Gujarat High Court
For Approval And Signature vs Workmen Represented By Bijlee Mazdoor ... on 31 August, 2017
Author: K.M.Thaker
Bench: K.M.Thaker
C/SCA/16912/2005 CAV JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 16912 of 2005
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE K.M.THAKER Sd/-
1 Whether Reporters of Local Papers may be allowed Yes
to see the judgment ?
2 To be referred to the Reporter or not ? No
3 Whether their Lordships wish to see the fair copy of No
the judgment ?
4 Whether this case involves a substantial question of No
law as to the interpretation of the Constitution of
India or any order made thereunder ?
CHIEF ENGINEER-THERMAL POWER STATION,GEB.....Petitioner(s)
Versus
WORKMEN REPRESENTED BY BIJLEE MAZDOOR PANCHAYAT &
3....Respondent(s)
Appearance:
MS LILU K BHAYA, ADVOCATE for the Petitioner(s) No. 1
MR DG CHAUHAN, ADVOCATE for the Respondent(s) No. 2
MR MUKESH A PATEL, ADVOCATE for the Respondent(s) No. 4
MRS SANGEETA N PAHWA, ADVOCATE for the Respondent(s) No. 1
RULE SERVED for the Respondent(s) No. 3
RULE SERVED BY DS for the Respondent(s) No. 4
CORAM: HONOURABLE MR.JUSTICE K.M.THAKER
Date : 31/08/2017
CAV JUDGMENT
Heard Mr. K.M. Patel, learned Senior Counsel Page 1 HC-NIC Page 1 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT with Ms. Lilu K. Bhaya, learned advocate for the petitioner electricity board and Ms. Sangeeta N. Pahwa, learned advocate for the respondent No. 1 and Mr. D.G. Chauhan, learned advocate for the respondent No. 2.
2. In present petition the petitioner electricity board has challenged award dated 24.3.2004 passed by learned Industrial Tribunal in Reference (ITN) No. 682 of 1998 whereby learned Tribunal directed the petitioner electricity board to treat the workmen engaged for work of Railway Track maintenance as workman of the Board w.e.f. 1.1.2000 by waiving the requirement with regard to educational qualification and the maximum age for entry in the service of the board and to pay regular salary in applicable pay-scale w.e.f. 1.1.2004 after fixing their salary in appropriate pay- scale w.e.f. 1.1.2000 and by treating period from 1.1.2000 to 31.12.2003 as notional.
The appropriate government referred the claim and dispute raised by the claimants vide order of reference dated 27.4.1997. The term of reference referred for adjudication vide said order of reference dated 27.4.1997 reads thus:-
"Whether the contractors working at Dhuvaran Thermal Power Station should be held to be sham and bogus and whether the following workmen should be given benefit of permanent workman (of the board) from the date they entered the service of the contractor)?"
Page 2 HC-NIC Page 2 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT 2.1 The said order of reference dated 27.4.1997 mentioned names of 14 persons who are concerned persons in the reference/petition. The union which sponsored the dispute / claim of the concerned workmen filed statement of claim and the details of the allegations and contention raised by the claimant / union before the learned Labour Court are recorded and elaborated in sufficient details in paragraph No.2 of the award.
3. From the award it appears that after the order of reference was passed, the agency which worked as contractor at relevant time i.e. M/s Chirag Associates was impleaded as party opponent vide order passed below Exh-50 in the reference case. The said contractor also filed defense statement which was taken on record at Exh-64.
4. In the statement of claim, the union on behalf of above mentioned claimants, alleged that:-
"I. That these workers are doing the work which is Essential and integral part of the whole business of the Board.
II The place they work is of the Board.
III The Railway lines maintained by this workers of the Board and the implements for the work are of the Board.
IV The end result of the work is of the Board.
V. The overall control of the work is of the Board.
VI The labour rendered by these workmen is for the benefit of the Board.
Page 3 HC-NIC Page 3 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT VII The economic control of the workmen, their continued employment and subsistence are in the hands of the Board.
Thus the Panchayat submits that as per the decisions of the Supreme Court these Workmen, having been doing the work of the Board, for the benefit of the Board and initiated by the Board, are the workmen of the Board. The Panchayat submits that the fact that these workmen are the workmen of the Board would be established by them beyond doubts during the course of the proceedings."
Having stated above quoted details, the Union/claimants further stated in the Statement of Claim that:
"(a) The panchayat submits that as per the rules of the Board and the service conditions of the workmen of the Board the lowest minimum salary of an unskilled workman is Rs.4,000/- and odd per month. Over and about this the Board gives many other benefits to the workmen. As per the condition precedent for the issue of licence the so called contractor is bound to pay the same and similar wages as in paid to the workmen of the Board to his workman also.
The contractor further is about to pay all the allowances and benefits to which the direct workmen of the Board are entitled to these workmen. All leave and holidays have also to be given to these workers. In this case, these workers are paid only 25% of the wages of the direct workers. They are not given any other benefit of facility to which the direct workers entitled to. Thus, these workers are exploited to the maximum. It is only with a view to deprive the workmen the service conditions of direct labour that such an arrangement is made and as such the same is malafide, shame and bogus.
(b) Needless to state that such myriad devices adopted by the Board provides
(c) opportunity and encouragements to many immoral acts like corruption, nepotism, pilferage etc. The bureaucracy in-efficient to man and manage the affairs of the Board has adopted such illegal and myriad devices.
(d) The Panchayat submits that the so called contractor is a dubious intermediary, a make believe trapping, a facade and bogus. It is only to snap of the real life bond of these workmen that such shame arrangement are entitled into by the Board.
(e) That the Panchayat submits that the demands of the Panchayat to declare all the contractors sham and bogus and to treat the 24 workmen named in the order of reference as permanent workmen of the Board with effect from the date of their joining are fully justified, proper and reasonable. "
On said premise, the claimants prayed, inter alia, that, Page 4 HC-NIC Page 4 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT "That the above being the brief justification the Panchayat prays the Hon'ble Tribunal be pleased to pass an award:
(a) declaring the contractor at Dhuvaran Thermal Power Station of the Board as sham and bogus.
(b) directing the Board to treat the workers named in the order of reference as permanent workmen of the Board from the day they are working in the Board.
(c) directing the Board to pay wages, benefits and all monetary allowances to the workmen at par with permanent workmen of the Board with effect from the day they are working."
4.1 The Board opposed the reference and the demand and contended in its written statement, inter alia, that the dispute referred for adjudication is not industrial dispute and the demand should not be granted. In its written statement the Board further contended and stated that:
"5. With respect to para 1(b) of the statement of claim, it is submitted that the various statements and averments made therein are irrelevant and incorrect. It is submitted that the Board is assigned the contract of maintaining RAILWAY LINES TO M/s. Chirag Associates and the Board has obtained necessary registration and the contractor has obtained the necessary licence in respect of the aforesaid job as required by the provisions of the contract Labour 'Regulation & Abolition) Act, 1970. It is submitted that the contention of the Union that the aforesaid contractor it is dubious intermediary is not true and a name lender is also not true. It is submitted that the aforesaid contractor employs the necessary persons for the aforesaid contract of maintaining the work entrusted to him and the persons working are paid by the said contractor and they are working under the supervision and control of the said contractor and, therefore, the contract given by the Board is genuine and not sham as alleged or otherwise."
"8. With respect of Para2(b) of the statement of claim, the Board submits that the statements, averments and allegations made therein are also misconceived, misleading and legally not tenable. The nature of importance of maintaining the railway lines has been exaggerated by the Union and further it is submitted that the same are irrelevant and legally not tenable. It is denied tha the work performed by the workers of the contractor is of perennial nature and is required to be done round the clock. The averment that the work done by the workers of the contractor, who has been entrusted with the job of maintaining railway line on contract basis is the integral part of the whole business of the Board is misconceived, Page 5 HC-NIC Page 5 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT irrelevant and legally not tenable."
"9. The facts stated in para 2(c) of the statement of claim are not admitted and are vehemently denied by the Board. It is denied that the relationship of master concerned and the Board. It is again vehemently denied that the arrangement of contract in respect of the maintenance of the railway lines is dubious, bogus and sham. The averments regarding the economic control of the workman etc., are incorrect and legally not tenable. It is denied that the aforesaid persons engaged by the contractor, as per the judgments of the Supreme Court are the workman of the Board. "
"11. It is submitted that the persons concerned are not the workers of the Board and that the contract given by the Board for the maintenance of the railway lines is genuine and legal and no relation of master and servant exists between the said persons and the Board."
The Board did not raise any other contention or defence nor did the Board plead any other fact.
4.2 The said Contractor denied the allegation that dubious arrangement are made by the Board with him and the concerned claimants are actually employees of the Board. The contractor claimed that the Board awarded the contract for maintenance of railway track and that he executed the contract job in accordance with terms and conditions prescribed in the contract. The said opponent also contended that the Board awarded the contract and legally valid contract is executed with the Board for maintenance of railway track. The said opponent (hereinafter referred to as Contractor for sake of convenience) also claimed that he holds licence Page 6 HC-NIC Page 6 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT issued by the Authority under the Contract Labour Act and his establishment is duly registered with the competent authority under the said Act. He also claimed that the persons working for execution of the Contract are his employees and their allegations that they are employees of the Board is incorrect. The Contractor also contended that he was not a party during conciliation proceeding. The said contractor through its written statement, supported the case and defence set-up by the Electricity Board before the learned Learned Tribunal.
4.3 After the parties concluded their pleadings, learned Tribunal received and recorded evidence on behalf of the claimants as well as the electricity board and the contractor. During proceeding before learned Tribunal, the Union examined Mr. Jikabhai Parmar, Mr. Chhatrasinh Udesinh. On the other hand, the Board examined Mr. V.M.Patel and Mr. N.R. Makwana as witnesses in support of its case. The Board also examined Mr. V.M.Patel. The Contractor examined Mr. Maganbhai Vejabhai as its witness. Upon conclusion of evidence by the concerned parties, the learned Labour Court heard rival submissions.
4.4 After considering the evidence available on record and rival submissions, learned Tribunal Page 7 HC-NIC Page 7 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT passed impugned award with above mentioned directions. The petitioner Board felt aggrieved by the award and filed present petition.
