Karnataka High Court
M/S. Larsen And Toubro Limited, ... vs State Of Karnataka on 30 March, 1998
Equivalent citations: ILR1998KAR1897, 1998(4)KARLJ323, (1999)IILLJ532KANT
Author: Ashok Bhan
Bench: Ashok Bhan, Mohamed Anwar
ORDER Ashok Bhan, J.
1. In all these writ petitions the question involved is identical with little variation of facts in W.P. Nos. 16388 to 16398 of 1997 and W.P. No. 22511 of 1997 to which we shall advert and deal with in the later part of the judgment. Facts are taken from W.P. nOB. 14083 and 14084 of 1997, M/s. Larsen and Toubro Limited and Another v State of Karnataka.
2. This case is concerned with the vires of the notification KA-E-C-LWA 97, dated 11th April, 1997 Annexure-A prohibiting the employment of contract labour in the canteen (industrial canteens) in factories employing 250 workers and above in the State of Karnataka under Section 10 of the Contract Labour (Regulation and Abolition) Act, 1970 (Act 37 of 1970) (hereinafter referred to as 'the Act').
3. Relevant facts extracted from the pleadings of the parties are:
4. First petitioner is one of the units of M/s. Larsen and Toubro Limited located at Byatarayanapura, Bellary Road, Bangalore. It was started in the year 1975 for manufacture of Hydraulic excavators, Earth-moving equipments and" Diesel Engine sets. These equipments are used largely in infrastructure development, construction activities, irrigation and mining industries. Factory employs about 1,300 employees on its rolls. Second petitioner is another unit of M/s. Larsen and Toubro Limited located at KIADB Industrial Area, Hebbal, Mysore and engaged in the manufacture of medical equipments, telecommunication switching equipments and test measuring instruments. The factory was started from the year 1986. It has 495 employees on its rolls.
5. It has been averred in the petition that the first petitioner is running a heavily subsidised canteen as welfare measure for the benefit of its employees. The canteens are being run through contractors right from the time of starting the canteens. The canteen at 1st petitioner factory was started in the year 1982 and the contract has been taken by Acharya Associates of which Smt. Shanta Acharya is the proprietrix. She is engaging about 41 contract labour for providing the canteen service. The canteen in the 2nd petitioner factory was started in the year 1986 and the contractor Sri Gururaj Achar of Annapoorna Caterers is employing about 12 contract labour in the canteen. The canteen in the petitioners' factory is being run on the basis of company providing building, furniture, equipments, utensils, crockery, cutlery, electricity, water and fuel free of charge. Besides, each employee at the 1st petitioner's factory is extended a cash canteen subsidy of Rs. 12.57 per day. That the contract labour engaged in the petitioners' canteens are paid fair wages which are far in excess of the prescribed minimum rates of wages under the provisions of the Minimum Wages Act, 1948. The contract labour are extended the benefit of Employees State Insurance and Provident Fund, earned leave, weekly offs and holidays and other benefits as provided under various legislations. They are provided with uniforms, shoes etc. They are paid bonus and gratuity as per the provisions of the respective legislations. Inspite of the fact that there is no statutory obligation to the petitioners to do so they have been liberally spending on the running of the canteens which has virtually become additional cost rather than mere providing of facilities as required by law. Section 46 of the Factories Act, 1948, only stipulates that a canteen should be provided for the use of workers, subject to the rules as may be framed by the State Government. The Karnataka Factories Rules, 1969, under Rules 93 to 99-A has dealt with the issues concerning establishment of canteen. Rule 95 deals with the canteen equipment. Rules 96 and 99(1) provide for prices to be charged in canteen which shall be on no-profit basis except when the canteen is managed by the co-operative society. Rule 96 further provides that if the management bears the cost of wages of canteen staff, buildings, water, lighting, fuel and insurance, it shall not be incumbent on them to run the canteen on any further loss to themselves. The food items which are being supplied by the petitioners are of good quality and heavily subsidised resulting in heavy losses in running the canteen.
6. It has further been submitted that throughout Karnataka and other places most of the canteens are not run departmentally but through contract labour inasmuch as the provision of canteen facility is only a welfare facility and is not related to the main activity of the industry. The provision of canteen is not in any way related to the payment of salary and is only a facility provided to the workmen not to waste their time in search of food and instead make it available at the nearest place and at a reasonable cost. That the Government of Karnataka without applying its mind to the relevant factors related to in Section 10(2) of the Act have abolished engagement of contract labour. The Government did not take into account the relevant criteria in this regard. By generally abolishing engagement of contract labour in all the factories the Government has contravened Section 10 of the Act. Running of canteen is not incidental to the manufacturing process but is only a statutory welfare requirement under the Factories Act.
7. I.A. No. 2 was filed at a later date to place on record additional pleas and grounds which was taken on record. The additional facts which have been brought on record are that in to-day's business the emphasis is to concentrate on core competency areas and contract out jobs to specialised agencies, engineers, contractors, etc. There are number of companies who have developed specialised services with research base. In to-day's business world, running of canteen both in India and elsewhere is regarded as a business. It is a specialist activity. It is not incidental to the core activity of the petitioners. The impugned notification has wiped out an important industry in the service sector. On facts it has been submitted that the constitution of the Contract Labour Advisory Board is not in conformity with the provisions of Rule 3 of the Contract Labour (Regulation and Abolition) Karnataka Rules. The Notification No. KE/58/KBS/94, dated 15-6-1995, under which Advisory Board is constituted, has been produced as Annexure-G. In the said notification there is only one contractor, who has been appointed as member, representing contractors. The representative is a contractor of beedi industries. While considering the question, of abolition of contract labour in the canteens, he will not be able to express any view pertaining to the canteen sector. Section 10 lays down that there should be consultation before passing the notification. The consultation is mandatory, as provided under Section 10, the same should be effective and strictly in accordance with the provisions of the Act and satisfy all the necessary criteria laid down therein. All the relevant materials as required under Section 10 must be available in respect of different types of industries, to make the consultation effective. The employer's representation should be moved from different types of industries so as to facilitate the expression of grievances peculiar to that industry.
