tion Civil No 2135 of 1982
Under Article 32 of the Constitution of India SK Bhattacharya for the Petitioner
Mahabir Singh KB Rohtagi SK Dhingra LK Gupta SK Verma BD Sharma Mrs section Dikshit and Ms A Subha shini NP for the Respondents
The following Order of the Court was delivered A letter addressed to this Court complaining about prevalence of bonded labour system in Cutton Anangpur and Lakkarpur areas of Faridabad District in Haryana State wherein the stone quarries workers are living in most inhu man conditions was treated as a writ petition under Article 32 of the Constitution
This Court appointed two Advocates as Commissioners to inquire into the working conditions of the stone quarry workers with particular reference to the cases mentioned in the writ petition
This Court finding the necessity of an in depth investigation into social and legal aspects of the problem also appointed Dr
SB Patvardhan and Mr Krishan Mahajan to study the working conditions prevail ing in the various quarries within the Faridabad district with particular reference to violation of provisions of the Bonded Labour System Abolition Act of 1976 and Inter State Migrant workmen Regulation of Employment  Conditions of Service Act
The Commissioners furnished their report to the Court on 28th of June1982
Several questions were raised before the Court apart from merit of the dispute the important ones being i whether an application under article 32 of the Constitution was maintainable particularly when to allegation of infringe ment of petitioner s fundamental right was 529 made ii whether a letter addressed to the Court could be treated as a writ petition and be proceeded with in the absence of support by affidavit or verification
and iiiwhether the Court had power to appoint Commissioners or an investigative body to inquire into allegations made in the petition and by affidavits and require reports to be made to the
Court for facilitating exercise of its juris diction under article 32 of the Constitution
The concept of public interest litigation had not then adequately developed and its contours sufficiently deline ated the practice of accepting letters as a foundation for a writ petition had not also been clearly established in writ petitions the practice of appointing Commissioners or investigating agencies had not been precedented the tradi tional concept of defence of locus standi has not been wiped away notwithstanding the decision in SP Gupta vs Union of India 1982 2 SCR 365
A 3 Judge Bench heard the matter at considerable length and each of them delivered a separate judgment
Though the main judgment was delivered by Bhagwati J as he then was and Justice AN Sen concurred with it by a separate judg ment and Pathak J as he then was while concurring with Bhagwati J on some issues gave his own views
The Court also took note of the position that the Presidential Ordi nance of 1975 for abolition of bonded labour and the subse quent Parliamentary legislation in 1975 were seeking to implement the mandate of article 23 of the Constitution but while statutory provision had been made taking into account the fact that the pernicious practice of bonded labour had prevailed in this country for centuries the then current social atmosphere had been tolerating this practice without any serious objection the concentration of wealth in the hands of a few and the majority being poor it became conven ient for he owners of property and wealth to exploit the poor and in India asocial_ change opposed to traditional methods was difficult to implement the Court did not treat the writ petition as disposed
of by its judgment and the application survived for further monitoring
In paragraph 39 of the judgment of Bhagwati J with whom on that aspect the other two learned Judges agreed it was said 530 We accordingly allow this writ petition and issue the above directions to the Central Government and the State of Haryana and the various authorities mentioned in the preceding paragraphs of this judgment so that  these poor unfortunate workmen who lead a miserable existence in small novels exposed to the vagaries of weather drinking foul water breathing heavily dust laden polluted air and breaking and blasting stone all their life may one day be able to realise that freedom is not only the monopoly of a few out belongs to them all and that they are also equally enti tled along with others to participate in the fruits of free freedom and development
These directions may be summarised as follows lm20 1 The Government of Haryana will without any delay and at any rate within six weeks from today constitute Vigi lance Committee in each sub division of a district in compliance with the require ments  of SeCtion 13 of the keeping in view the guidelines given by us in this judgment
2 The Government of Haryana will in struct the district magistrates to take up the work of identification of bonded labour as one of their top priority tasks and to map out areas of concentration of bonded labour which are mostly to be found in stone quarries and brick kilns and assign task forces for identification and release of bonded labour and periodi cally hold labour camps in these areas with a view to educating the labourers inter alia with the assistance of the National Labour Institute
3 The State Government as also the Vigilance Committees and the district magistrates will take the assistance of non political social action groups and voluntary agencies
for the purpose of ensuring implementation of the provisions of the 
4 The Government of Haryana will draw up within a period of three months from today a scheme or programe for rehabili tation of the freed bonded 531 labourers in the light of the guidelines set out by the Secretary to the Govern ment of India Ministry of Labour in his letter dated September 2 1982 and imple ment such scheme or programme to the extent found necessary
