Delhi High Court
Central Warehousing Corporation vs Govt Of India And Ors on 31 May, 2022
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 30.03.2022
Date of decision: 31st May, 2022
+ LPA 172/2021 & CM APPL. 17589/2021
CENTRAL WAREHOUSING CORPORATION ..... Appellant
Through: Mr.Vikas Singh, Sr. Adv. with
Mr.K.K. Tyagi and Mr.Iftekhar
Ahmad, Advs.
versus
GOVT OF INDIA AND ORS ..... Respondents
Through: Mr.R.V. Sinha, Sr.CGC with
Mr.A.S. Singh, Mr.Amit Sinha &
Ms.Sharanya Sinha, Advs. for R-1.
Mr.Asha Jain Madan &
Mr.Mukesh Jain, Advs. for R-2 to
R-225.
Mr.Neeraj Shekhar, Dr.Sumit
Kumar, Mr. Abhishek Pandey &
Mr. Hemant Kumar Sunny,
Advs.for R-227.
Mr.Harvinder Singh & Mr.Akhand
Pratap Singh, Advs. for Suman
Forwarding Agency Pvt. Ltd.
+ LPA 173/2021 & CM APPL. 17645/2021
CENTRAL WAREHOUSING CORPORATION ..... Appellant
Through: Mr.Vikas Singh, Sr. Adv. with
Mr.K.K. Tyagi and Mr.Iftekhar
Ahmad, Advs.
versus
VIJAY BAHADUR PAL AND ORS ..... Respondents
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Signing Date:01.06.2022
14:44:26 LPA 172/2021 & LPA 173/2021 Page 1 of 45
Through: Mr.Ashok Agarwal, Mr.Kumar
Utkarsh, Mr.Manoj Kumar, Advs.
for R-1 to R-107.
Mr. Neeraj Shekhar, Dr.Sumit
Kumar, Mr. Abhishek Pandey &
Mr. Hemant Kumar Sunny,
Advs.for R-227
Mr.Harvinder Singh & Mr.Akhand
Pratap Singh, Advs. for Suman
Forwarding Agency Pvt. Ltd.
CORAM:
HON'BLE MR. JUSTICE MANMOHAN
HON'BLE MR. JUSTICE NAVIN CHAWLA
NAVIN CHAWLA, J.
1. These two appeals have been filed by the appellant challenging the
Impugned Judgment and Order dated 17.05.2021, passed by the learned
Single Judge in CM No.1291 of 2021 and CM No.2812 of 2021 filed in
W.P.(C) 482 of 2021 (challenged in LPA 173 of 2021) and CM No.742
of 2021 in W.P.(C) 4114 of 2008 (challenged in LPA 172 of 2021). By
way of the Impugned Order, the learned Single Judge has directed the
appellant herein to continue the services of the workmen who were on the
rolls of M/s Suman Forwarding Agencies Private Limited (hereinafter
referred to as „M/s SFPL‟), the earlier contractor of the appellant, as on
05.01.2021 and continue to deploy at them at the concerned
establishment, that is, the Inland Clearance Depot (in short, „ICD‟),
Patparganj, Delhi, through a contractor of its choice, on the same terms
and conditions, till such time a final decision is reached in the pending
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proceedings, which would include W.P.(C) 4114 of 2008 and in the two
references, that is, I.D. No.142 of 2015 and I.D. No.57 of 2015.
2. W.P.(C) 4114 of 2008 had been filed by the appellant herein
challenging the Notification dated 17.11.2006 of the Government of
India, Ministry of Labour and Employment (hereinafter referred to as the
„Notification dated 17.11.2006‟), prohibiting the employment of contract
labour in the works of handling of import and export containers and
cargo, their loading and unloading from road vehicles, and their stuffing
or destuffing in and from containers, in the establishment of the Central
Warehousing Corporation (hereinafter referred to as the „CWC‟), Village
Ghazipur, Patparganj, Delhi (hereinafter referred to as „ICD,
Patparganj‟).
3. CM No. 742 of 2021 was filed by the respondent nos. 2 to 225 in
W.P.(C) 4114 of 2008, claiming therein that many of the
respondents/workers have been working for the appellant at the ICD,
Patparganj, for the last about three decades and have raised an industrial
dispute, being I.D. No. 57 of 2015, claiming regularisation of their
services, which is pending adjudication before the Central Government
Industrial Tribunal-cum-Labour Court (in short, the „CGIT‟). The
respondents/workmen prayed for a stay on termination of their services.
4. W.P.(C) 482 of 2021 was filed by 105 workmen against the
appellant, M/s SFPL and M/s Rahul Roadways (hereinafter referred to as
„M/s RR‟), claiming that they had been appointed as contract labour on
different dates during the period ranging from the year 1985 to the year
2002. Though several contractors were changed, the workmen were
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continued in services as contract labour with the appellant/CWC being
the principal employer. The workmen, who were the petitioners in the
writ petition alongwith certain other workmen, raised an industrial
dispute, which was referred by the Government of India for adjudication
to the CGIT, vide order dated 04.06.2015 and has been registered as I.D.
No. 142 of 2015. The same is pending adjudication before the CGIT,
however, in the absence of a Presiding Officer, the same is being
adjourned from time to time. They claimed that in the meantime, as the
appellant/CWC threatened termination of their services, they have filed
the said writ petition praying for a restraint on the appellant/CWC from
terminating their services during the pendency of the above stated
industrial dispute.
5. The application, being CM No. 1291 of 2021, was filed by the
workmen/writ petitioners, in W.P.(C) 482 of 2021, praying for interim
orders restraining the appellant/CWC from terminating the services of the
petitioners.
6. On the above application, the learned Single Judge, vide order
dated 13.01.2021, directed M/s RR, the new contractor employed by the
appellant/CWC, to maintain status quo with regard to the workmen/writ
petitioners, obtaining as on 13.01.2021, till further orders.
7. Another application, being CM No. 2812 of 2021, was thereafter
filed by the workmen/petitioners in W.P.(C) 482 of 2021, claiming that in
spite of the interim order dated 13.01.2021, M/s RR was not allowing the
petitioners therein to resume duty. The petitioners therein, therefore,
sought clarification of the order dated 13.01.2021 and, in the alternative,
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prayed for a direction to M/s RR, who had been impleaded as the
respondent no. 3 in the said writ petition, to permit the petitioners therein
to forthwith resume their duty.
8. The learned Single Judge, by way of the Impugned Order,
observed that it is not in dispute that although as many as four contractors
have been changed by the appellant/CWC between 2001 and 05.01.2021,
when M/s RR was appointed as one of the contractors, a substantial
number of workmen have remained on the rolls of one contractor or the
other. It was also not in dispute that the industrial dispute(s) raised by the
workmen are pending adjudication before the learned CGIT. The learned
Single Judge has held that the status quo was disturbed by the
appellant/CWC without taking express permission of the Industrial
Tribunal under Section 33(1) of the Industrial Disputes Act, 1947
(hereinafter referred to as the „ID Act‟), which, according to the learned
Single Judge, was attracted to the facts of the petition. The learned Single
Judge has further held that though the Notification dated 17.11.2006,
prohibiting the employment of contract labour at the ICD Patparganj, had
been stayed by the Court in the writ petition filed by the appellant/CWC,
being W.P.(C) 4114 of 2008, vide order dated 28.05.2008 (which was
made absolute on 26.04.2010), the said interim order did not efface either
the findings of the Central Advisory Contract Labour Board (hereinafter
referred to as the „CACLB‟) or the Notification dated 17.11.2006, which
was based on these findings. The learned Single Judge has held that the
appellant/CWC was therefore, wrong in replacing the workmen while the
above disputes were pending consideration.
