Delhi District Court
Ukai vs . Hindu Mazdoor Sabha 1995, Lab I.C. 2210 on 18 January, 2011
IN THE COURT OF DR. T. R. NAVAL ADDITIONAL
DISTRICT & SESSIONS JUDGE / PRESIDING OFFICER
LABOUR COURT KARKARDOOMA COURTS, DELHI.
ID NO. 20/10 (New) 1392/95 (Old)
Date of Institution : 18.01.1995
Date of Arguments: 16.11.2010
29.11.2010 &
04.12.2010
Date of Award : 18.01.2011
IN THE MATTER BETWEEN:
(i)M/s National Hydro Electric Power Corporation
(A Govt. of India Enterprises)
Hemkunt Tower, 98,
Nehru Place, New Delhi- 110 019.
(ii)M/s Nam Security Consultants,
B-66, Sector - 15, Noida, U.P.
The managements
AND
ITS WORKMEN
Sh. Pratap Singh & 31 others
C/o Delhi Multi Storeyed Building
Employees Workers Union,
Ground Floor, Akash Deep Building,
26-A, Barakhamba Road, New Delhi.
The workman
ID No.20/10 Page 1/51
AWARD
The Secretary (Labour), Government of NCT of
Delhi vide its order No.F.24(4530)/94-Lab./54044-50 dated
12.12.1994 referred an industrial dispute between the
above mentioned parties to the Labour Court with the
following terms of reference:
"Whether the services of workmen shown in
Annexure-A have been terminated illegally and, or
unjustifiably by the management, and if so, to what
relief are they entitled and what directions are
necessary in this respect?"
Annexure-A
Sl. No. Name Sl No. Name
1. Sh. Pratap singh 17. Sh. C. Gurang
2. Sh. Chand Khan 18. Sh. Gopal Singh
3. Sh. Sher Bahadur 19. Sh. Tilak Raj
4. Sh. Dinesh Bahadur 20. Sh. Sooraj Singh
5. Sh. A.M. Azad Khan 21. Sh. Sardar kesar
6. Sh. Suresh Chand 22. Sh. Jaswant Singh
7. Sh. Chabilal Gurung 23. Sh. Satya Prakash
8. Sh. Sukh Bahadur 24. Sh. R.S. Yadav
9. Sh. S. V. Sharma 25. Sh. Preetam
Bahadur
ID No.20/10 Page 2/51
Sl. No. Name Sl No. Name
10. Sh. Kul Bahadur 26. Sh. Ramesh Chand
11. Sh. Chakravarti 27. Sh. Dinesh Dinkar
12. Sh. Khushi Ram 28. Sh. Khem Bahadur
13. Sh. Ali Ram Bahadur 29. Sh. V.K. Tiwari
14 Sh. Rajeev Kumar 30. Sh. Bhola Dutt
15. Sh. T.P. Goswami 31. Sh. Som Bahadur
16. Sh. T.V. Rana 32. Sh. Bhim Bahadur
2. In their common statement of claim, which was
signed by only 10 workmen, and a representative of Delhi
Multi Storeyed Building Employees Congress Union, it has
been mentioned that Delhi Multi Storeyed Building
Employees Congress Union is a registered trade union and
it was authorized to represent the workers before this
court. The workmen as mentioned in Annexure 'A' and
shown in column 2, joined the management on the
date(s) shown in column 4 on the last drawn salaries
shown in column 5 of Table A, as Security Guards/Head
Guards. The management No.1 is a Government of India
Enterprises. Ostensibly, the management No.1 employed
the workmen through management No.2 which is a
contractor named M/s Security Guard Consultants. The
ID No.20/10 Page 3/51
appointments of workmen through the contractor is only a
camouflage and if the veil is lifted, it will reveal that the
workers were the direct employees of the management
No.1. They had been working under the direct control and
supervision of the officers of the the management No.1
since the date of their appointment. The agreement
between the Management No.1 and Management No.2
was executed and it was an eye wash only to deprive the
workmen to get their legitimate rights such as the
employment, wages, and emoluments and other benefits,
leave, etc. The work of security guards/head guards in the
management No.1 is of permanent and perennial nature.
The management No.1 employed the workmen through
the management No.2 with malafide intention to deprive
the workman to get their legitimate and lawful dues and
other benefits which they were entitled to get under
various Labour Laws. Their appointment through
management No.2 is nothing but unfair labour practice
adopted by management No.1 in violation of provisions of
Industrial Disputes Act, herein after referred to as the Act.
Both the managements, did not have any license which is
a mandatory under the Contract Labour (Abolition and
ID No.20/10 Page 4/51
Regulations) Act, here in after referred to as the CLAR Act.
The disbursement of the wages to the workmen was done
by officers of the management No.1 during the period
from February, 1993 till June, 1993. The period of contract
with management No.2 though expired on 13.06.1993,
yet the workmen continued to work till 07.07.1993. The
workmen were restrained from entering into the premises
of management No.1, illegally on 08.07.1993 on the
grounds that contract between the management No.1 and
management No.2 had expired on 13.06.1993. The
workmen made various representations to the
management No. 1 to regularize their services because
they had been working with the management No.1 for a
long period without any contract and under the direct
control and supervision of officers of management No.1
and work of security guards/head guards was of
permanent and perennial nature. The management No.1
ignored all their representations. As termination of their
services w.e.f. 08.07.1993 without serving any notice and
without paying any compensation as provided under the
Act was illegal, so the workmen made a complaint to the
Asstt. Labour Commissioner/conciliation officer. The
ID No.20/10 Page 5/51
efforts of conciliation officer also yielded no result and
resulted into present reference. It has been prayed in the
statement of claim that an award declaring that the
workmen named in Annexure A were the employees of
management No.1 may be made and illegal and malafide
termination of their services w.e.f. 08.07.1993 may be
quashed and the management No. 1 may be directed to
reinstate the workmen in service with full back wages,
continuity of services and with consequential benefits.
