REPORTABL E

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.4755 OF 2001

G.M. ONGC, Shilchar         ….Appellant

Vs

ONGC Contractual Workers Union              ….Respondent

WITH  Transfer Petition(Civil) Nos.890-892/2007

J U D G M E N T

HARJIT SINGH BEDI,J.

1. This appeal   after special leave arises out of the following

facts:

2. The  appellant,  the  Oil  and  Natural  Gas  Commission

(hereinafter called the “ONGC”) is engaged in the exploration

for oil and natural gas.  In 1997, the ONGC started its drilling

operations  in  the  district  of  Cachar  and  for  that  purpose

engaged  a  large  number  of  staff  in  various  fields,  initially

through contractors.  These employees later formed the ONGC

Contractual  Workers  Union  (hereinafter  called  the  “Union”)

which is the contesting respondent in this matter.  The Union

raised a dispute demanding the regularization of the services

of its members.  This demand was resisted by the ONGC and

on  the  failure  of  conciliation  proceedings,  the  State

Government made a reference to the Industrial Tribunal.

3. The  parties  before  the  Industrial  Tribunal  filed  their

pleadings and also recorded their evidence.  The Tribunal in

its award dated 11th July 1994, held that the members of the

Union were indeed the employees of the ONGC and a direction

was accordingly issued that their services be regularized in a

phased manner with pay and other allowances, as permissible

to  regular  employees.   This  award  was  challenged  by  the

ONGC in the High Court on the ground that the members of

the Union were employees of the contractors and not of the

ONGC and as such there was no obligation on the part of the

ONGC to regularize their services.  The learned Single Judge

accepted  this  submission  and  further  observing  that  the

Tribunal had exceeded its jurisdiction by deciding beyond the

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reference,  allowed  the  writ  petition.   A  Writ  appeal  was

thereafter taken by the Union before the Division Bench of the

High  Court  which,  vide  the  impugned  judgment  dated  24th

December  1999,  reversed the findings of  the learned Single

Judge  observing  that  the  powers  of  the  High  Court  while

examining an award of a subordinate tribunal were not as if it

were  a  Court  of  Appeal  and  that  the  learned  Single  Judge

appeared to have fallen into a cardinal error in differing with

the  conclusions  on  facts  drawn by  the  Industrial  Tribunal.

The Division Bench then noted that no workman or contractor

had  been  examined  to  show  the  existence  of  any  contract

labour  and that  no  clarification  having  been  sought  by  the

ONGC  under  section  10  of  the  Contract  Labour

(Regularisation & Abolition) Act 1970, the very basis for the

employment  of  contract  labour  did  not  exist.   The  Division

Bench also observed that there was no ambiguity with regard

to  the  issues  raised  in  the  reference  made  by  the  State

Government as the parties were fully aware as to its meaning

and  import.   The  writ  appeal  was  accordingly  allowed,  the

order of the learned Single Judge was set aside and the award

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of the Industrial Tribunal restored.  The ONGC is before us in

appeal.

4. At the very outset, Mr. Dushayant A. Dave, the learned

senior  counsel  for  the  appellant  has  referred  us  to  I.A.

No.7/2007  to  bring on record  the  present  ground situation

vis-à-vis the ONGC and the members of the respondent Union,

and  has  pointed  out  that  till  the  year  1999,  only  one  Oil

Company, the ONGC, owned by the Government of India had

the  exclusive  right  to  prospect  for  oil,  but  to  accelerate

exploration, it had been decided as from that year, to throw

the field open to National Oil Companies or private companies,

Indian or foreign, by way of an open bidding process, with the

result that the ONGC was no longer holding a monopoly in

this regard.   It  has been submitted that as a result  of  this

liberalization, a large number of companies besides the ONGC

were now engaged in the exploration for oil  and that it was

imperative  in  this  situation  and  changed  scenario  for  the

ONGC to make an attempt to reduce its work force and it had

done so by introducing a voluntary retirement  scheme with

effect from 1999, which had resulted in a reduction of more

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than 3500.  It  has been highlighted that at the time of the

