Perumalla Madhusudhan Rao vs The Ap Transco,
2021 Latest Caselaw 1170 AP

     THE HON'BLE SRI JUSTICE M.SATYANARAYANA MURTHY

                  WRIT PETITION NO.25757 OF 2020
ORDER:

The petitioners, who were working under the contractor -

M/s.Sterling and Wilson Private Limited, filed this petition under

Article 226 of the Constitution of India against the AP TRANSCO

and its officials to declare the action of respondent No.3 in orally

terminating the services of the petitioners from Electrical High

Tension 132/33 KV Sub-Station, Vinjamuru and not allowing

petitioners for duties with effect from 23.11.2020 on the ground

that the contract of the then contractor of Electrical High Tension

132/33 KV Sub-Station, Vinjamuru vide letter dated 20.11.2020 of

respondent No.3 as illegal, arbitrary, discriminative, contrary to the

ratio laid down by the Apex Court in para 46 at page 151 in "State

of Haryana v. Piara Singh1" and also in para18 of the judgment

in "K.Ravinder v. A.P.Generation Corporation Limited,

Hyderabad2" and contrary to the letter and spirit of the Memo No.

CGM (HRD/ DS/ AS.III/ PO.VII /Adm/D.No.3596/04, dated

27.12.2004 besides violative of Article 14, 16 and 21 of the

Constitution of India and consequently, direct the respondents to

allow the petitioners to discharge their usual daily duties just like

before 23.11.2020 in their respective capacities irrespective of the

fact of change of contractors from time to time.

The case of the petitioners in nutshell is that all the

petitioners were appointed through notification published in a

newspaper, on contract/outsourcing basis during May, 2019 as

High Skilled, Skilled and Un-skilled labourers to work at Electrical

(1992) 4 SCC 118

(2000) 6 ALD 56 MSM,J WP_25757_2020

High Tension (EHT) 132/33 KV Sub-Station, Vinjamuru. More

particularly to operate and maintain the said Sub-Station,

M/s.Sterling and Wilson Pvt., Ltd., was given contract for carrying

out operation work along with construction package for a period of

2 years at 132/33 KV Sub-Station, Vinjamuru by engaging 4

number of Diploma in Electrical Engineers and 4 numbers of ITI

Electrician Trade and 3 numbers of un-skilled persons for the

period from 01.06.2019 till 31.05.2021.

While the things stood thus, in recent past, vide letter

dated 20.11.2020, the manning contract of contractor for 132/33

KV Sub-Station, Vinjamuru got terminated with effect from

23.11.2020 on the ground that the contractor committed

irregularities in appointing Contract/Outsourcing Workmen for

respective Sub-Stations. Before terminating the contract itself, the

contractor denied the irregularities in appointments. But they were

allowed to continue in attending maintenance of 132/33 KV Sub-

Station, Vinjamuru. In spite of the fact that the contract is

subsisting till 31.05.2021 to continue in their respective posts,

they were thrown out forcibly on 23.11.2020 after completion of 10

am shift with a view to replace the petitioners from another set

of contract employees. Factually, even after completion of

31.05.2021, the respondents have no right to terminate their

services, mechanically, except for proven misconduct. On

26.11.2020, all the petitioners brought their grievance to the notice

of respondent No.3, but, they did not give any acknowledgment.

In continuation of earlier representation, the petitioners submitted

elaborate representation dated 01.12.2020, and brought their MSM,J WP_25757_2020

grievance to the notice of respondent No.1, requested to do justice,

but the same did not yield any fruitful result.

The main grounds urged by the petitioners are as follows:

(a) Even after completion of contract period on 31.05.2021

the respondents have no right to terminate the services of

the petitioners mechanically except on proof of

misconduct.

(b) The very thought of replacing the petitioners with another

set of contract/outsourcing workmen is illegal and

contrary to the principle laid down by the Apex Court in

"State of Haryana v. Piara Singh" (referred supra).

