Delhi District Court
Dayanath vs Ms Uma Shankar Khandelwal Company on 9 February, 2024
IN THE COURT OF SH. ARUN KUMAR GARG
PRESIDING OFFICER: LABOUR COURT-III
ROUSE AVENUE COURTS COMPLEX: NEW DELHI.
CNR No. DLCT13-004375-2013
Ref. No. F.24(382)/Lab./SD/2013/19/23 Dated 24.09.2013
LIR No. 53587/2013 (Old No. 587/2013)
Sh. Dayanath, S/o Late Sh. Kratan Prasad,
Through Okhla Industrial Workers Union (Regd.),
Opp. Kalkaji Bus Depot,
New Delhi-110019. ..... Workman
VERSUS
M/s. Uma Shankar Khandelwal & Company,
E-30, Okhla, Phase-II,
New Delhi-110020. ..... Management
Date of Institution of the case : 27.09.2013
Date on which Award is passed : 09.02.2024
Judgment:
1. By this order, I will dispose off the reference received from
the office of Deputy Labour Commissioner, South District, Govt.
of NCT of Delhi U/s 10(1)C & 12(5) of Industrial Disputes Act,
1947 vide order no. F.24(382)/Lab./SD/2013/19/23 Dated
24.09.2013 in the following terms:-
"Whether employer-workman relationship exists
between the management and Sh. Dayanath S/o Late
Sh. Kratan Prasad and/or whether his services have
been terminated illegally and/or unjustifiably by the
management, and if so, to what relief is he entitled and
what directions are necessary in this respect?"
2. The aforesaid reference was received by this Court on
LIR No.53587/2013
Dayanath Vs. M/s. Uma Shankar Khandelwal & Company
Judgment dated 09.02.2024 Page 1 of 28
27.09.2013 and since none had appeared on behalf of workman
despite service of notice dated 19.03.2014, the same was
disposed off vide a "no dispute award" dated 24.03.2014.
Subsequently, on an application of the workman for
recall/setting-aside of order dated 24.03.2014, the matter was
restored in terms of order dated 30.07.2016.
3. Statement of claim was thereafter filed on behalf of
workman on the same day alleging inter alia that he had been
working with the management on the post of Pressman since
May, 2004 against last drawn wages of Rs. 7,020/- per month
until 08.11.2012, on which date, he was illegally and
unjustifiably terminated from the services by the management. It
is alleged by the workman in his statement of claim that the
management did not issue any appointment letter, attendance
card, minimum wages, leave book, pay slip, PF, HRA etc. to the
workman and also did not provide weekly off, leaves, bonus and
over-time to him. When the workman raised demand for the
aforesaid facilities and arrears of minimum wages, the
management had started making efforts to get rid of him but
failed, however, when on 08.11.2012, the workman again
demanded the arrears of minimum wages for the period during
which he was employed with the management, the management
got annoyed and illegally terminated the workman from his
services without any rhyme and reason, any show cause notice or
any domestic inquiry, without payment of arrears of minimum
wages to the workman for the period May, 2004 to 07.11.2012.
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Dayanath Vs. M/s. Uma Shankar Khandelwal & Company
Judgment dated 09.02.2024 Page 2 of 28
4. The aforesaid act of the management, according to
workman, is in violation of Section 25 F and G of the Industrial
Disputes Act, 1947 and since the management has failed to
reinstate him into the service, despite service of demand notice
dated 09.11.2012 and despite the workman approaching the
Assistant Labour Commissioner vide complaint dated
12.11.2012, he is entitled to his reinstatement with full back
wages. The workman has further alleged that after his illegal
termination, he could not find any job despite search at many
places and hence he is completely unemployed and dependent
upon his family. The workman has thus prayed for an award of
his reinstatement with full back wages and all consequential
benefits.
5. Written statement to the aforesaid claim of the workman
was filed on behalf of the management on 17.10.2016, wherein,
the management has denied the existence of relationship of
employer and employee between the parties and hence the
existence of any industrial dispute. It has been alleged by the
management that the claimant was never employed/appointed by
the management. Rather, as per the management, the claimant
was in employment of the contractor Sh. Babu Shah for the
periods 28.07.2004 to 31.12.2005, 01.04.2006 to 23.10.2008,
02.03.2009 to 31.05.2010 and 02.07.2010 to 31.05.2012 and he
was deputed in the factory of the management by the aforesaid
contractor. On all those occasions, according to management, the
workman had resigned after full and final settlement of his
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Dayanath Vs. M/s. Uma Shankar Khandelwal & Company
Judgment dated 09.02.2024 Page 3 of 28
account with Sh. Babu Shah.
6. Again, according to management, the claimant had taken the
employment of Sh. Azad Ahmad, another contractor of the
management, on 10.07.2012 and had worked until 07.11.2012.
Thereafter, he has resigned from his services with Sh. Azad
Ahmad after full and final settlement of his account. Despite the
aforesaid stand of the management before Conciliation Officer,
according to management, the workman has failed to implead the
contractor as a party and hence the claim of the workman is
liable to be dismissed due to non-joinder of necessary party. It is
further the case of the management that though the claimant was
never employed by the management and was merely an
employee of different contractors at different points of time,
however, since the contractors were not having their own EPF
and ESI numbers, they used to provide these facilities to the
claimant under the management's code. The management has
thus prayed for dismissal of the claim of the workman with cost.
