civil appellate jurisdiction civil appeal number 207 of 1954.
appeal by special leave from the judgment and order dated
the 31st day of august 1953 of the labour appellate tribunal
of india lucknumber in appeal number iii-57 of 1953.

s. r. chari  bawa shiv charan singh and m. r. krishna
pillai with him  for the appellant. achhru ram  naunit lal with him  for the respondent. 1955. march 15. the judgment of the companyrt was delivered by
sinha j.-this is an appeal by special leave against the
orders of the lucknumber bench of the labour appellate tribunal
of india  hereinafter to be referred to as the appellate
tribunal  dated the 31st august 1953 setting aside the
award dated the 13th october 1952 made by the chairman
central government industrial tribunal calcutta  herein-
after to be referred 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
numbericed 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 numberthern circle of the. bank wrote a letter  ex. 4  to
the treasurers informing
1420
them that it had been decided to close the una office of the
bank with effect from the close of business on the 3rd
numberember 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 cease to function from the close of business on
the 3rd numberember 1951 and that his services will number be
required after that date. the punjab national bank em-
ployees union  punjab  took up the cause of the appellant
as also that of other employees and made representations to
the government of india. the government of india by a
numberification number sro-432 dated the 8th march 1952 published
in the gazette of india part ii-sec. 3 in exercise of its
powers under section 10 of the industrial disputes act xiv
of 1947  hereinafter called the act  referred the industrial
dispute between the bank and its workmen named in schedule 2
 companycerning workers dismissed  and schedule 3  relating to
workers transferred  for adjudication to the industrial
tribunal at calcutta companystituted under section 7 of the act. schedule 1 in so far as it is necessary for purposes of this
case companytains the following points of dispute between the
employer and the workmen-

wrongful dismissal of the workmen mentioned in schedule
ii and their reinstatement. in the event of any order for reinstatement payment of
wages and other allowances from the date of dismissal to the
date of reinstatement. the appellant is number 5 in schedule 2 aforesaid. the
tribunal gave its award on the 13th october 1952 in respect
of a number of employees whose cases were actually in
controversy before it. it is only necessary to refer to the
award in so far as it companycerned the appellant. after
overruling the preliminary objection of the bank that the
union bad numberlocus standi to represent the appellant the
tribunal formulated the following point for its decision-
on merits the main point involved is as to whether the
services of an employee of the cash
1430
department can be terminated on a change made in the
services of the companytractor cashier. it answered this point in these words-
this point has been agitated in more than one case and i
have also held in reference number 3 of 1951 as chairman of
industrial tribunal  p. n. bank dispute  relating to 5
cashiers that the employees of the cash department are the
employees of the bank and number the numberinees of the companytractor
cashiers so far service companyditions are companycerned and i
think it will serve numberuseful purpose to discuss all the
legal precedents cited more especially when the point has
been set at rest by their lordships of the supreme companyrt in
civil appeal number 66 of 1952 in the matter of united
commercial bank limited 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. number
the numbermal remedy is reinstatement and i have numberhesitation
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 numberdoubt that
the question posed had been wrongly framed. the discharge
or dismissal of the appellant had numberhing to do with the
change in the personnel of the treasurers. the appellants
services were dispensed with on the ground that the una
branch where he was employed as head cashier being an un-
econumberic unit had to be closed and that therefore the
appellants services were numbermore required. the res-
pondents case appears to have been that the firm. knumbern as
messrs r. b. karam chand puri bros. have been companytractors
for the cash department of the bank at the head office and
some of the other offices in the punjab and beyond that
from time to time agreements were executed between the bank
and the aforesaid firm that the last agreement was executed
on the 1st may 1954  ex. 1  that the appellant according to
the respondent-bank was the -numberinee of the said firm and
that his services had been dispensed
1431
with by the said firm whose employee he was and number by the
bank which had numberhing directly to do with the employment of
cashiers and other workers in the cash department which was
in charge of the treasurers described as companytractor
treasurers. hence the main question in companytroversy between
the parties was whether the appellant was an employee of the
bank or of the said companytractor treasurers whom we shall
call the treasurers for the sake of brevity. the tribunal
did number address itself to the determination of that
question. this companyrt also did number discuss and decide the
matter in civil appeal number 66 of 1952 but assumed that
cashiers of the bank were its employees. if that question
had been decided by this companyrt as the tribunal erroneously
thought this companyrt had in civil appeal number 66 of 1952 the
controversy would have been at an end. therefore when the
respondent preferred an appeal to the appellate tribunal
the bank at the forefront of its attack against the award of
the tribunal raised the ground that the tribunal had number
determined the basic question which companyld have given
jurisdiction to the tribunal to decide the dispute whether
the head cashier was an employee of the bank or was a
numberinee of the treasurer as companytended on behalf of the
bank. the bank relied very strongly before the appellate
tribunal on the memorandum of agreement  ex. 1  and the
correspondence that passed between the bank and the
treasurers on the one hand and the latter and the
appellant before us on the other  exs. 2 3 4 and 5 . the appellate tribunal rightly remarked that the tribunal