8. That the procedure for consultation has not been properly followed before issuing the impugned notification. Sequence of events leading to the issuance of notification have been detailed. It has been stated that the Karnataka Labour Advisory Board constituted a Committee on Industrial Canteen on 10th June, 1988. In 1988-89 the constituted committee recommended abolition of contract labour as per its report. Between 1989-94 no decision was taken by the Advisory Board or the Government. On 29th April, 1994, 7th Board Meeting was held and the five year old report of the committee which had been submitted in the year 1988-89 was considered. No decision was taken and the matter was left to he taken up by the new Advisory Board which was to be constituted soon. On 15th June, 1995 new Advisory Board was constituted. 8th Board meeting took place on 18th of December, 1995. New Board after taking into consideration the views of the members present decided to send the report of the committee recommending abolition of contract labour in canteens. The 9th Board Meeting took place on 3rd February, 1996. By that time reports from districts were not available. 10th Board Meeting was held on 1st March, 1996. Reports from district showing clear division between the managements and workers was found to be inadequate. The Advisory Board asked for further reports from Bangalore, Mysore, Hubli-Dharwad, Belgaum and Mangalore which were the major industrial areas where factories and establishments employing 250 workers or more were situated. It has been stated that without waiting for the complete picture Board approved the abolition of the contract labour in the canteens in the light of 9 year old report and without application of mind by reference to 7th/11th Board Meeting during which the constitution of the Board itself had been changed thereby showing errors of law and fact which are ex facie apparent on the face of the record. The Government issued the impugned notification on 11th April, 1997 relying upon irrelevant and incompetent report of the Advisory Board disclosing no application of mind.
9. State of Karnataka has filed its written statement. Along with the written statement respondent State has attached a copy of the statement of objections in similar connected writ petition in W.P. No. 12903 of 1997, dated 13th October, 1997. In addition to the objections filed in the written statement in this writ petition Government has taken the leave of the Court to adopt the statement of objections already filed in the said connected writ petitions. The statement of objections filed in the earlier writ petition has been attached as Annexure-Rl. Averments made in the petition have been denied. By referring to the statement of objections and reasons that accompanied the Bill for abolition of Contract Labour (Regulation and Abolition) Act, 1970 it was stated that the Act was made keeping in view two objectives namely, abolition of contract labour, where it is possible and regulation of contract labour where such abolition is not possible in view of the fact that certain works by their very nature required to be executed through contractors. Such works could be classified as works of a temporary nature such as construction of roads, buildings, works undertaken on a turn-key basis for which employment of a permanent work force would neither be feasible nor practicable. The Act does not countenance the employment of contract labour when the work involved is incidental or necessary to the main operations and perennial in nature. Wherever the work is incidental or necessary to the main operations and perennial in nature, then the appropriate Government has the authority to abolish employment of contract labour as contemplated under Section 10 of the Act. The State Government vested with powers under Section 10 of the Act could abolish employment of contract labour after consulting the State Advisory Board constituted under Section 4 of the Act. This Advisory Board is a body, which consists of representatives of Employers, Employees, Contractors, Contract Workers and Government representatives. The question of contract labour in canteens in factories which employ 250 workers and more was a matter referred to Karnataka State Labour Advisory Board (hereinafter referred to as 'the Board'). The Board deliberated on this question over a period of time in a series of meetings. Thereafter the Board came to the conclusion that employing contract labour in canteens in factories employing 250 workmen or more, fits squarely with the objective of the Act, namely, abolition and consequently, made recommendation to the respondent. The respondent after carefully considering recommendation of the Board and after taking into consideration the various factors including those mentioned under Section 10(2) of the Act, issued the impugned notification. The record of proceedings from 1988 onwards till the issuance of notification was placed before the Court for its perusal.
10. It has been stated that under Section 46 of the Factories Act, 1948 and the rules framed thereunder, it is mandatory for an employer to provide a canteen where 250 workers or more are employed. This being a statutory requirement, the incidentality, perenniality, regularity and sufficiency, the four criteria mentioned in Section 10(2) have to be presumed. The stattitory requirement mandates that the employer establishes and maintains the canteen and when it becomes a statutory requirement, a public duty is imposed on the petitioners to establish and maintain the canteen. The obligation herein for the petitioners is not only to run the canteen but also clearly casts an obligation on the petitioners to provide and maintain a canteen. Apart from the statutory obligations cast on the petitioners, the provision and maintenance of a canteen has become a service condition, since it has been in existence over a period of time. A canteen as contemplated under Section 46 of the Factories Act, 1948 and the rules framed thereunder is not a mere provision of a certain facility, but it specifically mandates the provisions of and maintaining a canteen for the workers. Canteens in factories employing 250 or more are invariably a part of the main establishment. It has been denied that the Government did not take into consideration the factors mentioned in Section 10(2) before issuing a notification. That it was not necessary to state in the notification issued under Section 10 that there was effective and meaningful consultation with the Advisory Board. It is sufficient that once it is stated that there was consultation, it means that it was effective and meaningful consultation as provided for under the Act. That there was sufficient material and data before the Karnataka State Contract Labour Advisory Board which were examined, considered and deliberated by the Members of the Board and the Board decided and recommended the system of abolition of contract in canteen. The Government after considering all the relevant factors and keeping in view the legislative intent of the Act and the law laid down by the Supreme Court of India issued the notification abolishing contract labour in canteen in factories employing 250 workers or more. It has been averred it was sufficient to issue a general notification abolishing the contract labour in canteen employing 250 or more workers and it was not necessary to hear each and every establishment before issuing the notification. The employer's representative was in the Advisory Board and the views expressed by him were taken into consideration before advising the Government to abolish the contract labour in canteens employing 250 or more workers. While exercising power under Section 10(2), the Government acts in a quasi-legislative sphere and in quasi-judicial or quasi-administrative sphere. While exercising quasi-legislative power the Government is not required to give an opportunity of hearing to each petitioner. Broadly it was stated the notification was issued after following the procedure laid down under the Act. There was no procedural irregularity and the notification issued was infra vires the Act and the Articles of Constitution of India.
