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[Cites 8, Cited by 0]

Jammu & Kashmir High Court - Srinagar Bench

Bilal Ahmad Bhat & Anr vs Union Of India & Ors on 8 December, 2023

Author: Sanjay Dhar

Bench: Sanjay Dhar

      IN THE HIGH COURT OF JAMMU & KASHMIR AND
                 LADAKH AT SRINAGAR
                                               Reserved on: 23.11.2023
                                               Pronounced on:08.12.2023


                         SWP No.1696/2012
                              c/w
                         CPSW No.346/2015

BILAL AHMAD BHAT & ANR.                              ...PETITIONER(S)

      Through: - Mr. Arshid Andrabi, Advocate.

Vs.

UNION OF INDIA & ORS.                              ...RESPONDENT(S)
      Through: -   Mr. Satinder Singh Kala, AAG.
                   Ms. Apu Singh, Advocate,
                   Mr. A. Hanan, Advocate.

CORAM: HON'BLE MR. JUSTICE SANJAY DHAR, JUDGE

                                JUDGMENT
SWP No.1696/2012

1) The petitioners, who claim to be President and Secretary of Bridge Superstructural Association, have filed this writ petition on behalf of members of the Union. According to the petitioners, the Union comprises 70 members. A direction has been sought upon the respondents to absorb/confirm and regularize the members of the Union against the available posts in respondent No.2-company. A further direction has been sought upon the respondents to comply with the provisions relating to payment of provident fund and to deposit the remaining portion of the provident fund in the Court.

2) Briefly stated, case of the petitioners is that the members of the Union were engaged on various jobs by respondent No.2 which SWP No.1696/2012 Page 1 of 13 include Supervisors, Technicians, Computer Analysts and Helpers. Their salaries were drawn through bank accounts operated for this purpose in J&K Bank Solina. They were assigned various jobs by respondent No.2-company. It has been submitted that the Site Managers of the respondent company informed the petitioners about discontinuation of services of the employees, as a result of which they are not getting salary. A number of representations are stated to have been made by the petitioners wherein it was highlighted that the employees have completed six years of service on the project and, as such, they are entitled to be suitably adjusted on regular posts on the establishment of the respondent company. It has been submitted that the employees have acquired knowledge and skill of the jobs and they have also acquired the status of permanent workmen, as a result of which they deserve to be confirmed and regularized.

3) The employees are stated to have approached the Additional Provident Fund Commissioner, Kashmir, through representations stating therein that they have been making contributions towards provident fund but the same has not been credited to the account. It has been submitted that when the employees approached Additional Provident Fund Commissioner and sought direction upon the respondent company to deposit its share of provident fund, upon directions by the Additional Provident Fund Commissioner, Kashmir, the respondent company agreed to make deposit of provident fund contribution. It has been further submitted that despite undertaking to SWP No.1696/2012 Page 2 of 13 make contribution to provident fund, the respondent company failed to abide by the undertaking and ultimately warrants were issued by the Additional Provident Fund Commissioner, Kashmir, against the officers of the respondent company, whereafter an amount of Rs.90,97,061/ has been deposited by the respondent company as contribution towards provident fund. The petitioners contend that by doing so, the respondent company has accepted the status of the employees, however, the respondent company vide its various communications has tried to wriggle out of its responsibility by claiming that the employees have been engaged through contractors whereas the fact of the matter is that the respondent company is the employer of all these employees. It has been further submitted that the provident fund deposited with the Additional Provident Fund Commissioner has not been released in favour of the employees which compelled them to file writ petition bearing SWP No.1358/2011 in which a direction was passed for release of legitimate wages of the employees.

4) It has also been submitted that the Additional Provident Fund Commissioner sought information from the respondent company but the same has been withheld by the company which has delayed the release of provident fund dues to the employees. It has been contended that the action of the respondent company is mala fide and actuated with political considerations, as a result of which the employees have been left high and dry. It has been submitted that the employees have SWP No.1696/2012 Page 3 of 13 been ousted from their employment by the respondent company without adopting due process of law. In short, case of the petitioners is that the workers employed for execution of the project were employees of respondent No.2-company and they are entitled to regularization of their services as also to provident fund dues.

5) Respondent No.2-company has filed its counter affidavit, in which it has been contended that the said company had, in connection with execution of work pertaining to Kashmir Railway Project, utilized the services of about 212 regular employees and in addition to this, service of 300 workers on need basis was utilized through sub- contractors from time to time. It has been submitted that the Rail Line from Qazigund to Baramulla has already been operationalized and the physical works pertaining to the project are complete in all respects, as a result of which, out of 212 regular employes of the respondent company, only 07 are in place and the rest have been transferred. Similarly, as against a total of 300 workers working through sub- contractors, only 10 workers are working at present. The respondent company has taken a stand that the petitioners have not placed on record any appointment orders, if any issued by the respondent Company, as such, it cannot be stated that the said workers have been employed by the respondent company.

