Friday, June 24, 2011

GOVT.TO PROVIDE INFRASTRUCTURES TO LABOUR COURT/TRIBUNALS-K.CHANDRU

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED : 14.06.2011

CORAM

THE HONOURABLE MR.JUSTICE K.CHANDRU

W.P.NOs.1949 and 7558 of 2010

1.S.Gunasekaran
2.K.M.Ramesh
Secretary,
Labour Law Practitioners' Association
157,Additional Law Chambers,
High Court Buildings,
Chennai-600 104. .. Petitioners in
W.P.No.1949 of 2010

R.Chandaran .. Petitioner in
W.P.No.7558 of 2010

Vs.

1.The Government of Tamil Nadu,
rep by its Secretary to Government,
Labour and Employment Department,
Fort St. George,
Chennai-600 009.
2.The Secretary to Government,
Law Department,
Government of Tamil Nadu,
Fort St. George,
Chennai-600 009.
3.The Presiding Officer,
Principal Labour Court,
High Court Buildings,
Chennai-600 104. .. Respondents in
W.P.No.1949 of 2010

1.The Presiding Officer,
Labour Court,
Coimbatore.
2.The Management of
Lower Kothagiri Industrial
Cooperative Tea Factory,
Bazzar Post, Kothagiri,
Nilgiris. .. Respondents in
W.P.No.7558 of 2010
W.P.No.1949 of 2010 is preferred under Article 226 of the Constitution of India praying for the issue of a writ of mandamus to direct the respondents 1 and 2 to create sufficient infrastructure for effective implementation/enforcement of the Awards and orders passed by the Labour Courts and Industrial Tribunal as per Section 11-B of the industrial Disputes, Act 1947 introduced vide Tamil Nadu Act 45 of 2008 with effect from 07.11.2008 within a time frame.
W.P.No.7558 of 2010 is preferred under Article 226 of the Constitution of India praying for the issue of a writ of mandamus to direct the first respondent to number the execution petition in C.F.R.No.3853 of 2009 under Section 11-B of the I.D. Act, take it on file and dispose of the same in accordance with law.

For Petitioners : Mr.Balan Haridoss in W.P.No.1949 of 2010
Mr.G.B.Saravana Bhavan
in W.P.No.7558 of 2010

For Respondents : Mr.Senthilkumar, AGP and
Mr.R.Murali, GA for RR1 and 2
in W.P.No.1949 of 2010


- - - -

COMMON ORDER

These two writ petitions came to be posted before this court on being specially ordered by the Hon'ble Chief Justice vide his order dated 13.4.2010.
2.In the first writ petition, the first petitioner is the workmen, who was an employee of Tamil Nadu Civil Service Corporation and covered by the Award in I.D.No.359 of 1979 passed by the Labour Court, which was upheld by this court in the writ petition as well as in a writ appeal. He sought for the execution of the Award by filing an application under Section 11-B of the Industrial Disputes Act on 08.12.2009. Since the Labour Court do not have any infrastructure pursuant to the State amendment to the Industrial Disputes Act, the second petitioner Association took up the cause and filed the first writ petition seeking for a direction to first and second respondents to create sufficient infrastructure for the effective implementation of the Award or order passed by the Labour Court and Industrial Tribunal as per Section 11-B of the I.D. Act introduced by Tamil Nadu Act 45/2008 with effect from 7.11.2008 within a time frame. In that writ petition, notice of motion was ordered on 03.12.2010.
3.In the meanwhile, the second writ petition came to be filed. The petitioner in that writ petition is a workman covered by I.D.No.484 of 1999, dated 8.7.2002, wherein and by which he was given the relief of reinstatement with service continuity but without backwages. Since the said award was not implemented, he filed a petition under Section 33C(2) of the ID Act being C.P.No.509 of 2003 before the Labour Court, Coimbatore. In that computation petition, the Labour Court had computed a sum of Rs.83,329/- as due and payable to the petitioner. It was at that stage, the Tamil Nadu Act 45 of 2008 was enacted, wherein the Labour Courts were specifically empowered with power to execute its own award as a decree of the civil court by introducing Section 11-B of the ID Act. The said amendment was brought into force with effect from 07.11.2008. Therefore, the petitioner filed an execution petition before the Labour Court in an unnumbered E.P. in the year 2009. The Presiding Officer of the Labour Court had returned the papers by stating that there were no Government orders issued granting the power to the Labour Court. Even though the petitioner several times represented his petition, the Labour Court repeatedly returned the application by stating that since no Government order was issued, the application cannot be taken on file. It was a rather unfortunate situation made by the Labour Court which forced the petitioner to come to this court seeking for a direction to the Labour Court to entertain his execution petition filed under Section 11-B of the Act and to deal with the same. When that writ petition came up on 15.4.2010, it was directed to be posted along with the first writ petition.

4.Since the issue involved in both the writ petitions are common, they were heard together. It must be noted that the Industrial Disputes Act, 1947 (Central Act 14/1947) was enacted with effect from 11.3.1947. The Act was intended to make provisions for investigation and settlement of the industrial disputes and for settling certain other issues. The Labour Courts were created under Section 7 of the said Act for adjudication of disputes relating to matters specified in the Second Schedule and for performing such other functions as may be assigned to them under this Act. Under Section 7A, similarly Industrial Tribunals were created for the very same purpose and for adjudicating the disputes relating to matters specified in the Second and Third Schedules and also to perform such other functions as may be assigned to them. The powers of Labour Courts are conferred under Section 11. Under section 11(3), the Labour Courts and Industrial Tribunals were granted same powers as are vested with the Civil Courts under the Code of Civil Procedure, 1908 when trying the suit in respect of enforcement of attendance of any person, examining witnesses on oath, compelling production of documents and material objects, issuing commission for examination of witnesses and in respect of other matters as may be prescribed. Normally, the Labour Court gets its power of adjudication on reference made by an appropriate Government under Section 10(1). But however in the State of Tamil Nadu by the introduction of Section 2A(2), routing the disputes by getting orders from the State Government was dispensed with and it was enough if the workmen who is non employed to go before a Conciliation Officer. After the failure of conciliation, if he files the claim statement along with the failure report it will be considered as a deemed reference of the industrial dispute.
5.After the introduction of Section 2A in the year 1965, number of disputes brought to the Labour Courts have increased by several folds. This was because an individual dispute need not be sponsored by a trade Union. The workmen have been given power to approach the Labour Courts directly in case of his non employment. The Labour Court after the adjudication of a dispute passes an Award. Such an Award is published in terms of Section 17 of the ID Act. Once an Award is published, it becomes operational within 30 days from the date of publication of the Award. In case, if the employer did not implement the award which is favourable to the workman, two courses are open to the workman. One is to prosecute the employer under Section 29 of the ID Act or in alternative seek for the computation of monetary benefits arising out of such award in terms of Section 33C(2) of the I.D. Act. If the award itself quantifies the monetary benefits or after computation of monetary benefits of Award by the Labour Court under Section 33C(2) of the ID Act, if amounts are not paid by an employer, Section 33C(1) of the ID Act provides for recovery of money dues by an employer on a certificate issued by the appropriate Government to collect or recover amounts as if it is an arrear of land revenue.
6.Therefore, the Government from the time when the ID Act was enacted was utilizing the power under Section 33C(1) to recover the amounts as an arrear of land revenue. It involves a cumbersome process. The workmen approaching the State Government for a certificate will have to produce proof for his monetary entitlement and thereafter, the Government after making an enquiry and giving show cause notice to the employer will issue an order in the form of the Government Order directing the concerned District Collector to recover the amount. The District Collector concerned thereafter directs his subordinate Tahsildar in-charge of the Taluk to recover the amount from the concerned employer as arrear of land revenue. Many occasions, the workmen got dissatisfied with the procedures because subordinate revenue officials never made any effort to recover amounts earnestly either because the employer was a powerful person in that area or their arms were greased for not taking an action. This had resulted the workmen approaching this Court by way of proceedings under Article 226 of the Constitution for directing the District Collector to make efforts to recovery the amount. Thereafter, some efforts were taken by the revenue officials to implement the order of the State Government. In this process, many times the employer get disappeared from the scene or the properties were altered or alienated.
7.When this Court gave a direction to furnish the number of certificates issued under Section 33C(1), the learned Additional Government Pleader produced the following details in respect of the certificates issued under Section 33C(1) for the last years which reads as follows:
Sl.No. Year No. of certificates issued
1 2008 103
2 2009 88
3 2010 46
-------
Total 237
-------
8.It was because of the unsatisfactory nature of the execution machinery, the Labour Advisory Board and many trade unions were sought for conferment of execution power to the Labour Courts themselves. The State Government after accepting such pleas had brought a legislation and amended the Industrial Dispute Act by Tamil Nadu Act 45 of 2008. The amendment Act reads as follows:
1.(1)This Act may be called the Industrial Disputes (Tamil Nadu Amendment) Act, 2008.
(2)It extends to the whole of the State of Tamil Nadu.
(3)It shall come into force on such date as the State Government may, by notification, appoint.
2.After section 11-A of the Industrial Disputes Act, 1947, the following section shall be inserted, namely:-
"11-B.Power of a Labour Court or Tribunal to execute its award by decree.-A Labour Court or a Tribunal shall have the power of a civil court to execute its own award as a decree of a civil court and also to execute any settlement as defined in clause (p) of section 2 as a decree."
(Emphasis added)
9.The amendment also received the assent of the President of India on 18.09.2008. As required under Section 1(3) of the Amendment Act, the State Government had issued G.O.Ms.No.134, Labour and Employment Department, dated 07.11.2008 and notified the amendment. The said notification was published in the Tamil Nadu Government Gazette Extraordinary in Part II Section 2, dated 7.11.2008. The notification reads as follows:
"In exercise of the powers conferred by sub-section (3) of Section 1 of the Industrial Disputes (Tamil Nadu Amendment) Act, 2008 (Tamil Nadu Act 45 of 2008), the Governor of Tamil Nadu hereby appoints the 7th November 2008 as the date on which the said Act shall come into force."

