Delhi District Court
Sh. Shiv Kumar Gautam & 88 Others vs Cmc Limited on 14 October, 2009
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IN THE COURT OF SH BABU LAL: POIT-II,
KARKARDOOMA COURTS, DELHI
I.D. 45/02
Sh. Shiv Kumar Gautam & 88 Others Workman
represented by CMC IVth Class
Workers Union ( Registered), 310-B, Tekhand,
Near New Okhla, Phase-I,
New Delhi.
Versus
CMC Limited Management
1,Ring Road, Kilokri,
Opposite Maharani Bagh,
New Delhi 14 through Its Chairman & MD.
Date of institution 24.09.02
Arguments concluded on 03.10.09
Date of award 14.10.09
AWARD
1. Workmen of CMC Limited through their union
CMC IVth Class Workers union have raised present
dispute and on failure of conciliation proceedings,
appropriate Government referred the dispute to this
tribunal in following terms of reference :-
'' Whether the services of the workmen Shiv
Kumar Gautam and 88 others as shown in
Annexure'A' working on the post of class IV
employees are entitled to be regularized w.e.f.
Their initial date of joining in the company M/s
CMC Ltd, Ring Road Kilokari, Opposite
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Maharani Bagh, New Delhi 14 and if so whether
they are entitled for equal wages and all the
consequential benefits at par with regular
employees of M/s CMC Ltd and if so what relief
are they are entitled to and what directions are
necessary in this respect ?''.
2. In the statement of claim, it is alleged that
workmen mentioned in annexure A had been engaged on
different posts by Management through its agents/
contractors. They have allegedly been continuously
working with Management without any break and that job
performed by them is of permanent and perennial nature.
It is alleged that Management with a view to deprive them
security of job and equal wages, employed them
ostensibly through its agents and contractors. It is alleged
that said agents/contractors have always been name
lenders with no control of any kind over them, they have
always been under direct control and supervision of the
Management and that their engagement through agents/
contractors is only a camouflage and if veil is lifted, it
would reveal that there is direct employer and employees
relationship between Management and workers. It is
alleged that contractors are being changed frequently by
the Management, but the services of the workers were
continued without any break by the Management.
Workers were allegedly working for the Management
when contractors were brought in and that at directions
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of Management, workers were continued in service in
spite of repeated change of the contractors. It is alleged
that contractors are not independent establishments and
that they are only name lenders. It is alleged that
Management is neither registered under provisions of
contract Labour ( Regulation and Abolition ) Act (
hereinafter referred to as CLRA Act) nor the contractors,
therefore, employment of the workmen as contract labour
by the Management is illegal being in contravention of
provisions of rules and provisions of CLRA Act. It is
alleged that since workmen have been working with
Management for a long time, it is under an obligation to
regularize their services and that they are also entitled to
receive same wages and benefits apart from other
facilities as are being paid to other regular employees of
the Management. Workmen are alleged to have made
various representations/ demands to the Management to
regularize their services on existing posts and to look into
their grievances but Management, instead of acceding to
their demands, intended to terminate their services.
Workers are alleged to have filed a writ petition before
Hon'ble High Court for regularization of their services on
the ground that their engagement through different
contractors is a camouflage and that contracts are sham
and that they were entitled to same wages as were being
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paid to direct employees of CMC. It is alleged that
Hon'ble High Court in said writ petition directed the
management vide its order dated 27.8.98 not to dispense
with services of the workman. It is alleged that in said
petition, Hon'ble High Court also directed Chief Labour
commissioner ( CLC) to specify wage rates, holidays,
hours of work and conditions of service of the petitioners
and CLC had submitted his report dated 23.8.01 holding
that workers were entitled to basic wage @ Rs 4700 p.m.,
with an annual increment of Rs 110, DA as admissible to
regular employees of CMC and other allowances such as
washing allowance, conveyance allowance and other
allowances being given to workers. Hon'ble High Court
vide its order dated 20.5.02 disposed of the writ petition
holding that disputed questions of fact had to be decided
by Industrial Adjudicators. It is alleged that thereafter on
21.5.2002 union had called its meeting and it was resolved
to raise an industrial dispute for regularization of services
of the workmen. On these facts, it is alleged that workmen
are entitled to be regularized with all consequential
benefits from initial date of joining, to pay equal wages,
allowances and other service benefits to workers as are
being paid to regular staff of the Management performing
identical work.
3. In the WS , it is alleged that there was no espousal
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of present industrial dispute. It is also alleged that
claimants were not employed by the Management and
that they were employed by contractors who are
independent employers, thus, workers involved in the
present case do not fall within definition of '' workman''
and there exists no relationship of employer and
employee between workers and the Management. It has
been denied that workmen were performing job of
permanent and perennial nature or that Management has
introduced various agents/ contractors to deprive the
workers of equal wages and other legitimate demands. It
has also been denied that workers were under direct
control and supervision of the Management or that their
engagement through contractors is only a camouflage. It
is stated that contractors are independent employers of
the workmen and are being paid wages by the contractors
and only contractors are depositing their PF and ESI
contribution with concerned authorities. It has also been
denied that Management is not registered under CLRA Act
. It is alleged that absence of any notification prohibiting
employment of contract labour for house keeping,
electrical workers, courier, security etc under CLRA Act,
employment of the contract labour is neither an unfair
labour practice nor Management was under obligation to
regularize them. It is alleged that present controvery was
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precisely the issue covered by issue No 3 in ID No 178/97
and findings of Hon'ble Tribunal on said issue was
squarely on this point. It is alleged that workmen are not
entitled to any relief.
4. In the rejoinder, workmen have reiterated and
reaffirmed all the facts as alleged in statement of claim
and denied all the facts as set up in the WS.
5. On the basis of pleadings of the parties, following
issues were framed :-
(1) Whether the cause of the workmen has been duly
espoused ?
(2) Whether the relationship of employer and employee
subsists between the parties ?
