REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS.__3641-42     OF 2008 (Arising out of SLP (C) No.22320-22321 of 2004)

FOOD CORPORATION OF INDIA & ANR.       … APPELLANTS

Versus

PALA RAM & ORS.      … RESPONDENTS

{With  C.A.  No._3654  of  2008  [@  SLP  (C)  No.  1742/2008],  C.A. Nos._3655-56  of  2008  [@  SLP  (C)  No.  22335-22336/2004  &  C.A. No._3657 of 2008 [@ SLP (C) No. 2757/2006]}

J U D G M E N T

S.B. Sinha, J.

1. Leave granted.

2. The case has a chequered history.  

Appellant has been constituted under the Food Corporation of India

Act, 1964.  For the purpose of carrying out its activities, it maintains a large

number of godowns in different parts of the country including the States of

Punjab  and  Haryana.   As  the  law  stood  then,  the  respective  State

Governments were considered to be the appropriate Government in respect

of the appellant.  Various State Governments issued Notification prohibiting

employment  of  contract  labour  in  some  processes  in  its  establishments

purported to be in exercise of its power under Section 10(1) of the Contract

Labour (Regulation and Abolition) Act, 1970 (for short, “the Act”).   

Indisputably, the Government of India in exercise of the same power

issued a Notification bearing No. S.O. No. 779(E) on or about 9.12.1976 to

the following effect:

“S.O.  No.  779(E)  –  In  exercise  of  the  power conferred  by  sub-section  (1)  of  Section  10  of  the Contract  Labour  (Regulation and Abolition)  Act,  1970 (37 of 1970) the Central Government after consultation with  the  Central  Advisory  Contract  Labour  Board, hereby prohibits employment of contract labour on and from the 1.3.1977, for sweeping, cleaning,  dusting and watching  of  buildings  owned  or  occupied  by  the establishments  in  respect  of  which  the  appropriate Government  under  the  said  Act  is  the  Central Government:  (emphasis supplied)

Provided that  this  notification  shall  not  apply to the outside cleaning and other maintenance operations of multi-storeyed  buildings  where  such  cleaning  or

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maintenance  operations  cannot  be  carried  out  except with specialized experience.”

In a decision  of  this  Court  titled  “Food Corporation of  India Workers’

Union  v.  Food Corporation of India & ors.” reported in (1985) 2 S.C.C.

294, it was held:

“On the interpretation of the relevant sections extracted above, we hold that the ‘appropriate Government’ for the purpose of this case pertaining to the regional offices and their  warehouses  in  the  respective  States  is  the  State Government and not the Central Government.”

3. However,  on  or  about  28.1.1986,  the  definition  of  ‘Appropriate

Government’ was amended by Act 14 of 1986 in terms whereof, the Central

Government was declared to be the ‘appropriate Government’, inter alia, so

far as establishments of FCI are concerned.   

4. The Central Government thereafter issued a Notification on or about

28.5.1992 stating that no case for abolition of contract labour in respect of

the jobs of sweeping, cleaning, dusting and watching of buildings in Food

Corporation of India was made out.  It reads as under:

“No. U.23013/11/89-LW Government of India : Ministry of Labour

Jaisalmar House, Mansingh Road,  

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New Delhi, Dated 28th May, 1992 To, All the members of Central Advisory contract Labour Board.

Subject: Report  (Part-I)  of  the  Committee  constituted  to study the working of Contractor Labour System in Sweeping, Cleaning,  Dusting  and  Watching  of  Buildings  owned  or occupied  by  establishments  in  respect  of  which  the  Central Government has become the appropriate government after the amendment  in  1986 of  the Contract  Labour  (Regulation  and Abolition) Act, 1970.

Sir,

I am directed to refer to this Ministry’s letter of even No. dated 3rd April, 1992 and to say that the matter relating to the dusting and  watching  of  buildings  owned  or  occupied  by  the Corporation  of  India.   Unit  Trust  of  India,  and  Central Warehousing Corporation was discussed in the 24th meeting of the  Central  Advisory  Contract  Labour  Board  held  on 29.02.1992  at  New Delhi  under  the  Chairmanship  of  Union Deputy Labour Minister.  It was inter-alia decided to leave the matter further for a decision by Government keeping in views the views expressed in the matter.  

2. In  pursuance  of  the  recommendations  of  the Board, the matter has been considered in detail by the Central Government  and  it  has  been  decided  not  to  prohibit employment  of  Contract  Labour  in  the  sweeping,  cleaning, dusting and watching of  Building owned or  occupied by the establishments,  of  Food  Corporation  of  India,  Industrial Finance  Corporation  of  India,  for  which  the  appropriate Government  under  the  Contract  Labour  (Regulation  and Abolition) Act, 1970 is the Central Government.   

