Jharkhand High Court
Bharat Coking Coal Limited vs Their Workmen Being Represented By Sri ... on 13 July, 2007
Equivalent citations: [2008(1)JCR255(JHR)]
Author: Narendra Nath Tiwari
Bench: Narendra Nath Tiwari
JUDGMENT Narendra Nath Tiwari, J.
1. In this writ petition, the petitioner has prayed for quashing the award dated 20th March, 2001 rendered by the Central Government Industrial Tribunal No. 1, Dhanbad, whereby the Tribunal has answered the reference in favour of the workmen directing their regularisation.
2. The brief facts of the case is that M/s. Bharat Coking Coal Limited (for short BCCL) awarded a turn key contract to M/s. Mining and Allied Machinery Corporation Limited (for short MAMC), a Government of India Undertaking, by virtue of agreement dated 9th December, 1985. It was for complete design, engineering, supply, delivery to site, erection and commissioning of coal washery of 2.5 Million Tones per annum at the cost of Rs. 72,50,00,000/-. The said contractor, MAMC, was required to complete the work i.e. erection of the plant within the stipulated time, commission the same and hand over charge to the BCCL.
3. The contractor, MAMC, in order to execute the work, awarded sub-contract to M/s. Hindustan Steel Works Construction Limited (for short HSCL). As the contract involved various types of works, the contractor/sub-contractor engaged sub-contractors having specialization on respective items of work.
4. The sub-contractors engaged by HSCL recruited their own men and employed their own machine. They paid wages to their workers and they were solely responsible for supervising the works and exercising all kinds of control over the same.
5. When the works were completed, the sub-contractors retrenched their workers by paying retrenchment compensation, as required under Section 25F of the Industrial Disputes Act, 1947 (hereinafter to be referred as the 'I.D. Act'), and they fulfilled other conditions also and released them.
6. The sub-contractor completed the work given to them by the middle of 1991 and all the persons engaged by subcontractors were disengaged after complying with the requirement of the I.D. Act. Their Principal Employer, HSCL, also completed the work of civil construction in the middle of 1991.
7. The concerned workmen were engaged by one M/s. Ravi & Company, who was a sub-contractor engaged by the contractor, MAMC. On completion of the work, the persons engaged by M/s. Ravi & Company were disengaged by making payment of retrenchment compensation and complying with the other requirement of law.
8. Notwithstanding the concerned workmen were engaged by M/s. Ravi & Company, they deliberately and baselessly claimed regularization in the BCCL with proper categorization and sought to raise an industrial dispute. The dispute led to the following reference:
Whether the management of Madhuban Washery Project of M/s, BCCL is justified in not according regularisation with proper categorization and corresponding wage payment as per NCWA-IV to the following 15 workmen employed through sub-contractor, M/s. Ravi & Company? It not to what relief the workmen are entitled?
9. The dispute was referred to the Central Government Industrial Tribunal No. l, Dhanbad, for adjudication under Section 10(1)(d)(2A) of the I.D. Act. The same was registered as Reference No. 105 of 1991.
10. The case of the concerned workmen is that they are the workmen of BCCL for all practical purposes and they had continuously worked from 1987 to the middle of 1991 and they are entitled to be regularized as permanent workmen on the pay scale as per National Coal Wage Agreement (for short NCWA). The management of BCCL has not paid the amount of wages to the concerned workmen, payable as per NCWA-IV.
11. According to the management of BCCL, the concerned workmen were not the workmen of BCCL and there was no relationship of employer and employee between them. The concerned workmen were engaged by a petty contractor, M/s. Ravi & Company by the sub-contractor-HSCL. After the completion of the work, M/s. Ravi & Company retrenched the said workmen after giving retrenchment compensation in the middle of 1991, as the petty work, allotted to them, was completed by that time. The clear stand of the petitioner is that the concerned workmen have absolutely no valid claim for regularisation as permanent employee of BCCL.
