M/S Gail (India) Ltd. vs Presiding Off. Cen. Govt. Indus. ...
2015 Latest Caselaw 5593 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

A.F.R.
 
RESERVED
 

 
Case :- WRIT - C No. - 49150 of 2015
 
Petitioner :- M/S Gail (India) Ltd.
 
Respondent :- Presiding Off. Cen. Govt. Indus. Tri.-Cum- Lab. Court & Anr
 
Counsel for Petitioner :- Prakash Padia,S.D. Singh
 
Counsel for Respondent :- Prashant Vyas,Abhishek Tandon,P.K.Sinha
 

 

 
Hon'ble Suneet Kumar,J.

The second respondent upon being terminated on 22 June 2012 approached the Ministry of Labour Court under Section 22-A of the Industrial Disputes Act, 1947, thereafter, in terms of Section 10 contained in Chapter III of the Act, a reference was made by the Ministry of Labour Court on 6 February 2013 referring the dispute to the first respondent, Industrial Tribunal-cum-Labour Court, Kanpur. The following reference was made:-

"Whether the demand of Km. Lalita d/o Late Dashrat Prasad claiming her appointment with effect from 24 March 2009 and her termination with effect from 19 June 2012 by the management of GAIL (India) Ltd., Pata, is legal and justified? What relief the workman is entitled to?

The second respondent submitted a statement of claim before the first respondent in Industrial Dispute Case No. 16 of 2013. The petitioner a Government of India undertaking contested by filing written statement, inter alia, raising a preliminary objection that the claim is wrong, the second respondent is not an employee of the petitioner, rather an employee of M/s. Pitambra Construction, Dibiyapur a contractor appointed by the petitioner-Management under the provisions of the Contract Labour (Regulation and Abolition) Act, 19701. During the pendency of the proceedings before the first respondent, the petitioner filed an application (16/1-3) with a prayer to implead the following contractors to the claim petition.

"1. M/s Global S.S. Construction Pvt. Ltd., Mumbai;

ii. M/s Uttrakhand Purva Sainik Kalyan Nigam Ltd., Dehradun;

iii. M/s. Pitambra Construction, Dibiyapur."

The workman/second respondent filed her objections. The first respondent vide order dated 16 July 2015 rejected the application to implead the labour contractors.

It has been averred that the petitioner being an enterprise under the Ministry of Petroleum & Natural Gas, Government of India is a company registered under the Companies Act, a 'State' within the meaning of Article 12 of the Constitution of India. The petitioner company outsourced certain activities/services which include secretarial, paramedical and peripheral services on contract basis. Accordingly, contract of such services were awarded to the eligible contractors by following the Contract and Procurement Policy (C&P Policy) of GAIL. Petitioner company is duly registered in terms of Section 7 of the Labour Contract Act 1970 for engagement of contract labour for performing various duties, as detailed therein, and all the contractors are duly registered under the Labour Contract Act, 1970.

It was further contended that the second respondent was from time to time appointed by various contractors, appointment and engagement orders were issued by the respective contractor and her service was finally terminated by M/s Pitambra Construction, Diviyapur on the ground of absenting from duty and leaving the work place without prior intimation.

The question for determination is, whether the private contractors could be impleaded in terms of Section 18(3) (b) of the Industrial Disputes Act.

Section 18 of the Act reads as follows:-

"18. Persons on whom settlements and awards are binding.-

(1) A settlement arrived at by agreement between the employer and workman otherwise than in the course of conciliation proceeding shall be binding on the parties to the agreement.

(2) Subject to the provisions of sub- section (3), an arbitration award which has become enforceable shall be binding on the parties to the agreement who referred the dispute to arbitration.

(3) A settlement arrived at in the course of conciliation proceedings under this Act or an arbitration award in a case where a notification has been issued under sub- section (3A) of section 10A or an award of a Labour Court, Tribunal or National Tribunal] which has become enforceable] shall be binding on--

(a) all parties to the industrial dispute;

(b) all other parties summoned to appear in the proceedings as parties to the dispute, unless the Board, arbitrator, Labour Court, Tribunal or National Tribunal, as the case may be, records the opinion that they were so summoned without proper cause;

(c) where a party referred to in clause (a) or clause (b) is an employer, his heirs, successors or assigns in respect of the establishment to which the dispute relates;

(d) where a party referred to in clause (a) or clause (b) is composed of workmen, all persons who were employed in the establishment or part of the establishment, as the case may be, to which the dispute relates on the date of the dispute and all persons who subsequently become employed in that establishment or part."