5 The Central Government and the Gov ernment of Haryana will take all neces sary_ steps for the purpose of ensuring that minimum wages are paid to the work men employed in the stone quarries and stone crushers in accordance with the principles laid down in this judgment and this direction shall be carried out within the shortest possible time so that within six weeks from today the workmen start actually receiving in their hands a wage not less than the minimum wage
6 If payment of wages is made on truck basis the Central Government will direct the appropriate officer of the Central Enforcement Machinery or any other appro priate authority or officer to determine the measurement of each truck as to how many cubic ft of stone it can contain and print or inscribe such measurement on the truck so that appropriate and ade quate wage is received by the workmen for the work done by
them and they are not cheated out of their legitimate wage
7 The Central Government will direct the Inspecting Officers of the Central Enforcement Machinery or any other appropriate Inspecting Officers to carry out surprise checks at least once in a week for the purpose of ensuring that the trucks are not loaded beyond their true measurement capacity and if it is found that the trucks are loaded in excess of the true measurement capacity the In specting Officers carry ing out such checks will immediately bring this fact to the notice of the appropriate authori ties and necesSary action shall be initi ated against the defaulting mine owners andor thekedars or jamadars
8 The Central Government and the Gov ernment of Haryana will ensure that payment of wages is made 532 directly to the workmen by the mine lessees and stone crusher owners or at any rate in the presence of a representa tive of the mine lessees or stone crusher owners and the Inspecting Officers of the Central Government as also of the Govern ment of Haryana shall carry out periodic checks in order to ensure that the pay ment of the stipulated wage is made to the workmen
9 The Central Board of Workers Educa tion will organise periodic camps near the sites of stone quarries and stone crushers in Faridabad District for the purpose of educating the workmen in the rights and benefits Conferred upon them by social welfare and labour laws and the progress made shall be reported to this Court by the Central Board of Workers  Education at least once in three months
10 The Central Government and the Government of Haryana will immediately take steps for the purpose of ensuring that the stone crusher owners do not continue to foul the air and they
adopt either of two devices namely keeping a drum of water above the stone crushing machine with arrangement for continuous spraying of water upon it or installation of dust sucking machine and a compliance report in regard to this direction shall be made to this Court on or before Febru ary 28 1984
11 The Central Government and the Government of Haryana will immediately ensure that the mine lessees and stone crusher owners start supplying pure drinking water to the workmen on a scale of at least 2 litres for every workman by keeping suitable vessels in a shaded place at conveniently accessible points and such vessels shall be kept in clean and hygienic condition and shall be emptied cleaned and refilled every day and the appropriate
authorities of the Central Government and the Government of Haryana will supervise strictly the enforcement of this direction and initi ate necessary action if there is any default
533 12 The Central Government and the Government of Haryana will ensure that minimum wage is paid to the women andor children who look after the vessels in which pure drinking water is kept for the workmen
13 The Central Government and the Government of Haryana will immediate ly direct the mine lessees and stone crusher owners to start obtaining drink ing water from any unpolluted source or sources of supply and to transport it by tankers to the work site with sufficient frequency so as to be able to keep the vessels filled up for supply of clean drinking water to the workmen and the Chief Administrator Faridabad Complex will set up the points from where the mine lessees
and stone crusher owners can if necessary obtain supply of potable water for being carried by tankers
14 The Central Government and the State GoVernment will ensure that conservancy facilities in the shape of latrines and urinals in accordance with the provisions contained in Section 20 of the Mines Act 1950 and Rules 33 to 36 of the Mines Rules 1955 are provided at the latest by February 15 1984
15 The Central Government and the State Government will take steps to immediately ensure that appropriate and adequate medical and first aid facilities as required by section 21 of the and Rules 40 to 45 A of the Mines Rub s 1955 are provided to the workmen not later than January 31 1984
16 The Central Government and the Government of Haryana will ensure that every workman who is required to carry out blasting with explosives is not only trained under the Mines Vocational Train ing Rules 1966 but also holds first aid qualification and carries a first aid outfit while on duty as required by Rule45 of the Mines Rules 1955
17 The Central Government and the State Government will immediately take steps to ensure that 534 proper and adequate medical treatment is provided by the mine lessees and owners of stone crushers to the workmen employed by them as also to the members of their families free of cost and such medical assistance shall be made avail able to them without any cost of trans portation or otherwise and the doctor s fees as also the cost of medicines pre scribed by the doctors including hospi talisation charges if any shall also be reimbursed to them
