ABAD DAIRY v. STATE — 1988 DIGILAW 196 (GUJ)

R. J. SHAH, J. ( 1 ) THESE are two petitions filed under Art. 226 of the Constitution amongst others whore common questions are involved. It is therefore proposed to dispose of the same at the admission stage by a common judgment and order. ( 2 ) PETITION No. 4587 of 1987 has been filed by Abad Dairy Dudh Vitaran Kendra Sanchalak Mandal against the State of Gujarat and the General Manager Abad Daisy inter alia for a writ direction or order quashing and setting aside the order dated 19-7-1986 (Annexure C) as being illegal perverse and contrary to the provisions of law and for an appropriate direction to the Government to refer the disputes in question to the Industrial Tribunal for adjudication. The said order was in respect of the demands made by the petitioner against respondent No. 2. After taking into consideration the report of the Conciliation Officer the Government reached the conclusion that the members of the petitioner were not workmen within the meaning of the Industrial Disputes Act 1947 and 90 it was not possible to refer the disputes to the Industrial Tribunal for adjudication under the Act. Hence the said petition. ( 3 ) THE same petitioner has filed another Petition No. 2492 of 1988 against Abad Dairy Gujarat Dairy Development Corporation Ltd. and the State of Gujarat wherein inter alia it has challenged the order of termination of services such as Annexure BB of its members. By virtue of an order dated 30-6-1988 granted in Civil Application No. 1178 of 1988 permitting amendments petitioner has prayed for further reliefs as under: (A) for a declaration that the new agreement at Annexure W is an attempt to over-reach the process of the Court unconscionable opposed to public policy vitiated by extraneous considerations and is otherwise also arbitrary inequitable unfair and unconstitutional and for a permanent injunction restraining the respondent authorities from altering the status quo with regard to the service conditions of the members of the petitioner-Union; (B) for a direction to respondents to grant the increase in commission of milk distribution as per the circular No. 1 dated 26-4-1988 marked Annexure DD to all the Booth incharge without insisting upon them to sign new agreement and for a further direction to the respondents to grant the complimentary gift of Steel Utensil (Tapeli) without any condition as mentioned in Annexure CC. ( 4 ) BOTH the petitions are opposed and it is submitted that both the petitions should be dismissed summarily. ( 5 ) TWO questions which go to the root of the matter arise for considerations: (1) Whether the agreement or agreements as the case may be between the parties are service contracts so that the members of the petitioner-Union can be regarded as workmen within the meaning of the said Act ? (2) If no whether both or either of the agreements can be set aside on the grounds alleged by the petitioner ? ( 6 ) A copy of the old agreement is at pages 145-147 in Special Civil Application No. 2492 of 1988. A copy of the new agreement is at pages 151-153 of the said Petition No. 2492 of 1988. On behalf of the respondents Nos. 1 and 2 in Special Civil Application No. 2492 of 1988 an affidavit of Mr. Sitaram Lingam Manager (Marketing) of respondents Nos. 1 and 2 dated 14-6-1988 has been put on record. It has been specifically stated in the said affidavit that relations between the Dairy and the commission agents are contractual in nature; that once the contract is entered into between the parties the parties are in the realm of contract and for any breach of the contract or the disputed issues arising out of the said contract a writ petition under Art. 226 of the Constitution of India is not a remedy; and that the party aggrieved of it feels that there is a breach of contract then it has a civil remedy which can be enforced in a Civil Court. It has been specifically contended that the petition involves disputed questions of facts and that the commission agents whom the petitioner. Union purports to respondent are not the employees of the respondent No. 1-Dairy; and that they are commission agents and independent contractors. It has also been averred in the said affidavit that there is no master and servant relationship between the commission agent and respondents Nos. 1 and 2. ( 7 ) THE aforesaid agreements are for the purpose of selling milk at various booths in the City of Ahmedabad. Both the aforesaid agreements do not seem to be contracts of service. They are not personal service contracts as is normally understood. 