Employment of workmen in handloom and power loom factory on piece rate basis.

The short question which arises for consideration in this writ petition is whether the petitioner who runs a handloom as well as power-loom factory is a person who is hound to make a contribution under the Employees’ State Insurance Act for the employees in his establishment. The petitioner took up the stand that in his establishment there were no employees as defined in section 2 (9) of the Act XXXIV of 1948, the Employees’ State Insurance Act, 1948, that what obtained between himself and the workers in his factory was only a contract for service and not a contract of service and therefore he was not bound to pay contribution in respect of the workers under the aforesaid Act. But the Employees’ State Insurance authorities rejected his contention and held that he was liable to pay the contribution under the Act. Against the order of the Regional Director of the Insurance Corporation demanding payment of contribution the petitioner filed an appeal under section 75 of the Act in the Court of the Additional Commissioner for Workmen’s Compensation, Madras, who confirmed the order of the Director. Aggrieved against that order the petitioner has come to this Court for relief under Article 226 of the Constitution by way of a writ of certiorari.

I may mention at this stage that earlier the matter was brought before this Court as an appeal in C.M.A. No. 84 of 1962 against the order of the Additional Commissioner. But Veeraswami, J., held that an appeal was not competent and rejected the appeal. This writ petition is filed as a consequence of the dismissal of the appeal

It is contended by the learned Counsel appearing for the petitioner, Sri N. R Raghavachariar, that the findings of the Tribunals below about the nature of the employment would attract the principles laid down by this Court in Palaniappa Mudaliar v. Additional First Class Magistrate, Kulitalai1, a judgment of Balakrishna Ayyar, J., as well as the decision of the Supreme Court in Shankar Balaji v. State of Maharashtra2. Before examining the applicability of these decisions to the present case I will set down briefly what are the findings of fact arrived at by the tribunals below regarding the nature of the work done in the petitioner’s factory.

The petitioner’s contention was that in his factory the business done is weaving of bed sheets, ribbons and dhothies and that he has maintained both power-looms as well as handlooms for the purpose. At a time about 70 persons work at the power-looms and about 120 persons work at the handlooms. The petitioner contended that weavers in the neighbourhood go over to his factory, undertake weaving of bed-sheets, dhothies and ribbons out of the yarn supplied by the petitioner that the weaving is done in the premises itself, that payment is not made as wages for work done at any particular time but is made according to the rates stipulated for a particular fabric woven and turned out by each individual weaver. The weavers had no fixed hours of work. They can work in the premises at any time convenient to them. The workers can go as they like and come as they like and work on such days as are convenient to them. In such circumstances, the petitioner contended that there was no relationship of master and servant and there is only a contract for service instead of a contract of service. But the finding of the Additional Commissioner for Workmen’s Compensation who inspected the factory on 20th June 1961 gives a substantially different picture of the nature of the employment. He’ found that there were two sections of machines in the business, one for power-looms for manufacturing cloth and ribbon and the other for handlooms for manufacturing dhothies. Handloom weavers are paid on the basis of yards of ribbon manufactured by them once a week. Powerloom weavers are paid on the basis of quantity of cloth produced by them once a week. One significant point was that the workmen are required to make dhothies, etc., out of the yarn supplied by the