Employers In Relation To The ... vs Their Workmen Being Represented ...
2023 Latest Caselaw 1997 Jhar

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  IN THE HIGH COURT OF JHARKHAND AT RANCHI
                    L.P.A. No.67 of 2020
                             ----
Employers in relation to the Management of Dugda Coal
Washery of M/s. Bharat Coking Coal Ltd., P.O. & P.S. -
Dugda, District - Dhanbad (now Bokaro).
                     ...    ...      Writ Petitioner/Appellant
                            Versus
1. Their workmen being represented by the Secretary, Bihar
Colliery Kamgar Union at Mohalla - Jharnapara, Hirapur,
P.O. & P.S. - Hirapur, District - Dhanbad.
2. Moti Mahto, son of Sri Ramu Mahto, resident of Village
Chanduwadih, P.O. & P.S. - Dugda, District - Bokaro.
3. Chunnu Mahto, son of Late Kharhar Mahto, resident of
Village - Chanduwadih, P.O. & P.S. - Dugda, District -
Dhanbad.
4. Ramu Rabidas, son of Sri Lalmohan Rabidas, resident of
Village Telo, P.O. Telo, P.S.Dugda, District - Bokaro.
5. Nakul Turi, son of Sri Gopi Turi, resident of Village - Telo,
P.O.- Telo, P.S.- Dugda, District- Bokaro.
6. Baburam Manjhi, son of Jeewan Manjhi, resident of Village
Telo, P.O.- Telo, P.S.- Dugda District - Bokaro.
7. Jitan Manjhi, son of Nuna Manjhi, resident of Village -
Dugda, P.O. & P.S. - Dugda, District - Bokaro.
8. Sufal Manjhi, son of Sri Sitaram Manjhi, resident of Village
- Dugda, Tola - Bera, P.O. & P.S. - Dugda, District - Bokaro.
9. Ruplal Tuddu, son of Late Baikunth Manjhi, resident of
Dugda, Bera Basti, P.O. & P.S. - Dugda, District - Bokaro.
10. Govind Mahto, son of Sri Bhola Mahto, resident of Village
- Chandanabad, P.O. - Kulmba, P.S. - Dugda, District -
Bokaro.
11. Brahamdeo Mahto, son of Sri Ramchandra Mahto,
resident of Village -Mainual Dhawra, P.O. & P.S. - Dugda,
District - Bokaro.
12. Mahendra Prasad, son of Sri Ram Bishun Prasad,
resident of M.I.T. Colony, P.O. & P.S.- Dugda, District -
Bokaro.
13. Sunita Kumari, daughter of Late Shishu Lal Murmu,
resident of M.I.T. Colony, P.O. & P.S. - Dugda, District -
Bokaro, presently resident of Bikramdih, P.O. Ghatiyali, P.S.
Pindrajora, - District Bokaro.
14. Phulwa Devi, daughter of Late Koshila Devi, resident of
Chirudih, P.O. & P.S. - Nawadih, District - Bokaro.
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15. Mahendra Paswan, son of Sri Bhuneshwar Paswan,
resident of Village - Budhidih Khatal, P.O. & P.S. Dugda,
District - Bokaro.
16. Bhagalu Turi, son of Sri Pati Turi, resident of Village -
Budhidih Khatal, P.O. & P.S. Dugda, - District - Bokaro.
17. Nandu Mahto, son of Sri, Balkishun Mahto, resident of
Village -G Type Colony, P.O. & P.S. -Dugda, District - Bokaro.
18. Ram Tahal Mahto, son of Sewa Mahto, resident of Village
- Popalo, P.O. Taranari, P.S. - Dugda, District Bokaro.
19. Rameshwar Manjhi, son of Sitaram Manjhi, resident of
Village - Dugda, P.O. & P.S. - Dugda, District - Bokaro.
20. Karamchan Mahto, son of Mohan Mahto, resident of
village - Ratari, P.O. & P.S. - Dugda, District - Bokaro.
21. Hari Manjhi, son of Late Basanti Devi (wife of Sri Chura
Manjhi, resident of Bagmari Tand (Dugda), P.O. & P.S. -
Dugda, District - Bokaro.
22. Kailash Mahto, son of Sri Satyanarayan Mahto, resident
of Village - Baghidih, P.O. & P.S.-Dugda, District - Bokaro.
23. Churaman Mahto, son of Sri Dukhan Mahto, resident of
Village - Karmatand, P.O. & P.S. Karmat, District - Bokaro.
                     ...     ...   Respondents /Respondents
                           -------
CORAM :HON'BLE MR. JUSTICE SUJIT NARAYAN PRASAD
            HON'BLE MR. JUSTICE SUBHASH CHAND
                            ------
For the Appellant  : Mr. Anoop Kumar Mehta, Advocate
                     Mr. Nikhil Kumar Mehta, Advocate
For the Respondents: Mr. Rahul Kumar, Advocate
                     Mr. Om Prakash Prasad, Advocate
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C.A.V. on 24.04.2023            Pronounced on 09/05/2023
Per Sujit Narayan Prasad, J.

