Judgement

RAY, C.:- The provisions of the Beedi and Cigar Workers (Conditions of Employment) Act, 1966 referred to as the Act are impeached as unconstitutional in these petitions and appeals.

2. Broadly stated, the Act is challenged on these grounds. First, Parliament has no legislative competence to enact this measure. It is a legislation for regulating beedi and cigar industry. Therefore, it falls under Entry 24 in State List II. Second the restrictions imposed by the Act violate freedom of trade and business guaranteed under Article 19(1)(g). The Act imposes unreasonable burdens in cases where a manufacturer or trade mark holder of beedi has no master and servant relationship and no effective control on independent contractors or home workers. The manufacturer or trade mark holder is rendered liable as the principal employer of contract labour. Third, Section 4 of the Act imposes conditions which are arbitrary, excessive, extraneous. Fourth, Section 7(1)(c) regarding entry into industrial premises, Sections 26, 27 regarding annual leave with wages, Section 31 regarding one month s wages in lieu of notice. Section 37 regarding application of Maternity Benefits Act, 1961 and therules for rejection of beedis are unconstitutional. These provisions are unreasonable restrictions on the freedom of trade and business.

3. The petitioners and the appellants are of two character. The majority are proprietors of beedi factories and owners of trade mark registered under the Trade Marks Act in relation to beedis. Some are home workers.

4. The beedi industry is widespread in this Country. The manufcture of beedi is done in stages. The tobacco is blended often with some other ingredient. A small quantity of it is part on the beedi leaf which is previously wet to render it flexible to prevent any crushing of leaf and is also cut to size. The beedi leaf is then rolled keeping the tobacco within it and its ends are then closed. The beedis thus rolled are collected and warmed or roasted after which they are ready for packing, labelling and sale. Where the propreitor owns a trade mark, the trade mark lables are affixed to the individual beedis as also on the packets.

5. The work of wetting and cutting of the wrapper leaves is one of the items of work in the process. Power is seldom employed for the purpose. The industry depends entitrely human labour. If more than 20 workers are employed in a particular place for the manufacture of beedis, the provisions of the Factories Act, 1940 will apply to the premises.

6. Three systems are adopted in the manufacture of beedis. First, is the factory system. There the manufacturer is an owner of the factory. Workers gather and work under his supervision as his employees. Second is the contract system of employment. That is the most prevalent form. Under this system, the proprietor gives to the middlemen quantities of beedi leaves and tobacco. The contractor on receiving the materials manufactuers beedis (i) by employing directly labourers and manufacturing beedis or (ii) by distributing the materials amongst the home workers, as they are called, mostly women who manufacture beedis in their own homes with the assistance of other members of their family including children. The third system is that of outworkrs. They roll beedis out of the tobacco and beedi leaves supplied by the proprietor himself without the agency of middlemen. The beedis thus supplied whether by the outworkers or contractor are roasted, labelled and packed by the proprietor and sold to the public.

7. Under these systems, the contractor engages labourers less than the statutory number to escape the application of the Factories Act. There is a fragmentation of the place of manufcture of beedis with a view to evading the factory legislation. Sometimes there is no definite relationship of master and servant between the actual worker and the ultimate proprietor. Branch managers of contractors are often men of straw. The proprietor will not be answerab