Madras High Court
Tamil Nadu Handicrafts Development ... vs Inspector Of Factories, Range No. Ii, ... on 26 October, 1999
Equivalent citations: 1999(3)CTC598
Author: P. Sathasivam
Bench: P. Sathasivam
ORDER
1. Aggrieved by the proceedings of the first respondent dated 9.4.1997, Tamil Nadu Handicrafts Development Corporation Limited represented by its Secretary has filed the above writ petition.
2. The case of the petitioner is briefly stated hereunder: The brass Artware and Handicrafts Unit at Madurai is managed by the second petitioner herein. The products are manufactured by the piece rate earners who come over to the work shed to whom the raw materials and other facilities are provided who according to their ability and the design given would manufacture the handicrafts and earn the payment for the same and leave the premises. There is no compulsion that they shall not work anywhere not it is mandatory that they shall come and work exclusively for petitioners. It is purely a temporary arrangement between the persons who could turn out the handicrafts from raw materials by utilising the facilities provided by the second petitioner. They used to be called as piece rate workers whose payment is fixed as per the production which they turn out of the raw material supplied to them. They can absent any number of days and there is no need to even inform the same to the 2nd petitioner. In short they are the freelance artisans who do the work as per their will and pleasure. The second respondent claims to have represented 23 piece rate payment earners and the second respondent seems to have preferred a letter dated 6.2.1997 to the first respondent who without furnishing the copy of such a representation sent a letter dated 17.3.1997 so as to enable the second petitioner herein to appear before him for an enquiry on 31.3.1997. The enquiry has been postponed and finally adjourned to 7.4.1997. Inspite of specific request for supplying copy of the representation dated 6.2.1997 of the second respondent herein, the first respondent, without any enquiry proceeded to pass the impugned order dated 9.4.1997. The enquiry said to have been conducted is false and contrary to the truth. The second petitioner never attended the enquiry as submitted. The first respondent has no jurisdiction or power to look into the issue raised by the second respondent inasmuch as the representation of the second respondent is not about workmen within the meaning of Section 2(4) of the Tamil Nadu Industrial Establishment (Conferment of Permanent status to Workmen) Act, 1981 (hereinafter referred to as "the Act"). Further, the petitioners herein are not the employers within the meaning of Section 2(1) of the Act. They were not employed by the petitioners and on the contrary, they are piece rate earners and the payment is made as per the production carried out by them. No service Rules of the Corporation is applicable to them. Hence, the very Act is not applicable as far as the issue raised by the respondents are concerned.
3. It is further stated that even though the first respondent has got powers to inspect the records, he is bound to adhere to Rules of Natural Justice while he was performing his quasi judicial duties. While exercising the powers vested under the Act, the first petitioner should have held an enquiry with the participation of the management enabling them to adduce evidence and also to put forward their case on the request made by the 2nd respondent. The first respondent has not given any opportunity at all to the petitioners herein to discredit the case of the respondents under the Act. Even as per Rule 4(4) of the Rules, the first respondent can hold an enquiry and issue suitable orders and directions to the employer in respect of the registers maintained by the employer. There is a legal compulsion on the part of the first respondent to observe natural justice. The decision of the first respondent in deciding the issue without adherence to the principles of natural justice is nothing but malice in law. With these averments, they prayed for setting aside the impugned order.
