Calcutta High Court
Fci Workers Union And Anr. vs Food Corporation Of India And Ors. on 14 May, 1992
Equivalent citations: 96CWN985, [1992(65)FLR1014], (1993)ILLJ359CAL
JUDGMENT Kalyanmoy Ganguli, J.
1. In the instant application under Article 226 of the Constitution of India, the petitioners, inter-alia, pray for a writ in the nature of mandamus commanding the respondents to rescind, recall, cancel and withdraw the proposed retrenchment notices, a specimen copy of which has been annexed to the petition marked with the letter 'N' and to command the Food Corporation of India not to dehire the Central Warehousing Corporation godowns at Central Warehousing, Calcutta VIII (Presidency Jute Mills) Rishra, Central Warehousing, Calcutta X (Ambica Jute Mills), Central Warehouse, Calcutta II (Hanuman Jute Mills) and Central Warehouse Calcutta I (Shyamnagar South Jute Mills) and restraining the respondents from retrenching the workmen whose names appear in the Annexure marked with letter 'A' and in the alternative commanding the Food Corporation of India to transfer the said workmen to its nearby depots.
2. The petitioner No. 1 is a registered trade union seeking to spouse the cause of all sections of workers of the Food Corporation of India and the petitioner No. 12 is the President of the petitioner No. 1.
3. The case of the petitioners is that persons whose names appear at Annexure 'A' of the petition are in fact all employees of the Food Corporation of India although the Central Warehousing Corporation and sometimes the State Warehousing Corporations are responsible for the immediate payment of their wages.
4. The petitioners state that since the inception of the Food Corporation of India after the enactment of the Food Corporation of India Act, the Food Corporation of India, hereinafter referred to as the FCI, has been employing labour at its various godowns and depots to carry out its functions, the primary and basic function being handling of foodgrains and food stuffs. The petitioners state that such function of handling foodgrains and foodstuffs is perennial in nature. The members of the petitioner no. 1 whose names appear in Annexure 'A' of the petition are working as Sardar/Mondal/Munsi/Handling/ Ancillary labours of the FCI for more or less 20 years.
5. It is stated that the FCI carries its functions of handling of food grains and foodstuffs through various types of godowns. The first category includes the godowns which are owned by the FCI, the second category includes go-downs which are hired by the FCI and the third category falls in the hired godowns where the FCI bears the cost of labourers who are paid wages and other fringe benefits by the FCI as for instance the Central Warehousing Corporation (hereinafter referred to as the CWC) and the State Warehousing Corporation (hereinafter referred to as the SWC.)
6. The workmen whose names appear at Annexure 'A' of the petition are employed in the godowns belonging to or hired by the CWC but the said workmen work exclusively for the FCI. The CWC is paid some supervising charges by the FCI for looking after the work of such godowns.
Before proceeding further it should be noted that the basic facts of this case are more or less admitted although the interpretation of these facts is in question.
7. It is asserted in the petition that although the employees concerned are working in the CWC and SWC godowns yet as they work exclusively for the FCI, the real employer is the FCI and in fact, the FCI has always taken the responsibility of the said employees including the payment of wages, other fringe benefits, bonus and uniforms. The FCI has also paid incentive wages to such workmen. It may also be noted here that the rate of bonus paid by the CWC to its own workmen and the rate of bonus paid to the workers working in the CWC godowns working exclusively for the FCI are different and the FCI invariably reimburses the CWC for payment of such bonus. According to the petitioners, the CWC merely manages the working of the godowns for which they are paid a supervising charge. In effect, it is stressed that the workmen concerned are the employees of the FCI as the entire responsibility of such workmen are shouldered by the FCI and the CWC merely comes as an intermediary.
8. Several illustrations and instances have been cited in the petition to drive home the point that the workmen concerned are in reality the employees of the FCI and that the CWc is a mere supervising agent working for a remuneration for supersiving the work of such employees of the FCI.
9. It is stated in elucidation of this point that when, in an arbitration proceeding under Section 10A of the Industrial Disputes Act, 1947, an award was published that the management of the godowns dealing with the FCI goods were liable to be given incentive wages to the workmen concerned, the FCI issued a notification which is Annexure 'D' to the petition, stating that the incentive schemes for handling workers would be applicable to all the workers of the FCI. These incentive wages were also paid or in other words the award was made applicable also to the workers working for FCI in the godowns managed by CWC and SWC. In fact, the management of the CWC and SWC were asked by the FCI to implement the award so far as the FCI workers working in the CWC and SWC godowns were concerned. Another, illustration has been givento establish the point that the workmen concerned are really the employees of the FCI and not of CWC or the SWC by referring to an order of reference as contained in Annexure 'E' to the writ petition in connection with the retrenchment of 887 workers of the FCI working in the CWC and SWC godowns. It will appear from the order of reference which is Annexure 'E' to the petition that persons sought to be retrenched were employees of the FCI. The said reference is still pending adjudication but it has been stated and stressed in the petition that most of the said retrenched workmen of the CWC and SWC godowns for whom the said reference was made were later reappointed by the FCI in its depots with ail due engagements given to them by the FCI. From this the petitioner wants to show that the FCI itself has accepted such workmen working in the CWC and SWC godowns as its own workmen. This aspect of the matter has not been categorically denied by the FCI in its affidavit-in-opposition.
