Gowrisankaran K. vs Labour Enforcement Officer (Central) and Others

M. Kapagavinayagam, J.—Crl. O.P. Nos. 15482 and 11681 of 1999 are being disposed of by this common order, as both petitions for

quashing would arise out of single complaint.

Mr. Gowrisankaran, Assistant General Manager, Indian Bank and Ms. Hamsa Priya, Proprietrix, Salute, the accused in C.C. No. 3085 of

1999 on the file of the XI Metropolitan Magistrate, Saidapet, Chennai, have filed both these petitions seeking for the quashing of the above

proceedings.

The Labour Enforcement Officer (Central), the respondent herein, inspected the premises of the petitioner-bank on February 18, 1999 and

found that the petitioner-bank had employed 11 contract labourers through Ms. Hamsa priya, Proprietrix, Salute, Chennai in violation of the

prohibitory notification issued by the Central Government dated December 9, 1976 u/s 10(1) of the Contract Labour (Regulation and Abolition)

Act, 1970.

On the same day, the respondent sent a show cause notice to both the petitioners to show cause within 10 days as to why action should not be

taken against them u/s 23 of the Contract Labour (Regulation and Abolition), Act 1970 and also directed them to rectify the said violation within

10 days. Despite the receipt of notice, they neither gave satisfactory reply nor sent compliance report. Therefore, the respondent herein filed a

complaint on May 17, 1999 before the trial Court and the same was taken on file in C.C. No. 3085 of 1999 for the offence u/s 23 of the Contract

Labour (Regulation and Abolition) Act, 1970.

As noted above, both the accused have filed these petitions u/s 482 Cr. P.C. seeking to quash the proceedings on the following grounds:

(i) The Contract Labour (Regulation and Abolition) Act, 1970 is not applicable to the building owned by the Indian Bank called Indian Bank

Management Academy for Growth and Excellence (IMAGE). There is no banking business or operation carried on in the said building. In batches,

the Officers of the bank are undergoing training in that academy. Section 10(1) of the Act specifically prohibits employment of contract labourer in

any process or operation or other work in the establishment. It cannot include any other work, though it is connected with the establishment.

(ii) Admittedly, on the date of inspection only 11 labourers were working. As per Section 10(1)(iv) of the Act, the Act would be applicable to the

establishment in which 20 or more workmen are employed. Since the contract labourers employed were only 11 in number, the Act would not be

applicable.

(iii) Section 23 of the Act would only provide the contravention of Section and Rule made under the Act and the conditions of the licence. It does

not provide any contravention of the notification. The notification is administrative in character. Therefore, the violation of the notification would not

attract the penal Section 23 of the Act.

(iv) Notification No. S.O. 779(E) dated December 9, 1976 does not apply to the petitioner-bank, since the proviso contained in the notification

itself would indicate that the same would not apply to maintenance and cleaning of multi-storied building involving specialized experience. The

building IMAGE consists of four floors and as such, the same is a multi-storied building.

The counsel appearing for the petitioner as well as the counsel appearing for the respondent would argue at length substantiating their respective

pleas. They would also cite various authorities.

I have carefully considered the submissions made by the counsel for the petitioner on record and perused the affidavits raising the grounds and

additional grounds and the counter affidavit and other records.

Before dealing with the above grounds, it is proper to refer to some of the facts which are not disputed by the parties.

On February 18, 1999, the premises of the petitioner-bank was inspected by the Labour Enforcement Officer (Central), Chennai. It was found

that the petitioner bank had employed 11 contract labourers, viz., 7 security guards and 4 sweepers through the other petitioner-contractor. Since

the employment of these labourers is in contravention of the Notification No. S.O. 779(E) dated December 9, 1976 issued by the Government of

India, Ministry of Labour, New Delhi under the powers conferred u/s 10 of the Contract Labour (Regulation and Abolition) Act, 1970, on the

same date, the respondent-complainant served show cause notice to both the petitioners, being the bank and the contractor, as to why legal action

should not be taken against them for the offence u/s 23 of the Contract Labour (Regulation and Abolition) Act, 1970. Through the very same show

cause notice, the petitioners were requested to rectify the irregularities mentioned in the Inspection report.