18 The Central Government and the State Government will ensure that the provi sions of the  the Maternity Benefit Mines and Circus Rules 1963 and the Mines Creche Rules 1966 where applicable in any particular stone quarry or stone crusher are given effect to by the mine lessees and stone crusher owners
As soon as any workman employed in a stone quarry or stone crusher receives injury or contracts disease in the course of his employment the concerned mine lessee or stone crusher owner shall immediately report this fact to the Chief Inspector or Inspecting Officers of the Central Government andor the State Government and such Inspecting Officers shall immediately provide legal assist ance to the workmen with a view to ena bling him to file a claim for compensa tion before the appropriate court or authority and they shall also ensure that such claim is pursued vigorously and the amount of compensation awarded to the workman is secured to him
20 The Inspecting Officers of the Central Government as also of the State Government will visit each stone quarry or stone crusher at least once in a fortnight and ascertain whether there is any workman who is injured or who is suf fering from any disease or illness and if so they will immediately take the necessary steps for the purpose of pro viding medical and legal assistance
21 If the Central Government and the Government of Haryana fail to ensure performance of any of the 535 obligations set out in clauses 11 13 14 and 15 by the mine lessees and stone crusher owners within the period speci fied in those respective clauses such obligation or obligations to the extent to which they are not performed shall be carried out by the Central Government and the Government of Haryana
The Court went on to further say We also appoint Shri Laxmi Dhar Misra Joint Secretary in the Ministry of Labour Govern ment of India as a Commissioner for the pur pose of carrying out the following assign ment lm20 a He will visit the stone quar ries and stone crushers in Faridabad District and ascertain by enquiring from the labourers in each stone quarry or stone crusher in the manner set out by us whether any of them are being forced to provide labour and are bonded labourers and he will prepare in respect of each stone quarry or stone crusher a state ment showing the names and particulars of those who according to the enquiry made by him are bonded labourers and he will also ascertain from them whether they want to continue to work in the stone quarry or stone crusher or they want to go away and if he finds that they want to go away he will furnish particulars in regard to them to the District Magis trate Faridabad and the District Magis trate will on receipt of the particulars from Shri Laxmi Dhar Misra make neces sary arrangements for releasing them and provide for their transportation back to their homes and for this purpose the State Government will make the requisite funds available to the District Magis trate
b He will also enquire from the mine lessees and owners of stone crushers as also from the thekedars and jamadars whether there are any advances made by them to the labourers working in the stone quarries or stone crushers and if so whether there is any documentary evidence in support of the same and he
will also ascertain what according to the mine lessees and owners of stone crushers or the jamadar or the 536 kedar are the amounts of loans still remaining out
standing against such labourers
c He will also ascertain by carrying out sample check whether the workmen employed in any particular stone quarry or stone crusher are actually in receipt of wage not less than the minimum wage and whether the directions given in this order in regard to computation and pay ment of minimum wage arc being implement ed by the authorities
d He will conduct an enquiry in each of the stone quarries and stone crushers in Faridabad District for the purpose of ascertaining whether there are any con tract labourers or inter State migrant workmen in any of these stone quarries or stone crushers and if he finds as a result of his enquiry that the Contract Labour Act andor the Inter State Mi grant Workmen Act is applicable he will make a report to that effect to the Court
e He will ascertain whether the direc tions given by us in this judgment re garding effective arrangement for supply of pure drinking water have been carried out by the mine lessees and stone crusher owners and pure drinking water has been made available to the workmen in accord ance with those directions
f He will also ascertain whether the mine lessees and owners of stone crushers in each of the stone quarries and stonecrushers visited by him have complied with the directions given by us in this judgment regarding provision of conservancy facilities
g He will also ascertain whether the directions given by us in this judgment in regard to provision of first aid facilities and proper and adequate medi cal treatment including hospitalisation to the workmen and the members of their families are being carried out by the mine lessees and stone crusher owners and the necessary first aid facilities and proper and adequate medical services including hospitalisation are provided to the workmen and the members of their families
537 h He will also enquire whether the various other directions given by us in this judgment have been and are being carried out by the mine lessees and stone crusher owners
 This Court indicated its expectation in paragraph 40 of the judgment thus We have no doubt that if these direc tions given by us are honestly and sin cerely carried out it will be possible to improve the life conditions of these workmen and ensure social justice to them so that they may be able to breathe the fresh air of social and economic freedom
