Workmen of Nilgiri Coop. Mkt. Society Ltd. Vs. State of Tamil Nadu and ors. - Court Judgment

Excerpt:
tamil nadu cooperative societies act, 1961 - section 2; industrial disputes act, 1947 - sections 10, 10(1), 25o and 25t; contract labour (regulation and abolition) act, 1970 - sections 7, 10(1), 12 and 21; industrial employment (standing orders) act, 1946 - relationship of employer and employee - determination of - nilgiri's cooperative marketing society constituted for welfare of vegetable growers and merchants - 407 workmen working in market yard of society on a daily wage basis - appellant union of workmen served charter upon society claiming permanency in service and other benefits - reference of dispute u/s 10(1)(d) to tribunal - rejection by tribunal holding non existence of relationship of employer and employee between society and workmen - writ petitions - dismissed by high court - plea of appellant union that, although workmen were said to be employed by third parties but since society paid wages to workmen, concerned workmen were employees of society - respondent society submitted that society being a service society and since workmen being appointed by both growers and merchants, independently, it could not be said that society was employer of workmen - appeal to supreme court - dismissing appeal, held that trial court and high court were justified in holding that concerned workmen were not able to discharge their burden of proof that they were employed by society - evidence to show that workmen were engaged both by growers and traders and only on some occasions, payment made to them by third parties - although certain activities carried out in market yard, society in general did not have necessity of employing and workmen either for loading, unloading or grading - respondent society being a cooperative society rendering services to its own members, not involved in a trading activity - evidence to show that growers and merchants were free to engage their own workmen and there was no obligation on society to engage services of workmen - when there being no maintenance of attendance registers, no control of society over workmen, no fixation of working hours, no issue of appointment order, no disciplinary control exercised over workmen by society and when payment made normally to a worker by member and no direct payment by society to worker and payment by society only in certain cases on authorization of member, workmen failed to prove that they were workmen of society - impugned findings of lower courts do not warrant any interference - - the small farmers are economically weak and have no holding power. many of them have to take loans for their subsistence, when the weather is not good. the member has a right to decline to sell his produce, if he is not satisfied with the highest rate offered by the merchants and is entitled to hold over the same till the next auction takes place. 23 of 1983 praying for minimum facilities like drinking water, toilet, rest-room, maternity benefits etc. the conciliation proceeding ended in a failure.s.b. sinha, j.background facts:1. 'nilgiris' is a hill district in the state of tamil nadu. mettupalayam is a small town situate in nilgiris. the villagers of the surrounding villages for their livelihood depend on growing of vegetables and tea. with a view to see that the small vegetable growers are not exploited by the vegetable merchants, a society known as 'nilgiris cooperative marketing society limited' (society for short) was formed as far back as in 1935 with only 116 members. 2. the society, however, grew in course of time and at present it has about 22000 members. the memberships of the society are of two categories. in the, first category only the vegetable or food growers, agricultural cooperative credit societies and agricultural improvement societies are a-class members having voting rights; whereas traders, commission agents and merchants dealing in the commodities grown by the agriculturists are classified as b-class members. they have no right to vote or participate in the management of the society. the b-class members only, however, are entitled to take part in auctions held in the marketing yards of the society. any dispute between the seller member and the purchaser member is resolved through arbitration in terms of the provisions of the tamil nadu cooperative societies act, 1961. 3. the land holdings of the members of the society varies from 1/4th acre to five acres averaging two acres per member. they mainly depend on the rainfall as irrigational facilities are not available. the small farmers are economically weak and have no holding power. many of them have to take loans for their subsistence, when the weather is not good. many of them are illiterate. the vegetables produced from their lands being subjected to the vagaries of the weather, the merchants with a view to pressurize them either used to force them to sell that at a very low price or would make them wait for days so that the vegetables become., useless. the majority of the members belong to 'badaga' community which had been declared to be a backward class by the government of tamil nadu. mettupalayam is a center for potatoes and vegetables trade. 