Yours faithfully,

Sd/- (Smt. P. Vankatachalam)

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Deputy Secretary of the Govt. of India  And Secretary of the Central Advisory  

Contract Labour Board.”

5. The  question  as  to  whether  on  abolition  of  contract  labour,  the

contract labourers working under the contractors became direct employees

of the management, has been debated in various High Courts.  The question

came up before this Court in  Air India Statutory Corporation & Ors.  v.

United Labour Union & ors.  reported in (1997) 9 S.C.C. 377 where it was

held  that  all  the  contract  labourers  on  issuance  of  Notification  dated

9.12.1976 became the direct employees of the respective managements. The

decision  of  this  Court  in  Food  Corporation  of  India  Workers’  Union

(supra) however was not noticed.   

6. A series of writ petitions thereafter were filed before the Punjab &

Haryana High Court.  In one of the matters, a Division Bench of the said

Court in LPA No. 742 of 1993 by a judgment and order dated 21.7.1998

opined that the contract labour in the depots of the appellant by reason of

the  said  notification  dated  9.12.1976,  the  workmen  were  entitled  to  the

benefits of the said decision of Air India (supra) holding:

“Accordingly, on finding the work to be perennial nature,  it  had  recommending  and  the  Central

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Government  had  considered  and  accepted  the recommendation to abolish the recommendation to abolish the contract labour system in the afore-said services.   Having  abolished  it  the  Central Government was denuded its power under Section 10(1)  to  again  appoint  insofar  as  the  above services of the Mohile Committee to go once over into the self – same question and recommendation of  the  latter  not  to  abolish  the  contract  labour system in  the  above  service  and  the  acceptance there  of  by the  Central  Government  are  without any legal base and therefore nonest.”

7. It  was  also  held  that  the  Central  Government  was  the  appropriate

Government in view of the decision of  this  Court  in   Air India  (supra),

stating :

“11. After  recording  the  above  mentioned conclusions their Lordships examined the correctness of the  directions  given  by  Bombay  High  Court  for enforcement of the notification dated 09-12-1976 qua to the  establishment  of  the  Corporation  and  upheld  the same.

12. In  view  of  the  judgment  of  the  Supreme Court in Air India Statutory Corporation’s Case (supra) approving decision of the Bombay High Court which has direct bearing on the case of the appellant, the impugned order of the learned Single Judge in which he dissented from the decision of the Bombay High Court cannot be regarded as laying down correct law.  In our opinion the interpretation given by the Apex Court to the definition of appropriate Government is also sufficient to upset the impugned judgment.  

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13. In the result we allow and set aside the order of  the  learned  Single  Judge.   Consequently  the  writ petition  filed  by  the  appellant  is  accepted  and  the respondent – Corporation is directed to give effect to the notification dated 09.12.1976 while making employment in  its  establishment.   As  a  logical  corollary,  the respondent  is  restrained from employ watchman for its godowns as contract labour.”

8. Indisputably,  a  Special  Writ  Petition  filed  thereagainst  by  the

petitioner was dismissed by an order dated 30.8.1999 stating:

“In view of the circular No. 2 of 1999 dated 23.3.1999 by  the  Food  Corporation  of  India  and  Office Memorandum  No.  S-16-11/2/99-LW  dated  8.2.1999 issued by the Government of India, this  Special  Leave Petition  deserves  to  be  dismissed.   The  Special  Leave Petition is, therefore, dismissed.”

9. This  question,  however,  again  came up  for  consideration  before  a

Constitution Bench of this Court in Steel Authority of India Limited & ors.

v. National Union Waterfront Workers & ors. [(2001) 7 SCC 1].   

The Constitution Bench took a different view.  Air India (supra) was

overruled prospectively. It was held that there being no provision under the

Act  to  direct  absorption  of  the  contract  labour  on  abolition  thereof,  Air

India (supra) did not lay down a good law, stating:  

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“107. 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  adjudicator/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.

*** *** *** 119. We are  not  persuaded  to  accede  to  the

contention  that  a  workman,  who  is  not  an outworker, must be treated as a regular employee of  the  principal  employer.  It  has  been  noticed above  that  an  outworker  falls  within  the exclusionary  clause  of  the  definition  of “workman”.  The  word “outworker”  connotes  a person  who  carries  out  the  type  of  work, mentioned  in  sub-clause  (C)  of  clause  (i)  of Section  2(1),  of  the  principal  employer  with  the materials supplied to him by such employer either

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(i) at his home, or (ii) in some other premises not under the control and management of the principal employer. A person who is not an outworker but satisfies  the  requirement  of  the  first  limb of  the definition  of “workman”  would,  by  the  very definition,  fall  within  the  meaning  of  the  term “workman”. Even so, if such a workman is within the  ambit  of  the  contract  labour,  unless  he  falls within  the  aforementioned  classes,  he  cannot  be treated  as  a  regular  employee  of  the  principal employer.

