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Judgment
A gazette notification, dated May 25, 2011, prohibiting the
employment of contract labour in the job of barrel and small can
filling (upto 1 liter.) in the establishment of Lube Oil Blending Plant
of Indian Oil Corporation, Budge Budge, is the subject matter of
challenge absolutely on certain points of law raised in the present writ petition. But as in respect of all points of law, so also in the
present one, it cannot be appreciated in vacuum, calling for a brief
narration of facts leading to the issue of the notification. This will
turn facilitate as appreciating both the context as well as the
validity of the points of law raised.
The petitioner i.e. Indian Oil Corporation, (the Corporation,
for short) is a government company. It owns and operates a
lubricant plant at Budge Budge. This was originally owned by IBP
Co. Ltd. which became the petitioner''s upon the amalgamation of
the Corporation with the IBP Co. Ltd. on May 2, 2007.
At all material times contract labour was employed in the
plant. In the year 2001, a union of the IBP company, i.e., the
respondent no. 4 moved a writ petition before this Court and
obtained an order directing the respondents therein to dispose of
the application under Section 10 of the Contract Labour
(Regulation and Abolition) Act, 1970, (the Act, for short) in
accordance with law within a period of three months from the date
of the communication of the order. The Central Advisory Contract
Labour Board (the Board, for short) by a resolution dated February
18, 2003, constituted a committee for examining the issue.
After a thorough examination of the issues involved the
committee submitted a report that it would not be reasonable to
prohibit the employment of contract labour in question. During
this period the concerned union and the respondent no. 4 informed
the Regional Labour Commissioner that the dispute raised in the
writ petition had been amicably settled and the matter pending
before the Board was to be treated as closed.
As per the direction the petitioner and the concerned union
attended the 62nd meeting of the Board, held on July 11 and 12,
2005. Upon a consideration of the said report the Board had taken
a decision that the contract labour should not be prohibited and
made a recommendation to the Government accordingly to that
effect.
The union, however, subsequently asked the Board to review
its decision and the matter was discussed at the board meeting on
various dates which the petitioner corporation had also attended.
Ultimately as the parties could not come to a settlement as
suggested by the Board, the union again moved a writ petition and
by an order dated April 28, 2010, a learned Single Judge with the consent of the respective parties disposed of the writ petition by
directing the Board to take a decision in the matter in accordance
with law as expeditiously as possible, preferably within a period of
six weeks from the date of the communication of the order.
Again the Board constituted a committee and the committee
held several meetings and made an "on the spot" study. The
petitioner put forward its case against the abolition of the contract
labour as there was no change in the circumstances from the time
of the recommendation of the first committee. The Corporation
placed a note also for the consideration of the committee.
On June 18, 2011, the Corporation received a copy of the
notification, dated May 25, 2011, which has been annexed to the
writ petition as Annexure P-9, of the Ministry of Labour,
prohibiting the employment of contract labour in certain activities
at the said plant. It also received a communication dated June 20,
2011, from the concerned union requesting the petitioner to treat
these contract labourers as its permanent employees.
Subsequently the petitioner requested the Regional Labour
Commissioner to supply copies of all reports of the committee which were sent to the Board and also to the Secretary of the
Board requesting to him to supply copies of the minutes of the
necessary consultation between the Board and the Union of India.
These letters have not been replied. From this the petitioner wants
to draw an inference that there has not be any consultation
between the Board and the Union of India before the gazette
notification dated May 25, 2011 which has been assailed in the
present writ petition.
The respondent nos. 1 to 3 contested the writ petition by
filing an affidavit affirmed by the Deputy Chief Labor
Commissioner. The affidavit gives a short narration of the factual
background. It states that pursuant to the concerned order passed
by this Court in the year 2010 on the consent of the parties, it was
decided at its 76th meeting of the Board to appoint a fresh sub-
committee to do the fact finding exercise keeping in view the
provision of Section 10 (2) of the Act for recommending the
abolition of employment of contract labour or otherwise. The sub-
committee held a meeting with the representatives of the petitioner
and the respondent no. 4 union and they visited the concerned
plant of the petitioner at Budge Budge where they inspected
various operational areas. At the meeting of the committee held on March 12, 2011, the abolition of contract labour in the operation of
the barrel and small can filling (upto 1 liter) was unanimously
recommended.
