Bombay High Court
Maharashtra State Coop. Marketing ... vs First Labour Court, Akola And Others on 3 March, 1987
Equivalent citations: 1988(1)BOMCR695, (1989)ILLJ577BOM
JUDGMENT
1. This petition by Maharashtra State Cooperative Marketing Federation ('Marketing Federation' for short) is directed against the order passed by the Labour Court, Akola upon an application by 27 persons claiming to be the employees of the petitioner, directing payment of Rs. 300/- as bonus to each of them.
2. The petitioner is a co-operative society registered under the Maharashtra Co-operative Societies Act and carries on the activity of marketing and is an apex body of Marketing Societies in the State of Maharashtra and was appointed by the State of Maharashtra as its Chief Agent for the procurement of raw cotton as well as for the implementation of the other provisions of the Act including processing of raw cotton. disposal of cotton seed, etc., under a Notification promulgated under the Maharashtra Raw Cotton (Procurement, Processing and Marketing) Act, 1971. The petitioner obtained licenses from various Agricultural produce Market Committees for enabling it to carry out its activities. The respondent Nos. 4 to 30 filed an application under Section 33C(2) of the Industrial Disputes Act, before the Labour Court, Akola, claiming to be the employees of the petitioner for doing the work of weightment of cotton-seeds and filling it into bags in the market yard at Akola, since the year 1972-73. According to them, they were paid wages at Rs. 250/- per month and had been given identity cards in recognition of beings the employees of the petitioner. Though the petitioner had paid bonus to its other employees for the year 1975-76, no such bonus was paid to the respondents Nos. 4 to 30 and they sought payment of bonus at the rate of Rs. 126/- per season for the years 1975-76 to 1979-80 amounting to Rs. 13,500/- The application was resisted by the petitioner who denied that the respondents Nos. 4 to 30 were its employees. It was contended that the petitioner had no control and exercised no. supervision on the work of the respondents and whatever wages were paid to them were piece rate wages as fixed by the Agricultural Produce Market Committee. They were employed as a gang irrespective of the number of persons who turned up to work on any occasion. While denying the liability to pay bonus under the provisions of the Payment of Bonus Act, 1965. it was urged that in view of the provisions of Section 32(iv) of the Payment of Bonus Act, as the respondents would be employees employed by the petitioner who had been engaged in an industry carried on under the authority of the State Government, the provisions of the Payment of Bonus Act would not apply to those employees, as under Section 42 of the Maharashtra Raw Cotton (Procurement, processing and Marketing) Act. 1971, the petitioner had been appointed by he State Government as their Agents for the purpose of purchasing, selling, storing, processing, marketing and carrying on other business in cotton.
The Labour Court held that the petition was maintainable under Section 33C(2) of the Industrial Disputes Act, that the respondents Nos. 4 to 30 were employees of the petitioner and, therefore, directed the petitioner to pay Rs. 300/- as bonus to each of the respondents Nos. 4 to 30. Feeling aggrieved by the order passed by the Labour Court, the petitioner filed this writ petition challenging the order passed by the Labour Court.
4. It was contended that it was not proved that the respondents Nos. 4 to 30 were the employees of the petitioner and, therefore, no direction could be made for payment of bonus to them under the provisions of the Payments of Bonus Act. The contention that the application could not be filed under Section 33C(2) of the Industrial Disputes Act, was not pressed in view of the Full Bench decision of this Court in Kohinoor Tobacco Products Pvt. Ltd. v. Presiding Officer, Second Labour Court, Nagpur (1986) Lab I.C. 1055, holding that the Bonus Act is a complete Code in so far as the right to bonus is concerned, but is not a complete Code as far as the remedies are concerned and application under Sec. 33C(2) of the Industrial Disputes Act for claiming minimum bonus under Section 10 of the Bonus Act is maintainable. Shri Oka the learned counsel for the petitioner sought leave to raise one additional point viz., that in view of the provisions of Section 42(2)(a) of the Maharashtra Raw Cotton (Procurement, Processing and Marketing) Act, 1971, which enabled the State Government for the purpose of purchasing, selling, storing processing, marketing and carrying on other business in cotton on its behalf to appoint agents for the whole State or any specified area, and since the petitioner came to be appointed as Agents of the State Government for this purpose, the respondents Nos. 4 to 30 would fall within the category of employees excluded by Section 32(iv) of the Payment of Bonus Act, as they were engaged in an industry carried under the authority of a department of the State Government. Since the question raised was only a question of law, it was allowed to be raised and the parties were heard.
