2001 Supreme(SC) 199

2001(2) Supreme 162
SUPREME COURT OF INDIA
(From Karnataka High Court)
S. Rajendra Babu & S.N. Variava, JJ.
Barat Fritz Werner Ltd. etc etc. -Petitioners
versus
State of Karnataka -Respondent
Special Leave Petition (C) No. 7371 of 1998
With
SLP (C) Nos. 10674/98, 10675/98, 10701-10702/98, 11057/98, 11651/98, 12651/98, 20769/2000, SLP (C) .....1998 CC 6285/98, 7420/98, 7580/98, 7581/98, 7582/98, 8125/98, 8127/98, 8179/98, 8192/98, 8202-8205/98, 8290/98, 8315/98, 9893-9897/98, 6515/99
Decided on 2-2-2001
Counsel for the Parties :
For the Appearing Parties: K. Kasturi, G.B. Pai, K.K. Venugopal, Kailash Vasdev, Mrs. Indira Jaisingh, Padmanabha Mahale, Raju Ramachandran, Sr. Advocates, Ms. Kasturi, K.K. Mani, Shantha, Kr. V. Mahale, Rajesh Mahale, R.C. Kohli, Ms. Manjula Gupta, Ms. Asha Pathak, Bharat Sangal, Anand Pandey, Gopal Singh, Ms. Suruchi Aggarwal, S. Ganesh, Ms. Padmini Kumar, B.C. Prabhakar, Ms. Meera Mathur, Vineet Kumar, G.V. Chandrashekar, P.P. Singh, Mrs. V.D. Khanna, Sanjay R. Hegde, Satya Mitra, N. Ganpathy, K.V. Viswanathan, Sanjay Ghose, K.V. Venkataraman, Prem Sagar Khera, Ms. S. Khere, Chand Sood, S. Ravindra Bhat, (A.N. Jayaram) Advocate, General, for the State of Karnataka, Rajan Narain Zutshi, Joseph Pookkatt, Prasenjit Keshwani, Prashant Kumar, Sanjeev Puri, Ms. Anita Shenoy, P.S. Narasimha, Naveen R. Nath, Ms. Hetu Arora, K.R. Nagaraja, R.N. Keshwani, K. Ram Kumar, Vishwajit Singh, N.P. Midha, K.K. Tyagi, Ms. Shalini Bhalla, A.P. Jain, Advocates.

Headnote:(i) Contract Labour (Regulation and Abolition) Act, 1970-Section 10-Abolition of contract labour-Notification of Karnataka Government dated 11.4.1997 prohibiting employment of contract labour in industrial canteen and factories employing 250 workers-Valid-Argument that canteen workmen are not engaged directly as workers in factory and therefore could not be treated as workers engaged in industry is falacious-Words other work in any establishment in Section 10 are to be construed as ejusdom generis-Expression process operation or other work in Section 10(2) cover other activity arising in industry and not merely actual manufacture. (Paras 15 to 19)