(c) The petitioners further contended that the services of

contract employees cannot be terminated to substitute

another set of contract employees, thereby the attempt

made by the respondents to substitute another set of

contract employees terminating the contractor -

M/s.Sterling and Wilson Pvt. Ltd is contrary to the

principle laid down by the learned single Judge of the

High Court of Andhra Pradesh at Hyderabad in

"K.Ravinder v. A.P.Generation Corporation Limited,

Hyderabad" (referred supra) on this ground also, the

action of respondent No.3 be declared as arbitrary, illegal

and contrary to the law laid down by the Apex Court in

"State of Haryana v. Piara Singh" (referred supra).

(d) The nature of work of the petitioners come under core

activity and the duties attached to the post of the

petitioners are not temporary in nature but, they are

perennial in nature and the petitioners are working MSM,J WP_25757_2020

round the clock i.e. 24 hours and 365 days. Factually, all

the posts supposed to be filled-up with regular

employees, but, in order to save money, reduce financial

burden on the management, all those posts are being

filled up with contract employees while directing them

to discharge the duties with regular employees. Thus,

engaging the services of the petitioners on contract basis

is nothing but exploitation of labour. Hence, the act of

respondents is illegal.

(e) Maintenance of GRID is a major issue in TRANSCO,

hence, to maintain GRID properly, dedicated employees

are required. Because of discharging duties by the

petitioners with a lot of dedication by coordinating with

all concerned employees there is no GRID failure during

last two years. On account of disputes with the

contractor - M/s. Sterling and Wilson Pvt. Ltd., the

petitioners were terminated by respondent No.3.

(f) The act of respondent No.3 is contrary to Regulation-3 (c)

and (d) of APSEB Service Regulations, which deals with

the power to engage the contract labour and regularizing

their services. Therefore, termination of services of the

petitioners by respondent No.3 is totally in contravention

of Regulation - 3 (c) and (d) of APSEB Service

Regulations, but the petitioners are waiting patiently

without approaching the Court waiting for an

opportunity to claim regularisation, but no purpose was

served.

(g) In previous recruitment notifications issued for recruiting MSM,J WP_25757_2020

regular employees, AP TRANSCO, AP GENCO and

DISCOMS had given in-service weightage marks

to the Contract/Outsourcing Workmen for their

respective working period, the same is evident from the

judgment reported in "S. Kesava Rao v. The Chairman

and Managing Director, APSPDCL, Corporate office,

Tirupathi, Chittor district3", but to avoid such

weightage while taking up recruitment, the contract was

terminated denying the petitioners to claim weightage.

(h) The petitioners were thrown out to avoid regularisation of

services in terms of Section 12 (3) of the Industrial

Disputes Act, 1947 and the request of the petitioners is

genuine and bonafide, but they were not allowed to

discharge their work, thereby sought relief as stated

supra.

The respondents did not file any counter.

During hearing, Sri Peeta Raman, learned counsel for the

petitioners reiterated the contentions urged in the petition while

drawing the attention of this Court to the judgment of the Apex

Court in "State of Haryana v. Piara Singh" and also the

judgment of the High Court of Andhra Pradesh at Hyderabad in

"K.Ravinder v. A.P.Generation Corporation Limited,

Hyderabad" (referred supra), the selection process undertaken by

the respondents to contend that though the petitioners were under

the supervision of respondent No.3, they were asked to work under

the contractor. Therefore, the petitioners were directly under the

control and supervision of respondent No.3 and its officers as they

2012 (5) ALD 71 (DB) MSM,J WP_25757_2020

are directly paying salaries to the petitioners, but camouflaging the

same, the relationship of contractor and contractee was created

between the respondents and M/s. Sterling and Wilson Pvt. Ltd. in

the guise of contract to maintain 132/33 KV Sub-Station, at

Vinzamuru and entered into contract.

It is further contended that when the petitioners are under

the direct control of respondent No.3 and its officials, the

petitioners cannot be thrown out abruptly to avoid their

regularisation in terms of APSEB Service Regulations and such

termination is against the law laid down by the Apex Court in

"State of Haryana v. Piara Singh" and also the judgment of the

High Court of Andhra Pradesh at Hyderabad in "K.Ravinder v.

A.P.Generation Corporation Limited, Hyderabad" (referred

supra), requested to issue a direction as sought supra.

