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2011 Supreme(Kar) 213
High Court of Karnataka
N. KUMAR & RAVI MALIMATH
M/s. L & T Komatsu Ltd., Bangalore, rep. by its Assistant General Manager-HR
Versus
All India Trade Union Congress, Bangalore, rep. by its General Manager & Others
Writ Appeal No.2686 of 2005 (L) C/w Writ Appeal Nos.2687, 2688, 2689, 2700, 2717, 2718, 2719, 2720, 2748, 2749, 2851, 2772, 2809, 2850, 3124 of 2005 & 1959 of 2006 (L)
Decided on: 24-03-2011
For the Appellant:Vijaya Shankar, Senior Counsel, B.C. Prabhakar, Senior Advocate & Subramanya, Advocate.
For the Respondent:R1 to R4 - M.C. Narasimhan, Senior Advocate, R5 to R7 -Vedha Murthy, GA.
Headnote:CONTRACT LABOUR (REGULATION AND ABOLITION) ACT, 1970 - Section 10: [N. Kumar & Ravi Malimath, JJ] Rescinding of Notification under Section 10 of 1970 Act - Held, Section 21 of the General Clauses Act applies only when in an enactment there is no specific provision providing for what is provided in Section 21. In order to find out whether such a provision exists, the scheme of the Act is to be scrutinized. If there is no indication of any such power expressly or by implication then Section 21 of the General Clauses Act has to be read into the said enactment. If an order is passed under a particular statute and if it is given effect to, acted upon, consequential further steps are taken in accordance with law, and third party interests are created, then rescinding or revoking such an order, at that stage, would have serious consequences. Then in those circumstances it cannot be said that the power to issue notification includes the power to rescind or revoke. In the absence of a specific provision providing for such recession or revocation and an express or implied bar for such recession or revocation, Section 21 of the General Classes Act applies, and such a power is to be read into such enactment. Otherwise, the very object of enacting this piece of legislation becomes redundant. This legal position is in no way denuded merely because the notification issued under an enactment was the subject matter of a litigation and the validity of such notification has been upheld by a Court. Thus, when there is no specific provision empowering the Government to rescind the notification issued under Section 10(1), the notification issued by the Government under Section 10(1) read with Section 21 of General Clauses Act rescinding the earlier notification issued under Section 10(1) cannot be said to be without the authority of law. Moreover, the Government which defended the notification under Section 10 of 1972 Act earlier, after it reached finality in Apex Court, on a second thought being convinced that the said notification is not in public interest, rescinded the said notification for good reasons, it could not be said that it had no power to rescind the contract. Such subsequent notification was thus, was legal. In fact Section 21 of the General Clauses Act empowers the Government to issue a notification rescinding the earlier notification notwithstanding the fact that the earlier notification was upheld by the Apex Court after challenges.
CONTRACT LABOUR (REGULATION AND ABOLITION) ACT, 1970 - Section 10: [N. Kumar & Ravi Malimath, JJ] Notification prohibiting contract labour in statutory canteen in industrial establishments - Upheld by Supreme Court - Subsequent notification rescinding such notification - Permissibility - Held, Where a notification prohibiting contract labour in statutory canteens in industrial establishments, was though, upheld by Apex Court however was subsequently withdrawn by Govt. by issuing another notification, in the absence of any specific allegations of mala fides against any of the officials, the mere fact that a Notification which was upheld by the Apex Court is withdrawn subsequently would not constitute malice in law so as to vitiate the subsequent Notification. Moreover, the High Court had granted an interim order of stay and the interim order of stay was in force even when the matter was before the Apex Court. Therefore, the earlier Notification could not have been given effect to at any rate and the Government cannot be blamed for such an action as it was obeying the order passed by the Court. The occasion to implement the Notification arose only after the challenge failed in the Supreme Court. Immediately, thereafter the employer made a representation for rescinding the earlier notification. They referred such a representation to the State Advisory Board and after receiving the recommendation, the impugned notification came to be issued. Therefore, in this background, it cannot be said that the State deliberately did not implement its own Notification. It is a policy decision. If they take a policy decision to withdraw prohibiting the contract labour in statutory canteens after following the prescribed procedure in law, as they were of the view that the said policy decisioen was not in best interest of the workmen, all that is expected to them is to follow the law prescribed and withdraw the said Notification.
Moreover, insofar as the violation of principles of natural justice is concerned, while issuing the earlier Notification, the views of the representatives of the workmen who were members of the Advisory Board were considered and thereafter before rescinding the notification, the same procedure is followed by the State Advisory Board. The matter was discussed at length. The representatives of the Labour Union clearly and unequivocally expressed their views opposing such withdrawal. However, the Government did not accept their views and proceeded to issue the impugned Notification. Therefore, it cannot be said that there has been a violation of principles of natural justice.
