ORDER Shivdayal, J. 1. This is a petitioner under Article 226 and 227 of the Constitution for a writ, order and directions to quash the orders passed by the Labour Court, Jabalpir, and the Industrial Court, Indore, for reinstatement of respondents No. 1 and payment of back wages. 2. The petitioner is the Manager of a Bidi factory belonging to firm M/S Vrajlal Manilal and Co. Sagar. During the course of the business, the petitioner receives readymade Bidis in bundles of 25 each, popularly known as “Kattas”. The work of wrapping kattas with tissue paper (known as ‘Jhilli’) and affixing labels on the kattas is colloquially known as “Relai”. The Petitioner engages Relaiwalas to wraps kattas. The petitioner further alleges that Gopal (respondent No. 1) did Relai work for the petitioner. He was permitted to come to the petitioner's factory to do Relai work; he was paid on the basis of the quantity of work done at the agreed rates on the total output per week; no time was fixed for arrival or departure of Relaiwalas in the factory, nor they had to perform any stipulated quantity of work during the factory hours; there was a room in the premises of the factory in which Relaiwalas worked; no instructions were given for the work to Relaiwalas; there was no supervision of control or the management on the manner of the work of respondent; he was not treated as a monthly paid employee in the factory and his attendance was never recorded; he was not given any bonus or leave with wages; he was not given any holidays, nor was required to apply for any leave; and in the course of the period of five months from November 19, 1958 to April 12, 1959, he worked only for 26 days. 3. Gopal (respondent No. 1) made an application under section 16 of the C.P. and Berar Industrial Disputes Settlement Act, 1947 (hereinafter called the Act) to the Labour Court, Jabalpur, alleging that he was an employee of the petitioner as a Bidi packer. By an order dated April 22, 1959 on he was dismissed on mala fide and baseless allegations. No charges were given to him. No notice was given to him, nor was any enquiry made against him. He contended that his dismissal was contrary to law.
By an order dated April 22, 1959 on he was dismissed on mala fide and baseless allegations. No charges were given to him. No notice was given to him, nor was any enquiry made against him. He contended that his dismissal was contrary to law. The petitioner resisted the application of respondent No. 1 before the Labour Court contending that he was not an employee as defined in the Act and that the provisions of section 16, or any other section of the Act, did not apply to the case. The jurisdiction of the Labour Court was challenged. 4. The Labour Court held that Gopal (respondent No. 1) hereinafter caned the respondent) was an "employee" within the meaning of section 2(10) of the Act and that the dismissal order was in contravention of the principles of natural justice as it was made without giving to the employee a proper charge sheet and without any enquiry. Accordingly, it directed reinstatement of the respondent No. 1 within 15 days from the date of the order and further directed the petitioner to pay back wages for the whole period, that is from, April 27, 1959 to the date of reinstatement; in default, to pay Rs. 500/- by way of compensation in addition to the wages from April 27, 1959 to November 21, 1964, (the date of the order). The petitioner went in revision before the Industrial Court, Indore. The revision was dismissed. 5. The following facts are not in disputes:-(1) The respondent was paid at piece rate for putting wrappers and labels on kattas. (2) He could absent himself on any day, but on the day that he wanted to work, it was necessary for him to be present in the factory before 9 A.M. (3). Except as above, there was no time fixed for his going to the factory premises. He was free to leave the factory whenever he chose to do so. There were no fixed working hours for him. He had to work during the working hours of the factory only, that is, neither before 9 A.M. nor after 6 P.M. (4). He was required to work within the premises of the factory only. He could not take any material home and to insure this, whenever he left the factory, a search was taken of his person. (5).
He had to work during the working hours of the factory only, that is, neither before 9 A.M. nor after 6 P.M. (4). He was required to work within the premises of the factory only. He could not take any material home and to insure this, whenever he left the factory, a search was taken of his person. (5). His work was supervised by a Munim and a Babu and the supervision consisted merely of examining at the end of the day whether the wrapping and labeling were proper. 6. The question is whether on these facts, the respondent could be held to be an "employee" within the meaning of section 2 (10) of the Act, so as to give jurisdiction to the Labour Court under section 16. It runs thus:- "2 (10). 'Employee' means any person employed by an employer to do any skilled or unskilled manual or clerical work for contract or hire or reward in any industry and includes an employee dismissed, discharged or removed on account of any industrial dispute." 7. The petitioner's case is that the above nature and condition of work constituted a contract for service, while according to the respondent, it constituted a contract of service. The distinction between the two has been the subject of discussion in a string of decisions of the Supreme Court; D.C. Works Ltd. Vs. State of Saurashtra 1957 SCR 152 = AIR 1957 SC 264 Chintamanrao Vs. State of M.P. 1958 SCR 1340 = AIR 1958 SC 388 , Birdhichand Vs. First Civil Judge (1961) 3 SCR 161 = AIR 1961 SC 644 , Shankar Balaji Vs. State of Maharashtra (1962) Sup. 1 SCR 249 = AIR 1962 SC 517 and D.M. Sahib and Sons Vs. Union, of U.P. Workers AIR 1966 SC 370 . 8. All these cases are noticed in a recent decision of the Supreme Court in V.P. Gopala Rao Vs. The Public Prosecutor, Andhra Pradesh Criminal Appeal No. 271 of 1968, decide on March 7, 1959. Their Lordships have then remarked thus:- "There is no abstract a priori test of the work control required for establishing a contract of service. In Short Vs.
