Central Administrative Tribunal - Bangalore
M Anandan vs N A L on 27 August, 2019
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CENTRAL ADMINISTRATIVE TRIBUNAL
BANGALORE BENCH, BENGALURU
ORIGINAL APPLICATION NO.170/000343 TO 347/2016
DATED THIS THE 27TH DAY OF AUGUST, 2019
HON'BLE DR.K.B.SURESH ...MEMBER(J)
HON'BLE SHRI C.V. SANKAR ...MEMBER(A)
1.Anandan. M,
Aged about 44 years,
S/o Late Mallappan,
Skilled I.T.I Fitter,
No.47, 1st Main, 1st Cross,
Gayathri School Road,
Vijinapura, Dooravaninagar ,
Bangalore-560 016.
2.Ananda Kumar K,
S/o Late Kuppuswamy,
Aged about 42 years,
Skilled I.T.I Welder,
No.156, 1st Cross,
Kullappa Colony,
Bangalore -560017.
3.Chandrakeerthi. G
S/o Gangappa. B
Aged about 49 years
Semi Skilled
No.21, 15th Cross, 1st Block,
R.T. Nagar,
Bangalore-560032.
4.Kumar. K, 5.Kumaresan S
S/o Kuttappan. K, S/o Late Sunderam
Aged about 45 years, Aged 44 years
Skilled I.T.I Welder, Highly Skilled D.M.E
No.7, 2nd Cross, No.14, 2nd Cross, L.B. Shastry nagar
Dabaspet, Vasanthnagar, Indiranagar Post, Bangalore 560 038
Bangalore-560 052. ..Applicants.
(By Advocate Shri U. Panduranga Nayak)
Vs.
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1. The Director,
The Managememnt of National Aerospace Laboratories,
Kodihalli Campus,
Bangalore-560017.
2. The Managing Director,
M/s Naltech Private Ltd.,
T.S. Building, Kodihalli,
Bangalore-560017. ...Respondents
(By Standing Counsel Shri K. Ananda for R-1)
O R D E R (ORAL)
HON'BLE DR.K.B.SURESH ...MEMBER(J)
Heard. Shri M.V. Rao, learned counsel for the respondents submits that the
matter is covered by our order in OA.No.106/2011 dated 03.11.2011, which we
quote:
"O R D E R
(V. AJAY KUMAR, MEMBER(J)
This OA has been filed seeking the following reliefs:
(i) For a declaration that the action of the respondents in terminating the services of
the applicant w.e.f. 3.1.2011 without any written order or prior notice by taking
back his identity card and entry pass as arbitrary and illegal and to reinstate him
with consequential benefits.
(ii) For a direction on the respondents to consider his representations dated 3.2.2011
and 31.1.2011 for his reinstatement with consequential benefits.
(iii) For a direction on the respondents to consider him for regularization of his
serviced as per the representation dated 3.12.2010 vide Annexure s A/15 and A/16
in the interest of justice and equity.
1. The applicant submits that he was appointed appointed as Technician ITI Welder
in the year 2000 with the Respondent- National Aerospace Laboratories,
Bangalore, on contract basis and was posted at the Accustic Test Facility, and
continued in service till 3.1.2011. He further submits that the nature of work
performed by the applicant was gas cutting, welding, maintenance activities
relating to accustic tests on Space, Aircrafts and launch of vehicles, etc.
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2. The applicant states that he has completed Pre-University Education in the year
1984 after completion of his SSLC. He completed ITI training in the year 1995
and obtained National Council for Vocational Training Apprentice Certificate in
the year 1999. He underwent training in KSRTC as Sheet Metal Worker and he
belongs to Scheduled Caste.
3. The applicant submits that the respondents terminated his service w.e.f. 3.1.2011
without any written or prior notice. He submits that since he had been working on
contract basis with the Respondent- National Aerospace Laboratories since 2000
till the date of his illegal termination, he is entitled for reinstatement and also for
regularization of his service.
4. In support of his case, the applicant has filed his certificates in respect of his
educational qualifications and he has also filed Attendance Registers for the
months of February 2000 to December, 2002 of a Company called NALYECH
Private Ltd., who are having work contract with the Respondent- National
Aerospace Laboratories, Bangalore. At Annexure A/9 another contract firm to the
same effect called Viskaan Associates has been filed. Exhibits A-10 to A-14 are the
experience certificates issued by National Aerospace Laboratories and the orders
of extension of period of engagement of the applicant from time to time, etc.
5. The respondents filed a detailed reply denying the allegations of the applicant and
submitted that the 2nd Respondent, NAL, is a constituent unit of Respondent No.1-
CSIR. The permanent work of the Laboratory carry out regular research and
development work of the Establishment. In addition to it, the Respondent No.2
establishment also may undertake sponsored projects depending upon the
programmes for the Government and other institutions, which are time-bound
programmes. In order to execute the said sponsored projects, the 2nd Respondent
enters into contract with several licensed contractors to provide additional
manpower for the projects. The said projects are partly temporary in nature and
the employment of the temporary work will come to an end with the completion of
the project. There is no privity of contract, direct or indirect, between the
Respondents and the workmen of the contractors. There is no employer and
employees relationship between them.
6. The respondents further submit that the applicant has been working on contract
basis since 2000 in the Respondent No.2 Establishment under different contract
agencies, such as NALTECH Private Limited, Cleanway Management Services,
Viskaan Associates and Bee Gee Facility Services. The Attendance Register
produced as Annexure A-7 indicates the fact that the applicant is an employee of
NALTECH Private Limited, which is one of the con tract Agency. Annexure A-8
and A-9 also clearly depicts that payment and bonus are paid to the applicant by
the contract Agency. Further, Annexure A-13 also clearly states that the
applicant's work is for a specific period only.
7. The respondents submit that the applicant has never been appointed by the
respondents and he was only working in the projects of the respondents as
contract employee, that too, employed by certain private contract firms only. In
view of the same, the applicant is neither entitled for reinstatement nor
regularization of service in the hands of the respondents and prayed for dismissal
of the O.A.
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8. It is to be seen that the averments made by the applicant and the various
annexures to the application clearly reveal that the applicant though working in
the various projects of the Respondent-NAL, but was never appointed or engaged
directly by NAL. Further, the applicant was never paid either wages or any other
benefits by the Respondents-NAL at any point of time. On the other hand, the
documents reveal that the applicant was engaged by certain private contract firms
for the purpose of executing certain programmes for the Respondent-NAL, on
contract basis. In this view of the matter, we find no merit in the submission made
by the applicant in the O.A. The various judgments relied on by the applicant's
counsel are of no held to the case of the applicant.
9. It is also not the case of the applicant that he has undergone any process of
selection conducted by the Respondent-NAL before his initial engagement or that
his name was sponsored by any Employment Exchange or that any order of
appointment/engagement on contract basis has been issued by the NAL or his
wages were being paid by NAL.
10. In the circumstances and for the aforesaid reasons, the O.A. is dismissed for being
devoid of any merit. No order as to costs"
2. Thereafter the matter was taken up in challenge in review to the Hon'ble
High Court in WP.No.451542/2012, which was disposed of vide order dated
01.10.2013, which we quote:
"THIS W.P. COMING ON FOR PRELIMINARY HEARING, THIS DAY, N KUMAR J.,
MADE THE FOLLOWING:
ORDER
This writ petition is filed challenging the order passed by the Central Administrative
Tribunal, dismissing the application filed by the petitioner, as being devoid of any merits.
2. The case of the petitioner was, he was appointed as a Technician ITI Welder in the
year 2000 with the respondent - National Aerospace Laboratories, Bangalore, on
contract basis and was posted at the Acoustic Test Facility and continued in service till
3.1.2011. The nature of work performed by him was gas cutting, welding maintenance
activities relating to acoustic tests on spares aircrafts and launch of vehicles, etc. His
services came to be terminated with effect from 3.1.2011, without any written order or
notice. Therefore, he approached the Tribunal for a declaration that his termination is
illegal and for reinstatement and for regularization of his services.