7. Rejoinder to the aforesaid written statement of the
management was filed by the workman on 18.07.2017, wherein,
he has denied that he was ever employed with any of the
contractors as alleged by the management. He has once again
reiterated that he had worked directly under the supervision and
control of the management and had never worked with any
contractor namely Azad Ahmad. The workman has once again
reiterated all the averments made by him in his statement of
claim and has denied the contrary averments made by the
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Dayanath Vs. M/s. Uma Shankar Khandelwal & Company
Judgment dated 09.02.2024 Page 4 of 28
management in its written statement.
8. Thereafter, on the basis of pleadings of the parties,
following issues were settled by Ld. Predecessor of this Court
vide order dated 16.03.2018:-
(i) Whether employer-workman relationship exists
between the management and Sh. Dayanath S/o Late
Sh. Kratan Prasad?
(ii) Whether services of workman have been
terminated illegally and/or unjustifiably by the
management, if so, to what relief is workman entitled?
(iii) Relief.
9. Workman has thereafter moved an application under Section
11 of the Industrial Disputes Act, seeking production of certain
documents such as the attendance register, wages register, muster
roll, day register, bonus register, leave register of employees
w.e.f. May, 2004 to November, 2012 of the management, ESI
and EPF record of the employees of the management w.e.f. May,
2004 to November, 2012, list of contractors of the management
w.e.f. May, 2004 to November, 2012, contract labour license of
all contractors w.e.f. May, 2004 to November, 2012, copy of
agreement held between the contractors and the management
w.e.f. May, 2004 to November, 2012, original bills issued by the
contractors to the management w.e.f. May, 2004 to November,
2012 and original payment details/register of contractors w.e.f.
May, 2004 to November, 2012.
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Dayanath Vs. M/s. Uma Shankar Khandelwal & Company
Judgment dated 09.02.2024 Page 5 of 28
10. The aforesaid application of the workman was allowed vide
order dated 30.01.2020 and thereafter, the matter was adjourned
for workman's evidence. Workman has thereafter examined
himself as WW-1 i.e. as the sole witness in support of his case
and tendered his evidence by way of affidavit Ex.WW1/A along
with following documents:-
(i) Ex.WW1/1: Carbon copy of complaint to ALC
dated 12.11.2012.
(ii) Ex.WW1/2: Original Labour Inspector report
dated 16.04.2013 / 23.04.2013.
(iii) Ex.WW1/3: Demand notice dated 09.11.2012.
(iv) Ex.WW1/4: Original postal receipt regarding
dispatch of demand notice.
(v) Ex.WW1/5: Copy of statement of claim filed
before Labour Office.
(vi) Ex.WW1/6: Copy of ESI card.
11. The workman was duly cross-examined by Ld. AR for
management and was confronted with the following documents:-
(a) Ex. WW1/M1: Document dated 08.11.2012.
(b) Ex. WW1/M2: Voucher dated 08.11.2012.
(c) Ex. WW1/M3: Form no.2 of EPF.
(d) Ex. WW1/M4: Form No.1 ESIC.
(e) Ex. WW1/M5: ESIC-TIC.
(f) Ex. WW1/M6: Document dated 02.03.2009.
(g) Ex. WW1/M7: Appointment letter dated 02.03.2009.
(h) Ex. WW1/M8: Voucher dated 25.05.2010.
(I) Ex. WW1/M9: Document dated 10.07.2012.
(j) Ex. WW1/M10: Application cum appointment letter
dated 10.07.2012.
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Dayanath Vs. M/s. Uma Shankar Khandelwal & Company
Judgment dated 09.02.2024 Page 6 of 28
(k)
Ex. WW1/M11: Document dated 02.07.2010.
(l)
Ex. WW1/M12: Application cum appointment letter
dated 02.07.2010.
(m) Ex. WW1/M13: Resignation dated 31.05.2012.
(n) Ex. WW1/M14: Voucher dated 31.05.2012.
(o) Ex. WW1/M15: Voucher dated 31.05.2012.
(p) Ex. WW1/M16: Voucher dated 30.09.2011.
(q) Ex. WW1/M17: Form 1 of ESIC alongwith original
Photograph.
(r) Ex. WW1/M18: Document dated 01.04.2006.
(s) Ex. WW1/M19: Application cum appointment letter
dated 01.04.2006.
(t) Ex. WW1/M20: Voucher dated 23.10.2008.
(u) Ex. WW1/M21: Voucher dated 29.10.2007.
(v) Ex. WW1/M22 to Ex. WW1/M30: Original salary
register of Babu Shah & Company for the years
2004-2005, 2005-2006, 2006-2007, 2007-2008,
2008-2009, 2009-2010, 2010-2011, 2011-2012 and
2012-2013 bearing signatures of workman at points
A.
(w) Ex.WW1/M31: Original salary register of Azaz
Ahmad and Company contractor for the period 2012-
2013 bears his signature at point A, however, it does
not bear his signature at point B.
