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Judgment
Srinivasan, J.—The management of Indian Bank is aggrieved by the Award passed by the Industrial Tribunal Madras, in I.D. No. 16 of
1981 holding that the second respondent herein is a workman as defined by Section 2(s) of the Industrial Disputes Act and granting a declaration
that she is deemed to be in service and would be entitled to a quantified amount of Rs. 100/- per month from 2nd May 1978 until her
reemployment by the management.
The second respondent became a Tiny Deposit Agent by virtue of a written contract marked as Ex. M. 3 dated 3rd March 1977 between her
and the Bank. There was also an order of appointment dated 21st February 1977 which is marked as Ex. M. 2. By letter dated 2nd May 1978
the Bank purported to terminate the agency of the second respondent. The second respondent raised a dispute through the union that she was a
workman as defined by the Industrial Disputes Act and the termination was not justified. On reference to the Tribunal, it was held by the Tribunal
that she satisfied the definition of workman given by Section 2(s) of the Act.
Section 2(s) of the Act reads as follows :
Workman"" means any person (including an apprentice) employed in any industry to do any manual, unskilled, skilled, technical operational,
clerical or supervisory work for hire or reward, whether the terms of employment be express or implied and for the purpose of any proceeding
under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with,
or as consequence of, that dispute, or whose dismissal, discharge, or retrenchment has led to that dispute, but does not include any such person ....
(i) who is subject to the Air Force Act, 1950 or the Army Act, 1950, or the Navy Act, 1957, or
(ii) who is employed in the police service or as an officer or other employee of a prison; or
(iii) who is employed mainly in a managerial administrative capacity; or
(iv) who, being employed in a supervisory capacity draws wages exceeding one thousand six hundred rupees per mensem or exercises, either by
the nature of the duties attached to the office or by reason of the powers vested in him functions mainly of a managerial nature
It is obvious that the language of the Section is of very wide import. The crucial words in the Section are ""employed in any industry"". They have
been construed as indicating a contract of service. It had been held that unless there is a contract of service, a person cannot be said to be
workman as distinguished by the Act. A contract of service has been differentiated from a contract for service. As pointed out by Denning L.J., in
Stevenson, Jorden and Harrison Ltd., v. Macdonald and Evans. 1953 1 TLR 101 it is almost impossible to give a precise definition of the
distinction between a contract of service and a contract for service. The learned Judge observed.
It is often easy to recognize a contract of service when you see it, but difficult to say wherein the difference lies. A ship''s master, a chauffeur, and
a reporter on the staff of a newspaper are all employed under a contract of service; but a ship''s pilot, a taxi-man, and a newspaper contributor are
employed under a contract for services. One feature which seems to run through the instances is that, under a contract of service, a man is
employed as part of the business, whereas, under a contract for services, his work although done for the business, is not integrated into it but is
only accessory to it.
Several tests have been prescribed in the text-books on the subject. In John Bowers ""A Practical Approach to Employment Law"", Second
Edition, at pages 11 to 14, the following tests have been indicated : (a) The control test (b) The integration test (c) The economic reality test and in
so far as this country is concerned, the relevant tests have been laid down by various decisions of the Supreme Court and the matter is not res
integra. In Dharangadhara Chemical Works Ltd. Vs. State of Saurashtra, it was held that the correct method of approach would be to consider
whether having regard to the nature of the work, there was due control and supervision by the employer. It was also held that a person can be a
workman even though he is paid not per day but by the job. The fact that Rules regarding hours of work etc., not being applicable to such
workman as well as the manner and the method of their work not being regulated by any directions given by the management was held to be
irrelevant. The Court pointed out that the broad distinction between a workman and independent contractor lies in that while the former agrees
himself to work, the latter agrees to get other persons to work. It was held that a person who agrees himself to work and does so work is a
workman, and does not cease to be such by reason merely of the fact that he gets other persons to work along with him and that those persons are
controlled and paid by him. It was ruled that what determines whether a person is a workman or an independent contractor is whether he has
agreed to work personally or not and if he has, then he is a workman and the fact that he takes assistance from other persons would not affect his
status. In that case, it was also held that the question whether the relationship between the parties is one as between employer and employee or
between master and servant is a pure question of fact and the decision of the Industrial Tribunal on a question of fact which it has jurisdiction to
determine is not liable to be questioned in proceedings under Article 226 of the Constitution unless at the least it is shown to be fully unsupported
by evidence.
