Jharkhand High Court
Their Workmen Bihar Colliery Kamgar ... vs Ms Bharat Coking Coal Ltd Through Its ... on 28 March, 2014
Equivalent citations: 2014 (2) AJR 510
Author: R. Banumathi
Bench: Chief Justice, Shree Chandrashekhar
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IN THE HIGH COURT OF JHARKHAND AT RANCHI
L.P. A No. 283 of 2013
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Their Workmen, Bihar Colliery Kamgar Union Appellant
Versus
M/s.Bharat Coking Coal Ltd. & Ano. Respondents
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CORAM: HON'BLE THE CHIEF JUSTICE.
HON'BLE MR. JUSTICE SHREE CHANDRASHEKHAR
For the Appellant : M/s. Satish Bakshi, S.K.Laik
For the Respondents : Mr.Anoop Kumar Mehta
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CAV on 24th March, 2014 Pronounced on 28th,March, 2014
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R.Banumathi,C.J. The present appeal is directed against the
order dated19.7.2013 passed in W.P(L) No.3015/2001, in and
by which the learned Single Judge allowed the writ petition,
setting aside the award dated 26.12.2000 passed by the
Central Government Industrial Tribunal No.1, Dhanbad, in
Reference No.28/1992.
2. Brief facts: The sponsoring Union, i.e. Bihar Colliery
Kamgar Union, had made a demand for regularization of Sunder
Dusadh and twenty-six others on the roll of Loyabad Coke Plant of
M/s. Bharat Coking Coal Ltd. (BCCL) on the ground that they have
been working in the permanent nature of job since long under the
direct control and supervision of the Management of Loyabad Coke
Plant of BCCL, but they are being paid less wages than the wages
prescribed under the National Coal Wage Agreement and the wages
are being disbursed in the name of intermediary, which does not
control and supervise the work of the concerned persons. On the
basis of the demand made by the sponsoring Union, conciliation
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proceedings took place before the Assistant Labour Commissioner
(C), Dhanbad, who submitted failure report. By the order dated
26.3.1992, the Central Government had referred the following dispute for adjudication to the Tribunal:-
"Whether the demand of the Bihar Colliery Kamgar Union for regularization of Shri Sunder Dusadh and 26 others on the roll of Loyabad Coke Plant of M/s. BCCL is justified? If so, to what relief the workmen are entitled?
3. By the impugned award dated 26.12.2000, the Tribunal directed the management to regularize the workmen holding that (i) the Management has not filed any registration certificate to show that the management has got its establishment registered for the engagement of contractor as required under the Contract Labour (Regulation and Abolition) Act, 1970 and therefore, it must be held that the concerned persons are the workmen of the Management and the arrangement with the Co-operative Society is nothing but to camouflage the real issue and (ii) the Management has not filed attendance register and therefore, adverse inference to be drawn against the management that the work is of permanent nature, which supports the claim of the workmen that they have been working for more than 240 days in a calendar year.
4. Being aggrieved by the award passed by the Tribunal, the Management filed W.P(L) No.3015/2001. Upon consideration of the rival contentions and the materials, l earned Single Judge held that the conclusion of the Tribunal that the engagement of the workmen through a contractor was a camouflage, was clearly an erroneous finding in view of the 3 judgment rendered by Hon'ble Supreme Court in the case of Dena Nath & Ors. v. National Fertilizer Ltd. [(1992) 1 SCC 695, para 22]. Learned Single Judge further held that there is no evidence to show that all the twenty-seven workmen were in the regular employment of the management for a period of 240 days in a calendar year so as to place the onus upon the employer to rebut the same and the Tribunal, without any legal basis or justification, drew an adverse inference against the management for non- production of the attendance register contrary to the law laid down by the Hon'ble Supreme Court.
5. Being aggrieved by the order passed in the writ petition setting aside the award, the workmen have preferred this appeal. Learned counsel for the appellant contended that learned Single Judge did not take into consideration mainly two facts - (i) the fact relating to violation of the provisions of CLRA Act and (ii) the fact that the engagement of the contractor was merely a camouflage and the learned Single Judge failed to consider the fact that the management has not produced the registration certification and while so learned Single Judge erred in interfering with the findings recorded by the Tribunal. It was contended that there was sufficient material to show that the job is of permanent and perennial in nature and the same was supervised and controlled by the management officials and the workmen-witness has specifically stated that he and other workmen have put in continuous service and the same has not been rebutted by the management/respondent and while so, learned Single Judge erred 4 in finding that the workmen have not put in continuous service of 240 days.
