Delhi District Court
Shri Hariphool vs M/S Dfm Foods Ltd on 8 July, 2015
IN THE COURT OF SHRI NARINDER KUMAR
ADDITIONAL DISTRICT & SESSIONS JUDGE
PRESIDING OFFICER : LABOUR COURT-XIX
KARKARDOOMA COURTS : DELHI.
LIR No. 1032/11
Unique Case ID No. 02402C0 190982005
Shri Hariphool,
S/o Sh. Jagmal Singh
C/o Hindustan Engineering and General Mazdoor Union,
C-49, New Moti Nagar,
New Delhi ............WORKMAN
Versus
M/S DFM Foods Ltd.,
Jwala Flour Mills,
33 Shivaji Marg,
New Delhi- 110015. ............MANAGEMENT
Date of institution of the case : 15.04.2005
Date of passing the Award : 08.07.2015
Ref. No. F.24(2848)/04/Lab.3978-82 Dated 11.02.2005
AWARD
The Government of NCT of Delhi, having satisfied regarding
existence of Industrial Dispute between the parties, named above, referred to
Labour Court for adjudication, the dispute on following terms of reference:
"Whether the services of Shri Harphool S/o Shri Jagmal
Singh have been terminated by the management illegally
and/or unjustifiably and if so, to what sum of money as
monetary relief alongwith consequential benefits in terms of
existing laws/Govt. Notifications and to what other relief is he
entitled and what directions are necessary in this respect?"
The reference pre-supposes relationship of employer and employee
between the claimant and the management, named above. But in this case, the
LIR No. 1032/2011 1 of 34
real issue between the parties is as to whether there existed relationship of
employer and employee between them and as to whether the claimant is
covered by the definition of "workman" as defined under Industrial Disputes Act
(hereinafter referred to as the Act).
Case of the parties, as per their pleadings, which has given rise to the
issue, is as under:
Case of workman :
2. Workman filed statement of claim challenging termination of his
services by the management on 19.05.2004, and prayed for directions to the
management for his reinstatement of his services with continuity in services,
payment of back wages and also wages for the months of April and May 2004.
In brief, case of workman, as per his statement of claim is that he
got employed with the management on 01.8.96, on the post of 'Bardana( jute
bags) Repairer', at a monthly wages of Rs. 8000/- but w.e.f May 2004, the
management stopped marking his attendance. The management did not make
him payment of wages for the months of April and May 2004. So, he reported
the matter to Labour office on 14.05.2004. On 19.05.2004 Labour Inspector
visited management establishment, but in vain.
Further, it is the case of the workman that on 19.05.2004 when he
reported for duty, the management, without any prior information or reason,
terminated his services. Again, he reported the matter to Labour office, on
20.05.2004, but, the management, did not allow him to join duties despite visit
LIR No. 1032/2011 2 of 34
of Labour Inspector.
As further claimed by the workman, he sent demand notice dated
21.05.2004 to the management by registered post setting forth his claim, but
the management did not reply the notice, what to say of any action or relief.
On the aforesaid grounds, claimant has claimed termination of his
services to be illegal, same being in violation of provisions of Section 25 F and
G of the Act.
Version of management.
Initially, the management was proceeded exparte and exparte
award was passed against the management. Subsequently, on an application
filed on behalf of the management, exparte award was set aside and the
management filed its written statement.
In its written statement, management has pleaded that the
workman was never employed by the answering respondent; that no
relationship of employer and workman existed between them and therefore, the order of reference made to this court is bad in law and workman is not entitled to any relief.
Management has claimed to have taken over the establishment in 1989. Further, it is case of management that workman was actually a contractor and he got executed contractual job, given to him from time to time, from his sons Vijay Kumar, Sanjay and Jaspal. Earlier, the workman used to get the LIR No. 1032/2011 3 of 34 contractual job done through employees. From 01.08.1996 to 30.04.2004 he also started working with his employees. However, his contract came to an end on 30.04.2004.
Certain legal objections have been raised by the management to the maintainability of the claim as put forth in para no. 4 to 9 of the written statement.
On merits, it has been pleaded by the management that factory of the company M/s Jwala Flour Mills has been closed permanently w.e.f 14.09.2004 and that in the given situation, no relief can be given to the workman beyond this date of closure.
As regards, Demand Notice dated 21.05.2004 referred to by the workman in his statement of claim, plea of the management is that it was duly replied vide letter dated 02.06.2004.
It has been pleaded that since the workman was never employed by the management, there was no question of compliance with the provisions of Section 25 F and G of the Act, he having not been retrenched and his services having not been terminated.
Rejoinder :
3. Workman has filed rejoinder, controverting the pleas put forth by the management in the written statement and reiterating his claim that he continuously served with the management since 01.08.1996. He has denied to LIR No. 1032/2011 4 of 34 have got any work done through his sons or that he was working on contractual basis. As claimed by the workman, in such situation, management would not have deducted any amount towards PF or ESI.
As regards plea put forth by the management regarding closure of the management, workman has claimed that the management shifted its place to A-381 Roshnara Road. Workman has not disputed that the management sold its establishment on Shivaji Marg, but denied that establishment has been closed.