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Background Facts
9. Before we take note of the submissions made by the learned
counsels for the respective parties, the facts leading up to the present
appeals need mention and are stated as under:
9.1 The appellant/CWC has been operating the ICD Patparganj on
licence being granted by the Customs Authorities since 1985. For the
purpose of handling and transporting the containers, the appellant/CWC
appoints the handling and transport contractors.
9.2 In January 2000, one Sh. Inderdev Paswan and 96 others, filed a
writ petition before this Court, being Civil Writ Petition No. 48 of 2000,
inter alia, claiming for regularisation of their services and issuance of a
notification for abolition of contract labour at the ICD facility of the
appellant/CWC. A similar writ petition, being Civil Writ Petition No.
4407 of 2000, was filed by one Sh. Subhash Chaurasia and 58 others. An
interim order, directing that the services of the petitioners be not replaced
with any other contract labour, was passed by this Court in the said writ
petitions.
9.3 The above-said writ petitions were disposed of by an order dated
17.10.2000, referring the dispute between the parties to the CACLB for
making an appropriate recommendation, if any, on whether the contract
labour requires to be abolished. In the meantime, the interim order was
directed to be continued till the disposal of the reference and it was
clarified that the services of the petitioners therein would not be
substituted with any other contract labour, however, that would not mean
that the petitioners were at liberty to flout any legal and valid orders
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passed by the respondents pertaining to their duties and shifts. It was
further clarified that the petitioners therein would, if entitled, be paid
overtime allowances.
9.4 The CACLB, in the minutes of its 53rd meeting held on 11th - 12th
March, 2003, made recommendations to the Government of India for
prohibiting the employment of contract labour in the work of handling of
import and export containers and cargo, their loading and unloading from
road vehicles and their stuffing and destuffing in or from containers in
the ICD Patparganj. In making the said recommendation, the CACLB
reached the following findings:
" The Board after taking into account the
submissions of the parties, the report of the
Committee constituted by it and the factors set out
in sub section (2) of Section 10 of the Contract
Labour Act came up with the following findings:-
(a) The work of storage of handling of import
and export container/cargo, loading and
unloading of import and export cargo from
road vehicle, their stuffing/destuffing in
containers is being carried out in the
establishment of ICD at Patparganj, CWC
since 1985 through contract labour.
Contractors have changed but the workers
engaged by them remain the same.
(b) The workers are paid minimum wages as
prescribed by the Government of NCT of
Delhi which is approximately Rs.2700/- to
Rs.3000/- per month and quite low in
comparison to the wages paid to the lowest
category of regular employees which
comes to about Rs.5500/- to Rs.7500/-. No
leave. enhancement of wages on an yearly
basis medical facilities, bonus etc. are
available to the workmen engaged through
contractors though welfare amenities to be
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provided under the Act have been adhered
to.
(c) The processes/operations carried out are
perennial in nature and of sufficient
duration which has been established by the
fact that these workmen are working in the
establishment since its inception that is
1985.
(d) There is sufficient work to employ
considerable number of whole time
workmen because though there has been
gradual mechanization of the operations
as endenced by the decline in the
manpower deployed in the year 2002 as
against the year 2001, the fact remains
that even the mechanical operations
cannot be run without the help of manual
labour, however, less the number may be.
(e) Reduction in business due to coming up of
a Mega Container Terminal at Dadri and
withdrawal of licence by the customs
authorities are only assumptions which
cannot be taken into account. Even if the
licence is withdrawn, similar treatment as
would be applicable to regular workmen
can be accorded to existing contract
labour, if they are regularized.
(f) The work is ordinarily done through
regular workmen in the similar
establishment of Container Corporation of
India."
9.5 Based on the recommendation of the CACLB, the Government of
India, Ministry of Labour and Employment, issued the Notification dated
17.11.2006, prohibiting the employment of the contract labour in the
works of handling of import and export containers and cargo, their
loading and unloading from road vehicles and their stuffing, destuffing in
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and from containers in the establishment of the appellant/CWC from the
date of publication of the Notification dated 17.11.2006.
9.6 Aggrieved of the above Notification dated 17.11.2006, the
appellant/CWC challenged the same before this Court by way of a writ
petition, being W.P.(C) 2849 of 2007. The said writ petition was disposed
of by this Court vide order dated 24.04.2007, with the observation that in
view of the judgment of the Supreme Court in ONGC v. Collector of
Central Excise1, the disputes are first to be raised before a High-Powered
Committee for appropriate clearance.
9.7 By a communication dated 01.05.2008, the Government of India
communicated its clearance for the appellant/CWC to pursue its remedy
in a writ petition before this Court, whereafter, the appellant/CWC filed
the petition, being W.P.(C) 4114 of 2008 (out of which the present
appeal, being LPA No.172 of 2021, arises), challenging the Notification
dated 17.11.2006.
9.8 This Court, vide its interim order dated 28.05.2008, was pleased to
stay the operation of the Notification dated 17.11.2006. The interim order
was confirmed by this Court vide its order dated 26.04.2010.
9.9 182 workmen, employed by M/s SFPL, raised their industrial
dispute, being I.D. No. 57 of 2015. Another industrial dispute, being I.D.
No. 142 of 2015, was also initiated at the instance of 115 workmen
purportedly employed by M/s SFPL.
(2004) 6 SCC 437.
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9.10 Pursuant to an open tender, M/s RR was appointed by the
appellant/CWC as a contractor in the handling and transportation of ISO
containers and allied services at the ICD, Patparganj.
9.11 M/s RR claims that vide its letter dated 05.01.2021, it supplied a
list of 120 authorised employees to the Manager, CWC, stating that they
would start their work from 06.01.2021. From 06.01.2021 these workmen
started to work at the ICD facility.
9.12 The respondent nos. 2 to 225 filed an application, being CM No.
742 of 2021, in W.P.(C) 4114 of 2008, praying for a stay on the
termination of their services. Notice in the application was issued by the
learned Single Judge vide order dated 08.01.2021. In the meantime, 105
other workmen filed their independent petition, being W.P.(C) 482 of
2021. On this writ petition, the learned Single Judge, vide order dated
13.01.2021, directed M/s RR to maintain status quo.
9.13 Another application, being CM No. 1291 of 2021, was filed by the
writ petitioners in W.P.(C) 482 of 2021, complaining that in spite of the
order dated 13.01.2021, they were not allowed to work by M/s RR.
9.14 As noted hereinabove, the learned Single Judge was pleased to
dispose of the above three referred applications by way of Impugned
Order.
Submissions of the Appellant
10. Mr Vikas Singh, the learned senior counsel for the appellant,
submits that in terms of the judgment of the Supreme Court in Steel
Authority of India Ltd. & Ors. v. National Union of Waterfront
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Workers2, no right to claim employment with the principal employer,
accrues in favour of the contract labour, even if a notification prohibiting
contract labour is issued by the appropriate government. He submits that,
in any case, the Notification dated 17.11.2006 having been stayed by this
Court in the writ petition filed by the appellant/CWC, no reliance thereon
can be placed for the present to grant any interim protection of
employment to the respondent-workmen. He submits that, therefore, the
reliance of the learned Single on the Notification dated 17.11.2006 in the
Impugned Order cannot be sustained.
10.1 He further submits that the reliance of the learned Single Judge on
Section 33 of the ID Act also cannot be sustained, inasmuch as, as of
now, the contract labour has not been declared as sham or bogus. The
contract labour continues to be governed by the Contract Labour
(Regulation and Abolition) Act, 1970 (hereinafter referred to as the
„CLRA Act‟), which provides for a complete code dealing with the
contract labour. In fact, the industrial dispute raised by the workmen is
itself not maintainable before the CGIT.
