# [2004] 2 S.C.R. 159 - **Citation:** [2004] 2 S.C.R. 159 - **Court:** Supreme Court of India - **Decided:** 2004-02-05 - **Case number:** Civil Appeal Nos. 1351-53 of 2002 - **Bench:** Y. K. Sabharwal Ands. B. Sinha - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/2004-2-s-c-r-159-19697 - **Pages:** 37 ## Headnote B Industrial Disputes Act, 1947-Section 2 (s)- Workme~ Determination of- Organisation and Control Test- Applicability of_;_ Lifting of veilApplicability of- Marketing yard of a cooperative society for sale of farmers' C produce- Porters and graders cariying on jobs at the yard- Their services hired directly by farmers and merchants and paid by them- Society only supervising the work- Held, not workmen. Industrial Dispute Act, 1947- Section 2 OJ- Industry-- Meaning of-· Farmers' cooperative societyfor marketing their produce- Services on(v to D . its members-- l'!atform provided to the farmers and the merchants for sale and purchase of agricultural produce by auction- No control on either farmer or merchants- Commission charged .from parties for rendering serviceHeld, not an ind11st1y Certain small and economically weak farmers formed a Co-operative E Society for sale of their produce. The Society had two big marketing yards where produce were brought by the farmers in trucks and lorries, unloaded, unpacked, graded, weighed, packed into stitched gunny bags and auctioned. For the convenience of the farmers as well as the merchants (who came to the marketing yards to purchase the produce), porters and F graders were always available at the yards. The porters did the job of unloading, unpacking, stitching and loading the bags of produce whereas the graders performed the job of grading, weighing and packing the produce. It was open to the farmers as well as the merchants to get the work done either through their own men or to engage the services of the porters and graders. The farmers and the merchants paid the porters and G graders directly for the work done by them. The Society also made payment to the porters an.d workmen on behalf of farmers in case of financial difficulty which was reimbursed to the Society by the workmen . The Society charged commission for its services from its members as well 159 H 160 SUPREME COURT REPORTS [2004] 2 S.C.R. A as the merchants. The Society did not maintain any attendance re·gister of the porters and graders and no working hours were fixed or insisted. l-lowever, the Society gave gifts to the porters and graders during the festival season. In 1982 the porters and graders claimed permanency in service and B other benefits from the Society. As attempts at conciliation failed, in 1984, the State Government referred the dispute to the lndustria_I Tribunal. The Industrial Tribunal was to decide "whether the non-employment of the workmen referred to in the reference (was) justified''. C The Industrial Tribunal opined that there was no relationship· of employer and employee between the parties. The porters and graders thereafter filed writ petitions before the l-ligh Court, which were dismissed by the High Court. The Letters Patent Appeals filed by the porters and graders were also dismissed. D Being aggrieved, the porters and graders filed appeals before the E Court. Before the Court, the appellant, inter alia, contended that the High Court erred: (i) in not applying the 'organisation test'; (ii) in holding that the supervision and control exercised by the Society on the workmen were not on its own behalf but on behalf of its members. Dismissing the appeals, the Court HELD: I.I. Determination of the vexed questions as to whether a F contract is a contract of service or contract for service and whether the concerned employees are employees of the contractors has never been an easy task. It is not possible to lay down any hard and fast rule. The question in each case has to be answered having regard to the fact involved therein. No single te_st- be it control test, be it organisation or any other test- has been held to be the determinative factor for determining the jural relationship of employer and employee. 