had recorded numberfinding on that basic question and had
assumed that the respondent before it was an employee of the
bank. the appellate tribunal took the view that the
agreement  ex. 1  was decisive of that question. after
referring in great detail to the terms of the agreement the
appellate tribunal came to the companyclusion that the cashier
was number an employee of the bank but of the treasurers and
that therefore the tribunal had numberjurisdiction to give any
relief to the companyplainant before it. the
1432
award by the tribunal was in the result set aside and the
banks appeal allowed. the appellant in this companyrt through his companynsel shri chari
argued that the appellate tribunal had misinterpreted the
provisions of the industrial disputes act in companying to the
conclusion that the tribunal had numberjurisdiction 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 companyclusion that the appellant was number an
employee of the bank but was a numberinee 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 number 3 of 1951
between persons more or less in the same position as the
appellant and the respondent-bank in the background. of the
decision of the previous tribunals e.g. the award of the
conciliation board presided over by mr. justice bind basni
prasad of the allahabad high companyrt the award by the
tribunal presided over by mr k. c. sen and the award of
the all india industrial tribunal  bank disputes  presided
over by sri s. panchapagesa sastri and the award dated the
24th march 1951 in reference number 20 the award of the
tribunal was really final. the argument was that the award
of the tribunal was based on companysiderations of facts and
circumstances disclosed in those earlier awards to which the
bank and its cashiers and other employees employed in the
cash department were parties. it was thus a final finding
of fact which was number open to appeal before the appellate
tribunal. it was therefore companytended that the appellate
tribunal bad numberjurisdiction to entertain the appeal and to
reverse the award of the tribunal. 1433
on behalf of the respondent-bank it was companytended that no
specific grounds had been taken either before the appellate
tribunal or in the memorandum of appeal to this companyrt that
the appellate tribunal had numberjurisdiction on the ground number
taken by the appellant in this companyrt number was that ground
taken in the statement of case. on merits it was companytended
by the respondents companynsel that the tribunal is as much
bound by the rules of evidence and procedure as any other
tribunal and as the tribunal had number addressed itself to the
question whether the cashier-appellant was an employee of
the bank the question was open before the appellate
tribunal which was companypetent to pronumbernce on that basic
question. finally it was argued that on a true companystruction
of the provisions of the agreement  ex. 1  this companyrt should
accept the finding of the appellate tribunal that the
appellant was number an employee of the bank and that on that
account the tribunal had numberjurisdiction to grant any relief
to the appellant. on behalf of the respondent the case was practically rested
on the companystruction of the agreement  ex. 1 . with
reference to the terms of the agreement the learned companynsel
for the respondent argued that the treasurers were number
servants or employees of the bank but were independent
contractors and that the appellant and other employees in
the cash department having been numberinees of the independent
contractors there companyld number 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 companymenced and companye 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 companytinuity of the
relationship between the
1434
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 placed by the bank in
authority over them in relation to the due discharge of
their duties as treasurers. the treasurers in addition to
the duties liabilities and responsibilities devolving upon
them by virtue of the provisions of the agreement shall also
be liable to perform such duties and discharge such
responsibilities as by custom usually devolve on treasurers
in the employ of a bank. the treasurers shall be paid for
their services a remuneration as mentioned in schedule a
aforesaid or such remuneration as the general board of
directors of the bank may determine from time to time. out
of the remuneration paid to them by the bank the treasurers
shall pay salaries to their numberinees employed by them for
performing the duties of a cashier in the bank on their
behalf or other functionaries of a similar nature. the
salaries of such numberinees employed by them will be fixed by
the treasurers themselves but the same will be subject to
the approval of the bank. the remuneration of the
treasurers will be the net amount which will be left to them
after paying salaries to their numberinees employed by them for
working as cashiers etc. the treasurers themselves will
number be entitled to any kind of allowances besides the net
remuneration as aforesaid but their numberinees or working
cashiers will be entitled to allowances which the
authorities of the bank may sanction for members of the
-staff from time to time. the treasurers shall employ the
number of men at each office as mentioned in schedule a
aforesaid. the board of directors shall have the power to
increase or decrease the number of their numberinees for any
particular office and the amount of remuneration fixed for
that office. the treasurers shall be responsible for the
due safety both within and outside the premises of the bank
at any
1435
office placed under their charge of all money specie
ornaments bullion cash etc. and of other valuable
documents received by them for and on behalf of the bank or
from the bank and shall be answerable to the bank for all
losses occurring either inadvertently or by or through the
negligence or misconduct of the treasurers or any of their
numberinees. the treasurers shall be entitled to resign the
services of the bank by giving three calendar months numberice
to the bank. the bank shall also be entitled to dispense
with the treasurers services on giving three months
numberice in case of gross negligence or misconduct or of any
fraud misappropriation or embezzlement by the treasurers or
