MANAGEMENT OF M/S. PURI URBAN COOPERATIVE BANK versus MADHUSUDAN SAHU AND ANR.

Citation: [1992] 2 S.C.R. 977 · Decided: 29-04-1992 · Supreme Court of India · Bench: L.M. SHARMA · Disposal: Appeal(s) allowed

Judgment (excerpt)

MANAGEMENT OF MIS. PURI URBAN COOPERATIVE BANK 
A 
v. 
MADHUSUDAN SAHU AND ANR. 
APRIL 29, 1992 
)... 
[LAUT MOHAN SHARMA AND MADAN MOHAN PUNCHHI, JJ.] B 
Industrial Disputes Act, 1947: 
="""'-
Section 2(s)--Appraiser engaged by Bank for weighing and testing gold 
l 
ornaments brought to Bank for pledging-Remuneration 011 commission c 
basis-No relationship of master and servant-Whether a workman. 
).., 
The respondent was engaged as an appraiser by appellant bank, for 
weighing and testing, gold ornaments offered to be pledged to the appel-
lant-Bank to secure loans, whenever required on commission basis. His D 
services were terminable at any time. After about one year and seven 
months the appellant Bank terminated his services. On a reference from 
the Government, at the instance of the respondent, the Labour Court set 
aside the termination order, holding it as illegal and unjustified and 
ordered his reinstatement in service. However, it held that he was not 
entitled to back wages since those were not capable of a precise computa-
E 
-t 
tion and involved an ·element of speculation. 
On appeal by both the appellant-Bank as well as the respondent, the 
High Court affirmed the view of the Labour Court. 
In the appeal before this Court on behalf of the appellant-Bank, it F 
was contended that though the appellant might be a workman as common-
ly understood. unless there was a jural. relationship of master and servant 
~~· between the respondent and the Bank, he could not be termed as a 
workman, for the purposes of the Industrial Disputes Act, 1947. 
Allowing the appeal, this Court, 
G 
HELD : 1.1. Though the respondent claims to be a workman as com-
).-
monly understood, be was not 'employed' as such, so as to establish a mas-
ter and servant relationship, which could warrant a re~union in the event 
of disruption, by. the intervention of the Labour Court. (980 H, 981 A) 
H 
977 
978 
SUPREME COURT REPORTS 
(1992} 2 S.C.R. 
A 
1.2. Engaging the respondent was to require him to weigh the oma· 
~ 
ments, brought in the Bank for pledging and to appraise their quality, 
purity and value. He could be directed to do this, but not the manner in 
which be shall do it. That was left to him exclusively, as it depended on bis 
skill, technique and experience. Besides, under the terms or engagement 
B 
be was required to, and be did, execute a bond indemnifying and holding 
himself responsible to the Bank for all his acts and commissions as an 
....( 
appraiser, and be accountable for the loss sustained by the Bank on 
account or under-valuation or the gold pledged with it. These terms inhered 
in the Bank the power to warn him and to remind him that he. was not 
expected to be negligent in his duty. Still there was a fair element of 
......... 
c freedom though coupled with responsibility for the respondent in the 
manner in which he could do his work. (980 F·G] 
...,.. 
1.3. It is also an uncontroverted position that the respondent was a 
~ 
reputed goldsmith and had remained gainfully employed so as to disentitle 
D 
him any back wages and that the Bank has, on its approved list, other such 
like appraisers and it was not obligatory for the Bank to allot work to the 
~spondent or any other, at all. Additionally, in no event can he ask for 
work, or periodic remuneration or idling wages. These particulars, not by 
thems~lves, but in the totality of circumstance indicate lack of master and 
servant relationship. (981 BJ . 
E 
1.4. In the circumstances, the courts below were wrong in holding 
...,._ 
that any master and servant relationship stood established in engaging the 
respondent as an appraiser or ornaments. (981 CJ 
D.C. Works Ltd. v. State of Saurashtra, AIR 1957 SC 264 and Chin· 
-
F 
taman Rao v. State of-M.P., AIR 1958 SC 388, referred to. 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1813 of 
1992. 
-r/-
From the Judgment and Order dated 14.3.1991 of the Orissa High 
G Court in O.JC No. 1483 of 1985. 
Narasing Murthy, Kirti Mishra and Sanjib Das for the Appellant. 
The Judgment of the Court was delivered by 
H 
'PUNCHHI, J. In this matter challenge has been made to the jtidg· 
PURI CO-OP. BANK v. M. SAHU [PUNCHHI, J.) 
979 
~ 
ment and order dated 14.3.1991 of the Orissa High Court passed in OJC A 
No. 1483 of 1985. Notice was issued to Madhusudan Sahu, respondent, the 
.. 
person concerned, indicating that the matter shall be disposed of at the 
notice stage. Despite presumptive service, no one appeared on 

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