3. The respondents, after service entered appearance and denied all the allegations in the
application. It was their specific case there was no privity of contract, direct or indirect,
between the respondents and the workmen and the contractors. There was no employer
and employee relationship between them. The applicant has been working on contract
basis since 2000 in Respondent No.2 establishment, under different contract agencies. As
they have not appointed him and he was only working in the projects of the respondent as
a contract employee, that too employed by certain private contract firms only, is neither
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entitled for reinstatement nor regularization of services in the hands of the respondents.
Therefore, they prayed for dismissal of the application.
4. On considering the rival contentions, the Tribunal was of the view that the petitioner
was never appointed or engaged directly by the respondents. He was never paid any
wages or any benefits by them. He was engaged by certain private contract firms.
Therefore, the Tribunal did not find any merit in the said application. Accordingly, they
dismissed the petition. Aggrieved by the said order, the present writ petition is filed.
5. The learned counsel for the petitioner assailing the impugned order, contends, from the
material on record, it is clear that the petitioner is a workman. He was employed by a
contractor in the establishment of the respondent. Respondent is the principal employer
though contractors are the immediate employers of the petitioner. Therefore, the question
for consideration is, "Whether the workman could have been terminated in the manner it
is being done in violation of the statutory provisions contained in the Industrial Disputes
Act?"
Further, the question was the arrangement under which he was working was a sham
transaction in order to overcome the provisions of the Industrial Disputes Act. Strictly
speaking, it was not a service matter. It was a labour matter. Though the workman
committed the mistake of approaching the Tribunal, the Tribunal ought to have seen
whether it had jurisdiction to decide the service conditions of the workman and whether
he was a public service in order to cloth the Tribunal with jurisdiction. He submits there
is a mistake apparent on the face of the record. The order requires to be set aside and the
petitioner - workman should be reserved the liberty to agitate his rights in an
appropriate manner, in accordance with law.
6. The learned counsel appearing for the respondents submits if the petitioner is a
workman, it is the Industrial Disputes Act which is applicable and certainly not the
provisions of the Administrative Tribunal Act. However, he submits that there is no cause
for interference with the order passed by the Tribunal. It is open to the petitioner to
agitate his rights in an appropriate forum.
7. In the light of what is stated above, we are of the view, having regard to the averments
made in the application, the nature of work he was discharging and the mode of his
employment, it is clear that he was not a public servant and therefore, the provisions of
the Administrative Tribunal Act had no application. In that view of the matter, we deem it
appropriate to set aside the order passed by the Tribunal and reserve liberty to the
petitioner to approach the forum created under the Industrial Disputes Act for
adjudication of his rights if any. The time spent in prosecuting this matter both before the
Tribunal and this Court shall stand excluded and on the ground of limitation, his claim
shall not be thrown out. In that view of the matter, we pass the following order:
Writ petition is allowed. Impugned order is hereby set-aside. Liberty is reserved to the
petitioner to approach the competent forum for adjudication of his rights. If and when he
approaches the forum, such an authority shall proceed to hear the case and pass an
order on merits in accordance with law, without going into the question of limitation and
without being in any way influenced by the impugned order and the order passed by this
Court."
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3. Learned counsel for the applicant, on the other hand urges us to look through
the order in WP.No.9974/2006 dated 07.01.2015, which we quote:
This Writ Petition is filed under Articles 226 & 227 of the Constitution of India praying
to quash the award dated 30.12.2005 passed by the Court of Industrial Tribunal,
Bangalore in Industrial Dispute No.37/2001 vide Annexure-A.
The writ petition having been heard and reserved for judgment, this day, CHIEF
JUSTICE pronounced the following:
C.A.V. JUDGMENT
1. The petitioner, management of National Aerospace Laboratories (NAL), has
challenged the award dated 30-12-2005 of the Industrial Tribunal, Bengaluru in
I.D.No.37/2001, directing regularization of services of 24 workmen from the date of
reference, with appropriate pay scales.
2. The petitioner is stated to be a constituent unit of the Council of Scientific and
Industrial Research (CSIR), New Delhi which is registered under the Societies
Registration Act, 1860 and actively engaged in research and development work in
science and technology area of aerospace. The petitioner is stated to be undertaking
sponsored projects of the Government and other public and private institutions on
commercial basis. Regular employees of the petitioner are stated to be governed by the
pay-scales and other service conditions of the CSIR, while another category of contract
employees were employed to work in various projects alongside the regular employees,
but with meager salary and without the security of service. Petitioner claims to have
entered into a contract with Respondent No.2 company NALTECH, for supply of such
additional manpower in compliance with the provisions of the Contract Labour
(Regulation and Abolition) Act, 1970.
3. Upon failure to reach a settlement in conciliation proceedings, Respondent No.1 -
union, espousing disputes related to contract employees in private and public companies
and autonomous bodies, raised a dispute on behalf of 67 contract workers in the
establishment of the petitioner and sought regularization of their services. Government of
Karnataka, referred the dispute on 24-04-2001 to Industrial Tribunal, Bangalore, under
section 10(1)(c) of the Industrial Disputes Act, 1947 ('ID Act' for short) with the terms of
reference as under:
"(1) Whether the Engineering and General Workers union is justified in demanding
(complaining) that the Management of M/s National Aerospace Laboratories Bangalore
establishment has not made the services of 67 persons, working as contract labour
permanent, although they have been discharging work of permanent nature?
(2) If not, what relief the said contract workmen are entitled to?"
(Above is the translation of the original in Kannada, which is agreed by the counsel to be
correct translation.)
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4. Before the Tribunal, Respondent No.1 - union claimed that the workmen in question
were employed by the petitioner since 1994 to 1996 or 1997 in technical posts and were
discharging continuously the duties of permanent and perennial nature, were shifted to
new projects after completion of old ones and that Respondent No.2-company,
NALTECH was floated by the petitioner establishment itself, subsequently, as an
artificial intermediary, only to circumvent the law and exploit the labour. The union
claimed that the workmen had gained and acquired skills, knowledge and experience in
their respective jobs and continued to serve the petitioner establishment with legitimate
expectation that their services would be regularized and they would be
absorbed.
5. The Tribunal, after examination of witnesses and arguments of parties, including
impleaded second party respondent (b), NALTECH, has made the impugned award dated
30-12-2005 directing NAL to regularize services of 24 of the remaining workmen. By the
time the award was made, only 19 workmen were continuing in service and whose rights
were left to be adjudicated. Respondent No.2 - NALTECH has supported the contentions
of the petitioner before the Industrial Tribunal and claimed that the workmen concerned
were contract employees supplied on temporary basis for specified projects and specified
periods as required by the petitioner.
6. Learned senior counsel Mr.S.N.Murthy appearing for the petitioner - company NAL,
firstly contended that the impugned award dated 30-12-2005 has to be set aside by this
Court in its extraordinary jurisdiction, as the petitioner establishment is a research
facility and not an 'industry' for the purposes of section 2(j) of the ID Act. He relied upon
the objects of CSIR as reflected in its memorandum of association and stated that they
are clearly related to research and development and that NAL was only involved in the
design of prototypes. He contended that the annual reports of NAL only reflected the
external cash flow and that NAL was not making any profits as an organization. He
placed reliance on the observation of the Supreme Court in Physical Research
Laboratory v. K.G. Sharma [ AIR 1997 SC 1855 ] where it was held that Physical
Research Laboratory, a public trust registered under the Bombay Public Trust Act, 1950
was purely involved in research activity and not producing and distributing services
which were intended or meant for satisfying human wants and needs, and hence not an
'industry.'