120. We have  also  perused all  the Rules  and forms  prescribed  thereunder.  It  is  clear  that  at various  stages  there  is  involvement  of  the principal  employer.  On  an  exhaustive consideration of the provisions of the CLRA Act we have held above that neither they contemplate creation  of  direct  relationship  of  master  and servant  between  the  principal  employer  and  the contract  labour  nor  can  such  relationship  be implied from the provisions of the Act on issuing notification under Section 10(1) of the CLRA Act, a  fortiori  much  less  can  such  a  relationship  be found to exist from the Rules and the forms made thereunder.”

The  summary  of  the  decision  was  outlined  in  paragraph  125;  the

relevant portions whereof are as under:

“(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:

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(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 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 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.

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(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 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.”

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The meaning of the expression “industrial adjudicator” was stated in

the following terms:

“126.  We  have  used  the  expression  “industrial adjudicator”  by  design  as  determination  of  the questions  aforementioned  requires  enquiry  into disputed questions of facts which cannot conveniently be  made by High Courts  in  exercise  of  jurisdiction under Article 226 of the Constitution.  Therefore,  in such cases the appropriate authority to go into those issues  will  be  the  Industrial  Tribunal/Court  whose determination will be amenable to judicial review.”

10. Interpretation of the decision of this Court in Steel Authority of India

Limited (supra) vis-à-vis the circulars issued by the Central Government as

also  by  the  appellant  fell  for  consideration  in  a  large  number  of  writ

petitions filed by the concerned workmen of different establishments of the

appellant.   

11. We have noticed hereinbefore the decision of the Division Bench of

the Punjab & Haryana High Court rendered in L.P.A. No. 742 of 1993. The

said decision itself was construed differently.  Whereas one Division Bench

in its judgment and order dated 22.8.2002 passed in Writ Petition No. 4695

of  1999  titled  “Sunil  Kumar  Vs.  FCI  &  Ors.”  opined  that  the  said

Notification  dated  9.12.1976  became final  vis-à-vis  the  establishment  of

FCI in Sangrur District, as noticed hereinafter,  other Benches of the said

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Court,  however,  took  a  different  view.   We  may,  however,  notice  the

Division Bench decision in “Sunil Kumar” wherein it was held:

“The only argument which survives for consideration of this Court is whether the petitioners are entitled to claim benefit of the directions contained in sub-para No. (6) of paragraph No. 121 of the judgment in Steel Authority of India’s case (supra).  Learned counsel for the petitioners contended  that  the  judgment  in  relation  to  Food Corporation  India  Class  IV  Employees  Union  (Regd.) Sangrur, has attained finality and has been implemented and, thus, would fall under the exception carved out by the  Hon’ble  Apex  Court  in  clause  (2)(b)  of  paragraph No. 121 and, therefore, the petitioners are entitled to the relief  limited  to  the  extent  that  the Corporation  would grant them preferential treatment in terms of sub-para (6) of paragraph 121 of the judgment.  According to him, by issuing  the  letters  of  1999  and  the  judgment  of  the Letters Patent  Bench as well  as the Apex Court would make  the  judgment  enforceable  in  favour  of  all employees of the Food Corporation India, irrespective of territory,  as  the  judgment  would  have  to  be  read  as  a judgment in rem and not in personem.  In other words, the Food Corporation India being the respondent in these petitions,  is  bound to  enforce  the  judgment  qua  all  its employees and particularly those who are working in the State of Punjab.”

12. Posing  the  question  as  to  what  would  be  the  meaning  of  the

expression  “if  it  has  otherwise  attained  finality  and/or  it  has  been

implemented” used in Steel Authority of India Limited (supra) and having

noticed the fact that the Notification dated 9.12.1976 stood set aside by the

Constitution Bench of this Court, it was observed that the appellant cannot

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justify  refusing  relief  to  the  employees  of  the  same  sector  of  the

Corporation, rather same District, i.e. Sangrur in the following terms :

“It is not disputed that Sunam is a part of District Sangrur and the petitioners are well within their rights to claim  the  benefit  of  a  settled  right.   It  is  only implementation  of  the  earlier  judgment  as  the  Union itself  was  a  party  before  the  High  Court  in  the  other cases.

