JUDGMENT N.V. Dabholkar, J.
1. The two criminal applications challenge the order regarding issuance of process against the respective petitioners as also the prosecutions by which they are prosecuted for contravention of Section 7 of the Contract Labour (Regulation and Abolition) Act, 1970 (for the sake of brevity, hereinafter, referred to as the said Act). Since the prosecutions are challenged by common grounds, the applications are being heard together by mutual consent.
2. The petitioner in Application No. 627 of 1993 is Principal of College of Agricultural Banking, Pune (hereinafter, referred to as "C.A.B." for the sake of brevity), which is run by Reserve Bank of India for conducting the residential training programmes to its officers. The Labour Enforcement Officer (Central) on 2.1.1992 carried out the inspection of the said college and found that contract labours were engaged. 31 for catering establishment, 17 for watch-n-ward and cleaning and 9 for gardening. Show cause notice dated 12.1.1992 accompanied by inspection report served on the petitioner was replied vide communication dated 24.1.1992. Having found the reply that provisions of the Act are not applicable to be unsatisfactory. Criminal Case No. 901 of 1992 is filed against the petitioner in the Court of Judicial Magistrate (First Class), Shivaji Nagar, Pune.
The Reserve Bank of India and its Manager, who are petitioners in Criminal Application No. 3089 of 1993 are prosecuted by the Labour Enforcement Officer, vide Criminal Case No. 187 of 1993 registered in the Court of 13th Metropolitan Magistrate, Bhoiwada, Dadar, Bombay for having engaged 38 contract labourers, in its canteen at Central Office Building. This was pursuant to the inspection dated 5.3.1993 followed by the show cause notice dated 8.3.1993.
3. Both the applications, while praying to quash the proceedings, invite this Court to invoke its supervisory jurisdiction under Article 227 of the Constitution of India as also inherent powers as conferred by Section 482 of the Code of Criminal Procedure. Both the lawyers have, therefore, relied upon number of cases, laying down the guidelines in such matters.
In State of Haryana v. Bhajanlal, the Honourable Apex Court has laid down certain categories of cases, by way of illustrations, wherein the High Court may exercise its powers under Article 226 or Section 482 of the Code, either to prevent the abuse of process of any Court or otherwise to secure the ends of justice. However, it is also clarified that, it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guidelines or rigid formulae, wherein such power should be exercised. The Apex Court has also cautioned that the power should be exercised sparingly and that too in the rarest of the rare cases.
In view of the pleadings in the two applications, the petitioners appear to contend that the provisions of the said Act are not at all applicable to them. We are concerned with the following guidelines prescribed by the Honourable Apex Court :
1. Where the allegations made in the first information report or the complaint even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused.
2. .....
3. Where uncontroverted allegations made in the first information report or complaint and the evidence collected in support of the same do not disclose the commission of any offence-and make out a case against the accused.
4. .....
5. .....
6. Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party."
As can be seen from the penal provisions incorporated in Sections 23 and 24 of the Act which are the only penal provisions; the maximum punishment that can be awarded extends to three months.
Consequently the cases would ordinarily be tried by the procedure prescribed, for trial of summons cases by a Magistrate, in Chapter XX of the Code of Criminal Procedure, which Chapter does not contain a provision analogous to Sections 227 and 245 as incorporated in Chapters XVIII and XIX of the Code for trial before the Court of Sessions and trial of warrant cases by Magistrates. Therefore, there is no question of refusing to entertain the petition on the ground that the appellants should approach the Magistrate for their discharge, as was done by the High Court in M/s Pepsi Foods Limited v. Special Judicial Magistrate,.
In Municipal Corporation of Delhi u. Ramkisan Rohatgi and Ors., it is held that if a complaint, ex-facie makes out no offence, proceedings can be quashed at initial stages. It also lays down that, if the complaint suffers from fundamental defects, such as want of sanction or absence of complaint by legally Competent Authority, the order issuing process can be quashed.
In Triloksingh and Ors. v. Satyadeo Treepathi, the Honourable Apex Court was pleased to quash the criminal proceeding, because it was the bona fide civil dispute.
In Madhaurao Scindia v. Sambhajirao Angre, the Honourable Apex Court, apart from referring the well settled legal position, that when a prosecution at the initial stage is sought be quashed, the test to be applied is whether uncontroverted allegations prima facie establish the offence, also added as follows :-
"It is also for the Court to take into consideration any special features, which appear in a particular case, to consider whether it is expedient and in the interest of justice to permit the prosecution to continue..."
The basis for such observation was that, the Court cannot be utilised for any oblique purpose.
In K. M. Mathew v. State of Kerala, it was observed that, if there is no allegation in the complaint, involving the accused in the commission of crime, the Magistrate has no jurisdiction to proceed against him.
Respondent relies upon the guidelines laid down in Bhajanlal's case and also Rupan Deol v. K. P. Gill, which followed those guidelines - State of Maharashtra v. Ishwar Pirajee, and State of Bihar v. Rqjendra Agrawal, by relying upon Rupan Deol's case, have in turn followed the guidelines in Bhajanlal's case.
State of U. P. v. O. P. Sharma, cautions the High Courts to be loath in interfering at threshold to thwart the prosecution exercising its inherent power under Section 428 or under Articles 226 and 227 of the Constitution.
State of H. P. v. Pirthi Chand and Anr., and Hareram Satpathy v. Tikaram, lay down that High Court should not weigh the pros and cons of the prosecution case and cannot launch on a detailed and meticulous examination of the case on merits.
