# V. P. GOPALA RAO v. PUBLIC PROSECUTOR, ANDHRA PRADESH

- **Citation:** [1969] 3 S.C.R. 875
- **Court:** Supreme Court of India
- **Decided:** 1969-03-07
- **Case number:** Criminal Appeal No. 271 of 1968
- **Bench:** S. M. Sikri, R. S. Bachawat, K. S. Hegde
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/v-p-gopala-rao-v-public-prosecutor-andhra-pradesh-4654
- **Pages:** 7

## Headnote

87 5·
F"ctories Act (63 of 1948), ss. 2(k) (i), 2(1)-'Manufacturing proces~· and "workers'-Meaning of.
The appellant who was the manager-cum-occupier. of a
company's
establishment at Elum was prosecuted for operating a factory
without
obtaining a licence as required by the Factories Act, 1948 and the Andhra
Pradesh Factory Rules, 1950.
The company had its main fact<>ry at
Bombay.
In the company's Eluru premises, sun-cu'red
tobacco
leave~
purc:hased from local producers were subjected to the processes of moistening, stripping and packing.
The tobacco leaves were moistened so
that they could be handled without breakage. The moistening was done
for IO to 14 days by sprinkling water on stacks of tobacco and shifting
the top and bottom layers. The stalks were stripped from the leav~s. The
Thukku (wholly spoilt) and Pagu (partly spoilt) leaves were separated.
The leaves were tied up in bundles and stored in the premises. From time
to time they were packed in gunny bags and exported to the company's
factory at Bombay where they were used for
manufacturing
cigarettes.
The appellant's defence was that it was not necessary to obtain the licence
or permission because (i) no manufacturing
process was carried on in
the premises; and (ii) the persons who worked in the premises we're not
workers as they were employed by independent contractors. The Magistrate accepted the defence contentions, and -acquitted the appellant.
But
the High Court convicted the appellant.
Dismissing
the
appeal, this
Court:-
HELD : The con1pany's premises at Eluru were a factory.
(i) Manufacturing processes as defined in s. 2(k) (i) of the Factories
Act were carried on in the premises.
Under s. 2(k) (i) manufadturing
precess means any process for 'making. altering, repairing ornamenting,
finishing. packing. oiling, \\'ashing. cleaning. breaking up, demolishing or
other,\ise treating or adapting any article or substance with a view to its
use. sale, transport. delivery or disposal." The definition is widely worded.
The moistening \vas an adaptation of the tobacco leaves. The stalks were
stripped by breaking them up.
The leaves were packed by bundling them
up rind putting them into gunny bags.
The breaking up, the adaptation
and the pn.cking of the tobacco leaves were done with a view to their use
and transport.
All these proce'ises a're manufacturing process within s.
2<kJ(i). [878 BJ
State of Kenda v. V. M. Patel,
[1961) I L.L.J.
549, Sardar C. S.
Anwe v. The State, I.LR. [1965) 15 Raj. 117, referred to.
(ii) The persons employed were workers as defined in s. 2 (I) of the
Facto'ries Act.
More than 20 persons worked in the premises regularly
every day. There was the positive evidence of P.W.s that the work of
stripping stalks from the tobacco leaves was done under the supervision
·975
SUPREME COURT REPORTS
[1969] 3 s.c.R.
.of the management.
There was nu evidence to show that the other work
in the premises was not done under like supervision. The prosecution adduced prima facie evidence showin2 that the relationship of master and
servant existed between the workmen and the management. The appellant
<lid not produce any rebutting evidence. In the cross-examination of P. W.
I, it was suggested that the workmen were employed by independent contracts, but the suggestion was not borne out by the materials on the
record. [881 B-EJ
Sri ChintQman Rao & Anr. v. State of Madhva Pradesh, [1958] S.C.R.
1340, 1349, Short v. J. W. Henderson Ltd., [1946] S.C. (H.L.) 24, 33-34.
Dharangadhara Chemical Works v. State of Saurashtra, [1957] S.C.R. 152,
State of Kera/a v. V. M. Patel [1961] 1 L.L.J. 549, Shankar Ba/aji Waje
v. State of Maharashtra, [19621 1 Lab. L.J. 119, Bridhichand Sharma v.
First Civil Judge, Na11vur, [1961] 2 Lab. L.J. 86, and D. C. Dell'all
Mohinder Saheb & Sons v, United Bidi Workers' Union, [19641
2 L.L.J.
638, referred to.