4. The second respondent in the main writ petition has filed an affidavit wherein it is stated that the petitioner Corporation has several units all over the State and the Brass Artware Unit at Madurai is one among them. There are in all 30 workers in the Madurai Unit and barring a few, all of them are engaged only on piece rate basis. They work full time from morning to evening in the premises of the second petitioner Brass Artware Production Centre at Madurai and do not work for anybody else. Time cards are given to them in Form 25-B under Rule 103-B of Tamil Nadu Factories Rules, 1950. All these workers were also covered under the Employees Provident Fund Scheme. They are also eligible to avail 15 days leave with full average wage for each completed year of work. They have to work only within the unit and they cannot work anywhere else. Their work is continuous, without any break. The work of the piece rate workers is supervised by the Supervisor and disciplinary action is taken against them. It was in the light of all these facts that the workers represented to the Inspector of Factories by their petition dated 6.2.1997 that 26 workers had been working continuously for various periods starting from 16.12.1980 onwards. On the basis of their continuous employment, they represented that they are entitled to be confirmed having completed 480 days of continuous work under the Act. Thereupon, after notice to the petitioner management, the Inspector of Factories visited the unit at Madurai and inspected its functioning and the records available in the petitioner's office with reference to the employees. After going through the records, the Inspector was satisfied that 23 out of 26 piece rate workers had fulfilled the requirement for conferment of permanent status. The 23 workers have been working for various periods from the year 1980 and yet have been denied the benefits of regular employment. The first respondent is fully justified in passing the impugned order and there is no merit in the writ petition.
5. In the light of the above pleadings, I have heard the learned counsel for the petitioner and respondents.
6. Mr.N. Jothi, learned counsel for the petitioners, after pointing out Sub-rule (4) of Rule 6 of the Tamil Nadu Industrial Establishments (Conferments of Permanent Status to Workmen) Rules, 1981, would contend that in the absence of copy of the representation of the second respondent dated 6.2.1997, the order passed by the first respondent conferring permanent status in favour of 23 workmen cannot be sustained. He also contended that the first respondent did not conduct any enquiry as claimed and in view of the stands of the petitioner that the Act itself is not applicable as far as the issue raised by the second respondent, the first respondent authority ought to have passed speaking orders after affording adequate opportunity to the petitioner and after conducting enquiry in terms of sub-rule (4) of Rule 6 of the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Rules, 1981. He also contended that inasmuch as the first respondent is performing his quasi judicial duties he should act in a proper and reasonable manner with fair play and without discrimination by providing equal opportunity to both parties.
7. On the other hand, Miss. R. Vaigai, learned counsel for the second respondent would contend that the petitioner has not raised objection regarding applicability of the Act. She contended that in the light of the various provisions contained in Rules 3 to 6 of the said Rules, no application is required and detailed enquiry is also not contemplated as claimed by the petitioner. She further contended that in as much as the petitioner Corporation failed to comply with the statutory mandates and on the basis of the records and after considering the claim of both parties, the authority has passed the impugned order; accordingly there is no merit in the writ petition.
8. I have carefully considered the rival submissions.
9. Before considering the merits of the impugned order passed by the first respondent, I shall consider the stand taken by the petitioner that the second respondent is not workmen within the meaning of Section 2(4) of the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981 (hereinafter referred to as "the Act") and the petitioner is not the employer within the meaning of Section 2(1) of the Act. Even though the said objection is raised first time in this writ petition, the fact remains that even after the notice dated 17.3.1997, admittedly the petitioner did not file any objection regarding non-applicability of the provisions of the Act. The petitioner Corporation is a State owned Corporation and it has several Units all over the State. We are concerned with the Brass Artware Unit at Madurai which is one of them. In the affidavit of the General Secretary of the second respondent Union, it is specifically stated that there are in all 30 workers in Madurai Unit and barring a few, all of them are engaged only on piece rate basis. It is specifically stated that employment on Piece rate only indicates a mode of payment and does not mean that there is no employer-employee relationship. They work full time from morning to evening in the premises of the second petitioner Brass Artware production centre at Madurai and do not work for anybody else. It is further stated that the officers of the petitioner Corporation mark their attendance both in the morning as well as in the afternoon and that time cards are given to them in Form 25-B under Rule 103-B of Tamil Nadu Factories Rules, 1950. It is further clear that after the joining services under the petitioner Corporation, all these persons were also covered under the Employees' Provident Fund Scheme. They are also eligible to avail 15 days leave for each completed year of work. The further information is that the piece rate workers are also given bonus from the first year of employment itself. It is reiterated that last year the statutory minimum bonus was given and this year, namely 1997-the year of filing of counter affidavit, 15% bonus was paid. The piece rate workers are even transferred from one unit to the other unit for which the case of one Govindan, who was transferred from Swamimalai Centre to Madurai Centre is sited. It is also their case that the work of the piece rate workers is supervised by the supervisor and disciplinary action is taken against them. They have to work only within the unit and they cannot work anywhere else. In the light of the above factual information and of the fact that the petitioner Corporation did not raise this issue before the first respondent, I am of the view that the same cannot be considered at this juncture in this writ petition.
