Buddhadev Maity & Ors. vs Union Of India & Ors.
2010 Latest Caselaw 2574 Del

                 *IN THE HIGH COURT OF DELHI AT NEW DELHI

+                             W.P.(C) No.5532/2003

%                                                 Date of decision: 14th May, 2010

BUDDHADEV MAITY & ORS.                                             ..... Petitioners
                 Through:                   Mr. Ravi Gupta, Sr. Advocate with Mr.
                                            Ambika Ray, Advocate.

                                         Versus
UNION OF INDIA & ORS.                                              ..... Respondents
                   Through:                 Mr. Ruchir Mishra & Mr. Mukesh
                                            Tiwari, Advocates for R-1&3.
                                            Mr. V.N. Kaura, Advocate with Mr.
                                            Paramjeet Benipal & Mr. Munindra
                                            Dvivedi, Advocates for R-2.

CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1.       Whether reporters of Local papers may
         be allowed to see the judgment?                   yes

2.       To be referred to the reporter or not?                  yes

3.       Whether the judgment should be reported                 yes
         in the Digest?

RAJIV SAHAI ENDLAW, J.

1. The petitioner no.1, being the Secretary of the Haldia Refinery

(Mechanical/Maintenance) Contractors Workmen Union and the petitioners no.2

to 18 seek quashing of the orders dated 23rd December, 2002 and 2nd June, 1992 of

the Central Government made in exercise of powers under Section 10 of The

Contract Labour (Regulation and Abolition) Act, 1970, deciding not to prohibit

employment of contract labour in normal maintenance, repair or emergency shut

down and operation works in the Mechanical Division of Haldia Refinery. The

petitioners also seek a writ directing the Central Government to issue a notification

prohibiting Contract Labour Work System at Haldia Refinery of the respondent

no.2 Indian Oil Corporation (IOC). The petitioners also seek a direction to the

respondent no.2 IOC to, in the event of employing workers for operations and

other works of Haldia Refinery, give preference to the members of the petitioner

no.1 Union and the petitioners no.2 to 18.

2. Notice of the petition was issued on 3rd September, 2003. Though the

petitioners had filed CM No.10936/2003 seeking interim directions restraining the

respondent IOC from terminating the jobs of the petitioners, but the said

application was dismissed as not pressed on 27th July, 2004. Rule was also issued

in the writ petition on the same date. The counsels for the petitioners, for the

respondent IOC and for the respondent Union of India have been heard.

3. It is the case of the petitioners that the respondent IOC for its Haldia

Refinery, has been appointing labour through contractors/labour suppliers for a

particular period and on expiry of such period appoints new contractors/labour

suppliers afresh but the employment and engagement and job allotment of the

members of the petitioners‟ Union and the petitioners remains undisturbed. The

petitioners claim that they have been so engaged for long for doing duties as

casual/helpers in the shops, divisions and departments in the Haldia Oil Refinery

and are performing various duties and functions relating to production,

maintenance and transport etc. in the Refinery. They further claim that though they

have been engaged through labour contractors, they continue to perform their

duties under the direct control and supervision of the management of the Refinery;

that the engagement through a contractor is only a paper arrangement in order to

escape the liabilities under various labour laws and that their employment is under

the absolute financial and other controls of the respondent IOC. The petitioners

further claim that the jobs being performed by them are of a perennial nature and

the respondent IOC by adopting the aforesaid device is making the petitioners

living in uncertainty and fear of insecurity of job. Though there are other pleadings

in this regard but it is not necessary for the present purposes to record the same

herein.

4. Employment of contract labour has been a cause of various problems. The

question of its abolition had been under the consideration of Government. The

system of employment of contract labour lends itself to various abuses. In the

Second Five Year Plan, the Planning Commission made certain recommendations

for undertaking of studies to ascertain the extent of the problem of contract labour,

progressive abolition of the system and improvement of service conditions of

contract labour where the abolition was not possible. Various deliberations were

held thereafter and the general consensus of opinion was that the system should be

abolished wherever possible and practicable and that in cases where the system

could not be abolished altogether, the working conditions of contract labour

should be regulated so as to ensure payment of wages and provision of essential

amenities. This forms the Statement of Objects and Reasons of The Contract

Labour (Regulation & Abolition) Act, 1970. The Act aims at abolition of contract

labour in respect of such categories as may be notified by the appropriate

Government in the light of certain criteria laid down in the said Act. The Act

provides for setting up of Advisory Board of a tripartite character, representing

various interests, to advise the Central and State Governments in administering the

legislation and registration of establishments and contractors. Section 3 of the said

Act is as under:-

"3. Central Advisory Board.- (1) The Central Government shall, as soon as may be, constitute a board to be called the Central Advisory Contract Labour Board (hereinafter referred to as the Central Board) to advise the Central Government on such matters arising out of the administration of this Act as may be referred to it and to carry out other functions assigned to it under this Act.

