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2023 Supreme(Bom) 576

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
K. R. Shriram, Rajesh S. Patil, JJ.
Oil & Natural Gas Corporation Ltd. - Appellant
Versus
Petroleum Employees Union and ors. – Respondents
Letters Patent Appeal No.337 of 2011 In Writ Petition No.6216 of 2011, Civil Application No.402 of 2011, Civil Application No.47 of 2018, Civil Application No.240 & 298 of 2013, Interim Application No.1708 of 2021, Civil Application No.25 of 2019, Interim Application No.1860 of 2022
Decided On : 05-06-2023

Advocates:
Advocate Appeared:
For the Appellant :Mr. J.P. Cama, Senior Advocate a/w. Mr. Gobindram D. Talreja and Mr. Rahul, Mantri i/b. Gobindram D. Talreja and Associates
For the Respondent:Mr. Sanjay Singhvi, Senior Advocate a/w. Ms. Rohini Thyagarajan and Mr. Avinash Belge i/b. Mr. R.D. Bhat, Mr. Ashutosh Mishra, Mr. Shaligram G. Mishra in person.

Headnote:(A) Contract Labour (Regulation and Abolition) Act, 1970 - Employment Status - The Tribunal declared contracts sham, awarding absorption and benefits to former contractors. The Court ruled that answer to issues on contractual legitimacy must follow the referenced terms and not beyond. (Paras 1, 16, 24, 25, 59)

(B) Jurisdiction of Tribunal - Tribunal must confine findings to the terms of governmental reference, thus ruling on matters of fact beyond that reference was erroneous. (Paras 21, 25)

Facts of the case:
The appellant engaged contractors for labor under contractual agreements. Workers claimed absorption as permanent employees after a notification abolished contract labor. The Tribunal ruled the contracts were not genuine and awarded absorption and back wages. (Paras 3-4)

Findings of Court:
The judgment of learned Single Judge upholding the Tribunal's findings was flawed due to errors in interpreting the terms of reference, concluding the validity of contracts as sham and awarding benefits. (Paras 57-58)

Issues: The main issues included the genuineness of the contracts between the corporation and contractors, the legality of absorption claims, and whether the tribunal exceeded its jurisdiction. (Paras 21, 24)

Ratio Decidendi: The court held that the Tribunal exceeded its jurisdiction by ruling on matters not referred in the government order, affirming that the claims of sham contracts lacked sufficient substantiation. (Paras 25-34)

Result: Appeal allowed; the Tribunal's award quashed, workmen to be discharged per law.

Table of Content
1. dismissal of writ petition impugning tribunal's award (Para 1 , 2)
2. nature of employment & contractual relationships (Para 3 , 4 , 5)
3. government's role in employment disputes (Para 6 , 7 , 8)
4. establishment of claims for absorption (Para 9 , 10 , 11)
5. the tribunal's power and jurisdiction limitations (Para 12 , 13 , 14)
6. status of contractual employees and rights to regularization (Para 15 , 16 , 17)
7. (Para 18 , 19)
8. constitutionality and validity of employment contracts (Para 20 , 21 , 22)
9. limits of claiming rights from legal judgments (Para 23 , 24 , 25 , 26)
10. conclusion on employment claims and absorption (Para 27 , 28)
11. final observations and instructions from court (Para 29 , 30 , 31 , 33 , 34 , 35)

JUDGMENT :

K. R. SHRIRAM, J.

1 Appellant is impugning judgment and order dated 8th September 2011 by which the learned Single Judge was pleased to dismiss the Writ Petition filed by Appellant. In the Writ Petition, Appellant was impugning an Award dated 28th February 2011 (the said Award) passed by the presiding officer Central Government Industrial Tribunal No.II) (hereinafter referred to as “The Tribunal”) in Reference CGIT – 2/10 of 2003.

2 The Tribunal, by the said Award, had disposed the Reference made on 27th February 2003 by the Government of India, Ministry of Labour. The Tribunal was pleased to declare that the contracts between Appellant and various Contractors in respect of workmen covered by the Reference and particularly in List A and List B are sham, bogus and mere camouflage. The Tribunal also declared that the workmen in these lists were absorbed as per the order of this court and they are entitled to appropriate wages and other service benefits on par with permanent workmen of Appellant. It was also held that the said workmen are entitled to the benefits of settlement dated 12th July 2000.

Facts, briefly stated, are as under :

3. Appellant is a Government of India Corporation engaged inter alia in Oil exploration and drilling. According to Appellant, from time-totime Appellant required specified kinds of workers for short duration. Hence, they entered into separate agreements with several Contractors for engagement of contract labourers. In the present case, there were approximately 21 Contractors engaged in various activities such as Housekeeping, Canteen, Security, etc.

4. In the year 1991, workers, through their Union, filed Writ Petition being Writ Petition No.2185 of 1991, seeking direction to the Central Government to issue a Notification abolishing Contract Labour under Section 10 of The Contract Labour (Regulation and Abolition) Act, 1970 (for the sake of brevity hereinafter referred to as the ‘CLR Act’). Necessary order was passed by the Hon’ble Court on 27th August 1991. By the same order the status quo order dated 2nd May 1991 was continued.

5. Thereafter an Abolition Notification was issued on 8th September 1994 abolishing Contract Labour in 13 forms of employment. The workers thereafter approached this Court by way of Writ Petition No.401 of 1996 and Writ Petition No.1240 of 1996, claiming that in view of the aforesaid abolition order they should be ordered to be regularized. Petitioners were the same Unions which are Respondent Nos.1 and 2 herein. An interim order of status quo was passed on 18th March 1996 in Writ Petition No.401 of 1996.

Ultimately, both these Writ Petitions were clubbed together and disposed on 31st August 1996 by a common judgment of His Lordship Mr. Justice A.P. Shah J. (as he then was), directing that the concerned workers were entitled to be absorbed into Appellant’s establishment retrospectively from 1st April 1997.

However, the Court further noted that it would not be possible for Appellant to absorb all the Contract workers and therefore liberty was granted to Appellant to determine the requisite complement which Appellant required and to absorb only that number. As for the balance, they were to be discharged in accordance with Chapter V-B of t

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