(3) Whether the workmen are entitled to the wages
equivalent to the regular employees ?
(4) Whether the workmen are entitled for regularization
?
(5) Whether the reference is bad as per preliminary
objections B to D.
(6) Whether the workmen are employees of contractor
and not of Management of M/s CMC Ltd ?
(7) Terms of reference.
6. In other to prove their case, workmen have filed
affidavit of as many as 5 persons, namely, Ramesh Patwal,
Ramesh Soni, Vinod Kumar Srivastava, Suresh Chand,
and Munna Lal who have been examined and cross
examined as WW--1 to WW--5 respectively. On the other
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hand, Management has examined two witnesses, namely,
MW--1 A.M. Rao and MW--2 A.C. Parmar.
7. I have heard AR for the parties and have carefully
gone through written submissions filed by them and the
record of the case. My issuewise findings are as under :-
Findings on issue No 1
Issue No 1 is whether the cause of the workmen
has been duly espoused. In the WS, case of the
Management is that cause of the workmen has not been
duly espoused. No facts have been alleged as to how
cause of the workmen has not been espoused. No
evidence has been led on this issue on behalf of the
Management. On the other hand, WW--1 has proved
resolution signed by Sh. Ramesh Patwal, Secretary and
Shiv Kumar Gautam President of the Union. This
resolution has been proved as Ex WW1/4.
8. It has been argued on behalf of the Management
in the written submissions that cause of the workmen has
not been duly espoused inasmuch as resolution dated
21.5.02 filed by the claimants can not be treated to be a
valid espousal as it is signed by only seven office bearers
of the Union.
9. On the other hand, on behalf of workmen it has
been argued in the written submissions that present
dispute has been duly espoused by the claimants union in
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its meeting vide espousal Ex WW1/47. AR for the
workmen has also relied upon an authority reported as
J.H. Jadhav vs M/s Forbes Gokak Ltd JT 2005 (2) SC 378
wherein it has been held that no particular form is
prescribed to effect espousal and that if espousal is
expressed by way of resolution passed, that will be a
sufficient for espousal.
10. I have perused Ex WW1/4 which was passed on
21.5.02 wherein it was resolved to raise industrial dispute
on behalf of workmen. In the absence of any evidence
from the side of Management and and in view of
resolution proved on record Ex WW1/4, I hold that
espousal has been proved on behalf of the workmen. I
accordingly hold that cause of the workmen has been duly
proved. This issue is accordingly decided in favour of the
workmen and against the Management.
11. Findings on issue No 2 & 6
Issue No 2 is whether the relationship of
employer and employee subsists between the parties.
Issue No 6 is whether the workmen are employees of
contractor and not of Management of M/s CMC Ltd. Both
these issues are interconnected, therefore, they shall be
decided together.
12. WW--1 Ramesh Patwal in his affidavit has
deposed that he was appointed as messenger by the
9
Management i.e. CMC in 1986 and that he along with
other claimants had been continuously working with
Management under its direct control and supervision. He
has also deposed that their engagement through different
contractors has only been a camouflage and a ruse and
workers have directly employer-employees relationship
with Management of CMC and that they are not
employees of the contractors. It is deposed that workers
have always been assigned duty by CMC Management
only. Management is deposed to have been transferring
the workman to different offices in Delhi and one of such
workmen, namely, Shri Kishan had been transferred by
Management to its Bhopal Office about 7-8 months back.
It is deposed that contractor has no power to reshuffle
their duties or to depute them at any place outside CMC.
It is deposed that most of the time instructions were given
verbally to the workers by Management and sometime
instructions were given in writing. Instructions given to
workmen Sh. Ramesh Soni by the Management have been
proved as Ex WW1/3 to 1/6. It is deposed that
appointment, removal and deployment of the workers has
always been within discretion of the Management and
contractors had nothing to do with it. It is deposed that
wages and other dues were paid directly by the
Management to the workmen. It is deposed that some of
10
the workers were paid wages through cheque by the CMC.
Copies of such cheques given to the workmen by the
Management have been proved as Ex WW1/8 to WW1/10.
It is deposed that conveyance allowances as reflected in
Ex WW1/11 to WW1/12, Ex WW5/1 and Ex WW5/2 were
paid to the workmen by the Management. Ticket booked
by the Management for Vinod Kumar Srivastava has been
proved as Ex WW1/13. Leave application of workman
addressed to Management has been proved as Ex
WW1/14. It is deposed that contractors had no authority
to sanction our leave. Certificate of good behaviour
issued to workman Suresh Chand have been proved as Ex
WW1/17 and WW1/18. It is deposed that attendance of
the workmen was marked by officers of the Management.
Copy of attendance sheet has been proved as Ex WW1/19.
Attestation of signatures of the workmen was done by
Officers of the Management as is reflected in Ex WW1/20
and Ex WW1/25, WW1/27, WW1/29, WW1/30, Ex WW5/3 .
Copies of authorization letter issued in favour of WW--1
authorizing him to collect items from concerned
departments have been proved as Ex WW1/28 and
WW1/29. Gate passes issued by Management in favour of
workmen have been proved as Ex WW1/31, Ex WW5/5.
Photocopy of affidavit given by DGM-Administration of
Management wherein identification of V.K.Srivastava was
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verified has been proved as Ex WW1/32. It is deposed
that quantum of their wages including DA and VDA is
directly decided by the CMC. It is deposed that many a
time there had not been any contractor, nevertheless
workmen continued to work with Management. Copies of
over time claim raised by workmen and duly sanctioned
by the CMC Officers have been proved as Ex WW5/6 and
Ex WW5/7.
13. MW--1 A.M. Rao in his affidavit has specifically
stated that Management has entered into contracts with
various contractors for services like house keeping,
courier, electrical maintenance, preparation of tea/
coffee. Copies of such contracts have been proved as Ex
MW1/2 (collectively). It is deposed that workmen were
working under direct control and supervision of the
contractors and not of the Management. It is deposed
that Management has nothing to do with employment of
workmen by contractors, payment of wages to them,
deduction of contribution on account of ESI and PF.