 The proceedings thereafter continued with a view to fulfilling the fond hope and expectation of the Court
Mr Laxmidhar Misra In due course submitted his report in two parts one dealing with the identification  of the bonded labour and the second covering the inquiry into the implementation of the 21 directives
The petitioner Morcha came before the Court with a petition for contempt action alleging that the directions were not being implemented
That led to the appointment of Mr Mahabir Jain of the Faculty of National Labour Institute to inquire into the measures and report on the degrees to which the 21 direc tives issued by the Court had implemented and to present to the Court a clear picture of the issues involved for ena bling it to make its own assessment and come to a conclusion as to whether the directions had been or were being imple mented and also as to whether action for contempt was appro priate or in the matter of monitoring the social problem some other course was necessary to be adopted
In February 1989 Mr Jain gave a very detailed report to the Court which is on record and to which reference has to be made in a later part of our order
The Union Territory of Delhi housing the capital of the country is surrounded on three sides by the Haryana State and on the other lies the State of Uttar Pradesh
The stone quarries of Faridabad have thrived for almost half a century now on account of building activity in the industrial belt of Haryana particularly Ballabgarh and Faridabad and in the Union Territory of Delhi
The quarrying process involves substantial manual labour and the need of Continuous avail ability of labour at cheap rate has led to the growth of the system of bonded labour in that trade
For a loan taken at an exorbitant rate of interest 538 the debtor virtually sells himself to the creditor and gets bonded usually for a period of life and renders service for the purpose of satisfying  the debt
The creditor anxious to exploit the situation ensures that the debt is never satis fied and often on the traditional basis of pious obligation the liability is inherited by the children of the original debtor
The system thus provides a built in mechanism for continuation of exploitation of the under privileged section of the society by the privileged few living therein
The bonded labourers are paid nominal wages and often their family members are not permitted to take remunerative jobs elsewhere without permission of the master Normally such permission is not granted and the impoverished condi tion is allowed to continue to the advantage of the credi tor
The Constitution fathers were aware of this prevailing inhuman practice and in article 231 provided lm5 Traffic in human beings and beggar and other similar forms of forced labour are prohibited and any contravention of this provision shall be an offence punishable in accordance with law
 So powerful was the rich men s lobby that it took 25 years after the enforcement of the Constitution to provide a definite law for the purpose and the Presidential Ordinance was the first positive measure in this direction
That got replaced Act entitled 
We may point out that the directives in articles 39c 41 and 42 are also relevant in this regard
It is perhaps not necessary to delve into the philosophy involved in the matter as the 3 Judge Bench has gone into it in the judgment of December 1983 and what remains for consideration at this stage is more or less a clear review of the enforcement of the directives and assessment of the outcome for achieving the statutory purpose and the constitutional goal and for the fulfilment of the hopes and expectations of this Court in that regard and if it is necessary to take further action and if so what such action should be
This will require an analytical study of the reports furnished by Mr Laxmidhar Misra and Mr Mahabir Jain
Mr Laxmidhar Misra in his letter to the Registry of this Court in January 1984  indicated that the inquiry entrusted to him had two phaSes the first relating to the inquiry into the implementation of the Bonded Labour System
Abolition Act Inter State Migrant Workmen Regulation of Employment and Conditions of Service Act and the Contract Labour Regulation and Abolition Act etc
and the 539 Second related to ascertaining the extent of compli ance of the directions of this Court by the concerned au thorities
On 4th February 1984 this Court directed So far as the consideration of the report of Mr Laxmidhar Misra is concerned the same does not brook any delay involving as it does the release and rehabilitation of the bonded labourers and amelioration of the lives and working conditions of the large number of stone quarry workers we would direct that the matter be expeditiously taken up Mr Laxmidhar Misra submitted his report on
the second aspect too
His report gave the ultimate indication that the enforcement of  the Acts covered by the first part of his report had not been adequate
In regard to the second part namely steps for implementation of the Court s direc tives he also came to hold that nothing very substantial had been done though some steps had been taken
On 351988 this Court required Shri AK Srivasta va Director General of Labour Welfare in the Ministry of Labour to inquire into the matter again and furnish a report on the degree to which the directions issued by the Court had received compliance
Shri Srivastava was not in a posi tion to undertake this inquiry and ultimately it led to the appointment Of Mr Mahabir Jain as already indicated
On 6th of March 1989 Mr Jain furnished his report
He took into account the 21 directives of the Court