7. Mr.V.R.Datar, learned counsel for Respondent No.1 - union contended that petitioner
- company is an industry as per the interpretation of section 2(j) of the ID Act by virtue
of the Supreme Court judgment in BWSSB v. A.Rajappa and others [ (1978) 2 SCC 213].
He pointed out that according to the certificate of registration of NALTECH (Ex.M-15)
under the Contract Labour (Regulation and Abolition) Act, nature of work of the
workmen has been described as: 'to conduct research and development /fabrication of
scientific & tech. projects" and the license issued to NALTECH, (Ex.M-18) clearly stated
that the license is 'to commercialise and market the technologies developed by NAL and
to aid the research and development programmes", which would show that the petitioner
company was involved in commercial activities albeit in the area of research and
development. He further contended that the Industrial Tribunal has given findings
based on evidence and reasoning that NAL is an industry and the same ought to be
upheld.
8. Having regard to the contentions of both parties, it is first necessary to examine the
scope of the definition of 'industry' in the context of research institutions as held by the
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Supreme Court in BWSSB v. A Rajappa (supra), wherein Krishna Iyer, J held at para
113 :
"Does, research involve collaboration between employer and employee? It does. The employer
is the institution, the employees are the scientists, parascientists and other personnel. Is
scientific research service? Undoubtedly it is. Its discoveries are valuable
contributions to the wealth of the nation. Such discoveries may be sold for a heavy price in the
industrial or other markets. Technology has to be paid for and technological inventions and
innovations may be patented and sold. In our scientific and technological age nothing has more
cash value, as intangible goods and invaluable services, than
discoveries. For instance, the discoveries of Thomas Alva Edison made him fabulously rich. It
has been said that his brain had the highest cash value in history for he made the world vibrate
with the miraculous discovery of recorded sound. Unlike most inventors, he did not have to wait
to get his reward in heaven; he received it munificently on this gratified and grateful earth,
thanks to conversion of his inventions into money aplenty. Research benefits industry. Even
though a research institute may be a separate entity disconnected from the many industries
which funded the institute itself, it can be regarded as an organisation, propelled by systematic
activity, modelled on co-operation between employer and employee and calculated to throw up
discoveries and inventions and useful solutions which benefit individual industries and the
nation in terms of goods
and services and wealth. It follows that research institutes, albeit run without profit-motive, are
industries."
9. The Industrial Tribunal has taken into consideration the test of 'nature of activity'
endorsed in the decision of the Andhra Pradesh High Court in National Remote Sensing
Agency v. Additional Tribunal-cum-Additional Labour Court,
Hyderabad, and others (2002) 95 FLR 786; where it was held that even discharge of
government functions may amount to an industrial activity. The Tribunal has also taken
into consideration the objects for which CSIR has been
established, the annual report of NAL, and from the statistical summary and examination
of witness in that behalf, it has been noticed that the petitioner company is not only
involved in research work, but also undertakes sponsored projects, and is also
undertaking commercial activities. On that basis the Tribunal has found that the
petitioner company is an 'industry' for the purposes of section 2(j) of the ID Act.
10.The case of Physical Research Laboratories (supra) is distinguished from the present
case as research institution in that case was found to be engaged purely in research
work, as observed in para 12 of the judgment:
"12. PRL is an institution under the Government of India's Department of Space. It is engaged
in pure research in space science. What is the nature of its research work is already stated
earlier. The purpose of the research is to acquire knowledge about the formation and evolution
of the Universe but the knowledge thus acquired is not intended for sale. The Labour Court has
recorded a categorical finding that the research work carried on by PRL is not connected with
production, supply or distribution of material goods or services. The material on record further
discloses that PRL is conducting research not for the benefit or use of others. Though the results
of the research work done by it are occasionally published they have never been sold. There is no
material to show that the knowledge so acquired by PRL is marketable or has any commercial
value. It has not been pointed out how the knowledge acquired by PRL or the results of the
research occasionally published by it will be useful to persons other than those engaged in such
type of study. The material discloses that the object with which the research activity is
undertaken by PRL is to obtain knowledge for the benefit of the Department of Space. Its object
is not to render services to others nor in fact it does so except in an indirect manner.
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Thus, it is clear that an organization which is predominantly involved in research and
development can also be within the purview of the definition of 'industry' owing to
industrial and commercial nature of its activity and petitioner -company
being such an organization, the finding of the Tribunal has to be upheld.
11. Learned senior counsel Mr.S.N.Murthy further contended for the petitioner that
appropriate government for the purposes of this dispute was in fact, the Central
Government and the reference by Government of Karnataka was not legal. He argued
that though CSIR was registered under Societies Registration Act, it was carried on
under the authority of the central government. He pointed out relevant rules and bye-
laws of the CSIR and its Memorandum of Association, to contend that in terms of Rule 3
of the 'Rules and Regulations and Bye-Laws of Council of Scientific and Industrial
Research' ('CSIR Rules' for short), the Prime
Minister of India was ex-officio President, Minister in-charge of the ministry/department
dealing with CSIR was the Vice-President and minister in-charge of finance and industry
along with the members of the Governing Body and Chairman of the advisory board
constituted the society i.e., CSIR.
Learned senior counsel relied upon the following observations of the Supreme Court.
a.In Steel Authority of India Ltd. and others v. National Union Waterfront Workers (2001)
7 SCC 1
"39. .... To hold that the Central Government is "the appropriate Government" in relation to an
establishment, the court must be satisfied that the particular industry in question is carried on by
or under the authority of the Central Government. If this aspect is kept in mind it would be clear
that the Central Government will be the "appropriate Government" under the CLRA Act and the
ID Act provided the industry in question is carried on by a Central Government company/an
undertaking under the authority of the Central Government. Such an authority may be conferred,
either by a statute or by virtue of relationship of principal and agent or delegation of power.
Where the authority,
to carry on any industry for or on behalf of the Central Government, is conferred on the
government company/any undertaking by the statute under which it is created, no further
question arises. But, if it is not so, the question that arises is whether there is any conferment of
authority on the government company/ any undertaking by the Central Government to carry on
the industry in question. This is a question of fact and has to be ascertained on the facts and in
the circumstances of each case."
b. In Pradeep Kumar Biswas v. Indian Institute of Chemical Biology and others (2002) 5
SCC 111, the issue whether CSIR is an instrumentality or agency of state and as such
'State' within the meaning of Article 12 of the Constitution was dealt with and answered
in affirmative.
c. In HAL v. Hindustan Aeronautical Canteen Kamgar Sangh and Others (2002) 5
SCALE 178, it was held that HAL is an undertaking of the central government
and it is the central government which exercises full control over the same, and the
issuance of license by state government under the Contract Labour Act is not
sufficient criteria to conclude that the 'appropriate government' was the State
Government and further held that for HAL, Central Government would be the
appropriate government.
12. Per contra, learned counsel Mr.V.R.Datar appearing for respondent No.1 -union
contended that the finding of the Supreme Court in Pradeep Kumar Biswas (supra) was
only pertaining to the meaning and interpretation of Article 12 of
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the Constitution vis-à-vis CSIR and was not conclusive of whether CSIR was working
under the authority of the Central Government. He contended that the tests for
determination of 'authority' for the purposes of being 'State' under Article 12 are
different from those required to be applied for Section 2(a) of the ID Act, as envisaged in
Steel Authority of India (supra). He contended that CSIR and its units are separate and
independent entities, distinctly different from any department of the Central Government
and they are not working under the direct authority of the Central Government.
