Madhya Pradesh High Court
Steel Authority Of India Ltd. And Ors. vs Authority Under The Minimum Wages Act, ... on 11 December, 2006
Equivalent citations: (2007)IILLJ750MP
Author: Dipak Misra
Bench: Chief Justice, Dipak Misra
JUDGMENT Dipak Misra, J.
1. In Writ Appeal No. 83/2006, the appellants, Steel Authority of India and its functionary, have called in question the defensibility of the order dated January 24, 2006 passed by the learned single Judge in W.P. No. 3134/2003(S) whereby the learned single Judge has not accepted the stance put forth by the Management in its assail to the order passed in Claim Case No. MWA-169/98 by the authority under the Minimum Wages Act, 1948 (for brevity 'the Act') inasmuch as he has only reduced the amount granted by the Authority pertaining to minimum Wages qua period and further while lanceting the direction pertaining to payment of five times compensation has awarded 6% interest on the determined quantum.
2. Being dissatisfied with and aggrieved by the order passed by the learned single Judge pertaining to reduction of the quantum in respect of the years 1996 to 1998 and annihilation of the direction for payment of five times compensation and restricting it to grant of interest, the Union and the workmen in the aforesaid writ petition have invoked the jurisdiction of this Court in the intra-Court appeal in W. A. No. 34/2006.
3. Before we advert to the respective challenges and attacks made by the parties, it is thought condign to set out the background facts, for it is not only necessitous but imperative to have a panoramic exposition of the events in a chronological manner as litigation at hand has had a chequered history.
The Protasis:
4. The controversy that has emerged for consideration is between the Management and the persons who have rendered work to the management and there can be no scintilla of doubt that protagonists before us are not equipoised and it is not a battle royal where parties are engaged, obsessed and engrossed in a litigation of luxury but, as Mr. P. Sadashivan Nair, learned senior counsel would submit, a fight for survival inasmuch as in last 13 years 300 workers have lost their life-spark, 3000 members have been compelled to pave the path of starvation being unable to meet the keen demands of appetite and 7000 children, the future of this nation, have left the educational institutions and abandoned their studies and further the lady members of the family are being treated as ex-communicado. The learned senior counsel would submit that prima facie, it may look as 'argumentatumm at Hominum' but on the factual canvass a legal right founded in law is sought to be pyramided with scientific temper taking aid of science of interpretation and incremented by the fulcrum of niceties and nuisances of placing the parties at their own relevant and requisite position.
The First Phase
5. The Contract Labour (Regulation and Abolition) Act, 1970 (hereinafter referred to as 'CLRA') was brought into existence to stop exploitation, regulating contract labour and to curb and curtail the atrocities of intermediaries and to assign a positive role to the principal employer. The Act authorises the appropriate Government to abolish the contract labour. In the instant case, the Central Government issued a notification on March 17, 1993 published in the Official Gazette of India on April 13, 1993 abolishing, with effect from the date of publication of the notification, the employment of contract labour in limestone and dolomite mines in the country. Certain works were mentioned in the schedule raising of mineral including breaking, sizing, sorting of limestone, dolomite etc. and transportation of limestone and dolomite from mine site to factory. After the notification came into existence the writ petitions under Article 226 of the Constitution of India were filed claiming relief that the employees who are members of the Union called Ispat Khadan Labour Mazdoor Union be declared as the employees of the Steel Authority of India (for short 'the SAIL') and the principal employer to pay wages at par with the regular employees. The SAIL raised many a technical objection before the learned single Judge including the instance of this Court not to adjudicate on the bedrock of notification; that a reference has already been made under Section 10 of the Industrial Disputes Act, 1947 for brevity 'the ID Act'); and that the factual disputes were involved. The learned single Judge placing reliance on the decision rendered in the case of Air-India Statutory Corporation v. Union, Labour Union directed that when a notification under Section 10 of the CLRA is issued, a direct relationship between the contract labourers and principal employer is created and contract labourers are required to be treated as regular employees and the only exercise that will be taken by the statutory authority is to see whether they are statutorily registered under the Mines Act and the provisions of other statutes have been duly followed. The learned single Judge further observed that departmentalisation or absorption of contract labour on the teeth of a notification of prohibition or abolition under Section 10 of CLRA is different. It was further made clear that in the reference the CGIT shall only enforce the legal position as laid down by the Apex Court in the case of Air India Statutory Corporation (supra). Be it placed, the learned single Judge did not direct for absorption. Against the said order two LPAs Nos. 326/97 and LPA No. 18/98 were preferred. The said LPAs were transferred to the Apex Court and the same were referred to in the case of Steel Authority of India and Ors. v. National Union Waterfront Workers and Ors. .
