Delhi High Court - Orders
30 Santosh Kumar Sharma & Anr vs The Institute Of Chartered Accountants ... on 17 November, 2021
Author: V. Kameswar Rao
Bench: V. Kameswar Rao
$~30 & 33
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 12914/2021
30 SANTOSH KUMAR SHARMA & ANR. ..... Petitioners
Through: Mr. K. Prabhakara Rao, Advocate
versus
THE INSTITUTE OF CHARTERED
ACCOUNTANTS OF INDIA & ORS ..... Respondents
Through: Ms. Pooja M. Saigal, Advocate with
Mr. Anshul Bajaj, Ms. Simrat Singh
Pasay and Mr. Chaitanya Pandey,
Advocates for R-1/ICAI
+ W.P.(C) 12965/2021
33 NARENDER SINGH & ORS. ..... Petitioners
Through: Mr. K. Prabhakara Rao, Advocate
versus
THE INSTITUTE OF CHARTERED
ACCOUNTANTS OF INDIA & ORS. ..... Respondents
Through: Ms. Pooja M. Saigal, Advocate with
Mr. Anshul Bajaj, Ms. Simrat Singh
Pasay and Mr. Chaitanya Pandey,
Advocates for R-1/ICAI
CORAM:
HON'BLE MR. JUSTICE V. KAMESWAR RAO
ORDER
% 17.11.2021
1. Both the writ petitions have been filed by the petitioners with the following prayers:
Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV Signing Date:18.11.2021 14:43:55"It is, therefore, prayed that this hon 'ble court may be pleased to:
(a) issue the writ of mandamus or any other appropriate writ, order or direction directing the respondent no. 1 to reinstate the petitioners with full back wages, attendant benefits and continuity of service;
(b) Any other I further appropriate relief, which this hon'ble court deems fit under the circumstances may also please be passed in the interest of justice and for this act of kindness, the petitioners as duty bound shall ever pray"
2. It is conceded case of the petitioners that they are not in employment with the respondents. From the prayers, it is noted that the petitioners are seeking relief against the respondent No.1. I have been informed by the learned counsel for the petitioners that the petitioners had approached the Deputy Labour Commissioner (Central) before approaching this Court and in the said proceedings a reply has been filed by the respondent No.1 stating that being a Statutory body, under the provisions of the Charted Accountants Act, 1949 it is not an "industry". Suffice to state, the issue whether the employer employee relationship exist between petitioners and respondent No.1, the same needs to be decided by an Industrial Adjudicator. This has been held by the Supreme Court in the Steel Authority of India Ltd. and Ors. v. National Union Waterfront Workers and Ors., (2001) 7 SCC 1 as under:
"71. By definition the term "contract labour" is a species of workman. A workman shall be so deemed when he is hired in or in connection with the work of an establishment by or through a contractor, with or without the knowledge of the principal employer. A workman may be hired: (1) in an establishment by the principal employer or by his agent with or without the knowledge of the principal employer; or (2) in connection with Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV Signing Date:18.11.2021 14:43:55 the work of an establishment by the principal employer through a contractor or by a contractor with or without the knowledge of the principal employer. Where a workman is hired in or in connection with the work of an establishment by the principal employer through a contractor, he merely acts as an agent so there will be master-and-servant relationship between the principal employer and the workman. But where a workman is hired in or in connection with the work of an establishment by a contractor, either because he has undertaken to produce a given result for the establishment or because he supplies workmen for any work of the establishment, a question might arise whether the contractor is a mere camouflage as in Hussainbhai case [(1978) 4 SCC 257] and in Indian Petrochemicals Corpn. case [(1999) 6 SCC 439] etc.; if the answer is in the affirmative, the workman will be in fact an employee of the principal employer; but if the answer is in the negative, the workman will be a contract labour."
3. Similarly, in the case of International Airport Authority of India v. International Air Cargo Workers' Union & Anr., (2009) 13 SCC 374 the Supreme Court has held:
"35. As noticed above, SAIL [(2001) 7 SCC 1] did not specifically deal with the legal position as to when a dispute is brought before the industrial adjudicator as to whether the contract labour agreement is a sham, nominal and merely a camouflage, when there is no prohibition notification under Section 10(1) of the CLRA Act.
36. But where there is no abolition of contract labour under Section 10 of the CLRA Act, but the contract labour contend that the contract between the principal employer and the contractor is sham and nominal, the remedy is purely under the ID Act. The principles in Gujarat Electricity Board [(1995) 5 SCC 27] continue to govern the issue. The remedy of the workmen is to approach the industrial adjudicator for an adjudication of their dispute that they are the direct employees of the principal employer and the agreement is sham, nominal and merely a camouflage, even when there is no order under Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV Signing Date:18.11.2021 14:43:55 Section 10(1) of the CLRA Act.
37. The industrial adjudicator can grant the relief sought if it finds that contract between the principal employer and the contractor is sham, nominal and merely a camouflage to deny employment benefits to the employer and that there is in fact a direct employment, by applying tests like: who pays the salary; who has the power to remove/dismiss from service or initiate disciplinary action; who can tell the employee the way in which the work should be done, in short, who has direction and control over the employee. But where there is no notification under Section 10 of the CLRA Act and where it is not proved in the industrial adjudication that the contract was a sham/nominal and camouflage, then the question of directing the principal employer to absorb or regularise the services of the contract labour does not arise.
38. The tests that are applied to find out whether a person is an employee or an independent contractor may not automatically apply in finding out whether the contract labour agreement is a sham, nominal and is a mere camouflage. For example, if the contract is for supply of labour, necessarily, the labour supplied by the contractor will work under the directions, supervision and control of the principal employer but that would not make the worker a direct employee of the principal employer, if the salary is paid by a contractor, if the right to regulate the employment is with the contractor, and the ultimate supervision and control lies with the contractor.
39. The principal employer only controls and directs the work to be done by a contract labour, when such labour is assigned/allotted/sent to him. But it is the contractor as employer, who chooses whether the worker is to be assigned/allotted to the principal employer or used otherwise. In short, worker being the employee of the contractor, the ultimate supervision and control lies with the contractor as he decides where the employee will work and how long he will work and subject to what conditions. Only when the contractor assigns/sends the worker to work under the principal employer, the worker works under the supervision and control of the principal employer but that is secondary control. The primary Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV Signing Date:18.11.2021 14:43:55 control is with the contractor."
4. Hence, the remedy for the petitioner is to approach the appropriate Forum under the provisions of the Industrial Disputes Act. Suffice to state any issue with regard to the respondent No.1 is an "industry" or not shall also be decided by the Industrial Adjudicator.
5. Accordingly, I do not see any reason to entertain these petitions, the same are closed with liberty to the petitioners as aforestated in accordance with law.
V. KAMESWAR RAO, J.
NOVEMBER 17, 2021/ds Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV Signing Date:18.11.2021 14:43:55