Madras High Court
Mrs.N.Packiyalakshmi vs The Union Of India on 19 September, 2007
Author: K.Chandru
Bench: K.Chandru
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED : 19/09/2007 CORAM: THE HONOURABLE MR.JUSTICE K.CHANDRU W.P.(MD)Nos.6678 of 2007, W.P.(MD)Nos.7402 and 7589 of 2007 and M.P.Nos.1+1+2 of 2007 Mrs.N.Packiyalakshmi ... Petitioners in all the W.Ps Vs. 1.The Union of India through its Secretary, Ministry of Labour, Shram Sakthi Bhavan, Raji Ahamed Kidwani Road, New Delhi. 2.The Central Provident Fund Commissioner, Mayur Bhavan, Connaught Circle, New Delhi. 3.The Regional Provident Fund Commissioner, Rayapettah High Road, Chennai - 600 014. 4.The Tamil Nadu Small Industries Development Corporation Limited, Industrial Estate, Guindy, Chennai -32, rep.by its Executive Engineer ... Respondents PRAYER in 6678 of 2007 : Writ Petition filed under Article 226 of the Constitution of India, praying for the issuance of a Writ of Certiorarified Mandamus to call for the records relating to the tender notification issued by the fourth respondent in tender notification No.7474/Ka.Po/2007 dated 20.07.2007 and quash the same as illegal in so far as insisting of E.P.F. Code is concerned and consequentially to direct the fourth respondent to consider the tender schedule submits by the petitioner without insisting the EPF Code. PRAYER in 7402 of 2007 : Writ Petition filed under Article 226 of the Constitution of India, praying for the issuance of a Writ of Mandamus to forbear the respondents herein from enforcing the provisions of the amended Para-26(2) of the Employees Provident Fund Scheme (EPF Code) in so far as temporary and casual and site workers engaged by the petitioner in her business. PRAYER in 7589 of 2007 : Writ Petition filed under Article 226 of the Constitution of India, praying for the issuance of a Writ of Mandamus to forbear the fourth respondent from insisting the petitioner to produce "EPF" Code of their own" while calling for tenders and also forbearing the respondents from holding any enquiry on the basis of the amended provision relating to para 26(2) of the Employees Provident Fund Scheme in so far as temporary or casual or site workers engaged by the petitioner in his business. !For Petitioner ... Mr.M.Ajmal Khan ^For R-1 ... Mr.P.Krishnasamy :COMMON ORDER
The petitioner in all these Writ Petitions are registered Contractors with the Tamil Nadu Small Industries Department Corporation ( for short TIDCO).
2.In all these Writ Petitions, the petitioners are challenging a condition imposed in the tender schedule viz., that the future tenders must be a registered and must have a registration number given by the Employees' Provident Fund Department under the Employees Provident Fund and Miscellaneous Provisions Act,1952.
3.The grievance of the petitioner is that they have been executing various projects undertaken by the SIDCO. During the execution of the said project, they were scrupulously observing all the labour laws. By the introduction of this condition, they have been asked to perform certain Acts which are next to impossibility. The question of registering with the P.F. authorities and keeping a permanent registration number does not arise. In most of the projects, the construction activities carried on by them which involves outsourcing the work or employing the workers who are less than members stipulated for coverage under the E.P.F. Act. Many time the casual employment of workers in construction activity do not involve coverage under E.P.F.Act.
4.Learned counsel for the petitioner submits that if the contract is awarded to them and in case there is a statutory coverage, they are bound to enforce those statutory obligations. By putting it as a precondition they have edged out of the competition and therefore they seek the aid of this Court to quash of the condition imposed in the Tender schedules floated by the fifth respondent.
5.This Court has given anxious considerations to the submission made by the petitioners. This is not a case of introduction of a condition after the tenderers have been awarded to the petitioners. In fact, the petitioners are yet to make any application pursuant to the tender notification which is impugned in the Writ Petition. In case of such tenderers, they are bound by the conditions prescribed by the authority, who are floating the tenders. The question of challenging a particular condition as it is not suited to them or they will be disqualified under that clause cannot be a ground to interfere with any tender conditions. A tender condition can be impugned only on the touchstone of Article 14 of the Constitution, if such tenders are floated by instrumentality's of the State coming within the meaning of 'State' under Article 12 of the Constitution. It should be that such a condition will deprive a whole classes of contractors who will be edged out in the process of offering their tenders and it is intended to benefit one individual or group.