1173-F, GI 1.2. Su1fervision and control test is the prima facie test for determining the relationship of employment. The nature or extent of control required to establish such relationship wou ## Text _Characters 0–39,993 of 87,782. This is a partial read: ask again with offset=39993 for what follows._ _, ..... WORKMEN OF NILGIRI COOP. MKT. SOCIETY LTD. A . v. STATE OF TAMIL NADU AND ORS. FEBRUARY 5, 2004 (Y. K. SABHARWAL ANDS. B. SINHA, JJ.] B Industrial Disputes Act, 1947-Section 2 (s)- Workme~ Determination of- Organisation and Control Test- Applicability of_;_ Lifting of veilApplicability of- Marketing yard of a cooperative society for sale of farmers' C produce- Porters and graders cariying on jobs at the yard- Their services hired directly by farmers and merchants and paid by them- Society only supervising the work- Held, not workmen. Industrial Dispute Act, 1947- Section 2 OJ- Industry-- Meaning of-· Farmers' cooperative societyfor marketing their produce- Services on(v to D . its members-- l'!atform provided to the farmers and the merchants for sale and purchase of agricultural produce by auction- No control on either farmer or merchants- Commission charged .from parties for rendering serviceHeld, not an ind11st1y Certain small and economically weak farmers formed a Co-operative E Society for sale of their produce. The Society had two big marketing yards where produce were brought by the farmers in trucks and lorries, unloaded, unpacked, graded, weighed, packed into stitched gunny bags and auctioned. For the convenience of the farmers as well as the merchants (who came to the marketing yards to purchase the produce), porters and F graders were always available at the yards. The porters did the job of unloading, unpacking, stitching and loading the bags of produce whereas the graders performed the job of grading, weighing and packing the produce. It was open to the farmers as well as the merchants to get the work done either through their own men or to engage the services of the porters and graders. The farmers and the merchants paid the porters and G graders directly for the work done by them. The Society also made payment to the porters an.d workmen on behalf of farmers in case of financial difficulty which was reimbursed to the Society by the workmen . The Society charged commission for its services from its members as well 159 H 160 SUPREME COURT REPORTS [2004] 2 S.C.R. A as the merchants. The Society did not maintain any attendance re·gister of the porters and graders and no working hours were fixed or insisted. l-lowever, the Society gave gifts to the porters and graders during the festival season. In 1982 the porters and graders claimed permanency in service and B other benefits from the Society. As attempts at conciliation failed, in 1984, the State Government referred the dispute to the lndustria_I Tribunal. The Industrial Tribunal was to decide "whether the non-employment of the workmen referred to in the reference (was) justified''. C The Industrial Tribunal opined that there was no relationship· of employer and employee between the parties. The porters and graders thereafter filed writ petitions before the l-ligh Court, which were dismissed by the High Court. The Letters Patent Appeals filed by the porters and graders were also dismissed. D Being aggrieved, the porters and graders filed appeals before the E Court. Before the Court, the appellant, inter alia, contended that the High Court erred: (i) in not applying the 'organisation test'; (ii) in holding that the supervision and control exercised by the Society on the workmen were not on its own behalf but on behalf of its members. Dismissing the appeals, the Court HELD: I.I. Determination of the vexed questions as to whether a F contract is a contract of service or contract for service and whether the concerned employees are employees of the contractors has never been an easy task. It is not possible to lay down any hard and fast rule. The question in each case has to be answered having regard to the fact involved therein. No single te_st- be it control test, be it organisation or any other test- has been held to be the determinative factor for determining the jural relationship of employer and employee. 