The Management Of Manali Petrochemical ... vs The Deputy Commissioner Of Labour-Ii, ... on 22 November, 2006

[Cites 20, Cited by 1]

Madras High Court

The Management Of Manali Petrochemical ... vs The Deputy Commissioner Of Labour-Ii, ... on 22 November, 2006

1. An amendment to the Certificate of Registration issued to the petitioner-Company under the Contract Labour (Regulation and Abolition) Act, 1970, by the Competent Authority, viz., The Deputy Chief Inspector of Factories (the second respondent), was cancelled on an appeal filed by the employees Union (the third respondent), by the Appellate Authority viz., the first respondent and questioning the said order, the Management of the Company has filed the present writ petition.

2. The brief facts leading to the present writ petition are as follows:

(a) The petitioner has a Certificate of Registration issued to them on 22.1.1991 under the Contract Labour (Regulation and Abolition) Act, 1970, hereinafter referred to as the 'Act', for employing Contract Labour. The Certificate of Registration is renewed year after after.

(b) On 13.6.2003, the petitioner filed an application before the second respondent for an amendment of the Certificate of Registration, to include in the Certificate of Registration, the names of three Contractors, to whom the operation and maintenance of the Boiler, Water Treatment Plant and Material Handling through Fork Lift Machines as well as the maintenance of Milk of Lime Plant were entrusted by the Company. The second respondent allowed the said application and issued an amendment on 2.7.2003.

(c) The third respondent filed a writ petition in W.P.No.19308 of 2003, seeking a direction to the second respondent not to process the application for amendment. However, the said writ petition was withdrawn with liberty to pursue an appellate remedy.

(d) Thereafter, the third respondent filed an appeal before the first respondent under Section 15 of the Act, challenging the amendment issued by the second respondent by his order dated 2.7.2003. The said appeal was contested by the petitioner-Management on the ground that the third respondent was not a "person aggrieved", who is entitled to maintain an appeal under Section 15 of the Act.

(e) By an order dated 25.1.2005, the first respondent allowed the appeal of the third respondent and directed the second respondent to undertake a fresh investigation and call for specific particulars and restrained the Management in the meantime, from engaging Contract Labour in the areas not permitted. Challenging the said order of the Appellate Authority viz., the first respondent, dated 25.1.2005, the petitioner has filed the above writ petition.

Page 3243

3. I have heard Mr.S.Ravindran, learned Counsel appearing for the petitioner, Mr.V.Arun, learned Government Advocate appearing for the respondents 1 and 2 and Mr.R.Yashod Vardhan, learned Counsel appearing for the third respondent.

4. Assailing the order of the first respondent, Mr.S.Ravindran, learned Counsel for the petitioner contended -

(a) that the appeal filed by the third respondent under Section 15 of the Act against the order of the second respondent allowing an application for amendment, was not maintainable, inasmuch as the third respondent is not a "person aggrieved" within the meaning of Section 15 of the Act; and

(b) that the first respondent exceeded the jurisdiction and powers conferred on him under Section 15 by virtually adjudicating a dispute between the Union and the Management.

5. Per contra, Mr.R.Yashod Vardhan, learned Counsel appearing for the third respondent contended -

(a) that the Act, being a Labour Welfare Legislation, enacted for the purpose of putting an end to the unfair labour practice of engagement of Contract Labour, should receive a liberal interpretation and if so done, the Employees' Union would very much be a "person aggrieved" within the meaning of Section 15 of the Act and entitled to file an appeal;

(b) that the amendment to the Certificate of Registration actually sought to affect the conditions of service of the employees and hence a duty was cast on the respondents 1 and 2 under Sections 7, 12 and 13 to conduct an enquiry into the effect of such amendment; and

(c) that at any rate, the order of the Appellate Authority was only an order of remand, which entitled the petitioner to go back to the Registering Authority and convince him on merits.