TABLE -A
Sl. Name Father's Name Date of Last
No joining Wages
. Drawn
1. Sh. Pratap singh Sh. Amar Singh 06.12.1984 1383/-
2. Sh. Chand Khan Sh. Ahamed Ali 06.12.1984 1383/-
3. Sh. Sher Bahadur Sh. Jeet 17.02.1984 1383/-
Bahadur
4. Sh. Dinesh Bahadur Sh. Lal Bahadur 13.05.1985 1383/-
5. Sh. A.M. Azad Sh. Ramjan Ali 13.05.1985 1558/-
6. Sh. Suresh Chand Sh. Pyare Lal 16.08.1985 1383/-
7. Sh. Chhabilal Sh. Jag Lal 17.01.1985 1383/-
Gurang Gurang
8. Sh. Sukh Bahadur Sh. Puran singh 03.03.1986 1383/-
ID No.20/10 Page 6/51
Sl. Name Father's Name Date of Last
No joining Wages
. Drawn
9. Sh. S. V. Sharma Sh. Puran Mal 11.04.1986 1383/-
Sharma
10. Sh. Kul Bahadur Sh. chitra 15.04.1986 1383/-
Bahadur
11. Sh. Chakravarti Sh. Ram Kumar 03.07.1987 1383/-
12. Sh. Khushi Ram Sh. Umrao 13.01.1987 1383/-
13. Sh. Ali Ram Sh. Beer 09.10.1990 1383/-
Bahadur Bahadur
14 Sh. Rajeev Kumar Sh. Dharampal 10.10.1990 1383/-
15. Sh. T.P. Goswami Sh. N.P. 01.10.1990 1383/-
Goswami
16. Sh. T.V. Rana Sh. Dhan Sigh 19.10.1984 1383/-
17. Sh. C.B. Gurang Sh. Rahi Lal 17.02.1984 1383/-
18. Sh. Gopal Singh Sh. Prem Singh 29.08.1991 1383/-
19. Sh. Tilak Raj Sh. Hari Singh 16.03.1988 1383/-
20. Sh. Sooraj Singh Sh. Bag Singh 15.11.1990 1383/-
21. Sh. Sardar kesar Sh. Wazir Hasan 27.07.1985 1383/-
22. Sh. Jaswant Singh Sh. Ram Dulare 01.12.1990 1383/-
Singh
23. Sh. Satya Prakash Sh. Ram Singh 15.02.1986 1383/-
Singh
24. Sh. R.S. Yadav Sh. Jagdev 24.03.1986 1383/-
Yadav
25. Sh. Preetam Sh. Puran 29.09.1984 1383/-
Bahadur Bahadur
ID No.20/10 Page 7/51
Sl. Name Father's Name Date of Last
No joining Wages
. Drawn
26. Sh. Ramesh Chand Sh. Gyan Chand 01.02.1991 1383/-
27. Sh. Dinesh Dinkar Sh. Jodhi Ram 01.08.1990 1383/-
28. Sh. Khem Bahadur Sh. Tek Bahadur 07.07.1984 1383/-
29. Sh. V.K. Tiwari Sh. Ram Uggar 01.10.1990 1383/-
Tiwari
30. Sh. Bhola Dutt Sh. Piryag Dutt 26.01.1990 1383/-
31. Sh. Som Bahadur Sh. Harka 24.07.1990 1383/-
Bahadur
32. Sh. Bhim Bahadur Sh. Inder 01.05.1982 1558/-
Bahadur
33. Sh. Puran Bahadur Sh. Amar Singh 10.04.1984 1383/-
3. The management No.1 contested their
statement of claim on the grounds inter alia that there
was no relationship of employer and employee between
the parties. The workman as mentioned in Annexure 'A'
were the employees of M/s Nam Security Consultants,
management No. 2. The management No. 1 availed
services of the workmen through management No. 2 vide
an agreement signed between management No. 1 and
management No. 2 under the CLAR Act. The
management No. 2 was required to provide all the
ID No.20/10 Page 8/51
emoluments, benefits to the workman as per law. The
work of security guards/head guards was not of perennial
and permanent nature. The management No. 1 &
management No. 2 were duly registered for availing
services of employees through contractor. The workmen
were the members of Delhi Multi Storyed Employees
Congress Union and that union was not authorized to
represent the workman. The official of the management
No. 1 never supervised the work of the workmen. Rather,
they had been working under the direct control and
supervision of management No. 2. The management No.
1 does not have any responsibility or liability to provide
employment to the workman after the expiration of the
period of agreement between management No. 1 and
management No. 2. The management No. 1 denied all the
material allegations and prayed for dismissal of the
statement of claim.
4. On 07.01.1999, the Counsel for the workmen
Mrs. Asha Jain Madan, made a statement on behalf of the
workmen that the workmen were seeking relief against
the principal employer and they do not want to proceed
ID No.20/10 Page 9/51
against the management No. 2 and name of management
No. 2 may be deleted from the array of parties.
Accordingly, my Ld. Predecessor vide order of even date,
deleted the management No. 2 from the array of the
parties.
5. The workmen in their common rejoinder, which
was signed by representatives of Delhi Multi Storeyed
Employees Congress Union, controverted the contentions
made in the Written Statement and reiterated the
averments made in the statement of claim.
6. On the pleadings of the parties, following
issues were framed by my Ld. Predecessor:
(i) Whether there exists no relationship of
employer and employee between the
parties?
(ii) Whether the reference is bad in view of
the preliminary objection No. D and E ?
(iii) As per terms of reference.
7. In support of their case, the workmen
examined witnesses as mentioned in Table B here in
below :
ID No.20/10 Page 10/51
TABLE-B
Sl. Witnesses Affidavit Documents relied on
No. Examined S/Sh. Proved as
1. Pratap singh Ex. WW1/A Ex. WW1/1 to Ex.
WW1/16
2. Abdul Majud Azad EX. WW2/A Ex. WW2/1 to Ex.
WW 2/18
3. Jagdish Parsad Ex. WW3/A Ex. WW3/1 to Ex.
WW3/3.
4. Dinesh Bahadur Ex. WW4/A
5. Khushi Ram Ex. WW5/A
Ex. WW5/B
6. Rajeev Kumar Ex. WW6/A
Ex. WW6/B
7. Suresh Chand Ex. WW7/A
8. S.K.Chakkarvarti Ex. WW8/B
Ex. WW8/A
9. S.V. Sharma Ex. WW9/A
Ex. WW9/B
In order to prove its case, the management
examined Sh. Krishan Lal Khurana, Security Officer of
management No.1 as MW1. He filed and proved his
affidavit as Ex.MW1/A. Sh. Hussain Ahmed, Asstt.
Manager Vigilance of management No.2 was examined as
MW2. He filed and proved his affidavit as Ex.MW2/A and
ID No.20/10 Page 11/51
relied on documents Ex.MW2/1 to Ex.MW2/20.
8. I have heard lengthy arguments addressed by
Counsels of both the parties and perused the file including
written arguments.
9. On perusal of the pleadings of the parties,
analysing evidence and material placed on record and
considering the arguments addressed by Authorised
Representatives for the parties/Counsels, I have formed
my opinions on the issues and that are discussed here in
below issue-wise:
10. At the outset, it is made clear that above
reference was sent for 32 workmen. Out of these
workmen, only 10 workmen signed their statement of
claim and only 8 workmen have been examined in
evidence. Thus, 24 workmen whose name do not appear
in Table B, have failed to file their statement of claim and
failed to examine themselves in support of their case.
Therefore, it is held that these 24 workmen could not
prove their case and they are not entitled to get any relief
ID No.20/10 Page 12/51
in this case.
11. Perusal of statement of claim has shown that
Sh. Puran Bahadur had also signed the statement of
claim. Annexure A of the order of reference does not
contain his name, therefore, filing of statement of claim
by Sh. Puran Bahadur is of no use and no relief can be
granted to him.
FINDINGS ON ISSUE NO. 1
12. The burden to prove this issue was on the
management and it had to prove that there was no
relationship of employer and employee between the
parties. As mentioned above, the workmen have claimed
that they were employees of management No. 1 whereas
management No. 1 had pleaded that they were the
employees of M/s Nam Security Consultants i.e.
Management No. 2 and management No. 1 availed their
services only through contractor. It would be appropriate
to reproduce provisions of Section 7 and 12 of the
Regulation Act. These run as under:
"7.Registration of certain establishments. - (1) Every
principal employer of an establishment to which this Act
ID No.20/10 Page 13/51
applies shall, within such period as the appropriate
Government may, by notification in the Official Gazette, fix
in this behalf with respect to establishments generally or
with respect to any class of them, make an application to
the registering officer in the prescribed manner for
registration of the establishment:***"
12. Licensing of contractors. - (1) With effect from such
date as the appropriate Government may, by notification in
the Official Gazette, appoint, no contractor to whom this
Act applies, shall undertake or execute any work through
contract labour except under and in accordance with a
licence issued in that behalf by the licensing officer.***"
13. As per provisions of Section 7 & 12 of the
Regulation Act, the principal employer i.e. management
no. 1 has to prove two factors for utilizing services of the
employees through contractor, i.e. management no. 2.
Firstly, the management no. 1 should have a certificate of
registration from the prescribed authority i.e. labour
department and secondly, the contractor, i.e.
management no. 2 should have a license issued by the
competent authority i.e. the labour department.