1173-F, GI 1.2. Su1fervision and control test is the prima facie test for determining the relationship of employment. The nature or extent of control required to establish such relationship would vary from business H to business and, thus, cannot be given a precise definition. The nature of .J _,_ I -·- WORKMENOFNILGIRI COOP. MKT. SOCY. LTD. v. STATE J6] business for the said purpose is also a relevant factor. The control test A and the organisation test are, therefore, not the only factors which can be said to be decisive. (174-B; 174-Ff Shivanandan Sharma v. Punjab National Bank Ltd, AIR (1955) SC 404 and Dharangadhara Chemical Works Ltd v. State of Saurashtra and Ors., AIR (1957) SC 264, referred to. B 1.3. The court is required to consider several factors which would have a bearing on the result: (a) who is the appointing authority; (b) who is the pay master; (c) who can dismiss; (d) how long alternative service lasts; (e) the extent of control and supervision; (t) the nature of the job, C e.g. whether, it is professional or skilled work; (g) nature of establishment; (h) the right to reject. With a view to find out reasonable solution in the problematic case of this nature, what is needed is an integrated approach meaning thereby integration of the relevant tests wherefor it may be necessary to examine as to whether the workman concerned was fully integrated into the employer's concern meaning thereby independent of D the concern although attached therewith to some extent. Law in this behalf is not static. 1174-G-H; 175-A; 176-EJ Ram Singh and Ors. v. Union Territory, Chandigarh and Ors., JT (2003) 8 SC 345 and Punjab National Bank v. Ghu/am Dastagir, ( 19781 2 SCC 358, referred to. Mersey Docks and Harbour Board v. Coggins & Griffith Liverpool Ltd (1947) A.C. 1, referred to. Industrial Law by I. T. Smith and J. C. Wood, (3rd Edn.), referred to. 1.4. If the provisions of the contract as a whole are inconsistent with its being a contract of service, it will be some other kind of contract and the person doing the work will not be a servant. (176-D) Ready Mixed Concrete (South East) Ltd. ·v. Minister of Pensions and E F National Insurance (1968) 2 W.L.R. 775, referred to. G 2.1. The concept of employment involves three ingredients, which are: (i) Employer- one who employs, i.e. engages in the services of other persons; (ii) Employee- one who works for another for hire; and (iii) Contract of employment- the contract of service between the employer and the employee whereunder the employee agrees to serve the employer H 162 SUPREME COURT REPORTS (2004] 2 S.C.R. A subject to his control and supervision. On the other hand, non-employment being negative of the expression "employment" would ordinarily mean a dispute when the workman is out of service. When non-employment is referable to an employment which at one point of time was existing would be a matter required to be dealt with differently than a situation where B non-employment would mean a contemplated employment. The question of non-employment in the latter category would arise only when the employer refuses to give work to a person who pleads and proves to the satisfaction of the management that he was entitled thereto. However, dispute regarding the refusal to employ the persons who were promised to be employed is not connected with employment or non-employment C within the meaning of Section 2 (k) of !,he Industry Dis1mtes Act. (183-G-H; 184-A-Bf Workers of Sadar Talkies v. Odean Cinema, (1957) (1) L.L.J. 639, referred to. D 2.2. In a given case it may not be possihle to infer that a relationship E F ·of employer and employee has come into being only because some persons had been more or less continuously working in a particular premises in as much as even in relation thereto the actual nature of work done by them coupled with other circumstances would have a role to play. It is a question of fact in each case whetfler the relationship of master and servant exists between the management and the workmen and there is no abstract a priori test of the work control required for establishing the control of service. (174-C-D-EI V. P. Gopala Rao v. Public Prosecutor, Andhra Pradesh, AIR (1970) SC 66, referred to. 2.3. The question whether the relationship between the parties is one of the employer and employee is a pure question of fact and ordinarily the High Court while exercising its power of judicial review shall not interfere therewith unless the finding is manifestly or obviously erroneous G or perverse. ( 179-CI 3. The person who sets up a plea of existence of relationship of employer and employee, the burden would be upon him to prove it (178-F) H N. C. John v. Secretary Thodupuzha Taluk Shop and Commercial -- • WORKMEN 01' NILGIRI COOP. MKT. SOCY. LTD. v. STA TE 163 Establishment Workers' Union and Ors., (f973) Lab.LC. 398 and Swapan A Das Gupta and Or~·. v. The First Labow: Court of West Bengal and Ors., (1975) Lab. I. C. 202, referred to. 4. 