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Judgment
V.K. Shukla, J.—Present writ petition had been filed by M/s Pashupati Singh and Company Contractor at M/s Indian Farmers Fertilizers Co-operative Ltd., Phoolpur, Allahabad assailing the validity of the award passed against them by Industrial Tribunal U.P. at Allahabad dated 3.7.1989.
Brief facts of the case, as set out in the writ petition, is that petitioner entered into contract with M/s. Indian Farmers Fertilizers Co-operative Ltd., Phoolpur, Allahabad for loading and unloading Urea bags for the period starting 1.9.1980 to 31.8.1981. Petitioner for getting the job for loading and unloading of aforementioned Urea bags, appointed contractor who are commonly known as Petty Contractors to perform the job of loading and unloading of Urea bags and the petitioners used to pay to the Petty Contractors is per bills raised by them and petitioner in his term realised as part of the bills from aforementioned Indian Farmers Fertilizers Co-operative Ltd., Phoolpur, Allahabad. Petitioner contends that the petitioner never employed any workman nor it paid any wages, nor there was any direct and indirect relation ship of master and servant. The job of employment of worker, manner of performance of work, administrative control, domain of the petty contractor who was solely responsible for the employment, relationship, if any of employer or employees was that of Sub-contractor Contract of petitioner expired on 31.8.1981 and later on another contract was given which also expired on 31.10.1982. In this new period of contract again the work of loading and unloading was performed by the petitioner through petty contractor. About 261 labours raised the dispute that services have been wrongfully dispensed with and they were entitled to remain in employment. The aforementioned dispute resulted in reference u/s 4-K of the U.P, Industrial Dispute Act made by the State Government by means of Government Order dated 31.3.1983. Reference was made to the effect that as to whether the Management justified to dispense/terminate or deprives the workers from the job w.e.f. 31.10.1982 and what relief be accorded to the workman. In the reference the State Government being not sure as with whom workers were employed both the petitioner as well as Indian Fanners Fertilizers Co-operative Ltd., Phoolpur, Allahabad were shown as employer respectively before the Industrial Tribunal. Precise plea has been set up by the workmen that they were employees of Indian Farmers Fertilizers Co-operative Ltd., Phoolpur, Allahabad. After evidence has been led, Industrial Tribunal proceeded to give award on 3.7.1989 which was published on 5.9.1989 and received by the petitioner on 6.10.1989 and by means of aforementioned award the Industrial Tribunal has directed payment of one month wages to each workers and compensation u/s 6-N of the U.P. Industrial Tribunal Dispute Act, 1947 to workers and further six months wages in lieu of reinstatement to each workers. At this juncture present writ petition has been filed.
To this writ petition, counter affidavit has been filed and therein it has been asserted that petitioner as well as Indian Farmers Fertilizers Co-operative Ltd., Phoolpur, Allahabad were employer of the respondent workmen in the tight of the provisions as contained u/s 2(1)(IV) and Section 2(z) of the U.P. Industrial Dispute Act, 1947. It has further been asserted that the order passed by the Industrial Tribunal has done substantial justice and no interference be made by this Court under Article 226 of the Constitution of India.
Counter affidavit has also been filed oil behalf of the respondent No. 4 Indian Farmers Fertilizers Co-operative Ltd., Phoolpur, Allahabad and therein it has been mentioned that concerned workmen are employees of the petitioner and answering respondent has no concern with the same. Petitioners are employees of workman and under the provisions of the Contract Labour (Regulation and Abolition) Act, 1970 no liability can be fastened on the aforementioned respondents. It has also been asserted that Industrial Tribunal rightly recorded finding that workmen are employees under the employment of petitioners.
To this Counter affidavit, rejoinder affidavit has been filed and therein statement of fact mentioned in the writ petition has been reiterated and dispute has been sought to be raised in regard to continuous service for workers for 240 days in calendar year.
After pleading has been exchanged inter-se parties, the matter has been taken up for hearing and final disposal.
Sri Vijay Singh, has entered appearance on behalf of the petitioner, Sri Vivek Ratan has entered appearance on behalf of IFFCO and Sri U.N. Sharma, has entered appearance on behalf of respondent-workmen.