6. Learned Counsel appearing for the petitioner as well as the third respondent presented a bird's eye view of the entire scheme of the Act and the Rules framed thereunder and relied upon the decisions of the Supreme Court in Maharaj Singh v. State of Uttar Pradesh and Ors. , The Workmen of the Food Corporation of India v. Food Corporation of India , Chiranjilal Shrilal Goenka v. Jasjit Singh and Ors. and Steel Authority of India Ltd., and Ors. v. National Union Waterfront Workers and Ors. .

Page 3244

7. Taking up the question as to whether the third respondent is a "person aggrieved" within the meaning of Section 15 of the Act, for the purpose of maintaining an appeal against the order of the second respondent, it is seen that the Act was enacted with the twin object of abolition of Contract Labour in respect of certain categories as may be notified by the appropriate Government and for regulating the service conditions of Contract Labour where abolition was not possible. After scanning the Statement of Objects and Reasons of the Act, the Supreme Court held in Vegoils Pvt Ltd v. Workman that "object of the Act is to regulate and to improve the conditions of service of Contract Labour and not merely to abolish Contract Labour". Therefore, the Act is primarily intended for the benefit of those engaged as Contract Labour and not for the benefit of regular workmen, whose service conditions and the security of employment were taken care of by various other enactments. With this distinction in mind, about the beneficiaries of this Legislation, the various provisions contained in the Act are to be analysed, to find an answer to the question as to whether the third respondent is a "person aggrieved".

8. The Act is divided into Seven Chapters, which inter alia deal with (i) the application and commencement of the Act and the definitions under the Act, (ii) Constitution of Advisory Boards; (iii) Registration of Establishments employing Contract Labour, (iv) Licensing of Contractors, (v) Welfare and Health of Contract Labour, (vi) Penalties and Procedure and (vii) Miscellaneous items. The object of the Act towards abolition of Contract labour is sought to be achieved by conferring power upon the appropriate Government to prohibit the employment of Contract Labour in any process, operation and other work in any establishment, under Section 10 of the Act. The other object of regulating the system of employment of Contract Labour is sought to be achieved by two sets of Regulatory Measures viz., (i) by requiring the Principal Employers to apply for Registration under the Act and (ii) by requiring the Contractors to obtain licenses for engaging Contract Labour for the execution of any work. While Chapter-III of the Act deals with the Registration of Principal Employers who wish to engage Contractors for the execution of any work, Chapter-IV deals with the Licensing of Contractors. Section 7 of the Act dealing with the Registration of Establishments, reads as follows:

7. Registration of certain establishments. -- (1) Every principal employer of an establishment to which this Act applies shall, within such period as the appropriate Government may, by notification in the Official Gazette, fix in this behalf with respect to establishments generally or with respect to any class of them, make an application to the Registering Officer in the prescribed manner for registration of establishment:

Provided that the Registering Officer may entertain any such application for registration after expiry of the period fixed in this behalf, if the Registering Officer is satisfied that the applicant was prevented by sufficient cause from making the application in time.

Page 3245 (2) If the application for registration is complete in all respects, the Registering Officer shall register the establishment and issue to the principal employer of the establishment a certificate of registration containing such particulars as may be prescribed.

9. Section 8 confers powers upon the Registering Officer to revoke the Certificate of Registration in certain cases and the said Section reads as follows:

8. Revocation of registration in certain cases. -- If the Registering Officer is satisfied, either on a reference made to him in this behalf or otherwise, that the registration of any establishment has been obtained by misrepresentation or supersession of any material fact, or that for any other reason the registration has become useless or ineffective and, therefore requires to be revoked, the Registering Officer may, after giving an opportunity to the principal employer of the establishment to be heard and with the previous approval of the appropriate Government, revoke the registration.

10. Section 10 empowers the appropriate Government to prohibit the employment of Contract Labour in "any process, operation or other work in any establishment". The said Section reads as follows:

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 and benefits provided for the contract labour in that establishment and other relevant factors, shall 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 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.

