaris under the society. Out of them, only 10 or 12 are licensed Kolagaris. It would appear originally there were 36 Kolagaries working for the society, but the present strength is only 27. That is borne out by the Attendance Register. The evidence on record does not show when exactly the respondent Kolagaris were appointed and if so whether there are any written orders appointing them. Indisputably the respondents have been doing the work for the Society for several years. The sub-Committee of the Society met and decided the terms on which Kolagaris should be remunerated and entered into an agreement on 16-4-67 as evidenced by Ex. W-1. The other agreement Ex W-2 relates to the rates at which "Kolagaris" that is wages have to be paid to the Kolagaris. What is to be determined is whether the said agreements would establish the relationship of employer and employee, and whether they are unenforceable in view of the provisions of the Andhra Pradesh Co-operative Societies Act. It is conceded by Mr. Rama Sarma that if these two agreements are held to be valid, then undoubtedly the relationship of employer and employee is established between Society and Kolagaris. We may therefore notice Ex. W-1 and W-2. The terms of the Agreement are these :-
The Kolagaris should be present the Society and attend to items of work entrusted to them from time to time by the officers and staff of the society and give attendance in the morning and evening every day.
The Kolagaris must arrange themself to receive all the produce that arrives at the Society and store and arrange for the grading of the stores and arrange and they should obtain slips from the staff of the Society regarding the names of the ryot, the quantity received, address etc., as per custom in the market. They should also promptly arrange for the auction of the produce received i.e. by arranging together all the buyers and conducting auctions in the presence of customers and other buyers who are interested in the auction. After the auction is over they should weigh the produce in the presence of the staff of the Society and the weighment should be entrusted to the Licenced Kolagaris. They should hand over the bills to the concerned purchasers soon after the auction. Except under i.e. rain fall etc the Kolagaris are responsible for the produce received, proper weighment and proper classification. If any complaint is received for shortages or incorrect and in proper classification and wrong classification they will be held responsible for monetary loss incurred thereby from the amount of Kolagaram payable to them. They should make arrangements for proper custody of the entire produce from the time of receipt till its disposal to the buyer and in the case of owned produce of the society till its disposal.
The Kolagaris will be entrusted with weights, scales and tarpaulines for the business and they should keep them in their custody and be answerable for their custody. They will be held responsible for improper use of these articles or any unreasonable losses.
In addition, the Kolagaris must attend to the collection of the bills, as directed by the officers of the Society from time to time and hand over the amounts so collected to the cashier of the Society. They are also to assist the cashier in their bank works.
The Kolagaris are responsible to discharge the duties entrusted to them without causing any delay, inconvenience or Joss to the society and its work and they will be wholly made responsible for any losses which the society may incur by any of their acts.
Among the enumerable duties assigned to Kolagaris, weighment is one. It is also significant that not all the Kolagaries are licensed to weigh the produces. This agreement according to Mr. Rama Sarma was objected to by the Registrar of Co-operative societies as one having been entered into beyond the statutory powers of the society Rule 28 of the Co-operative Societies Rules empowers the Society to appoint its officers and servants. This rule provides that the society shall not appoint any person as its paid officer or servant in any category of service unless he possesses the qualifications and furnishes the security as specified by the Registrar, from time to time, for such category of service in the society. If a paid officer or servant does not possess the requisite qualifications the society must dispense with his services. The Registrar is also empowered under this rule for special reasons to relax in respect of any paid officer or servant qualifications and other conditions, and the only other embargo on the society to appoint officers or servants is that it shall not appoint a person who is related to any director or member of the committee or financing bank to which the Society is affiliated except with the prior approval of the Registrar. No qualifications are prescribed for doing the work of Kolagaris. The nature of duties which a Kolagaris has to perform as may be seen from Ex. W-1 does not require any qualifications or knowledge. Therefore it cannot be said that the Society has exceeded its limits under Rule 28 in appointing Kolagaris, Kolagaris were employed by the Society several years ago and have been working for the society long before Ex. W-1 came into existence. W-1 was executed on 16-4-1967 by the representatives of Kolagiris and representatives of the management. The agreement only details the terms of employment of Kolagiris and their conditions of service.
