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Issues:
Interpretation of clause 6 of the scheme of arrangement regarding payment of arrears of wages to employees, determination of legal relationship between the applicants and the company based on the agreement dated 10th April, 1961. Analysis: The judgment revolves around a summons filed by the applicants seeking payment of Rs. 39,619.87 from the respondent company under clause 6 of a sanctioned scheme of arrangement. The applicants claimed to be employees entitled to arrears of wages for the period they acted as dalals for the company. However, the court delved into the legal relationship established by the agreement dated 10th April, 1961, to ascertain if the applicants were indeed employees or agents of the company. The agreement appointed the applicants as exclusive cloth dalals for the company, granting them the right to sell the company's cloth throughout India. Various clauses in the agreement outlined the responsibilities and limitations of the applicants, including guaranteeing the offers brought, obtaining company's consent for sales, and following company instructions. The court analyzed these clauses to determine the nature of the relationship between the parties. The court rejected the contention that the applicants were employees based on the agreement's provisions. It emphasized that the relationship was that of principal and agent, not employer and employee. The court highlighted that the agreement clearly designated the applicants as selling agents, with the company retaining control over certain aspects of the sales process. The court emphasized that the clauses relied upon by the applicants did not grant the company the authority to dictate the manner of work execution by the applicants. In conclusion, the court dismissed the summons, ruling that the applicants were not employees of the company as claimed. The judgment emphasized that the legal relationship between the parties, as per the agreement, established the applicants as agents of the company, precluding them from being considered employees entitled to arrears of wages under the scheme. The court upheld the principal-agent relationship based on the agreement's terms and conditions, ultimately denying the applicants' claim for payment under clause 6 of the scheme.
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