The instant intra-court appeal, preferred under Clause

10 of the Letters Patent, is directed against the

order/judgment dated 03.09.2019 passed by learned Single

Judge of this Court in W.P.(L) No.2196 of 2003 whereby and

whereunder the Award has been declined to be interfered

with by dismissing the writ petition.

2. Brief facts of the case as per the pleadings made in the

writ proceeding, which are required to be enumerated herein,

read as under :-

It is the case of the 22 concerned workmen/respondent

herein that they have been discharging the work of Plant

Cleaning Mazdoor and removal of spillage. The Management

of Dugda Coal Washery regularized 161 workmen who were

working on the job of Plant Cleaning Mazdoor at Dugda Coal

Washery during the period 1979-1980.

It is the further case of the workmen that subsequently

64 workmen have been employed on the basis of an Award

dated 13.07.1992 passed in Reference No. 258/1990,

wherein an order of regularization had been passed and

against the said award, a writ petition being C.W.J.C.

No.157/1993(R) had been filed which was dismissed by the

Hon'ble Ranchi Bench of Patna High Court and thereafter

these 64 workmen have been regularized.

It is the case of the respondents that they have been

discriminated as having not been allowed to work w.e.f.

18.02.1993 and since then they are out of employment.

The workmen raised an industrial dispute by submitting

required application through the Union on 3.10.1991 which

has been referred for conciliation and while conciliation was

pending, they have been stopped from working w.e.f.

18.02.1993. Upon failure of conciliation the matter was taken

up for consideration by the appropriate Government and by

an Order No. L-20012/225/93-I.R. (Coal-I) dated 27.04.1994

the Central Government has referred the dispute for

adjudication which was registered as Reference No.

106/1994.

Notice was issued to the Management and upon receipt

of notice from the learned Tribunal, the Management

appeared before the learned Tribunal and submitted its

Written Statement stating that reference is not legally

maintainable as there is no employer-employee relationship

between the Management and the concerned persons at any

point of time.

It has also been stated that no contractor was engaged

on any job which has been prohibited by issuance of

notification u/s 10 of the Contract Labour (Regulation and

Abolition) Act, 1970.

The learned Tribunal by reasons of its award dated

08.01.2003 held that the 22 concerned persons are entitled

to regularization and ordered to reinstate and regularized all

22 concerned workmen as Plant Cleaning Mazdoor subject to

being found medically fit and below the age of

superannuation.

Being aggrieved by the Award of the learned Tribunal,

the appellant preferred W.P.(L) No. 2196/2003.

However, learned Single Judge, relying upon a judgment

of this Court rendered in the case of Employer in relation to

the Management of Rajrappa Washery of Central

Coalfields Ltd. v. The Presiding officer, Central

Government Industrial Tribunal No.1, Dhanbad & Anr.

reported in 2015 (4) JCR 673 and the fact that the case of

the concerned persons is at par with 161 workmen

regularized in the year 1980 and also 64 workmen

regularized pursuant to the award passed in Ref. No.

258/1990, dismissed the writ application on the ground that

these 22 workmen cannot be discriminated on the strength of

one or other technical ground, against the aforesaid order

passed by the learned Single Judge, the present intra-court

appeal has been filed.

3. It is evident from the fact as referred hereinabove that

the workmen, respondents herein, claimed to be in

employment of the petitioner company since 1980 as Plant

Cleaning Mazdoor.

The case of the workmen is that the management has

regularized 161 coworkers as Plant Cleaning Mazdoor, leaving

behind these 22 workmen. Subsequently also, 64 other

workmen have been employed and these 64 workmen have

raised industrial dispute which has been referred vide

Reference No.258/1990 in which vide Award dated

13.07.1992, order of regularization of these 64 workmen has

been passed.

The writ petition has been filed by the employer-

management challenging the said Award being CWJC

No.157/1993(R), which has been dismissed and after

dismissal of the writ petition, those 64 workmen have been

regularized.

The grievance of the workmen is that they are also

discharging the similar nature of duty but they are being

discriminated as they have not been allowed to work w.e.f.

18.02.1993 and since then they are out of employment.

The further grievance is that they have raised an

industrial dispute by submitting required application through

Union on 03.10.1991 which has been referred for conciliation

and while conciliation was pending, they have been stopped

from working w.e.f. 18.02.1993.

Subsequently, the dispute was raised and a reference

has been made being Reference No.106/1994, the terms of

reference are as follows :-

"Whether the action of the management of Dugda Coal Washery of BCCL, P.O. Dugda, Dt. Dhanbad in not regularizing S/Sh. Moti Mahato and 21 others (as per list attached) is legal and justified? If not, to what relief are the concerned workmen entitled?"