(x) Ex.WW1/M32: Reply filed by the management
before Conciliation Officer.
(y) Mark-A: Handwritten resignation letter dated
25.05.2010
(z) Mark-B: Undated Handwritten resignation letter
(Za) Mark-C: Letter dated 08.06.2013 of Mr. azaz Ahmed
to the workman.
12. The workman has admitted his signatures on the documents
Ex.WW1/M1 to Ex.WW1/M30 and Ex. WW1/M32. So far as the
document Ex.WW1/M31 i.e. the salary register of Azaz Ahmad
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Dayanath Vs. M/s. Uma Shankar Khandelwal & Company
Judgment dated 09.02.2024 Page 7 of 28
and Company, contractor for the period 2012-13, is concerned,
although, he has admitted his signatures at point-A thereon,
however, he has denied his signatures at point-B. He has denied
his signatures as well as the thumb impression on the resignation
letter dated 25.05.2010 and undated resignation letter Mark-A
and Mark-B respectively. He has denied receipt of letter dated
08.06.2013 Mark-C from Sh. Azad Ahmad, although, he has
admitted that the same mentions the correct address of his union.
13. No other witness was examined on behalf of the workman
despite opportunity and hence, on a separate statement of the
workman, the workman's evidence was closed vide order dated
03.03.2023.
14. Thereafter, it appears that the application of the workman
under Section 11 of the Industrial Disputes Act, which had
already been allowed vide order dated 30.012020, has again been
taken up for consideration by Ld. Predecessor of this Court and
was again disposed off vide order dated 08.09.2022 while partly
allowed the same to the extent that the management was directed
to produce in the Court the attendance register, wage register,
muster roll, day register, bonus register, leave register of the
employees w.e.f. May, 2004 to November, 2012 while holding
that the ESI and EPF record of all the employees of the
management from 2004 to 2012 and original bills issued by the
contractors to the management during the aforesaid period by the
management on 03.03.2023 were not relevant. The entire record
produced by the management pursuant to the aforesaid directions
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Dayanath Vs. M/s. Uma Shankar Khandelwal & Company
Judgment dated 09.02.2024 Page 8 of 28
was returned to Ld. AR for management after inspection of the
same by the workman.
15. Management has thereafter examined its AR/Personal
Assistant (Admn.) of the management as MW-1 i.e. as the sole
witness on behalf of the management. He has tendered his
evidence by way of affidavit Ex.MW1/A, while relying upon the
documents Ex.WW1/M1 to Ex.WW1/M32, which were exhibited
during cross-examination of the workman. He was duly cross-
examined by Ld. AR for workman and thereafter, on the
submission of Ld. AR for management, management's evidence
was closed vide order dated 16.09.2023.
16. Final arguments were thereafter heard on behalf of both the
parties on 12.01.2024. Besides, written submissions have also
been filed on behalf of both the parties.
17. It is submitted by Ld. AR for workman that the workman
has been able to prove that he was employed with the
management w.e.f. May 2004 until 08.11.2012 at the post of the
pressman against last drawn wages of Rs. 7,020/- per month by
way of his uncontroverted testimony in the form of affidavit Ex.
WW1/A, which is duly corroborated by the documents Ex.
WW1/1 to Ex. WW1/6. He submits that, though, the
management has taken a plea that their existed no employee-
employer relationship between the workman and the
management and that workman was employed with one of the
contractors Sh. Azaz Ahamd, however, the management has
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Dayanath Vs. M/s. Uma Shankar Khandelwal & Company
Judgment dated 09.02.2024 Page 9 of 28
failed to prove the aforesaid fact by leading any cogent evidence
despite denial of the aforesaid suggestion by the workman during
his cross-examination.
18. He submits that MW-1, during his cross-examination, has
neither been able to produce any document to prove his
authorization to appear on behalf of the management nor has he
been able to produce the alleged contract agreements executed
between the management on the one hand and Mr. Azaz Ahamd
and Mr. Babu Shah & Co. Contractors. In fact, according to him,
he has pleaded his ignorance about the fact whether any
agreement in writing was ever executed between the
management on the one hand and the aforesaid contractors on the
other. It is further submitted that MW-1 has also failed to allege
or prove that either the management was registered under
Contract Labour (R & A) Act or that the contractors have
obtained requisite licenses under the same in view of the
admission on the part of MW-1 during his cross-examination that
ESI and EPF facilities were provided to the workman under the
code of the management since 2004.
19. It is further submitted on behalf of the workman that the
workman has been able to establish the existence of employer-
employee relationship between the management and the
workman beyond reasonable doubts, particularly, in view of the
observations of Hon'ble Supreme court in para 71 & Para 107 of
its Judgment in Steel Authority of India Ltd. & Ors. Vs.