10.Notwithstanding bringing into force of the amendment, the Labour Courts were unable to take up such applications in the absence of necessary infrastructures, i.e., additional staff required for executing the Award and settlements. Therefore, complaints were received as in the case of the two writ petitioners and request for creating infrastructures for the Labour Courts in the State of Tamil Nadu. The following courts are functioning under Sections 7 and 7A of the Industrial Disputes Act constituted by the State Government.
i)Industrial Tribunal, Chennai.
ii)Principal Labour Court, Chennai.
Iii) I Additional Labour Court, Chennai.
iv) II Additional Labour Court, Chennai.
v) III Additional Labour Court, Chennai.
vi)Labour Court, Coimbatore.
Vii)Labour Court, Madurai.
Viii)Labour Court, Salem.
ix)LAbour Court, Tiruchirappalli.
x)Labour Court, Tirunelveli.
xi)Labour Court, Cuddalore.
Xii)Labour Court, Vellore
xiii)Additional Labour Court, Vellore.
Thus there are 12 Labour Courts and one Industrial Tribunal for the 30 Revenue Districts in Tamil Nadu. There is only one Labour Court for each 3 Revenue Districts. By the said amendment, the Labour Court is not only expected to execute its own Awards, but also settlements signed between the parties. The term "settlement" is defined under Section 2(p) of the I.D. Act which means settlement arrived at in the course of conciliation proceedings and also the written agreement between the employer and workmen arrived at otherwise then in the course of conciliation proceedings. Therefore, the Labour Court by amendment is not only expected to execute its Awards and the orders passed under Section 33C(2), but also settlements between the employer and the workmen either bipartite (Section 18(1)) or tripartite (S.12(3) read with S.18(3)). This will create enormous work for the Labour Courts and without necessary supporting staff, it will be unthinkable that the Labour Court can execute such execution petitions as required under law.
11.In the first writ petition, the Labour Law Practitioners' Association also sent a representation to the State Government on 21.12.2009. Therefore, when the matter came up on 16.4.2010, this Court in view of the important issues raised and the urgency pleaded, had directed the Secretary to the Government, Labour Department, (first and second respondents herein) to file a proposal for sanctioning additional staff and infrastructure in view of the introduction of Section 11B. Obviously, the Government did not have an idea about the additional supporting staff and infrastructure required for bringing into force the amendment. Therefore, the Government by its letter dated 22.4.2010 sent a reply. The operative portion of the reply reads as follows:
"While the proposal for insertion of a proviso to section 11-B in order to enable the creation of posts of bailiffs to Labour Courts/Industrial Tribunals, is under the consideration of the Government, the Hon'ble High Court of Madras have issued the direction to file proposal to sanction additional staff and infrastructure in view of the introduction of section 11-B in the Industrial Disputes Act by Tamil Nadu Amendment Act 45 of 2008 and the consequential Government Order issued in G.O.No.134, Labour and Employment Department dated 7.11.2008. In this connection, in compliance with the directions of the High Court, I am to request the Registrar General, High Court to send necessary proposals to provide one Head Bailiff and a junior Bailiff along with infrastructure to each of the 12 labour courts and Industrial Tribunal functioning in the State of Tamilnadu, in view of the introduction of section 11-B in the Industrial Disputes by Tamil Nadu Amendment Act 45 of 2008 and the consequential Government Order issued in G.O.No.134, Labour and Employment Department dated 7.11.2008 so as to enable the Government to accord sanction for the same and to comply with the directions of the Honourable High Court of Madras."
(Emphasis added)
12.Thereafter, pursuant to the direction issued by this court on 16.4.2010, a status report was sent on 22.4.2010. In that report, it was stated as follows:
"In this connection, in compliance with the directions of the High Court, the Government have requested the Registrar General to send necessary proposals to appoint required number of Bailiffs and to provide infrastructure to labour courts and Industrial Tribunal functioning in the State of Tamilnadu, in view of the introduction of section 11-B in the Industrial Disputes Act by Tamil Nadu Amendment Act 45 of 2008 and the consequential Government Order issued in G.O.No.134, Labour and Employment Department dated 7.11.2008, so as to enable the Government to accord sanction for the same and comply with the directions of the Honourable High Court of Madras."

13.Pursuant to the request made by the State Government, the Registrar General of this Court sent a proposal after consulting with the Labour judiciary giving details of the total number of staff, pay scales as well as expenditure towards recurring as well as non recurring expenditures including infrastructures and additional accommodation that was required. The operative portion of that letter reads as follows:
"I am, therefore, to request that necessary orders of the Government for the sanction of 34 posts along with infrastructure for the creation of Nazareth establishment to each Labour Courts functioning ie. 8 units in the state of Tamil Nadu, may kindly be obtained and communicated to the High Court, immediately."
14.After the receipt of the proposal sent by the High Court, the Government had submitted a status report on 6.8.2010. In page 4 of the Status Report, it was stated as follows:
"It is submitted that for the sanction the Non recurring and Recurring expenditure the consent of Finance Department has to be obtained. For creation 34 posts in each Labour Courts, the consent of Home, Finance and P & AR Department and then the approval of Staff Committee is required.

After obtaining the consent from both the Advisory Department the file has to be circulated and order in circulation has to be obtained.

As these administrative procedure are mandatory and to followed scrupulously, it will take some more time to finalise the issue. It is submitted that complying the order of this Hon'ble Court, it will take some more time. Hence, it is just and necessary to grant extension of time to comply fully the order of this Hon'ble Court.

It is also submitted that if the extension of time is not granted, the Respondents will be put into much hardship.

In view of the facts and circumstances as stated above, it is humbly prayed that this Hon'ble Court may be pleased to grant extension of time for a period of 3 months to comply with the order dated 16.04.2010 in W.P.No.1949 of 2010 and thus render justice." (Emphasis added)

15.Thereafter, the Government sent letters asking for further particulars regarding details of the staff available, existing infrastructure available and the financial commitments involved. Apparently, these two letters were not signed by the Secretary, but by the Additional Secretary. Even though in the earlier letters sent and reflected in the status report, all the details were made available, attempts were made to delay the issue intentionally. The Government had its own reservation about sanctioning such amounts which may work out to Rs.4.5 Crores per annum with additional amounts towards creation of infrastructure. However suddenly there was an volte face by the Government. The first respondent sent a reply dated 02.11.2010 to the Registrar General. The operative portion of the reply found in paragraphs 4 and 5 reads as follows:
"4.Now the Government of India, has amended the Industrial Disputes Act 1947, Section 11 as follows.
In section 11 of the Principal Act, after sub section (8), the following sub sections shall be inserted, namely:-
"Every award made, order issued or settlement arrived at by or before Labour Court or Tribunal or National Tribunal shall be executed in accordance with the procedure laid down for execution of orders and decree of a civil court under Order 21 of the code of civil procedure, 1908.
The Labour Court or Tribunal or National Tribunal, as the case may be shall transmit any award, order or settlement to a civil court having jurisdiction and such civil courts shall execute the award, order or settlements as if it were a decree passed by it"
5)In the light of the above amendment made by Government of India, I am directed to request you to offer your opinion to Government urgently." (Emphasis added)
16.As noted, the Parliament had enacted Central Act 24/2010 and amended the Industrial Disputes Act. Section 7 of the Amending Act reads as follows:
7.In section 11 of the principal Act, after sub-section (8), the following sub-sections shall be inserted, namely:-
"(9)Every award made, order issued or settlement arrived at by or before Labour Court or Tribunal or National Tribunal shall be executed in accordance with the procedure laid down for execution of orders and decree of a Civil Court under order 21 of the Code of Civil Procedure, 1908.
(10)The Labour Court or Tribunal or National Tribunal, as the case may be, shall transmit any award, order or settlement to a Civil Court having jurisdiction and such Civil Court shall execute the award, order or settlement as if it were a decree passed by it."
17.The said amendment was brought into force with effect from 15.9.2010 and the same was notified in the Gazette of India, dated 15.09.2010 in Part II Section 3(ii). Immediately on receipt of the said reply, the Registrar General sent a detailed reply stating that the State amendment continues to be valid and is in operation. Therefore, the Government should sanction necessary infrastructure so as to make execution machinery attached to the Labour Court effective. Notwithstanding the request of the High Court, the first respondent State sent a letter dated 4.2.2011 enclosing a status report. After setting out the previous history, in paragraph 13, it was stated as follows:
"13.....it is clear that the provisions of sub-sections (9) and (10) of section 11 of the Industrial Disputes Act, 1947, as inserted by the Parliament in Central Act 24 of 2010, shall prevail over the provisions of section 11-B of the said Act, as inserted by Tamil Nadu Act 45 of 2008 and after coming into force of the said Central Act 24/2010, the Civil Court alone is competent to execute the award, or order or settlement of the Labour Court or Tribunal. Hence, question of providing any infrastructure for the Labour Court consequent on introduction of section 11-B does not arise." (Emphasis added)

18.In view of the stand taken by the State, this Court directed the State Government to file a counter affidavit. Accordingly, a counter affidavit, dated Nil (2011) was filed on behalf of first and second respondents. The second petitioner Association also filed an objection statement dated 14.3.2011.
19.In view of the rival contentions, it has to be seen whether the prayer of the petitioners can be granted by this Court?
20.The dispute revolve around a short campus. Whether in view of the Central amendment Act 24/2010, dated 18.8.2010, the Tamil Nadu amendment Act 45/2008 (introducing Section 11-B) stood eclipsed in the light of the Article 254(1) of the Constitution and Whether the State Amendment was repugnant to the amendment made by the Central Act and that the Central law will prevail over the State law?
21.Reliance was placed upon a judgment of the Supreme Court in T. Barai v. Henry Ah Hoe reported in (1983) 1 SCC 177 by the learned Additional Government Pleader. He referred to paragraph 15 of the said judgment, which reads as follows:
"15.There is no doubt or difficulty as to the law applicable. Article 254 of the Constitution makes provision firstly, as to what would happen in the case of conflict between a Central and State law with regard to the subjects enumerated in the Concurrent List, and secondly, for resolving such conflict. Article 254(1) enunciates the normal rule that in the event of a conflict between a Union and a State law in the concurrent field, the former prevails over the latter. Clause (1) lays down that if a State law relating to a concurrent subject is repugnant to a Union law relating to that subject, then, whether the Union law is prior or later in time, the Union law will prevail and the State law shall, to the extent of such repugnancy, be void. To the general rule laid down in Clause (1), Clause (2) engrafts an exception viz. that if the President assents to a State law which has been reserved for his consideration, it will prevail notwithstanding its repugnancy to an earlier law of the Union, both laws dealing with a concurrent subject. In such a case, the Central Act will give way to the State Act only to the extent of inconsistency between the two, and no more. In short, the result of obtaining the assent of the President to a State Act which is inconsistent with a previous Union law relating to a concurrent subject would be that the State Act will prevail in that State and override the provisions of the Central Act in their applicability to that State only. The predominance of the State law may however be taken away if Parliament legislates under the proviso to Clause (2). The proviso to Article 254(2) empowers the Union Parliament to repeal or amend a repugnant State law even though it has become valid by virtue of the President s assent. Parliament may repeal or amend the repugnant State law, either directly, or by itself enacting a law repugnant to the State law with respect to the same matter . Even though the subsequent law made by Parliament does not expressly repeal a State law, even then, the State law will become void as soon as the subsequent law of Parliament creating repugnancy is made. A State law would be repugnant to the Union law when there is direct conflict between the two laws. Such repugnancy may also arise where both laws operate in the same field and the two cannot possibly stand together, e.g., where both prescribe punishment for the same offence but the punishment differs in degree or kind or in the procedure prescribed. In all such cases, the law made by Parliament shall prevail over the State law under Article 254(1)......" (Emphasis added)