filing of this appeal, about 400 and odd workmen had been

involved  but  many  had  subsequently  accepted  voluntary

retirement  and  the  matter  had  been  initially  restricted  to

about 290 workmen, who in the light of the status quo order

passed by this Court in these proceedings, had been receiving

payments/service  charges  to  the  tune  of  Rs.7,22,000/-  per

month for  the  last  7  years  which now totalled  about  seven

crore although no work was being performed by them.  It has

been submitted that as a result of another Memorandum of

Understanding  signed  on  24th January  2007,  another  176

workmen or their legal heirs out of the 290 aforementioned,

had opted out of the appeal and accepted voluntary retirement

with the result that as of today, only about 70 or 80 workmen

were associated with the Union in pursuing this appeal.   It

has accordingly been pleaded that to meet the latest situation

and  in  the  light  of  the  above  facts,  the  earlier  scheme

formulated by the ONGC for absorption of its workmen set out

in  the  additional  affidavit  filed  on  14th February  2001,  be

treated  as  withdrawn,  though  the  offer  with  regard  to  the

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voluntary retirement scheme which has been accepted by the

176 workmen was still  open to the present members of the

Union.  On facts, it has been argued that the findings of the

Industrial  Tribunal  were  erroneous  and  the  learned  Single

Judge was, therefore,  fully justified in setting aside the award

pursuant  to  its  writ  jurisdiction  under  Article  226  of  the

Constitution of  India.   Reliance for this argument has been

placed on  Ahmedabad Municipal Corporation Vs. Virendra

Kumar  Jayantibhai  Patel  (1997)  6  SCC  650,  Trambak

Rubber Industries Ltd.   vs. Nashik Workers Union & Ors.

(2003) 6 SCC 416 and Seema Ghosh vs. Tata Iron & Steel

Co.  (2006)  7  SCC  722.  It  has  also  been  urged  that  a

workman who had worked  for  240  days or more  could  not

claim  regularization  of  services  and  that  in  any  case,

contractual  workers  were  not  entitled  to  regularization.   In

support of this submission, reliance has been placed on the

State of Karnataka & Ors. vs. KGSD Canteen Employees’

Welfare   Association  &  Ors.  (2006)  1  SCC  567,  M.P.

Housing Board & Anr. vs. Manoj Shrivastava (2006) 2 SCC

702,  Indian  Drug  & Pharmaceuticals  Ltd. vs. Workmen,

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Indian  Drugs  &  Pharmaceuticals  Ltd.  2007(1)  SCC  408,

Gangadhar Pillai  vs. Siemens Ltd. (2007) 1 SCC 533 and

Hindustan Aeronautics Ltd. vs. Dan Bahadur Singh & Ors.

(2007) 6 SCC 207.  It has finally been contended that after

the  promulgation  of  the  Contract  Labour  (Regularisation  &

Abolition) Act,  1970 regularization of contract labour was not

permissible and in support of this plea, the learned counsel

has  relied  on  Steel  Authority  of  India  Ltd.  &  Ors.  vs.

National Union Waterfront Workers & Ors.  (2001)  7 SCC

1 and Secretary, State of Karnataka & Ors. vs. Uma Devi

(3) & Ors. (2006) 4 SCC 1.

5. Mr. Sanyal, the learned senior counsel has, at the very

outset, pointed out that pursuant to the observations of this

Court,  the  ONGC  had  made  an  offer  for  absorption  of  the

workmen by way of an additional affidavit dated 14th February

2001 and the Union had been seriously inclined to accept that

offer,  but  had  sought  some  minor  clarifications  from  the

ONGC  (which were not forthcoming) and on the contrary, the

ONGC had moved I.A. No.7/2007 withdrawing the said offer

and  suggesting  another  voluntary  retirement  scheme  which

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was not   acceptable  to  the  members  of  the  Union.   It  has

accordingly  been  pleaded  that  it  was the  ONGC which had

been unfair  in its  dealings  and that despite  the  passage  of

almost 28 years, the workmen had not been able to get any

substantial  relief.   It  has  also  been  submitted  that  the

Industrial Tribunal was fully justified in delving into the facts

of the case to see the nature of employment of the workmen

i.e. as to whether they were employees of the ONGC or of the

contractor,  and  the  Tribunal  having  done  so,  the  learned

Single Judge was not justified in making a re-assessment on

facts.  For this argument, the learned counsel has relied on

R.K.Panda & Ors. vs. Steel Authority of India & Ors. (1994)