4. the society has two big marketing yards at mettupalayam. in the said yards, auction of vegetables takes place. infrastructure therefore such as offices, godowns yards, weighing machines etc. are provided by the society. there are two separate yards with pucca godowns, one for potatoes and another for vegetables. the primary members of the society bring their agricultural produce to the yards by hired lorries or trucks. they remain present till the agricultural produce brought by them is auction sold and-they receive the sale price. the number of primary members visiting the marketing yards of the society, depending upon the season varies from 100 to 200 members per day. the number of merchants coming to purchase these commodities also varies from 30 to 100. the society provides for accommodation to the members on a nominal rent. it also provides dormitory type of accommodation free of charge. the months of july to october of year are said to be a peak season. whereas during the peak season about 100 lorries arrive everyday; during the 'off season' average number of lorries arriving at the yard would be around 10. for the purpose of bringing potatoes gunny bags are supplied by the society free of cost. 5. the following main jobs are carried out in the said premises: i) unloading of the gunny bags containing potatoes from the lorries; ii) unpacking the gunny bags and keeping the potatoes in lots inside the godown; iii) grading the potatoes into different sorts: iv) weighing the auctioned potatoes in 45 kgs. and packing them into gunny bags brought by the merchants : v) stitching the gunny bags and loading them into lorries hired by the merchants. 6. throughout the process, lots brought by the primary members are kept separate with clear demarcation as regard the ownership theref. sometimes small farmers unload the bags of potatoes themselves; some of them bring their potatoes upon proper grading in their farms and place it in the yard in a sorted condition. however, if proper grading is not done by the vegetable growers, they are graded into the different sorts. 7. the number of persons undertaking the job varies depending upon the quantum of work. 8. admittedly an industrial dispute was raised by 407 persons; of whom 73 are potters and 335 are graders. the job of unloading, unpacking of gunny bags, stitching the gunny bags and putting them into lorries are done by porters whereas gradation of potatoes, weighing the auctioned potatoes in 45 kgs. and packing them into gunny bags are done by graders. most of them are women. 9. it is stated that the members of the society or their authorized representatives remain present throughout the auction. the auction is confirmed only with the consent of the members. the member has a right to decline to sell his produce, if he is not satisfied with the highest rate offered by the merchants and is entitled to hold over the same till the next auction takes place. 10. the society contends that for doing various items of work in the yards, services of certain third parties are made available to the members. they are always available in the yards and any member whether producer or merchant may engage them. the work is done through the workers of the concerned third parties. payment therefore is to be made by the persons engaging them to the said third parties (contractors). however, sometimes as the producer members may not have enough money with them, the society makes the payment on their behalf by way of advance, where for allegedly written authority is obtained. the society further contends that the farmers and merchants are at liberty to engage their own men for doing these items of work and some of them do the work themselves. there is no obligation on the part of the member to bring his produce to the society's yards. he is free to sell is produce in any manner thought it. 11. it is not in dispute that the society does not maintain any attendance register or wages register. the third parties are free to engage men of their own choice and no working hours are fixed or insisted. any person normally doing the job may come on any day to work. the third parties engage more number of persons during peak season and during lean season less number of persons are engaged. the porters and graders may take up any other job. dispute between the parties:12. the appellant-union, however, on or about 19.4. 1982 served a charter of demands upon the society claiming, inter alia, permanency in service and other benefits. a strike notice was also given where for a conciliation proceeding was initiated. the society thereafter filed a suit being o.s. no. 2293 of 1982. a writ petition was filed before this court being w.p. no. 23 of 1983 praying for minimum facilities like drinking water, toilet, rest-room, maternity benefits etc. the society is said to have declared a lock out and a conciliation proceeding thereupon started again. the writ petition was thereafter withdrawn. the conciliation proceeding ended in a failure.reference:13. on or about 19.5.1984, the state of tamil nadu issued a notification in exercise of its power under section 10(1)(d) of the industrial disputes act, 1947 referring the following disputes for adjudication