5. Mr. Patel, learned Senior Counsel for the petitioner board, contended that the work of maintenance of railway lines is not principal or main activity of the board. According to the petitioner board, the said activity is also not compulsory or mandatory activity for the board and initially, it was the "Railways" which used to maintain the railway lines. He also submitted that the learned Tribunal failed to appreciate that the claimants are not appointed by the board and they do not work under the control and supervision of the board, but they are employees of the contractor and employer / employee relationship does not exist between the claimants and the board. Mr. Patel, learned Senior Counsel, reiterated the contentions raised before the learned Tribunal with reference to the pending proceedings for abolition of contract system and absence of any notification prohibiting engagement of contract labourer for work of maintenance of railway lines. He contended that all day to day activities, including allotment of work and supervision of the work is done by the contractor or its supervisor / representative and not by the officers of the board. He also Page 8 HC-NIC Page 8 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT submitted that the salary of the claimant is paid by the contractor. According to learned Senior Counsel for the petitioner board, the learned Tribunal failed to take into account the principles applicable to the demand for regulation of service and that the final direction passed by learned Tribunal are contrary to evidence available on record and they are also contrary to the important and relevant findings of fact recorded by the learned Tribunal. He submitted that the learned Tribunal committed error in recording the observations that the contractor is only name sake and in reality, the claimants are working under control and supervision of the board. The learned Senior Counsel for the electricity board relied on the contract/agreement whereby the work of maintenance of the railway lines came to be awarded to the contractor and the learned Senior Counsel submitted that the terms and conditions of the said contract brings out that the electricity board had awarded job contract for maintenance of railway track after inviting tenders. He also contended that the board awarded contract at specified rate and the terms of the contract clearly specified that the contractor will be responsible for execution of the job including supervision of the employees and that therefore, there was no scope for the learned Page 9 HC-NIC Page 9 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT Tribunal to hold that the claimants are not employees of the contractor but they are employees of the electricity board. According to learned Senior Counsel for the petitioner board, the direction to the board to treat and consider the claimants permanent employees of the board and to pay salary to the claimants on par with permanent and regular employees of the board is unjustified and arbitrary. According to learned Senior Counsel for the petitioner board, the learned Tribunal exercised jurisdiction arbitrarily and without application of mind to the evidence and the material available on record. The learned Senior Counsel for the petitioner board also submitted that eight factors referred to by the High Court in the decision in case of Steel Authority of India Ltd. v. Gujarat Mazdoor Panchayat & Anr. [2004 (1) GLR 729] could not have been applied in light of the facts of present case and the learned Tribunal committed error in applying the said factors and principles in present case. According to learned Senior Counsel for the petitioner board, there is no justification and/or any material on record to justify the findings of fact and final conclusion recorded by the learned Tribunal and/or the final directions passed by learned Tribunal. He also assailed the award on the ground that the learned Tribunal failed to take into account the fact Page 10 HC-NIC Page 10 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT that the claimants raised dispute and demand after about 3 to 4 years. Mr. Patel, learned Senior Counsel, alternatively submitted that in view of subsequent developments viz. closure of thermal based units, the directions passed by the learned Tribunal deserves to be set aside. So as to support his contention,
6. Mrs. Pahwa, learned counsel for the respondents / concerned claimants, opposed the submissions by learned Senior Counsel for the petitioner as well as the petition. She submitted that the findings recorded by learned Tribunal are based on evidence available on record and this Court would not sit in appeal over the findings of fact recorded by learned Tribunal and this Court would not re-appreciate the evidence or interfere with the findings of fact recorded by learned Tribunal. She submitted that the findings recorded by learned Tribunal are not arbitrary or perverse. According to learned counsel for the claimants, the board exercised control and supervision over the claimants as well as their performance and their salary was also paid by the board. She also submitted that the proceedings related to demand for abolition of contract labour or for prohibition for engaging contract labour in the petitioner electricity board and/or in respect of the jobs Page 11 HC-NIC Page 11 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT of the electricity board is not relevant for determining the issues related to demand for benefits at par with the employees of the board and for status of permanent workmen. She submitted that during the period from 1992 to 1995, the contractor did not possess licence for engaging contract labour and therefore, the claimants are even otherwise, deemed to be employees of the electricity board. She submitted that the board created artificial bar between the board and the claimants with a view to creating an impression that the claimants are employees of the contractor, whereas in fact, the claimants are employees of the board and they were engaged for performing work of the board and that therefore, the contention that the employees and employer relationship did not exist between the claimant and the board is incorrect and unjustified, more particularly when the board exercised supervision and control over the claimants and paid salary to the claimants. According to learned counsel for the claimants, there is no error in the award and the award does not suffer from any infirmity or error of law or jurisdiction. She relied on admission by the witness who accepted that until 1995-1996, the contractor did not possess licence and that therefore, even otherwise, the claim and contention that the claimants are employees of Page 12 HC-NIC Page 12 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT the contractor is unjustified.
Mrs. Pahwa, learned counsel for the claimants, submitted that despite the fact that this Court granted interim relief, the petitioner board discontinued the service of the claimants from March 2011 and that on the allegation that the unit is closed down, the claimants are not engaged and they have not been allowed to work and since March 2011, they have been arbitrarily discontinued from service.
7. Mr. Chauhan, learned advocate for the contractor, adopted the submissions by learned Senior Counsel for the board.
8. The learned Senior Counsel for the petitioner board and the learned counsel for the claimants relied on below quoted decisions:
1. Steel Authority of India Ltd. & Ors. v.
National Union Waterfront Workers & Ors. [(2001) 7 SCC 1] (para 71, 107, 08, 115, 118, 119, 125 and 126).
2. Steel Authority of India Ltd. v. Gujarat Mazdoor Panchayat [2004 (1) GLR 729] (para 21, 32, and 33).
3. International Airport Authority of India v. International Air Cargo Workers' Union & Anr. [(2009) 13 SCC 374] (para 35 to 39, 47 to 56).
4. Balwant Rai Saluja v. Air India Ltd. [2014 (9) SCC 407] (para 24, 28, 43, 52 to 65, 74, 75, 83 to 89.
5. General Manager (OSD), Bengal Nagpur Cotton Mills, Rajnandgaon v. Bharat Lal & Anr. [(2011) 1 SCC 635] (para 8, 10 to 13).
Page 13 HC-NIC Page 13 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT
6. Municipal Corporation of Greater Mumbai v. K.V.Shramik Sangh & Ors. [(2002) 4 SCC 609] (para 3 and 20).
7. Hussainbhai, Calicut v. Alath Factory Thezhilali Union, kozhikode [AIR 1978 SC 1410].
8. Gujarat Electricity Board, Thermal Power Station, Ukai, Gujarat v. Hind Mazdoor Sabha & Ors. [1995 (1) GLH 1083].
9. I have considered rival submissions by learned advocate for the petitioner electricity board and learned advocate for the respondent No. 1 and learned advocate for the respondent No. 2.
10. Having regard to the pleadings by the parties and their rival contentions and more particularly the case of the Union/ claimants that the concerned claimants are actually employees of the Board and that the so called contractor is bogus arrangement, learned Tribunal would be obliged to decide as to whether the arrangement of engaging Contractor and/ or arrangement of engaging workmen through Contractor or the arrangement was genuine or sham and bogus arrangement.
10.1 The learned Tribunal has addressed said issue and answered the issue in light of evidence on record and learned Tribunal recovered findings of fact that the contract in question was sham and nominal and paper arrangement. The learned Tribunal passed directions in light of the Page 14 HC-NIC Page 14 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT conclusions reached and findings of fact recorded by it.
11. On the ground that the learned Tribunal has carefully and closely examined entire oral and documentary evidence and also analyzed the evidence under eight different heads and on the basis of its findings with reference to each of the eight heads the learned Tribunal reached to the final conclusion, learned advocate for the respondent workmen would submit that this Court may not sit in appeal over the said findings of fact and this Court may not enter into the process of re-appreciation of evidence as if the Court is examining the judgment in appellate jurisdiction. She would submit that even if some error in respect of finding of fact is noticed by the Court, then also this Court would not upset the final conclusion on ground of some error with regard to factual aspects, more particularly when the learned Tribunal has not committed any error of jurisdiction or law.
11.1 Learned senior advocate for the petitioner would, however, contend that the findings of fact recorded by the learned Tribunal are contrary to evidence on record. The learned tribunal, according to the petitioner, has overlooked the evidence on record or misconstrued the evidence Page 15 HC-NIC Page 15 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT and that, therefore, the final conclusion which is based on such erroneous findings, deserves to be and can be interfered with and set aside.
12. The Board's claim that the contract is genuine, legal and bonafide is vehemently and fundamentally opposed by the claimants who asserted that the contract is sham and bogus and mere paper arrangement.
12.1 At this stage, it is relevant to mention that the learned Tribunal has taken into account the contract and the terms and conditions.
12.2 The learned Tribunal has also taken into account the fact that over a period of time, the agency i.e. contractor/s changed from time to time and new agencies entered, however, the claimants continued to work. The new agency / contractor who would step-in in the place of outgoing contractor, however, same set of employees (i.e. present claimants) would continue with the employer.
12.3 Of course, the board would contend that the learned Tribunal had granted interim relief restraining the board from terminating the service of the claimants accepting the case of reported misconduct.
Page 16 HC-NIC Page 16 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT 12.4 It has however emerged from the submissions that the said arrangement - system was in vogue and said practice was followed even before the learned Tribunal passed order of interim relief.
12.5 Thus, the fact that most of the claimants worked continuously and uninterruptedly with the board since 1992-93, is supported by oral and documentary evidence.
13. In this backdrop, it would be appropriate at this stage to take into account the evidence on which the board as well as the claimants relied.
14. The claimants/witnesses have asserted that the railway line is of the board and the board has its own engines which are used by the board to bring to the power plant the railway wagons/tankers from Kathana Railway Station to Dhuvaran Power Station. The coal / oil reaches the power plant in racks/oil tankers through 17.5 kms. railway line. During their deposition, the witnesses examined on behalf of the claimants described in detail the duties and functions which they were required to perform. They claimed that tools and other material which would be required for maintenance of railway line i.e. for performing their duties were provided by the Page 17 HC-NIC Page 17 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT board and they had to seek sanction for leave from officer of the board and the officer of the board used to supervise their work. The said witnesses also claimed that they worked according to the instructions given by / received from officer of the board. The said witnesses also claimed and asserted that their salary was paid by the employee of the board. The said witnesses denied the suggestion by the board that one Mr.Kasambhai (representative of the contractor) paid salary. The said witness asserted that the salary was paid by the employees of the board.
14.1 Mr. C.G.Parmar (Exh.19) was examined by the union. In his deposition, the said witness asserted that railway line is utilized to transport oil which is used as fuel in the power station as well as spare parts of the plant and machinery in the power station. The said witness also described the work/duties performed by him which included maintenance of the railway line and he asserted that if the maintenance work is not carried out regularly then the track cannot be used and racks/oil tankers cannot be brought within the precincts of power station and resultantly, the operation of power station would be effected/jeopardized. During his cross examination, the said witness denied the case of the board that oil tankers are not received every Page 18 HC-NIC Page 18 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT day. The said witness also denied the case/suggestion by the board that their attendance was marked by representative of the contractor. In his cross examination, the said witness asserted that the wages were paid by the board but he did not know the name of the employee / officer who disbursed/paid the wages. The said witness also asserted that the equipments required for performing the work were provided by the board and the instructions were also issued by the officer of the board. The said witness also asserted that their requests/applications for leave were sanctioned/refused by the board depending on exigency of the work.
14.2 The union examined another workman Mr. Chhatrasinh Udesinh (Exh.23) as other witness. He deposed on the same line as Mr. C.G.Parmar (Exh.19). The said witness also asserted that the railway line was laid down by the board for its own purpose and the responsibility to maintain the railway line was of the board and they were engaged for all types of works related to railway line and its maintenance. During his cross- examination, the said witness clarified that the identity cards were not issued to them. The said witness also denied the case of/suggestion by the board that the attendance was marked by Mr. Page 19 HC-NIC Page 19 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT Kasambhai, representative of the contractor, and wages were also paid by contractor's representative. The said witness also denied the suggestion by the board that the work related instructions were issued by Kasambhai or Maganbhai, i.e. representatives of the contractor. The said witness asserted that instructions were issued by officers of the board. He clarified that he did not know names of the officers but could identify the officers who issued the instructions and supervised their work. He also denied the suggestion by the board that if their work was not carried out for 15 days or if their work was stopped for 15 days then the activities of working and functioning of the board would not suffer. Though the said witness admitted his signature in some of the wage registers, he specifically and categorically asserted that the wages were paid by the employee / officer of the board.
14.3 The Board examined one Mr. N.R.Makwana (Exh.34) (Personnel & Industrial Relation Officer). The said witness mentioned the details with regard to selection and recruitment procedure followed by the Board and stated that such procedure was followed while engaging the claimants. The said officer also stated that contract for maintenance of railway track was Page 20 HC-NIC Page 20 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT awarded to M/s. Chirag Associates and the board had obtained registration under the Act and the contractor had obtained requisite licence under the Act. He claimed that Kasambhai and Maganbhai, representatives of the contractor, supervised the work of the claimants and marked their attendance and paid their wages. During the cross examination, the said witness stated that he had no idea as to the year in which the contract was awarded for the first time. When the said witness was confronted with the work order issued by the board in March 1992, the said witness admitted the said document and also admitted that the work order was issued by the board in March 1992 and thereafter, it was extended from time to time. The said witness Mr. Makwana admitted that the railway track is of the board's ownership. However, he clarified that he had no idea about the number of racks / wagons received every day and/or about the daily consumption of oil by the board. The said witness also admitted that the railway track is an important requirement for operations of power station.