The society under Rule 28 has the right to prescribe conditions of service for its servants. So the agreement prescribing the conditions of service cannot be said to be unenforceable or as one made contrary to the requirement of Rule 28. Mr. Rama Sarma however invited our attention to Rule 42. Rule 42 deals with transactions with non-members. This rule prohibits the society from entering into any transaction with a person other than a member unless the bye-laws of the society permit it to enter into such transactions and the previous sanction of the Registrar has been obtained by the Society for entering into such transactions. The agreement relates to conditions of service of the employees of the society. The relationship between master and servant is governed by contract. So Rule 42, in our opinion, applies to transactions with non-members and does not cover cases of conditions of service prescribed by the Society in terms of the agreement entered into by it with its servants. There is nothing in the rules or bye-laws prohibiting the society from employing its servants or officers on a contract basis. We are therefore unable to agree with Mr. Rama Sarma that Ex. W-1 the agreement is unforceable merely because an objection has been raised by the Registrar, regarding the terms relating to rates prescribed in Ex. W-2.
The Payment of Bonus Act has been enacted to provided for the payment of Bonus to persons employed in certain establishments and for matters connected therewith. The expression "Employer" has been defined in sec. 2, Clause (14) of the payment of Bonus Act. This expression includes:
(i) in relation to an establishment which is a factory, the owner or occupier of the factory, including the agent of such owner or occupier, the legal representative of the deceased owner or occupier and where person has been named as a manager of the factory under Clause (f) of Sub-Section (1) of Sec. 7 of the Factories Act, 1948, and the person named ; and
(ii) in relation to any other establishment, the person who or the authority which, has the ultimate control over the affairs of the establishment and where the said affairs are entrusted to a manager, managing director or managing agent, such manager, managing director or managing agent.
That the society is an establishment coming within the ambit of the definition of "Employer" is not in dispute. What the learned counsel for the petitioner contends is that what is paid to the Kolagaris is not salary or wages. The expression "Salary or Wage" is also defined in Clause, (21) of Section 2 :
"Salary or Wages" means all remuneration other than remuneration in respect of over time work capable of being expressed in terms of money which would if the terms of employment, express or implied were fulfilled, be payable to an employee in respect of his employment or of work done in such employment and includes dearness allowance that is to say, all cash payment, by whatever name called, paid to an employee on account of a rise in the cost of living, but does not include.
X X X X
Therefore anything that is capable of being expressed in terms of money, which would if the terms of employment, express or implied, were fulfilled be payable to an employee in respect of his employment would come within the definition of wage or salary. The rate or rates at which the Kolagaris have to be paid is detailed in Ex. W-2. Therefore, what is paid to the Kolagaris are wages within the meaning of the expression "Wage". In view of the wording of Ex. W-1, there can be no doubt that the Society controls their work and exercises disciplinary control over Kolagaris. In Chintaman Rao and Another Vs. The State of Madhya Pradesh, Subba Rao, J. (as he then was) observed that the concept of employment involves then ingredients: (1) employer (2) employee: and (3) the contract of employment. All the three ingredients are present in this case. What test should be applied to see whether a person comes within the meaning of "workman" was stated by Bhagawati, J. in Dharangadhara Chemical Works Ltd. v. State of Saurashtra 1957 S.C. 264. The learned Judge pointed out:
The essential condition of a person being a workman within the terms of the definition in Sec. 2 (8) is that he should be employed to do the work in the industry, that there should be, in other words, an employment of his by the employer that there should be the relationship between the employer and employee or master and servant. Unless a person is thus employed there can be no question of his being a workman within the definition of the term as contained in the Act. The prima facie test for the determination of relationship between the 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. The nature of extent of control which is requisite to establish the relationship of employer and employee must necessarily vary from business to business and is by its very nature incapable of precise definition.