5. Turning to the first point viz., whether it was established that the respondents Nos. 4 to 30 were the employees of the petitioner Marketing Federation, Shri Oka urged that the finding of the Labour Court was vitiated because there was non-application of mind to certain circumstance which had been brought on record and the well established principles which should have guided the authority, were not applied. The respondents Nos. 4 to 30 examined two out of them, Mohd. Yasin and Abdul Nazir, besides two others Lilabai and Ganpat. Mohd. Yasin stated that the respondents Nos. 4 to 30 were employed on piece rate basis and the wages were top be paid Rs. 250/- to Rs. 300/- per month for the cotton seasons, which lasted from 6 to 9 months and they had all obtained Licences from the Agricultural Produce Marketing Committee for doing the work of weighing the seeds and filling it into bags. He also stated that at the beginning of every season, agreements were obtained in writing and they were duly signed by the employees in respect of the work. There was no cross-examination regarding the written agreement which contained the terms and conditions of employment. An application Ex. 5 was made before the Labour Court requiring the petitioner to produce the vouchers for the payments made to the respondents from 1975 to 1980, Karanamas executed by them during this period as well as the bonus register maintained for this period. That application was opposed by the petitioner, but a direction was made by the learned Judge of the Labour Court directing the petitioner to produce such of the documents, which were in their possession. Though there was a denial about having obtained the agreement in writing, one stamped authorisation purporting for the season 1981-82 was produced and it showed that the respondents were employed for weighting cotton-seeds and doing other work by the petitioner Federation and that whatever payments were to be made for that purpose, would be collected by one of them and that will amount to a discharges on behalf of others. There was no dispute that the identity cards had also been issued by the petitioner for enabling them to visit the place of work in the market yard. Abdul Nazir (A.W. 2) also spoke about the respondents employment, though he also stated that they also worked for others as well as admitted that certain voucher had been obtained from them for the work which they had done for others. Lilabai (A.W. 3) supported the respondents' version regarding their employment for about 6 to 7 months in the season. Her evidence would show that the respondents worked for others after the work of weightment was done. Ganpat (A.W. 4), a Stamp Vendor, stated that the respondents had purchased stamps from him for about 10-12 years for executing agreement with the petitioner though he had brought the register only from the year 1982.
6. On the other hand, the petitioner examined three witnesses Ramesh Dongre, Amarsingh and Jankiram. Ramesh was the Secretary of the Agricultural Produce Marketing Committee, Akot and he stated that a licence had to be obtained for doing Hamali work in the market yard and separate Licences were for separate types of work. He also stated that the petitioner did the Hamali also for grain merchants. Amarsingh's evidence was to the effect that the respondents had worked for his factory as well as for other traders. Jankiram who was employed as Accounts Clerk, stated that he worked as Cottonseed Clerk from 1976 to 1980 and repeated what Ramesh and Amarsingh had stated. According to him the petitioner had no control over the Hamals who worked for them and the wages used to be distributed by gangmen amongst themselves and with this the petitioner was not concerned. His cross-examination, however, showed that he worked only for one and half hours in the factory premises and for the rest of the time he used to work in the office. Apparently the petitioner had not examined any of its office bearers for showing the procedure which was adopted for entrusting goods for weightment and for being filled in bags, but from the very fact that the respondents were engaged for weightment and filling bags, it is difficult to believe that no supervision or control might have been exercised, having regard to the nature of the work they had been doing.
