Madras High Court
Management Of Seyadu Beedi Company vs The Appellate Authority on 5 June, 2007
Author: K.Raviraja Pandian
Bench: K.Raviraja Pandian
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED: 05/06/2007
CORAM:
THE HONOURABLE MR.JUSTICE K.RAVIRAJA PANDIAN
W.P.(MD)No.131 of 2004
and
W.P.M.P(MD)No.121 of 2004
Management of Seyadu Beedi Company
Rep. By Partner
4G, Salai Street,
Sindupoondurai,
Tirunelveli - 627 001. ... Petitioner
Vs.
1.The Appellate Authority
under the Beedi and Cigar Workers
(Condition of Employment) Act
(Labour Officer) Office of the
Labour Officer
19th Cross Street,
Maharaja Nagar,
Tirunelveli -11.
2.V.Madasamy
3.Management
Seyadu Cottage Industries,
4G Salai Street,
Sindupoondurai
Tirunelveli 627 001.
4.M.K.Nagoor Meeran Mohaideen
Seyadu Beedi Manufacturer
7/12 S.Kaduvetti Road,
Venkateswarapuram
Nettur (Via)
Tirunelveli District. ... Respondents
Writ Petition filed under Article 226 of the Constitution of India,
praying for the issuance of a Writ of Certiorari, to call for the records of the
respondent in his proceedings in Beedi Appeal No.2 of 1999, dated 31.03.2004
and quash the order passed therein dated 31.03.2004.
!For Petitioner .... Mr.R.S.Ramanathan
^For Respondents .... No Appearance
:ORDER
The correctness of the order passed by the first respondent, the authority under the Beedi and Cigar Workers (Conditions of Employment) Act, 1966 is put in issue in this writ petition.
2. The relevant facts, culled out from the materials available on record are produced below:
The second respondent filed a claim statement before the first respondent under Section 31(2) of the Beedi and Cigar Workers (Conditions of Employment) Act, 1966, (hereinafter referred to as 'the Act') on the premise that he was working with the fourth respondent for over a period of four years for rolling the beedies for and on behalf of the petitioner herein and he received Rs.37.70 per 1000 beedies. While that being so, on 16.02.1998 when he handed over the rolled beedies to the fourth respondent, informed him that he was not doing well and he would not attend work next day. Having recovered from his illness he attended for work on 02.03.1998, but the fourth respondent refused employment but directed to contact the third respondent. Even after contacting the third respondent, the second respondent was denied employment. On that basis he filed the appeal aforesaid. The fourth respondent filed a counter accepting that the second respondent was a home worker as defined under Section 2(f) of the said Act, but contended that he was an irregular worker and regular absentee. As the second respondent has not attended to work, on 07.03.1998 he was called upon to explain as to why action should not be taken against him. While the matter stood thus, the second respondent filed the appeal under Section 31(2) of the Act. As the second respondent neither attended the work nor co-operated with the enquiry proceedings, the fourth respondent requested the first respondent to advise the second respondent to attend the work and to co-operate with the enquiry. The petitioner herein originally by filing counter affidavit disowned him from the dispute, but filed additional counter affidavit, wherein it was contended that the petitioner was the trade mark holder of the seyadu beedi and the petitioner was getting the beedi manufactured through the third respondent. The third respondent provided raw materials to the fourth respondent. The fourth respondent engaged the second respondent for the purpose of rolling the beedies and had taken action for the irregularities committed by the second respondent. It is further contended that the fourth respondent, requested the first respondent to advise the second respondent to resume work and co-operate with the enquiry for completion of the proceedings.
3. The first respondent, the authority under the Act after taking into consideration of the materials on record, i.e., claim petition and the counter affidavit filed by the parties concerned and after narrating the conduct of the enquiry proceedings day by day with reference to the date on which the proceedings were adjourned, ultimately has come to the conclusion that the second respondent was denied employment and the petitioner being the principal employer, action initiated by the fourth respondent cannot be regarded as one taken in accordance with the statutory provisions and ultimately directed the petitioner to reinstate the second respondent and to pay 25% of the back-wages. The said order is assailed in this writ petition.