By referring to Section 2(a)(1) and 2(bb) of Industrial Disputes Act, 1947 read with Section 2(1)(a)(i) of Contract Labour (R & A) Act, 1970, learned Advocate for the applicants submitted that R.B.I, being Banking Company, Central Government would be the appropriate Government under both the Statutes. This position is not disputed by Special Counsel Shri Satpute, for the respondents.
It appears that in the cause title of the complaints "State", represented through the respective Labour Enforcement Officer, is shown as complainant. Reference to appropriate Government by learned Counsel for petitioner was aimed at an argument that the complainants being officers of the State [not of the Union (Central)], they cannot be the Inspectors as contemplated under Section 26 of the Act. Section 28, requires the appropriate Government to appoint the Inspectors for the purpose of this Act by notification in the Official Gazette. If the complainants are not "Inspectors" appointed by the appropriate Government, which is Central Government for R.B.I., the complaints could not be said to have been filed by Competent Authority.
However, since it is pointed out that the original complainants/respondents are Labour Enforcement Officers appointed by the Central Government and are also notified to be the Inspectors for the purposes of the Act, such an argument was not developed further.
4. Learned Counsel Shri Cama has referred to Section 26 of the Act, which reads as follows :-
"26. Cognizance of offences.- No Court shall take cognizance of an offence punishable under this Act except on a complaint made by, or with the previous sanction in writing of the inspector ....."
Referring to the designation of complainant, as stated at the end of each complaints, it was argued that the complaints are neither by an "Inspector" nor "with the previous sanction in writing of the Inspector", and as such no cognizance could have been taken, either by the Judicial Magistrate, Pune or by the Metropolitan Magistrate at Bombay.
The complaint which is subject matter of Criminal Application No. 627/ 1993 is signed by one Govlndram, with his designation below the signature as "Labour Enforcement Officer (Central), Pune and complainant and Inspector under the Contract Labour (R & A) Act, 1970."
The complaint in the Second Application is signed by one M. R. Bhavsar, designating himself as "Labour Enforcement Officer (Central) Bombay and complainant under the Act."
On this aspect, Special Counsel for respondents, Shri Satpute, has drawn attention of the Court to following contents in the respective complaints.
"Shri Govindram Labour Enforcement Officer (Central), who is declared as an Inspector under the Act vide Government Notification S-16025/11/82 - In (II) dated 11.6.1982 (S. O. No. 2303) had inspected the establishment ....."
AND "All the Labour Enforcement Officers (Central) Board are declared as an Inspector vide Gazette Notice No. S. O. 2303 dated 25.8.1992."
Thus, the respondents claim that they are the Inspectors for the purposes of the Act by virtue of declaration by Government notification. Consequently, they claim prosecutions to be the competent complainants.
Section 26 of the Act requires a complaint to be filed by an Inspector and only with the previous sanction in writing, of the Inspector, in case the complainant is not an Inspector himself. Since the complaints are filed by the Inspectors, there is no question of requirement of any sanction-The complaints therefore, do contain the details, which indicate that the prosecution is launched by authority competent to prosecute, under the provisions of the Act.
An exception is raised against the prosecution referred in Application No. 3089 of 1993, because the inspection dated 5.3.1993 and the inspection report, which is foundation of this prosecution, was by Labour Enforcement Officer (Central), Sangli.
Referring to Section 28(1) of the Act, it is evident that the appropriate Government not only notifies the appointment of Inspectors for the purposes of this Act. but also defines their territorial jurisdiction/local limits within which they are to exercise their powers under this Act, as indicated by sub-section (2) of Section 28 by such a notification.
Advocate Shri Satpute tried to meet this ground by pointing out that the prosecution is not launched by Inspector at Sangli, although it is launched on the basis of his observations. He also stated that there was crash inspection programme arranged, under which Sangli Officer concerned carried out the inspection. According to Shri Salpute, such an argument regarding territorial jurisdiction of the prosecuting agency could not be raised as a defence before the Trial Court.
On 15.2.2001, Special Counsel Shri Satpute by requesting to take the matter on Board, after securing presence of his counterpart Shri Munshi, Advocate has filed notification dated 30.11.1987 issued by the Director General (Labour Welfare), Joint Secretary to the Government of India. This is, a notification issued by the Government in exercise of powers conferred upon it by Section 28(1) of the Act. The officers in column No. 1 of the schedule are declared to be the Inspectors and empowered to exercise the powers conferred upon the Inspectors by or under the Act. The territorial jurisdiction of these Inspectors is specified in column No. 2. It appears that all Labour Enforcement Officers (Central) are appointed as Inspectors having territorial jurisdiction over the whole of India. The notification having conferred territorial jurisdiction to all Labour Enforcement Officers to carry out inspections etc. over whole of India, the objection if any, of the petitioners to inspection of Reserve Bank of India Canteen by Labour Enforcement Officer, Sangli would be unsustainable. The copy of the notification is marked Exhibit "X" for identification and taken on record.
5. By relying upon the case in Transport Corporation of India Limited and Ors. V. R. M. Gandhi, Regional Provident Fund Commissionero/Maharashtra, it is contended that the officers like the Principal in the first case and Manager in the second case, ought not to have been impleaded as accused persons. It was also added that there are posts like Vice-Principal and Registrar in the C.A.B. and other Administrative Officers in the Reserve Bank of India. Therefore, unless the complaint incorporates the details showing that these individuals recited as accused persons exercising administrative control, prosecution against them cannot be maintained.
In the case relied upon by the learned Counsel for the petitioners, petitioner (accused) was a Limited Company and other accused persons, who were petitioner Nos. 2 to 8 and 10 to 13 were its Directors. It was averred in the complaint that accused Nos. 2 to 14 were the persons in charge of the said establishment and were thus responsible for complying with all the provisions of the Employee's Provident Fund and Miscellaneous Provisions Act, 1952.