10. The other main contention of the learned counsel for the petitioners is that in the light of Rules 3 to 6 of the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Rules, 1981 (hereinafter referred to as "the Rules") the impugned order of the first respondent without conducting enquiry is bad. The Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Rules, 1981 was framed by the Government in exercise of the powers conferred by sub-section (9) of Section 10 of the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981. As per Rule 2(c) of the Rules, "Inspector" means a person appointed as Inspector under sub-section (1) of Section 4 of the Act. Powers of Inspectors are defined in Rule 3 of the Rules. It is clear that in addition to the powers conferred by section 5 of the Act, an Inspector shall, for the purpose of giving effect to the provisions of the Act, have power to do all or any of the following things, that is to say--
"(i) to satisfy himself at each inspection that the prescribed registers and forms are properly maintained;
(ii) to point out all such defects or irregularities as he may have observed and to give orders for their rectification and to record and furnish to the employer a summary of the defects or irregularities and of his orders;
(iii) to note how far the defects pointed out at previous inspections have been removed and how far orders previously issued have been complied with;
(iv) to require any employer to supply or send any return or true copy of any document or information relating to the provisions of the Act;
(v) to prosecute, conduct or defend before a court any complaint or other proceedings arising under the Act."
The Statement of Objects and Reasons for passing the Act is reproduced hereunder:
"Many workers in industrial establishments are being kept under temporary rules and on that pretext are being denied of various statutory as well as non-statutory benefits which are given to permanent workers. Mainly, in many establishments non- permanent workers are given consolidated wages which are far below the occupational wages and do not carry the benefit of dearness allowance paid to permanent employees. Similarly they are denied various other benefits like payment of festival, cyclone and marriage advances, payment of ex-gratia over and above the statutory bonus, supply of uniforms and tea, preference for the dependants of the employees in the matter of employment, etc. In order to curb various unfair labour practices and following the decision at the 25th meeting of the State Labour Advisory Board the Government have decided to undertake a special legislation to confer permanent status to the workers in various industrial establishments who have put in a service for a period of four hundred and eighty days in a period of twenty-four calendar months in such industrial establishments."
In order to achieve the above object, it is the duty of the Inspector to implement the provisions of the Act. As per Rule 6 of the Rules, every employer of an industrial establishments is to maintain a register of workmen in Form 1 and produce the same whenever it is required by the Inspector having jurisdiction over the industrial establishment. A duty is also cast on the employer to compile an up-to-date list in Form I except column (9) thereof at the end of each half-year ending on the 30th day of June and 31st day of December and exhibit the list prominently at any part of the industrial establishment for perusal of the list by the workmen during working hours on any day. As per sub-rule (3) of Rule 6, the employer is duty bound to send a copy of the up-to- date list so compiled under sub-rule (2) to the Inspector concerned within a fortnight from the expiry of the half-year ending with June and December of every year with a declaration that the list has been exhibited for the perusal of the workmen of the Industrial establishment as required under sub-section (2). Apart from this, the employer is to send particulars for each half-year in Form 2 along with the particulars in Form 1 as required under this sub-rule to the Inspector concerned. After furnishing those particulars in Form I and Form 2 to the Inspector, the employer is to get acknowledgment. Besides this, sub-rule (4) of Rule 6 of the Rules is relevant for consideration of this case which is as follows:
"Rule 6(4): Any employee who finds his name not entered in the list referred to in sub-rule (2) or finds that the entries have not been made correctly or finds that though entries regarding his service have been made correctly but he had not attested the entries in the register of workmen in Form 1 may make a representation to the Inspector concerned. The Inspector after examining the representation or after making enquiries may issue suitable directions to the employer for the rectification of the register in Form I or for the issue of orders conferring permanent status to the workman concerned."