1. Different tests have been applied in different cas.es having regard to the nature of the problem arising in the fact situation obtaining therein. Emphasis on application of control test and organisation test have been B laid keeping in view the question as to whether the matter involves a contract of service vis-a-vis contract for service; or whether the employer had set up a contrac~or for the purpose of employment of workmen by way of a smoke screen with a view to avoid its statutory liability. 1194-CI C D. C. Dewan Mohideen Sahib & Sons v. The Industrial Tribunal, Madras 11964) 7 SCR 646; Silver Jubilee Tailoring House and Ors. v. Chief Inspector of Shops and Establishments and Anr., 11974) 3 SCC 498; W. H. D. Cruz and Sons v. M. E. Thomas., (1996) 1 L.L.J. 706 (Ker.); Mis Shining Tailors v. Industrial Tribunal II, U. P., Lucknow and Ors., 11983) 4 SCC 464; Indian D Overseas Bank v. I. 0. B. Staff Canteen Workers' Union and Anr., 120001 4 SCC 245; Employers in relation to the Management of Reserve Bank of India v. Workmen, 119961 3 SCC 267; Steel Authority of India Ltd. and Ors. v. National Union Waterfront Workers and Ors. (2001) 7 SCC 1, Mishra Dhatu f\igam Ltd. etc. v. M. Venkataiah and Ors. etc. etc., JT 120031 795; Indian Banks Association v. Workmen of Syndicate Bank and Ors., [2001) 3 SCC E 36; Union of India and Ors. v. K. V Baby and Anr., 11998) 9 SCC 252; Bharat Heavy Electricals Ltd. v. State of U. P. and Ors., 12003) 6 SCC 528; Shri Chintaman Rao and Anr. v. The State of Madhya Pradesh, [1958) SCR 1340; Shankar Balaji Waje v. The State of Maharashtra, AIR (1962) SC 517; Dharangadhara Chemical Works Ltd. v. State of Saurashtra and Ors., AIR p (1957) SC 264; Management of Mis Puri Urban Cooperative Bank v. Madhusudan Sahu and Anr., AIR (1992) SC 1452; Bombay Canteen Employees' Association v. Union of India Ltd., (1997) 6 SCC 723; Air India Statuto1y Corporation and Ors. v. United Labour Union and Ors~, (19971 9 SCC 377; Mis Gammon India Ltd. and Ors. etc. v. Union of India and Ors., 1197 4) 1 SCC 596 and Hussainbhai, Calicut v. The Allath Factory Thezhilali G Union, Kozhikode and Ors., (1978) 4 SCC 257, referred to. 4.2. Whether a contract is a sham or camouflage is not a question of law. It is for the industrial adjudicator to decide the said question keeping in view the evidence brought on record. (184-E) H 164 SUPREME COURT REPORTS (2004] 2 S.C.R. A Municipal Corporation of Greater Mumbai v. K. V. Shramik Sangh and Ors., 12002) 4 SCC 609 and Sarya Shramik Sangh v. Mis Indian Smelting & Refining Co. Ltd. and Ors., JT (2003) 8 SC 243, referred to. 4.3. There cannot be any doubt whatsoever that where a person is engaged through an intermediary or otherwise for getting a job done, a B question may arise as the appointment of an intermediary was merely sham and nominal and rather than camouflage where a definite plea is raised in the Industrial Tribunal or the Labour Court, as the case may be, and in that event, it would be entitled to pierce the veil and arrive at the finding that the justification relating to appointment of a contractor C is sham or nominal and in effect and substance there exists a direct relationship of employer and employee between the principal employer and the workman. 1193-F-G] 5.1. The High Court has rightly affirmed the award of the Industrial Tribunal. The Tribunal as also the High Court further rightly arrived at D the finding to the effect that the concerned workmen were not able to discharge their burden of proof that they were employed by the Society. (194-B] 5.2. The farmers themselves are indigent persons. It is not a case where the concerned workmen are without any master. The third parties E employ and pay them their salary or wages invariably. They have right to appoint or not to appoint and the little amount of supervision made by the officers of the Society are for the purpose of overseeing the smooth transactions and not for its own benefit. The services of the workmen by the farmers or traders may or may not be taken. 