The Industrial Tribunal has proceeded to answer the

reference and accordingly, the same has been answered in

the following terms :-

"That award is, thus, made hereunder:

The action of the management of Dugda Coal Washery of M/s B.C.C.L. Ltd. in not regularizing the concerned workmen is not legal and justified and all those 22 concerned workmen deserve to be regularized in services of the management. Consequently, the management is hereby directed to reinstate and regularize the services of all the twenty two (22) concerned workmen (as per list attached with the order of reference) as plant cleaning mazdoors subject to being found medically fit and below the age of superannuation, within sixty days from the date of publication of the award and to pay them wages as per NCWA."

The management has preferred writ petition being

W.P.(S) No.2196 of 2003 but the learned Single Judge of this

Court has declined to interfere with the Award, against which

the present intra-court appeal.

4. Mr. Anoop Kumar Mehta, learned counsel appearing for

the appellant, has submitted that the order passed by the

learned Single Judge suffers from patent illegality, since,

there is no relationship of employer-employee in between the

appellant-management and the respondent-workmen but

without taking into consideration the aforesaid fact, the

Award of regularization has been passed and hence, on this

ground alone the impugned judgment is fit to be set aside as

also the Award passed in Reference No.106/1994.

The further ground has been taken that there is no

notification under Section 10(1) of the Contract Labour

(Regulation and Abolition) Act, 1970 (hereinafter to be

referred to as the Act, 1970) and in absence thereof, if there

is any violation of the statutory provision of the Act, 1970,

the penal offence is there but there cannot be any order of

regularization if in absence of any notification under Section

10(1) of the Act, 1970 the workforce is being used through

the contractor.

The further contention has been raised that the learned

Industrial Tribunal has passed the Award only the basis of

the application submitted on behalf of the contractor for

getting the gate pass with respect to 22 workmen and the

issuance of gate pass or requisition made to that effect

cannot be said to be a conclusive evidence to establish the

relationship of employer-employee in between the appellant-

management and the workmen-respondents.

The contention has been raised that the finding so

recorded by the learned Industrial Tribunal holding the

workmen entitled for the regularization even though they

have never been accepted by the Management to be its

employees and there is no evidence to that effect and, hence,

the Award passed by the Industrial Tribunal is nothing but

suffers from perversity but this aspect of the matter has also

not been considered by the learned Single Judge.

5. Per contra, Mr. Rahul Kumar, learned counsel

appearing for the respondent-workmen, has submitted by

defending the order passed by the learned Single Judge as

also the finding recorded by the Industrial Tribunal by raising

the ground that it is incorrect on the part of the appellant to

take the ground that there is no notification under Section

10(1) of the Act, 1970, rather, there is notification to that

effect as has been taken note of by the learned Tribunal in

the Award. Such reference of notification under Section 10(1)

of the Act, 1970 has been taken note of by the Industrial

Tribunal based upon the general notification issued in this

regard basis upon which the Award for regularization of other

co-workmen has been passed by answering the reference in

connection with Reference Case No. 106/1994.

It has been contended that when there is provision of

notification under Section 10(1) of the Act, 1970 and if

ignoring the same the workmen have been engaged, the

engagement of contractor is nothing but a sham and

camouflage transaction and in that view of the matter, the

ratio laid down by Hon'ble Apex Court in the case of Steel

Authority of India Limited and Others v. National Union

Waterfront Workers and Others, reported in (2001) 7 SCC

1 will well be applicable and after taking into consideration

the aforesaid proposition of law as also considering the fact

that there is notification under Section 10(1) of the Act, 1970

and if in that pretext the Award of regularization has been

passed which has been declined to be interfered with by the

learned Single Judge, the same cannot be said to suffer from

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any error.

6. This Court has heard the learned counsel for the

parties, perused the documents available on record as also

the finding recorded by the learned Single Judge in the

impugned order.

7. This Court, before proceeding to examine the factual

aspect, is required to refer certain judicial pronouncements

rendered by the Hon'ble Apex Court.

The judgment rendered by Hon'ble Apex Court in the

case of Air India Statutory Corporation and Others v.

United Labour Union and Others reported in (1997) 9

SCC 377 wherein the law has been laid down that if the

workers are being engaged through contractor, they will

automatically be absorbed but the said position of law has

been overruled by the Constitution Bench of Hon'ble Apex

Court in the case of Steel Authority of India Limited and

Others v. National Union Waterfront Workers and Others

(Supra).

The position of law after the judgment pronounced by

the Constitution Bench of Hon'ble Apex Court in the case of

Steel Authority of India Limited and Others v. National

Union Waterfront Workers and Others (Supra) and the law

laid down in International Airport Authority of India

Limited v. International Air Cargo Workers' Union and

Another, reported in (2009) 13 SCC 374, wherein it has

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been laid down that in absence of any notification under

Section 10(1) of the Act, 1970 and in the absence of any

allegation and/or finding that the contract was sham or

camouflage, there cannot be any order of reinstatement.