In our case, the second respondent Union made a representation dated 6.2.1997 to the Inspector of Factories, first respondent herein highlighting that 26 workers were not made permanent, even though they had completed the required number of days as per the provisions of the Act. On receipt of the said complaint, the first respondent directed the petitioner Management to appear before him on 31.3.1997 at 4 P.M. No doubt, the said enquiry was adjourned to 1.4.1997 and again adjourned to 7.4.1997. There is no dispute that on both the occasions, the petitioner Management was informed. No doubt, by letter dated 5.4.1997, the petitioner has requested the first respondent to furnish a copy of the complaint dated 6.2.1997 made by the workers' Union. The said letter has been despatched only on 7.4.1997 and the impugned order was passed by the first respondent on 9.4.1997. It is not clear whether the request of the petitioner was brought to the notice of the first respondent or not? However, paragraph 2 of the impugned order has shown that on the basis of the complaint of the second respondent the Inspector inspected the premises and the relevant records and satisfied that the 23 persons mentioned in the Schedule are eligible to become permanent employees in the petitioner establishment. It is also clear that for the enquiry dated 7.4.1997 the manager of the petitioner Corporation as well as the General Secretary of the Workers' Union were summoned and were enquired about the claim. After satisfying himself, the Inspector has arrived at a conclusion that all the 23 workmen are to be confirmed in the petitioner Corporation as they has worked more than 480 days without any break.
11. Mr.N. Jothi, learned counsel for the petitioners by pointing out sub-rule (4) of Rule 6, has vehemently contended that mere examination of the representation or records will not satisfy and the Inspector has to conduct enquiry and thereafter it is open to him to issue suitable direction to the parties. According to him, the first respondent did not conduct any enquiry and hence the said order is liable to be quashed for violating the principles of natural justice. He very much relied on a decision of the Constitutional Bench of the Supreme Court in the case of Maneka Gandhi v. Union of India, . The following observation in para 57 of the decision is pressed into service:
"...The principle of audi alteram partem which mandates that no one shall be condemned unheard, is part of the rules of natural justice. In fact, there are two main principles in which the rules of natural justice are manifested, namely nemo judex in sua causa and audi alteram partem. We are not concerned here with the former since there is no case of bias urged here. The question is only in regard to the right of hearing which involves the audi alteram partem rule. Can it be imported in the procedure for impounding a passport?
He has also relied on the following observation in para 59 of the same decision:-
"...The net effect of these and other decisions was that the duty to act judicially need not be super-added, but it may be spelt out from the nature of the power conferred, the manner of exercising it and its impact on the rights of the person affected and where it is found to exist, the rules of natural justice would be attracted."
There is no dispute with regard to the proposition of law pointed out by the Supreme Court. A reading of the impugned order shows that on receipt of the letter from the General Secretary of the second respondent Workers' Union after notice to the petitioner Corporation and after inspection, the first respondent authority satisfied himself that all the workmen mentioned in the Schedule are eligible to be made permanent in the petitioner Corporation. Even though Mr. Jothi contended that petitioner was not given adequate opportunity, admittedly the petitioner was asked to appear even on 31.3.1997 for enquiry at the Office of the first respondent. Again the enquiry was adjourned to 1.4.1997 and finally on 7.4.1997. Only on 9.4.1997 the first respondent has passed the impugned order. I have already stated that before passing the order, the first respondent inspected the premises, verified the records, heard the grievances of the workers through their Union Secretary and representative of the petitioner Management. In such a circumstances, there is no hesitation to came to a conclusion that the first respondent Officer has complied with the mandate of the Hon'ble Supreme Court enunciated in the Maneka Gandhi's case cited supra.