       The Petitioners have made provisions for running of the canteen in their establishments through a contractor at any rate on the basis that as a mandatory requirement of law or as contended for some of the Petitioners under the rules framed under the Factories Act to make provision for establishment of a canteen even assuming for a moment that the Petitioners have provided only for facilities to run a canteen and they are not themselves running the canteen but it is only with the help of a contractor the same is being run subject of course to the restrictions placed in the Act in regard to the price and the provisions made by the canteen managing committee even so the fact remains that they fall into a particular class of persons namely factories engaging more than 250 workmen in respect of whom canteen facilities have been provided in terms of Section 46 of the Factories Act and the rules framed thereunder and in such establishments the policy of the Government is to see that there is no contract labour but direct labour. To meet this view of the Government, the contention, put forth on behalf of the Petitioners is that the objectives of a factory and an establishment is to produce the goods or services as the case may be in terms of the Memorandum of Association or any other document under which it is established and supply of food or beverages is not one of their objectives and, therefore, the workmen in such establishments can never be treated as the workmen of the factory. If at all such workmen are treated as workmen of the factory it is only for the purpose of the Factories Act as has been held by this Court in IPCL case. Under the Factories Act, a worker is defined under Section 2(1) to mean a person who is employed, directly or by or through any agency (including a contractor) with or without the knowledge of the principal employer, whether for remuneration or not, in any manufacturing process, or in cleaning any part of the machinery or premises used for a manufacturing process, or in any other kind of work incidental to, or connected with, the manufacturing process, or the subject of the manufacturing process. The Factories Act has been enacted to regulate labour in factories. The main object of the Factories Act, 1948 is to ensure adequate safety measures and to promote the health and welfare of the workers employed in factories initiating various measures from time to time to ensure that adequate standards of safety, health and welfare are achieved at all work places. In particular, in the context of the need to secure maximum production and productivity an appropriate work culture conducive to safety, health and happiness of workers has to be evolved in the factories. To achieve these objectives more effectively, this enactment has been made. In fact, by amendments to the term "worker" so as to include within its meaning contract labour employed in any manufacturing process, improvement of the provisions in regard to safety and appointment of safety officers, reduction of the minimum number of women employees have been made. The said enactment was intended for the regulation in such a manner as to benefit the welfare of the workers. Therefore, the objective of the Act is to confine the applicability of the Act only to those workers on the premises of the factory as factory workmen and not working in the industry as such. The industry or the establishment which runs the factory is much larger expression and it includes not merely the workmen in the factory but others also. In that background, various provisions have been made in the Factories Act for the welfare of those who work in the factory and it became necessary to limit the number of workers who would be covered by the Factories Act. Therefore, the definition of `worker meant to relate to a factory where a manufacturing process activity is carried as otherwise it does not constitute a factory. That definition of `worker cannot be read outside the context of the factories as defined under the Factories Act. But if this definition is applied in the manner suggested by the learned counsel for the Petitioners, it would be doubtful whether those in the Administration or the Accounts Department or the Stores or other personnel like a Welfare Officer in the establishment which runs the factory can at all be called the employees of the establishment or not. The kind of definition sought to be relied upon by the learned counsel for the Petitioners to be read beyond the statute would lead to absurd results. Therefore, we do not think we can subscribe to such a submission. What is to be seen in a case of this nature is the definition as given in the Act. The worker therein is defined in a very broad way. A workman would mean any person employed in or in connection with the work of any establishment whether he is hired with or without the knowledge of the principal employer. We may also notice that even where Factories Act is not applicable to an establishment but canteen facility is provided as a condition of service, this Court has in several cases examined the question from various angles including the conditions referred to in Section 10 of the Act. If the arguments of the learned counsel were to be accepted, then all those cases where the question of considering a canteen worker as falling within the ambit of worker under the Factories Act would not arise for that enactment is not applicable and would form an officer class of establishments to which the Act would be applicable. That is not the intention of the Act at all. This Court having found that it is one of the incidental activities of the establishment, which is necessary for running it, and after ascertaining its perennial or ephemeral nature, done ordinarily through regular workers or otherwise and necessarily employ whole-time employees have all been considered and held that these employees are regular employees of the establishment without reference to the Act. It cannot be disputed that the provision for canteen is a welfare measure and necessarily a requirement to run the same is incidental to the main activity of the establishment particularly when it becomes a condition of service. Viewed from this angle, the suggestion to examine the definition of `worker in the Factories Act and to find out necessity to have such worker to run the establishment will be an academic exercise in semantics without any practical effect. Therefore, the argument of Shri Pai that the canteen workmen are not engaged directly as workers in a factory and therefore we should treat such workmen as workers engaged in the industry will not be correct but plainly fallacious. (Para 15)