## Text

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V. P. GOPALA RAO
v.
PUBLIC PROSECUTOR, ANDHRA PRADESH
March 7, 1969
[S. M. SIKRI, R. S. BACHAWAT AND K. S. HEGDE, JJ.]
87 5·
F"ctories Act (63 of 1948), ss. 2(k) (i), 2(1)-'Manufacturing proces~· and "workers'-Meaning of.
The appellant who was the manager-cum-occupier. of a
company's
establishment at Elum was prosecuted for operating a factory
without
obtaining a licence as required by the Factories Act, 1948 and the Andhra
Pradesh Factory Rules, 1950.
The company had its main fact<>ry at
Bombay.
In the company's Eluru premises, sun-cu'red
tobacco
leave~
purc:hased from local producers were subjected to the processes of moistening, stripping and packing.
The tobacco leaves were moistened so
that they could be handled without breakage. The moistening was done
for IO to 14 days by sprinkling water on stacks of tobacco and shifting
the top and bottom layers. The stalks were stripped from the leav~s. The
Thukku (wholly spoilt) and Pagu (partly spoilt) leaves were separated.
The leaves were tied up in bundles and stored in the premises. From time
to time they were packed in gunny bags and exported to the company's
factory at Bombay where they were used for
manufacturing
cigarettes.
The appellant's defence was that it was not necessary to obtain the licence
or permission because (i) no manufacturing
process was carried on in
the premises; and (ii) the persons who worked in the premises we're not
workers as they were employed by independent contractors. The Magistrate accepted the defence contentions, and -acquitted the appellant.
But
the High Court convicted the appellant.
Dismissing
the
appeal, this
Court:-
HELD : The con1pany's premises at Eluru were a factory.
(i) Manufacturing processes as defined in s. 2(k) (i) of the Factories
Act were carried on in the premises.
Under s. 2(k) (i) manufadturing
precess means any process for 'making. altering, repairing ornamenting,
finishing. packing. oiling, \\'ashing. cleaning. breaking up, demolishing or
other,\ise treating or adapting any article or substance with a view to its
use. sale, transport. delivery or disposal." The definition is widely worded.
The moistening \vas an adaptation of the tobacco leaves. The stalks were
stripped by breaking them up.
The leaves were packed by bundling them
up rind putting them into gunny bags.
The breaking up, the adaptation
and the pn.cking of the tobacco leaves were done with a view to their use
and transport.
All these proce'ises a're manufacturing process within s.
2<kJ(i). [878 BJ
State of Kenda v. V. M. Patel,
[1961) I L.L.J.
549, Sardar C. S.
Anwe v. The State, I.LR. [1965) 15 Raj. 117, referred to.
(ii) The persons employed were workers as defined in s. 2 (I) of the
Facto'ries Act.
More than 20 persons worked in the premises regularly
every day. There was the positive evidence of P.W.s that the work of
stripping stalks from the tobacco leaves was done under the supervision
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SUPREME COURT REPORTS
[1969] 3 s.c.R.
.of the management.
There was nu evidence to show that the other work
in the premises was not done under like supervision. The prosecution adduced prima facie evidence showin2 that the relationship of master and
servant existed between the workmen and the management. The appellant
<lid not produce any rebutting evidence. In the cross-examination of P. W.
I, it was suggested that the workmen were employed by independent contracts, but the suggestion was not borne out by the materials on the
record. [881 B-EJ
Sri ChintQman Rao & Anr. v. State of Madhva Pradesh, [1958] S.C.R.
1340, 1349, Short v. J. W. Henderson Ltd., [1946] S.C. (H.L.) 24, 33-34.
Dharangadhara Chemical Works v. State of Saurashtra, [1957] S.C.R. 152,
State of Kera/a v. V. M. Patel [1961] 1 L.L.J. 549, Shankar Ba/aji Waje
v. State of Maharashtra, [19621 1 Lab. L.J. 119, Bridhichand Sharma v.
First Civil Judge, Na11vur, [1961] 2 Lab. L.J. 86, and D. C. Dell'all
Mohinder Saheb & Sons v, United Bidi Workers' Union, [19641
2 L.L.J.
638, referred to.
CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No.
271 of 1968.
Appeal by special leave .from the judgment and order dated
July 3, 1968 of the Aindhra Pradesh High Court in Criminal
Appeal No. 883 of 1966.