The petitioner bank sent a reply on April 1, 1999 stating that the contract labourers were employed as a stop gap arrangement, since the

Reserve Bank of India had imposed some restriction on recruitment of employees and that steps were taken to rescind the contract without delay

and sought for two weeks time for alternative arrangements. Accordingly, the respondent gave them time till April 20, 1999 to report compliance.

Without sending the report of compliance, the petitioner-bank sent a further reply on May 14, 1999 stating that Section 10(1) of the Act does

not prohibit employment of labourers, as the building ''IMAGE'' which housed staff quarters and staff college, was not used for any other work in

the establishment and as such, further proceedings may be dropped.

In view of the above stand taken by the accused persons, the respondent filed a private complaint against both the petitioners, the bank and

the contractor for the offence u/s 23 of the Act.

From what is stated above, it is clear that the petitioner bank initially took a stand that the Reserve Bank of India imposed restrictions on the

bank for fresh recruitment and therefore, the contract was entered into between the bank and the contractor for employment of labourers as a stop

gap arrangement. As requested by the bank through the letter dated April 1, 1999 two weeks time was granted to the bank by the respondent to

rectify the irregularities by discontinuing the employment of security guards and sweepers through the contractor.

But, through the letter dated May 14, 1999, a different stand was taken by the petitioner-bank stating that Section 10(1) of the Act would not

apply to the building in question, since no operation or other work in the establishment is conducted therein.

Now, let us deal with the grounds raised in these petitions one by one.

As regards the submission that no banking business is carried on in the building in question, it is mentioned in the complaint that on the date of

inspection, 11 contract labourers were working in the premises/building of the Indian Bank ''Management Academy for Growth and Excellence

(IMAGE).

According to the counsel for the petitioners, the aforesaid labourers did not do any work relating to the operation and the business of the bank

and the work performed by them is only connected with the training college and as such, Section 10(1) of the Act would not apply. The learned

counsel has cited Gammon India Ltd. v. Union of India AIR 1974 SC 961 : 1974 I LLJ 89 and Powar Vs. Labour Enforcement Officer (C), .

According to the counsel for the respondent, IMAGE is part of Indian Bank, since the employees of the said bank are trained there and the

process of training and educating the employees of the bank is part and parcel of the operation of the Indian Bank. Section 10(1) of the Act

prohibits employment of contract labour in any process, operation or other work in any establishment.

It is true as laid down by the Supreme Court in Gammon India Ltd. and Others Vs. Union of India (UOI) and Others, and the Kerala High

Court in Powar Vs. Labour Enforcement Officer (C), , that Section 10(1) prohibits employment of contract labour in any process, operation or

other work in any establishment and it cannot include any work connected with the establishment. The prohibition envisaged u/s 10(1) of the Act is

not attracted to the employment of Contract Labour in the residential quarters of the bank.

In the said case, the Supreme Court, while dealing with the staff quarters, had held that the employment of contract labour in the said staff and

residential quarters would not be construed to mean as work in any establishment and the meaning of the expression ""in connection with the work

of any establishment is quite different"".

But, in this case, according to the complainant, IMAGE is part and parcel of Indian Bank and the employees of the said bank are trained there

and as such, the process of educating the employees is for the benefit and improvement of the functioning of the bank and as such, this is in

connection with the work in the establishment.

This submission, in my view, has force and the decisions cited by the counsel for the petitioners would refer to the residential staff quarters.

But, in the instant case, the building in question is an institution giving training to the employees of the bank. In other words, it could be easily

construed that the said institution is the limb of the establishment, namely, bank.

