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1965 Supreme(Pat) 57
PATNA HIGH COURT
R.K.Choudhary and G.N.Prasad JJ.
Nandkumar Tewari
Versus
Ali Hasan
Miscellaneous Judicial Case No. 967 of 1961 ;
Decided On : APRIL 28, 1965
The Bihar Shops and Establishments Act does not apply to the relationship between a contractor and a sub-contractor.
Headnote:
BIHAR SHOPS AND ESTABLISHMENTS ACT - SECTION 2(4) - RELATIONSHIP BETWEEN CONTRACTOR AND SUB-CONTRACTOR - INTERPRETATION AND APPLICATION OF THE ACT TO SUB-CONTRACTOR'S CLAIM FOR PAYMENT.
Fact of the Case:
A contractor engaged a sub-contractor for construction work. The sub-contractor filed a claim for payment under the Bihar Shops and Establishments Act, alleging that he was an employee of the contractor. The contractor contended that the sub-contractor was not an employee but a sub-contractor and, therefore, the Act did not apply.
Finding of the Court:
The court held that the relationship between the contractor and the sub-contractor was not that of an employer and employee, but of a contractor and sub-contractor. The court found that the sub-contractor had admitted before the Inspecting Officer that he was a sub-contractor and had employed several laborers under him. The court also found that the agreement between the parties was a sub-contract and that the sub-contractor's claim was based on the contract.
Issues: Whether the Bihar Shops and Establishments Act applied to the sub-contractor's claim for payment.
Ratio Decidendi: The court held that the Bihar Shops and Establishments Act did not apply to the sub-contractor's claim for payment because the relationship between the contractor and the sub-contractor was not that of an employer and employee, but of a contractor and sub-contractor. The court found that the Act was enacted to provide for the regulation of conditions of work and employment in shops and other establishments and that the work of a contractor and a sub-contractor could not be termed as work and employment.
Final Decision: The court set aside the order of the Assistant Labour Commissioner directing the contractor to make payment to the sub-contractor.
1. Petitioner No. 2 had taken a contract for construction of the Patna Burning Ghat from the Patna Improvement Trust in the year 1957 and petitioner No, 1 was his partner in the aforesaid contract work. By an agreement dated the 23rd of April, 1958, a copy of which is annexure "A" to the writ application, a sub-contract was given to Mathura-Mistry (respondent No. 3) for centring at the rate of Rs. 12-8-0 per hundred sq. ft., and it was also agreed that he would execute the work at the rate of 200 sq. ft. at the minimumper day. It is said that, in pursuance of the aforesaid agreement, respondent No. 3 engaged a few labourers under him who were his employees and workers. Respondent No. 3, however, did not fulfil his contract and the work done by his party, according to the petitioners, was most unsatisfactory and it did not cover up even the advance taken by him.
On the 25th of September, 1958, respondent No. 3 filed a petition before the Chief Inspecting Officer, Shops and Establishments. Office, Bihar, Patna, for settlement of his bill to the tune of Rs. 887.62 nP., as detailed in his petition, a copy of which is annexure "B" to the writ petition. That application was forwarded to the Inspecting Officer, who summoned the petitioners for a hearing on the 17th of October, 1958. When the petitioners appeared before him, they raised a preliminary point that the matter was beyond the jurisdiction of any authority under the Bihar Shops and Establishments Act as the relationship between the petitioners and respondent No. 3 was that of a contractor and sub-contractor, and not of an employer and employee. The petitioners allege that, before the Inspecting Officer, respondent No. 3, in his evidence, admitted that he was a sub-contractor and for the purpose of executing the work he had employed several labourers under him. In view of the above submission made before him, the Inspecting Officer dropped the proceedings. A copy of the report of the proceeding made by him to the Chief Inspecting Officer, dated the 8th of December, 1958, is annexure "D" to the writ petition.
On the 29th of September, 1958, responent No. 3 filed another petition under Sec. 28(1) of the Bihar Shops and Establishments Act (hereinafter referred to as the Act) for a direction under Sec.28(2) of the Act before the Assistant Labour Commissioner, who was the authority appointed under the Act for Patna. At the time of the hearing of this application, on the 15th of March, 1959, the petitioners again raised a preliminary objection that the provisions of the Act had no application to the case as there was no relationship of employer and employee between the parties, as found by the Inspecting Officer. On the 10th of May, 1960, the application was dismissed under Rule 22(10) of the Bihar Shops and Establishments Rules because of the absence of respondent No. 3. But it was again restored on the 27th of June, 1960, without giving any opportunity to the petitioners to be heard. The next date fixed in the case was the 10th of July, 1960, and it was then adjourned to the 16th of August, 1960, on which date the petitioners made an application for adjournment, but it was rejected and the case was decided ex parte. The Assistant Labour Commissioner allowed the claim of respondent No. 3 in toto and also awarded compensation of Rs. 10. He, however, did not decide the question raised by the petitioners about the want of jurisdiction in him to deal with the matter. The order of the Assistant Labour Commissioner was conveyed to the petitioners on the 8th of November, 1960, directing them to pay Rs. 897.62 nP. to respondent No .3. The petitioners, thereafter, preferred a review application, which was ultimately dismissed. They then preferred an appeal before the Chairman, Industrial Tribunal, Bihar, Patna, the appellate authority under the Act, but the appeal was dismissed as time-barred. Being thus aggrieved, the petitioners have filed this writ petition under Article 226 of