M. C. Setalvad, J. M. Mukhi and G. S. Rama Rao, for the
appe!lant.
P. Ram Reddy and A. V. V. Nair, for the respondent.
The Judgment of the Court was delivered by
Bachawat, J.
M/s. Golden Tobacco Co., Private Ltd.
have their head office and main factory at Bombay where they
manufacture cigarettes.
The appellant is
ttie
occupier-cum:
manager of the company's premises at Eluru in Andhra Pradesh
where sun-cured country tobacco purchased from the local producers is collected, processed and stored and then transported to
the company's factory at Bombay. The prosecution case is that
the aforesaid premises are a factory.
The appellant was prosecuted and tried for contravention of s. 6( 1) of the Factories Act
1948 and rules 3 and 5(3) of the Andhra Pradesh Factory Rules
1950 for operating the factory without obtaining a licence from
the Chief Inspector of Factories and his
previous permission
approving the plans of the building.
The appellant's defence
was that the premises did not constitute a factory and it was not
necessary for him to obfain the licence or permission. The 2nd
Addi. Munsif Magistrate, Eluru, accepted the defence contention and acquitted the appellant.
According to the Magistrate
the prosecution failed to establish that the premises were a factory
<lr that any manufacturing process was carried on or that any
worker was working therein.
The Public Prosecutor filed
an
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v. P. GOPALA v. PUBLIC PROSECUTOR (Bachawat, J.)
877
appeal against the order.
The Andhra Pradesh High
Court
allowed the appeal, convicted the appellant under s. 92 for con·
travention of s. 6 ( 1) and rules 3 and 5 ( 3) and sentenced him to
pay a fine of Rs.· 50 under each count. The present appeal has
been filed by the appellant after obtaining special leave.
The question in this appeal is whether the company's premises
at Eluru constitute a factory.
Section 2(m)
defines
factory.
Under s. 2(m) factory means any premises including the precincts thereof "whereon twenty or more workers are working, or
'were working on any day of the preceding twelve months, and
in any part of which a manufacturing process is being carried on
with the aid of power, or is ordinarily so carried on." It is not
disputed that more than 20 persons were working on the premises. The points in issue are : (I ) whether those persons were
"workers";' and (2) whether any
manufacturing process
was
being carried on therein.
For the purpose of proving the prosecution case the respondent relied upon the following materials : (I) the testimony of
PW I A. Subbarao, the Assistant Inspector of Factories; (2) his
report of inspection of the premises on December 20, 1965; (Ex.
Pl); (3,) the show cause notice Ex. P3, and the appellant's reply
dated January 15, 1966; (Ex. p5); (4) the testimony of PW 2
B. P. Chandrareddi, the Provident r'und Inspector; and ( 5) si'I
returns (Exs. P7 to Pl2), submitted by the Eluru establishment,
to the Regional Provident Fund Commissioner.
The materials on the record show that in the company's Eluru
premises, sun-cured tobacco leaves bought from the growers were
subjected to the processes of moistening, stripping and packing.
The tobacco leaves were moistened so that they may be handled
without breakage. The moistening was done for 10 to 14 days
by sprinkling water on stacks of tobacco and shifting the top and
bottom layers.
The stalks were stripped from the leaves.
The
Thukku (wholly spoilt) and Pagu (partly spoilt)
leaves
were
separated. The leaves were tied up in bundles and stored in the
premises.
From time to time they were packed in gunny bags
and exported to the company's factory at Bombay where they
wer.e used for manufacturing cigarettes. All these processes are
carried o~. in the tobacco industry. In Encyclopaedia Britannica,
1965 edition, Vol. 22, page 265 under the heading "tobacco
ind~stry'' j~ is st~ted ; "After curing, only during humid periods
or m special m01stenmg cellars can the leaf be handled without
breaka~e. It is remo~ed from the stalks or sticks and graded
accordmg to colour, size, soundness and other recognizable elements of quality. It is tied ~nto hands, or bundles, of 15 to 30
878
SUPREME COURT REPORTS
[1969] 3 S.C.R.
leaves by means of a tobacco leaf wrapped securely around the
stem end of the leaves.
After grading the leaf is ready for the
market."