On   the  one  hand,  the  workers  do  not  question  the genuineness  of  the  agreement,  while  on  the  other,  the management  admits  implementation  of  the  notification and  it  having  attained  finality  as  back  as  in  the  year 1999.  Once these two ingredients are satisfied in light of the  judgment  of  the  Hon’ble  Apex  Court,  denying limited relief in terms of sub-paragraph (6) of paragraph No. 121 of the judgment of Hon’ble Apex Court to the petitioners, may not be permissible.  

We  have  granted  relief  to  the  petitioners  in  these petitions  as  it  is  only  direction  in  furtherance  to  the judgment of the Court pending between the parties to the writ and which has attained finality.  While, if we were to  deny  relief  to  the  petitioners,  it  would  amount  to obstructing  implementation  of  the judgment  which  has attained finality upto the highest court of the land.   In other words, it  would tantamount to denial of a settled relief.  This judgment merely adds to the existing order of  the  court  particularly  in  view  of  the  fact  that  the respondents  have  admittedly  implemented  the notification in question.”

13. Indisputably, the Special Leave Petitions filed thereagainst have been

dismissed by this Court by an order dated 24.2.2003.  Appellant thereafter

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issued  two  advertisements  being  dated  13.9.2003  and  20.8.2003  for

enrolment of agencies for provision of security coverage of FCI foodgrains

stored  in  various  godowns/CAP complexes  in  Haryana  and  also  for  the

purpose of security of FCI  building at Chandigarh. A Division Bench of the

High Court opined that the workmen were entitled to the benefit of para 125

(b)  of  the  judgment  in  Steel  Authority  of  India  Limited (supra)  as

interpreted by the Division Bench of the said High Court in L.P.A. No. 742

of  1993 and Writ  Petition  No.  4695  of  1999.   The advertisements  were

quashed.  The main judgment was delivered in CWP No. 15484 of 2003.

That case pertained to the State of Punjab.   

14. Two other matters including one pertaining to the State of Haryana

came up for  consideration  before  the  High Court  in  CWP No. 16476  of

2003 and CWP No. 16482 of 2003.  The main judgment was delivered in

CWP No. 15484 of 2003.  The said decision was followed in other cases.

Noticing  the  decision  of  this  Court  in  Steel  Authority  of  India  Limited

(supra) as contained in para 125(b), it was held:

“The observations  aforesaid  must  accordingly be applied to the present case.  The judgment of this court in  the  LPA  is  dated  21.7.1998.   It  is  conceded  that directions given in that judgment had been implemented and acted upon and in view of the observations of the Supreme Court, the petitioners herein thus fall within the exceptions.  We have also been referred to the Division

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Bench Judgment of this Court  passed on 22.8.2002, in Civil Writ Petition No. 4695 of 1999 Sunil Kumar and Others vs. F.C.I. and others.  The relevant observations are as under:-

‘Consequently,  in  view  of  the  discussion aforestated,  we  allow  this  writ  petition, however,  limited  to  the  extent  that  the petitioners would be entitled to the relief in the  light  of  the  observations  made  by the Hon’ble Court in the case of Steel Authority of India (supra).   However, the parties  are left to bear their own costs.’

In  the  aforesaid  judgment  after  considering  the implications  of  the  judgment  of  the Supreme Court  in Steel  Authority  of  India’s  case  (supra),  the  Division Bench granted the necessary relief to the petitioners.  

We  accordingly  direct  that  the  petitioners  are entitled to the same relief.  The writ petition is allowed in  the  above  terms.   In  this  view  of  the  matter,  the advertisement  Annexure  P12  is  quashed.   The respondents  are directed to take a fresh decision in the light of the observations aforesaid within a period of four months  from the  day  a  certified  copy  of  the  order  is supplied to them.”

Curiously, the appellants have filed only two Special Leave Petitions

bearing  No.  22320-21  of  2004  and  22335-36  of  2004  questioning  the

decision of the High Court in CWP No. 16476 of 2003 and CWP No. 16482

of  2003  and  no  Special  Leave  Petition  has  been  filed  against  the  main

judgment, viz., CWP No. 15484 of 2003.

16

15. Before, however, embarking on the contentions raised by the parties,

we may also notice that Review Petitions had been filed thereagainst which

by reason of an order dated 21.5.2004 were dismissed.  

