1996 Supreme(SC) 2098

1997(2) Supreme 165
1997(2) Supreme 165
Supreme Court of India
K. Ramaswamy, B.L. Hansaria and S.B. Majmudar, JJ.
Air India Statutory Corporation —Appellant
versus
United Labour Union & Ors. —Respondents
Civil Appeal No. 15535 of 1996
(Arising out of SLP (C) No. 7417 of 1992)
With
Civil Appeal Nos. 15536-37 and 15532-34 of 1996
(Arising out of SLP (C) Nos. 7418-19/92 and 12353-55/95)
Decided on 6-12-1996
Counsel for the Parties :
For the Appearing Parties : Ashok Desai, Attorney General, T.R. Andhyarujuna, Solicitor General, P.P. Malhotra, Ms. Indira Jaising, K.K. Singhvi, Sr. Advocates,­ M.D. Sisodia, K. Swamy, Lalit Bhasin, Ms. Nina Gupta, Ms. Kiran Bhardwaj, Vineet Kr., Ms. Ethel Perei­ra, Ms. Ritu Makkar, P.P. Singh, G. Nageswara Reddy, C.V. S. Rao, Ms. Anil Katiyar, Ms. Anita Shenoe, Sanjay Parikh, B. N. Singhvi, Sanjay Singhvi, Anil K. Gupta, Ms. Pushpa Singhvi, T. Sridharan, P.K. Manoher, S.R. Bhat, Brij Bhushan, R.N. Keshwani and Ms. C. Ramamurthy & A.K. Sanghi, Advocates.

Very Important Points
1. Though there is no express provision in the Contract Labour (Regulation and Abolition) Act, 1970, for absorption of the employees whose contract labour system stood abolished by publica­tion of the notification u/s 10(1) of the Act, in a proper case, the Court as sentinel in the qui vive is required to direct the appropriate autho­rity to act in accordance with law and submit a report to the Court and based thereon proper relief should be granted.
2. On abolition of contract labour system from any establishment u/s 10 of the Contract Labour (Regulation and Abolition) Act, 1970, by the appropriate Government the logical and legitimate consequences thereof will be that the erstwhile regulated labour covered by the sweep of such abolition for the concerned activities would be entitled to be treated as direct employees of the employ­er on whose establishment they were earlier working and they would be entitled to be treated as regular employees at least from the day on which the contract labour system in the establishment for the work which they were doing gets abolished.

Headnote:(i) Labour Law—Contract Labour (Regulation and Abolition) Act, 1970—Section 10—Scope and ambit of—When condition of work which is of perennial nature etc., as envisaged in sub-section (2) of Section 10 are satisfied—Continuance of contract labour stands prohibited and abolished—What would be the consequence that ensue from abolition?—Principle employer is under statutory obligation to absorb contract labour—They would be entitled to be treated as regular employees from the day on which contract labour system in establishment for the work which they were doing gets abolished—Date of engagement will be criteria to determine their inter se seniority—Retrenchment of excess staff on principle of ‘last come, first go’—Dena Nath’s case, overruled.

       Held that on abolition of the contract labour system, by neces­sary implication, the principal employer is under statutory obligation to absorb the contract labour. The linkage between the contractor and the employee stood snapped and direct relationship stood restored between principal employer and the contract labour as its employees. Considered from this perspective, all the workmen in the respective services working on contract labour are required to be absorbed in the establishment of the appellant. Though there exists no specific scale of pay to be paid as regu­lar employees, it is for the establishment to take such steps as are necessary to prescribe scale of pay like class ‘D’ employees. There is no impediment in the way of the appellants to absorb them in the last grade, namely, grade IV employees on regular basis. It is seen that the criteria to abolish the contract labour system is the duration of the work, the number of employees working on the job etc. That would be the indicia to absorb the employees on regular basis in the respec­tive services in the establishments. Therefore, the date of engagement will be the criteria to determine their inter se seniority. In case, there would be any need for retrenchment of any excess staff, necessarily, the principle of “last come, first go” should be applied subject to his reappointment as and when the vacancy arises. Moreover, the Bombay High Court has correctly held that the High Court under Article 226 of the Constitution would direct the principal em­ployer to absorb the contract labour, after its abolition, even though some of the contractors have violated Section 12 of the Act and the appellants had violated Section 7 of the Act. In the judgments under appeal, High Court has directed to absorb the services of the workmen form the date of the judgment. The re­spondent-Union did not challenge it. We are, therefore, con­strained not to grant the benefit to the employees of the re­spondent-Union form the date of the abolition of the contract labour system. We, therefore, uphold the direction issued by the High Court to regularise their services with effect from the respective dates of the judgments of the High Court with all consequential benefits. (Para 47)