(2) The Central Board shall consist of--

(a) a Chairman to be appointed by the Central Government;

(b) the Chief Labour Commissioner (Central), ex-officio;

(c) such number of members, not exceeding seventeen but not less than eleven, as the Central Government may nominate to represent that Government, the Railways, the coal industry, the mining industry, the contractors, the workmen and any other interests which, the opinion of the Central Government, ought to be represented on the Central Board. (3) The number of persons to be appointed as members from each of the categories specified in sub-section (2), the term of office and other conditions of service of, the procedure to be followed in the discharge of their functions by, and the manner of filling vacancies among, the members of the Central Board shall be such as may be prescribed:

Provided that the number of members nominated to represent the workmen shall not be less than the number of members nominated to represent the principal employers and the contractors."

5. Similarly, Section 4 provides for setting up of the State Advisory Board

but with which we are not concerned herein.

6. Section 5 of the Act is as under:-

"5. Power to constitute committees.- (1) The Central Board or the State Board, as the case may be, may constitute such committees and for such purpose or purposes as it may think fit.

(2) The committee constituted under sub-section (1) shall meet at such times and places and shall observe such rules of procedure in regard to the transaction of business at its meetings as may be prescribed. (3) The members of a committee shall be paid such fees and allowances for attending its meetings as may be prescribed:

Provided that no fees shall, be payable to a member who is an officer of Government or of any corporation established by any law for the time being in force."

7. Finally Section 10 empowers the Government to prohibit contract labour.

The said provision is as under:-

"10. Prohibition of employment of contract labour.- (1) Notwithstanding anything contained in this Act, the appropriate Government may, after consultation with the Central Board or, as the case

may be, a State Board, prohibit, by notification in the Official Gazette, employment of contract labour in any process, operation or other work in any establishment.

(2) Before issuing any notification under sub-section (1) in relation to an establishment, the appropriate Government shall have regard to the conditions of work and benefits provided for the contract labour in that establishment and other relevant factors, such as--

(a) whether the process, operation or other work is incidental to, or necessary for the industry, trade, business, manufacture or occupation that is carried on in the establishment:

(b) whether it is of perennial nature, that is to say, it is of sufficient duration having regard to the nature of industry, trade, business, manufacture or occupation carried on in that establishment;

(c) whether it is done ordinarily through regular workmen in that establishment or an establishment similar thereto;

(d) whether it is sufficient to employ considerable number of whole- time workmen.

Explanation.-- If a question arises whether any process or operation or other work is of perennial nature, the decision of the appropriate Government thereon shall be final."

8. The petitioners represented to the Government of India for taking steps

under Section 10 aforesaid for prohibiting employment of contract labour by the

management of Haldia Refinery of respondent IOC for carrying out the

maintenance and operational work in the Mechanical Division. The said

representation of the petitioners was forwarded by the Government of India to the

Central Advisory Board constituted under Section 3 (supra) and which Board has

also been impleaded as respondent no.3 herein. The Advisory Board in turn,

appointed a three member Committee to look into the said representation. The

Central Government however on 2nd June, 1992 took a decision not to prohibit

employment of contract labour in the normal maintenance, repair or emergency

shut down and operation works in the Mechanical Division of Haldia Refinery.

The petitioners again represented to the Central Government for reconsideration of

the decision dated 2nd June 1992 and to provide opportunity of being heard to the

petitioners.

9. The petitioners filed W.P.(C) No.1762/2001 in this Court in this regard.

The said writ petition was disposed of vide order dated 7th May, 2002 with the

directions to the Central Government to communicate its decision on the

representation of the petitioners within eight weeks thereof. The Government

thereafter communicated its decision dated 23rd December, 2002 stating that the

decision dated 2nd June, 1992 in exercise of powers under Section 10 of the Act

could not be reviewed in view of the judgments in Steel Authority of India Ltd.