11. On these respective pleadings of the parties Dr. Rajeev Dhavan and Mr. Kasturi, Senior Advocates appearing for the petitioners contended that the impugned notification is contrary to and in excess of the purpose, intent and provisions of the Act. It violates the three principles of judicial review i.e., procedural impropriety, illegality, and irrationality and that it is ultra vires the Constitution namely Article 14. In that it seeks to make both 'over-inclusive' and 'under-inclusive' of Industry without application of mind to the ground realities and the information with the Advisory Board itself. It was over inclusive in the sense that it clubs together all firms with 250 employees or more in the same classification even though these firms vary in their size, or nature of activity, their labour practices and service conditions and financial and other consequences which would follow as a direct and inevitable effect of the impugned notification. On facts it was submitted by them that the Act lays down a rigorous procedure requiring real, effective and meaningful consultation with the Board. It has been asserted that the original examination of the issue was made in the year 1988-89 and the recommendation of the Board was made in the year 1997 that is after the original Board had changed and the new Board had failed to complete the tasks of investigation which it had indicated were essential to its deliberations taking reports from district level and six important cities where the factories employing 250 or more workers were situated. That the Board relied upon an outdated report which had been submitted in the year 1988-89. That canteen is a service industry having its own speciality. It has nothing to do with the core activity of the factory. In order to concentrate on its core activity the specialised services like running of a canteen were left to the service sector by running canteen through a contractor. The work of running a canteen was neither incidental nor perennial nor regular and therefore the requirement mentioned in Section 10(2) of the Act were not satisfied. No establishmentwise enquiry to separate the good from the bad establishment took place by taking into consideration the variety of conditions of work and benefits in various establishments. Without making an enquiry into incidentality or peren-niality of the canteen worker in an establishment, the Government and the Board fettered their considerations to policy consideration after misconstruing the Supreme Court judgments which according to them had stated it was their duty to abolish the contract labour in canteen. Lastly it was submitted that the Act be interpreted taking into account the past history and later development including the emergence of service sector.
12. We take up each of these contentions separately. To examine the legality and constitutional validity of an Act it is legitimate to refer to the statement of objections and reasons that accompanied the Bill when it was introduced in the Parliament. The objects and reasons which accompanied the Bill are excerpted herein below:
"The system of employment of contract labour lends itself to various abuses. The question of its abolition has been under the consideration of Government for a long time. In the Second Five Year Plan, the Planning Commission made certain recommendations, namely, problem of contract labour, progressive abolition of the system and improvement of service conditions of contract labour where the abolition was not possible. The matter was discussed at various meetings of Tripartite Committees at which the State Governments were also represented and general consensus of opinion was that the system should be abolished wherever possible or practicable and that in cases where this system could not be abolished altogether, the working conditions of contract labour should be regulated so as to ensure payment of wages and provision of essential amenities.
The proposed Bill aims at abolition of contract labour in respect of such categories as may be notified by appropriate Government in the light of certain criteria that have been laid down, and at regulating the service conditions of contract labour where abolition is not possible. The Bill provides for the setting up of Advisory Boards of a tripartite character, representing various interests, to advise Central and State Governments in administering the legislation and registration of establishments and contractors. Under the Scheme of the Bill, the provision and maintenance of certain basic welfare amenities for contract labour, like drinking water and first-aid facilities, and in certain cases rest-rooms and canteens, have been made obligatory. Provisions have also been made to guard against details in the matter of wage payment".
From the above it is clear that the Act has two objects namely abolition of contract labour where it is possible and regulation of contract labour, where such abolition is not possible. The Act specifically deals with the Central Government and State Government constituting Central Adi-vosry Board and the State Advisory Board respectively. Section 3 deals with the Constitution of the Central Board. Whereas Section 4 deals with the constitution of the State Board. Representation on the Board is given to the employer, contractor and the workmen. They have a voice in expression of their views in the Board. Section 10 provides for certain conditions to be specified before abolishing contract labour. It reads as under:
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 any 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, such as-
(a) Whether the process, operation or other work is incidental to, or necessary for the industry, trade, business, manufacture or occupation that is carried on in the establishment;
(b) Whether it is of perennial nature, that is to say, it is of sufficient duration having regard to the nature of industry, trade, business, manufacture or occupation carried on in that establishment;
(c) Whether it is done ordinarily through regular workmen in that establishment or an establishment similar thereto;
(d) Whether it is sufficient to employ considerable number of whole-time workmen.
Explanation.--If a question arises whether any process or operation of other work is of perennial nature, the decision of the appropriate Government thereon shall be final".
This section deals with prohibiting employment of the contract labour in any process, operation or other work in any establishment. Before issuing a notification prohibiting employment of the contract labour the appropriate Government is bound to consult the State Board or the Central Board as the case may be. Before issuing notification, the Government is mandatorily required to consult the Board and before issuing the notification the appropriate Government has to have in mind the condition of work and benefit provided for the contract labour in the establishment and other relevant factors such as mentioned in clauses (a) to (d).
