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CASE NO.: Writ Petition (civil)  433 of 1998

PETITIONER: A.I. Railway Parcel & Goods Porters Union                Versus Union of India & Ors.                                    @ August 22, 2003. # S. Rajendra Babu, Dr. AR. Lakshmanan & G.P. Mathur. & J U D G M E N T  

WITH

Writ Petition (Civil) Nos. 457 of 1998, 278 of 1999, 530 of 2000, 599 of 2000, 45 of 2001, 121 of 2000, 262 of 2002 and 19 of 2003, Civil Appeal No. 57 of 2001 and Civil Appeal No.________of 2003 @ Special Leave Petition (Civil) No.  6560 of 2001

Dr. AR. LAKSHMANAN, J.

Leave granted in Special Leave Petition No. 6560 of 2001.

This group of writ petitions and appeals raise common questions  of law relating to the abolition of contract system of labour.  Writ Petition  No. 433 of 1998 was filed by the All India Railway Parcel and Goods  Porters Union praying for the following reliefs: "a)     Issue appropriate writ in the nature of mandamus or any  other writ, direction or order commanding the  respondents to treat the petitioners who are working as  Parcel Porters as permanent employees of the Northern  Railway as has been directed by this Hon’ble Court in  various petitions filed by the colleagues of the petitioners  and a further direction may be given to abolish contract  system in parcel handling work at different Railway  Stations in Northern Railway and all the Parcel Porters  working at different Railway Stations of Northern  Railway may be treated as regular employees of the  Railways;

b)      Issue an appropriate writ, direction or order commanding  the respondents to treat the petitioners as employees of  Northern Railway and give them the same benefits  which have been given to other parcel porters working at  different Railway Stations of Northern Railway as regular  employees of Northern Railway;

c)      Issue an appropriate writ, direction or order commanding  the respondents to stop treating the petitioners as  contract labour at Railway Stations of Northern Railway  for loading and unloading of parcels as this work done  by the petitioners is of permanent and perennial nature."

Similar prayers have been asked for by the petitioners union in  other writ petitions.  Civil Appeal No. 57 of 2001 was filed by the Union  of India and Others questioning the correctness of the final judgment  and order dated 07.07.2000 passed by the High Court of Delhi in Writ  Petition No.5595 of 1998.  In the said case, the Central Administrative  Tribunal allowed the claim of the respondents therein by following the  judgment of this Court in National Federation of Railway Porters,

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Vendors and Bearers vs. Union of India and Others reported in 1995  Supp (3) SCC 152.  Since the issue raised in the said writ petition before  the Delhi High Court is pending consideration of this Court in Writ  Petition No. 433 of 1998 wherein this Court on 08.09.2000, passed the  following interim order. "Pending disposal of these petitions, there shall be no  regularization of parcel porters working at different railway  stations notwithstanding any order of any Court, Tribunal or  other authorities.  Call after six weeks."

Since the High Court dismissed the writ petition filed by the Union  of India holding that there is no legal infirmity in the order of the Tribunal,  the Union of India has preferred the above civil appeal.

Appeal @ Special Leave Petition No. 6560 of 2001 was filed by  one Radhey Shyam and Others against the Union of India and Others  questioning the correctness of the judgment and order dated 10.11.2000  passed by the High Court of Judicature at Allahabad in Writ Petition  No.1760 of 2000 dismissing the writ petition and affirming the order  passed by the Central Administrative Tribunal.

For the sake of convenience, we will first deal with the facts in  Writ Petition No. 433 of 1998 and the questions of law as they arise  therefrom.  The petitioners in this writ petition is the Union.  The writ  petition was filed seeking the same relief which has been granted by this  Court to the colleagues of the petitioners similarly situated and working  as Parcel Porters in Northern Railways at different railway stations for  the last 10-30 years onwards continuously.  However, they have not  been treated as the permanent employees of the Railway so far, though  they are discharging the duties of permanent and perennial nature.  A  list containing the names of Parcel Porters who have been engaged by  the Northern Railways as contract labour at different railway stations  along with their service details was also filed and marked as      Annexure-A.

Mr. Dinesh Kumar Garg, learned counsel appearing for the writ  petitioners, submitted that this Court in the case of National Federation  of Railway Porters, Vendors and Bearers (supra) (vide its judgment  and order dated 09.05.1995) gave directions to absorb all Parcel Porters  as permanent employees of the Railway.  He also invited our attention to  the judgment and order dated 15.04.1991 in Writ Petition No. 277 of  1988 in which this Court while directing to abolish the Contract Labour  system in Parcel work on different Railways, directed the Government of  India to treat 166 Parcel Porters working at Charbagh Railway Station at  Lucknow of Northern Railway to treat them as permanent employees of  Northern Railway (Annexure-B).  It is further submitted that subsequently  this Court in Writ Petition Nos. 568 and 711 of 1995 vide judgment and  order dated 08.07.1996 again directed the Railways to absorb parcel  porters as permanent employees of the railway according to their  seniority (Annexure-D).  Learned counsel has also invited our attention  to the order dated 19.09.1997 passed by this Court in Writ Petition No.  90 of 1997 directing the Assistant Commissioner (Labour), Central  Government to conduct an enquiry as to whether the Parcel Porters in  the aforesaid writ petition had been discharging the work of permanent  and perennial nature and if so the period for which they have been  engaged.  The learned counsel also drew our attention to various similar  orders passed by this Court directing the Labour Commissioner to  conduct an enquiry regarding the working of the Parcel Porters.

