Treating workmen employed by an intermediary as workman of the Firm of Beedi manufactures.

The petitioners in each of these two cases are the proprietors of an industrial concern in Salem district engaged in the manufacture and sale of beedis. The manual labour of rolling beedis was done by persons to whom it should be convenient to refer as the beedi rollers. Between the proprietors and the beedi rollers intervened a set of persons known to the industry as “contractors”, but whom I shall refer to for the purposes of this judgment as intermediaries, a less controversial nomenclature.

Thousand beedis rolled constituted the unit of work on the basis of which a beedi roller was paid for his work. Who paid that amount and who was legally bound to pay are questions to which I shall advert later. Till October, 1956 the beedi roller was paid Rs. 1-6-0 for every unit of large beedis and Rs. 1-8-0 for every unit of beedis of small size rolled by him. The rates were increased to Rs. 1-14.-0 and Rs. 2-0-0 respectively in October, 1956. In July-August, 1957, the Government increased the excise duty on tobacco by 2 annas per pound. That was in due course reflected not in the price ultimately charged to the consumer, but in the remuneration paid to the beedi rollers which was cut down by 2 annas per unit. The claims of the beedi rollers sponsored by their Union, that that cut should not have been imposed, were referred as industrial disputes for adjudication by the Industrial Tribunal, Madras, under section 10 (1) (c) of the Industrial Disputes Act. The proprietors, the intermediaries and the Union representing the beedi rollers were impleaded as parties to these disputes.

The main basis for the contention of the proprietors and that of the intermediaries, that what had been referred for adjudication were not industrial disputes as defined by the Act was the plea, that the beedi rollers were not ‘workmen’ within the meaning of section 2 (s) of the Act. That raised a jurisdictional issue, on the correct determination of which depended the further jurisdiction of the Tribunal to adjudicate upon the disputes referred to it as industrial disputes. The contention of the proprietors and the intermediaries was that there was no jural relationship of master and servant (1) between the proprietor and the beedi rollers, (2) between the proprietor and the intermediaries, or (3) between each of the intermediaries and the beedi rollers who worked for him. Thus the contention was that the beedi rollers were not “employed” under any one within the meaning of section 2 (s) of the Act.

The Industrial Tribunal disposed of both the disputes referred to it by a common award. The Tribunal held that the intermediaries were themselves employees of the proprietors and that the beedi rollers were also the employees of the proprietors, and that the beedi rollers were therefore workmen within the scope of section 2 (s) of the Act “employed” by the proprietors. By its award the Tribunal restored the remuneration of the beedi rollers to the levels of Rs. 1-14-0 and Rs. 2-0-0 that had prevailed before the cut imposed in July-August, 1957.

Each of the proprietors applied under Article 226 of the Constitution for the issue of a writ of certiorari to set aside the award of the Industrial Tribunal. The petitioners in W.P. No. 234 of 1958 were the proprietors of the concern known as the Three Lotus Beedi Factory, and the petitioners in W.P. No. 244 of 1958 were the proprietors of the concern known as D.C. Dewan Mohideen Saheb and Sons (D.C.D. for short). It was the validity of the same award that was challenged in each of these petitions. The contentions were similar, and it should be convenient to dispose of both the Writ Petitions by a single order.

The apparent organisation of the business which was more or less on similar lines in the case of both the petitioners was as follows. The work done by the beedi rollers was not done in any of the premises that belonged to or was at the disposal of the proprietor. That work was carried out only in the premises that