Calcutta High Court
Kishan Jawanjal & Ors. vs Steel Authority Of India Ltd. & Ors. on 18 June, 1999
Equivalent citations: (1999)3CALLT24(HC)
JUDGMENT M.H.S. Ansari, J.
1. The instant writ application is filed by petitioners, nine (9) in number. They had been employed by the Durgapur Steel Plant (respondent No.2 herein) (for short D.S.P.) in the Department of Blast Furnace refining through the contractors.
2. The State Government by its notification dated 22nd February. 1982 (annexure 'A') in purported exercise of the power conferred by sub-section (1) of section 10 of the Contract Labour (Regulation and Abolition) Act, 1970,, prohibited employment of contract labour in any process or operation in the jobs specified therein and employed by M/s. Durgapur Steel Plant with the effect from 1st March. 1982. In the said notification, there are about twenty one (21) jobs listed therein and at serial No. 19, the Job listed pertains to relining of blast furnace.
3. It is the petitioners case that after the said notification, the petitioners were asked to appear before the Selection Committee on different dates for the post of unskilled workers. They were required to fill up the application form along with the necessary specified documents and were advised to submit all such documents on or before 19.3.1985. Xerox copy of the specimen of the letter of interview issued to petitioner No. 1 has been annexed to the writ application as annexure 'B'.
4. It appears that the Contractors Workers Union of Durgapur Steel Plant entered into an agreement/settlement dated 9.1.91 with the Durgapur Steel Plant being annexure 'C' to the writ application, wherein it was recited that the notification issued by the Government of West Bengal on 22nd February. 1982 prohibited employment of contractors workers in those jobs listed under the notification dated 22.2.82 and a series of meetings were held over a period of time at bipartite and tripartite levels with regard to the departmentalisation of jobs as well as absorption for contractor workmen. Thereafter, it proceeds to set out the agreement arrived at and to be implemented. Clause (4)(d) of the settlement which is relevant for the purpose of the instant enquiry reads under;
(d) General
i) With a view to eliminating contract system inside the plant. the Unions and Management agree to review arears of repetitive continuous contract working and evolve a scheme for departmentalisation of such activities. The matter connected with the separation/deployment to contract labour in these areas will also be discussed and suitable scheme will be evolved depending on need and suitability of the workmen.
ii) In respect of engagement of contractor workers in 'BF Relining' which is also under notification a separate scheme will be evolved mutually within a period of three months. If no settlement is arrived at bipartite level, the matter will be referred to before the Commissioner for his final disposal."
5. Thereafter a memorandum of settlement dated 28.6.94. was signed pursuant to a tripartite meeting held on 28.6. 94 before the Labour Commissioner between Steel Authority India Ltd. {for short SAIL), Durgapur Steel Plant (DSP) and their workmen represented by diverse Contractors Workers Union. It is recited therein that a memorandum of settlement was signed between the parties on 9.9.91 (annexure 'C' referred to supra) and as per Clause (4)(d)(i) and (ii) of the said settlement, it was agreed to review areas of repititive continuous contract working and evolve a scheme for departmentalisation of such activities.
6. Clause 5 of the said settlement dated 28.6.94 sets out the "scheme" for absorption. Sub Clauses (i), (ii) and (iii) are relevant for the purposes of the instant writ application and are extracted hereunder. What according to the petitioners, is the offending portion has for the sake of convenience been underlined.
"i) An agreed list of "Blast Furnace Relining" Job workmen who were also interviewed during March,1985 has been drawn after having verified the documents.
ii) The rent of the enlisted workmen after separation have undergone medical test for ascertaining their age, physical fitness and suitability for absorption in the regular establishment of Durgapur Steel Plant. Those who have been found medically unfit and overaged about 45_years of age as per medical examination report will be separated from the notified job and, will have_no claim for' absorption in Durgapur Steel Plant.
iii) All those medically fit and upto 45 years of age as per medical examination report will be considered for absorption as regular workmen in L-1 grade with other benefits as applicable to regular workmen of Durgapur Steel Plant. Their absorption will be done in phases during the financial years 1994-95 and 1995-96. This is however, subject to clearance/exemption from appropriate Government and statutory reservation etc. Three hundred such workmen will be absorbed w.e.f. 1.8.94 and the remaining medically fit workmen will be absorbed in the second phase from 1.4.95. It is expected that they will work under the centractors before they are absorbed."