10. It is further stated that the FCI also provides the workers working in such CWC and SWC godowns with uniforms as per specification given to FCI departmentalised workers. It may in this connection be noted that other workers who are working in the same godowns but not for the work of the FCI, are not provided with such uniforms by the CWC and SWC authorities. In fact, the CWC in its affidavit-in-opposition at paragraph 9 specifically stated that the workmen concerned employed at the godowns of the CWC exclusively for the FCI were paid the same emoluments as the workmen of the FCI and that such payments were reimbursed to the CWC by the FCI. In paragraph 13 of the affidavit-in-opposition the CWC has stated that the bonus paid to the present workmen in the godowns of the CWC rented for exclusive use of FCI was at par with bonus to the departmentalised workers of FCI and it is different from that paid to the employees working for the CWC. From this it may be inferred that the CWC pays two kinds of bonus to its employees employed in the same godowns because one set of workmen are employed by the CWC authorities and the other set is treated to havt been employed to the FCI itself though through the intermediary of the CWC. The same is the case in respect of the workmen working in such CWC and SWC godowns on behalf of the FCI in respect of the payment of variable clearness allowance to such employees. In this connection a reference may be made to Annexure 'G' of the writ petition. Even ex-gratia payments given to such workmen working for FCI in CWC godowns are also determined by the FCI which would appear from Annexure 1 to the writ petition.
11. It is further stated in the petition that in the past whenever there was any surplusage of FCI workers in CWC and SWC godowns, the FCI ultimately took the responsibility of those surplus workmen and appointed and/or transferred such workmen in other depots of the FCI. In this connection a reference may be made to the Memo No. DM/...L-49/85/2371/4 dated September 6, 1990 wherefrom it will appear that consequent on dehiring the SWC Foreshore Road Godown with effect from September 1, 1990, 15 departmentalised workers of SWC, Foreshore Road Godown were posted to the FCI, Nandibagan depot. The said memo has been annexed to the petiiton marked with the letter 'J'.
12. This of course has been sought to be countered by the FCI by stating that such transfers were made not with the concurrence of the competent authority. But the fact remains that these workmen were withdrawn from the SWC godowns and were posted at FCI godowns directly under the FCI. Even the letter of appointment on compassionate grounds and appointments to the next of kin to the workers working on FCI work for CWC godowns were given by FCI and the CWC had no manner of control over such appointments. A specimen copy of such appointment letter has also been annexed to the petition marked with the letter 'K'. It has been further feebly sought to be contended by the FCI that it instructed the CWC that appointment letters issued by the CWC should not mention that these appointments were made on behalf of the FCI but the fact remains that even after such instructions, in such letters of appointment the CWC invariably stated that such appointments were made on behalf of the FCI.
13. Both FCI and CWC have filed affidavit-in-opposition in the matter. The CWC in its affidavit-in-opposition first of all contends that the writ petition is not maintainable, inter alia, inasmuch as this involves certain disputed questions of fact which cannot be resolved in the writ petition. I am afraid this is not correct inasmuch as the facts are not disputed at all but the inference to be drawn from such facts are the points in issue in the writ petition. In fact Mr. P.S. Sengupta appearing for the petitioners urges before this court that even if the matter is referred to the industrial tribunal for resolving the dispute on evidence, the petitioners will not be able to produce any evidence other than those annexed to the writ petition. These are all documentary evidences which can neither be supplemented nor supplanted by any oral evidence to the contrary and relegating the case to an industrial tribunal will only result in undue delay as there is nothing to be decided on oral evidence before the industrial tribunal.