Section 18(3)(a) of the Act provides that the award is binding on all the parties to the Industrial Dispute, Section 18 (3)(b) postulates an implied power in the Tribunal to add persons as parties to the proceedings who are other than those who were parties to the industrial dispute. Clause (b) of Section 18 contemplates such persons other than who are actually and directly involved in the dispute which is subject matter of reference under Section 10 of the Act. In view of Section 18(3)(b), it is sought to be urged that the award would not be binding upon the petitioner/company, therefore, the contractors who admittedly are the employers of the second respondent are necessary parties to the reference, it is, therefore, sought to be urged that the order impugned rejecting the impleament application is not only erroneous but illegal.

In the counter affidavit filed by the second respondent, there is no denial that the appointment of the second respondent was not made by the petitioner-company, on the contrary, it is admitted from the reading of the pleadings that the salary was transferred to the account of the respondent by an agency appointed by the petitioner-company, which though the second respondent claims to be a fictitious agency. Further, it is contended that the company got her service terminated on 19 June 2012 by an order issued by one of the contractors, namely, M/s Pitambara Construction. It is further averred that the agencies/labour suppliers are fictitious, whereas, the work of the respondent is of perennial nature, the engagement of the contractor being sham and not genuine, hence, it is sought to be urged that the impleadment of the contractor before the labour court is not necessary.

A three-judge Bench in Hochtief Gammon Versus Industrial Tribunal, Bhubaneshwar, Orissa and another2 was considering the scope and effect of Section 18(3)(b) of the Industrial Disputes Act, 1947. The Court upon considering the expression used in sub-clause (a) and (b) which refers to "all parties to the industrial dispute" whereas, sub-clause (b) refers to "all other parties summoned to appear", observed as follows:-

"The first question which we have to consider is, did Section 18(b), as it then stood, postulate an implied power in the Tribunal to add persons as parties to the proceedings who are other than those who were parties to the industrial dis- pute? It will be noticed that clause (a) refers to all parties to the industrial dispute, whereas clause (b) refers to all other parties summoned to appear. The word "other" seems to suggest that the parties summoned to appear to whom clause (b) refers are not identical with the parties to the industrial dispute specified by clause (a). Section 2(k) of the Act defines an 'industrial dispute', inter alia, as meaning any dispute or difference between employers and workmen; so that parties to the industrial dispute under clause (a) would mean persons between whom the dispute has arisen as prescribed by Section 2(k), and so, clause (b) contemplates persons other than those who are actually and directly involved in the dispute which is the subject-matter of reference under section 10. Thus, Section 18(b) seems to contemplate that persons other than parties to the industrial dispute may be summoned before the Tribunal."

Section 11(3) of the Act provides, inter alia, that the Tribunal shall have the same powers as are vested in a civil court under the Code of Civil Procedure, when trying a suit in respect of the matters specified in clauses (a) to (d); clause (a) refers to enforcing the attendance of any person and examining him on oath; clause (b) has reference to the power to compel the production of documents and material objects; clause (c) is in respect of issuing commissions for the examination of witnesses; and clause (d) is in respect of such other matters as may be prescribed.

Upon considering the provisions, the Court held that the power to implead must be read as being implicit in Section 18(b):

".......It is thus clear 'that the power to add a party to the proceedings pending before a Tribunal which may be exercised under the Code of Civil Procedure under Order 1 Rule 10 is not included in section 11(3), and there is no other section which confers such a power on the Tribunal, therefore, if section 18(b) contemplates that persons other than parties to the industrial dispute can be summoned, there is no specific provision conferring power on the Tribunal to summon them, and that inevitably suggests that the power must be read as being implicit in section 18(b) itself."

The court upon considering the provisions of Section 2K, Section 10 and Sections 11 and 18, held:

"The result of these relevant provisions clearly seems to be that if the Industrial Tribunal, while dealing with an industrial dispute, came to the conclusion that persons other than those mentioned as parties to the industrial dispute were necessary for a valid determination of the said dispute, it had the power to summon them; and if such persons were summoned to appear in the proceedings, the award that the Industrial Tribunal may ultimately pronounce would be binding on them. Since in cases where persons were added as parties to an industrial dispute were likely to raise the question as to whether the joinder of the parties was justified or not, s. '18(b) required that the Tribunal should record its opinion as to whether these persons had been summoned without proper cause."

