Gujarat High Court
Chemical Mazdoor Panchayat Through ... vs Krishak Bharti Co Operative Ltd on 19 January, 2026
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
NEUTRAL CITATION
C/LPA/1425/2014 JUDGMENT DATED: 19/01/2026
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/LETTERS PATENT APPEAL NO. 1425 of 2014
In R/SPECIAL CIVIL APPLICATION/13590/2007
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR.JUSTICE L. S. PIRZADA
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Approved for Reporting Yes No
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CHEMICAL MAZDOOR PANCHAYAT THROUGH TREASURER
Versus
KRISHAK BHARTI CO OPERATIVE LTD & ORS.
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Appearance:
MRS SANGEETA N PAHWA(527) for the Appellant(s) No. 1
M R BHATT & CO.(5953) for the Respondent(s) No. 1
MR PARITOSH CALLA(2972) for the Respondent(s) No. 7
MR YOGI K GADHIA(5913) for the Respondent(s) No. 8,9
MUNJAAL M BHATT(8283) for the Respondent(s) No. 1
NOTICE UNSERVED for the Respondent(s) No. 3,5
RULE SERVED for the Respondent(s) No. 4
RULE SERVED BY DS for the Respondent(s) No. 2
SERVED BY AFFIX. (R) for the Respondent(s) No. 6
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR.JUSTICE L. S. PIRZADA
Date : 19/01/2026
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)
1. Heard learned Advocate Ms.Sangeeta N. Pahwa appearing for the appellant, learned Senior Advocate Page 1 of 38 Uploaded by STANCY GOMES(HC02364) on Tue Jan 20 2026 Downloaded on : Tue Jan 20 23:47:25 IST 2026 NEUTRAL CITATION C/LPA/1425/2014 JUDGMENT DATED: 19/01/2026 undefined Mr.Manish R. Bhatt with learned advocate Mr.Munjaal M. Bhatt appearing for respondent No.1, learned advocate Mr.Paritosh Calla appearing for respondent No.7 and learned advocate Mr.Yogi K. Gadhia appearing for respondent Nos.8 and 9.
2. By this appeal under Clause 15 of the Letters Patent, 1865, the appellant--original respondent No.1 in the writ petition has challenged the Judgment and Order dated 05.11.2014 passed by the learned Single Judge.
3. The respondent No.1, Krishak Bharti Cooperative Ltd. (for short 'KRIBHCO'), in Special Civil Application No.13590 of 2007 challenged the Judgment and Award dated 10.04.2007, passed by the Industrial Tribunal, Surat (for short 'the Tribunal'), in Reference (IT) No.8 of 1995. In the said Special Civil Application, the original petitioner-respondent No.1 prayed for quashing and setting aside the Award dated 10.04.2007, passed by the Tribunal on the ground that the Tribunal had exceeded its Page 2 of 38 Uploaded by STANCY GOMES(HC02364) on Tue Jan 20 2026 Downloaded on : Tue Jan 20 23:47:25 IST 2026 NEUTRAL CITATION C/LPA/1425/2014 JUDGMENT DATED: 19/01/2026 undefined jurisdiction while passing the said Award.
4. The learned Single Judge, by the impugned Judgment and Order dated 05.11.2014, allowed the petition by quashing and setting aside the Award passed by the Tribunal.
5. The brief facts of the case are as under:
i. Reference (IT) No.8 of 1995 was made by the Appropriate Government at the instance of the appellant-
Union representing the workers of two contractors of respondent No.1, KRIBHCO, namely M/s.Ghanshyam Builders and M/s. V.K. Patel. Both the contractors were holding valid licences as required under law for carrying out work at the Bagging Plant of KRIBHCO at Hazira, (Surat), which involved the activities of filling the urea into bags, stitching, stacking and de-stacking, loading into trucks and railway wagons, unloading, etc. ii. The cause of action to give rise to the Reference Page 3 of 38 Uploaded by STANCY GOMES(HC02364) on Tue Jan 20 2026 Downloaded on : Tue Jan 20 23:47:25 IST 2026 NEUTRAL CITATION C/LPA/1425/2014 JUDGMENT DATED: 19/01/2026 undefined preferred by the Appropriate Government was the stoppage of work by the workers of the two contractors with effect from 12.06.1994, which, according to the workers was a called out lockout, whereas both the contractors claimed it to be an illegal strike by the workers without notice.
iii. The terms of Reference before the Tribunal were only as to whether there was a lockout by the respondent No.1 on 12.06.1994 or not and if yes, then whether the workmen were required to be reinstated by holding the same as illegal and from the date of their lifting of the lockout. The other point of Reference was whether the compulsion of signing the undertaking by the workers by the contractors was valid or illegal and accordingly, to declare as to whether the workers were to be continued in service without any break.
