T. DEVADASAN versus M/S. GORDON WOODROFFE & CO. (MADRAS) PRIVATE LTD. & ANR.

Citation: [1973] 1 S.C.R. 213 · Decided: 18-04-1972 · Supreme Court of India · Bench: C.A. VAIDYIALINGAM · Disposal: Appeal(s) allowed

Judgment (excerpt)

• 
213 
T. DEV ADASAN 
v . 
M/S. GORDON WOODROFFE & CO. (MADRAS) PRIVATE 
LTD. & ANR. 
April 18, 1972 
B 
(C. A. VAIDIALINGAM, 
P. JAGANMOHAN REDDY AND 
c 
D 
E 
F 
G 
H 
K. K. MATHEW, JJ.] 
Workmen's Compensation Act-S.41 (2)-Scope of-Whether the em· 
ployee in question was a person employed within the meaning of the 
Madras Shops and Establishments Act 1947. 
The appellant was appointed by Respondent No. 1, a Madras Company, 
which was the holding compa&y of another, a subsidiary, known as the 
Pallavaram company. 
After 2 years, the holding company revised the terms of engagement 
ol the appellant relating to basic salary, D.A. and Bonus, all other terms 
of service remalning unaltered. 
The appellant was given training in the 
Madras Company for 2 months and later, he was asked to go to Palla-
varam Company and. work there, which the appellant did. 
His salary 
was paid by the Madras Company; but by an agreement between the two 
companies, his salary was debited to the 
Pallavaram Company. 
The 
appellant worked till 1966 when his services 
were terminated by the 
holding company. 
The appellent. therefore, filed an appeal before the Additional Com· 
missioner for Workn1cn's Compensation under S.41(2) of the Workmen's 
Compensation Act. 
The respon~ent raised the objection by saying that 
since the appellant was a person wh011y or prinoipally employed by the 
Pallavaram Company, •he appellant was not a "person employed" within 
the meaning of the Madras Shops and Establishments A~t, 1947 and there-
fore, the provisions of the said Act would not be applicable to him. Tho 
main question for decision was whether the appellant was an employee of 
the holding company or of the subsidiary company. 
Allowing th~ appeal, 
HELD : On the facts and circumstances of the case, the Pallavaram 
Company is not the employee of the appellant. All relevant facts . point 
to the conclusion that the employer is the Madras Company. It was this 
company that appointed the appellant.. The appointment order shows that 
he was appointed as an Assistant in that Company. 
The ter1ns of the 
order further show that apart from the salary set out there, on w.hich he 
was appointed, he was to receive dearness allowances at the rate of 35 
per cent of the basic salary, or such other rate as the Board of. that com-
pany may decide from time to time. He has to become a member of the 
Provident Fund to which both he and Madras Company have to 
sub-
scribe. 
Annual bonus was to be calculated in the same manner as the 
annual bonus payable to other assistance of the company. His service can 
only be terminated ·by the Madras Company an<! the income-tax dedue· 
tions were also made by the Madras company. 
All these facts 
clearly 
show that the a,ppellant was an employee of the Madras Company and 
not Pallavaram Company, where the company directed tho appellant to 
work and the appellant was under an obligation to work wherever 
the 
company directs. him to work. [220GJ 
214 
SUPREME COURT REPORTS 
[1973] l S.C.R. 
The Salem Sri Ramaswami Bank Ltd. v. The Additional Commissioner 
for Workmeri's Compensation, Chepauk, Madras and another, 
.~1956) 2 
M.L.J. 254, T. P. Chandra y. The Commissioner for Workmen's Com-
pensation, Madras and Another, A.I.R. 1957 Vol. 44 p. 668 ancl T. Prem 
Sagar v. The. Standard Vacuum Oil Company Mtiaras and Others, [1964] 
5 S.C.R. I 030, discussed and distinguished . 
. CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 1421 
and 1422 of 1968. 
Appeals by special leave from the order dated J~nuary 18, 1968 
of the Additional Commissioner for workmen's compensation, 
Madras in M.S.E. Case No. 131of1966, and from the Order dated 
the 9th January, 1968 of the Commissioner of Labour, Madras in 
A 
B 
No. C2. 13897 of 1967 respectively. 
c 
0. P. Malhotra, Sat Pal and Ashok Grqyer, for the appellant 
(in both the appeals) . 
M. Natesan and D. N. Gupta, for respondent No. 1 (in both 
the appeals) . 
The Judgment of the Collrt was delivered by 
P. Jagamnohan Reddy, J.-These appeals are by special 
leave in which the question which falls for consideratiOI). is 
whether the appellant is a person employed :within the meaning of 
section 2 ( 12) (iii) of the Madras Shops & Establishments Act, 
1947 (Madras Act No. XXXVI of 1947) (hereinafter called 'the 
Act'). The first respondent, a private limited company, (herein-
after termed as 'the holding company' or the 'Madras company'), 
having been empowered by the Memorandum of Associati

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