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CASE NO.: Appeal (civil)  1902-1903 of 2000

PETITIONER: M/s Bharat Coking Coal Ltd.

RESPONDENT: Rashtriya Colliery Mazdoor Sangh                                 

DATE OF JUDGMENT: 16/01/2006

BENCH: ARIJIT PASAYAT & TARUN CHATTERJEE

JUDGMENT: J U D G M E N T

ARIJIT PASAYAT, J.  

       Appellant calls in question the legality of the judgment rendered by  a Division Bench of the Patna High Court upholding the judgment of the  learned Single Judge.  By the said judgments certain persons were held  to be workmen of the appellant.  

       Factual background in a nutshell is as follows:

       The Central Government in exercise of power under Section 10 of  the Industrial Disputes Act, 1947 (in short the ’Act’) referred the  following two disputes for adjudication to the Central Government  Industrial Tribunal No.1, Dhanbad (hereinafter referred to as the  ’Tribunal’):

Reference No.32 of 1989 dated 16th March, 1989:  

       1.      "Whether the action of the management of  Sudamdih Colliery of M/s in denying employment to  Shri Karma Rout and 21 others with effect from  9.7.1977 is justified? If not, to what relief the  concerned workmen are entitled" and     

Reference No.35 of 1989 dated 20th March, 1989:  

       2.      "Whether the action of the management of  Sudamdih Area of M/s BCCL in denying employment  to Shri Bhagwat Singh and 3 others, viz. Shri Sapan,  Karan Sahi and Shanti Thakur, who were engaged as  sump cleaning mazdoors is justified?  If not, to what  relief are the workmen entitled"?

       As the controversy involved in both the cases was the same, the  Tribunal heard them analogously and answered the references in favour  of the workmen declaring them to be workmen of the principal employer,  namely, the Management of M/s. Bharat Coking Coal Ltd. (hereinafter  referred to as the ’management’) and directing for their reinstatement in  service with effect from the dates of references with 75% back wages.   Being aggrieved by the said combined Award, the management filed two  writ petitions before the Patna High Court, being CWJC No.859/1993 (R)  and CWJC No. 856/1993 (R), which were dismissed by the learned Single  Judge on 10th August, 1998.  Not being satisfied with the judgment of  the learned single Judge, the management has filed two appeals under  clause 10 of the Letters Patent.            Relying on a decision of this Court in Air India Statutory  Corporation etc. v. United Labour Union and others (AIR 1997 SC 645)  the Division Bench held that the decision of the learned Single Judge

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was unexceptionable.  Reference was also made to a decision of this  Court in Secretary, Haryana State Electricity Board v. Suresh & Ors. etc.  (JT 1999 (2) SCC 435) to hold that where the engagement of workmen by  a contractor is a camouflage to conceal the real relationship between  principal employer and the workmen, then also the workmen employed  through unlicensed contractor are liable to be treated as workmen of the  principal employer.   

       Mr. Ajit Kumar Sinha, learned counsel for the appellant submitted  that the view expressed by the learned Single Judge and the Division  Bench cannot be sustained in view of the Constitution Bench judgment  of this Court in Steel Authority of India Ltd. and Ors. v. National Union  Waterfront Workers and Ors. (2001 (7) SCC 1). It was pointed out that  though dispute purportedly relating to the period 1976-77 was raised  long after i.e. about a decade and on that score alone the claimants were  not entitled to any relief.  There was a settlement arrived at which was  binding. But the Tribunal and the High Court did not take note of the  same. Additionally, in the reference names of the workmen were not  given and it was not clear as to whose cause was being espoused by the  union.  For the first time in the statement filed before the Tribunal by the  Union, the names were indicated. The reference was, therefore,  incompetent, but the Tribunal had lightly brushed it aside.

       Mr. S.B. Upadhyay, learned counsel for the respondent on the  other hand submitted that the decision in Steel Authority’s case (supra)  applies to the present case as the so-called contractor was introduced as  a camouflage. This aspect has been noticed by the Tribunal.   Additionally, the respondents were not inactive and they were making all  the efforts to get the matter settled.  Merely because the names were not  given, that did not render the reference incompetent. Further, the  settlement referred to had no legal sanction.  

       In order to appreciate the rival submissions observations of this  Court in various cases need to be noted.   