13. The relevant factors mentioned are not exhaustive, because, the expression used is 'other relevant factors such as', which means that the conditions are illustrative and not exhaustive. Supreme Court of India in Royal Hatcheries Private Limited v State of Andhra Pradesh and Another, has said that so far as the words 'such as' occurring in a statutory provision are concerned they are meant to be illustrative and not exhaustive. In other words Government would take into consideration the factors mentioned in clauses (a) to (d) of Section 10(2) and other relevant factors as well.
14. In M/s. Gammon India Limited v Union of India and Others , a Constitution Bench of the Supreme Court held as under:
"The Act was passed to prevent the exploitation of contract labour and also to introduce better conditions of work. The Act provides for' regulation and abolition of contract labour. The underlying policy of the Act is to abolish contract labour, wherever possible and practicable, and where it cannot be abolished altogether, the policy of the Act is that the working conditions of the contract labour should be so regulated as to ensure payment of wages and provision of essential amenities. That is why the Act provides for regulated conditions of work and contemplates progressive abolition to the extent contemplated by Section 10 of the Act. Section 10 of the Act deals with abolition while the rest of the Act deals mainly with regulation. The dominant idea of Section 10 of the Act is to find out whether contract labour is necessary for the industry, trade, business, manufacture or occupation which is carried on in the establishment".
15. A perusal of this paragraph shows that the policy of the Act is to abolish the contract labour whereever possible and where it cannot be abolished altogether, the policy of the Act is to regulate the working conditions of the contract labour to ensure payment of wages and essential amenities. While opining as to whether the contract labour is to be abolished or not the consideration has to be had to the fact as to whether the contract labour is necessary for the industry, trade, business, manufacture or occupation which is carried on in the establishment.
16. Submission that employers' point of view was not before the Board or Government before taking the decision to issue the notification cannot be accepted because it is not borne out by the facts. Object of the Act is to abolish contract labour where the work is incidental to or perennial in nature in an establishment.
17. The Act envisages under Section 10(2) the setting up of a Central Advisory Board and a State Advisory Board under Sections 3 and 4 respectively. Constitution of Board requires a Chairman, Commissioner of Labour and Members not exceeding 11 but not less than 9. Rule 3(2) of the Karnataka Rules prescribes the following:
(a) Government One person
(b) Employers Five Public Sector Undertakings run by Govt.:
One K.E.B.:
One Private Sector Undertakings:
One Contractors:
Two
(c) Employees Five Employees in Public Sector Undertakings:
One K.E.B.:
One Private Sector:
One Contractors:
Two Total:
Eleven
18. The composition of the Karnataka State Contract Labour Advisory Board was in keeping with the requirements of the Act and the rules. There was due representation of the Employees and Employers and the Contractors on the Board.
19. Mr. Vijaya Shankar, learned Advocate General placed before us the record concerning the constitution of the Board, report of the Subcommittee and the deliberations of the Board at different dates. The Government file was also placed before us.
20. On 10th June, 1988 on the suggestion made by Sri V.G.K. Nair and Sri H. Mahadevan the members of the Board that the principal employers of various factories were not maintaining the canteen as per the Karnataka Factories Rules and engaging the contractors in various industrial canteens and thus depriving the contract workers of the benefits provided under Rule 25(v)(a) of the Karnataka Rules, 1974 (hereinafter referred to as 'the Rules'). They were supported by other members. On this the Chairman of the Board suggested to constitute a Committee to study the feasibility of abolition of contract system in hotels (canteen) and to submit a detailed report to the Board. Committee submitted its report on 29th May, 1989.
21. Apart from the officials due representation was given to the employers, employees and the contractors on the Committee. Committee finalised comprehensive questionnaire to issue to certain employers, establishments and contractors who were interested in the subject for replies. After receipt of the replies to the questionnaire the Committee visited some of the industrial canteens in Bangalore for detailed investigation and to study the existing problems in them. In the meantime some of the employers, contractors and trade unions requested the Com-mittee for extension of time for submitting replies to the questionnaire. A press note was issued in the local papers regarding the (sic) the Committee and inviting suggestions and objections and also to meet the Committee in person on 25th October, 1988. Fair number of employers filed replies to the questionnaire sent to them. Committee had discussion with management, contractors, workers and also with the staff members of the canteen. After analysing the facts which the Committee had gathered from the representatives of the employers, employees and the contractors and discussions which they had, it was unanimously recommended by the Committee to abolish the contract system in industrial canteens. A detailed reference was made to the factors mentioned in clauses (a) to (d) of Section 10(2). The Committee concluded that the operation of the industrial canteen is connected with the very functioning of the industry where an industry is required to run a canteen statutorily having 250 or more workers. No operation or process could be carried on without workmen and there could be no employment of workmen without canteen being provided. Keeping these factors in mind the Committee concluded that there is no justification in running industrial canteens on contract system or to engage contract labour in canteens run by the factories themselves. Accordingly Committee submitted its report. The Committee Report was taken up in the 7th meeting of the Advisory Meeting held on 29th April, 1994. View point of the representatives of employers and the employees was taken note of. One of the objections raised by the representatives of M/s. Larsen and Toubro Limited was that report of the Committee should not be taken as the same is five years old and in this five years lot of changes have taken place which were relevant to the present circumstances. Chairman of the Board expressed the view that the life of Karnataka Advisory Board Committee was coming to an end and consequently a new Advisory Board has to be constituted. It was suggested that in this view of the matter it would be appropriate if the matter is left to the new Advisory Board to be constituted which would consider the issue involved. This suggestion of the Chairman was accepted unanimously. New Board was constituted and the meeting of the newly constituted Advisory Board was held on 18th December, 1995. Representatives of the employers and the employees put forward their point of view. After hearing the views of the members, the Chairman expressed the view that it would be appropriate and in the interest of all concerned, if the report is discussed at the district level by the representatives of concerned parties and their views obtained. The suggestion was accepted and it was unanimously resolved that Labour Officers at district level would call meetings of the representatives of the employers and the employees, discuss the recommendation of the Committee, obtain their views and furnish the same to the Board. On receipt of the report from the Labour Officers, the Board could take appropriate decision. 