National Union Waterfront Workers & Ors. (2001)7 SCC 1, as
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Dayanath Vs. M/s. Uma Shankar Khandelwal & Company
Judgment dated 09.02.2024 Page 10 of 28
the alleged contractors at the management were completely sham
and bogus contractors. Once, according to him, workman has
been able to prove the existence of employee-employer
relationship between the parties, it was incumbent upon the
management to prove it was the workman himself, who had
tendered the resignation from the services of the management, as
alleged by the management in its written statement, however,
according to him, though the alleged resignation letter Mark A
has been relied upon by MW-1 in his evidence, however, he has
failed to prove the same by examining the person to whom the
same was tendered.
20. In fact, according to him, MW-1 has admitted that the
workman had never resigned in his presence. Thus, according to
him, since the workman has been able to prove illegal
termination of services of the workman by the management and
the management has failed to prove that the workman was
gainfully employed, the workman is entitled to his reinstatement
with full back wages and continuity of service.
21. On the other hand, it is submitted that Ld. AR for
management that after the dispute was raised by the workman
before the conciliation officer about his alleged illegal
termination w.e.f. 8.11.2012, the management has filed a reply
thereto which is Ex. WW1/M32 clarifying that there existed no
relationship of employer and employee between the parties, since
the claimant was employed with one of contractors of the
management viz. Sh. Azaz Ahmad and it was the aforesaid
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Dayanath Vs. M/s. Uma Shankar Khandelwal & Company
Judgment dated 09.02.2024 Page 11 of 28
contractor, who had deputed the claimant in the factory of the
management.
22. According to him, it was further clarified that prior thereto,
the claimant was under employment of Sh. Babu Shah, who was
also one of the contractors of the management, however, despite
the aforesaid stand on the part of the management, the claimant
had neither amended his claim, nor, had he raised any issue
before conciliation officer regarding the contract between the
management and the contract being sham/camouflage. He further
submits that the workman has even failed to implead the said
contractors as a party in the present dispute. However, despite all
the aforesaid shortcomings, according to him, the conciliation
officer has made a mechanical reference to this Court viz a viz
alleged termination of the services of the claimant by the
management.
23. In none of the documents, including the statement of claim
filed before this Court, according to the management, the
workman had alleged that the contracts between the management
and its contractors were sham or camouflage despite disclosure
of the aforesaid fact by the management during the proceedings
before the conciliation officer. It is further the case of the
management that the entire record maintained by the
management was produced by the management before this Court,
pursuant to the directions vide order dated 08.09.2022 on an
application of the workman U/s 11(3) (b) of ID Act, however,
after inspection of the same, workman has not insisted for
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Dayanath Vs. M/s. Uma Shankar Khandelwal & Company
Judgment dated 09.02.2024 Page 12 of 28
retention of even a single document on the record of this Court,
since his name was not appearing even in a single document.
24. Besides, according to him, in his entire evidence by way of
affidavit, the workman has failed to allege that the contractor was
either sham or camouflage. He submits that the entire evidence
by way of affidavit of workman is merely a reiteration of stand
taken by him in his statement of claim. During his cross-
examination, according to Ld. AR for management, the workman
has admitted his signatures on all the documents Ex. WW1/M1 to
Ex. WW1/M32 which were pertaining to the contractors. A bare
perusal of the aforesaid documents, according to him, shows that
the workman was receiving his wages from the contractors and
used to sign vouchers through which he had been receiving full
and final settlement of his account. The aforesaid documents,
according to him, also include ESI and EPF documents duly
signed by the workman, his application for employment
submitted to the contractors, subsequent letters issued by the
contractors, undertaking given by him as well as the contractors
to the respondent that they are the employees of the contractor
only, complete salary registers for the entire period as per the written statement which were being maintained by Babu Shah and Co. and Azaz Ahamd and Co.
25. Despite denial of all the suggestions by the workman regarding his employment with the contractors, according to Ld. AR for management, workman has admitted his signatures on all the aforesaid documents. So far as the ESI and EPF facilities are LIR No.53587/2013 Dayanath Vs. M/s. Uma Shankar Khandelwal & Company Judgment dated 09.02.2024 Page 13 of 28 concerned, according to him, MW-1 has duly clarified that since the contractors were not having any ESI and EPF accounts, they were providing the aforesaid facilities to the claimant under the management's code/account number. He submits that it was pursuant to the statutory requirements on preservation of the records of the contractors by the management for inspection/ audit that the management, being a principal employer, has safeguarded the aforesaid record.
26. He submits that despite lengthy cross-examination of MW-1 by the workman, nothing material could be elicited from him, which would have the effect of proving the case of the workman. Under the aforesaid circumstances, according to him, the workman has miserably failed to prove any document which would indicate the existence of employer-employee relationship between the parties. Ld. AR for management has further relied upon the observations of Hon'ble Supreme Court in Kirloskar Brothers Ltd. Vs. Ram Charan and Ors. (2023)1 SCC 463 in support of his submission that the tests applied to find out whether a person is employee or an independent contractor may not automatically apply in finding out whether the contract labour is sham, nominal or mere camouflage.