5 SCC 304 and  Steel Authority of India Ltd. (supra). It has

also been contended that the reference made undoubtedly did

give an impression that the Union had accepted their status

as contractual workers and were merely seeking regularization

of their services but in the light of the pleadings of the parties,

the  evidence  led  before  the  Industrial  Tribunal  and  the

arguments raised by the learned counsel in all the fora, it was

clear that the examination was not limited to this investigation

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but the broader question as to whether the members of Union

were  employees  of  the ONGC or of  the contractors  was the

core issue and as the parties were fully aware of this basic

fact,  it  was  not  open  to  the  ONGC  to  contend  that  the

reference  was  bad.   It  has  further  been  highlighted  that

reliance by the appellant on Uma Devi’s case was misplaced

as this matter had been clarified and explained by this Court

in U.P. State Electricity Board vs. Pooran Chandra Pandey,

(2007) 12 SCALE 304.

6. We first take up Mr. Dave’s arguments with regard to the

propriety of the Division Bench entering into the facts of the

case and upsetting the findings recorded by the Single Judge

with regard to the nature of employment of the workmen.  It

has  been  submitted  that  the  interference  by  the  Division

Bench was not called for in the light of the various judgments

of the Supreme Court.   

7. On the contrary, Mr. Sanyal has been at pains to point

out  that  the  Industrial  Tribunal  was  in  fact  the  sole  fact

finding authority and interference by the Single Bench of the

High  Court  in its  writ  jurisdiction  under  Article  226  of  the

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Constitution could be justified only if  the findings could be

said to be perverse.  He has relied upon several judgments of

this  Court  including  Sadhu  Ram  vs. Delhi  Transport

Corporation AIR 1984 SC 1467  for this argument.  It  has

also been submitted that there was no perversity in the Award

of  the Industrial  Tribunal,  and the Single Judge  had, thus,

impinged  and  transgressed  into  the  jurisdiction  of  the

Industrial Tribunal.  

8. We  have  examined  the  arguments  advanced  by  the

learned counsel. This Court has held time and again that the

High  Court  had  the  authority  to  enquire  as  to  whether  a

finding arrived at by the Tribunal was based on evidence and

to correct an error apparent on the face of the record.  The

observations  in  Trambak  Rubber  Industries  Ltd.’s  case

(supra)     are to this effect and it has been highlighted that the

High  Court  would  be  fully  justified  in  interfering  with  an

Award of an Industrial Court on account of a patent illegality.

In Seema Ghosh’s case (Supra), this Court observed that the

High Court’s interference under Articles 226 and 227 of the

Constitution with an Award of the Labour Court was justified

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as the Award had been rendered contrary to the law laid down

by this Court and as a measure of  “misplaced sympathy”, and

was thus perverse.  The other judgments cited by Mr. Dave lay

down  similar  principles  and  need  not  be  dealt  with

individually.   It  will  be  seen  therefore  that  the  interference

would be limited to a few cases and as already noted above, in

the case of a patent illegality or perversity.  On the contrary,

Mr. Sanyal’s reliance on  Sadhu Ram’s case (supra) is more

appropriate to the circumstances herein. It has been observed

as under:

“The jurisdiction under Article 226 of the  Constitution  of  India  is  truly  wide but,  for  that  very  reason,  it  has  to  be exercised with great circumspection. It is not for the High Court to constitute itself into  an  appellate  court  over  tribunals constituted  under  special  legislations  to resolve  disputes  of  a  kind  qualitatively different from ordinary civil disputes and to  re-adjudicate  upon  questions  of  fact decided  by  those  tribunals.  That  the questions  decided  pertain  to jurisdictional  facts  does  not  entitle  the High Court to interfere with the findings on jurisdictional facts which the Tribunal is  well  competent  to  decide.  Where  the circumstances indicate that the Tribunal has  snatched  at  jurisdiction,  the  High Court may be justified in interfering. But where the tribunal gets jurisdiction only if a reference is made and it is therefore impossible ever to say that the Tribunal has  clutched  at  jurisdiction,  we  do  not

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think  that  it  was  proper  for  the  High Court to substitute its judgment for that of  the  Labour  Court  and  hold  that  the workman had raised no demand with the management”.  

