Tamil Nadu Handicrafts Development Corporation Limited v. The Inspector of Factories, Range No.II, Madurai

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 17.10.2008C O R A M : THE HONOURABLE MR. JUSTICE K. CHANDRUW.P.No.8281 of 19981. Tamil Nadu Handicrafts Development Corporation Limited, rep.by its Secretary and Personnel Manager, No.759, Anna Salai, Madras-2.2. The Superintendent, Brass Artware Production Centre, A Unit of Tamil Nadu Handicrafts Development Corporation, Madurai-7. .. Petitioners-vs-1. The Inspector of Factories, Range No.II, Madurai-2.2. Madurai General Workers' Union, rep.by its General Secretary, R.Sankaran, No.166, North Masi Street, Madurai-2.3. S. Sundaramoorthy .. RespondentsPRAYER : Petition filed under Article 226 of the Constitution ofIndia praying for the issuance of a writ of certiorari calling forthe records pertaining to the proceedings of the first respondentmade in No.E.872/97, dated 21.5.1998 and to quash the same.For petitioners :: Mr.C.Saravanan For respondents :: Mr.A.Arumugam, Spl.G.P.for R1 *****O R D E R The writ petitioners are State owned Tamil Nadu HandicraftsDevelopment Corporation Limited represented by its Secretary andPersonnel Manager and also the Superintendent, Brass ArtwareProduction Centre at Madurai. https://hcservices.ecourts.gov.in/hcservices/

2. Aggrieved by the order passed by the first respondent, who isan Inspector of Factories, under the Tamil Nadu IndustrialEstablishments (Conferment of Permanent Status to Workmen) Act, 1981(for short, Tamil Nadu Act 46 of 1981), dated 21.5.1998, the presentwrit petition has been filed.3. The third respondent in this writ petition was employed as aworkman in the unit run by the second petitioner. He was representedby the second respondent trade union, which made a complaint to thefirst respondent on 18.5.1998 that inspite of Tamil Nadu Act 46 of1981, the services of the third respondent was not made permanent. Onthe basis of the said complaint, the first respondent - Inspector ofFactories, Range-II, Madurai, inspected the premises of the secondpetitioner. This inspection was made in the presence of theSuperintendent, who is the second petitioner and also in the presenceof the third respondent. The records relating to the attendance ofthe third respondent was summoned and was perused by the firstrespondent. As a matter of fact, the first respondent found that thethird respondent, from June 1995 till April 1998, had worked for morethan 480 days and, therefore, he was eligible to be made permanent interms of Section 3 of the Tamil Nadu Act 46 of 1981. Therefore, hehas passed an order, dated 21.5.1998 directing conferment ofpermanent status in favour of the third respondent and reportcompliance of the same to his office. 4. Aggrieved by the said order, the present writ petition hasbeen filed. In the writ petition, notice of motion was ordered on19.6.1998 and a direction was issued suspending conferment ofpermanent status in favour of the third respondent for a period ofeight weeks. Subsequently, on 24.2.2003, this Court refused to extendthe interim order and also directed the continuance of the service ofthe third respondent. 5. Today, when the matter was taken up for final disposal, thelearned counsel for the petitioners submitted that the order of thefirst respondent suffers from several infirmities. First andforemost, the third respondent is not a 'workman' under theprovisions of Tamil Nadu Act 46 of 1981 as he had been engaged on aspecific assignment and there is no supervision or control over theactivities of the third respondent and hence he cannot be held to bea 'workman' under the provisions of the Tamil Nadu Act 46 of 1981.With reference to the employment and the number of days worked byhim, there is no dispute by the petitioners.6. A perusal of the provisions of the Tamil Nadu Act 46 of 1981clearly shows that it applies to all Factories as well as to theEstablishments under the Tamil Nadu Shops and Establishments Act. Thefirst petitioner is a Corporation involved in promoting handicrafts https://hcservices.ecourts.gov.in/hcservices/ for sales. For this purpose, they are having several captive unitsand the second petitioner is one such unit at Madurai. Therefore, itcannot be said that the Act, which covers industrial establishmentsof various types set out under Section 2, will not cover thepetitioner establishment. It is surprising that the petitionerestablishment being a State Owned Corporation, itself has chosen todeny the welfare provisions of Labour Legislation made by the StateGovernment without any justification. In any event, the only questionthat is raised is whether by the nature of service rendered by thethird respondent whether he can be termed as a 'workman' within theprovisions of Tamil Nadu Act 46 of 1981. 