9th Meeting of the Board was held on 3rd of February, 1996. The meeting was adjourned without taking any substantive decision because the Secretary of the Board informed that reports from the district levels had not been received. Chairman advised the Labour Officers to submit their report expeditiously. After receipt of the report from the districts the 10th Board Meeting was held on 1st March, 1996. After taking note of the view points of the employers, employees and the contractors it was decided that in industrial canteens in factories employing 250 or more workers, located in Bangalore, Mysore, Hubli, Dharwad, Belgaum and Mangalore, detailed information should be obtained about the understanding between the principal employer and the contractors and brought to the notice of the Board. Government being a model employer, contract labour should be abolished in Public Sector Undertakings as well, 11th Board Meeting took place on 10th December, 1996. After taking into consideration the report of the sub-committee supplemented by the reports of the Labour Officers from the districts and the reports received from six important towns where most of the establishments having 250 or more workers were located, the Board came to the conclusion that the contract labour be abolished from establishments which are mandatorily required to run a canteen under Section 46 of the Factories Act, 1948, having 250 workers or more employees. As it was a statutory requirement, running of a canteen was a necessity. The canteen work being of perennial in nature required permanent workers. It recommended the Government to abolish employment of contract labour in industrial establishments in factories employing 250 or more workers. The matter was then put up before the Secretary to Government. It was discussed at various levels of the Government and ultimately a final decision was taken by the Government to abolish the contract labour in canteens in establishments employing 250 or more workers. Contention of the Counsel for the petitioner that there was no application of mind or that the decision was taken on the basis of an outdated report submitted in the year 1989 cannot be accepted. Keeping in view the period which had elapsed since the submission of report the Board reappraised itself of all later developments after taking into consideration the fresh data which was made available to it by the Labour Officers from each district after discussion with the employer and the employees and the reports received from the six important cities where most of the establishments employing 250 or more workers were located and after taking into account the view points of the employers and employees, the Board made its final recommendation recommending abolition of contract labour.
22. From the perusal of the file we find that the Government did not accept the advice of the Board in routine. The representation of the employers taking objections to the advice of the Board were before the Government. After a detailed discussion and keeping in view the view points of all concerned, Government decided to abolish the contract labour from canteens in establishments employing 250 or more employees. The submission on facts made by the Counsel for the petitioner that the Government did not take into consideration the latest factual position existing in the establishments while issuing notification for abolishing contract labour is ill-founded. The same is against the facts existing on the records and therefore cannot be accepted.
23. Running of a canteen is not only of perennial nature but also mandatory in factories employing more than 250 workers. The work in canteen being in discharge of statutory obligation under Section 46 of the Factories Act would be incidental to and connected with the work of the establishment. The fact that maintaining a canteen is not part of the 'core competency' of an industry is irrelevant for deciding the question whether contract labour should be abolished or not. The question to be considered is, is it incidental to the work of the establishment? Supreme Court of India in M/s. J.K. Cotton Spinning and Weaving Mills Company Limited v Labour Appellate Tribunal of India, III Branch, Lucknow, held that gardeners employed in the mill though not employed in the actual work of the mill were engaged in a work or operation which was incidentally connected with the main industry. It was found as a fact that gardeners were working in the bungalows owned by the mill, allotted under the terms of the employment of officers. The bungalows and gardens being the amenities supplied by the mill, the gardeners looking after the gardens must be held to be engaged in operations incidentally connected with the main industry. In Saraspur Mills Company Limited v Ramanlal Chimanlal and Another, it was held that canteen workers were engaged in work incidentally connected with the main industry which was bound to run the canteen under the Factories Act. It was held that the workmen concerned were the employees of the mill and entitled to claim wages on the basis of the award. In Parimal Chandra Raha and Others v Life Insurance Corporation of India and Others , the Supreme Court after tracing the history of the relevant case law from the beginning held that:
"What emerges from the'statute, law and the judicial decisions is as follows:
(i) Whereas, under the provisions of the Factories Act, it is statu-torily obligatory on the employer to provide and maintain canteen for the use of his employees, the canteen becomes a part of the establishment and, therefore, the workers employed in such canteen are the employees of the management.
(ii) Where, although it is not statutorily obligatory to provide a canteen, it is otherwise an obligation on the employer to provide a canteen, the canteen becomes a part of the establishment and the workers working in the canteen, the employees of the management. The obligation to provide a canteen has to be distinguished from the obligation to provide facilities to run canteen. The canteen run pursuant to the latter obligation, does not become a part of the establishment.
(iii) The obligation to provide canteen may be explicit or implicit. Where the obligation is not explicitly accepted by or cast upon the employer either by an agreement or an award, etc., it may be inferred from the circumstances, and the provision of the canteen may be held to have become a part of the service conditions of the employees. Whether the provision for canteen services has become a part of the service conditions or not is a question of fact to be determined on the facts and circumstances in each case. Where to provide canteen services has become a part of the service conditions of the employees, the canteen becomes a part of the establishment and the workers in such canteen become the employees of the management.
(iv) Whether a particular facility or service has become implicitly a part of the service conditions of the employees or not, will depend, among others, on the nature of the service/facility, the contribution the service in question makes to the efficiency of the employees and the establishment, whether the service is available as a matter of right to all the employees in their capacity as employees and nothing more, the number of employees employed in the establishment and the number of employees who avail of the service, the length of time for which the service has been continuously available, the hours during which it is available, the nature and character of management, the interest taken by the employer in providing, maintaining, supervising and controlling the service, the contribution made by the management in the form of infrastructure and funds for making the service available, etc.".