9. We are therefore of the opinion that in the light of the

facts that have come on record we find no perversity or patent

illegality in the Award of the Industrial Tribunal and on the

contrary must appreciate that it has minutely examined the

evidence in arriving at its decision.  In this view of the matter,

it was inappropriate for the Learned Single Judge to have re-

appraised the evidence and come to a different conclusion.

10. Mr. Dave has also laid great emphasis on the fact that in

the light of several judgments of the Supreme Court there was

no inflexible right in a workman who had put in 240 days or

more to have his/her services regularized and that contractual

workers were in any case precluded from claiming this relief.

Mr. Sanyal has, however, submitted that most of the workmen

had joined in the year 1979 and 1984 and though they had

two orders in their favour, one of the Industrial Tribunal and

the other  of the Division Bench,  they had not been able  to

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enforce their rights in some cases for almost 30 years.  We

have accordingly chosen to deal  with these  issues  together.

There  are  several  observations  which  do  suggest  that  a

workman who has put in 240 days or is a contractual worker,

is not entitled automatically to regularization.   We, however,

believe  that  the  present  case  is  not  one  of  regularization

simpliciter  such  as  in  the  case  of  an  ad-hoc  or  casual

employee  claiming  this  privilege.   The  basic  issue  in  the

present case is the status of the workmen and whether they

were the employees of the ONGC or the contractor and in the

event that they were employees of the former, a claim to be

treated at par with other such employees.  As would be clear

from the discussion a little later, this was the basic issue on

which the parties went to trial, notwithstanding the confusion

created by the ill-worded reference.  The Division Bench has

examined the evidence on this aspect and has endorsed the

finding  of  the  Industrial  Tribunal.   We  also  find  that  the

observations in R.K.Panda’s case(supra) are significant:

“It is true that with the passage of time and  purely  with  a  view  to  safeguard  the

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interests  of  workers,  many  principal employees while renewing the contracts have been insisting that the contractor or the new contractor retains the old employees. In fact, such  a  condition  is  incorporated  in  the contract itself. However, such a clause in the contract  which  is  benevolently   inserted  in the contract to protect the continuance of the source  of  livelihood   of  the  contract  labour cannot  by  itself  give  rise  to  a  right  to regularization  in  the  employment  of  the principal  employer.  Whether  the  contract labourers have become the employees of the principal  employer  in  course  of  time  and whether the engagement and employment of labourers  through  a  contractor   is  a  mere camouflage and a smokescreen, as has been urged in this case, is a question of fact and has  to  be  established  by  the  contract labourers  on  the  basis  of  the  requisite material. It is not possible for the High Court or  this  Court,  while  exercising  writ jurisdiction or jurisdiction under Article 136 to decide such questions, only on the basis of the affidavits. It need not be pointed out that in all  such cases, the labourers are initially employed and engaged by the contractors. As such  at  what  point  of  time a  direct  link is established  between  the  contract  labourers and the  principal  employer,  eliminating  the contractor from the scene, is a matter which has to be established on material  produced before the court. Normally, the Labour Court and  the  Industrial  Tribunal,  under  the Industrial  Disputes  Act  are  the  competent fora  to adjudicate such disputes on the basis of  the  oral  and  documentary  evidence produced before them.”

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Likewise in Steel Authority of India’s case (supra) this

is what the Court had to say:

“An analysis of the cases, discussed above, shows that they fall in three classes: (i) where contract labour is engaged in or in connection with  the  work  of  an  establishment  and employment  of  contract  labour  is  prohibited either  because  the  industrial adjudication/court  ordered  abolition  of contract  labour  or  because  the  appropriate Government issued notification under Section 10(1)  of  the  CLRA  Act,  no  automatic absorption  of  the contract  labour  working in the establishment was ordered; (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;  (iii)  where  in discharge  of  a  statutory  obligation  of maintaining a canteen in an establishment the principal  employer  availed  the  services  of  a contractor  the  courts  have  held  that  the contract  labour  would  indeed  be  the employees of the principal employer.”