The Public Prosecutor, Andhra Pradesh Criminal Appeal No. 271 of 1968, decide on March 7, 1959. Their Lordships have then remarked thus:- "There is no abstract a priori test of the work control required for establishing a contract of service. In Short Vs. J.M. Enderson Ltd. 1945 HCHL 24, 33-34, Lord Thankerton quoting Lord Justice Elerk's dicta in an earlier case said that the principal requirement of a contract of service was the right of the master 'in some reasonable sense' to control the method of doing the work." 9. Having carefully studied the above rulings, we find that their Lordships decided those cases not in similar circumstances and it appears that certain peculiar circumstances weighed with their Lordships in each case. There are no hard and fast rules or tests to distinguish between an employee and an independent contractor. Their Lordships said, in Chintanan Rao Vs. State of M.P. (supra), that whether a particular person under whatever designation he may be known, is a worker or nor under the Act depends upon the terms of the contract entered into between him and the employer. Hence no general proposition can be laid down that under no circumstances and independent contractor can be considered to be a worker within the meaning of a its definition in the Act. However, their Lordship observed that the identifying mark of a workmen in distinction to an independent contractor is that he should be under the control and supervision of the employer in respect of the details of the work. Some of the predominant indicia which have constantly attracted attention may be summed up thus:- (1) Whether the right of the employer exists not merely to direct what work is to be done, but also control the manner in which it is to be done. (2) Whether the employee's time is at the disposal of the employer. (3) Whether the employee is bound to work at the premises of the employer. However, different considerations would apply according to the nature of the work. For instance regarding the first, in the case of skilled or highly technical work, it may not be possible to supervise the mode of execution of the work even so, the worker may be an employee.
However, different considerations would apply according to the nature of the work. For instance regarding the first, in the case of skilled or highly technical work, it may not be possible to supervise the mode of execution of the work even so, the worker may be an employee. Conversely, even in the case of an independent contractor, the employer may keep a watch on the manner of execution of the work to see, for instance, that his material is not vested. So also with regard to the third, it may be that the nature of the work or certain consequences attached to it may necessarily require, even in the case of an independent contractor, to work at the factory itself. For example, where the work is to be done upon something attached to the earth or something which cannot be removed from the premises of the factory. An example is the present case itself. Labels bearing the trade mark cannot be allowed to go outside the factory. Therefore, even an independent contractor will have to paste labels at the premises of the factory itself. It can well be seen by these illustrations that even these tests may not sometimes, be decisive or crucial. Having given our anxious consideration, we are of the opinion that the second is indeed a predominant criterion. Barring very rare exceptions, an employer will insist on Punctuality and regularity of attendance of the employee. He would not allow him to come to the factory whenever he chooses and leave it whenever he wants. He would not leave it in the employee's discretion to come or not to come on any day that he pleases, or to remain continuously absent for any period that he chooses. This will be so even in the case of piece rate workers. 10. However, in ultimate, analysis, to things emerge out. Firstly, and to speak broadly, what is to be seen is whether the element of subordination or the element of freedom predominates. Secondly, it is the totality of all the circumstances which determines the question.