Prior to the law laid down by the Constitution Bench,

the law prevailing was, as per the judgment pronounced in

the case of Air India Statutory Corporation and Others v.

United Labour Union and Others (Supra) that the legal

consequence of the prohibition notification under Section

10(1) of the Act, 1970 prohibiting employment of contract

labour was that the concerned workman would be entitled to

be treated as regular employee from the day on which the

contract labour system in the establishment for the work

which they are doing gets abolished.

But the effect of the prohibition notification under

Section 10(1) of the Act, 1970 issued by the appropriate

Government at the later stage came to be examined by the

Constitution Bench of the Hon'ble Apex Court in the case of

Steel Authority of India Limited and Others v. National

Union Waterfront Workers and Others (Supra) and it was

held that there is no provision under CLRA Act whether

expressly or necessarily implication which provides for

automatic absorption of contract labour on issuance of a

notification by the appropriate Government under Section

10(1), prohibiting employment of contract labour, in any

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process, operation or other work in any other establishment

and overruled the judgment rendered in the case of Air India

Statutory Corporation and Others v. United Labour

Union and Others (Supra) making it clear that neither

Section 10 nor any other provision in the CLRA Act provides

for automatic absorption of contract labour on issuance of

notification by the appropriate Government under Section

10(1) of the CLRA Act and consequently, the principal

employer is not required by operation of law to absorb the

contract labour working in the establishment.

It is evident from the judgment rendered by Hon'ble

Apex Court in Steel Authority of India Limited and Others

v. National Union Waterfront Workers and Others (Supra)

that on issuance of prohibition notification under Section

10(1) of the Act, 1970, 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

the 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

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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.

The condition is that 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 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.

Reference in this regard be made to paragraphs Nos. 68,

88, 105 and 125 of Steel Authority of India Limited and

Others v. National Union Waterfront Workers and

Others, (Supra) which are being quoted hereunder :-

68. We have extracted above Section 10 of the CLRA Act which empowers the appropriate Government to prohibit employment of contract labour in any process, operation

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or other work in any establishment, lays down the procedure and specifies the relevant factors which shall be taken into consideration for issuing notification under sub-section (1) of Section 10. It is a common ground that the consequence of prohibition notification under Section 10(1) of the CLRA Act, prohibiting employment of contract labour, is neither spelt out in Section 10 nor indicated anywhere in the Act. In our view, the following consequences follow on issuing 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 utilise 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.

The point now under consideration is: whether automatic absorption of contract labour working in an establishment, is implied in Section 10 of the CLRA Act and follows as a consequence on issuance of the

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prohibition notification thereunder. We shall revert to this aspect shortly.

88. If we may say so, the eloquence of the CLRA Act in not spelling out the consequence of abolition of contract labour system, discerned in the light of various reports of the Commissions and the Committees and the Statement of Objects and Reasons of the Act, appears to be that Parliament intended to create a bar on engaging contract labour in the establishment covered by the prohibition notification, by a principal employer so as to leave no option with him except to employ the workers as regular employees directly. Section 10 is intended to work as a permanent solution to the problem rather than to provide a one-time measure by departmentalizing the existing contract labour who may, by a fortuitous circumstance be in a given establishment for a very short time as on the date of the prohibition notification. It could as well be that a contractor and his contract labour who were with an establishment for a number of years were changed just before the issuance of prohibition notification. In such a case there could be no justification to prefer the contract labour engaged on the relevant date over the contract labour employed for a longer period earlier. These may be some of the reasons as to why no specific provision is made for automatic absorption of contract labour in the CLRA Act.

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

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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.

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

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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 eo 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 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

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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.

(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 the 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

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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 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."

The Hon'ble Apex Court in the case of International

Airport Authority of India Limited v. International Air

Cargo Workers' Union and Another (Supra) has been

pleased to hold at paragraph 38 regarding the test to be

applied to find out whether a person is an employee or

independent contractor may not automatically apply in

finding out whether the contract labour agreement is a sham,

nominal and is a mere camouflage, for ready reference,

paragraphs 38 and 39 of the aforesaid judgment are quoted

hereunder as:-

"38. The tests that are applied to find out whether a person is an employee or an independent contractor may not automatically apply in finding out whether

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the contract labour agreement is a sham, nominal and is a mere camouflage. For example, if the contract is for supply of labour, necessarily, the labour supplied by the contractor will work under the directions, supervision and control of the principal employer but that would not make the worker a direct employee of the principal employer, if the salary is paid by a contractor, if the right to regulate the employment is with the contractor, and the ultimate supervision and control lies with the contractor.

39. The principal employer only controls and directs the work to be done by a contract labour, when such labour is assigned/allotted/sent to him. But it is the contractor as employer, who chooses whether the worker is to be assigned/allotted to the principal employer or used otherwise. In short, worker being the employee of the contractor, the ultimate supervision and control lies with the contractor as he decides where the employee will work and how long he will work and subject to what conditions. Only when the contractor assigns/sends the worker to work under the principal employer, the worker works under the supervision and control of the principal employer but that is secondary control. The primary control is with the contractor."