Sri Y.Nagi Reddy, learned standing counsel for respondents,

supported the action of the respondents on the ground that there

was no direct relationship of employee and employer between the

petitioners and the respondents and the services of the petitioners

were engaged by the M/s. Sterling and Wilson Pvt. Ltd. as such

without impleading the contractor, the petitioners are not entitled

to claim any relief in the writ petition and the judgment of the Apex

Court in "State of Haryana v. Piara Singh" and also the

judgment of the High Court of Andhra Pradesh at Hyderabad in

"K.Ravinder v. A.P.Generation Corporation Limited,

Hyderabad" (referred supra) have no application to the present

facts of the case. In the absence of any legal right or statutory right

to enforce against the respondents, the writ of Mandamus cannot

be issued, requested to dismiss the writ petition.

MSM,J WP_25757_2020

Considering rival contentions, perusing the material

available on record, the points that arose for consideration are:

(1) Whether there was any relationship of employee and

employer between the petitioners and respondents?

(2) Whether the termination of contract for maintaining

132/33 KV Sub-Station at Vinjamuru with M/s. Sterling

and Wilson Pvt. Ltd. would create/confer any right to

claim continuation of the petitioners in service? If so,

whether the denial of discharge of duties by the

petitioners in 132/3 KKV Sub-Station at Vinzamuru is

contrary to the law declared by the Apex Court in "State

of Haryana v. Piara Singh" and also the judgment of

the High Court of Andhra Pradesh at Hyderabad in

"K.Ravinder v. A.P.Generation Corporation Limited,

Hyderabad" (referred supra) and violative of Article 14,

16 and 21 of the Constitution of India and liable to be

declared as illegal while directing the respondents to

allow the petitioners to work at 132/33 KV Sub-Station

at Vinjamuru?

P O I N T No.1:

Undisputedly, the services of the petitioners were engaged by

the M/s. Sterling and Wilson Pvt. Ltd., who is entered into contract

with respondent No.3 to manage/maintain 132/33 KV Sub-Station

at Vinzamuru. Thus, there is no direct relationship of employer

and employee between the respondents and the petitioners, but for

one reason or other, the M/s. Sterling and Wilson Pvt.Ltd., who

engaged the services of the petitioners, is not made as a party.

MSM,J WP_25757_2020

In view of the specific contention raised by the petitioners

that their services were engaged by respondent No.3 directly

having participated in the selection process and supervising the

work of the petitioners, paying salaries directly to the petitioners, it

is necessary to advert to the process undertaken by the concerned

in selection of the petitioners.

Copy of the contract is placed on record to find out the

purpose of contract. As per the contract, nature of the work is

carrying out operation works of EHT Sub-Station along with

construction package for a period of 2 years at 132 KV SS

Vinjamuru by engaging 4 Nos. I.I.I. (Electrician Trade) and 3 Nos.

Un-skilled persons for the period from 01.06.2019 to 31.05.2021 in

OMC circle Nellore.

The rates for the operations cost (Monthly) shall covers fixed

wages of workers as per Minimum Wages Act. Administrative and

Supervision Charges, EPF, ESI etc. Fixed Charges/covering wages

to workers of labour employed/per month as per minimum wages

Act i.e.

Category Pay per month Other Total Rs. allowances per Remuneration month (Per person per Rs. month) Rs.

Highly                  14,973.00       7,616.00       22,589.00
skilled
Skilled                 12,003.00          8,595.00          20,598.00
Un-skilled               8,284.00          8,189.00          16,473.00

Wages to be paid to the contract labour shall be calculated

for 30/31 days. Hence, the contractor shall ensure that all the

labour to be engaged should avail weekly off on suitability of the

work.

MSM,J WP_25757_2020

The contract is also contained clauses relating to

Administrative and Supervision Charges, ESI/Insurance/other

statutory Acts and security deposit etc.

The responsibilities of the contractor are dealt with by clause

28 of the contract/agreement and clause 29 deals with deployment

of personnel, which is as follows:

"29. DEPLOYEMENT OF PERSONNEL: '

(a) The Contractor shall provide necessary labour with minimum qualification as specified and they will be tested for their :", '

knowledge for various Operations in the Substation connecting to the breakers, isolators. issuing of line clear. etc., before actually engaging them by the selection committee.