13. Mr.V.R.Datar referred to decision of the Supreme Court in Tata Memorial Hospital
Workers Union v. Tata Memorial Centre and Another AIR 2010 SC 2943 regarding
determination of 'appropriate government' under section 2(a) of the ID Act, and
emphasized the following observations :
"47. As far as an industry 'carried on by the Central Government' is concerned, there need not
be much controversy inasmuch as it would mean the industries such as the Railways or Post and
Telegraph, which are carried on departmentally by the Central Government itself. The difficulty
arises while deciding the industry which is carried on, not by but 'under the authority of the
Central Government'. Now, as has been noted above, in the Constitution Bench Judgment in
Steel Authority of India Limited (AIR 2001 SC 3527 : 2001 AIR SCW 3574) (supra), the
approach of the different Benches in
four earlier judgments has been specifically approved and the view expressed in Air India (AIR
1997 SC 645 : 1997 AIR SCW 430) (supra) has been disagreed with.
The phrase 'under the authority' has been interpreted in Heavy Engineering (supra), to mean
'pursuant to the authority' such as where an agent or servant acts under authority of his
principal or master. That obviously cannot be said of a company incorporated under the
Companies Act, as laid down in Heavy Engineering Mazdoor Union case (AIR 1970 SC 82)
(supra). However, where a statute setting up a corporation so provides
specifically, it can easily be identified as an agent of the State. The Judgment in Heavy
Engineering Mazdoor Sangh observed that the inference that a corporation was an agent of the
Government might also be drawn where it was performing in substance governmental and non-
commercial function. The Constitution Bench in Steel Authority case (AIR 2001 SC 3527 : 2001
AIR SCW 3574) (supra) has disagreed with this view in para 41 of its judgment. Hence, even a
corporation which is carrying on commercial activities can also be an agent of the state in a
given situation. Heavy Engineering
Judgment is otherwise completely approved wherein, it is made clear that the fact that the
members or directors of corporation are entitled to call for information, to give directions
regarding functioning which are binding on the directors and to supervise over
the conduct of the business of the corporation does not render the corporation an agent of the
Government. The fact that entire capital is contributed by the Central Government and wages
and salaries are determined by it, was also held to be not relevant.
"48 to 49. ........."
"50. The propositions in Steel Authority are to be seen on this background viz. that merely
because the government companies/corporations and societies are discharging public functions
and duties that does not by itself make them agents of the Central or the State Government. The
industry or undertaking has to be carried under the authority of the Central Government or the
State Government. That authority may be conferred either by a statute or by virtue of a
relationship of principle and agent, or delegation of
power. When it comes to conferring power by statute, there is not much difficulty. However,
where it is not so, and whether the undertaking is functioning under authority it is a question of
fact. It is to be decided on the facts and circumstances of each case.
"51. Application of these tests to the facts of the present case.
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As far as the facts of the present case are concerned, as can be seen from the submissions of the
parties, the determination of the question as to which Government
is the appropriate Government for the first respondent - establishment, will depend upon two
issues -
(1) How is the property of the first respondent vested? and
(2) Whether the control and management of the Hospital and the Research Centre is
independently with the first respondent?"
14. Mr.V.R.Datar pointed out from the rules and bye-laws of CSIR as a society, that
though the Society has members from the ministry, its governing body was independent
from the authority of the central government. As per section 16 of the Societies
Registration Act, 1860, management of the affairs of a society is entrusted by the rules
and regulations, to its Governing Body and according to Rule 29 of CSIR Rules the
governing body is mainly constituted of scientists and
eminent industrialists with only one ex-officio member, Secretary to Government of India
for financial matters. By alluding to powers and functions of the Governing Body
enumerated in Rules 42 to 48, learned counsel pointed out
the apparent self-administration and autonomy of CSIR.
Mr.V.R.Datar submitted that by Rule 53, powers of the Director of NAL were delineated,
making him responsible for managing the affairs of the National Laboratory as per
decisions of the Management Council. He further stated that vide Rules 65 and 66,
Management Council of the individual National Laboratories, as in the present case, was
completely free of central government supervision and was an independent entity
empowered to administer, control and
manage its own affairs and environs including writing off losses, recommending resource
allocation for its R&D activities, approving contracts, licensing IPR, constituting its
selection and assessment committees for all technical staff, etc. Further, the funds of the
Society as per Rule 54, though consisting of grants made by the Government, is not
dependent on the budgetary allocation charged to the Consolidated Fund of India,
thereby bringing it outside the authority of Central Government. It was the contention of
respondent No.1 - union that even the CSIR -society is a mere policy laying body and
does not directly exercise control over working of the constituent organizations. In view
of the above it was submitted by learned counsel Mr.V.R.Datar that, petitioner - NAL is
an employer who is independent and distinct from the Central Government, not in any
way working as an agent of the Central Government.
15. The Tribunal has relied upon judgment of the Apex Court in Heavy Engineering
Mazdoor Union v. State of Bihar and Others 1970 SCR (1) 995 where it was held in the
context of determination of 'authority of Central Government'
that :
"The company so incorporated derives its powers and functions from and by virtue of its
memorandum of association and its articles of association. Therefore, the mere fact that the
entire share capital of the respondent-company was contributed by the Central Government and
the fact that all its shares are held by the President and certain officers of the Central
Government does not make any difference. The company and the shareholders being, as
aforesaid, distinct entities the fact that the President of India and
certain officers hold all its shares does not make the company an agent either of the President or
the Central Government"
Thus, though CSIR-Society has the Hon'ble Prime Minister and others as its members,
the Society itself does not derive any power under the authority of Central Government,
12 OA NO.343-
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but the Governing body is empowered to make arrangements and enter into agreements
even with the Government of India,
indicating that CSIR is a distinct entity and working not under the authority of Central
Government.
16. Applying the tests laid down in the recent decision of Tata Memorial Hospital
Workers Union (supra), regarding control and management of the employer
establishment, if powers are derived from its articles of association and exercised
independently, Central Government's authority cannot be inferred. In Steel Authority
(supra), it is clearly held that whether an establishment is working under the authority of
Central Government or not, is a question of fact to be decided on the facts and
circumstances of each case. The CSIR Rules pointed out by learned counsel Mr.V.R.Datar
clearly indicate that all the authority was vested in the Governing body of the CSIR -
society and the Management Council of each of the National Laboratories and they
undertake public and private projects and function on commercial lines. The material on
record shows that petitioner - NAL is an autonomous establishment in charge of its own
affairs, and not an agent or entity working under the authority of the Central
Government. Therefore, the second main argument of the petitioner also fails.
17. Learned senior counsel Mr.S.N.Murthy further contended for the petitioner that, if the
claim of the workmen to have worked directly under the petitioner were to be accepted,
as per section 14 of the Administrative Tribunals Act, 1985, and notification dated 31-10-
1986 issued thereunder, jurisdiction of industrial tribunals to entertain disputes was
barred and that Central Administrative Tribunal alone had jurisdiction to address the
grievances of the respondent No.1-union in the present matter. It was however pointed
out by Mr.V.R.Datar learned counsel for respondent No.1-union that, as per section 28 of
the Administrative Tribunals Act, the jurisdiction of industrial tribunals was saved and
made concurrent with that of the Central Administrative Tribunal in matters falling under
the Industrial Disputes Act. Section 28 of the Administrative Tribunals Act, 1985 reads as
under:
"28. Exclusion of jurisdiction of courts except the Supreme Court under article 136 of the
Constitution.--On and from the date from which any jurisdiction, powers and authority becomes
exercisable under this Act by a Tribunal in relation to recruitment and matters concerning
recruitment to any Service or post or service matters concerning members of any Service or
persons appointed to any Service or post, no court except--
(a) the Supreme Court; or
(b) any Industrial Tribunal, Labour Court or other authority constituted under the
Industrial Disputes Act, 1947 (14 of 1947) or any other corresponding law for the
time being in force,
shall have, or be entitled to exercise any jurisdiction,
powers or authority in relation to such recruitment or matters concerning such
recruitment or such service matters."