Sri Vijay Singh, has submitted that by no stretch of imagination Industrial Tribunal could have passed the award against the petitioner, inasmuch as, the dispute which has been sought to be raised, was not at all Industrial Dispute as petitioner did not fall within the definition of employer and further being licensed contract or and the petitioners establishment being covered under the provision of the Contract labour (Regulation & Abolition) Act, 1970 which is special Act and has over riding effect and thus no relief, whatsoever, can be granted qua the petitioner and as such award passed by the Industrial Tribunal is liable to be set aside.
Counsel for the respondent-workman on the, other hand submits that definition as contained u/s 2(i)(iv) and 2(z) U.P. Industrial Dispute Act, 1947 clearly reveals that there was relationship of the employee and employer and there being industrial dispute, the Industrial Tribunal has full authority and jurisdiction to pass appropriate orders. In the facts and circumstances of the case, the Industrial Tribunal has done substantial justice and as such the same shall not be interfered.
Sri Vivek Ratan, on the other hand submits that proceedings in question being covered under the Contract Labour (Regulation and Abolition) Act, 1970 right of the parties would have to be decided under the provisions contained in the aforementioned Act and no liability could be fastened upon his client and Industrial Tribunal has rightly recorded finding of fact that workmen were labourers of contractor and had no relationship of employer and employee with Indian Farmers Fertilizers Co-operative Ltd., Phoolpur, Allahabad was in existence.
From the pleading of the parties, this fact has not been disputed that the petitioner firm is a licensee under the provision of Contract Labour (Regulation and Abolition) Act, 1970 and further M/s Indian Farmers Fertilizers Co-operative Ltd., Phoolpur, Allahabad had authority to enter info contract with the petitioners for loading and unloading Urea bags. Industrial Tribunal has recorded categorical finding of fact that workmen were employed on contractual basis and in this view of the fact no liability has been fastened upon Indian Farmers Fertilizers Co-operative Ltd., Phoolpur, Allahabad.
In the present case, now the question which is arising as to whether any liability could have been fastened upon petitioners after recording finding of fact to the effect that workmen were employees of petitioner who are contractors under the provisions of Contract Labour (Regulation and Abolition) Act, 1970.
Question which bas sought to be raised has already been answered by this Court in Civil Misc. Writ Petition No. 15399 of 1988 (Indian Explosives Ltd. v. State of U.P.) alongwith bunch of writ petition and therein precise view has been taken that Contract Labour (Regulation and Abolition) Act, 1970 has take away from the State Government, authority to refer industrial dispute related to employments of contract labours and industrial dispute can be raised by the contract labours only in the contingency when it is claimed that contract is in genuine. Relevant paras of the aforementioned judgment are being quoted below;
However, relying upon the provisions of Section 2(1)(iv) of the U.P. Industrial Disputes Act 1947 (hereinafter called the U.P. Act) and further relying upon the judgment of the Hon''ble Supreme Court in Basti Sugar Mills Ltd. Vs. Ram Ujagar and Others, , the Labour Court came to the conclusion that the work in the packing department was a part of the industry as it was gone regularly, in the packing process the Urea from the machine was filled up into the bags and in that process the bags got over filled and the urea was spilled on the ground. He spilled urea was removed and packed in bags manually and Stocked in the store for being sold. The work of cleaning this urea was every days affair and the work was of perennial nature. It was a part of the manufacturing process and, thus, the said 67 workmen should be declared permanent employees of the petitioner company with effect from the date of said award, i.e. 1.7.1988. While making the award the Labour Court also made the following observations:
The object of Contract Labour (Regulation and Abolition) Act is to "permit" an "''employer" to employ contract labour at their sweet will. This Act has been enacted to regulate the exercise of such right and where necessary abolish the same. It gives powers to the State Government u/s 10 to abolish, if where it finds an abuse of this right. This Act does not permit an employer to employ contract labour for performing such work in an industry where the work is either of perennial nature or is ancillary to or part of the industry. Therefore, in the case where die workmen concerned are doing such work in the factory which is part of the industry, the Contract Labour (Regulation and Abolition) Act will give then go shelter.
