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SUPREME COURT OF INDIA
A.M. KHANWILKAR, AJAY RASTOGI, JJ.
THE DIRECTOR, STEEL AUTHORITY OF INDIA LTD.– Appellant(s)
VERSUS
ISPAT KHANDAN JANTA MAZDOOR UNION – Respondent(s)
Civil Appeal No(s). 8081-8082 and 8084 of 2011
Decided on : 05-07-2019
(a) Contract Labour (Regulation & Abolition) Act, 1970 - Section 10(1) - Automatic absorption of contract labour on issuing a notification by the appropriate Government under Section 10(1) - Not provided. (Para 33)
(b) Contract Labour (Regulation & Abolition) Act, 1970 - Section 10(1) r/w section 25(H), Industrial Disputes Act, 1947 - In case of contract being sham - Contract labour will have to be treated as direct employee of the principal employer - Such labour entitled to regularization - In case of genuine contract and prohibition notification issued - Principal employer to give preference to erstwhile contract labour in future employment. (Para 34, 35)
(2001) 7 SCC 1 - Relied upon
(1997) 9 SCC 377; (1974) 3 SCC 498; (1978) 4 SCC 257; (1999) 6 SCC 439 - Referred
(c) Contract Labour (Regulation & Abolition) Act, 1970 - Section 10(1) - Tribunal finding that contract was not sham and labour were terminated by the contractor - Tribunal holding labour not entitled for absorption - Not perverse - at least, a possible view - Further, supply of necessary labour by the contractor under a contract - Labour working under directions, supervision and control of the principal employer - In itself will not construe the contract to be sham and bogus per se - Interference by High Court under judicial review - Not justified. (Para 45, 46, 47)
(2009) 13 SCC 374 - Relied upon
(1992) 1 SCC 695 - Distinguished
Facts of the case:
Steel Authority of India Limited (SAIL) has one of the captive lime stone and dolomite mines in Kuteshwar in the District of Katni of Madhya Pradesh which were worked through contractor.
SAIL is registered establishment in terms of Section 7 of the CLRA Act and the contractors through whom the contract labour was engaged were also holding a valid licence under Section 12 of the CLRA Act and the workmen engaged as contract labour by the contractor in the establishment of the appellant (SAIL) were paid their due wages in terms of the tripartite agreement entered into from time to time not less than the rates so prescribed by the authority under the Minimum Wages Act, 1948.
The contract labour of the contractors at Kuteshwar Lime Stone Mines were doing the same jobs as enumerated in schedule of the prohibition Notification No. S.O. 707 dated 17th March, 1993 issued under Section 10 (1) of the Contract Labour (Regulation & Abolition) Act, 1970 (CLRA Act).
The appropriate Government issued a prohibition notification of employment of contract labour for the establishment under Section 10(1) of the CLRA Act dated 17th March, 1993.
The Tribunal held that the contract between the Management (SAIL) and the contractors was genuine and not sham and bogus and the contract workers were allowed to continue even after the prohibition notification under Section 10(1) dated 17th March, 1993 under the CLRA Act on the same terms and conditions and the services of the contract labourer were terminated by the Contractor in April, 1996.
The Tribunal finally held that the employment of the contract labourer through contractors was not sham and bogus before notification dated 17th March, 1993, but after publication of the said notification, by operation of law, the contract through contractors could not be considered to be genuine but became void and sham as the contract labour was allowed to continue in the establishment till April 1996. It was further observed that the Union is at liberty to take recourse of the penal consequences as mandated under Section 23 to 25 of the CLRA Act.
The High Court reversed the finding of fact recorded by the Tribunal and observed the contract to be sham and bogus.
Finding of the Court:
Impugned judgment is not sustainable.
Result: Appeals disposed of.
JUDGMENT
Ajay Rastogi, J.
These appeals arise from the judgment dated 6th September, 2010 passed by the Division Bench of the High Court of Madhya Pradesh in Writ Petition No. 10963 of 2009 and 12485 of 2009 setting aside the award passed by the Central Government Industrial Tribunal(CGIT), Jabalpur dated 16th September, 2009 answering the reference in the affirmative form and directing the contract labourers who were in the employment of SAIL from 1993 till 1996(17th March, 1993 to April 1996) to be reinstated, and their cases be considered for regularisation in accordance with Para 125 of the Judgment of this Court in Steel Authority of India Ltd. and Others Vs. National Union Waterfront Workers and Others, 2001(7) SCC 1, declining to grant them back wages.
2. The case involves a chequered history and almost after four rounds of litigation, the matter has reached at a stage where the reference was made by the appropriate Government under Section 10(1) of the Industrial Disputes Act, 1947 to decide the industrial dispute raised by the Union, namely, Ispat Khadan Janta Mazdoor Union vide notification dated 27th January, 2003 followed with 22nd February, 2005.
3. The seminal facts in brief which may be relevant for the present purpose are that the appellant Steel Authority of India Limited (hereinafter being referred to as "SAIL") is a Government of India undertaking and is a State within the meaning of Article 12 of the Constitution of India and has steel plants in different parts of India. SAIL has one of the captive lime stone and dolomite mines in Kuteshwar in the District of Katni of Madhya Pradesh. Limestone and Dolomite are necessary ingredients for manufacture of steel. The SAIL did blasting work as this work had been departmentalised vide Notification dated 15th December, 1979 w.e.f. 22nd June, 1980. The contract labour of the contractors at Kuteshwar Lime Stone Mines were doing the same jobs as enumerated in schedule of the prohibition Notification No. S.O. 707 dated 17thMarch, 1993 issued under Section 10(1) of the Contract Labour (Regulation & Abolition) Act, 1970(hereinafter referred to as "CLRA Act").
4. It is not disputed that the establishment of the appellant(SAIL) is the registered establishment in terms of Section 7 of the CLRA Act and the contractors through whom the contract labour was engaged were also holding a valid licence under Section 12 of the CLRA Act and the workmen engaged as contract labour by the contractor in the establishment of the appellant(SAIL) were paid their due wages in terms of the tripartite agreement entered into from time to time not less than the rates so prescribed by the authority under the Minimum Wages Act, 1948.
5. The appropriate Government at a later stage issued a prohibition notification of employment of contract labour for the establishment wherein their services hired by the appellant SAIL under Section 10(1) of the CLRA Act dated 17th March, 1993, the extract of which is referred to hereunder:-
"4. The Notification No.S.O.707 dated 17-3-93 was issued and published by the Government of India whereby prohibited with effect from the date of publication of this notification, the employment of Contract Labour in the works specified in the following schedule in the Lime Stone and Dolomite Mines in the country namely:
SCHEDULE
a. Raising of minerals including breaking sizing sorting of Lime Stone Dolomite and,
b. Transportation of limestone and dolomite which includes loading and unloading from trucks, dumpers, conveyors and transportation from mine site to factory."
6. Pursuant to a prohibition notification issued by the appropriate Government under Section 10(1) of the CLRA Act, the relationship of contractor and contract labour stands ceased and by legal fiction, contract comes to extinct and the in disputed fact which has come on record is that no fresh agreement, in the interregnum period, was executed and the existing agreement to whom the appellant & contract labour is a signatory
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