CERTIFICATE OF REGISTRATION BY MANAGEMENT
NO. 1 AND LICENSE IN FAVOUR OF MANAGEMENT
NO. 2 FROM THE LABOUR DEPARTMENT
ID No.20/10 Page 14/51
14. On perusal of file, I find that management has
proved on record a certificate of registration dated
25.04.1984 as Ex.MW2/9. As per this certificate,
management No. 1 was authorized to avail services of
security guards from M/s Nam Security Consultants i.e.
management No. 2. The managements have also proved
a copy of license dated 20.06.1984 in favour of
management No. 2 as Ex.MW4/9. According to this
license, the management No. 2 was granted a license for
the period from 20.06.1984 till 30.04.1985. The
management has also proved on record the agreement
dated 30.04.1985 and 01.011.1999 Ex. MW1/1 between
management No. 1 and management No. 2 for providing
of labour particularly for availing security services.
15. It has been argued on behalf of the
management that all the workmen were employed with
the contractor. They intentionally and deliberately are not
claiming any right against the contractor because the
contractor is a private person and the management No. 1
is a Government entity and the workmen wanted to be
absorbed as regular employees under the garb of back
ID No.20/10 Page 15/51
door entry.
16. The Counsel for management relied on a
number of cases including Gujrat Electricity Board,
Ukai vs. Hindu Mazdoor Sabha 1995, LAB I.C. 2210
SC. It was held by Apex Court that:
"27. While parting with these matters, we cannot help
expressing our dismay over the fact that even the
undertaking in the public sector have been indulging in
unfair labour practice by engaging contract labour when
workmen can be employed directly even according to the
tests laid down by Section 10(2) of the Act. The only
ostensible purpose in engaging the contract labour instead
of the direct employees is the monetary advantage by
reducing the expenditure. Apart from the fact that it is an
unfair labour practice, it is also an economically short-
sighted and unsound policy, both from the point of view of
the undertaking concerned and the country as a whole. The
economic growth is not to be measured only in terms of
production and profits. It has to be gauged primarily in
terms of employment and earnings of the people. Man has
to be the focal point of development. The attitude adopted
by the undertakings is inconsistent with the need to reduce
unemployment and the Govt. policy declared from time to
time to give jobs to the unemployed. This is apart from the
mandate of the directive principles contained in Arts, 38,
39, 41, 42, 43 and 47 of our constitution. We, therefore,
recommend that -
(a) all undertakings which are employing the contract
labour system in any process, operation or work which
satisfies the factors mentioned in clauses (a) to (d) of
ID No.20/10 Page 16/51
Section 10(2) of the Act should on their own discontinue
the contract labour and absorb as many of the labour as is
feasible as their direct employees.
(b) both the Central and the State Governments should
appoint a committee to investigate the establishments in
which the contract labour is engaged and where on the
basis of the criteria laid down in clauses (a) to (d) of
Section 10(2) of the Act, the contract labour system can be
abolished and direct employment can be given to the
contract labour. The appropriate Government on its own
should take initiative to abolish the labour contracts in the
establishments concerned by following the procedure laid
down under the Act.
(c) the Central Government should amend the Act by
incorporating a suitable provision to refer to the industrial
adjudicator the question of the direct employment of the
workers of the ex-contractor in the principal establishment,
when the appropriate Government abolishes the contract
labour."
17. Counsel for management further relied on a
case Municipal Corporation of Greater Mumbai, vs.
K.V. Shramik Sangh and others, 2002 LAB. I.C. 1672
SC. The Apex Court observed:
"The municipal corporation carried on the work of lifting,
transporting and dumping of debris, garbage, silt, house
gully material etc., at the various dumping grounds of the
Municipal Corporation, through the system of labour
contract. The Union of workmen doing work of handling
solid waste filed a writ petition for direction to the
corporation to abolish contract labour system and for
regularization of services of the workers. The union claimed
ID No.20/10 Page 17/51
that the contract entered into by the Corporation with the
contractors is a sham arrangement. The workmen
concerned with the writ petition are in law and in fact
employees of the Corporation, particularly so, when the
task of sweeping and cleaning roads, gullies and removal
of debris and garbage etc. are the statutory duties to be
performed by the Corporation under the Municipal
Corporation Act. The claim that the contract was sham was
specifically denied by the Corporation***.
29. As laid down in the Constitution Bench Judgment,
absorption of contract labourers cannot be automatic and it
is not for the court to give such direction. Appropriate
course to be adopted is as indicated in para 125 of the said
judgment in this regard. Thus having considered all
aspects, we are of the view that the impugned judgment
and order cannot be upheld."
18. On the other hand, Authorized Representative
of Workmen argued that the workmen were in fact, the
employees of management No. 1 and the agreement
entered into between the management No. 1 and
management No. 2 is a sham document and only a
camouflage to deprive the workmen to get their benefit of
permanent employees of management No. 1. He also
relied on a number of judgments including Steel
Authority of India and Others Vs. National Union
Waterfront Workers, JT 2001 (7) SC 268 . The Apex
Court held that:
ID No.20/10 Page 18/51
"70. By definition the term 'contract labour' is a species of
workman. A workman shall be so deemed when he is hired
in or in connection with the work of an establishment by or
through a contractor, with or without the knowledge of the
principal employer. A workman may be hired: (1) in an
establishment by the principal employer or by his agent
with or without the knowledge of the principal employer; or
(2) in connection with the work of an establishment by the
principal employer through a contractor, he merely acts as
an agent so there will be master and servant relationship
between the principal employer and the workman. But
where a workman is hired in or in connection with the work
of an establishment by a contractor, either because he has
undertaken to produce a given result for the establishment
or because he supplies workman for any work of the
establishment, a question might arise whether the
contractor is a mere camouflage as in Hussainbhai Calicut's
case (supra) and in Indian Petrochemicals Corporation's
case (supra) etc.; if the answer is in the affirmative, the
workman will be in fact an employee of the principal
employer; but if the answer is in the negative, the
workman will be a contract labourer.***
"The upshot of the above discussion is outlined thus: ***
(3) Neither Section 10 of the CLRA Act nor any other
provision in the Act, whether expressly or by necessary
implication, provides for automatic absorption of contract
labour on issuing a notification by appropriate
Government under sub-section (1) of Section 10,
prohibiting employment of contract labour, in any
process, operation or other work in any establishment.
Consequently the principal employer cannot be required
to order absorption of the contract labour working in the
concerned establishment.
(4) We over-rule the judgment of this court in Air India's
case (supra) prospectively and declare that any direction
issued by any industrial adjudicator/any court including
ID No.20/10 Page 19/51
High Court, for absorption of contract labour following the
judgment of in Air India's case (supra), shall hold good
and that the same shall not be set aside, altered or
modified on the basis of this judgment in cases where
such a direction has been given effect to and it has
become final.
(5) On issuance of prohibition notification under Section
10(1) of the CLRA Act prohibiting employment of contract
labour or otherwise, in an industrial dispute brought
before it by any contract labour in regard to conditions of
service, the industrial adjudicator will have to consider
the question whether the contractor has been interposed
either on the ground of the having undertaken to produce
any given result for the establishment or for supply of
contract labour for work of the establishment under a
genuine contract or is a mere ruse/camouflage to evade
compliance of various beneficial legislations so as to
deprive the workers of the benefit thereunder. If the
contract is found to be not genuine but a mere
camouflage, the so-called contract labour will have to be
treated as employees of the principal employer who shall
be directed to regularise the services of the contract
labour in the concerned establishment subject to the
conditions as may be specified by it for that purpose in
the light of para 6 hereunder.