18. The Administrative Tribunals Act has been enacted to provide a forum for
adjudication of disputes and complaints with respect to recruitment and conditions of
service of persons appointed in public services and posts in connection with the affairs of
the Union of India or of a State or of any local or other authority within the territory of
India or under the control of the Government of India or of any corporation or society
owned or controlled by the Government in pursuance of Article 323A of the Constitution
and for matters connected therewith or incidental thereto. A bare reading of the provision
of Section 28 indicates that the power of the Industrial Tribunal is saved by this
provision, and disputes arising under the ID Act may be referred to Industrial Tribunal
13 OA NO.343-
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by the appropriate government for adjudication. In the context of Sections 14 and 28 of
the Administrative Tribunals Act, the Supreme Court has held in Telecom District
Manager and Others v. Keshab Deb (2008) 8 SCC 402, that an employee who claims
himself to be a workman will have a right of election in the matter of choice of forum
between the CAT and Industrial Tribunal. Hence, contention for the petitioner that
Central Administrative Tribunal has exclusive jurisdiction over the dispute by virtue of
section 14 of the Administrative Tribunals Act, 1985 is not sustainable.
19. Another argument reiterated for the petitioner was with regard to the status of the
workmen concerned as contract employees and their having no right to regularization in
the service of NAL. It was submitted that the petitioner was getting sponsored projects
and NAL was assigned particular work packages for the execution of which NAL would
enter into contract with the contractors for supplying manpower. There was no contract
or employer and employee relationship between the petitioner and the workmen
concerned, according to the submission. Elaborating on that argument it was also
submitted that the contract workers were not involved in any core activities of NAL and
were engaged only for doing routine jobs for particular projects. The workmen were not
directly selected and appointed by the petitioner; they were not paid wages directly by
the petitioner and their ESI and PF contributions were also made by the contractor. It
was further submitted that such workmen were carrying out the work assigned to them
under the control and supervision of the contractor, while the heads of division only
verified if the work was done according to the specifications. The petitioner relied upon
the following observations made by the Apex Court in Haldia Refinery Canteen
Employees Union & others v. M/s. Indian Oil Corporation Ltd., and others [ AIR
2005 SC 2412 ).
"15. No doubt, the respondent management does exercise effective control over the contractor
on certain matters in regard to the running of the canteen but such control is being exercised to
ensure that the canteen is run in an efficient manner and to provide wholesome and healthy food
to the workmen of the establishment. This however does not mean that the employees working in
the canteen have become the
employees of the management.
16. A free hand has been given to the contractor with regard to the engagement of the employees
working in the canteen. There is no clause in the agreement stipulating that the canteen
contractor unlike in the case of Indian Petrochemicals Corporation Ltd. & Another (supra) shall
retain and engage compulsorily the employees who were already working in the canteen under
the previous contractor. ..."
The above observations were made in the context of the workmen being treated as
employees of the contractor where the factory of the employer was governed by the
provisions of the Indian Factories Act, 1948 and the canteen where the workmen were
employed was a statutory canteen established to fulfill the requirement of the Factories
Act.
20. The following observation of the Apex Court in General Manager, (OSD), Bengal
Nagpur Cotton Mills, Rajnandgaon v. Bharat Lal and Another. [ (2011) 1 SCC 635 ] was
also referred for the following observations made therein :
"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: (SCC p.388, paras 38 -39)
14 OA NO.343-
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"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 a contractor, if the right to regulate the 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." "
21. As against the above arguments for the petitioner, it was submitted for the
respondent-union that the Tribunal has in the impugned award, after elaborate
discussion of the evidence on record, arrived at the finding of fact that the workmen were
working under the petitioner on full time basis along with their regular employees
without being supervised by the contractor. It was submitted that the workmen concerned
have actually and continuously worked for the petitioner and the findings of fact based
on evidence are not even alleged to be perverse. In fact, it was proved before the Tribunal
by documentary evidence that the contract system adopted by the petitioner was a façade
and a sham arrangement, according to the submission. Ex.M-18 on the record is the
licence obtained by NALTECH on 28.11.1997 from the office of the Assistant Labour
Commissioner, Bangalore and it was in force till 27.11.1998 and thereafter renewed from
year to year till 2005. That licence clearly stipulated that, "this licence is for doing the
work of: to commercialize and market the packages developed by NAL and to aid the
research and development programmes in the
establishment of the Director, NAL. ..."
As for the contractors, the licence given on 24.10.2002 to Sri E.Mohan Raju (Ex.M-19)
was for "doing the work of developing prototypes and preparation of moulds, lay-up,
vaccum bagging component and Associated works at ACDDivision at NAL, Bangalore."
Another licence for one more year was given on 25.11.2003 which was renewed in 2004
to expire on 24.11.2005. As against that, when the petitioner offered a work package for
fabrication of 60 spars on 05.11.2005 to M/s. Comat System Solutions (P) Ltd., it was
given with the condition, inter alia stipulating that,
"2.2 Manpower - We found the following 40 persons (5 Engineers and 35 Diploma/III)
referred in your quotation are found suitable to our requirement".
These 40 persons named in the work package (Ex.M-20) included many of the workmen
concerned, signifying the fact that they were selected and appointed to work for the
petitioner, under its contract with another contractor. It is significant to note that the
petitioner could not adduce any evidence for having registration of itself as a principal
employer in respect of the period 1996-1997 and after November 2002. These facts on
record supported the submission that arrangement of principal employer and contractor
was only a subterfuge to deny to the workmen their status and benefits due to regular
employees of the petitioner. All such oral and documentary evidence having been duly
considered and elaborately discussed by the Tribunal, it was submitted that the finding of
fact in the impugned award did not call for any interference. Learned counsel Mr. Datar
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relied, in that context, upon the following observations of the Apex Court in Bhuvnesh
Kumar Dwivedi v. M/s. Hindalco Industries Ltd. (AIR 2014 SC 2258):
"18. A careful reading of the judgments reveals that the High Court can interfere with an Order
of the Tribunal only on the procedural level and in cases, where the decision of the lower courts
has been arrived at in gross violation of the legal principles. The High Court shall interfere with
the factual aspect placed before the Labour Courts only when it is convinced that the Labour
Court has made patent mistakes in admitting evidence illegally or have made grave errors in law
in coming to the conclusion on facts. The High Court granting contrary relief under Articles 226
and 227 of the Constitution amounts to exceeding its jurisdiction conferred upon it. ...."
22. It was contended by the petitioner before the Tribunal that all project works were
time bound and appointment of the workmen concerned, made through the contractors,
was co-terminus with the duration of the projects. However, the Tribunal has, on the
basis of the material on record found that Mohan Raju, the contractor for NAL since
September 2002 had admitted to have not terminated the services of any workmen at the
completion of any project, nor had he issued
any letters regarding shifting of workmen from one project to another. As noted by the
Tribunal it was admitted by M.W-3, Company Secretary for NALTECH, respondent No.2
herein that the workmen concerned were working in NAL prior to 1997 when NALTECH
issued appointment letters to them as also, by Mohan Raju (M.W.2) licensed contractor
since 24-10-2002 that he was unaware if the workmen were working for NAL prior to his
becoming a contractor. Based on the letters of appointment issued in favour of two of the
workmen, produced as Ex.W.30 & 31, it was noted by the Tribunal that NALTECH had
been informed by the Director of NAL that the services of the persons mentioned in those
letters were required, on contract basis and that it showed that the management had
found them suitable and hence made the specific request for their appointment. As
regards the supervision exercised over the workmen, the Tribunal found that these
workmen were working alongside regular workmen and that their supervision was found
to have been done by NAL itself. In the light of these observations it was concluded by
the Tribunal that the workmen were actually working for NAL and that the contracts were
a mere façade, artificially created by the petitioner.