       The learned counsel for the Petitioners sought to make a distinction arising under Section 10 of the Act in relation to prohibition of contract labour and regulation of contract labour . They contended that the basis on which contract labour can be abolished under this section is that it should relate to the manufacturing, industry, trade, business or occupation that is carried on in the establishment. In other words, in matters integral to the work in the establishment and not to a mere facility in respect of its workmen as defined in Section 2(1) of the Factories Act. Once again, the argument cannot be appreciated at all because it would be a matter of policy for the Government to prohibit or to regulate the contract labour in an establishment does not necessarily dependent upon whether they are engaged in the core activity or a peripheral like activity the facility of a canteen. Learned counsel for the Petitioners adverted to certain decisions in Standard Vacuum Refining Co., wherein the abolition was in relation to the workmen engaged in the cleaning of the machinery; Shibu Metal Works, wherein workers being engaged for work which was of a permanent nature and it was a part of manufacturing process of the goods manufactured in the factory; Vegoils Pvt. Ltd., wherein it was in relation to the feeding of hoppers in the solvent extraction plant which is an activity closely and intimately connected with main activity of the appellant such as crushing oil cakes and oil seeds for extraction of oil and other chemical production; Catering Cleaners of Southern Railways where it was observed that the work of cleaning, catering establishment and pantry car is necessary and incidental to the industry or business of the Southern Railway and, therefore, the requirement of Section 10(2) was satisfied. The words "other work in any establishment" in Section 10 are to be construed as ejusdom generis and the expression "other work" in the collection of words process, operation or other work in any establishment occurring in Section 10 has not the same meaning as the expression "in connection with the work of an establishment" with reference to a workman or a contractor. Section 10 of the Act provides for prohibition of employment of contract labour in any process, operation or other work in an establishment. The words "Process, operation or other work" need not be interpreted to mean only the core activity and not peripheral activity as is sought to be suggested by learned counsel for Petitioners. In sub-section (2) of Section 10 of the Act certain guidelines have been provided for the Government before the issue of any notification to find out whether the "Process, operation or other work" is incidental or necessary for the industry, trade, business, manufacture or occupation that is carried on in the establishment. The expression used therein is wide in ambit to cover other activity arising in industry and not merely the actual manufacture. Otherwise to understand the expression "Process, operation or other work" other than the meaning given in clause (a) of sub-section (2) of Section 10 would be to narrow down the meaning thereto. That does not seem to be the intention of the enactment at all. Therefore, we cannot agree with the submission made by the learned counsel for the Petitioners in this regard either. (Paras 18 & 19)

       (ii) Contract Labour (Regulation and Abolition) Act, 1970-Section 10-Abolition of contract labour-Notification for-Government not bound by advice given by Advisory Board-All that is required to consult Advisory Board. (Para 20)

       (iii) Contract Labour (Regulation and Abolition) Act, 1970-Section 10-Abolition of contract labour-Notification for-Notification prohibiting employment of contract labour in Industrial canteens and factories employing 250 workers-General single notification-Valid-Separate notification in respect of each factory/industrial canteen not required.

       It was next contended that conditions in each one of the factories had to be ascertained and separate notification had to be issued in respect of each one of the factories. This argument needs to be rejected out right because when the Government was formulating the policy it has to take note of the conditions prevalent generally in such establishments and not with reference to any one or other. In general, if it is found that it would be appropriate to abolish contract labour in canteens run by factories, individual distinctive features do not affect such a decision. When the notification is applicable to establishments falling in a particular category, the fact that separate notification is not issued will not make impact on the action of the Government in the issue of a notification, if otherwise it is valid. (Paras 21 and 22)

       (iv) Contract Labour (Regulation and Abolition) Act, 1970-Section 10-Abolition of contract labour-Karnataka Government s notification prohibiting employment of contract labour in industrial canteen employing 250 workers-Petitioner sick industry under rehabilitation scheme -Plea that notification should not be made applicable to it-Untenable-Petitioner cannot stand on a different footing merely because it has become sick. (Para 25)