24. A reading of the above judicial decisions and principles enunciated therein leaves no element of doubt that the working of statutory canteen is not only incidental but necessary for the proper running of an industry. The necessity for running a canteen arises by virtue of statutory requirement. The obligation is not only to run the canteen but also clearly casts an obligation to provide and maintain a canteen. The provision and maintenance of canteen has therefore become a service condition. The canteen exists to render service during the hours of work of the factory. The service provided by a canteen by the very nature, is aimed at directly assisting the employees in discharging their duties efficiently. The absence of a canteen would certainly hamper the normal working and would adversely affect the efficiency level of the employees. Running of a canteen is no longer a welfare measure but an essential requirement which has been made mandatory by law. Factories Act makes it clear the canteens have a standard form of accommodation, furniture etc. Canteens require the constitution of a managing committee. Every factory having more than 250 workers has to have a lunch room. Karnataka Factories Rules, 1969 contain provisions for canteen, dining hall, canteen equipments, prices to be charged in canteen, canteen account, canteen managing committee, food stuffs to be served and prices to be charged etc.
25. Section 10(2)(b) states whether it is of a perennial nature i.e., to say that it is of sufficient duration having regard to the nature of industry, trade, business, manufacture or occupation carried on in that establishment. Examining whether the running of canteen is of perennial nature inasmuch as the workmen are employed and are above 250 in number no other factor need be examined to come to this particular conclusion except that running and maintaining a canteen statutorily necessarily means the nature of work is perennial.
26. Section 10(2)(c) states whether it is done ordinarily through regular workmen in that establishment or an establishment similar thereto. Committee constituted by the Advisory Board in its report after examining the material before it came to the conclusion that 53 employers responded to the questionnaire sent to them. Out of them 33 employers stated that they were running the canteen themselves without employing contract labours. 17 employers stated that they were running the canteen through contractors. Requirement of Section 10(2)(c) was thus complied with.
27. Under Section 10(2)(d) it has to be seen as to whether it is sufficient to employ considerable number of whole-time workmen. The number of workmen employed by the contractors are also employed for the whole-time inasmuch as they are not employed on part-time or on any other basis. Having satisfied regarding the existence of factors mentioned in Section 10(1)(a) to (d) the Government has issued the notification.
28. A general notification under Section 10 of the Act abolishing contract labour from a class of industries can be issued. In the present case the Government issued a notification abolishing contract labour from canteens, in establishments employing 250 or more workers. Under Section 46 of the Factories Act, 1948 read with rules framed by the Karnataka State, it is the statutory duty of the establishment employing 250 or more workers to run a canteen. There is nothing in the Act or the Scheme underlying the same which precludes the appropriate Government from issuing the notification to all establishments as long as the same has been issued after due consideration of all the relevant criteria laid down under Section 10 of the Act. Section 10 empowers the Government to issue a single notification in respect of different establishments provided the operation and nature of work are similar or identical in all aspects which are sought to be covered by the notification.
29. Under Section 46 of the Factories Act, 1948 read with Rules framed by the State of Karnataka, all establishments having 250 or more employees are required to run a canteen statutorily. The Board constituted a Committee to consider the desirability of abolishing the contract labour from the establishments employing 250 or more employees. The Committee made its report. It was considered by the Board on which there were representatives of the employers, employees and the contract labour. After considering their view points as a class where canteen is to be run statutorily the Government decided to abolish the contract labour keeping in view the conditions of work and benefits provided for the contract labours and other relevant factors mentioned in clauses (a) to (d) of Section 10(2) of the Act. Government is not required to issue a separate notification regarding each of the establishments after taking into account the individual peculiarities of each establishments.
30. It is important to remember that the Government has issued notification abolishing contract labour from canteens in factories having 250 or more employees keeping in view the conditions of contract labour in such establishments as a class. May be in cases of certain individual establishments it might have worked to their disadvantage or hardship which has not been established on facts before us and which, by its very nature being incapable of determination by judicial review, is not a sufficient ground for interference with the impugned notification on the ground that individual peculiarities of each establishment were not considered while issuing the notification or that the Government is required to issue separate notification regarding each establishment.
31. We find substance in the submission of Mr. Vijaya Shankar, learned Advocate General appearing for the State of Karnataka that exercise of powers under Section 10 would fall under the 'conditional legislation' and not 'delegated legislation' thus restricting the scope of judicial review. Distinction between a conditional legislation and delegated legislation as pointed out by the Supreme Court in Hamdard Dawakhana and Another v Union of India and Others , is:
"that in the former the delegate's power is that of determining when a legislative declared rule of conduct shall become effective, and the latter involves delegation of rule making power which constitutionally may be exercised by the administrative agent".
This means that the legislature having laid down the broad principles of its policy in the legislation can then leave the details to be supplied by the administrative authority. In other words by delegated legislation the delegate completes the legislation by supplying details within the limits prescribed by the statute and in the case of conditional legislation the power of legislation is exercised by the legislature conditionally leaving to the discretion of an external authority the time and manner of carrying its legislation into effect as also the determination of the area to which it is to extend.
32. Thus when the delegate is given the power of making rules and regulations in order to fill in the details to carry out and subserve the purposes of the legislation, the manner in which the requirements of the statute are to be met and the rights therein created to be enjoyed, it is an exercise of delegated legislation.
33. Sub-section (2) of Section 10 of the Act lays down detailed guidelines for taking a decision in the matter. Once the Court is satisfied that the Government has taken into consideration the broad guidelines laid down by the legislation while taking a decision to abolish the contract labour from an establishment/establishments, the scope of judicial review would be restricted to the procedural fairness of the action taken by the State Government. It would include the constitution of the Board which requires representation of all interests so as to provide opportunity of hearing to all interested and fulfilment of relevant criteria before the issuance of the notification for the abolition. Such a law once implemented and any action taken thereunder necessarily becomes fair.