It was held that, it was not enough to make a bald allegation in the complaint by reproducing the language of the section to attract the provisions of Section 14(A)(2) of the Act. It would be futile to vaguely aver in the complaint that all the Directors named in the complaint were in charge of the establishment and were responsible for conduct of the business. The complaint was, therefore, quashed as against the petitioner Nos. 2 to 14.
While dealing with the case under Employee's Provident Funds Miscellaneous Provisions Act, 1952, the Court was concerned with Section 14-A. On comparison of the text of the said section with analogous provisions contained in Section 25 of the C. L. (R & A) Act, 1970, there cannot be two opinions that the provisions are pari materia.
Advocate Shri Satpute, learned Special Counsel, tried to seek assistance from the observations in case of Municipal Corporation of Delhi v. Ramkishan Rohatgi and Ors.,. This was a complaint against the Manager and Directors of the manufacturing Company for an offence punishable under Section 7 read with Section 16 of the Food Adulteration Act, presuming that accused were in charge and responsible for conduct of the business of Company.
It was held that prima facie offence was made out against the Manager, in view of the very nature of his office and functions, but the complaint was vague as against the Directors and no offence was revealed against them. The Honourable Apex Court observed that the High Court was justified in quashing the proceedings against the Directors but erred in doing so against the Manager.
While drawing support by observations in either of these two cases, it must be borne in mind that, in both reported matters, offences were by the Companies, in contradistinction with the case before us, wherein office or the department of the Government is prosecuted. Reliance by learned Counsel on the observations in Vehicle Research Laboratory v. K. G. Sharma, are therefore, futile. The reported case considered whether the Laboratory was the industry within the scope of Section 2(j) of the Industrial Disputes Act. In the impugned prosecution, petitioners are not prosecuted as an industry but as a Government Department/Office and therefore, being the establishment under the Act.
Referring to the provisions of Contract Labour Act, 1970 and especially the definition of "establishment", as contained in Section 2(1)(a), it can be seen that the establishments are categorised in two sub-clauses. Government Offices and Departments as also local authorities are in the first group, whereas, the places, wherein industry, trade, business, manufacture or occupation is being carried on are in the second category. If at all the Companies in the reported cases relied upon by both the lawyers are to be considered, in the light of definition of "establishment" in this Act, those would fall in the second category, whereas the petitioners are in the first category.
The petitioners are prosecuted for contravention of Section 7 and opening part of the said section, which is relevant for our purpose reads as follows :-
"7. Registration of certain establishments .- (1) Every principal employer of an establishment to which this Act applies shall, within such period as the appropriate Government may, by notification in the Official Gazette, fix in this behalf with respect to establishments generally or with respect to any class of them, make an application to the Registering Officer in the prescribed manner for registration of the establishment:...."
Thus it is evident that, responsibility to comply the requirement under Section 7 of the Act is placed on the shoulders of the principal employer of the establishment, "Principal employer" is defined by Section 2(1)(g) of the Contract Labour Act. Sub-clause (g) as grouped classifies the group of "principal employers" into four categories. Although fourth clause is a residurary clause, on reference to sub-clauses (i) and (ii) it can be seen that the Government Departments or the local authorities on one hand and factories etc. on the other, who are grouped separately by definition of "establishment", are also kept on different pedestal while defining "principle employer". In relation to any office or department of the Government or a local authority, the head of that office or department or such other officer as the Government or the local authority, as the case may be, may specify in this behalf, as the principal employer.
In the present case, the petitioners do not deny that the Principal of C.A.B. and Manager of R.B.I, are the heads of the respective offices. They have not come out with contention that any other officer has been specified as principal employer for the purposes of Contract Labour Act. 1970.
Thus in view of the fact that C.A.B. as well as R.B.I, are offices or department of the Government, Section 25 of the Contract Labour Act, 1970 is not the relevant provision. On the contrary, considering the definitions of "establishment" and "principal employer" as incorporated in sub-sections (e)(i) and (g)(i) of Section 2(1) of the Act in the light of Section 7, under which principal employer is responsible for compliance on behalf of the establishment, the principal of the institute and Manager of the R.B.I, seem to have been correctly impleaded as accused persons.
It was also pointed out by Advocate Shri Satpute for the respondents, by referring to the documents filed with the first application - both lease deeds are signed by the present petitioners on behalf of the R.B.I./C.A.B. Even the reply dated 24.1.1992 in response to the show cause notice accompanied by inspection report is replied under the signature of petitioner. Similarly, in the second application the lease deed is signed by petitioner No. 2 in the capacity of Manager on behalf of the R.B.I. Thus, according to Shri Satpute, these are indications of the respective petitioners having administrative control of their respective Institutions. It can also be inferred that they are heads of the respective department institutions and that the Labour Enforcement Officers/Inspectors have not prosecuted wrong persons.
Since Section 7 of the Act Itself casts a responsibility upon the Principal Employer and head of the department or office as Principal Employer by virtue of Section 2(1)(g), the arguments that complaint does not specifically aver as to how the individual officers are responsible is not tenable.
6. Since a workman is deemed to be employed as a "contract labour" in or in connection with the work of establishment, when he is hired in or in connection with such work by or through a contractor, the petitioners have placed reliance on definitions of "contractor" and "workman". It is contended that the agencies through which the workers are employed either for the purpose of catering or watch-n-ward and cleaning duties or gardening, are not at all contractors as defined in Section 2(1)(c) of the Act. It is also pleaded that the workers employed by the agencies cannot be termed as "workman" as defined by Section 2(1)(1) of the Act. Sum total of these contentions, raised on behalf of the petitioners is that, the provisions of Contract Labour Act, 1970 are therefore, not applicable, inspite of employing workers for the purpose of catering, watch-n-ward, cleaning and gardening through respective agencies.
