HUSSAINBHAI, CALICUT versus ALATH FACTORY THOZHILALI UNION, KOZHIKODE AND ORS.

Citation: [1978] 3 S.C.R. 1073 · Decided: 28-07-1978 · Supreme Court of India · Bench: V.R. KRISHNA IYER · Disposal: Dismissed

Cited by 3 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

HUSSAINBHAI, CALICUT 
)'. 
ALATH FACTORY THOZHILALI UNION, 
KOZHIKODE AND ORS. 
July, 28, 1978 
1073 
[V. R. KRISHNA IYER, D. A. DESAI AND 0. CHINNAPPA REDDY, JJ.] 
Employee in labour law, concept of-Whether includes a person hired by 
an independent labour contractor for creating l'inculum ;uris. 
The petitioner a factory owner, manufacturing ropes had entered into agree-
ments with intermediate contractors who had hired the 
respondent union'11 
·work.men. Jn an industrial dispute raised by the respondent union the petitioner 
contended that no direct employer-employee vinculu1n iuris existed between 
,,him and the workmen. However, the Tribunal gave an award in favour of the 
_..,rorkn1e11 which was affirmed by both the single Judge as \\'ell as a Division 
Bench of the Kera1a High Court. 
Dismissing the special leave the Court, 
HELD : 1. Where a 1Norker or a group of 'A'orkers labour to produce goods 
or services and these goods or services are for the business of another, that 
other is in fact the employer. He has economic control over the workers' sub-
sistence, skill, and continued employment. If be, for any reason, chokes off the 
worker is, virtually, laid off. 
The presence of intermediate contractors 
with 
'A1hom alone the workers have immediate or direct relationship ex-contractu is 
of no consequence when, on lifting the veil or looking at the conspectus of 
factors governing employment, Courts discern the naked truth, though draped in 
different perfect paper arrangement. that the real employer is the management, 
not the in1mediate contractor. 
[1075 C-D] 
If the livelihood of th,e workmen substantialy depends on labour rendered to 
produce goods and services for the benefit and satisfaction of an enterprise, the 
absence of direct relationship or the presence of dubious intermediaries or the 
make-believe trappings of Qetachment from the Management cannot snap the 
real-life bond. 
The story may vary but the inference defies ingenuity. 
The 
liability cannot be shaken off. 
Of course, if there is total dissociation in fact 
between the disowning management and the aggrieved workmen, the employ-
ment is, in substance and in real-life terms, by another. 
The Management's 
adventitious conn.ections cannot ripea into real employment. 
[1075 E-F-G] 
2. The source and strength of the industrial branch of Third World Joris-
prudence is socia_l justice proclaimed in the Preamble to the 
Constitution. 
The Court must be astute to ,avoid the mischief and achieve the purpose of the 
law and not be misled by th6 maya of legal appearance when myriad devices 
are resorted to when labour legislation casts welfare obligations on the real 
employer based on Articles 38, 39, 42, 43 and 43A of the Constitution. The 
contention of the petitioner as to the 
non-existence of the 
vinculum juris 
between the respondent and himself is if at all impeccable only in laissez faire 
economics 'red in tooth and claw' and under the Contract Act rooted in English 
common Jaw as the human gap of a century yawns between this strict doctrine 
and the industrial jurisprudence of today. [1074 G-H, 1075 D·E] 
CIVIL 
APPELLATE 
JURISDICTION: 
(Civil) No. 1853 of 1978. · 
Special Leave 
Petition 
From the Judgment and Order dated 30-6-.1977 of the Kerala 
High Court in Writ Appeal No. 142/77. 
A 
B 
c 
D· 
E 
F 
G 
H 
A 
8 
c 
D 
E 
F 
G 
H 
1074 
S\ll'J(EME COURT REPORTS 
[1978] 3 s.c.R. 
N. Sudhakaran for the Petitioner. 
The Order of the Court was delivered by 
KRISHNA IYER, J.-The petitioner before us in this special leave 
petition is a factory owner manufacturing ropes. 
A 
number 
of 
workmen were engaged to make ropes from within the factory, but 
those workmen, according to the petitioner, were hired by contrac-
tors who had executed agreements with the petitioner to get such 
work done. 
Therefore, the petitioner contended that the workmen 
were not his workmen but the contractors' workmen. 
The industrial 
award, made on a reference by the State Government, was attacked 
on this ground. 
The learned single Judge of the High Court, in an 
elaborate judgment, rightly held that the petitioner was the employer 
and the members of the respondent-Union were employees under the 
petitioner. 
A division Bench upheld this stand and the petitioner 
has sought special leave from th.is Court. 
It is not in dispute that 29 workmen were denied employment 
which led to the reference. 
It is not in dispute that the work done 
by these workmen

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