10.2 The learned senior counsel for the appellant further submits that,
even otherwise, the Notification dated 17.11.2006 issued by the Central
Government, is not sustainable and is liable to be set aside by this Court.
He submits that the CACLB, in issuing its recommendations, had
wrongly stated that the similar establishment of Container Corporation of
India is getting the same work through regular workmen. This is factually
incorrect. He submits that the recommendations were even otherwise
(2001) 7 SCC 1.
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based on the conjunctures and failed to take into account relevant
circumstances.
10.3 The learned senior counsel for the appellant further submits that
the Impugned Order is liable to be set aside inasmuch as it has granted
final relief at the interim stage. The Impugned Order further directs status
quo ante, which could not have been granted at an interim stage.
10.4 He further submits that the appellant/CWC has, in fact, introduced
a number of SVRS Schemes and as against the regular employee strength
of 8579 in the year 2000-01, the strength in the year 2021 is only 2642.
The total number of Twenty Equivalent Units (in short, „TEUs‟) handled
at the ICD, Patparganj, in the year 2000 was 47496, which has been
reduced to 17183 in the year 2020 and has further gone down drastically
thereafter. He submits that the Impugned Judgment would make the
entire functioning of the ICD, Patparganj unviable, which may even lead
to the closure of the unit. He submits that M/s RR, the new contractor, is
being paid on the basis of the TEUs and not on the basis of workmen
employed. He submits that therefore, the implementation of the interim
order passed by the learned Single Judge, will lead to an irreparable
injury to the appellant/CWC and M/s RR.
Submissions on behalf of M/s RR
11. To maintain the continuity of the submissions made against the
Impugned Judgment, we now record the submissions made by Mr Neeraj
Shekar, Advocate appearing on behalf of M/s RR.
11.1 He submits that pursuant to the Notice Inviting E-Tender dated
29.09.2020, for being appointed as a contractor for the handling and
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transportation of ISO containers and allied services at the ICD,
Patparganj, floated by the appellant/CWC, M/s RR, being successful, was
awarded the contract, vide letter dated 11.12.2020. In terms of the tender
document, M/s RR, vide letter dated 05.01.2021, supplied a list of 120
employees to the Manager, CWC, stating that they would start their work
on 06.01.2021. These employees started the work from 06.01.2021. He
submits that M/s RR has applied for a Contract Labour Licence under the
CLRA Act. He further submits that neither the tender document nor the
Agreement provides that M/s RR is required to employ the
respondents/workmen, on a contractual basis or otherwise, for
discharging the obligation under the contract and, therefore, no direction
could have been issued against M/s RR for continuing with the
employment of respondents/workmen. He submits that no employer-
employee relationship ever existed between the respondents/workmen
and M/s RR.
Submissions on behalf of M/s SFPL
12. As noted hereinabove, we first are taking note of submissions
made against the Impugned Judgment. Accordingly, we take note of
submissions made by Mr Harvinder Singh, Advocate appearing on behalf
of M/s SFPL.
12.1 He submits that directions, as issued by the Impugned Judgment,
could not have been passed till the final decision is reached in the
industrial dispute(s) raised by the workmen. He further submits that the
workmen have been taking an inconsistent stand in various proceedings
by, first, contending to be contract labour, and later, claiming that such a
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contract was a sham. He further adopted the submissions of Mr. Vikas
Singh, the learned senior counsel appearing for the appellant/CWC.
Submissions of Ms Asha Jain Madan, the learned counsel appearing
for the workmen in LPA 172/2021
13. Ms. Madan, the learned counsel for the workmen in LPA 172 of
2021, submits that the respondents/workmen herein have been working
with the appellant/CWC with effect from different dates from the year
1986. Though the contractors have been changed, yet the
respondents/workmen have continued in the employment of the
appellant/CWC and have been seeking regularisation of their services
ever since the year 2000 and that, except 25 workmen, the other
respondents, who were the petitioners in the writ petitions, being Civil
Writ Petition 4407 of 2000 and Civil Writ Petition 48 of 2000, have
continued in service of the appellant/CWC.
13.1 She further submits that the CACLB, in its recommendations,
found that the work carried out by the workmen is perennial in nature and
that their employment through contract labour should be prohibited for
the appellant/CWC. This recommendation has been accepted by the
Government of India. Merely because the Notification dated 17.11.2006
has been stayed by this Court, the workmen cannot be put in a worse
position and be made to go out of their job.
13.2 She further submits that the Supreme Court, in Steel Authority of
India (supra), relied upon by the appellant/CWC, has held that the
workmen can prove that they were, in fact, employed by the principal
employer and the contract labour was a sham. Even otherwise, the
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contract labour cannot be replaced by another contract labour. She
submits that, therefore, the respondents/workmen were, at least, entitled
to be given preference in employment by the new contractor.
13.3 On Section 33 of the ID Act, she submits that the
respondents/workmen have also raised an industrial dispute, which is
pending adjudication before the learned CGIT. In view of Section 33 of
the ID Act, the employer is bound to maintain status quo as regards the
services of the workmen. In this regard, she places reliance on the
following judgments:
(i) The Bhavnagar Municipality v. Alibhai Karimbhai & Ors.3;
(ii) T.N. State Transport Corporation v. Neethivilangan,
Kumbakonam4; and
(iii) Jaipur Zila Sahakari Bhoomi Vikas Bank Ltd. v. Ram Gopal
Sharma & Ors.5.
13.4 She further submits that in the present case, the workmen had
immediately approached the learned Single Judge on the new contractor
being appointed and on being threatened of being terminated from their
services. The learned Single Judge, vide interim order dated 13.01.2021,
directed the maintenance of status quo. The appellant/CWC and M/s RR
did not comply with the said order. The learned Single Judge has,
therefore, rightly clarified that status quo has to be maintained as on
(1977) 2 SCC 350.
(2001) 9 SCC 99.
(2002) 2 SCC 244.
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05.01.2021. She submits that this is not the case of passing of status quo
ante as contended by the appellant/CWC.
13.5 She submits that even otherwise, the balance of convenience is in
favour of the respondents/workmen inasmuch as they would be out of
work and not have any means of earning a livelihood. She submits that
while the appellant/CWC contends that the respondents/workmen are not
employed by it, M/s SFPL is also not ready to own the
respondents/workmen. It is not permitted either in equity or in law.
Submissions of Mr Ashok Aggarwal, the learned counsel appearing
on behalf of the workmen in LPA 173 of 2021
14. Mr. Ashok Aggarwal, Advocate appearing for the
respondents/workmen in LPA 173 of 2021, submits that the workmen
herein have been working with the appellant/CWC for the last 18 to 35
years. Though, since then, nine contractors have changed, yet the
respondents/workmen have continued in service. He submits that the
respondents/workmen have filed an industrial dispute claiming
regularisation of their services. During the pendency of such industrial
dispute before the CGIT, the appellant/CWC has, however, in fact,
terminated their services, which is in violation of Section 33(2)(b) of the
ID Act. He submits that, therefore, the learned Single Judge was justified
in granting an interim order in favour of the respondents/workmen.
14.1 He submits that even otherwise, one set of contract labour cannot
be replaced with another set of contract labour. In support of his
submission, he places reliance on the judgment dated 02.09.2019, titled
Sh. Hemant Kumar & Ors. v. Employees State Insurance Corporation
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& Ors.6, and on the judgment dated 26.05.2000, titled Rajender Lal &
Ors. v. Union of India & Ors.7
14.2 He reiterates that the respondents/workmen have been left without
any means of earning livelihood and, therefore, are entitled to a direction
of reinstatement in services.
