Zila Satna Cement Steel Foundry ... vs Union Of India
2022 Latest Caselaw 3458 MP

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      IN THE HIGH COURT OF JUDICATURE FOR MADHYA
                  PRADESH AT JABALPUR
                           th
                  ON THE 11 of MARCH, 2022
                            BEFORE
     HON'BLE SHRI JUSTICE PURUSHAINDRA KUMAR KAURAV

                WRIT PETITION No. 19705 of 2019

          Between:-
          ZILA SATNA CEMENT STEEL FOUNDRY KHADAN
          KAAMGAR UNION THROUGH ITS GENERAL
          SECRETORY, RAMSAROJ KUSHWAHA AGED
          ABOUT 48 YEARS, S/O SHRI RAM KUMAR
          KUSHWAHA AITUC OFFICE, SANT NAGAR, GHUR
          DANG, WARD NO. 11, POST: BIRLA VIKAS, SATNA
          (M.P.).

                                                  ....APPELLANT
          (BY SHRI UTTAM        MAHESHWARI,   ADVOCATE       FOR
          PETITIONER)
                               AND

1.        UNION OF INDIA, THROUGH, SECRETARY,
          DEPARTMENT OF LABOUR & EMPLOYMENT,
          SHRAM SHAKTI BHAWAN, RAFI MARG,
          SANSAD MARG ROAD AREA, NEW DELHI
          -11001 (M.P.).

2.        DEPUTY CHIEF LABOUR COMMISSIONER
          (CENTRAL) BLOCK NO. 10 CIVIC CENTRE,
          MARHATAL JABALPUR (M.P.) 482002.

3.        PRISM JOHNSON LTD. (EX-PRISM CEMENT
          LTD.) TRHOUGH MANAGING DIRECOR,
          MANKAHARI,    POST    BATHIA,       NEAR
          SAGANPUR, DISTRICT SATNA (M.P.) 485111.

4.        RAVI SECUTIRY ORGANIZATION (P) LTD.
          O.O 126 MAYUR MARKET, THATIPUR,
          GWALIOR (M.P.) 474011

                                               ......RESPONDENTS
                                     -:- 2 -:-                             W.P.No.19705 of 2019

 (BY SHRI DEVESH BHOJNE, ADVOCATE FOR THE RESPONDNET NO.
2)

(BY SHRI HITENDRA KUMAR GOLHANI, ADVOCATE FOR THE
RESPONDNET NO. 4)
-----------------------------------------------------------------------------------------------
        This petition coming on for admission this day, Hon'ble Shri Justice
Purushaindra Kumar Kaurav passed the following:


                                          ORDER

The petitioner in the instant writ petition is challenging the order

dated 25.07.2019 (Annexure P-11) passed by respondent No.1 with a

further prayer to direct the respondent No.1 to conclude the proceedings

by making a reference to the appropriate CGIT.

2. The facts of the case are that the petitioner is a Trade Union duly

registered under the provision of the Trade Union Act 1926 and it

represents the cause of its members.

3. The petitioner-Union raised an Industrial dispute against the

respondent No. 3 and 4 before the Conciliation Officer stating therein that

the member of the petitioner-Union have not been paid over time in

consonance with the applicable statutory provision for the period of

01.07.2015 to 31.03.2016.The petitioner/Union has raised various others

grievances.

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4. Respondent No. 2 i.e Deputy Labour Commissioner Central

initiated conciliation proceedings and notices were issued to the

respondent No. 3 and 4. The action of issuance of the notices was

challenged by the respondent No. 2 before this Court passed in W.P. No.

11460/2017, however, the said challenge was rejected. The respondent

No. 2 after examining the submission of the parties sent the failure of

conciliation report. The respondent No. 1, thereafter, rejected the request

of the petitioner-Union, vide impugned order dated 25.07.2019, to send

the reference to the CGIT.

5. Learned counsel for the petitioner has submitted the respondent No.

1 cannot assume the jurisdiction of the CGIT to adjudicate the dispute.

However, the role of the respondent no. 1 is only limited to examine as to

whether their remains any dispute between the parties. Since there is

dispute between the employee and employer, therefore, the appropriate

course for the respondent No.1 was to refer the dispute to the concern

Labour Court. He places reliance on decision of this Court in the matter

of Zila satna cement steel foundry khadon kaamgar union vs. Union of

India and others1 where the scope of Section 10 of the Industrial

Disputes Act, 1947 (for short "I.D.Act) in the context of definition of the

"Industrial Disputes" under Section 2(k) of the I.D Act has been

discussed and it has been held that even question whether the member of

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the petitioner-Union whether are workman under the definition of the I.D

Act requires examination by the concern tribunal and hence, the decision

not to send the reference to the concern tribunal was found to be

erroneous.

6. No one appears on behalf of respondent No.3, however, the reply

has been filed.

7. Learned counsel appearing on behalf of the respondent No. 1, 2 and

4 has opposed the prayer and they submit that on the basis of the facts of

the present case the impugned order is absolutely in accordance with law.

The dispute in question has been referred after huge delay. The reasons

given in the impugned order dated 25.07.2019 by the respondent No. 1,

are in accordance with law, therefore, no interference is called for. They

further submit that a conjoint reading of Section 7, 7(A) and Section 10

makes a clear that impugned order is in consonance with the scheme of

the I.D Act 1947.