6. In the aforesaid case their Lordships in paragraph 63 have expressed the view as under 2001-II-LLJ-1087 at p. 1117:
63. We have extracted above Section 10 of the CLRA Act which empowers the appropriate Government to prohibit employment of contract labour in any process, operation or other work in any establishment, lays down the procedure and specifies the relevant factors which shall be taken into consideration for issuing notification under Sub-section (1) of Section 10. It is common ground that the consequence of prohibition notification under Section 10(1) of the CLRA Act, prohibiting employment of contract labour, is neither spelt out in Section 10 nor indicated anywhere in the Act. In our view, the following consequences follows on issuing a notification under Section 10(1) of the CLRA Act:
(1) contract labour working in the establishment concerned at the time of issue of notification will cease to function; (2) the contract of principal employer with the contractor in regard to the contract labour comes to an end; (3) no contract labour can be employed by the principal employer in any process, operation or other work in the establishment to which the notification relates at any time thereafter; (4) the contract labour is not rendered unemployed as is generally assumed but continues in the employment of the contractor as the notification does not serve the relationship of master and servant between the contractor and the contract labour; (5) the contractor can utilize the services of the contract labour in any other establishment in respect of which no notification under Section 10(1) has been issued where all the benefits under the CLRA Act which were being enjoyed by it, will be available; (6) if a contractor intends to retrench his contract labour, he can do so only in conformity with the provisions of ID Act...
(Emphasis supplied)
7. The Apex Court in sub-paragraphs 3, 4, 5 and 6 of paragraph 119 has ruled thus at pp. 1131 & 1132:
779.... (3) Neither Section 10 of the CLRA Act nor any other provision in the Act, whether expressly or by necessary implication, provides for appropriate Government under Sub-section (1) of Section 10, prohibiting employment of contract labour, in any process, operation or other work in any establishment. Consequently the principal employer cannot be required to order absorption of the contract labour working in the establishment concerned, (4) We overrule the judgment of this Court in Air India case (supra) prospectively and declare that any direction issued by any industrial adjudicator/any Court including the High Court, for absorption of contract labour following the judgment in Air India case 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 labour or otherwise, in an industrial dispute brought before, it by any contract labour 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 work of the establishment or for supply of contract labour for work of the establishment under a genuine contractor or is a mere ruse/camouflage to evade compliance with 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 labour will have to be treated as employees of the principal employer who shall be directed to regularise the services of the contract labour in the establishment concerned subject to the 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 the prohibition notification under Section 10(1) of the CLRA Act in respect of the establishment concerned has been issued by the appropriate Government, prohibiting employment of contract labour in any process, operation or other work of the establishment the principal employer intends to employ regular workmen, he shall give preference to the erstwhile contract labour, if otherwise found suitable and, if necessary, by relaxing the condition 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 condition as to academic qualification other than technical qualifications.
(Emphasis supplied)
8. Be it noted that the Apex Court did not deal with the controversy in the said LP As and the other two LPAs which were also filed in different context and transferred the said appeals to this Court to be decided in the light of the judgment rendered in the case of National Union Waterfront Workers and Ors. (supra). The Constitution Bench in regard to these LPAs passed the following directions at p. 1133:
125. LPAs Nos. 326 of 1997 and 18 of 1998 on the file of the High Court of Judicature, Madhya Pradesh, Bench at Jabalpur were transferred and numbered as TCS Nos. 17 and 18 of 2000. The letters patent appeals were directed against the order of a learned single Judge allowing the writ petitions and directing absorption of the members of the respondent Union. The claim of the petitioners was based on a notification issued by the Central Government on March 17, 1993 prohibiting with effect from the date of publication of the notification the employment of contract labour in the limestone and dolomite mines in the country, in the works specified in the schedule to the notification. The points that arise in these cases are; (i) the validity of the notification, and (ii) the consequential orders that may be passed on issue of the abolition notification. Having regard to the facts of these cases, we consider it appropriate to direct that the case be transferred back to the High Court to be decided by the High Court in the light of the main judgment. Transferred cases are disposed of accordingly.
