Case Analysis: Shankar Balaji Waje vs State of Maharashtra

Case Details

Case name: Shankar Balaji Waje vs State of Maharashtra
Court: Supreme Court of India
Judges: Raghubar Dayal, J.L. Kapur, Subba Rao, J.
Date of decision: 27 October 1961
Citation / citations: 1962 AIR 517; 1962 SCR Supl. (1) 249
Case number / petition number: Criminal Appeal No. 63 of 1960; Criminal Reference No. 94 of 1959; Criminal Reference No. 94 of 1955
Proceeding type: Criminal Appeal (by special leave)
Source court or forum: High Court of Bombay

Source Judgment: Read judgment

Factual and Procedural Background

The appellant, Shankar Balaji Waje, owned the bidi‑manufacturing factory “Jay Parkash Sudhir Private Ltd.” Pandurang Trimbak Londhe performed bidi‑rolling work in the factory for several days in 1957 and ceased work on 17 August 1957. The appellant had posted a notice terminating Pandurang’s services on 12 August 1957, and Pandurang did not receive payment for four days of earned leave. No written or oral contract of service bound Pandurang to attend the factory for any fixed hours or period.

The matter originated with a complaint that the appellant had contravened section 79(11) of the Factories Act, 1948. The Additional Sessions Judge, Nasik, issued Criminal Reference No. 94 of 1959, which was affirmed by the High Court of Bombay on 9 October 1959. The High Court upheld the conviction of the appellant under section 92 of the Act and imposed a fine. The appellant then filed Criminal Appeal No. 63 of 1960 before the Supreme Court of India by special leave, seeking reversal of the conviction and refund of the fine.

The appeal represented the final appellate stage. The appellant prayed that the Supreme Court set aside the conviction, acquit him of the offence, and order the refund of any fine that had been paid.

Issues, Contentions and Controversy

The Court was required to determine (i) whether Pandurang Trimbak Londhe qualified as a “worker” within the meaning of section 2(1) of the Factories Act, 1948, and (ii) if he was a “worker,” whether he was entitled to leave wages under section 80 of the Act. The controversy centered on the interpretation of “worker” and the applicability of sections 79 and 80 to a person who performed bidi‑rolling without a formal contract of service and without demonstrable employer control.

The appellant contended that (a) no contract of service existed; (b) Pandurang was free to attend or leave the factory at will; (c) the appellant exercised no supervision or control over the manner of work; and (d) even assuming “worker” status, sections 79 and 80 could not be applied because the statutory notice of periods of work and the calculation of “full‑time earnings” were impossible.

The State argued that the appellant exercised sufficient control and supervision over Pandurang, thereby making him a “worker” within the statutory definition, and that consequently the provisions of sections 79 and 80 were applicable, rendering the conviction valid.

Statutory Framework and Legal Principles

Section 2(1) of the Factories Act defined a “worker” as a person employed, directly or through an agency, whether for wages or not, in any manufacturing process. Sections 79 and 80 dealt respectively with the entitlement to leave wages and the computation of “full‑time earnings.” Section 85 empowered the State Government to deem persons working with the owner’s permission as not being “employed” by the owner. Section 92 created an offence for contravening the provisions of the Act. The Court also referred to sections 61 and 63, which prescribe the statutory regime for working hours and holidays, to illustrate the impossibility of applying the leave provisions where no fixed hours existed.

The Court applied the “control test” articulated in Dharangadhara Chemical Works Ltd. v. State of Saurashtra, examining whether the employer possessed the right to control the employee’s hours, attendance, and manner of work. It also employed the three‑ingredient test of employment—employer, employee, and contract of service—derived from Shri Chintaman Rao v. State of Madhya Pradesh. Under these principles, a person could be deemed a “worker” only when (i) a contract of service existed, (ii) the work was performed for hire, and (iii) the employer had the right to control and supervise the manner, hours, and conditions of that work.

Court’s Reasoning and Application of Law

The majority held that the essential ingredients of an employment relationship were absent. It observed that no written or oral contract bound Pandurang to attend the factory for any fixed hours, that he could attend or leave at will and could be absent for up to ten days without informing the appellant, and that the appellant did not supervise the manner in which the bidis were rolled, merely supplying tobacco and accepting finished products. Consequently, the control test was not satisfied.

The Court further noted that, under section 85, persons working with the owner’s permission could be deemed not to be “employed” by the owner. Because Pandurang worked with the owner’s permission and without a contract of service, the Court concluded that he was not a “worker” within the meaning of section 2(1).

Since the statutory notice of periods of work had not been issued for Pandurang, the Court found that the condition of a continuous period of 240 days of work in a calendar year required by section 79 could not be established. The absence of a defined daily working period precluded the calculation of “full‑time earnings” required under section 80. Therefore, the provisions of sections 79 and 80 were inapplicable to the facts.

The dissenting judgment of Justice Subba Rao, which held that Pandurang was a “worker,” was expressly noted as not forming part of the binding law.

Final Relief and Conclusion

The Supreme Court set aside the conviction of the appellant under section 92 read with section 79(11) of the Factories Act. The appellant was acquitted of the offence, and the Court ordered the refund of any fine that had been paid. The judgment established that, where no contract of service and no employer control exist, a person cannot be classified as a “worker” for the purposes of sections 79 and 80, and liability under section 92 cannot arise. The dissenting view did not affect the binding precedent.