1 and 2. ( 7 ) THE aforesaid agreements are for the purpose of selling milk at various booths in the City of Ahmedabad. Both the aforesaid agreements do not seem to be contracts of service. They are not personal service contracts as is normally understood. The agreements show that they find the heirs and successors of the commission agents which could only never be in the case of personal service contracts. It is also to be noticed that under the agreements the commission agent who is selling milk of respondents Nos. 1 and 2 at various booths does not sell the milk for and on behalf of the respondent-Dairy. The required quantity of milk by a particular commission agent is to be indented by him in advance that is to say on the previous day and the milk once indented and delivered to the commission agent becomes the property and responsibility of the commission agents. The unsold milk lying with the commission agent is not taken back by the Dairy and once delivered as per the indent the milk is not taken back except when there is a complaint about curding of milk. If the said contracts were service contracts then the Dairy would be under an obligation to take back the unsold milk lying with the commission agents. Under the contract the milk once delivered becomes the property of the commission agent who becomes the owner of the milk so delivered. ( 8 ) UNDER the old agreement there was no provision for time limit and so the commission agents were continued irrespective of the age of such commission agents. It is stated on affidavit that more than 80 commission agents out of total 900 commission agents are presently above 60 years of age about 18 of them are above 70 years; and about 5 have even crossed the age of 75 years. This is a clear indication that the old agreement between the parties was not a service contract and was not containing service conditions. The above deponent has given a complete statement at Annexure B to the affidavit giving particulars of some such commission agents who are presently above the age of 60 years. This is one of the vital features which do not support the theory advanced by the petitioner. The above deponent has given a complete statement at Annexure B to the affidavit giving particulars of some such commission agents who are presently above the age of 60 years. This is one of the vital features which do not support the theory advanced by the petitioner. It has further been stated in the said affidavit in the above connection that in the past no agreement; of any commission agent has been terminated on account of his or her reaching the ago of 60 years. In the said affidavit it his further been stated that if a particular commission agent became incapable of carrying out the agreement due to old ago or other physical infirmity then the Dairy has in the past transferred the agreement to the family member or nominee of such commission agent and that there are about 50 such instances some of which have been stated in the statement at Annexure C to the said affidavit. ( 9 ) THE contract of service is always personal in nature. It is stated in the said affidavit that in majority of the cases the work under the agreement is not carried out personally by the commission agents; that in many cases the work is done by the persons who are totally strangers and not the family members or relatives of the commission agents; and that there are about 100 booths at which the milk is taken delivery of and sold to the consumers by the persons who are neither the family members nor the relatives of the commission agents and are persons with whom there is D0 agreement. The aforesaid would not have been possible had it been a contract of service. ( 10 ) IT has further been averred in the said affidavit that there is no real supervision or control of the Dairy over the manner and method of work carried out by the commission agents The commission agent is free to sell the milk to any consumer. There are 900 booths in the City of Ahmedabad at which the milk is sold. There are 20 Area Supervisors who generally visit a booth once or twice in month. At each booth there is a complaint book and the supervision and control of the Dairy through these supervisors is confined in respect of the complaints regarding over-pricing adulteration and refusal to sell the milk. There are 20 Area Supervisors who generally visit a booth once or twice in month. At each booth there is a complaint book and the supervision and control of the Dairy through these supervisors is confined in respect of the complaints regarding over-pricing adulteration and refusal to sell the milk. The aforesaid supervision is of random type. It is submitted in the said affidavit that milk being an essential commodity and governed by the provisions of Prevention of Food Adulteration Act 1954 the Dairy has to look after the quality of milk because adulteration may entail penal consequences on Dairy as well; and that the degree ant manner of supervision does not render the agreement in question as the one of contract of service. It has further been averred that the method of payments in respect of the milk sold would show that the commission agent does not deposit or pay the milk price every day and in some cases entire milk price has also not been deposited. This aspect also militates against the theory propounded by the petitioner. ( 11 ) IT has also been pointed out