12. The other decision referred to by Mr.N. Jothi is a Division Bench decision of this Court in the case of Metal Power Company Limited and another v. State of Tamil Nadu and another, 1985 (II) LLJ 376. In the said decision Their Lordships had occasion to consider the very same sub-rule (4) of Rule 6 of the Rules. Learned counsel has very much relied on the following observation made by Their Lordships:
"Para 20.... all these can be properly become the subject matter of the enquiry which is contemplated in Rule 6(4) of the Rules. The stand taken by the learned Advocate General and Mr. Chandran is that the Inspector will give enough opportunity to the employer to put forth his case and produce the necessary material. The latter part of Rule 6(4) clearly provides that, the Inspector, after examining the representation or after making enquiries, may issue suitable instructions to the employer for the rectification of the Register in Form I of for issue of orders conferring permanent status on the workmen concerned. Form I contains the proforma of the Register of Workmen which has to be maintained by the employer. The information incorporated therein is useful for ascertaining whether the workman is entitled to the benefits of the Act These columns have to be filled by the employer himself and only if there is a doubt about the correctness of the entries in this register, an enquiry will become necessary. Similarly, the Inspector has to be furnished with the necessary details in Form II which will enable him to ascertain whether the law is being complied with or not. We do not find there is anything vague or uncertain in the Act or the Rules which will create difficulties in the implementation of the Act, requiring the provisions of the Act to be struck down.
Para 25... Relying on this decision, Mr. Somayaji has argued that we must read the requirement to make a speaking order in Rule 6(4), when Rule 6(4) provides that the Inspector should examine the representation of the employee and must make the necessary enquiries. This argument must be accepted because, when the Inspector has to determine whether the workman is entitled to the benefit of Section 3 and when the employer contests this right, he has to make the necessary enquiries and these enquiries must culminate in a speaking order disposing of the contentions of the employer, and the workman..."
By pointing out the above conclusion, Mr.N. Jothi would contend that in the absence of any enquiry and a speaking order, the impugned order cannot be sustained. I am unable to accept the said contention for the very same reasons mentioned above. It is clear that petitioner was given an opportunity to participate in the enquiry and as a matter of fact, a representative of the petitioner Corporation also participated in the enquiry. According to the petitioner, if the workmen concerned are entitled to be made permanent, nothing prevented them from placing relevant materials before the authority. I have already mentioned the statutory obligation on the part of every employer to maintain Register of workmen in Form I. The Inspector is authorised to verify the Registers and take appropriate decision. Here again, I hold that the first respondent has fully complied with and followed the law laid down by Their Lordships in the Division Bench decision referred to above. For the very same reasons, I hold that the first respondent has fully complied with the direction issued by Their Lordships in Government of Tamil Nadu v. Tamil Nadu Race Course General Employees' Union, 1992 (1) LLN 590, as well as 1990 (1) LLJ page 50.
13. Miss. Vaigai, learned counsel for the 2nd respondent, by relying a decision of the Supreme Court in the case of State Bank of Patiala v. S.K. Sharma, , would contend that there is no violation of principles of natural justice in the order impugned as claimed by the petitioner. In that decision, Their Lordships have observed that "the interests of justice equally demand that the guilty should be punished and that technicalities and irregularities which do not occasion failure of justice are not allowed to defeat the ends of justice. Principles of natural justice are but the means to achieve the ends of justice. They cannot be perverted to achieve the very opposite end. That would be a counter productive exercise," After holding so, Their Lordships have summarised the principles. Among the principles, principle No.3 in para 33 is relevant:-
"33.(3): In the case of violation of a procedural provision, the position is this: procedural provisions are generally meant for affording a reasonable and adequate opportunity to the delinquent officer/employee. They are, generally speaking, conceived in his interest. Violation of any and every procedural provision cannot be said to automatically vitiate the enquiry held or order passed. Except cases falling under - "no notice", "no opportunity" and "no hearing" categories, the complaint of violation of procedural provision should be examined from the point of view of prejudice, viz., whether such violation has prejudiced the delinquent officer/employee in defending himself properly and effectively. If it is found that he has been so prejudiced, appropriate orders have to be made to repair and remedy the prejudice including setting aside the enquiry and/or the order of punishment. If no prejudice is established to have resulted therefrom, it is obvious, no interference is called for. In this connection it may be remembered that there may be certain procedural provisions which are of a fundamental character, whose violation is by itself proof of prejudice. The Court may not insist on proof of prejudice in such cases. As explained in the body of the judgment, take a case where there is a provision expressly providing that after the evidence of the employer/government is over, the employee shall be given an opportunity to lead defence in his evidence, and in a given case, the enquiry officer does not give that opportunity inspite of the delinquent officer/employee asking for it. The prejudice is self evident. No proof of prejudice as such need be called for in such a case. To repeat, the test is one of prejudice, i.e., whether the person has received a fair hearing considering all things. Now, this very aspect can also be looked at from the point of view of directory and mandatory provisions, if one is so inclined. The principle stated under (4) hereinbelow is only another way of looking at the same aspect as is dealt with herein and not a different or distinct principle."