23. Even as the issue of recruitment rules and procedure for appointment under the
petitioner was additionally raised before the Tribunal, it was further elaborated to submit
that regularization of the workmen concerned would amount to permitting back-door
entry and permanent appointment without following the recruitment rules and process of
selection prescribed therein. It was submitted for the petitioner that, as held in Secretary,
State of Karnataka and others v. Uma Devi and others [AIR 2006 SC 1806], an
appointment for a post in Government service or in the service of its instrumentalities
can only be by way of a proper selection in the manner recognized by the relevant
legislation in the context of the relevant provisions of the Constitution. In the name of
individualizing justice, it is also not possible to shut eyes to the constitutional scheme and
the right of the numerous as against the few who are before the court. It is however, in the
context of Articles 14, 16, 39(d) and 226, that the Apex Court went on to observe:
"43. ...... This classical position continues and a mandamus could not be issued in favour of the
employees directing the Government to make them permanent since the employees cannot show
that they have an enforceable legal right to be permanently absorbed or that the State has a
legal duty to make them permanent".
It needs to be noted here that Uma Devi (supra) was not dealing with matters arising out
of the operation of or adjudication undergone under the provisions of the ID Act. And
16 OA NO.343-
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besides that, the Apex Court still made the following pertinent order in para 44, for the
respective State Governments concerned:
"44. One aspect needs to be clarified. There may be cases where irregular appointments (not
illegal appointments) as explained in S.V. Narayanappa [(1967) 1 SCR 128 : AIR 1967 SC
1071], R.N. Nanjundappa [(1972) 1 SCC 409 : (1972) 2 SCR 799] and B.N. Nagarajan [(1979)
4 SCC 507 : 1980 SCC (L&S) 4 : (1979) 3 SCR 937] and referred to in para 15 above, of duly
qualified persons in duly sanctioned vacant posts might have been made and the employees have
continued to work for ten years or more but without the intervention of orders of the courts or of
tribunals. The question of regularisation of the services of such employees may have to be
considered on merits in the light of the principles settled by this Court in the cases above
referred to and in the light of this judgment. In that context, the Union of India, the State
Governments and their instrumentalities should take steps to regularise as a one-time measure,
the services of such irregularly appointed, who have worked for ten years or more in duly
sanctioned posts but not under cover of orders of the courts or of tribunals and should further
ensure that regular recruitments are undertaken to fill those vacant sanctioned posts that require
to be filled up, in cases where temporary employees or daily wagers are being now employed.
The process must be set in motion within six months from this date. We also clarify that
regularisation, if any already made, but not sub judice, need not be reopened based on this
judgment, but there should be no further bypassing of the constitutional requirement and
regularising or making permanent, those not duly appointed as per the constitutional scheme."
24. Learned counsel for the petitioner, however, extended his argument by submitting a
memo, after conclusion of the arguments, to submit that the pay scales are prescribed for
direct permanent recruits, for whom minimum required
qualifications are prescribed and the workmen concerned would not meet the
requirements of minimum qualifications with necessary percentage of marks. Per contra,
it was submitted for the respondent workmen that the judgment in Umadevi (supra)
would not apply in a case where an industrial dispute is raised and referred under the
statutory provisions of the ID Act, as the Tribunal to which the dispute is referred is duty
bound to make an award which would be final and binding on the parties. As recently
held by the Apex Court in Civil Appeal Nos.10353-10354/2014 (dated 18.11.2014), the
Industrial and Labour Courts are not denuded of their powers to order permanency of
the workers who have been victims of unfair labour practice on the part of the employer
under Item 6 of Schedule IV to the ID Act.
25. It emerges from the guarantees and ideals enshrined in the Constitution in the form of
Directive Principles of State Policy and the goal of social and economic justice laid out
in its Preamble, that they ought to be guiding principles for justice delivery by the Courts
and Tribunals. The underlying aim and object of adjudication of an industrial dispute is,
in effect, dispensation of social and economic justice and translating fundamental rights
as well as directive principles
into some tangible relief. As held in State of Bombay v. Hospital Mazdoor Sabha, [(1960)
2 SCR 866], by Gajendragadkar.J, regarding understanding the scope of
industry, trade and business:
"11. ....... Industrial adjudication has necessarily to be aware of the current of socio-economic
thought around; it must recognise that in the modern welfare State healthy industrial relations
are a matter of paramount importance and its essential function is to
assist the State by helping a solution of industrial disputes which constitute a distinct and
persistent phenomenon of modern industrialised States. In attempting to solve industrial disputes
industrial adjudication does not and should not adopt a doctrinnaire approach. It must evolve
some working principles and should generally avoid formulating or adopting abstract
generalisations. ......"
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As held in Basti Sugar Mills Co. Ltd. v. State of U.P., (1979) 2 SCC 88, by V.Kishna
Iyer.J, :
"22. .........Industrial Jurisprudence does not brook nice nuances and torturesome technicalities
to stand in the way of just solutions reached in a rough and ready manner. Grim and grimy life-
situations have no time for the finer manners of elegant jurisprudence. ...."
Thus, the process of industrial adjudication is an onerous task being guided by the
constitutional mandates and aiming at settlement of the industrial dispute on a fair and
just basis, tested on the touchstone of social and economic justice. When an industrial
dispute is raised, it is a commotion to be pacified by dispensing justice. In such
adjudication, not just the right to equality and other constitutional guarantees, but the
aims and ideals of the Constitution enter into the consideration.
26. An analysis of the constitutional scheme shows that, by its very preamble, the
Constitution is dedicated to securing to all citizens, social and economic justice. By
virtue of Article 37, the principles contained in Part IV are fundamental in the
governance of the country. Dr.B.R.Ambedkar said before the Constituent Assembly in this
context that:
"...In my judgment the Directive Principles have a great value for they lay down that our ideal is
economic democracy. Because we did not want merely a parliamentary form of government to be
instituted through the various mechanisms provided in the Constitution without any directions as
to what our economic ideal or as to what social order ought to be, we deliberately included the
directive principles in our Constitution. ..."
It is the duty of the Courts to apply directive principles in interpreting the Constitution
and the laws. As held by the Supreme Court in U.P. State Electricity v. Harishankar Jha
1978 (4) SCC 16, the injunction that the Directive Principles are fundamental in the
governance of the country, means that while the Courts are not free to direct making of
legislation, Courts are bound to evolve, affirm and adopt principles of interpretation
which will further and not hinder the goals set out in the Directive Principles of State
Policy, and this command of the Constitution must be ever present in the minds of the
Judges when interpreting statutes which concern themselves directly or indirectly with
the matters set out in the Directive Principles.
27. Article 38 of the Constitution requires the State to strive to promote welfare of the
people by securing and protecting, as effectively as it may, a social order in which social
and economic justice may inform all the institutions of the national life and, in particular,
to minimize inequalities in income and endeavour to eliminate inequalities in status,
facilities and opportunities amongst individuals and groups. Article 39 requires the State
to direct its policy towards securing for every citizen the right to an adequate means of
livelihood and to see that the operation of the economic system does not result in the
concentration of wealth and means of production to the common detriment. Article 41
requires the State within its limitation to make effective provisions for securing the right
to work and Article 42 requires making of provisions for securing just and humane
conditions of work. Article 43 requires the State to endeavour to secure by suitable
legislation or economic organisation or in any other way, to all workers, work, a living
wage and conditions of work ensuring a decent standard of life and full enjoyment of
leisure. Article 51-A makes it a fundamental duty of every citizen to abide by the
Constitution and to respect its ideals, to follow the noble ideals which inspired our
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freedom struggle, to promote harmony, to develop humanism and to have compassion for
all living creatures.