7. The learned Judge of the Labour Court has taken into consideration all these aspects. Shri Oka for the petitioner, however, urged that due weight was not given to the fact that the licences were being issued by the Agricultural Produce Marketing Committee and not by the petitioner, but it must be noted that merely because the licences had to be issued by the Agricultural Produce Marketing Committee for any one who worked in the market yard, it would not follow that the licensees could not be the employees of the petitioner. The licensees alone were authorised to work within the market area. Another circumstance on which Shri Oka relied was that the respondents Nos. 4 to 30 worked as a gang and were paid as such, but that also would not be conclusive of the fact that they were doing only casual jobs and were not employees. The stamped agreement showed not only that payment to one would operate as a valid discharge in respect of payments to be made to the others, but also that the signatories worked for the petitioner. The circumstance that the respondents worked for others also, would not detract from their being the employees of the petitioner. In Silver Jubilee Tailoring House v. Chief Inspector of Shops and Establishments (1973-II-LLJ-495), it was pointed out that the right to control the manner of work is not the exclusive test for determining the relationship of employer and employee, and that they are not obliged to work for the whole day does not militate against their being employees of the proprietor of the shop where they attend for work. The circumstances on which Shri Oka relied would not indicate that the respondents were not the employees of the petitioner. In fact all these aspects have been considered by the learned Judge of the Labour Court and the finding has been reached upon appreciation of evidence and no case has been made out for interference with that finding by this Court in the exercise of its writ jurisdiction.
8. The main question, however, is whether the petitioner was bound to pay the bonus to the respondents 4 to 30 under the provisions of the Payment of Bonus Act in view of the exception (iv) in Section 32 of the Payment of Bonus Act, under which nothing in the Act applies to employees, employed by an establishment engaged in any industry carried on by or under the authority of any department of the Central Government or a State Government or a local authority. There is no dispute about the position that the petitioner Marketing Federation was appointed as Chief Agent of the State of Maharashtra under the Maharashtra Raw Cotton (Procurement, Processing and Marketing) Act, 1971 for the procurement of raw cotton as also for the implementation of other provisions of the Act, including processing of raw cotton, disposal of cotton-seed, etc. The Maharashtra Raw Cotton (Procurement, Processing and Marketing) Act, 1971 was enacted to provide for carrying on for a certain time of all trade in raw cotton by the State of Maharashtra and the preamble reads as follows :-
"Whereas, ginned and pressed cotton has been commanding a high level of prices at the terminal markets in recent years, nevertheless it has been brought to the notice of the Government of Maharashtra that because of too many intermediaries and also defects in the marketing system, growers of cotton in the State do not get a fair share of the price for their crop;
And whereas, it is also necessary to supply unadulterated cotton to consumers at a reasonable price, and to guarantee the purity of cotton and honest trade practices at processing centres;
And whereas, the Government of Maharashtra has decided that all trade in raw cotton should be carried on by the State for a certain time, and for, that purpose to take power for acquiring cotton from the growers and other persons having stocks thereof, getting in ginned or pressed into bales, selling it in any form to consumers and others on behalf of the tenders and paying compensation to the tenders and provide for matters relating to the purposes aforesaid, it is hereby enacted in the twenty-second year of the Republic of India as follows :"
Section 42, which is material, relates to the power to delegate and to appoint agents and sub-section (1) and clause (a) of sub-section (2) reads as follows :
"42. (1) The State Government may, by notification in the Official Gazette, direct that any power or duty which by this Act is conferred or imposed upon the State Government (except the power to make rules), shall, in such circumstances and under such conditions, if any, as may be specified in the direction, be exercised or discharged also by an Officer or authority subordinate to it.
(2)(a) The State Government may, for the purpose of purchasing, selling, marketing and carrying on other business in cotton on its behalf, appoint agents for whole State or any specified area, and any such agent may be appointed for more than one such area."