12. In order to establish the case of the concerned workmen, the sponsoring union espoused their cause. On behalf of the concerned workmen two witnesses, namely, Khedan Mahato (WW-1) and Arjun Mahato (W W-2) were produced, They were themselves the concerned workmen. The evidences of the said two witnesses are discussed in Para-5 of the impugned award, which may be quoted hereunder for proper appreciation:
5. The sponsoring union, on the other hand, has examined two of the concerned workmen, namely, Khedan Mahato (WW-1) and Arjun Mahato (WW-2) who have said that they were working under petty contractor in the Madhuban Washery Project from May, 1987 to June, 1991 which belongs to M/s. B.C.C. Ltd. They have also said that they were working as fitter, helper, khalasi etc. and used to prepare column beam and other articles as per specification. They have come to say that initially they were getting Rs. 17/- per day which was raised to the maximum of Rs. 27/- per day which is much less than the wages of NCWA. They have further said that for running of the washery M/s. B.C.C. Ltd. requires to engage about 5000 persons which has not been denied by the management, therefore, their demand for regularisation is justified.
13. The management of BCCL, on the other hand, has examined Mr. Ashok Kumar, as MW-1, the Superintending Engineer. The documents were also exhibited on behalf of the petitioner. Exts. M-l and M-l/1 are agreements of the works awarded to MAMC. Ext. M-2 is the licence of MAMC, granted under the provisions of the Contract Labour (Regulation & Abolition) Act, 1970 (for short CIRA Act) for the period from 18th November, 1986 to 10th November, 1992. Ext. M-3 is the award-sheet of M/s. Ravi & Company showing full and final payment to the concerned workmen including the pay, notice pay and retrenchment compensation.
14. On the basis of the said evidences, the Presiding Officer came to the conclusion that the management of Madhuban Washery Project of BCCL is not justified in not regularizing the concerned persons as permanent employees in proper categorization as per NCWA-IV and the concerned persons are entitled for their regularisation as permanent employees of Madhuband Washery Project of BCCL in Category-I General Mazdoor. It was further directed that the award shall be implemented within 30 days from the date of publication and the concerned persons are entitled to the wages of General Mazdoor, Category-I from the date of publication of the award.
15. It is relevant to mention here that almost on identical facts situation, another reference was also made, being Reference No. 100 of 1991. The same was also referred to the Central Government Industrial Tribunal No. l, Dhanbad under Section 10(1)(d)(2A) of the I.D. Act. Both the references were taken up together and similarly answered. The instant case is, however, not concerned with Reference No. 100 of 1991 and as such, discussion of the said reference case has been avoided.
16. The conclusion of the Tribunal is mainly based on the grounds; that i. The Management of BCCL has not filed any licence of the petty contractors to show that they were licensee under Section 12 of the CLRA Act.
ii. The Management of BCCL has also not filed any registration certificate, as required under Section 7 of the CLRA Act to show that Madhuban Washery Project of BCCL was registered as Principal Employer for engaging a contractor.
iii. The concerned workmen are entitled for regularization as permanent employees by the management of the BCCL on the basis of the settled legal principles laid down by the Supreme Court in Secretary, Haryana Steel Electricity Board v. Suresh and Ors. reported in 1999 LLR 433 and Air India Statutory Corporation, etc. v. United Labour Union, etc. reported in 1997 Lab I.C. 365 : 1997 LLR 288.
17. Learned Presiding Officer has held that in absence of any registration certificate of the Principal Employer or licence of the contractor, the contractor's workers shall be deemed to be the employees of the Principal Employer. The tribunal for the said findings relied on the decision of the Apex Court in the cases of Secretary, Haryana Steel Electricity Board v. Suresh and Ors. (Supra) and Air India Statutory Corporation, etc. v. United Labour Union, etc. (Supra) and held that the concerned persons are entitled for regularization as permanent employees under the management of Madhuban Washery Project of BCCL.