Vs. National Union Water Front Workers AIR 2001 SC 3527 and Air India

Statutory Corporation Vs. United Labour Union AIR 1997 SC 645.

10. Aggrieved therefrom, the present petition was filed. The counsels have

addressed not on the aspect of whether the decision dated 2nd June, 1992 could be

reviewed or not but on the aspect of the validity of the decision dated 2nd June,

1992.

11. Section 10 of the Act empowers the Government to, "after consultation

with the Board", prohibit employment of contract labour. Section 10 (2) lays down

factors which the Government should consider before taking such decision. The

explanation to Section 10 makes the decision of the Government final only on

question as to whether any process or operation or other work is of perennial

nature or not. The questions which thus arise are -

i. What is the scope of judicial review of a decision taken by the

Government in exercise of powers under Section 10 of the Act?

ii. If judicial review is permissible, to what extent and circumscribed by

what parameters, if any?

iii. what is the meaning of "after consultation with the Board" in Section

10(1) of the Act and whether the decision arrived at without such

consultation can be quashed/set aside by the court.

12. The aforesaid aspects are covered by judgments cited by the counsels for

the parties. However before noticing the said judgments, the facts leading to the

decision dated 2nd June, 1992 may be noticed.

13. As aforesaid, the representation of the petitioners for abolition of contract

labour was forwarded by the Central Government to the Central Advisory Board

which constituted a three member Committee. The petitioners have as annexure to

the writ petition filed the report of the Committee. From the said report it

transpires that the matter was discussed in the meeting held on 14th December,

1987 of the Board when it was decided that a three member Committee be

constituted to go into the question of whether or not the contract labour system

may be abolished in the Mechanical Division of Haldia Refinery. Vide Resolution

dated 30th May, 1988 of the Board, a Committee consisting of Shri N.C. Sinha,

Executive Director (Establishment) of Indian Railways, Shri B. Choudhury,

General Secretary, Indian National Trade Union Congress and the Welfare

Commissioner, Labour Welfare Organization, Calcutta was so constituted. The

terms of reference of the said Committee were to study the working of the contract

labour system in the Maintenance and Operation working in the Mechanical

Division of Haldia Refinery of the respondent IOC and, keeping in view the

provisions of Section 10(2) of the Act, to make suitable recommendations whether

or not the employment of contract labour in the said division in Haldia Refinery

should be prohibited. I had during the hearing enquired from the counsels for the

parties whether the members of the said Committee were otherwise also members

of the Board. The answer is in the negative. The Committee thus was of

independent persons and not a representative of the Board.

14. The aforesaid Committee invited views of the petitioners‟ Union, held

consultations with the Regional Labour Commissioner and also held discussions

with the management and workers of the Haldia Refinery as well as the then

contractors. The Committee also enquired into and studied the practice being

followed in other Refineries of the respondent IOC as to how the work during

emergency and annual turn-around time was being carried on in the other

Refineries. The Committee also made a study/analysis of the jobs in the

Mechanical Division of Haldia Refinery. Two members of the Committee finally

made the following findings:-

"5. From the submissions made by the management and the Union and the visit to the Refinery it is found

(a) that the contract labour is engaged in the Mechanical Division on the processes/operations and area of work which is incidental to and/or necessary for the jobs carried out in Haldia Refinery;

(b) engagement of contract labour in Haldia Refinery on day to day job is of perennial nature although the management stresses that they are engaging the contract labour "due to historical reasons and under pressure;"

(c) at least in 2 other Refineries, except for annual shutdowns, the day to day job and emergencies are being carried out without assistance of the contract labour; and

(d) while it may not be possible for the management to employ large number of persons for attending to annual shutdowns, which are of limited duration, the day to day operations and most of emergencies can be carried out by the department labour the strength of which is under study by the National Productivity Council."

15. The third member of the Committee gave his dissent report and in

the said dissent report concluded that the need for contract labour is there in

the Mechanical Division of Haldia Refinery and recommended accordingly.