Points for determination :
4. From pleadings of the parties, following issues were framed on 24.02.2009 :
1. Whether the reference is bad in law?OPM
2. Whether there existed a relationship of employer and employee between the claimant and the management? If answer to the issue is in negative then to what effect?OPW
3. Whether management has closed its factory w.e.f. 14.9.04, if so to what effect. OPM
4. As per terms of reference.
5. Relief .
Evidence of Claimant
5. In order to prove his case, workman initially stepped into witness box as WW1 and tendered his evidence by way of affidavit Ex.WW1/A and documents Ex.WW1/1 to Ex.WW1/11.
Workman has also examined WW-2 Ms.Lalita from ESI department to prove documents Ex.WW2/1 to Ex. WW2/5.
LIR No. 1032/2011 5 of 34 Another witness examined as WW2 is Sh. R.K.Kaushal, Labour Inspector.
It may be mentioned that workman once again stepped in the witness box as WW-3 on 30.03.2011 and 30.08.2011 and tendered in evidence by way of affidavit Ex.WW3/A and documents Ex.WW3/1 and Ex.WW3/2.
Evidence of Management On the other hand, management has examined MW-1 Sh. Rajiv Sharma, Mill Manager of M/s Jwala Flour Mills, a unit of the management. MW-1 has tendered in evidence his affidavit Ex.MW1/A and documents Ex.MW1/1 to Ex. MW1/4.
Management has also examined MW-2 Sh.H.N.Yadav, Accountant of M/s Jwala Flour Mills, a Unit of DFM Foods Ltd. MW-2 has tendered in evidence his affidavit Ex.MW2/A and document Ex.MW2/1.
MW-3 is Sh. A.K.Malik, who remained posted as Quality Control Supervisor with M/s Jwala Flour Mills. He has tendered in evidence his affidavit Ex.MW3/A.
7. I have heard Learned Authorized Representatives of both parties and gone through the record to appreciate their respective contentions submitted orally and in writing.
LIR No. 1032/2011 6 of 34 Discussion : ISSUE No. 1 : (Whether the reference is bad in law)
8. In the course of arguments, learned AR (Management) has submitted that the reference made to this Court is bad in law in view of the stand of the management that no relationship of employer and employee ever existed between the parties, whereas reference pre-supposes existence of relationship of employer and employee between the management and the claimant. The contention is that in the given facts and circumstances, this Court may answer the reference order to be bad in law .
A perusal of terms of reference order passed by the Govt. of NCT of Delhi would reveal that it pre-supposes existence of relationship of employer and employee between the claimant and the management. Before this reference was made to this Court, the claimant submitted complaint Ex.WW3/4 to the Conciliation Officer on 01.7.2004. There is nothing in the written statement to suggest that the management appeared before the Conciliation Officer or filed any reply denying existence of any relationship of employer and employee between the management and the claimant. It is not in dispute that an Industrial dispute exists between the parties.
Furthermore, in view of the pleadings of parties, a particular issue on this point, i.e. point of existence of relationship of employer and employee has been framed and parties have been provided opportunity to lead evidence to substantiate their respective version .
LIR No. 1032/2011 7 of 34 In the given situation , even if the reference pre-supposes existence of relationship of employer and employee between the management and the claimant, it cannot be said that the reference is bad in law. So, there is no merit in the contention raised by learned AR (Management).
This issue is therefore decided against the management and in favour of the claimant.
ISSUE No. 2 : (Whether there existed a relationship of employer and employee between the claimant and the management? If answer to the issue is in negative then to what effect)
8. As noticed above, this is the basic issue in this case. It is case of the workman from the very beginning that he joined the management on 01.8.1996 as Bardana Repairer and that last wages drawn by him were @ Rs. 8000/-.
As further testified by him in his affidavit Ex.WW3/A , he raised demand for issuance of appointment letter, attendance card, earned leave, casual leave, bonus and overtime etc. but the management started threatening him with termination of his services. Management stopped payment of his wages in the month of April 2004 and also did not pay him wages for the month of May 2004. Ultimately, on 19.5.2004, management terminated his services and withheld payment of bonus for the period 2005-2006 and 2006 -2007 , overtime and incentives.
Workman has tendered in evidence documents Ex.WW3/1 and LIR No. 1032/2011 8 of 34 WW3/2.
Ex.WW3/1 is copy of demand notice purported to have been sent by the workman to the management by registered post vide postal receipt Ex.WW3/2. In this document, the workman alleged that he was in employment with the management since 01.8.1996, as Bardana Repairer, and that the last wages drawn by him were Rs.8000/-. He further alleged in this demand notice that the management had terminated his services w.e.f. 19.5.2004, without any information and without any reason , although he had rendered services continuously for a period of 240 days. He further alleged in this demand notice violation of provisions of Section 25-F and 25-G of the Act and called upon the management for payment of wages for the month of May 2004, bonus, minimum wages, arrears of minimum wages and back wages.
Ex.WW3/3 is copy of complaint dt. 19.5.2004 made by the workman to the Asstt. Labour Commissioner. In this complaint, he levelled allegations against the management of its having not paid him wages, for the month of April 2004 and having terminated his services w.e.f. 19.5.2014. This complaint was submitted by the workman and two others through their Union .