8. This Court in the matter of Zila Satna Cement 1 has considered the

similar reason of rejection by the respondent No. 1 for not sending the

dispute to the concern tribunal and after considering the law laid down by

the Hon'ble Supreme Court in the Telco Convoy Drivers Mazdoor Sangh

and Ors. Vs. State Of Bihar and Others2. has held as under:-`

2 AIR 1989 SC 1565.

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"11 The singular reason for rejection is that the demand of regularization of contract labour does not fall under ei- ther IInd or IIIrd Schedule of the ID Act. The question whether the members of the petitioner-Union were "work- men" or not needs to be examined by the appropriate Tri- bunal. Interestingly, a similar objection was raised by the employer in the case of Telco Convoy Mazdoor Sangh (supra). Para 12 & 13 of said judgment reads as under:

"12. It is, however, submitted on behalf of TELCO that unless there is relationship of employer and employees or, in other words, unless those who are raising the disputes are work- men, there cannot be any existence of industrial dispute within the meaning of the term as defined in section 2(k) of the Act. It is urged that in order to form an opinion as to whether an industrial dispute exists or is apprehended, one of the factors that has to be considered by the Government is whether the persons who are raising the disputes are workmen or not within the meaning of the definition as contained in section 2(k) of the Act.

13. Attractive though the contention is, we regret, we are unable to accept the same. It is now well settled that, while exercising power under section 10(1) of the Act, the function of the appropriate Government is an administrative function and not a judicial or quasi judicial function, and that in per- forming this administrative function the Government cannot delve into the merits of the dispute and take upon itself the determi- nation of the lis, which would certainly be in excess of the power conferred on it by sec- tion 10 of the Act. See: Ram Avtar Sharma v. State of Haryana, [1985] 3 SCR 686; M.P.Irrigation Kararnchari Sangh v. The State of M.P., [1985] 2 SCR 1019 and

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Shambhu Nath Goyal v. Bank of Baroda, Jullundur, [1978] 2 SCR 793."

[Emphasis Supplied]

12. This is now settled in industrial jurisprudence that even in cases of contractual employees, the labour Courts are equipped with the power to lift the veil and see the real nature of employment. In other words, where the contract itself is a sham contract or it is merely a smoke screen or camouflage, the labour Court is not powerless to examine the real nature of employment. This aspect can be decided by the labour Court after recording evidence of the parties. Way back, in 1978 (4) SCC 257 (Hussainbhai, Calicut vs. The Alath Factory Thezhilali Union Kozhikode and oth- ers), the Apex Court poignantly held as under:

"5. The true test may, with brevity, be indicated once again. Where a worker or group of work- ers labours to produce goods or services and these goods or services are for the business of another, that other is, in fact, the employer. He has economic control over the workers' subsis- tence, skill, and continued employment. If he, for any reason, chokes off, the worker is, virtu- ally, laid off. The presence of intermediate con- tractors with whom alone the workers have im- mediate or direct relationship ex contractu is of no consequence when, on lifting the veil or looking at the conspectus of factors governing employment, we discern the naked truth, though draped in different perfect paper arrangement, that the real employer is the management, not The immediate contractor. Myriad devices, half- hidden in fold after fold of legal form depending on the degree of concealment needed, the type of industry, the local conditions and the like may be resorted to when labour legislation casts welfare obligations on the real employer, based on Articles 38, 39, 42, 43 and 43-A of the Constitution. The court must be astute to avoid the mischiefand achieve the purpose of the law

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and not be misled by the maya of legal appear- ance.

6. If the livelihood of the workmen substan- tially depends on labour endered to produce goods and services for the benefit and satisfac- tion of an enterprise, the absence of direct rela- tionship or the presence of dubious intermedi- aries or the make-believe trappings of detach- ment from the management cannot snap the real-life bond. The story may vary but the infer- ence defies ingenuity. The liability cannot be shaken off."

This principle was reiterated by Constitution Bench in Steel Authority of India Limited vs. National Union Wa- ter Front Workers, 2001 (7) SCC. The reference may be made to para 107 which reads as under:

"107. ... (ii) where the contract was found to be a sham and nominal, rather a camou- flage, 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 de- clared the correct position as a fact at the stage after employment of contract labour stood prohibited;"

In 2003 (6) SCC 528 (Bharat Heavy Electricals Ltd. vs. State of U.P. and others), the Apex Court considered aforesaid judgments and opined that the case of Hus- sainbhai(Supra) is neither dissented from nor diluted by Constitution Bench in the case of Steel Authority of India Ltd. (Supra). In 2004 (1) SCC 126 (Ram Singh and oth- ers vs. Union Territory, Chandigarh and others), Dhar- madhikari J. speaking for the Bench opined that normally, the relationship of employer and employee does not exists between an employer and a contractor and the servant of

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an independent contractor. Where, however, an employer retains or assumes control over the means and method by which the work of a contractor is to be done, it may be said that the relationship between employer and employee exists between him and the servants of such a contractor. In such a situation the mere fact of formal employment by an independent contractor will not relieve the master of li- ability where the servant is, in fact, in his employment. In that event, it may be held that an independent contractor is created or is operating as a subterfuge and the employee will be regarded as the servant of the principal employer. Whether a particular relationship between employer and employee is genuine or a camouflage through the mode of a contractor, is essentially a question of fact to be deter- mined on the basis of the features of the relationship, the written terms of employment, if any, and the actual nature of the employment. The actual nature of relationship con- cerning a particular employment being essentially a ques- tion of fact, it has to be raised and proved before an indus- trial adjudicator."

9. Since the perusal of the facts clearly show that the decision rendered by this Court is with respect to the same parties and the only distinction is with regard to the final relief.

10. Having considered the submissions made by learned counsel for the parties this Court is of the opinion that the present petition deserves to be allowed. According the order dated 25.07.2019 (Annexure P-11) is set aside. The Government is directed to refer the dispute for adjudication to the appropriate tribunal within a period of 45 days from the production of this order.

(PURUSHAINDRA KUMAR KAURAV ) JUDGE

Roshni

ROSHNI SINGH 2022.03.16 14:44:48 +05'30'

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