27. He submits that the claimant has miserably failed to prove that the contract between the principal employer and the contractors was sham under the Industrial Disputes Act. In support of his aforesaid submissions, Ld. AR for management has relied upon the judgment of Hon'ble Delhi High Court in LIR No.53587/2013 Dayanath Vs. M/s. Uma Shankar Khandelwal & Company Judgment dated 09.02.2024 Page 14 of 28 Ranbir Singh & Ors Vs. Shri Ganga Ram Hospital 2015 SCC online Delhi 11575. Moreover, according to him, in view of the authoritative pronouncement of Hon'ble Supreme Court in Dena Nath & Ors Vs. National Fertilizers Ltd & Ors (1992) 1 SCC 695, mere non registration of the management under the Contract Labour (Regulation and Abolition) Act, 1972 and absence of license with the contractor under the aforesaid Act shall not have the effect of creation of employer and employee relationship between the principal employer and the workman.
28. So far as the plea of the workman regarding the contract between the management and the contractor being sham/ bogus/ camouflage is concerned, according to him, in view of the authoritative pronouncement of Hon'ble Delhi High Court in Chhathoo Lal Vs. Management of Goramal Hariram Ltd. 2006:DHC:6135, this Court can not go into the aforesaid issue since no reference to the aforesaid effect has been made to this Court by the appropriate Government. Under the aforesaid circumstances, according to Ld. AR for management, though, the claimant has miserably failed to prove that there existed any employer-employee relationship between the management and the workman, the management has proved it beyond reasonable doubts that he was an employee of the contractors. He has thus prayed for dismissal of claim of the workman with costs.
29. I have heard the submissions made on behalf of the parties and have carefully perused the material available on record in the light of various judgments relied upon by Ld. ARs for both the LIR No.53587/2013 Dayanath Vs. M/s. Uma Shankar Khandelwal & Company Judgment dated 09.02.2024 Page 15 of 28 parties. My issue wise findings on the issues settled by Ld. Predecessors of this Court vide order dated 16.03.2018 are as follows:-
Issue no. (i):- Whether employer-workman relationship exists between the management and Sh. Dayanath S/o Late Sh. Kratan Prasad?
30. Onus to prove the aforesaid issue was upon the workman. Workman has examined himself as the sole witness in support of his plea that he was working with the management on the post of pressman since May 2004 and his last drawn wages were Rs. 7,020/- per month. Workman has failed to produce any appointment letter issued by the management in his name, since, according to him, no such appointment letter was ever issued by the management in the name of workman. In fact, no document has been produced by the workman to prove his employment with the management except a copy of his ESI card Ex. WW1/6. Though, the aforesaid ESI Card does not bear the name of the management as the employer of the workman, however, it is significant to note that during cross-examination of the workman, management itself has produced the document Ex. WW1/M5, which is a temporary identity certificate of the Employee State Insurance Corporation and records the insurance ID of the workman as 201552801 with the registration date as 16.07.2012.
31. As per the aforesaid Identity certificate, the name of employer of the beneficiary is M/s Uma Shankar Khandelwal & Company and the date of appointment of the workman with the LIR No.53587/2013 Dayanath Vs. M/s. Uma Shankar Khandelwal & Company Judgment dated 09.02.2024 Page 16 of 28 employer is stated to be 10.07.2012. The workman has heavily relied upon the aforesaid document to contend that since the ESIC and EPF facilities were being provided to him under the employer code of the management, he was under direct employment of the management.
32. The aforesaid plea of the workman has been opposed by Ld. AR for the management on the ground that mere registration of the workman with ESIC, under the employer code of the management, is not sufficient to prove the existence of employer- employee relationship between the parties, more so, when the management has duly clarified that the workman was registered with the employee code of management since the contractors, hired by the management, were not having their ESIC codes. As has already been observed hereinabove, in support of his aforesaid submission, Ld. AR for management has relied upon the judgment of Hon'ble Delhi High Court in Ranbir Singh & Ors. Case (supra).
33. A bare perusal of the aforesaid judgment shows that facts of the aforesaid case before Hon'ble Delhi High Court were similar to the facts of the present case. In the aforesaid case, Hon'ble Delhi High Court was dealing with a reference dated 30.03.1994, regarding alleged illegal termination of the workman by the management, wherein, management no. 1 had denied the existence of any employer-employee relationship between management no. 1 and the workmen and had taken a plea that workmen were the employees of management no. 2, who had LIR No.53587/2013 Dayanath Vs. M/s. Uma Shankar Khandelwal & Company Judgment dated 09.02.2024 Page 17 of 28 deployed them at the hospital of management no. 1. On the other hand, the workmen had alleged that they were the employees of management no. 1/ hospital and were later shown to be the employees of management no. 2 under the garb of an alleged sham and bogus agreement executed between the two managements.