Analysis and Findings
15. We have considered the submissions made by the learned counsels
for the respective parties.
CLRA Act
15.1 At the outset, we shall first make a reference to the judgment of the
Supreme Court in Steel Authority of India (supra). The said judgment
overruled the earlier judgment of the Supreme Court in All India
Statutory Corporation v. United Labour Union & Ors.8, wherein it had
been held that though there is no express provision in the CLRA Act for
absorption of the contract labour, when engagement of contract labour
stood prohibited on publication of the notification under Section 10(1) of
the CLRA Act, from that moment, the principal employer cannot
continue contract labour and direct relationship gets established between
the workmen and the principal employer. In Steel Authority of India
(supra), however, the Supreme Court laid down the following
W.P. (C) 6891 of 2019.
Civil Writ Petition No. 3741 of 1998.
(1997) 9 SCC 377.
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consequences on the issuance of a notification under Section 10(1) of the
CLRA Act:
"(1) contract labour working in the
establishment concerned at the time of issue of
notification will cease to function;
(2) the contract of principal employer with
the contractor in regard to the contract labour
comes to an end;
(3) no contract labour can be employed by the
principal employer in any process, operation or
other work in the establishment to which the
notification relates at any time thereafter;
(4) the contract labour is not rendered
unemployed as is generally assumed but continues
in the employment of the contractor as the
notification does not sever the relationship of
master and servant between the contractor and
the contract labour;
(5) the contractor can utilize the services of
the contract labour in any other establishment in
respect of which no notification under Section
10(1) has been issued where all the benefits under
the CLRA Act which were being enjoyed by it, will
be available;
(6) if a contractor intends to retrench his
contract labour, he can do so only in conformity
with the provisions of the ID Act."
15.2 The Supreme Court has held that there is no implicit requirement
of automatic absorption of contract labour by the principal employer in
the establishment concerned on the issuance of a notification by the
appropriate Government under Section 10(1) of the CLRA Act
prohibiting employment of contract labour in a given establishment. We
quote paragraph 105 of the judgment hereunder:-
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"105. The principle that a beneficial legislation
needs to be construed liberally in favour of the
class for whose benefit it is intended, does not
extend to reading in the provisions of the Act what
the legislature has not provided whether expressly
or by necessary implication, or substituting
remedy or benefits for that provided by the
legislature. We have already noticed above the
intendment of the CLRA Act that it regulates the
conditions of service of the contract labour and
authorizes in Section 10(1) prohibition of contract
labour system by the appropriate Government on
consideration of factors enumerated in sub-
section (2) of Section 10 of the Act among other
relevant factors. But, the presence of some or all
those factors, in our view, provides no ground for
absorption of contract labour on issuing
notification under sub-section (1) of Section 10.
Admittedly, when the concept of automatic
absorption of contract labour as a consequence of
issuing notification under Section 10(1) by the
appropriate Government, is not alluded to either
in Section 10 or at any other place in the Act and
the consequence of violation of Sections 7 and 12
of the CLRA Act is explicitly provided in Sections
23 and 25 of the CLRA Act, it is not for the High
Courts or this Court to read in some unspecified
remedy in Section 10 or substitute for penal
consequences specified in Sections 23 and 25 a
different sequel, be it absorption of contract
labour in the establishment of principal employer
or a lesser or a harsher punishment. Such an
interpretation of the provisions of the statute will
be far beyond the principle of ironing out the
creases and the scope of interpretative legislation
and as such, clearly impermissible. We have
already held above, on consideration of various
aspects, that it is difficult to accept that
Parliament intended absorption of contract labour
on issue of abolition notification under Section
10(1) of the CLRA Act."
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15.3 The Supreme Court has further held that there can, however, be
cases where the contract was found to be a sham and nominal, rather a
camouflage, in which case, the contract labour working in the
establishment of the principal employer was held, in fact and in reality,
the employees of the principal employer himself. Such cases do not relate
to abolition of contract labour but instances wherein the Court pierced the
veil and declared the correct position as a fact at the stage after
employment of contract labour stood prohibited. Again, we may do no
better but to quote paragraph 107 of the judgment, as under:-
"107. An analysis of the cases, discussed above,
shows that they fall in three classes: (i) where
contract labour is engaged in or in connection
with the work of an establishment and employment
of contract labour is prohibited either because the
industrial adjudicator/court ordered abolition of
contract labour or because the appropriate
Government issued notification under Section
10(1) of the CLRA Act, no automatic absorption of
the contract labour working in the establishment
was ordered; (ii) where the contract was found to
be a sham and nominal, rather a camouflage, in
which case the contract labour working in the
establishment of the principal employer were held,
in fact and in reality, the employees of the
principal employer himself. Indeed, such cases do
not relate to abolition of contract labour but
present instances wherein the Court pierced the
veil and declared the correct position as a fact at
the stage after employment of contract labour
stood prohibited; (iii) where in discharge of a
statutory obligation of maintaining a canteen in
an establishment the principal employer availed
the services of a contractor the courts have held
that the contract labour would indeed be the
employees of the principal employer."
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15.4 The Supreme Court summarised its findings in the judgment, as
under:
"125. The upshot of the above discussion is
outlined thus:
(1)(a) Before 28-1-1986, the determination
of the question whether the Central Government
or the State Government is the appropriate
Government in relation to an establishment, will
depend, in view of the definition of the expression
"appropriate Government" as stood in the CLRA
Act, on the answer to a further question, is the
industry under consideration carried on by or
under the authority of the Central Government or
does it pertain to any specified controlled
industry, or the establishment of any railway,
cantonment board, major port, mine or oilfield or
the establishment of banking or insurance
company? If the answer is in the affirmative, the
Central Government will be the appropriate
Government; otherwise in relation to any other
establishment the Government of the State in
which the establishment was situated, would be
the appropriate Government;
(b) After the said date in view of the
new definition of that expression, the answer to
the question referred to above, has to be found in
clause (a) of Section 2 of the Industrial Disputes
Act; if (i) the Central Government
company/undertaking concerned or any
undertaking concerned is included therein co
nomine, or (ii) any industry is carried on (a) by or
under the authority of the Central Government, or
(b) by a railway company; or (c) by a specified
controlled industry, then the Central Government
will be the appropriate Government; otherwise in
relation to any other establishment, the
Government of the State in which that other
establishment is situated, will be the appropriate
Government.
(2)(a) A notification under Section 10(1) of
the CLRA Act prohibiting employment of contract
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labour in any process, operation or other work in
any establishment has to be issued by the
appropriate Government;
(1) after consulting with the Central
Advisory Board or the State Advisory
Board, as the case may be, and
(2) having regard to
(i) conditions of work and benefits
provided for the contract labour in the
establishment in question, and
(ii) other relevant factors including
those mentioned in sub-section (2) of
Section 10;
(b)Inasmuch as the impugned notification
issued by the Central Government on 9-12-1976
does not satisfy the aforesaid requirements of
Section 10, it is quashed but we do so
prospectively i.e. from the date of this judgment
and subject to the clarification that on the basis of
this judgment no order passed or no action taken
giving effect to the said notification on or before
the date of this judgment, shall be called in
question in any tribunal or court including a High
Court if it has otherwise attained finality and/or it
has been implemented.
(3) Neither Section 10 of the CLRA Act nor
any other provision in the Act, whether expressly
or by necessary implication, provides for
automatic absorption of contract labour on
issuing a notification by the appropriate
Government under sub-section (1) of Section 10,
prohibiting employment of contract labour, in any
process, operation or other work in any
establishment. Consequently the principal
employer cannot be required to order absorption
of the contract labour working in the
establishment concerned.