4. Mr.R.S.Ramanathan, learned counsel appearing for the petitioner very strenuously contended that the authority under the Act has to decide the issue as per the statutory provisions and not by the admission made by the petitioner. As per the statute, by no stretch of imagination, the petitioner can be regarded as an 'employer' with reference to the definition under Section 2(g) of the Beedi and Cigar Workers(Conditions of Employment) Act, 1966.
5. Though notice has been duly served in the writ petition on the respondents, the second respondent who is the contesting respondent neither engaged counsel nor appeared in person to put forth his case. Hence this Court considered the order impugned with reference to the argument advanced by the counsel from the petitioner.
6. The point in issue is whether the petitioner can be regarded as an employer or principal employer under the provisions of the Act so as to fasten the liability on it?
7. In order to resolve the point, let us consider the relevant provisions under the Act. The Act defines in Section 2(e) 'contract labour' as meaning any person engaged or employed in any premises by or through a contractor with or without the knowledge of the employer, in any manufacturing process; Section 2(f) of the Act defines 'employee' to mean a person employed directly or through any agency, whether for wages or not, in any establishment to do any work skilled and unskilled and includes (i) any labourer who is given raw materials by an employer or a contractor for being made into beedi and cigar or both at home (hereinafter referred to in this Act as "home-worker") and (ii) any person not employed by an employer or a contractor but working with the permission of, or under agreement with, the employer or contractor. Section 2(g) of the Act defines "employer" to mean (a) in relation to contract labour the principal employer, and (b) in relation to other labour, the person who has the ultimate control over the affairs of any establishment or who has, by reason of his advancing money, supplying goods or otherwise, a substantial interest in the control of the affairs of any establishment, and includes any other person to whom the affairs of the establishment are entrusted, whether such other person is called the managing agent, manager, superintendent or by any other name. Section 2(m) of the Act defines "principal employer" to mean a person for whom or on whose behalf any contract labour is engaged or employed in an establishment. Section 2 (h) of the Act defines "establishment" to mean any place or premises including the precincts thereof in which or in any part of which any manufacturing process connected with the making of beedi or cigar or both is being, or is ordinarily, carried on and includes an industrial premises. Section 2(i) of the Act defines 'industrial premises' to mean any place or premises in which any industry or manufacturing process connected with the making of beedi or cigar or both is being or is ordinarily carried on with or without the aid of power.
8. With reference to the above definition, if we consider the facts of the matter, though an intermediary - fourth respondent is inserted, I am of the view that the insertion so made is only to avoid the provisions of the Act. However, the factor is available in the case by way of additional counter affidavit filed by the petitioner before the first respondent, the authority under the Act in the claim proceedings. It is on record that in the original counter statement the petitioner has disowned its liability as if it has nothing to do with the affairs of the third respondent and fourth respondent. However, the cosmic truth has come out from the additional counter statement filed by the petitioner herein. In the additional counter statement, the petitioner, with all consciousness and without any uncertain terms, stated, rather, admitted that :--
i. The petitioner was a trade mark holder;
ii. It got the beedies manufactured through the third respondent, namely, Seyadu Cottage Industries, now renamed as Seyadu Home Industries by entering into contract with the fourth respondent for the purpose of manufacturing beedies; iii. All the affairs of the fourth respondent were controlled, conducted and managed as per the directions and advice of the petitioner herein. iv.The second respondent was employed by the fourth respondent and action initiated by the fourth respondent for the irregularities committed by the second respondent.
v.Despite the counter filed by the fourth respondent requesting the first respondent to advice the second respondent to attend the work and co-operate with the enquiry, the second respondent did not attend the work till date. vi. The petitioner was the principal employer as per the provisions of the Act. vii.The petitioner adopted the counter statement filed by the fourth respondent without prejudice to the interest of the petitioner.