The answering respondents have also mentioned of a
contempt proceeding initiated by the respondent no. 4 union in
view of which the Secretary, Ministry of Labour and Employment
as well as the Secretary of the Board were directed to circulate a
copy of the report, dated March 12, 2011, prepared by the
committee to all the members of the Board with a request to send
their views by fax or by speed-post. It was further clarified that if
any response was not received it would be presumed that the said
member did not have any objection to the report of the committee.
The affidavit discloses that in response to the said letter
majority of the members of the Board in writing approved the
report of the committee that had prohibited the employment of
contract labour.
Upon receipt of the said approval the impugned notification
prohibiting employment of contract labour in the specific job as mentioned therein was published by the Central Government in
the official gazette.
The respondent nos. 1 to 3 have denied the allegations made
in the writ petition and stated that the notification had been issued
after a detailed fact finding exercise resulting in unanimous
decision of the committee formed under Section 5 of the Act. The
decision has been duly endorsed by the members of the Board. The
petitioner was given adequate opportunity of being heard during
the fact finding exercise of the meeting. Therefore, their legal right
to natural justice has not been compromised in any manner. The
respondent nos. 1 to 3 have prayed for dismissal of the writ
petition.
Mr. Chowdhury, the learned Senior Counsel for the petitioner
submitted that the petitioner did not wish to file any affidavit-in-
reply to the affidavit of the respondent nos. 1 to 3.
The principal ground of challenge to the impugned
notification is that the mandatory requirement of Section 10 of the
Act has not been observed by the Government before issuing the
notification rendering the entire action to be bad in law.
In order to appreciate the validity of the submission and the
specific requirements of Section 10 of the Act it is necessary to
consider the section itself which is reproduced below:
S. 10: Prohibition of employment of contract labour.-
Notwithstanding anything contained in this Act, the appropriate Government may, after consultation with the Central Board or, as the case may be, a State Board, prohibit, by notification in the Official Gazette, employment of contract labour in any process, operation or other work in any establishment.
Before issuing any notification under sub-Section (1) in relation to an establishment, the appropriate Government shall have regard to the conditions of work and benefits provided for the contract labour in that establishment and other relevant factors, such as -
(a) whether the process, operation or other work is incidental to, or necessary for the industry, trade, business, manufacture or occupation that is carried on in the establishment;
(b) whether it is of perennial nature, that is to say, it is so of sufficient duration having regard to the nature of industry, trade, business, manufacture or occupation carried on in that establishment;
(c) whether it is done ordinarily through regular workmen in that establishment or an establishment similar thereto;
(d) whether it is sufficient to employ considerable number of whole-time workmen. Explanation. - If a question arises whether any process or operation or other work is of perennial nature, the decision of the appropriate Government thereon shall be final.
Section 10 of the Act specifically thus stipulates that the
government may after consultation with the Central Board or a
State Board, as the case may be, prohibit by the notification in the
official gazette employment of contract labour in any process,
operation or other work in any establishment. The principal point
of grievance of the petitioner is that there has not been any
consultation between the government and the Board and the
petitioner by its letter dated June 27, 2011, requested the
Secretary of the Board to furnish it with the copies of the minutes
of the necessary consultation between the Board and the Union of
India and other relevant documents. These documents had not
been supplied to the petitioner and, therefore, the petitioner
argued that an inference might be drawn that there was no such
consultation between the government and the Board before the
notification was issued.
It is the specific case of the petitioner that even in the
affidavit used by the respondent nos. 1 to 3 the allegations made in
the relevant paragraph of the writ petition have not been specifically denied. Mr. Chowdhury, the learned Senior Counsel for
the petitioner, further argued that the affidavit makes one thing
clear that the members of the Board did not consider the report of
the committee at a single meeting but the same was circulated
amongst them and some of them concurred with the findings in
writing. Mr. Chowdhury specifically drew the attention of the Court
to the letter dated March 15/24, 2011 written by the Secretary of
the Board to its Chairman and submitted that it transpires from it
that the views of the Board had not even been sent to the
government. In paragraph 6 of the said letter, the Secretary of the
Board had written that eight members had agreed with the
recommendation of the committee and the rest who have not
submitted their views may also be treated to have agreed with the
recommendation of the committee to prohibit the employment of
contract labour in certain operations of the petitioner Corporation.