(4) We overrule the judgment of this Court
in Air India case [Air India Statutory Corpn. v.
United Labour Union, (1997) 9 SCC 377 : 1997
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SCC (L&S) 1344] prospectively and declare that
any direction issued by any industrial adjudicator/
any court including the High Court, for
absorption of contract labour following the
judgment in Air India case [Air India Statutory
Corpn. v. United Labour Union, (1997) 9 SCC
377 : 1997 SCC (L&S) 1344] shall hold good and
that the same shall not be set aside, altered or
modified on the basis of this judgment in cases
where such a direction has been given effect to
and it has become final.
(5) On issuance of prohibition notification
under Section 10(1) of the CLRA Act prohibiting
employment of contract labour or otherwise, in an
industrial dispute brought before it by any
contract labour in regard to conditions of service,
the industrial adjudicator will have to consider
the question whether the contractor has been
interposed either on the ground of having
undertaken to produce any given result for
establishment or for supply of contract labour for
work of the establishment under a genuine
contract or is a mere ruse/camouflage to evade
compliance with various beneficial legislations so
as to deprive the workers of the benefit
thereunder. If the contract is found to be not
genuine but a mere camouflage, the so-called
contract labour will have to be treated as
employees of the principal employer who shall be
directed to regularise the services of the contract
labour in the establishment concerned subject to
the conditions as may be specified by it for that
purpose in the light of para 6 hereunder.
(6) If the contract is found to be genuine
and prohibition notification under Section 10(1) of
the CLRA Act in respect of the establishment
concerned has been issued by the appropriate
Government, prohibiting employment of contract
labour in any process, operation or other work of
any establishment and where in such process,
operation or other work of the establishment the
principal employer intends to employ regular
workmen, he shall give preference to the erstwhile
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contract labour, if otherwise found suitable and, if
necessary, by relaxing the condition as to
maximum age appropriately, taking into
consideration the age of the workers at the time of
their initial employment by the contractor and
also relaxing the condition as to academic
qualifications other than technical qualifications."
(Emphasis supplied)
15.5 A reading of the above judgment would show that even if the
Notification dated 17.11.2006 is upheld by this Court by dismissing the
writ petition filed by the appellant/CWC, that is W.P.(C) 4114 of 2008, it
would not lead to a position where the respondents/workmen can, as a
natural corollary, claim direct employment under the appellant/CWC.
Nor can they claim automatic absorption in the appellant/CWC. An
independent exercise would have to be carried out, by raising an
industrial dispute, that has been so raised by the workmen in the present
case, on the issue of whether the contract of employment through the
contractors was not genuine but a mere camouflage. It is only when it is
so found that the employment through the contractor was a camouflage,
that the contract labour will be treated as the employees of the principal
employer, that is the appellant/CWC, and shall be directed to be
regularised in services of appellant/CWC. On the other hand, on enquiry,
if it is found that the contract is genuine, the only direction that can be
passed is that where the principal employer, that is the appellant/CWC
herein, intends to employ regular workmen, it shall have to give a
preference to the erstwhile contract labour, if otherwise found suitable
and, if necessary, by relaxing the condition as to the maximum age
appropriately, taking into consideration the age of the workers at the time
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of their initial employment by the contractor and also relaxing the
condition as to academic qualifications other than technical
qualifications.
15.6 In the present case, not only is the Notification dated 17.11.2006-
prohibiting the employment of the contract labour stayed by this Court
vide its order dated 28.05.2008 (as confirmed on 26.04.2010), but also
the industrial dispute(s) raised by the respondents/workmen claiming
their contract to be a sham and camouflage, pending adjudication before
the CGIT.
15.7 Therefore, until the Notification dated 17.11.2006 and the
employment of respondents/workmen held to be a camouflage adopted
by the appellant/CWC, the respondents/workmen cannot claim to be
direct employees of the appellant/CWC or claim absorption in the
services of the appellant/CWC as a matter of right. Equally, no protection
of their services can be granted in the interim as that would amount to
granting a final relief at the interim stage itself. The
respondents/workmen would have to succeed in their industrial dispute
by showing that their employment as contract labour was a sham and
camouflage adopted by the appellant/CWC, before they are held entitled
to any relief.
Section 33 of the ID Act
15.8 As far as Section 33 of the ID Act is concerned, its application
presupposes an employer-employee relationship to exist between the
parties.
15.9 Sub-sections (1), (2) and (3) of Section 33 of the ID Act are
reproduced, as under:
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"33. Conditions of service, etc., to remain
unchanged under certain circumstances during
pendency of proceedings.-- (1) During the
pendency of any conciliation proceeding before a
conciliation officer or a Board or of any
proceeding before an arbitrator or a Labour
Court or Tribunal or National Tribunal in respect
of an industrial dispute, no employer shall,--
(a) in regard to any matter connected
with the dispute, alter, to the
prejudice of the workmen concerned
in such dispute, the conditions of
service applicable to them
immediately before the
commencement of such proceeding;
or
(b) for any misconduct connected with
the dispute, discharge or punish,
whether by dismissal or otherwise,
any workman concerned in such
dispute,
save with the express permission in writing of the
authority before which the proceeding is pending.
(2) During the pendency of any such
proceeding in respect of an industrial dispute, the
employer may, in accordance with the standing
orders applicable to a workman concerned in such
dispute or, where there are no such standing
orders, in accordance with the terms of the
contract, whether express or implied, between him
and the workman--
(a) alter, in regard to any matter not
connected with the dispute, the
conditions of service applicable to
that workman immediately before
the commencement of such
proceeding; or
(b) for any misconduct not connected
with the dispute, discharge or
punish, whether by dismissal or
otherwise, that workman:
Provided that no such workman
shall be discharged or dismissed, unless he
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has been paid wages for one month and an
application has been made by the employer
to the authority before which the
proceeding is pending for approval of the
action taken by the employer.
(3) Notwithstanding anything contained in sub-
section (2), no employer shall, during the
pendency of any such proceeding in respect of an
industrial dispute, take any action against any
protected workman concerned in such dispute--
(a) by altering, to the prejudice of such
protected workman, the conditions
of service applicable to him
immediately before the
commencement of such proceedings;
or
(b) by discharging or punishing,
whether by dismissal or otherwise,
such protected workman,
save with the express permission in writing of the
authority before which the proceeding is pending.
Explanation.-- For the purposes of
this sub-section, a "protected
workman", in relation to an
establishment, means a workman
who, being a member of the
executive or other office bearer of a
registered trade union connected
with the establishment, is recognised
as such in accordance with rules
made in this behalf."
15.10 Sub-section (1) of Section 33 of the ID Act prohibits the
"employer" during the pendency of any conciliation proceedings before
the conciliation officer or a Board or any proceedings before an arbitrator
or a Labour Court or Tribunal or National Tribunal in respect of an
industrial dispute from altering, to the prejudice of the workmen
concerned, the conditions of service applicable to such workmen
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immediately before the commencement of such proceedings in regard to
any matter connected with the dispute or for any misconduct connected
with the dispute; discharge or punish, whether by dismissal or otherwise,
any workmen concerned in such dispute, except with the express
permission in writing of the authority before which the proceeding is
pending.
15.11 Sub-section (2) of Section 33 of the ID Act, however,
permits the employer to take action against the workmen in regard to any
matter not connected with the dispute, however, such action against any
protected workmen concerned in such dispute shall not be to the
prejudice of such protected workmen or amount to discharge or
punishing of protected workman, whether by dismissal or otherwise, save
with the express permission in writing of the authority before which the
proceeding is pending.