Copies of challans filed by various contractors with PF
departments have been proved as Ex MW1/3 to Ex MW1/9
and challan deposited by various contractors with ESI
departments have been proved as Ex MW1/10 to Ex
MW1/16. It is deposed that none of claimants was
employed by CMC at any point of time.
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14. MW--2 Sh. A.C.Parmar in his affidavit has stated
that all the contractors have been allotted separate code
numbers under ESI and PF as detailed in para 2 of his
affidavit. It is deposed that contractors being employers
of the claimants are responsible for payment of wages to
them and for deduction and deposit of ESI and EPF
contributions with competent authorities. Photocopies of
challans of deposited by contractors have been proved as
Ex MW2/1 ( collectively). Copy of bill submitted by
contractor with Management has been proved as Ex
MW2/3 ( collectively). Copies of 6 bills raised by M/s
Srivastava Electronics and copies of cheques for payment
made in favour of Vinod Kumar Srivastava have been
proved as Ex MW2/4( collectively). Bill of Bidhuri
Enterprises who is employer of claimants Basant Verma,
C.L. Yadav and Mr. Sita Ram have been proved as Ex
MW2/5. It is deposed that these claimants are direct
employees of M/s Bidhuri Enterprises as is clear from
copies of wage registered proved as Ex MW2/13. It is
deposed that claimant Paramjit Singh is partner of M/s
P.J. Refrigeration Engineers, one of the contractor and
photocopy of letter of Paramjit Singh in this regard has
been proved as Ex MW2/6. Copies of bills submitted by
Paramjit Singh as partner of M/s P.J. Refrigeration
Engineers have been collectively proved as Ex MW2/7.
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Copies of bills of M/s Unique Co-operative Labour
construction Society Ltd have been proved as Ex MW2/8.
Copies of bills of Professional group for rendering house
keeping services have been proved as Ex MW2/9. Copies
of bills of M/s CD Security services Network Ltd has been
proved as Ex MW2/10. Copies of bill of M/s SS Placement
services for providing security services has been proved as
Ex MW2/11 and Ex MW2/12. Copies of latest wage
register maintained by contractors as employer of the
claimants have been proved as Ex MW2/13. Copies of
letter of management written to various contractors for
renewing contracts has been proved as Ex MW2/14.
15. It has been argued on behalf of the workmen that
they had been employed by the management directly, but
subsequently agency of contractorship was introduced to
create a camouflage to conceal actual relationship
between the parties. It is argued that workmen had been
working with the Management irrespective of repeated
changes of contractors from the date as shown in Ex
WW1/1. It is also argued that Management started
providing free food, tea and coffee to the claimants since
1980. It is argued that workmen were already working in
CMC when contracts were allegedly given to various
contractors which clearly establishes that workmen had
been engaged by the CMC through said agency. It is
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further argued that workmen had been working during
the period when there were no contractors and contracts
were made effective retrospectively after termination of
earlier contracts and till the time new contractors were
appointed. It is argued that even on papers, there has
been no contractors as is clear from Ex MW1/2
collectively. Claimants, it is argued, continued to work in
absence of contractors, for CMC and new contractors
were appointed much after the earlier contractors and
since there is no cross examination or suggestion to the
contrary, arrangement of contractor-ship is patently
sham. It is further argued that Ex MW1/19 establishes
that CMC was not registered during most of the period the
claimants were working for it and similarly Ex MW1/20
would establish that contractors were not having licenses
to engage contract workers till before the reference of the
dispute on 22.9.2002. It is argued that since engagement
of contract labour in absence of registration/ license is
punishable with imprisonment, the strong presumption
arises that Management had never intended to engage the
claimants as contract labour.
16. On the other hand, AR for the management in
written submissions has argued that as per admission of
the claimants themselves, they were not engaged by the
contractors as stated in statement of claim, therefore, now
15
they can not be allowed to change the stand that they had
been employed by the management. It is also argued that
in his testimony WW--3 has stated that PF was being
deducted by the Management but he did not know its
number. He had also stated that he was having facility of
ESI and that he had ESI Card. It is also argued that
WW--5 in his cross examination has stated that his PF
was being deducted only in the year 1993. He has stated
that he had been given statement of accounts by the P.F.
Commissioner. He has also argued that MW--2 has given
details of sub-codes allotted to various contractors under
ESI Act and EPF Act, therefore, argument on behalf of the
workmen that they had been employed by the
Management does not hold ground. It is argued that no
relationship of employer and employee ever existed
between the parties.
17. At the outset, I may mention that as per
document Ex WW1/1 filed on behalf of the workmen, it is
mentioned that (1) workmen from Sl No 1 to 29 were
working as Security Guards in various offices of the
Management under contractor S.S. Placement. (2)
Workmen from Sl No 30 to 42 were working as sweepers
under contractor Trio Security P. Ltd. (3) Workmen from
Sl No 43 to 51 were working as messengers under
contractor Unique Co-Operative Labour & Construction
16
Society Ltd. (4) Workmen from sl No 52 to 56 were
working in canteen under contractor Trio Security. (5)
Workmen from Sl no 57 to 66A were working in office of
CMC under contractor Professional Group. (6) Workmen
at Sl No 67 was allegedly working as electrician under
contractor Trio Security Pvt. Ltd. (7) Workmen from Sl No
68 to 69 in various offices of CMC under contractor M/s
P.J. Refrigeration. (8) Workmen from Sl No 70 to 77 were
allegedly working as electricians in various offices of CMC
under contractor Bidhuri Enterprises. (9) Workmen from
Sl No 78 to 80 were allegedly working as gardeners under
contractor Trio Security Pvt Ltd. (10) Workman at Sl No
81 was also working as gardener under contractor
Professional group. (11) Workmen at Sl No 82 & 83 were
allegedly working as plumbers under contractors
Professional Group and Trio Security Pvt Ltd respectively.