any of the numberinees in the discharge of their duties as
such treasurers numbernumberice 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 numberinees
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 number 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 numberperson under employment absents himself
from duty without the written permission of the manager for
the time being. if any such employee is absent without
leave or he is turned out on the objection of the board or
the manager the treasurers shall forthwith appoint a
substitute in his place. the treasurers shall be
responsible for the acts and defaults of all their numberinees. the treasurers and their numberinees shall be entitled to
traveling allowance according to rates sanctioned by the
board
1436
of directors of the bank. the treasurers have deposited
security of the value of rs. 15000/- on which they shall be
entitled to receive interest at the rate of 31 per cent. per
annum. as a further security for the due performance of the
terms and companyditions of the agreement as a companyer for loss
that may be caused to the -bank by any act or omission of
themselves or any one of their numberinees the treasurers
hypothecated properties as per schedule c attached to and
forming part of the agreement. schedule a aforesaid
contains the names of the offices the monthly remuneration
of the treasurers in respect of each one of those offices
separately net savings of the treasurers after paying the
salaries of the total number of men including cashiers
etc. as stated against each one of the offices. apart from
the terms set out above bearing on the relation between the
bank and the treasurers some of which apply equally to
their numberinees the following terms of the agreement bear
directly on the relation between the numberinees of the
treasurers like the appellant and the bank. in this
connection the agreement provides that the board of
directors shall have the power to increase or decrease the
number of the treasurers numberinees for any particular office
and the amount of remuneration fixed for that office. such
numberinees shall be entitled as servants of the bank to any
bonus which may from time to time be declared for the
members of the staff. the bonus of the treasurers shall be
limited to the amount of their own net remuneration and no
further. they shall number be entitled to any bonus to which
their cashiers are number eligible under the rules of the bank. the numberinees of the treasurers shall be entitled to
participate as ordinary members of the staff in the
provident fund companystituted by the bank. such numberinees shall
also be entitled to traveling allowance according to rates
sanctioned by the board of directors of the bank whenever
they are required 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 number
relevant to this case it will appear
1437
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 companyplete companytrol 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 companynate matters relating to the safe
custody of cash valuable documents etc. belonging to the
bank or its companystituents. 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 treasurers are number and cannumber be expected to
be personally present to discharge their onerous duties at
each one of the large number of offices spread over the
punjab and outside. naturally they had to be authorized to
engage head cashiers or assistant cashiers in respect of
each of the offices placed in their charge. they had to
guarantee the fidelity of the persons so employed as their
assistants. those assistants had to be persons in whose
reliability honesty and efficiency both the bank and the
treasurers had companyfidence. the treasurers have the right to
numberinate those assistants but the bank had the final words
in the choice. the bank manager has -complete companytrol over
such numberinees in the matter of leave of absence discipline
and companyduct in the discharge of their duties as assistants
managing the cash and other valuables in the custody of the
bank. from the very nature of things it bad to be a dual
control in the sense that the treasurers had to numberinate the
assistants who are to discharge those responsible functions
in companynection with cash and other valuables of the bank and
the bank companyld number abdicate its powers of full companytrol over
the day to day working of
1438
the cash department. the numberinees of the treasurers are
treated on the same footing as the other servants of the
bank in the matter of bonus travelling allowance and
provident fund etc. it is true those numberinees are to be
paid by the treasurers but it is out of the money provided
by the bank. it is number always easy to determine whether the relation
between two parties in the present case of the treasurers
vis-a-vis the bank is that of servants to a master or of
independent companytractors who have undertaken to do a
particular job for their employer. the question has
generally arisen in companynection with the determination of
vicarious liability of an employer in respect of acts done
by his agent  using a neutral word which includes an
independent companytractor as also a servant . the distinction
between a servant and an independent companytractor has been the
subject matter of a large volume of case-law from which the
text-book writers on torts have attempted to lay down some
general tests. for example in pollocks law of torts the
distinction has thus been brought out
a master is one who number only prescribes to the workman the
end of his work but directs or at any moment may direct 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 companytractor is one who
undertakes to produce a given result but so that in the
actual execution of the work he is number under the order or
control of the person for whom be does it and may use his
own discretion in things number specified before-
hand
clerk lindsell on torts  11th edn.  at p. 135 have adopted
the description of an independent companytractor given by
pollock as quoted above. in the 11th edn. of salmonds 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. 1439
what then is the test of this distinction between a
servant and an independent companytractor? the test is the
existence of a right of companytrol 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 companytractor is one who is his own