7. The Supreme Court, in the case of Silver Jubilee TailoringHouse -vs- Chief Inspector of Shops and Establishments (AIR 1974 SC37), has categorically laid down that there cannot be a single testfor determining the relationship of a Master and Servant in anestablishment and no single test is foolproof in this regard. TheSupreme Court has also held that the organisational test can bepressed into service. If the workman's livelihood solely depends uponthe earning by the service rendered in favour of particularorganisation, then he could be termed as a 'workman' within theprovisions of the said Act.8. The same view was also reiterated by the Supreme Court inHussainbhai, Calicut v. The Alath Factory Thozhilali Union,Kozhikode [(1978) 4 SCC 257]. The following passage found inparagraphs 4 to 6 may be usefully extracted below:- Para 4:"This argument is impeccable in laissez faire economics“red in tooth and claw” and under the Contract Actrooted in English Common Law. But the human gap of acentury yawns between this strict doctrine andindustrial jurisprudence. The source and strength ofthe industrial branch of Third World Jurisprudence issocial justice proclaimed in the Preamble to theConstitution. This Court in Ganesh Beedi case hasraised on British and American rulings to hold thatmere contracts are not decisive and the complex ofconsiderations relevant to the relationship isdifferent. Indian Justice, beyond Atlantic liberalism,has a rule of law which runs to the aid of the Rule oflife. And life, in conditions of poverty aplenty, islivelihood, and livelihood is work with wages. Rawsocietal realities, not fine-spun legal niceties, notcompetitive market economics but complex protectiveprinciples, shape the law when the weaker, workingclass sector needs succour for livelihood through https://hcservices.ecourts.gov.in/hcservices/ labour. The conceptual confusion between the classical law of contracts and the special branch of lawsensitive to exploitative situations accounts for thesubmission that the High Court is in error in itsholding against the petitioner.Para 5:The true test may, with brevity, be indicated onceagain. Where a worker or group of workers labours toproduce goods or services and these goods or servicesare for the business of another, that other is, infact, the employer. He has economic control over theworkers’ subsistence, skill, and continued employment.If he, for any reason, chokes off, the worker is,virtually, laid off. The presence of intermediatecontractors with whom alone the workers have immediateor direct relationship ex contractu is of noconsequence when, on lifting the veil or looking at theconspectus of factors governing employment, we discernthe naked truth, though draped in different perfectpaper arrangement, that the real employer is theManagement, not the immediate contractor. Myriaddevices, half-hidden in fold after fold of legal formdepending on the degree of concealment needed, the typeof industry, the local conditions and the like may beresorted to when labour legislation casts welfareobligations on the real employer, based on Articles 38,39, 42, 43 and 43-A of the Constitution. The court mustbe astute to avoid the mischief and achieve the purposeof the law and not be misled by the maya of legalappearances.Para 6:If the livelihood of the workmen substantially dependson labour rendered to produce goods and services forthe benefit and satisfaction of an enterprise, theabsence of direct relationship or the presence ofdubious intermediaries or the make-believe trappings ofdetachment from the Management cannot snap the reallife-bond. The story may vary but the inference defiesingenuity. The liability cannot be shaken off."9. Therefore, it is too late in a day for the petitioners tocontend that the Act will not apply to the case of the thirdrespondent. The question of lack of notice by the first respondentdoes not arise. Under the Scheme of the Tamil Nadu Act 46 of 1981,Section 3 itself declares the right of a workman to be made permanentin case of completion of 480 days' of service within a period of 24calendar months. The Inspector under the Act, by virtue of Rule 6, isempowered to enter into any establishment and verify the records and https://hcservices.ecourts.gov.in/hcservices/ make appropriate notice in the records of the employer. In thepresent case, the records were verified only in the presence of thesecond petitioner and there is no dispute regarding the number ofdays worked by the third respondent. In fact, there is no averment inthe affidavit that such a factual finding was not borne out byrecords. When the power of the first respondent is delineated by Rule6(4) of the Rules, no further enquiry is contemplated in terms of theAct. 10. In the light of the same, the challenge to the impugned orderis misconceived and devoid of merits and, accordingly, the writpetition will stand dismissed. The petitioners are directed toimplement the order within a period of eight weeks from the date ofreceipt of a copy of this order. There shall be no order as to costs.Sd/-Asst. Registrar./true copy/Sub Asst. Registrar.jsTo1. The Secretary and Personnel Manager, Tamil Nadu Handicrafts Development Corporation Limited, No.759, Anna Salai, Madras-2.2. The Superintendent, Brass Artware Production Centre, A Unit of Tamil Nadu Handicrafts Development Corporation, Madurai-7. 3. The Inspector of Factories, Range No.II, Madurai-2.4. General Secretary, Madurai General Workers Union, Madurai-2. W.P.No.8281 of 1998RSY {CO}TP/22.10.08