In Ready Mixed Concrete (South East) Ltd. v. Minister of Pensions and National Insurance (1968) II WLR 775 Mac Kenna, J. had to deal
with the question and his observations are worth reproduction and it is done here :
I must now consider what is meant by a contract of service. A contract of service exists if these three conditions are fulfilled : (i) The servant agree
that in consideration of a wage or other remuneration, he will provide his own work and skill in the performance of some service for his master. (ii)
He agrees, expressly or impliedly, that in the performance of that service he will be subject to the other''s control in a sufficient degree to make that
other master. (iii) The other provisions of the contract are consistent with its being a contract of service.
I need say little about (i) and (ii)
As to (i), there must be a wage or other remuneration. Otherwise there will be no consideration, and without consideration no contract of any kind.
The servant must be obliged to provide his own work and skill. Freedom to do a job either by one''s own hands or by another''s is inconsistent
with a contract of service, though a limited or occasional power of delegation may not be; see Atiyah''s Vicarious Liability in the Law of Torts
(1967) pp. 59 to 61 and the cases cited by him.
As to (ii), Control includes the power of deciding the thing to be done, the way in which it shall be done, the means to be employed in doing it; the
time when and the place where it shall be done. All these aspects of control must be considered in deciding whether the right exists in a sufficient
degree to make one party the master and the other his servant. The right need not be unrestricted.
What matter is lawful authority to command so far as there is scope for it. And there must always be some room for it, if only in incidental or
collateral matters."" ... Zuijs v. Wirth Brothers Proprietary. Ltd. (1955) 93 C.L.R. 561
To find where the right resides one must look first to the express terms of the contract and if they deal fully with the matter one may look no
further. If the contract does not expressly provide which party shall have the right, the question must be answered in the ordinary way by
implication.
The third and negative condition is for my purpose the important one, and I shall try with the help of five examples to explain what I mean by
provision inconsistent with the nature of a contract of service.
(i) A contract obliges one party to build for the other, providing at his own expense the necessary plant and materials. This is not a contract of
service, even though the builder may be obliged to use his own labour only and to accept a high degree of control : it is a building contract. It is not
a contract to serve another for a wage, but a contract to produce a thing (or a result) for a price.
(ii) A contract obliges one party to carry another''s goods, providing at his own expense everything needed for performance. This is not a contract
of service, even though the carrier may be obliged to drive the vehicle himself and to accept the other''s control over his performance : it is a
contract of carriage.
(iii) A contract obliges a labourer to work for a builder, providing some simple tools, and to accept the builder''s control. Notwithstanding the
obligation to provide the tools, the contract is one of service. That obligation is not inconsistent with the nature of a contract of service. It is not a
sufficiently important matter to affect the substance of the contract.
(iv) A contract obliges one party to work for the other, accepting his control, and to provide his own transport. This is still a contract of service.
The obligation to provide his own transport does not affect the substance. Transport in this example is incidental to the main purpose of the
contract. Transport in the second example was the essential part of the performance.
(v) The same instrument provides that one party shall work for the other subject to the other''s control, and also that he shall sell him his land. The
first part of the instrument is no less a contract of service because the second part imposes obligations of a different kind :
Amalgamated Engineering Union v. Minister of Pensions and Notional Insurance (1963) 1 W.L.R. 441 .
I can put the point which I am making in other words. An obligation to do work subject to the other party''s control is a necessary, though not
always a sufficient condition of a contract of service. If the provisions of the contract as a whole are inconsistent with its being a contract of service,
it will be some other kind of contract, and the person doing the work will not be a servant. The judge''s task is to classify the contract (a task like
that of distinguishing a contract of sale from one of work and labour). He may, in performing it, take into account other matters besides control.