6. Mr. Anoop Kumar Mehta, learned counsel for the respondent, submitted that if there is no registration certificate under the CLRA Act, the consequence is only penal one and the Tribunal was not justified in raising presumption that the labour contract system was a camouflage and in directing regularization on the presumption that the contract labourers are the employees of the principal employer. Learned counsel further submitted that the Tribunal erroneously held that the contract is sham and camouflage and has not kept in view the decisions of Hon'ble Supreme Court rendered in the case of Municipal Corporation of Greater Mumbai Vs. K.V.Shramik Sangh & Ors. [(2002) 4 SCC 609] and General Manager, (OSD), Bengal Nagpur Cotton Mills, Rajnandgaon v. Bharat Lal & Ano. [(2011) 1 SCC 635] and the learned Single Judge rightly set aside the award. It was also submitted that the work is not of permanent nature and that the workmen have only worked for a short period in 1986 and 1989 and since the Tribunal committed an error of law in raising erroneous presumption, learned Single Judge rightly set aside the award and the impugned judgment warrants no interference.
7. We have carefully considered the submissions of the learned counsel for the parties and perused the materials on record.
8. Loyabad Coke Plant under Sijua Area of BCCL manufactures Hard Coke and its bye-products by feeding raw coal 5 after crushing into the coke ovens. After the completion of the manufacturing process, the coke in hot condition is pushed from the coke ovens into the surface for the purpose of quenching the same with the help of pumped water and on being watered the same is allowed to flow and settle in the tanks constructed for the purpose. The content of breeze coke settled in the tanks are cleaned by engaging contractor's workers. The workmen have been working in the job of breeze cleaning under a Contractor, Muslim Mian. The contractor used to engage his own men for cleaning of breeze coke settled in the tanks and the contractor used to raise bills and on being passed, the same was disbursed by the contractor. Subsequently, dispute arose between the contractor and the workmen and the concerned persons formed a Co-operative Society and the work order was awarded to the Co-operative Society, namely, Kamgar Shramik Sahayog Samitee Ltd.
9. The first question to be considered is whether the concerned workmen are really the workmen of the contractor or whether the management has tried to camouflage the issue by branding them as contractor's workers.
10. For cleaning the breeze coke settled in the tanks, the work orders dated 28.3.1986 and 20.9.1989 were issued. The contractor used to engage his men as per the requirement of casual workers numbering 4 to 5 persons. It is the case of the management that the workmen were engaged only for a short period during 1986 and 1989 and thereafter no work was being performed by the workmen and the work is of intermittent, casual 6 and temporary in nature. The work was awarded to the contractor, who used to raise bills and payment were made on the basis of volume of work executed through cheques in the name of the contractor - Co-operative Society.
11. The Tribunal held that since the management had not filed any registration certificate under Section 7 of the CLRA Act, 1970 and also no licence of the Co-operative Society under the same Act was filed, the arrangement of the management is a camouflage leading to inference that the concerned persons are the workmen of the management.
12. Learned counsel for the respondent-management submitted that in the case of Dena Nath & Ors. [(1992) 1 SCC 695], Hon'ble Supreme Court held that the effect of non-compliance of the provisions of CLRA Act of 1970, i.e. non-registration of the establishment under Section 7 of the Act and non-possession of licence under Section 12 of the Act would not result in regularization of the concerned workmen, rather it would result in penal consequences - that is, prosecution under Section 23/24 of the CLRA Act, 1970 and therefore, the finding of the Tribunal that the contract labour system is sham or camouflage was an erroneous finding and referring to the findings of the Tribunal that the arrangement of the management is camouflage, learned Single Judge held that the said finding is in clear teeth of the decision rendered by Hon'ble Supreme Court in the case of Dena Nath & Ors. v. National Fertilizer Ltd. [(1992) 1 SCC 695] and para 22 thereof reads as under:-7
"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 we approve the same."
Hon'ble Supreme Court thus categorically held that the effect of non-compliance of the CLRA Act, 1970 and non-possession of licence under Section 12 of the Act would not result in regularization of the concerned workmen, rather it would result in prosecution under Section 23/24 of the CLRA Act. We are of the view that the learned Single Judge has rightly held that merely because of non-registration of the establishment under Section 7 of the CLRA Act and non-possession of licence under Section 12 of the Act, the Tribunal was not right in concluding that the contract labour system is a sham or camouflage.