iv. The background of stoppage of work, which is alleged to be a lockout or illegal strike by the workers, who are members of the Union, was the demand for Page 4 of 38 Uploaded by STANCY GOMES(HC02364) on Tue Jan 20 2026 Downloaded on : Tue Jan 20 23:47:25 IST 2026 NEUTRAL CITATION C/LPA/1425/2014 JUDGMENT DATED: 19/01/2026 undefined increase in wages and regularization of their services. The workers were working on 'go-slow' with effect from 19.05.1994 and accordingly, the contractors suspended 11 workers, resulting into the conflict and the workers stopped working with effect from 12.06.1994. Such situation was considered by the appellant-Union as a lockout. The Union, therefore, made representations before the competent officers of the Labour Commissioner/Labour Officer, as about 350 workers were not permitted to work, whereas both the contractors have considered such situation as an illegal strike without notice by issuing advertisements in the newspaper calling upon the workers to join the duty. However, as the contractors insisted upon signing of the undertaking by the workers, there was a Conciliation Case No. IDC- 30/1994, and as no conciliation could take place, the Conciliation Officer submitted the failure report on 18.08.1994 before the Appropriate Government, which made the Reference on the two demands raised by the appellant-Union - one, regarding declaration of the Page 5 of 38 Uploaded by STANCY GOMES(HC02364) on Tue Jan 20 2026 Downloaded on : Tue Jan 20 23:47:25 IST 2026 NEUTRAL CITATION C/LPA/1425/2014 JUDGMENT DATED: 19/01/2026 undefined lockout with effect from 12.06.1994 as illegal and reinstatement of the workers with double wages during the lockout period and the other, to declare the signing of the undertaking as illegal etc.,which is referred to in the Reference made by the Appropriate Government before the Tribunal.
v. It appears that the Tribunal, after considering the terms of the Reference, decided the same on the issues which were arising out of such Reference as to whether the workers, admittedly the employees of the contractors, were to be considered as employees of respondent No.1 or not. It is pertinent to note that the dispute as to whether the workers of the appellant-Union have an employer-employee relationship with respondent No.1, KRIBHCO, or not, is under separate litigation. Therefore, the issue raised before the Tribunal as to whether the 299 workers had an employer-employee relationship with KRIBHCO was to be considered by the Tribunal or not, was a major issue before the learned Single Judge. The Page 6 of 38 Uploaded by STANCY GOMES(HC02364) on Tue Jan 20 2026 Downloaded on : Tue Jan 20 23:47:25 IST 2026 NEUTRAL CITATION C/LPA/1425/2014 JUDGMENT DATED: 19/01/2026 undefined learned Single Judge, after considering the submissions made by both sides, held as under:
"5.1 The genesis of the Reference in question was the Industrial unrest at the Hazira - Unit of the petitioner KRIBHCO In June, 1994. To understand the controversy in proper perspective the following facts, as emerging from record, need to be recorded. The petitioner KRIBHCO used to engage contractors having valid licence for carrying out its activities at its Bagging Plant at Hazira which involved the activities of filling the Urea Into the bags, their stitching, staking, de-stacking, loading into trucks, railway wagons and unloading etc. M/s. Ghanshyam Builders and M/s. V.K.Patel were such two Contractors. Those Contractors, in turn engaged workers and those workers demanded parity in conditions of service with the employees of KRIBHCO and also demanded that they (those workers) be treated to be employees of the KRIBHCO, and for that purpose Reference was also made by the Government being Reference No.44 of 1994. The said Reference is ultimately rejected by the Industrial Tribunal, Surat vide order dated 20.05.2010, which is not the subject matter of this Page 7 of 38 Uploaded by STANCY GOMES(HC02364) on Tue Jan 20 2026 Downloaded on : Tue Jan 20 23:47:25 IST 2026 NEUTRAL CITATION C/LPA/1425/2014 JUDGMENT DATED: 19/01/2026 undefined petition. During the pendency of that Reference before the Tribunal, the workers of the sald Contractors ralsed certain demands which according to the principal employer and the Contractors were contrary to the settlement arrived at In Reference No.56 of 1989 and therefore, those demands were not accepted. This led to industrial unrest, including physical assault by certain workers on the rival group of workers. Even one worker died. Work was stopped with effect from 12.06.1994, which was called a lockout by the workers, and on the other hand the Contractors claimed it to be an Illegal strike by the workers without notice. The Authorities of the Labour Department intervened in the matter. The Unlon also entered in correspondence with the Government. Reference can be made to one such communication dated 07.11.1994 addressed to the Assistant Commissioner of Labour, Surat. Under these circumstances, the Appropriate Government passed an order on 21.02.1995 making Reference to the Industrial Tribunal, Surat. It came to be registered as Reference No.8 of 1995. The point for adjudication before the Tribunal, under these circumstances was, as to whether it was a strike by the contract Page 8 of 38 Uploaded by STANCY GOMES(HC02364) on Tue Jan 20 2026 Downloaded on : Tue Jan 20 23:47:25 IST 2026 NEUTRAL CITATION C/LPA/1425/2014 JUDGMENT DATED: 19/01/2026 undefined workers or was a lockout by the Contractors and what relief they were entitled to. The Tribunal, vide its impugned Award dated 10.04.2007, inter alia declared that, there was employer - employee relationship between the workers and KRIBHCO. With this declaration, the Tribunal granted certain reliefs in favour of the workers. Thus, the very foundation of the Award in question is the declaration by the Tribunal regarding employer employee relationship between the petitioner KRIBHCO and the workers, which was not the point for determination. Be it noted that, this very issue was the subject matter of a separate Reference being Reference No.44 of 1994, which was earlier in point of time and which was also pending with the same Tribunal at the relevant time. Further, it is relevant to note that the said Reference l.e. Reference No. 44 of 1994 is subsequently rejected by the Tribunal. In this factual background this Court finds that, the very foundation of the impugned Award is untenable and therefore as the necessary consequence the impugned Award is unsustainable.
