The Indian Iron & Steel Co. Ltd vs The Union Of India & Ors on 7 July, 2010

[Cites 10, Cited by 1]

Calcutta High Court (Appellete Side)

The Indian Iron & Steel Co. Ltd vs The Union Of India & Ors on 7 July, 2010

This writ application is directed against the notification No.1034(E) dated October 14, 1999 issued in exercise of powers conferred by sub-section(1) of Section 10 of Contract Labour (Authority Regulation and Abolition) at 1970 prohibiting the employment of contract labour in the jobs, processes or operations mentioned in the schedule annexed to the above notification in the establishment of Indian Iron and Steel Company Ltd., Burnpur, West Bengal.

The facts of this case in a nutshell are as under:-

The petitioner company was nationalized in the year 1972 and it became a subsidiary of steel authority of India Ltd., Government of India Undertaking. It was engaged in manufacturing and selling Iron and Steel Process.

By a notification dated February 9, 1980 the Government of West Bengal, in exercise of power conferred by sub-section(1) of Section 10 of the Contract Labour (Regulation and Abolition) Act 1970 (hereinafter referred to as the said Act) prohibited employment of contract labour in the processes or operations specified in the schedule annexed to the above notification in the establishment of the petitioner company with effect from April 1, 1970. Consequent thereupon contract labourers specified in the schedule to the aforesaid notification were absorbed in the role of the petitioner company.

Subsequently, several writ petitions were filed by the groups of contract labourers engaged by the petitioner company praying for orders for the purpose of their absorption as regular employees of the petitioner company claiming that the jobs performed by them were of perennial nature. Those writ petitions were allowed. But on appeal, a Division Bench of this court was pleased to set aside those judgments allowing the appeal of the petitioner company with the direction that the petitioner company should go on making investigation with regard to those petitioners in the process regularisation of their services.

After the judgment of the Hon'ble Supreme Court in the matter of AIR India Vs. Union of India, reported in AIR 1997 SC 645, several writ petitions were filed claiming that the writ petitioners were performing notified jobs under the petitioner company. By a judgment dated May 11, 1999 delivered in W.P. 3 No.13024(W) of 1998 with W.P. No.11932(W) of 1998, the writ petitioners of the above writ applications were directed to make comprehensive representation to the Central Government(Secretary, Department of Labour, Government of India) for abolition of contract labour giving all particulars therein in support of their contentions as also the Central Government was directed to come to a decision after consultation with the Central Board in accordance with law after hearing the petitioners and the company by passing a reasoned an speaking order.

The petitioner company preferred appeals being nos. MAT 1704 of 1999 and MAT 1705 of 1999 against the aforesaid judgment and both the appeals were disposed of by the common judgment dated August 12, 1999 fixing a time frame within which the appropriate Government was to conclude the proceeding under the said Act taking final decision by September 17, 1999. In compliance of the above direction the impugned notification dated October 14, 1999 was issued.

It is submitted by Mr. Lakshmi Kumar Gupta, Learned senior advocate appearing for the petitioner company, that the impugned notification was issued without complying with the provisions of sub-section(2) of Section10 of the said Act. It is submitted by him that under the above provisions the appropriate government, before issuing any notification under sub-section(1) of Section10 of the said Act, should have regard to the condition of work and benefits provided for the contract labour in an establishment and other relevant factors mentioned in clauses (a) to (d) of sub-section(2) of Section 10 of the said Act. In doing so the appropriate government should consult with the Central Advisory Board or a State Board, as the case may be. According to Mr. Gupta the impugned 4 notification was issued by the Central Government and as such the consultation with the Central Advisory Board was necessary. In accordance with the provisions of Section 3 of the said Act the purpose of constituting Central Advisory Board was to obtain advise on such matters arising out of the administration of the said Act as might be referred to it. According to him the impugned notification was issued in violation of the aforesaid provisions.

Mr. Gupta relied upon the decisions of Banwarilal Vs. State of Bihar, reported in AIR 1961 SC 849, Swrashati Industrial Syndicate Ltd. Vs. Union of India, reported in AIR 1975 SC 460 and Steel Authority of India Ltd., Vs. National Union Waterfront Workers, reported in (2001) 7 SCC 1 in support of his submissions.