7. It is the petitioners case that in the tripartite agreement dated 9.1.91, there was no clause prescribing the age limit and a large number of contractor workers who were medically fit and tested in two phases were employed without implementation of age criteria. It is their further case that the petitioners Nos. 1.2,6,8 and 9 have crossed the age limit of 45 years at the date of medical test while petitioners No. 3.4,5, and 7 have not, but were still not absorbed.
8. The petitioners, it is contended, have been working under the contractors since long and they have been successful in the interview and the medical test, the decision in the settlement to exclude the incumbent from departmentalisation who are above the age of 45 years on the date of medical test is arbitrary, whimsical and violative of Article 16 of the Constitution of India.
9. Consequent upon the judgment of the Division Bench remanding the matter to this court a supplementary affidavit has been filed on behalf of the petitioners affirmed on 18.3.97. In the said supplementary affidavit reference has been made to the judgment of the Supreme Court in Air India Statuary Corporation v United Labour Union and Ors. and right is claimed for being treated as regular employees and prayer has been made for grant of all benefits with the effect from 22.2.1982.
10. In the affidavit-in-opposition filed on behalf of the respondents, it is denied that Durgapur Steel Plant is a subsidiary of Steel Authority of India Ltd. (SAIL), respondent No. 1 herein. It is one of the manufacturing unit of SAIL. It is stated that the Job of blast furnace relining was undertaken from time to time and was completed by engaging contractors. The blast furnace relining job. It was asserted, is not of continuous of regular nature. The question of regularisation of the services of the petitioners did not arise and that SAIL or DSP is under no obligation to absorb the contract labour only because the job has been declared perennial by a notification of the Government of West Bengal.
11. With reference to the tripartite agreement dated 9.9.91 and Clause 4d(ii). It is stated in the affidavit-in-opposition that:
"it was made clear to the Union representatives of the contract labour Unions that the job of blast furnace relining therein was not at all existing although it came under Government notification, although Job is notified. Mangement of DSP would sympathetically consider to absorb some physically fit persons keeping in view of the limited scope and for that purpose the working age was fixed upto 45 years."
12. With reference to the agreement of 28th June, 1994, it is stated that the cut off age at 45 years was unanimously agreed to by all concerned.
13. In the supplementary affidavit filed on behalf of the respondents by Nemai Chandra Majhi affirmed on 14th October. 1996, it is reiterated that the jobs of blast furnace relaining in DSP is not repititive continuous contract work though is enumberated in the notification under section 10(1) of the Act. The said notification does not authorise or prescribe automatic absorption or regularisation of labourers of DSP.
14. With reference to the petitioners statement as to the age as on date of medical examination, it is stated that the medical examination were held long prior to the tripartite settlement dated 28.6.94 and that all the nine (9) petitioners were aged over 45 years as on the date of medical examination. The allegation that the petitioners No.3,4,5, and 7 had not reached 45 years on the date of medical test, it is stated, is contrary to the record.
15. It must be stated here that by an order dated 4th April, 1995, the instant writ application was disposed of holding that the writ petitioners were working as contract labour and were entitled to get jobs. The respondents were directed that in case the writ petitioners were found to be medically fit, they should be considered for absorption on regular basis within the time framed.
16. Aggrieved against the said order of the learned trial Judge dated 4.4.95. Durgapur Steel Plant preferred an appeal being APO No.168 of 1998 which was disposed of by the Division Bench by order dated 26th September, 1996, wherein it was held as under:
"Since the validity of the tripartite agreement/settlement has not been gone into the learned trial Judge had not considered whether in view of the tripartite settlement such a relief could be granted. In the facts and circumstances of the case, we set aside the order of the learned trial Judge and remand the matter back for fresh consideration of the matter."
17. It was further observed in the said order of the Division Bench that all points are left open to be decided on its merits.
18. That is how the matter has appeared once again before this court and heard de novo.
19. Subsequent to the Division Bench Judgment, the respondents as well as the writ petitioners have filed supplementary affidavit as also respective affidavits-in- opposition thereto, brief refernce to which has been made supra. State respondents have not affirmed any affidavits.
20. It must also be noted that the judgment of the Division Bench is dated 26th September. 1996 that is before the judgment of the Supreme Court in Air India Statutory Corporation & Ors v. United Labour Union & Ors., , the three Judges' Bench judgment of the Supreme Court was delivered on 6th December, 1996.
21. In so far as the Contract Labour (Regulation and Abolition) Act, of 1970 (for short the Act, 1970) is concerned, the legislation subserves twin purposes viz.,
i) to abolish the contract labour and
ii) to regulate the working conditions of contract labour wherever such employment is required in the interest of industry.