34. When the function is treated as legislative, a party affected by the order has no right to notice unless the statute so requires. It being of general obligation applicable to all persons and situation of an identifiable class, the legislative order cannot be challenged only on the ground that it omits to take into account individual peculiarities and those falling within that class. The action being quasi-legislative and while discharging quasi-legislative function, the Government is not required to afford an opportunity of being heard to the representative of each establishment.
35. We have already held that a general notification can be issued and while issuing the general notification the Government has to take into consideration the view points of the employers, employees and the contractors. The view point "of each of them is reflected through their representatives on the Board. Submission of petitioners that employers' representative belonging to the trade Body could not represent their view point and shall entitle them to successfully challenge the constitution of the Board, its deliberations or advice tendered to the Government on the ground that the view point of the representatives of the petitioners is not taken into consideration cannot be accepted. The view point of the petitioner was represented through a member of the Board who had been taken from the category of the employers' representative. Requirement of law is that the view point of the employer, employee and the contractor should be represented in the Board. It does not mean that representation should be from a particular specified industry or establishment. Having regard to the scheme of the Act and the Rules, Advisory Board would be a permanent body. It is unthinkable that such Advisory Board consists of representatives of different establishments and different industries. In such a situation there would be fluctuating Advisory Board which would not be consistent with the scheme of the Act.
36. We also agree with the submission of Mr. Vijaya Shankar that in the case of conditional legislation the scope of judicial review is limited. Sufficiency or otherwise of the reasons cannot be gone into. While examining its validity, the object of the Act has to be kept in mind. In case the notification is issued keeping in view the parameters laid down in Section 10 after taking into consideration the relevant factors mentioned therein, then the scope of judicial review would be restricted to its procedural aspect only. Judicial review is not an appeal from a decision but a review of the manner in which the decision was made.
37. We do not find any substance in the submission made by the Counsel for the petitioner that the notification is bad on the grounds that detailed reasons have not been given in the notification for recommending abolition of contract labour. We agree with the observation of the Bench of the Madras High Court in Bharat Heavy Electricals Limited v Government of Tamil Nadu and Others, that the absence of detailed reasons does not vitiate the notification itself on the ground of non-application of mind as long as records disclose to the satisfaction of the Court all relevant considerations enjoined by the Statute have been taken into consideration. The Government is not expected to repeat all the materials in the notification in the form of a judicial order.
38. Notification cannot be said to be over-inclusive for the reason that all the establishments with 250 or more employees which are required to statutorily run canteen form a separate category distinct from other establishments. It is based on intelligible and discernible criteria forming a reasonable classification because of the statutory requirement of running a canteen by an establishment having 250 or more employees.
39. Constitutional validity of the Act and its validity on the touch-stone.of Article 19(l)(g) has already been upheld by the Supreme Court of India. The constitutionality of the Act was challenged in M/s. Gammon India Limited, supra, on the touchstone of fundamental rights given by Articles 14, 15 and 19(l)(g). The Constitution Bench after elaborately considering the provisions of the Act held that the Act in Section 10 empowers the Government to prohibit employment of contract labour. It was noted in paragraph 14 of the judgment that the object of the Act was to abolish contract labour wherever the work was incidental and perennial, and wherever it was not so possible, to regulate the same. The constitutionality of the Act was upheld. Plea of the Counsel for the petitioner that the Government had imposed unreasonable restriction thus violating Article 19(l)(g) of the Constitution of India while issuing the notification cannot be accepted.
40. Reliance on two Division Bench decisions of Orissa High Court in Zenith Industrial Services v Union of India and Tata Refractories Limited, Belpahar and Others v Union of India , is of no assistance to the Counsel for the petitioners because in these judgments the notifications were quashed because the Government inspite of opportunity granted to it by the Court failed to place on record material relating to the compliance of the conditions mentioned in Section 10(2) of the Act. In the present case the State Government has placed before us proceedings of the Board report and the papers including the Government file. We have perused the file and are satisfied that the relevant factors in Section 10(2) were present in the case which led the Government to issue the notification under Section 10 abolishing the contract labour in establishments having 250 or more employees. We have examined each relevant factor mentioned in Section 10(2) separately and individually while dealing with the statement of facts.
41. We take up W.P. Nos. 16388 to 16398 of 1997 and W.P. No. 22511 of 1997. The Government issued the notification abolishing contract labour in steel re-rolling mills. These operations are mentioned in the notification. It was found that even though these operations are hazardous in nature, safety measures are not provided to the workers. The main function of steel re-rolling is to convert ingots into steel of different lengths/specifications, It was observed the processes/operations in items of work:
1. Unloading of billets/ingots and cutting.
2. Placing billets/ingots on the pusher.
3. Moving billets/ingots on the pusher into the furnace.
4. Activities connected with the operation of the furnance.
5. Pulling and pushing of heated billets/ingots into rolling mill/roughing mill.
6. Cutting the steel to required length on cooling bed.
7. Twisting of finished goods.
8. Cutting.
9. Bending.
10. Bundling.
11. Loading.
the contract labour was engaged. All these operations/processes are permanent and perennial in nature. The process/operations were directly connected with the main process/nature of the industry. Government agreeing with the State Advisory Board formed the opinion that employment of contract labour in these process/operation would be against the principles of Contract Labour (Regulation and Abolition) Act, 1970. Advocate-General placed before us the proceedings of the various Board Meetings and the Government file, After examining the record we are of the opinion that there was due deliberations in the meetings of the Board and the recommendation was made by the Board keeping in view the view points of the employers and the employees. It can be seen from the nature of work that the process or occupation are incidental as well as perennial in nature which can only be discharged by having required employees. From the record we find that the Commissioner of Labour, Sri T.Y. Nayaz Ahmed, I.A.S., himself accompanied by officers/officials of his department visited steel re-rolling mills and observed employees of various jobs/occupation. The wages paid to the workmen were low, they did not have any life saving facilities and were deprived of various benefits that accrued to them under different labour laws. It was further found by the Commissioner that although the work was perennial in nature, contract labour was employed. While the lowest pay the permanent worker gets was Rs. 2,400/- per month, the skilled contract worker gets Rs. 800/- to 900/- per month. The contractors in a very systematic manner pay only 60 per cent of what they receive from the Principal Employer to the contract labour and retain the balance 40 per cent with themselves. The abolition of contract labour in steel re-rolling mills was being considered simultaneously with the abolition of contract work in canteens in establishment employing 250 or more was being considered. The process was going parallel. The contract labour engaged is in operation being processes which are permanent and perennial in nature and these works are directly connected with the main operation of the establishment. The permitting of employment on contract labour in these processes in steel re-rolling mills would be contrary to the provisions of the Act and the various judgments of the Supreme Court of India referred to above.
42. Some of the petitions have been filed by the contractors as well. The pleas taken by them are basically the same. The only additional argument raised by them is that the running of a canteen is a service industry which is a fast developing concept in the industry. Specialised services like canteen are left to the specialists to leave the industry to concentrate in their field of core competency. That it is violative of Article 19(l)(g) of the Constitution as it imposes an unreasonable restriction in the running of their trade and profession. We have dealt with these submissions while disposing of the main writ petition. Suffice it to say that the Contract Labour (Regulation and Abolition) Act, 1970 was enacted keeping in view the fact that the system of employment of contract labour lends itself to various abuses. It was to abolish contract labour progressively wherever practicable and possible and in cases where this system could not be abolished altogether, the working conditions of contract labour should be regulated so as to ensure payment of wages and provision of essential amenities. The point put forth before us on behalf of the contractors runs counter to the objects of the Act. Submission raised on their behalf are irrelevant to the point in issue.
43. The Contract Labour (Regulation and Abolition) Act, 1970 at its Preamble states it is brought into force to regulate the employment of contract labour in certain establishments and to provide for its abolition in certain circumstances and for matters connected therewith. Supreme Court in Bharat Heavy Electricals Limited Workers' Association, Hard-war v Union of India and Others, held:
"It is true that for a long time, a maleficent nature of the system of contract labour and the destructive results which flow from it had been noticed by various committees appointed by the Government, including the Planning Commission, and that as a result of the report and discussions that took place the Act was passed. According to the statement of objects and reasons: The system of employment of contract labour lends itself to various abuses. The question of its abolition has been under the consideration of Government for a long time. In the Second Five Year Plan, the Planning Commission made certain recommendations, namely, undertaking of studies to ascertain the extent of the problem of contract labour, progressive abolition of the system and improvement of service conditions of contract labour, where the abolition was not possible. The matter was discussed at various meetings of Tripartite Committees at which the State Governments were also represented and general consensus of opinion was that the system should be abolished wherever possible or practicable and that in cases where this system could not be abolished altogether, the working conditions of contract labour should be regulated so as to ensure payment of wages and provisions of essential amenities.
The proposed Bill aims at abolition of contract labour in respect of such categories as may be notified by appropriate Government in the light of certain criteria that have been laid down, and at regulating the service conditions of contract labour where abolition is not possible".
Section 10(2) of the Act lays down detailed guidelines for taking a decision in the matter. The object of the Act is to regulate so long as the contract labour is not perennial. Similarly when the appropriate Government finds that the employment is perennial, contract labour should be put to an end to by abolishing the same. Taking into consideration the scheme of the Act, its objects, reasons and judicial decisions and in particular the decision of the Constitution Bench in M/s. Gammon's case, supra, on the interpretation of the Act, it becomes clear that the abolition is the norm and the contract labour is the exception, In an establishment when the process, operation or other work is incidental to or necessary for the industry, when it is perennial and is of sufficient duration keeping in mind the nature of industry and when a particular job is done ordinarily through regular workman, is sufficient to employ considerable time of all time workmen, then the Government can issue a notification recommending abolition of the contract labour in that process, operation or other work.
44. Supreme Court in Air India Statutory Corporation v United Labour Union and Others, has held that to make the right to life a reality to workmen, shift of judicial orientation should be from private law principles to public law interpretation and consistent with the directive principles of State Policy, it was observed:
"To make the right to life a reality to workmen, shift of judicial orientation from private law principles to public law interpretation harmoniously fusing the interest of individual entrepreneur and the paramount interest of the community is required. Article 39-A furnishes beacon light that justice be done on the basis of equal opportunity and no one be denied justice by reason of economic or other disabilities. Courts are sentinel on the qui vive of the rights of the people, in particular, the poor. The judicial function of a Court, therefore, in interpreting the Constitution and the provisions of the Act, requires to build up continuity of socio-economic empowerment to the poor to sustain equality of opportunity and status and the law should constantly meet the needs and aspirations of the society in establishing an egalitarian social order. Therefore, the concepts engrafted in the statute require interpretation from that perspective, without doing violence to the language. Such an interpretation would elongate the spirit and purpose of the Constitution and make the aforesaid rights to the workmen a reality lest establishment of an egalitarian social order would be frustrated and constitutional goal defeated".
45. While examining the validity of the notification abolishing contract labour it is to be seen as to whether the notification is ultra vires of the Act or its objectives and as to whether the procedural safeguards provided under the statute have been observed or not. In our view the impugned notification is in furtherance of the object of the Act and that the procedural safeguards provided under the statutes have been observed before the issuance of the notification abolishing the contract labour.
46. For the reasons stated above, we do not find merit in either of the submissions made by the Counsel for the petitioners. Petitions are dismissed leaving the parties to bear their own costs.