A) ABSTRACT / HEADNOTE

The case Dharangadhara Chemical Works Ltd. v. State of Saurashtra (1957) SCR 152 focuses on the critical legal issue of determining whether “Agarias” working in salt manufacturing are independent contractors or workmen under Section 2(s) of the Industrial Disputes Act, 1947. The Supreme Court meticulously analyzed the nature of employment, control, and supervision to interpret the employer-employee relationship. The Court stressed that the test for employment involves not just what work is to be done, but how it is to be done, which is vital to determine if a person is a workman. By emphasizing the practical control exercised by the employer over the working process, even when formal markers of employment like prescribed work hours were absent, the Court upheld the Tribunal’s finding that the Agarias were workmen. The decision also reinforced that pure questions of fact, once determined by the Tribunal, could not be disturbed under Articles 226 and 227 of the Constitution unless wholly unsupported by evidence.

Keywords: Industrial Disputes Act 1947, Employer-Employee Relationship, Agarias, Workmen Definition, Control and Supervision Test, Section 2(s), Article 226 Constitution of India.

B) CASE DETAILS

i) Judgement Cause Title:
Dharangadhara Chemical Works Ltd. v. State of Saurashtra

ii) Case Number:
Civil Appeal No. 85 of 1956

iii) Judgement Date:
23rd November 1956

iv) Court:
Supreme Court of India

v) Quorum:
Justices Bhagwati, Venkatarama Ayyar, S.K. Das, Govinda Menon

vi) Author:
Justice Bhagwati

vii) Citation:
(1957) SCR 152

viii) Legal Provisions Involved:

• Section 2(s) of the Industrial Disputes Act, 1947

• Article 226 of the Constitution of India

ix) Judgments Overruled by the Case (if any):
None directly overruled.

x) Case is Related to which Law Subjects:
Labour Law, Constitutional Law, Administrative Law, Industrial Relations

C) INTRODUCTION AND BACKGROUND OF JUDGEMENT

The Supreme Court addressed the pivotal query whether Agarias, engaged in salt manufacturing, were employees under the Industrial Disputes Act, 1947 [5]. The employer, Dharangadhara Chemical Works Ltd., contended that Agarias operated as independent contractors without any formal employment control. Disputes arose in 1950, leading the Government of Saurashtra to refer the matter for adjudication under Section 10 of the Act [5]. The Tribunal held Agarias to be workmen, a finding upheld by the High Court, culminating in this appeal to the Supreme Court.

D) FACTS OF THE CASE

Dharangadhara Chemical Works Ltd. leased lands for salt manufacture, employing Agarias—a class of professional labourers—to work on seasonal basis from October to June [5]. Each Agaria received a plot (patta) and an advance of ₹400 to meet initial expenses. They worked primarily with their families, independently engaging extra labour if needed. No strict work hours or muster rolls were maintained. However, supervision over quality and process remained with the employer via a Salt Superintendent [5].

Payments were made based on quantity of salt produced at a fixed rate, and final accounts were settled at season-end. Agarias had autonomy but remained subjected to quality controls throughout the production stages [5].

E) LEGAL ISSUES RAISED

i) Whether Agarias were “workmen” under Section 2(s) of the Industrial Disputes Act, 1947 [5].
ii) Whether the Industrial Tribunal’s finding could be challenged under Article 226 of the Constitution [5].

F) PETITIONER/ APPELLANT’S ARGUMENTS

i) The counsels for Petitioner / Appellant submitted that:

The Agarias operated independently, lacked prescribed working conditions, and employed their own labour without employer interference [5]. Payments were piece-based and not wage-based, suggesting absence of a traditional employment relationship. The Tribunal’s finding was challenged as erroneous and beyond jurisdiction under Article 226 [5].

Appellants relied on distinctions between “contract for service” and “contract of service” as laid down in Performing Right Society Ltd. v. Mitchell and Booker (1924) 1 KB 762 and Stevenson, Jordan and Harrison Ltd. v. Macdonald and Evans (1952) 1 TLR 101 [5].

