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TMI Blog1955 (3) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... red to as "The Tribunal") reinstating the appellant as the head cashier with back salary under the Punjab National Bank (hereinafter called "The Bank"). The facts leading up to this appeal may shortly be stated. The appellant started his service as the head cashier in the Una Branch of the Bank on the 18th June 1949. The Cash Department of the Bank is in charge of Treasurers. The relation between the Bank and the Treasurers is evidenced by an agreement dated the 1st May 1944 (Ex. 1) which will be noticed in detail hereinafter. That was an agreement between the Bank and "Messrs Rai Bahadur Karam Chand Puri & Bros". That firm was appointed the Treasurers at the head office of the Bank and other places in and outside the Punjab. On the 28th September 1951 the District Manager of the Northern Circle of the. Bank wrote a letter (Ex. 4) to the Treasurers informing them that it had been decided to close the Una office of the Bank with effect from the close of business on the 3rd November 1951. In pursuance of that letter the Treasurers intimated by a letter dated 2nd October 1951 enclosing a copy of Ex. 4 to the appellant that the Una Branch of the Bank will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the Supreme Court in Civil Appeal No. 66 of 1952 in the matter of United Commercial Bank Ltd. v. Secretary, U. P. Bank Employees' Union and Others. I am of the opinion that the dismissal of Shri Sharma was wrongful and liable to be set aside. Now the normal remedy is reinstatement and I have no hesitation in allowing the same. He will also be paid his back salary an allowance from the date of dismissal to the date of reinstatement". Whatever may be the merits of the answer given to the question propounded by the Tribunal, there is no doubt that the question posed had been wrongly framed. The discharge or dismissal of the appellant had nothing to do with the change in the personnel of the Treasurers. The appellant's services were dispensed with on the ground that the Una Branch where he was employed as head cashier being an un- economic unit had to be closed and that therefore the appellant's services were no more required. The respondent's case appears to have been that the firm. known as Messrs R. B. Karam Chand Puri & Bros. have been contractors for the Cash Department of the Bank at the head office and some of the other offices in the Punjab and beyond; th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f to the complainant before it. The award by the Tribunal was, in the result, set aside and the Bank's appeal allowed. The appellant in this Court through his counsel Shri Chari, argued that the Appellate Tribunal had misinterpreted the provisions of the Industrial Disputes Act in coming to the conclusion that the Tribunal had no jurisdiction to entertain the dispute simply on the ground that one of the parties to the dispute bad successfully denied the relationship of employer and employee; that the Appellate Tribunal misconceived its functions by basing its findings on the interpretation of the written agreement between the Bank and its Treasurers when it should have gone into all the relevant facts to determine the substance of the matter; and finally, that the Appellate Tribunal misdirected itself on the question of the interpretation of the agreement for coming to the conclusion that the appellant was not an employee of the Bank but was a nominee of the "Treasurers". It was further argued on behalf of the appellant that the Tribunal having based its decision on its previous award dated the 16th September 1952 in Reference No. 3 of 1951 between persons more or le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been nominees of the "independent contractors" there could not be any relation of employer and employee between the Bank and the appellant. It is therefore necessary to examine in some detail the terms of the agreement aforesaid. We set out below, underlining important words, the terms of the agreement in so far as they are relevant for the determination of the true relation between the Bank and the Treasurers. Though this agreement is dated the 1st May 1944, cl. (1) provides that it will be deemed to have commenced and come into force from the 15th March 1942, the date of the death of R. B. Karam Chand Puri and will take the place of the previous agreement dated the 26th July 1941, thus maintaining the continuity of the relationship between the Bank and the Treasurers'. The agreement provides that the Treasurers shall diligently and faithfully serve the Bank at the Head Office and its various offices mentioned in schedule A attached to and forming part of the agreement and at other offices where they may hereafter be appointed treasurers and shall in all respects diligently and faithfully obey and observe all lawful orders and instructions of the Bank or the person p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice In case of gross negligence or misconduct or of any fraud, misappropriation or embezzlement by the Treasurers or any of the nominees in the discharge of ,their duties as such Treasurers, no notice shall be necessary and the Bank shall have the right to dispense with their services forthwith. The Bank shall have the right to take the Treasurers into the service of the Bank after settlement of remuneration with the Treasurers at any other office or offices of the Bank. The Treasurers and their nominees shall obey all the orders, rules and regulations prescribed by the Bank with regard to the discharge of their duties by the cashiers as well as with regard to the amount of balance they are allowed to keep with them. It shall be the duty of the cashiers to inform the manager of the Bank as soon as the balance in hand exceeds the prescribed limit and to ask for orders on the point. The Treasurers shall not engage any person as their assistant or peon about whose character, conduct or reliability the manager of the Board of Directors of the Bank may have any objection. The Treasurers shall also arrange that no person under employment absents himself from duty without the written per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uired