Ex.WW3/4 is copy of complaint submitted by the workman , through Union , to the Conciliation Officer. In this complaint, workman also alleged about termination of his services by the management w.e.f. 19.5.2014, withholding of his payment for the month of May 2004, about submission of LIR No. 1032/2011 9 of 34 complaints to the Labour Office on 14.5.2014 and 19.5.2014 and about another complaint dt. 20.5.2014. He also mentioned about dispatch of demand notice dt. 21.5.2014 to the management.
Ex.WW3/5 is the reply submitted by management to the workman in response to the demand notice dt. 21.5.2014.
It is in the cross-examination of workman, as WW3, that he joined M/S Dhanpatmal Jwala Mill on 01.8.1996. He further stated that he was working in the factory on piece rate basis. He admitted that payment was being made to him by cheque. He denied the suggestion put forth on behalf of management that prior to 1.8.1996 he was working on contractor job.
9. Learned AR (workman) has submitted from material on record it stands established that the relationship of employer and employee existed between the parties.
Submission of learned AR(workman) is that since the claimant used to perform his job on piece rate basis, his case is covered by the definition of "workman" under the provisions of the Act. Reference in this regard has been made to decision in Silver Jubilee Tailoring House & ors. Vs. Chief Inspector of Shops & Establishments, 1973 (27) FLR 350.
10. On the other hand, the argument raised by learned AR (management) is that no relationship of employer and employee ever existed between the parties herein as the claimant was never employed by the LIR No. 1032/2011 10 of 34 management. The contention is that the claimant was only a contractor, for repair of jutebags etc. and in this regard initially he used to avail of services of two sons or other persons, but, ultimately, he himself too started doing this job and he used to be paid as per bills. Further, the contention is that the decision in Silver Jubilee Tailoring House & Others, referred to by learned AR(Workman) does not apply to facts of this case. In support of his contentions, learned AR(Management) has referred to decision in Workmen of Nilgiri Coop. Marketing Society Ltd. vs State of Tamil Nadu & Ors. 2004 LLR 351.
11. In Nilgiri Coop. Society's case (supra), Hon'ble Apex Court had to deal with the vexed question as to whether the concerned persons were employees of the management. While dealing with the question, Hon'ble Court observed that on this question, no decision of Apex Court has laid down any hard and fast rule nor it is possible to do so and further that he question in each case has to be answered having regard to the fact involved therein . No single test, be it control test, be it organization or any other test has been held to be the determinative factor for determining the jural relationship of employer and employee. Hon'ble Court further observed that there are cases arising on the borderline between what is clearly an employer employee relation and what is clearly the independent entrepreneurial dealing.
On the point of Tests laid down in various decisions, Hon'ble Court referred to decisions in Shivanandan Sharma Vs. Punjab National Bank LIR No. 1032/2011 11 of 34 Ltd. (1955 11 LLJ 688; AIR 1955 SC 404 and Dharangadhara Chemical Works Ltd. Vs. State of Saurashtra and others (1975 11 LLJ 477 - AIR 1957 SC 264 wherein it was observed that supervision and control test is the prima facie test for determining the relationship of employment. The nature or extent of control required to establish such relationship would vary from business to business and, thus, cannot be given a precise definition . The nature of business for the said purpose is also a relevant factor.
As to what are the relevant factors in this regard, Hon'ble Apex Court observed that the control test and the organization test, therefore, are not the only factors which can be said to decisive. With a view of elicit the answer, the court is required to consider several factors which would have a bearing on the result : (a) who is apointing authority; (b) who is the pay master; (c) who can dismiss; (d) how long alternative service lasts; (e) the extent of control and supervision ; (f) the nature of the job , e.g. whether, it is professional or skilled Work ; (g) nature of establishment; (h) the right to reject.
Hon'ble Court went on to observe that with a view to find out reasonable solution in a problematic case of this nature, what is needed is an integrated approach meaning thereby integrating of the relevant tests wherefore it may be necessary to examine as to whether the workman concerned was fully integrated into the employer's concern meaning thereby independent of the concern although attached therewith to some extent.
LIR No. 1032/2011 12 of 34
12. So far as position of a piece rate workman is concerned, in Silver Jubilee's case (supra), Hon'ble Apex Court observed in the manner as under :
"It is in its application to skilled and particularly professional work that control test in its traditional form has really broken down . It has been said that in interpreting 'control' as meaning the power to direct how a servant should do his work , the Court has been applying a concept suited to a past age, but not now".
Therein , the owner of the tailoring house used to supply clothes to tailors and pay them remuneration on piece rate. He had never controlled those tailors in any manner except in supplying them the cloth as per their capacity and making payment of money as per piece rate. Sewing machines and sewing material also used to be provided by the owner to the tailors. He was not maintaining any labourers under the Labour Laws. The Chief Inspector of Shops & Establishment prosecuted him. The plea put forth by the owner was that he had no technical knowledge of training and that he had engaged the tailors on contract basis, i.e. on piece rate basis and as such they were not regular employees. He also pleaded that his business was a seasonal business. Hon'ble Apex Court treated all the piece rate tailors as workmen .