(6) If the contract is found to be genuine and prohibition
notification under Section 10(1) of the CLRA Act in respect
of the concerned establishment has been issued by the
appropriate Government, prohibiting employment of
contract labour in any process, operation or other work of
any establishment and where in such process, operation
of other work of the establishment the principal employer
intends to employ regular workmen he shall give
preference to the erstwhile contract labour, if otherwise
found suitable and, if necessary, by relaxing the condition
as to maximum age appropriately taking into
ID No.20/10 Page 20/51
consideration the age of the workers at the time of their
initial employment by the contractor and also relaxing the
condition as to academic qualifications other than
technical qualifications."
19. Counsel for workman further relied on a case
Hussainbhai v. Alath Factory Tezhilali Union, (SC)
1978 AIR (SC) 1410: 1978(4) SCC 257. The Supreme
Court held that:
"5. The true test may, with brevity, be indicated once
again. Where a worker or group of workers labours to
produce goods or services and these goods or services are
for the business of another, that other is, in fact, the
employer. He has economic control over the worker's
subsistence, skill, and continued employment. If he, for
any reason, chokes off, the worker is, virtually, laid off.
The presence of intermediate contractors with whom
alone the workers have immediate or direct relationship
ex contractu is of no consequence when, on lifting the veil
or looking at the conspectus of factors governing
employment, we discern the naked truth, though draped
in different perfect paper arrangement, that the real
employer is the Management, not the immediate
contractor. Myriad devices, half-hidden in fold after fold of
legal form depending on the degree of concealment
needed, the type of industry, the local conditions and the
like, may be resorted to when labour legislation casts
welfare obligations on the real employer, based on Arts,
38-39-42, 43 and 43-A of the Constitution. The court must
be astute to avoid the mischief and achieve the purpose of
the law and not be misled by the maya of legal
ID No.20/10 Page 21/51
appearances".
20. Counsel for workman further relied on a case
M/s Bharat Heavy Electrical Ltd. v. State of U.P.,
(SC) 2003 (3) LLJ 215 2003, LIC 2630, the Supreme Court
held that:
"11. The learned counsel for the appellant wanted to take
support from the Constitution Bench judgment of this
Court in Steel Authority of India Ltd. and others v.
National Union Waterfront Workers and others, 2001(4)
SCT 1 (SC) : 2001(7) SCC 1. For that purpose, he took us
through paras 107 to 116. In the said judgment, the
provisions of the Contract Labour (Regulation and
Abolition) Act, 1970 came up for consideration and
interpretation. After detailed analysis of the provisions
and consideration of various decisions, in para 107
contract labours were classified in three categories. In
paras 108-116, the issue whether on a contractor
engaging contract labour in connection with the work
entrusted to him by a principal employer, the relationship
of master and servant between him (the principal
employer) and the contract labour emerges. An extreme
stand was taken by learned Senior Counsel in that case
that the engagement of contract labour by the contractor
in any work of or in connection with the work of an
establishment, the relationship of master and servant is
created between the principal employer and the contract
labour. In dealing with the said contention, various earlier
cases decided by this Court were referred to including the
case of Hussainbhai Calicut (supra). The extreme
ID No.20/10 Page 22/51
contention was rejected. From the perusal of paragraphs
107-116, it is clear whether a workman is an employee of
principal employer or not depends on the facts and
circumstances of a given case. The case of Hussainbhai
Calicut (supra) is neither dissented nor diluted. On the
other hand, it is held that the said case is covered by
class (ii) of para 107 which reads :-
"107. ................................ (ii) where the contract was
found to be a sham and nominal, rather a camouflage, in
which case the contract labour working in the
establishment of the principal employer were held, in fact
and in reality, the employees of the principal employer
himself. Indeed, such cases do not relate to abolition of
contract labour but present instances wherein the Court
pierced the veil and declared the correct position as a
fact at the stage after employment of contract labour
stood prohibited....."This apart, the finding that the
respondents-workmen were the employees of the
appellant, does not rest merely on the test of control. The
other evidence and facts and circumstances of the case
were also kept in mind in recording such a finding
including a vital fact that the appellant did not produce
the records alleging that they were not available which
led to drawing adverse inference against them. It is not
possible for us to hold that such concurrent findings
recorded by the Labour Court and the High Court that the
workmen were to be treated as the employees of the
appellant are either perverse or based on no evidence or
untenable at all."
21. Counsel for the workmen referred to the cross
examination of the management witnesses. Particularly
those portions of cross examination of MW2 were referred
ID No.20/10 Page 23/51
in which MW2 admitted that he used to supervise the
work of workmen. MW2 further admitted that he was
doing the work of supervision in NHPC till January, 1998.
He was also doing the work of investigation of the
complaints. MW2 admitted that Sh. H.P. Yadav was also
supervising the work of workmen. MW3 in this regard
stated that salary of Sh. H.P. Yadav and Sh. Ravinder
Goswami were ultimately given by NHPC.
22. On the other hand, counsel for the
management argued that there is no camouflage in the
present case and the workmen were in fact the
employees of the contractor. The Officers of the
contractor were supervising their work so that their work
was in accordance with the requirement of the
management. The Officers of the contractor were
authorized to do so as held in a case Haldia Refinery
Canteen Emps. Union v. M/s. Indian Oil Corporation
Ltd., (SC) 2005 LIC 2078: 2005(5) J.T. 62. The Apex Court
held that:
"14. No doubt, the respondent management does
exercise effective control over the contractor on certain
ID No.20/10 Page 24/51
matters in regard to the running of the canteen but such
control is being exercised to ensure that the canteen is
run in an efficient manner and to provide wholesome and
healthy food to the workmen of the establishment. This
however does not mean that the employees working in
the canteen have become the employees of the
management. 15. A free hand has been given to the
contractor with regard to the engagement of the
employees working in the canteen. There is no clause in
the agreement stipulating that the canteen contractor
unlike in the case of Indian Petrochemicals Corporation
Ltd. & Another (supra) shall retain and engage
compulsorily the employees who were already working in
the canteen under the previous contractor. There is no
stipulation of the contract that the employees working in
the canteen at the time of the commencement of the
contract must be retained by the contractor. The
management unlike in Indian Petrochemicals Corporation
Ltd. case (supra) is not reimbursing the wages of the
workmen engaged in the canteen. Rather the contractor
has been made liable to pay provident fund contribution,
leave salary, medical benefits to his employees and to
observe statutory working hours. The contractor has also
been made responsible for the proper maintenance of
registers, records and accounts so far as compliance of
any statutory provisions/obligations are concerned. A duty
has been cast on the contractor to keep proper records
pertaining to payment of wages etc. and also for
depositing the provident fund contributions with
authorities concerned. Contractor has been made liable to
defend, indemnify and hold harmless the employer from
any liability or penalty which may be imposed by the
Central, State or local authorities by reason of any
violation by the contractor of such laws, regulations and
also from all claims, suits or proceedings that may be
brought against the management arising under or
ID No.20/10 Page 25/51
incidental to or by reason of the work provided/assigned
under the contract brought by employees of the
contractor, third party or by Central or State Government
Authorities.
16. The management has kept with it the right to
test, interview or otherwise assess or determine
the quality of the employees/workers with regard
to their level of skills, knowledge, proficiency,
capability etc. so as to ensure that the
employees/workers are competent and qualified
and suitable for efficient performance of the work
covered under the contract. This control has been
kept by the management to keep a check over the
quality of service provided to its employees. It has
nothing to do with either the appointment or taking
disciplinary action or dismissal or removal from service of
the workmen working in the canteen. Only because the
management exercises such control does not mean
that the employees working in the canteen are the
employee of the management. Such supervisory
control is being exercised by the management to
ensure that the workers employed are well
qualified and capable of rendering the proper
service to the employees of the management.