In Silver Jubilee Tailoring House and Others Vs. Chief Inspector of Shops and Establishments and Another, it was held that the right to control
and the manner of work is not the exclusive tests for determining the relationship of employer and employee and that it is also to be considered as
to who provides equipment. In that case, it was found on the facts that the sewing machines on which the workers did the work generally belonged
to the employer and it was held to be an important consideration for deciding that the relationship was that of master and servant. It was also
pointed out that the right of the employer to reject the end-product if it does not conform to the instructions of the employer and direct the worker
to do the work again proved the element of control and supervision involved in the work and that was a matter to be taken into account to decide
the relationship of the parties. The Supreme Court reiterated that the fact that some employees took up the work from other tailoring
establishments and did that work in the shop in which they generally attend for work and that they were not obliged to work for the whole day did
not militate against their being employees of the proprietor of the shop where they attend for the work.
In Hussainbhai, Calicut Vs. The Alath Factory Thezhilali Union, Kozhikode and Others, V. R. Krishna Iyer, J., applied the test of economic
control and he held that where a worker or group of workers labours to produce goods or services and these goods or services are for the
business of another, that other is, in fact, the employer, as he had the economic control over the workers'' subsistence, skill and continued
employment. On the facts and circumstance of the case it was held that there was no change in the position just because there were intermediaries
who had engaged the actual workers for service. In Shining Tailors Vs. Industrial Tribunal II, U. P., Lucknow and Others, it was held that tailors
working on piece-rate basis in a big tailoring establishment were workmen of the owner of the establishment. The Court cautioned that every
piece-rated workman is not an independent contractor and that piece-rated payment meaning thereby payment correlated to production is a well-
recognised mode of payment to industrial workmen. Once again, the employer''s right to reject the end-product if it does not conform to the
instruction of the employer was indicated as providing an element of control and supervision.
Bearing the above principles in mind, the facts of the present case have to be considered. Ex. M.3 is the agreement between the second
respondent and the Bank. Under the agreement, the second respondent agreed to collect the Tiny Deposits from the customers of the Bank
regularly in terms of the rules of business in that behalf at a time to be mutually agreed upon between her and such depositors. Clause 2 of the
agreement provides that she shall render a true and correct account of the Tiny Deposits collected by her to the specified Branch of the Bank as
required by provides that deposit collections made by her every day shall be accounted for and deposited in cash by her at the specified Branch of
the Bank on the next working day at the commencement of the office hours with the Tiny Deposit Daily Scroll, and the relative duplicate copies of
the Temporary Tiny Deposit Receipts duly signed by the depositors Clause 5 provided for furnishing of security for a sum of Rs. 500/- by the
second respondent to the Bank, for faithfully discharging her duties. Under Clause 6, the second respondent agreed to be an agent on commission
at a rate or rates fixed and determined by the Bank from time to time on the actual collections made by her and she shall receive the same once in
every month. She also agreed to contribute 10% of such commission to her security deposit every month. Clause 7 enables the second respondent
to give a month''s notice in writing before renouncing her agency to the Bank. Under the same Clause, she shall also be in a position to make
alternative arrangements for collection of the deposits at the doors if she is unable to make collections personally. It is specifically provided that the
delegate of the second respondent comply and fulfill all the terms of the agency and she shall be solely responsible for all the acts of omission and
commission of the above said delegate, who shall be appointed by her with prior permission of the Bank. Clause 8 provides for termination of the
agency without any notice to the second respondent, and by Clause 9, she is prevented from making collections for and on behalf of any other
Bank, or organisation which is having a similar scheme so long as she remained as Tiny Deposit Agent of the Bank, Clause 11 provides for Bank
being entitled to get confirmation of the balance in all the any tiny deposit accounts at the time when the second respondent ceases to be an agent.