On the point of Contract Labour, it was held that if principal employer keeps control on contract labour, including granting them leave or extending any salary advance, then the contract between the contractor and the principal employer is a sham. In this regard, in the written arguments, simply a reference has been made to the decision in Ram Singh & anr. Vs. UT LIR No. 1032/2011 13 of 34 Chandigarh 2004 1 LLJ 227 , where both the contractor and the contract labourers were held to be direct employees of the principal employer. Full text of the judgment in Ram Singh's case (supra) has not been provided by learned AR (workman).
13. Taking into consideration the legal proposition, this court proceeds to decide the point in issue in this case. As noticed above, from the very beginning, it is case of the claimant that he joined employment with the management as Bardana Repairer. He so joined on 01.8.1996 but the management refused to provide him facilities like appointment letter, attendance card, annual increment, PF, ESI, EL, CL, leave book etc. despite demand and rather got annoyed and stopped marking his attendance from 14.5.2004 and ultimately refused to take him back on duty w.e.f. 19.5.2004. Appointment letter and Attendance record
14. In case of employer-employee relationship, generally, appointment letter is issued. Case of the claimant is that he was not issued any appointment letter. He has not led any evidence to suggest that appointment letters had not been issued even to persons on the rolls of the management.
In his cross-examination, the claimant admitted to have made complaint only to the Mill Manager and that too orally. He admitted to have not made any complaint to the Labour Department. Had he not been issued any appointment letter or granted any other legal benefits under the Industrial Law, he would LIR No. 1032/2011 14 of 34 have immediately reported the matter to the Labour Department . There is no explanation from the claimant as to why he did not report the matter to Labour Department as soon as his grievances, if any, were not redressed by the management.
According to the workman, last of all he worked with the management in April 2004, again said upto 19.5.2004. Had the claimant been on the rolls of the management from 1996 onwards, his name must have figured in the registers. In the cross-examination workman was shown original attendance and wages registers for the period from 1991-2004. On having seen the registers, workman admitted that his name does not figure in these registers. There is no explanation as to why the name of the claimant does not find mention in these registers. Nothing has been brought on record to suggest that entries in these registers have been fabricated or that the registers are forged documents or that for such and such reason his name was not being shown in the wages and attendance register. Had he been on the rolls of the management, but his name was not entered in these registers, the claimant should have immediately taken up the matter with the management and then with the Labour Department. But there is nothing on record to suggest that he took any step in writing in this regard to show that he had been lodging protest with the management from the very beginning. Herein, he reported the matter to the Labour Department for the first time in April 2004. Therefore, it cannot be LIR No. 1032/2011 15 of 34 said that though on the rolls of the management, his name was not being shown in the record of the management as its employee for the purposes of his attendance and payment of wages. Claimant could examine anyone of persons on the rolls of the management to prove that he too remained employed with the management as a workman and that he did not perform contractual job or that he was also being paid wages. He has not examined any person on the rolls of the management to lend corroboration to his version regarding employment as a workman.
Herein, there is nothing on record to suggest that the management kept control on claimant, including granting him leave or extending any salary advance. Claimant has not led any evidence that at any point of time he availed of any kind of leave or availed of any salary advance facility.
Claimant has admitted in cross-examination certain bills and vouchers vide which he used to receive payments from the management for the work done by him. Nature of the job which he used to do finds clearly mentioned in the bills. The entire job could not be done by him alone. Having regard to the nature of the job, which used to be done, as is available from the bills, it can safely be said that that much work could not be done by the claimant alone. He must have been taking assistance of others for completion of his job. This goes to show that in this regard the claimant has not come to court with clean hands.
As seen above, management has come up with the plea that initially the LIR No. 1032/2011 16 of 34 complainant alone used to get the job done as a contractor but from August 1996 to 30.4.2004, he also started working with his employees.
Learned AR (Management) has submitted that the claimant also used to get the work done through his sons Jaspal, Vijay Kumar and Sanjay and also used to with his employees and further that he was within his rights to do so, as a contractor, but he cannot be said have been employed with the management as a workman.
The claimant, as WW3, denied in his cross-examination to have deployed his sons Vijay and Jaspal in his contractor job . According to the claimant, they worked with the management prior to him. In this regard, it is significant to note that claimant has not examined his sons or any other person to show that he never got any job done from them or that actually he himself used to do the job, so as to show relationship with the management as that of employer and employee.
Employment of sons and other employees
15. Claimant has denied to have deployed his sons Vijay and Jaspal in the contractual job. The workman explained that actually his sons Vijay and Jaspal used to work in the factory even prior to him. To prove this fact, he could examine anyone of them.
It is significant to note that workman has not examined his sons or any other person to lend corroboration to his version or to prove that actually they LIR No. 1032/2011 17 of 34 or anyone of them used to work in the factory even prior to his father or that they were directly in employment with or on the rolls of the management. Their non examination adversely affects the case of the workman. Settlements
16. It is further in the cross-examination of workman that staff was shifted and workers were shifted to M/S Delhi Flour Mills Co. Ltd. but he never went to the factory at 33, Shivaji Marg, New Delhi, after 21.5.2004. In his cross- examination, workman admitted that about 70%-80% of workers took full and final dues on closure of factory while some took job in the aforesaid company, i.e. M/S Delhi Flour Mills Co. Ltd. Claimant further admitted that there were settlements, from time to time, between the management and the workers during the period from 1991 to 2003 and the workers used to get benefits under those settlements. Learned AR (Management) has contended that in view of this admission of the workman having not arrived at any settlement with the management, like other workers, it can safely be said that the claimant was not an employee of the management.