Recently also, the Hon'ble Apex Court in the case of

Kirloskar Brothers Limited v. Ramcharan and Others

reported in (2023) 1 SCC 463 has been pleased to hold after

taking into consideration the judgment rendered by

Constitution Bench of Hon'ble Apex Court in Steel Authority

of India Limited and Others v. National Union

Waterfront Workers and Others (Supra) and International

Airport Authority of India Limited v. International Air

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Cargo Workers' Union and Another (Supra) that in absence

of any notification under Section 10(1) of the CLRA Act and in

absence of any allegation and/or findings that the contract

was sham and camouflage, there cannot be any order of

reinstatement or absorption of the workmen.

8. This Court is now proceeding to examine the argument

advanced on behalf of the appellant on the aforesaid settled

legal position.

Admittedly herein, the work in question which was being

performed by the workmen has been notified to be under the

prohibited category by virtue of notification issued by the

Ministry of Labour as contained in Notification No.S.O.3460

dated December, 11 1990 published in the Gazette of India,

Part II Section 3(ii) dated 22nd December, 1990, for ready

reference the same is being referred hereunder as :-

"Ministry of Labour, Noti. No. S.O. 3460, dated December 11, 1990 published in the Gazette of India, Part II, Section 3(ii), dated 22nd December, 1990, p.

5633 [U.23013/31/87-LW] In exercise of the powers conferred by sub-section (1) of Section 10 of the Contract Labour (Regulation and Abolition) Act, 1970 (37 of 1970), the Central Government, after consultation with the Central Board, hereby prohibits the employment of contract labour in the works/operations specified in the following Schedule, in the coal washery in the country, with effect from the date of publication of this notification in the Official Gazette.

SCHEDULE

(i) Transport of middling; and

(ii) Removal of slurry."

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9. It is, thus, evident that the work regarding removal of

slurry which pertains to the cleaning job has been notified

under Section 10(1) of the Act, 1970 under the prohibited

category. The moment the work in question has been notified

under the prohibited category under Section 10(1) of the Act,

1970 and even if the work is being taken by the contractor,

as per the case made out on behalf of the appellant, then as

per the legal position as held by Constitution Bench of

Hon'ble Apex Court in the case of Steel Authority of India

Limited and Others v. National Union Waterfront

Workers and Others (Supra) and the recently in Kirloskar

Brothers Limited v. Ramcharan and Others (Supra) that

twin test is required to be seen while considering the case of

regularization of concerned workme i.e., there must be a

prohibition notification under Section 10(1) of the Act, 1970

and the engagement of workmen through the contractor

amounts to sham and camouflage transaction or not?

10. The fact is not in dispute as would be evident from the

material on record that similar nature of workmen have been

taken on regular establishment by virtue of an Award passed

in Reference Case No. 258/1990 vide Award dated

13.07.1992. The said Award was challenged by the

Management by filing writ petition being C.W.J.C. No.157 of

1992(R) but was dismissed and in consequence thereafter 64

workmen have been regularized in the regular establishment.

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Further, it is also not in dispute that the Management

has regularized 161 co-workers as Plant Cleaning Mazdoor

but the cases of the present workmen, 22 in number, have

not been considered for regularization and for that purpose

the dispute has been raised.

11. This Court, since has found from the notification dated

December, 11 1990 that the work in question is prohibited

one and on examination of the Award passed in Reference

Case No.258/1990 it has been found therefrom that the

Award has been passed with respect to 64 concerned

workmen after taking into consideration the fact that the

work in question is perennial in nature and falls under the

prohibited category, as has been referred at paragraph 13, for

ready reference the paragraph 13 of the Award is referred

hereunder :-

13. The case of the sponsoring union is that most of the workmen who were departmentalised earlier as plant cleaning mazdoor were transferred to other job and plant cleaning again started to be done through contractor labour. This has been disputed by the management. MW-1 J.S.Srivastava has stated that about 150 to 150 workers were engaged on the job of plant cleaning and their services were departmentalised. Now about 100 of such workmen have been doing the job of plant cleaning. He has denied that only 40 to 50 regular workmen have been deployed on the job of plant cleaning. WW-1 Gulab Chouhan has stated that some 50 to 60 regular workmen of the management were also doing the job of plant cleaning in 1987. The internal note of the management on this matter is revealing. This note-

- 24 -

sheet has been produced by the union and has been marked Ext.W-3 which is re-produced hereinbelow:

"Sub:-House-keeping at Dugda-I Coal Washery

The persons departmentalized for the purpose of House-keeping of Duga-I have been absorbed in operation and maintenance department of above plant against the vacancies created by retirement of persons as well as commissioning of Upgradation plant. Hence, with the very small number of available persons the condition of House-keeping all around the plant deteriorated, If action for improvement is not taken immediately, the production of plant is likely to be affected including the safety of persons working at various sections of the plant. This has also been pointed out by Factory Inspector in his inspection note No.66 dated 22.3.90. It is, therefore, proposed to get the work done by engaging an outside agency. The total quantity of various materials to be handled in Dugda-1 including Raw coal section and Upgradation plant is about 5900 M.T. and by taking a rate of Rs.8.40 per M.T. (Rate Ref:M/O.SMS/C/24/90-1499 dated 9.11.90) the total amount comes to Rs.49,560/-.

