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Judgment
K. Chandru, J.—The Tamil Nadu Ex-Servicemen''s Corporation Ltd. (for short Texco) represented by its General Manager is the Petitioner
in W.P.(MD) No. 1913 of 2010. They have come forward to challenge an order of the Bharat Sanchar Nigam Ltd. (for short Bsnl), second
Respondent, dated 30.11.2009. By the said order, the BSNL cancelled the Advance Work Order given in favour of the Texco. The reason given
by them was that there were two writ petitions pending before this Court on the subject matter and that in W.P.(MD) No. 5266 of 2009, there has
been an interim order against the BSNL. After cancelling the advance work order, the bank guarantee and the agreement submitted by them were
returned to the writ Petitioner. Since the impugned order referred to two other writ petition, i.e. W.P.(MD)Nos.10233 of 2008 and 5266 of 2009,
they were also directed to be listed along with this writ petition. Further since W.P.(MD) No. 4060 of 2010 also raised similar issue it was also
tagged along with this writ petition.
In W.P.(MD) No. 10233 of 2008, the Petitioner is the Trichy Region Ex-servicemen and Family Welfare Association. They have filed the writ
petition, seeking to challenge the order, dated 20.10.2008 issued by the Bsnl, Trichy. In that order, the BSNL informed the Texco rearranging the
number of security guards to be supplied by Texco. It was informed to Texco that initially for the IMPCS towers, total security guards were 335.
But their Corporate Office had informed that security guards should be posted only for major vital installations and sensitive store yard and other
offices. Therefore, the offices at Trichy had to reduce the number of security guards posted for certain exchanges and offices. The list of security
guards to be reduced or posted was also enclosed along with the impugned order. Therefore, the said Association comprising of the persons who
were supplied as security guards by Texco apprehending that reduction of security guards supplied by Texco will result in their members being sent
out of employment, had filed the writ petition. They also apprehended that after reducing almost 62 members of their association, the BSNL may
go for outsourcing by private agencies at reduced cost which cannot be permitted.
When the matter came up on 21.11.2008, notice was taken by the counsel for the BSNL. He also undertook that status quo as on 21.11.2008
will continue. On notice from this Court, on behalf of the Director General Resettlement, the Government of India, a counter affidavit, dated
6.3.2009 was filed. In that counter affidavit, the Directorate General Resettlement, New Delhi in paragraph 6 had averred as follows:
6.I state and submit that the Petitioner is indirectly impugning the policy decision of the Government of India expressed through the said
instructions. The policy has got a social objective to fulfill obviously as contemplated under Chapter IV of the Constitution of India namely to give
equal opportunity in employment. There is no arbitrariness in the said policy. I am advised to state this writ petition impugning the policy decision of
the Respondents 1 and 2 is not maintainable. There is no right vested on the Petitioner to continue their employment beyond the period stipulated
under the sponsorship of the 3rd Respondent. In case the prayer of the Petitioner is granted it would perpetuate the employment of the Petitioner
Association members forever without any time or other restrictions as imposed by the said instructions. It would make them as permanent
employees in the guise of continuance of service. It is against the public policy. Further it would disable the employer namely the 5th Respondent a
public organization from reducing the strength of the security guards to its bare necessities and minimum requirement and to avoid squandering and
wastage of public fund. Further, I am advised to state that the Petitioner Association itself not having been empanelled as sponsoring agency
independently it is not an affected person and so I am advised to state that this writ petition filed by the Petitioner Association a 3rd party as
against the Respondents 1 and 2 is not maintainable.
In the counter affidavit fled by the BSNL, dated 22.12.2008, it was claimed that after formation of BSNL, there has been periodical directives
issued by the Corporate Office for keeping the economic strength of the Bsnl and that on the basis of the same, they have entered into contractual
arrangements with Texco. The labour supply by the Texco depends upon the requirement of the BSNL. Therefore, the BSNL decided on review
that it requires only 274 security guards as against the original deployment of 335. There is no question of any private outsourcing and whatever
they do will be with the approved sponsored organizations by the Director General of Resettlement. The Petitioner association has no relationship
with the BSNL and they cannot maintain a writ petition. Even with reference to the locus standi of Texco in filing any case, in paragraph 5 of the
counter, it was averred as follows:
...As far as the award of contract is concerned the decision of BSNL depends upon the procedure and agreement of terms and conditions of
successful bidder. M/s.TEXCO the 3rd Respondent is also a participant of the tender and hence tender procedure will reach its finality. The copy
of agreement expired on 30.11.2008 and the proposed tender document are filed as document No. 4 & 5 respectively. The Petitioner cannot
make any claim or pray interim injunction over the orders of BSNL in view of above.