When settlements took place between other workmen and the managements, it remains unexplained as to why the claimant did not take any step for any settlement with the management. There is nothing to suggest as to whether any of his sons also took advantage of settlement with management. It appears that having seen workmen of the management getting LIR No. 1032/2011 18 of 34 monetary benefits under the settlement, the claimant wanted to encash opportunity claiming himself to be a workman.
When it has come in evidence that settlement were arrived at between the management and its employees but no settlement having been arrived at between the claimant, it cannot be said that there was relationship of employer and employee between the management and the claimant.
17. Workman has examined one Labour Inspector to lend corroboration to his version on the point of employment with the management. Let's see if statement of the Labour Inspector is of any help to the claimant to establish his relationship with the management.
WW2 :
WW2 Shri RK Kaushal - Labour Inspector has been examined to prove his report dt. 05.7.2004. According to the witness, the claimant herein submitted to Asstt. Labour Commissioner, through Union, a complaint and the same was marked to him. Thereupon, he carried out inspection at the factory of the management in the year 2004, as provided under the Minimum Wages Act. At the time of inspection , he met Shri Rajiv Sharma - Manager.
In his cross-examination WW2 stated that Shri Rajiv Sharma - Manager informed him that the claimant was a Contractor and not his employee ; that two workers were employed by the workman ; and also that the workman used to raise his bills for contractor job and his bill were paid by the company.
LIR No. 1032/2011 19 of 34 It is true that according to the Labour Inspector - WW2, Shri Rajiv Sharma - Manager did not show him bills, although he visited the factory twice and demanded their production. Further, according to the witness, management was called to appear at the Labour Office, on two dates, but none on behalf of the management, turned up. These facts do not help the claimant, firstly, because during these proceedings, management has produced on record bills and vouchers. There is nothing on record to suggest that same have been forged or fabricated. In case the management did not produce any such bills, the Labour Inspector should have initiated proceedings against the Management. But there is nothing to suggest that any legal proceedings were conducted by the Labour Inspector against the management.
It is not in the statement of WW2-Sh. RK Kaushal that anyone from the management told him that the claimant was employee and not a contractor. It is not in his statement that the claimant had objected to the version of the management that he had employed two workers or his sons to help him in the job.
At this stage, this court finds it appropriate to refer to the evidence led by the management.
MW1 :
18. On the other hand, MW1 Shri Rajiv Sharma - Mills Manager of M/S Jwala Flour Mills - a unit of M/S Delhi Flour Mills Co. Ltd. has testified in LIR No. 1032/2011 20 of 34 Ex.MW1/A that in the year 1989 when M/S Jwala Flour Mills was taken over, the claimant herein was a contractor with the said mills and he continued as such i.e. as a contractor, even after 1989. He has further testified that the claimant was never an employee of the management and there existed no relationship of employer and employee between him and the management. Rather, while further testifying, he explained that the workman was a Bardana (jute bags) contractor and in this regard he used to execute contractual jobs pertaining to bardana (jute bags). According to MW1, payment used to be made to him in respect of contractual services rendered by him at the rates fixed from time to time between the parties. The contractor was at liberty to execute contractual obligations either himself or through his employees, but subsequently, he himself also started doing work with his employees. Management had no supervision or control on the claimant - contractor or his employees deputed by him. The contractor was responsible to keep records regarding his employees and making payments of their salaries and other dues.
It is also in the affidavit of MW1 that after completion of contractual obligations, payment used to be made to the workman on the bills submitted by him, which were duly verified. Thus, payments used to be made by cheques on weekly basis.
According to MW1, M/S Jwala Flour Mills was permanently closed on LIR No. 1032/2011 21 of 34 14.9.2004. Copy of notice of closure is Ex.MW1/1. Ex. MW1/2 is notice dt. 15.9.2004 giving information about closure of the factory.
Ex.MW1/2 and MW1/4 are copies of sale deeds dt. 30.12.2004 vide which land under the factory was sold.
MW2 :
19. MW2 Sh. H.N. Yadav was in employment of M/s Jwala Flour Mills as Accountant. He has also testified in his affidavit Ex. MW2/A, in line with statement of MW1. Testimony of this witness is to the effect that the Contractor was a 'Bardana Contractor' and never an employee of the management.
He has also relied on documents Ex. WW3/M2, i.e. TDS Certificate and Ex. WW3/M1 - copy of complete set of documents consisting of various bills and payment vouchers.
The witness has also relied on Ex. WW3/M3 - copies of relevant settlements arrived at between workers and the management, to show that these do not depict name of the claimant or his employees. MW2 has also relied on documents Ex. MW2/1, 3 & 4.