The Chairman of the Board had endorsed on the letter that after
going through the matter in details he was in agreement with the
decision of the committee and the proposal in the paragraph
mentioned above was approved and the same might be
communicated to the concerned immediately. Mr. Chowdhury
pointed out that there is no positive averment in the affidavit that there was any consultation between the government and the Board
or there was no material in the form of minutes of meeting or even
noting in a file to show that any consultation between the two had
truly taken place.
Ms. Alam appearing for the respondent nos. 1 to 3 submitted
in terms of the statements made in their affidavits-in-opposition.
She submitted that a notification was initially published in the
Official Gazette of February 18, 2003 to go into the question of
abolition of the contract labour in the concerned plant of the
petitioner. A committee under Section 5 of the Act was constituted
and the terms of reference were formulated. Initially, the committee
and the Board at their meeting held on July 11/12, 2005, decided
that contract labour should not be prohibited and proposed that
such recommendation to be forwarded to the government. Since
the workers prayed for a reconsideration of the decision based on
the report of the committee, the same was discussed at the Board
meeting. Subsequently the Board had requested the parties to try
to settle the dispute amicably between themselves. Subsequently,
when a writ petition was filed by the respondent no. 4, the learned
Single Judge disposed of the matter with a direction upon the Board to take a decision in the matter in accordance with law as
early as possible.
Ms. Alam had laid stress on the decision taken at the 76th
meeting of the Board where it was decided to form a sub-
committee to conduct a fact finding exercise for this purpose and
the representatives of the writ petitioner and the respondent no.4
were present.
Ms. Alam, reiterating the circulation of the Report to all the
members, argued that, therefore, it is to be presumed that the
members who did not respond actually accepted the proposal of
the government accepting the report of the committee. Thus, the
Chairman of the Board approved the proposal and desired the
same to be communicated immediately.
Ms. Alam contested the primary contention of the petitioner
that there was no consultation with the Board relying on Rule 12
of Contract Labour (Regulation and Abolition) Central Rules, 1971
which reads as under:
R. 12: Disposal of business: Every question which the Board is required to take into consideration shall be considered at a meeting, if the Chairman so directs, by sending the necessary papers to every member for opinion, and the question shall be disposed of in accordance with the decision of the majority:
Provided that in the case of equality of votes, the Chairman shall have a second or a casting vote.
Explanation:- "Chairman" for the purpose of this Rule shall include the Chairman nominated under Rule 13 to preside over a
meeting.
The respondents had next sought to justify the impugned
notification by referring to the alternative meaning of the word
''consult''. Referring to Mitra''s Legal and Commercial Dictionary [(5th
Edn., Kolkata - 1990) p.168]. Ms. Alam submitted that the word
''consult'' implies a conference of two or more persons or the impact
of two or more minds in respect of a topic in order to enable them
to evolve a correct or at least a satisfactory solution. Such
consultation may take place at a conference table or through
correspondence. The form is not material but what really matters
is the substance. Again, she has relied on Stroud''s Judicial
Dictionary on Words and Phrases [(5th Edn., Vol-I, London - 1986)
p. 523] to find out a different meaning attached to the word. The
essence of consultation is the communication of a genuine
invitation to give advice. Mere sending of a letter which is not
received is not sufficient.
The respondents have further relied on the case of Chandra
Mouleshwar Prasad Vs. Patna High Court and Others, reported in
AIR 1970 SC 370. There also the exact connotation of the word
''consultation'' came up for consideration and a five-judge Bench of
the Supreme Court held that consultation or deliberation is not
complete or effective before the parties thereto make their
respective points of view known to the other or others and discuss
and examine the relative merits of their views. If one party makes a
proposal to the other who has a counter proposal in his mind
which is not communicated to the proposer, the direction to give
effect to the counter proposal without anything more cannot be
said to have been issued after consultation.