16. The Food Corporation of India Class IV Employees’ Union filed a

Writ Petition praying for the following reliefs:

“i) a writ in the nature of mandamus or any other writ, order  of  direction  directing  the  Respondents  to employ the persons mentioned in Annexure P/1 as watchmen in accordance with the directions of the Hon’ble Supreme Court of India in Steel Authority of India’s case reported as AIR 2001 SC 3527 and in  accordance  with  the  directions  given  by  this Hon’ble Court in Civil Writ Petition No. 4695 of 1999 decided on 22.8.2002 (Annexure P/8)

ii) any other writ, order or direction which in the circumstances, of this  case,  this  Hon’ble  Court  deems  fit  and  proper  be  also passed;

iii) issuance of advance notices be dispensed with;

iv) filing of certified copies of annexures be dispensed with;

v) cost of the petition be awarded.”

It was furthermore prayed:

“i) that during the pendency of the writ petition, the Respondents  be  restrained  from  employing  any other  persons  in  preference  to  the  persons mentioned in Annexure P-1;

17

ii) and Respondents be directed to dispense with the services  of  the SPOs/Home Guards  employed as watch  and  ward  staff  by  way  of  a  stop  gap arrangement.”

17. A Division Bench of the said Court dismissed the said Writ Petition

giving liberty to the Union to approach the Labour Court.   

18. Special Leave Petition (Civil) No. 2757 of 2006 arose out of the said

order.  Raj Kumar and 71 others also filed a Writ Petitioin before the High

Court which was marked as CWP No. 3945 of 2006.  Therein a contention

was raised that the petitioners who had been working as watchmen could

not have been asked to appear at a test having regard to the directions issued

by this Court in Steel Authority of India Limited  (supra). Reliance therefor

was placed on the decision of the Division Bench of the High Court in CWP

No. 15484 of 2003 as also a decision in Food Corporation of India, Class IV

Employments  Union   (Regd.)  Sangrur  v.  Food  Corporation  of  India,

Chandigarh, 1999 (1) Punjab Law Reporter 35.  The Division Bench opined

that  having  regard  to  another  Constitution  Bench  decision  of  this  Court

rendered  in  Secretary,  State  of Karnataka  and  others  v.  Umadevi  and

others  [JT 2006 (4) SC 420 :  (2006) 4 SCC 1], the Writ  Petition is  not

maintainable stating :

18

“The  various  grounds  raised  by  the  petitioners need not be separately dealt  with because the Supreme Court  of  India  in  Secretary,  State  of  Karnataka  and others  vs.  Umadevi  and  others  JT  2006  (4)  420,  has clarified that the right to employment, if  it  is a part  of right to file, would stand denuded by preferring persons who had got in casually or who had come through the back  door.   It  would  be  consistent  with  the  policy  of Article 39(a) of the Constitution of India, if the Courts recognized that the appointment to a post in government service  or  in  the  service  of  its  instrumentalities  could only  be  by  way  of  a  proper  selection  in  a  manner recognized by legislation in the context of the provisions of the Constitution of India.  

This quite clearly would not permit FCI to recruit the petitioners  who had until  1999 worked for various period as watchmen on contract labour.  If the petitioners are seeking benefit  of  direction given by this  Court  in Food  Corporation  of  India,  Class  IV  Employments Union (Regd.) Sangrur Vs. Food Corporation of India, Chandigarh  (1999-1)  Punjab  Law Reporter  35  then  in Umadevi’s  case  (supra),  the  Supreme  Court  had  also clarified  that  a  decision  which  ran  counter  to  the principles  settled by them shall  stand denuded of  their effect as precedent.

Consequently,  we have  no  hesitation  in  holding that  all  judgments  and directions  which run counter  to Umadevi’s case including judgment of this court in Food Corporation  of  India,  Class  IV  Employments  Union (Regd.) Sangrur (supra)  and any other judgment which seems to enforce notification of 1976 to re-employ the contract labour stand denuded of its effect as precedent.”

19. Mr.  Ajit  Pudussery,  learned  counsel  appearing  on  behalf  of  the

appellant  would  submit  that  the  Division  Bench  of  the  High  Court

19

misconstrued  and  misinterpreted  the  decision  of  this  Court  in  Steel

Authority of India Limited  (supra) as also the decision rendered in the case

of CWP Nos. 4891 and 4887 of 2004 as the fact thereof was confined to the

District of Sangrur only.  Each establishment being separate and distinct, the

decision in CWP Nos. 4891 and 4887 of 2004 could not have been applied

in relation to all other godowns.   

20. Mr. Dharmendra Kumar Sinha, learned counsel appearing on behalf

of the respondent, on the other hand, would submit that it is incorrect that

the decision of the Punjab & Haryana High Court in CWP Nos. 4891 and

4887 of 2004 was rendered only in relation to the Sangrur District inasmuch

as it was contended that from a perusal of the order passed by the Punjab &

Haryana  High  Court  as  also  the  Circulars  issued  both  by  the  Central

Government and the Food Corporation of India itself would appear that the

contract labour stood abolished and in that view of the matter the impugned

judgments rendered in CWP No. 15484 of 2003, CWP No. 16482 of 2003

and CWP No. 15694 of 2003 are wholly unassailable.  