16. Notwithstanding the dissent of one of the members, the Committee,

probably acting on the principle of majority, made the following

recommendations under the signature of all three members:-

"14. The Committee, therefore, recommends that except for annual turn-arounds, the employment of contract labour in the Mechanical Division of the Haldia Refinery of Indian Oil Corporation Limited should be prohibited."

17. The aforesaid report/recommendation of the Committee was placed before

the Board. The Board however only forwarded the report of the Committee to and

left the matter for the decision by the Government "taking into consideration the

views expressed in the matter."

18. The Central Government in the decision dated 2nd June, 1992 has held as

under:-

"2. In pursuance of the recommendations of the Board, the matter has been considered in detail by the Central Government and it has been decided not to prohibit employment of contract labour in normal maintenance, repair of emergency shutdowns, and operation works in the Mechanical Division of Haldia Refinery. It has further been decided that wage rates and other conditions of service be regulated in terms of Rule 25(2) (v) (a) of the General Labour (Regulation and Abolition) Central Rules, 1971 to ensure that the workers get same benefits/facilities as are being made available to the regular employee doing the same or similar jobs."

19. The aforesaid facts would show that though the representation of the

petitioners was rightly forwarded by the Central Government to the Board

constituted under the Act and though the Board in exercise of its powers under

Section 5 of the Act constituted a Committee but on receipt of a report of the

Committee the only advice of the Board to the Central Government was to decide

"taking into consideration the views expressed in the majority and the minority

report of the Committee". What thus falls for adjudication is whether the aforesaid

can constitute an "advise of the Board to the Government" within the meaning of

Section 3 of the Act so as to hold that the Central Government has taken the

decision in exercise of powers under Section 10 (1), "in consultation with the

Board."

20. "Consultation" is a word of many hues. Its meaning/interpretation is

contextual. In my view, the word „consultation‟ in Section 10 has to take colour

from and/or be read in the context of the obligation/duty of the Board in Section 3

to advise the Government. In the present case no advice has been given by the

Board. All that the Board has done is to constitute a Committee and to forward the

report of the said Committee to the Government. The views, suggestions,

observations, recommendations of the members of the Committee cannot be

considered as the advice of the Board to the Central Government. Moreso when

the same were not unanimous. As aforesaid, the members of the Committee were

not the members of the Board. They were outsiders appointed to investigate facts

and place the report with their views before the Board. The obligation/duty under

the Act to advise the Central Government is not of the members of the said

Committee but of the Board. The Board as aforesaid has been prescribed to

comprise of a Chairman to be appointed by the Central Government, the Chief

Labour Commissioner and such other members from the Government, Railways,

Coal Industry, Mining Industry, contractors, workmen or any other interest, which,

in the opinion of the Government, ought to be represented on the Board. It is

assumed that the Government, in appointing the Chairman of the Board will have

due regard to the duties to be performed by him. The person appointed as a

Chairman is expected to be an expert or having experience and qualification in the

subject. The role of such a highly specialized body, containing representatives

from several fields, as the Board is under Section 3 of the Act, cannot be reduced

only to appointment of a committee and of forwarding the report of the committee

to the Central Government. The qualifications prescribed of the members of the

Board are not to be utilized in the appointment of the committee and/or in

selecting the members of the committees but in rendering advice to the

Government on whether the employment of contract labour in any process,

operation or other work in any establishment should be prohibited or not. I am

afraid the Board in the present case has not rendered any advice whatsoever as it

was required to and in the absence of any advice rendered, there could not be any

consultation of the Central Government with the Board, only whereafter the

Central Government is to take a decision on whether to prohibit contract labour or

not.

21. At this stage, another aspect may also be noted. As set out in the Statement

of Objects and Reasons of the Act itself, the question of abolition of contract

labour had been engaging the attention of the legislature. However in the Act as

enacted, instead of prohibiting contract labour generally it was deemed expedient

to empower the Government to prohibit contract labour which was found to be

abusive, in certain sectors only. However, since the said decision was being left to

the Government, a scheme for the manner in which the decision was to be taken

was framed. The Government was empowered to take the decision only after

consultation with the Board constituted under the Act and which was to be an

Advisory Body to the Government in this respect. The whole purpose of

constitution of such a high level Advisory Body would be lost if it were to fail in

performing its duties and to reduce itself to a mere post office. The views of the

members and Chairman of the Advisory Board, neither on the report of the

Committee nor on the facts of the case are known. All that the Central

Government had before it were the views of the Committee. In fact, the members

of the Board did not even say whether they agreed with the views of the

Committee or not and if so whether with the majority view or with the minority

view. The Committee was not to be a substitute for the Board.