G) RESPONDENT’S ARGUMENTS

i) The counsels for Respondent submitted that:

The respondents argued the employer retained essential control over quality, process, and final product through supervision [5]. They highlighted precedents like Mersey Docks and Harbour Board v. Coggins and Griffith (Liverpool) Ltd. (1947) AC 1 which emphasized control over the “manner of work” as critical [5].

Further, they contended the Industrial Tribunal’s factual finding was binding and could not be disturbed unless unsupported by evidence, citing Ebrahim Aboobakar v. Custodian General of Evacuee Property (1952) SCR 696 [5].

H) RELATED LEGAL PROVISIONS

i) Industrial Disputes Act, 1947, Section 2(s) (Link)
Defines “workman” to include anyone employed in industry for hire or reward.

ii) Constitution of India, Article 226 (Link)
Grants High Courts the power to issue writs for enforcement of fundamental rights and for other purposes.

I) JUDGEMENT

a. RATIO DECIDENDI

i) The Supreme Court held that employment exists when the employer not only specifies the work but supervises the manner of its execution [5]. Even in absence of strict control over daily activities, overarching supervision sufficed to establish an employer-employee relationship [5].

They observed that payment by piece-work does not negate workman status, citing Sadler v. Henlock (1855) 4 El. & Bl. 570 and Blake v. Thirst (1863) 32 LJ Ex 188 [5].

Similarly, engaging helpers did not alter Agarias’ workman status, supported by Grainger v. Aynsley (1881) 6 QBD 182 and Weaver v. Floyd (1855) 21 LJ QB 151 [5].

The finding of fact by Industrial Tribunal was upheld as there was ample evidence to support it [5].

b. OBITER DICTA 

i) The Court noted that even though practical difficulties might arise applying standard industrial rules to Agarias, it would not change their status as workmen [5].

c. GUIDELINES 

i) Existence of employer’s control over production and quality standards defines employment [5].

ii) Payment on piece-rate basis does not imply independent contractor status [5].

iii) Employment relationship does not terminate by right to hire assistants [5].

iv) Industrial Tribunal’s factual findings are binding unless wholly unsupported by evidence [5].

v) Complexities or practical difficulties in regulating employment terms do not alter employee status [5].

J) CONCLUSION & COMMENTS

The case strengthens the broader interpretation of “workmen” under labour law and ensures worker protection despite flexible employment arrangements. It prioritizes practical realities over formalistic criteria, adopting a pro-worker stance consistent with constitutional aims under Article 39 of the Constitution. The emphasis on employer’s right of supervision rather than daily management marks a significant shift towards a purposive interpretation of employment in industrial jurisprudence [5].

K) REFERENCES

1. Dharangadhara Chemical Works Ltd. v. State of Saurashtra, (1957) SCR 152 [Supreme Court of India].

2. Mersey Docks and Harbour Board v. Coggins & Griffith (Liverpool) Ltd., (1947) AC 1.

3. Simmons v. Heath Laundry Company, (1910) 1 KB 543.

4. Ebrahim Aboobakar v. Custodian General of Evacuee Property, (1952) SCR 696.

5. Sadler v. Henlock, (1855) 4 El. & Bl. 570; 119 ER 209.

6. Blake v. Thirst, (1863) 32 LJ (Exchequer) 188.

7. Grainger v. Aynsley: Bromley v. Tams, (1881) 6 QBD 182.

8. Weaver v. Floyd, (1855) 21 LJ QB 151.

9. Whitely v. Armitage, (1864) 16 WR 144.

10. Performing Right Society Ltd. v. Mitchell and Booker (Palais de Danse), (1924) 1 KB 762.

11. Stevenson, Jordan and Harrison Ltd. v. Macdonald and Evans, (1952) 1 TLR 101.