6) It has been further submitted that the petitioners have filed two more writ petitions bearing SWP No.242/2010 and SWP No.1358/2011 claiming similar reliefs, as such, the instant writ petition is not SWP No.1696/2012 Page 4 of 13 maintainable. It has been further submitted that the sub-contractors, through whom the employees were engaged, have not been made parties to the present writ petition, as such, the writ petition is not maintainable. It has been claimed that in respect of all 300 workers who were engaged through sub-contractors, the wages have been paid by the sub-contractors through whom they were engaged. According to the respondent company, the workers were last engaged through sub- contractors, namely, M/S Glitters Forever and M/S Asian Constructions respectively and they were never engaged by the respondent company. It has been further submitted that the petitioners are not working with the respondent company with effect from July and October, 2009.

7) It has been submitted that the warrants were issued by Additional Provident Fund Commissioner, Kashmir, against General Manager of Ircon International Limited, being the principal employer, as a result of which, an amount of Rs.90, 97,061/ on account of provident fund contribution towards workers engaged through sub-contractors with effect from June, 2003 to April, 2008, was deposited because the sub- contractors had failed to deposit the provident fund. It has been further submitted that whatever information was available with the respondent company, the same was furnished to the Provident Fund Commissioner and with effect from April, 2008, every worker engaged through sub- contractors was being paid his provident fund contribution through sub- contractors well in time. It has been submitted that the respondent company has never paid any wages to any of the workers engaged SWP No.1696/2012 Page 5 of 13 through sub-contractors because the wages were being paid to them by the sub-contractors through whom they were engaged.

8) I have heard learned counsel for the parties and perused the record of the case.

9) The grievance of the petitioners, in short, is that the members of the Union that is being represented by the petitioners, were engaged as workers in different capacities by the respondent company and they continued to work with the said company for a number of years and, therefore, they are entitled to permanent absorption in the respondent company. It is also the case of the petitioners that these workers have not been paid their provident fund dues as the respondent company being their employer has not deposited the employer's provident fund contribution with the Provident Fund Commissioner. It is also the grievance of the petitioners that the workers engaged by the respondent company have been disengaged without following due process of law.

10) The respondent company, on the other hand, disputes the status of the workers who happen to be the members of the Union, whom the petitioners represent. According to the respondent company, the workers were never engaged by the said company and their services were utilized after their engagement by the sub-contractors. The respondent company has also named two sub-contractors through whom the workers were being engaged. It is case of the respondent company that the project has been operationalized, therefore, services SWP No.1696/2012 Page 6 of 13 of most of the workers are not being utilized by the respondent company and there is no question of their absorption because the workers were engaged through sub-contractors.

11) The first question that falls for determination in this case is as to what is the status of workers who were working on the project executed by the respondent company. The petitioners claim that these workers were employed/engaged by the respondent company which fact is being denied by the respondent company, according to whom the workers were engaged through sub-contractors.

12) In order to substantiate their contention, the petitioners have submitted that the fact the respondent company has deposited the employer's contribution towards provident fund with the Additional Provident Fund Commissioner shows that the respondent company is the employer of the workers. On the other hand, the respondent company has submitted that this was done pursuant to a warrant of recovery issued by the Additional Provident Fund Commissioner, Kashmir, and as a principal employer, the respondent company has discharged its obligation under Section 21 of the Contract Labour (Regulation and Abolition) Act, 1970 (hereinafter referred to as "the CLRA Act").

13) If we have a look at the record of the case, the petitioners have not placed on record any document or engagement letters that would go on to show that they were directly employed by the respondent SWP No.1696/2012 Page 7 of 13 company. Merely because the respondent company has deposited the employer's contribution fund pursuant to a warrant of recovery issued by the Provident Fund Commissioner may not be a determinative factor for holding that the workers were directly engaged by the respondent company. The issue whether a worker has been directly engaged by the principal employer and whether the contract between the principal employer and the sub-contractor for supplying of workers is a sham document, is a question of fact. It is only in cases where a notification under Section 10 of the CLRA Act has been issued whereby employment of contract labour in any process or establishment has been prohibited that a direction can be issued for absorption of the contract labour but in a case where no such notification has ben issued, it has to be determined as to what is the actual nature of engagement of a worker.

14) In the instant case, admittedly no notification under Section 10 of the CLRA has been issued abolishing the contract labour in respect of the operation of the work that was being undertaken by the respondent company. Therefore, for determination of the question whether the workers whom the petitioners represent were actually engaged by the respondent company, it has to be seen whether they were employees of the respondent company or they were employees of the sub-contractor. In this regard it has to be determined as to under whose directions, supervision and control the workers were performing their duties and it has also to be seen as to who was paying the salary to the workers. The SWP No.1696/2012 Page 8 of 13 nature of employment of the workers has also to be determined in the light of the fact as to who was regulating their employment and if it is found that it was the principal employer who was actually running the show by supervising and regulating the employment of the workers and it was the principal employer who was paying the salary to the workers, then an inference can be drawn that the workers, whom the petitioners represent, were the employees of the respondent company and that the contract between the respondent company and the sub-contractors was a sham transaction. For undertaking such an exercise, evidence has to be led by the parties and intricate questions of fact have to be determined on the basis of such evidence which cannot be done in the writ proceedings.