Though in the letter of appointment dated 21st February 1977 issued by the Bank to the second respondent commission was fixed payable to
the second respondent at 3% on the total collections made by her each month, Clause 6 of the agreement provided that the commission could be
fixed and determined by the Bank from time to time at different rates. In the letter of appointment, the second respondent was enjoined to prepare
in duplicate a statement of collection of deposit amounts in the collection sheets provided to her by the Bank and remit the amount in the next day
at the Branch assigned to her. The following features are present in this case and they are not in dispute. The deposit mobilization is one of the chief
functions of the Bank as admitted by M.W. 2 who is the Assistant Chief Officer in the Development Department of the management of the Bank,
at Madras. As part of deposit mobilisation the Tiny Deposit Scheme has been initiated by the Bank. It is seen from the Rules framed by the Bank
with regard to the scheme, opening of the account will have to be done only in the presence of an authorised official of the Bank though the
collecting agent is permitted to receive deposits from door to door. This is an important circumstance which shows that the collecting agent is not
an independent contractor so as to enroll customers of the Bank on his own. It is the Bank official who has to enroll the customer even if there is a
recommendation by the collecting agent with reference to any particular customer. Secondly, the Tiny Deposit agent is undoubtedly engaged in the
business of the Bank, viz., the deposit mobilisation. Thirdly, the remuneration of the Tiny Deposit Agent is fixed in the agreement, Ex. M.3 as well
as the appointment letter, Ex. M.2 Though, it is called commission it will still to be remuneration as defined by the decisions of the Supreme Court
as well as the definition of wages in the Act. In State of Assam v. Kanak Chandra Dutta 1968 I LLJ 228 the Supreme Court held that
remuneration could be by way of commission on collections. In that case, the question related to a mauzadar in the Assam Valley. The question
was whether be held a civil post under the State of Assam and was entitled to the protection of Article 311(2) of the Constitution. One of the
arguments advanced was that he could not be considered to hold a civil post as he did not draw the salary. The Supreme Court held that a post
outside the regularly constituted services need not necessarily carry ""a definite rate of pay."", and the post of mauzadar carried with it a
remuneration by way of a commission on collections of Government dues. It was, therefore, held that mauzadar was a person holding civil post. It
was also pointed out that he need not be a whole time employee. Applying the ruling, there will be no difficulty in holding that the commission
provided for payment to the second respondent under the agreement will be hire or regard within the meaning of Section 2(s) of the Industrial
Disputes Act. Fourthly, it is in evidence that the nature of work of the second respondent demands daily attendance in Bank and deposit of the
collections made by her on the prior day. Fifthly, she is obliged to inform the Bank in advance if she is not in a position to make the collections
herself and whenever she appoints a delegate, she must do so only with the prior permission of the Bank and she is responsible for the conduct of
such delegate. Sixthly, she has to do some clerical work as she is bound to fill up relevant forms, ledgers, pass books, etc. In that evidence of
M.W. 2, it is elicited that Tiny Deposit Agents have to come to the Bank every day to deposit the collections made by them and they have to fill up
weekly collection Registers and also the corresponding challans. It cannot be disputed that the weekly collections registers are only in the Bank
premises and they can be filled up only inside the Bank premises.
Seventhly, the agent has to pay 10% out of the commission due to her every month towards the Security. Eightly, it is in evidence that the Bank
can instruct the agent not to enroll new subscribers at any time. The provision enabling the agent to terminate the agency on giving the Bank a
month''s notice is the ninth circumstance which goes to show that it is a contract of service. Tenthly, the agent is bound under the agreement to
produce physical fitness certificate to the Bank. If it is a mere contract for service, there is no necessity for such physical fitness certificates. The
eleventh circumstance is, the agent is taken to task when any depositer closes the account within a period of two years from the commencement
thereof. There will be a reduction of the commission payable to the agent in that event. All the above facts will go to prove in that there is sufficient
control over the work of the agent by the Bank and that the agent is not an independent contractor but part of the organisation.