According to petitioners. M/s Pai Enterprises and M/s Pai and Co., whose services are taken at Hostels "A" and "B" of C.A.B. (first application) as also M/s Pooja Catering Services, who are rendering identical services at the Central Office Building of Reserve Bank of India (Second petition) are infact, licensees, who are allowed to use the premises of respective institution/office, they are under agreement merely to supply goods or articles to the establishment. They are not the persons, who undertake to produce a given result for the establishment. Therefore, said agencies are not contractors within purview of Section 2(1)(c) of the Act.
As far as workers employed through these agencies, it is claimed that they are not the persons employed in or in connection with the work of establishment. This is because, function of C.A.B., Pune is to train officers of the Bank, whereas R.B.I, regulates the Issuance of currency notes and keeping of reserves with a view to secure monetary stability in India and generally operates the currency and credit system of country. Three agencies referred above, which only supply articles such as tea, edibles, breakfast, lunch etc. to the trainees and staff members have thus no concern with the core function of the establishment and therefore, workers employed for the said purpose cannot be said to be workmen as defined by Section 2(1)(i) of the Act.
Infact, similar argument is also putforth in relation to 17 workers engaged through M/s Unique Services for watch-n-ward and cleaning of residential quarters of the officers and staff members, which are situated outside the college campus of C.A.B. and nine workers of M/s Orchids and Gardens who are maintaining the garden in the college premises as well as the residential quarters.
For the sake of convenient reference, the details regarding agencies, strength of the workers and the nature of work entrusted, can be tabulated as follows :
Sr. No. Name of the College Existing Intake capacity Proposed increase In capacity
1. G.S. Medical College, Parel, Mumbai 180 20
2. L.T. Medical College. Sion, Mumbai.100 15
3. T.N. Medical College, Mumbai 120 15
4. Govt.Medical College, Miraj 100 25
5. Dr.V. M. Medical College Solapur 100 25
6. S.R. T. R. Medical College. Ambajogal 50 50
7. S.B. H. Govt. Medical College. Dhule 50 50
8. Indlra Gandhi Medical College, Nagpur 100 25
9. Grant Medical College. Mumbai 200 25
10. B.J. Medical College, Pune 200 25
11.
Govt.Medical College. Nagpur 200 25 1400 300 Shri Cama, learned Counsel for the petitioners did place some reliance on the observations of Kerala High Court in the matter of Powar v. Labour Enforcement Officer (C).. This was the prosecution launched for engaging three contract labourers for sweeping, cleaning and watching of residential quarters of officers of the R.B.I., Trivendrum, which was prohibited as per notification No. S-779/(E) dated 9.12.1976 of the Government of India, pursuant to Section 10(1) of the Act. In the application filed to quash the proceedings pending before the Court of Additional Chief Judicial Magistrate, it was contended that the employment of contract labour in the residential quarters of Bank Officers does not come within the ambit of Section 10(1) of the Act. After referring to the text of the notification dated 9.12.1976, which prohibit the employment of contract labour in the buildings owned or occupied by the establishment, the learned Judge observed that the notification cannot make any improvement or addition to the definition to include residential quarters. The notification cannot go beyond, that Section 10(1) of the Act as envisaged. Thus, the contention that, as per notification residential buildings owned by R.B.I, would also come within the purview of the Act was held untenable, and proceedings of the criminal case were quashed. The learned Judge thus seems to have held that the notification travelled beyond the extent permitted by Section 10(1) of the Act i.e. "prohibition of employment of contract labour in any process, operation or other work in establishment."
Shri Cama, learned Counsel has in all fairness also pointed out that the Division Bench of this Court in Mumbai Shramik Sangh u. Bharat Petroleum Corporation Limited and Ors., has taken a conlra view in the similar case.
In this case, 27 persons were allegedly employed through contractor M/s Klinwel (India) for cleaning, sweeping, dusting md washing multi-storeyed buildings in staff colony at Mahul, Mumbai, which was owned and possessed by B.P.C.L. The petitioner union claimed that 27 employees had become direct employees by virtue of Central Government Notification dated 9.12.1976 and were entitled to all consequential benefits.
The Corporation had raised a ground that the buildings, wherein 27 employees were working, were staff quarters and therefore, were not covered by the notification. The decision of Kerala High Court referred to above is discussed in para No. 7 of the judgment. After taking into consideration a plethora of judicial pronouncements, the Division Bench was pleased to allow the petition directing the Corporation to absorb 25 persons, as permanent employees and confer upon them emoluments and other benefits as were available to workmen of the Corporation doing similar work in the establishment.
Shri Cama did not fail to point out that the Corporation has approached the Honourable Supreme Court and in the case B.P.C.L. v. Mumbai Shramik Sangh the case, the Honourable Supreme Court has been pleased to refer following questions to be decided by the Constitution Bench of the Apex Court :
(1) Whether the observations of the Constitution Bench in Gammon's case, so far as Section 10 of the Act is concerned are correct and whether the Central Government, under Section 10(1) and (2) of the Act can by notification prohibit contract labour, doing the work of cleaning, sweeping, etc. at the residential premises of the staff or sports complex, owned by Bharat Petroleum Corporation, or whether the Central Government under Section 10 of the Act has no jurisdiction to abolish such contract labour.