10. It  was contended by Mr. Dave that this Court in  Uma

Devi’s  case (supra) has clearly  opined that the  contract  or

casual  labour  could  not  claim regularization and he has in

particular  emphasized  that  in  the  light  of  the  admitted

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position  that  at  some  stage,  the  workmen  were  indeed

contract  employees  the  ratio  of  the  aforesaid  was  clearly

applicable to the facts of the case.  We, however, observe that

the  aforesaid  decision  was  considered  by  another  Bench  of

this Court in Pandey’s case (supra) wherein it has been held

that  the  ratio  of  any  decision  must  be  understood  in  the

background of the facts of that case and that the case is only

an authority for what it  logically  decides  and what logically

flows from it.        In Pandey’s case (supra) the question was

as  to  whether  casual  employees  working  in  the  Electricity

Board were entitled to regularization of their services.  This is

what the Division Bench had to say in paragraphs 16 and 17:

“We are constrained to refer to the above  decisions  and  principles  contained therein because we find that often Uma Devi’s case  (supra) is  being  applied  by  Courts mechanically  as if  it  were a Euclid’s  formula without seeing the facts of a particular case. As  observed  by  this  Court  in  Bhavnagar University’s  case  (supra) and  Bharat Petroleum Corporation Ltd.’s case (supra), a little difference in the precedential value of a decision.  Hence,  in our opinion,  Uma Devi’s case (supra) cannot  be  applied  mechanically without seeing the facts of a particular case, as  a little  difference  in facts  can make  Uma

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Devi’s case (supra) inapplicable to the facts of that case.

In  the  present  case  the  writ  petitioners (respondents herein) only wish that they should not  be  discriminated  against  vis-à-vis  the original employees of the Electricity Board since they  have  been  taken  over  by  the  Electricity Board  “in  the  same  manner  and  position”. Thus, the writ petitioners have to be deemed to have  been  appointed  in  the  service  of  the Electricity Board from the date of their original appointments in the Society. Since they were all appointed in the society because 4.5.1990 they cannot be denied the benefit of the decision of the  Electricity  Board  dated  28.11.1996 permitting regularization of the employees of the Electricity Board who were working from before 4.5.1990. To take a contrary view would violate Article 14 of the Constitution. We have to read Uma  Devi’s  case  (supra) in  conformity  with Article  14 of  the  Constitution,  and we cannot read  it  in  a  manner  which  will  make  it  in conflict with Article 14. The Constitution is the supreme law of the land, and any judgment, not even  of  the  Supreme  Court,  can  violate  the Constitution.”

11. It  will  be  seen  therefore  that  each  case  has  to  be

examined to a very large extent  on its  specific  facts,  and a

universal yardstick should not be attempted.

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12.  In  the  instant  case,  on  a  consideration  of  material

produced  before  it,  the  Tribunal  came  to  the  following

conclusions:

(1) That there existed a relationship of master and servant.

(2) That  there  was  no  contractor  appointed  by ONGC.

(3) That  the  ONGC used  to  supervise  and  allot works to individual workers.

(4) That  the  ONGC took disciplinary  action  and called for explanations from the workers.

(5) The workers were paid wages though they did not attend their duties due to Cachar Bandh and due to flood.

(6) The wages were paid direct to the workers by the  ONGC  and  the  acquaintance  roll  was prepared  by  the  Management  to  make payment to the workmen”.  

13. It  has  also  been  observed  that  even  the  ONGC  had

admitted  that  since  1988,  there  was no licensed  contractor

and that the wages were being paid through one of the leaders

of the Union and one such contractor, Manik has been named.