In our opinion, manufacturing processes as defined in s. 2
(k) (i) were carried on in the premises .. Under s. 2(k) (i)
manufacturing process means any process for "making, altering,
repairing, ornamenting,
finishing,
packing,
oiling,
washing,
cleaning, breaking up, demolishing or
otherwise
treating
or
adapting any article or substance with a view to its use,
sale,
transport, delivery or disposal." The definition is widely worded.
The moistening was an adaptation -0f the tobacco leaves. The
stalks were stripped by breaking them up.
The leaves were
packed by bundling them up and putting them into gunny bags.
The breaking up, the adaptation and the packing of the tobacco
leaves were done with a view to their use and transport.
All
these processes are manufacturing processes within s. 2(k) (i).
The reported cases are of little help in deciding whether a
particular process is a manufacturing process as defined in s. 2
(k) (i). In State of Kera/av. V. M. Patel(') the Court held that
the work of garbling pepper by winnowing, cleaning,
washing
and drying it on concrete floor and a similar process of curing
ginger dipped in lime and laid out to dry in a warehouse were
manufacturing processes.
With regard to the decision in Col.
Sardar C. S. Angre v. The State(') it is sufficient to say that the
work of sorting and drying potatoes and packing and re-packing
them into bags was held not to be a manufacturing process as
the work was done for the purpose of. cold storage only and
not for any of the purposes mentioned in s. 2(k) (i).
The next question is whether 20 or more persons worked on
the premises. On behalf of the appellant it is admitted that more
than 20 persons work there, but his contention is that they are
employed by independent contractors and are not workers as
defined in s. 2(1).
Section 2(1) reads :-"worker" means a
person employed, directly or through any agency, whether for
wages or not, in any manufacturing process, or in cleaning any
part of the machinery or premises used for a manufacturing process, or in any other kind of work incidental to, or connected
with, the manufacturing process, or the subject of the manufacturing process;"
In Sri Chintaman Rao & anr. v. State of Madhya Pradesh(')
the Court gave a restricted meaning to the words "directly or
(!) [1961] I L.L.J. 549.
(2) I.LR. [1%5] 15 Raj. 117.
(3) [195RJ s.c.R .. 1340. 1349.
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V, P. GOPALA v. PUBLIC PROSECUTOR (Bachawat, J.)
879
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through an agency" in s. 2 ( 1) and held that a worker was a
person employed by the management and that there must be a
contract of service and a relationship of master and servant between them.
On the facts of that case the Court held that certain Sattedars were independent contractors and · that they and
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the coolies engaged by them for rolling bidis were not "workers".
It is a question of fact in each case whether the relationship
of master and servant exists between the management and the
workmen.
The relationship is characterized by contract of service between them. In Short v. J. W. Henderson Limited(')
Lord Thankerton recapitulated four indicia of a
contract
of
service. As stated in Halsbury's Laws of England, 3rd ed. vol. 25,
p. 448, Art. 872 :
"The following have been stated to be the indicia
of a contract of service, namely, ( 1) the master's power
of selection of his servant; (2) the payment of wages or
other remuneration; ( 3) the master's right to control
the method of doing the work; and ( 4) the master's
right of suspension or dismissal (Sharl v. J. and W.
Henderson Ltd. ( 1946 S. C. (H. L.) 24, at p~. 33,
34, Could v. Minister of National Insurance, [1951)
I. K. B. 731 at p. 734; [1951) All E. R.
368 at
p. 371; Pauley v.
Ke1111ldo Ltd. [1953] I All. E. R.
226, C. A., at p. 228) ; but modern industrial conditions have so affected the freedom of the master that
it may be necessary at some future time to restate the
indicia; e.g., heads (1), (2) and (4) and probably also
head (3), are affected by statutory provisions (Short v.
J. W. Henderson Ltd., supra at p. 34."
In Dharangadlwra Chemical Works v. Stille of Saurashtra( 2 )
the Court held that the critical test of the relationship of master
and servant is the master's right of superintendence and control
of the method of doing the work.
Applying this test workmen
rolling bidis were found to be employees o[ independent contractors and not workers within s. 2 (I), in State of Kera/a v.
Patel V. M.(') and Shankar Balaji Waje v. State of Maharashtra(')
while they were found to be workers within s. 2 ( 1) in
Bridhichand Sharma v. First Civil Judge, Nagpur(') and workmen
within the meaning of s. 2 ( s) of the Industrial Disputes Act in
D. C. Dewan Mohinder Saheb & Sons v. United Bidi Workers'
Union(').