in the said affidavit that the Dairy has its own full-time salesmen; that the Recruitment Rules for the post of full-time salesmen provide for minimum educational qualification of 7th Standard; that full-time salesmen who are employees of the Dairy are in the pay-scale of Rs. 800-950; that there are about 42 full-time salesmen; that they are deployed to work at various booths where the agreement of the commission agent is suspended or terminated for breach of the agreement that it is a sort of stand-by arrangement made by tic Dairy to see that the consumers of the said locality are not put to inconvenience as and when agreement of the concerned commission agent is suspended or terminated. As against the aforesaid it is not necessary for the commission agent to powers any educational qualification. Besides the salesman of the Dairy is in fixed pay-scale whereas the Commission agent would earn profit or commission depending upon the sale of milk and milk products made by him and that there are cases where the commission agent earns more than Rs. 3000. 00 per month as is evident from the statement at Annexure I to the affidavit. Besides the salesman of the Dairy is in fixed pay-scale whereas the Commission agent would earn profit or commission depending upon the sale of milk and milk products made by him and that there are cases where the commission agent earns more than Rs. 3000. 00 per month as is evident from the statement at Annexure I to the affidavit. ( 12 ) AS is pointed out in the said affidavit there are good chances in the case of commission agents to earn more and more profits and there is also a risk of loss for the commission agent if milk remains unsold with him and is not taken back by the Dairy. This cannot happen if the agreements in question were service contracts. ( 13 ) ALL the aforesaid features clearly point in the direction that both the agreements are in the nature of contracts as between two principals; that the Commission agents are independent contractors; and that there are no relations of master and servant or emloyer and employee between the petitioner and respondents Nos. 1 and 2. The petitioner has therefore failed to point out that either or both the said agreements are service agreements and contain service conditions. ( 14 ) IT is necessary to note another aspect of the matter which has also relevance regarding the subject matter of the petitions. Respondent No. 1-Dairy was formerly owned and managed by Ahmedabad Municipal Corporation. It came to be transferred and entrusted to the respondent No. 2-Corporation in December 1979 under a tri-parte agreement reached between the Ahmedabad Municipal Corporation Government of Gujarat and respondent No. 2-Corporation. Since then the Dairy is known as Abad Dairy When the Dairy was taken over by the Corporation there were about 600 milk booths in the City of Ahmedabad as against 900 milk booths which are at present. It is to be noted that all the commission agents under the agreement with the Ahmedabad Municipal Corporation were continued by the respondent No. 2-Corporation and in some cases there has also been transfer of agreements in the facts and circumstances stated earlier. It is to be noted that all the commission agents under the agreement with the Ahmedabad Municipal Corporation were continued by the respondent No. 2-Corporation and in some cases there has also been transfer of agreements in the facts and circumstances stated earlier. It has been specifically stated on oath in the said affidavit that there has been no termination of any agreement and when the Corporation opened the milk booth after taking over the Dairy it adopted the forms of agreement which was prevailing since the days when the Dairy was run by Ahmedabad Municipal Corporation. Because of the experience gathered by taking over the Dairy it was noticed that there were some practical difficulties and so it was felt that the agreement required amendment or modification. Respondent No 1 therefore proposed the new agreement as per Annexure A to the affidavit. It has further been stated that there was no compulsion or force on any of the existing commission agents to enter into the new agreement; that those who did not want to sign the new agreement were at liberty to work under the old agreement; after understanding the terms and conditions of the new agreement 820 commission agents signed the new agreement with free consent whereas remaining 80 did not sign the new agreement. In this connection it has been alleged in the said affidavit that at the instance of the petitioner-Union a joint letter purported to have been signed by 26 commission agents as per Annexure AA of the petition at pages 96 to 98 was received by the Dairy that thereafter a further communication purported to have been signed by 65 commission agents on or about 19 alleging that their signatures on the new agreement were not with free consent and that new agreement was not finding on them was received. On behalf