       In Steel Authority’s case (supra) it was observed, inter alia, as  follows (at para 125):                                

"125 -  The upshot of the above discussion is outlined  thus:  (1)(a) Before 28-1-1986, the determination of the  question whether the Central Government or the State  Government is the appropriate Government in relation  to an establishment, will depend, in view of the  definition of the expression "appropriate Government"  as stood in the CLRA Act, on the answer to a further  question, is the industry under consideration carried  on by or under the authority of the Central  Government or does it pertain to any specified  controlled industry, or the establishment of any  railway, cantonment board, major port, mine or oilfield  or the establishment of banking or insurance company  ? If the answer is in the affirmative, the Central  Government will be the appropriate Government;  otherwise in relation to any other establishment the  Government of the State in which the establishment  was situated, would be the appropriate Government;  (b) After the said date in view of the new definition of  that expression, the answer to the question referred to  above, has to be found in clause (a) of Section 2 of the  Industrial Disputes Act; if (i) the Central Government  company/undertaking concerned or any undertaking  concerned is included therein eo nominee, or (ii) any  industry is carried on (a) by or under the authority of  the Central Government, or (b) by a railway company;

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or (c) by a specified controlled industry, then the  Central Government will be the appropriate  Government; otherwise in relation to any other  establishment, the Government of the State in which  that other establishment is situated, will be the  appropriate Government.  (2)(a) A notification under Section 10(1) of the CLRA  Act prohibiting employment of contract labour in any  process, operation or other work in any establishment  has to be issued by the appropriate Government:  (1) after consulting with the Central Advisory Board or  the State Advisory Board, as the case may be, and  (2) having regard to  (i) conditions of work and benefits provided for the  contract labour in the establishment in question, and  (ii) other relevant factors including those mentioned in  sub-section (2) of Section 10;  (b) Inasmuch as the impugned notification issued by  the Central Government on 9-12-1976 does not satisfy  the aforesaid requirements of Section 10, it is quashed  but we do so prospectively i.e. from the date of this  judgment and subject to the clarification that on the  basis of this judgment no order passed or no action  taken giving effect to the said notification on or before  the date of this judgment, shall be called in question  in any tribunal or court including a High Court if it  has otherwise attained finality and/or it has been  implemented.  (3) Neither Section 10 of the CLRA Act nor any other  provision in the Act, whether expressly or by necessary  implication, provides for automatic absorption of  contract labour on issuing a notification by the  appropriate Government under sub-section (1) of  Section 10, prohibiting employment of contract labour,  in any process, operation or other work in any  establishment. Consequently the principal employer  cannot be required to order absorption of the contract  labour working in the establishment concerned.  (4) We overrule the judgment of this Court in Air India  case (Air India Statutory Corpn. v. United Labour  Union, (1997) 9 SCC 377 prospectively and declare  that any direction issued by any industrial  adjudicator/any court including the High Court, for  absorption of contract labour following the judgment  in Air India case (Air India Statutory Corpn. v. United  Labour Union, (1997) 9 SCC 377 shall hold good and  that the same shall not be set aside, altered or  modified on the basis of this judgment in cases where  such a direction has been given effect to and it has  become final.  (5) On issuance of prohibition notification under  Section 10(1) of the CLRA Act prohibiting employment  of contract labour or otherwise, in an industrial  dispute brought before it by any contract labour in  regard to conditions of service, the industrial  adjudicator will have to consider the question whether  the contractor has been interposed either on the  ground of having undertaken to produce any given  result for the establishment or for supply of contract  labour for work of the establishment under a genuine  contract or is a mere ruse/camouflage to evade  compliance with various beneficial legislations so as to  deprive the workers of the benefit thereunder. If the  contract is found to be not genuine but a mere  camouflage, the so-called contract labour will have to

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be treated as employees of the principal employer who  shall be directed to regularise the services of the  contract labour in the establishment concerned  subject to the conditions as may be specified by it for  that purpose in the light of para 6 hereunder.  (6) If the contract is found to be genuine and  prohibition notification under Section 10(1) of the  CLRA Act in respect of the establishment concerned  has been issued by the appropriate Government,  prohibiting employment of contract labour in any  process, operation or other work of any establishment  and where in such process, operation or other work of  the establishment the principal employer intends to  employ regular workmen, he shall give preference to  the erstwhile contract labour, if otherwise found  suitable and, if necessary, by relaxing the condition as  to maximum age appropriately, taking into  consideration the age of the workers at the time of  their initial employment by the contractor and also  relaxing the condition as to academic qualifications  other than technical qualifications."  

       In a later case in Nitinkumar Nathalal Joshi and Ors. v. Oil and  Natural Gas Corporation Ltd. and Ors. (2002 (3) SCC 433), it was noted  in paragraph 8 as follows: "8-In the present case, the appellants were not  absorbed by the principal employer. Therefore, it  cannot be said that the decision in Steel Authority of  India Ltd. case ((2001) 7 SCC 1) cannot be applied. The  directions issued by the learned Single Judge were  modified by the Division Bench of the High Court and  never given effect to. Therefore, the directions issued  by this Court in Steel Authority of India Ltd. case  ((2001) 7 SCC 1) are applicable on all fours."  

       So far as delay in seeking the reference is concerned, no formula of  universal application can be laid down. It would depend on facts of each  individual case.   