22. The senior counsel for the petitioners has invited attention to -

A. Gujarat Working Class Union Vs. State of Gujarat

MANU/GJ/0241/1994. The challenge before the Division bench of

the Gujarat High Court was to the decision taken by the Government

not to abolish contract labour system in respect of security staff of

Gujarat Narmada Valley Fertilizers Company Ltd. The Board in that

case comprised of a retired judge of the High Court as Chairman and

nine members; while four members of the Board opined against

abolition of contract labour, four other members and the Chairman

opined for it. The Division Bench however found that the State

Government, besides the report aforesaid of the Board, also took into

consideration certain other material and which material was not

before the Board. The Division Bench held that the object of

consultation with the Board is not merely to collect information

which the Government could have collected through its own

departments or other agencies. It was held that "consult" implies a

conference of two or more persons or impact of two or more minds

to enable them to evolve a correct solution. It was further held that

without any meaningful dialogue with the Board and interaction of

views and thoughts, there was no consultation of the Government

with the Board, which is mandatory. The Division Bench thus

quashed and set aside the order of the State Government and directed

it to re-examine the matter in accordance with law.

B. Indian Airports Employees Union Vs. Air India

MANU/MH/0260/1996. In this case also the Board had constituted a

Tripartite Committee. However there was no unanimity of opinion

amongst the members of the Board as to the report of the said

Committee. The Board as such recommended to the Central

Government to take a final decision. The Division Bench of the

Bombay High Court held that Section 10 (1) imposes a duty on the

appropriate Government to consult the Board; though the advice of

the Board is not binding on the Government and the ultimate

discretion to prohibit contract labour rests with the appropriate

Government, nevertheless the language is suggestive that the advice

of the Board has to be discarded for sound reasons. It was held that

the Boards consist of representative of the workmen, of the industry

and appropriate Government and so the consultation with these

Boards means that the representatives of the contractor, the

workmen and industry will have a voice in expressing their views

when the Board is being consulted with regard to the proposal

whether the contract labour should be prohibited or not. It was

further held that the Act does not vest absolute discretion in the

appropriate Government to prohibit contract labour. The Division

Bench held that the Board in the circumstances had failed to perform

its statutory duty and had abdicated its functions in favour of the

Government. In this case also the decision of the Board was quashed

and the matter remanded for fresh decision.

C. M/s L & T Mc. Neil Ltd. v. Government of Tamil Nadu AIR 2001

SC 844 laying down that the views of the Board are to be ascertained

for the purpose of assisting the Government in reaching its

conclusion on the matter one way or the other. The Supreme Court,

finding that no definite view was expressed by the Board in that

case, held that the Government could not have reached the

conclusion one way or the other in the absence of any advice of the

Board. The decision of the Government in issuing the notification

under Section 10(1) was thus held to be vitiated.

D. M/s. Zenith Industrial Services Vs. Union of India 1990 I LLJ 38.

The Division bench of the Orissa High Court also held that the

power under Section 10 has to be exercised in the manner indicated

therein and prior consultation with the Advisory Board is a must to

prevent the Government from misusing or abusing the power or

exercising it arbitrarily. Finding no material of the nature of

consultation, the Division Bench struck down the notification issued

in exercise of power under Section 10.

23. Per contra, the respondent no.2 IOC relies on Barat Fritz Werner Ltd. Vs.

State of Karnataka AIR 2001 SC 1257. In this case also the contention was that

no consultation had been held with the Board. The Supreme Court however found

that the Board had sent its advice to the Government suggesting the abolition of

contract labour. It was thus held that the consultation had been held. The counsel

for the respondent IOC, on the basis of the said observation contends that all that

is required by consultation is the assimilation of data and material and which in the

present case has been done by the Committee and as such the Board by placing the

report of the Committee before the Central Government has rendered advice and

nothing further was required to be done. Reliance in this regard is also placed on

the judgment of Single Judge of Calcutta High Court in Indian Oil Blending Ltd.