34. After conclusion of trial, Ld. Labour Court in the aforesaid case had passed two separate awards dated 10.04.2003 and 08.04.2003 against the workmen and hence the workmen in both the aforesaid cases preferred two separate writ petitions before Hon'ble Delhi High Court seeking quashing of the aforesaid awards. The aforesaid writ petitions were disposed off by Hon'ble Delhi High Court vide a common judgment dated 28.08.2015 which was reported as Ranbir Singh & Ors. (supra). It was observed by Hon'ble Delhi High Court that the whole dispute in the aforesaid case was hinging around the question as to whether there was any employer-employee relationship between the petitioners and the management no. 1. After quoting the relevant observation of Hon'ble Supreme Court in Steel Authority of India's case (supra), Hon'ble Delhi High Court went on to observe that to prove the allegation of illegal termination of the workmen by management no. 1, it was incumbent upon the workman to first establish the relationship of employer-employee between management no. 1 and the workman. It was further observed that for the aforesaid purpose, the workmen were required to prove that either they were LIR No.53587/2013 Dayanath Vs. M/s. Uma Shankar Khandelwal & Company Judgment dated 09.02.2024 Page 18 of 28 working with management no. 1 who had issued their respective appointment letters or else they were required to produce the documents to show that they had completed 240 days of continuous service in a calendar year with management no. 1.
35. It was further observed that admittedly the workmen were never issued any appointment letters by management no. 1 and the workmen had not produced any salary slips issued by management no. 1 to prove that they were receiving their salaries from management no. 1. It was further observed that the workmen had alleged that even the PF contribution in respect of the workmen was being deposited by management no. 1 and not by management no.2 which indicates that management no. 2 was merely acting as an agent of management no. 1. Under the aforesaid circumstances, it was further alleged that the contract executed between the two managements was not a genuine contract but factually a camouflage, sham and bogus contract. After observing that the management no. 1 had outsourced the security services of Ganga Ram Hospital to the licensed contractor and various vouchers were produced by the management to prove that the payments in respect of outsourced security services were made by management no. 1 to management no. 2, the Court went on to deal with the effect of deposit of provident fund qua workmen by management no. 1.
36. It was observed by Hon'ble Delhi High Court that the aforesaid fact of deposit of PF contribution in the name of workmen by Management no. 1, by itself, does not create the LIR No.53587/2013 Dayanath Vs. M/s. Uma Shankar Khandelwal & Company Judgment dated 09.02.2024 Page 19 of 28 relationship of employer-employee between the management no.1 and the petitioners. While arriving at the aforesaid conclusion, Hon'ble Delhi High Court has referred to the definition of "employees" U/s 2(f) of the Employee Provident Fund and Miscellaneous Provisions Act 1952 which means- any person employed for wages in any kind of work of an establishment to get his wages directly or indirectly from the employer and includes a person employed by or through a contractor in or in connection with the work of the establishment. It was thereafter held by Hon'ble Delhi High Court that the aforesaid definition does not have the effect of creating the relationship of employer-employee under the Industrial Disputes Act, 1947 and was meant for the limited purpose of EPF&MP Act 1952, since under the aforesaid Act, the contractor's employees are deemed to be the employees of principal employer for the purposes of the aforesaid Act.
37. Hon'ble Delhi High Court has further referred to the provisions of Section 6 of the aforesaid Act, which requires the employer to remit the provident fund contribution in respect of the employees employed by him directly or by or through a contractor, besides, para 30 of the Employees Provident Fund Scheme 1952 and has concluded that since the aforesaid Act cast the responsibility and the statutory obligation on the principal employer to remit the PF contributions even in respect of the contractor's employees, mere remittance of the PF by the management no. 1, ipso-facto, does not create any employer-
LIR No.53587/2013Dayanath Vs. M/s. Uma Shankar Khandelwal & Company Judgment dated 09.02.2024 Page 20 of 28 employee relationship between management no. 1 and petitioner/ workmen. At this stage, I deem it appropriate to reproduce the relevant observations of Hon'ble High Court of Delhi in Ranbir Singh & Ors. (supra) for ready reference:
"14. The onus to prove that the petitioner-workmen were employees of management no. 1, too, was upon the petitioner-workmen. It is an admitted fact that the petitioner-workmen were never issued an appointment letter by management no. 1 at any point of time since the date of their appointments i.e., 01.11.1986 and 10.03.1985 respectively till the date of their termination i.e., 28.07.1992. As per the allegation of the petitioner- workmen, they were employed with the management no. 1 and their services were terminated on 28.07.1992 but the workmen were unable to produce salary slips of management no. 1 to prove that management no. 1 paid their salaries from their respective dates of appointment i.e. 01.11.1986 and 10.03.1985 till the date of their termination i.e. 28.07.1992. As per the allegation, the petitioner- workmen worked with the management no. 1 for a period of more than five years. There is no allegation till date on behalf of the petitioner-workmen that their salaries for the aforesaid period is due against the management no. 1 which means that either the petitioner-workmen are not coming to this Court with clean hands or they are hiding something which they should not have.
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26. The Employees' Provident Funds and Miscellaneous Provisions Act, 1952 and The Employees' Provident Funds Scheme, 1952 cast the responsibility and statutory obligation on the principal employer to remit the PF contributions even in respect of contractor's employees.