22. There is, however, a total unanimity of Judicial pronouncements to the effect that in the event, the contract labour is employed in an establishment for seasonal workings, the question of abolition would not arise but in the event of the same being of perennial nature, i.e. to say, in the event of engagement of labour force through intermediary which is otherwise in the ordinary course of events and involves continuity in the work, the legislation is candid enough to record its abolition since, involvement of contractor may have its social evil of labour exploitation and thus the contractor ought to go out of the scene bringing together the principal employer and the contract labourers rendering the employment as direct, and resultantly a direct employee.
23. This aspect of the matter has been dealt with great lucidity by His Lordship Justice Majumdar in the Air India's case (cited supra).
In AIR India's case (cited supra, the Supreme Court has as matter of fact taken note of more or less the entire catena of cases pertaining to contract labour. It will suffice, therefore, to extract some of the observations of the Supreme Court in Air India's case (cited supra).
24. His Lordship Justice Ramaswamy in the leading Judgment observed in pragraph 58 as under:
".............. On abolition of contract labour, the intermediary i.e., contractor, is removed from the field and direct linkage between labour and principal employer is established. Thereby, the principal employer's obligation to absorb them arises. The right of the employee for absorption gets ripened and fructitied. If the interpretation in Dena Nath case , 1992 SCC (L&S) (349) Is given acceptance, it would be an open field for the principal employer to freely flout the provisions of the Act and engage workmen in defiance of the Act and adopt the principle of hire and fire making it possible to exploit the appalling conditions in which the workmen are placed. The object of the Act. thereby gets rudely shattered and the object of the Act easily defeated......."
25. While recording concurrance with His Lordship Justice Ramaswamy but presenting his own reasons therefor His Lordship Justice Majumdar observed as follows:
"It has to be kept in view that contract labour system in an establishment is a tripartite system. In between contract workers and the principal employer is the intermediary the employer is treated as principal employer with various statutory obligations flowing from the Act in connection with regulation of the working conditions of the contract labourers who are brought by the intermediary contractor on the principal's establishment for the benefit and for the purpose of the principal employer and who do his work on his establishment through the agency of the contractor. When these contract workers carry out the work of the principal employer which is of a perennial nature and if provisions of section 10 get attracted and such contract labour system in the establishment gets abolished on fulfilment of the conditions requisite for that purpose, it is obvious that the intermediary contractor vanishes and along with him vanishes the term 'principal employer'. Unless there is a contractor agent there is no principal. Once the contractor intermediary goes the term 'principal' also goes with it. Then remains out of this tripartite contractual scenario only two parties--the beneficiaries of the abolition of the erstwhile contract labour system i.e. the workmen on the one hand and the employer on the other who is no longer their principal employer but necessarily becomes a direct employer for these erstwhile contract labourers. U was urged that section 10 nowhere provides for such a contingency in express term. It is obvious that no such express provision was required to be made as the very concept of abolition of a contract labour system wherein the work of the contract labour is of perennial nature for the establishment and which otherwise would have been done by regular workmen, would posit improvement of the lot of such workmen and not its worsening. Implicit in the provision of section 10 is the legislative intent that on abolition of contract labour system, the erstwhile contract workmen would become direct employees of the employer on whose establishment they were earlier working and were enjoying all the regulatory facilities on that very establishment under chapter V prior to the abolition of such contract labour system. Though the legislature has expressly not mentioned the consequences of such abolition, but the very scheme and ambit of section 10 of the Act clearly indicates the inherent legislative intent of making the erstwhile contract labourers direct employees of the employer on abolition of the intermediary contractor. it was contended that contractor might have employed a number of workmen who may be in excess of the requirement and, therefore, the principal employer on abolition of the contract labour may be burdned with excess workmen. It is difficult to appreciate this contention. The very condition engrafted in section 10(2)(d) shows that while abolishing contract labour from the given establishment, one of the relevant considerations for the appreciate Government is to ascertain whether it is sufficient to appoint considerable number of whole time workmen. Even otherwise there is in inbuilt safety value in section 21 of the Act which enjoins the principal employer to make payment of wages to the given number of contract workmen who he has permitted to be brought for the work of the establishment if the contractor falls to make payment to them. It is, therefore, obvious that the principal employer as a wordly businessman in his practical commercial wisdom would not allow contractor to bring larger number of contract labour which my be in excess of the requirement of the principal employer. On the contrary, the principal employer would see to it that the contractor brings only those number of workmen who are required to discharge their duties to carry out the work of the principal employer on his establishment through, of course the agency of the contractor. In fact the scheme of the Act and regulations framed thereunder clearly indicate that even the number of the workmen required for the given contract work is to be specified in the licence given to the contractor."