       However, certain observations made by this Court need to be  noted. In Nedungadi Bank Ltd. v. K.P. Madhavankutty and Ors. (2000 (2)  SCC 455) it was noted at paragraph 6 as follows:     

"6.     Law does not prescribe any time-limit for the  appropriate Government to exercise its powers under  Section 10 of the Act. It is not that this power can be  exercised at any point of time and to revive matters  which had since heel) settled. Power is to be exercised  reasonably and in a rational manner. There appears to  us to be no rational basis on which the Central  Government has exercised powers in this case after a  lapse of about seven years of the order dismissing the  respondent from service. At the time reference was  made no industrial dispute existed or could be even  said to have been apprehended. A dispute which is  stale could not be the subject-matter of reference  under Section 10 of the Act. As to when a dispute can  be said to be stale would depend on the facts and  circumstances of each case. When the matter has  become final, it appears to us to be rather incongruous  that the reference be made under Section 10 of the Act  in the circumstances like the present one. In fact it  could be said that there was no dispute pending at the  time when the reference in question was made. The  only ground advanced by the respondent was that two

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other employees who were dismissed from service were  reinstated. Under what circumstances they were  dismissed and subsequently reinstated is nowhere  mentioned. Demand raised by the respondent for  raising an industrial dispute was ex-facie bad and  incompetent."

       In S.M. Nilajkar and Ors. v. Telecom District Manager, Karnataka  (2003 (4) SCC 27) the position was reiterated as follows: (at para 17) "17.     It was submitted on behalf of the respondent  that on account of delay in raising the dispute by the  appellants the High Court was justified in denying  relief to the appellants. We cannot agree. It is true, as  held in M/s. Shalimar Works Ltd. v. Their Workmen  (supra) (AIR 1959 SC 1217), that merely because the  Industrial Disputes Act does not provide for a  limitation for raising the dispute it does not mean that  the dispute can be raised at any time and without  regard to the delay and reasons therefor. There is no  limitation prescribed for reference of disputes to an  industrial tribunal, even so it is only reasonable that  the disputes should be referred as soon as possible  after they have arisen and after conciliation  proceedings have failed particularly so when disputes  relate to discharge of workmen wholesale. A delay of 4  years in raising the dispute after even reemployment of  the most of the old workmen was held to be fatal in  M/s. Shalimar Works Limited v. Their Workmen  (supra) (AIR 1959 SC 1217), In Nedungadi Bank Ltd. v.  K.P. Madhavankutty and others (supra) AIR 2000 SC  839, a delay of 7 years was held to be fatal and  disentitled to workmen to any relief. In Ratan Chandra  Sammanta and others v. Union of India and others  (supra) (1993 AIR SCW 2214, it was held that a casual  labourer retrenched by the employer deprives himself  of remedy available in law by delay itself, lapse of time  results in losing the remedy and the right as well. The  delay would certainly be fatal if it has resulted in  material evidence relevant to adjudication being lost  and rendered not available. However, we do not think  that the delay in the case at hand has been so  culpable as to disentitle the appellants for any relief.  Although the High Court has opined that there was a  delay of 7 to 9 years in raising the dispute before the  Tribunal but we find the High Court factually not  correct. The employment of the appellants was  terminated sometime in 1985-86 or 1986-87.  Pursuant to the judgment in Daily Rated Casual  Employees Under P&T Department v. Union of India  (supra) (AIR 1987 SC 2342), the department was  formulating a scheme to accommodate casual  labourers and the appellants were justified in awaiting  the outcome thereof. On 16-1-1990 they were refused  to be accommodated in the scheme. On 28-12-1990  they initiated the proceedings under the Industrial  Disputes Act followed by conciliation proceedings and  then the dispute was referred to the Industrial  Tribunal cum-Labour Court. We do not think that the  appellants deserve to be non suited on the ground of  delay."  

       It appears that the Tribunal and the High Court did not consider  the factual position in the background of the legal position as noted  above. Of course at the point of time when the matter was decided Air

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India’s case (supra) held the field. But, in view of the pronouncement of  the Constitution Bench in Steel Authority’s case (supra) the matter needs  to be re-examined by the High Court. Though it was submitted by Mr.  Upadhyay that there is a finding about the appellant having adopted a  camouflage, there is no definite finding by the Tribunal and/or the High  Court in this regard.  Mere reference to certain observations of this Court  would not suffice without examination of the factual position.   Additionally, the effect of omitting the names of the claimants whose  cause was being espoused by the Union has not been considered by the  High Court in the proper perspective.  Similar is the position regarding  purported settlement. In these peculiar circumstances, it would be  appropriate for the learned Single Judge of the High Court to re-consider  the matter.  Accordingly, the matter is remitted to the High Court so that  learned Single Judge can consider the matter afresh taking into account  the principles set out above and consider their applicability to the  background facts on the issues raised by the appellant.  As the matter is  pending since long, learned Chief Justice of the High Court is requested  to allot the matter to a learned Single Judge who shall make an effort to  dispose of the matter afresh within a period of six months from the date  the matter is allotted by the learned Chief Justice.   

       The appeals are allowed to the aforesaid extent without any order  as to costs.