of respondents Nos. 1 and 2 it has been submitted in the said affidavit that 820 commission agents who-had signed the new agreement had done so with free consent. The facts which have been alleged by the petitioner in this connection have been disputed by the respondents Nos. 1 and 2 and it is hardly open to this Court in these petitions under Art. 226 of the Constitution to enter into such disputed questions of fact. The facts which have been alleged by the petitioner in this connection have been disputed by the respondents Nos. 1 and 2 and it is hardly open to this Court in these petitions under Art. 226 of the Constitution to enter into such disputed questions of fact. The admitted fact however remains that except the aforesaid 26 commission agents and a further lot of 65 commission agents the rest of the commission agents have entered into new agreements and they have not challenged the new agreements. Be that as it may we have a clear statement made on affidavit by the aforesaid deponent in the said affidavit that those who did not want to sign the new agreement were at liberty to work under the old agreement. It is true that there is a dispute as to what would happen to those commission agents who have entered into the new agreement and have claimed that the new agreement has been entered into by them under compulsion and duress; It is to be noticed in this connection that there is a term in the new agreement that after the commission agent enters into the new agreement old agreement in his case comes to an end. In the aforesaid circumstances it would seem that in the case of those commission agents who agitate that they had not entered into the new agreement with free consent and had done so under coercion and duress the remedy if at all would lie elsewhere and certainly not by any of a writ petition under Art. 226 of the Constitution. Those commission agents may have to take recourse to a Civil Court for having the said agreement set aside on any of the grounds which are available to them under law. It is absolutely clear that this Court in these writ petitions cannot entertain such disputes based on such disputed facts. On behalf of the respondent-Dairy as per Annexure BB at page 100 of the Petitions No. 2492 of 1988 a letter dated 5-5-1988 has been addressed to one of the commission agents wherein it has been made clear that as per clause 23 of the new agreement the old agreement has come to an end. On behalf of the respondent-Dairy as per Annexure BB at page 100 of the Petitions No. 2492 of 1988 a letter dated 5-5-1988 has been addressed to one of the commission agents wherein it has been made clear that as per clause 23 of the new agreement the old agreement has come to an end. It has been made clear in the said letter that since the commission agent concerned was claiming that the new agreement is not binding on her so far as respondent-Dairy was concerned the said new agreement was brought to an end because of the said stand taken by the Commmission agent and such a representation on behalf of the commission agent was regarded as a representation to end the new contract between the parties and so the said new contract was terminated accordingly and possession of the booth was claimed from the commission agent on that basis. As stated above the aforesaid stand taken by the respective party is also within the realm of disputed facts and whoever feels aggrieved by the said letter may take recourse to such action according to law as he or she is advised. In the present writ petitions it in not possible to enter into such disputed questions of contractual rights and obligations based on disputed facts and decide the matters. ( 15 ) IN view of all the aforesaid it is not possessible to hold that either of the said agreements is a service contract as claimed by the petitioners. We endorse the view that the members of the petitioner. Union are not workmen within the meaning of the said Act. ( 16 ) IN view of what we have observed hereinabove it is not possible in these writ petitions to set aside both or either of the said agreements on the grounds alleged by the petitioner on behalf of some of the commission agents. We however make it clear that the members of the petitioner-Union if they feel aggrieved may have recourse to the ordinary Civil Courts to ventilate their grievances if they are so advised. ( 17 ) IN the aforesaid view of the matter both the petitions fail and are hereby summarily dismissed. Notices in the above Special Civil Applications are hereby discharged. The ad-interim relief granted in Special Civil Application No. 249) of 1988 is hereby vacated. ( 17 ) IN the aforesaid view of the matter both the petitions fail and are hereby summarily dismissed. Notices in the above Special Civil Applications are hereby discharged. The ad-interim relief granted in Special Civil Application No. 249) of 1988 is hereby vacated. In the circumstances of the case there will be no order as to costs. Rule discharged. .