1183-B, CJ F G 5.3. In a situation of this nature and particularly having regard to the fact that the respondent is a co-operative Society which only renders services to its own memhers and despite the fact that in relation thereto it receives commission at the rate of 1 % both from the farmers as also the traders, it does not involve in any trading activity. [1Q5-C-D) 6. The reference made by the State Government was absolutely vague. The very fact that reference suggests that the workmen are not being employed by the Society is itself a pointer to the fact that it is not the case where the State Government has proceeded on the basis that there existed such a relationship. Save an except in certain situations, as for H example when there exists a provision in the standing order certified under - I .. -- WORKMEN OF NILGIRI COOP. MKT. SOCY. LTD. v. STATE [SINHA, J.) 165 Industrial Employment (Standing Orders) Act, 1946 or a memorandum A of settlement require the employer to employ certain persons, directions ordinarily cannot be issued by the Industrial Tribunal directing the employer to give employment. (184-C-DJ CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 1351-53 of 2002. B From the Judgment and Order dated 12.12.2000 of the Madras High Court in W.A. No. 109-110/89 and W.P.No. 14659 of 1989. N.G.R. Prasad, S. Guru Krishna Kumar and S.R. Setia for the Appellant. Sudarsh Menon and Bharat Swaroop Sharma for the Respondent No. 2. Subramonium Prasad, Gopalakrishnan, S.N. Jha, Abhay Kumar and P.N. Ramalingam (NP) for the Respondent No. I. The Judgment of the Court was delivered by S.B. SINHA, J .: BACKGROUND FACTS: 'Nilgiris' is a hill district in the State of Tamil Nadu. Mettupalayam is c D a small town situate in Nilgiris. The villagers of the surrounding villages for their livelihood depend on growing of vegetables and tea. With a view to see E that the small vegetable growers are not exploited by the vegetable merchants, a society known as 'Nilgiris Cooperative Marketing Society Limited' (Society for short) was formed as far back as in 1935 with only 116 members. The Society, however, grew in course of time and at present it has about 22000 members. The memberships of the Society are of two categories. F In the first category only the vegetable or food growers, agricultural cooperative credit societies and agricultural improvement societies are Aclass members having voting rights; whereas traders, commission agents and merch~nts dealing in the commodities grown by the agriculturists are class.ified as B-class members. They have no right to vote or participate in the G management of the Society. The B-class members only, however, are entitled to take part in auctions held in the marketing yards of the Society. Any dispute between the seller member and the purchaser member is resolved through arbitration in terms of the provisions of the Tam ii Nadu Coopera~ive Societies Act, 1961. H 166 SUPREME COURT REPORTS [2004] 2 S.C.R. A The. land holdings of the members of the society varies from I /4th acre to five acres averaging two acres per member. They mainly depend on · the rainfall as irrigational facilities are not available. The small farmers are economically weak and have no holding power. Many of them have to take loans for their subsistence, when the weather is not good. ~..1any of them are B illiterate. The vegetables produced from their lands being subjected to the vagaries of the weather, the merchants with a view to pressurize them either used to force them to sell that at a very low price or would make them wait for days so that the vegetables become useless. The majority of the members belong to 'Badaga' community which had been declared to be a backward class by the Government of Tamil Nadu. Mettupalayam is a centre for potatoes C and vegetables trade. The Society has two big marketing yards at Mettupalayam. In the said yards, auction of vegetables takes place. Infrastructure therefore such as ofticl:!s, godowns yards, weighing machines etc. are provided by the Society. There are two separate yards with pucca godowns, one for potatoes and another for D vegetables. The primary members of the Society bring their agricultural produce to the yards by hired lorries or trucks. They remain present till the agricultural produce brought by them is auction- sold and they receiye the sale price. The number of primary members visiting the marketing yards of the Society, depending upon the season varies from I 00 to 200 members per E day. The number of merchants coming to purchase these commodities also varies from 30 to 100. The Society provides for accommodation to the members on a nominal rent. It also pr?vides dormitory type of acco111modation free of charge. The months of July to October of year are said to be a peak season. Whereas during the peak season about I 00 lorries arrive everyday; during the 'off season' average number of lorries arriving at the yard would F be around I 0. For the purpose of bringing potatoes gunny bags are supplied by the Society free of cost. G The following main jobs are carried out in the said premises: (i) unloading of the gunny bags containing