Shri S.N. Verma, learned Senior Advocate has vehemently argued that the Labour Court has erred in giving the award against the petitioner company and the said award has been challenged on various grounds. Provisions of the Contract Labour (Regulation and Abolition) Act, 1970, (hereinafter called the Act) do not abolish the contract labour system, it merely authorise the appropriate Government to abolish the contract labour as is provided u/s 10 of the said Act. The scheme of the Act provides that even if the labourer/workmen are employed through the contractor, they should not be exploited or there should be no unfair labour practice in the establishment.
Similarly, Rule 25 of the U.P. Rules, 1975 provides for various checks for supplying the Contract labour as it provides for grant of valid licence and regarding the liability etc. of the Principal employer to the extent that the wages payable to the workmen by the contractor shall not be less than the rates prescribed under the Minimum Wages Act. Moreover, the provisions of the Act particularly. Section 14 provides for revocation/suspension and amendment of the licence. Sections 16 and 21 provides for the welfare and health of contract labour, which include the liability pf the principal employer to provide the facility of the Principal employer to provide the facilities of canteen rest room, first-aid etc. it also provides that the principal employer shall be responsible for the payment of wages to each workman employed by him as contract labour and such wages shall be paid before the prescribed period. Chapter VI of the Act, provides for penalty and procedure for contravention of the provisions regarding employment of contract labour. Section 30 of the Act provides that the provisions of the Act shall have an overriding effect over any other law/agreement for the time being in force.
The Industrial Tribunal has passed its judgment admittedly interpreting the definition of employer provided u/s 2(i)(iv) of the U.P. Act which reads as under;
(1) Employer include....
(iv) there the owner of any industry....
In the course of or for the purpose of contract, the industry contract with any person for the execution by or under such person of the whole or any part of any work which is ordinarily part of the industry, the owner of such industry.
However, the Labour Court did not notice the definition of Clause of the Act. Section 2(i)(b) of the Act provides as under;
A workman shall be deemed to be employed as "contract labour" in or in connection with the work of an establishment when he is hived in or in connection with such work by or through a contractor, with or without the knowledge of the principal employer.
Further Section 2(i)(c) of the act defines the contractor as under:
"Contractor", in relation to an establishment means a person who undertakes to produce a given result for establishment or who supplies contract labour for any work of the establishment and includes a sub-contractor.
Section 2(g) of the Act defines the principal employer as under:
Principal Employer, means-
(i)....
(ii) In a factory, the owner or occupier of the factory and where a person has been named is the manager of the factory under Factories Act, 1948 (63 of 1948) the person so named.
The objects and reasons of the Act specifically provide that "the working conditions of contract labour should be regulated so as to ensure payment of wages and provisions of essential amenities. Under the Scheme of the Bill, the provisions and maintenance of certain basic welfare amenities for contract labour, like drinking water and first-aid facilities, and in certain cases, rest-room and canteen, have made obligatory. Provisions have also been made to guard against delay in the matter of wage payment."
Under Section 10 of the Act, the appropriate Government has the power to issue a notification for abolition of the contract labour, but there is no other competent authority under the Act which can deal with the subject. The labour adjudicator has also been enclothed with the power to pass any order abolishing the contract labour. If the appropriate Government is satisfied and a notification is issued abolishing contract labour in the establishment, the natural corollary would be that from issuance of such a notification the principal employer shall not be permitted to have labour through a contractor but the question does arise even if such a notification is issued whether the labourers supplied by the factor can claim the privilege of absorption on permanent basis with the principal employer. The answer has to be in the negative because the statute does not provide for any such remedial measure, Vide P. Karunakaran v. The Chief Commercial Superintendent and Ors. 1988 Lab. IC 1346.
In fact the Act of 1970 has taken away the power of the State Government to refer the industrial dispute relating to employment of contract labour to the industrial Tribunal. Vide M.S. Air France, New Delhi v. The Industrial Tribunal, and Anr. 1984 Lab. IC 847, and Management Burmah Shell Oil Storage and Distribution Co. of India Ltd. Madras v. The Industrial Tribunal, Andhra Pradesh and Ors. 1975 Lab. IC 165.