(12) Workmen at Sl No 84 to 86 were allegedly working as
Telecommunication Operators, carpenter and driver
under contractor Trio Security Pvt Ltd. (13) Workman at
Sl No 87 was working as packer under contractor
Professional Group.
18. To prove that workmen were employed directly
by the Management, workmen have relied upon
documents Ex WW1/3 to WW1/6. These are photocopies
of of instructions given to workmen on behalf of the
17
Management. However, none of these documents show
that any of these instructions was addressed to any of the
workmen or any duty was assigned to them through these
communications. If any instructions are recorded in Ex
WW1/1 to WW1/6, it is only in respect of handing over of
articles to bearer of these letters by the addressee of the
request. However, on the basis of these documents, it can
not be said that any of the workmen was employed by the
Management or that it referred to any of the claims as
employees of the Management. Therefore, on the basis of
these documents, it can not be said that workmen were
ever employed with management directly or Management
had treated them as its employees.
19. Workmen have further relied upon cheques Ex
WW1/7 to WW1/10. These cheques are in the name of
several persons. However, amount of these cheques
range from Rs 961 to Rs 4185. No evidence has been led
on behalf of the workmen that these cheques represented
the salary of various persons. Moreover, the cheque
amounts do not match with amount of wages being paid
to the workmen as mentioned in Ex WW1/1.
20. Workmen have further relied upon conveyance
allowances vouchers Ex WW1/11 to WW-/12, Ex WW5/1
and 5/2. According to the workmen these are the receipts
regarding payment of conveyance allowance to them by
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the Management. However, no evidence has been led
that these documents pertain to Management. They do
not bear stamp or seal of the Management. There is no
mention on these documents, if the conveyance
allowance was paid by the contractor or by the
Management. In the absence of such evidence, it can not
be said that conveyance allowance as reflected in
documents referred to above was paid by the
Management.
21. Ex WW1/13 is ticket in the name of V.K.Srivastava.
It is issued by Travel Planner Provided Ltd. It is not a
railway ticket or air ticket on the basis of which, it could
be said that any ticket was booked in the name of
V.K.Srivastava by CMC Ltd.
22. Ex WW1/14 is leave application. First of all, it is
only a photostat copy. Workman did not summon the
original of it from the Management. Secondly, if it was
addressed to Administrative Manager, it is only an
intimation that he would not be joining his duties on a
particular date. It does not make the workmen employee
of the Management.
23. Ex WW1/17 to 18 are certificates of good
behaviour in favour of the workmen. These are only
photostat copies, original of these have not been
produced in the court. Management has challenged that
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these documents were not issued by it. When workmen
have not produced original of these certificates and when
Management has not accepted that these were issued by
it, these documents do not stand proved on record in
accordance with law, therefore, they can not be read in
evidence.
24. Ex WW1/19 is attendance sheet which only shows
the timings of arrival and departure. In any manner, it
does not go to prove that workmen had been employed by
the Management directly. When an employee is
employed even through contractor, management will
record timing of his/ her arrival and departure. Therefore,
this document is also of no help to the workmen.
25. Ex WW1/20 to 32 and Ex WW5/3 are
authorization letters or documents in which signatures of
the workmen have been verified by officers of the
Management. These documents were meant to facilitate
to collect material. In no manner, they establish
relationship of employer and employee between
workmen and the Management.
26. Ex WW1/31 and Ex WW3/4 to 10, Ex WW5/5 are
gate passes issued to various workmen. Perusal of these
documents show that they were only to facilitate the
person to take in or out goods/ articles from the premises
of the Management. But in no manner, they go to prove
20
that persons so authorized were employed by the
Management directly. It shows only permission/
authorization to take goods from inside the office to
outside.
27. Ex WW5/6 and 5/7 are receipt of over time.
However, these are only photostat copies. Original of
these documents have not been produced. Even the
workmen have not proved by whom these documents
have been signed. These documents do not bear
signatures of any of the workmen in token of receipt of
overtime. Ex WW3/1 is also authorization letter in favour
of Vinod Srivastava wherein he was authorized to collect
cheque. However, this letter again does not mention that
he was employee of the Management.
28. Ex WW3/2,3/12, 4/3 are requests for
Administration Services. These only show that some jobs
were entrusted and performed by the workmen. They do
not in any manner go to prove that workmen were
employed by the Management directly. Ex WW5/4 are
extracts of the log books which show details of car users.
But they do not show that car was used by any of the
employees or other than employees also. In what
situation it was used. Therefore, these documents also do
not go to prove that workmen were employees of the
Management.
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29. On the other hand, Management has proved
agreements entered into between Management and
various contractors for providing miscellaneous services
of house keeping, gardening, electrical, canteen personnel
etc. Ex MW1/3 shows that PF contribution was deposited
with concerned department by various contractors.
Management has also relied upon copies of challans of PF
deposited by various contractors with concerned
departments on behalf of the workmen which have been
proved as Ex MW1/3 to 9 and copies of ESI challans have
been proved as Ex MW1/10 to Ex MW1/10. Management
has also relied upon various bills raised on Management
by various contractors which have been proved as Ex
MW2/3 to Ex MW2/14.
30. From the evidence as summarized above, it is
clear that workmen were working with various
contractors. It has been admitted by the workmen in their
statement of claim that they had been employed by
contractors. If they had been working with the
Management prior to introduction of contractor-ship
system, certainly they would not have agreed to that
arrangement and would have raised industrial dispute at
that very time. Absence to raise industrial dispute at that
time clearly shows that they had been employed by the
contractors. It appears that just to raise this industrial
22
dispute, they have projected themselves to be employees
of the Management. In my opinion none of the
documents produced by the workman shows that at any
point of time relationship of employer and employees
existed between the workman and the Management. On
the other hand, it has been clearly shown on record that
they had been employed by various contractors, their PF
and ESI contributions were being deducted and deposited
by contractors with concerned departments.