Learned counsel for the petitioner places reliance on the following circumstances (1) No qualifications have been prescribed for the post; (2)
What is paid to the agent is only commission and not remuneration; (3) The agent is in a position to make alternative arrangements if the agent is
unable to do the work herself; (4) The agent can be employed elsewhere also and she is not a wholetime employee of the Bank; (5) There is no
fixed norm for any amount collected as admitted by W.W. 1; (6) As stated by W.W. 2 in the course of evidence no time is specified as to when
the second respondent should go to the Bank and how long she should stay there. Admittedly, she has no other work inside the Bank; (7) The
second respondent does not sign the attendance register and she does not write any accounts; (8) No disciplinary action can be taken against the
second respondent and the Bank has no power to transfer her from one place to another; (9) No minimum remuneration for any period, is fixed to
be payable to the second respondent. Apart from the commission, she is not entitled to any other payment; (10) There is no provision in the Shastri
Award or bipartite settlement for the post of Tiny Deposit Agents.
Having regard to the decision of the Supreme Court which we have made reference earlier, the circumstance relied on by learned counsel for
the petitioner have no significance whatever. The Supreme Court has repeatedly held that the fact that the worker is a part time worker who is able
to serve more than one master does not militate against him or her being a workman as defined by the Act. That has been laid down even as early
as in Dharangadhara Chemical''s case (supra). We have already referred to the fact that the second respondent has to do clerical work by filling up
the relevant registers in the Bank. In fact the Bank provides the second respondent with all the necessary forms in order to get deposits from the
customers and to get signatures of the customers in the counterfoil. The Bank official signs the forms and hands over to the agent in order to hand
them over to the customer. The circumstances which we have pointed out earlier proved beyond doubt that the second respondent is a workman
as defined by the Act. The fact that there is no reference in the Shastri Award or bipartite settlement to the post of Tiny Deposit Agent will not
militate against the agent being a workman as defined by the Act. Times have changed since Shastri Award was passed. The functions of the Bank
were at that time limited. Nowadays, the concept of Banking has undergone a radical change. Nationalised Banks have now enlarged their
activities and play a positive role in the industrial economy of the country. At any rate, mobilisation of deposit is admittedly a chief function of the
Bank. Hence, it cannot be said that a person who is appointed to collect deposits from the customers is not to be part of the organisation of the
Bank.
Learned counsel for the petitioner invites our attention to the judgment of a Bench of this Court in N. Rajakumar Vs. The Management of
Indian Bank, Madras, in which the provisions of Tiny Deposit Scheme came up for consideration when the abolition of the scheme was challenged
by one of the agents. The Division Bench held that the writ petition at the instance of an agent was not maintainable as the right of the agent was
purely contractual and not a fundamental right. The Bench had no occasion to consider the question whether the Tiny Deposit Agent was a
workman as defined by the Act. While referring to the provisions of the scheme, the Bench pointed out that the scheme was intended for the
benefit of weaker sections of the society and came within the directive principles. That judgment will have no bearing on this case as the question
which we are facing did not arise for consideration before that Bench.
Learned counsel for the petitioner places reliance on a judgment of the Full Bench of the Kerala High Court in Canara Bank and Others Vs.
Appellate Authority and Others, . In that case, the Bench remanded the matter to the appellate authority for fresh consideration of the question
whether the concerned person was a workman as defined by the Act. The Bench only held that the relevant tests were not applied by the appellate
authority. It was observed that the finding of the appellate authority in that case was based on the fact that the person concerned had to be in the
office during banking hours and he was under the control and supervision of the head of the branch. The Full Bench held that those facts had to be
looked into in the background of other factors, namely, whether he was not required to mark any attendance, whether he was not required to
remain in the office after the bank hours were over, and whether the above conditions were applicable to the staff of the Bank. The Full Bench did
not go into the question whether the person concerned was a workman and lay down the relevant tests therefor. Hence, the judgment of the Full
Bench does not help the petitioner in the present case.