It is pertinent that the said witness of the board also accepted that he had no idea how the activity of maintenance of railway line is undertaken. In response to the question, the board's employee/witness stated that he had no personal knowledge about the jobs / functions Page 21 HC-NIC Page 21 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT performed by the claimants and he had no idea as to who executed the work of laying sleepers or levelling the metal or replacing the tracks. The said witness also accepted that the thermal power station used gas as well as oil as fuel and that the said material / fuel was brought to the plant through railway tankers for which the railway line laid by the board was used and that daily about 3-4 racks were brought to the plant on said railway tracks. The said witness also accepted that the machines/machine parts used in the power station were also brought through the said railway lines.
14.4 The Executive Engineer examined by the board stated that as Executive Engineer (Civil), it was his duty to inspect the work related to rail / track maintenance. He also accepted that the inspection and checking about railway maintenance was required to be done on daily basis, however, if, for any reason the inspection could not be undertaken on daily basis, then he would do the inspection / checking once a week. He also accepted that junior engineer and deputy engineer were responsible for supervision of the work of labourers engaged for railway maintenance. He also stated that on an average about 40-50 racks (oil tankers) arrived every month. He also accepted that earlier coal was used for operating Page 22 HC-NIC Page 22 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT power plant, however, subsequently, modifications were made so as to make the power plant suitable for the operation through gas as well as oil. The said Executive Engineer (board's witness) also accepted that the work of railway maintenance was not done intermittently but regularly and daily for at least 8 hours, except Sundays. The said Executive Engineer also accepted that the board received maintenance report on daily basis. The said Executive Engineer also clarified that about 7 kms. railway line covers the distance from Kathrana Railway Station to Dhuvaran Power Station and about 8 kms. railway line covers the distance of yard within the power plant which brings the fuel and machines/machine parts within the precincts of the power plant. The said Executive Engineer also explained that there are four main railway line and three sidings. The said Executive Engineer also accepted that maintenance of railway line would continue so long as the need for transporting fuel and spare parts through railway continues. The said witness Mr. V.M.Patel, executive engineer (civil) Exh.35, claimed that the representatives / supervisors nominated by the contractor were supervising the work of the claimants. According to said witness, the board received on an average about 40 to 50 oil tankers in a month. During his cross examination, the said witness stated that the Page 23 HC-NIC Page 23 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT work of maintenance is carried out daily for about 8 hours and not occasionally. He, however, claimed that the supervision was done by Mr. Maganbhai and Mr. Kasambhai. The said witness also accepted that in absence of the track, wagons cannot reach the plant. He also stated that on inspection by the officers of the board, if defect in maintenance was noticed then it was brought to the notice of the contractor. According to said witness, the board maintained four main lines and three lines were maintained by oil sliding. The witness accepted that the said lines were maintained by the claimants. The witness also accepted that the maintenance work will have to be continued so long as the railway lines are to be operated and wagons / tankers are brought to the precinct of the plant.
14.5 The board also examined Mr. Maganbhai Virabhai, representative of M/s. Chirag Associates. The said witness accepted that the contract was, for the first time, awarded to M/s. Chirag Associates in 1992 and since then, same workers have been working. The said witness also accepted that if the tracks are not properly and regularly maintained then there would be possibility of accident and that if the tracks within precinct of the plant were not laid and are not maintained then the wagons cannot reach Page 24 HC-NIC Page 24 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT the yard/plant of the board and consequently oil/gas, spare parts, raw materials, etc. cannot reach the power plant. The said witness also accepted that the claimants are not paid wages at par with the regular employees of the board. The said witness claimed that if the workers had any problem, then, they would approach him and he would take steps to resolve the problem of the workmen and he and Kasambhai used to make payment of wages to the workers and they allot duties to the workers.
14.6 The contractor M/s. Chirag Associates examined Mr. Maganbhai Virabhai (Exh.87) as its witness. The said witness placed on record certain wage registers and attendance registers so as to support the claim that the wage and attendance were maintained by the contractor. The said witness claimed that the supervision and other administrative works like sanctioning leave, etc. were done by the supervisor appointed by him. The said witness claimed that he had obtained licence in October 1995 and the licence was renewed from time to time. Upon being confronted with the licence (Exh.81), he accepted that the licence was issued on 3.10.1996 and thereafter it was renewed upto 2001. The said witness also accepted and admitted that from 1.4.2001, the claimants were not continued as Page 25 HC-NIC Page 25 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT employees of M/s. Chirag Associates but were transferred to rolls of M/s. Narayan Consultancy and that before effecting such transfer of the workers to M/s. Narayan Consultancy, they had not obtained permission from the learned Tribunal. The said witness also accepted that he worked as Manager of the said M/s. Narayan Consultancy and that the address of the office of M/s. Narayan Consultancy is the same as that of M/s. Chirag Associates. He, however, denied that the owner of M/s. Chirag Associate and M/s. Narayan Consultancy is the same and M/s. Chirag Associates merely change the name. The said witness also accepted that there were difference and discrepancies in his depositions as witness of the board (Exh.39) and as witness of M/s. Chirag Associates (Exh.87).
15. These are the broad summary or sum and substance of the oral evidence by witnesses examined by the contesting parties.
16. At this stage, it would be appropriate to turn to the observations by Apex Court and High Court in the cases on which contesting parties relied.
[a] In the decision in case of Steel Authority of India Ltd. & Ors. v. National Union Waterfront Workers & Ors. [(2001) 7 SCC 1], the Apex Court Page 26 HC-NIC Page 26 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT observed, inter alia, that:-
"71. By definition the term contract labour is a species of workman. A workman shall be so deemed when he is hired in or in connection with the work of an establishment by or through a contractor, with or without the knowledge of the principal employer. A workman may be hired: (1) in an establishment by the principal employer or by his agent with or without the knowledge of the principal employer; or (2) in connection with the work of an establishment by the principal employer through a contractor or by a contractor with or without the knowledge of the principal employer. Where a workman is hired in or in connection with the work of an establishment by the principal employer through a contractor, he merely acts as an agent so there will be master and servant relationship between the principal employer and the workman. But where a workman is hired in or in connection with the work of an establishment by a contractor, either because he has undertaken to produce a given result for the establishment or because he supplies workman for any work of the establishment, a question might arise whether the contractor is a mere camouflage as in Hussainbhai Calicuts case (supra) and in Indian Petrochemicals Corporations case (supra) etc.; if the answer is in the affirmative, the workman will be in fact an employee of the principal employer; but if the answer is in the negative, the workman will be a contract labour.
107. An analysis of the cases, discussed above, shows that they fall in three classes; (i) where contract labour is engaged in or in connection with the work of an establishment and employment of contract labour is prohibited either because the Industrial adjudicator/Court ordered abolition of contract labour or because the appropriate Government issued notification under Section 10(1) of the CLRA Act, no automatic absorption of the contract labour working in the establishment was ordered;
(ii) where the contract was found to be sham and nominal rather a camouflage in which case the contract labour working in the establishment of the principal employer was held, in fact and in reality, the employees of the principal employer himself. Indeed, such cases do not relate to abolition of contract labour but present instances wherein the Court pierced the veil and declared the correct position as a fact at the stage after employment of contract labour stood prohibited; (iii) where in discharge of a statutory obligation of maintaining canteen in an establishment the principal employer availed the services of a contractor and the courts have held that the contract labour would indeed be the employees of the principal employer.
108. The next issue that remains to be dealt with is:
B. Whether on a contractor engaging contract labour in connection with the work entrusted to him by a principal employer, the relationship of master and servant between him (the principal employer) and the contract labour emerges.
115. In a three-Judge Bench decision of this Court in Hussainbhais case (supra), the petitioner who was manufacturing ropes entrusted the work to the contractors who engaged their own workers. When, after some time, the Page 27 HC-NIC Page 27 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT workers were not engaged, they raised an industrial dispute that they were denied employment. On reference of that dispute by the State Government, they succeeded in obtaining an award against the petitioner who unsuccessfully challenged the same in the High Court and then in the Supreme Court. On examining various factors and applying the effective control test, this court held that though there was no direct relationship between the petitioner and the respondent yet on lifting the veil and looking at the conspectus of factors governing employment, the naked truth, though draped in different perfect paper arrangement, was that the real employer was the management not the immediate contractor. Speaking for the Court, Justice Krishna Iyer observed thus :-
Myriad devices, half-hidden 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 legislation 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 misled by the maya of legal appearances.....
119. We are not persuaded to accede to the contention that a workman, who is not an out-worker, must be treated as a regular employee of the principal employer. It has been noticed above that an out-worker falls within the exclusionary clause of the definition of workman. The word out worker connotes a person who carries out the type of work, mentioned in sub-clause (C) of clause (i) of Section 2, of the principal employer with the materials supplied to him by such employer either (i) at his home or (ii) in some other premises not under the control and management of the principal employer. A person who is not an out worker but satisfies the requirement of the first limb of the definition of workman would, by the very definition, fall within the meaning of the term workman. Even so, if such a workman is within the ambit of the contract labour, unless he falls within the afore-mentioned classes, he cannot be treated as a regular employee of the principal employer.
125. The upshot of the above discussion is outlined thus:
(1) (a) xxx
(2) (a) xxx
(b) xxx
(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 labour on issuing a notification by appropriate Government .....
(4) We over-rule the judgment of this court in Air Indias case (supra) prospectively .....
(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 Page 28 HC-NIC Page 28 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT either on the ground of having undertaken to produce any given result for the establishment or for supply of contract labour 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 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 concerned establishment 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 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 labour 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 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 qualifications other than technical qualifications."
[b] In the decision in case of Steel Authority of India Ltd. v. Gujarat Mazdoor Panchayat [2004(1) GLR 729], this Court observed, inter alia, that:-
"21. The factors which may establish that a contract between the principal employer and the labour contractor is a mere paper arrangement or an eye wash or a camouflage or a ruse or a facade or a name lender are; (i) activities / business of the principal employer, (ii) genuine need or requirement of engaging contract labour, (iii) length of continuous and uninterrupted service of workmen, (iv) nature of work done by workmen, i.e. whether the work is perennial in nature or intermittent, (v) who has, in fact, supplied the labour force to the principal employer, meaning thereby, whether the services of the workmen were made available to the principal employer by the labour contractor after making recruitment, (vi) extent of supervision and control of the workmen by principal employer, (vii) whether the workers do the labour work to produce goods or service for business of the principal employer, and (viii) whether the provisions of the Act relating to registration and licence etc. are complied with. The plea that the industrial adjudicator cannot take into consideration the factors mentioned in Clauses (a) to (d) of Section 10(2) of the Act to arrive at the finding as to whether the labour contracts are genuine or not cannot be accepted in view of the principles laid down in Gujarat Electricity Board v. Hind Mazdoor Sabha (supra) at page 67, paragraph 59.
32. Abovereferred to findings are pure findings of facts Page 29 HC-NIC Page 29 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT reached by the Tribunal after appreciating evidence and, normally, the same cannot be interfered with in a petition, which is essentially filed under Article 227 of the Constitution.