5.2.1 With a view to see that, what had welghed with the Appropriate Government Page 9 of 38 Uploaded by STANCY GOMES(HC02364) on Tue Jan 20 2026 Downloaded on : Tue Jan 20 23:47:25 IST 2026 NEUTRAL CITATION C/LPA/1425/2014 JUDGMENT DATED: 19/01/2026 undefined while making References to the IRT Tribunal, the order making such Reference is looked at by the Court. The said order dated 21.02.1995 has recorded the circumstances in which the Reference was made. The translation from the said original Gujarati order dated 21.02.1995 (in substance] reads as under.
"GOVERNMENT OF GUJARAT LABOUR AND EMPLOYMENT DEPARTMENT SACHIVALAYA, GANDHINAGAR DATE: 21.02.1995 ORDER NO.KHR/49/SCA-1094-H-85-M(4) M/s.Ghanshyam Builders and M/s. V.K. Patel were engaged as Contractors to carry out the contract work of Urea Handling and Bagging for the period of one year from 27.02.1994 to 28.02.1995 at Surat based Urea manufacturing Unit of Krishak Bharati cooperative Limited. The workers of the contractors resorted to go-slow tactics w.e.f.
19.05.1994 in support of their demands for increase in wages. Consequent upon this, the said contractors suspended 11 workers and Page 10 of 38 Uploaded by STANCY GOMES(HC02364) on Tue Jan 20 2026 Downloaded on : Tue Jan 20 23:47:25 IST 2026 NEUTRAL CITATION C/LPA/1425/2014 JUDGMENT DATED: 19/01/2026 undefined appointed new workers to maintain continuity of work. A conflict was created between the workers instigated by the so- called Union named Gujarat Mazdoor Panchayat and the new workers, thereby resulting in disruption of work environment. The work of the contractors was stopped w.e.f. 12.06.1994.
The said Union treated it as lockout by the contractors and made a request to the local labour department to reinstate 350 workers who were not allowed to resume their work and to prohibit the lockout. The contractors treated this situation as strike without notice and accordingly, published an appeal in local newspaper to report for duties and to sign an undertaking. The act of contractors compelling the workers to sign an undertaking and then only allowing to resume duties is projected to be a lockout by the union and to prohibit it, the said Union made a written complaint to the labour department that the efforts have been made by the contractors to project that workers have gone on strike without notice. Thus conciliation proceedings were commenced before the Assistant Labour commissioner due to the situation arisen on 12.06.1994 and Page 11 of 38 Uploaded by STANCY GOMES(HC02364) on Tue Jan 20 2026 Downloaded on : Tue Jan 20 23:47:25 IST 2026 NEUTRAL CITATION C/LPA/1425/2014 JUDGMENT DATED: 19/01/2026 undefined the under mentioned two demands were made by the Gujarat Mazdoor Panchayat vide their letter dated 09.07.1994 in conciliation case No. IDC-30/94. However since no compromise took place between the parties, the Conciliation officer forwarded his failure report on 18.08.1994 to the Government to adjudicate the matter under the Industrial Disputes Act.
Demand No.1 To prohibit the lock out from 12.06.1994 and to declare it as illegal and unjustified till the date of lifting and to reinstate the workers and be paid wages at double the rate during the lockout period.
Demand No.2 act To declare the of the above referred contractors to compel the workers to sign the undertaking bond as illegal, unreasonable and null and void and to declare that the workers were on duty continuously without any break.
2. Keeping in mind the order dated 17.09.2014 passed by the Hon'ble High Court of Gujarat in Special civil Application No.10284 of 1994 filed by the Gujarat Mazdoor Panchayat carefully going through Page 12 of 38 Uploaded by STANCY GOMES(HC02364) on Tue Jan 20 2026 Downloaded on : Tue Jan 20 23:47:25 IST 2026 NEUTRAL CITATION C/LPA/1425/2014 JUDGMENT DATED: 19/01/2026 undefined the entire situation as to whether the situation arisen on 12.06.1994 should be treated as a lockout or strike, the Government did not consider it to fit to decide this issue.
3. The Government of Gujarat is of the opinion that the Industrial Dispute as mentioned in the Schedule is between the aforesaid two contractors whose Frincipal Employer is Krishak Bharati Cooperative Limited, surat (KRIEHCO), and its workers/workers Union Gujarat Mazdoor Panchayat, Ahmedabad.
And therefore as per section 12 (4) of the Industrial Disputes Act, the conciliation officer and Assistant Labour commissioner, Surat has referred the conciliation case No.30/94 in which demands were raised by the Gujarat Mazdoor Panchayat along with the failure report dated 18.08.1994 to the State Government to proceed further in accordance with law.
Therefore, in exercise of powers conferred under Section 10(1) (d) of the Industrial Disputes Act, the Government of Gujarat refers the following disputes to the Industrial Tribunal, Surat for adjudication.