Rajagopalan, J. in Modern Match Industries v. Labour Appellate Tribunal of India, Madras AIR 1975 Mad. 688 similarly observed that unless the relationship of master and servant is proved a person who claims to be a workman within the meaning of Sec. 2 (s) cannot be said to be employed within the meaning of that clause ; and if he was not employed he would not be a workman as defined by that clause. Justice Matthew in Silver Jubilee Tailoring House and Others Vs. Chief Inspector of Shops and Establishments and Another, after referring to the earlier cases of the Supreme Court and English cases observed :--
It is exceedingly doubtful today whether the search for a formula in the nature of a single test to tell a contract of service from a contract for service will serve any useful purpose. The most that profitably can be done is to examine all the factors that have been referred to in the cases on the topic. Clearly, not all of these factors would be relevant in all these cases or have the same weight in all cases, it is equally clear that no magic formula can be propounded which factors should be in any case be treated as determining ones. The plain fact is that in a large number of cases the court can only perform a balancing operation weighing up the factors which point in one direction and balancing them against those pointing in the opposite direction.
During the last two decades the emphasis in the field has shifted and no longer rests so strongly upon the question of control, is obviously an important factor and in many cases it may still be the decisive factor, but it is wrong to say that in every case it is now no more than a factor, although an important one.
The terms referred to in Ex. W-1 leave absolutely no room for doubt and it is not in dispute when once Ex. W-1 is held to be valid that Kolagaris are workmen employed by the employer-society.
The learned counsel next invited our attention to the provisions of the Andhra Pradesh (Agricultural Produce and Livestock) Markets Act, 1966 to contend that the licensed hamalis or weighment are prohibited from working for others and therefore the work done by the Kolagaris must be held to be in contravention of the statutory provisions. It is not necessary to notice the various provisions of the Act and the rules referred to by the various provisions of the Act and as they only relate to the object and scheme of the Act and the duties of the Market Committees. This Act has been enacted for the purpose of providing for a better regulation of buying and selling of agricultural produce and live stock and to mike rules for the proper administration of the Market Committees. The relevant rule relied upon by the learned counsel Mr. Rama Sarma is Rule 49. To the extent material it is in these terms :
49 (1):--No person shall operate within a notified area as broker, carting or clearing agent, warehouseman, weigh man, measurer surveyor, lorry owner, cartman or hamal except under and in accordance with the conditions of a licence granted to him by the Market Committee.
Provided that no person who is in the service of any other person, or who does any other business, shall be eligible to hold a licence as a broker, warehouseman, weighman, measurer, surveyor, or cartman, carting or clearing agent.
But admittedly all the Kolagaris are not weighmen. Only 10 or 12 of them were made to obtain licences by the Society. What is prohibited by this rule is that no person in the service of any other person or who does any other business will be eligible to hold a licence as a weighman, that is, if a licensed weighman is working as weighman of another person or is doing any other business, himself, he will not be eligible to hold a licence. It is nobody''s case that Kolagaris are doing any other business. They are employed by the Society not only for the purpose of weighing the produce but for performing the various other duties as detailed in Ex. W-1. They are not in the service of any other person other than the Commission Agent i.e. the Society in this case. They weigh the produce for and on behalf of the Society for which purpose the Society has obtained licenses for them. The licensed weighmen are not the servants of the Market Committee. Therefore, we are unable to understand how Rule 49 percludes workmen-Kolagaris from getting the bonus under the provisions of the Payment of Bonus Act. This Act is not applicable at all to workman who are entitled to payment of bonus. Even assuming for the sake of argument that there is violation of the rules, Kolagaris will not be entitled to get the licence as weighmen, but that will not take them out of the benefits due to them under the provisions of the Payment of Bonus Act. The provisions of Rule 49 made in exercise of the powers conferred upon the State Government under Sec. 33 of the A.P. (Agricultural Produce and Livestock) Markets Act, have no overriding effect over the provisions of Payment of Bonus Act an Act made by Parliament. The object, purpose and scheme of the two Acts are different. The payment of Bonus Act is enacted to provide for the payment of bonus to persons employed in certain establishments. We therefore do not see how Rule 49 of the A.P. (Agricultural Produce and Livestock) Markets Rules comes in the way of the respondent-workmen from getting statutory bonus which they are entitled to. For the reasons recorded, we are unable to interfere with the award made by the Tribunal. The Writ Petition is dismissed with costs. Advocates fee Rs. 100/-.