As noted earlier, by filing instant petition under Articles 226 & 227 of the Constitution, the petitioner has claimed writ of certiorari to quash the impugned award of the Tribunal. Therefore, it would be instructive to refer to the scope of jurisdiction to issue a writ of certiorari. This question has been considered by a five judge Constitution Bench of the Supreme Court in Syed Yakoob v. Radhakrishnan, (supra). In that case, a notification, calling for applications for the grant of two stage carriage permits for the route Madras to Chidambaram was issued by the State Transport Authority under the Motor Vehicles Act, 1939. Several applications were received. The authority had granted the first permit to one of the applicants and for the second, it was decided to call for fresh applications. The appellant, as also a number of other applicants, had appealed to the State Transport Appellate Tribunal. The Tribunal had confirmed the grant of the first permit and as regards the second, it had allowed the appeal of the appellant and directed that it should be granted to him. Thereupon, the respondent No. 1 had moved the High Court under Article 226 of the Constitution for the issue of a writ of certiorari and the learned Single Judge, who had heard the matter, had held that the Appellate Tribunal had overlooked relevant considerations and allowed irrelevant considerations to prevail. So holding, the learned Single Judge had made the Rule absolute. A Letters Paten Appeal was preferred by the appellant. The Division Bench had affirmed the order of the learned Single Judge on the ground that the Appellant Tribunal had overlooked material considerations in favour of the respondent No. 1, and dismissed the appeal. The appellant had thereupon approached the Supreme Court by way of Special Leave and contended that in issuing the writ of certiorari, the High Court had exceeded its jurisdiction under Article 226 of the Constitution. While allowing the appeal, the Supreme Court has made following pertinent observations in paragraph 7 of the reported judgment.
"7. The question about the limits of the jurisdiction of High Courts in issuing a writ of certiorari under Art. 226 has been frequently considered by this Court and the true legal position in that behalf is no longer in doubt. A writ of certiorari can be issued for correcting errors of jurisdiction committed by inferior courts or tribunals : these are cases where orders are passed by inferior courts or tribunals without jurisdiction, or is in excess of it, or as a result of failure to exercise jurisdiction. A writ can similarly be issued where in exercise of jurisdiction conferred on it, the Court or Tribunal acts illegally or improperly, as for instance, it decides a question without giving an opportunity to be heard to the party affected by the order, or where the procedure adopted in dealing with the dispute is opposed to principles of natural justice. There is, however, no doubt that the jurisdiction to issue a writ Page 30 HC-NIC Page 30 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT of certiorari is a supervisory jurisdiction and the Court exercising it is not entitled to act as an appellate Court. This limitation necessarily means that findings of fact reached by the inferior Court or Tribunal as result of the appreciation of evidence cannot be reopened or questioned in writ proceedings. An error of law which is apparent on the face of the record can be corrected by a writ, but not an error of fact, however grave it may appear to be. In regard to a finding of fact recorded by the Tribunal, a writ of certiorari can be issued if it is shown that in recording the said finding, the Tribunal had erroneously refused to admit admissible and material evidence, or had erroneously admitted inadmissible evidence which has influenced the impugned finding. Similarly, if a finding of fact is based on no evidence, that would be regarded as an error of law which can be corrected by a writ of certiorari. In dealing with this category of cases, however, we must always bear in mind that a finding of fact recorded by the Tribunal cannot be challenged in proceedings for a writ of certiorari on the ground that the relevant and material evidence adduced before the Tribunal was insufficient or inadequate to sustain the impugned finding. The adequacy or sufficiency of evidence led on a point and the inference of fact to be drawn from the said finding are within the exclusive jurisdiction of the Tribunal, and the said points cannot be agitated before a writ Court. It is within these limits that the jurisdiction conferred on the High Courts under Art. 226 to issue a writ of certiorari can be legitimately exercised (vide Hari Vishnu Kamath v. Ahmad Ishaque, 1955-1 SCR 1104 : ( (S) AIR 1955 SC 233); Nagendra Nath v. Commr. of Hills Division, 1958 SCR 1240 : (AIR 1958 SC 398) and Kaushalya Devi v. Bachittar Singh, AIR 1960 SC 1168."
33. The relevant observations made by the Supreme Court in the above quoted two decisions make it evident that a limited jurisdiction is available to High Courts while considering the question, whether a writ of certiorari, as claimed by the writ petitioner, can be issued. Under Article 226 of the Constitution, High Court will not interfere with weighing of evidence led before the Tribunal as if the High Court were sitting in appeal. A finding of fact cannot also be challenged on the ground that relevant materials and evidence adduced before the Tribunal was insufficient or inadequate to sustain the findings recorded by the Tribunal. The adequacy or sufficiency of evidence and the inferences to be drawn from the evidence are the exclusive domain of the Tribunal and the same cannot be agitated before the writ Court. ...... It is true that burden of proof to prove the fact rests upon a person who asserts existence of the same, and there is no manner of doubt that primary burden of proof to prove that the workmen concerned were employees of SAIL, was on the workmen. However, both by way of their claim statement and oral evidence, the workmen have established that they were never recruited by any of the contractors and were under control and supervision of SAIL. The Tribunal has considered the evidence led by the writ petitioner, and reached a conclusion in paragraph 13 of the impugned award that the concerned workmen were/are serving under the supervision, control and direction of SAIL. The best Page 31 HC-NIC Page 31 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT evidence that could have been produced, viz. employment record, could not be produced by the writ petitioner before the Tribunal. ..... Moreover, it is well settled that once the parties have led evidence understanding the nature of the case to be met, and the Court has recorded the findings on the basis of evidence led, the question of burden of proof becomes academic. As observed by the Supreme Court in Mohd. Shahnavaz Akhtar & Anr. v. IST ADJ, Varasani & Ors., (2002) 9 SCC 375, jurisdiction under Article 226 of the Constitution does not include re-appreciation of evidence and on that basis dislodge the finding of fact recorded by the Tribunal. The findings which have been recorded by the Tribunal are such which could have been reasonably arrived at, properly thought out and logical. Under the circumstances, the findings recorded by the Tribunal and final conclusion based thereon are not liable to be interfered with in instant petition."
[c] In the decision in case of International Airport Authority of India v. International Air Cargo Workers' Union & Anr. [(2009) 13 SCC 374], Apex Court observed, inter alia, that:-
"35. As noticed above, SAIL did not specifically deal with the legal position as to when a dispute is brought before the Industrial Adjudicator as to whether the contract labour agreement is sham, nominal and merely a camouflage, when there is no prohibition notification under section 10(1) of CLRA Act.
36. But where there is no abolition of contract labour under section 10 of CLRA Act, but the contract labour contend that the contract between principal employer and contractor is sham and nominal, the remedy is purely under the ID Act. The principles in Gujarat Electricity Board continue to govern the issue. The remedy of the workmen is to approach the industrial adjudicator for an adjudication of their dispute that they are the direct employees of the principle employer and the agreement is sham, nominal and merely a camouflage, even when there is no order under section 10(1) of CLRA Act.
37. The industrial adjudicator can grant the relief sought if it finds that contract between principal employer and the contractor is sham, nominal and merely a camouflage to deny employment benefits to the employer and that there is in fact a direct employment, by applying tests like: who pays the salary; who has the power to remove/dismiss from service or initiate disciplinary action; who can tell the employee the way in which the work should be done, in short who has direction and control over the employee. But where there is no notification under section 10 of the CLRA Act and where it is not proved in the industrial adjudication that the contract was sham/nominal and camouflage, then the question of directing the principal employer to absorb or regularize the services of the contract labour does not arise.
38. The tests that are applied to find out whether a Page 32 HC-NIC Page 32 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT person is an employee or an independent contractor may not automatically apply in finding out whether the contract labour agreement is a sham, nominal and is a mere camouflage. For example, if the contract is for supply of labour, necessarily, the labour supplied by the contractor will work under the directions, supervision and control of the principal employer but that would not make the worker a direct employee of the principal employer, if the salary is paid by contractor, if the right to regulate employment is with the contractor, and the ultimate supervision and control lies with the contractor.
39. The principal employer only controls and directs the work to be done by a contract labour, when such labour is assigned/allotted/sent to him. But it is the contractor as employer, who chooses whether the worker is to be assigned/allotted to the principal employer or used otherwise. In short worker being the employee of the contractor, the ultimate supervision and control lies with the contractor as he decides where the employee will work and how long he will work and subject to what conditions. Only when the contractor assigns/sends the worker to work under the principal employer, the worker works under the supervision and control of the principal employer but that is secondary control. The primary control is with the contractor.
51.1 As notice above, these workers were the permanent employees of Airfreight. When Airfreight ceased to be the ground handling agent, it was Airfreight's responsibility to deploy its workers elsewhere. But knowing that Airfreight may not continue them in service in view of termination of the licence, these workers requested IAAI to offer them employment.
51.2 Though there was no obligation to offer them employment or give any other relief, on humanitarian grounds and to mitigate the hardship of these workers, IAAI proposed that if the workers formed a co-operative society, it may consider giving the cargo handling work to such society so that the workers of Airfreight can earn their livelihood. It also agreed purely as an interim measure to employ them as casual labourers till the formalities of formation of the society and the society entering into a contract with IAAI were completed. Therefore the direct casual employment given to the workers was purely an interim or ad hoc measure as a part of the package proposal made by IAAI in its memorandum filed before the High Court, duly recorded by the High Court in W.P. No.11683 of 1985, and accepted by the workers.
51.3 On formation of the society and on the society entering into a contract with IAAI for providing contract labour, there was no need to employ these workers as casual labourers. Nor did the workers had any right to claim continuation as casual labourers. In fact they did they claim any such right. They worked for less than 240 days as casual labourers under IAAI and were not entitled to claim the benefit of either section 25F nor regularization on the basis of such short casual service as daily rated employees. Therefore, it follows that on the basis of the service as casual employees between November, 1985 and July, 1986, the Page 33 HC-NIC Page 33 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT workers are not entitled to any relief.
52. The third finding is that the contracts dated 1.7.1986, 14.7.1986 and 11.12.1987 between society and IAAI for supply of contract labour was sham and nominal.
52.1 We have already referred to the circumstances in which the said contract labour agreement was executed. To repeat, the workers were the regular and permanent employees of Airfreight till 31.10.1985. When Airfreight ceased to be the ground handling agent, apprehending retrenchment by Airfreight, the workers appealed to the IAAI to provide them some employment. They also approached the High Court in a writ petition. IAAI categorically stated that it cannot absorb them. Purely as a humanitarian measure and to mitigate their hardship, the IAAI offered to entrust the work of handling of cargo to a society formed by these workers and the workers through their union, readily agreed to form a society and the cargo handling work was given to the society and the workers as the members of the society benefited from such work/contract by working as contract labour. Instead of working under private employer operating with a profit motive, they worked under their own society.
52.2 xxx 52.3 It should also be noticed that at no point of time, the workers or their union pleaded that the agreement between IAAI and the society was sham or nominal. A careful reading of the claim statement filed before the tribunal and the evidence given by WW-1 shows that not even an allegation or claim to that effect was made in that behalf. In these circumstances, it is un-understandable as to how the tribunal could have held that the agreement was sham and nominal.
52.4 xxx
53. The last finding is that there were three indicators to show that contract labour for loading/unloading were direct employees of IAAI : direct payment of wages, direct penal action by IAAI against the contract labour, and direct control and supervision of contract labour by IAAI. Therefore, the contracts for supply of contract labour were `paper' contracts and a camouflage to deny benefits of labour laws to the members of first respondent Union.
53.6 On the basis of these documents, the Tribunal has held that payments were being directly made to workers when they were contract labours. This is a finding based on absolutely no evidence and shockingly perverse and is liable to be rejected accordingly.
53.7 The Tribunal held that IAAI was taking penal and disciplinary action by suspending and punishing the contract labour and that was proof of direct employment. This finding is also based on no evidence. Not even a single document was produced to show that any notice of suspension or show cause notice for disciplinary action or order imposing punishment was passed by IAAI in regard to any of the contract labour. Reliance was placed on Ex.W10, M-15 to M-17, M-21, M-23 as Page 34 HC-NIC Page 34 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT also M2, 24 to 31 and 34 to 40 to prove that IAAI was directly taking action against the contract labour. None of them is relevant.