31. Workman have not produced any PF receipts
issued to them by PF Commissioner nor have they
produced or filed ESI card, though ESI contribution was
being deducted from their wages. It is well settled law
that parties are under a legal obligation to produce best
evidence in their possession whether they have been
called upon to do so or not and if they do not produce
best evidence in their possess, an adverse inference is
warranted against them. If any authority for this
proposition of law is required, then Gajender Singh vs
State of UP, AIR 1975 SC 1703 can be relied upon.
32. Since PF and ESI contributions were being
deducted from their wages and when they have failed to
produce these documents, I am of the view that adverse
inference is warranted against the workmen. If they had
produced these documents, they would not have
23
supported their case. On the other hand, Management
has produced clinching evidence viz. contracts entered
into between Management and various contractors to
provide misc. services of house keeping, refrigeration,
electrical, plumbering, packing etc, PF and ESI challans,
bills raised on Management by various contractors which
show that workmen were employed by the contractors
and not by the Management.
33. AR for the workmen has relied upon authorities
reported as Steel Authority of India Ltd and others vs
National Union Water Front Workers and others JT
2001(7) SC 268, M/s Indian Farmers Fertilizers Coop. Ltd
vs IT, Allahabad, JT 2002 ( 2) SC 496, Hussainbhai,
Calicut, vs Alath Factory Thezhilali Union Kozhikode
AIR 1978 SC 1410, Shivnandan Sharma vs The Punjab
National Bank Ltd AIR 1955 SC 4040, Bharat Heavy
Electrical Ltd vs State of UP, 2003(6) SCC 582, Ram Singh
and others vs Union Territory, Chandigarh JT 2003 (8) SC
345, Dharangadhara Chemical Works Ltd vs State of
Saurastra, 1957( 001) SCR 152, Indian Petrochemicals
corporation Ltd vs Shramik Sena and others 1999 (5) JT
339, Shri Birdhichand Sharma vs First Civil Judge,
Nagpur, AIR 1961 SC 644, Silver Jubilee Tailoring House
and others vs Chief Inspector of Shops and
24
Establishments and Anr. AIR 1974 SC 37, D.C. Dewan
Mohideen Sahib and Sons vs The Industrial Tribunal,
Madras 1964 92) LLJ 633, GB Pant University of
Agriculture and Technology, Pantnagar, Nainital vs
State of UP and others JT 2000(9) SC 67 and Gujarat
Electricity Board vs Hind Mazdoor Sabha JT 1995 ( 4) SC
264 to press her contentions that terms of the contracts
are dictatorial in nature, leaving no discretion with
contractor to decide anything independently; contractors
were to comply with directions of CMC management;
decision of CMC was final and binding' no employee
could have been employed by the contractor to the
annoyance of CMC; CMC had authority to terminate or
transfer the services of the workman; number of workmen
could not be increased or decreased without written
permission of CMC; to pay increased minimum wages
was liability of the Management; CMC was to reimburse
wages of the workers for three national holidays; workers
were liable to security check by the CMC; colour and
material of uniform was decided by CMC; CMC had right
to deny entry to the workers if they did not come in
prescribed uniform; conveyance was provided by CMC;
all consumable materials was approved; provided or
reimbursed by the CMC; contracts were terminable at the
discretion of CMC; leaves were granted by CMC;
25
attendance were marked by officials of CMC.
34. On the other hand, AR for the management has
heavily relied upon an authority reported as Management
of Power Grid Corporation of India Ltd vs Presiding
Officer and others 137 ( 2007) DLT 419 in which it has
been held that where a contractor is employed to provide
those services which are not part of the main stream
business of the establishments, contract can not be
considered to be sham contract.
35. In the present case also, Management is a
computer maintenance company and present workmen
as shown in Ex WW1/1 are only, plumbers, sweepers,
security guards, electricians, packer and were employed
by the contractors and their jobs do not concern with
main stream business of the Management i.e. Computer
maintenance. Therefore, in view of authority, it can not
be said that where contractor is employed to provide
services which are not part of main stream business of the
establishments, contract can not be said to be sham one.