27. Mere remittance of the provident fund by the management no. 1, i.e., the principal employer ipso facto does not create any employer- employee relationship between the management no. 1 and petitioner-workmen."LIR No.53587/2013
Dayanath Vs. M/s. Uma Shankar Khandelwal & Company Judgment dated 09.02.2024 Page 21 of 28
38. It is significant to note in this regard that the provisions of the Employees State Insurance Act, 1948 regarding deposit of ESI contributions are in pari materia with the provisions of EPF & MP Act. A bare perusal of the definition of "employee" U/s 2 (9) of ESI Act, 1948 shows that it includes any person employed for wages in or in connection with the work of a factory or establishment, who is either directly employed by the Principal employer for any work of the factory or establishment or is employed by and through an immediate employer. It also includes the person whose services are temporarily lent or let on hire to the principal employer by the person with whom the person whose services are so lent or let on hire has entered into a contract of service.
39. The aforesaid definition does not leave any manner of doubt that for the purposes of the ESI Act, even the contract labour is deemed to be an employee of the principal employer. Moreover, Section 40 of the ESI Act, 1948 cast a duty upon the principal employer to pay, in respect of every employee, both the employer's contribution and the employee's contribution, whether the employee is directly employed by him or through an immediate employer, though, he may subsequently recover the same from the immediate employer in terms of provisions of Section 41 of Act.
40. Thus, in view of the authoritative pronouncement of Hon'ble Delhi High Court in Ranbir Singh And Ors Vs. M/S Ganga Ram Hospital(supra), in my considered opinion, mere LIR No.53587/2013 Dayanath Vs. M/s. Uma Shankar Khandelwal & Company Judgment dated 09.02.2024 Page 22 of 28 registration of the workman under ESI Act, 1948 against the employer code of the management, ipso-facto, does not have the effect of creation of employer-employee between the management and the workman.
41. Now coming to the next plea of the workman that the alleged contract between the management and the contractors was sham, bogus and camouflage, it is significant to note in this regard that it is not even the case of the workman that he was an employee of the contractor. Rather, he has taken a specific plea to the effect that he was never employed under any contractor and was directly under the employment of the management, despite specific plea of the management as to non existence of any employer-employee relationship between the management and the workman even during the proceedings before the Conciliation officer. Since the workman has failed to take any plea that he was employed with the management through a contractor, however, the aforesaid contract was sham, bogus and camouflage, the Court cannot go into the aforesaid issue merely because during the evidence, the workman has admitted various documents which go on to show that he was deployed with the management through a contractor, more so when there is no reference of any such issue made to this Court vide reference order dated 24.09.2013.
42. While taking the aforesaid view, I draw support from the following observations of Hon'ble Delhi High Court in Chhathoo Lal's Case (Supra):
LIR No.53587/2013Dayanath Vs. M/s. Uma Shankar Khandelwal & Company Judgment dated 09.02.2024 Page 23 of 28 "8. In the present case the workman had not raised any contention that the contract entered into between the contractor and the management was a sham. In fact the contention of the workman was that he was an employee of the respondent. The Labour Court could not have gone into the question whether the contract was sham or not because no such reference was made to the Labour Court. The reference made to the Labour Court was that whether the services of the petitioner were illegally terminated or not and the contention of the petitioner was that he was a direct employee of the respondent. I consider that the petitioner should have initially raised a proper dispute. He should have come up with clean hands and submitted that he was an employee of the contractor and the contract should be declared as sham and camouflage and he should be considered as an employee of the principal employer. He did not disclose the true facts and taking a false plea stood in the way of referring the proper dispute to the Labour Court. It is settled law that the Labour Court is a creation of the reference and the Labour Court cannot go beyond the terms of reference except that the questions incidental to the dispute and those, who go to the root to the jurisdiction of Labour Court can be decided by the Labour Court while deciding a reference.
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10. In A.P.SRTC and Ors. v. G.Srinivas Reddy and Ors., Supreme Court held that if the respondents wanted the relief of absorption they will have to approach the Industrial Court and establish that the Contract Labour System was only a ruse/camouflage to avoid labour law benefits to them. Where the workmen do not approach the Court with correct reference and true facts, workmen cannot later on turn around and say that now they should be considered as workmen through the contractor and they should be deemed to be the employees of the management because contract was sham and camouflage." (Emphasis mine)
43. To sum up, it has already been held by this Court hereinabove that the workman has failed to produce any LIR No.53587/2013 Dayanath Vs. M/s. Uma Shankar Khandelwal & Company Judgment dated 09.02.2024 Page 24 of 28 document, other than the document Ex. WW1/6, to prove the existence of any employer-employee between the parties and the document Ex. WW1/6 by itself cannot have the effect of proof of existence of employer-employee between the parties. It has further been held by this Court that this Court cannot go into the issue as to the contract between the management and M/s Azaz Ahmad and Company being sham, bogus and camouflage for want of any such reference or for that matter any such pleadings on the part of the workman either before the conciliation officer or before this Court despite specific plea on the part of management, in its reply to the statement of claim filed by the management before the conciliation officer, that the workman was never the employee of the management, but, was an employee of contractor Sh. Azaz Ahmad.
44. Thus, although, the workman has failed to produce any document to prove the existence of any employer-employee between the parties, however, the management has confronted the workman with various documents Ex. WW1/MW1 to Ex. WW1/M31 all of which have been admitted by the workman, which, go on to prove that the workman was deployed with the management by the contractors Babu Shah & Company and Azaz Ahmad & Company and he had been receiving his wages from the contractors and not from the management.