53.12 Thus, none of these documents is evidence of any penal or disciplinary action by IAAI against the contract labour.
53.13 The next ground referred is that the contract labour were working under the direct supervision and control of officers of IAAI. This is not in fact disputed. The contract labour were engaged in handling cargo, that is loading, unloading and movement of cargo in the Cargo Complex of IAAI. Naturally, the work had to be done under the supervision of the officers of IAAI. Merely because the contract labour work is under the supervision of the officers of the principal employer, it cannot be taken as evidence of direct employment under the principal employer.
54. Clause 17 of the Contract Agreement required a supervisor to be employed by the society also. Exercise of some control over the activities of contract labour while they discharge their duties as labourers, is inevitable and such exercise is not sufficient to hold that the contract labour will become the direct employees of the principle employer.
55. It is thus seen that all the three grounds mentioned by the Tribunal and which have found favour with the Division Bench as indicators of direct employment by IAAI and the contract labour agreement with the society being a camouflage, are wholly baseless.
56. In view of the above we answer the questions as follows :
(i) The contract labour agreement between IAAI and the society was not sham, nominal or as a camouflage and the contract labour were not the direct employees of IAAI.
(ii) There was no violation of section 9A of the ID Act.
(iii) In the absence of a notification under section 10 of CLRA Act prohibiting the employment of contract labour in the operation of cargo handling work, the workmen employed as contract labour are not entitled to claim absorption."
[d] In the decision in case of Balwant Rai Saluja v. Air India Ltd. [2014 (9) SCC 407], Apex Court observed, inter alia, that:-
"28. The question before us is "when the company is admittedly required to run the canteen in compliance of the statutory obligation under Section 46 of the Act, 1948, whether the canteen employees employed by the contractor are to be treated as the employees of the company only for the purpose of Act 1948 or for all the other purposes.
43. The Hussainbhai case (supra) did not deal with the Act, 1948, much less any statutory obligation thereunder. The case proceeded on the test of employer-employee Page 35 HC-NIC Page 35 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT relationship to ascertain the actual employer. The Court gave due weight and consideration to the concept of 'economic control' in this regard. It may only be appropriate for the Court in the present case to refer to this judgment as regards determining the employer-employee relationship.
52. To ascertain whether the workers of the Contractor can be treated as the employees of the factory or company on whose premises they run the said statutory canteen, this Court must apply the test of complete administrative control. Furthermore, it would be necessary to show that there exists an employer-employee relationship between the factory and the workmen working in the canteen. In this regard, the following cases would be relevant to be noticed.
62. A recent decision concerned with the employer employee relationship was that of the NALCO case (supra). In this case, the appellant had established two schools for the benefit of the wards of its employees. The Writ Petitions were filed by the employees of each school for a declaration that they be treated as the employees of the appellant- company on grounds of, inter alia, real control and supervision by the latter. This Court, while answering the issue canvassed was of the opinion that the proper approach would be to ascertain whether there was complete control and supervision by the appellant therein. In this regard, reference was made to the case of Dhrangadhra Chemical Works case (supra) wherein this Court had observed that:
"14. The principle which emerges from these authorities is that the prima facie test for the determination of the relationship between master and servant is the existence of the right in the master to supervise and control the work done by the servant not only in the matter of directing what work the servant is to do but also the manner in which he shall do his work, or to borrow the words of Lord Uthwatt at p.23 in Mersey Docks and Harbour Board v. Coggins & Griffith (Liverpool) Ltd., (1952) SCR 696 "The proper test is whether or not the hirer had authority to control the manner of execution of the act in question"."
65. Thus, it can be concluded that the relevant factors to be taken into consideration to establish an employer- employee relationship would include, inter alia,
(i) who appoints the workers;
(ii) who pays the salary/remuneration;
(iii) who has the authority to dismiss;
(iv) who can take disciplinary action;
(v) whether there is continuity of service; and
(vi) extent of control and supervision, i.e. whether there exists complete control and supervision.
As regards, extent of control and supervision, we have already taken note of the observations in Bengal Nagpur Cotton Mills case (supra), the International Airport Authority of India case (supra) and the NALCO case (supra)."
Page 36 HC-NIC Page 36 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT
74. It has been noticed above that workmen hired by a contractor to work in a statutory canteen established under the provisions of the Act, 1948 would be the said workmen of the given factory or corporation, but for the purpose of the Act, 1948 only and not for all other purposes. Therefore, the appellants-workmen, in the present case, in light of the settled principle of law, would be workmen of the Air India, but only for the purposes of the Act, 1948. Solely by virtue of this deemed status under the Act, 1948, the said workers would not be able to claim regularization in their employment from the Air India. As has been observed in the Indian Petrochemicals case (AIR 1999 SC 2577 : 1999 AIR SCW 2740) (supra), the Act, 1948 does not govern the rights of employees with reference to recruitment, seniority, promotion, retirement benefits, etc. These are governed by other statutes, rules, contracts or policies.
75. To ascertain whether the appellants-herein would be entitled to other benefits and rights such as regularization, this Court would have to apply the test of employer-employee relationship as noticed hereinabove. For the said purpose, it would be necessary to refer to the Memorandum of Association and the Articles of Association of the HCI to look into the nature of the activities it undertakes. The objects of the HCI, as provided under its Memorandum of Association, inter alia, include the following:
(i) To carry on the business of hotel, motel, restaurant, cafe, tavern, flight kitchen, refreshment room and boarding and lodging, housekeepers, licensed victuallers, etc.;
(ii) To provide lodging and boarding and other facilities to the public;
(iii) To purchase, erect, take on lease or otherwise acquire, equip and manage hotels;
(iv) To establish shops, kitchens, refreshment rooms, canteens and depots for the sale of various food and beverages.
83. Therefore, the only consideration before this Court is the nature of control that the Air India may have over the HCI, and whether such control may be called effective and absolute control. Such control over the HCI would be required to be established to show that the appellants- workmen were in fact the employees of the Air India.
85. In the present case, HCI is a separate legal entity incorporated under the Act, 1956 and is carrying out the activity of operating and running of the given canteen. The said Articles of Association of the HCI, in no way give control of running the said canteen to the Air India. The functions of appointment, dismissal, disciplinary action, etc. of the canteen staff, are retained with the HCI. Thus, the exercise of control by the HCI clearly indicated that the said respondent No. 2 is not a sham or camouflage created by respondent No. 1 to avoid certain statutory liabilities.
87. In our considered view, and in light of the principles applied in the Haldia case (supra), such control would have nothing to do with either the appointment, dismissal or Page 37 HC-NIC Page 37 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT removal from service, or the taking of disciplinary action against the workmen working in the canteen. The mere fact that the Air India has a certain degree of control over the HCI, does not mean that the employees working in the canteen are the Air India's employees. The Air India exercises control that is in the nature of supervision. Being the primary shareholder in the HCI and shouldering certain financial burdens such as providing with the subsidies as required by law, the Air India would be entitled to have an opinion or a say in ensuring effective utilization of resources, monetary or otherwise. The said supervision or control would appear to be merely to ensure due maintenance of standards and quality in the said canteen.
88. Therefore, in our considered view and in light of the above, the appellants-workmen could not be said to be under the effective and absolute control of Air India. The Air India merely has control of supervision over the working of the given statutory canteen. Issues regarding appointment of the said workmen, their dismissal, payment of their salaries, etc. are within the control of the HCI. It cannot be then said that the appellants are the workmen of Air India and therefore are entitled to regularization of their services.
89. It would be pertinent to mention, at this stage, that there is no parity in the nature of work, mode of appointment, experience, qualifications, etc., between the regular employees of the Air India and the workers of the given canteen. Therefore, the appellants-workmen cannot be placed at the same footing as the Air India's regular employees, and thereby claim the same benefits as bestowed upon the latter. It would also be gainsaid to note the fact that the appellants-herein made no claim or prayer against either of the other respondents, that is, the HCI or the Chefair."
[e] In the decision in case of General Manager (OSD), Bengal Nagpur Cotton Mills, Rajnandgaon v. Bharat Lal & Anr. [(2011) 1 SCC 635], Apex Court observed, inter alia, that:-
"10. It is now well-settled that if the industrial adjudicator finds that contract between the principal employer and contractor to be sham, nominal or merely a camouflage to deny employment benefits to the employee and that there was in fact a direct employment, it can grant relief to the employee by holding that the workman is the direct employee of the principal employer. Two of the well- recognized tests to find out whether the contract labour are the direct employees of the principal employer are (i) whether the principal employer pays the salary instead of the contractor; and (ii) whether the principal employer controls and supervises the work of the employee. In this case, the Industrial Court answered both questions in the Page 38 HC-NIC Page 38 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT affirmative and as a consequence held that first respondent is a direct employee of the appellant.
12. The expression `control and supervision' in the context of contract labour was explained by this court in International Airport Authority of India v. International Air Cargo Workers Union [2009 (13) SCC 374] thus:
"38. If the contract is for supply of labour, necessarily, the labour supplied by the contractor will work under the directions, supervision and control of the principal employer but that would not make the worker a direct employee of the principal employer, if the salary is paid by contractor, if the right to regulate employment is with the contractor, and the ultimate supervision and control lies with the contractor.
39. The principal employer only controls and directs the work to be done by a contract labour, when such labour is assigned/allotted/sent to him. But it is the contractor as employer, who chooses whether the worker is to be assigned/allotted to the principal employer or used otherwise. In short, worker being the employee of the contractor, the ultimate supervision and control lies with the contractor as he decides where the employee will work and how long he will work and subject to what conditions. Only when the contractor assigns/sends the worker to work under the principal employer, the worker works under the supervision and control of the principal employer but that is secondary control. The primary control is with the contractor."
13. Therefore we are of the view that the Industrial Court ought to have held that first respondent was not a direct employee of the appellant, and rejected the application of the first respondent."
[f] In the decision in case of Municipal Corporation of Greater Mumbai v. K.V.Shramik Sangh & Ors. [(2002) 4 SCC 609], Apex Court observed, inter alia, that:-
"3. In the writ petition, it was emphasized that the nature of work carried out by the contract labour is perennial; merely because the Corporation has chosen to employ system of contract labour for discharging its statutory obligations, the contract labour does not cease to be workman of the principal employer - the Corporation. According to the writ petitioners (Union), if at all, contract labour system was to be permitted, it could be done only in accordance with the provisions of the CLRA Act; an employer could not be allowed to carry on work through contract labour unless provisions of the statute were strictly complied with (sic) that the Corporation was carrying on the work State contract labour for almost 15 years even without registering itself as a principal employer, that too through contractors who were not holding Page 39 HC-NIC Page 39 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT any licence under the CLRA Act.....
20. The material referred to relates to the complaints of the Union, recommendations of the Labour Commissioner, Labour Minister and the Labour Contract Advisory Board in regard to abolition of contract labour under Section 10 of CLRA Act but that material could not be a foundation or basis to say that the labour contract was sham, camouflage or a devised to deny the statutory benefits to the workers. From the judgment under challenge, it is clear that Air India case (supra) weighed with the High Court which judgment now stands overruled as already stated above. The High Court rejected the contention that jurisdiction to abolish the contract labour system vested with the appropriate Government under Section 10 of CLRA Act and that power could be exercised after obtaining advice of the Contract Labour Advisory Board which in turn had to keep several factors enumerated in Clauses (a) to (d) of Section 10(2) of CLRA Act stating that in the present case in almost 15 years, there was no registration of principal employer; none of the contractors ever held a licence under the Act; the work that was being carried on fellow within the parameters of Clauses (a) to (d) of Section 10(2) of the Act and having regard to what was said by the Chairman, Standing Committee of the Corporation and the contractors and the recommendation of the Labour Commissioner to abolish the contract labour system. Further the Minister for Labour of Govt. of Maharashtra went on to record in clear terms that the Government had taken a decision to abolish system of contract labour in the Solid Waste Management Department of the Corporation, the High Court thought that thee was sufficient material for abolishing the contract labour system. The High Court drew an inference that the State admitted that all the requirements were satisfied for acting under Section 10(2) but because of the election code of conduct it was unable to act and passed order for absorption of workers saying that it had no impediment to do so in view of its conclusions. Referring to Air India case (supra), the High Court observed that the said judgment suggested that a contract labour system can be said to be genuine only if it is carried in compliance with the provisions of the CLRA Act and anything contrary thereto would lead to the presumption that the purported contract labour system was merely a devise and sham. In our view, the conclusion of the High Court that the contract labour system in the present case was sham cannot be sustained in the light of what is stated above and particularly when the disputed questions of fact arose for consideration in the light of rival contentions raised by the parties. We have detailed them above to say so."