The Second Phase
9. After the LPAs were transferred to this Court a Division Bench of this Court adverted to issues proposed by the learned Counsel for the parties, referred to paragraphs 68 and 125 of the National Union Waterfront Workers and others(supra) came to hold as under:
22. If the aforesaid paragraph is understood in the tenor, it is couched, it becomes unequivocally clear that a contract labour working in the establishment concerned at the time of issue of notification will cease to function and the contract between the principal employer and the contractor in regard to the contract labour is snapped. It becomes extinct. As a logical corollary as has been, put forth by their Lordships no contract labour can be employed by the Principal employer in any process or operation or other work in the establishment to which the notification relates. We are not concerned what is relationship between the contractor and the contract labour. That has been dealt with in separate sub-paras, namely, sub-paragraphs 4, 5 and 6. In the present case, the notification was issued on March 17, 1993 and was published in the official gazette on April 3, 1993. This Court gave the stamp of approval to the notification on December 16, 1993. Mr. Shrivastava, learned senior counsel has submitted that the High Court of Calcutta by order dated January 14, 1994 restrained the management to give effect to the notification and then passed an order not to give further effect to the same. Mr. Nair as well as Mr. Jain reiterated the argument which was canvassed before the learned single Judge with regard to the territorial jurisdiction of the Calcutta High Court. We are not inclined to address ourselves in that regard. We are only inclined to state that by the time the Calcutta High Court passed the order on January 16, 1994 the notification had already taken effect. It was not an order of injunction. It was not an order of stay which could be passed as if nothing has worked out. Mr. Shrivastava, pyramided his submission by putting it with vehemence that the Court directed the management not to give further effect and thus the management had no option. In our considered view, the said order of stay does not render much assistance to the management, appellant inasmuch as the notification had come into existence on April 3, 1993 and any interdiction or injunction that flowed from the Court in the mid of January 1994, almost after expiry of 10 months. What remains to be seen if the labours who worked under the contractors by virtue of the contract between the principal employer and the contractor were allowed to work after the notification, and whether they were entitled in law to be allowed to work by the principal employer. We will be failing in our duty if we do not notice a submission of Mr. Shrivastava that Clause (1) of paragraph 68 has been held by the Apex Court deals with abolition of the system. We have read with thoughtful anxiety and consideration the said paragraph to appreciate the submission of learned senior counsel. In our humble view Sub-clause (1) deals with contract labour which is a person as per the definition under 2(1 )(b) of the Act. We say so as we are of the opinion that Clause (1) to (3) are to be read in conjunction and not in isolation or separation. In view of the aforesaid a different scenario emerges in the instant case. We may not be understood to have said that the person who were working as contract labours, worked for the period that they have claimed but there is pleading in that regard in the writ petition and what has been stated in oppugnation does not totally spurn that no one was engaged. What has been stated that the payments have been made upto 1996. On what foundation or on what basis the payments had been made to the persons who worked in the establishment requires to be enquired into. We cannot accede to the ab initio prayer made by Mr. Nair and Mr. Jain that as there has been no denial in the counter affidavit in the proper manner, and therefore, this Court should issue a mandamus. In our considered view this has to be adjudicated by the appropriate forum.
10. After so holding this Court repelled the stance of the SAIL that even if there had been engagement of contract labours the establishment would face penal consequence and nothing else. This Court opined that the facts which have been brought on record required adjudication to adjudge whether a fresh relation did come into existence between the principal employer and the persons who were working under the contractor. Eventually the Division Bench after referring to the case of National Union Waterfront Workers and others (supra) expressed the view as under:
25. We have quoted the aforesaid paragraph only to indicate that if a worker engaged in an establishment has direct relationship with the principal employer he has the relationship of servant and master. A contract labour would be treated as direct workman, if there is no intermediary. In the present case, by legal fiction the contract came to be extinct. The relationship between the contractor and the contract labour ceased, The contract labour, if he is directly engaged in spite of the notification by the principal employer, he would definitely have a different status, We have already stated earlier that a writ of mandamus cannot be issued to regularise the members of the petitioner Union who are the respondents in the two appeals, as automatic absorption is not permissible. They are to be governed by sub-paras (5) and (6) of the Constitution Bench judgment. It is not disputed at the Bar that a industrial dispute has already been raised before the competent authority. The matter is in the stage of conciliation. As the writ petitioners have already taken recourse to the same and we think rightly so, we only direct that the conciliation officer shall proceed in quite promptitude and the management will co-operate with the proceedings. We may not be understood to have said that we have expressed any opinion in this regard.
(Emphasis supplied)
11. As is evincible the Division Bench had observed that relationship of master and servant might not have been established because the persons who were under the contractor were engaged, as alleged, by the principal employer, but simultaneously it held that the status of the contract labour would be different if he is directly engaged by the principal employer. In the case at hand the principal employer had admitted in the counter affidavit that payment to the persons working were made upto March, 1996 through the contractors. The bench taking note of the same held that role of contractor had ceased to be in existence, however, the bench refrained itself to elucidate much in the said spectrum and left it to the parties to raise an industrial dispute in this regard.
12. At this juncture, it is worth noting two other LP As were clubbed with the aforesaid LPA. In LPA No. 418/99 the order passed by the competent authority under the Minimum Wages Act was called in question. The learned single Judge had refused to interfere and held that appropriate objection should be raised by the Management with regard to jurisdiction of the competent authority. The Division Bench expressed the view that no decision had been rendered by the learned single Judge which would affect the management and accordingly granted liberty to the Management to raise all the objections before the competent authority who shall adjudicate upon the same.
13. LPA No. 19/98 pertained to the directions issued in paragraph 25 of the order of the learned single Judge. The grievance put forth was that scope of reference has been restricted by the learned single Judge. The Division Bench observed that as the appellants would have been granted to raise a dispute taking their stand they had worked from 1993 to 1996 under the principal employer, nothing remained to be adjudicated in that LPA. Be it noted, reference to the Industrial Tribunal was made at that juncture when decision rendered in the case of Air-India Statutory Corpn. (supra) was in force. This Court ruled that in view of the Constitution Bench Judgment the reference did not deserve to be dealt with. That apart, an industrial dispute had been instituted by the employees on June 10, 2002. Leave was granted to raise a further dispute taking the stand that the workers had worked from 1993 to 1996 under the principal employer.