(2) Whether the notification dated 9.12.1976 issued by the Government of India, under Section 10(1) of the Contract Labour (Regulation and Abolition) Act, 1970 can be construed as validly abolishing contract labour employed by Contractor M/s Klinwel (India) Ltd. for the cleaning, sweeping etc. in the staff housing colony and sports complex, owned by the appellant Corporation and situated at Chembur, Bombay.
It may be mentioned here that the reliance was placed by the petitioner-Mumbai Shramik Sangh, while claiming regularisation of contract labour; upon observations of the Honourable Supreme Court in Gammon India's case . A group of petitions under Article 32 of the Constitution challenge the validity of the Contract Labour (R & A) Act and Con tract Labour (R& A) Rules, Central as well as those framed by the States of Rajasthan and Maharashtra. In para No. 16 it was observed as follows:
"16 :- The words, "other work in any establishment" in Section 10 are to be construed as ejusdem generis. The expression "other work" in collocation of words, process, operation or other work in any establishment, occurring in Section 10 has not the same meaning as the expression "in connection with the work of an establishment", spoken in relation to workman or contractor."
It was observed that, when the Banking Company employs some persons to construct a building, the later are, in relation to the establishment, contractors who undertake to produce given result for the Bank. They are also persons, who undertake to produce the result through contract labour. It cannot be said that the construction work, which is away from the place, where the industry, trade, business of the establishment is already on, is not the work of the establishment.
The expression "employed in or in connection with the establishment" does not mean that the operation assigned to workmen must be a part or incidental ter work by the Principal Employer.
Special Counsel Shri Satpute for the respondents ip order to reply the argument, that the workers employed by the petitioners through respective agencies are not employed in or in connection with the work of the establishment; has placed reliance on the reported cased in the matter of M/s Gammon India Ltd. v. Union of India (supra), as also Division Bench judgment of Bombay High Court in Indian Airports Employees' Union v. International Airport Authority and Ors.. and Mahindra and Mahdidra Ltd. v. State of Maharashtra,. In case of Indian Airports Employees' Union, the petitioner union had sought enforcement of notification dated 9.12.1976 by restraining the Airports Authority from engaging contract labour insofar as the work of sweeping, cleaning and dusting of the building owned by the Airport Authority. Consequently, the petitioners also sought quashing of a letter dated 3.4.1992 issued by the Deputy Secretary to the Government of India, to the effect that the Central Government had decided not to prohibit employment of contract labour in sweeping, cleaning and dusting .of building owned or occupied by the establishment of Airport Authority.
The Division Bench of the Bombay High Court was pleased to hold that notification dated 9.12.1976 squarely applies and there was prohibition of employment of contract labour on and from 1.3.1977 for sleeping, cleaning and dusting of buildings owned and occupied by the establishment of Airport Authority and therefore, it was pleased to quash the letter dated 3.4.1992 and the respondent Airport Authority was directed to absorb required number of workmen in accordance with their seniority and rule "last come first go".
In the matter of Mahindra and Mahindra (supra) notification issued prohibiting employment of contract labour, in the process, operation and other work, namely, house keeping and sweeping in the establishment of petitioner Company issued by the State Government dated 26.3.1991 was challenged by the petitioner Company and its employees and share holders, on the ground that it was ex-facie bad in law and wholly without jurisdiction.
Since the State Advisory Board had given an opportunity of hearing to all concerned parties and after careful assessment of the rival contentions, it proposed abolition of Contract Labour in the work of house keeping and sweeping and also declined the abolition in maintenance of garden, the Division Bench was pleased to hold the notification to be perfectly legal and valid.
Apart from placing reliance on the reported cases, learned counsel Shri Satpute also urged that all the reported cases are relating to Section 10 i.e. prohibition aspect of the Act. According to him, the prosecutions in question, which are under challenge have no concern with the prohibition aspect, but those are concerned only with the regulation of contract labour. By implications he suggested in-application of all these judicial decisions to the present situation.
True it is, in all the cases of Gammon India, Indian Airports Employee's Union, Mahindra and Mahindra Limited, as also Mumbai Shramtk Sangh notification dated 9.12.1976, issued by the Central Government, which was appropriate Government in the respective matters (except Mahindra and Mahindra) and similar notification issued by the State Government, in case of Mahindra and Mahindra, in exercise of the powers conferred by Section 10 of the Act, thereby prohibiting employment of contract labour in certain regions were subject matter of the dispute and the Courts were basically concerned with the interpretation of phrase "... Prohibit by notification in the Official Gazette, employment of contract labour In any process, operation or other work in the establishment."
Taking into consideration that the petitioners are prosecuted for breach of Section 7 i.e. non-registration of the establishment by the petitioners, inspite of allegedly employing contract labour, we are concerned with the definition of "workman", as given in Section 2(1)(i) of the Act, since a workman is deemed to be employed as a contract labour, when he is hired in or in connection with the work of establishment by or through the Contractor. We are therefore, concerned with the phrase"....... employed in or in connection with the work of any establishment", as contained in Sections 2(1)(b) and 2(1)(i) and not with the phrase ".... in any process, operation or other work in establishment", as used in Section 10 of the Act.