17. In Indian Petrochemicals Corporation Ltd. (supra) this
Court after analysing the earlier judgments on the same
point has held that the workmen working in the canteen
becomes the workers of the establishment for the
purposes of Factories Act only and not for any other
purpose. They do not become the employees of the
management for any other purpose entitling them
for absorption into the service of the principal
employer. Factors which persuaded this Court in
Indian Petrochemicals Corporation Ltd. case (supra)
to take the view that the workmen in that case
were employees of the management are missing in
ID No.20/10 Page 26/51
the present case. No power vests in the management
either to make the appointment or to take disciplinary
action against the erring workmen and their dismissal or
removal from service. The management is not
reimbursing to the contractor the wages of the workmen.
On these facts, it cannot be concluded that the contractor
was nothing but an agent or a manager of the respondent
working completely under the supervision and control of
the management." [Emphasis supplied]
23. In view of the principles of law laid down in
case Haldia Refinery Canteen Emps. Union v. M/s.
Indian Oil Corporation Ltd., the officers of the
management No. 1 were empowered to supervise the
work of the workmen and that supervision will not result
into a relationship of employer and employees between
the parties.
24. My attention goes to a case Secretary, State
of Karnataka v. Umadevi, (SC), 2006(2) S.C.T. 462 :
2006(4) J.T. 420. The Apex Court held that:
"Thus, it is clear that adherence to the rule of equality in
public employment is a basic feature of our Constitution
and since the rule of law is the core of our Constitution, a
Court would certainly be disabled from passing an order
upholding a violation of Article 14 or in ordering the
ID No.20/10 Page 27/51
overlooking of the need to comply with the requirements
of Article 14 read with Article 16 of the Constitution.
Therefore, consistent with the scheme for public
employment, this Court while laying down the law, has
necessarily to hold that unless the appointment is in
terms of the relevant rules and after a proper competition
among qualified persons, the same would not confer any
right on the appointee. If it is a contractual appointment,
the appointment comes to an end at the end of the
contract, if it were an engagement or appointment on
daily wages or casual basis, the same would come to an
end when it is discontinued. Similarly, a temporary
employee could not claim to be made permanent on the
expiry of his term of appointment. It has also to be
clarified that merely because a temporary employee or a
casual wage worker is continued for a time beyond the
term of his appointment, he would not be entitled to be
absorbed in regular service or made permanent, merely
on the strength of such continuance, if the original
appointment was not made by following a due process of
selection as envisaged by the relevant rules. It is not open
to the court to prevent regular recruitment at the instance
of temporary employees whose period of employment has
come to an end or of ad hoc employees who by the very
nature of their appointment, do not acquire any right.
High Courts acting under Article 226 of the Constitution of
India, should not ordinarily issue directions for absorption,
regularization, or permanent continuance unless the
recruitment itself was made regularly and in terms of the
constitutional scheme. Merely because, an employee had
continued under cover of an order of Court, which we
have described as 'litigious employment' in the earlier
part of the judgment, he would not be entitled to any right
to be absorbed or made permanent in the service. In fact,
in such cases, the High Court may not be justified in
issuing interim directions, since, after all, if ultimately the
ID No.20/10 Page 28/51
employee approaching it is found entitled to relief, it may
be possible for it to mould the relief in such a manner that
ultimately no prejudice will be caused to him, whereas an
interim direction to continue his employment would hold
up the regular procedure for selection or impose on the
State the burden of paying an employee who is really not
required. The courts must be careful in ensuring that they
do not interfere unduly with the economic arrangement of
its affairs by the State or its instrumentalities or lend
themselves the instruments to facilitate the bypassing of
the constitutional and statutory mandates.***
While directing that appointments, temporary or casual,
be regularized or made permanent, courts are swayed by
the fact that the concerned person has worked for some
time and in some cases for a considerable length of time.
It is not as if the person who accepts an engagement
either temporary or casual in nature, is not aware of the
nature of his employment. He accepts the employment
with eyes open. It may be true that he is not in a position
to bargain - not at arms length - since he might have been
searching for some employment so as to eke out his
livelihood and accepts whatever he gets. But on that
ground alone, it would not be appropriate to jettison the
constitutional scheme of appointment and to take the
view that a person who has temporarily or casually got
employed should be directed to be continued
permanently. By doing so, it will be creating another mode
of public appointment which is not permissible. If the
court were to void a contractual employment of this
nature on the ground that the parties were not having
equal bargaining power, that too would not enable the
court to grant any relief to that employee. A total
embargo on such casual or temporary employment is not
possible, given the exigencies of administration and if
imposed, would only mean that some people who at least
get employment temporarily, contractually or casually,
ID No.20/10 Page 29/51
would not be getting even that employment when
securing of such employment brings at least some succor
to them. After all, innumerable citizens of our vast country
are in search of employment and one is not compelled to
accept a casual or temporary employment if one is not
inclined to go in for such an employment. It is in that
context that one has to proceed on the basis that the
employment was accepted fully knowing the nature of it
and the consequences flowing from it. In other words,
even while accepting the employment, the person
concerned knows the nature of his employment. It is not
an appointment to a post in the real sense of the term.
The claim acquired by him in the post in which he is
temporarily employed or the interest in that post cannot
be considered to be of such a magnitude as to enable the
giving up of the procedure established, for making regular
appointments to available posts in the services of the
State. The argument that since one has been working for
some time in the post, it will not be just to discontinue
him, even though he was aware of the nature of the
employment when he first took it up, is not one that
would enable the jettisoning of the procedure established
by law for public employment and would have to fail when
tested on the touchstone of constitutionality and equality
of opportunity enshrined in Article 14 of the Constitution
of India."
25. It has been argued on behalf of the workmen
that principles of law laid down in case of Umadevi
(Supra) are not attracted on the facts of the present case
in view of principles of law laid down in a case Mineral
Exploration Corp. Employees Union v. Mineral
ID No.20/10 Page 30/51
Exploration Corp. Ltd., (SC) 2006(3) SCT 802: 2006(5)
SLR 21. The Supreme Court held that:
"We, therefore, direct the Tribunal to decide the claim of
the workmen of the Union strictly in accordance with and
in compliance with all the directions given in the
judgment by the Constitution Bench in the case of
Secretary, State of Karnataka and others v.
Umadevi and others (supra), and in particular,
paragraphs 53 and 12 relied on by the leaned senior
counsel appearing for the Union. The Tribunal is directed
to dispose of the matter afresh within 9 months from the
date of receipt of this judgment without being influenced
by any of the observations made by us in this judgment.
Both the parties are at liberty to submit and furnish the
details in regard to the names of the workmen, nature of
the work, pay scales and the wages drawn by them from
time to time and the transfers of the workmen made from
time to time, from place to place and other necessary and
requisite details. The above details shall be submitted
within two months from the date of the receipt of this
judgment before the Tribunal."
26. The arguments of counsel for the workman are
not convincing in this regard because the Hon'ble Apex
Court directed the Tribunal to decide the claim of the
workman strictly in accordance with and in compliance
with all the directions given in the judgment by the
constitutional bench in case of Secretary, State of
Karnataka vs. Umadevi and others (supra).