In the light of the statement of facts made by the first respondent regarding giving an opportunity to the petitioner, examination of the records and hearing the representative of the workmen and the management, in the absence of any material by the petitioner herein before the said authority it is not open to the petitioner to raise all objections. In this regard, the following observation of Their Lordships of the Supreme Court in the case of Bhagwati Prasad v. Delhi State Mineral Development Corporation, is relevant:
"...It is now settled law that the statement of facts recorded by a Court or quasi-judicial tribunal in its proceedings as regards the matters which transpired during the hearing before it would not be permitted to be assailed as incorrect unless steps are taken before the same forum. It may be open to a party to bring such statement to the notice of the Court/Tribunal and to have it deleted or amended..."
14. In the case of Madras Labour Union v. Binny Limited, , a Division Bench of this Court, after considering Menaka Gandhi's case, and other subsequent decisions regarding audi alteram partem rule, culled out certain basic principles. They are:-
"(i) The principles of natural justice are not inflexible and they cannot be put in a strait-jacket formula.
(ii) The terms of a statute can exclude the rule of prior hearing and provide for post-decisional hearing depending on the nature of the proceeding and the decision.
(iii) The court has to decide the applicabilities of the principles by considering the nature of the jurisdiction, the character of the rights of the persons affected, the scheme and policy of the statute and the degree of urgency, if any, as evident from the facts and circumstances of the case.
(iv) The court has to decide whether the observance of the rule was necessary for a just decision on the facts of the case.
(v) In certain cases, the provision for appeal is sufficient to meet the requirement of opportunity of being heard."
With regard to similar contentions that the parties were not given adequate opportunity before the B.I.F.R. Board and considering rule of audi alteram partem, Their Lordships have observed thus:-
"...By the very nature of the provision, the principle of natural justice on the rule audi alteram partem may not have any applicability as the sickness of the company is to be decided on a perusal of the records. It is almost like assessing the work of a student by the academic authorities on the basis of the records. The proceedings before the Board are only with the aim of adopting measures for rehabilitation of the company. Hence, at that stage, it is not necessary for the Board to hear the workmen or the employees in the company. The declaration of sickness of the company does not by itself affect the rights of the workmen as such as the sickness of the company is only a jurisdictional fact to be decided by the Board so that the Board can taken further proceedings. If the workmen and employees are heard before a scheme is finalised, that is more than sufficient to protect the interests of the workmen and employees."
I have already extracted the objected of the above enactment and the procedure to be followed by the Inspector. Even though it is stated that the petitioner was not given a copy of the letter dated 6.2.1997 of the General Secretary of the Madurai General Workers Union, as per the statutory provision, particularly Rule 6 (1) (2) and (3) of the Rules, a statutory duty is cast on the petitioner to maintain a Register relating to the workmen employed. It is clear from the impugned order that the Inspector/Officer concerned inspected the premises in question, records etc., and after conducting enquiry on 7.4.1997, passed the impugned order directing the petitioner to make the 23 workers mentioned therein permanent since they worked more than the required number of days.
15. Under these circumstances, I do not find any error or infirmity in the impugned order of the first respondent dated 9.4.1997; consequently the writ petition fails and the same is dismissed. No costs. Consequently W.M.P.No. 21418 of 1998 is also dismissed.