36. In Haldia Refinery Canteen Employees' Union vs
IOCL IV ( 2005) SLT 228, following observations were
made "-
''No doubt, the respondent management does exercise
effective control over the contractor on certain matters in regard to the running of the canteen but such control is being exercised to ensure that the canteen is run in an efficient manner and to provide wholesome and healthy 26 food to the workmen of the establishment. This however does not mean that the employees working in the canteen have become the employees of the management. (para
14) A free hand has been given to the contractor with regard to the engagement of the employees working in the canteen. There is no clause in the agreement stipulating that the canteen contractor unlike in the case of Indian Petrochemicals Corporation Ltd. and Another (supra) shall retain and engage compulsorily the employees who were already working in the canteen under the previous contractor. There is no stipulation of the contract that the employees working in the canteen at the time of the commencement of the contract must be retained by the contractor. The management unlike in Indian Petrochemicals Corporation Ltd. case (supra) is not reimbursing the wages of the workmen engaged in the canteen. Rather the contractor has been made liable to pay provident fund contribution, leave salary, medical benefits to his employees and to observe statutory working hours. The contractor has also been made responsible for the proper maintenance of register, records and accounts so far as compliance of any statutory provisions/obligations are concerned. A duty has been cast on the contractor to keep proper records pertaining to payment of wages, etc. and also for depositing the provident fund contributions with authorities concerned. Contractor has been made liable to defend, indemnify and hold harmless the employer from any liability or penalty which may be imposed by the Central, State of local authorities by reason of any violation by the contractor of such laws, regulations and also from all claims, suits or proceedings that may be brought against the management arising under or incidental to or by reason of the work provided/assigned under the contract brought by employee of the contractor, third party or by Central or State Government Authorities. (para-15) The management has kept with it the right to test, interview or otherwise assess or determine the quality of the employees/workers with regard to their level of skills, knowledge, proficiency, capability, etc. so as to ensure that the employees/workers are competent and qualified and suitable for efficient performance of the work covered under the contract. This control has been kept by the management to keep a check over the quality of service provided to its employees. It has nothing to do with either the appointment or taking disciplinary action or dismissal or removal from service of the workmen working in the 27 canteen. Only because the management exercises such control does not mean that the employees working in the canteen are the employee of the management. Such supervisory control is being exercise by the management to ensure that the workers employed are well qualified and capable of rendering the proper service to the employees of the management. (para 16) In Indian Petrochemicals Corporation ltd. (supra) this Court after analysing the earlier judgment on the same point has held that the workmen working in the canteen becomes the workers of the establishment for the purposes of Factories Act only and not for any other purpose. They do no become the employees of the management for any other purpose entitling them for absorption into the service of the principal employer. Factories which persuaded this Court in Indian Petrochemicals Corporation ltd. case (supra) to take the view that the workmen in that case were employees of the management are missing in the present case. No power vests in the management either to make the appointment or to take disciplinary action against the erring workmen and their dismissal or removal from service, the management is not reimbursing to the contractor the wages of the workmen. On these facts, it cannot be concluded that the contractor was nothing but an agent or a manager of the respondent working completely under the supervision and control of the management. (para 17)
37. In the present case, it is not case of the workmen that Management had any right to take disciplinary action against the workman or they were competent to dismiss or remove from service any of them. It is not their case that Management had any supervision of control over job of the workmen. In the absence of such evidence, it can not be said that it has been proved on record that engagement of the workmen through contractors was in any manner sham or rues or was designed to deprive the workmen of any benefit accruing to them under the law.
38. In view of above, discussion, I hold that 28 relationship of employer and employees did not exist between Management and the workmen. I also hold that workmen were employed by various contractors and not by the Management. These issues are accordingly decided.
39. Findings on issue No 3 & 4 Issue No 3 is whether the workmen are entitled to the wages equivalent to the regular employees. Issue No 4 is whether the workmen are entitled for regularization. Both these issues are interconnected, therefore, they shall be decided together. WW--1 in his affidavit has stated that when he had come to know about vacancy existing in CMC through some of his close friends, he went to CMC Office at Hansalya Building, Barakhamba Road, New Delhi, he was interviewed for selection by Sh. J.K. Arora, Senior Administrative Officer. He is deposed to have been found suitable by him and was directed to join his duties as messenger. It is deposed that he was not informed by the Management that he was engaged through contractor and that he came to know about contractor only after he started working with CMC and when he was given his first wages by CMC on slip containing name of the contractor. It is deposed that he along with other claimants have been continuously working with management from initial date of their joining irrespective of repeated change of 29 contractors. It is deposed that Management has always treated them as its direct employees and had been giving repeated assurances that their services would be soon regularized, though same has not been so far done. It is deposed that job performed by the workman was of permanent and perennial nature, however, instead of regularizing services of the workmen, Management has been threatening them to terminate their services. It is deposed that there is a huge different in wages given to workmen and wages given to other regular employees performing similar work. It is deposed that workman had made several representations and demands to the Management for regularization and wage parity but nothing was done. Photocopies of letters given by the workers' union to the Management have been proved as Ex WW1/33 to 35. Letters written by Management to workers' union have been proved as Ex WW1/36 to 41. Photocopies of notings whereby some of grievances of the workmen were considered have been proved as Ex WW1/42 to 44. It is deposed that Management wanted to terminate services of the workmen, therefore, they filed writ petition in Hon'ble High Court in which CLC was directed to specify wage rate, holiday, hours of work etc and who gave his report Ex WW1/45. It is deposed that said writ petition was disposed of vide order Ex WW1/46. 30
40. MW--1 Sh. A.M.Rao in his affidavit has deposed that status of CMC since its inception in the year 1975 till 16.10.2001 was that of a public sector company and majority of its shares was owned by Central Government. However, it is deposed that on 16.10.2001 on disinvestment of 51% of equity shares of CMC in favour of Tata Sons Ltd, status of CMC has changed to a public Limited Company instead of Government Company. It is deposed that CMC could only make appointments either through employment exchange or on the basis of advertisement in the newspaper and could not have made any appointment on the basis of recommendations of alleged friends without issuance of proper appointment letters. It is deposed that personnel employed in Management are normally categorized as Executive or Non-Executive and so far as Delhi is concerned, it has strength of 100 persons in non-Executive category. It is deposed that it does not have on its rolls any employees who are called as class IV employees such as peons, messengers, sweepers, guards, helpers etc. It is deposed that CMC had from to time entered into written agreements/ contracts with various contractors in areas of house keeping, courier services, internal vigilence, electrical repairs/ maintenance, preparation of tea etc. It is deposed that even some of the claimants are 58 years of 31 old, namely, Paramjit Singh and Ramjit Lal and do not possess educational qualification necessary for appointment on regular basis. It has been denied that job which the workman were performing was of permanent and perennial nature. Copy of registration obtained by the Management under CLRA Act to employ contract labour or contractors have been proved as Ex MW1/19 and Ex MW1/20.
41. It has been argued on behalf of the workmen that arrangement of contractor-ship between the Management and the contractor is camouflage, therefore, according to decision of Hon'ble Supreme Court in Steel Authority ( supra), they are entitled for regularization and they are entitled for equal wages. On the other hand, AR for the management has argued that since relationship of employer and employee did not exist and since claimants have been employed by the contractor nor the Steel Authority has any application nor the workmen are entitled for regularization.