7. As already discussed, the Honourable the Supreme Court while considering the case of B.RC.L. in Civil Appeal No. 6213 of 1997 against the decision of the Bombay High Court in Writ Petition No. 436 of 1991 (O.O.C.) has referred the issue regarding work of cleaning, sweeping, etc. as the residential premises of the staff or sports complex owned by B.P.C.L. to Constitution Bench of the Supreme Court. As far as Application No. 627 of 1993 before this Court, it has three categories of workers, considering the nature of duties they perform as enlisted in para 6 above and 17 workers employed through M/s Unique Services who are entrusted the duties of watch-n-ward as also cleaning of residential quarters of the officers and staff, beyond the college campus, stand on the same footing as the workers in the issue referred. Judicial discipline would, therefore require that this Court may not enter into adjudication of the same issue, and if the decision of the present application is required to be based solely on the adjudication of the issue then to wait for adjudication upon the issue by the Honourable Apex Court and decide the present application only after findings of the Honourable Supreme Court are pronounced on the issue under controversy.
However, in the present mailer, it is not necessary to wait for such adjudication. This is because, the total number of employees allegedly engaged as contract labour by C.A.B., Pune is 31 (catering) + 17 (watch-n-ward and cleaning of residential quarters beyond the campus of college) + 9 (gardening in the college premises and also residential quarters) = 57. The issue referred to the Constitution Bench touches the 17 workers, who are employed for the purpose of cleaning residential quarters beyond college campus, but not the employees employed for the purposes of catering and gardening.
As far as the workers employed for the purpose of keeping gardens, they are doing the work not only in the residential quarters beyond college campus but are also maintaining the gardens in the college premises. All 38 contract labourers allegedly employed by R.B.I, through M/s Pooja Catering Services arc rendering catering services at the Central Office of the Bank and therefore, the issue under reference is not applicable to them.
Even if 17 workers employed at C.A.B., Pune. who can possibly be covered by the issue under reference arc excluded, still C.A.B., Pune has employed 31+9=40 workers, alleged to be the contract labourers. Section 4(1) makes the provisions of the Act applicable to every establishment In which 20 or more workmen are/were employed on any day of the preceding 12 months as contract labourers. Even excluding 17 workers, the number of alleged contract labour exceeds 20 and the provisions of Act will be attracted, if the workers employed for catering and gardening work are considered to be contract labour.
8. Infact, the argument of learned counsel Shri Satpute that all the cases relied upon by both the sides are concerning the issue of prohibition of contract labour and the prosecution under challenge before this Court is pertaining to regulation aspect of the Act, has quite a grain of substance. Simultaneous reference to Sections 2(1)(b), 2(1)(i) and Section 10(1) of the Act, and especially the clause regarding purpose of employment of contract labour would be useful.
Section 2(1)(b): A workman shall be deemed to be employed as "contract labour" in or in connection with the work of an establishment, when he is hired in or in connection with such work, by or through the Contractor ....."
Section 2(1)(i) "workman" means any person employed in or in connection with the work of any establishment to do ....."
Section 10. Prohibition of employment of contract labour :
(1) Notwithstanding anything contained in this Act, the appropriate Government may, after consultation ...... prohibit by notification in the Official Gazette employment of contract labour, in any process, operation or other work in the establishment.
It can be seen that phrase used regarding the nature of work in Section 2(1)(b) at 2 places and 2(1)(i) is identical, whereas, the phrase used in Section 10(1) is slightly different. It is felt that use of words "in connection with" give wider import, whereas, collocation "in any process, operation" used in Section 10(1) gives an impression of restricted scope. Considering the restricted zone of operation of Section 10(1), in comparison with the field in which Sections 2(1)(b) read with 2(1)(i) may operate, it may not be an error to say that all employees who can be subject to prohibition under Section 10(1) of the Act are bound to be contract labours, but vice-versa may not necessarily be correct. There may be a class of contract labour which may not come within the zone of prohibition that can be imposed by Section 10(1) of the Act.
Thus, it appears that the Legislation did not feel it expedient to do away with the contract labour altogether. There are several fields of employment, where it is not otherwise possible to have continuous employment and as such regard being had to the necessities of the situation the Act of 1970 provides for continuation of contract labour. The Legislation in the enactment Itself has provided various provisions pertaining to working conditions of contract labour, provided employment of contract labour being necessary in the interest of concerned industry. In the event, contract labour is employed in an establishment for seasonal work, the question of abolition would not arise. But in case, the same being of perennial nature, the Legislature steps in to abolish the same.
9. In view of discussion above, the only question that is required to be determined is whether 31 catering workers and 9 gardening workers employed at C.A.B., Pune and 38 catering workers employed at Central Office Building of R.B.I, are contract labourers. If yes, both the establishments come within the clutches of Section 4(a) and having not registered as required by Section 7, it will have to be said that there is prima facie case for contravention of Section 7 against them.
Although the petitioners have produced on record the agreements entered into with the respective catering contractors, similar agreement with M/s. Orchids and Gardens for maintaining the garden entered into by C.A.B., Pune is not brought on record. Admittedly, said agency is contracted for providing services for the purpose of maintaining the garden in the college premises and in the residential quarters. Since these 9 workers employed through M/s Orchids and Gardens are maintaining the garden in the college premises. It is difficult for the petitioners to claim that these workmen are not workmen employed in or in connection with the work of establishment. There should be therefore, no obstacle in holding that these 9 workers employed through M/s Orchids for maintaining the garden in the college premises are contract labour as defined by Section 2(1)(b) employed through contract with M/s Orchids.
The observations of the Honourable Supreme Court in the matter of G. B. Pant University of Agriculture and Technology v. State of U. P., can be usefully referred and relied upon, in order to consider whether the workers employed through respective contractors for catering services are contract labourers or not. Admittedly, the main function of C.A.B., Pune is to train the officers of the R.B.I.. R.B.I, itself controls issuance of currency notes and financial reserves of the country. The catering services rendered by the respective contracts arc certainly not related to the core activity of training institute or R.B.I.. But in the matter of G. B. Pant University also 175 workers were employed for providing the food services to 14 hostels of the University. Thus, the employees in the reported case also, were not directly related to core activity of the University. While considering the claim of these employees for regularisation, the Labour Court declared them to be regular employees of the University and the High Court was pleased to uphold the Labour Court award.