13. It is now well settled that if the industrial adjudicator finds the contract between the principal employer and the contractor to be a sham, nominal and merely a camouflage to deny employment benefits to the employee and that there was in fact a direct employment, it can grant relief to the employee by holding that the workman is the direct employee of the principal employer. Two of the well-recognized tests to find out whether the contract 8 labourers are the direct employees of the principal employer are: (i) whether the principal employer pays the salary instead of the contractor; and (ii) whether the principal employer controls and supervises the work of the employee. In this case, the Tribunal answered both the above questions in affirmative and held that the workmen are direct employees of the management. We are of the view that the Tribunal ought to have examined the matter in the light of the above well-settled principles. On careful consideration of the evidence and materials on record, we are of the view that the Industrial Tribunal committed a serious error in arriving at the finding that because of non-registration of establishment under Section 7 of the CLRA Act and non-possession of licence under Section 12 of the said Act, the contract labour system was a sham or camouflage.
14. In so far as the terms, "control and supervision" are concerned, the Tribunal misconstrued the meaning of the terms, "control and supervision". As pointed out earlier, the work was awarded to the contractor for removal of sludge from settling tanks, which was supervised by the contractor. The work was awarded to the contractor, who used to raise bills and payments were made on the basis of the volume of work executed. The salary was paid to the workmen by the contractor and removal of sludge from the settling tanks was executed under the control and supervision of the contractor. The right to regulate the employment is with the contractor and the supervision and control lies with the contractor.
15. The expression "control and supervision" in the context of contract labour was explained by the Hon'ble Supreme Court in 9 the case of International Airport Authority of India v. International Air Cargo Workers' Union, [(2009) 13 SCC 374] in paras 38-39, which read as under:
"38. ... 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 control is with the contractor."
Same principle was reiterated in (2011) 1 SCC 635 (General Manager, (OSD), Bengal Nagpur Cotton Mills, Rajnandgaon, v.
Bharat Lal & Another).
16. Since the work of removal of sludge from the settling tanks was supervised by the contractor and salary also disbursed by the contractor, the Tribunal ought not to have held that the contract labour system was sham or camouflage and learned Single Judge rightly held that the findings of the Tribunal that the engagement of the workmen through the contractor was a camouflage, was erroneous and the conclusion is clearly erroneous in view of the decisions rendered in the cases of Dena Nath & Ors. v. National Fertilizer Ltd. [(1992) 1 SCC 695] and General Manager, (OSD), Bengal Nagpur Cotton Mills, Rajnandgaon, v. Bharat Lal & Ano. [(2011) 1 SCC 635].
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17. So far as the second issue relating to engagement of work for more than 240 days under the management of respondent-BCCL is concerned, the Tribunal arrived at a finding that all twenty-seven workmen were in regular employment of the management for a period of more than 240 days in a calendar year. This finding is based upon the evidence of workmen-witness, WW1, Hiralal Paswan.
18. It is the case of the management that the work is of casual and intermittent in nature and at no point of time, all the workmen were required to do the job. According to the management, the job of removal of sludge from settling tanks was done intermittently and the contractor used to engage his own men as per the requirement of casual worker numbering four to five persons. It is for the workmen to show that they were engaged for more than 240 days in a particular calendar year. In the case of Municipal Corporation, Faridabad v. Durga Prasad [(2008) 5 SCC 171], Hon'ble Supreme Court held that onus and burden of proof that the workmen have worked for 240 days is upon the workmen and it cannot be placed on the management and the same was enunciated in the case of State of M.P. v. Arjunlal Rajak [(2006) 2 SCC 711].
19. The appellant examined only one person, WW1, Hiralal Paswan, who deposed that he was working for the Co-operative Society and performed the work of cleaning breeze settled in the tanks. The register, allotment of work, was marked as Ext.W1. In the present case, apart from the evidence of WW1, there is no evidence brought on record in respect of each individual workmen 11 regarding their engagement for a particular period that they have worked for 240 days in a calendar year and Ext.M-2/1 is only the work order issued to the contractor. The workmen have not discharged their burden cast upon them to prove that all twenty- seven workmen have worked on a regular basis for a period of 240 days in a calendar year.
20. Before the Tribunal, the sponsoring Union filed an application to direct the management to produce the attendance register of the concerned persons. Since the management did not produce the attendance register, the Tribunal drew the adverse inference against the management that the management has withheld the same because if the attendance register had been produced then the claim of the concerned persons of having worked for more than 240 days would have been clearly established. Such an inference drawn by the Tribunal is erroneous in the light of the decision of Hon'ble Supreme Court rendered in the case of Manager, RBI, Bangalore v. S. Mani & Ors. [(2005) 5 SCC 100].