CONTRACT LABOUR (REGULATION AND ABOLITION) ACT, 1970 - Section 10: [N. Kumar & Ravi Malimath, JJ] Notification prohibiting contract labour in statutory canteen in industrial establishment - Subsequent notification rescinding such notification - Validity - Held, Where in subsequent notification rescinding the previous notification which prohibited contract labour in statutory canteens in industrial establishments, Govt. took into consideration recommendation of Advisory Board as also factors., mentioned in Section 10(2) as was done in previous notification though it was not so mentioned as in previous notification and it was clear that recommendation of Advisory Board for withdrawing the earlier Notification was not unanimous because three members did oppose such a move whereas six persons made a favorable recommendation and that apart, the Labour Minister was totally opposed to withdrawing the earlier Notification, so also the Labour Commissioner and the Chief Minister was in a fix and therefore, he wanted a consultation and it was after all this exercise that ultimately the Government took a decision to withdraw the earlier Notification. The subsequent notification was not illegal as it was not a case where a decision was taken clandestinely without applying its mind and without considering the relevant factors., because the matter was discussed at length. There was a stiff opposition to the move of the Government. The Chief Minister was forced to consult, and persuade all concerned and ultimately a decision was taken to withdraw the said Notification. W. P. No. 42939 of 2002, D/- 27-10-2006.
Further, whether it is a wise decision, whether there may be yet another decision or whether it is acceptable to the Court, are the matters which are beyond the pale of judicial review by High Court. In that view of the matter, when the Government of the day has followed the procedure prescribed under law taking into consideration all the relevant factors., and wanted to re-trace the steps and differ from the earlier view and make the policy decision not to prohibit contract labour in statutory canteens, it cannot be found fault with.
CONTRACT LABOUR (REGULATION AND ABOLITION) ACT, 1970 - Sections 10 & 30: [N. Kumar & Ravi Malimath, JJ] Contract labour - Employer required to run and maintain canteen in terms of provisions of Factories Act - Notification abolishing contract labour in such canteens - However, no right is conferred on such contract labours thereby demanding automatic absorption of such statutory canteens - Subsequent notification rescinding such earlier notification held valid by High Court - Declaration of such automatic absorption is liable to be set aside. However, it was made clear by High Court that whatever rights the contract labours possesses under the provisions of the Factories Act are intact. Notification rescinding the earlier Notification in no way affects their rights.
1. These batch of appeals are preferred by the employers challenging the order passed by the learned single Judge who set aside the notification dated 1.8.2001 by which the notification issued under Section 10(1) of the Contract Labour (Regulation and Abolition) Act, 1970 (for short hereinafter referred to as ‘the Act’) came to be rescinded and also the declaration granted by the learned single Judge that statutory canteens employees are to be regularized by the respective managements according to the terms of his order and the other consequential reliefs which he has granted.
2. As the subject matter of all these appeals and the questions raised and to be considered are one and the same, they are taken up for consideration together and disposed of by this order.
3. For the purpose of convenience, the parties are referred to as they are referred to in the original writ proceedings. For proper appreciation of the legal issues which arise for consideration in these proceedings, the facts in W.P. Nos.28677-78/2001 are briefly stated.
The first petitioner is a National Trade Union Centre representing the interest of the working class. The second petitioner is a Trade Union registered under the Trade Unions Act, 1926 and it has a membership in Engineering Industries and general service Establishments. Besides representing the organized workers, they have been assiduously engaged in organizing the unorganized labour. The second petitioner-Union is affiliated to the first petitioner-federation. The third and fourth petitioners are employed in the canteen run and maintained by the respondent-management.
The second respondent issued a notification vide No.KAE:6LWA:97 dated 11.4.1997 prohibiting employment of contract labour for industrial canteens in factories employing 250 workers and above in the State of Karnataka exercising the powers conferred under Section 10(1) and (2) of the Act. The said notification came to be issued after considering the unanimous recommendations of the State Contract Labour Advisory Board constituted by the State Government under Section 4 of the Act read with Rule 3 of the Rules and consists of equal number of representatives from the employers-management, trade unions and independent member.
4. More than 700 factories in the State of Karnataka came under the purview and ambit of the notification and were required to abolish contract labour system in their canteens. However, some 40 managements being aggrieved by the aforesaid notification, challenged the validity of the same on a number of grounds as stated in W.P.Nos.14083-84/1997 and connected Writ Petitions before this Court. The learned single Judge considering the importance of the issues involved referred the Writ Petitions for consideration before the Division Bench. In the said proceedings the State Government defended the validity of the notification along with the trade unions representing the contract labour. The Division Bench of this Court after considering the rival contentions and all other aspects, dismissed the Writ Petitions by an order dated 30.3.1998. Aggrieved by the said judgment of the Division Bench, some of the employers-management preferred to file a Special Leave Petition (Civil) No.7371/1998 before the Supreme Court. Even before the Supreme Court the State Government stoutly defended the notification. The Hon’ble Supreme Court dismissed the Special Leave Petition by its order dated 2.2.2001. Some of the employers filed Review Petition No.359/2001 which also came to be dismissed on 19.4.2001. Thus, the validity of the notification was upheld and it reached finality. There were no interim orders of stay of the operation of the notification either before the High Court or before the Apex Court. Therefore, the workmen had a vested right to be treated as employees of the principal employer from the date of notification.
5. In spite of the challenge to the notification having failed, the respondents in these proceedings di