(b) Each personnel deployed by the Contractor should be issued identity card with passport size photograph affixed ,on it and duly attested by the Contractor. A photo copy of such identity card to be given to officer- in-charge;

(c) In the event of the contractor substituting the Highly skilled Iskilled/unskilled labour by suitable labour of the qualification laid down, they will be kept on a training period of seven days at contractors cost.

(d) Procedure for checking the educational qualifications: For EHT sub-stations.

i) Highly Skilled labour: - The Executive Engineer/ Deputy Executive Engineer has to verity the certificate produced by the labour (through the contractor). They will be kept in training under supervision of Deputy Executive Engineer/Asst. Engineer for one week to acquaint to the EHT System. '

ii) Skilled labour: - The Executive Engineerl Deputy Executive Engineer has to verify the certificate produced by the labour (through the contractor). They will be kept in training under supervision of Asst. Divisional Engineer for one week to acquaint to the EHT system.

iii) The contractors has to submit the notary attested copies of certificates of labourers and an undertaking on RS.100 stamp paper by the individual labourer that the educational qualifications are true and if found incorrect at later stage, the contractor is liable for suitable criminal and civil actions."

As per clause (d) of condition No.29 of the Contract, the

Executive Engineer/Deputy Executive Engineer has to verity the

certificate produced by the labour (through the contractor).

MSM,J WP_25757_2020

They will be trained under supervision of Deputy Executive

Engineer/Asst. Engineer for one week to acquaint to the EHT

System.

As such, genuineness of the certificates of the petitioners

regarding qualifications of highly skilled labour and skilled labour

were verified by the department people of respondent No.3.

Whereas, notarised attested copies of the certificates were directed

to be produced and undertaken shall be given on Rs.100/- stamp

paper by the individual labourer.

After entering into contract, M/s. Sterling and Wilson Pvt.

Ltd. invited applications under the caption "Wanted", which is as

follows:

"WANTED Contract Labours are being recruited for 220KV Sub-Station, Atmakuru & 132/33 KV Sub-Station, Vinjamuru of AP Transco by the M/s.Sterling & Wilson Pvt. Ltd.

1. Highly Skilled (Diploma EEE)

2. Skilled (ITI Electrician)

3. Un-skilled (minimum 9th class pass) QUALIFICATIONS

1. Age Limit 18 years to 35 years

2. Possess requisite qualifications

3. Must pass in qualifying examination

4. Appointments should be done by following RoR ATTEND FOR EXAMINATIONS HELD ON 17,18-01-2019 CONTACT: 7702212170"

Though the contact number was given in the notification, it

is not known to this Court - whose number was that and whether

the notification was issued by M/s.Sterling and Wilson Pvt. Ltd. or

any third party agency. But the petitioners were selected after

calling for application for Highly skilled, skilled, and un-skilled to

work under the Sterling and Wilson Pvt. Ltd.

MSM,J WP_25757_2020

After completion of selection process, appointment letters

were issued to the petitioners by Sterling and Wilson Pvt. Ltd.

specifying the terms and conditions of appointment, which are as

follows:

"STERLING AND WILSON PVT. LTD.

Electro Mechanical Engineers Associates of ShapporjiPallonji Pvt. Ltd.

CIN:U31200MH1974PLC017538

Dt.24.05.2019

To

Madhusudhana Rao P S/o Chennaiah Perumalla, Chejerla Village and Mandal, SPSR Nellore Distrct-524342, Andhra Pradesh.

Lr.No.NIL Dt.24.05.2019

Sub: - Appointment orders of contract Highly Skilled Person to work at132KV Substation,APTRANSeO, Vinjamuru-Reg.

You have been selected as contract Highly Skilled Person in our MIs Sterling and Wilson Pvt. Ltd, to at O&M Works132KV Substation, APTRANSeO, Vinjamurufrom 24-05-2019 To 23-05-2021 you are deputed to work under the directions of Assistant Executive Engineer Deputy Executive Engineer, Vinjamuru.

The following are the terms and conditions for the ahove appointment.