It is not clear as to how the said judgment will have any assistance to the respondent State when there is no repugnancy shown and that the two laws can possibly stand together. Further, the case referred to related to imposition of penal provisions and therefore, invocation of Article 21 arose in that case.
22.It must be noted that the Tamil Nadu Act 45 of 2008 was brought into effect from 7.11.2008 and it had received the assent of the President of India on 18.09.2008. Insofar as the amendment is concerned, the State law will prevail in the State of Tamil Nadu in terms of Article 254(2) of the Constitution. Since the question largely revolved around the question of repugnancy, it is necessary to refer to the Article 254 (1) and (2) and it reads as follows:
"254.Inconsistency between laws made by Parliament and laws made by the Legislatures of States.- (1)If any provision of a law made by the Legislature of a State is repugnant to any provision of a law made by Parliament, which Parliament is competent to enact, or to any provision of an existing law with respect to one of the matters enumerated in the Concurrent List, then, subject to the provisions of clause (2), the law made by Parliament, whether passed before or after the law made by the Legislature of such State, or, as the case may be, the existing law, shall prevail and the law made by the Legislature of the State shall, to the extent of the repugnancy, be void.
(2)Where a law made by the Legislature of a State [***] with respect to one of the matters enumerated in the Concurrent List contains any provision repugnant to the provisions of an earlier law made by Parliament or an existing law with respect to that matter, then, the law so made by the Legislature of such State shall, if it has been reserved for the consideration of the President and has received his assent, prevail in that State:
Provided that nothing in this clause shall prevent Parliament from enacting at any time any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by the Legislature of the State."
23.Before deciding the repugnancy, it has to be seen whether there are any distinction between the Central Law and State Law. Insofar as the State legislation is concerned, the execution power is given to the Labour Court under Section 11-B to execute its Awards or the settlements as defined under Section 2(p). The Award as well as the settlement has to be treated as decrees of Civil Courts. But, the Central amendment had given execution power only in respect of the Awards or orders of the Labour Court or settlement arrived at by or before the Labour Court or Tribunal to be treated as decrees and to be executed in terms of Order 21 of CPC. As per the amendment in form of Sections 11(9) and 11(10), the Labour Court or the Tribunal as the case may be were directed to transmit the award or order or settlement to the civil court having jurisdiction. It is only that civil court that can execute the award, order or settlement as if decrees passed by it. A close reading of both the provisions will show that the State amendment had a wider impact, i.e., it is not only the Awards of the Labour Court and settlements culminated before the Labour Court, but even settlements arrived at between the employer and the workmen (either bipartite or tripartite) were also treated as decrees. The said power was not available for all types of settlements in the Central amendment. While the State amendment specified that it was the labour court should execute its Award and can have the power of a civil court to execute its awards or settlements, in the Central amendment, the Labour Courts are merely directed to transmit them to the civil court having jurisdiction for the purpose of executing the Awards or settlements.
24.It must be noted that both amendments can be said to be operating on different fields. In relation to the industry, where the Central Government is the appropriate Government it can create its own labour court and tribunal. Insofar as the State of Tamil Nadu is concerned, the Central Government by virtue of the power under Section 7A had created only one Central Government Industrial Tribunal-cum-Labour Court (CGIT) for the entire State. It did not have that much load of work which the State Labour Courts or Tribunal have and it may be possible either the Award or settlement entered before can be transmitted to the civil court having jurisdiction. But the same thing cannot be said to happen in respect of the State Labour Courts and Tribunal, because the work here is not only enormous, but the extended operation of Section 11-B will create more number of work as it not only covers adjudicated matters, but also the settlements arrived at between the parties. Therefore, it is possible to have both amendments stand together without there being any repugnancy to each other.
25.In respect of the contention that the amendment of the State legislature was repugnant due to the subsequent Central amendment, it has to be examined with the law relating to repugnancy and the scope of Article 254(2) in this regard. Under Article 246 of the Constitution, the subject matter of law that can be made by the Parliament and the legislature of the State are delineated. Under Article 246(2), the Parliament as well as the legislature of the State has power to make laws with reference to any matters enumerated in the List III of the Seventh Schedule of the Constitution known as the concurrent list. Item 22 deals with employment and unemployment. It is an admitted fact that the law relating to the present legislation comes under List III which is the concurrent list. When once the State legislature received the assent of the President, then in terms of Article 254(2), it will prevail over any Central legislation in that State. Even though it was argued that subsequent law made by the Parliament was to prevail, the proviso to Article 254(2) only enables the Parliament to make law at any time with reference to the same matter including the law adding, omitting, varying or repealing the law so made by the legislation. In the present case, nothing is seen from the Central Act 24/2010 that it was intended to omit or vary or repeal the law made by the State legislature. On the other hand, the Parliament made law for the entire country and did not even intend to eliminate the State enactment.
26.It will be worthwhile to refer to certain decisions of the Supreme Court which will have a bearing on the said subject.
27.The Supreme Court vide its judgment in Bhagwat Singh v. State of Rajasthan,(1964) 5 SCR 1 = AIR 1964 SC 444 dealt with the question of repugnancy in the Industrial Disputes Act i relation to the law made by the State legislature. In paragraph 14, it was stated as follows:
"14.It is unnecessary however to consider the merits of these contentions because the legislature has remedied the defects, if any, in the constitution of the Tribunal, by ending the Rajasthan Industrial Tribunal (Constitution and Proceedings) Validating Act, 1959, which was reserved for the consideration of the President of India and has received his assent. By Section 2(1) of that Act, notwithstanding any judgment, decision or order of any Court and notwithstanding any defect or want of form or jurisdiction, the Industrial Tribunal for Rajasthan, constituted under Section 7 of the Industrial Disputes Act, 1947 by Government notification dated June 2, 1953, as amended by order dated March 9, 1956, shall, as respects the period commencing on the 10th day of March 1957 and ending with the 15th day of April, 1949, be deemed to have been duly constituted under Section 7-A of the said Act. By sub-section (2) it is provided that notwithstanding any judgment, decision or order of any court all references made to and all proceedings taken and orders passed by the Industrial Tribunal constituted in sub-section (1) between the period March 10, 1957 and April 15, 1959, shall be deemed respectively to have been made, taken and passed as if the said Tribunal were constituted under Section 7 A of the Act. It is clear from the validating provisions that the Tribunal Originally constituted under Section 7 of the Industrial Disputes Act, 1947, before it was amended by Act 36 of 1956 is to be deemed to have been duly constituted under Section 7A, and the reference made on December 18, 1957 is to be deemed to have been made as if the Tribunal were constituted under Section 7A of the amended Act. The Validating Act is because of Item 22 List III of the Seventh Schedule to the Constitution within the competence of the State Legislature, and it was reserved for the consideration of the President and has received his assent. It must by virtue of Article 254(2) prevail in the State of Rajasthan."
28.The Supreme Court in M. Karunanidhi v. Union of India reported in (1979) 3 SCC 431 has held that presumption is always in favour of the constitutionality of a statute and before any repugnancy can arise, certain conditions must be satisfied and there can never be any repeal by implication unless the inconsistency appears on the face of the two statutes. In paragraphs 24 and 35, the Supreme Court had observed as follows:
"24.It is well settled that the presumption is always in favour of the constitutionality of a statute and the onus lies on the person assailing the Act to prove that it is unconstitutional. Prima facie, there does not appear to us to be any inconsistency between the State Act and the Central Acts. Before any repugnancy can arise, the following conditions must be satisfied:
1. That there is a clear and direct inconsistency between the Central Act and the State Act.
2. That such an inconsistency is absolutely irreconcilable.
3. That the inconsistency between the provisions of the two Acts is of such nature as to bring the two Acts into direct collision with each other and a situation is reached where it is impossible to obey the one without disobeying the other.
35.On a careful consideration, therefore, of the authorities referred to above, the following propositions emerge:
1. That in order to decide the question of repugnancy it must be shown that the two enactments contain inconsistent and irreconcilable provisions, so that they cannot stand together or operate in the same field.
2. That there can be no repeal by implication unless the inconsistency appears on the face of the two statutes.
3. That where the two statutes occupy a particular field, but there is room or possibility of both the statutes operating in the same field without coming into collision with each other, no repugnancy results.
4. That where there is no inconsistency but a statute occupying the same field seeks to create distinct and separate offences, no question of repugnancy arises and both the statutes continue to operate in the same field."
29.The Supreme Court while permitting the law to be made by both Central and State Government has held that in order to find the inconsistencies, it should be seen whether by abiding the State law without flouting or violating the Central law, then it cannot be a case of repugnancy and the laws of complementary to each other. Both laws can stand together. Reference may be made to the judgment of the Supreme Court in Ram Chandra Mawa Lal v. State of Uttar Pradesh reported in 1984 Supp SCC 28. In paragraph 50, the Supreme Court had observed as follows:
"Is the alleged inconsistency irreconcilable or intolerable one?
50.There are degrees of inconsistency in the context of conflict of laws. There can be apparent or surface inconsistency which may be considered as a non-hostile, tolerable, benign, one, subject to the unquestioned power of the Centre to override the State if so minded. On principle, every apparent inconsistency cannot be presumed to be hostile or intolerable. More so when the Centre does not even raise a whisper of discord. One of the tests for ascertaining whether the inconsistency is an irreconcilable or intolerable one, is to pose this question: Can the State law be obeyed or respected without flouting or violating the Central law in letter and spirit? If the answer is in the affirmative, the State law cannot be invalidated. Not at any rate when the State law merely promotes the real object of both the laws, and is in the real sense supplementary or complementary to the Central law. In the present case the test answers in favour of the validity of the impugned State notification. The Central notification is not violated if the dealers sell the fertilizers from out of the existing stocks acquired at the lower rates, for, both the notifications fix the maximum selling price and the maximum selling price fixed under the State notification is not higher than that fixed under the Central notification. What is more, the State notification promotes and serves the object and purpose of both the Centre and the State. Promotes and serves , in the sense, that the manifest object of fixing maximum ceiling price is to make available to the cultivators who grow the food for the Nation to obtain the inputs at reasonable prices and to protect them from exploitation so that the food production is not retared. It is not contended even by the petitioners, for the very good reason that it is incapable of being so contended, that the object of the price regulation is to enable the dealers to make unconscionable profit. Thus the impugned State notification promotes rather than defeats , the life-aim of Central as also the State notifications. It helps rather than hurts the objectives and goals of the Centre, and there is no conflict whatsoever of interest , purpose , or perspective . The State has done only that which the Centre presumably would have readily done if it was fully aware of the situation from all angles of vision. For, the only impact of the impugned notification is that the cultivator for whose protection the price regulation is essentially made, is saved from exploitation without hurting the legitimate claim of the dealer, who, in any case, gets his fixed profit margin of Rs 45 per ton."
30.The Supreme Court had an occasion to consider the effect of provisions relating to retrenchment under Chapter V-A of the ID Act, 1947 as well as restrictions imposed on the employer on terminating the service of an employee under Section 41 of the Andhra Pradesh Shops and Establishments Act. It was found that subsequent to the Central Act, the State enactment had received the assent of the President. Notwithstanding the fact that the State enactment did not have the provisions relating to retrenchment, the Supreme Court found that while the right of parties can be derived from the Central Act, there is no impediment for the workman to agitate such right granted under the Central Act in a forum provided under the State enactment. The said view was laid in Krishna Distt. Coop. Mktg. Society Ltd. v. N.V. Purnachandra Rao reported in (1987) 4 SCC 99. In paragraph 7, the Supreme Court had observed as follows:
"10.The result of the above discussion is that if the employees are workmen and the management is an industry as defined in the Central Act and the action taken by the management amounts to retrenchment then the rights and liabilities of the parties are governed by the provisions of Chapter V-A of the Central Act and the said rights and liabilities may be adjudicated upon and enforced in proceedings before the authorities under Section 41(1) and Section 41(3) of the State Act."
31.The Supreme Court vide its judgment in Pt. Rishikesh v. Salma Begum, (1995) 4 SCC 718 has held that merely because there is subsequent Central Act on the same issue is enacted, it does not automatically result in a repugnancy. Unless they are in coalition course, there is no necessity for the State legislature to re-enact the law to make it valid. In this context, it is necessary to refer to paragraph 21 of the said judgment, which reads as follows:
"21.The condition precedent to bring about repugnancy should be that there must be an amendment made to the principal Act under the Central Act and the previous amendment made by a State Legislature or a provision made by a High Court must occupy the same field and operate in a collision course. Since the State Act as incorporated by Act 37 of 1972 and the Explanations to Rule 5 by Act 57 of 1976, Rule 5 was not occupied by the Central Act in relation to the State of U.P., they remain to be a valid law. We may clarify at once that if the Central law and the State law or a provision made by the High Court occupy the same field and operate in collision course, the State Act or the provision made in the Order by a High Court being inconsistent with or in other words being incompatible with the Central Act, it becomes void unless it is re-enacted, reserved for consideration and receives the assent of the President after the Central Act was made by Parliament i.e. 10.9.1976."
32.In the present case, there is no conflict between the State amendment and the Central amendment made by the Parliament, though they occupy the same subject like the execution of awards of the labour court. But the State amendment also covers wider area of settlements coming within the meaning of Section 2(p) of the ID Act also. There is neither any apparent or real conflict between the two amendments. It must also be noted that both amendments related to procedure for executing Awards, orders or settlements. While the Parliament amendment enabled the jurisdictional civil court to execute such decrees in terms of Order 21 of CPC, the State Government had given powers only to the Labour Court.
33.In the present case, while there is only one Central Government Industrial Tribunal-cum-Labour Court exists in the State of Tamil Nadu having a very few cases. The Awards turned by the 12 Labour Courts and 1 Industrial Tribunal in the State are enormous. Further figures relating to settlements are unavailable as they were done on the volition of parties. There is likelihood of increase in number of such settlements being executed by the executing court. If such matters are sent to the so-called jurisdictional civil courts, it will not only result in time consuming process of delay, because even those courts are saddled with numerous execution petitions, but it will also result in enable the employers to invoke the powers conferred under Section 47 of CPC. Under Section 47 of CPC, though execution courts cannot go behind decrees, yet there are well known exceptions made. It has been held that objections regarding invalidate decree can be raised even at the execution stage and in collateral proceedings. (See : Sabitri Dei v. Sarat Chandra Rout reported in (1996) 3 SCC 301).
34.It is well settled by a catena of decisions that the question raised by the judgement-debtor under Section 47 CPC that the decree sought to be executed is a nullity is a question to be determined by the executing court under this Section. But, it must be borne in mind that the executing court cannot adjudicate upon the legality or correctness of the decree unless the decree is a nullity. In other words, if the decree is challenged as the same is nullity, the executing court can go into it, but if the execution of the decree is challenged on the ground that the decree is contrary to law, such objection cannot be entertained under this Section. The Court executing the decree is competent to embark upon an enquiry of the facts tending to show that the Court which passed the decree had no jurisdiction, unless the Court has by wrongly deciding a jurisdictional fact assumed jurisdiction.
35.Similarly, the question whether a decree is capable of execution or not falls under this Section and the executing court is competent to decide whether a decree is executable or incapable of execution. For example, where a decree is vague in its term, or a decree becomes incapable of execution because of the subsequent events to the decree or because of the subsequent legislation, or where the decree merely declares the rights of the parties, then in such cases the decree can be said to be incapable of execution.