The Third Phase
14. The Central Government referred the dispute to the Industrial Tribunal on January 27, 2003 under Section 10 of the Industrial Disputes Act, 1947. The said reference reads as under:
1. Whether the action of the Mines Manager, Koteshwar Lime Stone Mines Authority of India Ltd. in terminating services of 3404 (3580 + 24, as per list attached) mine workers in March 1996 who ceased to be contractor labour after prohibition of employment of contract labour in Lime Stone Mine vide Notification No. S.O. 707 dated March 17, 1993 was legal, fair and justified? If not, what relief the concerned workmen or heirs in case of deceased worker are entitled for ?
2. Whether the action of the Mines Manager Koteshwar Lime Stone Mines of Steel Authority of India Ltd. in denying terminal benefits of gratuity, retrenchment "compensation and ex gratia applicable to VRS seeking employees is fair and justified. If not, to what relief these workers/heirs are entitled to?
3. Whether the action of the management of the Mines Manager, Koteshwar Lime Stone Mines of Steel Authority of India Ltd. in disregarding Clause-8 of Memorandum of Agreement signed between the Steel Authority of India, New Delhi and their Unions including contractors on jobs of permanent and perennial nature in mines between 5-20 years even without ensuring statutory wages and service conditions was legal, fair and justified ? If not, to what relief concerned workmen/heirs are entitled?
15. It is worthwhile to mention that the order passed in the LPA was assailed in SLP No. 23288/02. The Supreme Court while dismissing the SLP filed by the Union had passed the following order:
One of the questions for decision is whether or not the employment through contract labour is sham and bogus. These are questions, which will require adjudication before an appropriate forum. The writ Court may not be the appropriate forum to decide this question. We, therefore, direct the appropriate Government to refer this question to Industrial Tribunal who will whether or not the alleged employment through Contractor is sham and bogus and whether in fact there is direct employment by the Company, We clarify that we have not expressed any opinion on merits either way. Undoubtedly, it will be open to both the parties to raise all contentions available to them before the Industrial Tribunal.
16. After the said order the Central Government vide order dated February 22, 2005 passed the following order of reference:
Whether the employment of the workmen mentioned in this Ministry's order of even number dated January 27, 2003 through contractors is sham and bogus and whether in effect there is direct employment by the company ? If so, to what relief the workman concerned are entitled.
Be it placed on record the said reference is pending adjudication before the Industrial Tribunal.
The Fourth Phase
17. While the matter has been pending for adjudication before the Central Government Industrial Tribunal, the competent authority under the Minimum Wages Act, adjudicated the lis refusing to entertain the objection raised by the Management. The learned single Judge in exercise of writ jurisdiction quashed the order passed by the competent authority. Against the said order the LPA Nos. 380/2003 and 381/2003 were preferred. The Division Bench of this Court after referring to the decision rendered in the case of P. Nalla Thampi v. Union of India and after referring to the decision rendered in the case of Steel Authority of India Ltd. (supra) and the earlier order passed in the LPA and further taking note of the reference made by the Union of India to the CGIT in paragraphs No. 14 and 15 expressed the view as under:
14. We are disposed to state at this juncture, that the present appeals encapsules and engulf the issue of basis of human existence. It relates to the cry of workmen seeking justice. Justice is wedded to mercy. Law can never be divorced from justice. Long back it has been said that all endeavour should be made to do good to the collective. The good of collective has to prevail and the benefit of the lesser must succumb to the larger interest. While exercising an equitable jurisdiction under Article 226 of the Constitution of India justice has to have paramountcy. The concept of live and let live cannot be allowed to be thrown to Pacific Ocean. While being aware that it is a right between the lamb and the lion, the Himalayan suffering and the Olympian power, the role of equity has to be allowed to come to the centre stage. Mr. Shrivastava has submitted that the notification dated July 12, 1994 cannot be extended to the workmen in view of the content of paragraph 5. We think it condign to reproduce the said paragraph:
"5 . Where the existing rates of wages of any employees, based on contract or agreement or otherwise are higher than the rates notified herein, the higher rates shall be protected and treated as the minimum rates of wages applicable for the purpose of this notification to such employees."
15. It is not disputed at the Bar, that the principal employer is bound to pay the wages, to the contract labourers if the contractor does not pay. The bone of contention is whether the contract labourers would be protected to get the minimum wages in the absence of an agreement. The apprehension of Mr. Shrivastava is that if a finding is recorded by the competent authority it would cause prejudice to the reference pending before the Central Government Industrial Tribunal and may create a tremendous remora for the management. In this backdrop he has supported the order of the learned single Judge.
18. Eventually in paragraph 17 this Court expressed the view as under:
77. Before we part with the case, we would like to repeat at the cost of the repetition that it is not in dispute that on March 17, 1993 a notification was issued under the provisions of the Contract Labour (Regulation & Abolition) Act, 1970, abolishing the contract labour with respect to the labourer at Dolomite Limestone, Koteshwar. It is also alleged by the workmen that from March 17, 1993 right up to 1996, the workmen, who are before the Minimum Wages Authority, worked either as contract labourers or as employees of the principal employer till 1996, the difference between the wages actually paid and, regular wage paid to the employees of SAIL, will come to about eight crores. What this Court is doing only to direct payment of Rs. 1 1/2 Crores, which will be nowhere near the living wages that was being paid to the employees of the SAIL. We have also to bear in mind that the employees are not in employment presently after 1996 and are awaiting adjudication before the Tribunal.