The  Tribunal  then  opined  that  it  appeared  from the  record

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that Manik himself was a workman and not a contractor as he

too  was  shown  in  the  acquaintance  roll  to  have  received

wages.   We find that the real issue was as to the status of the

workmen as employees of the ONGC or of the contractor, and

it having been found that the workmen were the employees of

the  ONGC  they  would  ipso-facto  be  entitled  to  all  benefits

available  in  that  capacity,  and  the  issue  of  regularization

would, therefore, pale into insignificance. We find that in this

situation, the Industrial  Tribunal and the Division Bench of

the  High  Court  were  justified  in  lifting  the  veil  in  order  to

determine as to the nature of employment in the light of the

judgments quoted above.   We, therefore, find that the ratio of

the  judgment  in  Uma  Devi’s  case  (supra) would  not  be

applicable  and  that  the  facts  of  Pandey’s  case are  on  the

contrary more akin to the facts of the present one.

14. We are therefore of the opinion that in the light of the

aforesaid  observations,  Mr.  Dave’s  argument  that  the

workmen  being  on  a  contractual,  were  not  entitled  to  any

relief, cannot be accepted and the large number of judgments

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cited by Mr. Dave,  on this aspect,  cannot be applied to the

facts of the case.

15. We  have  also  considered  Mr.  Dave’s  argument  with

regard  to  the  nature  of  the  reference.   We  re-produce  the

reference as made:

“Whether  the  demand  of  the  ONGC ‘Contractual  Workers’  Union,  Silchar  on the  management  of  ONGC,  Cachar Project,  Silchar  for  regularization  of  the services  of  the  contractual  workers  is justified.  If  so,  what  relief  are  the workmen concerned entitled to?”

16. It  is  true  that  the  underlined  portion  of  the  reference

prima facie does give the impression that it presupposes that

the workmen were contractual employees and the only dispute

was with regard to the regularization of their services.  It  is

equally true that the reference appears to have been rather

loosely worded but as observed by the Industrial Tribunal and

the Division Bench, both parties were aware of the real issues

involved in the light of the protracted litigation and the efforts

made  during  conciliation  proceedings.   The  Division  Bench

has, thus, rightly observed that it was open to the Industrial

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Tribunal to have lifted the veil so as to determine the nature of

the employment and the dispute between the parties and for

that purpose to look into the pleadings and evidence produced

before it.   

17. In  Delhi  Cloth  &  General  Mils  Co.  Ltd.  vs.  The

workmen & Others AIR 1967 SC 469, this is what the Court

had to say:

“In our opinion, the Tribunal must, in any  event,  look  to  the  pleadings  of  the parties to find out the exact nature of the dispute, because in most cases the order of  reference  is  so  cryptic  that  it  is impossible  to  cull  out  therefrom  the various  points  about  which  the  parties were at variance leading to the trouble. In this  case,  the  order  of  reference  was based  on  the  report  of  the  Conciliation Officer and it  was certainly open to the Management  to  show  that  the  dispute which  had  been  referred  was  not  an industrial dispute at all  so as to attract jurisdiction  under  the  Industrial Disputes Act. But the parties cannot be allowed to go a stage further and contend that  the  foundation  of  the  dispute mentioned in the order of reference was non-existent  and  that  the  true  dispute was something else”.

18. The pleadings in the present matter would show that the

core issue before the Tribunal was with regard to the status of

the employees as employees of the ONGC or of the contractor

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and that  it  was  this  issue  simpliciter  on  which the  parties

went to trial.  Mr. Dave’s argument with regard to the decision

of the Tribunal  being beyond the reference,  is  to our mind,

and  in  the  circumstances,  hyper  technical.   In  this

background,  we  feel  that  the  judgments  cited  by  Mr.  Dave

pertaining  to  regularization  of  contract  labour  are  not

applicable to the facts of the case.

19.   We,  thus,  find  no  merit  in  the  appeal,  which  is

accordingly dismissed.   In view of the judgment made in Civil

Appeal No.4755/2001, these Transfer Petitions are rendered

infructuous.     

…………………………….J. ( TARUN CHATTERJEE )

……………………………J. ( HARJIT SINGH BEDI )

New Delhi Dated :  May 16, 2008

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