This will be so even in the case of piece rate workers. 10. However, in ultimate, analysis, to things emerge out. Firstly, and to speak broadly, what is to be seen is whether the element of subordination or the element of freedom predominates. Secondly, it is the totality of all the circumstances which determines the question. In the present case, no doubt, the respondent was not allowed to work except at the premises of the factory, but this was not the crucial test because even an independent contractor cannot be allowed to take, outside the premises, labels which bear trades mark and trade mark in the case of bidis has outstanding importance to the manufacture. Admittedly, there was no supervision in the manner of execution of the work done by the respondents. It is true that at the end of the day, the work done by him could be rejected. Shri Chitale contended that the very power to reject implies that the worker is an independent contractor because, in the case of an employee the employer may reprimand him but does not reject the goods which are his own. 11. In the present case, it is remarkable that the respondent worked only for 26 days in the course of five month, that is, November 19, 1958 to April 12, 1959. (vide Exs. D-1 to D-20). And, Exs. D-14 and D-15 show that in the week from 15 to 21st February he did not work at all and in the next week from 22nd to 28 February, he worked only on the 27th February, which means that from 15th to 26th February, he was continuously absent. On any day that the respondents choose to do work, he was free to go to the factory at any time and leave it at any time. The only restriction was that on any day that he desired to work, he had to reach there before 9 A.M. otherwise, the work could not be allotted to him on the day. 12. Admittedly, there was no attendance register.
The only restriction was that on any day that he desired to work, he had to reach there before 9 A.M. otherwise, the work could not be allotted to him on the day. 12. Admittedly, there was no attendance register. In the present case, toe outweighing consideration, along with others which are akin to Shankar Balaji's case (supra), is not only that the respondent was free to come and free to leave the factory as he pleased, but also that he worked only for 26 days in the course at five months and remained absent for long intervals at a stretch. 13 In Shankar Balaji Vs. State of Maharashtra (supra) (1), one Pandurang was one of the persons who rolled bidis in the appellant's bidi factory; (2) there was no agreement or contract of service between the appellant and Pandurang; (3) Pandurang was not bound to attend the factory for any fixed hours of work or for any fixed time; he was free to go to the factory at any time he liked and he was equally free to leave the factory whenever he liked; (4) Pandurang could be in the factory during the hours of the working of the factory; (5) Pandurang could remain absent or work on any day he liked he could be absent upto 10 days, without even informing the appellant. If he was to be absent for more than 10 days, he had to inform the appellant, not for the purpose of taking his permission or leave, but for the purpose of assuring the Appellant that he had no intention to give up work at the factory (6) there was no actual supervision of the work Pandurang did in the factory; (7) Pandurang was paid at fixed rates on the quantity of bidis turned. out, and there was however, no stipulation that he had to turn out any minimum quantity of bidis in a day; (8) leaves used to be supplied to Pandurang for being taken home and cut there. The tobacco to fill the bidis used to be supplied at the factory; he was not bound to roll the bidis at the factory after taking permission from the appellant; and (9) at the close of the day, the bidis used to he delivered to the appellant and bidis not up to the standard, used to be rejected.
The tobacco to fill the bidis used to be supplied at the factory; he was not bound to roll the bidis at the factory after taking permission from the appellant; and (9) at the close of the day, the bidis used to he delivered to the appellant and bidis not up to the standard, used to be rejected. This decision of their Lordships is on all fours with the present case. It could not be distinguished on the ground that the respondent was bound to work at the premises of the factory. That consideration has no significance at all in determining whether the respondent was an employee or an independent contractor, because, as pointed out above, in no case could the labels be allowed to be taken out of the factory premises. Thus, having regard to the totality of the above factors, the only conclusion is that the dement of freedom was predominant, not the element of subordination. In our opinion, in the present case, the Labour Court and the Industrial Court did not approach the matter correctly. 14. For these reasons, the respondent was bound to be held to be not an employee within the meaning of section 2 (10) of the Act. The Labour Court and the Industrial Court had no jurisdiction to try the application under section 16 filed by Gulab respondent No. 1. 15. Shri Gulab Gupta contended that the finding whether a person is an employee or not is one of fact, so that we could not go into that question. In our opinion, this contention must be rejected. The question whether the respondent was an employee or notice a jurisdictional fact, because on the determination of that fact depended the jurisdiction of the Labour Court and the Industrial Court. This position is now well settled that where the jurisdiction of a Court or a Tribunal of limited jurisdiction depends upon the existence of a certain fact, such Court or Tribunal cannot, by wrongly determining such collateral fact, confer upon itself the jurisdiction which it has not. This jurisdiction of determining a collateral fact is different from the jurisdiction to determine those questions of fact or law for which it is constituted.