26. Briefly summarised, the ratio as in Air India's case (cited supra), is to the effect that on abolition of contract labour by notification under section 10(1) of the Act. the principal employer's obligation to absorb the employees arises. The right of the employee gets ripened and fructified, implicit in the provision of section 10 of the Act, 1970 is the legislative intent that on abolition of contract labour system, the erstwhile contract workmen would become direct employees of the principal employer.
27. Mr. Arijit Chowdhury is right in his submission that a contract entered into under a mistake of law of both parties falls under section 21 of the Indian Contract Act, 1872. If a mistake of law had led to the formation of a contract, section 21 enacts that that contract is not for that reason voidable.
28. Mrs. Debjani Sengupta, however, has contended that the offending portion of the settlement dated 28.6.94 is void as it defeats the provisions of section 10 of the Act, 1970 in the light of the ratio as in the Air India's case (supra).
29. It is therefore, necessary to scrutinise the impugned provisions of the settlement dated 28.6.94 to see what are the obligations cast on the employer and the manner by which effect is sought to be given to the rights that accrued to the erstwhile contractor labour consequent upon the abolition of contract labour. Whether the said provisions of the settlement dated 28.6.94 accord with or otherwise frustrate the very scheme of abolition of contract labour envisaged by the Act, 1970.
30. That portion of the settlement dated 28.6.94 [clauses 5(ii) and (iii)], extracted supra, to the extent they exclude from absorption, the erstwhile contractor labourers (petitioners herein) is contrary to the very scheme of section 10 of the Act, 1970 admits of no doubt.
31. Under clause 5(ii), those erstwhile contractor labour who are aged over 45 years can have no claim for absorption. Under clause 5{iii), only those who are medically fit and upto 45 years of age will be considered for absorption as regular workmen in L-I grade. Therefore, in my view, the said condition as to the cut off age as below 45 years for absorption was designed to avoid the statutory liability of the employer envisaged under section 10 of the Act, 1970. To that extent i.e., the condition as to the prescription of age as below 45 years for purpose of absorption must be held to be void in view of section 23 of the Indian Contract Act because its object is to defeat the provision of section 10 of the Act 1970. It is accordingly so held on the ration of the Air India's case (supra).
32. The contention of the petitioners that the work of blast furnace relining is not of a perennial nature, is in my view, one without substance. The notification under section 10(1) of the Act lists out the said Jods as one of a perennial nature and the repondents No. 1 or 2 having chosen not to assail the same by any independent proceedings, it is not therefore, open to the respondents to raise the said question in this proceedings.
33. Mr. Arijit Chowdhury, learned counsel for the respondents sought to contend that in the light of the Ait India's case (supra), the appropriate Government is the Central Government in the case of SAIL, the State Government of West Bengal is not the competent Government to have issued the notification under section 10(1) of the Act.
34. Ms. Debjani Sengupta, learned counsel for the petitioners submitted that in the light of the Division Bench Judgment of this High Court in Steel Authority of India Ltd. v. State of West Bengal & Ors., reported in 1998(80) FL.R 245, the said contention is untenable.
35. The Steel Authority of India. Ltd.. respondent No. 1 in the instant case has raised a similar contention which was considered and negatived by the Division Bench in the case cited supra in the following terms:
"Thus, on principle for a subsequent change in law of a pronouncement of the Court will not render any act done by a person or authority who at the relevant time was competent to make the instrument or issue the order invalid as well as for the reason that the Supreme Court has left to manner of doubt that the appropriate Government is the Government of West Bengal, the contention that the Central Government is the appropriate Government and thus the notification of abolition of contract labour by the State Government is invalid has to fail."
36. In coming to the said conclusion, the Division Bench has referred to the orders of the Supreme Court in W.P.No.1439 of 1987 which was disposed of with a direction to the Government of State of West Bengal whether the contract labour should be abolished in the stock yard or not and to issue appropriate orders within four months.
37. In the light of the said Division Bench judgment, the contention of the respondent as to the authority of the State Government to issue the notification in question has accordingly to be rejected.