W.P.(MD) No. 5266 of 2009 was filed by the very same Tiruchirapalli based Association of employees seeking for a direction to restore 61
removed members of the Petitioner association consequent upon the impugned order in W.P.(MD) No. 10233 of 2008. In that writ petition, an
interim order of status quo was granted on 25.6.2009. A counter affidavit has been filed by the Directorate General of Resettlement.
In the meanwhile, an another association by name National Ex-Servicemen Welfare Association represented by its President had filed W.P.
(MD) No. 4060 of 2010, seeking to challenge an order, dated 3.3.2010 issued by the office of the Assistant General Manager (HR&Admn.),
Bsnl, Thanjavur, in which 13 security guards were directed to be withdrawn from the various offices on account of implementation of the order of
the Corporate office. In that writ petition, notice was ordered on 26.3.2010 returnable by two weeks. In the meantime, status quo was directed to
be maintained for a period of two weeks.
In view of common questions were raised in these writ petitions, they were heard together and disposed of by a common order.
Before proceeding to deal with the writ petition filed by the Texco who has an order of allotment for labour supply of security guards to BSNL,
the locus standi of the Petitioners in the other three writ petitions, i.e. W.P.(MD)Nos.10233 of 2008, 5266 of 2009 and 4060 of 2010 will be first
decided.
It is claimed by the two associations that they represented the security guards whose services were lent to Bsnl. By the reduction of the number
of security guards to be deployed, their members may lose employment. It is on that premise, these three writ petitions came to be filed.
The members of the two associations do not have any privity of contract with BSNL. By reduction of the members of the security guards to be
employed to the BSNL and if they lose their employment, their grievance can be only against the Texco and not against the Bsnl. Even assuming
that the members of those two associations have the status of contract labour engaged by Bsnl and claim restoration of their services or seek a
restraint order against BSNL from reducing the total work force, the same cannot be raised in a writ petition filed under Article 226 of the
Constitution of India.
The Supreme Court vide its judgment in Steel Authority of India Ltd. and Others etc. etc. Vs. National Union Water Front Workers and
Others etc. etc., while dealing with the right of the contract workmen in seeking either regularisation or absorption had held that a writ petition
under Article 226 cannot be maintainable and in such case, the workmen will have recourse to the provisions of the Industrial Disputes Act. If they
establish that the contract with the principal employer is sham and nominal, they can maintain an industrial dispute. In such case where there is
prohibition of contract labour, then the remedy is to move an authority u/s 10 of the Contract Labour (Regulation and Abolition) Act, 1970. But, in
no such circumstances, the writ petition is maintainable at the instance of such contract labours. The following passages found in paragraphs 125 (4
to 6) and 126 of the said judgment may be usefully extracted below:
The upshot of the above discussion is outlined thus:....
(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 case2 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 u/s 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 u/s 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.
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.
Therefore, this Court is not inclined to entertain the writ petitions at the instance of those two associations. Hence W.P.(MD)Nos.10233 of
2008, 5266 of 2009, and 4060 of 2010 are liable to be dismissed.
This only leaves out the writ petition filed by the Texco against the BSNL. Ms. Pushpa Menon, learned Counsel for Texco strenuously
contended that the BSNL being the public sector undertaking and Texco is an agency to find rehabilitation for Ex-servicemen, the writ petition
should be decided on the basis of the social justice . Having agreed by solemn agreement to retain 253 security guards for a period from 1.7.2009
to 30.6.2011 for a period of two years on the basis of the Advance Work Order, it will not be open to them to cancel the same. In any event, they
must be directed to retain the work force agreed by the BSNL till the end of the contract period, i.e. 30.6.2011. The learned Counsel also
submitted that the reasons found in the impugned order, i.e. the order, dated 30.11.2009 that the pendency of the two writ petitions and an interim
order passed thereon cannot be a ground to reduce the work force. If at all in those two orders, the court had granted only status quo order and
that cannot prejudice the BSNL. In this context, she also referred to the decisions of the Supreme Court in Harbanslal Sahnia and Another Vs.