As the report indicateshe adopted the method of interviews observations representations holding of formal and informal meetings reference to documents and other available literature as the basis for collection of information
He spent considerable time in the jhuggi colonies where the bonded labourers dwell in different parts of the quarry area
He noticed absence of sufficient drinking water facility no provision for school ing of the children of the bonded labourers and want of appropriate medical facility
Apart from these he also found that the jhuggis were very small unhygienic and did not constitute reasonable accommodation for human use
He noticed that there was lack of organisation among the jhuggi dwellers which facilitated their exploitation by the stone quarry owners
Even though camps were being organised at regular intervals
for workers employed in the stone quar ries and stone crushers by the Regional Directorate of Workers Education Centre Faridabad there was no discerni ble  impact whiCh would catch the eye of the visitor
He recorded the statements of several people he met 540 including workers their widows dependants relations outsiders and public officials
He noticed that adequate safety measures were not available in the mines and several accidents had taken place on that account
With reference to the Workers  Education Centre at Faridabad Mr Jain observed A critical analysis of the camp reports shows mat a few Acts like the  Minimum Wages Act BOnded Labour System Act 
Payment of Wages Act and Trade Union Act had been given much emphasis in almost all the camps
In only one or two camps topics like eradication of social evils economic problems a sense of coopera tion and the need for organisation of the workers had been discussed
If one goes back to the camp reports of the Centre for Workers Education Faridabad
one finds that the basic objectives of the camps were to desensitise the workers about their legal rights and the need for workers organisation
Compared to those objectives the discussion of the topics relevant to organisation building had been given less emphasis
Besides less emphasis was also on audiovisual method of teaching
However topics discussed in different camps were more or less the same
Therefore topics which would create awareness among stone quarry workers need to be discussed in the camps
In regard to the specific direction of the Court Mr Jain noticed that Vigilance Committees as required under Section 13 of the Act had been constituted in all districts and sub divisional headquarters of the State of Haryana and a good number of meetings of the Vigilance Committees had been held
He however came to the conclusion on verifying the proceedings of the Vigilance Committee at Faridabad that he did not find any useful information regarding the work of the Vigilance Committee 
Mr Jain then referred to the report submitted by Shri Laxmidhar Misra to this Court where he had said that 26 per cent of the bonded labourers had been released and rehabili tated by the State Government nearly 30per cent of the identified bonded labourers were not willing to go back to their native places
At the same time 41 per cent of
the bonded labourers had left the work site
According to 541 Mr Jain these facts showed that only one bonded labourer out of every three identified was willing to go back to his or her native place
Mr Jain however found that most of the bonded labourers who had been released or rehabilitated came back to the mines a feature which clearly indicates that the rehabilitation process was defective and not use ful
If the rehabilitated bonded labourer had a sense of confidence in the arrangement of rehabilitation there would indeed be no occasion for him to run away from the rehabili tative process back to bondage
Mr Jain found that the task of identifying the bonded labourers had not been sincerely carried out
It is true that in 1982 the Haryana Government had instructed all the District Magistrates to make rehabil itation schemes for released bonded labourers in accordance with the Government of India s scheme and contemporaneously or near about that point of time some rehabilitation had been undertaken
In the absence of constant goading the exercise had become sporadic and even fell into disuse
Mr Jain found that there had been an increase in the number of bonded labourers and stone quarries were again thriving
The minimum wage programme had not been effectively introduced
A few prosecutions had been lodged but that was not adequate and had not generated the requisite consciousness
Payment of wages had not been properly recorded and in the absence of documents cross verification became indeed difficult
The Commissioner found that even though Mr Laxmidhar Misra had indicated about deficiency of drinking water schooling facility medical treatment and the like no attention had been bestowed on improving these aspects and he noticed dearth of these wherever he went
Portions from the conclu sions of the Jain report may now be extracted
His report said It is a technologically backward industry thriving on continuous plentiful supply of cheap replaceable labour
The impoverished rural hinterland sends forth an unending stream of uprooted assetless illiterate e people from the traditionally oppressed communities mainly the Scheduled Castes and Tribes
As workers in stone quarries and crushers they must remain uprooted asset less illiterate and oppressed so that they may be easily replaced so that the industry may continue to get its labour cheap
 He further found It is an industry which in the mineral extraction part allows unchecked operation of self appointed unregistered 542 middlemen nicknamed contractors  who perform a variety of functions His yet further findings were that there was no account ability the trade was ecologically hazardous there was lack of planning and the working involved an in built system of criminality