36.The executing court can also go into the question if the decree is nullity or invalid. The Supreme Court has time and again held that the civil court's jurisdiction over the matters covered by the Industrial Disputes Act are impliedly ousted. By the process of sending concluded awards, orders or settlements indirectly power is conferred on civil courts to go behind such decrees in case an employer wants to raise such issues. Invariably an employer who has adverse order against him will engage a counsel before the civil court, whereas under Section 36(1) of the ID Act, the workman can be represented by his authorised representative including an office bearer of his trade union of which he is a member. These difficulties were never kept by the Parliament while making the amendment to Section 10. The State amendment as well as the Central amendment do not stand on a coalition course. Since the State amendment had received the assent of the President under Article 254(2), it can be a valid law insofar as the State of Tamil Nadu is concerned. Such an interpretation is not only beneficial to the scheme of the Industrial Disputes Act, but also will render help to the workmen who will have inexpensive procedure before the Labour Court. Therefore, the contention raised by the respondents is without merits and deserves to be dismissed.

37.In the present case, as already noted, while the amendment was made and brought into force, the State Government did not think about the financial side of the matter. The State Government woke up only when the High Court informed them about the expenditure involved in creating the execution machinery for each Labour Court. The State Government cannot refuse to provide the execution machinery only on account of the economic burden because it is the State legislature which had brought about the amendment. The first respondent being a delegate had also brought into force the State amendment without creating the infrastructure.
38.The Supreme Court in Salem Advocate Bar Assn. v. Union of India reported in (2005) 6 SCC 344 had emphasised the Judicial impact assessment to be made before legislation is introduced. It is necessary to refer to the following passages found in paragraphs 46 to 49, which reads as follows:

"46.The Committee has taken note of para 7.8.2 of Vol. I of the Report of the National Commission to Review the Working of the Constitution which reads as follows:
7.8.2 The Government of India should not throw the entire burden of establishing the subordinate courts and maintaining the subordinate judiciary on the State Governments. There is a concurrent obligation on the Union Government to meet the expenditure for subordinate courts. Therefore, the Planning Commission and the Finance Commission must allocate sufficient funds from national resources to meet the demands of the State Judiciary in each of the States.
47.The Committee has further noticed that:
33.3 As pointed out by the Constitution Review Commission, the laws which are being administered by the courts which are subordinate to the High Court are laws which have been made by:
(a) Parliament on subjects which fall under the entries in List I and List III of Schedule 7 to the Constitution, or
(b) State Legislatures on subjects which fall under the entries in List II and List III of Schedule 7 to the Constitution.
But, the bulk of the cases (civil, criminal) in the subordinate courts concern the law of contract, the Transfer of Property Act, the Sale of Goods Act, the Negotiable Instruments Act, the Penal Code, the Code of Civil Procedure, the Code of Criminal Procedure, etc., which are all Central laws made under List III. In addition, the subordinate courts adjudicate cases (in civil, criminal) arising under Central laws made under List I.
33.4 The Central Government has, therefore, to bear a substantial portion of the expenditure on subordinate courts which are now being established/maintained by the States. (The Central Government has only recently given monies for the Fast Track Courts but these courts are a small fraction of the required number.)
33.5 Under Article 247, the Central Government could establish courts for the purpose of administering Central laws in List I. Except a few tribunals, no such courts have been established commensurate with the number of cases arising out of subjects in List I.
48.The Committee has suggested that the Central Government has to provide substantial funds for establishing courts which are subordinate to the High Court, and the Planning Commission and the Finance Commission must make adequate provisions therefor, noticing that it has been so recommended by the Constitution Review Committee.
49.The Committee has also suggested that:
Further, there must be judicial impact assessment , as done in the United States, whenever any legislation is introduced either in Parliament or in the State Legislatures. The financial memorandum attached to each Bill must estimate not only the budgetary requirement of other staff but also the budgetary requirement for meeting the expenses of the additional cases that may arise out of the new Bill when it is passed by the legislature. The said budget must mention the number of civil and criminal cases likely to be generated by the new Act, how many courts are necessary, how many judges and staff are necessary and what is the infrastructure necessary. So far in the last fifty years such judicial impact assessment has never been made by any legislature or by Parliament in our country.

39.Having introduced the legislation and also brought it into force, it is not open to the State Government to resile from their obligation on account of the funding that was required. The earlier cumbersome procedure of moving the Government for a certificate under Section 33C(1) is not only time consuming, but the revenue recovery machinery provided therein is a colonial process and proved to be most ineffective. In fact, neither the State amendment nor the Central amendment had taken away the jurisdiction of the State Government to issue a certificate under Section 33C(1) for recovering the amounts as arrears of land revenue. As seen from the earlier data given in para 7, the State Government was unnecessarily saddled with the long cumbersome procedure for issuing certificates and placing the revenue authorities to collect the amounts from the employer. It is an unnecessary diversion and an extra load on the revenue staff. Therefore, it is in the interest of State Government itself, the Act was amended. Having created the power to the Labour Courts, they should also provide the supporting machinery, lest the workmen will be left high and dry.

40.In the light of the above, both the writ petitions will stand allowed. The first respondent State is hereby directed to provide the infrastructure and mahineries as requested by the High Court vide letter dated 05.07.2010 and accepted by the State Government vide Status Report, dated 6.8.2010 within a period of three months from the date of receipt of the order and report compliance. However, there will be no order as to costs.










vvk

To

1.The Government of Tamil Nadu,
rep by its Secretary to Government,
Labour and Employment Department,
Fort St. George,
Chennai-600 009.
2.The Secretary to Government,
Law Department,
Government of Tamil Nadu,
Fort St. George,
Chennai-600 009.
3.The Presiding Officer,
Principal Labour Court,
High Court Buildings,
Chennai-600 104.
4.The Presiding Officer,
Labour Court,
Coimbatore

Wednesday, June 8, 2011

DOMESTIC ENQUIRY-DEFENCE ASST.CAN CROSS THE MGT.WITNESS-K.CHANDRU

(REPORTED IN 2010-1-MLJ-427)

IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 23.10.2009
CORAM:
THE HON BLE MR.JUSTICE K.CHANDRU
W.P.No.18823 of 2009 and
M.P.Nos.1 and 2 of 2009

S.Selvam ... Petitioner

Vs


1.The Deputy Inspector General of Police,
Salem Range, Salem.

