DHARANGADHARA CHEMICAL WORKS LTD VS STATE OF SAURASHTRA

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INTRODUCTION: 

The Dharanyadhra Chemical Ltd v. State of Saurashtra case is a landmark case that addresses the classification of agarias working in the salt works as either workmen or not under the Industrial Dispute Act of 1947. The Supreme Court emphasized the distinction between “Contract of service” and “contract for service.”

FACTS OF THE CASE:

The appellants held a license for the salt work and were the lessees permitted to manufacture salt on the land. Agarias, a specialized labor class, were responsible for salt production. The majority of the salt was utilised in chemical processes, with the remainder sold to other customers. The appellants oversaw the salt production and appointed a salt superintendent. Due to its dependence on rainwater, salt production was seasonal. The land was divided into plots (pattas), and each agaria allocated a patta for salt production, which would remain their allocation in subsequent years.

The appellants provided a certain amount of money to agarias at the start of the season to cover their expenses. The salt production process involved various steps, including land levelling, land enclosure, well sinking, brine collection in reservoirs, brine preservation until appropriate density, crystallisation in pattas, and storage of crystals in salt depots. Agarias were compensated between 5-6 rupees per maund. Settlement of agaria accounts occurred at the end of the season, where the initial deposit was adjusted with the earlier payments. Agarias enjoyed flexible working hours and leaves, and their names were not listed in the muster rolls.

In 1950, a dispute arose between agarias and appellants regarding the terms under which agarias would manufacture salt. The Government of Saurashtra referred the matter to the Industrial Tribunal, Saurashtra. The appellants contended that agarias were independent contractors and not covered under the Industrial Dispute Act.

The tribunal determined that agarias were considered workmen under the Industrial Dispute Act. Dissatisfied with this judgement, the appellants appealed to the Labor and Industrial Tribunal of India, where they lost the case. They subsequently petitioned the High Court to quash the writ and sought a stay on further proceedings in the industrial tribunal. The High Court concurred with the industrial tribunal’s decision that agarias fell under the definition of workmen in section 2(s) of the act. A certificate was granted under Article 133(1)(c) of the constitution, and the appeal was referred to the Supreme Court. In this case, the supervisor appointed by the appellants supervised the agarias. Without his approval, agarias could not complete the salt-making process, indicating significant control and supervision by the employer.

Mersey Docks and Harbour Board v. Coggins & Griffith (Liver-Pool) Ltd., and Another [1947] 1 A.C. 1, and Simmons v. Heath Laundry Company [1921] 1 K.B. 543 were referenced. The determination of whether the relationship between the parties was that of an employer and employee or master and servant was deemed a factual matter. A finding by the Industrial Tribunal, vested with authority to decide this, could not be contested under Art. 226 of the Constitution unless it was evidently baseless. Ebrahim Aboobakar v. Custodian General of Evacuee Property [1952] S.C.R. 696 was cited. The case of Performing Right Society Ltd. etc. v. Mitchell and Booker (Plaise De Danse) [1924] i K.B. 762 was not followed. It was established that a person could be considered a workman even if they engaged in piece-work and were paid by the job or employed their own labour and compensated accordingly.

ISSUES: 

Are the agarias appointed in the salt works considered ‘workmen’ under Section 2(s) of the Industrial Disputes Act, 1947?

JUDGEMENT: 

The Supreme Court concurred with the decision of the Industrial Tribunal. The court, drawing from precedents, clarified the distinction between a workman and an independent contractor, and accordingly, provided its interpretation. The court determined that the agarias were indeed workmen under section 2(s) of the Industrial Dispute Act, 1947, based on the evidence presented.

CONCLUSION: 

The criteria for establishing the relationship between employer and employee or master and servant have been clearly defined. The key test applied universally to determine this relationship is the presence of the right to control the manner in which the work is performed.

REFERENCE:

https://Indiankanoon.org

https://lawplanet.in

Written by Mita Sarker an intern under legal vidhiya.

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