28. These aims and ideals, coupled with a duty to follow them, are cast in the
Constitution to keep them constant and above the vicissitudes of political ideology and
economic policy. When an industrial adjudicator having the power to transcend
contractual conditions of service entertains an industrial dispute, he exercises the
judicial power of the State and endeavours to secure for the industrial workers "work, a
living wage and conditions of work ensuring a decent standard of life and full enjoyment
of leisure", within the limitations laid down by law and binding precedents. The
jurisdiction of an Industrial Tribunal, therefore, is expansive and creative and not
restricted to only enforcing or interpreting the contract of service or the extant legal
provisions and it is not fettered by the limitations of contracts and can even involve
extension of existing agreement or the making of a new one, or in general, creation of
new obligations or modification of old ones. If the employment of a portion of the
workforce on casual/ temporary/ irregular basis is in violation of the express provisions
of the ID Act or if it amounts to unfair labour practice on the part of the employer, such
illegality or unfair labour practice must come to an end with the adjudication.
Particularly, if the practice of employing workmen on a casual or temporary basis
through a sham arrangement were permitted, it would amount to licence to exploit and
would fly in the face of every constitutional aim, ideal, edict and obligation referred
hereinabove.
29. In the above facts, after confirming the factual finding that the arrangement of
contract labour by the petitioner was a sham, the next logical conclusion would be that
the workmen concerned were in fact employed for nearly a decade or, by now, longer, for
and by the petitioner, and the object of not making regular appointments in a legal
manner was to continue such workmen without conferring upon them any status and
privileges of regular workmen and without undertaking the process of regular
recruitment. That would obviously amount to an unfair labour practice which may not
strictly be punishable but which would as well not be countenanced in adjudication of an
industrial dispute. As observed earlier, the adjudicator of industrial disputes is also
guided by the spirit of constitutional edicts and cannot allow an employer to take benefit
of his own wrong in employing, for a fairly long period, a set of its workforce as contract
labourers, bypassing its own recruitment rules and procedure for selection, resulting into
obvious discrimination and an unjust inequality. As tritely summed up by Shri. Vithalbhai
B Patel in his "Law on Industrial Disputes" [Lexis Nexis, 4th
Edition (2014), Volume I, §4.12] at page 141 regarding the principle of social justice:
"It, therefore, endeavours to resolve the competing claims of employers and employees
by finding a solution which is just and fair to both parties with the object of establishing
harmony between capital and labour, and good relationship. The ultimate object is to see
that industrial disputes are settled
by industrial adjudication on principles of fair play and justice."
30. The very fact that the workmen concerned herein were actually named for being
employed under a new contract only for carrying out a work package (Ex.M-20) clearly
proved that the petitioner chose and wanted many of the workmen concerned to work on
their projects. It is unbecoming and unfair on the part of the management to set up a
technical defence in an industrial dispute with the workmen, who were chosen by the
management to work for them for years on end, that they would not have fulfilled the
requirements of qualification under their recruitment rules. Therefore, the last-ditch
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attempt at depriving the workmen concerned of their legitimate claim for status and full
wages and benefits at par with the regular employees, has to be spurned. It has however
also to be mentioned in fairness to the petitioner that they have agreed to the list of the
workmen concerned, which was submitted as an annexure to the submissions of the
respondent, in so far as it gives in a tabulated form, the posts which each of the workmen
should have been holding and the pay-scale to which each such workmen would have
been entitled as on the date of reference, if their demand were to be accepted. That table
is reproduced hereunder for ready
reference and avoiding any further litigation or complication.
TABLE
SL.NO. NAME DATE OF QUALIFI ELIGIBLE POST APPLICABLE
(In the JOINING C ON THE DATE SCALE OF
order OF REFERENCE
ATION PAY IN NAL
of AS ON DATE OF
Refere REFERENCE
nce) (VTH PAY
COMMISSION)
67 Rama Prasanna 01/09/1994 DME Junior 4,500-125-
Technical 7,000
Asst. Grade III
(1)
19 Ratnakar B 01/10/1996 DME Junior 4,500-125-
Technical 7,000
Asst. Grade III
(1)
31 Paranthaman N 18/09/1997 DME Junior 4,500-125-
Technical 7,000
Asst. Grade III
(1)
36 Basavaraju S M 12/11/1997 DME Junior 4,500-125-
Technical 7,000
Asst. Grade III
(1)
3 Arul Kumar A 01/08/1994 ITI (Fitter Support Staff 3050-75-
trade) Grade II (1) 3950-80-
4590
8 Gunakara B 10/12/1995 NAC Support Staff 3050-75-
Grade II (1) 3950-80-
4590
12 Omprakash 01/01/1996 NAC Support Staff 3050-75-
Swamy Grade II (1) 3950-80-
4590
17 Gangaraju 08/02/1996 NAC Support Staff 3050-75-
Grade II (1) 3950-80-
4590
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18 Srinivas P 03/07/1996 NAC Support Staff 3050-75-
Grade II (1) 3950-80-
4590
63 Suresh Reddy 31/12/1996 ITI Support Staff 3050-75-
(Welder) Grade II (1) 3950-80-
4590
23 Rammanna 04/04/1997 NAC Support Staff 3050-75-
Gundad Grade II (1) 3950-80-
4590
61 Mahanthappa 04/04/1997 ITI (Fitter) Support Staff 3050-75-
Grade II (1) 3950-80-
4590
21 Parthiban 14/07/1997 ITI (Fitter) Support Staff 3050-75-
Grade II (1) 3950-80-
4590
34 Raghu H L 01/08/1997 ITI Support Staff 3050-75-
(Machinist) Grade II (1) 3950-80-
4590
32 Eshwarappa S 01/08/1997 NAC Support Staff 3050-75-
Grade II (1) 3950-80-
4590
4 Chandrashekar 01/09/1994 SSLC Support Staff 2550-55-
R Grade I (1) 2660-60-
3250
2 Krishnappa B M 01/09/1994 SSLC Support Staff 2550-55-
(Fail) Grade I (1) 2660-60-
3250
62 Prabhakaran D 16/09/1994 SSLC Support Staff 2550-55-
Grade I (1) 2660-60-
3250
39 Mani S 28/08/1998 SSLC Support Staff 2550-55-
Grade I (1) 2660-60-
3250
31. In the facts and circumstances discussed hereinabove, the petition is dismissed with
the consequential additional directions that the workmen concerned shall be treated at
par with regular employees in their eligible posts as per the above table and paid the
difference of wages and benefits from the date of reference. The arrears due to the
workmen as on the date of the impugned award from the date of reference shall be paid
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with interest at the rate of 9% per annum. The arrears on account of difference of wages
for the period subsequent to the date of the award shall be capitalized at the end of each
year and shall be paid with 9% interest per annum from the date of the end of each such
year. The payment of interest on arrears of difference of wages from the date of the award
is necessary and justified by the fact of inflation and constantly corroding purchasing
power of money. Besides that, withholding of the benefits due to the workmen since the
impugned award has to be duly compensated. There is no order as to costs."
4. But then, thereafter it was apparently taken up to the Hon'ble Apex Court in
SLP.No.13880/2015, which was dismissed vide order dated 24.09.2015. Therefore,
the decisions canvassed by these judgments have become final. Therefore the
question is, how far these decisions are applicable to NAL and its employees?
5. Apparently. The applicant is only a contractor appointed employee, which
may have no primafacie connection with NAL, as it is. Even though under the
relevant Labour Regulations, NAL can be considered as principal employer, but to
what extent the principal employer will be bound to protect the interest of the
employees is the question. Since the matter has many aspects to it, we had looked
into the matter and found that from the very beginning employees were brought in
randomly without any specific parameters and it caused huge and great loss to the
public exchequer. We hold, that without any doubt, after examining this matter in
great detail, that the performance of NAL and these employees had been minimal,
to say the least.