Section 30 of the Act provides that the provisions of the Act would have an riding effect over other provisions of law for the time being in force. Even otherwise the Act being a special Act would1 prevail over the general law, i.e. the Industrial Dispute Act as the Act deals with the subject of contract labour and it had taken away the power of the Government which it enjoyed previously u/s 10 of the Industrial Disputes to refer the dispute relating to contact labour to the Industrial Tribunal. However, under the provisions of the Act the appropriate Government, if it so desires can prohibit contract labour in an process by issuing the required notification Vide Delhi Cloth and General Mill Co. Limited and Ors. v. State of Rajasthan. (1962) 65 FLR 877.
The only reason given by the Tribunal for deciding in favour of the workmen was that the work done by the workmen was of a perennial nature and former an integral part in the manufacturing process of the employer. In fact the Tribunal failed to understand that the workmen made an attempt to get the relief through the Tribunal against the principal employer who in fact was not their actual employer or master. The Court or the Tribunal does not have any power to make a declaration that a particular workman would be absorbed in the establishment or would be deemed to be an employee in the establishment unless there is a relationship between the employer and the said workmen of master, and servant.
In Workmen Food Corporation of India v. Food Corporation of India 1985 (50) FLR 142 , the Supreme Court had placed reliance upon its earlier judgment in the case of Dharanga Dhara Chemical Works Ltd. v. State of Saurastra AIR 1975 SC 264, and held that unless a person is thus employed there can be no question of his being a workmen within definition of the term as contained in the Industrial Disputes Act. The Court held as under:
Therefore, when the contract system was in vogue, the workmen employed by the contractor were certainly not the workmen of the corporation.
This Court while deciding the Writ Petition No. 14758 of 1990 and other connected writ petitions between the1 same parties vide its judgment dated 25.1.1991 considered the definition of workmen under the Act and compared it with the definition of workmen given under, the Industrial Disputes Act and observed as under:
The definition of ''workmen'' as given in C.L.A., therefore, is having a deeming Clause also even if such workman is hired in connection with ''such work'' by or through a contractor. Therefore, there is a marked distinction in the definition of workmen as given in the C.L.A. and the definition of workmen as given in the C.L.A. and the definition of word workmen as given in the Act. The award of the Tribunal is based only upon the definition of ''workmen'' as to be found in the Act with reference to the improvement or changed stand of the union regarding the relationship of master and servant and .that tool based upon the statement of witnesses only as regards the nature of work done by them. The said award and the findings of the Tribunal cannot, therefore be sustained under any circumstances. Strong reliance was placed on behalf of the employers on the decision of the Supreme Court in the case of India General Navigation and Railway Co. Ltd., Calcutta and Another Vs. Their Workmen and Another, . In that case the Supreme Court set aside the award of the Industrial Tribunal where the company was directed to pay retrenchment compensation to die workmen. The Supreme Court held that there was no relationship of master and servant between the company and the labour employed by the contractor nor was there any evidence to show that the contract labour became employees of the company at any time. During the course of judgment the Supreme Court held as under;
...Therefore, we are satisfied that the Tribunal was in error in coming to the conclusion that the retrenched workmen had been ?employed by appellant f No. 1. That being so, appellant No. 1 is not the employer of the 56 workmen in question and as such the Tribunal can give them no relief. If they have any claim at all, it would be against the contractor who was their employer.
On the given facts of the present case, it would be open to the aggrieved persons to get a reference made to the Tribunal for getting reliefs as regards their rights of payment or wages, retrenchment compensation etc. from the contractor.
Sri S.N. Verma has relied upon the judgment of the Supreme Court in Gujarat Electricity Board, Thermal Power Station, Ukai Vs. Hind Mazdoor Sabha and Others, , wherein the Supreme Court after considering the entire law and catena of judgments decided by the Apex Court earlier, came to the following conclusion:
(i) In view of the provisions of Section 10 of the Act, it is only the appropriate Government which has the authority to abolish genuine labour contract in accordance with the provisions of the said section. No. Court including the industrial adjudicator had jurisdiction to do so.