19. At this juncture it is seemly to state that an appeal was preferred to the Apex Court and their Lordships dismissed the appeal preferred against the interim order as in the meantime; the final order has been delivered by the Competent Authority under the 1948 Act.
20. This Court on November 21, 2006 had directed disbursement of amount on pro rata basis.
The Adjudication
21. Thereafter the matter was adjudicated by the Competent Authority of Minimum Wages Act whereby the said authority granted number of opportunities to SAIL which were not availed. Eventually, the authority directed payment of Rs. 21,38,42,243.00 p. and fixed five times compensation as damages. The said order as has been indicated above was challenged before the learned single Judge who interpreted Rule 25(iv) and (v) of the Contract Labour (Regulation and Abolition) Central Rules, 1971 (hereinafter referred to as 'the 1971 Rules') and affirmed the order of grant of minimum wages for the period 1993 to 1996 and axed the order relating to the subsequent period. The learned single Judge also unsettled and dislodged the grant of compensation and directed that the interest at the rate of 6% p. a. would be levied on the determined quantum of Rs. 21,38,42,243/.
The Rivalised Submissions
22. Mr. Kishore Shrivastava, learned senior counsel being assisted by Mr. Piyush Dharmadhikari and Mr. R.C. Shrivastava for the respondents has proposed as under:
(A) The Competent Authority has grossly erred by deciding the jurisdiction in favour of the workers though he has no jurisdiction to entertain the lis in question.
(B) The Competent Authority has erroneously placed reliance on the memorandum of agreement dated July 30, 1975 by Joint Negotiation Committee for the Steel Industries since the said agreement only applies to regular employees of the SAIL and by no stretch of imagination can be extended to the workers who are working under the contractors.
(C) The Competent Authority had not granted adequate opportunity to the Management to put forth its case in proper perspective and, therefore, the order has to pave the path of vitiation being violative of the requisite and necessitous principles of natural justice which are in the realm of substantive law in a case of this nature.
(D) Grant of minimum wages has to be as per notification under the 1948 Act subject to certain agreements and settlements and in the case at hand there was an agreement with the contract labourers that Rs. 11.65/- was to be paid in excess than the notified rate and that having been made good the Competent Authority should not have relied on the Joint Negotiation Agreement which has no applicability.
(D-A) The Competent Authority has erroneously relied upon the Rule 25(iv) and (v) of the 1971 Rules inasmuch as that was not the case of the workers before the Competent Authority, for the case was exclusively advanced on the basis of the decision rendered in the case of Airport Authority (supra) has been overruled.
(E) Assuming for the sake of argument, 1971 Rules has application the same has to be adjudicated by the Central Labour Com missioner and not by the competent authority under the 1948 Act and that makes the order invalid in law.
(F) The learned single Judge has erroneously appreciated the aforesaid rule and concurred with the finding of the competent authority and hence, the order passed by him is sensitively susceptible.
(G) It was incumbent on the part of the authority to notice the contractor and that having not been done, the order is indefensible.
(H) Grant of interest by the learned single Judge is totally unwarranted as concept of grant of interest is alien to the 1948 Act.
To bolster his submissions Mr. Shrivastava has commended us to the decisions rendered in the cases of Food Corporation of India v. Provident Fund Commissioner and Ors. , Dena Nath and Ors. v. National Fertilizers Ltd. and Ors. , Municipal Council, Hatta v. Bhagat Singh and Ors. , Steel Authority of India and Ors. v. National Union Waterfront Workers (supra), Range Forest Officer v. S.T. Hadimani , Mishra Dhatu Nigam Ltd. and Ors. v. M. Venkataiah and Ors. , Talwinder Singh v. PO, Labour Court and Anr. , Ram Singh and Ors. v. Union Territory, Chandigarh and Ors. , State of Haryana and Ors. v. Charanjit Singh and Ors. , Steel Authority of India Ltd. v. Union of India and Ors. .
23. Resisting the aforesaid contentions raised by the learned senior counsel for the appellant, Mr. P. Sadashivan Nair, learned senior counsel has putforth following submissions:
(a) The contention that the competent authority did not grant opportunity to the Management is absolutely untenable since the record would reveal that ample opportunity was granted by the said authority and the said facet has been adequately dealt with by the learned single Judge which is totally flawless.
(b) The stand that the controversy has to be adjudicated by the Industrial Tribunal and then only any benefit can accrue in favour of the workers is sans merit inasmuch as reference pertains to different spectrum and has nothing to do with the fixation of minimum wages.
(c) The competent authority has the jurisdiction to adjudicate the lis in question as the Management availed the work from the workers after issue of notification under the CLRA Act and thereby creating a relationship of employer and employee between the parties.
(d) Issue of absorption or conferral of status of an employee on regular basis is quite different than engagement of worker in the employment and hence, the concept of grant of minimum wages has to be understood within the parameter of 1948 Act and 1971 Rules.