17. On reading the award, it comes out that so as to decide the issue whether the contract is genuine or camouflage or sham and bogus and whether the contract is merely name lender and so as to reach to the final conclusion with regard Page 40 HC-NIC Page 40 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT to the dispute referred by appropriate Government, learned Tribunal examined, analyzed, evaluated and appreciated the documentary and oral evidence available on record in 8 segments i.e. under 8 broad heads namely viz.
"(1) Activities/ business of the principal employer (2) genuine need or requirement of engaging contract labour (3) length of continuous and uninterrupted service of workman (4) nature of work done by the workmen i.e. whether the work is perennial in nature or intermittent (5) who has in fact, supplied the labour force to the principal employer, meaning thereby, whether service of the workmen were made available to the principal employer by the labour contractor after making recruitment (6) extent of supervision and control of the workmen by the principal employer (7) whether the workers do the labour work to produce goods or service for business of the principal employer and (8) whether the provisions of the Act (The Contract Labour (R&A) Act, 1970) relating to registration and licence etc. are complied with."
18. At this stage, it would be appropriate to take into account the observations and findings recorded by the learned Tribunal with regard to said 8 criteria/factors for determining the relationship between the claimants and the board and the legality, propriety and justiciability of the claim raised by the union on behalf of the claimants.
18.1 With regard to first point i.e. issue related to activity and business of the board, the learned Tribunal has observed and recorded that the board is engaged in production of electricity for which coal or oil / gas are used as fuel / raw material and without use of said material, Page 41 HC-NIC Page 41 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT the boilers and turbine cannot be operated, i.e. said material is essential and vital for operation of power station and the principal activity of the board and transportation of said material within the precincts of power station s integral part of its principal activity.
18.2 So far as second factor i.e. genuine need for engaging contractor is concerned, the learned Tribunal observed and recorded, inter alia, that:-
"...this Tribunal is of the view that the board cannot be said to have genuine need of engaging the contract labours because the railway track is of the ownership of the board, the land under the said railway track is also of the board the said track is utilized for day to day transportation of oil and some times big spare parts for the purpose of the thermal power station of the board, the track is to be kept in all time serviceable condition and well maintained so that there may not be any accident or derailment of tankers or wagons running on the track, the track is also required to be kept well maintained for smooth and uninterrupted supply of the raw materials in the form of oil."
"...The railway track in question is a private siding the board and therefore, it is the responsibility of the board to maintain the same and hence in the opinion of this Tribunal there was no genuine need for requirement for the board to engage contract labours for maintenance of the railway track which runs for about more than 17 kms."
18.3 So far as third factor is concerned i.e. length of continuous and uninterrupted service of the claimants, the learned Tribunal observed, inter alia, that:-
"It can be seen from the evidence of the witness of the parties that the railway track maintenance work was started to be done by the contract workers in the year 1992 and the same is being done by them even as on today. There is no evidence that the work of maintenance was not done for several days during the period commencing from 1992. All the contract workers working on the maintenance work of railway track are working regularly, continuously and uninterruptedly."
Page 42 HC-NIC Page 42 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT 18.4 So far as fourth factor is concerned i.e. whether the work can be considered perennial or intermittent in nature, the learned Tribunal has observed, inter alia, that:-
"The evidence shows that these contract workers have to work on day to day basis. The railway track which is being maintained by these workers is a permanent establishment of the board and the board must have spent a huge expenditure in laying the railway lines. The supply of raw materials would be a day to day necessity of the board because otherwise the production of electricity cannot be carried on. It is born out in the evidence that the railway track is important and necessary for the board..."
"This Tribunal is, therefore, of the view that the work of railway track maintenance is of perennial nature and not of intermittent nature."
18.5 So far as fifth factor is concerned i.e. who appointed or who supplied the labour force and whether the service of the claimants were made available by the contractor after the contractor recruited the claimants, the learned Tribunal has observed, inter alia, that:-
"Actually there is no specific evidence on this point either by the board or from the side of contractor. The learned Tribunal also observed that neither the board nor the contractor placed on record complete set of wage registers or the muster roll though the contractor placed on record certain wage registers i.e. for the period from January 1997 to March 2000."
18.6Having clarified the said factual aspect, the learned Tribunal held, inter alia, that:-
"from the evidence, it is an admitted position that the contract was given in the year 1992 and since then the contract workers are working on maintenance of railway track. There is no evidence that the contractor had recruited the said contract labours and thereafter had supplied them to the board for the maintenance work of railway track. The witness Shri Maganbhai Virabhai Chauhan while giving deposition vide Exh.39 had stated in the last paragraph of his cross examination that the contract workers are of the nearly area of Dhuvaran and that he does not know as to who recruited them."
Page 43 HC-NIC Page 43 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT In this view of the matter, the tribunal considered it proper and safe to accept the case of the claimants that it was board who had originally engaged the claimants (contract workers).
18.7 With reference to sixth factor, the learned Tribunal observed, inter alia, that:-
"From the evidence on record it cannot be said that there is no control or supervision of the board at all. The executive engineer (civil) and his deputies are exercising checks over the work once in a week and the work is also checked by the railway authorities."
"It has come in the evidence that the executive engineer or the railway authorities after checking are passing instruction to contractor and the work of maintenance is done accordingly."
"In view of the above, this Tribunal is of the opinion that if not full control, there was certain amount of control and supervision by the principal employer through its executive engineer (civil)."
18.8 So far as seventh factor is concerned i.e. whether the workers do the work to produce goods or services for the business of the principal employer, the learned Tribunal observed, inter alia, that:-
"Admittedly the present contract workers are not producing any goods but they can be certainly said to be producing the services for the benefit of the board. They are maintaining the railway track which is of the board. The said track is required to be maintained on day to day basis so that there may be smooth transportation of oil and other machineries for the thermal plower station. Mainly oil racks are received on the said track and oil is the main raw material to produce the electricity. If the service of the maintenance of railway track is discontinued, there is possibility of accident or derailment which the board cannot afford because in such contingency, there may not be supply of oil and in the absence of oil the production of electricity could not be done. Thus, the present workers do labour work to produce services for the business of the principal employer."
Page 44 HC-NIC Page 44 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT 18.9 So far as eighth factor i.e. whether the provisions of the Act relating to registration and license etc. are complied with, learned Tribunal has taken into account the different statement filed by the contractor (Exh.64).
18.10On this count, learned Tribunal has, after considering the evidence available on record, observed and recorded, inter alia, that from the register (Exh.82), it emerged that in 1992, the contractor had engaged 8 workers and in the year 1993 four more workers were employed and thereby the board exceeded the limit (for obtaining licence) of 10 workers and in 1994, four more workers were employed and in 1995 one more workman was engaged. The learned Tribunal has also observed that when in 1993 four additional workers came to be employed, the total strength exceeded the limit of 10 workmen and at that time, i.e. in 1993 itself, the contractor should have obtained licence. Thereafter, the learned Tribunal took into account relevant provision under the Contract Labour Act and after discussing various relevant aspects emerging from the provision under the Act and the facts which emerged from the document and oral evidence, learned Tribunal observed and held, inter alia, that:-
"29. From Ex.79 which is an application of the contractor for obtaining a license under the said act, it appears that the application was made on 22.5.96 the said application was Page 45 HC-NIC Page 45 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT stated to have been received by the licensing officer on 10/5/1996 as per ex.80. How it can be possible? The application dated 22/5/96 could not have reached the licensing officer on 10/5/96. So either the application Ex 79 is false or the receipt Ex 80 is false. Then here is license issued in favour of the present contractor is produced at Ex 81 which is dated 3/5/96 or 3/10/96 and was renewed up to 30/9/2001. There is narration "the license shall remain in force 1/10/95 till 30/9/95" how a post dated license could have been issued by the licensing authority is not understood when the license was issued only on 3/10/96 as per Ex 53/1 the license fee was paid by the contractor only on 8/5/1996. It is not convincing as to how the license could be issued even without payment of fees. The fees were paid in the year 1996 and the license was issued effective from 1st October, 1995. This documentary evidence is irreconcilable and found to be fishy."
18.11Having discussed above mentioned aspects and having reached to above quoted findings, learned Tribunal recorded following conclusion:-
"..Thus, so far as the eight factor as enumerated in the decision of Hon.High Court in the Steel Authority of India V/S Gujarat Mazdoor Panchayat (supra) is concern through the board had obtained registration it dies not appear to have amended its registration certificate and through the contractor had obtained a license in 1996 it was made effective from retrospective date. Under the aforesaid circumstances, this Tribunal is of the view that the contract between the board and the contractor was and is an eyewash or camouflage."
The learned Tribunal further observed that:-
"the work of Railway track maintenance is incidental and necessary for the business of the board that is to say that the said maintains work is also perennial in nature with regards to the nature of industry which the board is carrying at Dhuvaran thermal power station."
19. At this stage, it would be appropriate to consider the factual backdrop in light of which Hon'ble Apex Court recorded above quoted observations, so that facts of present case can be considered in appropriate and proper perspective.
Page 46 HC-NIC Page 46 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT 19.1 Hon'ble Apex Court made above quoted observations in the case of National Union Waterfront Workers & Ors. (supra) in backdrop of the fact that the work of handling goods in the stock yard of the appellant company was entrusted to contractors. Somewhere in 1989, the State Government issued notification under Section 10(1) of the Contract Labour Act and prohibited employment of contract labour in specified stock yards. Upon certain representations, the notification was kept in abeyance for 6 months and the said period was extended from time to time. On the strength of the said notification, the respondent union, who represented about 350 contract labourers, initiated proceedings in Calcutta High Court seeking absorption of contract workers on regular establishment. In light of the dispute, Hon'ble Apex Court addressed 3 issues one of the said three issues was whether automatic absorption of contract labourer should follow valid notification under Section 10. It was, essentially, in light of third issue that the observations with regard to master and servant relationship and the constituents which would indicate existence of said relationship came to be explained by Hon'ble Apex Court. Essentially facts of present case are different from facts of cited case. However, it Page 47 HC-NIC Page 47 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT is relevant that while addressing the said issue, Hon'ble Apex Court observed, inter alia, that unless the contractor is mere camouflage, the contract labour cannot be treated as an employee of principal employer. Hon'ble Apex Court explained that where a workman is hired in or in connection with the work of establishment by principal employer through contractor, then, the contractor merely acts as an agent and therefore, there will be master and servant relationship between the principle employer and it would be necessary to examine that whether the contractor is mere camouflage or whether the contract was found to be sham or nominal and if the answer is in affirmative, then, the workman in fact, will be employee of principal employer, otherwise not.
19.2 When the said principles are applied in facts of present case, then, the first and important aspect which emerges from the award is that after detailed and careful appreciation and evaluation of oral and documentary evidence available on record, learned Tribunal has reached to finding of fact that the contract in present case was a camouflage and it was a sham contract.
19.3 In this context, at this stage, it is necessary to keep in focus that this Court would, ordinarily, not interfere with the findings of Page 48 HC-NIC Page 48 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT fact recorded by learned Tribunal unless it is specifically and conclusively demonstrated that the findings by learned Labour Court or learned Tribunal are perverse.