Addl. CE(W)/Dugda is requested to kindly approve the proposal for expenditure of Rs.49,560/- for improvement of the House Keeping and Dy.PM/Dugda is requested to please concur in the same. The expenditure will be charged against the operation budget for the year, 1991-92.

Sd/-

Dy. F.M.                       Dy. C.E. (CP) 17/7
                                     D-I

No. DC I/F/House-keeping/91-1903'A' dated 17th July, '91.

In view of the Addl. C.E. (E&M)/Dugda remarks on the body of our Lt.No. FA/HSK/91-424 dt.20.7.91 the proposal for handling of 5900 MT of coal @ Rs.8.40 is concurred in at a total cost of Rs.49,560/- subject to approval of C.C.M. Since from 23.3.01 to 2.7.91 a sum of Rs.2,30,014.02 has already been incurred on the account of handling of 25133.229 MT of coal. In view of the urgency stated by Addl.C.E. (E&M) a consolidated proposal for Rs.8.16,680/- has already been sent after Budget certification vide this office Letter No. DG/Acctt/NK/12/96/91 dated 5.8.91. As it is a perennial nature of job and also falls under prohibited category, administrative approval of Competent Authority must be obtained.

Sd/- Dy. Fin.Manager.

Addl. Chief Mngr.(E&M)"

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According to MW-1 J.S.Srivastava house-keeping job is the other name of plant cleaning job. This note- sheet discloses that the workmen departmentalised for the purpose of plant cleaning job had been absorbed in Operation and Maintenance Department against vacancy created by retirement of persons as well as commissioning of upgradation of plant. The initiator of the note-sheet, Dy. C.E. (CP) proposed that House-keeping job be done by engaging outside agency. Dy. Pinance Manager has recorded his note on the note-sheet to state that the job is perennial nature of job and also falls under prohibited category and administrative approval must be obtained. Thus, it appears that the management under compulsive circumstances, tried to subvert the prohibition on the job of plant cleaning by employment of contract labour by giving a different nomenclature of the job, such as, re-handling of coal etc."

12. This Court, on perusal of the Award passed in Reference

Case No.106/1994, has found therefrom that the learned

Tribunal has considered the prohibition notification under

Section 10(1) of the Act, 1970 and after taking note thereof as

also the engagement or workmen through the contractor and

by considering the prohibition notification under Section

10(1) of the Act, 1970, the engagement of workmen through

the contractor has been held to be a sham and camouflage

transaction, as would be evident from the finding recorded to

that effect at paragraph 8 of the Award, for ready reference

the extract of paragraph 8 is being referred hereunder as :-

"8. ... ... ...

Therefore, from all the aforesaid it is clear that though the workmen concerned were engaged

- 26 -

through a contractor and were shown to be the contractor's workmen but the system of contract or the presence of contractor was mere a device to camouflage the real issue and in fact for all practical purposes thee existed relationship of employer and employee between the concerned workmen and the management and most of the jobs performed by the concerned workmen during the period of their engagement under the management were the plant cleaning jobs which, as observed above, are considered to be of permanent and perennial nature."

Further, it is evident that the ground of parity has been

taken of regularizing 161 workmen as also 64 workmen who

are discharging the similar nature of work basis upon which

the Award of regularization has been passed.

13. Parity is mandatorily to be followed if the concerned

workers are working in the same management and one

section of the workmen have been regularized by taking into

consideration the prohibition notice under Section 10(1) of

the Act, 1970, then there is no question not to extend such

benefit to other group of labourers from whom the same

nature of work is being taken and are also coming under the

prohibited category in views of the notification under Section

10(1) of the Act, 1970.

The principle of parity has been considered by the

Hon'ble Apex Court in the recent judgment in the case of

Union of India and Others v. Munshi Ram reported in

2022 SCC OnLine SC 1493 wherein it has been held that

the parity principle is to be maintained if the concerned

- 27 -

employees are working in the same management. The

relevant paragraph of the aforesaid judgment is being

referred hereunder as :-

"56. It cannot be disputed that employees working in different divisions/zones in the Railways are under the very same employer - Railway Board which is under the Ministry of Railways. There are 16 Zones and 68 Divisions in the Railways. Therefore, the employees working under the same employer - Railway Board working in different Zones/Divisions are required to be treated similarly and equally and are entitled to similar benefits and are entitled to the same treatment. As rightly submitted on behalf of the respondents, there cannot be any discrimination inter se. Under the circumstances, on the ground of parity, the Commission Vendors/bearers working in the Northern Railway are entitled to the same benefits which are held to be entitled to all the similarly situated Commission Vendors/Bearers working under different Zones/Divisions. There cannot be different criteria/parameters with respect to similarly situated employees - Commission Vendors/bearers working in different Zones/Divisions, but working under the same employer."