11. Section 12 prohibits a Contractor from undertaking or executing any work through the Contract Labour, except under and in accordance with a license issued by the Licensing Officer. Section 12(2) enables the Licensing Officer to incorporate in the license, such conditions like "conditions as to hours of work, fixation of wages and other essential amenities." Before the Page 3246 grant of a license under Section 12 of the Act, the Licensing Officer is obliged to make an investigation under Section 13(2), in respect of the application filed under Section 13(1) of the Act. Sections 13(1) and (2) read as follows:

13. Grant of licenses. -- (1) Every application for the grant of a license under Sub-section (1) of Section 12 shall be made in the prescribed form and shall contain the particulars regarding the location of the establishment, the nature of process, operation or work for which contract labour is to be employed and such other particulars as may be prescribed.

(2) The Licensing Officer may make such investigation in respect of the application received under Sub-section (1) and in making any such investigation the Licensing Officer shall follow such procedure as may be prescribed.

12. The Licensing Officer is empowered to revoke, suspend and amend the licenses under Section 14 of the Act and Section 15 provides for a remedy of appeal against an order passed under Sections 7, 8, 12 or 14 of the Act. Section 15 reads as follows:

Section 15. Appeal. -- (1) Any person aggrieved by an order made under Section 7, Section 8, Section 12 or Section 14 may, within thirty days from the date on which the order is communicated to him, prefer an appeal, to an Appellate Officer who shall be a person nominated in this behalf by the appropriate Government:

Provided that the Appellate Officer may entertain the appeal after the expiry of the said period of thirty days, if he is satisfied that the appellant was prevented by sufficient cause from filing the appeal in time.

(2) On receipt of an appeal under Sub-section (1), the Appellate Officer shall, after giving the appellant an opportunity of being heard, dispose of the appeal as expeditiously as possible.

13. On a careful analysis of Sections 7, 8, 12, 14 and 15 of the Act, it is seen that the appeal under Section 15 of the Act may arise out of -

(i) the grant or refusal of a Certificate of Registration under Section 7;

(ii) the revocation of the Certificate of Registration under Section 8;

(iii) the grant or refusal to grant a license under Section 12; and

(iv) the revocation, suspension or amendment of licenses under Section 14 of the Act.

Therefore, the words "person aggrieved" used in Section 15, should receive an interpretation in the context of persons who are likely to be affected by the orders passed under Sections 7, 8, 12 and 14 of the Act.

14. Keeping the above principle in mind, if we see who are the persons who are likely to be affected by the orders passed under Sections 7, 8, 12 and 14 of the Act, the following position will emerge:

(a) While processing an application under Section 7, there are only two parties to the proceeding viz., the Principal Employer and the Registering Officer. Therefore, in an appeal arising out of Section 7, the Principal Employer or the establishment seeking registration alone could be the "person aggrieved" and there is no scope for any other person to be Page 3247 aggrieved by an order under Section 7;

(b) In a proceeding initiated under Section 8 for the revocation of Registration, there would certainly be at least two parties viz., the Principal Employer and the Registering Officer. But there is a likelihood of any other person also being aggrieved, in respect of a proceeding under Section 8, since Section 8 enables the Registering Officer to revoke the Certificate of Registration "either on a reference made to him in this behalf or otherwise". Thus, Section 8 gives scope for a third party other than the Principal Employer and the Registering Officer, to peep into the matter. Therefore, if revocation of a Certificate of Registration is ordered at the instance of a third party, then such third party may also be a "person aggrieved" within the meaning of Section 15.

(c) In a proceeding under Section 12 of the Act, there are only two parties viz., the Contractor seeking license and the Licensing Officer. Therefore, in an appeal arising out of Section 12, the Contractor alone could be the "person aggrieved" and none-else.

(d) Section 14 empowering the Licensing Officer to revoke, suspend or amend a license, can be invoked by the Licensing Officer "either on a reference made to him in this behalf or otherwise". Thus, the first limb of Section 14(1) is almost in pari materia with the first limb of Section 8. Therefore, the power under Section 14, could be exercised even at the instance of a third party and when so exercised, such third party also becomes a "person aggrieved" in an appeal arising out of an order passed under Section 14.