15) In the above context I am supported by the judgment of the Supreme Court in the case of International Airport Authority of India vs. International Air Cargo Workers' Union and another, (2009) 13 SCC 374. Paras 36 and 37 the said judgment are relevant to the context and the same are reproduced as under:

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 : 1995 SCC (L&S) 1166] 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 Section 10(1) of the CLRA Act.
SWP No.1696/2012 Page 9 of 13
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.
16) From the afore-quoted observations of the Supreme Court, it is clear that 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 between the principal employer and the sub-contractor is merely sham or a camouflage. Thus, so far as the claim regarding absorption in the respondent company is concerned, the workers, whom the petitioners represent, will have to approach the Industrial Adjudicating Forum for determination of the question whether or not they are the employees of the respondent company and if they succeed in showing that they are actually the employees of the respondent company, they can claim regularization of their services. All these matters cannot be the subject matter of determination in writ proceedings.
17) That takes us to the contention of the petitioners as regards their entitlement to provident fund dues. According to the petitioners, the workers engaged in the project have not been paid their provident fund SWP No.1696/2012 Page 10 of 13 dues and the employer did not make his contribution towards the said fund. The respondent company has submitted that the sub-contractors failed to deposit the employer's contribution towards the provident fund and in order to discharge its obligation under Section 21 of the CLRA Act, it has deposited an amount of Rs.90,97,061/ as employer's contribution in respect of the workers engaged by the sub-contractors on the project executed by the respondent company and this contribution takes care of employer's contribution for period June, 2003 to April, 2008, whereafter the employer has regularly deposited its contribution towards the provident fund.
18) In connected writ petition bearing SWP No.1358/2011, which has been dismissed for non-prosecution on 06.05.2017, the Additional Commissioner, Provident Fund, Kasmir, has filed his reply in which the said Authority has admitted the deposition of Rs.90,97,061/ by respondent IRCON. However, it has been submitted that the amount deposited by the respondent company does not tally with the statements furnished by M/S Green Channel Construction, Asian Construction and Star Construction, sub-contractors through whom the workers were engaged, and when the facts were ascertained from the respondent IRCON, they did not authenticate these statements, as a result of which the provident fund dues in favour of the workers could not be released.
19) In the above context, it has to be noted that the reason given by the Provident Fund Commission in not releasing the provident fund SWP No.1696/2012 Page 11 of 13 dues of the workers is not tenable for the reason that Section 7A of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, vests powers on Provident Fund Commissioner for determination of moneys due from the employers. It provides that a Provident Fund Commissioner has to conduct an enquiry for the purposes of determination of any amount due from the employer and in this regard, the Authority is vested with the powers of a Civil Court in respect of enforcing the attendance of any person or examining him on oath, requiring the discovery and production of documents, receiving evidence on affidavits and issuing commissions for the examination of witnesses. It has been further provided in the said provision that such enquiry is deemed to be a judicial proceeding within the meaning of Sections 193 and 228 as also for the purpose of Section 196, of the Indian Penal Code. Sub-section (3A) of the same provision provides that if an employer etc. does not attend or fails to produce any document etc., the Authority can determine the amount due from the employer on the basis of the evidence adduced during enquiry and other available documents.
20) From the above, it is clear that a Provident Fund Commissioner is not powerless to take action for determination of the amount due from the employer and to make an enquiry so that the provident fund dues are released in favour of the beneficiary workers. The stand of the Provident Fund Commissioner that because the sub-contractors and the respondent company did not furnish the requisite information, SWP No.1696/2012 Page 12 of 13 therefore, he has been unable to release the provident fund dues in favour of the workers is a clear case of abdication of duties which cannot be countenanced in law.
21) For the foregoing reasons, the writ petition is disposed of with the following directions:
(I) To the extent of relief relating to absorption of the workers in the respondent company, the writ petition is dismissed leaving it open to the petitioners /workers to approach the Industrial Adjudicating Authority/Forum for the appropriate relief.
(II) Regarding the relief relating to release of provident fund dues of the workers, the Provident Fund Commissioner is directed to hold an enquiry in terms of Section 7A of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, and disburse the provident fund dues of the workers expeditiously, preferably within a period of three months from the date a copy of this judgment is served upon him.

CPSW No.346/2015:

In view of the decision in the main writ petition, the order out of which instant contempt petition has arisen, has merged in the final judgment. Therefore, nothing further survives for consideration in this contempt petition. The same is, accordingly, disposed of.
(Sanjay Dhar) Judge SRINAGAR 08.12.2023 "Bhat Altaf, PS" 
                   Whether the order is speaking:       Yes/No
                   Whether the order is reportable:     Yes/No

SWP No.1696/2012                                                   Page 13 of 13