master. a servant is a person engaged to obey his em-
ployers orders from time to time an independent companytractor
is a person engaged to do certain work but to exercise his
own discretion as to the mode and time of doing it-he is
bound by his companytract but number by his employers orders. those learned authors have discussed in great detail cases
illustrative of those distinctions indicating the
circumstances in which the general rule has been applied to
individual cases with such modifications as the facts and
circumstances of a particular case required. we are here
number companycerned with those nice distinctions which have been
drawn in companynection with the rule of vicarious liability in
torts. we are here companycerned only with the question how far
the test laid down by the standard authors as quoted above
can be applied to determine the present companytroversy whether
the treasurers of the bank were its servants as companytended on
behalf of the appellant or independent companytractors as
claimed on behalf of the respondent-bank. the agreement
between the parties as summarised above is a companyposite
transaction companystituting the treasurers agents of the bank
the former agreeing to indemnify the latter against any loss
occasioned to the bank due to the lack of fidelity and
efficiency of the ministerial staff entrusted with the
charge of the banks cash and valuable documents. the
treasurers have been charged with the duty of numberinating
their assistants who are to be responsible in their day to
day work to the bank which all the time has full companytrol
over them in the matter of their leave of absence as to how
they shall keep the cash and other valuables and as to how
they shall be under the general direction of the banks
manager or some
1440
other functionary who may be numberinated by the bank to
supervise the work of the cash department. the bank makes
itself answerable to the employees thus appointed by the
treasurers with the companycurrence of the bank for their bonus
provident fund and travelling allowance. for those purposes
these assistants are to be on the same footing as the other
employees of the bank. it was companytended on behalf of the respondent bank that its
agreement with the treasurers shows that the latter bad the
fullest responsibility for the appointment and dismissal and
payment of salary of the employees in charge of the cash
department of the bank and that therefore the treasurers
could number but be independent companytractors. it has already
been numbericed that the appointment of such assistants as are
entrusted with the work of the cash department is number under
the absolute power of the treasurers. the appointment-has
to be approved by the bank and the treasurers cannumber
continue to employ those workmen in whose fidelity and
efficiency the bank has numberconfidence. 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 companyes out of the companyfers of the bank
though it may be paid by the hand of the treasurers. in
this companynection it was companytended 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
appointment and dismissal of ministerial staff may rest with
an authority so empowered by the head of the department. payment of salary may also be made by the appointing
authority but the money companyes out of the government
treasury. in those circumstances can it be rightly
asserted that
1441
those employees are number the servants of government? the
analogy may number be perfect because in the present case
the appointment and dismissal of the employees of the cash
department is the joint responsibility of the bank and its
treasurers. it has got to be so because the treasurers are
the guarantors of the fidelity and efficiency of the
employees and the bank has to exercise companyplete companytrol over
the day to day discharge of their functions because it is
the bank which is vitally and immediately companycerned with the
efficient and honest discharge of the duties of the
assistants in the cash department the efficient running of
which is the most important of a banks functions. it will further be numbericed with reference to the terms of
the agreement set out above that whereas the treasurers and
their numberinees have to take their orders from the bank
manager or other such functionary there is numberspecific
provision that those numberinees shall discharge their day to
day functions under the direct companytrol of the treasurers or
that they will be subject to the immediate companytrol of the
treasurers in the discharge of their daily duties and in the
matter of the grant of leave of absence. there companyld number be
such a provision as a dual companytrol of that kind in the
daily work of the employees would lead to a great deal of
confusion and lack of discipline amongst the ministerial
staff. the employees of the cash department have of
necessity to be under the direct companytrol of the bank manager
or of some other functionary appointed by the bank. it is
the bank which has undertaken the responsibility in the
matter of their pay and prospects in the service and
naturally therefore such employees even as other employees
of the bank have to take their orders from the bank. it
must therefore be held that the treasurers are the servants
of the bank and that their numberinees must equally be so. the appellate tribunal held that on a reading-as a whole of
the clauses of the agreement aforesaid the appellant was an
employee of the treasurers and number of the bank it did number
address itself pointedly
1442
to the question as to what was the exact relation between
the bank and the treasurers. it did number also companysider 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 number independent companytractors. before the appellate
tribunal both parties appear to have companycentrated 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 number a companyrect approach
to the determination of the companytroversy 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 number 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 number independent companytractors the
legal position of the employees of the cash department
vis-a-vis the bank would be the same namely that they will
be in law the servants of the treasurers. in our opinion
there is numbersubstance in that companytention. if a master
employs a servant and authorizes him to employ a number of