1) You have to work 8:00 hrs round the clock shift duties/maintenance works and you have to work sincerely and obediently and follow the instructions of Assistant Executive Engineer Deputy Executive Engineer, Vinjamuru.

2) This appointment is purely temporary and if you full to perform your duties directed by the Assistant Executive Engineerl Deputy Executive Engineer, Vinjamuru. You are liable for termination from duties with one month notice without assigning any reasons thereto.

3) Your salary will bef 14,973- + Other Allowance Rs.7,616/- = Rs.22,589/- EPF will be given @ 13.36 % inclusive @1~1oconlribution from the employee. From absence of duties, The proportionate amount Rs.300/- will be recovered from your monthly salary of respective month.

4) The disputes arising out of this appoinunent should be decided in the courts situated in Nellore Dist only.

5) You shall note that carrying the work in the vicinity equipment in service, care must be taken to avoid any accidents, If any work is 10 be MSM,J WP_25757_2020

done on any of the equipment and shall ensure that such works will be carried out only after taking proper line clear.

6) It is made clear to you that this is a temporary appointment in 132KV Substation, APTRANSCO, Vinjamuru. You are not APTRANSCO employee for your claims.

7) The statutory duties and taxes as applicable from time 10 time as directed by Govt. of AP and labour commission such as EPF, Professional Tax and E.S.I etc. will be recovered from your salary.

8) At any time you shall not participate in strikes, dharnas and any anti-social elements against to APTRANSCO rules and regulations failure of which will cause termination of the appointment.

I have read the above Terms and conditions of this appointment and accept the same.

LABOURER APPOINTED CONTRACTOR

A bare look at the letter of the appointment of the

petitioners, it is evident that the petitioners were selected by

M/s.Sterling and Wilson Pvt. Ltd. and created a relationship of

employer and employee between them. Copies of Employees

Provident Fund accounts of the petitioners were also placed on

record. Those accounts would show that the establishment's name

is M/s. Sterling and Wilson Pvt. Ltd. with Id number and other

details. Thus, M/s.Sterling and Wilson Pvt. Ltd. alone depositing

the amount to the credit of Employees Provident Fund

Organisation from the amount payable to the employees engaged

by it, as contribution of the employees i.e. petitioners. Similarly,

other documents produced before this Court clinchingly

established that the salary is being paid by M/s.Sterling and

Wilson Pvt. Ltd. The entire documentary evidence produced by the

petitioners along with writ petition and allegations made in the writ

affidavit clinchingly established that the services of the petitioners

were engaged by M/s.Sterling and Wilson Pvt. Ltd. and not by the MSM,J WP_25757_2020

respondents and that there is no direct relationship of employer

and employee between respondent No.3 and the petitioners. Even if

the tests for determining nature of contract are applied, the

petitioners failed to satisfy those tests. The first test is Supervision

and Control, second test is Economic Control and the third test is

Twin Test.

Except the first test i.e. test of supervision, the petitioners

were not under the control of respondents. Since the TRANSCO is

dealing with dangerous trade i.e. supply of electricity, the persons

working therein under the constant supervision to avoid untoward

incident. Therefore, the work of the petitioners is being supervised

by the highly skilled officers of the respondents and mere

supervision on the petitioners by itself is not sufficient to create

any relationship of employer and employee. The petitioners did not

satisfy any other tests to prove direct relationship between them

and the respondents and the Apex Court succinctly held that the

Supervision Test and Economic Control are not the determining

factors to decide the relationship of employee and the employer.

The Apex Court held that two well-recognised tests are

whether: (i) principal employer pays salary instead of contractor,

and (ii) principal employer controls and supervises work of

employee.

Applying the said test in "Shining Tailors v. The

Industrial Tribunal4" the Apex Court observed that

supervision and control test was more suited to an agricultural

society prior to Industrial Revolution and during the last few

1983 Lab. IC 1509 MSM,J WP_25757_2020

decades the emphasis in the field has shifted and no longer rests

exclusively or strongly on the question of control.

Therefore, the Supervision and Control test has created more

confusion, the level of supervision and control required to form a

master-servant relationship is a question of fact which exist to this

day. But, later the economic control is to be one of the factors to

decide the relationship, but ultimately due to passage of time, the

twin tests are prescribed in "Bengal Nagpur Cotton Mills v.