Pursuant to the direction of this court the records relating to issuance of the impugned notification are produced before this court. Relying upon those records it is submitted by Mr. R. N. Das, learned senior advocate appearing on behalf of the respondent No.1 that the Central Government referred the matter under reference to the Central Advisory Board. The Central Advisory Board, by an order dated July 19, 1999 constituted a three members sub-committee to study and examine the question of abolition of contract labour under reference. The above sub-committee submitted its report to the Central Advisory Board on September 2, 1999. The Chairman of the board was abroad on a private visit and he was expected to come back by the end of October 1999. In the mean time, a suo-moto contempt rule was issued by a Division Bench of this High Court for non-compliance of the judgment dated August 12, 1999. Consequent 5 thereupon the Central Government had to take a decision in the matter. The Director General (Labour Welfare) in his office note dated October 12, 1999 stated that the meeting of the Central Advisory Board could not be held before returning to the Chairman of the Board. In order to comply with the direction of the Hon'ble High Court of Calcutta, the Central Government had no other alternative but to take a decision in the matter based on the report of the sub- committee. The above office note also contained that recommendations of the sub-committee were reasonable having no difference in the ultimate conclusion drawn by the sub-committee at the time of issuing notification dated February 9, 1980 by the State Government. According to Mr. Das the provisions of sub- sections1(1) and (2) of Section 10 of the said Act were substantially complied with.

Mr. Das relies upon the decision of B.H.E.L. Workers Association Vs. Union of India, reported in AIR 1985 SC 409 to submit that the decision of the Central Government in the matter cannot be reexamined in course of judicial review in this writ application.

I have heard the learned counsel appearing for the respective parties at length and I have considered the facts and circumstances of this case. The moot question which falls for consideration of this court is this whether the impugned notification was issued adhering to the provisions of Section 10 read with Section 3 of the said Act. So the above provisions are quoted below:-

"3. Central Advisory Board.- (1) The Central Government shall, as soon as may be, constitute a board to be called the Central Advisory Contract Labour Board (hereinafter referred to as the Central Board) to advise the Central Government on such matters arising out of the 6 administration of this Act as may be referred to it and to carry out other functions assigned to it under this Act.

(2) The Central Board shall consist of-

(a) a Chairman to be appointed by the Central Government;

(b) the Chief Labour Commissioner (Central), ex-officio;

(c) such number of members, not exceeding seventeen but not less than eleven, as the Central Government may nominate to represent that Government, the Railways, the coal industry, the mining industry, the contractors, the workmen and any other interests which, in the opinion of the Central Government, ought to be represented on the Central Board.

(3) The number of persons to be appointed as members from each of the categories specified in sub-section (2), the term of office and other conditions of service of, the procedure to be followed in the discharge of their junctions by, and the manner of filling vacancies among, the members of the Central Board shall be such as may be prescribed:

Provided that the number of members nominated to represents the workmen shall not be less than the number of members nominated to represent the principal employers and the contractors.

10. Prohibition of employment of contract labour.- (1) Notwithstanding anything contained in this Act, the appropriate Government may, after consultation with the Central Board or, as the case may be, a State Board, prohibit, by notification in the Official Gazette, employment of contract labour in any process, operation or other work in any establishment.

(2) Before issuing any notification under sub-section (1) in relation to an establishment, the appropriate Government shall have regard to the conditions of work any benefits provided for the contract labour in that establishment and other relevant factors, such as-

(a) whether the process, operation or other work is incidental to, or necessary for the industry, trade, business, manufacture or occupation that is carried on in the establishment;

(b) whether it is of perennial nature, that is to say, it is of sufficient duration having regard to the nature of industry, trade, business, manufacture or occupation that is carried on in that establishment;

(d) whether it is sufficient to employ considerable number of whole time workmen.

Explanation.- If a question arises whether any process or operation or other work is of perennial nature, the decision of the appropriate Government thereon shall be final."

According to the above provisions the appropriate Government, in this case the Central Government was, under obligation to act in consultation with the central Advisory Contract Labour Board. Under the provisions of sub-section(1) of Section 3 of the said Act the Central Advisory Contract Labour Board was to advise the Central Government on the matter under reference.