2.The Deputy Superintendent of Police,
Velur Sub Division,
Namakkal District. ... Respondents

Prayer :Petition under Article 226 of the Constitution of India praying for a Writ of certiorarified mandamus, to call for the records in respect of the proceedings of the 2nd respondent dt 20.7.2009 in PRNO.28/B1/09/Salem/PR No.20/G1/2009 DPO and quash the same consequently direct the 2nd respondent herein to permit the petitioner herein to engage a lawyer to proceed with the oral enquiry in respect of the Charge Memo dt._03.2009 issued by the 1st respondent herein in his proceedings in PR 28/B1/2009.
For Petitioner : Mr.R.Nalliyappan
For Respondents: Mr.R.Neelakantan,G.A.


O R D E R
Heard both sides.

2. The petitioner was employed as a Grade I Police Constable. He filed the present writ petition seeking to challenge the order of the second respondent the Deputy Superintendent of Police, Vellore Sub Division, Namakkal dated 20.07.2009 and for a consequential direction to permit the petitioner to engage a lawyer and to proceed with the enquiry pursuant to the charge memo issued by the first respondent.

3. By the impugned order dated 20.07.2009, the petitioner was informed that though he was permitted to engage a lawyer to assist him in the oral enquiry, but it is subject to the condition that the lawyer should not cross examine the prosecution witness during the oral enquiry. In effect, according to the second respondent, the lawyer should be present as an observer during the oral enquiry. Therefore, the petitioner has come forward with the present writ petition.
4. Notice was issued to the respondents. The learned Government Advocate brought to the notice of this Court the judgment of the Supreme Court in D.G.Railway Protection Force and others v. K.Raghuram Babu reported in (2008) 4 SCC 406. In the said judgment, it was stated that ordinarily in a department enquiry, the charged officer cannot be represented by a lawyer and if there is some rule which permits the charged officer to be represented by someone else, permission can be granted. Such representation cannot be claimed as a matter of right. After stating so in paragraph 11, the Supreme Court observed as follows:
"11.Following the above decision it has to be held that there is no vested or absolute right in any charge-sheeted employee to representation either through a counsel or through any other person unless the statute or rules/standing orders provide for such a right. Moreover, the right to representation through someone, even if granted by the rules, can be granted as a restricted or controlled right. Refusal to grant representation through an agent does not violate the principles of natural justice."

5. There is no quarrel with the well known proposition of law that as a matter of right a Government servant cannot have the assistance of a lawyer. But in the present circumstances, it is not a question of the request of the petitioner being denied by the respondents. On the contrary, the petitioner was permitted to have a lawyer present during the department enquiry. But he has been asked not to cross examine the witness. This Court is at a loss to know after having permitted a lawyer as to how any restriction can be made about the role of the lawyer. In fact, the very purpose of utilising the assistance of a lawyer is to effectively defend the charged officer in the enquiry.

6. It is brought to the notice of this Court that the Government has issued an order in G.O.Ms.No.2769 Public Department dated 11.11.1969 that the disciplinary authority is vested with the discretion to permit the charged officer to have the assistance of a legal counsel. Therefore, in the present case, the issue is not whether the petitioner is entitled to have the assistance of a lawyer or not. On the contrary, having permitted the assistance of a lawyer, whether the lawyer should be kept idle in the course of the proceedings. A Division Bench of the Gujarat High Court vide its judgment in Navinchandra Shakerchand Shah v. Ahmedabad Co-operative Department Stores Ltd reported in 1979 1 LLJ 60, in paragraph 18 held as follows:
"18. ... The inquiry has to be in accordance with the principles of natural justice. In such a situation apart from technicality whether permission is asked for or having not been asked for, a time has come to expect the employer or his nominee to inform the employee of his rights. If thereafter the employee does not avail of the opportunity, no grievance could be made. And here the petitioner as required by cl.(4) had a right to cross-examine witnesses. Sitting in law Courts day in and day out we know what the art of cross-examination is and few have mastery over it. Do we expect this petitioner to cross examine witnesses on his own, unaided and unhelped by anyone? We are aware of the fact that another workman of his department would have hardly improved the matter, but two together could have put up some show of cross-examination and Udesing could have been cross-examined. If a party is required to showcause and has a right to cross-examine witnesses, such a right would be illusory if it is required to be exercised by lay persons Vide B.E.Supply Co. v. The Workmen, (supra)..."

7. Therefore, the presence of the legal counsel cannot be an idle spectator. But it must have some nexus with the discretion exercised by the respondent. Once a legal counsel is allowed to appear on behalf of a charged officer, he is entitled to exercise the power as a lawyer and effectively defend his client in the enquiry.

8. Therefore, the impugned order in so far as it refuses the engaged lawyer to cross examine the witness is hereby set aside. The writ petition stands allowed. No costs. Consequently, connected miscellaneous petitions are closed.

23.10.2009
svki
Index : Yes/No
Internet:Yes/No



K.CHANDRU,J.

Svki

To


1.The Deputy Inspector General of Police,
Salem Range, Salem.

2.The Deputy Superintendent of Police,
Velur Sub Division,
Namakkal District.







W.P.No.18823 of 2009 and
M.P.Nos.1 and 2 of 2009










23.10.200

K.CHANDRU JUDGEMENT ON APPLICABILITY OF PERMANANCY ACT, UNFAIR LABOUR PRACTICE

IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated 22..7..2008
Coram:
The Hon'ble Mr. Justice K.CHANDRU
W.P. Nos. 37547 of 2005 and 12772 of 2006

W.P. No. 37547 of 2005:-

1. Hindustan Petroleum Corporation Ltd.
Rep. by its Chairman cum Managing Director
17 Jameshedji Tata Road
Mumbai

2. Hindustan Petroleum Corporation Ltd.
Rep. by its General Manager
4th Floor
Thalamuthu Natarajan Building
Gandhi Irwin Road
Egmore
Chennai .. Petitiones

vs.

1. The Presiding Officer
Central Government Labour Court
cum Industrial Tribunal
Shastri Bhavan
Chennai

2. The Regional Secretary
Petroleum Workers Union
Hindustan Petroleum Corporation Ltd.
Egmore
Chennai

3. G. Karmegam
4. G. Sekar Babu
5. J. Irudayaraj
6. A. Rajkumar
7. K. Williams
8. S. Egambaram
9. K. Vadivel
10. P.S. Irudayaraj .. Respondents

Petitions filed under Article 226 of the Constitution of India seeking for issuance of writ of Certiorari calling for the records of the first respondent relating to Award dated 14.3.2005 and made in I.D. No. 311 of 2004 and quash the same.

W.P. No. 12772 of 2006:-

1. G. Karmegam
2. G. Sekar Babu
3. J. Irudayaraj
4. A. Rajkumar
5. K. Williams
6. S. Egambaram
7. K. Vadivel
8. P.S. Irudayaraj .. Petitioners
vs.


1. Hindustan Petroleum Corporation Ltd.
Rep. by its Chairman cum Managing Director
17 Jameshedji Tata Road
Mumbai

2. Hindustan Petroleum Corporation Ltd.
Rep. by its General Manager
4th Floor
Thalamuthu Natarajan Building
Gandhi Irwin Road
Egmore, Chennai

3. The Presiding Officer
Central Government Labour Court
cum Industrial Tribunal
Shastri Bhavan
Chennai

4. The Regional Secretary
Petroleum Workers Union
Hindustan Petroleum Corporation Ltd.
Egmore, Chennai .. Respondents

Petitions filed under Article 226 of the Constitution of India seeking for issuance of writ of Certiorarified Mandamus calling for the records on the file of the third respondent, to quash that portion 'directing regularisation from the date of retrenchment' in the Award dated 14.3.2005 and made in I.D. No. 311 of 2004 as confirmed by order dated 19.9.2005 made in I.A. No. 239 of 2005 in I.D. No. 311 of 2004 by declaring and modifying the order as 'directing regularisation of service of the petitioners from the date of completing 480 days of service with the second respondent.
For Management : Mr. G. Masilamani, AG
for M/s King and Patridge

For workmen : Mr. K.V. Ananthakrushnan


C O M M O N O R D E R

W.P. No. 37547 of 2005 is filed by the Hindustan Petroleum Corporation Limited [for short, 'HPCL'], a Public Sector Undertaking, against the Award dated 14.3.2005 passed by the Central Government Industrial Tribunal cum Labour Court, Chennai [for short, 'CGIT'] in I.D. No. 311 of 2004 in granting relief of regularisation to the respondents 3 to 10 from the date of their alleged retrenchment with all attendant benefits including backwages quantified at 50%.

2. W.P. No. 12772 of 2006 is filed by eight workmen challenging the very same Award dated 14.3.2005 as well as the order dated 19.9.2005 made in I.A. No. 239 of 2005 and seeks for regularisation of their service from the date of completion of 480 days of service of their service, which was denied by the CGIT.
3. The writ petition filed by the Management of the HPCL was admitted on 21.11.2005 and an interim stay was granted on the same day. Subsequently, when the workmen filed a petition for vacating the stay, this Court, vide order dated 26.4.2006, directed the HPCL to pay Rs.6175/- to each of the workmen every month starting from October 2005 and that the arrears was to be made within a period of four weeks from the date of receipt of a copy of that order and if the workmen are not restored to duty on or before 15.5.2006, the HPCL was further directed to continue to pay monthly salaries in terms of Section 17B of the Industrial Disputes Act, 1947 [for short, 'I.D. Act'].

4. In view of the interconnectivity between these two writ petitions, the matters were taken up together and a common order is being passed.

5. Heard the arguments of Mr. G. Masilamani, learned Advocate General appearing for M/s King and Patridge, representing the HPCL and Mr. K.V. Ananthakrushnan, learned counsel appearing for the workmen and perused the records. For the sake of convenience, the Management is referred to as 'HPCL' and the eight individual workmen are referred to as the 'workmen'.

6. It is the case of the workmen that they were engaged for cleaning toilets, house keeping, sweeping, maintaining the Lunch Room and bringing the lunch and tiffin to their offices at Egmore and Meenambakkam in Chennai and they have been working since the year 1989 in the case of four persons, in the case of one Vadivelu since 1985, in the case of one P.S. Iudayaraj since 1987, in the case of one A. Rajkumar since 1992 and in the case of one S. Egambaram since 1997.

7. The Government of India, vide their notification issued under Section 10(1) of the Contract Labour (Regulation and Abolition) Act, 1970 [for short, 'CLRA Act'], on and from 09.12.1976, prohibited employment of contract labour relating to sweeping, cleaning, dusting and watching of buildings owned or occupied by establishments in respect of which the appropriate Government under the CLRA Act is the Central Government. Subsequently, the Supreme Court in Air India Statutory Corporation v. United Labour Union [1997 (9) SCC 377] held that even though there is no express provision in the CLRA Act for absorption of the contract labour when engagement of contract labour stood prohibited on publication of the notification under Section 10(1) of the Act, from that moment the principal employer cannot continue contract labour and direct relationship between them and the principal employer gets established between the workmen and the principal employer and in that view of the matter, for any contract workman engaged in violation of provisions of the CLRA Act, they can get a direction to absorb the employee of the principal establishment.