It was pleaded by the University before the Honourable Supreme Court that the University had no role in the management and control of the Cafeteria, the employees were not appointed by the University and there was no allocation of any budget to meet the expenses on account of salaries of Cafeteria employees. Thus, there was absence of relationship employer and employee, between the University and Cafeteria workers.
Upon considering the regulations as framed under the Statutes (U. P. Agriculture University Act), the Honourable Supreme Court found that the twin conventional tests of implicit obligation and factors of over all control and supervision by the University stood satisfied.
The observations from earlier judicial pronouncement in Parimal Chandra v. L.I.C. of India, were borrowed in para No. 11 of the judgment, some of which can be reproduced and usefully referred to, for the purpose of matter at hands.
" The facts on record on the other hand, show in unmistakable terms that the canteen services have been provided to the employees of the Corporation for a long time and it is the Corporation, which has been from time to time taking steps to provide the said services."
"The terms of the contract further show that they are in the nature of directions to the Contractor about the manner in which the canteen should be run and the canteen services should be rendered to the employees. Both, the appointment of the Conlractor and the tenure of the contract is as per the stipulations made by the Corporation in the agreement. Even the price of the items served, the place where they should be cooked, the hours during which and the place where they should be served are dictated by the Corporation. The Corporation has reserved the right to modify the terms of the contract unilat-erally and contractor has no say in the matter."
"This is apart from the fact that the infrastructure for running Canteen visually furniture, the electricity, water etc. is supplied by the Corporation to the managing agency for running the canteen."
"Further it cannot be disputed that the Canteen service is essential for the efficient working of the employees of the offices of the Corporation. In fact by controlling the hours during which the counter and floor service will be made available to the employees by canteen, the Corporation has also tried to avoid the waste of time and would otherwise be the result, if the employees have to go outside the offices in search of such services."
Coming to the agreements in the present cases, it can be said that in all the three contracts, infrastructure for running the catering services are provided by C.A.B., Pune and R.B.I., which includes the premises, crockery, gas, electricity etc. In all three contracts, it is stipulated that the catering services are available only to the personnel connected with the training institute and R.B.I. Those are not meant for an outside customer. There is control over quality of raw material and food products by respective offices. There is also control over the rates at which the services are to be rendered by catering contractor. There is also provision for the establishment to have particular employee removed by the Contractor on the ground of medical fitness (in case the Medical Officer advised discontinuation of a particular worker). All the contracts, although drafted as licences, the Institution and Bank have control over its tenure and continuation. The powers to carry out inspection and consider the complaints received are also retained with the management of the establishment.
Taking into consideration these factors which are common to all three contracts, there should be no hesitation in holding that the establishments are having sufficient control over the catering services, through the Contractor.
There are also some peculiar aspects in these agreements. In the agreement with M/s Pai Enterprises, the caterer is also obliged to provide Khidmatgar for serving the officer staff, executives and dignitaries staying at V.I.P. Guest House and for that the caterer is provided additional sum of Rs. 600/- per month. There is provision for another Khidmatgar, to be provided by the Caterer, for serving the guests and the contractor is entitled to another payment of Rs. 600/- per month for that purpose. The Contractor is also entitled to subsidy of Rs. 600/- for supply of tea to the officers and guest speakers. Agreements also prescribe the amount of charges for providing lunches and dinners to V.I.P.s and foreign nationals visiting the institute.
Thus, it can be seen that the catering services, although not directly related to the core activity of the training institute, those are as an assistance to the smooth functioning of the training institute as per the schedule.
In the conract with M/s Pooja Catering Services by R.B.I., clause 9 introduces a condition of working of the canteen to be subject to the supervision and control of the Manager of R.B.I. This canteen is also paid a heavy subsidy of Rs. 95,000/-per month for the purpose of providing food articles to the staff members at the rates prescribed by the Bank and it is further stipulated that, the Bank has liberty to reduce the subsidy, in case it permits the upward revision of rates of food articles. Clause 25 in this Contract requires the caterer, in case of expiry or sooner determination of the licence, to surrender to the Bank all licences and permits then in force, relating to the said canteen and also to further assist in transfer of such licences and permits to the Bank or its nominee. This clause is clear indication that the catering services are being run by the Bank with the assistance of the Contractor.
Thus, considering the terms of the contract and the purpose of catering services, which can be presumed to avoid waste of time by trainees or employees going outside in search of such services, it can be said that the twin conventional tests, implicit obligation and factors of over all control and supervision by the respective establishments over the respective catering contractor stand satisfied and therefore, the workers employed by catering contractors must be said to be workmen as defined by Section 2(1)(i) of the Act and since employed through the Contractor, they are contract labour within the purview of Section 2(1)(b). Consequently, the arguments of the petitioners that they are not governed by the provisions of the Contract Labour (R & A) Act, 1970 cannot be sustained.
Both the agreements so far those relate to the C.A.B., require the caterer to provide catering services on all working days as well as holidays and the contract is for a period of one year. In the case of R.B.I., the contract is for a period of two years. These are indications that the work is of perrineal nature and not merely seasonal or temporary.
In view of the ratio laid down in the matter of G. B. Pant University (supra), it is difficult to accept the contention of the petitioner that the catering contractors are engaged merely to supply goods or articles of manufacture to establishment and those are not the contractors within the meaning of Section 2(1)(c) of the Act.