potatoes from the lorries; (ii) unpacking the gunny bags and keeping the potatoes in lots inside the godown; (iii) grading the potatoes into different sorts; (iv) weighing the auctioned potatoes in 45 kgs. and packing them into H gunny bags brought by the merchants; • WORKMEN OF NILGIRI COOP. MKT. SOCY. LTD.'" STATE [SINHA,J.] J 67 (v) stitching the gunny bags and loading them into lorries hired by A the merchants. Throughout the process, lots brought by the primary members are kept separate with clear demarcation as regard the ownership thereof. Sometimes small farmers unload the bags of potatoes themselv.es; some of them bring their potatoes upon proper grading in their farms and place it in the yard in B a so1ted condition. However, if proper grading is not done by the vegetable growers, they are graded into the different sorts. The number of persons undertaking the job varies depending upon the quantum of work. Admittedly an industrial dispute was raised by 407 persons; of whom 73 are porters and 335 are graders. The job of unloading, unpacking of gunny bags, stitching the gunny bags and putting them into lorrief) are done by po1ters whereas gradation of potatoes, weighing the auctioned potatoes in 45 kgs. and packing them into gunny bags are done by graders. Most of them are women. It is stated that the members of the Society or their authorized representatives remain present throughout the auction. The auction is confi1111ed only with the consent of the members. The member has a right to decline to sell his produce, if he is not satisfied with the highest rate offered by the merchants and is entitled to hold over the same till the next auction takes place. c D The Society contends that for doing various items of work in the yards, services of ce1tain third parties are made available to the members. They are always available in the yards and any member whether producer or merchant may engage them. The work is done through the workers of the concerned F third parties. Payment therefor is to be made by the persons engaging them to the said third parties (contractors). However, sometimes as the producer members may not have enough money with them, the Society makes the payment on their behalf by way of advance, wherefor allegedly written authority is obtained. The Society further contends that the farmers and G merchants are at liberty to engage their own men for doing these items of work and some of them do the work themselves. There is no obligation on the part of the member to bring his produce to the Society's yards. He is free - to sell is produce in any manner through it. It is not in dispute that the Society does not maintain any attendance H 168 SUPREME COURT REPORTS [2004) 2 S.C.R. A register or wages register. The third parties are free to engage men of their own choice and no working hours are fixed or insisted. Any person normally doing the job may come on any day to work. The third parties engage more number of persons during peak season and during lean season less number of persons are engaged. The porters and graders may take up any other job.· B DISPUTE BETWEEN THE PARTIES: The appellant-Union, however, on or about 19.4. 1982 served a charter of demands upon the Society claiming, imer alia, permanency in service and other benefits. A strike notice was also given wherefor a conciliation C proceeding was initiated. The Society thereafter filed a suit being O.S. No.2293 of 1982. A writ petition was filed before this Court being W.P. No.23 of 1983 praying for minimum facilities like drinking water, toilet, rest-room, maternity benefits etc. The Society is said to have declared a lock out and a conciliation proceeding thereupon started again. The writ petition was thereafter withdrawn. The conciliation proceeding ended in a failure. D E F REFERENCE: On or about 19.5.1984, the State of Tamil Nadu issued a notification in exercise of its power under Section I 0( I ){d) of the Industrial Disputes Act, 1947 referring the following disputes for adjudication of the Industrial Tribunal "(i) Whether the non-employment of the workmen referred in the reference is justified ? (ii) To what relief ?" PROCEEDINGS BEFORE THE TRIBUNAL: In the aforementioned industrial reference before the Tribunal, witnesses were examined on behalf of the parties. Documents were also produced. By reason of an award dated 5.?.1989, the Tribunal opined that there did not exist any rel.ationship of employer and employee between the Society and the . G concerned persons, observing : "36. In view of the above finding, if we approac" this case, there is no convincing evidence placed by the petitioner to establish the master and servant relationship to hold that the persons referred in this dispute are only workmen of the Respondent-Society. H 37. Viewed from any angle, either on facts or on law, the petitioner- , WORKMEN OF NILGIRI COOP. MKT. SOCY. LTD.1'. STATE [SINHA . .I ! 