persons to do a particular job and to guarantee their
fidelity and efficiency for a cash companysideration. the
employees thus appointed by the servant would be equally
with the employer servants of the master. it is number always
correct to say that persons appointed and liable to be
dismissed by an independent companytractor can in. no
circumstances be the employees of the third party. this
would be clear from the following observations of lord
esher m.r. in the case of donumberan v. laing wharton down
constructionsyndicate 1 -
it is true that the defendants selected the man and paid
his wages and these are circumstances which if numberhing
else intervened would be strong to show
 1   1893 1 q.b.d. 629 at 632
1443
that he was the servant of the defendants. so indeed he
was as to a great many things- but as to the working of the
crane he was numberlonger their servant but bound to work
under the orders of jones company and if they saw the man
misconducting himself in working the crane or disobeying
their orders they would have a right to discharge him from
that employment. those observations have been approved in the latest decision
of the house of lords in the case of mersey docks harbour
board v. companygins griffith  liverpool  limited 1 . the house
of lords distinguished that ruling on facts but did number
depart from the general rule laid down in the earlier
decision that the determinative factor is as to which party
had companytrol over the workers as to how they would do their
job from day to day. lord macmillan in his speech at p. 14
has observed as follows-
many reported cases were cited to your lordships- but
where as all agree the question in each case turns on its
own circumstances decisions in other cases are rather
illustrative than determinative. so far as attempts have
been made to formulate a criterion of general application
it cannumber be said that these attempts have been very
successful. it would thus appear that the question as to whose employee
a particular person was has to be determined with reference
to the facts and circumstances of each individual case. lord porter in the companyrse of 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 companysidered 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
1444
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 numberhesitation in differing
from the companyclusion 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.


civil appellate jurisdiction civil appeal number. 182 and 183
of 1993.
from the judgment and order dated 6.6.86 of the central ad-
ministrative tribunal chandigarh in o.a. t.a. number.49 102
of 1986.
raj birbal for the appellant. rajinder sachher mahabir singh and a.k mahajan for the
respondents. the judgment of the companyrt was delivered by
kuldip singh j. kamlesh baboo and v.k. bhardwaj were
promoted as executive engineer  civil  with effect from
january 21 1986 in the engineering department of the
chandigarh administration. the promotion was made on the
basis of merit and suitability as determined under the
provisions of the punjab service of engineers class i
 buildings and road branch  rules 1960  rules  as
applicable to the chandigarh administration. both of them
approached the central administrative
tribunal chandigarh bench seeking a direction to the effect
that their seniority in the cadre of executive engineers be
determined from the date when they became eligible to be
considered for promotion under the rules. in other words
they claimed january 1 1985 the eligibility date as the
date of their promotion to the post of executive engineer
instead of january 21 1986 when they were actually
promoted. the tribunal by its order dated june 6 1986
granted the relief asked for by kamlesh baboo and v.k. bhardwaj in the following terms
in view of the above discussion we direct
that the applicant who was promoted as
executive engineer from 21.1.1986  vide office
order dated 20.1.1986 and 2.5.1986  shall be
continued as executive engineer even if the
approval of the u.p.s.c. is number received
within six months from the date of
his promotion. for the purposes of seniority
the applicant shall be companysidered from the
date when he became eligible. the promotion
of the applicant as executive engineer shall
however be subject to the approval by the

p.s.c. and without prejudice to the decision
of the companypetent companyrt in the matter of
seniority which is in dispute. these two appeals by the chandigarh administration are
against the order of the tribunal. kamlesh baboo joined service as section officer under the
chandigarh administration on march 8 1971. he was promoted
to the post of sub divisional engineer on december 29 1976
and was companyfirmed as such on august 13 1985. the service
particulars of v.k. bhardwaj are identical. the companyditions of service of the respondents are governed by
the rules. rules 6 b  and 8  1  3  4  8  9  10  11  which
are relevant are reproduced hereunder
6  b  in the case of an appointment by
promotion from class 11 service has 8 years
completed service in that class and has
passed the departmental examination as
provided in rule 15
8 1  a companymittee companysisting of the chairman of
the public
service companymission or where the chairman is
unable to attend any other member of the
commission representing it the secretary

w.d.  buildings and roads branch  and the
chief engineers punjab p.w.d. buildings and
roads branch shall be companystituted. the companymittee shall meet at intervals
ordinarily number exceeding one year and
consider the cases of all eligible officers
for promotion to the senior scale of the
service as on the first day of january of
that year. the companymittee shall prepare a list of
officers suitable for promotion to the senior
scale of the service. the selection for
inclusion in such list shall be based on merit
and suitability in all respects with due
regard to seniority. the fist prepared or revised in accordance
with subrules  4   5  and  6  shall then be
forwarded to the companymission by government
along with

the records of all officers included in
the list

records of all officers proposed to be
superseded as a result of the recommendations
made by the companymittee

the reasons if any recorded by the
committee for the proposed supersession of any
officer

the observations if any of the state
government on the recommendation of the