Vs. Union of India 2005 (107) FLR 940. However, it will be found that in Barat

Fritz Werner Ltd. (supra) the Board had rendered advice to the Government. All

that the said judgments hold is that the said advice constituted sufficient

consultation.

However in the present case there is no advice whatsoever of the Board.

The Board has merely appointed a Committee and pushed the report of the

Committee and which also has an element of dissent, to the Government without

even as much as letting the Government know whether it agrees or disagrees with

the dissent. The said judgments, therefore, cannot come to the rescue of the

respondent IOC.

24. The counsel for the Union of India has adopted the arguments of the

counsel for the respondent no.2 IOC.

25. Once the Board has given its advice, the sufficiency or insufficiency thereof

depends on the facts of a particular case. Here we are faced with a case of no

advice at all. The decision of the Central Government is thus clearly vitiated.

26. The Supreme Court in Ex-Capt. Harish Uppal Vs. Union of India (2003) 2

SCC 45, in relation to a Statutory Body as the Bar Council of India, held that no

Body or Authority, statutory or not, vested with powers can abstain from

exercising the powers when an occasion warranting such exercise arises. It was

further held that power vested in a public authority is coupled with a duty to

exercise it when a situation calls for such exercise; the Authority cannot refuse to

act at its will or pleasure and the Courts will always have the authority to compel

or enforce the exercise of the power by the Statutory Authority and be compelled

to issue directions as are necessary to compel the Authority to do what it should

have done on its own.

27. Similarly, qua "consultation", in Chandramouleshwar Prasad v. The

Patna High Court AIR 1970 SC 370, it was held that consultation or deliberation

is not complete or effective before the authorities thereto make their respective

points of view known to the other and discuss and examine the relative merits of

their views. If one party makes a proposal to the other, who has a counter proposal

in his mind, which is not communicated to the proposer, the direction to give

effect to the counter proposal without anything more, cannot be said to have been

issued after consultation. Though in Supreme Court Advocates-on-Record

Association Vs. Union of India (1993) 4 SCC 441 it was held that meaning of

"consultation" will take colour from the context, but in the present case

considering that the jobs of a socially and economically weaker section of a

society are likely to be affected by the decision of the Government and further

considering the machinery which has been devised under the Act, the meaning of

"consultation" would be as adopted by the Supreme Court in

Chandramouleshwar Prasad (supra). The whole purpose of constituting a high

powered Statutory Advisory Board would be vitiated if the members appointed

thereof do not get an opportunity to exchange their views with the Government. If

the members of the said Board advise for prohibition and which would be in the

interest of the workers and the Government intends to act otherwise, it is essential

for the Government to place its reasons for disagreeing with the recommendation

before the Board to enable the Board to point out the fallacy, if any, in the reasons

prevailing with the Government. Without such fair exchange, the Government

would have an executive fiat to prohibit or to not prohibit the contract labour and

which would be contrary to the express language and spirit of the Act. As

aforesaid, though prior to the enactment it was felt that contract labour per se

should be prohibited but the decision of the sectors in which it was to be

prohibited was left to the Government but the powers of the Government were

circumscribed by consultation with the Board. Though the Government is not

bound by the recommendation of the Board, but the decision of the Government is

subject to judicial review and which would also be facilitated if a record of such

fair exchange of views is maintained.

28. I, therefore, hold that in the present case the Central Advisory Board

(Respondent no.3) has failed to perform its duty and to render advice sought by

the Central Government. Resultantly, the decision dated 2nd June, 1992 of the

Central Government impugned in this petition is without consultation with the

Central Advisory Board and thus not in accordance with Section 10 of the Act.

The said decision is thus quashed. The matter has already been delayed. The

representations were made by the petitioners nearly quarter of a century ago.

Directions were also issued for hearing the petitioners. In the circumstances and

since sufficient time has elapsed, the petitioners are given an opportunity, to

within eight weeks hereof, make a fresh representation if necessary to the Central

Government. The Central Government is directed to take a decision thereon in

accordance with law including as aforesaid within six months of receipt of

representation from the petitioners. The Central Government shall also give an

opportunity of being heard to the petitioners after informing the petitioners of the

advice of the Central Advisory Board.

No order as to costs.

RAJIV SAHAI ENDLAW (JUDGE) 14th May, 2010 pp