Learned counsel for the petitioner invites our attention to the provisions of Section 10 of the Banking Regulation Act, 1949. u/s 10(1)(b)(ii), no
banking company shall employ or continue the employment of any person whose remuneration or part of whose remuneration takes the form of
commission or of a share in the profits of the company. The proviso contains the explanation that any commission to any broker, cashier,
contractor, clearing and forwarding agent, auctioneer or any other person, employed by the banking company under a contract otherwise than as a
regular member of the staff of the company will not be governed by the Section. According to learned counsel, when the Bank was statutorily
prevented from employing any person for remuneration in the form of commission, and the Bank has entered into a contract of agency with a
particular person for the purpose of making collections on behalf of the Bank from the customers of the Bank, it should be considered as a pure
and simple contract for service and not a contract of service. According to learned counsel, the Bank cannot be presumed to have committed an
illegality by contravening the provisions of the Banking Regulation Act. In our opinion, this contention is like seeking to put the cart before the
horse. The question before us is whether on the terms of the employment as found in the written contract as well as the oral evidence adduced
before the Tribunal, the second respondent is a workman as defined by the Act. If the definition contained in the Industrial Disputes Act in satisfied
and if the various tests laid down by the Supreme Court are fulfilled, then there cannot be any doubt that the second respondent will be the
workmen. Just because the Bank is prevented from employing a person on commission, the second respondent will not cease to be a workman as
defined by the Act. The provisions of the Banking Regulation Act will not enable the Bank to contend that the second respondent must be held to
be an independent contractor even if the second respondent satisfies the definition of a workman u/s 2(s) of the Industrial Disputes Act. Hence, this
contention has to be rejected.
Learned counsel for the petitioner submitted that the question whether there is a relationship of master and servant between two parties is a
mixed question of law and fact and if the Tribunal decides that question and assumes jurisdiction on the basis of its finding given on that question, it
will be a jurisdictional issue in which event this Court can interfere with the finding under Article 226 of the Constitution. Learned counsel derives
support for this proposition from the decision of a Division Bench of this Court in United Beedi Workers'' Union v. S. Ahmed Hussain & Sons
1964 I LLJ 285 . In that case, the Division Bench held that the question whether there is any relationship of employer and employee is a
jurisdictional issue, upon the correct decision of which depends the further jurisdiction of the industrial tribunal to adjudicate upon the disputes
referred to it, and that the Tribunal functioning under the Industrial Disputes Act has no power to finally decide whether there is that relationship of
master and servant between the parties, which would justify its assumption of jurisdiction but it has necessarily to decide that point wherever there
is a controversy about it. Consequently, the Division Bench took the view that if the Tribunal comes to an erroneous conclusion, it will be open to
this Court to reverse that conclusion by considering the relevant evidence on record while exercising its jurisdiction under Article 226 of the
Constitution regardless of the fact that the incorrect conclusion of the Tribunal is on a question of fact, but, not on a question of law.
We have already referred to the decision of the Supreme Court in Dharangadhara Chemicals case (supra) in which it was categorically held
that the question whether the relationship between the parties is one as between the employer and the employee or between master and servant is
a pure question of fact and the decision of the Tribunal on a question of fact which it has jurisdiction to determine is not liable to be questioned in
proceedings under Article 226 of the Constitution unless it is shown that it is fully unsupported by evidence. In fact in that case, it was held that the
High Court exercising its jurisdiction under Articles 226 and 227 of the Constitution was not competent to set aside the finding of fact recorded by
the Industrial Tribunal and the Supreme Court entertaining an appeal from the decision of High Court should not interfere with the finding of fact
recorded by the Tribunal. That judgment of the Supreme Court came to be distinguished by the Division Bench in United Beedi Workers'' Union v.
Ahmed Hussain & Sons (supra). After referring to the judgment in Dharanghadhara Chemical Works case, the Bench observed that a reference
was made by the Supreme Court to its own earlier decision in Ebrahim Aboobakar and Another Vs. Custodian General of Evacuee Property,
where the distinction in regard to the scope of interference in the two categories of cases was recognised and the observations of Lord Esher,
M.R., in Reg. v. Commissioner for Special Purposes of the Income Tax 1888 2 Q.B.D. 313 were followed. Then the Bench proceeded to quote
the observations in T.C. Basappa Vs. T. Nagappa and Another, and observed as follows 1964 I LLJ285 :
To contend that if the jurisdictional issue depends on an adjudication on a question of fact, the superior Court will be powerless, however gross
that error might be, is to overlook the distinction that has always existed between a decision of an inferior tribunal on a collateral fact and of the
actual matter that is within the ambit of its jurisdiction. The matter is placed beyond doubt in Lilavati Bai Vs. The State of Bombay, where Sinha, J
(as he then was), referred to the distinction between the jurisdiction of the tribunal to decide a certain fact as one of the issues in the controversy
and the collateral fact on which the jurisdiction to determine the controversy arose.