169 Union has not substantiated that the persons mentioned in thl' Annexure A are workmen and therefore their non-employment is not justified. Hence this point is found against the Petitioner Union." On the said findings the refere.nce was rejected. PROCEEDINGS BEFORE THE HIGH COURT: Aggrieved thereby the appellant preferred a writ petition before the High Court marked as Writ Petition No.14659 of 1989. B During the pendency of the said proceeding, other disputes also ensued resulting in closure of the yards; whereafter, again conciliation proceedings C were initiated on or about 3.8.1985. The respondent-Society issued an advertisement in a Tamil newspaper inviting tenders for operations. Questioning the said action on the part of the Society, a writ petition was filed in the Madras High Court which was marked as W.P. No.9333 of 1985 praying therein for issuance of writ of mandamus directing the State to prohibit introduction of contract labour system in the Society. Another writ petition D being W.P. No.9334 of 1985 was also filed wherein the petitioners prayed for issuance of a writ of or in the nature of mandamus directing the Society not to engage contract labour purported to be on the ground that the same is contrary to Sections 25-0 and 25-T of the Industrial Disputes Act and Sections 7 and 12 of the Contract Labour (Regulation and Abolition) Act, 1970. Certain E interim orders were passed by the High Cou1t and some appeals were also filed and the matter came up before this Court also, being Civil Appeal No.5381 of 1985 on or about 26.9.1986 wherein this Court passed the following order : "On behalf of the Marketing Society, Dr. Y.S. Chitale, learned Counsel assures us that hereafter workmen will not be permitted to be employed by contractors to work within the yard of the Society. He also assures us that the 407 workers previously employed may come back and work in the yard without any objection. It is open to any worker to F go and seek employment, but.contractors will be excluded. The case now pending before Industrial Tribunal may be disposed of G expeditiously. Civil Misc. Petition is disposed of accordingly." By another interim order passed in Writ Petition No.19310 and J 9311 of 1986, a learned Single Judge of the Madras High Court directed : "The third respondent shall give employment dii-ectly to all the 407 workers. If, after providing employment to these 407 workers, any H 170 SUPREME COURT REPORTS [2004] 2 S.C.R. A more lands are required, then the ·management is free to give employment to such of these persons. The Collector of Coimbatore will see to it that the order of the Supreme Court extracted above is implemented in its true spirit." In an appeal carried out by the Society being W.A. No. 1372 of 1986, B the High Court of Madras issued the following directions : c D E F "Apparently it appears to us that the order made by the learned single Judge runs counter to the order of the Supreme Court dated 4.12.1985. Therefore, the order of the learned Single Judge is. stayed. Since the order which is in controversy is that of the Supreme Court, this is eminently a fit case where the parties are at liberty to get necessary clarification from the Supreme Court. Till the order is clarified by the Supreme Court, if the parties approach the Supreme Court for this, the appellant will implement the order dated 4.12.1985 by way of an interim arrangement." On an application, this Comt by an order dated 13.4.1987, observed: "The interim arrangement will continue till disposal of the writ petition· in the High Court. Meanwhile the trial of the industrial dispute will be stayed. No order on the application for impleading party. All the CMPs are disposed of accordingly." Another interim order was passed on 29.8.1988 in Writ Petition N0.9334 of 1985 in the following terms : "In the result, the 3rd respondent is directed to give employment directly to all the 407 workers and pay the wages directly to them as per the order of the Supreme Court dated 4.12.1988. Th is petition is ordered accordingly." On an appeal preferred by the Society before a Division Bench marked as W.A. No.1261 of 1988, it was directed : G . "To give quietus to the controversy in the writ petition, we direct that H W.P. 9334/85 along with the connected writ petition viz. W.P. No. 9333185 be listed for final hearing on 26.10.1988 at the top of the list before the learned Single Judge, who hears the date.