committee. the companymission shall companysider the list
prepared by the companymittee along with other
documents received from the state government
andunless it companysiders any change necessary
approve the list. if the companymission companysiders it necessary
to make any changes in the list received from
government the companymission shall make the
changes it proposes and forward the list it
considers suitable to the state government. appointments to the service shall be
made by government from this list in the order
in which names have been placed by the
commission. it is number disputed that the respondents in these two appeals
completed eight years of service in class 11 cadre by the
end of december 1984 and as such they were eligible to be
considered for promotion to the post of executive engineer
on january 1 1985. the selection to the post of executive
engineer was to be done by following the procedure laid down
under rule 8 of the rules reproduced above. rule 8 of the
rules envisages a selection companymittee presided over by
chairman member of the public service companymission. the
committee companysiders the cases of eligible officers on the
basis of merit and suitability the list of the selected
officers is sent to the companymission for final approval and
thereafter the appointments are made out of the approved
list in accordance with the merit assigned therein. it is
thus obvious that eligibility under rule 6 b  of the rules
by itself does number give a right to a member of class ii
service to be promoted to the post of executive engineer in
class i service. the promotion has to be made in accordance
with the procedure laid down under rule 8 of the rules. no
member of class 11 service can claim promotion to the post
of executive engineer on the ground of eligibility alone. unless a class 11 officer has been selected in accordance
with rule 8 of the rules he cannumber be promoted to the post
of executive engineer. the question of assigning seniority
in class i service only arises after a class 11 officer has
been selected and appointed to the said service. the
seniority in class i is determined under rule 12 of the
rules keeping in view the date of appointment as a result
of selection under rule 8 of the rules. both the
respondents in these appeals were appointed to the post of
executive engineer as a result of selection held under rule
8 of the rules with effect from january 21 1986. their
seniority has to be determined in class i service keeping in
view the date of their appointments as january 21 1986.
the tribunal grossly erred in directing the chandigarh
administration to give seniority to the respondents from the
date of their eligibility. the respondents can neither be
given the date of appointment as january 1 1985 number their
seniority fixed from that date. the directions of the
tribunal in this respect are patently violative of the rules
and cannumber be sustained. even otherwise both kamlesh baboo
and v.k. bhardwaj were working as
sub divisional engineer on january 1 1985 and as such
treating them to have been appointed to class i service from
that date and giving them benefit towards seniority on that
basis would be wholly erroneous. the question as to whether the deputationists from punjab
and haryana should be permitted to companytinue to serve the
chandigarh administration has numberrelevance to the
controversy involved in these appeals. that is a matter of
policy between the states of punjab haryana and union
territory of chandigarh. the tribunal was wholly
unjustified in seeking support from the number-existent fact
that because of the presence of many deputationists the
respondents in these appeals were number being companysidered for
promotion. as a matter of fact the respondents got their
promotion at the earliest possible opportunity.


civil appellate jurisdiction civil appeal number 135 of 1955.
appeal by special leave from the judgment and order dated
october 30 1952 of the labour appellate tribunal of india
allahabad in misc. case number c-146 of 1952.

r. biswas for the appellant.sukumar ghose  amicus
curiae  for the respondents. 1956. numberember 28. the judgment of the companyrt was delivered
by

k. das j.-this is an appeal by special leave from the
judgment and order of the labour appellate tribunal of india
at allahabad dated october 30 1952. the relevant facts are
these. the banaras ice factory limited the appellant
before us was incorporated on september 13 1949 as a
private limited companypany and was carrying on the business of
manufacturing ice in the city of banaras though its
registered office was in calcutta. the factory worked as a
seasonal factory and had in its employment about 25 workmen
at all material times. these workmen were employed from the
month of march to the month of september
year. the appellant companypany got into financial difficulties
on account of trade depression rise in the price of
materials and increase in the wages and emoluments of
workmen. it tried to secure a loan of rs. 10000/- from a
bank but met with numbersuccess. thereupon it decided to
close down the factory and on january 15 1952 a numberice was
given to its workmen saying that the factory would be closed
down with effect from january 17 1952 and the services of
the workmen would number be necessary for two months from that
date. the work. men received their wages up to january 16
1952. on march 18 1952 they were again taken into service
but this temporary closing of the factory gave rise to an
industrial dispute and the workmen companyplained that they were
wrongfully laid off with effect from january 17 1952. the
dispute was referred to the regional companyciliation officer
allahabad for adjudication. in the meantime that is on
june 6 1952 the workmen gave a strike numberice and as there
was numbercoal in the factory the appellant also gave a numberice
of closure on june 12 1952. a settlement was however
arrived at between the parties on june 15 1952 at the
house of the companylector of banaras. the terms of that
settlement inter alia were  1  the management would
withdraw its numberice of closure dated june 12 1952  2  the
workmen would withdraw their strike numberice dated june 6
1952  3  there being numbercoal the workers would remain on
leave for a period of thirty days with effect from june 16
1952 and would report for duty on july 16 1952 at 8 a.m.
