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29. The contract of the management with the contractor came to an end and the contract labour ceased to function in the concerned establishment and principal employer was prohibited from employing contract labour, it was submitted that some of the contractors filed writ petition before the Calcutta High Court . However, the fact remains that there was no stay granted by any Court for a period of one year up to 1994. There were several contractors under whom the contract workers were employed. The reference made in May, 1997 to CGIT, Jabalpur by the Central Government indicates that workers were employed by seven contractors. M/s Singhal Enterprises had employed 700 contract workers, M/s Power United 550, M/s I.S.S.Construction Co.450, M/s Sri Krishna Mehrotra 400, M/s Singhal Enterprises 50, M/s R.Harnath Reddi 59 and M/s Eastern Mineral Trading Agency had employed 85 contract workers. Only M/s Eastern Mineral Trading Agency obtained stay from Calcutta High Court of which 85 workers were involved. It is not shown any other aforesaid contractors obtained stay.In case some of the contractors with respect to the mines situated in West Bengal have obtained stay, that would not have inured for the benefit of contractors in the State of M.P. In the State of Madhya Pradesh, WP No.4968/1993 was filed which was dismissed by a Division Bench of this Court on 16.12.93. Ultimately after chequered history of litigation between the parties, the Apex Court has ordered that matter is such which should be adjudicated by the industrial adjudicator as Industrial Adjudicator can examine whether the agreement is sham and bogus.

33. Coming to the findings recorded by the Industrial Tribunal, in the instant case, the Tribunal has found that it has not been established that prior to 17.3.93 contract workers were the employees of SAIL and the contract was sham and bogus, however, it was sham and bogus after 17.3.1993. The Tribunal has held that wage slips were issued by the Contractors. However, it is apparent that wage slips register was also retained by the management and management used to retain the amount of provident fund and till it was proved that it has been credited to the accounts of the workers, the retained amount used to released to the contractors. We find that supervision and control was by management. The agreements entered into time to time prohibited employment of the contract labour in perennial and permanent nature of work. It has not been disputed that Dolomite & Lime Stone are necessary ingredients of manufacture of steel and work is perennial and permanent in nature. It has also not been disputed that Government of India has prohibited the aforesaid work to be taken from 17.3.93 by the contract labour, still it was taken by the SAIL from the workers without there being any interim stay till 1994 and thereafter also till 1996, and still it is not disputed at Bar the work is being taken by and large through the contract labours.The prohibition notification has not been enforced for the reasons best known to the SAIL so far. It has failed to satisfy this Court that there is any interim stay with respect to Koteshwar Mines obtained by any contractor which is operative as on today. A vague submission has been raised that some of the contractors of SAIL had obtained interim stay from Calcutta High Court. In case any of the contractors from Kuteshwar Limestone had obtained the stay, till which date it continued, whether the petition is pending, counsel on behalf of the SAIL was unable to point it out specifically.

(xiv) There was no concept of contract labour after 17.3.93. Thus, taking work from the contract workers under the same very contracts was clearly sham and bogus. It was prohibited under the law also.

In our opinion the contract was sham and bogus considering the functioning of the mines.There was absolutely no justification after 17.3.93 to continue with the contract workers.By their continuance on lifting the veil, it becomes clear that the contract under the guise of which they were continuing was sham and bogus as found by the Tribunal also and in our opinion there was relationship of master and servant between the workers and principal employer.

40. There is yet another important facet in the case due to which the workers are entitled for relief of reinstatement, even assuming for the time being that contract was not sham and bogus, however, fact remains that prohibition notification to employ the contract workers came into force with effect from 17.3.93. Work could not have been taken thereafter from the contract workers. The Apex Court in Steel Authority of India Ltd. and others vs. National Union Waterfront Workers and others (supra) has laid down in para 125 (6) that preference has to be given to the erstwhile contract labour while employing the regular workmen. Thus, the preference has to be given to the erstwhile contract labours by relaxing the condition as to maximum age, etc. subject to the suitability. It is not proper for SAIL to continue with the contract labour once the notification of prohibition under Section 10(1) of CLRA Act has come into force in the year 1993. Not appointing the regular workers and taking the work from contract workers is illegal, arbitrary and violative of the notification issued under Section 10 of CLRA Act.