15.12 A reading of the above provisions would show that the
relationship of existence of an employer-employee would be a sine qua
non for attracting provisions of Section 33 of the ID Act.
15.13 In the present case, though the respondents/workmen have
claimed, in the industrial dispute raised by them that they are direct
employees of the appellant/CWC and the contract labour adopted by the
appellant/CWC was a sham and camouflage, such claim is yet to be
adjudicated by the CGIT/Industrial Tribunal. Until such adjudication is
made, it cannot be presumed for purposes of Section 33 of the ID Act that
the employer-employee relationship between the appellant/CWC and the
respondents/workmen exists.
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15.14 In CIPLA Ltd. v. Maharashtra General Kamgar Union &
Ors.9, the Supreme Court, while considering a case arising out of a
complaint of unfair labour practice under Section 28 of the Maharashtra
Recognition of Trade Unions and Prevention of Unfair Labour Practices
Act, 1971 (in short, the „Maharashtra Act‟), filed by the workmen who
had similar claim that they are wrongly shown as "contract workmen"
working for the contractor, observed as under:
"8. But one thing is clear --- if the employees are
working under a contract covered by the Contract
Labour (Regulation and Abolition) Act then it is
clear that the Labour Court or the industrial
adjudicating authorities cannot have any
jurisdiction to deal with the matter as it falls
within the province of an appropriate Government
to abolish the same. If the case put forth by the
workmen is that they have been directly employed
by the appellant Company but the contract itself is
a camouflage and, therefore, needs to be
adjudicated is a matter which can be gone into by
appropriate Industrial Tribunal or Labour Court.
Such question cannot be examined by the Labour
Court or the Industrial Court constituted under
the Act. The object of the enactment is, amongst
other aspects, enforcing provisions relating to
unfair labour practices. If that is so, unless it is
undisputed or indisputable that there is employer-
employee relationship between the parties, the
question of unfair practice cannot be inquired into
at all. The respondent Union came to the Labour
Court with a complaint that the workmen are
engaged by the appellant through the contractor
and though that is ostensible relationship the true
relationship is one of master and servant between
the appellant and the workmen in question. By this
process, workmen repudiate their relationship
with the contractor under whom they are
employed ·but claim relationship of an employee
(2001) 3 SCC 101.
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under the appellant. That exercise of repudiation
of the contract with one and establishment of a
legal relationship with another can be done only
in a regular Industrial Tribunal/Court under the
ID Act.
9. Shri K.K. Singhvi, the learned Senior
Advocate appearing for the respondent, submitted
that under Section 32 of the Act the Labour Court
has the power to "decide all matters arising out of
any application or complaint referred to it for
decision under any of the provisions of the Act".
Section 32 would not enlarge the jurisdiction of
the court beyond what is conferred upon it by
other provisions of the Act. If under other
provisions of the Act the Industrial Tribunal or the
Labour Court has no jurisdiction to deal with a
particular aspect of the matter, Section 32 does
not give such power to it. In the cases at hand
before us, whether a workman can be stated to be
the workman of the appellant establishment or
not, it must be held that the contract between the
appellant and the second respondent is a
camouflage or bogus and upon such a decision it
can be held that the workman in question is an
employee of the appellant establishment. That
exercise, we are afraid, would not fall within the
scope of either Section 28 or Section 7 of the Act.
In cases of this nature where the provisions of the
Act are summary in nature and give drastic
remedies to the parties concerned elaborate
consideration of the question as to relationship of
employer-employee cannot be gone into. If at any
time the employee concerned was indisputably an
employee of the establishment and subsequently it
is so disputed, such a question is an incidental
question arising under Section 32 of the Act. Even
the· case pleaded by the respondent Union itself is
that the appellant establishment had never
recognised the workmen mentioned in Exhibit 'A'
as its employees and throughout treated these
persons as the employees of the second
respondent. If that dispute existed throughout, we
think·, the Labour Court or the Industrial Court
under the Act is not the appropriate court to
decide such question, as held by this Court in
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General Labour Union (Red Flag) v. Ahmedabad
Mfg. & Calico Printing Co. Ltd., [1995 Supp (1)
SCC 175 : 1995 SCC (L&S) 372] which view was
reiterated by us in Vividh Kamgar Sabha v.
Kalyani Steels Ltd. [(2001) 2 SCC 381 : (2001) 1
Scale 82.]"
(Emphasis supplied)
15.15 Similarly, in Sarva Shramik Sangh v. Indian Smelting &
Refining Co. Ltd. & Ors.10, again, while dealing with the Maharashtra
Act, the Supreme Court, after making a reference of the judgment of
Steel Authority of India (supra), observed as under:
"15. Reference has also been made to
Sections 27, 28, 29(d) and 32 of the Maharashtra
Act. While Section 27 deals with prohibition on
engaging in unfair labour practices, Section 28
empowers filing of a complaint. Any union or an
employee or an employer or any investigating
agency has the locus to file a complaint. Section
29(d) categorises parties on whom order of the
court is binding. Great emphasis was laid on
Section 32 of the Maharashtra Act by the
appellant to contend that matters connected with
the dispute can be gone into under the provision.
The expression "all matters arising out of"
clearly emphasizes that it has connections, and
not that it is the basic issue. There is a gulf of
difference between a basic issue and something
connected with or arising out of the application.
In R. v. Basudeva [AIR 1950 FC 67 : 51 Cri LJ
1011] it was observed that the connection
contemplated must be real and proximate, not far-
fetched or problematical. By no logic can it be a
substitute of the other. "In connection with any
assessment" [Canada: Income War Tax Act
R.S.C. 1927 (C. 97) S. 66] has been interpreted as
"having to do with" in Nanaino Community
Hotel, Re [(1945) 3 DLR 225]. The basic question
(2003) 10 SCC 455.
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which was also raised in Cipla case [(2001) 3
SCC 101 : 2001 SCC (L&S) 520] relates to the
existence of the relationship, and of any dispute
connected with that. For getting protection under
the Maharashtra Act, it has first to be established
that the complainant is an employee of a person
under whom he claims to be an employee and
against whom he files a complaint. In other words,
the determinative question is, can anybody who is
not an "employee" of or under a person against
whom a grievance is sought to be made file a
complaint under the Act and the answer is
inevitably "No". The fundamental issue therefore
is whether the complainant is an employee of the
person against whom a complaint is made under
the Maharashtra Act and if there is a dispute, he
has to establish it, first before the appropriate
forum designated for adjudication of such
industrial disputes. Section 32 does not aid the
appellant in the sense that it is not a matter
arising out of the application, when the pre-
existing relationship of employer-employee is a
must and an essential prerequisite. It is the core
issue on which only the very locus to make a
complaint can at all be claimed. A person who
does not answer the description has no legal locus
to file a complaint. A jurisdictional fact is one on
the existence or otherwise of which depends
assumption or refusal to assume jurisdiction by a
court, tribunal or authority. The said fact has to
be established and its existence proved before a
court under the Maharashtra Act can assume
jurisdiction of a particular case. If the complaint
is made prima facie accepting existence of the
contractor, in such a case what has to be first
established is whether the arrangement or
agreement between the complainant and the
contractor is sham or bogus. There is an inherent
admission in such a situation that patently the
arrangement is between the complainant and the
contractor and the claim for a new and different
relationship itself is a disputed fact. To put it
differently, the complainant seeks for a
declaration that such arrangement is not a real
one but something which is a facade. There is no
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direct agreement between the complainant and the
principal employer and one such is sought to be
claimed but not substantiated in accordance with
law. The relief in a sense relates to a legal
assumption that the hidden agreement or
arrangement has to be surfaced...."