of the industrial tribunal :'i) whether the non-employment of the workmen referred in the reference is justified ?ii) to what relief ?' proceedings before the tribunal:14. in the aforementioned industrial reference before the tribunal, witnesses were examined on behalf of the parties. documents were also produced. by reason of an award dated 5.9.1989, the tribunal opined that there did not exist any relationship of employer and employee between the society and the concerned persons, observing :'36. in view of the above finding, if we approach this case, there is no convincing evidence placed by the petitioner to establish the master and servant relationship to hold that the persons referred in this dispute are only workmen of the respondent-society,37. viewed from any angle, either on facts or on law, the petitioner-union has not substantiated that the persons mentioned in the annexure are workmen and therefore their non-employment is not justified. hence this point is found against the petitioner union.' 15. on the said findings the reference was rejected.proceedings before the high court:16. aggrieved thereby the appellant preferred a writ petition before the high court marked as writ petition no. 14659 of 1989.17. during the pendency of the said proceeding, other disputes also ensued resulting in closure of the yards: whereafter, again conciliation proceedings were initiated on or about 3.8.1985. the respondent-society issued an advertisement in a tamil newspaper inviting tenders, for operations. questioning the said action on the part of the society, a writ petition was filed in the madras high court which was marked as w.p. no. 9333 of 1985 praying therein for issuance of writ of 7mandamus directing the state to prohibit introduction of contract labour system in the society. another writ petition being w.p. no. 9334 of 1985 was also filed wherein the petitioners prayed for issuance of a writ of or in the nature of mandamus directing the society not to engage contract labour purported to be on the ground that the same is contrary to sections 25-o and 25-t of the industrial disputes act and sections 7 and 12 of the contract labour (regulation and abolition) act, 1970, certain interim orders were passed by the high court and some appeals were also filed and the matter came up before this court also, being civil appeal no. 5381 of 1985 on or about 26.9.1986 wherein this court passed the following order :'on behalf of the marketing society, dr. y.s. chitale, learned counsel assures us that hereafter workmen will not be permitted to be employed by contractors to work within the yard of the society. he also assures us that the 407 workers previously employed may come back and work in the yard without any objection. it is open to any worker to go and seek employment, but contractors will be excluded. the case now pending before industrial tribunal may be disposed of expeditiously. civil misc. petition is disposed of accordingly. '18. by another interim order passed in writ petition no. 19310 and 19311 of 1986, a learned single judge of the madras high court directed :'the third respondent shall give employment directly to all the 407 workers. if, after providing employment to these 407 workers, any more lands are required, then the management is free to give employment to such of these persons. the collector of coimbatore will see to it that the order of the supreme court extracted above is implemented in its true spirit.'19. in an appeal carried out by the society being w.a. no. 1372 of 1986, the high court of madras issued the following directions :'apparently it appears to us that the order made by the learned single judge runs counter to the order of the supreme court dated 4.12.1985. therefore, the order of the learned .single judge is stayed. since the order which is in controversy is that of the supreme court, this is eminently a fit case where the parties are at liberty to get necessary clarification from the supreme court. till the order is clarified by the supreme court, if the parties approach the supreme court for this, the appellant will implement the order dated 4.12.1985 by way of an interim arrangement. '20. on an application, this court by an order dated 13.4.1987, observed :'the interim arrangement will continue till disposal of the writ petition in the high court. meanwhile the trial of the industrial dispute will be stayed. no order on the application for impleading party. all the cmps are disposed of accordingly.'21. another interim order was passed on 29.8.1988 in writ petition no. 9334 of 1985 in the following terms :'in the result, the 3rd respondent is directed to give employment directly to all the 407 workers and pay the wages directly to them as per the order of the supreme court dated 4.12.1988. this petition is ordered accordingly.'22. on an appeal preferred by the society before a division bench marked as w.a. no. 1261 of 1988, it was directed :'to give quietus to the controversy in the writ petition, we direct that w.p. 9334/85 along with the connected writ petition viz. w.p. no. 9333/85 be listed for final hearing on 26.10.1988 at the top of the list before the learned single judge, who hears the date-fixed writ petitions. '