The Division Bench took the view that Sinha. J. in Lilavati Bai Vs. The State of Bombay, referred to the distinction between the jurisdiction of
the tribunal to decide a certain fact as one of the issues in the controversy and the collateral fact on which the jurisdiction to determine the
controversy arose. We have our own doubts on the correctness of the decision of the Bench. When the very same question has been held by the
Supreme Court to be one of fact and it is held that a finding thereon cannot be interfered under Arts 226 and 227 of the Constitution of India, we
wonder how a contrary view can be taken by this Court. However, it is not necessary for us to consider the matter any further in this case as we
have come to the same conclusion as the Tribunal on an appreciation of the evidence on record.
Learned counsel for the petitioner drew our attention to the judgment of the Supreme Court in Piyare Lal Adishwar Lal Vs. The Commissioner
of Income Tax, Delhi, . The question before the Court in that case was whether a treasurer appointed by the Bank under certain terms and
conditions was an independent contractor or an employee of the Bank. On the facts and circumstances of the case, the Court held that he was the
servant of the Bank. For doing so, the Court followed its own earlier decision in Dharangdhara Chemical Works''s case (supra) and applied the
tests prescribed in that judgment.
Learned counsel for the petitioner brings to our notice a later judgment of the Supreme Court in which a treasurer of the Bank was held to be
an independent contractor and not a servant thereof. That case was reported in I. T. Commr. U. P. v. Manmohan Das (AIR) 1966 S.C. 789. On
the facts of the case, the Supreme Court held that the person concerned was not an employees but only an independent contractor. Referring to
the earlier judgment in Piyare Lal''s case (supra), the Court distinguished the facts of that case, on the footing that there was no covenant in the
case before them which either expressly or impliedly conferred upon the Bank such control and supervision over the work done by the Treasurer,
and the agreement was not liable to summary determination, and also held that the duties, liabilities and responsibilities were to be such as either by
custom or contract usually devolve upon the Treasurers and those which were specified in the agreement. Hence, the Supreme Court found that
the ruling in earlier case could not apply to the latter case.
Reliance is placed upon a judgment of the Supreme Court in Ram Pershad Vs. The Commissioner of Income Tax, New Delhi, . While holding
that a Managing Director of a Company is a servant of the Company, the Court held that the Director was not a servant. The following
observations made by the Court are relied on by learned counsel for the petitioner.
A similar view was taken by this Court in Lakshminarayan Ram Gopal and Son Ltd. Vs. The Government of Hyderabad, . Bhagwati, J. speaking
for the Court held that the assessee under the managing agency agreement, having regard to certain indicia discernible from that agreement was an
agent. At p. 458 the functions of the assessee which were inconsistent with his being a servant were specified. They were :-
The power to assign the agreement and the rights of the appellant thereunder;
The right to continue in employment as the agents of the company for a period of 30 years until the appellants of their own will resign;
The remuneration by way of commission of 2 1/2 per cent of the amount of sale proceeds of the produce of the company; and
The power of sub-delegation of functions given to the agent under Art. 118.
All these circumstances went to establish that the appellants were the agents of the company and not merely the servants remunerated by wages or
salary.
The very first circumstance set out in the above passage, viz., the power to assign the agreement and the rights of the appellant under the
agreement is absent in the present case. In this case, the second respondent cannot assign the agreement between her and the Bank in favour of
anybody else nor her rights could be assigned to another person. Learned counsel also places reliance on a judgment of this Court in Pudukottah
Textiles Ltd., v. Adityan (88) L.W. 788 to the effect that the contractor of a Company could bean agent under certain circumstances. The question
whether a contractor is a workman did not arise for consideration in that case.