Bharat Lal5" wherein it was observed that two of the well-

recognized tests to find out whether the contract labourers are the

direct employees of the principal employer are (i) Whether the

principal employer pays the salary instead of the contractor, and;

(ii) Whether the principal employer controls and supervises the

work of the employee.

Coming to the twin test, it is satisfied partly i.e. test of

supervision, but the petitioners failed to establish the second test

i.e. economic test. Thereby, the petitioners failed to establish the

relationship of employer and employee between the respondents

and the petitioners satisfying any of the tests referred above except

satisfying part of the test, that by itself is not sufficient to create

relationship of employee and employer between the petitioners and

the respondents.

As discussed above, there is no direct relationship of

employee and employer between the petitioners and the

respondents, but their services were engaged by M/s.Sterling and

Wilson Pvt. Ltd. and the respondents did not participate in

(2011) 1 SCC 635 MSM,J WP_25757_2020

selection process except verification of certificates of highly skilled

and skilled workers to avoid production of fake certificates to work

in Sub-Station and in case they are not qualified obtaining degrees

from a recognised institution, their level of understanding may be

low or sub-standard. In those circumstances, if they are allowed to

attend the work, it would result in serious consequences, causing

loss to life and property of the general public, mostly to the

consumers of electric power. Therefore, mere verification of

certificates itself is not a ground to conclude that the selection

process was undertaken by respondent No.3 and its officials.

In view of my foregoing discussion, I find that the petitioners

miserably failed to establish the relationship of employee and

employer between the petitioners and the respondents.

Accordingly, the point is answered against the petitioners and in

favour of the respondents.

P O I N T No.2:

The petitioners claimed consequential relief in the writ

petition to allow them to discharge their duties as usual in their

respective capacities. But the petitioners were not engaged by the

respondents, engaged by an independent contractor i.e.

M/s.Sterling and Wilson Pvt. Ltd. for maintenance of 132/33 KV

Sub-Station, Vinjamuru. When the contract is terminated, it is for

the contractor to decide whether to engage the services in any

other appropriate work, but this Court cannot issue a direction to

the respondents herein to engage the services of the petitioners in

maintenance of 132/33 KV Sub-Station, Vinjamuru for the simple

reason that there was no relationship of employer and employee MSM,J WP_25757_2020

between the respondents and the petitioners as they were engaged

by independent contractor M/s.Sterling and Wilson Pvt. Ltd.

There are two types of contract workers. First one is

engaging the services of employee by the employer on contract

basis obtaining necessary documents. Second one is engaging the

services by an independent contractor for any specific purpose. In

the first case, there is a relationship of employee and employer, but

on the contract basis. In the second case, there was absolutely no

relationship of employee and employer. In the present case, the

petitioners cannot be deemed to be workmen within the definition

of workmen.

On the other hand, the Contract Labour (Regulation and

Abolition) Act, 1970 deals with engagement of employees on

contract basis. The said Act was enacted to regulate the

employment of contract labour in certain establishments and to

provide for its abolition in certain circumstances and for matters

connected therewith, as the system of employment of contract

labour lends itself to various abuses. The question of its abolition

has been under the consideration of Government for a long time.

Finally, the Act was enacted by the Government of India with

avowed object to avoid unlawful labour practices and to regulate

and improve the services and conditions of contract labour and not

merely to abolish the same and it is a piece of social legislation.

The word "contractor" is defined under Section 2 (c) of the

Contract Labour (Regulation and Abolition) Act, 1970. As per

Section 2 (c) of the Act, the word "contractor", in relation to an

establishment, means a person who undertakes to produce a given MSM,J WP_25757_2020

result for the establishment, other than a mere supply of goods or

articles of manufacture to such establishment, through contract

labour or who supplies contract labour for any work of the

establishment and includes a sub-contractor. M/s.Sterling and

Wilson Pvt. Ltd. is a contractor within the definition of Section 2 (c)

of the Act, but the petitioners were engaged by such independent

contractor not by principal employer i.e. respondents herein. The

word "principal employer" is defined under Section 2 (g) of the

Contract Labour (Regulation and Abolition) Act, 1970. According to

it, "principal 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.