He therefore recommended that there should be central registration of all workers conferment of the status of small producers by allocating permits directly to them determining the minimum remuneration facilitating modernisation total exclusion  of contractors and middlemen from the trade and protection and restoration of the natural environment
This matter was heard for  some time on the basis of these reports of Mr Jain and we reserved judgment on 1oth of July 1990
 Swami Agnivesh at Whose instance this Court had registered the proceeding had undertaken to supply a list of unrehabilitated bonded labourers
He took quite Some time to submit the statements and these reports indicated their number to be 3993
When we were proceeding to dispose of the matter a communication was received by the Court dated 2411991 from the Director General of Labour Welfare in the Ministry of Labour that the total number was 523 upto 30111990
The gap was so huge that we found it difficult to proceed tO Conclude the matter on the basis of the state ments given by Swami Agnivesh by ignoring the situation
These aspects were brought to the notice of the parties and after hearing them by an order of 2 1st FebrUary 1991 this Court directed With a view to meeting the situation we direct that a Committee shall immediately be set up  with Director General Labour Welfare of the Union Government or a very senior officer from his establishment the Chief Judicial Magistrate Faridabad Mrs Raju Ramachandran an advocate of the Supreme Court with social service background an officer from the Haryana Government nor below the rank of Additional District Commissioner and Swami Agnivesh representing the petitioner
Mr Rohtagi or his nominee advocate appearing for the brick kiln owners would be permitted to associate in the activities of the Committee
This Committee shall within six weeks from now check up the particulars pro vided in the list by the petitioner identify the persons claimed to have been bonded 543 labour and collect all relevant material in respect of them so as to assist this Court to make further directions in terms of the re quirement of the scheme to rehabilitate them
In course of their movement for the purpose of complying with this order if fresh cases of bonded labour are noticed by them they would collect the particulars separately and report to the Court
 The Committee obtained extension of time from this Court and ultimately has furnished its report on July 1 1991
This Committee adopted the questionnaire form to elicit information on all relevant aspects Which were 18 in number and have collated the material
In a part of the report it has said The Committee members have personally identi fied every person whose name appears in the list prepared by the Committee
They were approximately 1983 persons so identified but from each dera there were about 20 per sons who were not available for identification either out of fear of the contractor or be cause they had gone out that day for buying provisions or to the doctor
Some persons could not be identified because the Committee missed finding them in their homes and also missed finding them in their places of work
Some workers from the list given by the peti tioner had left and gone elsewhere and in their place some others had come
There were some persons whose names had been missed in the list prepared by the Bandhua Mukti Mor cha
The list of persons prepared by the Committee is all inclusive of the above iden tified categories
 In this setting it would perhaps be appropriate to proceed on the footing that the total number of identified bonded labour is around 2000 and hot 3993 as stated by the petitioner
It may be that some of the people whose name appear in the list furnished by Swami Agniyesh are no more in the area
It may also be that people who had left their work even by then had been included in that list
The picture placed by the Committee in regard to wages does not give one different from what had been recorded by this Court when the original case was disposed of in 1982
It may be that the labourers have  become more  informed and educated about their rights
They have 544 however no organised base
are the weaker party and once they are in the trap of bondage the capacity to negoti ate is gone
That is how exploitation thrives notwithstand ing the intervention of this Court
The facility of school ing and medical treatment availability of water provisions and scope for recreation are aspects which still require attention
The Committee has reported Inspite of order dated 17th October 1990 of the Chief Labour Commissioner under section 252vb of  the Contract Labour Regula tion and Abolition Central Rules 1971 in respect of stone breaker who is a piece rated worker working in the stone mines in the Faridabad area fixing the piece rated wage at the rate of Rs 133 per 200 cft
stone there is no implementation thereof
 At another place the Committee has said that though this Court in the main judgment had indicated that untrained workers should not be engaged in the blasting operation with explosives the practice seems to  be still continuing and the law as also the direction of this Court were being violated by the contractors
The Committee therefore has recommended that the principal employer should be made liable for implementation of the directions both of law and the court
The contractors working under the Haryana Miner als Ltd were mostly unregistered and unlicensed
The Committee has noted that the entire area of opera tion has a dust cover in the atmosphere which is hazardous to the workmen s health