6.In the present case, one should examine the context in which such a condition namely that future contractors must have a permanent register number under the E.P.F.Act came to be made. It was through various Court directions both by the Apex Court and by this Court. Under the provisions of EPF Act, a Principal employer is made liable to make good the payments arising out of the provisions of the E.P.F.Act in case the contractors either do not fulfill their obligations or runs away from the contract. In such cases, then the entire liability is passed on to the principal employer. In the present case, it is the fifth respondent who had floated the tender will be much liable as the principal employer.
7.Further, it it also the obligation of the State to scrupulously follow the various labour laws and in the course of giving largesse of the State to private entrepreneurs by out-sourcing work it will be the bounden duty to see that of the labour laws must be followed by such of those contractors, who are bound to make profits out of executing those contracts. In view of the peculiar situation of the P.F.Act which passes on the entire liability to the principal employer, any prudent employer may always want to make his position secure so that a future liabilities are not made against the principal employer only because he floated a contract be given to various contractors.
8.For the first time the plight of the construction workers came to the notice of the Supreme Court, when Asian Games were to take place in New Delhi hosted by Delhi Administration. On a letter written by an association by name People's Union for Democratic Rights(PUDR), it was treated as a Writ Petition. The Supreme Court thereafter looked into the plight of various construction workers brought from all over India and were made to work for hours together in appalling conditions and abject poverty and penury. The various sub-contractors and contractors engaged by the Delhi Administration were found to be violating laws including the Contract Labour Regulation and Abolition Act,1970. In that context the Supreme Court gave a number of guidelines to various authorities to strictly implement the provisions of various enactments concerning labour.
9.In the decision reported in (1982) 3 SCC 235,PEOPLE'S UNION FOR DEMOCRATIC RIGHTS V. UNION OF INDIA, the relevant portions are reproduced below:-
"15.Before leaving this subject, we may point out with all the emphasis at our command that whenever any fundamental right which is enforceable against private individuals such as, for example, a fundamental right enacted in Article 17 or 23 or 24 is being violated, it is the constitutional obligation of the State to take the necessary steps for the purpose of interdicting such violation and ensuring observance of the fundamental right by the private individual who is transgressing the same. Of course, the person whose fundamental right is violated can always approach the court for the purpose of enforcement of his fundamental right, but that cannot absolve the State from its constitutional obligation to see that there is no violation of the fundamental right of such person, particularly when he belongs to the weaker section of humanity and is unable to wage a legal battle against a strong and powerful opponent who is exploiting him. The Union of India, the Delhi Administration and the Delhi Development Authority must therefore be held to be under an obligation to ensure observance of these various labour laws by the contractors and if the provisions of any of these labour laws are violated by the contractors, the Petitioners vindicating the cause of the workmen are entitled to enforce this obligation against the Union of India, the Delhi Administration and the Delhi Development Authority by filing the present writ petition. The preliminary objections urged on behalf of the respondents accordingly be rejected.
10.Further in paragraph 16, it was held as follows:-
16.....So far as observance of the other labour laws by the contractors is concerned, the Union of India, the Delhi Administration and the Delhi Development Authority disputed the claim of the Petitioners that the provisions of these labour laws were not being implemented by the contractors save in a few instances where prosecutions had been launched against the contractors. Since it would not be possible for this Court to take evidence for the purpose of deciding this factual dispute between the parties and we also wanted to ensure that in any event the provisions of these various laws enacted for the benefit of the workmen were strictly observed and implemented by the contractors, we by our Order dated May 11, 1982 (Sec (1982) 2 SCC 494:1982 SCC (L&S) 262 appointed three ombudsmen and requested them to make periodical inspections of the sites of the construction work for the purpose of ascertaining whether the provisions of these labour laws were being carried out and the workers were receiving the benefits and amenities provided for them under these beneficent statutes or whether there were any violations of these provisions being committed by the contractors so that on the basis of the reports of the three ombudsmen, this Court could give further direction in the matter if found necessary. We may add that whenever any construction work is being carried out either departmentally or through contractors, the Government or any other governmental authority including a public sector corporation which is carrying out such work must take great care to see that the provisions of the labour laws are being strictly observed and they should not wait for any complaint to be received from the workmen in regard to non-observance of any such provision before proceeding to take action against the erring officers or contractors, but they should institute an effective system of periodic inspections coupled with occasional surprise inspections by the higher officers in order to ensure that there are no violations of the provisions of labour laws and the workmen are not denied the rights and benefits to which they are entitled under such provisions and if any such violations are found, immediate action should be taken against defaulting officers or contractors."