18. Mr. A.K. Mehta, learned Counsel, appearing on behalf of the petitioner, assailed the award on the following ground:
i. It is an admitted case that the concerned persons were engaged by the petty contractor, M/s. Ravi & Company, working under HSCL. There is, thus, no relationship of employer and employee between the management of BCCL and the concerned persons.
ii. The Wage Register (Ext. 3) goes to prove that full and final payment was made to the concerned persons, including their wages, leave wages and retrenchment compensation, by M/s. Ravi & Company and they were disengaged as far back as in the month of May, 1991. Any relationship of employer-employee even between the petty contractor, M/s. Ravi & Company, and retrenched persons was also terminated. Thereafter, they are not found on the roll of the said petty contractor and as such, question of their regularization does not arise.
iii. The reference of the dispute was made on 23rd October, 1991 and the award was rendered on 20th March, 1991 without even any challenge, with regard to their retrenchment. There was no occasion for making the claim for regularization nor any such claim can be accepted either against M/s. Ravi & Company or HSCL or MAMC. There is absolutely no question of any such claim against BCCL.
iv. It is not the case that the work of civil construction of washery was under the prohibited category envisaged under Section 10(1) of the CLRA Act and the contract labours were engaged in any such prohibited job. The award was passed on the basis of the decision of the Apex Court in Air India Statutory Corporation (Supra), which was overruled by the decision of the Constitution Bench of the Supreme Court rendered in the case of Steel Authority of India Limited and Ors. v. National Union Waterfront Workers and Ors. .
v. There is no pleading or any evidence to establish that the contract, in question, was a ruse or camouflage and that in fact there was an employer-employee relationship between the concerned persons and BCCL. The fact that the contract was a mere camouflage, has to be established by producing the evidences/materials on record before the tribunal. He relied on a decision of the Supreme Court in the case of Municipal Corporation of Greater Mumbai v. K.V. Shramik Sangh and Ors.
vi. Learned Counsel submitted that another decision of the Supreme Court relied upon by the Tribunal i.e. Secretary, Hariyana Electricity Board (Supra) was also followed in Air India Statutory Corporation (Supra), which was in connection with the employment of contract labour in prohibitory category of job under Section 10(1) of the CLRA Act, but since the decision in Air India Statutory Corporation case (Supra) has been overruled by the Constitution Bench of the Supreme Court in the case of Steel Authority of India Ltd. (Supra), the said decision of the Supreme Court has no relevance in the instant case.
vii. The Tribunal has drawn adverse inference for non-production of licence of petty contractors and registration of establishment under Sections 7 and 12, respectively, which is an error of law committed by the Tribunal. The Management of BCCL was never called upon to produce the said documents and for not producing the documents by the Management, adverse inference cannot be drawn. Learned Counsel placed reliance on a decision of the Supreme Court in Manager, Reserve Bank of India, Bangalore v. S. Mani and Ors. .
viii. Absorption/regularization is always subject to the vacancy and other consideration, including eligibility, qualification and age, and the same is not an automatic process. Even in a given case, the workers cannot claim regularization against the Principal Employer, unless the said conditions are fulfilled. The said proposition enunciated in the case of Air India Statutory Corporation (Supra) has been overruled by the decision of the Constitution Bench of the Supreme Court in Steel Authority of India Ltd. (Supra). Any regularization in the permanent roll contrary to the said legal requirement would be violative of Articles 14 and 16 of the Constitution of India and is not at all permissible. Learned Counsel relied on recent decision of the Supreme Court in the case of State of Karnataka v. Uma Devi , which was followed in subsequent decision of the Supreme Court in labour matter in the case of Indian Drugs & Pharmaceuticals Ltd. v. Workmen, Indian Drugs & Pharmaceuticals Ltd. .
ix. Mr. Mehta, learned Counsel also relied upon decisions reported in 2004(1) JLJR 76 (Employers in relation to the Management of Bhuli Town Administration of Bharat Coking Coal Ltd., Koyla Bhawan, Koyla Nagar, Dhanbad v. The Presiding Officer, Central Government Industrial Tribunal No. 2 at Dhanbad and Anr.), 2003(4) JLJR 536 (Employers in relation to the Management of Bhuli Township Administration of B.C.C.L. Ltd. and Anr. v. Presiding Officer, Central Govt. Industrial Tribunal No. 2 and Anr.), 2004(1) JLJR 227 (Employers in relation to the Management of Balihari Colliery of Bharat Coking Coal Limited v. Presiding Officer, Central Government Industrial Tribunal No. 1, Dhanbad and Ors.) and 2003(4) JLJR 625 (Employers in relation to the Management of Lodna Area of Bharat Coking Coal Limited, Dhanbad v. The Presiding Officer, Central Government Industrial Tribunal No. 2, Dhanbad and Anr.) in order to fortify his contentions.