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1) Whether the lock-out was declared w.e.f.12.06.1994 at the place of the Industrial Establishment, Krishak Bharati Cooperative Limited, Surat by the establishment ?
2) If yes, whether or not the lock-out be declared as illegal and unjustified till the date of its lifting and whether the workmen are entitled to reinstatement with back wages at double the rate for the said period or not ?
3) Whether the act of contractors to compel the workers to sign the undertaking be treated as illegal or improper and declared as null and void ? And accordingly whether or not to declare the services of workers as continuous service without break ?
By order and in the name of the Governor of Gujarat.
Sd/-
(T.A.Saiyed) section officer Labour and Employment Department"
5.2.2 Thus, from the above order of the Appropriate Government also, it is clear that, Page 14 of 38 Uploaded by STANCY GOMES(HC02364) on Tue Jan 20 2026 Downloaded on : Tue Jan 20 23:47:25 IST 2026 NEUTRAL CITATION C/LPA/1425/2014 JUDGMENT DATED: 19/01/2026 undefined it was even the case of the workers that they were the workers of the contractors. It was neither the case of the workers, nor was it necessary for the Tribunal to go into the question as to whose workers they were. At this juncture, it is also required to be noted that, the minutes of the conciliation proceedings is on record. Reference can be made to the proceedings dated 16.06.1994 and 17.06.1994. It was between the Union and the Contractors before the concerned Deputy Commissioner of Labour. The employer / establishment referred therein is the Contractors and not the petitioner KRIBHCO. Thus, there is ample material on record to hold that It was not even the case of the Union that there was employer employee relationship between the workers and the petitioner KRIBHCO.
5.3 Having held that it was neither assigned to the Tribunal, nor was it necessary for it to adjudicate whose workers they were, this Court also finds that the same cannot be termed to be incidental to the principal controversy as to whether it was a strike or a lockout. For these reasons, this Court finds that, the Tribunal, while recording the impugned Award had exceeded its Page 15 of 38 Uploaded by STANCY GOMES(HC02364) on Tue Jan 20 2026 Downloaded on : Tue Jan 20 23:47:25 IST 2026 NEUTRAL CITATION C/LPA/1425/2014 JUDGMENT DATED: 19/01/2026 undefined jurisdiction and the impugned Award therefore is unsustainable.
5.4 This Court also finds that, even If it was open or necessary for the Tribunal to go into that question, there is ample material on record to adjudicate that issue, which the Tribunal has not deliberated at all. Though the Impugned Award is quite lengthy and it runs into hundreds of pages, on this material point, there is no discussion or adjudication. This is an additional point which makes the Impugned Award untenable.
5.5 This Court also finds that there is substantial force in the submission of learned advocate for the petitioner that the contesting group of workers change their stand as per their convenience. In this regard, Reference can be made to the common Award passed by the Labour Court, Surat dated 31.12.2010 in Reference (LCS) No.631 of 1995 with 26 other identical References. By the said Award, the Labour Court had dismissed all the References where the claim of the workmen, who were similarly situated to the present group of contesting workers was that they should be reinstated in service by KRIBHCO. It is relevant to note that the said discontinuance Page 16 of 38 Uploaded by STANCY GOMES(HC02364) on Tue Jan 20 2026 Downloaded on : Tue Jan 20 23:47:25 IST 2026 NEUTRAL CITATION C/LPA/1425/2014 JUDGMENT DATED: 19/01/2026 undefined of service was almost at the relevant time and even the Reference was made by the Appropriate Government on 21.06.1995. It is also required to be noted that the said Award has attained finality. This is an additional factor which tilts the balance against the respondent Union.
5.6 Both the learned advocates have addressed the Court at length but many of those arguments are, in substance to make good a point that the concerned workmen were or were not, the workers of the KRIBHCO. Since that issue was already the subject matter of a separate Reference being Reference No.44 of 1994 and the same is adjudicated by the Tribunal against the workers, and challenge thereto is pending before this Court In a separate petition being Special Civil Application No.4056 of 2012, it would be prejudicial to the parties to go into the said question in this petition. For this reason, those arguments are not addressed by this Court in this judgment. The same is the case with the authorities cited by both the sides. It is also recorded that, though numbers of authorities are cited by both the sides, on the face of the findings recorded above, which is evident from the material on Page 17 of 38 Uploaded by STANCY GOMES(HC02364) on Tue Jan 20 2026 Downloaded on : Tue Jan 20 23:47:25 IST 2026 NEUTRAL CITATION C/LPA/1425/2014 JUDGMENT DATED: 19/01/2026 undefined record, those authorities are not discussed in this judgment."
vi. In view of the above reasons, the learned Single Judge has come to the conclusion that the Tribunal has exceeded its jurisdiction by taking into consideration the relevant material which was on record and as such, the order of the Tribunal resulted in a perverse order. It is also considered by the learned Single Judge that, though the Award runs into more than 460 pages, no reasons are assigned for the terms of the Reference made before the Tribunal and accordingly, the Award was quashed and set aside.