-fix-ed writ petitions." ' WORKMEN OF NILGIRI COOi!. MK'r. SOCY. LTD. v. STATE [SINHA,J) J 71 JUOGMENT OF THE HIGH COURT: All the three writ petitions came up for hearing before a learned Single Judge of the Madras High Court. The said writ petitions were dismissed observing : A "The writ petitions are liable to be dismissed. However, having B regard to the fact that the petitioner has made an application to the State Government as early as on 9 .8.1985 as seen from paragraph 13 of the affidavit to prohibit the employment of contract labour under section 10 of the Act for loading, unloading and other activities of the 3rd respondent society, a reference to the counter affidavit filed by the government is necessary. C Paragraphs 12 and 13 of the counter affidavit are extracted : "It submit that the averments in paragraph 13 are not correct. The Union has applied to the State Advisory Contract Labour Board to issue directions to the Management prohibiting the employment of contract labour under Sec. I 0 of the Act. I submit D that after consultation with State Advisory Contract Labour Board the Government will take a decision in this matter." This counter affidavit has been sworn to on 5th December, 1986. Even though there was no order pending these W.Ps. Prohibiting the Government from passing orders under Sec. I 0 of the Act, the E Government has not taken any action in spite of the averments contained in paragraphs 12 and 13 of the counter affidavits. It is for the Government to pass orders under Sec. I 0 of the Act as expeditiously as possible, one way or other." Three letters patent appeals were preferred by the appellant herein being F aggrieved by and dissatisfied therewith. By reason of the impugned judgment · the said appeals were dismissed. The appellant is, thus, before us in these appeals. Civil Appeal No.135152 arise out of Writ Petition No. I 09 and 110 of 1989 wherein certain interim orders were passed. Civil Appeal No.1353 of 200 I is the main appeal which G arises out of an award of the Industrial Tribunal. SUBMISSIONS: Mr. N.G.R. Prasad, learned counsel appearing on behalf of the appellant would take us through the evidences adduced by the parties both oral and H 172 SUPREME COURT REPORTS (2004) 2 S.C.R. . A documentary as also the findings of the lndustrial·Tribunal and would submit that it and consequently the High Court committed a manifest error: B c (i) in passing the impugned award insofar as they failed to apply the 'organisation test' in the light !>f the decisions of this court; (ii) despite having arrived at the conclusion that the respondents society exercises supervision and control over the concerned workmen, in concluding that such supervision and control were not on its own behalf but on behalf of its members; . (iii) in arriving at the finding that as the society does not carry out any manufacturing activities; it is not industry, inasmuch as supply of the services by. an organisation would also give rise to formation of relationship of an employer and employees. Elaborating his submissions, Mr. Prnsad would contend that it is not in dispute that the 407 workmen had been working in the market yard on a daily D wage. basis and although they are said to have been employed by the third parties but indisputably, the society pays wages to them although the same is said to be reimbursed by the members of the society. It was pointed out tJ1at the dispute between the members and members are resolved by the society and furthermore as the concerned persons have been given token and are given gifts during festival season, would lead to an irresistible inference E that the concerned workmen are employees of the society. Mr. Prasad would argue that the principal question which was required to be asked was for whom do the workmen work and to whom· they look up for their wages. It was submitted that the relationship between the Society and the wo.rkmen was required to be determined having regard to the following F · fact: (i) work is being carried out in the premises belonging to the society; (ii) wages are paid by the society; (iii) from Ex. W7 and WS, it would