19.4 In present case, it has emerged from the discussion and evidence by learned Tribunal that learned Tribunal has taken into account various factual assertions by witness including the fact that the claimants were working with the petitioner even before entry of the contractor and that the contractor had merely taken over existing employees. In this context, it is relevant to note that after careful examination of oral and documentary evidence on record, learned Tribunal has recorded, inter alia, that:-
"...There is no evidence that the contractor had recruited the said contract labours and thereafter had supplied them to the board for the maintenance work of railway track..."
19.5 Of course, the petitioner has tried to hide behind or take shelter under the interim order passed by learned Tribunal whereby learned Tribunal directed that the workmen should be continued in the event the contractor was changed which required the petitioner to ensure that in the event, the contract was required to be changed, the employees should be continued. However, the said interim order cannot offer any escape route to the petitioner in present case, because above mentioned situation occurred and Page 49 HC-NIC Page 49 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT prevailed even before the interim order came to be passed by the learned Tribunal. While taking note of the said vital fact and evidence, learned Tribunal also took into account the fact that the contractor had, as an afterthought and with a view to complying the statutory obligation, subsequently applied for licence. On reading impugned award, it comes out that the learned Tribunal has taken into account more than couple of instances and indicators to reach to the conclusion that the contract was sham and the arrangement was camouflage. In this view of the matter, this Court is of the view that the findings of fact recorded by the learned Tribunal is justified. In any case, it is a possible view which can be taken in light of the evidence available on record and that therefore, there is no justification to interfere with the said final order.
20. Above quoted observations by Hon'ble Apex Court in case of International Air Cargo Workers' Union & Anr. (supra) are made by Hon'ble Apex Court in light of factual background which is substantially and materially different than the facts involved in present case. In the cited decision, appellant International Airport Authority of India had entered into an agreement with a private company for handling cargo and the Page 50 HC-NIC Page 50 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT company was assigned work as ground handling agency. Subsequently, the airport authority decided to take over the ground handling work and to entrust work to new licencee by inviting competitive tenders. The private company which, until then, was handling the work as ground handling agency came to be discontinued. The said termination of contract did not oblige new agency to take over the workers employed by the out- going agency / contractor. Thus, on the premise or apprehension or assumption that they would be discharged, the contract labourers made appeal to airport authority to provide them work. In this background, the airport authority and the workers arrived at an arrangement where the workers form a cooperative society which was registered as such and the airport authority awarded contract to the society so upon by the workers.
20.1 In the said background, Hon'ble Apex Court considered the claim and observed and held that the industrial adjudicator can grant relief as sought by the contract labourer if it finds that the contract between the principal employer and the contractor is sham, nominal and mere camouflage. Hon'ble Apex Court further observed and held that the tests that are applied to find out whether a person is an employee or an independent contractor may not automatically Page 51 HC-NIC Page 51 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT apply in case where it is necessary to find out whether the contract labourer agreement is sham, nominal and merely camouflage. In the said decision, Hon'ble Apex Court also explained that if the contract is for supply of labour, necessarily workers supplied by the contractor will work under direction, supervision and control of principal employer, but that would not make the worker direct employee of principal employer if salary is paid by the contractor and if right to regulate employment is with the contractor and where the principal employer controls and directs the work to be done.
20.2 On this count, it is necessary to mention that in present case, learned Tribunal considered the said aspects by applying 8 criteria (as laid down and explained by this Court in case of Steel Authority of India Ltd. v. Gujarat Mazdoor Panchayat & Anr. [(2004) 1 GLR 79]) for determining the relation between the claimants and the board. After taking into account the answers and findings with reference to said 8 criteria, learned Tribunal reached to the conclusion, inter alia, that there was enough evidence on record of present case to demonstrate and establish that the board exercised supervision and control and that the salary was paid through contractor by principal employer.
Page 52 HC-NIC Page 52 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT 20.3 On reading the award, it comes out that while evaluating evidence under the said 8 different criteria, learned Tribunal has, in considerable detail assessed and evaluated evidence and carefully appreciated evidence in light of the factors laid down by the Court in above mentioned decision. Therefore, it cannot be said that the findings recorded by the learned Tribunal are not supported by evidence or are contrary to the evidence on record.
20.4 In this context and in this view of the matter, it becomes necessary to decide the scope and extent of interference of this Court against findings of fact recorded by learned Tribunal after proper and sufficient appreciation of evidence. In above mentioned decision, in case of International Air Cargo Workers' Union & Anr., Hon'ble Apex Court has explained the scope of interference in labour matters particularly whether the learned Labour Court has recorded findings of fact in light of evidence available on record. Hon'ble Apex Court has explained and emphasized that in exercising writ jurisdiction, High Court cannot sit in appeal over the findings and award of industrial tribunal and therefore, cannot re-appreciate evidence. Ordinarily, the findings of fact recorded by fact finding Page 53 HC-NIC Page 53 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT authority should be considered as final and should not be interfered with in writ jurisdiction merely on the ground that material on which the learned Tribunal has acted was insufficient or not credible and that as long as the finding of fact are based on some material which are relevant, findings should not be interfered with merely because another view is also possible, but tribunal records finding that no evidence or irrelevant evidence, High Court may interfere with such findings. As mentioned above, in present case, it cannot be said that the findings recorded by the learned Tribunal are on no evidence or irrelevant evidence and therefore, there is no scope for this Court to interfere with the findings of fact recorded by learned Tribunal.
21. So far as the observations by Hon'ble Apex Court in case of General Manager, (OSD), Bengal Nagpur Cotton Mills, Rajnandgaon (supra) are concerned, in the said decision, Hon'ble Apex Court observed that (a) it is for the employees to prove that it was the principal employer who directly paid salary (and salary was not paid by the contractor); and (b) merely because principal employer gave some instructions to the employees of contractor, that would not make them employees of principal employer The said observations came Page 54 HC-NIC Page 54 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT to be made in light of the fact that the contract in question in the said decision was with regard to the work of security service for mills premises. The case was also examined in light of the fact that the service of the concerned claimant was terminated. The said decision is essentially based on the fact that in the said case, the claimant failed to establish that he was working under direct control and supervision of principal employer, whereas in present case, the learned Tribunal has after detailed appreciation of evidence reached to the finding that the claimant established, with aid of documentary and oral evidence, that the board, through its officers, exercised supervision and control and the board, through the contractor, paid the salary and that the claimants are not appointed by the contractor i.e. they were not the employees of the contractor who merely deployed them for execution of the work. In present case, learned Tribunal also reached to the conclusion that the work and duty which the claimants performed was integral part of board's activity and the said work was of perennial nature.
22. The decision in case of Municipal Corporation of Greater Mumbai (supra) would not render much assistance in present case because in Page 55 HC-NIC Page 55 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT the said decision, Hon'ble Apex Court did not approve the direction by High Court on the ground that the claimants had directly approached the High Court and the denial of factual aspect by the Municipal Corporation gave rise to several disputed questions of fact which necessitated considerable evidence and that High Court could not and ought not have gone into process of determination of such disputed facts and also on the ground that in the said case, High Court did not record finding of fact that the contract was sham or camouflage. Whereas in present case, the claimants had approached learned Tribunal and led extensive evidence and the learned Tribunal has, after evaluating and appreciating evidence from both sides and after applying 8 criteria explained by this Court, reached to specific finding of fact and has recorded conclusion that the contract in question was sham and camouflage and that the contractor was middleman who had merely taken over the workers who were already working on the establishment of the board and the claimants worked under supervision and control of the board though its officers.
23. In the decision in case of Air India Limited & Ors. (supra), Hon'ble Apex Court explained 6 factors or criteria which should be examined to ascertain as to whether the contract labourers Page 56 HC-NIC Page 56 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT can be treated as employees of the company (principal employer). Hon'ble Apex Court explained that for the said purpose, it should be considered as to who appoints the workers, who pays the remuneration, who has the authority to take disciplinary action and terminate the worker and whether there exists complete control and supervision with the principal employer. With reference to the observations by Hon'ble Apex Court in the said decision, it is necessary to keep in focus the fact that in the said case, the Court was examining the claim by contract labourers engaged in statutory canteen and since service of the said workers were terminated, the question of legality of termination of service was also under consideration. In the said case, the labourers claimed that they should be deemed to be employees of Air India merely on the ground that they worked in canteen established on the premise of respondent Air India as the consequence of statutory obligation under Section 46 of the Factories Act.
23.1 In the cited decision, the observations by Hon'ble Apex Court are made in light of the fact that the claimants employed by a company named HCI which, though wholly owned subsidiary of Air India, was a separate entity. After taking into account the said fact, Hon'ble Apex Court Page 57 HC-NIC Page 57 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT observed and held that the workman would be workman of Air India, only for the purpose of Factories Act, however, the workers would not be able to claim regularization in their employment from Air India and to determine whether the workers would be entitled to other benefit and rights on such regularization, the test of employer and employee should be applied.
23.2 In light of the said observation by Hon'ble Apex Court, it would be appropriate, at this stage, to turn to the final directions by learned Tribunal in the impugned award.
23.3 Having reached to specific findings of fact that the board exercised supervision and control over the claimants and performance of their duties and that the agreement or the contract was sham, nominal and camouflage, the learned Tribunal directed the board to treat the workmen as its employees from 1.1.2000 by waiving educational qualification and standard of maximum age for entry in service of the board and to fix their salary at par with regular and permanent employees of the Board w.e.f. 1.1.2000 to 31.12.2003 but to pay actual wages as per such fixation w.e.f. 1.1.2004 i.e. to treat the period from 1.1.2000 to 31.12.2003 as notional.
Page 58 HC-NIC Page 58 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT
24. The questions which, therefore, would arise is (i) whether the direction to treat the claimants as employees of the board is incorrect and unjustified, and (ii) whether the direction to waive the requirement of educational qualification in maximum age limit is justified and sustainable, and (iii) whether the direction to pay salary to the claimants at par with court's employee w.e.f. 1.1.2004 is justified.
25. So far as the direction to treat the workmen as employees of the electricity company w.e.f. 1.1.2000 is concerned, it is necessary and relevant to recall that after evaluating and appreciating evidence available on record, learned Tribunal reached to the finding of fact that the contract in question was sham, nominal and camouflage. Having reached the said conclusion, learned Tribunal passed above mentioned directions.
25.1 On this count, it is necessary to recall the observation by Hon'ble Apex Court in case of Steel Authority of India Ltd. & Ors. v. National Union Waterfront Workers & Ors (supra) wherein Hon'ble Apex Court observed that :-
"...where the contract was found to be sham and nominal rather a camouflage in which case the contract labour working in the establishment of the principal employer was held, in fact and in reality, the employees of the principal employer himself...."
Page 59 HC-NIC Page 59 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT 25.2 In the same decision, Hon'ble Apex Court also observed and clarified that :-
"...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 concerned establishment subject to the conditions as may be specified by it for that purpose in the light of para 6 hereunder."
25.3 Subsequently, in the decision in case of International Airport Authority of India v. International Air Cargo Workers' Union & Anr. (supra), Hon'ble Apex Court observed and clarified that:-
"The industrial adjudicator can grant the relief sought if it finds that contract between principal employer and the contractor is sham, nominal and merely a camouflage to deny employment benefits to the..."
25.4 Thereafter, in 2011 while deciding the case between General Manager (OSD), Bengal Nagpur Cotton Mills, Rajnandgaon v. Bharat Lal & Anr. (supra), Hon'ble Apex Court observed and clarified that:-
"It is now well-settled that if the industrial adjudicator finds that contract between the principal employer and contractor to be sham, nominal or merely a camouflage to deny employment benefits to the employee and that there was in fact a direct employment, it can grant relief to the employee by holding that the workman is the direct employee of the principal employer...."
25.5 When the directions passed by learned Tribunal in present case are examined in light of above quoted observations by Hon'ble Apex Court and in light of the fact that upon proper and detailed examination of evidence, learned Page 60 HC-NIC Page 60 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT Tribunal reached to the finding and conclusion that in present case, the contract is sham and nominal, then, such finding and conclusion cannot be faulted.