MW3 :
20. MW3 Sh. A.K. Malik was employed with M/s Jwala Flour Mills as 'Quality Control Supervisor'. He has testified in his affidavit Ex. MW3/A that M/s Delhi Flour Mills Co. Ltd. purchased M/s Jwala Flour Mills on 15.11.1989.
Employees of the mills were also accommodated by the said company.
LIR No. 1032/2011 22 of 34 According to the witness, he was promoted as 'Assistant Miller' in the company w.e.f. 01.08.1990. M/s DFM Foods Ltd. was incorporated in the year 1993. It purchased M/s Jwala Flour Mills from M/s DFM Co. Ltd. and as such M/s Jwala Flour Mills became a unit of M/s DFM Foods Ltd. According to the witness, he was promoted as Assistant Production Manager by M/s DFM Foods w.e.f. 01.04.1998.
Wages:-
21. Case of complainant is that his last drawn wages were to the tune of Rs.8,000/-. In case management was to pay to the claimant Rs.8000/-per month as wages, there is no explanation from the claimant as to why he was accepting payments from the management as per these bills as per prevalent rates. In other words, why did he not refuse to accept payments from the management as per bills.
Even otherwise, workman has not led any documentary in proof of the fact that he was actually receiving payment of Rs.8,000/-per month from the management as wages.
Payments made to the claimant by the management
22. As noticed above, claimant has admitted the factum of payment made to him on the basis of bills. He has admitted his signatures available on these bills. From the particulars found lying attached to the vouchers, it LIR No. 1032/2011 23 of 34 becomes clear that management used to pay the bill to the claimant having regard to the job done on the basis of number of bags and rate per 100 bags. The nature of the job in connection with repairing and handing of gunny bags as depicted in the bills reads as :-
Sr. Particulars No. of Rate per Amount
No. Bags 100 bags
1 Lifting of empty gunnies from HOD I 18944 4.09 757
2 Sorting of lifted bags from HOD I 19708 5 98.5
3 Major & Minor repairs 11315 24.5 2772
4 Cleaning & Stencil Marking-Bran 8782 10 878
5 Cleaning & Screen Printing (Used Bags) 8485 15 1272
6 Screen Printing of New Bags & Stacks 5045 13.5 680
Sorting of New Gunnies from Mkt. Purchases
7 (Old or New) 14800 5.5 814
8 Bundle making for sale of bags 15000 2.75 412
Supply of Gunnies from Gunny Gdn. To Pkg.
9 Point (Rawa/Suji/Ref.) 13616 2.5 340
Shifting of New Gunny from Shed to Gdn.
10 (Passed Bags Only) 10809 2.5 270
Shifting of Gunnies from Gunny Gdn. To Bran
11 Shed (Ist floor) for Bran B/S. 9455 2.5 236
12 Punny Dalwai in 90/50/45 Kgs. Bags. 6624 16 1059
13 Collecting & Shifting of Marka Bags. 2161 2.5 54
14 Shifting charges of Damage/Ref. Bags. 15000 2.5 375
15 Loading/unloading of E.G. Bags 2000 3 60
HDPE Sorting, Marking Date & Supplg. To
16 Packing Point - Ground Floor 5273 3 158
17 -------Do-------- Ist Floor - 4 -
18 Loading charges of HDPE Rejected Bags - 1 -
Monthly charges for cleaning of various - -
godown, and stacking of gunnies for counting &
19 loose wheat filling etc. 4500
LIR No. 1032/2011 24 of 34
As noted above, whilst claimant was under cross-examination , certain bills and vouchers were shown to him, and on seeing the same, he admitted his signatures available on these documents. Same have been collectively exhibited as Ex.WW3/M1. But the workman added that he also used to sign a register on which he used to get his payment apart from the voucher. Significantly, no such register or copy thereof has been got proved on record. Therefore, it cannot be said that he used to get any payment from the management under signatures on any such register.
Ex. WW3/M1 is copy of voucher dated 08.04.1996 prepared by the management for Rs. 7500.92/- regarding payment thereof to the claimant. Herein, in the middle column of narration, words " against credit balance"
stands recorded.
The other voucher of same date is for Rs. 7727.33/-. In the first column, words "gunny repairs" have been mentioned whereas in the middle column under the head narration, words "charges for the period 01.04.96 to 07.04.96"
stand recorded.
Another journal voucher dated 18.04.1996 is for Rs. 5634.60/- in proof of payment against credit balance by the management to the claimant herein.
Voucher dated 25.04.1996 is for Rs. 6068.90/- in proof of payment against credit balance by the management to the claimant herein.
Journal voucher of the same date depicts payment of Rs. 6192.90 to the LIR No. 1032/2011 25 of 34 claimant by the management towards charges for 16.04.1996 to 22.04.1996 in respect of gunny repairs.
Another voucher dated 30.04.1996 is for Rs. 8648.62/- in proof of payment against credit balance by the management to the claimant herein.
Still another journal voucher of the same date depicts payment of Rs. 10381.62 to the claimant by the management towards charges for 23.04.1996 to 30.04.1996 in respect of gunny repairs. This journal voucher depicts deductions from the total sum of Rs. 10,381.62/-. These deductions were towards TDS payable, PF, FPF, ESI, ESC and Creditor others i.e. a sum of Rs. 208/- towards TDS payable, Rs. 1056/- towards PF payable, Rs. 140/- towards FPF payable, Rs. 89/- towards ESI payable and Rs. 239 towards ESC payable.