Thus, the respondents herein would fall within the definition

of "principal employer" as defined in Section 2 (g) of the Contract

Labour (Regulation and Abolition) Act, 1970.

Section 10 of the Contract Labour (Regulation and Abolition)

Act is amended by the Andhra Pradesh State by A.P.Act No.10 of

2003 with effect from 22.08.2003 published in A.P. Gazette Part

IV-B, Ext.No.12 dated 19.06.2003, which is, which is as follows.

"10. Prohibition of employment of contract labour. -(1) Notwithstanding anything contained in this Act, employment of contract labour in core activities of any establishment if prohibited:

Provided that the principal employer may engage contract labour or a contractor to any core activity, if-

(a) the normal functioning of the establishments is such that the activity is ordinarily done through contractors; or MSM,J WP_25757_2020

(b) the activities are such that they do not require full time workers for the major portion of the working hours in a day or for longer periods, as the case may be;

(c) any sudden increase of volume of work in the core activity which needs to be accomplished in a specified time.

(2) Designated authority. -

(a) The 'appropriate Government' may by notification in the Official Gazette appoint a designated authority to advise them on the question whether any activity of a given establishment is a core activity or otherwise;

(b) if a question arises as to whether any activity of an establishment is a core activity or otherwise the aggrieved party may make an application in such a form and manner as may be prescribed, to the appropriate Government for decision;

(c) the appropriate Government may refer any question by itself or such application made to them by any aggrieved party as prescribed in clause (b), as the case may be, to the designated authority, which on the basis of relevant material in its possession, or after making such an enquiry as deemed fit shall forward the report to the appropriate Government, within a prescribed period and thereafter the appropriate Government shall decide the question within the prescribed period."

To abolish contract labour in industry, notification of

abolition of contract labour is required to be issued in consultation

with Central Advisory Board, and consultation of the State Board

is mandatory. But in the present case, no notification as

contemplated under Section 10 of the Contract Labour (Regulation

and Abolition) Act was issued. Hence, respondent No.3 engaged

independent contractor for maintaining 132/33 KV Sub-Station,

Vinjamuru under a special contract incorporating certain terms to

maintain and manage by engaging highly skilled, skilled, un-

skilled labour. There was absolutely nothing on record to establish

the relationship of employer and employee between the

respondents (principal employer) and the petitioners.

MSM,J WP_25757_2020

Assuming for a moment that there is a relationship of

employee and employer between the petitioners and the

respondents, such engagement of employees is prohibited by the

Act and their continuation is illegal.

It is not the case of the petitioners that the services of the

petitioners were engaged in any regular vacancies after following

regular process of selection of any employee by the employer, but

they were selected by M/s.Sterling and Wilson Pvt. Ltd. by inviting

applications by publishing notification under the caption "Wanted"

as extracted above. The role of respondent No.3 is only to verify the

certificates of the highly skilled and skilled workers engaged by the

Contractor to find out the genuineness of their qualifications as the

respondents engaged in a dangerous trade of production of

electricity and supply to the consumers. The reason for verification

is if any employee either skilled or unskilled produced fake

certificates and not actually qualified in a particular trade, it is

difficult for them to manage and maintain the 132/33 KV Sub-

Station, Vinjamuru, which would result in failure of power supply,

sometimes it may cause unnecessary electrocution causing loss to

the public at large. Mere verification of the certificates in view of

the trade being carried out by the petitioners would not create any

relationship of employer and employee.

The main endeavour of the petitioners from the beginning is

that contract employee cannot be substituted by another contract

employee relying on the judgment of the Apex Court in "State of

Haryana v. Piara Singh", wherein it is held that an ad hoc or

temporary employee should not be replaced by another ad hoc or MSM,J WP_25757_2020

temporary employee; he must be replaced only by a regularly

selected employee. This is necessary to avoid arbitrary action on

the part of the appointing authority.