(Emphasis supplied)
15.16 Though the learned counsels for the respondents/workmen are
correct in their submissions that the above two judgments were referring
to the Maharashtra Act and not to Section 33 of the ID Act, and, in fact,
had also held that the ID Act is a more comprehensive and provides for
investigation and settlement of the industrial dispute(s) as raised by the
respondents/workmen, the fact remains that in the present case, till now
there is no finding of any competent tribunal holding that the
respondents/workmen are in fact, the employees/workmen of the
appellant/CWC and that the contract labour is sham and bogus. In the
absence of such a finding, merely raising such a dispute cannot entitle the
respondents/workmen to automatic protection under Section 33 of the ID
Act against the appellant/CWC.
16. It is important to reach a determination on existence of employer-
employee relationship, because Section 33 of the ID Act shall operate
only against the "employer" of the workmen.
17. Herein, it must also be kept in view that the CLRA Act is a special
and complete code dealing with the contract labour. It provides for the
rights and the liabilities of the contractor, the principal employer, and the
workmen, and the consequences of breach thereof. The
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respondents/workmen having invoked the jurisdiction under the CLRA
Act on basis of their assertion of being contractual labour, are now trying
to set up a case of direct employment and/or a right of regularisation
under the appellant/CWC. Till such right is proved and established, no
interim relief based on such a right and assertion can be granted.
18. Reliance of the learned counsels for the respondents/workmen on
the judgment of the Supreme Court in The Bhavnagar Municipality
(supra), in support of the contention that Section 33 of the ID Act is
applicable to them, cannot be accepted. In the said case, there was no
dispute on the status of the respondent being "workmen". The dispute
related to several demands, including the demand for the permanent
status of daily-rated workers, who were otherwise employed by the
industry. It was in that background that the Supreme Court laid down the
following features that must be present in order to attract the provisions
of Section 33 of the ID Act:
"10. In order to attract section 33(1)(a), the
following features must be present:
(1) There is a proceeding in respect of an
industrial dispute pending before the
Tribunal.
(2) Conditions of service of the workmen
applicable immediately before the
commencement of the Tribunal proceeding
are altered.
(3) The alteration of the conditions of
service is in regard to a matter connected
with the pending industrial dispute.
(4) The workmen whose conditions of
service are altered are concerned in the
pending industrial dispute.
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(5) The alteration of the conditions of
service is to the prejudice of the workmen."
19. In the said case, as there was no dispute otherwise that the
workmen were temporary employees of the industry, the Supreme Court
held that Section 33 of the ID Act would be attracted where the industry
wanted to effect a change of their system in getting the work done
through a contractor instead of by these temporary workers. In fact, the
Supreme Court went on to hold that in a complaint under Section 33A of
the ID Act, even if the employer is found to have contravened the
provisions of Section 33 of the ID Act, the Tribunal has to pronounce
upon the merits of the dispute between the parties. The order passed in an
application under Section 33A of the ID Act is an Award similar to one
passed in a reference under Section 10 of the ID Act. A complaint under
Section 33A of the ID Act takes, as it were, in the form of a reference of
the industrial dispute by the appropriate authority and the same has to be
disposed of in like manner by adjudicating the matter and making the
award on the merits as required under the law.
20. Applying the above ratio to the facts of the present case, therefore,
before attracting Section 33 of the ID Act, a finding would have to be
rendered that the respondents/workmen are, in fact, the
employees/workmen of the appellant/CWC. Without such determination,
and merely on the assertion of the respondents/workmen, Section 33 of
the ID Act could not have been invoked by the learned Single Judge.
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21. The order dated 04.12.2019 passed by the learned Single Judge of
this Court in Bharat Heavy Electricals Ltd. v. Udaibir Singh & Ors.11,
cannot also be used by the respondents/workmen inasmuch as, apart from
the fact that the order was passed on a concession of the learned counsels
for the parties, there was already an award by the Industrial Tribunal
directing the petitioner in that case to pay 75% of the last drawn wages to
each of the workmen therein.
22. The judgment of the Supreme Court in Jaipur Zila Sahakari
Bhoomi Vikas Bank Ltd. (supra), cannot also come to the aid of the
respondents/workmen as in the said case as well, it was not in dispute
that the respondents therein were employees of the appellant-bank, which
admission, in the present case, is missing.
23. The reliance of Mr. Aggarwal, the learned counsel on behalf of the
respondents/workmen in LPA 173 of 2021, on Life Insurance
Corporation of India v. D. J. Bahadur & Ors.12, also cannot be accepted
as the said case dealt with the effect of Section 9A of the ID Act. It is not
the case of the respondents/workmen herein that Section 9A of the ID
Act is attracted to the facts of the present case.
24. Similarly, the reliance of Mr. Aggarwal, on the judgment of the
Supreme Court in M. D. Tamil Nadu State Transport Corporation v.
W.P.(C) 10148 of 2019.
(1981) 1 SCC 315.
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Neethivilangan Kumbakonam13, is also not relevant inasmuch as in the
said judgment, the Court was considering the effect of the refusal of the
Industrial Tribunal to accord its approval to be taken by the employer,
and not rejecting the application filed by the said employer under the
proviso to Section 33(2)(b) of the ID Act. It is not the case of the
appellant/CWC that the respondents/workmen have been removed under
Section 33(2)(b) of the ID Act on account of some alleged misconduct. In
fact, the case of the appellant/CWC is that the respondents/workmen are
not their employees and therefore, Section 33 of the ID Act has no
application at all.
25. In Bhilwara Dugdh Utpadak Sahakari v. Vinod Kumar Sharma
Dead By LRs & Ors.14, relied upon by Mr Aggarwal, there was a finding
given by the Labour Court that the workmen were employees of the
industry and not employees of the contractor, and that the industry
resorted to subterfuge to show that the workmen concerned were
workmen of the contractor. In the present case, such a finding is yet to be
rendered by the concerned Industrial Tribunal, where the dispute in that
regard is pending adjudication. The judgment therefore, would have no
application to the facts of the present case.
26. In Indian Farmers Fertilizer Coop. Ltd. v. Industrial Tribunal I,
Allahabad & Ors.15, the Supreme Court has held that any claim raised by
2001 LAB. I.C. 1801.
(2011) 15 SCC 209.
(2002) 3 SCC 544.
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the workmen that they are not being given work, and in light of the
defence taken by the industry therein that these workmen were, in fact,
the contract labour, it was necessarily an issue to be decided by the
Labour Court as to the nature of the employment of such workmen, as the
relief that would be granted to them is dependent upon the same. The
CGIT would necessarily have to go into the question of whether such
employees were employees of the industry or of the contractor.
27. Similar would be the case in the present appeals, it would be for
the CGIT to render a decision, upon evidence, on the issue as to whether
the respondents/workmen are employees of the appellant/CWC or the
contractor.
28. From the above discussion, it is apparent that the stage for
applying or invoking Section 33 of the ID Act has not yet arrived. The
applications of the respondents/workmen, on which the Impugned
Judgment has been passed, clearly required adjudication of disputed
questions of fact for determining whether the claim of the
respondents/workmen that they are employees of the appellant/CWC was
correct or not. It could not have been so determined in a summary
manner. Equally, unless such determination is made, in the facts of the
present case, Section 33 of the ID Act could not have been invoked. The
learned Single Judge has, therefore, committed an error in placing
reliance on Section 33 of the ID Act in granting relief to the
respondents/workmen in the Impugned Order.