The learned counsel would contend that the fact of the matters being

wholly  undisputed,  the  High  Court  has  committed  a  manifest  error  in

passing the order dated 15.9.2005 in  CWP Nos. 4891 and 4887 of 2004

20

which is the subject matter of Special Leave Petition (Civil) No. 2747 of

2006. Furthermore,  the right  of  the  workmen having been preserved and

protected in terms of the Constitution Bench decision of this Court in Steel

Authority  of  India  Limited (supra),  the  High  Court  manifestly  erred  in

dismissing the Writ Petition filed by the Raj Kumar & ors. relying on or on

the basis of the Constitution Bench decision in Umadevi (supra).

21. The core question involved in these appeals is the interpretation of

the judgment of this Court in Steel Authority of India Limited (supra) and

in particular  clause (b)  of  para  125 thereof.   Air India  (supra)  has been

overruled prospectively.   What  has been directed  is  that  despite  the  said

judgment, if any order had been passed or any action had been taken giving

effect to the Notification dated 9.12.1976, the same would not be called in

question in any Tribunal or Court including the High Court subject to the

condition  that  the  same  has  otherwise  attained  finality  or  had  been

implemented.

22. What was therefore required to be implemented or finality attached to

any judgment delivered or action taken,  relates  to the Notification of the

Central Government dated 9.12.1976.  We do not find from the discussions

in any of the judgments of the High Court that the said Notification dated

9.12.1976 had been given effect to.  We have noticed hereinbefore that the

21

Central Government upon becoming the appropriate Government in relation

to the appellant – Corporation issued a Notification on or about 28.5.1992.

The validity of the said Notification is not in question.  Once the prohibition

purported to  have been made by the Central  Government  in  terms of its

Notification dated 9.12.1976 stood withdrawn with effect from 28.5.1992,

the question of prohibiting employment of contract labour in sweeping or

watching buildings  owned or  occupied by all  the establishments  of Food

Corporation of India, inter alia, would not arise.   

It may be true that the writ petitioner in the writ application, inter alia,

contended  that  the  Corporation  had  implemented  the  decision  both  in

Punjab and Haryana. What was however was sought to be implemented was

the  Circular  letters  issued  by  the  Central  Government  and/or  the  Food

Corporation of India itself, which find reference in the order of this Court

dated 30.8.1999 passed in Special Leave Petition (Civil) No. 4605 of 1999.   

We may notice Circular No. 2 of 1999 as also Office Memorandum

dated 8.2.1999.  By reason of the said Office Memorandum dated 8.2.1999,

the Central Government acting as the ‘appropriate Government’ in respect

of  the  Food  Corporation  of  India  opined  that  the  Notification  dated

9.12.1976 is  applicable  to it  and the Regional  Labour Commissioner (C)

Chandigarh has initiated action to enforce the said Notification, stating:

22

“In the circumstances, since the jobs in watching of the buildings  owned or  occupied  by the  establishment,  far which  the  Appropriate  Government  is  the  Central Government,  have  been  prohibited  by  the  notification dated 9.12.1976, the Food Corporation of India would be well  advised not  to  engage contract  labour  in  the jobs specified in the notification.”

The  Circular  No.  2  of  1999  dated  23.3.1999  issued  by  the  Food

Corporation of India is to the same effect whereby it was directed:

“In  view of  the  above  instructions  of  the  Ministry  of Labour,  you  are  requested  not  to  engage  the  contract labour  in  the  jobs  specified  in  the  notification  dated 9.12.76 (copy enclosed).   Further  it  should  be assured that the instructions are strictly followed.

Please acknowledge the receipt.”

What however has not been noticed is the Notification issued under

Section 10(1) by the Central Government itself in the year 1992. The effect

of the Notification issued under sub-Section (1) of Section 10 of the 1970

Act  cannot  be  taken  away  by  a  Circular  letter  issued  by  the  Central

Government or by the appellant itself.  The right of the workmen to file a

writ petition for obtaining a writ in the nature of mandamus must be based

on a legal right.  This Court in  Steel Authority of India Limited (supra)

only recognized an existing right and not any future right.

23

Such a right was to be existing as on 30.8.2001 when the judgment in  

Steel Authority of India Limited (supra) was rendered and not thereafter.