14. The learned Tribunal has taken into consideration the

principle of parity and the prohibition notification under

Section 10(1) and the engagement of the workmen considered

to be sham and camouflage and came to the conclusive

finding by answering the reference in favour of the workmen.

The position of law is well settled that if the prohibition

notification under Section 10(1) of the Act, 1970 and even if

the work is being taken through the contractor the same is

- 28 -

nothing but a sham and camouflage transaction and the said

contract cannot be said to be genuine one and in that view of

the matter, the concerned employer will be treated to be the

employee working for the principal employer.

The twin test, therefore, a prohibition notification under

Section 10(1) and there must be a finding of sham and

camouflage transaction is required to be there before

answering the reference of regularization and we, after going

through the Award, have found that these two tests are

available in the Award since there is prohibition notification

under Section 10(1) of the Act, 1970 and further, specific

finding to the effect of the engagement of the workmen

through the contractor has been considered to be sham and

camouflage coupled with the fact that the learned Industrial

Tribunal has considered the principle of parity since the

workmen discharging similar nature of work have been

regularized by the Management itself who were 161 in

number. Subsequently, 64 other workmen, by virtue of the

Award passed in Reference Case No.258/1990, discharging

similar nature of duty have also been regularized leaving

apart these 22 workmen even though they also come under

the prohibited category of work and they are also being

engaged through contractor.

The engagement of contractor is not in dispute, rather,

only dispute has been raised that merely on the basis of the

- 29 -

gate pass, there cannot be any regularization.

But the said contention, according to our considered

view, is not fit to be acceptable since it is not a matter of only

gate pass which led the learned Tribunal in passing the

Award of regularization, rather, the learned Tribunal, after

taking into consideration the twin test of prohibition

notification under Section 10(1) of the Act, 1970 and after

having considered the engagement of these workmen to be a

sham and camouflage transaction and to that effect specific

finding has been recorded and in that view of the matter, if

the Award has been passed for regularization answering the

reference in favour of the workmen, the same cannot be said

to suffer from an error.

15. We, after having discussed the factual aspect along with

the legal position and on scrutinizing the order passed by the

learned Single Judge, have found therefrom that the learned

Single Judge has given thoughtful consideration regarding

the principle of parity, the prohibition notification under

Section 10(1) of the Act, 1970 as also the finding with respect

to the sham and camouflage transaction.

16. The law is well settled that the power of judicial review

regarding interference to be shown in the order passed by the

Tribunal while answering the reference is very limited, as has

been held by Hon'ble Apex Court in the case of Syed Yakoob

Vrs. Radhakrishnan, reported in A.I.R. 1964 SC 477,

- 30 -

wherein at paragraph no.7 their Lordships have been pleased

to held as follows:-

"The question about the limits of the jurisdiction of High Courts in issuing a writ of certiorari under Art. 226 has been frequently considered by this Court and the true legal position in that behalf is no longer in doubt. A writ of certiorari can be issued for correcting errors of jurisdiction committed by inferior courts or tribunals : these are cases where orders are passed by inferior courts or tribunals without jurisdiction, or is in excess of it, or as a result of failure to exercise jurisdiction. A writ can similarly be issued where in exercise of jurisdiction conferred on it, the Court or Tribunal Acts illegally or improperly, as for instance, it decides a question without giving an opportunity to be heard to the party affected by the order, or where the procedure adopted in dealing with the dispute is opposed to principles of natural justice. There is, however, no doubt that the jurisdiction to issue a writ of certiorari is a supervisory jurisdiction and the Court exercising it is not entitled to act as an appellate Court. This limitation necessarily means that findings of fact reached by the inferior Court or Tribunal as result of the appreciation of evidence cannot be reopened or questioned in writ proceedings. An error of law which is apparent on the face of the record can be corrected by a writ, but not an error of fact, however grave it may appear to be. In regard to a finding of fact recorded by the Tribunal, a writ of certiorari can be issued if it is shown that in recording the said finding, the tribunal had erroneously refused to admit admissible and material evidence, or had erroneously admitted inadmissible evidence which has influenced the impugned finding. Similarly, if a finding of fact is based on no evidence, that would be regarded as an error of law which can be corrected by a writ of certiorari. In dealing with this category of cases,

- 31 -

however, we must always bear in mind that a finding of fact recorded by the Tribunal cannot be challenged in proceedings for a writ of certiorari on the ground that the relevant and material evidence adduced before the Tribunal was insufficient or inadequate to sustain the impugned finding. The adequacy or sufficiency of evidence led on a point and the inference of fact to be drawn from the said finding are within the exclusive jurisdiction of the Tribunal, and the said points cannot be agitated before a writ Court. It is within these limits that the jurisdiction conferred on the High Courts under Art. 226 to issue a writ of certiorari can be legitimately exercised (vide Hari Vishnu Kamath v. Ahmad Ishaque, 1955-1 SCR 1104 : ((S) AIR 1955 SC 233); Nagendra Nath v. Commr. Of Hills Division, 1958 SCR 1240 : (AIR 1958 SC 398) and Kaushalya Devi v. Bachittar Singh, AIR 1960 SC 1168.