42. The Contract Labour ( Regulation and Abolition) Act, 1970 ( hereinafter referred to as the CLRA Act ) has been enacted to regulate employment of contract labour and if appropriate Government deem it necessary to do so, by notification prohibit employment of contract labour in any industry. The scheme of the Act is such that 32 sections 6 to 8 deal with mothodology to be adopted by the Government for the purpose of regulation of contract labour. For that purpose the appropriate Government has to notify certain industrial establishments generally or any class of them which would require registration under CLRA Act. If notification under section 7 has been published by the Government specifying establishments generally or any class of establishments which would be required to register themselves for the pupose of said Act, such establishments are required to apply for registration to the Appropriate Government. Government has to grant registration and therefore it is also competent to revoke registration. However, Government has also been empowered under said Act to abolish contract labour system. To achieve this object, Appropriate Government has to issue notification prohibiting employment of contract labour in process or operation in any establishments. After notification has been issued, it will be illegal to employ contract labour. So far as contract labour already employed in an industry, the notification would have certain consequences. However, unless notification U/s 7 or under section 10 has been issued, it will not be per se illegal to employ contract labour.
43. I have specifically asked AR for the workmen as to whether any notification has been issued by the 33 Appropriate Government U/s 7 CLRA Act requiring specified industrial establishments to apply for registration in prescribed form for the purpose of said Act. No such notification has been placed on record. It shows that no notification has been issued U/s 7 CLRA Act. It is clear that Government did not want to regulate employment of contract labour in the Management. In other words, neither employment of contract labour by the Management is illegal nor did it offend the provisions of CLRA Act. It is not case of the workmen that any notification U/s 10 CLRA Act has been issued by the Government prohibiting employment of contract labour with the management. In these circumstances, question arises whether employment of contract labour by the management would have any adverse consequences for it or whether claimants have any right in this regard. While deciding issue No 2 & 6, I have specifically held that relationship of employer and employee did not exist between Management and workmen. Secondly, I have also come to the conclusion that arrangement of contractor-ship to supply work force to the Management was neither sham nor camouflage but was a legal arrangement between the parties. In my opinion when neither the Government had intention to regulate employment of contract labour nor had it issued any 34 notification U/s 7 in this regard nor had it issued any notification U/s 10 prohibiting employment of contract labour, the workmen can not claim either regularization or permanent absorption in the service of the Management.
44. AR for the workmen has relied upon authority reported as Secretary, Haryana State Electricity Board vs Suresh JT 1999 (2) SC 435. However, this authority is not applicable to the facts of the present case inasmuch as arrangement of contract labour was found to be sham in that case. But in the present case, employment of contract labour has been found to be genuine and not sham or a camouflage. Therefore, this authority is of no assistance to the workmen.
45. AR for the workmen has heavily relied upon Steel Authority Ltd and others vs National Union Water Front Workers & others ( supra). However, conclusion reached in this authority have bearing on decision of the present case is as follows:-
(3)'' Neither section 10 of the CLRA Act nor any other provision in the Act, whether expressly or by necessary implication, provides for automatic absorption of contract labourer on issuing a notification by appropriate government under sub-section (1) of section 10, prohibiting employment of contract labourer, in any process, operation or other work in any establishment.
Consequently the principal employer can not be required to order absorption of the contract labourer working in the concerned establishment.
35(4)'' We overrule the judgment of this court in Air India's case ( supra) prospectively and declare that any direction issued by any industrial adjudicator/ any court including High Court, for absorption of contract labourer following the judgment of Air India's case ( supra), shall hold good and that the same shall not be set aside, altered or modified on the basis of this judgment in cases where such a direction has been given effect to and it has become final.
(5) On issuance of prohibition notification under section 10(1) of the CLRA Act prohibiting employment of contract labourer or otherwise, in an industrial dispute brought before it by any contract labourer in regard to conditions of service, the industrial adjudicator will have to consider the question whether the contractor has been interposed either on the ground of having undertaken to produce any given result for the establishment or for supply of contract labourer for work of the establishment under a genuine contract or is a mere ruse/ camouflage to evade compliance of various beneficial legislations so as to deprive the workers of the benefit thereunder. If the contract is found to be not genuine but a mere camouflage, the so-called contract labourer will have to be treated as employees of the principal employer who shall be directed to regularize the services of the contract labourer in the concerned establishment subject to conditions as may be specified by it for that purpose in the light of para 6 hereunder.
(6) If the contract is found to be genuine and prohibition notification under section 10(1) of the CLRA Act in respect of the concerned establishment has been issued by the appropriate government prohibiting employment of contract labourer in any process, operation or other work of any establishment and where in such process, operation or other work of the establishment the principal employer intends to employ regular workmen, he shall give preference to the erstwhile contract labourer, if otherwise found suitable and if necessary by relaxing the conditions as to maximum age appropriately taking into consideration the age of the workers at the time of their initial employment by the contractor and also relaxing the conditions as to academic qualifications other than technical qualifications.
46. In view of observations as reproduced above, I come to the conclusion that contract for supply of 36 claimants by the contractors is not a camouflage, therefore, management can not be directed to regularize services of the workman. Admittedly no notification U/s 10 CLRA Act has been issued so that it could be held that workmen are entitled for regularization after prohibition of employment of contract labour under notification issued by the appropriate government in this regard. Even in that situation employer is not bound to absorb the claimants as a matter of right. In that eventuality employer can only give preference to erstwhile contract labour if it intends to employ regular workmen, and they are found suitable and if necessary by relaxing conditions as to maximum age of the workmen at the time of their initial appointment and also by relaxing conditions as to academic qualifications. Therefore, I come to the conclusion that under present circumstances and in view of reasons given above, workmen are not entitled for regularization.
47. So far as claim of the workmen to equal wages as paid to regular employees is concerned, in statement of claim, workmen have not alleged that management has employed regular employees on various posts on which claimants had been working with it and as to what salary/ wages they have been drawing and as to how the pay being paid to the workmen is different. In the absence of 37 such evidence, it can not be said that workmen are entitled to any relief in this regard.