       (ii) Judicial Review—Contract Labour—Constitution of India—Art. 226—Contract Labour (Regulation and Abolition) Act, 1970—Section 10—Abolition of contract labour—Whether High Court under Art. 226 has power to direct their absorption—(Yes)—From what date?—Right to judicial review—Basic structure of Constitu­tion.

       Held : The founding fathers placed no limitation or fetters on the power of the High Court under Article 226 of the Constitution ex­cept self-imposed limitations. The arm of the Court is long enough to reach injustice wherever it is found. The Court as sentinal in the qui vive is to mete out justice in given facts. On finding that either the workmen were engaged in violation of the provisions of the Act or were continued a contract labour, despite prohibition of the contract labour under Section 10(1), the High Court has, by judicial review as the basic structure, constitu­tional duty to enforce the law by appropriate directions. The right to judicial review is now a basic structure of the Con­stitution. (Para 43)

       Further held that though there is no express provision in the Act for absorption of the employees whose contract labour system stood abolished by publication of the notification under Section 10(1) of the Act, in a proper case, the Court as sential in the qui vive is required to direct the appropriate authority to act in accordance with law and submit a report to the Court and based thereon proper relief should be granted. (Para 46)

       (iii) Public Law—Remedy enforceable under Art. 226 of Con­stitution—Action of authority need to fall in realm of public law—Judicial decisions. (Para 45)

       (iv) Contract Labour (Regulation and Abolition) Act, 1970—Sec­tion 2(1)(a)—Word ‘appropriate Government’—Meaning of—Held, appropriate Government is the Central Government from inception of Act—Notification published u/s 10 on December 9, 1976 was in exercise of its power as appropriate Government. (Paras 17 & 20)

       (v) Constitution of India—Article 12—Expression ‘other authori­ty’—Scope. (Para 17)

       (vi) Right to Employment— Contract labour—All essential facilities and opportunity to the poor people are fundamental means to development, to live with minimum comforts, food, shelter, clothing and health—Right to employment—Cannot be claimed—But after appointment to a post or an office it is required to be dealt with as per public ele­ment—Right to life to a workman.

       Held that all essential facilities and opportunities to the poor people are fundamental means to devel­opment, to live with minimum comforts, food, shelter, clothing and health. Due to economic constraints, though right to work was not declared as a fundamental right, right to work of workman, lower class, middle class and poor people is means to development and source to earn livelihood. Though, right to employment cannot, as a right, be claimed but after the appointment to a post or an office, be it under the State, its agency instrumentality, jurisdic person or private entrepreneur it is required to be dealt with as per public element and to act in public interest assuring equality, which is a genus of Article 14 and all other concomitent rights emanating therefrom are species to make their right to life and dignity of person real and meaningful. In a socialist democracy governed by the rule of law, private property, right of the citizen for development and his right to employment and his entitlement for employment to the labour, would all harmoneously be blended to serve larger social interest and public purpose. (Para 35)

       (vii) Constitution of India—Preamble—Socialism—Meaning of—Concept of social justice—Social security, just and humane conditions of work and leisure to workman are part of his mean­ingful right to life—Social justice and equality are complemen­tary to each other.

       Held, the aim of social justice is to attain substantial degree of social, economic and political equality, which is the legitimate expectation and constitutional goal. Social security, just and humane conditions of work and leisure to workman are part of his meaningful right to life and to achieve self-expression of his personality and to enjoy the life with dignity. The State should provide facility and opportunities to enable them to reach at least minimum standard of health, economic security and civilised living while sharing according to their capacity, social and cultural heritage. (Para 32)