6. If we had passed an order to regularise those employees, it will be a great
crime against the nation and greater public interest. We refuse to do so. But the
applicant that 19 people have been regularised. One mistake will not make matters
right. For multiplicity of reasons the application cannot lie. But one reason is that
one contractor has appointed certain employees on his own. The employees are
bound by the orders of the contractor and it has come in proof that the contractor
22 OA NO.343-
347/2016/CAT//BANGALORE
and his employees have also failed. Therefore, we hold that the OA lacks merit.
Dismissed.
7. At this point of time, learned counsel for the applicant pressurised us to look
into our order passed in OA No.1477/2014 on 14.12.2015, which we quote:
DR. K.B. SURESH, MEMBER (J):
Heard. The learned counsel for the respondent brings in the notion of an outsourced car driver who may later claim to be a central government employee which notion had not been agreed to by an earlier Bench on a different ground that similarly situated people were not selected through the employment exchange and for this reason it cannot be presumed that they were selected by the respondent in any way. It had gone up to the Hon'ble High Court and Hon'ble High Court felt that the remedy of the applicant would lie only in the industrial Tribunal and not in service Tribunal as the nexus between them and government is not established yet but then the Hon'ble Apex Court in many cases held that whenever issues arise we must lift the corporate veil to see what lies underneath, therefore, we had called for the agreement between the alleged contractor and the respondent. The contractor name itself is very significant. It is M/s. Aircraft Design and Engineering Services Private Limited which is registered with the address of HAL 2nd stage, Bangalore has been significantly shown. We had gone through the various aspects of the agreement. It is exactly a mirror reflection of the work to be done by the respondents and nothing else starting from aircraft design of Saras and C-NM5, product support of HANSA-3 and the pending design and Saras- PT3 and conversion of Saras PTI to Saras PT - 1N and other technical services which had a mirror reflection of respondents work having handed over midway. It is also mentioned in paragraph 1 that the contractor will execute the work at the CSIR, NAL premises, all the basic facilities will be provided by the NAL who is the respondent. The progress of the job will be reviewed periodically by the Director or any of the Project Directors or any of the authorized person and then the more significant in paragraph 2 the contractor will also assist in the design and fabrication of test rigs, jigs and fixtures and other items. The contractor vide paragraph 3 is to engage experienced aircraft designers, engineers and technical staff required during different phases of this project. Therefore in effect the contractor is doing everything except sweeping the floor which is to be done by NAL. This mirror reflection of work will therefore point out only one thing that the labour laws of this country are being circumvented by a devious strategy and nothing else. The employees are thus doing only the work which will normally be done by NAL and therefore NAL will be the principal employer, without any doubt.
2. Now, we do not know under what premise has the contractor taken on its employees but then according to paragraph 5 of the agreement since the contractor has to base the progress on the milestone certified by the Programme Director we must assume that a proper selection process would have been undergone to select the best possible among the possible persons to be employed. It is also said in paragraph 8 that the contractor person will adhere to the normal working hours of the NAL and will be bound by the 23 OA NO.343- 347/2016/CAT//BANGALORE security regulations of NAL. If they have to work overtime, permission has to be taken from the authorized official of the NAL.
3. For employing anybody the contractor will submit details of names, parentage, residential address, age etc. of the person deployed in the NAL premises and for them NAL will issue temporary photo identity card and temporary biometric cards.
4. In paragraph 8 it is said that the contractor will be responsible for EPF Act, ESI Act, Workmen Compensation Act and the contractor will keep NAL indemnified for any breach, that is the crux of the issue. To avoid the labour laws implementation through a devious methodology this contract was thought of which is an exact mirror reflection of the work done by NAL and nothing else. The contractor is doing all the other jobs except sweeping the floor, therefore, there cannot be any doubt that in reality the employees are NAL employees alone. The Constitution of India in Directive Principles stipulate that there cannot be exploitation of human labour. The devious methodology adopted by NAL, therefore, is not correct ethically, morally or legally, it is particularly so as in accordance with paragraph 14 of the agreement the contractor will have to hand over to the concerned Project Director all design, drawings, work sheets and other documents prepared or collected during the work. It must be noted that these are the intellectual property of contractor alone and NAL has no right to it unless NAL is the entire controlling entity. This establishes only that NAL is the controlling authority and none else. That being so there cannot be any doubt that NAL is the principal employer and the contractor is only a namesake brought in to avoid the contractual and other liabilities which the NAL will have to shoulder.
5. This matter Shri M.V. Rao, learned counsel for the respondents, asserts is covered by the Hon'ble High Court judgment but then the Hon'ble Apex Court in Hussain Bhai reported in 1978 4 SCC 257 had clearly held that it is the principal employer who must bear the burden, but then since NAL is a very important component of national enhancement we would like them to have a period of consideration even though this order is issued today and copy will be issued to Shri M.V. Rao, learned counsel for the respondents, to facilitate further discussion we will expect NAL to come out with a proper decision on accommodation of these employees.
6. A copy of this order shall be issued to the learned counsel for the respondents. Post on 21.12.2015.
8. That matter relates to payment of EPF and ESI, which as per statutory regulation, must be paid by the principal employer. Therefore the distinction between the principal employer being ultimately responsible for the welfare of the employees for the work done in his office premises is within the regulation.
Regulation means, that by regulation, employee attains a statute, it is not part of 24 OA NO.343- 347/2016/CAT//BANGALORE contract. It is an attainment of statute. That the statute requires more elements with compliance with the contract and that element is not specifically present here, because these are only the employees of the contractor and we have found after distinction and continued search that employees have not benefitted the institution in any way. In fact it has done great impediment to the national welfare. There is no ground. OA dismissed.
9. At this point, learned counsel for the applicant makes a statement that 19 employees of the same contractor have been absorbed by NAL and with the instance of the NAL only. But then, one illegality cannot be cited for equalisation under Article 14, It was clearly illegal or for some specific purpose, employees wanted their services. Since they are not in the party array, we do not want to say anything on the subject.
10. Learned counsel for the applicants submits to us that the applicants have been working for more than 14 years at the same place. Therefore, we will make a regulation that the applicants cannot be substituted by another contract employees.
But the OA is dismissed. No costs.
(C.V. SANKAR) (DR.K.B.SURESH)
MEMBER(A) MEMBER(J)
vmr
25 OA NO.343-
347/2016/CAT//BANGALORE
Annexures referred to by the Applicants in OA No.170/00343-347/2016 Annexure A1 : Experience certificate of 1st applicant Annexure A2 : Experience certificate of 1st applicant .
Annexure A3 : Bank statements of 1st applicant.
Annexure A4 : Salary slips of the 1st applicant
Annexure A5 : Experience certificate of 2nd applicant
Annexure A6 : Experience certificate of 2nd applicant .
Annexure A7 : Salary slips from Feb 2001 to Feb 2002, Jan 2011 to
Oct 2015.
Annexure A8 : Bank statements of 2nd applicant.
Annexure A9 : Salary slips of the 3rd applicant.
Annexure A10 : Bank statements of 3rd applicant .
Annexure A11 : Experience certificate of 4th applicant Annexure A12 : Salary slips of the 4th applicant.
Annexure A13 : Bank statements of 4th applicant.
Annexure A14 : Experience certificate of 5th applicant Annexure A15 : Experience certificate of 5th applicant . Annexure A16 : Experience certificate of 5th applicant . Annexure A17 : Salary slips of the 5th applicant.
Annexure A18 : Offer letter and extension of service from 3.11.1998 issued by the 2nd respondent.
Annexure A19 : Bank statements of 5th applicant.
Annexure A20 : Attendance from April 2003 to March 2005. Annexure A21 : Attendance from January 2014 to October 2015.
***************** 26 OA NO.343- 347/2016/CAT//BANGALORE