In view of the provisions of Sub-section(1) of Section 3 of the said Act, the term "Consultation" used in sub-section(1) of Section 10 of the said act purports action on the part of the appropriate government in this case the central Government on the advise of the Central Advisory Contract Labour Board. It is a well settled principle of interpretation that the courts always presumed that the legislature inserted each and every part of the statute for the definite purpose and the legislative intention is that every part of the statute should have effect. Reference may be made to the decision of J. K. Cotton Spinning and Weaving Mills Co. Ltd. Vs. State of U.P., reported in AIR 1961 SC 1170.

Admittedly, the Central Government acted in the matter on the report submitted by a committee constituted by the Central Advisory Board. The Central Advisory Board could not consider the matter in its meeting. Rule 12 of the Contract Labour (Regulation and Abolition) Central Rules, 1971 prescribed the adherence to the following procedure in case of non-consideration of a matter at its meeting and the above provisions are quoted below:- 8

"12. Disposal of business.- Every question which the Board is required to take into consideration shall be considered at a meeting, or, if the Chairman so directs, by sending the necessary papers to every member for opinion, and the question shall be disposed of in accordance with the decision of the majority;

Provided that in the case of equality of votes, the Chairman shall have a second or a casting vote.

Explanation. - " Chairman" for the purposes of this Rule shall include the Chairman nominated under rule 13 to preside over a meeting."

The procedure prescribed in the above rule was not followed. Admittedly, observations of the appropriate government, in this case the Central Government with regard to the conditions of working and benefits provided for contract labour in the establishment of the petitioner company relating the facts enumerated in clauses (a) to (d) of sub-section (2) of Section 10 of the said act were not available in the records produced before this court.

Therefore, undisputedly the procedure prescribed in Clauses (a) to (d) of sub-section(2) of Section 10 in issuing a notification in sub-section(1) of Section 10 of the said Act in consultation with the Central Advisory Board upon due consideration of its advice as prescribed in sub-section(1) of Section 3 of the said Act read with Rule 12 of the Contract Labour (Regulation and Abolition) Central Rules 1971 were followed in breach.

The rule laid down in the matter of Taylor Vs. Taylor reported in (1876)1 CH 426 that where a power is given to do a certain thing in a certain way, it must be done in that way or not at all and the other methods of performance are necessarily forbidden, was adopted for the first time in India by the judicial committee of the privy council in the matter of Nazir Ahmed Vs. King Emperor, 9 reported in AIR 1936 PC 253. The above principle was followed by the Honb'le Supreme Court in the matter of State of U. P. Vs. Singhara Singh, reported in AIR 1964 SC 358. This principle was approved by a Constitution Bench of the Hon'ble Supreme Court in the matter of CIT Vs. Anjum M. H. Ghaswala, reported in (2002) 1 SCC 633 and the relevant portions of the above decision are quoted below:-

"27. Then it is to be seen that the Act requires the Board to exercise the power under Section 119 in a particular manner i.e. by way of issuance of orders, instructions and directions. These orders, instructions and directions are meant to be issued to other income tax authorities for proper administration of the Act. The Commission while exercising its quasi-judicial power of arriving at a settlement under Section 245-D cannot have the administrative power of issuing directions to other income tax authorities. It is a normal rule of construction that when a statute vests certain power in an authority to be exercised in a particular manner then the said authority has to exercise it only in the manner provided in the statute itself. If that be so, since the Commission cannot exercise the power of relaxation found in Section 119(2)(a) to exercise the same in its judicial proceedings by following a procedure contrary to that provided in sub-section (2) of Section 119."

In view of the above settled principles of law the decision making process of the Central Government in issuing the impugned notification is liable to be quashed and set aside on the ground of impropriety in its decision making process.

In view of the distinguishable facts and circumstances of this case, the decision of B.H.E.L. Workers Association(supra) with regard to the scope of judicial review has no manner of application in this case.

Consequent upon the observations and discussions made herein above the impugned notification No. SO 1034(e) dated October 14, 1999 is quashed and set 10 aside. The Central Government is directed to take a decision in the matter of prohibiting the employment of contract labour in the jobs, process or observations mentioned in the scheduled annexed to the impugned notification in the establishment of the petitioner company afresh strictly in accordance with law preferably within a period of three months from the date of communication of this order.

There will be, however, nor order as costs.

Urgent Photostat certified copy of this judgment, if applied for, be given to the parties, as expeditiously as possible, upon compliance with the necessary formalities in this regard.

( Debasish Kar Gupta, J. )

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Calcutta High Court (Appellete Side)