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10. The aspects relating to contributions to ESI and PF, it was conceded even by the learned counsel appearing for the workmen were statutory liabilities on the principal employer and therefore, they would themselves not prove that workmen had been directly engaged by them. The provision for medical facilities was also the duty of the occupier to provide to all the workmen including workmen through contractors under the provisions of the Factories Act and therefore, even the said feature will not be conclusive evidence of direct engagement by the management. The provision for shoes and uniform, though they were in the nature of other allowances that even the workmen under the contractor were assured of, by parity in treatment under the Wage Board Award, it must be noticed that these provisions ought to have been provided only by the contractors themselves and what the Wage Board provided was the workmen under the contractors were entitled to the same privileges and allowances as other workmen directly employed by the management. It ought not to be understood that the management itself was liable for making provision for these allowances to the workmen under the contractors. It was at best only a provision enjoining the contractors to provide a parity in treatment to how the management would treat its own workmen in the matter of such allowances. Let us assume for the moment that even if the workmen had directly been provided these provisions like shoes or uniform, it ought not to be taken as a decisive factor to consider the alleged sham character of the contract. The provision for conveyance and cycle allowances was wholly different but the management did not pay on their own. It was done on the directions of the Labour Court in a different case, when in an application under Section 33 C(2) there had been orders. It must be remembered that the orders did not come through any reference after a dispute under section 10 of the ID Act. Orders under section 33 C(2) are invariably summary adjudications and the decision rendered therein shall have no bearing in a subsequent case when a comprehensive decision was required where there had been a relationship of master and servant. If an inference had been made on a dispute whether the workmen were entitled to such allowances and an adjudication was sought whether there existed relationship of master and servant, the order passed by the Labour Court finding the workmen to have been held under a direct contract the managment could be taken as relevant but never conclusive. Further, the communications of the contractor that all these workmen had been given to them by the management and the management itself had at some point of time given to the factory manager some directions for training these workmen though not irrelevant, are definitely not conclusive.

13. A sham instrument is no instrument in the eye of law and it is merely a ruse to which what the law otherwise prohibits. The Wage Board's Award allowed for engagement of contract labour for the activity of loading and unloading that included packing. So long as all the workmen conceded that they were working only in the Packing Division, they cannot plead that they shall be treated as workmen engaged directly by the management. If they had been assigned lesser duties, which were less onerous than loading and unloading and at some point of time, the management had decided to do those lesser duties through their own workmen employed directly, there were two options open which were more in the nature of an option for a contractor than for a workman. One, the contractor can shift all these workmen to some other units or place where they had a control to engage such workmen, who were capable of doing only less onerous duties. Two, the contractor had a right to expect them to undertake onerous duties and serve appropriate notices for change in service conditions and if the workmen were willing, they could have been employed for other onerous duties on fresh terms without putting an end to their respective engagements. The management that had the power to employ contract labour for certain activities does not lose its right to have their own workmen in respect of those jobs for which they could have also availed of contract labour. Consequently, if at some point of time, the lesser duties in the packing section availed through contract labour was decided to be done by the workmen directly employed by the management, it had every power to do so. If it resulted in slicing down the arrangement of workforce through contractors, the contractors might have a remedy against the management if there had been any violation of the contractual terms. The workmen themselves cannot have a remedy against the management in such a case. The reasoning of the Labour Court, in my view, is faulted only by a fact that certain of the communications made by the contractors had made mention of the fact that the workmen had been handed over to them by the management or the services of some other of the workmen were not required by the management were taken to be instances of proof that the management itself had directly employed the workmen.

14. In this case, the Labour Court had assumed the character of the contract agreement with respondent Nos.2 and 3 as a sham one too lightly without actually examining whether the management had an oblique motive or a deliberate intent to create a fraud on the statute or the obligations created under any of the provisions of the Industrial Disputes Act. A sham transaction is indeed a specie of fraud. Such fraudulent intent cannot be inferred only by the fact that the management retained some degree of control over the workmen under the contract basis. After all, the contract labour had not been working outside the factory. They were within the factory and inevitably there has to be some manner of control and homogenous approach of the management at least, in so far as extending minor privileges like health and hygiene. If the management had provided shoes or uniform or if they had provided medical facilities, it should be rather seen as appropriate acts of the management without making needless distinctions even for benefits that ought to have been extended on a humane principle between workmen directly employed and workmen employed through contractors. In this case, acts of munificence and graceful acts of the management have been wrongly characterized as instances of sham and fraudulent behaviour. In National Thermal Power Corporation & others v Badri Singh Thakur & others (2008) 9 SCC 377, the Hon'ble Supreme Court was considering the claim of workmen seeking absorption in NTPC, when the corporation had been registered under section 7 of the Contract Labour (Regulation and Abolition) Act and the contractor had also been licensed under the Act. The Court held the CLRA Act governed the field in view of the supremacy of the Central Act over MP Industrial Relations Act and held so long as there was no prohibition under section 10 of the Act for engaging contract labour, there was no question of regularising the services of the labour directly under the management. The issue is akin to considering whether the contract labour could be seen as directly engaged by the management. The Labour Court's award, in so far as it finds that the contract was sham and finding that all the workmen were to be treated as directly engaged by the management is erroneous and accordingly set aside.