15. Thus it is clear that in an appeal arising out of an order under Section 7 or 12, only the "Establishment" or the "Contractor" alone could be the "person aggrieved" within the meaning of Section 15 and in an appeal arising out of Section 8 or 14, even a third party could be a "person aggrieved" if the order under Section 8 or 14 was passed at his instance. Therefore, I am of the considered view that the appeal filed by the third respondent under Section 15 of the Act against the order of the second respondent issued under Section 7 of the Act was clearly not maintainable.

16. Mr.R.Yashod Vardhan, learned Counsel appearing for the third respondent contended that the words "person aggrieved" are of wide import and should not be subjected to a restrictive interpretation. To drive home this point, the learned Counsel cited the judgment of the Supreme Court in Maharaj Singh v. State of U.P. and Ors. . But the said decision is of no help to the third respondent, since it was a case arising under U.P. Zamindari Abolition and Land Reforms Act, in which the State of Uttar Pradesh, as a co-plaintiff, pursued the matter to the High Court while the other plaintiff dropped out of the litigation. The very right of the State of Uttar Pradesh to file an appeal was questioned on the ground that the State was not a "person aggrieved", despite having suffered a decree. It is in the said context and in view of the larger public interest that the State of Uttar Pradesh was held to be a "person aggrieved" in the said case, providing a wider meaning and import to the words "person aggrieved". But for the appeal, Page 3248 the State of Uttar Pradesh would have been left without a remedy in the said case. But in the present case, the third respondent has innumerable other remedies available to them as against the petitioner and hence the third respondent cannot come within the meaning of the term "person aggrieved" under Section 15 of the Act.

17. One of the reasons given by the first respondent for entertaining the appeal of the third respondent is that the third respondent-Union challenged the very application for amendment made by the petitioner, by filing a writ petition in W.P.No.19308 of 2003 and that the same was withdrawn with liberty to file a statutory appeal and that therefore, the third respondent cannot be non-suited on the ground that it is not a "person aggrieved". It is true that the third respondent filed a writ petition in W.P.No.19308 of 2003, seeking a Writ of Certiorari to call for the records of the second respondent and to quash the order passed on 2.7.2003, allowing the application for amendment filed by the Management. But the said writ petition was dismissed as withdrawn, by an order dated 30.7.2004 which reads as follows:

Advocates are boycotting Courts. Hence the learned Counsel for the petitioner is not present in Court. However, he has given a letter to Registry on 26.7.2004 seeking permission to withdraw the writ petition with liberty to pursue the appellate remedy. Permission is granted. Accordingly, the the writ petition is dismissed as withdrawn with liberty to pursue the appellate remedy.

Therefore, the said order cannot be taken to an order conferring a right upon the third respondent to file an appeal under Section 15 of the Act, nor can the said order be taken to be a "ratio decidendi" on the question as to whether the third respondent is a "person aggrieved". The liberty granted to the third respondent in the writ petition could be taken only to mean that the third respondent could pursue an appellate remedy, if it was available under the Statute. The said order cannot be construed as one conferring a right of appeal upon the third respondent, irrespective of whether such appeal was provided or not under the Statute. It is well settled that the remedy of an appeal should be conferred by a Statute and cannot be conferred by consent of parties or even by Courts. In Chiranjilal Shrilal Goenka v. Jasjit Singh and Ors. , the Supreme Court held that "the power to create or enlarge jurisdiction is legislative in character". Quoting from the decision of the Seven Judges Bench of the Supreme Court in A.R.Antulay's case, the Supreme Court held as follows:

The power to create or enlarge jurisdiction is legislative in character. So also the power to confer a right of appeal or to take away a right of appeal. The Parliament alone can do it by law and no Court whether superior or inferior or both combined can enlarge jurisdiction of a Court and divest a person of his rights of appeal or revision.