The question has to be decide on the facts and circumstances of each case. We have come to the conclusion that the second respondent is a
workman as defined by the Act on the facts and circumstances of this case, having regard to the terms and conditions set out in the agreement
between the Bank and the second respondent. The evidence in this case clearly establishes that the second respondent is a servant of the Bank and
not an independent contractor. Hence, the above decision cannot apply.
Learned counsel for the petitioner contends that even if the second respondent is held to be a workman as defined by the Act, the Award of
the Tribunal cannot be sustained as the Tribunal has failed to consider the evidence on record that the second respondent''s services were
terminated on proper grounds. Learned counsel places reliance on Ex. W. 6 which is a letter dated 17th June 1978 written by the Bank to the
President of All Kerala Banks'' Deposit Collectors'' Association in which it was stated that the second respondent was not attending to the
collection work for days together with the result a serious set back befell on the Tiny Deposit Scheme. It was alleged that the account holders
came running to the Bank inquiring about the slackness in the matter of collection and there was even demand for foreclosure from many of the
customers. It was further alleged that the second respondent was quite unenthusiastic in the matter and her collection work per day was very poor.
The allegations in Ex. W. 6 would not amount to proof. This is a matter to be proved by the Management before the Tribunal. Merely because
some allegations are made in a communication sent to the union prior to the initiation of proceedings, it does not mean that a case has been made
out against the second respondent for termination of her services. It was certainly open to the Management to prove by evidence before the
Tribunal that non-employment of the second respondent was justified. But, no such evidence was placed before the Tribunal. Learned counsel
submits that Ex. W. 8 would prove the inefficiency of the second respondent in the matter of collection of amounts from the customers. Far from
establishing any such thing, Ex. W. 8 has nothing to do with the aspect of the matter. In Ex. W. 8, which is a letter written by the Management''s
Advocate to the Advocate for the Union, it was merely stated that the agency was terminated since her work was not satisfactory and the Bank
being the principal had no confidence in the agent. There was no allegation in Ex. W. 8 that the second respondent even if she was a workman did
not satisfactorily perform her duties. The Bank examined two witnesses, one of whom was the Manager of the Bank at Chrompet, Madras. He
was a Branch Manager in Thycaud Branch, Trivandrum, Kerala State from April 25, 1978 till the end of September 1981. The other witness was
the Assistant Chief Officer in the Development Department of the Management of Indian Bank at Madras. The second witness had nothing to do
with the case and he had no knowledge of the second respondent or her work. The first witness who was the Branch Manager during the relevant
period at Thycaud Branch admitted in his cross-examination that the termination of services of the second respondent was pursuant to the
instructions of the Regional Manager, Trivandrum. According to him, the instruction was in writing but he did not mention any ground in Ex. W. 1,
the termination letter as to why the services were terminated. The so-called instruction given by the Regional Manager is not even produced before
the Tribunal. It is also admitted by M.W.1 that without looking into the accounts or records he could not say if there had been any instance of any
action taken by the Bank for non-remittance of the amount collected by the second respondent. It is also admitted that without referring to his files
he could not say whether any complaint in writing had been received in the office against the second respondent. He adds that though some oral
complaints were received against the second respondent, he did not issue any memo to her based on those complaints. In the face of this evidence,
it is not possible for any Court to justify the non-employment of the second respondent. Hence, we hold that the Award passed by the Industrial
Tribunal is unassailable on the facts and circumstances of the case.
In the result, the writ petition fails and it is dismissed with costs.
It is brought to our notice that in W.M.P. No. 13251 of 1982, this Court passed an order on February 3, 1987 directing the petitioner Bank
to deposit a sum of Rs. 15,000/- with the Tribunal and the Tribunal was directed to invest the same in a nationalised Bank. Now that we have
dismissed the writ petition, the second respondent is entitled to withdraw the said amount as would have accrued due by this date from out of the
amount in deposit. It is stated that the amount is in Fixed Deposit with the petitioner Bank, to the credit of the I.D. The Bank is directed to pay the
amount due to the second respondent as on this date as awarded by the Industrial Tribunal with interest accrued thereon. The second respondent
is entitled to claim the future amounts due as per the Award.