Any decision  rendered  thereafter  could  not  confer  a right  much less  any

other right.  In terms of the aforementioned judgment, what has been done is

to recognize such a right and not  declaring the same afresh.  The law as

enunciated in Steel Authority of India Limited (supra) is very clear.  Even

the provisions of 1970 Act are unambiguous and explicit.  There has to be a

Notification abolishing contract labour as regards watching of the buildings

or  godowns  belonging  to  the  Corporation  for  the  purpose  of  storage  of

foodgrains.  

23. Whether as on 9.12.1976 the Central Government was the appropriate

Government or not as opined by this Court in  Food Corporation of India

Workers’  Union  (supra)  may not  be of  much significance as the Central

Government  admittedly  became  the  appropriate  Government  with  effect

from 28.1.1986.   

24. Clause (b) of Section 125 uses the word ‘establishments’ in plural. A

Corporation  therefore  may  have  more  than  one  establishment.  We  may

notice hereinbefore the differences of opinion amongst the Benches of the

Punjab & Haryana High Court itself.   

24

Whereas in the case of ‘Sunil Kumar’ a Division Bench opined that

the establishment which was the subject matter of L.P.A. No. 742 of 1993

was confined to  the district  of  Sangrur,  a  different  view is  sought  to  be

projected before us.   

It is, however, evident from the decision in L.P.A. No. 742 of 1993

dated 21.7.1998 that the petitioner therein confined its case to Sangrur.  It

was  the  Sangrur  branch  of  the  Union  which  filed  the  application.   The

learned counsel  may be correct  that  while allowing the Writ  Petition,  no

distinction was made between one or the other godowns or one or the other

Regional  Offices situated either in the State of  Punjab or  in the State of

Haryana.  But as is well known, a judgment must be construed on its own

facts.   Application  of  the  said  judgment  in  relation  to  the  Sangrur

establishment of the Corporation is not in dispute.  But the question as to

whether in absence of any valid Notification abolishing contract labour the

same could be held to be binding on other establishments or not required

serious consideration.  The High Court unfortunately in its judgment did not

pose any such question.   

It is interesting to notice that the writ petition filed by the Union and

of  the  Raj  Kumar  apparently  proceeded  on  the  basis  that  they  were

25

appointed by the Corporation.  In the writ petition filed by Raj Kumar and

others, camouflage was pleaded.   

What was sought to be contended was that the contractor was supplier

of labour.  It was not the contention that the watchmen had been deployed

by the contractor.  The gravamen of the contention is that for all intent and

purport they have been appointed by the Corporation itself.  It was stated

that the Assistant Manager used to prepare the duty list of the watchmen.  It

has categorically been averred:

“That although the petitioners were shown to have been employed  through  the  contractor  yet  the  petitioners worked under the direct supervision and control of the officials of the respondent – Corporation.”

This Court in Steel Authority of India Ltd. v. Union of India & ors.

[2006 (9) SCALE 597] held:

“22. We  may  reiterate  that  neither  the Labour Court  nor the writ  court  could determine the  question  as  to  whether  the  contract  labour should be abolished or not, the same being within the  exclusive  domain  of  the  Appropriate Government.  

23. A  decision  in  that  behalf  undoubtedly  is required to be taken upon following the procedure laid down in Sub-section (1) of Section  10 of the

26

1947  Act.  A  notification  can  be  issued by  an appropriate  Government  prohibiting  employment of  contract  labour  if  the  factors  enumerated  in Sub-section (2) of Section 10 of the 1970 Act are satisfied.  

24. When, however, a contention is raised that the  contract  entered  into  by  and  between  the management and the contractor is a sham one, in view  of  the  decision  of  this  Court  in  Steel Authority  of  India  Limited  (supra),  an  industrial adjudicator would be entitled to determine the said issue.  The  industrial  adjudicator  would  have jurisdiction  to  determine the  said  issue as  in  the event  if  it  be  held  that  the  contract  purportedly awarded  by  the  management  in  favour  of  the contractor was really a camouflage or a sham one, the employees appointed by the contractor would, in  effect  and  substance,  be  held  to  be  direct employees of the management. The view taken in the  Steel  Authority  of  India  Limited (supra)  has been  reiterated  by this  Court  subsequently.  [See e.g. Nitinkumar Nathalal Joshi and Ors. v. Oil and Natural  Gas  Corporation  Ltd.  and  Ors. and Municipal Corporation of Greater Mumbai v. K.V. Shramik Sangh and Ors.”

The writ petition, therefore, was not maintainable.

Out attention, however, has been drawn to the fact that the direction

of the High Court in L.P.A. No. 742 of 1993 was applicable both to Punjab

as well as Haryana which had not been denied or disputed. We may notice

the following contention raised in the petition in this regard.  

27

“This  direction  it  is  submitted  is  applicable  both  to Punjab  as  well  as  Haryana  as  both  fall  within  the jurisdiction of this Hon’ble Court.”