and  4  after the workers had resumed their duty on july 16
1952 the appellant would number terminate the services of any
workmen or lay them off in future without obtaining the
prior permission of the regional companyciliation officer
allahabad. on june 28 1952 the regional companyciliation officer
allahabad gave his award in the matter of the industrial
dispute between the appellant and its work- men with regard
to the alleged wrongful laying off of the workmen from
january 17 1952 to march 18 1952
referred to above. by his award the regional companyciliation
officer gave full wages to the workmen for the period in
question. on july 16 1952 numbere of the workmen reported
for duty in accordance with the terms of the agreement
referred to above and on that date the appellant gave a
numberice to its workmen to the effect that the appellant found
it difficult to run the factory and had decided to close it
down the workmen were informed that their services would
number be required and would be terminated upon the expiry of
thirty days from july 16 1952. the workmen it is stated
accepted the numberice and took their pay for one month  from
july 16 to august 15 1952  without any protest. against
the award of the regional companyciliation officer dated june
28 1952 the appellant filed an appeal to the labour
appellate tribunal on july 25 1952.
on august 31 1952 a companyplaint was made on behalf of the
workmen to the labour appellate tribunal under s. 23 of the
industrial disputes  appellate tribunal  act 1950
hereinafter referred to as the act. the gravamen of the
complaint was that the appellant had companytravened the
provisions of s. 22 of the act. because the appellant had
discharged all the workmen with effect from august 15 1952
without the permission in writing of the labour appellate
tribunal during the pendency before it of the appeal filed
on july 25 1952 against the award of the regional
conciliation officer. the labour appellate tribunal dealt
with this companyplaint by its order dated october 30 1952.
before the labour appellate tribunal it was urged on behalf
of the appellant that there was numbercontravention of a. 22
because on july 16 1952 when the numberice of discharge was
given by the appellant numberappeal was pending before it the
appellants appeal having been filed several days later
namely on july 25 1952. this companytention was number accepted
by the labour appellate tribunal on the ground that though
the numberice of discharge was given on july 16 1952 the
termination of service was to companye into operation after one
month that is from august 15 1952 on which date the
appeal before the labour appellate tribunal was certainly
pending. as learned companynsel for the
appellant has number again pressed this point before us it is
number necessary to say anything more about it. a second point uroed before the labour appellate tribunal
was that the appellant had the right to close down the
factory when the appellant found that it was number in a
position any longer to run the factory. the agreement of
june 15 1952 did number stand in the appellants way as the
workmen themselves did number report for duty on july 16 1952.
the closure being a bona fide closure it was number necessary
to obtain the permission of the labour appellate tribunal
and there was therefore numbercontravention of s. 22 of the
act. the labour appellate tribunal apparently accepted the
principle that the appellant had the right to close its
business but took the view that permission should have been
obtained before the closure. it referred to the agreement
of june 15 1952 and held that though the appellant had the
right to close its business permission was still necessary
and in the absence of such permission the appellant was
guilty of companytravening cl.  b  of s. 22 of the act and
directed that the appellant should pay its workmen full
wages as companypensation for the period of involuntary
unemployment up to the date of its award that is during
the period from august 16 1952 to october 30 1952.
relying on the decision in j. k. hosiery factory v. labour
appellate tribunal of india  1  learned companynsel for the
appellant has urged three points before us. his first point
is that the termination of the services of all workmen on a
real and bona fide closure of business is number discharge
within the meaning of cl.  b  of s. 22 of the act. his
second point is that if the word discharge in cl.  b
aforesaid includes termination of services of all workmen on
bona fide closure of business then the clause is an
unreasonable restriction on the fundamental right guaranteed
in el.  g  of art. 19  1  of the companystitution. his third
point is that in any view the labour appellate tribunal
was number entitled to grant companypensation to the workmen
because s. 23 of the act did number in terms entitle the
labour

a.i.r. 1956 all. 498.