Pursuant to the directions given by this Court in the instant case  on 30.11.1992, the Assistant Labour Commissioner (Central) Lucknow  conducted an elaborate enquiry and submitted a detailed report in which  he had recorded the findings that the work of parcel handling Northern  Railway is permanent and perennial in nature and sufficient to keep all  the Parcel Porters engaged continuously, and the requirements of

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Section 10 of the Contract Labour (Regulation and Abolition) Act, 1970  had been satisfied and the petitioner parcel porters were working  continuously for long years without any break in service.

According to the learned counsel, in spite of the directions given  by this Court for the abolition of the Contract System in parcel handling  work and in spite of various orders passed by this Court and of the  commitment made by the Northern Railway, the contract system in  parcel handling work is neither been abolished nor the parcel porters  working in different railway stations have been treated as permanent  employees of the railway, though these parcel porters had been working  for the last 10-30 years continuously.  He would further submit that  though the contractors are changed from time to time, the petitioners  have been working continuously as Parcel Porters under the direct  control of Railways which is the principal employer, therefore, he  submitted that the petitioners should be given the relief which has been  granted by this Court to their colleagues by absorbing them as  permanent employees and also to issue a further direction to abolish  contract system in parcel handling work at different railway stations in  Northern Railway  The learned counsel has also invited our attention to  para 12 of the writ petition as to how the petitioners are discharging the  work of permanent and perennial nature and as to how it is very  essential for the railways to continue its activities as narrated in para 12  (a)â\200\223(k).  It is also submitted that the conduct and duties of the petitioners  are being controlled by the Railway Authorities and if the Authorities are  displeased with any of the Parcel Porters, they are empowered to punish  such parcel porters and turn them out of the railway station and do not  issue entrance passes as well as badges to such parcel porters.  It is  also contented that since the petitioners have to discharge their loading  and unloading and shifting duties under the strict supervision of the  Railway Authorities, they cannot be treated as contract labourers.

Counter affidavit was filed on behalf of respondent Nos. 1-7  contending that this Court has ordered for regularization of the required  number of persons to the extent of perennial number of posts  ascertained after conducting work study and not all the petitioners as  stated in the annexures.  It is further submitted that most of the  petitioners of the petitions mentioned have already been regularized  against the perennial posts and on the basis of work study report in case  any additional post is found as perennial and permanent in nature, the  senior-most person(s) will be regularized after completing all other  formalities as per the Railway rules.  It is also stated in the counter that it  is not possible to stop the contract labour system of handling work and  that the nature of job which is not perennial and permanent will have to  be completed by engaging contract labourers and for the work which has  been casual in nature are not permanent in nature it is not possible to  engage permanent parcel porters.  It is further stated that parcel  handling works are awarded to the labour cooperative societies which  supply the labour as per the requirement of the Railways on a day to day  basis depending upon the volume of the work to be handled on a  particular day, and the payment is made to the cooperative societies and  not to the individual labourers on the basis of the total weight handled.

Another counter affidavit was filed on behalf of respondent Nos. 1,  3 and 8 stating that the muster rolls of the cooperative societies have no  sanctity and cannot be taken to show the names of the labour who have  been genuinely working and the length of time for which they have been  continuously working.

An additional affidavit was filed by respondent Nos. 1-7 through  their Deputy Chief Marketing Manager, Northern Railway stating that the  Railways do not have the records of the porters who have been working  with the contractors, and in the absence of any documentary proof, they  were not in a position to either accept or deny the claims of the  petitioners.  A rejoinder affidavit was filed by the petitioners’ union

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denying the averments contained in the counter affidavit.

The Eastern Railway Administration filed an additional affidavit on  its behalf.   

Mr. Raju Ramachandran, learned Additional Solicitor General,  took us through the statements and averments contained in various  affidavits filed by the Railways and submitted that the Railways is not  just a commercial concern, but also a public utility concern which carries  several essential commodities at a very concessional freights and also  gives a lot of concessions in passenger traffic to innumerable categories  of persons.  This being so, if such economically non-viable acts like  regularization of the petitioners is forced upon the railways, public utility  and passenger amenity items are bound to suffer.  He would further  submit that the work performed by the contract labour is of fluctuating  nature and the amount of work depends upon the parcels received in a  particular day and that no labour is required as the loading and  unloading is done by the party itself and in view of the fluctuations and  irregular and seasonal type of work, keeping permanent cadre for doing  this parcel handling work is not possible.  He would further urge that the  Railways are facing a financial crisis due to decreasing budgetary  support and increasing cost of production and purchase of various items  and the Railway Administration is itself contemplating measures for  downsizing its present cadre, minimizing the staff cost and operating  ratio.  This being the case, it will not be feasible for the railway  administration to absorb the petitioners in regular service.  Moreover, if  the present petitioners unreasonable prayers are acceded to by this  Court, it would lead to several such requests for regularization from  many quarters even though the applicants may be working elsewhere  and may not have undergone the well laid down procedures for  recruitment and may not be fulfilling the eligibility criteria for appointment  for the post or may not be adequately trained.  It is thus submitted that in  view of the huge number of petitioners, lack of any documentary proof of  their having worked continuously, and the meagre parcel handling  earnings, their regularization by the Railways is financially not viable.  It  is further submitted that due to the government policy of downsizing the  staff cadre, the Railways is coming up with many schemes of awarding  contracts to private parties by leasing of SLRs and BOLT schemes etc.  to implement the Fifth Pay Commission recommendations.  Thus, the  absorption of such a huge work force of Class IV employees without  adequate amount of work will result in a financial crunch.  The learned  Additional Solicitor General drew our attention to the additional affidavit  of Respondent Nos. 1-7 and the statements made thereunder, to the  effect that as a result of the present loading/unloading operations being  totally uneconomical, a loss of approximately 900 crores is being  incurred by the Railways and, therefore, there is no option but to  rationalize the entire operation with regard to the parcel handling  business.  The learned Additional Solicitor General would further  contend that in order to improve services, the Railways introduced the  concept of leasing the space in the luggage compartment of the front  luggage coach of some of the passengers carrying trains in November,  1991.  However, a comprehensive policy was introduced in the year  1999 in order to attract parcel traffic through the leasing route and as per  the master circular issued on 16.11.1999, SLR space in the front SLR  was permitted for leasing for all types of trains and SLR space in over  200 trains is being leased out to provide operators, where the loading  and unloading is also done by them.  The process of leasing was taken  one step further with the launch of the Parcel Express trains known as  "Millennium Parcel Express" trains in March, 2001, which envisages  running of high speed "time-tabled" parcel trains leased to cargo  consolidators on the basis of open tenders and two such weekly trains  are already being operated and more are likely to be introduced in  future.  It is further submitted that the steps taken by the Indian Railways  to encourage handling of parcel by private parties through leasing of the  space in SLRs, VPs and parcel trains has helped in increasing the