19. Mr. H.K. Mahto, learned Counsel, appearing on behalf of the concerned workmen, in reply, made the following submissions:
i. The concerned workmen were employed in the works of BCCL and for all practical purposes, they were the employees of BCCL.
ii. The concerned workmen have continuously worked for about four years. The construction of Madhuban Washery Project was completed and after its commissioning, there is perennial work. The concerned workmen cannot be retrenched on the ground that the project for which they were engaged is completed and came to an end.
iii. The concerned workmen were engaged by M/s. Ravi & Company, who were said to be licensee under Section 12 of the CLRA Act, but neither the licence of the relevant period of the said contractor has been produced nor any registration certificate, issued under the CLRA Act, has been produced by the management of BCCL In absence of production of the licence or the registration certification, as required under the CLRA Act, contract workers shall be deemed to be the employees of the Principal Employer, as was held by the Supreme Court in the cases of Secretary, Hariyana Steel Electricity Board (Supra) and Air India Statutory Corporation (Supra) and in that view the concerned workmen are entitled for regularisation.
iv. Learned Presiding Officer has rightly come to the conclusion and has answered the reference in favour of the concerned workmen. There is no infirmity or illegality in the impugned award.
20. The following facts are admitted in this case:
(i) The concerned workmen were engaged by the petty contractor, M/s. Ravi & Company, which was a sub-contractor under HSCL. The concerned workmen got their wages from M/s. Ravi & Company and were retrenched in May, 1991 on payment of the wages and retrenchment compensation.
(ii) The concerned workman are no more on roll of M/s. Ravi & Company after May, 1991.
(iii) There is nothing on record to show that the construction of civil work of washery is of prohibited category.
21. The claim of the concerned workmen was based on the principle laid down in the cases of Secretory, Hariyana Steel Electricity Board (Supra) and Air India Statutory Corporation (Supra). But the Constitution Bench of the Supreme Court in its decision in Steel Authority of India Ltd. and Ors. has overruled the said earlier view. The Apex Court, while discussing the legal principles underlying in the provisions of CLRA Act, came to the following conclusions:
89. In the light of the above discussion we are unable to perceive in Section 10 any implicit requirement of automatic absorption of contract labour by the principal employer in the establishment concerned on issuance of notification by the appropriate Government under Section 10(1) prohibiting employment of contract labour in a given establishment.
XX XX XX XX 1O5. The principle that a beneficial legislation needs to be construed liberally in favour of the class for whose benefit it is intended, does not extend to reading in the provisions of the Act what the legislature has not provided whether expressly or by necessary implication, or substituting remedy or benefits for that provided by the legislature, we ' have already noticed above the intendment of the CLRA Act that it regulates the conditions of service of the contract labour and authorizes in Section 10(1) prohibition of contract labour system by the appropriate Government on consideration of factors enumerated in Sub-section (2) of Section 10 of the Act among other relevant factors. But, the presence of some or all those factors, in our view, provides no ground for absorption of contract labour on issuing notification under Sub-section (1) of Section 10. Admittedly, when the concept of automatic absorption of contract labour as a consequence of issuing notification under Section 10(1) by the appropriate Government, is not alluded to either in Section 10 or at any other place in the Act and the consequence of violation of Sections 7 and 12 of the CLRA Act is explicitly provided in Sections 23 and 25 of the CLRA Act, it is not for the High Courts or this Court to read in some unspecified remedy in Section 10 or substitute for penal consequences specified in Sections 23 and 25 a different sequel, be it absorption of contract labour in the establishment of principal employer or a lesser or a harsher punishment. Such an interpretation of the provisions of the statute will be far beyond the principle of ironing out the creases and the scope? of interpretative legislation and as such, clearly impermissible. We have already held above, on consideration of various aspects, that it is difficult to accept that Parliament intended absorption of contract labour on issue of abolition notification under Section 10(1) of the CLRA Act.