No attention has been bestowed by the inspecting authority or the labour law enforcers to secure improved conditions of working
There has been divi sion of opinion as to whether it is the responsibility of the State Government Or the employer in regard to providing educational facility to the children of the quarry WorkerSWe have not been able to see any reason for the difference
Quahies are located
in a particular area away from habitation
On account of necessity for  workmen in the area people from different parts Of the country are made to live therein along with their families under very insanitary and inconvenient conditions
Health care of
workmen and members of their families and education of the children as also the adults in such exclusive locality should be of the employer
To require a school to be built in such an area where there may not be adequate number of children for the purpose of schooling at the expense of the State exche 545 quer may not be appropriate
That apart these institutions should be a part of the trade
In the manner the employer hasto make provision for water and medical care it should also have the responsibility of providing schooling for the children of the workmen
Today emphasis is also being given on adult  education
If appropriate facility is provided the workmen beyond their working hours can also have scope for learning the three Rs and this could be through a process of adult education with State support under the relevant scheme
The State of Haryana must come forward to play its role in a better way As already pointed outthese are quarries located nearabout the industrial belt of Haryana and not far away from Delhi
Ecology
is not only a focal problem but must be taken to be a problem of Delhi also
Dust emanating from the working area in Haryana is bound to affect adverse ly the Delhi atmosphere
In fact if adequate importance is given to the angle of pollution the industry itself has to be regulated or may have to be stopped
 The State of Haryana we must say has not taken our intervention in the proper spirit and has failed to exercise appropriate control though some eight years back  this Court had in clear terms laid down the guidelines and had called
upon the  public authority to take charge of the situation and provide adequate safeguards
The operation of stone quarries is more or less concen trated in particular areas
That is a feature which facili tates control
If a local officer of appropriate status had been placed around the corner it would have helped in im proving the lot of the workmen
If the pollution authority had been made to visit the area at repeated intervals pollu tion
control Could have been imposed
If some authority entrusted with welfare had been made to inspect this area at regular intervals he could have ensured availability of facilities for schooling and hospital as also supply of drinking water to the workmen
It is a hot belt and for over 4 to 5 months water scarcity is there in this area
The Workmen s job is such that they are exposed to the summer heat
It is the obligation of the employer therefore to provide a definite source of water The workmen are engaged almost on full time basis
As report indicates bulk of the workmen are not prepared to return to their States
What isnecessary therefore is provision of a permanent base for residence at or near the work site
This would necessitate reason  able housing supply of water a reasonable provision store at hand 546 schooling facility facility of a hospital recreational facilities and attention to the law and order problem
Perhaps near the area a police station or an outpost could be located
If the workers were insufficient in number a doctor could be taken as a visitorto the area at frequent intervals and instead of a regular
school one single teach er could be provided to look after the health of the people
Court s judgment to regulate such matters has inherent limitation
These are not schemes which could be convenient ly monitored by a court far less can the apex court keep track of the matter
Its Registry has congestion
To get attention for a matter of this type from the Court is bound to take some time
Human problems in their normal Way do not
wait for a time schedule for attention
In such circum stances it should be the obligation of the State which on account of running stone quarries within its area must in various ways be getting benefits to look after these as pects
As a welfare  State it is now the obligation of the State of Haryana to cater to these requirements of the area
Haryana as we find has made substantial
advances compared to many other States of the country and there is some amount of welcome consciousness in the administration of the State
We hope and trust that if a direction is issued to the Chief Secretary of the State to regulate these aspects the repos ing of trust by this Court would not turn out to be mis placed
In these circumstances we call upon the State of Har yana to attend to the needs referred to above of the workmen in a wellconsidered  and systematic way
Since those workmen who will be working there have to be protected from the vagaries of employment and the anxiety of the employer to draw work without adequate payments the authorities of the State of Haryana must take care to protect the workmen fromthe hands of the employer by ensuring compliance with the laws and if there be any vacuum
in the laws the State of Haryana should rise to playthe role of a welfare State and play it well
In fact there could be a special cess raised against the quarry activities to be specifically utilised by way of return to the industry and there could be a special fund out of which all the amenities referred to above could be provided
What is wanting is not power but the mind and alertness regarding one s duty