9. From the above, it is clear that the petitioner management of Seyadu Beedi got its beedi manufactured by the third respondent Seyadu Cottage Industries now renamed as Seyadu Home Industries Pvt. Ltd. by entering into a contract with the fourth respondent Seyadu beedi manufacturer and it is also admitted fact that the manufactured beedi by the fourth respondent with the leaves and tobacco supplied by the third respondent were traded by the petitioner with their trade mark. Coupled with the admission made by the petitioner to the effect that the petitioner was the principal employer as per the provisions of the Act and the affairs of the fourth respondent are controlled, conducted and managed as per the directions and advice of the petitioner herein, it is amply clear that the petitioner is the principal employer though the fourth respondent has been inserted as already stated to avoid the clutches and rigour of the Act. The technical argument that despite the admission so made with all consciousness by way of solemn, sworn affidavit by the petitioner, the Court has to construe the statutory provision and give a finding to that effect, cannot be legally sustained as this Court has come to the conclusion that the insertion of the fourth respondent is only to avoid the consequences contemplated under the provisions of the Act and in the teeth of the admission made that the petitioner is the principal employer and having full control over the affairs of the fourth respondent. Further, it is also well settled legal principle that admitted facts need not be proved, which does not require any authority.
10. The statutory authority, the first respondent herein, after narrating the facts, in order to come to the conclusion that the petitioner is the principal employer has taken in aid the decision of the Supreme Court in the case of Mangalore Ganesh Beedi Works Vs.Union of India reported in 1974 (4) SCC 43- paragraph-33 and extracted paragraph 33 of the judgment which read as under
:
"33.The two classes of employers are broadly defined as the employer and the principal employer. The first kind is the manufacturer who directly employs labour. Such a manufacturer becomes an employer within the meaning of Section 2
(g)(b) of the Act by engaging the principal employer who through a contractor as defined in Section 2(3) of the Act engages labour which is known as contract labour. This labour is engaged by or on behalf of the manufacturer who becomes the principal employer. The third category of employer is a contractor who engages labour for executing work for and on his own behalf. Such a contractor may undertake work from a manufacturer or a trade mark holder but he becomes the principal employer in relation to contract labour on the ground that the labour is engaged for and on his own behalf. The fourth class of employer is where a contractor becomes what is known as sub-contractor, of a contractor. A contractor in such a case would ask the sub-contractor to engage labour for and on behalf of the contractor. In such a case the contractor would be the principal employer because the sub-contractor is engaging contract labour for and on behalf of the contractor who is the principal employer. The fifth class of employer is where a person by reason of advancing money or supplying goods or otherwise having a substantial interest in the control of any establishment becomes the employer of labour. To illustrate, a mortagagee in possession of an industrial premises, a hypothecatee of goods manufactured in industrial premises or in any establishment, a financier in relation to a manufacturer or a contractor or a subcontractor may become employer by reason of such consideration mentioned in the Act."
The authority also reproduced the observations of the Supreme Court in the case of B.K.B. Beedi Factory Vs. O.S.Thange, 1970 LLJ-1 which read as follows:
"The employee has the right to claim wages from the employer and not from the third party to whom his services are lent or hired. It may be that such third party may pay his wages during the time he had hired his serves but that is because of his agreement with the employer. That does not preclude the employee from the claiming his wages from the employer. The hirer may also exercise control and direction in the doing of thing for which he hired or even the manner in which it is to be done. But, if the employee fails t carry out his direction he cannot dismiss him and can only complain the employer. The right of dismissal vests in the employer."
11. On the basis of the available materials, as stated in the earlier paragraphs, this Court is of the opinion that the petitioner cannot be allowed to wriggle out and contend otherwise when he himself by way of sworn statement admitted that he is the principal employer. Apart from the facts narrated above and modus operandi of the petitioner in getting the beedi manufactured, inserting the fourth respondent would not relieve the petitioner from its liability as it is admitted that the third respondent entered into contract on behalf of the petitioner with the fourth respondent for manufacturing beedi. Thus, even as per the statutory provision, the petitioner can only be regarded as the principal employer de hors the admission made.
12. In view of the discussion made in the foregoing paragraphs, I am of the view that the petitioner has not made out any case in its favour. The writ petition is liable to be dismissed and it is accordingly dismissed.