The law declared by the Apex Court in the said judgment is

not in quarrel, but the same is not applicable to the present facts

of the case since the petitioners are highly skilled, skilled and

unskilled workers engaged by an independent contractor. When

the contract itself is cancelled or came to an end, the workers

engaged by the independent contractor have nothing to do with the

principal employer, the respondents herein. Therefore, the

contention of the petitioners that the contract employee cannot be

substituted by another contract employee is hereby rejected.

The other contention of the learned counsel for the

petitioners is that the contract is proposed to be given to the third

party after terminating the contract with M/s.Sterling and Wilson

Pvt. Ltd. and the consequential termination of the petitioners is

illegal and contrary to the law laid down by the learned Single

Judge of the High Court of Andhra Pradesh in "K.Ravinder v.

A.P.Generation Corporation Limited, Hyderabad" (referred

supra), wherein it is held as follows:

"It also came to light that after the construction work is over in KTPS V project, some of the petitioners are working with the contractors in maintenance and operations. If the term of the contract expires and if the corporation wants to entrust the work to new contractor, it shall be made a condition precedent that he shall employ the contract labour, who are working with the previous contractor as on today. If any worker comes to adverse notice of the Corporation official, he shall not claim any benefit under any of the orders of this Court. "

MSM,J WP_25757_2020

Imposition of such condition to engage the workers being

engaged by other contractor is made mandatory in the judgment,

but the concept of contract is totally different as there is bargain

with the employees by the independent contractor and if such

direction is given to the respondents herein, there is no possibility

of engaging highly skilled, skilled or unskilled workers by the

independent contractor of his choice settling the bargain regarding

salaries etc., it impedes the very purpose of maintenance contract

of 132/33 KV Sub-Station, Vinjamuru.

In the present case, one of the reliefs claimed by the

petitioners is to permit them to discharge their duties as usual.

Unless, maintenance work is entrusted to another independent

contractor and the said contractor engages the services of the

petitioner, they cannot be allowed to discharge their duties.

Another contention of the petitioners is that as per memo

No.CGM(HRD)/ DS/ AS.III/ PO.VII/ Adm/D.No.3596/04 dated

27.12.2004 all Superintending Engineers/Operation are informed

to advice the contractors not to change the labour who were

already working with the respective contractors.

No doubt, in view of the instructions issued in memo

No.CGM(HRD)/ DS/ AS.III/ PO.VII/ Adm/D.No.3596/04 dated

27.12.2004, respondent No.3 is bound to adhere to the memo

referred above in the event of change of contractor and it is for

respondent No.3 to incorporate such condition keeping in view the

law laid down by the learned Single Judge of the High Court of

Andhra Pradesh at Hyderabad in "K.Ravinder v. A.P.Generation

Corporation Limited, Hyderabad" (referred supra) and in the

memo No.CGM(HRD)/ DS/ AS.III/ PO.VII/ Adm/D.No.3596/04 MSM,J WP_25757_2020

dated 27.12.2004, at least the interest of the petitioners shall be

protected to some extent. Even if, the services of the petitioners are

engaged by the Contractor, they are not entitled for regularisation

or absorption in the department in the absence of any rules for

their absorption or regularisation.

The petitioners contended that they were orally terminated

by the respondents. The question of termination of petitioners does

not arise as there was no relationship of employee and employer

between the petitioners and the respondents and their services

were engaged by independent contractor, who is not a party to this

petition. As soon as the contract is terminated, the petitioners are

not entitled to work in 132/33 KV Sub-Station, Vinjamuru. Hence,

the alleged termination is neither true nor correct and this Court

cannot declare the alleged oral termination of the services of the

petitioner as illegal and arbitrary.

In view of my foregoing discussion, I find that it is a fit case

to issue a direction to respondent No.3 to advice the contractors

not to change the labour who were already working with the

respective contractors.

In the result, the writ petition is dismissed. However,

respondent No.3 is directed to advice the contractors not to change

the labour who were already working with the respective

contractors in view of the memo No.CGM (HRD)/ DS/ AS.III/

PO.VII/ Adm/D.No.3596/04 dated 27.12.2004. No costs.

The miscellaneous petitions pending, if any, shall also stand

closed.

_________________________________________ JUSTICE M. SATYANARAYANA MURTHY 26.02.2021 Ksp