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120. We hove also perused all the Rules and forms prescribed thereunder. It is clear that at various stages there is involvement of the principal employer. On an exhaustive consideration of the provisions of the CLRA Act we have held above that neither they contemplate creation of direct relationship of master and servant between the principal employer and the contract labour nor can such relationship be implied from the provisions of the Act on issuing notification under Section 10(1) of the CLRA Act, a fortiori much less can such a relationship be found to exist from the Rules and the forms made thereunder.
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125. The upshot of the above discussion is outlined thus:
(1)(a) Before 28-1-1986, the determination of the question whether the Central Government or the State Government is the appropriate Government in relation to an establishment, will depend, in view of the definition of the expression "appropriate Government" as stood in the CLRA Act, on the answer to a further question, is the industry under consideration carried on by or under the authority of the Central Government or does it pertain to any specified controlled industry, or the establishment of any railway, cantonment board, major port, mine or oilfield or the establishment of banking or issuance of company? If the answer is in the affirmative, the Central Government will be the appropriate Government; otherwise in relation to any other establishment the Government of the Slate in which the establishment was situated, would be the appropriate Government;
(b) After the said date in view of the new definition of that expression, the answer to the question referred to above, has to be found in Clause (a) of Section 2 of the Industrial Disputes Act; if (i) the Central Government company/undertaking concerned or any undertaking concerned is included therein eo nomine, or (ii) any industry is carried on (a) by or under the authority of the Central Government, or (b) by a railway company; or (c) by a specified controlled industry, then the Central Government will be the appropriate Government; otherwise in relation to any other establishment, the Government of the State in which that other establishment is situated, will be the appropriate Government.
(2)(a) A notification under Section 10(1) of the CLRA Act prohibiting employment of contract labour in any process, operation or other work in any establishment has to be issued by the appropriate Government:
(1) after consulting with the Central Advisory Board or the State Advisory Board, as the case may be, and (2) having regard to
(i) conditions of work and benefits provided for the contract labour in the establishment in question, and
(ii) other relevant factors including those mentioned in Sub-section (2) of Section 10;
(b) Inasmuch as the impugned notification issued by the Central government on 9-12-1976 does not satisfy the aforesaid requirements of Sec/ion 10, it is quashed but we do so prospectively i.e. from the date of this judgment and subject to the clarification that on the basis of this judgment no order passed or no action taken giving effect to the said notification on of before judgment, shall be called in question in any tribunal of court including a High Court if it has otherwise attained finality and/or it has been implemented.
(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 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 establishment concerned.
(4) We overrule the judgment of this is Court in Ali India Case prospectively and declare that any direction issued by any industrial adjudicator/any court including the High Court, for absorption of contract labour following the judgment in Air India Case 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.
(emphasis supplied) (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 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 with 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 regularize the services of the contract labour in the establishment concerned subject to the conditions as may be specified by it for that purpose in the light of para 6 here under.
(6) If the contract is found to be genuine and prohibition notification under Section 10(1) of the CLRA Act in respect of the establishment concerned has been issued by the appropriate Government prohibiting employment of contract labour in any process, operation or other work of any establishment and wherein such process, operation or 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 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.
22. The said observations and findings of the Supreme Court in Steel Authority of India Ltd.'s case (Supra) are sufficient to upset the findings arrived at by the Tribunal based on earlier decisions of the Apex Court, which was overruled by the said subsequent decision of the Constitution Bench.
23. In yet another recent decision of the Constitution Bench of the Supreme Court in the case of State of Karnataka v. Uma Devi (Supra), it has been held that the regularisation of a person in permanent job without following the due procedure is violative of Articles 14 and 16 of the Constitution of India. In the case of Indian Drugs & Pharmaceuticals Ltd. (Supra), same principle has been applied with regard to employment in industrial concerned and in the case of industrial disputes.
24. Learned Tribunal without taking into consideration of the recent decisions of the Hon'ble Supreme Court and without proper appreciation of the provision of CLRA Act and material on record has erroneously held that concerned workmen are entitled for regularization as permanent employees by the management of the BCCL.
25. In view of the legal position, as discussed above, the impugned award cannot sustain and is liable to be set aside.
26. In the result, this writ petition is allowed. The impugned award dated 20th March, 2001 is set aside. However, in the circumstances of the case, there shall be no order as to costs.