25.6 From said observations and facts of this case and findings recorded by the tribunal, it also becomes clear that the direction against the petitioner company viz. to consider the claimants as employees of the company cannot be termed arbitrary or unjust or unreasonable and said direction cannot be faulted. Therefore, the said direction is confirmed.
26. However, so far as further direction passed by learned Tribunal viz. to waive educational qualifications and standard of maximum age are concerned, the said directions cannot be considered proper and/or within the province of learned Tribunal's jurisdiction and said directions deserve to be set aside and modified.
26.1 If the selection and recruitment rules of the petitioner company prescribe eligibility criteria and such eligibility criteria include any specification with regard to the requirement of educational qualification then the learned Tribunal would not be competent or justified to direct the employer to waive such eligibility Page 61 HC-NIC Page 61 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT criteria, more particularly educational qualifications. Such direction, therefore, cannot be sustained. The direction to waive the requirement of educational qualification is set aside.
26.2 Likewise, so far as maximum or upper age limit is concerned, ordinarily the direction to the effect that the age limit at the time of initial entry of concerned workmen should be taken into account, can be passed by the learned Tribunal, however, an absolute or blanket direction to completely waive the criterion related to upper age limit cannot and should not be passed. The learned Tribunal, in present case, is not justified in passing such blanket direction Therefore, impugned award and direction to above mentioned extent deserves to be set- aside and modified.
27. It is, therefore, clarified that those claimants who, at the time of first-initial entry possessed and fulfilled prescribed eligibility criteria which prevailed at relevant time will be eligible and entitled for regularisation and while regularizing service of the claimants the petitioner company shall take into account prescribed educational qualification which prevailed at the relevant time i.e. at the time Page 62 HC-NIC Page 62 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT of entry of the workmen and it shall also take into account prescribed upper age limit which prevailed at the relevant time, i.e. at the time of first/initial entry/appointment of concerned claimant. The claimants who did not possess educational qualification and/or had crossed the upper age limit, at the relevant time of entry into service, shall not be eligible for regularisation and the direction passed by learned Tribunal shall not be available for them.
28. So far as the direction to fix the salary of the concerned workmen on par with regular and permanent employees of the Board w.e.f. 1.1.2000 to 31.12.2003 and to pay actual wages as per such fixation w.e.f. 1.1.2004 and to treat the period from 1.1.2000 to 31.12.2003 is concerned, the said direction is not disturbed.
29. Now, before concluding, it is necessary as well as relevant to take into account some events and developments which, occurred during pendency of present petition.
29.1 After the learned Tribunal passed the award, this Court passed order dated 16.8.2005 in present petition and directed the parties to maintain status-quo. Thus, in view of said order dated 16.8.2005, the petitioner board was under
Page 63 HC-NIC Page 63 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT obligation to maintain status quo. The said order dated 16.8.2005 was confirmed under order dated 4.10.2005 with direction that the said direction shall continue till final disposal of the petition. It appears that despite said orders during pendency of the petition, the workers apprehended that their service will be discontinued and that therefore, the union preferred Civil Application No.3091 of 2010 wherein the union prayed, inter alia, that:-
"8(B) YOUR LORDSHIPS may be pleased to direct the respondent no.1 to continue the concerned workmen in services and further be pleased to direct them to pay regular salary, in the interest of justice;"
29.2 The said application came to be disposed of vide order dated 19.4.2010 wherein the Court recorded a statement and assurance by learned advocate for the petitioner company. The said order dated 19.4.2010 reads thus:-
"1. Heard learned Advocate Mrs. Sangeeta N.Pahwa for applicant, learned Advocate Ms. Lilu K. Bhaya for respondent NO.1. On 15.4.2010, this Court has passed following order :
1. Ms. Lilu K. Bhaya, learned advocate appearing for the respondent no.1, request for some time. Hence, the matter is adjourned to 19th April 2010.
2.Ad interim relief granted earlier by this Court shall remain continued till 19th April 2010.
2. Today, learned Advocate Ms. Lilu K.Bhaya has made a statement before this Court on having instructions from Shri B.M. Pandya, Deputy General Manager, who is present before this Court, that the Contractor who was working before passing of interim order of this Court is still remained continue as contractor and workmen, those who are working with the contractor, they also have remained continued with the contractor.
3. Therefore, in view of this statement made by learned Advocate Ms. Lilu K. Bhaya on behalf of respondent NO.1 on having instructions from Deputy General Manager, this application is disposed of. If the Salary of March, 2010 has not been paid by Contractor, let it be paid by contractor to employees concerned."
Page 64 HC-NIC Page 64 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT 29.3 Sometime after above-mentioned application was disposed of on the basis of the statement and assurance by the company, the company preferred application seeking permission / order contrary to the statement made and assurance given to the Court at the time of hearing of Civil Application No.3091 of 2010. The company filed Civil Application No.11283 of 2010 and prayed, inter alia, that:-
"17(A)Be pleased to modify the orders dated 4.10.2005 passed in SCA No.16912 of 2005 and permit the applicant to close the oil based unit nos. 5 & 6 at Dhuvaran Thermal Power Station of the applicant w.e.f. 30.6.2010 for the reasons stated in the Memo of Application."
29.4 The company, however, subsequently, withdrew the said application. Accordingly, the said Civil Application No.11283 of 2010 came to be disposed of as not pressed.
29.5 Subsequently, the company came out with another application i.e. Civil Application No.16923 of 2010 wherein the company prayed, inter alia, that:-
"3(A) Be pleased to join the Opponent no.4 herein as party respondent no.4 to the Special Civil Application No.16912 of 2005 and permit the applicant to amend the cause-title accordingly for the reasons stated in the Memo of Application."
29.6 The said application came to be disposed of vide order dated 31.1.2011 which reads thus:-
"Heard learned Advocates appearing for the respective parties. Despite objection of Mr. Chauhan the application is required to be allowed and is hereby allowed in terms of prayer 3(A). It is Page 65 HC-NIC Page 65 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT needless to state that Mr. Chauhan will have all opportunities to argue and resist the presence of proposed respondent as if he is not joined and therefore without creating any equity, the application is allowed and the proposed respondent is joined and cause title be amended accordingly. After the cause title is amended let there be a notice to the proposed respondent returnable on 07.02.2011. Direct service permitted."
29.7 It is appropriate to note that the said application was preferred with a request to implead the new contractor who was engaged by the company upon conclusion of the contract.
29.8 What is more important is the fact that after the round of above-mentioned applications came to be disposed of, the company filed additional affidavit i.e. affidavit dated 25.2.2011 stating and declaring its decision to close the contract on the date when the period of contract would expire. The company claimed that it has closed down the unit No.6. It is relevant to take into account the details mentioned by the company in said affidavit.
"2. It is submitted that the Dhuvaran TPS [oil based] unit no. l,2,3,4, each were commissioned on 1964 - 65 and installed capacity was 63.5 MW and unit no. 5 & 6 having rated capacity of 140MW each were commissioned on 27/05/1972 & 10/09/1972 respectively & the useful life of units has been over since long. The above units were declared to 110 MW from original installed capacity of 140 MW vide CEA [Central Electricity Authority], Delhi.
3. It is submitted that LSHS is the prime fuel and sourced from IOCL for running of above units which was being transported through Railway.
4. It is submitted that the CEA vide letter dated 10/09/2009 proposed to retire above units during Xl plan giving reasons of ageing, low level of operating efficiency & PLF [Plant load factor]. However, Govt. of Gujarat had requested not to maintaining voltage profile in Saurashtra region and for arrangement for drawl of Narmada water.
5. It was noticed that the cost of generation from all these Page 66 HC-NIC Page 66 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT units was much higher than gas based power plant of Dhuvaran and therefore generation from oil based units of Dhuvaran are not commercially viable.
6. In the present commercial merit order based dispatch system, the generation from oil based Dhuvaran units 1 to 6 are backed down as cheaper power was available from gas based power plant. The cost of per unit generation in gas based power plant is approximate Rs. 3.00, where as in oil based power plant it is between Rs. 5 to 6 per unit.
7. Considering generation being commercially not viable, the unit no. 5 was under reserve shut down since November'09 onwards and unit no.6 was also running at technical minimum load as directive of SLDC [State Load Dispatch Center].
8. Moreover SLDC vide letter dated 30/11/2009 informed that the generation from oil based unit of Dhuvaran may not be required during next three - four months and they have asked to close down unit no. 6 also after consuming existing stock of fuel. In view of this IOCL also been asked to discontinue oil supply from December 2009 onwards. Finally unit no.6 was closed on 24/01/2010 and Central Electricity Authority given approval on 11-02-2011. Copy marked as Annexure "A".
9. The PAP [Plant Availability Factor] of Oil based unit of Dhuvaran up to November 2009 was 40.59%. Considering the same, the loss in fixed cost was @ 36.7l crores. (The PAF & fixed cost is approved by GERC for the year 2009-10 is 80% & 74.53 crores respectively).
1O. Further IOCL has shown unwillingness to supply LSHS after September 2010.
ll. As unit nos. 1 to 4 were closed on 20.4.2007, it was felt that running of unit no. 5 and 6 of Dhuvarnn TPS is not commercially viable. Copy of minutes of meeting marked as Annexure "B".
l2. The matter was placed before the Board of Directors of the applicant Company in its 104th meeting held on 19/01/2010. After discussion and deliberation. the Board has decided to close down and retire the above units vide its resolution no.l04.l6.1654. As a result of this, transportation of LSHS would not now be required for running the aforesaid unit.
13. The present permanent staff of the petitioner Corporation working at oil based unit of Dhuvaran is also required to be redeployed. Since two nos. of Gas based units are in operation, the team consisting of senior officers of Corporate office and senior officers of Dhuvaran TPS have studied and identified the requirement of staff to be retained and surplus staff due to closure of above units. The team is proposing the re-deployment formula for present surplus staff of class I to class IV due to closure of units."
29.9 It appears from the affidavit subsequently filed by the union (affidavit dated 1.2.2016) Page 67 HC-NIC Page 67 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT that the company relieved the claimants w.e.f. March 2011. In this context, it is appropriate to take into account the details mentioned by the union in paragraph No.3 of the said affidavit, which reads thus:-
"3. I say that though there is an order of status quo and there is no permission taken by the respondent to relieve the workers in pursuance of the additional affidavit filed by the petitioner, the workers have been relieved from service w.e.f. March 2011. I say that in the additional affidavit filed by the petitioner, it is stated that the petitioner has decided to close down unit no.6 on 24.1.2010. I say that in pursuance of closing down of the unit, the workers have been not allowed to work."
29.10The affidavits subsequently filed by the petitioner electricity company and original claimants as well as above mentioned orders have brought out that certain changes, in respect of fact situation (which prevailed at the time when petition came to be filed and admitted) have taken place. In light of said subsequent developments, more particularly in view of the fact that the claimants have been terminated/relieved with effect from March 2011, learned counsel for the claimants submitted that the said action of the petitioner board amounts to violation of the orders dated 16.8.2005 and 4.10.2005.
30. In light of such change in the fact - situation, it is clarified that since the service of the concerned claimants are already terminated, this Court has not examined the said Page 68 HC-NIC Page 68 of 69 Created On Sat Sep 02 20:34:00 IST 2017 C/SCA/16912/2005 CAV JUDGMENT issue because it falls out side the scope and purview of the petition as well as the award impugned in present petition. However, it is clarified that if the concerned workmen have initiated any proceedings against termination of their service or if they initiate such proceedings, then, the said proceedings would be adjudicated on its own merits without being influenced by the award impugned in present petition or the result of this petition.
With aforesaid observation, directions and clarifications, impugned award is partly confirmed and partly set aside / modified and the petition accordingly stands disposed of. To that extent Rule is made absolute.
Sd/-
(K.M.THAKER, J.) kdc/Bharat/Suresh* Page 69 HC-NIC Page 69 of 69 Created On Sat Sep 02 20:34:00 IST 2017