The Apex Court considered the extent of the power of Tribunal. The Industrial Tribunal is a tribunal of limited jurisdiction which is confined to the dispute referred, therefore, tribunal cannot travel materially beyond the terms of reference. Under Section 10(1) the appropriate Government can refer to the Industrial Tribunal a specific industrial dispute for adjudication, the Tribunal while dealing with the said points, deal with such incidental matters connected with or relevant to such dispute. The Court in paragraph 8 observed as follows:

"Section 10(4) which was also added by the same amending Act provides, inter alia, that the jurisdiction of the Indus- trial Tribunal would be confined to the points of dispute specified by the order of reference, and adds that the said jurisdiction may take within its sweep matters incidental to the said points. In other words, where certain points of dispute have been referred to the Industrial Tribunal for adjudication, it may, while dealing with the said points, deal with natters incidental thereto, and that means that if, while dealing with such incidental matters, the Tribunal feels that some persons who are not joined to the reference should be brought before it, it may be able to make an order in that behalf under section 18(3)(b) as it now stands."

It is, thus, clear that this power implied in section 18(3)(b) cannot be exercised by the Tribunal so as to enlarge materially the scope of reference itself, because basically the jurisdiction of the Tribunal to deal with an industrial dispute is derived solely from the order of reference passed by the appropriate Government under section 10(1). What the Tribunal can consider in addition to the disputes specified in the order of reference, are only matters, incidental to the said disputes; that naturally suggests certain obvious limitations on the implied power of the Tribunal to add parties to the reference before it, purporting to exercise its implied power under section 18(3)(b).

(Refer-President, Cement Corporation of India Versus Presiding Officer Labour Court3, and Bara Hindu Rao Versus The Kapra Mazdoor Ekta Union and others4)

Having examined the scope of Section 18 of the Industrial Disputes Act, the only question that arises for consideration is as to whether the Industrial Tribunal has power to add necessary and proper party while answering the reference. The answer is that it is not open to the Tribunal to travel materially beyond the terms of reference. It is settled law that the terms of reference determine the scope of its power, however, certain points of dispute that have been referred to the Industrial Tribunal for adjudication, it may, while dealing with the said points, deal with matters incidental thereto, that means, while dealing with such incidental matters, the Tribunal feels that some persons who are not original party to the reference should be brought before it, the Tribunal may be able to make an order impleading such party.

The fact is that respondent/workman was engaged by the petitioner/management through the contractors. It is the case of the petitioner/company that the workman was engaged by the contractor. In the affidavit filed before this Court it is not being disputed by the second respondent that she was engaged by various contractors from time to time, though it is contended that the contract is a sham contract. The labour court by the impugned order dismissed the impleadment application stating that the contractors are neither necessary party nor does it have power to implead a party other than the parties to the dispute. In Hoftiff Gamon case (supra), the Supreme Court held that a Tribunal has implicit power to implead certain parties if it is necessary for proper adjudication of the dispute, however, such power cannot be exercised by the Tribunal to enlarge the scope of reference. Ultimately it depends upon the facts of each case.

In the case before the Supreme Court the application to implead was rejected as the parties to the dispute admitted that the parties sought to be impleaded had never employed the workman. In the facts of the present case, admittedly the stand of management is clear and unambiguous that the workman was never employed by the petitioner-management but employed only by the contractors, therefore, it has become necessary to implead contractors so that they may become parties to the dispute, if the management is to be absolved of any liabilities in accordance with law then the contractors are necessary parties. There is no point in raising the dispute if the management were to foreclose the objections of the workmen by stating that the second respondent is not the worker under the management but under the contractors.

In these circumstances, it becomes necessary to know the truth as to whether the workman is under the management or under the contractors and if so what relief the second respondent entitled to. This is essentially the function of the Tribunal, therefore, in view of the stand taken by the management that the second respondent was employed by the contractors, it would be appropriate to implead the contractors as parties to the dispute.

In fact such a situation would be in the interest of the management as well. However, it becomes necessary, after impleading the contractors to permit them to raise their objection as to whether the respondent was really employed by the contractors or not, accordingly, the writ petition is allowed. The impugned order is set aside to the extent it refuses to implead the contractors as parties. The contractors shall be permitted to be impleaded as parties and the contractors shall be permitted to file their objections. The Tribunal is directed to dispose of the dispute in accordance with law within the terms of reference as expeditiously as possible.

No costs.

Order Date :- 21.12 .2015

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