ID No.20/10 Page 31/51
27. Counsel for workmen further relied on a case
Indian Oil Corporation v. Union of India , (Delhi),
2009 (158) DLT 320. The Delhi High Court held that:
"14. We are afraid that the contention is completely
injudicious. In Umadevis case the Court was concerned
with public employment and Court's power under Articles
226/227 to grant relief of regularization. In Umadevi's
case the Court was not concerned with the provisions of
the Contract Labour (Regulation and Abolition) Act and the
power of the industrial adjudicator to grant appropriate
relief in a reference under the Industrial Disputes Act. The
case does not even deal with the judgment in the Steel
Authority of India case. Both operate in different fields and
the decision in Umadevis case does not deal with the
question of reference and forum where rights will have to
be adjudicated. Umadevis case is concerned with relief
and the industrial adjudicator is required to examine the
said question. The respondent workmen cannot be
denied reference at this stage. As to what relief will be
granted is uncertain and depends upon the number of
facts. This position is also clear from at least three
Supreme Court judgments, which are discussed
hereinafter."
{Emphasis supplied}
28. The arguments of Ld. Counsel for the workmen
in this regard are not convincing as in the case Indian Oil
Corporation vs. Union of India (supra) the Delhi High
Court clarified that fields and decisions in the Uma Devi's
ID No.20/10 Page 32/51
case were different. Besides, the question for decision
was only grant of relief of reference.
29. Counsel for workman further relied on a case
Oil & Natural Gas Corpn. Ltd. v. Engineering
Mazdoor Sangh, (SC), 2007(1) SCT 372: 2007(1) SCC
250. The Apex Court held that:
"15. We, accordingly, dispose of this appeal by setting
aside the judgments and orders of both the learned Single
Judge and the Division Bench of the High Court and
restoring the judgment and order passed by the Tribunal.
We, however, add that till such time as these 153 workmen
are not absorbed against regular vacancies in the
concerned category no recruitment from outside will be
made by the appellant. Furthermore, even in matters of
seasonal employment, the said 153 workmen or the
numbers that remain after regularization from time to
time, shall be first considered for employment before any
other workmen are engaged for the same type of work in
the field. The appellant should make a serious attempt to
regularize the services of the workman concerned, in terms
of the order passed by the Tribunal, as quickly as possible,
but preferably within a period of two years from the date of
this order. There will be no order as to costs."
30. The arguments of counsel for workman in this
regard are not convincing because the decision of Oil &
ID No.20/10 Page 33/51
Natural Gas Corpn. Ltd. v. Engineering Mazdoor
Sangh, (SC) (supra) was a Judgment on the principle of
last comes first go. There was no discussion of Uma Devi's
case in that case.
31. My attention also goes to a case ICM
Engineering Workers Union v. Union of India,
(Delhi),2001(1) S.C.T. 1043. The Delhi High Court held
that:
"23. Therefore, even in the absence of notification under
Section 10(2) of the Act, the contract workers can raise
dispute and if they are able to establish that the contract
was sham and a contractor is mere camouflage and a
smoke screen, Industrial Tribunal/Labour Court can given
appropriate relief to them directing the Principal Employer
to absorb such contract workers as its direct employees
but it has to be done by the Labour Court/Industrial
Tribunal on the basis of material produced before it as it is
to be determined by the said court as to at what point of
time a direct link is established between the contract
labourers and the Principal Employer, eliminating the
contractor from the scene, is a matter which has to be
established on the material produced before court."
"III. Effect of non-observance of formalities required under
Sections 7 and 12 of the Act.
29. Under Section 7 of the Act every principal employer of
an establishment to which this Act applies has to make an
ID No.20/10 Page 34/51
application to the registering officer for registration of the
establishment meaning thereby, if the particular
establishment wants to engage contract labour and to
such an establishment the provisions of this Act applies, it
has to get itself registered with the Registering Officer.
Likewise, under Section 12 of the Act the Contractor, to
whom this Act applies, has to obtain a license from the
Licensing Officer under this Act and unless it has taken
such a license, contractor is not permitted to undertake to
execute any work through contract labour. The non-
observance to Section 7 and/or 12 is penal and the erring
establishment or the contractor, as the case may be, can
be prosecuted (refer, Sections 22 to 27 of the Act).
However, the question which falls for determination is as
to what would be the fate of such contract labour which is
engaged by the contractor who is not having a valid
license under Section 12 of the Act or where the principal
employer has not got itself registered under Section 7 of
the Act. The initial judicial thinking was that consequence
of violation of Sections 7 and 12 of the Act would be that
establishment or the contractor, as the case may be,
would attract penalty under the provisions of the Act but
that would not make employees engaged by the
contractor direct employees of the principal employer.
Registration/licensing was only a regulatory measure and
it did not create any privilege in favour of contract
workers (refer General Labour Union (Red Flag) v. K.N.
Desai, reported in 1990 LLR 208 (Bom.), Steel Authority of
India v. Steel Authority of India Contract Workers' Union,
reported in 1990(64) FLR 573 (Karn.) and Dinanath v.
National Fertilizer Limited, reported in 1992 LLR 46 (SC).
However, recent judicial trend shows that in such cases
directions can be given to the principal employer to treat
such contract workers as its direct employees if the
contract labour is engaged violating Section 7 and/or 12
of the Act (refer United Labour Union v. Union of India,
ID No.20/10 Page 35/51
reported in 1990 (Vol. 60) FLR 686). In this case Division
Bench of Bombay High Court dealt with this aspect in
great detail. The Supreme Court also in the cases of Air
India (supra) and HSEB (supra) has categorically held such
a consequence to follow. Therefore, following these
judgments one can conclude that in case the
establishment is not registered under Section 7 of the Act
or the contractor, to which this Act applies, has not taken
license under Section 12 of the Act and still contract
labour is engaged such contract workers would be treated
as direct employees of the principal employer."
32. On analysing the testimonies of witnesses, I
find that all the WWs in their respective affidavits deposed
that they performed their respective duties in the
premises of management No. 1. However, in cross
examination, they deposed differently. WW1 deposed that
he was not issued any letter for interview or any
appointment letter and he was never issued any pay slip.
WW2 admitted in cross examination that he had not given
any joining report. He was not issued any appointment
letter. Though he denied that he was an employee of
management No. 2, yet he admitted that he heard that
management no. 2 was the contractor of the security for
management No. 1. WW3 in his cross examination stated
that he could not produce any record as the same had
ID No.20/10 Page 36/51
been destroyed in fire. He admitted that Sh. Raj Kumar
who was the president of Union, might have said that the
workers in the present case were the employees of the
contractor M/s. Nam Security Consultants, i.e.
management No. 2. In cross examination, WW4 admitted
that when there was some dispute, he heard the name of
Nam Security by Captain Narender Singh, Chief Security
Officer in management No. 1. He was never issued any
appointment letter but he never made any complaint.
WW5, in his cross examination, stated that he submitted
his bio-data to the contractor and he was not issued any
appointment letter. He worked without any appointment
letter. WW6 deposed that Mr. Khurana was supervisor of
security guards of Management No. 1. He did not make
any representation to the management No. 1 for his
regularization. He could not say whether there was any
systematic recruitment procedure in management No. 1.
WW7 deposed in his cross examination that he did not
make Nam Security as a party to the present claim and he
was not aware whether the management No. 1 is a Govt.
company. WW8 & WW9 also stated that they were the
employees of management No. 1.
ID No.20/10 Page 37/51
33. On the other hand, MW2 deposed that during
the period 1993 to 1998, he was posted as Security
Supervisor. A contract was awarded for providing security
services to the various establishments of management
No. 1 through M/s Nam Security under whose employment
the present set of workmen were deployed for the
contractual jobs with management No. 1. He proved
various documents including the certificate of registration
in favour of management No. 1 for availing services of
contract labour and license in favour of management No.