6. Learned advocate Ms.Sangeeta Pahwa, appearing for the appellant, reiterated the contention raised before the learned Single Judge and submitted that, in order to answer the terms of Reference, it was incidental for the Tribunal to frame and decide the issue with regard to the employer-employee relationship between the workers, who were discharging the duties for number of years with Page 18 of 38 Uploaded by STANCY GOMES(HC02364) on Tue Jan 20 2026 Downloaded on : Tue Jan 20 23:47:25 IST 2026 NEUTRAL CITATION C/LPA/1425/2014 JUDGMENT DATED: 19/01/2026 undefined respondent No.1. It was pointed out from the Judgment and Award of the Tribunal that the Tribunal had not been weighed by the fact that, though there is an employer- employee relationship between respondent No.1 and the workers, through the contractors, the Tribunal had adopted a human approach to hold that, in effect, the workers are the employees of respondent No.1 by adopting a modus operandi to employ them through the contractors. It was, therefore, submitted that, to hold that there was an illegal lockout by respondent No.1 and not by the contractors, the Tribunal had rightly come to the conclusion that there was an employer-employee relationship, through contractors, between the workers and respondent No.1-KRIBHCO.
7. It was, therefore, submitted that the learned Single Judge ought to have taken into consideration the reasons assigned by the Tribunal to come to the conclusion that there was an illegal lockout and that such findings of the Tribunal cannot be considered to be a decision with regard to the employer-employee relationship between Page 19 of 38 Uploaded by STANCY GOMES(HC02364) on Tue Jan 20 2026 Downloaded on : Tue Jan 20 23:47:25 IST 2026 NEUTRAL CITATION C/LPA/1425/2014 JUDGMENT DATED: 19/01/2026 undefined the workers and respondent No.1.
8. It was further submitted that, assuming for a while that the findings arrived at by the Tribunal regarding the Issue No.1, as to whether there was an employer- employee relationship between the workers and respondent No.1, KRIBHCO, and on reversing the findings, the ultimate conclusion arrived at by the tribunal regarding the illegal lockout ought to be sustained, and the workers should be ordered to be reinstated with the existing contractors with continuity of service, as more than three decades have passed in litigation and the dispute as to whether the workers discharging their duties with respondent No.1 are employees of respondent No.1 has been made the subject matter of pending litigation. In support of the submission, reliance was placed on the decision of the Hon'ble Supreme Court in the case of General Manager, Oil and Natural Gas Commission, Silchar v. Oil and Natural Gas Commission Contractual Workers Union, reported in (2008) 12 SCC 275, wherein the Page 20 of 38 Uploaded by STANCY GOMES(HC02364) on Tue Jan 20 2026 Downloaded on : Tue Jan 20 23:47:25 IST 2026 NEUTRAL CITATION C/LPA/1425/2014 JUDGMENT DATED: 19/01/2026 undefined Hon'ble Supreme Court has held that the High Court should not interfere in labour matters in judicial review of the Award of the Industrial Tribunal on the grounds of perversity and patent illegality, as no such infirmity can be said to be carved out from the impugned Award passed by the Tribunal.
9. It was submitted that, in the facts of the case before the Hon'ble Apex Court, the Reference was with regard to the demand of the ONGC Contractual Workers Union, Silchar, for regularization of the services of the contractual workers and wherein the Hon'ble Apex Court held that it was open for the Tribunal to lift the veil so as to determine the nature of the employment and the disputes between the parties and for that purpose, to look into the pleadings and evidence produced before it.
10. In such circumstances, the Hon'ble Apex Court has held as under:
"25. The pleadings in the present matter would show that the core issue before the Page 21 of 38 Uploaded by STANCY GOMES(HC02364) on Tue Jan 20 2026 Downloaded on : Tue Jan 20 23:47:25 IST 2026 NEUTRAL CITATION C/LPA/1425/2014 JUDGMENT DATED: 19/01/2026 undefined Tribunal was with regard to the status of the employees as employees of ONGC or of the contractor and that it was this issue simpliciter on which the parties went to trial. Mr Dave's argument with regard to the decision of the Tribunal being beyond the Reference, is to our mind, and in the circumstances, hypertechnical. In this background, we feel that the judgments cited by Mr Dave pertaining to regularisation of contract labour are not applicable to the facts of the case."
11. Applying the above ratio, it was submitted by learned advocate Ms. Pahwa that, in the facts of the present case also, the issue was whether there was an illegal lockout by the employer and the employer, in turn, is respondent No.1 - KRIBHCO, who has employed contractors, who in turn had employed the workers to discharge duties at the factory of respondent No.1. Therefore, the Tribunal was justified in lifting the veil for arriving at a conclusion as to whether there was an illegal lockout or not. It was therefore submitted that, assuming for a while that the findings of the Tribunal on Issue No.1 Page 22 of 38 Uploaded by STANCY GOMES(HC02364) on Tue Jan 20 2026 Downloaded on : Tue Jan 20 23:47:25 IST 2026 NEUTRAL CITATION C/LPA/1425/2014 JUDGMENT DATED: 19/01/2026 undefined as to whether there was an employer-employee relationship are set aside, then also, to arrive at a conclusion, it would be necessary for the Tribunal to go into the facts giving rise to the dispute and for raising the wages, as ultimately the wages are to be paid by respondent No.1 through the contractor to the workers and as the "go-slow" policy was adopted by the workers at the factory of respondent No.1, the Tribunal rightly came to the conclusion that the contractors were only a camouflage between respondent No.1 - KRIBHCO and the workers.