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railway earnings and as a result thereof, the earning from parcel traffic  has increased from 294.24 crores in 1998 to Rs. 433.46 crores in 2001- 02 which according to the learned Additional Solicitor General is proof of  the fact that the senders and receivers of parcel prefer handling through  their own agency.

With a view to make the parcel services vibrant business along  with better service to its customers, the Government has accepted the  recommendation of the Parliamentary Standing Committee on Railways,  as contained in their 9th Report (2001) presented in Lok Sabha in April,  2001 to segregate parcel services from passenger services.  He would  further state that the Government of India’s plan of "rightsizing" the  workforce has been acted upon by the Railways.  Rightsizing  automatically involves rationalizing the operations, coming down to  redundant areas and outsourcing of "non-core" areas.  As  loading/unloading of parcels is a non-core activity, the parcel leasing  schemes vest the leaseholder with the responsibility of handling the  parcel traffic.

Learned Additional Solicitor General further submitted that apart  from the losses in parcel business that the Railways are sustaining, they  have also to face the mounting wage bill of the employees.  The average  annual wage bill of a Railway employee during 2000-01 was Rs.  1,21,281/-.  As against this overall average for all staff, the annual wage  bill of a group D employee was as high as Rs. 84,576/-.  The wage bill  has been increasing over the years and the average wage bill of group D  employee has increased from Rs. 37,344/- in 1994-95 to Rs. 84,576/- in  2000-01.  The current wage bill can be estimated to be nearly around  Rs. 1 lakh per group D staff.  Thus, with a workforce of over 9000  departmental parcel porters, the annual wage bill on this account is over  Rs. 90 crore.  Thus, though the average number of group D staff has  reduced from Rs. 5.06 lakh in 1994-95 to Rs. 4.62 lakh in 2000-01, there  is a continuous and heavy increase in the wage bill of the Indian  Railways, which is difficult to bear.

It is also submitted in the instant batch of cases, the number of  petitioners are again more than 1500.  If the judgment of this Court is in  favour of the petitioners, there will be spate of litigation with many more  parcel porters and other similarly placed workers approaching this Court  for similar relief.  The financial implication for the Indian Railways in  regularization of the petitioners would be Rs. 1 crore for every 100 such  private parcel porters.  

Concluding his argument, the learned Additional Solicitor General  submitted even for the parcel traffic handled departmentally by the  Railways by Mail/Express and Passenger trains, the loading/unloading  work is of a sporadic and intermittent nature.  Even this work is confined  only to the time when the various trains originate/terminate/stop at the  stations for short duration.  Thus, whichever worker is engaged by the  contractor, will generally be available on the Railway premises for the  purpose of loading/unloading only on the day and at the time of  arrival/departure of various trains and that the work of loading/unloading  is neither regular nor continuous in nature and, therefore, does not  require engagement of regular workers.  Concluding his argument, the  learned Additional Solicitor General submitted that as the railways are  sustaining an annual loss of Rs. 900 crores and also have to face the  mounting wage bill, they have no option but to rationalize the parcel  business by leasing out to private cargo operators and will not be in a  position to absorb the contract labourers engaged in parcel handling.   Our attention was also drawn to the various circulars issued by the  Government of India, Ministry of Railways marked as Exhibit-R1, R2 and  R3. The petitioners have not filed any reply or rejoinder to the  additional affidavit of respondent Nos. 1-7 filed on 16.01.03.

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Learned counsel for the other writ petitioners have adopted the  arguments advanced by learned counsel for the writ petitioner              Mr. Dinesh Kumar Garg.

Learned counsel for the writ petitioners drew our attention to the  order passed by this Court on 14.07.1999 in Writ Petition No. 433 of  1998 which reads thus: "The Assistant Labour Commissioner (Central), Lucknow to  whom copies of all the previous orders passed in the case,  shall be sent, shall conduct an inquiry as to whether the  petitioners were working continuously and whether the job  which they perform is of a perennial nature.  The inquiry may  be completed within three months from the date of receipt of  this order and a report submitted to this Court."  