14. The CWC in paragraph 6 of its affidavit-in-opposition has fairly and honestly stated that the godowns referred to in the writ petition were rented by the CWC at the specific request of FCI exclusively for the purpose of storage of the goods of FCI and that the emoluments of the workmen working in such godowns were reimbursed by the FCI to CWC and it is only when the FCI decided to dehire the godowns in question, that the CWC was obliged to issue the retrenchment notices impugned in the writ petition. It is stated by the CWC that the retrenchment compensation was provided by the FCI. It is further admitted in paragraph 8 of the said affidavit-in-opposition of the CWC that the amounts paid to the workmen working in the CWC godowns exclusively for the FCI are realized by the CWC from FCI and that the workmen working in the CWC godowns exclusively for the FCI are paid the same emoluments as the workmen of FCI. It is further admitted that in case of retrenchment of workmen working in the CWC godowns for the purpose of FCI the workmen were paid retrenchment benefits in effect by the FCI. The CWC has also admitted that the bonus paid to the workmen working in such godowns of CWC rented for the exclusive use of FCI was at par with the bonus paid to the departmentalised workers of FCI and it is different from that paid to the employees employed directly by the CWC. It is further stated in paragraph 19 of the affidavit-in-opposition of the CWC that the impugned retrenchment notices had to be issued because the FCI decided to dehire the godowns in question and that the FCI has also agreed to pay the retrenchment compensation in respect of such workmen to be retrenched by the CWC
15. The affidavit-in-opposition filed by the CWC strengthens the case of the petitioners that the workmen concerned are in reality the workmen of FCI and CWC merely acts as an intermediary and is nothing but a thin layer of insulation between the workmen concerned and the FCI and that for preserving such layer of insulation the CWC is paid some supervising charges.
16. The FCI has also filed, as already stated, an affidavit-in- opposition. The first point taken by the FCI is the maintainbility of the writ petition on the ground of absence of any employer-employee relationship between the workmen concerned as listed in Annexure 'A' of the petition and the FCI because of the existence of the aforesaid layer of insulation. The FCI also stated that the matter involves disputed questions of fact which cannot be resolved in a writ petition but should be referred to the appropriate forum under the provisions of the Industrial Disputes Act. The FCI further claims that a policy decision of the FCI cannot be challenged in a writ application.
17. The first point raised by the FCI regarding the employer-employee relationship amounts to begging the question as that is the subject matter of the writ petition itself and this is the only substantive point in the writ petition. I have already quoted that there are no disputed questions of fact but only disputed questions of inferences to be drawn from admitted facts.
18. The FCI concentrated its attack on the question of employer- employee relationship and cited a large number of decisions on this aspect of the matter but in my opinion it is not even necessary to refer to the said cases. The ratios of the said decisions are well known and well respected but these decisions become relevant only when the question arises as between two parties in an action relating to their inter se relationship. Here the case is entirely different. Here it is not a case whether in between two parties the question arises as to whether the second party is the employee of the first party or is an independent contractor agreeing to produce a given result in exchange of the remueration promised by the first party and whether the first party has not only the control over the promised result of the work to be done but the first party has control over the manner in which such work is to be done. These are time tested propositions of law and in their own field they are invulnerable and I respectfully agree with the decisions cited by Dr. Tapas K. Banerjee appearing for the FCI. But the question here is altogether a different one. Here in the instant case, there are three parties, the FCI, the CWC and the workmen whose names appear at An-nexure 'A'. The third dimension present in the instant case is conspicuous by its absence in all the cases cited by Dr. Tapas K. Banerjee appearing for the FCI. The admitted position of fact is that the FCI requests the CWC to hire certain godowns and to employ workmen exclusively for the handling and storing works for the FCI. Here the CWC merely acts as an agent of FCI and looks after the works of the FCI for which it gets a supervising charge. It may be reiterated that all the incidences of the work are borne by the FCI. The matter now boils down to the question of law as to whether the thin layer of 5 insulation between the FCI and the workmen concerned should be allowed to stand in the way of treating the workmen as the workmen of FCI. These are the days of lifting of veils and if we lift such veil of CWC, FCI and the workmen concerned are tete-a-tete. If that be so it must of necessity be concluded that the workmen concerned are workmen of FCI and the CWC merely acts as catalytic agent, though for a remuneration.
19. In this case a reference to the case of Hussain Bhai v. Alath Factory Tozhilali Union and Ors. reported in 1978-II-LLJ-397 is very material, where the "cheeking off theory was propounded. Paragraph 3 of the said Judgment reads as follows (p. 398):
"Who is an employee, in Labour Law? That is the short, die-hard question raised here but covered by this Court's earlier decisions. Like the High Court, we give short shrift to the contention that the petitioner had entered into agreements with intermediate contractors who had hired the respondent-Union's workmen and so no direct employer-employee vinculum juria existed between the petitioner and the workmen."
Paragraph 4 of the said judgment states as follows:- (p. 398):
"This argument is impeccable in laissezfaire economics 'red in tooth and claw' and under the Contract Act rooted in English Common Law. But the human gap of a century yawns between this strict doctrine and industrial urisprudence. The source and strength of the industrial branch of Third World Jurisprudence is social justice proclaimed in the preamble to the Constitution. This Court in Ganesh Beedi's case 1974-I-LLJ-367 has raised on British and American rulings to hold that mere contracts are not decisive and the complex of considerations relevant to the relationship is different. Indian Justice, beyond Atlantic liberalism, has a rule of law which runs to the aid of the rule of life. And life; in conditions of property aplenty, is livelihood and livelihood is work with wages. Raw societal realities, not finespun legal niceties, not competitive market economics but complex protective principles, shape the law when the weaker, working class sector needs succour for livelihood through labour. The conceptual confusion between the classical law of contracts and the special branch of law sensitive to exploitative situations accounts for the submission that the High Court is in error in its holding against the petitioner."