(e) Reliance on Rule 25(v), 1971 Rules by the competent authority as well as by the learned single Judge is absolutely correct and sound inasmuch as the Management did not enter contest in that regard and in the absence of any disagreement the finding recorded by the competent authority cannot be recorded as fallible;
(f) If the Rule 25(v) is understood in proper perspective it would convey that when there is no disagreement or contest or resistance the same would tantamount to minimum wages which a contract labour is entitled to get.
(g) The finding of the learned single Judge that though there was no renewal of licence under the provisions of CLRA Act, yet as employment continued, under the contractor, that would be governed by the JCM agreement as the employment continued.
The Delineation
24. To appreciate the rivalized submissions raised at the Bar it is thought seemly to refer to, Section 2(h) and 2(i) of the dictionary clause of the 1948 Act which define "wages" and "employee" respectively. They read as under:
2(h) "wages" means all remuneration, capable of being expressed in terms of money, which would, if the terms of the contract of employment, express or implied, were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment and includes house rent allowance, but does not include...."
"2(i) "employee" means any person who is employed for hire or reward to do any work, skilled or unskilled, manual or clerical, in a scheduled employment in respect of which minimum rates of wages have been fixed; and includes an out-worker to whom any articles or materials are given out by another person to be made up, cleaned, washed, altered, ornamented, finished, repaired, adapted or otherwise processed for sale for the purpose of the trade or business of that other person where the process is to be carried out either in the home of the out-worker or in some other premises not being premises under the control and management of that other person; and also includes an employee declared to be an employee by the appropriate Government; but does not include any member of the Armed Forces of the Union.
25. It is also apposite to refer to Section 12(1) of the 1948 Act. It reads as under:
12. Payment of minimum rates of wages.(1) Where in respect of any scheduled employment a notification under Section 5 is in force, the employer shall pay to every employee engaged in a scheduled employment under him wages at a rate not less than the minimum rate of wages fixed by such notification for that class of employees in that employment without any deductions except as may be authorised within such time and subject to such conditions as may be prescribed.
26. The State of Madhya Pradesh has incorporated an amendment by M.P. Act No. 23 of 1961 incorporating Section 1A to Section 12. The said provision reads as under:
(1-4) Where immediately before the issue of a notification under Section 5 fixing or revising the minimum rates of wages in respect of any scheduled employment, wages at a rate higher than the rate so fixed or revised, were payable under this Act, or under any law or award or agreement or customs or usage for the time being in force, then, notwithstanding anything contained in this Act, wages at such higher rate shall be payable to the employee in such scheduled employment and the wages so payable shall be deemed to be the minimum wages for the purposes of this Act.
27. In this context, it is apposite to refer to Rule 25(iv) and (v) of the 1971 Rules. They read as under:
(iv) the rates of wages payable to the workmen by the contractor shall not be less than the rates prescribed under the Minimum Wages Act, 1948 (II of 1948), for such employment where applicable, and where the rates have been fixed by agreement, settlement or award, not less than the rates so fixed;
(v)(a) in cases where the workmen employed by the contractor perform the same or similar kind of work as the workmen directly employed by the principal employer of the establishment, the wage rates, holidays, hours of work and other conditions of service of the workmen of the contractor shall be the same as applicable to the workmen directly employed by the principal employer of the establishment on the same or similar kind of work:
Provided that in the case of any disagreement with regard to the type of work the same shall be decided by the Chief Labour Commissioner (Central) whose decision shall be final:
(b) in other cases the wage rates, holidays, hours of work and conditions of service of the workmen of the contractor shall be such as may be specified in this behalf by the Chief Labour Commissioner (Central).
28. We have referred to the : aforesaid provisions to appreciate the wide concept of the term employer and the beneficial nature of the provisions. Be it noted, though we have enumerated the submissions, they can fundamentally be compartmentalized with regard to the status of the respondents, their basic entitlement under the provisions of the 1948 Act which would include the concept of jurisdiction by the competent authority under the said statute and affording of opportunity.
29. Prior to adverting to the said submissions it would be condign to deal with the citations placed reliance upon by Mr. Shrivastava. In the case of Food Corporation of India, (supra) the Apex Court was dealing with the dues under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 and in that context it was held that it was incumbent on the part of the Commissioner to notice the contractor and that having not been done he has failed to exercise his jurisdiction. In the case of Dena Nath and others (supra) the Apex Court expressed the view that High Court under Article 226 cannot issue direction for deeming the contract labour as direct employee. In the case of S.T. Hadimani (supra) it was held that filing of an affidavit to prove that the workman has worked or 240 days in the year preceding his termination was not sufficient proof to unsettle the order of retrenchment. In the case of Talwinder Singh (supra) their Lordships opined that there has to be material to show that the workman has worked for 240 days of service. In the case of Mishra Dhatu Nigam Ltd. (supra) a two Judge Bench of the Apex Court referring to the Factories Act, 1948 and Andhra Pradesh Factories Rules, 1950 especially Rules 65 and 71 expressed the opinion that the Management has the statutory duty for providing a canteen for workmen and hence, the inaction of the Management in non absorbing them was illegal. Be it noted their Lordships affirmed the order passed by the Division Bench of the High Court. In the case of Municipal Council, Hatta, (supra) the Apex Court held that an application under Section 22 of the Minimum Wages Act claiming payment of overtime under Section 14 thereof for additional hours of work put in by the municipal employees of Hatta who are getting much more than minimum wages under the M.P. Municipal Services (Scale of Pay and Allowances) Rules, 1967 cannot seek the benefit under Section 14 and such an application under Section 22 was misconceived. Their Lordships further opined that employment under any local authority is listed as Item 6 in the Schedule to the Minimum Wages Act and the same would not make the employees automatically entitled to get the overtime under the said Act. In A.P.S.R.T.C. and Ors. v. G. Srinivas Reddy and Ors. 2006-II-LLJ-425 (SC), it has been held that if the workers want the relief of absorption, they will have to approach the Industrial Tribunal /Court and establish that the contract labour system was only a ruse/camouflage to avoid labour law benefits to them. The High Court could not, in exercise of its jurisdiction under Article 226, direct absorption of respondents, on the ground that work for which respondents were engaged as contract labour was perennial in nature.