He also invited our attention to the report of the Assistant Labour  Commissioner (Central) Lucknow dated 18.01.2000 containing 85  pages.  We have perused the same.  The Assistant Labour  Commissioner framed two issues for enquiry which are as follows:- 1.      Whether the petitioners were working continuously and  2.      Whether the job which they perform is of a perennial  nature. According to the Labour Commissioner, the railways have not produced  any records pertaining to the period of working of the parcel porters as  no records of the petitioners are maintained at the stations or any other  railway office. Railways have also contended that they have no  knowledge as to which of the petitioners were engaged by the  contractors and from what date.  It is further stated in the report that only  six contractors appeared and dozens of them did not even respond to  his notice he had sent to them on their addresses which were supplied  to him by the petitioners and the railways.  A number of registered letters  were returned undelivered with the postal department’s remarks that  either the contractors refused to accept the letters or they were not  available at those addresses.  The contractors who appeared before the  Labour Commissioner did not also produce any records.  Under such  circumstances, he heard the individual petitioners who appeared before  him and recorded their statements.  The Labour Commissioner has  stated that in fact the contractor is suppressing the records to conceal  the fact of the petitioners working and, therefore, he accepted the  employment cards/service certificates submitted by the petitioners as  proof of their working for the period claimed by them.  The findings on  issue Nos. 1 and 2 rendered by the Labour Commissioner runs thus:- "Issue No.1: The Railways and the contractors have verified the  period of working of the petitioner parcel porters in some cases.   The period of such verification is very short in many cases, the  reason being that the contractors have changed very frequently  and the records that might be in possession of earlier  contractors could not be obtained.  The Railway and the  contractors have not produced the records of working of the  parcel porters who have claimed to have worked prior to the  period as verified by the contractors and the Railway.  It  appears unjust that the petitioners’ interests should be harmed  due to non-production of records. Despite several notices having been issued to the  concerned respondent Railways and the contractors that in the  event of failure on their part to produce records the claim of the  petitioners would be accepted, till 14.1.2000 on which date I  finalised this report none of them produced records for the past  period to admit or deny the claim of petitioners.  I am left with  no other option than to conclude that they must have worked.

a)      The list of petitioners whose period of working has been  verified is enclosed as Annexure "A" to this report.   b)      The list of petitioners who have claimed to have worked

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but whose working period could not be verified due to  non-production of records by the Railway and the  contractors is enclosed as Annexure "B" to this report.

Issue No.2  

I have reached to the conclusion that the work of parcel  handling/loading/un-loading is an activity that is not separate  and detatched from the complex parcel handling job being done  by Railways.  Parcel handling is an integral part of the whole  system and it has been going on for ages round the clock  during day and night for all the 365 days in a year without the  break of a single day.  In fact the job of parcel handling which is  being performed by the petitioners is the foundation on which  the gigantic structure of parcel department stands.  If the parcel  handling work is stopped then the whole work of parcel  transportation will come to stand still and all the regular staff  and officers whose number is very large will become idle. The parcel handling work being performed by the  petitioners is of a perennial nature.

Submitted."

The Railways filed opposition to the report of the Labour  Commissioner.  It is stated therein that the railways came to know about  the report only through the Central Agency Section on 08.05.2000 and  more surprisingly, the report dated 18.01.2000 appears to have been  submitted before this Court in the same week itself but neither the  answering respondent nor the railways was afforded any opportunity to  either lead evidence or cross-examine the witnesses appeared on behalf  of the respondents.  According to the railways, from a bare reading of  the report it will be clear that the report is not based on any documentary  evidence and that the objections raised by the Railway Authorities have  either been not entertained and incorporated in the report or have been  dealt in most unfair manner and that the Labour Commissioner has not  taken pain to summon the contractors along with the relevant records  though complete addresses of such contractors were supplied by the  Railway Administration.  It is, therefore, submitted that in the absence of  the documents regarding the particulars of the services rendered by the  Porters, the Railway Administration was obviously not in a position either  to admit or deny the claim of the petitioner.  It is also stated in the  opposition that since the contract labour is abolished w.e.f. 30.10.1995  there is no question of any other labourers left to be regularized and,  therefore, the Assistant Labour Commissioner should be directed to  permit the Railway Administration to verify the contents of the  documents submitted by the petitioners and ex-contractors by cross- examination; compel all the ex-contractors to be present at the hearing  and submit a fresh report based on the documents actually presented  before him.   

Per contra, learned counsel for the petitioners submitted that the  Labour Commissioner gave repeated adjournments to enable the  Railways for finalizing objections or to cross-examine the petitioners and  contractors under whom the petitioners have been discharging their  duties at different railway stations.  However, the officials refused to  cross-examine the petitioners or the contractors and, therefore, the  Labour Commissioner on the basis of the record available on the file of  the Assistant Labour Commissioner as well as with the officials of the  Railways have submitted his report.  Thus, it is submitted that the  objections regarding the report of the Labour Commissioner had been  raised for no reason or basis.  It is seen from the report of the Labour Commissioner that the  contractors have refused to produce the records and cooperate with the  Labour Commissioner at the enquiry.  Likewise, Railways also  complained that the Labour Commissioner has not afforded them

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sufficient opportunity to verify the veracity of the documents as well as  the period for which the petitioners have already worked as parcel  porters.  Therefore, the report of the Assistant Labour Commissioner  cannot be taken as a full and complete report as to whether the  petitioners were working continuously and whether the job they perform  is of perennial nature.

As per the established principle of law, the petitioners in order to  succeed will have to substantiate their claim.  Non-production of  evidence in opposition will not support the claim of the petitioners even  by legal fiction.  The Assistant Labour Commissioner, in our opinion, has  failed to appreciate this proposition of law while recommending the claim  of the petitioners.