45. It is next sought to be contended by Ld. AR for workman that since the management was not registered under the Contract Labour (Regulation and Abolition) Act 1972 and even the LIR No.53587/2013 Dayanath Vs. M/s. Uma Shankar Khandelwal & Company Judgment dated 09.02.2024 Page 25 of 28 contractors were not having any license under the aforesaid Act, the claimant should be considered to be the direct employee of the management. I do not find any force in the aforesaid submission made on behalf of the workman, in as much as, the consequences of non registration of an establishment under the Contract Labour (Regulation and Abolition) Act, 1972 and of the contractor not holding any license under the provisions of aforesaid Act, have been authoritatively laid down by Hon'ble Supreme Court in Dena Nath v. National Fertilisers Ltd., (1992) 1 SCC 695 in the following words:
"22. It is not for the High Court to inquire into the question and decide whether the employment of contract labour in any process, operation or in any other work in any establishment should be abolished or not. It is a matter for the decision of the government after considering the matter, as required to be considered under Section 10 of the Act. The only consequences provided in the Act where either the principal employer or the labour contractor violates the provision of Sections 9 (sic 7) and 12 respectively is the penal provision, as envisaged under the Act for which reference may be made to Sections 23 and 25 of the Act. We are thus of the firm view that in proceedings under Article 226 of the Constitution merely because contractor or the employer had violated any provision of the Act or the rules, the Court could not issue any mandamus for deeming the contract labour as having become the employees of the principal employer. We would not like to express any view on the decision of the Karnataka High Court or of the Gujarat High Court (supra) since these decisions are under challenge in this Court, but we would place on record that we do not agree with the aforequoted observations of the Madras High Court about the effect of non-registration of the principal employer or the non-licensing of the labour contractor nor with the view of Bombay High Court in the aforesaid case. We are of the view that the decisions of the Kerala High Court and Delhi High Court are correct and LIR No.53587/2013 Dayanath Vs. M/s. Uma Shankar Khandelwal & Company Judgment dated 09.02.2024 Page 26 of 28 we approve the same." (Emphasis mine)
46. The aforesaid observations were quoted with approval by Hon'ble Constitution Bench of Supreme Court in Steel Authority of India's case supra in the following words:
"96. In Dena Nath case [(1992) 1 SCC 695 : 1992 SCC (L&S) 349] a two-Judge Bench of this Court considered the question, whether as a consequence of non-compliance with Sections 7 and 12 of the CLRA Act by the principal employer and the licensee respectively, the contract labour employed by the principal employer would become the employees of the principal employer. Having noticed the observation of the three-Judge Bench of this Court in Standard Vacuum case [AIR 1960 SC 948 : (1960) 3 SCR 466] and having pointed out that the guidelines enumerated in sub-section (2) of Section 10 of the Act are practically based on the guidelines given by the Tribunal in the said case, it was held that the only consequence was the penal provisions under Sections 23 and 25 as envisaged under the CLRA Act and that merely because the contractor or the employer had violated any provision of the Act or the Rules, the High Court in proceedings under Article 226 of the Constitution could not issue any mandamus for deeming the contract labour as having become the employees of the principal employer. This Court thus resolved the conflict of opinions on the said question among various High Courts. It was further held that neither the Act nor the Rules framed by the Central Government or by any appropriate Government provided that upon abolition of the contract labour, the labourers would be directly absorbed by the principal employer."
47. In view of the aforesaid discussion, issue no. (i) is hereby decided against the workman while holding that there existed no relationship of employer-employee between the management and the workman.
Issue no. (ii): Whether services of workman have LIR No.53587/2013 Dayanath Vs. M/s. Uma Shankar Khandelwal & Company Judgment dated 09.02.2024 Page 27 of 28 been terminated illegally and/or unjustifiably by the management, if so, to what relief is workman entitled?
48. Onus to prove the aforesaid issue was also upon the workman. Since the workman has failed to prove the existence of any employer-employee between the parties, in my considered opinion, there is no question of his termination, much less, illegal termination by the management. Issue no. (ii) is thus decided against the workman.
Issue no. (iii):- Relief.
49. In view of my findings on issues no. (i) and (ii), in my considered opinion, the workman is not entitled to any relief.
50. Reference dated 24.09.2013 is thus answered in negative in the following terms:
"The workman Sh. Dayanath S/o Late Sh. Kratan Prasad has failed to prove the existence of any employee-employer between him and the management and also that his services were terminated by the management illegally and/ or unjustifiably and hence he is not entitled to any relief".
51. Ordered accordingly.
52. Requisite number of copies of the award be sent to the competent authority for publication as per rules.
Announced in the open Court on this 09th day of February, 2024.
This award consists of 28 number of signed pages. ARUN Digitally signed by
ARUN KUMAR GARG
KUMAR Date: 2024.02.12
GARG 09:48:17 +05'30'
(ARUN KUMAR GARG)
Presiding Officer Labour Court-III
Rouse Avenue Court, New Delhi
LIR No.53587/2013
Dayanath Vs. M/s. Uma Shankar Khandelwal & Company Judgment dated 09.02.2024 Page 28 of 28