Ms. Alam next relied on the case of Supreme Court Advocates-
on-record Association Vs. Union of India, reported in (2016) 5 SCC
1, where it has been observed that the word ''consult'' implies a
conference of two or more persons or an impact of two or more
minds who may be able to confer and produce mutual impact. It is
essential that each must have for its consideration full and
identical facts which can at once constitute both the source and
foundation of the final decision. Ms. Alam submitted, therefore, in
the present case, the Secretary of the Board who is also an official of the government circulated the report of the committee to all the
members of the Board seeking their opinion. Whether they had
responded or refrained from making any response, it would be
presumed that they were in agreement with the report. The
members had full and identical facts that formed mutual impact,
thereby constituting the source and foundation of the final
decision giving rise to issue the notification, dated May 25, 2011.
After completion of the consultation process with the Board it is
presumed that the Board had accepted the proposal and since
there was no contrary proposal, the consultation process was duly
completed resulting in issuing the gazette notification abolishing
contract labour in Lube Oil Blending Plant of the writ petitioner.
A very major emphasis of Ms. Alam''s submission is that the
members of the Board had unanimously accepted the findings of
the committee and had communicated their views. None had
expressed any contrary view and hence the Government of India
has acted in accordance with the view of the statutory fact finding
committee.
The stand of the respondents is that the requirements of
Section 10 of the Act were duly complied with and none has made any allegation about it. The entire dispute between the petitioner
and the respondent no. 4 being confined to the process or
operation at the plant the decision of the appropriate government
is final.
As mentioned above, the principal challenge of the petitioner
to the impugned notification is on the ground that the mandatory
requirement of Section 10 has not been complied with by the
government before issuing the impugned notification. This being
the initial issue with which the petitioner approached the Court it
has now to be considered whether the version of the respondents
has successfully dispelled the area of criticism. In other words,
whether the projected unanimous decision of the Board can be
taken to be the proper consultation by the government merely
because he who had circulated it was a government employee.
One thing stands out very clearly from the case of the
respondents that no factual consultation did take place between
the government and the Board, at least the meaning in which the
word ''consultation'' is understood in common parlance. Therefore,
the respondents attempted to justify their action by resorting to
the extended meaning of the word ''consultation''. It has been specifically pleaded in the writ petition that since no minutes of the
necessary consultation between the Board and Union of India and
other relevant documents, despite being asked by the petitioner,
was supplied an inference should be drawn that there was no
consultation as such at all between the government and the Board
before the notification was issued.
The affidavit used by the respondents does not dislodge the
reasons for drawing an inference by the petitioner about the
absence of any consultation at least by was of a meeting between
the Union of India and the Board. The respondents have given a
very evasive reply to the very specific case made by the petitioner
in paragraph 11 of the writ petition as matters of record. It has to
be borne in mind that from the circumstances the petitioner could
only a negative inference. The onus to counter it lay on the
respondents as a fact within their special knowledge. This they
never attempted with reference to the specific allegation.
Mr. Chowdhury has specifically argued that the members of
the Board did not consider the report of the committee at a
meeting but concurrence was obtained through circulation. Relying
on the letter dated March 15/24, 2011 from the Secretary of the Board to its Chairman Mr. Chowdhury argued, and not without
valid reasons that the views of the Board had not even been sent to
the Government. The Chairman''s endorsement on the letter is
significant.
Mr. Chowdhury submitted that the impugned notification in
all probability was the result of a sense of urgency created by the
initiation of a contempt proceeding by the respondent no. 4. Since
the contempt was directed against the Chairman and members of
the Board, the Secretary was anxious to dispose of the matter as
early as possible, and in the process a very important part of the
consultation was ignored.
I find sufficient substance in the submission of the petitioner
that in the present case there was no consultation worth the name
and the requirement of Section 10 of the Act has not been
satisfied. Whatever extended meaning that may be attached to the
word ''consult'' or ''consultation'', such act must be between two
persons or bodies. The law requires a consultation between the
government and the Central Board. It does not speak of an inter se
unanimity of opinion by circulation of the views between the
members of the Board. If the meaning sought to be projected by Ms. Alam is to be accepted that consultation means the meeting of
mind or the impact it must be between the two persons or
authorities and not an inter se consultation between the members
of the Board; it must be between the relevant government and
Board. The explanation that the Secretary of the Board being an
official of the government, there was a consultation between the
government and the Board is hardly any defence, let alone a
satisfactory one, to the point of criticism by the petitioner.