20. Paragraph 5 of the said judgment reads as follows (p. 398):
"The true test may, with brevity, be indicated once again. Where a worker or group of workers labours to produce goods or services and these goods or services are for the business of another, that other is, in fact, the employer. He has economic control over the workers' subsistence, skill and continued employment. If he, for any reason chokes off, the worker is, virtually, laid off. The presence of intermediate contracts with whom alone the workers have immediate or direct relationship ex contract is of no consequence when, on lifting the veil or looking at the conspectus of factors governing employment, we discern the naked truth, though draped in different perfect paper arrangement, that the real employer is the Management, not the immediate contractor. Myriad devices, halfhidden in fold after fold of legal form depending on the degree of concealment needed, the type of industry, the local conditions and the like may be resorted to when Labour legilsation casts welfare obligations on the real employer based on Articles 38, 39, 42, 43 and 43-A of the Constitution. The Court must be astute to avoid the mischief and achieve the purpose of the law and not be mislead by the maya of legal appearances."
21. Paragraph 6 of the said judgment states as follows (p. 399):
"If the livelihood of the workmen substantially depends on labour rendered to produce goods and services for the benefit and satisfaction of an enterprise, the absence of direct relationship or the presence of dubious intermediaries or the make- believe trappings of detachment from the management cannot snap the real-life bond. The story may vary but the inference defies ingenuity. The liability cannot be shaken off."
22. The ratio of the said judgment marches down to posterity with divine honours and once for all does away with the finer niceties of law where human starvation looms large because of the existence of legal innovation improvised by intellectual trend in the earth to deprive the unread and the unfed.
23. Considering all the aspects of the case and applying the ratio of the decision in Hussainbhai (supra) I am of the opinion that the persons whose names appear at Annexure 'A' of the petition are employees of the FCI and the FCI is responsible for their destiny.
24. A second question has been raised in the writ petition namely that the retrenchment notices impugned in the petition are not made in accordance with the provisions of Sections 25-G and 25-N of the Industrial Disputes Act, 1947. It is averred that the principle of "last come first go" as enunciated in Section 25-G of the Act has not been complied with and from that point of view the impugned orders cannot be sustained in law. It has further been stated in the petition that the provisions of Section 25-N which are the conditions precedent to retrenchment of workmen have not been complied with. There seems to be substantial force behind the contentions raised by the petitioners. The respondents in their feeble attempt to counter this, have stated that as the FCI is not a "factory", the said provisions do not apply to it. This seems to be the strangest submission made by the respondents at bay. Neither Section 25-G nor Section 25-N is confined to factories but these apply to all industrial establishments of certain magnitude 2 and now under the extended definition of industry it cannot be argued by any stretch of imagination that the godowns concerned are not industries or that no industrial activities are carried on there. I refrain with some effort from referring to the celebrated case of Bangalore Water Supply and Sewerage Board v. A. Rajappa, reported in 1978-I-LLJ-349 which has now become a legend in the legal firmament of this country.
25. For the reasons stated above the impugned orders of retrencment issued in respect of the workmen working in the CWC godowns of the FCI as detailed in Annexure 'A' to the petition are hereby set aside. Liberty however is given to the respondents to proceed in accordance with law. The FCI is directed to evolve a scheme to absorb the workmen concerned in their other godowns as far as practicable and if retrenchment becomes inevitable then the FC! is directed to company strictly with the provisions of Sections 25-G and 25-N of the Industrial Disputes Act, 1947 before issuing the notices for retrenchment of any of such workmen.
26. The workmen whose names appear at Annexure 'A' of the petition are to be paid all their emoluments from the date when the orders of retrenchment become effective minus any sums already received by them as retrenchment compensation according to the existing system of payment till such time as a final decision is arrived at in the light of the observations made hereinbefore. These payments are to be made within 4 weeks from the date of communication of this order.
27. Summing up I hold that the workmen whose names appear at Annexure 'A' to the writ petition are workmen of the FCI and the retrenchment notices issued by the CWC are set aside with the directions to the FCI as indicated hereinabove.
28. In the facts and circumstances of this case, there will be no order as to costs.
29. After this judgment was delivered, a prayer for stay of operation of this judgment was made by the FCI. As 4 weeks time has already been given to them to act in terms of this judgment, the question of granting further stay does not arise, and, as such, the prayer is rejected.
30. All parties shall act on a signed copy of the operative part of this judgment upon usual undertaking.