9. Chapter III deals with prohibitions on trading in and transport of cotton and on cotton ginning and pressing factories, and Sections 17, 18 and 19 therein relate to the prohibition on carrying on business in cotton (other than baled cotton), cotton ginning factories and transport of cotton other than baled cotton outside the State. Under Section 20(1) every grower of cotton is obliged to sell the cotton produced by him and which the wishes to dispose of to the State Government, by tendering it at a collection centre. There are various provisions which deal with mode of fixing and payment of price for cotton tendered at a collection centre, price fluctuation fund, and control of cotton ginning and pressing factories as well as provision for settlement of disputes regarding baled cotton sold by the Government. From the various provisions of the Act, there can be no doubt that a monopoly in the matter of purchasing, selling, marketing and carrying on other business in the cotton is conferred on the State Government. The machinery set up and the organisation leave no doubt as to the industry for this purpose being run solely by the State Government which may have several agencies for the purpose of implementing the provisions and carrying out the purposes of the Act.
10. As indicated above, clause (a) of sub-section (2) of Section 42 of the Maharashtra Raw Cotton (Procurement, Processing and Marketing) Act, 1971 enables the State Government to appoint agents for the purposes specified and the petitioner Marketing Federation is constituted the Chief Agent for the purpose. The business in raw cotton is the business of the State Government and it is this business which is to be carried on by the petitioner Marketing Federation. It is in this context that the provisions of Clause (iv) of Section 32 of the Payment of Bonus Act fall to be considered Shri Sirpurkar, the learned counsel for the respondents Nos. 4 to 30, contended that the petitioner Marketing Federation is a separate entity and has a separate personality and, therefore it is distinct from the State Government and cannot be said to be a department of the Government and he relied on the observations in Union of India v. R. C. Jain (1981-I-LLJ-402), but it is difficult to see what assistance he can derive from the observations therein as there the provisions of the Payment of Bonus Act were held inapplicable because Delhi Development Authority constituted under the Delhi Development Act, 1957 was a local authority. In the present case Shri Oka for the petitioner does not rely on the first part of clause (iv) which relates to an establishment engaged in any industry carried on by the Central Government or State Government, but the second part thereof which relates to an establishment engaged in any industry carried on under the authority of any department of the Government. The argument of behalf of the respondents that the petitioner cannot be regarded as an authority under Article 12 of the Constitution, would not be relevant because the expression "under the authority of any department", has no reference to an authority contemplated by Article 12 of the Constitution. The expression came to be considered by the Supreme Court in Rashtriya Mill Mazdoor Sangh v. The Model Mills, Nagpur (1986) Lab. IC. 382 in relation to an industry viz., the Model Mills, Nagpur in respect of which an authorised controller was appointed under Section 18-A of the Industries (Development and Regulation) Act (65 of 1951) and it was held that the establishment does not become one engaged in any industry carried on under the authority of the department of Central Government, and, therefore, its employees are not excluded from the operation of the Payment of Bonus Act. One of the questions which arose for consideration there was whether on appointment of the authorised controller, did the industrial undertaking acquire the status of an establishment engaged in an industry which is carried on by or under the authority of the department of Central Government and it was held that on a pure grammatical construction, the expression "establishment engaged in an industry carried on under the authority of the department of Central Government" cannot take in one in respect of which the Central Government, in exercise of the powers conferred under the Industries (Development and Regulation) Act, directed a change of management. But the discussion in para 11 of the report would show that while making a reference to that expression it was said that it would in ordinary parlance mean that the department is directly responsible for the management of the industrial undertaking. That, however, was not the reason for ultimately holding that the Model Mills would be entitled to the exception under clause (iv) of Section 32 of the Payment of Bonus Act. While pointing out that the underlying purpose of Section 32(iv) is not to exclude the employees of some stray establishments from the operation of the Act but to exclude all employees of all establishments in any industry which is carried on under the authority of the department of the Central Government, it was observed that it cannot be said that the textile industry is being carried on under the authority of the Department of the Government and ordinarily the Central Government would not like to treat an establishment set up by it in an industry in which there are other private sector establishments to differentiate and discriminate between employees of establishment engaged in the same industry.