8. Taking advantage of the said judgment, the workmen, who were engaged in contract by the HPCL at Bangalore, Bombay, Vishakapattinam and Mangalore filed wit petitions and it was allowed by the respective High Courts and those workmen have been absorbed by the HPCL.

9. Similarly, the workmen through their Trade Union, by name, Petroleum Workers Union, filed a writ petition being W.P. No. 12297 of 1998 before this Court and sought for absorption as direct workmen. Pending the writ petition, this Court, vide order dated 18.8.1998, granted an injunction not to terminate the services of the workmen. During the pendency of the writ petition, they also moved the authority under CLRA Act, viz., Deputy Chief Labour Commissioner (Central), Bangalore, under Rule 25(2)(V)(a) and (b) of the CL(R&A) Central Rules, 1971 seeking for payment on par with the workmen directly engaged by HPCL as the CLRA Act guarantees the same payment even if workmen were engaged as contract labour and the principal employer, by virtue of Section 21(4) of the CLRA Act was bound to make the payment. But the authority, by his order dated 23.3.2000, held that since neither the HPCL nor the so-called contractors were engaging more than 20 workers, the CLRA Act will not be applicable. Therefore, the only remedy available to the Union was to move the machinery to enforce the Government Order dated 09.12.1976 prohibiting contract labour.

10. The workmen did not pursue their remedy against the said order. In the meanwhile, HPCL charge-sheeted the Regional Secretary of the Trade Union (by name, R. Govindarajan), who was also an employee of the HPCL, by a Charge memorandum dated 28.12.1999 for having taken the issue before the Deputy Chief Labour Commissioner claiming parity of wages for the contract workmen and also seeking for their absorption in a writ petition before this Court. Even though such an act was contemnatious, they proceeded with an enquiry and imposed a punishment of stoppage of two increments with cumulative effect vide order dated 25.4.2001. He was also transferred from Chennai to Vadalur in Cuddalore District (the punishment order was marked as Ex. W.98 before the CGIT).

11. In view of the punishment imposed on the Secretary of the Trade Union, the workmen, apprehending that their case may not be prosecuted properly, filed an impleadment petition being W.M.P. No. 63298 of 2002. This Court, by an order dated 03.3.2003, allowed the application and ordered the workmen to be impleaded as petitioners 2 to 9.

12. Subsequently, the judgment of the Supreme Court in Air India Statutory Corporation case (cited supra) came to be overruled by a Constitution Bench of the Supreme Court in Steel Authority of India Ltd. and others v. National Union Waterfront Workers and others [2001 (7) SCC 1]. The Notification dated 09.12.1976 issued by the Central Government abolishing contract labour was also set aside by the Supreme Court. The following passages found in paragraphs 125(3) to 125(6) and in paragraph 126 of the said judgment may be usefully reproduced as it will have a bearing on the present writ petitions:-
Para 125: "(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 the 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 Court in Air 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.

(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 regularise 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 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 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 where in 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.

Para 126: We have used the expression industrial adjudicator by design as determination of the questions aforementioned requires enquiry into disputed questions of facts which cannot conveniently be made by High Courts in exercise of jurisdiction under Article 226 of the Constitution. Therefore, in such cases the appropriate authority to go into those issues will be the Industrial Tribunal/Court whose determination will be amenable to judicial review."

13. In the light of the later development of law, the writ petition filed by the workmen (W.P. No. 12297 of 1998) was dismissed with the following directions as found in paragraph 18 of the said order:-
"In the result, the writ petition is disposed of with the following observations:-
(i) The third respondent / Union Government is directed to frame and refer the disputes between the workers and respondents 1 and 2 under Section 10 of the Industrial Disputes Act to the appropriate forum namely, Industrial Tribunal or the Labour Court at Chennai, within a period of four weeks form the date of receipt of a copy of this order.

(ii) The appropriate authority Industrial Tribunal / Labour Court shall proceed thereon to adjudicate the reference in accordance with law and pass an award within a period of four months form the date of receipt of the order of reference. The said authority is also directed to consider the mutual contentions independently without being influenced by any of the observations made in this order. The appropriate authority has to find out the real nature of the engagement of the petitioners / employees and the relief to which they are entitled to in accordance with law.

(iii) Respondents 1 and 2 are directed to retain the petitioners / employees in service on the same terms and conditions as on date, without prejudice to the contentions of both sides."

14. In view of the direction issued by this Court, the Central Government, vide its order dated 19.02.2004 referred the industrial dispute for adjudication by the CGIT, Chennai. The point for adjudication as mentioned in the order of reference reads as follows:-
"Whether the industrial dispute raised by Petroleum Workers Union against the management of Hindustan Petroleum Corporation Ltd. for regularisation of services of eight workmen as mentioned in the Annexure and also for other relief claimed in Writ Petition No. 12297 of 1998 is justified? If so, to what relief the concerned workmen are entitled?"

15. It was thereafter, a Writ Appeal was filed against the order of the learned Judge in W.A. No. 627 of 2004. The Division Bench of this Court took note of the subsequent reference made by the Central Government and, therefore, declined to interfere with the order. But, however, it modified the continued retention of the workmen and paragraph 2 of the said judgment of the Division Bench reads as follows:-
"Having regard to the arguments of either counsel and having regard to the facts and circumstances of the case, we dispose of this writ appeal with a direction to the Central Government Industrial Tribunal cum Labour Court, Chennai to dispose of the industrial dispute referred by the Central Government in its reference dated 19.02.2004 within four months from the date of receipt of a copy of this order, after affording opportunity of hearing to either party. Pending the same, the eight members of the writ petitioner Union namely., 1. G. Sekar, 2. G. Karmegam, 3. J. Irudayaraj, 4.A.Rajkumar, 5. S. Egambaram, 6. K. Vadivelu, 7. K. Williams and 8. S. Irudayaraj, who are respondents 2 to 9 herein, shall be paid the existing wages for a period of four months Should there be a delay in disposing of the industrial dispute, then either party can mention to this Court, apart from the making such request before the Central Government Industrial Tribunal cum Labour Court itself. It is needless to mention that if the industrial dispute ends in favour of the workmen, then the appellants have to abide by the said award of the Industrial Tribunal cum Labour Court, and even if any appointment is made in place of the workmen in the meantime, they have to pave way for the induction of the respondents workmen...."
[Emphasis added]

16. It was thereafter, the CGIT took up the dispute as I.D. No. 311 of 2004 and issued notice to the HPCL. In the meanwhile, the workmen, without any necessity, moved the Central Government for an amendment of the reference by requesting that the individual workmen should also be made as parties to the dispute. But when they did not get any reply, they filed an application being I.A. No. 69 of 2004 before the CGIT seeking for impleadment of the eight workmen as petitioners in addition to the Trade Union. Though it was resisted by the HPCL, the CGIT allowed the said I.A. by an order dated 14.7.2004 and the workmen were also made as petitioners 2 to 9 in the said Industrial Dispute.

17. In the affidavit filed in support of the writ petition, in paragraph 7, a contention was raised that the impleadment of the workmen by the CGIT was erroneous and the HPCL reserved its right to challenge the said order at an appropriate stage meaning, after the Award was passed. In view of the said averment, the learned Advocate General argued that the CGIT has no power to implead any party and the dispute is only between the Trade Union and the Management and the individual workers have no right of say in collective industrial dispute. But, however, it is found from the prayer made in the present writ petition no such attack is made against the order dated 14.7.2004 made in I.A. No. 69 of 2004 and the certified copy of the I.A. order has also not been filed. Hence, they cannot be permitted to raise such an issue without proper pleadings. Even otherwise, under Section 18(3) of the I.D. Act, when an Award is binding on a party, the Tribunal has power to implead any party, who is proper and necessary to the dispute. The power of the Tribunal to implead a new party has been approved by the Supreme Court vide its judgment in Hochtief Gammon v. Industrial Tirbunal, Bhubaneshwar, Orissa and others [1964 (2) L.L.J. 460].

18. In the present case, apprehending that the Union may not pursue the dispute, the workmen were allowed to come on record in the earlier writ petition filed before this Court. Further, the Union leader himself was charge-sheeted by the HPCL (as found in Ex. W.98) for taking up the issue by the workmen herein. During the trial before CGIT, the trade Union had also remained ex-parte as found in paragraph 3 of the impugned Award.

19. A Division Bench of this Court vide its judgment in The Special Officer of the Management of T.U.C.S. Ltd. v. S.Loganathan [1986 (II) L.L.J. 225] upheld the right of the individual workmen to challenge an Award passed by the Industrial adjudicator on the ground that the individual workers, who are aggrieved by the Award, are entitled to question it even in their individual capacity. Therefore, the objection raised by the learned Advocate General with reference to the impleadment of the workmen in the Industrial Dispute has to be necessarily overruled and it is accordingly, overruled.

20. Before the CGIT, on behalf of the workmen, three witnesses were examined as W.W.1 to W.W.3 and 198 documents were filed which were marked as Exs. W.1 to W.198. On the side of the HPCL, three witnesses were examined as M.W.1 to M.W.3 and 57 documents were filed which were marked as Exs. M.1 to M.57. The CGIT, on an analysis of the evidence (both oral and documentary), came to the conclusion that the so-called contractors examined as M.W.2 and M.W.3 are fake and the contract entered into between them and the contractors M/s T.M. Gurusamy M.W.3 and A. Kasper M.W.2 and P.S. Irudayaraj W.W.3 was sham and nominal and the workmen are employees of the HPCL. After having recorded the said finding, the CGIT held that the workmen are entitled for relief of regularisation from the date of their retrenchment with all the attendant benefits including 50% of the backwages.

21. Finding that the CGIT had not given full relief, the workmen filed I.A. No. 239 of 2005 before the CGIT and sought for correcting the error and also for directing their regularisation from the date of completion of 480 days' within a period of 24 calendar months. This was stoutly resisted by the HPCL. Thereafter, the CGIT, by an order dated 19.9.2005, dismissed the said I.A. holding that there was no error in the Award passed by it and if at all the Union is aggrieved, they will have to challenge the same before an higher forum. Therefore, the workmen have filed the writ petition being W.P. No. 12772 of 2006 as noted above.