The burden of proving the claim of continuous working rests on  the claimants for which they are required to furnish concrete proof and  reliable documents.  We are, therefore, of the view that an opportunity to  cross-examine the petitioners and to peruse the records produced by the  petitioners should be afforded to the railways.  As already noticed, the  contractors did not produce the original records and the railways had no  opportunity to cross-examine the contractors also.  The contractors are,  therefore, be directed to appear before the Labour Commissioner and to  produce the records for the relevant period in question and the claim of  the petitioners can again be verified and regularize the services of the  members of the petitioners association as employees of the Railway  Administration.  We, therefore, direct the Labour Commissioner to again  afford an opportunity to the Railway Administration and the contractors  and the petitioners and verify the authenticity and genuineness of the  claim made by the petitioners with reference to the records that may be  produced by the Railway Administration and the contractors and submit  a report to the Railways within six months from the date of receipt of this  judgment which, in our opinion, would resolve the disputed claim of the  petitioners and the railways and on the basis of the report submitted, the  railway administration shall consider the claim of the individual  petitioners subject to the terms and conditions to be stated infra in this  judgment.

Along with the writ petition, number of orders passed by this Court  on few earlier occasions have also been filed as Annexures.  Annexure- B is one such order in Writ Petition No. 277 of 1998 filed by one  Raghavendra Gaumastha, under Article 32 of the Constitution. The  petitioners claimed relief for issue of writ of mandamus directing the  Railway Administration to regularize the petitioners services and to pay  them the same salary which is paid to others carrying out the similar  duties and functions.  This Court, by order dated 04.10.1989, referred  the matter to the Labour Commissioner to decide the question whether  the petitioners are contract labourers or they are the employees of  Railways and also the question as to whether they have been working  as labourers for a number of years.  This Court, after extracting the  report of the Labour Commissioner, directed the railway administration  to treat the petitioners as regular parcel porters and to grant them the  same salary which is being paid to regular parcel porters in view of the  fact that most of the petitioners have been working since 1972 and some  of them since 1980 and few of them in 1985.   

The order passed by this Court dated 15.04.1991 in writ petition  No. 277 of 1998 was followed by this Court in the case of National  Federation of Railway Porters, Vendors and Bearers (supra).  This  Court, taking into consideration the nature of the prayer in the writ  petition, made an order directing the Labour Commissioner to enquire  and submit a report and after perusal of the said report issued certain  guidelines and directions to the Union of India and the Railway  Administration in regard to the absorption of the railway parcel porters  on permanent basis.  

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Again this Court by order dated 08.07.1996 in Writ Petition  No.568 and 711 of 1995 filed by National Federation of Railway Porters  Union have issued directions for regularization of their services as  mentioned in the order if the petitioners are found to be eligible.   

Yet another order can also be profitably looked into in this context  which has been passed by this Court in Writ Petition No. 90 of 1997  dated 19.09.1997 in which this Court directed the Assistant Labour  Commissioner, Calcutta to conduct an enquiry into the allegations  whether the petitioners who were working as parcel porters at various  railway stations had been working continuously at the concerned railway  stations and the work is of a perennial nature and requirements of  Section 10 of the Contract Labour (Regulation and Abolition) Act, 1970  have been satisfied.  Similar direction was issued by this Court on  27.04.1998 in Writ Petition No. 176 of 1995.

The learned counsel for the petitioners placed strong reliance on  the judgment of this Court in National Federation of Railway Porters,  Vendors and Bearers (supra) and the directions given by this Court in  absorbing the labourers under certain conditions.  This Court in R.K.  Panda and Others vs. Steel Authority of India and Others reported in  JT 1994 (4) SC 151 issued directions that all labourers who had been  initially engaged through contractors but have been continuously  working with the respondent for the last 10 years on different jobs  assigned to them in respect of the replacement and change of the  contractors shall be absorbed by the respondent as regular employees  subject to being found medically fit and if they are below 58 years of age  being age of superannuation.  The Court also gave further directions for  fixing inter se seniority, absorption of wages and terms and conditions of  service.  The Court also directed that the respondent shall be at liberty to  retrench the workmen so absorbed in accordance with law.

In Gujarat Electricity Board, Thermal Power Station, Ukai  vs.  Hind Mazdoor Sabha and Others AIR 1995 SC 1893, this Court held  that where the contract labour system is abolished the industrial  adjudicator can, depending upon the facts of the case, direct the  principal employer to absorb all or any of the workmen of the ex- contractor and on such terms as he may determine.  This Court after  pointing out the vital lacuna in the Act, namely, no provision as to the  fate of workman of ex-contractor after the abolition of contract labour  system however issued guidelines for such absorption that the workmen  of the ex-contractor, if found suitable can be absorbed by the principal  employer after the contract system is abolished.  This Court has laid  down guidelines for the same in the said judgment.

