Bharat Heavy Electrical LTD. vs State Of U. P.

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2003 Supreme(SC) 634

2003(5) Supreme 45
SUPREME COURT OF INDIA
(From Allahabad High Court)
Shivaraj V. Patil & D.M. Dharmadhikari, JJ.
M/s. Bharat Heavy Electrical Ltd. -Appellant
versus
State of U.P. & Ors. -Respondents
Civil Appeal Nos. 2459-2461 of 1999
Decided on 21-7-2003
Counsel for the Parties :
For the Appellant : Sudhir Chandra, Sr. Advocate, Ms. Indu Malhotra, Ms. Madhu Sweta and Achintya Dwivedi, Advocates.
For the Respondents : Dr. Maya Rao and S.C. Patel, Advocates.

Headnote:Labour Law-U.P. Industrial Disputes Act, 1947-Section 6-N-Respondents were engaged as gardeners (Malis) to sweep, clean and maintain and look after lawns and parks inside factory and campus of residential colony of appellant through agency of contractor respondents 3 to 5-Their services were terminated-Industrial dispute before Labour Court-Defence plea of appellant that respondents were never employed by it-Labour Court directed reinstatement of workmen and payment of compensation-Writ petition dismissed by High Court-Appeal-On evidence High Court held that workmen were under the direct employment, supervision and control of appellant-No good reason or valid ground to upset concurrent finding of fact-Where workman labour was engaged to produce goods or services and those goods or services were for business of another, the other is employer-No interference was called for.
       Held : The High Court took note of the fact that the respondents-workmen were engaged for working as gardeners in the factory premises, campus and residential colony of the appellant; Ram Swarup, Head Mali was admittedly employed by the appellant; he used to supervise the work of the respondents-workmen; another employee of the appellant, namely, Sadhu Ram used to maintain the record of attendance of the respondents-workmen; when dispute arose consequent upon disengagement of the workmen, he destroyed the attendance register by tearing it off at the instance of one Mr. Varshney who was working as Manager with the appellant. Further, in the impugned order, the High Court observed that if the respondents-workmen were in fact engaged by independent contractors, the record of their attendance should have been maintained by them and to show their control and supervision of the work performed by the workmen. Thus, considering the evidence, the facts and circumstances of the case and findings of fact recorded by the Labour Court, the High Court held that the workmen were under the direct employment, supervision and control of the appellant observing that sometimes, the employers, with a view to get over stringent provisions of the labour law, resort to engage the workmen through some intermediary and such an arrangement has to be termed as artificial. (Para 7)
       Further held : Whether a workman is an employee of principal employer or not depends on the facts and circumstances of a given case. The case of Hussainbhai Calicut (supra) is neither dissented nor diluted. On the other hand, it is held that the said case is covered by class (ii) of para 107 which reads:-
       "107. ..........
       (ii) where the contract was found to be a sham and nominal, rather a camouflage, in which case the contract labour working in the establishment of the principal employer were 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 the correct position as a fact at the stage after employment of contract labour stood prohibited....."
       This, apart, the finding that the respondents-workmen were the employees of the appellant, does not rest merely on the test of control. The other evidence and facts and circumstances of the case were also kept in mind in recording such a finding including a vital fact that the appellant did not produce the records alleging that they were not available which led to drawing adverse inference against them. It is not possible for us to hold that such concurrent findings recorded by the Labour Court and the High Court that the workmen were to be treated as the employees of the appellant are either perverse or based on no evidence or untenable at all. (Paras 12 and 13)

JUDGMENT

Shivaraj V. Patil, J.-Respondent Nos. 6-19 (in the writ petition before the High Court) were engaged as Gardeners (Malis) to sweep, clean and maintain and look after the lawns and parks inside the factory premises and the campus of the residential colony of the appellant through the agency of respondent Nos. 3-5. Their services were terminated on 1.12.1988. They raised industrial disputes before the Labour Court. The appellant took up a plea that they were never employed by it and it was not liable to pay any amount of compensation or to reinstate them in service. The Labour Court, on consideration of respective contentions and the evidence placed before it, passed the award dated 5.7.1996 directing to re-employ them and for payment of compensation of Rs. 15,000/- each for non-compliance of the provisions of Section 6-N of Uttar Pradesh Industrial Disputes Act, 1947 (for short the Act ) besides ordering Rs. 500/ as costs to each one of them. Aggrieved by the award, the appellant filed Civil Misc. Writ Petition No. 2109 of 1997 before the High Court. On 30.11.1998, Deputy Labour Commissioner issued a certificate to the Collector for recovery of Rs. 2,17,000/-. Challenging the said certificate, Civil Misc. Writ Petition No. 41787 of 1998 was filed by the appellant. In the 3rd Writ Petition No. 1654 of 1999, the appellant questioned the validity and correctness of the order dated 2.1.1999 under which the appellant was asked to show-cause why prosecution should not be launched under Section 14-A of the Act.

2. The High Court by the impugned common order dismissed Writ Petition Nos. 2109 of 1997 and 41787 of 1998 concurring with the findings recorded by the Labour Court. Writ Petition No. 1654 of 1999 was disposed of directing no further action for initiating criminal proceedings under Section 14-A of the Act if the appellant deposited a sum of Rs. 2,17,000/- within a period of one month and in the event of failure of depositing the amount, there would be no impediment in launching criminal proceedings against the appellant.

3. Aggrieved by and not satisfied with this common impugned order, these appeals are brought before this Court.

4. On behalf of the appellant, the following contentions were urged:-

(1) That the findings recorded by the Labour Court as affirmed by the High Court are perverse being contrary to the evidence placed on record.

(2) That the High Court committed a serious error in applying test of control in relation to the work of the respondents-workmen having regard to the definition of employer contained in Section 2(i)(iv) of the Act as the work of the respondents-workmen was not part of the industry.

(3) That the respondents-workmen had not worked for 240 days to complain violation of Section 6-N.

5. Submissions were made on behalf of the respondents-workmen supporting the impugned order.

6. The Labour Court on the basis of the evidence concluded that the appellant was the principal employer. In the award, the Labour Court in this regard has stated thus :-

"From the statements of Ram Swarup who is Head Mali under Employer No. 1, it appears that though the concerned workers were employed at work by the contractor but he himself used to take work from them in the capacity of Head Gardener and he also used to look after their work. The contractor used to pay salary only and their attendance were used to be marked in a separate Register by another Head Gardener Sadhu Ram and the Register was got torn by Manager Shri Varshney so that no proof may remain and after tearing of register, workers were removed. From these, it appears that employer No. 1 had control over the plaintiff workers and they cannot be said to be the workers only of the contractor. It appears that with the object to keep them out of the ambit of U.P. Industrial Dispute Act, this method was adopted that work was taken from them by the employee of the employer and payment should be shown to hav

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2003 Supreme(SC) 634

Cases Referred (2)