Indian Oil Corpn. Ltd. and Others, and Trimex International FZE Ltd. Dubai v. Vedanta Aluminium Ltd., India reported in 2010 (1) MLJ 1322
(SC)to contend that even for breach of contract, the writ petition is maintainable. The rule relating to directing the party to avail an alternative
remedy is only of rule of discretion and not based upon lack of jurisdiction. Hence, the learned Counsel submitted that at least, till the end of the
period by which the work order comes to an end, the workers must be retained in the interest of social justice and for the rehabilitation of the Ex-
servicemen.
Countering the arguments made by the learned Counsel for the Petitioner, Mr. Govindarajan, learned Counsel for the BSNL stated that as the
technology had advanced, the BSNL had found that the earlier technology became outmoded and the installations maintained by them for giving
land line connections have reduced takers. Therefore, the BSNL had to restructure its own organization, so that it becomes commercially viable.
He also submitted that when they have power to restructure their own work force, at the instance of the contractor, they should not saddle with the
inflated work force even if there is no requirement. Thanks to the order of status quo, they are paying the amount to the security guards supplied by
the TEXCO without there being any necessity for their retention.
The learned Counsel further submitted that the writ petition is not maintainable as there is no concluded contract between the TEXCO and the
BSNL. Assuming that there was implied contract, the breach of contract can only involve a claim for damages and not retention in service. He also
submitted that even if the BSNL decided to outsource any of its work, the Directorate General Resettlement has given certain guidelines and those
guidelines have to be followed. It is always open to the Texco to participate in the open tender process. They cannot have monopoly in the matter
of security guards. In this context, he pointed out the counter affidavit filed by the Directorate General of Resettlement stating that Texco cannot
have sole monopoly to continue the contract of labour supply.
In the present case, the question is not whether the Texco can have monopoly of labour supply of security guards for which an inspiration was
drawn from the judgment of a division bench of this Court in The Tamil Nadu Ex-Servicemen''s Corporation Limited (TEXCO), Government of
Tamil Nadu Vs. The Bharat Sanchar Nigam Limited (BSNL) and Others, , where the question is whether the Respondent BSNL is entitled to
restructure its work force depending upon its own requirement and whether the so-called contract obtained by the TEXCO can prevent such
restructuring. Under the Industrial Law, the BSNL has power to restructure its own work force. There is no gainsay that the labour supply
contractor can dictate terms as to how many security guards the BSNL must possess. Even if there was any contract between the Texco and the
Bsnl, if there is any breach, the Texco can only claim damages for such breach of contract.
The Texco do not render execution of any work in favour of the BSNL, but they merely supply security guards. The Texco is only the labour
supplying contractor. TEXCO in more than one occasion had taken a stand that the security guards supplied by them can have no employer
employee relationship with TEXCO and no claim can be made against them. If that is so, the question of TEXCO trying to enforce the terms of
contract against the BSNL will not arise. Further, inspite of contract if there is reduction of work force for bona fide reasons, even the direct
employees of the BSNL can only claim appropriate compensation either in the form of retrenchment compensation or closure compensation.
Therefore, the TEXCO cannot have any superior right of maintaining the work force supplied by them till the end of the contract period, i.e.
30.06.2011. That would amount to claiming superior right over the right of direct workmen employed by the BSNL and such a right is not
recognised either under the Industrial Law or in any other law including Contract Law. In this context, it will also be significant to mention the
submission of the learned Counsel for BSNL that there is no concluded contract between the parties and even a formal agreement has not been
executed between them assumes importance.
Even for any reason TEXCO feel aggrieved about the breach of alleged contract, they can only seek appropriate remedy under the Civil law
and not filing of writ petition to enforce the non existing contract between it and the BSNL. Therefore, the decisions cited by the learned Counsel
for the Petitioner has no relevance to the facts of the case. It is not a case of exercising discretionary power, but it is a question of this Court
entering into the realm of the contract and enforcing the alleged breach of contract between the parties. The observations of the Supreme Court in
SAIL''s case (cited supra) relating to contract labour will squarely apply even to the TEXCO. The TEXCO cannot claim greater right than the
workmen engaged by them merely because they have attempted to rehabilitate the ex-servicemen in some avenues of employment. Hence the
Petitioner has not made out any case to entertain the writ petition.
In the result, all writ petitions will stand dismissed. However, there will be no order as to costs. Consequently, connected miscellaneous
petitions stand closed.