2 for providing services of contract labour.
34. As mentioned in Table 'A', the workmen
allegedly joined the services during the period from 1984
till 1990. The managements have proved only two
agreements for the year 1992 and 1989. The
managements have failed to prove any agreement for the
period thereafter. Thus, the evidence on record has
established that there was no strict compliance of the
provisions of Sections 7 & 12 of the Regulations Act for
availing the services of contract labour during this period.
ID No.20/10 Page 38/51
35. It has to be seen as to what is the effect of
violation of provisions of Sections 7 & 12 of the CLAR
Act? Whether the workmen have become employees of
principal employer i.e. management No. 1 directly? My
attention goes to a case New Delhi General Mazdoor
Union, Delhi Offices and Establishment Employees
Union (Regd.) vs. Standing Conference of Public
Enterprises and another, LLR 1991 516. It was held by
Apex Court that:
"The Act does not prohibit employment of contract labour
altogether. It only regulates the employment of contract
labour in certain establishments and provides for its
abolition in certain circumstances which would appear to be
the ultimate object. For, that purpose, it requires the
registration of the principal employer, the licensing of the
contractor, the benefits to be enjoyed by the contract
labour, who is to provide for the same, the overseeing of
the functioning of the Act, and providing for infraction
thereof. Contravention of sections 7 and 12 is an offence. If
there is contravention of the provisions of the Act, the
offender is liable to be punished under section 23 and 24 of
the Act. If the petitioners contention is correct, the
Legislature could have provided for it and said in very
simple words that contravention of provisions of Section 7
or Section 12 or any one of these provisions would make
the casual worker of the contractor ipso facto the employee
of the principal employer. If the Court says so it will amount
to legislation and for which the Court has no power. Court is
not an extension of the Legislature. Fields occupied by the
ID No.20/10 Page 39/51
Executive, Legislature and the Courts are all different. The
Courts will not impinge on the jurisdiction of the Labour. If
the argument of the petitioner that they ipso facto because
the employees of the principal employer, there would be no
offence and, what would be there for the inspecting
offences to go and investigate and to make the principal
employer and contractor to conform to the provisions of the
Act, as the petitioners would be better placed. Further if
the contention of the petitioner is accepted and they
have become the employee of the principal employer
as provision of Sections 7 and 12 have been
contravened, it may amount to their entry into
service through back door in contravention of
service rules and other provisions for employment.
The contentions of the petitioners that the
circumstances of these cases they became the
employees of SCOPE, was rejected."
[Emphasis added]
36. My attention also goes to a case Dena Nath &
Others vs. National Fertilisers Ltd. & Others 1992
LLR 46 wherein the Apex Court held that:
"The only consequences provided in the Act where either
the principal employer of the labour contractor violates the
provision of section 9 and 12 respectively the penal
provision, as envisaged under the Act for which reference
may be made to sections 23 and 25 of the Act. We are
thus of the firm view that the proceedings under
article 226 of the Constitution merely because
contractor or the employer had violated any
provision of the Act or the rules, the Court could not
issue any mandamus for deeming the contract
labour as having become the employees of the
principal employer. We would not like to express any
ID No.20/10 Page 40/51
view on the decision of the Karnataka High Court or of the
Gujarat High Court (supra) since these decisions are under
challenge in this court, but we would place on record that
we do not agree with the aforequoted observations of the
Madras High Court about the effect of non-registration of
the principal employer or the non-licensing of the labour
contractor nor with the view of Bombay High Court in the
aforesaid case. We are of the view that the decisions
of the Kerala High Court and Delhi High Court are
correct and we approve the same."
[Emphasis added]
37. In case Food Corporation of India & Others
vs. Presiding Officer, Central Government IT cum
LC-I, Chandigarh and ors. 2008 LLR 391. Punjab &
Haryana High Court held that:
"The view taken by the High Courts of Punjab and Kerala
was that the only consequence of non-compliance either by
the principal employer of section 7 of the CLRA Act or by
the contractor in complying with section 12 of the CLRA Act
is that they are liable for prosecution under the Act;
whereas the view taken by Madras, Bombay, Gujarat and
Karnataka High Courts was that in such a situation the
contract labour becomes directly the employee of the
principal employer. The Supreme Court, after considering
the various provisions of the CLRA Act and the other
decisions, approved the view taken by the High Courts of
Punjab and Kerala. It was held that the CLRA Act as can be
seen from the scheme of the Act, merely regulates the
employment of contract labour in certain establishment
and provides for its abolition in certain circumstances. The
Act does not provide for total abolition of contract labour
ID No.20/10 Page 41/51
but it provides for its abolition by the appropriate
Government in appropriate cases under section 10 of the
Act. If by engaging the contract labour by the
contractor to the principal employer, the provisions
of sections 7 and 12 of the CLRA Act have been
violated, the only consequence of those violations
will be as envisaged under sections 23 and 25 of the
CLRA Act and the contract labour engaged in
violation of the provisions of sections 7 and 12 of the
CLRA Act cannot be deemed to be the employees of
the principal employer, and the High Court in
exercise of power under Article 226 of the
Constitution can not issue a mandamus for deeming
them as having become the employees of the
principal employer."
[Emphasis added]
38. My attention also goes to a case Sarva Shramik
Sangh v. Indian Oil Corporation Ltd., (SC), 2009(2)
S.C.T. 642 : 2009(3) R.A.J. 299, wherein Hon'ble Supreme
Court held that:
"9. The stand of the appellant and the workers was always
consistent. But before the decision of a Constitution Bench
of this Court in Steel Authority of India Ltd. v. National
Union Waterfront Workers, 2001(4) SCT 1 : [2001(7)
SCC 1, for short referred to as `SAIL-I), it was thought that
the appropriate relief available was to seek an
investigation and abolition of contract labour under the
CLRA Act and consequently seek absorption. Therefore the
prayer was made with reference to the CLRA Act in the
first petition. In SAIL-I rendered on 30.8.2001, this Court
held that even if there was an order under section 10 of
ID No.20/10 Page 42/51
CLRA Act prohibiting contract labour in any process or
operation, there would be no automatic absorption of the
contract labour by the principal employer.
39. After analysing the evidence and material
placed on record and considering the arguments of Ld.
Counsels for the parties and principles of law laid down in
cases referred to here in above, I have come to the
conclusion that although the workmen had been working
in the premises of management No. 1 for a considerable
long period, there was no relationship of employer and
employees between the workmen and the management
No. 1. However, it has been established on record that
there was violation of provisions of Section 7 and 12 of
the Regulations Act in as much as the management No. 1
failed to file and prove the agreements between the
management No. 1 and the management No. 2 for
providing of contract labour for the entire period.
Therefore, the workmen are entitled to be compensated
for the legal injuries caused to them by management No.
1. Accordingly, issue No. 1 is decided in favour of the
management No. 1 and against the workmen except the
ID No.20/10 Page 43/51
right of the workmen to get compensation from the
management No. 1.
FINDINGS ON ISSUE NO. 2
40. The burden to prove this issue was on the
management and the management had to prove that
statement of claim of the workmen is not maintainable
because the workmen have not claimed any relief
against the management No. 2 and the name of
management No. 2 has already been deleted from the
array of the parties. The management had further to
prove that the order of reference was bad as the
reference was not made by the appropriate Government.
41. I have considered the plea of the management
in this regard and on perusal of file, I find that name of
management No. 2 was deleted from the array of the
parties on 07.01.1999 at the request of the counsel for
the workmen. However, that will not result into dismissal
of statement of claim on that ground because the
workmen may or may not seek relief against either of the
ID No.20/10 Page 44/51
managements. In the present case, the workmen opted
not to seek relief against management No. 2.