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Other important submissions/material
29. In our view, the learned Single Judge has also failed to take note of
the submissions of the appellant/CWC that the contractor hired by CWC
are not paid on the basis of workmen employed but on the basis of the
tonnage handled by it, which is stated to be measured in TEUs. In this
regard, the learned senior counsel for the appellant has drawn our
attention to the terms and conditions of the Notice Inviting E-Tender,
which resulted in the contract being awarded to M/s RR and the invoices
of M/s SFPL. This was an important circumstance to be considered by
the learned Single Judge in granting relief to the respondents/workmen,
especially at the interim stage, as it would show that there is no
obligation, even on M/s RR, to provide a fixed number of workmen to
CWC. The work awarded to M/s RR is not to provide workmen but to
handle containers.
29.1 As far as the continued employment of the respondents/workmen
under M/s SFPL is concerned, the learned senior counsel for the
appellant has explained that the due to the interim order dated
17.10.2000, passed by this Court in Civil Writ Petition 48 of 2000, filed
by the workmen, and prohibiting the contract labour to be substituted by
another contract labour, the appellant has stipulated such conditions in its
tender document, directing the contractor to comply with the interim
order as the proceedings before the CACLB culminated in the notice
dated 17.12.2006, which, in turn, was stayed by this Court in W.P.(C)
4114 of 2008 filed by the appellant herein, this stipulation was not made
in the tender floated in the year 2015, in which M/s SFPL was found
successful. The appellant/CWC contends that the M/s SFPL continued
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with the respondents/workmen at its own discretion and as per its own
requirement, thereafter.
29.2 The learned senior counsel for the appellant has also drawn our
attention to a chart depicting the number of workmen hired by the
contractors from the years 2000 to 2021, to contend that there has not
been a fixed number of workmen employed by such contractors, as the
same depends upon the volume of business being handled by them.
29.3 He has further submitted that the volume of business has
drastically reduced from 47496 TEUs handled in the year 2001 to 17183
handled in the year 2020 and 9948 being handled by the present
contractor, that is, M/s RR between 06.01.2021 to 30.04.2021 at the ICD,
Patparganj. The chart referred by the learned senior counsel for the
appellants is reproduced herein below:
Sl. Year No. of workers Volume of Name of H&T contractor
No. / contract business (No.
labour of TEUs
handled)
1 2001 156 47496 M/s. CTA Movers Pvt.
Ltd. (01.01.2001 to
01.03.2001)
2 2002 293 52565 M/s. OMMC Pvt. Ltd.
(01.03.2001 to
3 2003 322 48678 20.12.2006)
4 2004 320 53582
5 2005 311 59395
6 2006 327 51194 M/s. Aqdas Maritime Pvt.
Ltd. (21.12.2006 to
7 2007 327 46318
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8 2008 326 43184 02.01.2013)
9 2009 321 41278
10 2010 319 43422
11 2011 319 41600
12 2012 313 37949
13 2013 313 41064 M/s. Suman Forwarding
Agency Pvt. Ltd.
14 2014 310 48611 (03.01.2013 to
15 2015 307 41387 05.01.2021)
16 2016 303 37101
17 2017 301 37797
18 2018 294 26072
19 2019 295 24548
20 2020 289 17183
21 2021 102 9948 M/s. Rahul Roadways
(06.01.2021 to
30.4.2021)
29.4 The learned senior counsel for the appellant has also submitted
that, in fact, there has been a regular reduction of staff strength of the
appellant/CWC; from 8579 in the year 2000-01 to 2642 in the year 2020-
21. He submits that in the light of this reduction, forcing the
appellant/CWC to continue with the services of the
respondents/workmen, even though they are not required would, in fact,
cause irreparable damage to the appellants. The chart showing the staff-
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strength of the appellant/CWC in the year 2001 to 2021, referred by the
learned senior counsel by the appellant, is reproduced herein below:
Sl. No. Year No. of CWC Staff
1 2000-01 8579
2 2001-02 8455
3 2002-03 6984
4 2003-04 6813
5 2004-05 6690
6 2005-06 6413
7 2006-07 6192
8 2007-08 6059
9 2008-09 5936
10 2009-10 5765
11 2010-11 5667
12 2011-12 5492
13 2012-13 5222
14 2013-14 4777
15 2014-15 4557
16 2015-16 4078
17 2016-17 3639
18 2017-18 3570
19 2018-19 3042
20 2019-20 2880
21 2020-21 2642
29.5 The learned Single Judge has also failed to appreciate that M/s RR
is carrying out its work under a new contract by employing 120 workmen
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only. Therefore, an additional burden of the respondents/workmen herein
could not be cast on the appellant and/or M/s RR.
29.6 The above aspects, which in our opinion, are relevant to be
considered by the learned Single Judge, have not been so considered
while passing the Impugned Order.
29.7 The learned Single Judge has also erred in observing that in spite
of the order staying the operation of the Notification dated 17.11.2006 by
this Court, the same did not efface either the findings of the CACLB or
the Notification dated 17.11.2006. The order of stay granted by this Court
has to be given full effect to, and no reliance could have been placed on
the Notification dated 17.11.2006 for granting the relief to the
respondents/workmen.
29.8 At the same time, it must be acknowledged that the appellant/CWC
should have continued with the condition or at least persuaded M/s RR,
on its own, to give preference to the respondent/workmen while hiring
contractual labour. By not doing so, the appellant/CWC has brought
about this unfortunate situation.
Conclusion
30. In the light of the above, the Impugned Order passed by the
learned Single Judge cannot be sustained, at the same time, we are of the
opinion that the respondents/workmen can also not be left high and dry.
A balance has to be struck between the competing claim of the
respondents-workmen and the appellant as also those of M/s RR. In our
view, this balance was provided by this Court in its interim order dated
17.10.2000, passed in W.P.(C) 48 of 2000, which directed as under:
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" Learned Counsel for the parties are agreed
that the dispute raised in this petition ought to be
settled by the Central Advisory Contract Labour
Board. Accordingly, the dispute between the
parties is referred to the Central Advisory
Contract Labour Board for making an
appropriate recommendation, if any, whether
contract labour requires to be abolished in the
areas in which the petitioners are said to be
working.
The interim order passed on 6th January,
2000, will continue till the disposal of the
reference by the Central Advisory Contract
Labour Board.
It is clarified that the services of the petitioner
will not be substituted by any other contract
labour but this does not mean that the petitioners
are at liberty to flout any legal and valid orders
passed by the respondents pertaining to their
duties and their shifts.
The petitioners will, if entitled, be paid
overtime allowance."
(Emphasis supplied)
31. However, the above order would need a small modification, which
is for the reason that M/s RR claims to have already employed 120
workmen. Any order passed, in favour of the respondents/workmen,
would be to the deterrence of these workmen.
Relief
32. Accordingly, while setting aside the Impugned Judgment of the
learned Single Judge, it is directed that in case, M/s RR is to replace any
contract labour already employed by it, preference shall be given to the
respondents/workmen, and no third person shall be appointed as a
contract labour. In case M/s RR needs to employ further contract labour,
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again preference shall be given to the respondents/workmen in such
employment.
33. The above interim arrangement shall be without prejudice to the
rights and contentions of the parties in the pending writ petitions before
the learned Single Judge and/or the reference pending before the CGIT.
We make it clear that any observations made by us in the present
judgment are only prima facie in nature and shall not influence either the
learned Single Judge and/or the learned CGIT in any manner. Such
proceedings shall be adjudicated on their own merit without being
influenced by any observations made in the present judgment.
34. The learned CGIT is directed to expedite the adjudication of the
industrial dispute(s) pending before it, in the form of I.D. No. 57 of 2015
and I.D. No. 142 of 2015.
35. The appeals are disposed of, in the above terms, with no order as to
costs.
NAVIN CHAWLA, J
MANMOHAN, J
MAY 31, 2022/Arya/AB/P
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