Rule 10 of the Rules referred to above limits the functions of
the Secretary to assisting the Chairman in convening the meetings
of the Board and certain other matters relating to its functions as
specified in the said Rule. If he is also the Under Secretary to the
Government of India, a letter from him cannot be said to be in
satisfaction of the requirement of consultation by the government
with the Board. Even if the Secretary has used the stationeries of
the Government of India or had used the dual designation below
his signature that is no pointer that the Under Secretary was
acting on behalf of the government.
A very pertinent question raised by the petitioner and left
untouched by the respondents is that under the relevant Act and Rules, the Secretary cannot exercise any power beyond that
conferred by Rule 10. I fully agree with the submission of the
petitioner that the lacuna cannot be covered with reference to Rule
12 of the said Rules. Even if Rule 12 is pressed into action, the
Situation for the respondents is hardly improved. All that it says is
that either the question which a Board is required to take into
consideration shall be considered at a meeting, or, if the Chairman
so directs, by sending the necessary papers to every member for
opinion and the question shall be disposed of in accordance with
the decision of the majority. If this Rule permits the Board to take
a decision by circulation of papers, it must be preceded by a
direction of the Chairman of the Board. It has nowhere been
pleaded that the Chairman had directed the circulation.
It is a principle of law settled for more than a century and a
half that when the law requires a thing to be done in certain
manner it should either be done that way or not at all. The
Supreme Court in the case of Ramchandra Keshav Adke (Dead) by
Lrs. Vs. Govind Joti Chavare and Others, reported in AIR 1975 SC
915, observed that more than a century ago i.e. from the date of
delivery of the judgment by the Supreme Court, in Taylor Vs.
Taylor, reported in (1875) 1 CHD 426, Jessel M. R. adopted the rule that where a power is given to do a certain thing in a certain
way the thing must be done in that way or not at all and other
methods of performance are necessarily forbidden. The Privy
Council applied it in Nazir Ahmed Vs. Emperor, reported in AIR
1936 Privy Council 253 (2) and later by this Court in a large
number of cases. This principle of law applies with full force to the
facts of this case as neither the notification was issued in terms of
Section 10 of the Act upon consultation with the Board nor was
the paper circulation amongst the members of the Board was done
in terms of Rule 12 of the Rules referred to above.
A further point to take a note of is that there has not been
any change in the factual position between the time the Board
decided not to recommend abolition of the contract labour and the
time when it did so recommend. Until and unless the
circumstances requiring an alteration of the recommendation is
clarified or indicated by the respondents the later recommendation
must be held to be not sustainable in law.
In paragraph 9 of the writ petition, the petitioner has
specifically mentioned that there has not been any change in the
factual situation between the two decisions of the Board. This statement of the petitioner goes uncontroverted in the affidavit
used by the respondents. I find sufficient merit in the submission
of Mr. Chowdhury that the earlier decision was arrived at after the
Board had heard all the parties including the petitioner. Such a
decision must be given some degree of finality so as to save it from
the consequential uncertainty visiting the relevant area. When the
previous decision is sought to be revisited by the Board and the
Board makes a contrary recommendation, it was incumbent upon
the Board to consider and record the change of circumstances
warranting an altered recommendation. This not having been done
the recommendation subsequently made must be deemed to have
been made on the same circumstances prevailing at the time when
the first recommendation was made. Unless there is an alternation
in the circumstances, a contrary recommendation by the same
Board is not a laudable act.
Ms. Alam relied on the judgment in the case of Gujarat
Electricity Board, Thermal Power Station, Ukai Vs. Hind Mazdoor
Sabha and Others, reported in AIR 1995 SC 1893. The Supreme
Court had held in the relevant paragraph that after coming into
operation of the Act, the authority to abolish the contract labour is
vested exclusively in the appropriate Government which has to take its decision in the manner in accordance with the provisions
of Section 10 of the Act. However, the authority to abolish the
contract labour under Section 10 of the Act comes into play only
where there exists a genuine contract. In other words, if there is no
genuine contract and the so called contract is sham and
camouflage to hide the reality the said provision is inapplicable.
Again Ms. Alam relied on the judgment in the case of Steel
Authority of India Ltd. Vs. Union of India and Others, reported in
AIR 2006 SC 3229. The Supreme Court had held that the Act is a
complete code by itself. Determination of the question relating to
relationship of employer and employee is essentially a question of
fact and that would depend upon a large number of factors.