30. On a perusal of the ratio of the aforesaid decisions we have not shadow or scintilla of doubt in our mind that the aforesaid citations do not render any assistance to the learned Counsel for the appellants as they have been rendered in different contexts altogether. It is settled law that a decision is a precedent for what has been decided therein and not for what is inferable from it. The said principle has been laid down in the case of Ambalal Manibhai Patel v. State of Gujarat and Ors. which reads as under:
The ratio of any decision must be understood in the background of the facts of that case. It has been said long time ago that a case is only an authority for what it actually decides, and not what logically follows from it.
31. The submission of Mr. Shrivastava is that unless there is adjudication by the CGIT with regard to reference determining the status of the workers no minimum wages can be granted. He has heavily relied on the decision rendered in the case of Steel Authority of India and others (supra) and any adjudication would be without jurisdiction. We have referred to the paragraphs 68 and 125 of the said decision. On a scrutiny of the said decision there can be no shadow of doubt that on issue of notification under Section 10 of the CLRA Act there can not be automatic absorption of contract labour and the principal employer cannot be required to absorb the contract labour working in the establishment concerned. Their Lordships in the aforesaid case have overruled the decision rendered in the Air India (supra) wherein it was directed that there would be absorption of contract labour under the principal labour on issue of notification. In the said case in sub-para 5 of paragraph 125 their Lordships have expressed the view that if the contract is found to be not genuine or is mere camouflage, the so-called contract labour will have to be treated as an employee of the principal employer who shall be directed to regularize the services of the contract labour in the establishment concerned subject to the conditions as may be specified by it for that purpose in the light of paragraph 6 of the paid paragraph. It is contended by Mr. Shrivastava that unless there is declaration of status of the workers the benefit under the Minimum Wages Act cannot be granted. We repeat at the cost of the repetition that the reference is pending before the Industrial Tribunal and this Court on the earlier occasion had not issued direction for absorption. But, a pregnant one, after issue of notification dated March 13, 1993 the contract labourers under the 1970 Act, worked for the relevant period and, therefore, the question of their status of being employee for the purpose of absorption on the regular basis has different contention altogether. The fact remains that they had worked in the company. It would come within the conception of jurisdictional fact as per the law relating to jurisdictional facts exposited in State of M.P. v. Sardar D. K. Jadav AIR 1968 SC 1186 and Raza Textiles Ltd. v. ITO . Once the jurisdictional fact is found in the positive, adjudicatory facts can be addressed. As in the instant case, the workers were engaged in the work of SAIL, the authority had the jurisdiction to deal with the facts in issue.
32. The next submission of Mr. Shrivastava is that there has been non-granting of opportunity and, therefore, the order is vitiated in law being violative of requisite procedure. On a perusal of the record of the competent authority it is clear as noon day that ample opportunity was given to the Management, Steel Authority of India. The learned single Judge has discussed the same in paragraph 16 of his order. On a perusal of the same it is demonstrable that the order sheet dated May 30, 2000 of the proceeding before the competent authority reveals that the company had stated before it that it is not required to give evidence of payment of minimum wages to the alleged workers. On that day, after recording evidence of Jaggu Bhagwat and Ganpat, on behalf of the workers, it was agreed by both the parties that the remaining workers were required to give evidence in the form of affidavits. On March 28, 2003 affidavits and documents on behalf of the workers were filed and evidence of witnesses Pradeep Kumar Gautam and Bacchan Nayak was recorded. Learned Counsel for the Management did not cross-examine the witnesses and prayed for time. The authority adjourned the matter for April 7, 2003 with the direction that the Management shall produce the evidence and witnesses on that date. On the adjourned date the company chose not to produce any evidence. The authority closed the matter for hearing with further opportunity to submit their arguments and statements by April 30, 2003. The Management neither filed any reply on merits nor reply to any allegations and confined in raising preliminary objection,
33. In view of the aforesaid analysis we are of the considered opinion the spacious submission urged by Mr. Shrivastava that no opportunity was granted is bound to collapse and unhesitatingly we repel the same.
