T. PREM SAGAR versus THE STANDARD VACUUM OIL COMPANY MADRAS AND OTHERS

Citation: [1964] 5 S.C.R. 1030 · Decided: 16-12-1963 · Supreme Court of India · Bench: P.B. GAJENDRAGADKAR · Disposal: Appeal(s) allowed

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Judgment (excerpt)

}Jl6J 
. December 16 
1030 
THE 
SUPREME COVRT REPORTS 
T. PREM SAGAR 
v • 
[1964) 
STANDARD VACUUM OIL COMPANY 
MADRAS AND OJHERS 
(P.B. 
GAJENDRAGADKAR 
AND 
K.C. 
DAS 
GUPTA 
JJ.) 
Madras Shops and Establishments Act (36 ofl947), ss.4(1)(a) 
and SI-Position of management-What is practice-Writ of 
certiorari-Issue of-High 
Court-Jurisdictkm 
to 
decide on 
facts.· 
The appellant was appointed by respondent as Road Engineer. 
After some time, he was promoted as Operations Assistant. I 
There was 
some misunderstanding between 
him and the' 
respondent in 1957. While he was drawing Rs. 1000 p.m., ""'! 
he was asked to .take leave. When .he reported for duty, he was 
'-
riot allowed to join duty as Operations Assistant but was asked 
to· take up the post of the Senior Operations Supervisor carrying 
a salary of Rs. 900. As he refused .to take up the new post, his 
services were . terminated without complying with the provisions 
of Section 41(1). He filed an appeal before the Additional Com-
missioner under s. 41 of the Madras Shops & Establishments Act, 
1947. His contenti.on was that the order terminating his services 
i:_, 
was invalid. The contention of the respondent was that the 
Additional Commissioner had no jurisdiction to deal with the 
appeal as the appellant was a person employed in a position of 
management and hence the provisions of the Act were not applicable 
to him. Under Section 51 of the Act, the Commissioner of Labour 
decided that the appelh1nt was not employed under the respondent 
in a position of management. The respondent filed a writ petition 
in ·the Madras High .Court challenging the order of the Commis-
~foner of Labour. 
When the case was taken·up by the Additional Commissioner, 
the respondent contended that the appellant was an employer 
as defined in the Act and not an employee. That contention was 
rejected by the Additional Commissioner who also set aside the 
order of tern1ination of services of appellant. The respondent 
filed a wri.t·.petitioµ challenging the order of the Additional Com-
missioner. 
The two writ petitions were heard together by a Single 
Judge of the Madras High Conrt and were dismissed on the ground 
that the question involved was one of fact. However, Letters 
Patent Appeals were accepted by the Division Bench of the Madras 
High Court. It is against the order of the Division Bench that the 
appellant came to this Court after obtaining a certificate from the 
~i_gh Court. Allowing the Appeals, 
·-
( 
,, 
·~ 
5 S.C.R. 
SlJPREME COURT REPORTS 
1031 
Held 
(i) The High Court was not right in coming to the 
conclusion that the impugned order suffered from any error of 
law which was apparent on the face of the record and there was 
no justification for interfering with that order. 
The order of 
the Commissioner was an elaborate and well considered order. 
The Commissioner had taken into account the oral and documen-
tary evidence and had already examined the probabilities of the 
case. He had laid down certain tests to determine as to whether a 
person was in a position of management and also applied them to 
the facts of the case. 
(ii) The appellant was not employed in a position of manage-
ment and as such did not fall within the exemption of s. 4(1) (a). 
In order to determine whether a person is in a position of 
management or not, the factors to be considered are whether the 
person had power to operate on the Bank account, whether he 
could make payments to third parties and enter into agreements with 
them on behalf of the employer, whether he was entitled to 
represent the employer to the world at large in regard to the dealings 
of the employer with strangers, whether he had authority to supervise 
the work of the clerks employed in the establishment, whether he 
had control and charge of the correspondence, whether he could 
make commitments on behalf of the employer, whether he could 
grant leave to the members of the staff and hold disciplinary procee-
dings against them and whether he had the power to appoint members 
of the staff or punish them. The salary drawn by an employee 
may have no significance and may not be material though it may 
be treated theoretically as a relevant factor. 
(iii) It could not be maintained that because s. SI provided 
that the 'order of Commissioner of Labour on the questions falling 
within his jurisdiction was final and could not be agitated in any 
court of law, High Court was not competent to deal with the writ 
pe

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