10. Reliance was placed on E.M. of R.B.I, v. Workmen R.B.I., by learned counsel Shri Cama, The reported case was concerning a claim of canteen employees for rcgularisation and for the purpose they were claiming to be the Bank employees. The prosecution under challenge being for breach of Section 7. we are not really concerned with the relationship of "Master and Servant" between the Bank and catering employees, but we are only concerned with whether the persons employed in catering services are "contract labours through contractor" of the "principal employer i.e. head of the department of Government office or department. The provision of canteen may not be a statutory or other legal obligation of the Bank but as observed in Parimal Chandra's case (supra), the canteen service is essential for the efficient working of the employees of the Bank and of training institute, and therefore, the provision of canteen is an implied obligation. The extent of the total control that may have to be established in order to substantiate the claim that catering employees are Bank employees, cannot be the just parameter for considering whether catering employees engaged through the contractor are contract labours. The catering employees, therefore, may not be the employees of Bank but that does not negate the claim of complainant that catering employees are contract labours employed by the Bank through the Contractor.
As discussed in para No. 8, the zone of operation of Section 10(1) of the Act which governs the total abolition of contract labour and consequent regularisalion (not regulation) of such contract labour, is certainly narrower than the zone of contract labour which can be subject of regulation (and not abolition/regularisation). The case relied upon dealt with the aspect of abolition and regularisation and therefore, the ratio therein is not applicable to the present case.
11. The petitioners have placed reliance on judicial pronouncement of this High Court in S.B. Deshmukh v. State and Anr.,. In this matter, the State Bank of India had employed contract labour through M/s Yash Pest Control and the Bank as well as Directors were prosecuted by Labour Enforcement Officer for employing those contract labours in contravention of Section 10(1) of the Act. The learned Single Judge was pleased to allow the applications by observing that the perusal of reply to the show cause notice clearly showed bona fide belief on the part of the S.B.I, that the provisions of the Act did not apply to their establishment since they were employing less than 20 workmen. Consequently, the argument of the petitioners that there was no intentional breach and the absence of mens rea, that would render the petitioner's innocent, was accepted by the learned Single Judge.
In the case at hand, number of contract labours employed is definitely more than 20 and therefore, it cannot be said that under the legal advise the present petitioners bona fide believed that the provisions of the Act do not apply to them. The plea of non-application of the Act in the matter at hands is based on much intricate interpretation of definitions of "workman" and "contract labour". It is not based on simple and express provision such as Section 1(4) which indicates that the Act applies to all the establishments employing more than 20 contract labours, on any day during the preceding 12 months.
In the reported case, the inspection report itself had recorded that 12 workers were found working as contract labours. As against this, in the matter at hand, there are as many as 40 workers with the C.A.B. and 38 with the R.B.I., (even after excluding those workers, who are doing the watch-n-ward and cleaning and sweeping work, because the issue to that extent has been referred by Honourable Apex Court to its Constitution Bench). In view of this distinction, especially about the grounds for claiming non-applicability of the Act, I am afraid, the reported judgment is incapable of application in favour of the petitioners.
12. The issues such as absence of mens rea or whether the caterers arc mere licensees of respective establishments and therefore, the provisions of the Act are not attracted, are the arguments based on additional material, that is produced by the petitioners for the first lime in this Court. It may not be incorrect to say that the defences which could have been relied upon during the course of trial are being raised as ground to attack the order of issuance of process. To challenge an order of the Trial Court by material produced for the first time in the High Court and which was not considered by the Trial Court, since it neither had an opportunity nor occasion to consider the same, may itself be against the principles of natural justice and fair trial. Absence of mens rea or non-applicability of the provisions of the Act could have been the defences to be raised during the course of trial. But those cannot be the grounds to quash the proceedings, as can be seen from illustrative parameters laid down in Bhajanlal's case. The parameters at Sr. Nos. 1 and 3 are already reproduced in para 3 above clearly indicate that quashing of process would be justifiable, only if, the allegations in the complaint, even if taken at their fact value and accepted in entirety do not prima facie constitute any offence. The allegations in the complaint therefore, are required to be considered uncontroverted. In the light of judgment in Bhajanlal's case, therefore, it will be incorrect to consider the probability of sustenance of the defence raised and to quash the order regarding issuance of process on that count.
13. The learned counsel for the petitioner has relied upon the contents of para No. 28 in the case of M/s Pepsi Foods Ltd. (supra) wherein it is observed that the order of the Magistrate, summoning the accused must reflect that he has applied his mind to the facts of the case and law applicable thereto. There cannot be any dispute about this proposition. But an order which is so worded that it does not indicate application of mind on the part of Magistrate may not be sufficient to quash the process unless uncontroverted allegations in the complaint fail to make out any offence. An error on the part of the Magistrate or to some extent failure fn his duties cannot be a ground to frustrate the prosecution of the complainant.
14. In view of the reasons discussed above, the contentions of the petitioners that the provisions of the Act do not apply to the respective establishments, based upon the interpretation of definitions of "contract labour", "contractor", "workman", "establishment" as also "principal employer" is not tenable. It also does not appear that an authority which is not complctent to prosecute has filed the complaints nor it can be said that the persons not responsible for breach are impleaded as accused before the Trial Court.
Consequently, both the applications fail and are dismissed.
15. At this stage, Advocate Shri Munshi, holding for the applicants prays for continuation of the stay of the proceedings before the Trial Court, so as to enable the applicants to approach the Honourable Apex Court. The stay to the proceedings before the Trial Court that was granted during the pendency of applications shall continue for a period of four weeks. Certified copy expedited.