Another voucher dated 08.05.1996 is for Rs. 6175.50/- in proof of payment against credit balance by the management to the claimant herein.
Voucher dated 09.05.1996 is for Rs. 6051.50/-It depicts payment to the claimant by the management towards Bag Repair charges for the period from 01.05.1996 to 07.05.1996. It also depicts deductions/contributions of Rs. 124/- towards TDS.
Voucher dated 18.05.1996 is for Rs. 5459.52/- in proof of payment against credit balance by the management to the claimant.
Then, there is journal voucher dated 17.05.1996 for a sum of Rs. 7571.52/- towards charges for gunny bags for the period 08.05.1996 to LIR No. 1032/2011 26 of 34 15.05.1996. This amount depicts deductions of Rs. 112 towards TDS payable; Rs. 2000/- towards Creditor others ; and another sum of Rs. 5459.52/- also towards Creditor others.
Another voucher dated 24.05.1996 is for Rs. 6535.40/- in proof of payment against credit balance by the management to the claimant herein.
Voucher of the same date is for Rs. 6668.40/- depicting charges for gunny repairs for the period from 16.05.1996 to 22.05.1996. It depicts contributions/deductions of Rs. 133/- towards TDS payable and Rs. 6535.40/- towards Creditor others.
Voucher dated 31.05.1996 depicts payment of Rs. 9757.72/- towards payment against credit balance. Another journal voucher of the same date is for Rs. 11618.72/- towards charges for gunny bags for the period from 23.05.1996 to 31.05.1996. This amount depicts deductions of Rs. 233/- towards TDS payable; Rs. 95.80/- towards ESI payable, Rs. 256/- towards ESI Special Payable, Rs. 1126/- towards PF payable, Rs. 150/- towards FPR payable and Rs. 9757.72 towards Creditor others. Similarly, copies of other vouchers and journal vouchers depict payment towards wages for gunny repairs for different periods and deductions/contributions made towards TDS, ESC etc.
23. Words "Contractor" typed on the top of the bills initially submitted to the management, are of much significance. In case, the claimant had joined the management as its employee, why he allowed word "Contractor" being LIR No. 1032/2011 27 of 34 used in the bills. In other words, why he did not lodge protest with the management or the Labour Department . There is no explanation on this aspect.
Deductions from payments-
TDS
24. During arguments, Ld. AR(M) has referred to documents Ex. WW3/M1 (colly exhibited) to point out that as per these documents, payments were made to the claimant for his contractual job, on the basis of vouchers and journals. Further, it has been submitted that payments which were made at the end of the month, showed deductions made by way of TDS, PF and ESI. In this regard, reference has been made to TDS Certificate Ex. WW3/M. The contention is that from these factors, it cannot be said that claimant was in employment with the management.
Rate of deduction of TDS in case of an employee would be different from the slab of TDS to be deducted in case of a contractor. Learned AR(M) has submitted that herein TDS was deducted at the rate of 2% whereas in case of employee it is required to be deducted as per different slabs, and as such the claimant cannot be said to be an employee of the management.
On the other hand, Ld. AR(W) has referred to his cross-examination , wherein he denied that he was a contractor and further stated that he was working on piece rate basis in the factory. Learned AR (workman) submitted LIR No. 1032/2011 28 of 34 that simply because some amount used to be deducted towards TDS, it cannot be said that there was no relationship of employer and employee between the management and the claimant. has submitted that TDS is deducted where an employee gets wages on the higher side and that herein, on the basis of evidence available on record, it can safely be said that claimant was an employee of the management and not simply a contractor.
Although, initially in his cross-examination conducted on 30.3.2011, claimant displayed ignorance if any TDS was deducted by the management while making him payment, in his cross-examination recorded on 30.8.2011, he admitted that he used to get payment after deduction of TDS.
Claimant has admitted case of the management that he used to receive payments, after deduction of TDS. Admittedly, he used to deposit the cheques in his Bank Account No. 20368 with Punjab National Bank - Rajouri Garden New Delhi, during those days,. He further admitted that all his cheques and the TDS refund used to be deposited in this very bank account. Deductions towards PF and ESI
25. Learned AR (workman) has referred to the evidence led by the management wherein MW1 has admitted that payment made by the claimant herein to the management used to be deposited by the management under its ESI Code. The contention is that in view of this admission regarding deposit of contribution towards PF and ESI, it can safely be said that there existed LIR No. 1032/2011 29 of 34 relationship of employer and employee between the management and claimant.
It is case of the claimant that contributions towards PF and under ESI schemes were made after deductions from his wages. The claimant alleges in the claim that management compelled him make contributions of amount in these accounts.
Management has admitted deposits towards PF and ESI but denied that management used to compel for their deposit.
Claimant has examined WW2 Ms.Lalita from ESI department. WW2 has proved on record documents Ex. WW2/1 to WW2/5 i.e. EPF statement dated 16.02.2010, letter to The Secretary, Labour Commissioner, intimating Closure of Factory dated 15.09.2004, Statement of EPF contribution Form 6A, EPF contributions and Form No. 24 Annual Statement of Accounts respectively.