42. On the other hand, counsel for the workman
argued that L.G. of Delhi was empowered to delegate
powers to Labour Department by notification in the year
1995 and Secretary Labour, Govt. of NCT of Delhi was
competent to refer this dispute to the Labour Court
situated in territory of Delhi. Vide notification dated
03.07.1998 published in the Gazette of India, dated
3.7.1998. Sh. Padma Balasubramaniam, Joint Secretary,
Ministry of Labour issued the notification as under:
"S.O. 556 (E). In exercise of the powers conferred by
Section 39 of Industrial Disputes Act, 1974(14 of 1947),
the Central Government hereby directs that all the power
exercisable by it under that Act and the Rules thereunder
shall in relation to all the Central Public Sector
Undertakings and their subsidiaries, Corporations and
autonomous bodies specified in Schedule annexed to this
Notification be exercisable also by the State Government
subject to the condition that the Central Government shall
exercise all the powers under the said Act and Rules made
thereunder as and when it considers necessary to do so."
The name of NHPC has been mentioned in that
Notification.
ID No.20/10 Page 45/51
43. The present dispute was referred to the Labour
Court on 12.12.1994. Admittedly, there was Notification of
like nature prior to the year 1995. In these circumstances,
I am of the view that this industrial dispute was referred
by the appropriate government which was competent to
refer this dispute to labour court. This argument of
Counsel for management is, therefore, not tenable.
Accordingly, the issue No. 2 is decided in favour of the
workmen and against the management.
FINDINGS ON ISSUE NO. 3
44. WW1 to WW9 in their respective affidavits
have deposed that they joined the management No. 1 as
security guards on 06.12.1984, 13.05.1985, 13.01.1987,
10.10.1990, 16.08.1985, 11.04.1986, 09.10.1990. They
were shown the employees of the contractors. In fact,
they were continuing their services and the contractors
were being replaced. They were allowed to work till
07.07.1993 on the ground that contract of the last
contractor was not renewed after 30.06.1993. In their
cross examination, they admitted that they were not
issued any appointment letter. No pay slip was issued to
ID No.20/10 Page 46/51
them. They did not give joining report. They themselves
admitted that ostensibly they were engaged through
contractor. The evidence on record has established that
they had been working with the management No. 1 for a
period of more than 240 days. Neither any notice nor any
wages in lieu of notice or retrenchment compensation was
offered or paid to them. MW1 in his cross examination
also admitted this fact. Neither any charge sheet was
issued to them nor any enquiry was conducted against
them.
In view of the reasons , discussion and evidence and
particularly discussed here in above, I am of the view that
there has been violation of provisions of Section 25 F of
the Act in terminating the services of workmen. Therefore,
issue No. 3 is decided in favour of the workmen and
against the management.
LUMP SUM COMPENSATION
45. In case of Kishan Swaroop Vs. Project and
Equipment Corporation of India
Ltd.,MANU/DE/3010/2007 it was held by Delhi High Court
that in each and every case of illegal and unjustified
ID No.20/10 Page 47/51
termination of services, the relief of reinstatement and full
back wages is not to be granted automatically and the
Labour Court can mould the relief by granting lump sum
compensation in lieu thereof.
46. In case of Allahabad Jal Sansthan v. Daya
Shankar Rai,(2005) 5 SCC 124, it was held that:
"6. A law in absolute terms cannot be laid down as to in
which cases, and under what circumstances, full back
wages can be granted or denied. The Labour Court and/or
Industrial Tribunal before which industrial dispute has been
raised, would be entitled to grant the relief having regard to
the facts and circumstances of each case. For the said
purpose, several factors are required to be taken into
consideration".
47. In case of Hindustan Tin Works (P) Ltd. v.
Employees (1979) 2 SCC 80 a three-Judge Bench of Apex
Court laid down:
"11. In the very nature of things there cannot be a
straitjacket formula for awarding relief of back wages. All
relevant considerations will enter the verdict. More or
less, it would be a motion addressed to the discretion of
the Tribunal. Full back wages would be the normal rule
and the party objecting to it must establish the
circumstances necessitating departure. At that stage the
Tribunal will exercise its discretion keeping in view all the
relevant circumstances. But the discretion must be
exercised in a judicial and judicious manner. The reason
for exercising discretion must be cogent and convincing
ID No.20/10 Page 48/51
and must appear on the face of the record. When it is said
that something is to be done within the discretion of the
authority, that something is to be done according to the
rules of reason and justice, according to law and not
humour. It is not to be arbitrary, vague and fanciful but
legal and regular***"
48. As their legal right has been violated they have
right to be compensated by award of reasonable amount.
Therefore, due to this reason and the principles of law laid
down in case Kishan Swaroop Vs. Project and
Equipment Corporation of India Ltd. (supra),
Allahabad Jal Sansthan v. Daya Shankar Rai (supra),
and Hindustan Tin Works (P) Ltd. v. Employees
(supra), it is held that workmen have right to get
compensation in lieu of reinstatement in service and
backwages.
ORDER
49. Consequent upon the decision of all the issues in favour of 8 workmen, namely, Sh. Pratap Singh, serial No.1, Sh. A.M.Azad, serial No.3, Sh. Dinesh Bahadur, serial No.2, Sh. Khushi Ram, serial No.7, Sh. Rajeev Kumar, serial No.9, Sh. Suresh Chand, serial No.4, Sh.
ID No.20/10 Page 49/51S.K.Chakkarvarti, serial No.6, and Sh. S. V. Sharma, serial No.5 as mentioned in Annexure 'A' and against the managements, the terms of reference are answered in favour of these 8 workmen and it is held that termination of services of these 8 workmen was illegal and unjustified and therefore, they are entitled to get relief.
50. As these 8 workmen have suffered legal injury due to illegal action of the managements and they cannot be put to their original posts as they were not having right against the post with management no. 1, therefore, considering all the relevant factors including pay, length of service of the workmen and facts and circumstances of the case, I am of the view that it would be just, fair and appropriate if a co mpensation of Rs. 1,00,000/- (each) (Rupees One Lakh Only) (each) is awarded in favour of workmen namely Sh. Pratap Singh, serial No.1, Sh. A.M.Azad, serial No.3, Sh. Dinesh Bahadur, serial No.2, Sh. Khushi Ram, serial No.7, Sh. Rajeev Kumar, serial No.9, Sh. Suresh Chand, serial No.4, Sh. S.K.Chakkarvarti, serial No.6, and Sh. S. V. Sharma, serial No.5 and against the managements and particularly management No. 1.
ID No.20/10 Page 50/5151. The appropriate Government is advised to direct the managements and particularly Management no. 1 to pay Rs. 1,00,000/- (Rupees One Lakh Only) to each of these 9 workmen within 30 days from the date of publication of this award failing which, they will also be entitled to get the future interest @ 8% from the date of award till the realization of the said amount.
It is further held that remaining 24 workmen are not entitled to get any relief in view of reasons mentioned in paragraph No. 10 of this award. Award is, accordingly passed.
52. Copy of award be sent to the Secretary Labour, Govt. of NCT, Delhi for publication as per rules. Copy of award be also sent to Ld. Senior Civil Judge, District South Delhi in compliance of provisions of Sec. 11(10) of the Act as amended by Industrial Disputes (Amendment) Act, 2010 (No. 24 of 2010).
File be consigned to Record Room.
Announced in the Open Court
on 18th January, 2010 (DR. T. R. NAVAL)
Additional District & Sessions Judge
Presiding Officer, Labour Court,
Karkardooma Courts, Delhi
ID No.20/10 Page 51/51