Page 3249 Therefore, the liberty given to the third respondent while withdrawing the earlier writ petition, did not make the third respondent a "person aggrieved", so as to entitle him to file an appeal.

18. The next reason stated in the impugned order for entertaining the appeal of the third respondent is that the third respondent-Union raised an Industrial Dispute in respect the attempt of the petitioner to engage Contract Labour in the place of permanent employees, but the Government refused to refer the dispute merely on the ground that the third respondent was entitled to seek relief under the Contract Labour (Regulation and Abolition) Act, 1970, and that therefore, the appeal filed by the third respondent cannot be thrown out on the ground of maintainability. It is true that the Government refused to refer the dispute raised by the Union, on the ground that the third respondent is entitled to seek a relief under the Contract Labour (Regulation and Abolition) Act, 1970. But the order passed by the Government in G.O.(D) No.848, Labour and Employment Department, dated 19.7.2004, shows that the Government merely made a general statement that the third respondent was entitled to seek a relief under the said Act. The nature of the relief that could be sought for by the third respondent was not mentioned in the Government Order. Therefore, the Government Order cannot be construed either as one conferring jurisdiction upon the Appellate Authority to entertain the appeal of the third respondent or as one making a reference only to an appellate remedy under Section 15 of the Act. At the most, the Government Order could be taken only as an indication of certain other remedies available to the employees Union under the Contract Labour (Regulation and Abolition) Act, 1970. Therefore, I am unable to accept the reasons stated in the impugned order for holding the third respondent to be a "person aggrieved" and entertaining the appeal under Section 15 of the Act.

19. Mr.R.Yashod Vardhan, learned Counsel for the third respondent contended that, being a Labour Welfare Legislation, the provisions of the Act are to be given a liberal interpretation that would subserve the objects of the Act and avoid an interpretation that would defeat the objects of the Act. In order to substantiate the said contention, the learned Counsel relied upon the decision of the Supreme Court in The Workmen of Food Corporation of India v. Food Corporation of India . In paragraph-18 of the said judgment, the Supreme Court held as follows:

The Act was enacted with a view to abolishing wherever possible or practicable, the employment of Contract Labour. The proposed bill aimed at abolition of contract labour in respect of such categories as may be notified. The Corporation attempted by its action to reverse that trend which does no credit to it. We say no more save and except saying that where the law helps, such anti-labour practices must be thwarted or nipped in the bud.

But the said decision is of no avail to the third respondent for two reasons viz., (a) that it was a case arising out of an Industrial Dispute raised by the workmen for alteration of their terms and conditions of service in violation of Page 3250 Section 9A of the Industrial Disputes Act, 1947; and (b) that in that case the contract labour were made permanent and subsequently there was an attempt to change their status once again as Contract Labour. In the case on hand, the third respondent raised an Industrial Dispute but the same was refused to be referred to the Labour Court. The third respondent has not so far chosen to challenge the Government Order refusing to refer the dispute to the Labour Court. Even now it is open to the third respondent to pursue their remedies against the said order and the appeal under Section 15 of the Contract Labour (Regulation and Abolition) Act, 1970, cannot be used by the employees-Union as a substitute for a remedy under the Industrial Disputes Act, 1947.

20. On the question of adopting a liberal interpretation to the Act in question, the issue is no longer res integra. The Constitution Bench of the Supreme Court in Steel Authority of India Limited v. National Union Water Front Workers' and Ors. , made it clear that literal interpretation is to be adhered to, in cases where the language of the Statute is clear and unambiguous. The following passage from the said judgment, lays down the law in no uncertain terms:

The function of the Court is to interpret the statute to ascertain the intent of the legislature, the Parliament. Where the language of the statute is clear and explicit, the Court must give effect to it because in that case words of the statute unequivocally speak of the intention of the legislature. This rule of literal interpretation has to be adhered to and a provision in the statute has to be understood in its ordinary natural sense unless the Court finds that the provision sought to be interpreted is vague or obscurely worded in which event the other principles of interpretation may be called in aid. A plain reading of the said phrase shows that it is lucid and clear. There is no obscurity, no ambiguity and no abstruseness. Therefore the words used therein must be construed in their natural ordinary meaning as commonly understood.