This jurisdiction of determining a collateral fact is different from the jurisdiction to determine those questions of fact or law for which it is constituted. It is stated in Seervai's Constitutional Law of India, page 587 (Para 16-24):- “The jurisdiction of an inferior tribunal may depend upon the existence of a particular condition or a particular state of facts and a question then arises whether the inferior tribunal can give itself jurisdiction by erroneously deciding the existence of the condition or the facts upon which its jurisdiction depends. No doubt a tribunal must decide the collateral question whether the condition is satisfied or the fact exists which gives it jurisdiction, but can it do so conclusively? The answer to this question was given by Lord Esher M.R. in a passage which is regarded as a classical exposition of the subject. In R. Vs. Commissioner for Special Purposes of the Income Tax (1888) 21 QBD 313.319-20, said: "When an inferior Court or tribunal or body which has to exercise the power of deciding facts is first established by Act of Parliament, the legislature has to consider what powers it will give that tribunal or body. It may in effect say that, if a certain state of facts exists and is shown to such tribunal or body before it proceeds to do certain things, it shall have jurisdiction to do such things, but not otherwise. There it is not for them conclusively to decide whether that state of facts exists, and, if they exercise the jurisdiction without its existence, what they do may be questioned, and it will be held that they have acted without jurisdiction.” And the learned author, in paragraph 16.156 (Page 689), has cited certain decisions to illustrate this well settled proposition. 16. In the present case, the question before the Labour Court was whether the dismissal of Goral (respondent 1) without any charge sheet being given to him and without any enquiry, was lawful. That matter is an industrial dispute within the meaning of section 2 (12) of the Act, as it related to an industrial matter within the meaning of section 2 (13) of the Act. But the jurisdiction of the Labour Court depended upon the existence of the fact that the petitioner was an employee within the meaning of section 2 (10) of the Act.
But the jurisdiction of the Labour Court depended upon the existence of the fact that the petitioner was an employee within the meaning of section 2 (10) of the Act. This last mentioned fact was collateral to the actual matter which the tribunal had to try. It had to be determined before the determination of that actual question. The Labour Court or the Industrial Court could not, by a wrong decision with regard to this collateral fact, give itself a jurisdiction which it would not otherwise possess. This proposition is well settled by decision in Ujjam Bai Vs. Stale of Uttar Pradesh AIR 1962 SC 1621 , where there Lordships have cited with approval the statement in Halsbury's law of England (3rd Edition) Vol. I, page 59:- "The jurisdiction of an inferior tribunal may depend upon the fulfillment of some condition precedent or upon the existence of some particular fact. Such a fact is 'collateral to the actual matter which the tribunal has to try and the determination whether it exists or not is logically prior to the determination of the actual question which the tribunal has to try. The tribunal must itself decide as to the collateral fact, when, at the inception of an inquiry by a tribunal of limited jurisdiction, a challenge is made to its jurisdiction, the tribunal has to make up its mind whether it will act or not and for that purpose to arrive at some decision on whether it has jurisdiction or not. There may be tribunals which by virtue of legislation constituting them, have the power to determine finally the preliminary facts on which the further exercise of their jurisdiction depend" but, subject to that an inferior tribunal cannot by a wrong decision with regard to a collateral fact, give itself a jurisdiction which It would not otherwise possess." 17. The Labour Court and the Industrial Court thus wrongly decided the collateral fact whether Gopal (respondent No. 1) was an 'employee' within the meaning of section 2 (l0) of the Act. On this collateral fact depended their jurisdiction. Consequently, it must be said that the Labour Court and the Industrial Court had no jurisdiction to decide the respondent's application for reinstatement and payment of back wages on the ground that his dismissal was in contravention of law having been made without a charge and enquiry. 18.
On this collateral fact depended their jurisdiction. Consequently, it must be said that the Labour Court and the Industrial Court had no jurisdiction to decide the respondent's application for reinstatement and payment of back wages on the ground that his dismissal was in contravention of law having been made without a charge and enquiry. 18. Shri Chitale argued that this petition is not only under Article 226 of the Constitution for certiorari but also under Article 227, invoking powers of superintendence of this Court. 19. This should be end of the matter. However since Shri Chitale argued at length the question whether the respondent was dismissed in contravention of the law and was, therefore, entitled to the reliefs given to him by the Industrial Court, we shall briefly deal with that aspect of the case as well. 20. It is clear that the petitioner stopped giving work to the respondent because of the latter's misconduct, which a amounted to dismissal according to the well known connotation of that expression. As such, it was within section 31, Schedule II (3). No doubt, there are no "Standing Orders" of the petitioner but the Labour Court has held that it was the requirement of the principles of natural justice that proper charge-sheet should have been given to him and there ought to have been a fair and proper enquiry. The word "law" in section 31, read with Schedule II (3), includes the observance of the principles of natural justice. If the respondent was an employee within the meaning of section 2 (10) of the Act, the orders passed by the Labour Court and the Industrial Court would have been upheld. 21. For these reasons, the petition is allowed. The orders passed by the Labour Court and the Industrial Court are quashed. There shall be no order for costs. The security amount shall be refunded to the petitioner.