In another judgment of Hon'ble Apex Court in the Case

of Sawarn Singh Vrs. State of Punjab reported in (1976) 2

SCC 868 their Lordships while discussing the power of writ

under Article 226 for issuance of writ of certiorari has been

please to hold at paragraph nos.12 and 13 as under:

"12. Before dealing with the contentions canvassed, it will be useful to notice the general principles indicating the limits of the jurisdiction of the certiorari jurisdiction can be exercised only for correcting errors of jurisdiction committed by inferior courts or tribunals. A writ of certiorari can be issued only in the exercise of supervisory jurisdiction which is different from appellate jurisdiction. The Court exercising special jurisdiction under Article 226 is not entitled to act as an appellate Court. As was pointed out by this Court in Syed Yakoob's case (supra).

13. In regard to a finding of fact recorded by an

- 32 -

inferior tribunal, a writ of certiorari can be issued only if in recording such a finding, the tribunal has acted on evidence which is legally inadmissible, or has refused to admit admissible evidence, or if the finding is not supported by any evidence at all, because in such cases the error amounts to an error of law. The writ jurisdiction extends only to cases where orders are passed by inferior courts or tribunals in excess of their jurisdiction or as a result of their refusal to exercise jurisdiction vested in them or they act illegally or improperly in the exercise of their jurisdiction causing grave miscarriage of justice."

In another judgment rendered by Hon'ble Apex Court in

the case of Pepsico India Holding (P) Ltd. Vrs. Krishna

Kant Pandey reported in (2015) 4 SCC 270 their Lordships

while discussing the scope of Article 226 and 227 of the

Constitution of India in the matter of interference with the

finding of the tribunal has been please to hold by placing

reliance upon the judgment rendered in the case of

Chandavarkar Sita Ratna Rao Vrs. Ashalata S. Guram

reported in (1986) 4 SCC 447 at para 17 has held as

under:-

"17. In case of finding of facts, the court should not interfere in exercise of its jurisdiction under Article 227 of the Constitution. Reference may be made to the observations of this Court in Bathutmal Raichand Oswal V. Laxmibai R. Tarta where this Court observed that the High Court could not in the guise of exercising its jurisdiction under Article 227 convert itself into a court of appeal when the legislature has not conferred a right of appeal. The High Court was

- 33 -

not competent to correct errors of facts by examining the evidence and reappreciating. Speaking for the Court, Bhagwati, J, as the learned Chief Justice then was, observed at page 1301 of the report as follows:

......... power of superintendence conferred by Article 227 is, as pointed out by Harries, C.J., in Dalmia Jain Airways v. Sukumar Mukherjee to be exercised most sparingly and only in appropriate cases in order to keep the subordinate courts within the bounds of their authority and not for correcting mere errors. This statement of law was quoted with approval in the subsequent decision of this Court in Nagendra Nath Bose V. Commr. Of Hills Division and it was pointed out by Sinha, J., as he then was, speaking on behalf of the court in that case: It is thus, clear that the powers of judicial interference under Article 227 of the Constitution with orders of judicial or quasijudicial nature, are not greater than the power under Article 226 of the Constitution. Under Article 226 the power of interference may extent to quashing an impugned order on the ground of mistake apparent on the face of the record. But under Article 227 of the Constitution, the power of interference is limited to seeking that the tribunal functions within the limits of its authority."

It is evident from the ratio laid down by the Hon'ble

Apex court in the judgments as referred hereinabove that the

scope of High Court sitting under Article 226 of the

Constitution of India in exercise of power of judicial review on

the finding of the labour court is very limited.

17. This Court, on the basis of the aforesaid principle, is of

the view that this is not a case where the power conferred to

- 34 -

this Court under Article 226 of the Constitution of India is fit

to be exercised by showing interference and on this premise if

the learned Single Judge has refused to interfere with the

Award, the same, according to our considered view, cannot be

said to suffer from an error.

18. On the basis of the entire discussion made hereinabove,

this Court is of the view that the instant Letters Patent

Appeal lacks merit and accordingly, dismissed.

19. Interlocutory application, if any, also stands disposed of.

               I agree                        (Sujit Narayan Prasad, J.)




      (Subhash Chand, J.)                         (Subhash Chand, J.)


Birendra/ A.F.R.