Learned AR(W) has submitted that from the unchallenged testimony of WW2 and contributions/deposit of PF and ESI it can safely be said that the claimant was employee of the management and that otherwise these deposits would have never been made.
In his affidavit, MW1 has testified that that management had to deposit ESI and PF contribution under its code number, as per provisions of the ESI and PF Act, the reason being that contractor did not have his own ESI and PF Code number.
LIR No. 1032/2011 30 of 34 MW1 Rajiv Sharma stated in his cross-examination that as per Ex.MW1/W1, i.e. ESI record, there were 91 employees in the category of workers of the management. He denied the suggestion put on behalf of the workman that the management used to deduct PF and ESI contribution and deposit the amount in its account, but then he volunteered that claimant used to make payment to the management and management used to deposit through its code, the reason being that the claimant was not having any PF or ESI Code.
While referring to this statement of MW1, Learned AR (Management) has referred to Section 40 of Employees' State Insurance Act, 1948 and submitted that the management simply obliged the claimant herein in depositing the amount deducted by him from the salary of his employees, in the Code/Account of the management and that simply from the deposit of the amount by the management, in this manner, it cannot be said that the claimant herein was one of its employees.
26. Section 40 of the Employees' State Insurance Act, 1948 provides that the principal employer shall pay in respect of every employee, whether directly employed by him or by or through an immediate employer, both employer's contribution and employee's contribution.
27. Section 41 of the Employees' State Insurance Act, 1948 provides that the principal employer, who has paid contribution in respect of an LIR No. 1032/2011 31 of 34 employee employed by or through an immediate employer, shall be entitled to recover the amount of the contribution so paid from the immediate employer, either by deduction from any amount payable to him by the principal employer under any contract, or as a debt payabgle by the immediate employer".
Ex.WW2/1 and WW2/3 to WW2/5 are the documents which pertain to contributions towards PF and ESI.
Ex.WW2/1 is dt. 16.2.2010 issued by EPF Organization . This document depicts Accounts Statement pertaining to Hariphool.
Ex.WW2/3 is copy of Form 6A depicting deposits/contributions for the period from 01.4.2004 to 31.3.2005.
Ex.WW2/4 also pertains to deposits/contributions. This document does not depict the period to which it pertains.
Ex.WW2/5 is also the Annual Statement of Accounts in respect of the subscriptions pertaining to the management. It pertains to the period from 2004 to 2005.
In all these documents, DL No. 220 stands recorded. As per Ex.WW2/3, statutory rate of contribution was 12% and 120 members were voluntarily making contribution.
In view of above evidence, simply because claimant's name finds mention in ESI record, it cannot be said that he was an employee of management.
LIR No. 1032/2011 32 of 34 Conclusion
28. Absence of any appointment letter, record of attendance, leave etc. and proof regarding any payment by the management to the claimant towards wages, and presence of evidence regarding payments to the claimant vide bills, and that too, from time to time belies the version put forth by the claimant that he was in employment of the management at monthly wages of Rs.8,000/-and rather the record establishes that the claimant was working with the management as a contractor and he used to get the job done through his sons or other persons and that sometimes he himself also used to do the job with them. In this situation, the decision cited by learned AR(W) to contend that the claimant was a piece rate worker does not apply to the facts of this case.
As a result, this Court finds that no relationship of employer and employee existed between the parties so as to hold that the claimant was workman in employment of the management for wages.
This issue is accordingly decided against the claimant and in favour of the management.
Issue No. 3:- (Whether management has closed its factory w.e.f. 14.9.04, if so to what effect)
29. As discussed above, there existed no relationship of employer and employee between the management and the claimant and as such, factum of closure of the management is of no significance for adjudication of this claim. Even otherwise, according to MW1, M/S Jwala Flour Mills was permanently LIR No. 1032/2011 33 of 34 closed on 14.9.2004. Copy of notice of closure is Ex.MW1/1. Ex. MW1/2 is notice dt. 15.9.2004 giving information about closure of the factory.
Ex.MW1/2 and MW1/4 are copies of sale deeds dt. 30.12.2004 vide which land under the factory was sold.
No evidence to the contrary has been led by the claimant to show that M/s Jawala Flour Mills - Unit of the management was not permanently closed on 14.09.2004. This issue is decided accordingly in favour of the management and against the workman.
Issue no. 4 & 5:- (As per terms of reference) & (Relief)
30. In view of findings on issue no. 2 above when no relationship of employer and employee ever existed between the management and the claimant herein, it cannot be said that the management at any point of time illegally terminated the services of the claimant. The claim filed by the claimant therefore deserves to be dismissed and he is held not entitled to any relief. Consequently, the claim is dismissed and reference answered accordingly.
Copy of this award be sent for publication and case file be consigned to Record Room.
ANNOUNCED IN OPEN COURT ON 8th Day of July 2015 (Narinder Kumar) Addl. District & Sessions Judge Presiding Officer Labour Court-XIX Karkardooma Courts, Delhi LIR No. 1032/2011 34 of 34