12. It was therefore submitted that the learned Single Judge ought to have held that there is no perversity in the impugned Judgment and Award passed by the Tribunal, which, may at the best, be made subject to the litigation between the parties with regard to the employer- employee status, as such Award passed by the Tribunal could not have been made final and binding between the parties in the facts of the case.
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13. It was therefore summarized by learned advocate Ms.Pahwa that, in arriving at a conclusion to answering the Reference by the Tribunal, the incidental issue with regard to the employer-employee relationship was decided and considered by the Tribunal, which is not binding in the facts of the case between the parties and the same may be made subject matter of pending litigation. However, the ultimate conclusion arrived at by the Tribunal to declare the lockout as illegal and the consequential reliefs granted to the workers ought to be sustained by the learned Single Judge.
14. On the other hand, learned Senior Advocate Mr.Bhatt, appearing with learned advocate Mr.Munjaal Bhatt for respondent No.1, has submitted that the learned Single Judge has rightly held that the terms of Reference were not with regard to decide the employer-employee relationship between the respondent No.1 and the workers.
15. Learned Senior Advocate Mr.Bhatt submitted that, Page 24 of 38 Uploaded by STANCY GOMES(HC02364) on Tue Jan 20 2026 Downloaded on : Tue Jan 20 23:47:25 IST 2026 NEUTRAL CITATION C/LPA/1425/2014 JUDGMENT DATED: 19/01/2026 undefined as the Tribunal travelled outside the scope of the Reference in holding that the workers were the employees of KRIBHCO, the learned Single Judge has rightly quashed and set aside the Award passed by the Tribunal, as the Tribunal could not have treated the contract workers as employees of KRIBHCO.
16. Hence, it was submitted that earlier the issue as to whether the workers were the employees of KRIBHCO or not was the subject matter of litigation, which is still going on between the parties and therefore, the Tribunal could not have decided such sub-judice issue in a Reference relating to the alleged lockout or illegal strike.
17. It was further submitted that, while Awarding back- wages for the entire period from 1994 to 2007, the Tribunal has erred in ignoring the vital aspect as to whether the workers were gainfully employed or not during the said period, as it would be impossible to believe that the contract workers would have remained unemployed for 13 years.
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18. It was further submitted that, though respondent No.1-KRIBHCO, had produced evidence to substantiate the violent acts of the contract workers and their abstaining from work, the Tribunal, by the impugned Award, has granted a premium to the wrong done and therefore, the Award passed by the Tribunal is rightly quashed and set aside on the ground of perversity.
19. Learned Senior Advocate Mr. Bhatt also pointed out from the impugned order of the Tribunal that the oral evidence of three witnesses on behalf of KRIBHCO, supported by documentary evidence, has not been properly evaluated and on the other hand, the oral evidence of the contract workers, without the support of any documentary evidence, has been solely given credence by the Tribunal. It was submitted that the alleged agreement dated 17.06.1994 itself admitted the adoption of "go-slow" by the contract workers, which was an accepted position that the contractors were the employers and not respondent No.1. It was further Page 26 of 38 Uploaded by STANCY GOMES(HC02364) on Tue Jan 20 2026 Downloaded on : Tue Jan 20 23:47:25 IST 2026 NEUTRAL CITATION C/LPA/1425/2014 JUDGMENT DATED: 19/01/2026 undefined pointed out that the agreement dated 17.06.1994 was not even a settlement under Section 2(p) of the Industrial Disputes Act,1947 (for short the 'I.D. Act').
20. It was therefore submitted that the Tribunal, having ignored the factual reports submitted by the Labour Officer to the effect that there was no lockout by the contractors and that, in fact, the workers, after committing violent acts, were absconding due to apprehension of arrest, the material evidence which led into master-servant relationship between the contractors and the workers has been put aside to hold that there was a lease between the respondent No.1 and the workers. It was submitted that the Tribunal has further committed an error in holding that the employer-respondent No.1- KRIBHCO, having availed the services of the workers through contractors is sham and bogus, more particularly when the respondent No.1 is a cooperative society, wherein the representatives of the Ministry are on the Board of Directors and therefore, the employer availing the services of the workers through contractors could not Page 27 of 38 Uploaded by STANCY GOMES(HC02364) on Tue Jan 20 2026 Downloaded on : Tue Jan 20 23:47:25 IST 2026 NEUTRAL CITATION C/LPA/1425/2014 JUDGMENT DATED: 19/01/2026 undefined have been said to be sham or bogus.
21. Hence, learned Senior Advocate Mr.Bhatt referred to the relevant paragraphs of the Award passed by the Tribunal to point out that paragraphs 2 to 13 relate to the facts and submissions, whereas from paragraph 31 onwards the Tribunal has made observations without analysis of the facts or submissions to arrive at a conclusion that the action of the contractors of sustaining the contract workers was illegal, by discussing general principles about proposal, agreement, etc.