We have carefully examined the report of the Assistant Labour  Commissioner, the findings recorded therein and the counter affidavits,  reply affidavits and rejoinder filed by the respective parties.  The facts  disclosed in the report and the findings recorded in regard to the  perennial nature of work cannot be overruled.  Though we have heard at  length both the parties, the learned Additional Solicitor General  appearing for the Railway Administration was not able to point out to us  any valid reason as to why the present writ petitions should not be  allowed in terms of the order dated 15.04.1991 made by this Court in  similar Writ Petition No. 277 of 1988 particularly when in the matter of  absorption of contract labour by a public undertaking on a permanent  regular basis.  We feel, therefore, it is just and appropriate to issue the  following directions to the respondent Union of India and the Railway  Administration Units: 1.      The Assistant Labour Commissioner, Lucknow is directed to  again scrutinize all the records already placed by the petitioners  and also the records to be placed by the respective contractors  and the railway administration and discuss and deliberate with all  parties and ultimately arrive at a conclusion in regard to the  genuineness and authenticity of each and every claimant for

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regularization.  This exercise shall be done within six months from  the date of receipt of this judgment.  2.      Subject to the outcome of the fresh enquiry and the report to be  submitted by the Assistant Labour Commissioner, the Railway  Administration should absorb them permanently and regularize  their services.  The persons to be so appointed being limited to  the quantum of work which may become available to them on a  perennial basis.  The employees so appointed on permanent  basis shall be entitled to get from the dates of their absorption, the  minimum scale of pay or wages and other service benefits which  the regularly appointed railway parcel porters are already getting. 3.      The Units of Railway Administration may absorb on permanent  basis only such of those Railway Parcel Porters (petitioners in this  batch) working in the respective railway stations concerned on  contract labour who have not completed the age of  superannuation. 4.      The Units of Railway Administration are not required to absorb on  permanent basis such of the contract labour Railway Parcel  Porters who are not found medically fit/unsuitable for such  employment. 5.      The absorption of the eligible petitioners in the writ petitions on a  regular and permanent basis by the Railway Administration as  Railway Parcel Porters does not disable the Railway  Administration from utilizing their services for any other manual  work of the Railways depending upon its needs.    6.      In the matter of absorption of Railway Parcel Porters on contract  labour as permanent and regular Railway Parcel Porters, the  persons who have worked for longer periods as contract labour  shall be preferred to those who have put in shorter period of work. 7.      The report to be submitted by the Assistant Labour Commissioner  should be made the basis in deciding the period of contract labour  work done by them in the railway stations.  The report shall be  finalized and submitted after discussions and deliberations with  the railway administration and the contractors and all the  representatives of the writ petitioners or writ petitioners  themselves. 8.      While absorbing them as regular employees their inter se  seniority shall be determined department/job-wise on the basis of  their continuous employment. 9.      After absorption, the contract labourers will be governed  exclusively by the terms and conditions prescribed by the railway  administration for its own employees irrespective of any existing  contract or agreement between the respondent and the  contractors.  No claim shall be made by the contractors against  the railway administration for premature termination of their  contracts in respect of the contract labourers.   10.     The railway administration shall be at liberty to retrench the  workmen so absorbed in accordance with law.  This order shall  not be pleaded as a bar to such retrenchment. 11.     This judgment does not relate to the persons who have already  been absorbed.

Several I.As were filed to modify the order dated 08.09.2000  passed by this Court in Writ Petition No. 433 of 1998 and 457 of 1998.   Few I.As were filed seeking certain prayers pending writ petition.  Few  I.As were filed to implead the proposed parties as parties to the writ  petition.  Some I.As were filed for intervention.  

In view of the disposal of the main matters, no separate direction  is necessary in these I.As.   

In the result, the writ petitions and the civil appeals including the  I.As filed in different writ petitions shall stand disposed of accordingly.

However, there will be no order as to costs.    

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+ 9 436 2003 5 8444 2002 ! VINOD KUMAR                                              

RESPONDENT: Vs. PREM LATA                                                        

DATE OF JUDGMENT: 19/08/2003

BENCH: R.C. LAHOTI, SHIVARAJ V. PATIL & BRIJESH KUMAR.

JUDGMENT: JUDGMENT

R.C. LAHOTI, J.

       Proceedings for eviction were initiated under clause (i) of sub-section  (2) of Section 13 of the Haryana Urban (Control of Rent & Eviction) Act, 1973  (hereinafter referred to as the ‘Haryana Act’ for short) and culminated in  favour of the landlord, directing the tenant to be evicted from the premises in  his occupation, on the finding that he had not paid or tendered the rent due  from him in respect of the rented premises.  The tenant preferred Appeal by  Special Leave.  By judgment dated 16.12.2002 this Court allowed the  tenant’s appeal, set aside the judgments of the High Court and the  authorities below and directed the case to be sent back to the Controller for  hearing and decision afresh in accordance with the law laid down by this  Court in Rakesh Wadhawan & Ors. Vs. Jagdamba Industrial Corporation &  Ors. (2002) 5 SCC 440.  This petition for review of the judgment dated  16.12.2002 seeks to question the correctness of the law laid down by this  Court in Rakesh Wadhawan’s case.   We have heard the learned counsel for both the parties.  The principal  submission, rather the only one, made by the learned senior counsel for the  Review-petitioner is that two earlier decisions of this Court, namely, M/s.  Rubber House Vs. M/s. Excelsior Needle Industries Pvt. Ltd. (1989) 2 SCC  413 and Rajinder Kumar Joshi Vs. Veena Rani (1990) 4 SCC 526, were not  brought to the notice of this Court while deciding Rakesh Wadhawan’s case  and, therefore, Rakesh Wadhawan’s case does not lay down the correct law.   All the three decisions, namely, the decisions in Rakesh Wadhawan’s case  (supra), M/s. Rubber House’s case (supra) and Rajinder Kumar Joshi’s case  (supra), are two-Judges Bench decisions and, therefore, the matter has been  placed for consideration by a three-Judges Bench.   In Rakesh Wadhawan’s case, the decree for eviction was passed  under Section 13(2)(i) of the East Punjab Urban Rent & Restriction Act, 1949  (hereinafter referred to as ‘the Punjab Act’ for short).  It is, therefore,  necessary to consider the relevant provisions of the two Acts.  The same are  extracted and re-produced hereunder: PUNJAB ACT HARYANA ACT S.13. Eviction of tenants.-  (1)  A tenant in possession of a  building or rented land shall not be  evicted therefrom in execution of a  decree passed before or after the  commencement of this Act or  otherwise and whether before or  after the termination of the tenancy,  except in accordance with the  provisions of this section, or in

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pursuance of an order made under  section 13 of the Punjab Urban Rent  Restriction Act, 1949 as subsequently  amended.