11.Subsequently, the Supreme Court in the judgment relating to labours reported in (1983) 2 SCC 181, onceagain dealt with the plight of the construction workers and in which the LABOURERS, SALAL HYDRO PROJECT V. STATE OF JAMMU AND KASHMIR, in paragraph No.7 held as follows:-
"7....It is only if the officers of the National Hydro electric Power Corporation and the Central Government are sensitive to the misery and suffering of workmen arising from their deprivation and exploitation that they will be able to secure observance of the labour laws and to improve the life conditions of the workmen employed in such construction projects."
12.Subsequently, the Supreme Court in a petition under Article 32 dealt with the case of the bonded labourers vide its Judgment relating to BANDHUA MUKTI MORCHA V. UNION OF INDIA, reported in (1984) 3 SCC 161. The relevant portion in paragraph Nos.37 and 38 it is held as follows:-
"..37.We must not be content with the law in books but we must have law in action. If we want our democracy to be a participatory democracy, it is necessary that law must not only speak justice but must also deliver justice.
38....There have also been occasions where the magistrate and judicial officers have scotched prosecutions and acquitted or discharged the defaulting employers on hypertechnicalities. This happens largely because the magistrates and judicial officers are not sufficiently sensitised to the importance of observance of labour laws with the result that the labour laws are allowed to be ignored and breached with utter callusness and indifference and the workmen begin to feel that the defaulting employers can, by paying a fine which hardly touches their pocket, escape from the arm of law and the labour laws supposedly enacted for their benefit are not meant to be observed but are merely decorative appendages intended to assuage the conscience of the workmen. We would therefore strongly impress upon the magistrates and judicial officers to take a strict view of violation of labour laws and to impose adequate punishment on the erring employers so that they may realise that it does not pay to commit a breach of such laws and to deny the benefit of such laws to the workmen."
13.It gave series of directions both to the Central and the State Governments in the matter of non-implementation of labour laws and the States were directed to implement the labour laws in its letter and spirit.
14.Infact, this Court in the Judgment relating to NELLAI MAVATTA COOLI THOZHILALAR SANGAM V. THE STATE OF TAMIL NADU, reported in 1954 Writ law reported 102 rendered by the Hon'ble Mr.Justice Sathidev took the note of the facts and in paragraphs Nos.8, 9 and 10 held as follows:-
"8.In every future contract entered into by third respondent, a clause must be introduced to the effect that the Contractor is bound by the provisions of Act 37 of 1970 and such other enactments, which he is bound to implement.
9.It is mainly because of the inordinate delay in implementing the provisions of the Act, Petitioner had to spend for filing this writ petition. By the long delay sizable sections of the labour force have been deprived of ever so may benefits, which neither first respndent nor third respondent would compensate them. They have lost them once and forever.
10.When private enterprises fail to remit provident Fund, 100% penalty is imposed irrespective of whether it was due to illegal strikes, 100% power cut, slump in, international trade; financial crisis for no fault of theirs, etc. Wherever socio-beneficial legislations are not implemented, apart from prosecutions, coercive recovery proceedings are taken. But, when a State owner establishment avoids implementing a labour enactment, how can it expect a differential treatment?"
15.However, the learned counsel for the petitioner submits that two things has to be taken into consideration before the contract employees to be covered under the EPF Act. Namely, that the workmen is a regular workmen and also that they are liable to be covered by the State Act. All this theoretical exercise may be relevant when this Court examines any demand by the P.F. Department with reference to contribution in respect of the petitioner's establishment. Now in the present case, we are not strictly construing the provisions of the P.F.Act. We are only concerned with the fifth respondent being a State instrument authority while parting their own provision or which are to be engaged by the contractors securing itself by such conditions which will not bring any future liability on that account various claims made under the P.F.Act and also seeing that such labour laws are not violated by the future contractors employed by them.
16.Infact the condition imposed in the tender schedules notification impugned in the Writ Petition only enhances the mandate under Part III and Para IV of the Constitution and are not arbitrary as alleged by the contractors. The interest of the petitioners who are made contractors is only with a view to avoiding various obligations. In the name of liaberlisation, the State cannot be a mute spectator to allow the contractors to ignore the welfare of the labour.
17.The Writ Petitions are misconceived and will stand dismissed. No costs. Consequently, connected M.Ps are closed.
ssm To
1.The Secretary, The Union of India Ministry of Labour, Shram Sakthi Bhavan, Raji Ahamed Kidwani Road, New Delhi.
2.The Central Provident Fund Commissioner, Mayur Bhavan, Connaught Circle, New Delhi.
3.The Regional Provident Fund Commissioner, Rayapettah High Road, Chennai - 600 014.
4.The Executive Engineer The Tamil Nadu Small Industries Development Corporation Limited, Industrial Estate, Guindy, Chennai -32, Ssm