(ii) If the contract is sham or not genuine, the workmen of the so called contractor can raise an industrial dispute for declaring that they were always the employees of the principal employer and for claiming the appropriate service conditions. When such dispute is raised, it is not a dispute for abolition of the labour contract and hence Section 10 of the Act will not bar either the raising of the adjudication of the dispute. When such dispute is raised, the industrial adjudicator has lo decide whether the contract is sham or genuine. It is only if the adjudicator comes to the conclusion that the contract is sham, that he will have jurisdiction to adjudicate the dispute. If, however, he comes to the conclusion that the contract is genuine, he may refer the workmen to the appropriate Government for abolition of the contract labour u/s 10 of the Act and keep the dispute pending. However, he can do so if the dispute is espoused by the direct workmen of the principal employer. If the workmen of the principal employer have not espoused the dispute, the adjudicator, after coming to the conclusion that the contract is genuine has to reject the reference, the dispute being not an industrial dispute within the meaning of Section 2(k) of the ID. Act. He will not be competent to give any relief to the workmen of the erstwhile contractor even if lire labour contract is abolished by the appropriate Government u/s 10 of the Act.
(iii) If the labour contract is genuine a composite industrial dispute can still be raised for abolition of the contract labour and their absorption. However, the dispute, will have to be raised invariably by the direct employees of the principal employer. The industrial adjudicator, after receipt of the reference of such dispute will have first to direct the workmen to approach the appropriate Government for abolition of the contract u/s 10 of the Act and keep the reference pending. If pursuant, to such reference, the contract labour is abolished by the appropriate Government, the industrial adjudicator will have to give opportunity to the parties to place the necessary material before him to, decide whether the workmen, of the erstwhile contractor should be directed to be absorbed by the principal employer how many of them and on what terms. If, however, the contract labour is not abolished, the industrial adjudicator has to reject the reference.
(iv) Even after the contract labour system is abolished, the direct employees of the principal employer can raise an industrial dispute for absorption of the ex-contractor''s workmen and the Adjudicator on the material placed before him can decide as to who and how many of the workmen should be absorbed and on what terms.
Same view has been reiterated in the case of Kamlesh Rai v. Presiding Officer, Civil Misc. Writ Petition No. 51022 of 1999 decided on 4.4.2003.
Hon''ble Apex Court in the case of Steel Authority of India Ltd. and Others etc. etc. Vs. National Union Water Front Workers and Others etc. etc., , has also considered this aspect of the matter and in paragraph 99 of the said judgment it has been mentioned only in the contingency where the contract is found sham and ingenuine and in fact workman is employee of the principal employer then labour Court can grant effective relief. Relevant paragraph 99 is being quoted below:
An analysis of the case, discussed above, shows that they fall in three classes; (i) where contract labourer is engaged in or in connection with the work of an establishment and employment of contact labour is prohibited either because the Industrial adjudicator/Court ordered abolition of contract labour or because the appropriate Government issued notification u/s 10(1) of the CLRA Act, no automatic absorption of the contract labourer working in the establishment was ordered; (ii) where the contract was found to be sham and nominal rather a camouflage in which case the contract labourer working in the establishment of the principal employer was held, in fact and in reality, the employees of the principal employer himself. Indeed, such cases do not relate to abolition of contract labour but present instances wherein the Court pierced the veil and declared tire correct position as a fact at the stage after employment of contract labour stood prohibited; (iii) where in discharge of a statutory obligation of maintaining canteen in an establishment the principal employer availed the services of a contractor and the Courts have held that the contract labourer would indeed be the employees of the principal employer.
From all these principles which has been discussed in the aforementioned judgment it is clear that definition of workman under the U.P. Industrial Dispute Act, 1947 is far different than the definition of workman as provided for under the Contract Labour (Regulation and Abolition) Act, 1970 and rights of Contract Labour has to be determined within the four corners of provisions as contained under the Contract Labour (Regulation and Abolition) Act, 1970 and the contract labourer only in one contingency could have raised the dispute for declaration that he be declared as an employee of the company, On the ground that the contract in question is sham or not genuine and in no other contingency in reference which has been made, any relief could have been awarded by Industrial Tribunal.
In these circumstances, once finding of fact has been returned that workmen were employee of contractor then by no stretch of imagination any such direction could have been issued as has done in the present case and the provisions of Section 6-N of the U.P. Industrial Dispute Act 1947 was not at all attracted in inter-se dispute labourer qua contractor.
In this view of the fact, award passed, by the Industrial Tribunal is manifestly illegal and the same is quashed. The writ petition succeeds and is allowed.
No order as to costs.