(2) A landlord who seeks to evict his  tenant shall apply to the Controller  for a direction in that behalf.  If the  Controller, after giving the tenant a  reasonable opportunity of showing  cause against the applicant, is  satisfied â\200\223

(i) that the tenant has not paid or  tendered the rent due by him in  respect of the building or rented land  within fifteen days after the expiry of  the time fixed in the agreement of  tenancy with his landlord or in the  absence of any such agreement, by  the last day of the month next  following that for which the rent is  payable:

Provided that if the tenant on the  first hearing of the applications for  ejectment after due service pays or  tenders the arrears of rent and  interest at 6% per annum on such  arrears together with the cost of  application assessed by the  Controller, the tenant shall be  deemed to have duly paid or  tendered the rent within the time  aforesaid;

         X          X          X

the Controller may make an order  directing the tenant to put the  landlord in possession of the building  or rented land and if the Controller is  not so satisfied he shall make an  order rejecting the application:

Provided that the Controller may  given the tenant a reasonable time  for putting the landlord in possession  of the building or rented land and  may extend such time so as not to  exceed three months in the  aggregate."    S.13. EVICTION OF TENANTS.- 1. A tenant in possession of a  building or a rented land shall not be  evicted there-from except in  accordance with the provisions of this

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Section.

2. A landlord who seeks to evict his  tenant shall apply to the Controller,  for a direction in that behalf.  If the  Controller, after giving the tenant a  reasonable opportunity of showing  cause against the application, is  satisfied -

(i) that the tenant has not paid or  tendered the rent due from him in  respect of the building or rented land  within fifteen days after the expiry of  the time fixed in the agreement of  tenancy with his landlord or in the  absence of any such agreement, by  the last day of the month next  following that for which the rent is  payable:

Provided that if the tenant, within a  period of fifteen days of the first  hearing of the application for  ejectment after due service, pays or  tenders the arrears of rent and  interest, to be calculated by the  Controller, at eight percentum per  annum on such arrears together with  such costs of the application, if any  as may be allowed by the controller,  the tenant shall be deemed to have  duly paid or tendered the rent within  the time aforesaid:

Provided further that the landlord  shall not be entitled to claim arrears  of rent for a period exceeding three  years immediately preceding the date  of application under the provision of  this Act.  

the Controller may make an order  directing the tenant to put the  landlord in possession of the building  or rented land and if the Controller is  not so satisfied he shall make an  order rejecting the application:

Provided that the Controller may give  the tenant a reasonable time for  putting the landlord in possession of  the building or rented land and may  extend such time so as not to exceed  three months in the aggregate."

       The learned senior counsel for the Review-petitioner tried to draw a

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distinction between the provisions of the Punjab Act and the Haryana Act,  submitting that the phraseology employed in the two Acts is different, and,  therefore, the decision in Rakesh Wadhawan’s case which is under the Punjab  Act has no relevance and applicability insofar as the provisions of the  Haryana Act are concerned.  We find no merit in the submission so made.   Except for a difference in the manner of constructing the sentences there is  no substantial difference in effect between the two provisions and the crux of  the issue emerging for decision under the relevant provisions of the two Acts  remains the same.         In Rakesh Wadhawan’s case, this Court noticed a lacuna in the drafting  of Section 13(2)(i) of the Punjab Act and resolved the same by applying well- settled principles of statutory interpretation so as to cull out the legislative  intent and then held that the expression "assessed by the Controller" as  occurring in the proviso to Section 13(2)(i) of the Act qualifies all the three  things, i.e., (i) the arrears of rent, (ii) interest at 6% per annum on such  arrears, and (iii) the cost of application, which are included in the preceding  part of the sentence.  The order of assessment made by the Controller is not  an assessment of costs alone; it is an assessment of the arrears and interest  as well.  The Court further held that such order of the Rent Controller making  an assessment shall, in the scheme of the section, be an interim or  provisional order which would be based on a summary enquiry leading to the  formation of a prima facie opinion based on the consideration of relevant  material brought on record by the parties, which may consist of the  documents, affidavits and pleadings which would enable the Controller to  make a provisional and yet judicial assessment, and place it on record by  way of an order to satisfy the spirit of the proviso.  Having said so, the Court  explained the mechanism to be followed by the Controller in this regard and  the meaning to be assigned to the expression "the first date of hearing" so as  to make it practical and workable. Failing the interpretation adopted by the  Court in Rakesh Wadhawan’s case, the provision under consideration could  have run the risk of being struck down, because it would be unworkable and  lead to uncertainty.  The provision had remained on the statute book for  more than 50 years but was creating practical difficulties in its working and  applicability to different sets of facts.  Such meaning has been placed on the  language of the proviso to Section 13(2)(i) as would make it workable and  sensible and would least offend the sense of justice.  Care has been taken to  protect the interests of both the landlord and the tenant.  The interpretation  protects the landlord from frivolous pleas raised by recalcitrant tenants and  at the same time saves the tenants from undue hardship likely to be caused  by unscrupulous landlords accusing the tenants of such default as may not  exist.         In M/s. Rubber House’s case (supra), the provisions of the Haryana Act  came up for the consideration of the Court.  Having scrutinized Section  13(2)(i) and the first proviso thereto, the Court held that there is no  statutory duty cast on the Controller even in the first instance to determine  and calculate the arrears of rent and the interest but, on the contrary, the  proviso requires the tenant to pay or tender the actual arrears of rent within  15 days of the hearing of the application for ejectment after due service.   The calculation by the Controller is confined only to calculating the interest at  8% per annum on such arrears together with the cost of the application.  The  argument advanced by the learned counsel for the tenant in that case that  the proviso casts a statutory duty on the Controller to calculate and  determine the arrears of rent as well as the interest to be paid by the tenant  within a period of 15 days of the first hearing of the application for ejectment  after due service was rejected by the Court on the reasoning that such an  argument, if accepted, would result in the Rent Controller holding an enquiry  at the first instance in every case and determining the arrears of rent even  on the first date of hearing which is in the nature of things not possible  without any evidence, nor is contemplated under the scheme of the Act.  We  find it difficult to agree with the above-said reasoning in M/s. Rubber House’s  case.  On the plain language of the Haryana Act, the expression "to be  calculated by the Controller" qualifies both the arrears of rent and interest.   The succeeding expression "such costs of the application" is again qualified  by the expression "if any, as may be allowed by the Controller".  Thus the  provision itself casts an obligation on the Controller to calculate and