22. It was pointed out that in paragraph 34 of the impugned Award, the Tribunal, without discussing any evidence, held that the contractors had adopted a lockout and, therefore, the workers were entitled to reinstatement and 100% back wages. It was submitted that the Tribunal, without considering the evidence on record, came to the conclusion in paragraph 35 onwards that the undertaking demanded by the contractor was not proper, and that it was within the jurisdictional power of Page 28 of 38 Uploaded by STANCY GOMES(HC02364) on Tue Jan 20 2026 Downloaded on : Tue Jan 20 23:47:25 IST 2026 NEUTRAL CITATION C/LPA/1425/2014 JUDGMENT DATED: 19/01/2026 undefined the Tribunal to decide the burning issues which had nothing to do with the issue under Reference. It was further pointed out that the Tribunal, after considering the provisions of Section 10 and Sections 25B onwards of the I.D. Act, came to the conclusion that the respondent No.1 is an employer and thereafter considered general principles to hold that the contract system is a fraud. It was submitted that the discussion up to paragraph 73 in the impugned Award was to arrive at a conclusion that the wages paid by the contractor were very less and therefore, respondent No.1-KRIBHCO was ordered to reinstate the workers as they had worked for a long period.
23. It was submitted that the findings arrived at by the Tribunal are, on the face of it, perverse and have, accordingly, been rightly reversed by the learned Single Judge and no interference be made in the impugned Order as the issue of employer employee relationship between the workers and KRIBHCO is align and subject to the litigation between the parties as Special Civil Page 29 of 38 Uploaded by STANCY GOMES(HC02364) on Tue Jan 20 2026 Downloaded on : Tue Jan 20 23:47:25 IST 2026 NEUTRAL CITATION C/LPA/1425/2014 JUDGMENT DATED: 19/01/2026 undefined Application No.4056 of 2012 is pending for adjudication. In support of his submission reliance was placed on the following decision:
1. (2006) 5 SCC 123 - State Bank of Bikaner & Jaipur v.
Om Prakash Sharma.
2. 2024 SCC Online Guj 1808 - Chief Engineer - Thermal Power Station, GEB v. Workman represented by Bijlee Mazdoor Panchayat and Ors.
3. 2025 SCC Online SC 2096 - General Manager, U.P. Cooperative Bank Ltd. v. Achchey Lal and Another.
4. (2008) 14 SCC 589 - Steel Authority of India Ltd. v. State of West Bengal and Others.
5. (2014) 9 SCC 407 - Balwant Rai Saluja and Anr. v. AIR India Ltd. & Ors.
6. (2019) 13 SCC 82 - Bharat Heavy Electricals Ltd v. Mahendra Prasad Jakhmola and Ors.
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24. On the other hand, learned Senior Advocate Mr. K.M. Patel, appearing for duly joined respondent Nos. 8 and 9, who are the present contractors, namely M/s. L.K.L. Construction Co. and Perfect Handlers, was heard. Learned Senior Advocate, Mr.K.M. Patel along with the learned advocate, Mr.Yogi Gadhia was also heard, and respondent Nos. 8 and 9 were ordered to be joined as proper and necessary parties, as there was a discussion between the appellant-Union and respondent No.1 to allow the workers to join their duties subject to the outcome of the pending litigation with continuity of service. However, such eventuality was objected to by respondent Nos. 8 and 9, as it would have affected the working of the present workers discharging their duties and a proposal was given that, at the best, 25 workers could be accommodated per day on a rotation basis and such proposal was refused by the appellant-Union. Learned Senior Advocate Mr. Patel submitted that respondent Nos. 8 and 9 are having contract service Page 31 of 38 Uploaded by STANCY GOMES(HC02364) on Tue Jan 20 2026 Downloaded on : Tue Jan 20 23:47:25 IST 2026 NEUTRAL CITATION C/LPA/1425/2014 JUDGMENT DATED: 19/01/2026 undefined orders from respondent No.1-KRIBHCO for a period of two years from 12.07.2025 to 11.07.2027, as both respondent Nos. 8 and 9 are having licences under the Contract Labour (Regulation and Abolition) Act, 1970 for 250 persons, issued by the competent authority and valid up to 11.07.2027. It was submitted that respondent Nos. 8 and 9 are not parties to the Reference proceedings and have no relation with the concerned workers, and that the employees of respondent Nos. 8 and 9 would be severely affected if the workers of the appellant-Union are allowed to rejoin work, as the terms and conditions of the service contract issued by respondent No.1-KRIBHCO in favour of respondent Nos. 8 and 9-contractors cannot be changed and all conditions are required to be adhered to. It was further submitted that it is the duty of respondent Nos. 8 and 9 to provide trained manpower who are medically fit and possess the requisite qualifications to carry out the work in the bagging department of respondent No.1. It was also pointed out that there are provisions of penalties and recoveries, and therefore, Page 32 of 38 Uploaded by STANCY GOMES(HC02364) on Tue Jan 20 2026 Downloaded on : Tue Jan 20 23:47:25 IST 2026 NEUTRAL CITATION C/LPA/1425/2014 JUDGMENT DATED: 19/01/2026 undefined non-compliance of the terms and conditions of the contract by respondent Nos. 8 and 9 would turn out to be costly, as both the contractors have sufficient manpower.