The  said  statement  therefore  was  primarily  made  for  invoking  the

jurisdiction of the High Court. In any event, if a decision is not applicable as

has  been  found  by  one  Bench  of  the  High  Court,  the  same  would  not

become applicable  only  because  the  Corporation  failed  to  rebut  the  said

contention.  It is a question of jurisdiction.

25. The writ petitions of the workmen do not disclose the names of the

contractors.  It has not been disclosed as to whether the contractors were

registered or not.  What are the terms and conditions of employment have

also  not  been  stated.   On  and  from  which  date  each  individual  was

appointed and by which contractor and in respect of which establishment

has not been disclosed.   

The  writ  petition  filed  by the  Raj  Kumar  and  others  categorically

show that the averments made therein proceeded on the basis that the actual

employer was the Corporation.  If that be so, having regard to the decision

of this Court in Steel Authority of India Limited  (supra), the writ petition

28

could not have been entertained.  No authority or forum has scrutinized the

records.  The registers maintained by the so-called contractors had not been

scrutinized. It was obligatory on the part of the High Court to take recourse

thereto.  The benefit  of any order or action taken will  be a reputation to

State must have a direct nexus with the Notification dated 9.12.1976, that

9.12.1976  Notification  ceased  to  have  any  application,  question  of  its

attained finality in law would not arise.   

26. Our attention has been drawn to the Order dated 23.1.2004 passed in

CWP No. 15484 of 2003 wherein it was recorded:

“It is the conceded position that the matter was taken by the Food Corporation of India in a special Leave Petition before the Supreme Court which too was dismissed on 30.08.1999.  It is further conceded that the directions of the Division Bench were subsequently complied with by the Food Corporation of India.”

What was conceded was the implementation of the order in relation to

Sangrur District and not others.  We therefore do not find any illegality in

the order dated 15.9.2005 passed in CWP No. 4891 of 2004.  So far as the

order passed in CWP No. 3945 of 2006 is concerned we again do not find

any illegality therein apart from the fact that on their own showing, the writ

petition was not maintainable.   

29

27. Keeping  in  view the  decision  of  this  Court  in  Steel  Authority  of

India Limited (supra), it is evident from the writ petition itself that another

right, viz., a right under Section 25(h) of the Industrial Disputes Act, 1947

had been claimed.  The benefit of Steel Authority of India Limited (supra)

was sought to be invoked without  stating the requisite foundational  facts

therefor.   

They were asked to appear in the written test.  They were asked to do

so for judging their  eligibility.  They must know how to read and write.

They were required to show that they were in a position to perform their

duties as watchmen.  Their contention that they should be exempted from

appearing at the written test was wholly unfounded.  The High Court may

not be correct in following the Constitution Bench decision of this Court in

Umadevi  (supra),  but  there  cannot  be  any  doubt  whatsoever  that  the

ultimate conclusion of the High Court is correct; particularly, when it had

categorically  been stated  in  the written  reply of the  Corporation  that  the

recruitment for the post provided for a test so that it could be determined as

to whether the candidates were literate or not.  We may furthermore notice

that in para 3 of the said written reply it was stated by the Corporation :

“…Some persons were employed as Watchmen/security guards through contractors/security agencies.  It is wrong

30

that  the  appointment  was  shown  to  be  through contractor.  The correct position is that the said workmen were employees  of  the contractor.   No watchman who was  the  employee  of  the  contractor  was  given appointment  letter  by  the  answering  respondent. Whether  the  contractor  concerned  issued  any appointment  letter  or  not  in  the  knowledge  of  the answering respondent.  This fact can be disclosed by the contractor.”

[See  Bharat  Heavy  Electric  Ltd. v.  E.S.I.  Corporation,  AIR  2008

SCW 1494]

A series of disputed questions of fact therefore was raised.  Even on

that premise, the writ petition was, thus, not maintainable.   

28. We therefore  allow the  appeals  arising  out  of  Petition  for  Special

Leave to Appeal  (Civil)  Nos.  22320-22321 of 2004 and 22335-22336 of

2004 and dismiss the appeals arising out of Petition for Special Leave to

Appeal (Civil) Nos. 1742 of 2008 and 2757 of 2006.   

29. In view of the fact that the order dated 23.1.2004 passed in CWP No.

15484  of  2003  is  not  in  question,  the  same must  be  held  to  have  been

31

attained finality.  In the facts and circumstances of the case, however, there

shall be no order as to costs.

……………..…………J. [S.B. Sinha]

               .………………….……J.        [V.S. Sirpurkar]

New Delhi May 16, 2008

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