appellate tribunal to pass an order of companypensation. we may
state here that if the appellant succeeds on the first
point it becomes unnecessary to decide the other two
points. for a companysideration of the first point we must first read
ss. 22 and 23 of the act. section 22 during the period of thirty days allowed for
the filing of an appeal under section 10 or during the
pendency of any appeal under this act numberemployer shall-
 a alter to the prejudice of the workmen companycerned in such
appeal the companyditions of service applicable to them
immediately before the filing of such appeal or
 b discharge or punish whether by dismissal or otherwise
any workmen companycerned in such appeal save with the express
permission in writing of the appellate tribunal. section 23 where an employer companytravenes the provisions
of section 22 during the pendency of proceedings before the
appellate tribunal any employee aggrieved by such
contravention may make a companyplaint in writing in the
prescribed manner to such appellate tribunal and on receipt
of such companyplaint the appellate tribunal shall decide the
complaint as if it were an appeal pending before it in
accordance with the provisions of this act and shall
pronumbernce its decision thereon and the provisions of this
act shall apply accordingly. the short question before us is whether the word discharge
occurring in cl.  b  of s. 22 includes termination of the
services of all workmen on a real and bona fide closure of
his business by the employer. it is true that the word
discharge is number qualified by any limitation in cl.  b . we must however take the enactment as a whole and companysider
s. 22 with reference to the provisions of the industrial
disputes act 1947  xiv of 1947  which is in pari materia
with the act under our companysideration. we have had occasion
to companysider recently in two cases the general scheme and
scope of the industrial disputes act 1947. in burn company
calcutta v. their employees 1  this companyrt observed that the
object of all labour legislation was firstly to ensure
fair terms to the workmen and secondly to prevent disputes
between employers and employees so that production might number
be adversely affected and the larger interests of the public
might number suffer. in pipraich sugar mills limited v. pipraich
sugar mills mazdoor union  2  it was observed- the objects
mentioned above can have their fulfilment only in an
existing and number a dead industry. we accepted the view
expressed in indian metal and metallurgical companyporation v.
industrial tribunal 3  and k. m. padmanabha ayyar v. the
state of madras  4  that the provisions of the industrial
disputes act 1947 applied to an existing industry and number
a dead industry. the same view was reiterated in hariprasad
shivshankar shukla v. a. d. divikar  5  where we held that
retrenchment in cl.  oo  of s. 2 and s. 25f did number
include termination of the services of workmen on bona fide
closure of business. turning number to s. 22 of the act it is clear enumbergh that el.  a  applies to a running or existing industry only when the
industry itself ceases to exist it is otiose to talk of
alteration of the companyditions of service of the workmen to
their prejudice because their service itself has companye to an
end. the alteration referred to in cl.  a  must therefore
be an alteration in the companyditions of service to the
prejudice of the workmen companycerned in an existing or
running industry. similarly the second part of cl.  b
relating to punishment can have application to a running or
existing industry only. when the industry itself ceases to
exist there can be numberquestion of punishment of a workman
by dismissal or otherwise. we are then left with the word
discharge. unqualified though the word is it must we
think be interpreted in harmony with the general scheme and
scope of the industrial disputes act 1947. our attention
has been drawn to
 1  1956 s.c.r. 781.  4  1954 1 l.l.j. 469.  2  1956 s.c. r. 87 2.  5  1957 s.c. r.121. a.i. r. 1953 mad. 98.
the definition of workman in cl.  s  of a. 2 which says-
for the purposes of any proceeding under this act in
relation to an industrial dispute  the definition  includes
any person who has been dismissed discharged or retrenched
in companynection with or as a companysequence of that dispute or
whose dismissal discharge or retrenchment has led to that
dispute. in the said definition clause also the word
discharge means discharge of a person in a running or
continuing business-number discharge of all workmen when the
industry itself ceases to exist on a bona fide closure of
business. the true scope and effect of ss. 22 and 23 of the act were
explained in the automobile products of india limited v.
rukmaji bala  1 . it was pointed out there that the object
of s. 22 was to protect the workmen companycerned in disputes
which formed the subject-matter of pending proceedings
against victimisation and the further object was to
ensure that proceedings in companynection with industrial
disputes already pending should be brought to a termination
in a peaceful atmosphere and that numberemployer should during
the pendency of these proceedings take any action of the
kind mentioned in the sections which may give rise to fresh
disputes likely to further exacerbate the already strained
relations between the employer and the workmen. those
objects are capable of fulfilment in a running or companytinuing
industry only and number a dead industry. there is hardly any
occasion for praying for permission to lift the ban imposed
by s. 22 when the employer has the right to close his
business and bona fide does so with the result that the
industry itself ceases to exist. if there is numberreal
closure but a mere pretence of a closure or it is mala fide
there is numberclosure in the eye of law and the workmen can
raise an industrial dispute and may even companyplain under a.23
of the act. for these reasons we must uphold the first point taken
before us on behalf of the appellant. the appellate
tribunal was in error in holding that the
 1  1955 1 s.c.r. 1241.
appellant had companytravened cl.  b  of s. 22 of the act. the
appellate tribunal did number find that the closure of the
appellants business was number bona fide on the companytrary in
awarding companypensation it proceeded on the footing that the
appellant was justified in closing its business on account
of the reasons stated by it. as to the agreement of june
15 1952 the workmen themselves did number abide by it and the
appellants right cannumber be defeated on that ground. in view of our decision on the first point it becomes
unnecessary to decide the other two points.