21. It is pertinent to note that the Tribunal has not passed any order for production of any attendance register by the management. As rightly pointed out by the learned Single Judge that without any legal basis or justification the Tribunal drew adverse inference against the management for non-production of the attendance register contrary to the law laid down by Hon'ble Supreme Court. As discussed earlier, it is for the workmen to prove that they were in the regular employment of the management for a period of more than 240 days in a calendar year. The evidence of the sole witness of WW1 cannot, prima facie, establish that all 12 twenty-seven workmen were in regular employment of the management for a period of 240 days in a calendar year so as to place the onus upon the management to rebut the same. It is admitted by the appellant-workmen that only two work orders were issued by the management of the respondent-BCCL. The very fact that the appellant-workmen worked only under those two work orders itself is an indication that the work performed by the workmen was not of permanent and perennial in nature. In view of the evidence brought on record, we affirm that the work performed by all twenty-seven workmen was not of permanent and perennial nature but was intermittent in nature and the workmen were engaged through the contractor and they never worked under the direct control and supervision of the respondent-management and they were engaged only through the contractor. Referring various decisions, learned Single Judge rightly held that the Tribunal arrived at an erroneous conclusion that the workmen were engaged on regular basis for a period of 240 days in a calendar year.
22. Looked at from any angle, direction of regularization could not have been issued by the Tribunal. It is well settled that merely because the workman has worked for 240 days, it would not entitle the workman for regularization of his service. The "concept of 240 days" has been evolved with reference to Section 25F of the Industrial Disputes Act and it has been held by the Hon'ble Supreme Court that merely working of "240 days" in a calendar year cannot be the sole ground for regularization of the service of the workman. Also, as per the decision of Hon'ble Supreme Court 13 in State of Karnataka v. Umadevi (3) [(2006) 4 SCC 1), the court cannot issue direction for regularization of temporary or casual employees and the contractual employees in violation of Article 14 and the constitutional scheme. In the case of U.P. Power Corporation Ltd. v. Bijli Mazdoor Sangh [(2007) 5 SCC 755], Hon'ble Supreme Court held that even though the Industrial adjudicator can modify the relief, but that does not dilute the observations of the Hon'ble Supreme Court in Umadevi(3) case [(2006) 4 SCC 1] about the regularisation. In paras 6 and 7of the above decision, [(2007) 5 SCC 755], Hon'ble Supreme Court held as under:-
"6. It is true as contended by learned counsel for the respondent that the question as regards the effect of the industrial adjudicators' powers was not directly in issue in Umadevi (3) case [(2006) 4 SCC 1]. But the foundational logic in Umadevi (3) case [(2006) 4 SCC 1] is based on Article 14 of the Constitution of India. Though the industrial adjudicator can vary the terms of the contract of the employment, it cannot do something which is violative of Article 14. If the case is one which is covered by the concept of regularisation, the same cannot be viewed differently.
7. The plea of learned counsel for the respondent that at the time the High Court decided the matter, decision in Umadevi (3) case [(2006) 4 SCC 1] was not rendered is really of no consequence. There cannot be a case for regularisation without there being employee-employer relationship. As noted above the concept of regularisation is clearly linked with Article 14 of the Constitution. However, if in a case the fact situation is covered by what is stated in para 45 of Umadevi (3) case [(2006) 4 SCC 1] the industrial adjudicator can modify the relief, but that does not dilute the observations made by this Court in Umadevi (3) case [(2006) 4 SCC 1] about the regularisation."
23. In conclusion, the Tribunal committed serious error of law in holding that the contract labour system is a sham or camouflage merely because of non-registration of the establishment under Section 7 of the CLRA Act and non- possession of licence under Section 12 of the Act. The Tribunal also erred in raising the presumption that the workmen have worked for more than 240 days, which is not based on any 14 evidence or scientific calculation. Since the Tribunal committed a serious error of law and misconstrued the meaning of the terms, "control and supervision", learned Single Judge rightly held that the conclusion of the Tribunal is erroneous in the teeth of the decisions rendered in the cases of Dena Nath & Ors. v. National Fertilizer Ltd. [(1992) 1 SCC 695] and General Manager, (OSD), Bengal Nagpur Cotton Mills, Rajnandgaon, v. Bharat Lal & Ano. [(2011) 1 SCC 635]. We do not find any infirmity in the order of the learned Single Judge setting aside the award passed by the Tribunal and this LPA is liable to be dismissed.
24. In the result, LPA is dismissed.
(R. Banumathi, C.J.) (Shree Chandrashekhar, J.) Jharkhand High Court, Ranchi Dated __28th March, 2014 AFR Dey/