to go to out-stations on bank business. From the terms of the agreement aforesaid set out above almost verbatim omitting such clauses and words as are not relevant to this case, it will appear that the Treasurers are under the employment of the Bank on a monthly basis for an indefinite term, that is to say, until such time as either party to the agreement terminated it in accordance with the terms quoted above. They are under the complete control and direction of the Bank through its manager or other functionaries. The Treasurers have to take their orders from day to day as regards the cash balance or other cognate matters relating to the safe custody of cash, valuable documents, etc. belonging to the Bank or its constituents. The Treasurers receive in respect of each office under the incharge a certain name sum out of which they have to pay the salary of a stated number of their assistants who may be head cashiers or cashiers or assistant cashiers and other such functionaries. They are entitled to receive bonus on the net amount secured to them as their remuneration, being the lump sum fixed in respect of each office, minus the salary of the assistants. It is true that these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irect the means also, or, as it has been put, 'retains the power of controlling the work', a servant is a person subject to the command of his master as to the manner in which he shall do his work........ An independent contractor is one who undertakes to produce a given result but so that in the actual execution of the work he is not under the order or ,control of the person for whom be does it, and may use his own discretion in things not specified before- hand......................." Clerk & Lindsell on Torts (11th Edn.) at p. 135 have adopted the description of an independent contractor given by Pollock as quoted above. In the 11th Edn. of Salmond's Treatise on the Law of Torts, the same distinction has been clearly indicated in the following passage at p. 98 *Pages 62 & 63 of Pollock on Torts, 15th Edn. "what then, is the test of this distinction between a servant and an independent contractor? The test is the existence of a right of control over the agent in respect of the manner in which his work is to be done. A servant is an agent who works under the supervision and direction of his employer; an in- dependent contractor is one who is his own master ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and that therefore the Treasurers could not but be independent contractors. It has already been noticed that the appointment of such assistants as are entrusted with the work of the Cash Department is not under the absolute power of the Treasurers. The appointment-has to be approved by the Bank and the Treasurers cannot continue to employ those workmen in whose fidelity and efficiency the Bank has no confidence. Hence both in the matter of appointment and dismissal of the employees the Bank reserves to itself the power to' give direction to the Treasurers. Similarly in the matter of the payment of salary the money comes out of the coffers of the Bank, though it may be paid by the hand of the Treasurers. In this connection it was contended on behalf of the appellant that payment of salary of the employees in the Cash Department is made through the Ban].,, itself but we have no tangible evidence in this case beyond the bare assertion at the Bar. But, in our opinion, the situation in respect of the appointment, dismissal and payment of salary of the employees of the Cash Department is analogous to that of the employees of a particular department of Government, in which appointmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n as to what was the exact relation between the Bank and the Treasurers. It did not also consider the question as to what would be the position of the employees of the Cash Department vis-a-Vis the Bank if it were held that the Treasurers Id. themselves were the servants of the Bank and not independent contractors. Before the Appellate Tribunal both parties appear to have concentrated their attention on the question as to whether the employees of the Cash Department were servants of the Bank or of the Treasurers. In our opinion, that was not a correct approach to the determination of the controversy between the parties. If the Treasurers' relation to the Bank was that of servants to a master, simply because the servants were authorized to appoint and dismiss the ministerial staff of the Cash Department would not make the employees in the Cash Department independent of the Bank. In that situation the ultimate employer would be the Bank through the agency of the Treasurers. It was argued on behalf of the respondent that even if it were held that the Treasurers were the servants of the Bank and not independent contractors, the legal position of the employees of the Cash Department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his speech in the reported case (supra) at p. 17 has observed as follows:- "Many factors have a bearing on the result. Who is paymaster, who can dismiss, how long the alternative service lasts, what machinery is employed, have all to be kept in mind. The expressions used in any individual case must always be considered in regard to the subject matter under discussion but amongst the many tests suggested I think that the most satisfactory, by which to ascertain who is the employer at any particular time is to ask who is entitled to tell the employee the way in which he is to do the work upon which he is engaged". (1) [1947] A.C. 1, As indicated above, in the present case the direction and control of the appellant and of the ministerial staff in charge of the Cash Department of the Bank was entirely vested in the Bank through its manager or other superior officer. We have therefore no hesitation in differing from the conclusion arrived at by the Appellate Tribunal and in holding that the appellant was an employee of the Bank. That being so, the Tribunal had the jurisdiction to make the directions it did in respect of the appellant. The respondent did not at any stage of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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