(I) [1946] S.C. (H.L.) 24, 33-34.
(3) [1961] l L.L.J. 549.
(5) [1961] 2 Lab. LJ 86.
(2) [1957] S.C.R. 152.
(4) [1962] 1 Lab. L.J. 119.
16) [1964] 2 Lab. L. J, 638.
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[1969] 3 S.C.R.
There is no abstract a priori test of. the work control required
for establishing a contract of service. In Short v. J. N. Henderson Ltd.(') Lord Thankerton quoting Lord Justice Clerk's dicta
in an earlier case said that the principal requirement of a contract of service was the right of the master "in some reasonable
sense" to control the method of doing the work. As pointed out
in Bridhichand's case(') the fact that tlie workmen have to work
in the factory imply a certain. amount of supervision
by
the
mainagement. The CoUrt held that the nature and extent of control varied in different industries and that when the operation was
of a simple nature the control could be exercised at the end of
the day by the method of rejecting the bidis which did not come
up to the proper standard.
In the present case, the prosecution relied on ( 1) Bx. P7 to
P 12, (2) the testimony of PW! and (3) Bxs. Pl and P5 to prove
that the. persons working at the company's premises at Eluru
were employed by the management.
Exhibits P7 to P12 are
monthly returns for July to December 1966 submitted by the
company's Bluru establishment to the Regional Provident Fund
Commissioner under paragraph 38(2) of the Employees Provident Fund Scheme, 1952. The returns disclosed the number and
names of about 200 persons employed every month and
the
recoveries from the wages and the company's contributions on
account of the provident fund of each employee. At the top of
each return it was stated that the employees were contract employees.
Section 2 ( f) of the Employees Provident Fund Act
1952 defines "employee" as including any person employed by
or through a contractor. Paragraphs 20 and 30 of the Employees
,Provident Fund Scheme 1952 shows that the employer is required
to pay contributions in respect of all such employees.
Paragraph 26 of the Scheme shows that employees who have actually
worked for not less than 12 months or less in the factory or
establishment is eptitled and required to become a member of
the Fund. In view of the fact that the returns are in respect of
all persons employed in the establishment either by the management or by or through a contractor they are not of much help in
determining whether the employees
were
employed
by
the
management or were employed by the contractors.
They only
show that in the months of July to December 1966, 200 workers
had been working in the establishment for not less than 240 days.
The testimony of PWl, A. Subbarao, the Assistant Inspector
of Factories shows that on December 20, 1965 he found 120
workmen working in the premises.
He is corroborated by his
inspection report Bx. Pl. In his reply Bx. P-5 the appellant did
not dispute the fact that 120 persons were working there. PW 1
(I) [1946] S.C. (H.L.) 24.
(2) (1961] 2 L.L.J. 86.
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£ound workinen doing the work of stripping stalks from
the
tobacco leaves.
The work of stripping was being done under
the supervision of the management's clerk J. Satyanarain Rao.
At the end of the day the clerk collected the stripped tobacco and
noted the quantity of work done in the work sheet allotted to
the worker.
PWl found some workmen doing other work.
The onus of proving that the workmen were emp!Oyed by the
management was on the prosecution. We think that the prosecution has discharged this onus. It is not disputed that more than
20 persons worked in the premises regularly every day.
'rhere
is the positive evidence of PWl that the work of stripping stalks
from the tobacco leaves was done under the supervision of the
management. There is no evidence to show that the other work
in the premises was not done under the like supervision.
The
prosecution adduced prima facie evidence showing
that
the
relationship of master and servant existed between the workmen
and the management.
The appellant did not produce any rebutting evidence. In the cross-examination of PWl, it was suggested that the workmen were employed by independent contractors, but the suggestion is not borne out by the materials on
the record. We hold that the persons employed are workers as
defined in s. 2 (1). The High ·Court rightly held that the company's premises at EJuru were a factory.
In the Courts below the appellant produced ( 1 ) an order
of the Chief Inspector of Factories, Madras, and (2) a letter of
Superintendent of Central Excise I.D.O.,
Vijayawada.
Mr.
Setalvad conceded, and i:n our opinion: rightly, that these documents throw no. light on the qljtStion whether in 1966 the pr~
mises were a factory within tb,e meaning of s. 2(m). We,
therefore say nothing more with regard to these documents.
In the .result, the appeal is dismissed.
Y.P.
Appeal dismissed.