The Supreme Court in a recent decision in International Airport Authority Employees Union and Another Vs. International Airports Authority

of India and Others, while dealing with the question as to whether the car parking area in Santa Cruz and Sahara Airports, would clearly hold that

the sweepers employed in the car parking area in the International Airport are entitled to be regularised in service, as the Notification dated

December 9, 1976 would prohibit the employment of contract labour for sweeping, cleaning, dusting and watching of the building owned by or

occupied by the establishment.

The above observation made by the Supreme Court, in my view, would be squarely applicable to the facts of the present case also. Thus, it

can be safely held that the employment of contract labourers in the building, where the employees of the bank are trained for the effective

functioning of the bank, would clearly attract Section 10(1) of the Act. Therefore, the first ground would fail.

Regarding the second point, it is submitted that only 11 labourers were found working and as such, Section 10(1) of the Act does not apply to

the establishment of the Indian Bank, in view of Section 1(4) making the applicability only to the establishment where 20 or more workmen were

employed as contract employees. This contention also, in my opinion, is not tenable, in view of the decision reported in S.B. Deshmukh, Chief

Regional Manager, State Bank of India, Nagpur Vs. The State and another, .

It may be true that Section 1(4) of the Act would relate to the establishment in which 20 or more workmen were employed within the

preceding 12 months as contract labour. But, the reading of Section 10 of the Act would make it clear that it gives authority to the appropriate

Government to prohibit employment of ntract labour in any process, operation or other work in any establishment. Thus the prohibition u/s 10 of

the Act is not only about the establishment, but also about the particular activity of the contract labour.

Once the object of Section 10(1) of the Act is understood, then it would be obvious that the same is applicable to all establishments

irrespective of a particular activity of the contract labour, which is prohibited u/s 10(1) of the Act.

Furthermore, Section 10(1) of the Act opens with a non obstante clause. The non obstante clause means notwithstanding any other provision

in the statute to the contrary. Thus, the non obstante clause operates in its own field notwithstanding other provisions of the Act.

In view of the above, particularly, in view of the aims and objectives of the Act that it was the abolition of contract labour which was under

consideration, one would easily come to the conclusion that as and when the possibility of abolition of a particular category of contract labour must

prevail over the other provisions of the Act which merely relate to regulation of the contract labour. Thus, the second contention also would fail.

The third contention is that violation of the notification would not constitute violation of the Section of the Act. In support of this contention, the

learned counsel for the petitioner would cite Indian Iron and Steel Co. Ltd. and Others Vs. State of Bihar and Others, .

It is, of course, held in the said decision by the Patna High Court that the violation of the notification issued u/s 10(1) of the Contract Labour

(Regulation and Abolition) Act cannot attract the penal provision of the Act. With great respect, I am of the opinion, that the above principles have

not been laid down correctly.

It is not debated u/s 10(1) of the Act, that the power is vested with the Central Government to notify in the official Gazette the prohibition of

the employment of contract labour in any process, operation or other work in any establishment. The notification in question had been issued by

the Central Government in S.O. 779(E) dated December 9, 1976. So, once there is a contravention of the said notification, it would amount to

violation of Section 10(1) of the Act. Since there is violation of Section 10(1) of the Act, it would automatically attract the penal Section 23 of the

Act.

This is not the case of mere violation of the notification issued under the executive power. But, it is clear violation of Section 10(1) of the Act

by which the notification was issued prohibiting employment of contract labour which certainly would attract Section 23 of the Act. Therefore, this

ground also would lack substance.

Fourthly, it is contended that it is a multi-storied building for which exception has been given.

According to the learned counsel of the respondent, it is not a multi-storied building. As defined under the Development Control Rules for

Chennai Metropolitan Area, the work carried on by the contract labour includes not only outside cleaning, but also the cleaning, sweeping and

maintaining of the interiors which is prohibited by the notification issued u/s 10(1) of the Act.

In view of the stand taken by the learned counsel for the respondent that exception would not apply to the building in question, this point could

be decided by the trial Court on the basis of the material placed by the parties during the course of trial.

In view of the discussion made above, I do not find any merit in these petitions for quashing. Hence these petitions are dismissed.

Consequently, the connected Crl. M.Ps are closed.