22. The learned Advocate General, attacking the Award made the following submissions before this Court:-
(a) The workmen were contract workers. Even in the pleadings in the writ petition filed before this Court, they have admitted that they were contract workers and, therefore, they cannot turn back and make an argument that the contract is sham and nominal;
(b) The workmen were continued in service by virtue of the interim order of this Court dated 18.8.1998 and, therefore, anything done after the said interim order cannot be taken note of for the purpose of deciding whether the contract is sham and nominal;
(c) Since the establishment of HPCL had not engaged more than 20 contract labourers and the contractors also have not engaged more than 20 contract labourers in terms of the CLRA Act, there is no prohibition for engagement of contract labour and there is no employer employee relationship between the workmen and the HPCL;
(d) The fact that the HPCL paid Provident Fund contributions and ESI contributions to the workmen will not create any relationship between the workmen and the HPCL as under those two enactments, the obligation is on the principal employer to make contributions.
(e) The question of regularisation of the workmen will not arise as their entry into service was not proper and no Court can direct their absorption when their initial entry was improper; and
(f) The provisions of the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981 (T.N. Act 46 of 1981) will not apply to the HPCL.


23. It must be stated that the Division Bench, when approached by the HPCL, vide its order dated 25.3.2004, clearly directed that if the Industrial Dispute ends in favour of the workmen, then the HPCL should abide by the said Award. Even after getting such a direction, it is not fair for the HPCL to challenge the impugned Award before this Court.

24. In any event, the learned Advocate General submitted that in L. Justine and another v. Registrar of Co-operative Societies, Chennai [2002 (4) CTC 385], this Court held that the back door entry of workmen cannot be permitted and the provisions of the T.N. Act 46 of 1981 cannot be pressed into service in such cases. The issue was also taken before the Supreme Court in A.Umarani v. Registrar, Co-operative Societies and others [2004 (7) SCC 112] and the judgment of the Division Bench was confirmed. Learned Advocate General placed strong reliance upon paragraphs 39 and 40 of the said judgment to emphasis that those who came by back door should go through that door and that regularisation cannot give permanency to an employee whose services are adhoc in nature.

25. He also placed reliance upon the Constitution Bench judgment of the Supreme Court in Secretary, State of Karnataka v. Uma Devi (3) reported in 2006 (4) SCC 1 to reiterate the very same point. It must be noted that even in Uma Devi (3)'s case (cited supra), the Supreme Court in paragraph 45, had observed as follows:-
Para 45: ".... 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, would not be getting even that employment when securing of such employment brings at least some succour 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...."
Therefore, it is not as if the Uma Devi (3)'s case (cited supra) has prohibited employment of workmen in contract or temporary and it only states that while making regularisation, proper norms will have to be followed consistent with Articles 14 and 16 of the Constitution.

26. The learned Advocate General also referred to the decision of the Supreme Court in Indian Drugs and Pharmaceuticals Ltd. v. Workmen, Indian Drugs and Pharmaceuticals Ltd. [2007 (1) SCC 408] and submitted that the rules of recruitment cannot be relaxed and the Court / Tribunal cannot direct regularisation to temporary employees dehors the Rules (See: page 430).
27. The learned Advocate General also referred to the judgment of the Supreme Court in Dena Nath and others v. National Fertilisers Ltd. and others [AIR 1992 SC 457] for the proposition that a contract labour employed does not become direct employee of the principal employer merely because the contractor does not hold any licence under the CLRA Act.

28. Considering these arguments, it must be stated that the the Constitution Bench of the Supreme Court in the SAIL Case (cited supra) had categorically laid down in paragraphs 125 - (3) to (6) and 126 (as extracted above), the parameters under which an industrial adjudicator can decide the claims of the workmen. In such cases, it was also held that in case of a sham and nominal contract, the employer cannot contend that it was still a contract and the Court has no power to order relief to such workmen. Therefore, that position of law has not been so far diluted in the subsequent pronouncement of the Supreme Court.
29. Though the learned Advocate General tried to contend that there is no statutory bar for engaging labour on contract and outsourcing is the modern trend in employment, it must be stated that under the existing law, there is limitations in doing so. The workmen in HPCL are governed by certified standing orders (CSO) framed under the Industrial Employment (Standing Orders) Act, 1946. In that CSO, there is no provision to engage any contract labour and Courts have held that any contract in violation of Certified Standing Orders will be void. (See: Western India Match Co. Ltd. v. Its Workmen reported in 1973 (2) L.L.J. 403 (S.C.)].

30. Further, "Unfair Labour Practice" in any forum is prohibited under Section 25T of the I.D. Act and violation of which is punishable under Section 25U of the said Act. The term "Unfair Labour Practice" is defined under Section 2(ra) r/w V Schedule to the I.D. Act. Part I of the V Schedule lists out the Unfair Labour practices prohibited to be committed by an employer. Item No. 10 of Part I reads as follows:-
"to employ workmen as "badlis", casuals or temporaries and to continue them as such for years, with the object of depriving them of the status and privileges of permanent workmen."
Hence, commission of such an unfair labour practice by the employer is prohibited by the I.D. Act. In this Award, the finding of the CGIT was that the work in which workmen were engaged was of a permanent and perennial in nature.

31. It must also be stated that the Supreme Court in U.P. State Electricity Board v. Pooran Chandra Pandey & others [2007 AIR SCW 6904] referred to Uma Devi (3)'s case (cited supra) and observed in paragraphs 11, 16 and 17 and 19, which may be usefully extracted below:-
Para 11: "Learned counsel for the appellant has relied upon the decision of this Court in Secretary, State of Karnataka & Ors vs. Uma Devi (3) & Ors (2006) 4 SCC 1 and has urged that no direction for regularization can be given by the Court. In our opinion, the decision in Uma Devi's case (supra) is clearly distinguishable. The said decision cannot be applied to a case where regularization has been sought for in pursuance of Article 14 of the Constitution."

Para 16: "We are constrained to refer to the above decisions and principles contained therein because we find that often Uma Devi's case (supra) is being applied by Courts mechanically as if it were a Euclid's formula without seeing the facts of a particular case. As observed by this Court in Bhavnagar University (supra) and Bharat Petroleum Corporation Ltd. (supra), a little difference in facts or even one additional fact may make a lot of difference in the precedential value of a decision. Hence, in our opinion, Uma Devi's case (supra) cannot be applied mechanically without seeing the facts of a particular case, as a little difference in facts can make Uma Devi's case (supra) inapplicable to the facts of that case.

Para 17: In the present case the writ petitioners (respondents herein) only wish that they should not be discriminated against vis-`-vis the original employees of the Electricity Board since they have been taken over by the Electricity Board "in the same manner and position". Thus, the writ petitioners have to be deemed to have been appointed in the service of the Electricity Board from the date of their original appointments in the Society. Since they were all appointed in the society before 4.5.1990 they cannot be denied the benefit of the decision of the Electricity Board dated 28.11.1996 permitting regularization of the employees of the Electricity Board who were working from before 4.5.1990. To take a contrary view would violate Article 14 of the Constitution. We have to read Uma Devi's case (supra) in conformity with Article 14 of the Constitution, and we cannot read it in a manner which will make it in conflict with Article 14. The Constitution is the supreme law of the land, and any judgment, not even of the Supreme Court, can violate the Constitution."

Para 19: "In the present case many of the writ petitioners have been working from 1985 i.e. they have put in about 22 years' service and it will surely not be reasonable if their claim for regularization is denied even after such a long period of service. Hence apart from discrimination, Article 14 of the Constitution will also be violated on the ground of arbitrariness and unreasonableness if employees who have put in such a long service are denied the benefit of regularization and are made to face the same selection which fresh recruits have to face."

32. Very recently, (vide its judgment dated 16.5.2008), the Supreme Court in G.M., O.N.G.C., Shilchar v. O.N.G.C. Contractual Workers Union [2008 AIR SCW 3996] had reviewed the previous case laws and in paragraphs 11 to 18, the Court held as follows:-
Para 11: "It will be seen therefore that each case has to be examined to a very large extent on its specific facts, and a universal yardstick should not be attempted.

Para 12: In the instant case, on a consideration of material produced before it, the Tribunal came to the following conclusions:

(1) That there existed a relationship of master and servant.
(2) That there was no contractor appointed by
ONGC.
(3) That the ONGC used to supervise and allot
works to individual workers.
(4) That the ONGC took disciplinary action and
called for explanations from the workers.
(5) The workers were paid wages though they did not attend their duties due to Cachar Bandh and due to flood.
(6) The wages were paid direct to the workers by the ONGC and the acquaintance roll was prepared by the Management to make payment to the workmen".

Para 13: It has also been observed that even the ONGC had admitted that since 1988, there was no licensed contractor and that the wages were being paid through one of the leaders of the Union and one such contractor, Manik has been named. The Tribunal then opined that it appeared from the record that Manik himself was a workman and not a contractor as he too was shown in the acquaintance roll to have received wages. We find that the real issue was as to the status of the workmen as employees of the ONGC or of the contractor, and it having been found that the workmen were the employees of the ONGC they would ipso-facto be entitled to all benefits available in that capacity, and the issue of regularization would, therefore, pale into insignificance. We find that in this situation, the Industrial Tribunal and the Division Bench of the High Court were justified in lifting the veil in order to determine as to the nature of employment in the light of the judgments quoted above. We, therefore, find that the ratio of the judgment in Uma Devi's case (supra) would not be applicable and that the facts of Pandey's case are on the contrary more akin to the facts of the present one.

Para 14: We are therefore of the opinion that in the light of the aforesaid observations, Mr. Dave's argument that the workmen being on a contractual, were not entitled to any relief, cannot be accepted and the large number of judgments cited by Mr. Dave, on this aspect, cannot be applied to the facts of the case.



Para 15: We have also considered Mr. Dave's argument with regard to the nature of the reference. We re-produce the reference as made:
"Whether the demand of the ONGC `Contractual Workers' Union, Silchar on the management of ONGC, Cachar Project, Silchar for regularization of the services of the contractual workers is justified. If so, what relief are the workmen concerned entitled to?"

Para 16: It is true that the underlined portion of the reference prima facie does give the impression that it pre-supposes that the workmen were contractual employees and the only dispute was with regard to the regularization of their services. It is equally true that the reference appears to have been rather loosely worded but as observed by the Industrial Tribunal and the Division Bench, both parties were aware of the real issues involved in the light of the protracted litigation and the efforts made during conciliation proceedings. The Division Bench has, thus, rightly observed that it was open to the Industrial Tribunal to have lifted the veil so as to determine the nature of the employment and the dispute between the parties and for that purpose to look into the pleadings and evidence produced before it.

Para 17: In Delhi Cloth & General Mils Co. Ltd. vs. The workmen & Others AIR 1967 SC 469, this is what the Court had to say:
"In our opinion, the Tribunal must, in any event, look to the pleadings of the parties to find out the exact nature of the dispute, because in most cases the order of reference is so cryptic that it is impossible to cull out therefrom the various points about which the parties were at variance leading to the trouble. In this case, the order of reference was based on the report of the Conciliation Officer and it was certainly open to the Management to show that the dispute which had been referred was not an industrial dispute at all so as to attract jurisdiction under the Industrial Disputes Act. But the parties cannot be allowed to go a stage further and contend that the foundation of the dispute mentioned in the order of reference was non-existent and that the true dispute was something else".