11. Shri Oka relied also on the observations in Heavy Engineering Mazdoor Union v. State of Bihar (1969-II-LLJ-549). While considering the provisions of Section 2(a) of the Industrial Disputes Act, where the words "in relation to any industrial dispute concerning any industry carried on by or under the authority of the Central Government" appearing in clause (i), it was pointed out that the words "under the authority" means pursuant to the authority, such as where an agent or a servant acts under or pursuant to the authority of his principal or master, and it was held that the Heavy Engineering Corporation Limited, which was an incorporated company, could not answer that test. The Supreme Court also took the view that the question whether the Corporation is agent of the State must depend on the facts of each case and where a statute setting up a corporation so provides, such a corporation can easily be identified as the agent of the State, as in Graham and others v. His Majesty's Commissioners of Public Works and Building 1901 (2) K.B. 781, where Phillimore J., held that for that purpose the Crown has, with the consent of Parliament, in certain cases established certain officials who are to be treated as agents of the Crown but with a power of contracting as principals. In the absence of statutory provision, however, a Commission or Corporation acting on its own behalf even though it is controlled wholly or partially by Government department, would not be ordinarily presumed to be servant or agent of the State. The contention on behalf of the respondents that the petitioner Marketing Federation has a separate entity as a body constituted under the Maharashtra Co-operative Societies Act, would not be material and such an individuality of the Marketing Federation will not come in the way of its being constituted an agent of the State, if such is the effect of statutory provisions such as Section 42(2)(a) of the Maharashtra Raw Cotton (Procurement, Processing and Marketing) Act, 1971. The Supreme Court approved in the case of Rashtriya Mill Mazdoor Sangh v. The Model Mills. (supra) the view of Calcutta High Court in Carlsbad Mineral Water Manufacturing Co. Ltd. v. P. K. Sarkar (1952-I-LLJ-488) wherein the Calcutta High Court had held that a business which is carried on by or under the authority of the Central Government must be a Government business. The High Court had further held that an industry to be carried on under the authority of the Central Government it must be an industry belonging to Central Government, that is to say its own undertaking. There can be no doubt in the circumstances of the present case that the business of raw cotton for which a monopoly is created in the State of Maharashtra is the business of the State Government and though the decision in the case of Rashtriya Mill Mazdoor Sangh, (supra) turned upon the separate personality of Model Mills the main consideration which weighed was that it was not an establishment engaged in any industry carried on under the authority of any department of the Central Government and this is clear from the further observations in para 16 of the report that the authorised controller is appointed by the Central Government and he has to work subject to the directions of the Central Government, does not render the industrial undertaking an agent of the Central Government and, therefore, could not be said to be an establishment engaged in an industry carried on by or under the authority of the Central Government.
12. Having, regard to the statutory provisions and the clear factual position that the petitioner Marketing Federation is appointed under Section 42(2)(a) of the Maharashtra Raw Cotton (Procurement, Processing and Marketing) Act, 1971 as the agent of the State Government, there can be no escape from the conclusion that its employees would be excepted by virtue of clause (iv) of Section 32 of the Payment of Bonus Act, from the provisions of that Act and they would not be entitled to lay a claim for bonus under that Act.
13. In view of this position, the petition will have to be allowed and the impugned order passed by the Labour Court granting bonus to the respondents Nos. 4 to 30 will have to be quashed and it is accordingly quashed and the application by the respondents Nos. 4 to 30 claiming bonus under Section 33C(2) of the Industrial Disputes Act is dismissed. Rule made absolute in these terms. There will be no order as to costs.