WORKMEN OF NILGIRI COOP. MKT. SOCIETY LTD. versus STATE OF TAMIL NADU AND ORS.

Citation: [2004] 2 S.C.R. 159 · Decided: 05-02-2004 · Supreme Court of India · Bench: Y.K. SABHARWAL · Disposal: Dismissed

Judgment (excerpt)

_, 
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WORKMEN OF NILGIRI COOP. MKT. SOCIETY LTD. 
A 
. v. 
STATE OF TAMIL NADU AND ORS. 
FEBRUARY 5, 2004 
(Y. K. SABHARWAL ANDS. B. SINHA, JJ.] 
B 
Industrial Disputes Act, 1947-Section 2 (s)- Workme~ Determination 
of- Organisation and Control Test- Applicability of_;_ Lifting of veil-
Applicability of- Marketing yard of a cooperative society for sale of farmers' C 
produce- Porters and graders cariying on jobs at the yard- Their services 
hired directly by farmers and merchants and paid by them- Society only 
supervising the work- Held, not workmen. 
Industrial Dispute Act, 1947- Section 2 OJ- Industry-- Meaning of-· 
Farmers' cooperative societyfor marketing their produce- Services on(v to D 
. its members-- l'!atform provided to the farmers and the merchants for sale 
and purchase of agricultural produce by auction- No control on either farmer 
or merchants- Commission charged .from parties for rendering service-
Held, not an ind11st1y 
Certain small and economically weak farmers formed a Co-operative E 
Society for sale of their produce. The Society had two big marketing yards 
where produce were brought by the farmers in trucks and lorries, 
unloaded, unpacked, graded, weighed, packed into stitched gunny bags 
and auctioned. For the convenience of the farmers as well as the merchants 
(who came to the marketing yards to purchase the produce), porters and F 
graders were always available at the yards. The porters did the job of 
unloading, unpacking, stitching and loading the bags of produce whereas 
the graders performed the job of grading, weighing and packing the 
produce. It was open to the farmers as well as the merchants to get the 
work done either through their own men or to engage the services of the 
porters and graders. The farmers and the merchants paid the porters and G 
graders directly for the work done by them. The Society also made 
payment to the porters an.d workmen on behalf of farmers in case of 
financial difficulty which was reimbursed to the Society by the workmen . 
The Society charged commission for its services from its members as well 
159 
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160 
SUPREME COURT REPORTS 
[2004] 2 S.C.R. 
A as the merchants. The Society did not maintain any attendance re·gister 
of the porters and graders and no working hours were fixed or insisted. 
l-lowever, the Society gave gifts to the porters and graders during the 
festival season. 
In 1982 the porters and graders claimed permanency in service and 
B other benefits from the Society. As attempts at conciliation failed, in 1984, 
the State Government referred the dispute to the lndustria_I Tribunal. The 
Industrial Tribunal was to decide "whether the non-employment of the 
workmen referred to in the reference (was) justified''. 
C 
The Industrial Tribunal opined that there was no relationship· of 
employer and employee between the parties. The porters and graders 
thereafter filed writ petitions before the l-ligh Court, which were dismissed 
by the High Court. The Letters Patent Appeals filed by the porters and 
graders were also dismissed. 
D 
Being aggrieved, the porters and graders filed appeals before the 
E 
Court. Before the Court, the appellant, inter alia, contended that the High 
Court erred: 
(i) 
in not applying the 'organisation test'; 
(ii) in holding that the supervision and control exercised by the 
Society on the workmen were not on its own behalf but on 
behalf of its members. 
Dismissing the appeals, the Court 
HELD: I.I. Determination of the vexed questions as to whether a 
F contract is a contract of service or contract for service and whether the 
concerned employees are employees of the contractors has never been an 
easy task. It is not possible to lay down any hard and fast rule. The 
question in each case has to be answered having regard to the fact involved 
therein. No single te_st- be it control test, be it organisation or any other 
test- has been held to be the determinative factor for determining the jural 
relationship of employer and employee. 1173-F, GI 
1.2. Su1fervision and control test is the prima facie test for 
determining the relationship of employment. The nature or extent of 
control required to establish such relationship would vary from business 
H to business and, thus, cannot be given a precise definition. The nature of 
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WORKMENOFNILGIRI COOP. MKT. SOCY. LTD. v. STATE 
J6] 
business for the said purpose is also a relevant factor. The control test A 
and the organisation test are,

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