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determine by its order (i) the arrears of rent; (ii) the interest; and (iii) the  costs, quantifying the amount which should be paid or tendered by the  tenant (at that stage) to comply with the proviso.  The words ‘calculated’  and ‘allowed’ occurring in the proviso imply a duty cast on the Controller  which has to be discharged judicially.  Such determination will be only for the  purpose of securing compliance by the tenant on ‘the first date of hearing’  succeeding the date of order by the Controller, which order would be based  on a summary enquiry and would obviously be subject to final determination  by the Controller at the end of the regular full-fledged enquiry.  Thus it is not  correct to say that the provision does not contemplate an enquiry, nor is it  correct to say that such an interpretation would result in the holding of a full- fledged enquiry on the first date of hearing, which is not possible.         In M/s. Rubber House’s case, the Court further held that it is for the  tenant to calculate the exact arrears of rent due and to pay or tender the  same and if the tenant fails to do so, he is deemed not to have paid or made  the valid tender of the rent.  However, the case does not answer the question  as to what would happen if the tenant, having paid or tendered the arrears of  rent as per his own calculation, is found at the end of the enquiry to have  made a wrong - if not a deliberately wrong - calculation of the arrears.         Rajinder Kumar Joshi’s case is under the Punjab Act.  There also the  Court had noticed a lacuna in the legislative drafting raising a contention  worthy of serious consideration and the hardship to which a tenant may be  put where the landlord makes a demand on the tenant for rent which is not  due from him, as was found to have been done in that case.  The Court was  faced with a dilemma in adopting either interpretation.  If the provisions of  Section 13(2)(i) of the Act were to be so interpreted as to require the tenant  to tender the rent as demanded (though the demand is exaggerated by  reference to the rate of rent or the period of default) or to face the  consequences of eviction from the rented premises, the provision would  result in causing hardship to the tenant.  On the other hand, to hold the  requirement of the proviso to Section 13(2)(i) to tender the rent as meaning  the tender of the rent as the tenant thinks he is in arrears of, would render  nugatory the requirements of the said proviso.  The Court felt the need for  striking a balance between the two situations so as not to render the  protection given by the Act to the tenant illusory, and at the same time not  to deprive the landlord of his minimum legitimate expectation to be paid  regularly the rent for the use and occupation of his premises.  The solution  which the Court provided was in the background of the facts of that case,  and is hence a limited one.  The Court said that if the rate of rent is not fixed  or becomes the subject matter of dispute, the tenant may have resort to  Section 4 of the Act and apply to the Controller to fix the fair rent failing  which he must deposit the rent at the rate as demanded by the landlord.  If  there is any dispute as to the period of default, the tenant may deposit the  rent which he thinks to be in arrears, but he must take the risk for doing so.   If it is proved ultimately that the rent paid or tendered by him was less than  what was due, he must face eviction.  Such an interpretation gives an  uncertainty to the litigation and does not take care of several situations  which may emerge in a litigation other than the one as arose in that case  before the Court.   It is true that the decisions in M/s. Rubber House (supra) and Rajinder  Kumar Joshi (supra) were not brought to the notice of the Court deciding  Rakesh Wadhawan’s case (supra) and it would have been better if that would  have been done at the Bar.  However, the present petition has given us the  opportunity of examining afresh the merits of the three decisions under  consideration and also for making a comparative study of the provisions  contained in the Punjab Act and the Haryana Act insofar as the ground for  eviction on account of default in payment or tendering the arrears of rent by  the tenant is concerned.  We are of the opinion that M/s. Rubber House’s  case and Rajinder Kumar Joshi’s case do not place a correct interpretation  upon the provisions.  The decision in Rakesh Wadhawan’s case correctly lays  down the law and is re-affirmed.  The interepretation placed by this Court in  Rakesh Wadhawan’s case on Section 13(2)(i) with the proviso in the Punjab  Act applies for interpreting Section 13(2)(i) and the proviso as contained in  the Haryana Act.  

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The petition is held devoid of any merit and is dismissed.