34. Presently, to the issue of adjudication, submission of Mr. Nair is that the National Joint Committee who has the authority had signed the memo of agreement related to wage structure under service conditions of the Steel Authority of India employee. As per the agreement "wage" - wage structure of employees was primarily basic wage and dearness allowance. The nature of employment in Lime Stone is covered under schedule of employment in Minimum Wages Act and the Central Government has fixed rate of wages. Clause 5 of the notification reads as under:
where the existing rates of wages of any employee, based on contract or agreement or otherwise are higher than the rates notified herein the higher rates shall be protected and treated as the minimum rates of wages applicable for the purpose of this notification to such employee.
35. It is urged by Mr. Shrivastava that NJCS agreement is meant for regular employees and not for contract employees. We have reproduced Rule 25(iv) and (v) of the 1971 Rules. If the anatomy of such rule is scanned in proper perspective it would be clear as crystal that the workman employed by the contractor shall be paid the same wages as the workman directly employed by the principal employer if the nature of the work is similar. Section 21(4) of the 1970 Act stipulates that if the contractor fails to make payment of wages, within the prescribed period or makes short payment, then the principal employer would be liable to make payment of wages in full or the unpaid balance due to the contract labour employed by the contractor and recover the amount so paid from the contractor either by deduction from any amount payable to the contractor under any contract or as debt payable by the contractor.
36. Submission of Mr. Kishore Shrivastava is that due to peculiar circumstances the workers were employed through the contract labour. We may hasten to add that whether they worked under contractor or the principal employer, Rule 25(v) would come into operation. There had been no 'disagreement' because the Steel Authority of India did not contest the matter, The Minimum Wages have been notified in the notification. The persons who were working, there is no denial or any statement in oppugnation that the workers did not do similar work. In fact, the evidence is contrary. In the absence of any negation it would become wages and if we allow ourselves to say so, would tantamount to minimum wages as envisaged under the NJCS.
37. We may hasten to clarify that the matter would have been totally different had there been extinction of contract labour by the Steel Authority of India on issue of notification. That was not the case. The workers continued to work. What would be the status has to be determined by the Central Government Industrial Tribunal. The term of reference that has been setforth earlier is in different expanse and in a different context. The fact which is unequivocally luminescent is that the workers rendered their services and worked under the Steel Authority of India. They were engaged. Whether they would become employees for the purpose of absorption has nothing to do with the minimum wages. The stand that the company has paid the minimum wages as has been notified under the 1948 Act is sans substratum. The employees under the contract labour and the direct employer would carry the same benefit if they carry out the same work. Despite grant of opportunity the Steel Authority of India chose not to adduce any evidence whatsoever or produce any document. There is no denial that the workmen did not perform similar kind of work. Thus, the irresistible conclusion is that they would be governed by the agreement of NJCS as far as grant of primary basic wages is concerned. The calculation by the competent authority has been done primarily on basic wages and on the basis of the aforesaid agreement. The learned single Judge has also got computed the difference between the minimum wages that has been paid by the respondent No. 2 and the amount payable under the above rules for the period 1993-1996. In view of this, we do not find any merit in the submissions raised by the learned Counsel for the appellant in this regard.
38. The next aspect which has been highlighted by Mr. Kishore Shrivastava is that the competent authority should have issued to the contractor for proper adjudication. We are not impressed by the said contention inasmuch as the Management itself chose not to controvert the facts and, in fact, admit that the workers were engaged through contractor. The onus was on them to disagree or negative any fact. Thus, the said contention raised by Mr. Shrivastava is only noted to be rejected.
39. The next arena we shall advert to relates to the appeal preferred by the workman. The competent authority had granted wages from January 1, 1989 to April 30, 1998. The learned single Judge has dislodged the same on the ground that the workers did not work during that point of time. Submission of Mr. Nair is that they were prevented from work. The learned single Judge felt that whether the management has done away with the services of the workers as per law or not has to be decided by the Industrial Tribunal. We find that the said finding is absolutely presentable and does not warrant any interference.
40. The next spectrum is relatable to grant of five times of compensation by the competent authority. The learned single Judge has allowed 6% interest on the amount of compensation of Rs. 21,38,42,243/. Submission of Mr. Nair is that the respondent Company has made the life of the workers miserable for more than a decade, and if the agony, anguish and trauma is taken into consideration the grant of five times compensation by the competent authority is justified. The learned single Judge to negative the said finding of the competent authority has taken note of the fact that the company had contested the claim for minimum wages on the ground that unless reference of dispute under Section 10 of the Industrial Disputes Act was finally adjudicated the authority had no Jurisdiction to entertain the case. It has fought the litigation upto the Apex Court. The learned single Judge has observed that the objection of the Management cannot be regarded as baseless or mala fide. He has held that the justice can be made if the workers are granted 6% interest on the amount of compensation. Submission of Mr. Shrivastava is that there is no provision for grant of interest. Without entering into the said debate, we would quantify the compensation and according to us, the cause of justice would be best subserved if the compensation of Rs. 5 crores is allowed. The amount already deposited before this Court shall stand excluded from the aforesaid amount. The rest of the amount shall be deposited before the competent authority within a period of two months from today.
41. Ex consequenti both the writ appeals are disposed of with the above modification of the order passed by the learned single Judge. There shall be no order as to costs.