25. It was, therefore, submitted that the appeal may be decided on merits.
26. Having heard the learned advocates for the respective parties, it appears that the learned Single Judge, after taking into consideration the details of the Award passed by the Tribunal running into 460 pages, has come to the conclusion that the impugned Award is perverse on the ground that the preliminary issue framed by the Tribunal regarding the employer-employee relationship between the workers and respondent No.1- KRIBHCO could not have been framed so as to decide the terms of the Reference relating to illegal lockout, or whether there was a lockout and the same was illegal, or whether there was an illegal strike without notice by the workers.
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27. It is not in dispute that the workers of the appellant-Union were employed by the contractors and were discharging their duties for a number of years with respondent No.1-KRIBHCO as employees of the contractors only. It was also not in dispute that the litigation with regard to the regularization of the services of the workers of the appellant-Union as employees of KRIBHCO is pending and sub judice. In such circumstances, the Tribunal ought not to have decided the issue of the service conditions of the workers of the appellant-Union. The Tribunal was only required to consider as to whether there was a lockout by the contractors or an illegal strike by the workers. On perusal of the entire Award passed by the Tribunal, it appears that after recording the facts and submissions and referring to general provisions, the Tribunal has been carried away by factors beyond the scope of the Reference to arrive at a conclusion that there was an illegal lockout by the contractors and that the contractors were also not justified in asking for an undertaking from Page 34 of 38 Uploaded by STANCY GOMES(HC02364) on Tue Jan 20 2026 Downloaded on : Tue Jan 20 23:47:25 IST 2026 NEUTRAL CITATION C/LPA/1425/2014 JUDGMENT DATED: 19/01/2026 undefined the workers at the instance of respondent No.1- KRIBHCO.
28. It is true that the Tribunal was justified in holding that the workers could not have been blamed, in view of the agreement arrived at before the Labour Officer between the contractors and the workers' Union, whereby the workers were required to join their duties immediately. However, there was an insistence on the part of the contractors to sign an undertaking, which was objected to and resulted in the failure of the agreement between the contractors and the workers. The undertaking to be signed by the workers appears to have been at the instance of respondent No.1-KRIBHCO to safeguard the safety of its plant and machinery, as there were violent acts on behalf of the workers which had resulted in stoppage of work from 12.06.1994. The Tribunal, therefore, though justified in arriving at a conclusion, recorded reasons which were not germane to such conclusion in holding that the workers ought to have been permitted to join the respondent-contractors and Page 35 of 38 Uploaded by STANCY GOMES(HC02364) on Tue Jan 20 2026 Downloaded on : Tue Jan 20 23:47:25 IST 2026 NEUTRAL CITATION C/LPA/1425/2014 JUDGMENT DATED: 19/01/2026 undefined that respondent No.1 ought to have permitted them to join duties without insistence of any undertaking in the year 1994 itself. However, more than three decades have passed due to such stalemate, which has resulted in the present litigation, as the Tribunal travelled beyond the scope of the Reference.
29. Therefore, an attempt was made by the Court to persuade respondent No.1-KRIBHCO as well as the Union to allow the workers to join duties subject to the outcome of the pending litigation between the parties. However, respondent Nos. 8 and 9, the present contractors have informed that they cannot finally permit the workers to be continued. In view of the passage of time of more than three decades, more than 299 workers are suffering for no fault on their part. In such circumstances, the impugned Judgment passed by the learned Single Judge is modified in the following terms:
1.) The findings of the Tribunal with regard to the employer-employee relationship between the workers Page 36 of 38 Uploaded by STANCY GOMES(HC02364) on Tue Jan 20 2026 Downloaded on : Tue Jan 20 23:47:25 IST 2026 NEUTRAL CITATION C/LPA/1425/2014 JUDGMENT DATED: 19/01/2026 undefined and respondent No.1-KRIBHCO are held to be not arising out of the Reference and are, accordingly, quashed and set aside.
2.) The findings of the Tribunal to reinstate the workers with continuity of service and back wages are also quashed and set aside. However, it is not necessary to arrive at a finding as to whether there was a lockout or an illegal strike, and in view of the settlement arrived at between the workers and the contractors before the Labour Officer, the workers ought to have been permitted to join without any preliminary undertaking in the year 1994 itself. The Tribunal ought to have restricted itself to such findings after considering the evidence on record.
However, in view of the matter being pending for more than three decades, it would not be in the interest of justice to remand the matter to the Tribunal, and therefore, respondent Nos. 1, 8 and 9 are directed to permit the workers who are willing to join service on a rotational basis as per the workman conditions which may be framed and regulated by respondent Nos. 1, 8 and 9 Page 37 of 38 Uploaded by STANCY GOMES(HC02364) on Tue Jan 20 2026 Downloaded on : Tue Jan 20 23:47:25 IST 2026 NEUTRAL CITATION C/LPA/1425/2014 JUDGMENT DATED: 19/01/2026 undefined together with the Union, to permit the workers to have at least the opportunity of working and earning on their original posts. However, the same shall be without back wages and continuity of service, which are to be decided in the pending litigation before the appropriate forum.
30. In view of the above, the appeal is accordingly disposed of with the aforesaid directions and modifications.
(BHARGAV D. KARIA, J) (L. S. PIRZADA, J) STANCY GOMES Page 38 of 38 Uploaded by STANCY GOMES(HC02364) on Tue Jan 20 2026 Downloaded on : Tue Jan 20 23:47:25 IST 2026