38. Lastly it was submitted by Mr. Arijit Chowdhury , learned counsel for the respondents that the triprtitie settlement dated 28.6.94 in the instant writ application is saved by the "defacto doctrine". It is the submission of the learned counsel for the respondents employer that prior to the pronouncement and the ratio as in Air India's case (cited supra), there was no right in the employee much less any obligation on the employer to absorb the employees pursuant to the abolition of contract labour after publication of section 10(1) notification. The employer and employee were at liberty to settle the terms with respect to the abolition of contract labours and method for absorption. The impugned settlement, was arrived at after discussions with all contractors labours union including the union in which the petitioners were members. The impugned tripartite settlement dated 28.6.94 it is submitted, is for the benefit of the majority of the contract labourers and the same is binding upon the petitioners and that the same is not open to challenge in writ jurisdiction of this court.
39. The contention and the submission made by the learned counsel as above, would have merited consideration, if the terms of the settlement were not in contravention, of or in violation of any accrued rights i.e. rights flowing from statutory provisions of the Act,1970. There can be little doubt that the offending portion of the settlement [clauses 5(ii) and (iii)] which confer power on the principal employer to throw out of the establishment the erstwhile contract labourers consequent upon abolition of contract labour is contrary to the Act.1970 and the very scheme of abolition of contract labour envisaged by section 10 of the Act. 1970 as already noticed above. The observations of His Loardship Majumdar in Air India's case (supra) are apposite on this aspect of the matter which read as under:
"....................The real scope and ambit of the Act is to be abolish contract labour system as far as possible from every establishment. Consequently, on abolition which is the ultimate goal, the erstwhile regulated contract labour cannot be thrown out on establishment as tried to be submitted on behalf of the management taking resort to the express language of section 10 of the Act. Such a conclusion reached by the two member Bench in Dena Nath case, files in the face of the very scope and ambit of the Act and frustrates the very scheme of abolition of contract labour envisaged by the Act. Such a conclusion, with respect, cannot be countenanced, as it results in a situation where relatives of the patient are told by the operating surgeon that operation is successful but patient has died."
40. The said notification under section 10(1) of the Act, 1970 was published on 22.2.82. The settlement dated 9.9.91 merely provided for evolving a scheme for absorption of contractor workers in BF relining within a time frame. The schme as evolved, however, by settlement dated 28.6.94 contained certain conditions which have not been accepted by the petitioners.
41. May be, the parties proceeded on a misconception of their respective legal rights when the settlement dated 28.6.94 was executed. The petitioners did not accept the said settlement and questioned the same by filing the instant writ application on 12.8.94.
42. The petitioners took no steps in the matter perhaps in the hope that a mutually acceptable scheme would be evolved for their absorption. They thus waited for over a decade after the said section 10(1) notification when they filed the instant writ application.
43. Therefore, in my view. Mr. Arijit Chowdhury, learned senior advocate for the respondent's submission have significance and any relevance, if at all, for determining the date from which the petitioners would be entitled to back wages consequent upon absorption. That the petitioners are entitled to be absorbed with effect from the date of abolition of contract labour admits of no doubt, as already held supra. However, the petitioners have not been absorbed nor they rendered services in the grade to which they were entitled to be absorbed only because of the impugned provisions of the settlement dated 28.6.94. The earliest date from which the petitioners are entitled to back wages. In my view, therefore, is the date on which the instant writ application was filed.
44. In the circumstances, the instant writ application has to be allowed and is accordingly allowed in part. A writ of mandamus shall issue with the declarations and consequential directions as under;
I) The petitioners shall be entitled to be treated as direct employees of the respondents No.1 and 2 on whose establishment they were earlier working. The petitioners will be entitled to be treated as regular employees from the day on which the contract labour system in the establishment for the work which they were doing got abolished by virtue Of the notification published under section 10(1) of the Act for all purposes except seniority and back wages.
II) The petitioners shall be entitled to and the respondents No.1 and 2 shall be obliged to pay the wages/salary and all consequential benefits with the effect from 12th August. 1994 (the date on which the instant writ application was filed in this Court). The seniority including inter-se seniority of the petitioners shall be determined w.e.f. 12.8.94.
III) It shall be lawful for respondents No. 1 and 2 to absorb the petitioners in the last grade (L-I grade) on regular basis with effect from date of abolition. However, the payment in the prescribed scale of pay shall be from the date as specified as in (II) above and as applicable to the last grade (L-I).
IV ) Time of two (2) months from date hereof is granted to the respondents No. 1 and 2 employer to take all such steps as are necessary to absorb the petitioners and prescribe the scale of pay and to pay the arrears in accordance therewith within two (2) months thereafter.
The writ application is accordingly disposed of, however, without any order as to costs.
45. Application disposed of