Para 18: The pleadings in the present matter would show that the core issue before the Tribunal was with regard to the status of the employees as employees of the ONGC or of the contractor and that it was this issue simpliciter on which the parties went to trial. Mr. Dave's argument with regard to the decision of the Tribunal being beyond the reference, is to our mind, and in the circumstances, hyper technical. In this background, we feel that the judgments cited by Mr. Dave pertaining to regularization of contract labour are not applicable to the facts of the case."

33. Therefore, the present issue will have to be decided in the light of the parameters indicated by the latest decision of the Supreme Court in O.N.G.C. Case (cited supra) which had taken note of all the contentions raised by the learned Advocate General. The sum and substance of the decisions are that if it is established that the workmen were employed directly by HPCL, even on temporary basis, they are eligible for regularisation provided it is shown that they have not come through any back door. One such back door entry as indicated in the decisions of the Supreme Court in Uma Rani and Uma Devi (3)'s cases (cited supra) is not getting the names sponsored through the Employment Exchange.

34. Admittedly, the workmen were all either sweepers or scavengers or cleaners. Under Section 3 of the the Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959, any employment to do unskilled office work has been exempted from the purview of the said Act. It is also not shown that the workmen were not appointed by the appropriate authority.

35. A Division Bench of this Court in School Committee, Tilak Vidyalaya Higher Secondary School, Kallakurichi v. District Educational Officer, Tirunelveli [1991 TLNJ 1] has held that an Office Helper need not come

through the Employment Exchange and his appointment cannot be considered to be in violation of the 1959 Act.

36. On the question of non-application of the Tamil Nadu Act 46 of 1981, as argued by the learned Advocate General, it must be stated that the HPCL is an establishment coming under Section 2(6) of the Tamil Nadu Shops and Establishments Act, 1947 [for short, 'TNSE Act']. The term 'Commercial establishment' found in the said sub-section is further defined in Section 2(3) of the TNSE Act which includes a clerical department of a factory or even a joint stock company. HPCL is certainly covered by Section 2(6) r/w Section 2(3) of the TNSE Act and, therefore, it is automatically covered by the provisions of the Conferment of Permanent Status to Workman Act, 1981. Such a contention with reference to a joint stock company raised by the HPCL was rejected by this Court in S. Ramanathan v. Saroja Mills Ltd., Madurai and another [1977 (II) L.L.J. 202]. Even otherwise, the office at Egmore is the clerical wing of the HPCL storages which are registered under the Factories Act by HPCL. Therefore, the argument of the learned Advocate General cannot be accepted.

37. Further, it must also be that the constitutional validity of the Tamil Nadu Act 46 of 1981 was upheld by the Supreme Court vide its judgment in State of Tamil Nadu v. Nellai Cotton Mills Ltd. and others [1990 (2) SCC 518].

38. Once there is a valid State enactment providing for relief to such of those workmen deemed permanency to those who had completed 480 days' of service within a period of two calendar years then, such workmen getting permanent status cannot be questioned by any Management. Such conferment of permanent status to the workmen cannot be labelled as violation of Articles 14 and 16 of the Constitution. The effect of a local enactment conferring permanent status to workmen was never considered by any Court so far.

39. Therefore, the only point that will have to be decided in the present case is whether the findings of the CGIT in recording that the so-called contracts under which the workmen were engaged, were 'sham and nominal'. If the answer to the question is in the affirmative, then the workmen can have the benefit of the Award impugned in the writ petition.

40. As already stated, before the CGIT, a wealth of documents were filed by the workmen and oral evidence was also let in even by one of the so-called contractor, viz., the 10th respondent P.S. Irudayaraj, who had deposed that there was no contract between him and the HPCL and that he himself was rendering physical service to the HPCL. With regard to the other finding that the contract between the so-called contractors and the HPCL was only sham and nominal, the CGIT has held that the workmen in Bombay and Vishakapattinam who were doing similar work in the HPCL, were absorbed in those areas. As found in the ONGC, Shilchar case, this is a violation of Article 14 of the Constitution by the HPCL.

41. In the present case, the workmen have been working from 1989 till 1998 without any break and they were not under the control of the so-called contractors. The HPCL was directly supervising their work. It also held that the work was perennial since for any establishment, the up-keep of the establishment is important even though under law, there was no requirement of holding any licence for a contractor, who supplies labour. In the present case, the issue is slightly different wherein the workmen were directly engaged by the HPCL, who supervised the work and controlled all their activities.

42. Though the HPCL claimed that as the principal employer they have paid the EPF and ESIC contributions in each of the agreements with the so-called contractors, they have specified that the contractors must be responsible for the EPF and ESIC contributions. This was not adhered to. Further, it was the HPCL which forwarded all the applications for part-withdrawal of PF to the authorities and the so-called contractors never initiated any such move.

43. The contract made between the HPCL and W.W.3, M.W.2 and M.W.3 is clearly sham and nominal. The agreements produced before the CGIT show the nature of duties to be performed by the men supplied by the so-called contractor. There are many instances in which the same workmen were sent out for work with outside agencies such as Sales Tax Department, Government Secretariat and Book shops for getting stationery and books as if they are the office boys of the HPCL and the scope of such work was never specified in the agreement. For doing such work, in some of the authorisation letters, the workmen were described as the staff of HPCL.

44. The contract agreements produced as exhibits show that it was for labour supply agreement. But in real term, the so-called contractor himself was doing the work. In one case, there was no other worker other than the alleged contractor himself was doing the work. This was spoken to by the alleged contractors who had deposed as W.W.2 and W.W.3.

45. It was also from Exs. W.93 and W.94 that the payment of wages was directly paid to the workmen by the HPCL and signatures were obtained from them in the records of the HPCL. Though the said contract did not provide for any Bonus, such payments were made to workmen as found in the documents produced by the workmen. Except contending that the workmen were contract labourers and relying upon the so-called agreements, the HPCL did not acquit itself to show that they were proper agreements. On the contrary, the workmen's evidence both oral and documentary clearly shows that the contracts were mere sham and nominal. It was a finding of fact recorded by the CGIT and such findings cannot be assailed in a writ petition under Article 226 of the Constituion.

46. In this context, it is necessary to refer to the decision of the Supreme Court in Workmen of English

Electric Company of India Ltd. v. Presiding Officer and another [1990 (2) SCC 18]. The relevant passage found in paragraph 8 of the judgment may be usefully extracted below:-
Para 8: ".... While it is a fact that the workmen had made tall claims which they had failed to substantiate, it was for the Tribunal and the High Court to appreciate the material on the record and decide as to which part of the claim was tenable. The finding of the Tribunal that 131 workmen had put in more than 240 days of work was arrived at on the basis of some evidence; it may be that better particulars and clear evidence should have been placed before the Tribunal. Quantum of evidence or appreciation thereof for recording findings of fact would not come within the purview of High Court s extraordinary jurisdiction under Article 226 of the Constitution...."

47. The HPCL's contention was that the pleadings of the workmen were not consistent and before this Court they have stated that they were contract workmen. But in the light of the changing decisions of the Supreme Court, such pleadings will become inevitable. In the writ petition, they heavily banked on the Air India Statutory Corporation Case (cited supra). But the learned Judge, while directing the matter to be tried by the Tribunal, removed all misconceptions and directed the matter to be dealt with afresh. The learned Judge even recorded a finding that the order of the Deputy Chief Labour Commissioner under the CLRA Act does not help either side. Even the Supreme Court in SAIL's case (cited supra) has indicated the parameters of decision making by the industrial adjudicators and hence, the matter will have to be dealt with afresh in the light of the said judgment.

48. In the present case, the role of HPCL in hounding out a Union General Secretary with a charge-sheet and a resultant punishment and a transfer to far off place for pursuing the case of the workmen and coupled with the fact that the Union remained ex-parte before the CGIT will only show that there

was bound to be minor contradictions in the stand of the workmen. Their plight in this regard is understandable.

49. The HPCL never denied in their pleadings regarding the workmen in Mumbai and Vizag, who were similarly placed, were regularised in view of the Air India Statutory Corporation case (cited supra). In Industrial Law, the "region cum industry" principle is applicable and the HPCL, being an all India Organisation, cannot take shifting stand depending upon the region in which it operates. Considering that most of these workmen had continuously worked before the interim order for over ten years in a work which is perennial in nature, their demand for regularisation can never be termed to be illegal or unjust.

50. In the light of the above materials, the finding of fact rendered by the CGIT regarding the contract between the workmen and the HPCL being sham and nominal, the impugned Award is fully in consonance with the legal precedents referred to above. Further, the Tribunal, conscious of its power, had limited the backwages at 50% to be paid to the workmen.

51. But while ordering the regularisation only from the date of retrenchment, the CGIT did not keep in mind the relevant legal provisions, viz., the effect of the Tamil Nadu Act 46 of 1981, which guarantees permanency if a workman completes 480 days' of service within a period of 24 calendar months. Pending the adjudication of the regularisation issue, the HPCL could not have dispensed with the service of the workmen without getting prior approval form the CGIT under Section 33(2)(b) of the I.D. Act. Such violation by the HPCL will clearly make their non-employment void ab initio and the position of law in this regard has been well-settled by a Constitution Bench judgment of the Supreme Court in Jaipur Zila Sahakari Bhoomi Vikas Bank Ltd. v. Ram Gopal Sharma and others [2002 (2) SCC 244]. In that case, the Supreme Court has held in paragraph 14 that the workman need not challenge such a dispensation from service with any independent proceedings.

52. Therefore, the payment of salary for four months from 25.3.2004, viz., the date of receipt of the order of the Division Bench, cannot help the case of the HPCL. The Division Bench itself had stated that in the event of the workmen succeeding, the HPCL should abide by the Award. As held in the Jaipur Zila Sahakari Bhoomi Vikas Bank Ltd. case (cited supra),any termination pending the adjudication without approval under Section 33(2)(b) of the I.D. Act will become void ab initio. Therefore, the CGIT was wrong in directing regularisation only from the date of the retrenchment, viz., July 2004, and it should be in accordance with the mandate of Tamil Nadu Act 46 of 1981, which is applicable to HPCL.

53. In the light of the above, the writ petition W.P. No. 37547 of 2005 filed by the HPCL will stand dismissed with costs. The cost is quantified at Rs.1000/- to be paid to each of the workmen (respondents 3 to 10) towards the cost of litigation, which has been pending since 1998 for a period of ten years.

54. W.P. No. 12772 of 2006 filed by the workmen will stand allowed. The Award of the CGIT dated 14.3.2005 made in I.D. No. 311 of 2004 will stand modified to the extent indicated above. The workmen are entitled to get their regularisation from the date on which each of them had completed 480 days' of service within a period of 24 calendar months together with 50% of the backwages ordered by the CGIT.




gri

To
The Presiding Officer
Central Government Labour Court cum Industrial Tribunal
Shastri Bhavan,
Chennai