21. In view of the above, I hold that the third respondent was not a "person aggrieved" within the meaning of Section 15 of the Act, in so far as the appeal filed by them was against an order under Section 7 of the Act. However, as pointed out in the previous paragraphs, if an order is passed under Section 8 or 14 of the Act, by the Registering Officer or the Licensing Officer as the case may be, at the instance of a third party, which may include even the third respondent, then such third party at whose instance the order under Section 8 or 14 was passed, will be a "person aggrieved" within the meaning of Section 15 of the Act.

22. Coming to the second ground of attack to the impugned order of the first respondent, it is seen that the first respondent has actually gone into details about the possible alteration in the terms and conditions of employment of the permanent employees, in his impugned order. The first respondent has observed in his order that the nature of the work to be performed by the Contract Labour is not specific and the Management was attempting to convert the whole industry into a place for Contract Labour by increasing the number Page 3251 of persons engaged through Contractors. The first respondent further held that the engagement of Contract Labour in loading and unloading of lime and material handling was not proper and that the grant of permission on vague uncertain particulars was not genuine. After holding so, the first respondent issued a direction to the second respondent to undertake an investigation and call for specific particulars. Not stopping at that the first respondent also issued a prohibition order restraining the petitioner from engaging Contract Labour in the areas not permitted.

23. In my considered view, the findings so made and the order eventually passed on merits by the first respondent, are beyond scope of an appeal arising out of an order under Section 7 of the Act. Section 7(1) extracted above mandates the Principal Employer to make an application for Registration in the prescribed manner, within such period as may be notified by the appropriate Government. Sub Section (2) of Section 7 makes it mandatory for the Registering Officer to register the establishment "if the application for registration is complete in all respects". Thus the Section does not lay down any condition other than the submission of an application "complete in all respects", for the grant of a Certificate of Registration. It is only while granting license to a Contractor under Section 12, that the Licensing Officer is required to conduct "an investigation" under Section 13(2), in respect of "the location of the establishment, the nature of the process, operation or work for which Contract Labour is to be employed" under Section 13(1) of the Act. Thus, the Act clearly makes a distinction between the procedure to be adopted while granting a Certificate of Registration to a Principal Employer and the procedure to be adopted while granting a license to a Contractor. But unfortunately, the first respondent has virtually imported into Section 7(2), the provisions of Section 13(1) and (2) of the Act.

24. That the requirement to conduct an investigation into the nature of the process, operation or work etc., is confined only to the licensing process under Section 12, is made clear even by Rules 17, 18, 19, 21 and 22 of the Contract Labour (Central) Rules, 1971 and by Rules 17, 18, 19, 21 and 22 of the Tamil Nadu Contract Labour Rules, 1975. Rule 19 of the Central Rules as well as the State Rules which are in pari materia, enables the Registering Officer to reject an application for registration only if it is not complete in all respects. None of these Rules contemplate any "investigation or enquiry" to be made by the Registering Officer. On the contrary, Rules 22 and 23 of the Central Rules as well as the State Rules mandate the Licensing Officer to conduct an investigation in respect of certain matters including the particular type of work in respect of which the applicant claims to be a Contractor. Therefore, the first respondent was clearly in error in directing the second respondent to hold an investigation as though the petitioner had applied for a license under Section 12. Consequently, the impugned order is vitiated and is liable to be set aside.

25. As observed above, the third respondent-Union is not without any remedy if the terms and conditions of service of the workmen are altered or if the Certificate of Registration itself becomes vulnerable for attack under the other provisions of the Act. Therefore, the writ petition is allowed and the impugned order is set aside. No costs. Consequently, connected WPMP and WVMP are closed.

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