48. In view of reasons given above, I come to the conclusion that workmen are not entitled to regularization. I also come to the conclusion that they are also not entitled to equal wages as being paid to regular employees of the Management. These issues are accordingly decided.
49. Findings on issue No 5 Issue No 5 is whether the reference is bad as per preliminary objections B to D. and issue No 7 is terms of reference. Preliminary objections No (b to d) is that an identical claim had earlier been submitted by claimants at Sl No 2, 5 to 8, 10 to 13, 17 to 20 along with 21 other persons ( all of whom were employees of the contractors) with same averments, reference was made and same was registered vide I.D. No 178/87, issues were framed, evidence was led by the parties and an award dated 15.5.1995 was passed holding the claimants to be workers of the contractors, therefore, same is binding in this case, therefore, workmen involved in the present case are precluded to raising the same dispute on the principles of res-judicata and order 2 Rule 2 CPC.
50. MW--1 Sh. A.M.Rao in his affidavit has deposed that claimants whose name appear at Sl No 2,5-8,10- 38 13,17-20, 21 in present case along with 21 other persons had raised an industrial dispute claiming relief of permanent absorption with management as its permanent employees in which award Ex MW1/1 was passed whereby workmen in that case were held to be workers of the contractors and not the Management, therefore, present dispute is barred under rule 2 of Order 2 and section 11 of CPC. No evidence has been led on this issue on behalf of the workmen.
51. It has been argued by AR for the management in the written submissions that earlier an identical ID No 178/87 was raised by 35 contract labourers of the management including claimants No 2,5-8,10-13,17-20 which was decided by IT-III holding that workers were employed by the contractors and not by the Management and that they were not entitled to any relief. It is argued that said award was not challenged and has acquired finality, therefore, present reference is bad in law. AR for the management has relied upon an authority reported as Management of MUDIDIH Colliery vs UOI & Others 2003 (99) FLT-790 and Alfa Engineering Co. vs Ibrahim vora 2006 (108) FLR 1219.
52. On the other hand, AR for the workmen has argued in the written submissions that earlier award was not a decision on merits of the case,therefore, same is not 39 binding in the present case. It is also argued that present dispute has been raised after about 7 years of passing of above award, when new facts have developed which further confirm the direct employer and employee relationship between the claimant workers and the Management of CMC. It is also argued that plea of res- judicata is not available to the management as industrial Courts/ Tribunals are not bound by strict principles of CPC. In this regard, AR for the workmen has relied upon authorities reported as Workmen of M/s Hindustan Lever Ltd and others vs Management of M/s Hindustan Lever Ltd 1984 LAB. I.c. 276( SC), workmen of Balmer Lawrie & Co. Ltd vs Balmer Lawrie & Co. Ltd. and another 1964 I LLJ 380 ( SC) and Shahdara ( Delhi) Saharanpur Light Railway Co. Ltd vs Shahdara-Saharanpur Railway Workers' Union ( 1969) I LLJ 734 ( SC).
53. I have perused award passed in earlier industrial dispute which has been proved as Ex MW1/1. In this award it has been specifically held that Industrial Tribunal did not have jurisdiction to try the issue,therefore, it was incompetent to give any findings on issue either on fact or law. This award has neither been challenged nor has been set aside. To apply the concept of res-judicata, it is necessary for the party invoking such concept to prove 40 that the Court which tried the issues of fact and law was competent to try the same. It is well settled law that decision of a Court which is competent to try a particular issue can only operate res-judicata in subsequent proceedings between the same parties. When a Industrial Tribunal came to the conclusion that it was not competent to try issues raised in the reference, findings given by the Tribunal can not operate as res-judicata in the present case. This issue is accordingly decided.
54. Findings on issue No 7 Issue No 7 is as per terms of reference. Terms of reference are whether the services of the workmen Shiv Kumar Gautam and 88 others as shown in Annexure'A' working on the post of class IV employees are entitled to be regularized w.e.f. their initial date of joining in the company M/s CMC Ltd, Ring Road Kilokari, Opposite Maharani Bagh, New Delhi 14 and if so whether they are entitled for equal wages and all the consequential benefits at par with regular employees of M/s CMC Ltd and if so what relief are they are entitled to and what directions are necessary in this respect.
55. In view of my findings on various issues referred to above, I hold that workmen Shiv Kumar Gautam and 88 others as shown in Annexure'A' working on the post of class IV employees are not entitled to be regularized w.e.f. 41 their initial date of joining in the company M/s CMC Ltd, Ring Road Kilokari, Opposite Maharani Bagh, New Delhi
14. I also hold that workmen are not entitled for equal wages and other consequential benefits at par with regular employees of M/s CMC Ltd. I also hold that workmen are not entitled to any relief. Reference is answered in these terms. Award is accordingly passed. Same be sent to appropriate Government for publication. File be consigned to record room.
Announced in open court on 14.10.09 (BABU LAL)
Presiding Officer, Industrial Tribunal-II Karkardooma Courts, Delhi.
42 I.D. No 45/02 14.10.09 Present Some of workmen in person
Sh. Inderjeet Singh AR for the management Vide separate award, I hold that workmen Shiv Kumar Gautam and 88 others as shown in Annexure'A' working on the post of class IV employees are not entitled to be regularized w.e.f. their initial date of joining in the company M/s CMC Ltd, Ring Road Kilokari, Opposite Maharani Bagh, New Delhi 14. I have also held that workmen are not entitled for equal wages and other consequential benefits at par with regular employees of M/s CMC Ltd. I also held that workmen are not entitled to any relief. Reference is answered in these terms. Award is accordingly passed. Same be sent to appropriate Government for publication. File be consigned to record room.
( BABU LAL) POIT-II, KKD COURTS DELHI/14.10.09