Ordinarily a writ court would not go into such a question. Neither
the labour court nor the writ court can determine the question as
to whether the contract labour should be abolished or not, the
same being within the exclusive domain of the appropriate
government. A decision in that behalf undoubtedly is required to
be taken upon following the procedure laid down in Section 10 (1)
of the Act.
So far as the first judgment is concerned it is not clear why it
has been relied on by the respondents. It does not help the
respondents advance their submission in support of the case that
the requirements of Section 10 (1) have been complied with. The
judgment is entirely on a different point.
So far as the case of Steel Authority of India Ltd. (Supra) is
concerned, the background of the case was a notification by the
State Government referring an industrial dispute for adjudication
to the labour court to determine whether the contract workers
employed in the nature of the contract work of the concerned
company justified in demanding absorption as regular permanent
employees thereof. The contract employees'' union was common in
both the proceedings i.e., the one under the Industrial Disputes
Act the other being the writ petition. It was in this context that the
Supreme Court had observed that since the relationship between
the employer and employee was a matter of fact depending on
various factors, the same cannot be gone into in a writ petition. All
that the Supreme Court restrained the labour court and the writ
court was from entering into a question whether the contract
labour should be abolished or not. The Supreme Court has never
held that in a given case if it is alleged that before a notification has been issued there had not been proper compliance with the
provision of Section 10 (1) of the Act, the writ court must stay off
its hands as the issue falling into the area of impermissible
jurisdiction. The petitioner never raised any issue about whether
the contract labour should be abolished. It is the non-compliance
of the procedure provided which is the subject matter of challenge
in the present writ petition.
It may be mentioned that a similar question came up for
consideration in the case of Tata Refractories Ltd. Vs. Union Of
India, reported in (1992) 2 LLJ 810. There also the notification of
the Central Government issued in exercise of powers conferred by
sub-Section 1 of Section 10 of the Act prohibiting engagement of
contract labour in the fireclay mines of the country was challenged
by way of a writ petition, primarily on the ground that the
appropriate authority had not applied its mind to the relevant
conditions stipulated under the Act before issuing the notification.
The question that arose for consideration before the Court was
whether the exercise of power by the Central Government under
Section 10 of the Act and issuing a notification could be said to be
invalid and inoperative for non-compliance with the provisions
contained in Section 10 of the Act.
A Division Bench of the Orissa High Court in Tata
Refractories (Supra) observed that the Act had been enacted to
regulate the employment of contract labour in certain
establishments and to provide for its abolition in certain
circumstances as enumerated in different provisions of the Act.
The Division Bench noted the observations of the Supreme Court
in various judgments that the system of engaging contract labour
has been held to be ''archaic'', ''primitive'' and of ''baneful nature''.
However, the Division Bench was constrained to hold that
howsoever laudable the object the legislation may be and
howsoever primitive the practice of engaging the contract labour
may be when a notification issued by the Central Government
abolishing contract labour is challenged, it must be shown by the
appropriate government that there has been due compliance with
the provisions of the Act and the formation of the opinion of the
Central Government is bona fide after considering the germane
materials as enumerated in the Act itself. Otherwise, the exercise
of power conferred on the Central Government will be vitiated. It
has further been held that before issuing the notification under
Section 10 of the Act consultation with the Board is mandatory.
As mentioned earlier, howsoever the respondents authorities
may try to establish a non-conventional mode of consultation it
cannot be gainsaid that it does not satisfy the requirement of
Section 10 of the Act which requires such consultation to take
place between the appropriate government with the Board. Merely
because the recommendations of the committee was forwarded by
the Under Secretary of the government who was also the Secretary
to the Board it does not mean that the government was consulted.
When the law requires that the government should be consulted its
rules of business must lay down with which designated
functionary such consultation must take place. This is an area on
which the respondents never tried to throw any light. The grayness
of the area as emerging from the stand of the respondents has
been covered by an obfuscatory darkness.
I, thus, find that the essential pre-conditions for issuing the
impugned notification under Section 10 of the Act have been
violated. The notification dated May 25, 2011, is set aside and
quashed.
The writ petition is allowed.
There shall, however, be no order as to the costs.
Urgent Photostat certified copy of this order, if applied for, be
supplied to the parties on priority basis upon compliance of all
requisite formalities.