If our directions are worked out there would really be no bonded condition and the workmen would be paid their due share against employment and with the facilities ensured they can live well in the area
547 At the point of enforcement of the directions as indi cated above if any one turns out to be bonded and is freed and is also prepared to return to his State the scheme
framed by the Government of India would be applicable to such person
We are thankful to Mr Laxmidhar Misra Mr Mahabir Jain and the members of the new Committee for their cooperation
The society to maintain its own elevation requires willing and voluntary contribution from all those who inhabit it
In a welfare State it is the society
which has to develop its welfare means
No society can have the welfare outlook unless geared up on the basis of amity friendship coopera tion consideration and compassion
If everyone living in India is willing to believe in the live and let live  principle he would be prepared to devote the same attention to the people around him as he is willing to devote for himself
This factor if practised would immediately bring about sufficient rejuvenation of the ailing society
It is this elevated society that everyone must look forward to
We therefore dispose of this petition by directing that the State of Haryana shall now ensure that the people who have been identified numbering about 2000 are continued in work with the improved conditions of service and facili ties as referred to above and such of them who want to go back to their native areas be treated as released from bondage and appropriate action must be taken in accordance with Government of India s scheme forthwith
There shall be no order as to costs
We had called upon the State of Haryanato deposit Rs20000 to meet the expenses of the Committee appointed by us
The Registry will look into that matter and on the basis of the statement furnished by the Committee put up a note within two weeks for giving direction regarding honorarium to be paid to the members of the Committee
VPR Petition allowed


Summary:
The appellant company purchased machinery worth Rs281741 in the year 1957 and gave it on hire to another company which insured the machinery
In the year 1966 a fire broke out in the lendee company causing extensive damage to the machinery of the appellant
On a settlement of the insurance claim the lendee company paid to the appellant a sum of Rs632533 on account of the destruction of its machinery
The difference between the actual cost of the machinery and its written down value worked out to Rs262781 which the appellant the asses I see showed in its income tax return for the relevant year as profit chargeable to tax under section 412 of the Income Tax Act
The lncomeTax Officer subjected to tax also the additional amount of Rs350792 the difference between the amount of insurance claim and the original cost of the machinery treating the same as capital gains chargeable under section 45 of the Act and rejected the case of the appellant that the capital gains tax was not attracted to the amount received on account of the insurance claim since there was no transfer of capital asset as was contemplated by section 45 read with section 247 of the Act
The appeal of the assessee was dismissed by the Appel late Assistant Commissioner but its claim was accepted by the Income Tax Appellate Tribunal which held that the amount was not received on account of transfer of the capital asset but on account of damage to it and that section 45 was attracted only when there was a transfer of the capital asset
The reference at the instance of the revenue was an swered by the High Court against the assessee
Aggrieved the assessee filed the appeal before this Court on a certificate granted by the High Court
On the question whether the money received towards the insurance claim on account of the damage to or destruction of the capital 578 asset was so received on account of the transfer of the asset within the meaning of section 45 of the Act and was there fore chargeable to the capital gains tax under the said section Allowing the appeal this Court HELD 11 The money received under the insurance policy is by way of indemnity or compensation for the damage loss or destruction of the property
It is not in consideration of the transfer of the property for the transfer of any right in it in favour of the insurance company
It as by virtue of the contract of insurance or of indemnity and in terms of the conditions of the contract
584C D 12 In the case of damage partial or complete or destruction for loss of property there is no transfer of it in favour of a third party
The fact that while paying for the total loss of or damage to the property the insurance company takes over such property or whatever is left of it does not change the nature of the insurance claim which is indemnity or compensation for the loss
The payment of insurance claim is not in consideration of the property taken over by the insurance company for
one is not consid eration for the other
The insurance claim is not the value of the damaged property
The claim is assessed on the basis of the damage sustained by the property or the amount neces sary to restore it to its original conditions
It is not a consideration for the damaged property
584C F G 13 In the instant case the amount received by the assessee was the one received by it as damages on account of the loss of its machinery
The lendee company as a bailee had insured the machinery hired from the assessee since it was liable to make good the loss of the machinery to the assessee
This was implied under a contract of bailment unless it was provided to the contrary
The lendee company paid the insurance amount pro rata to the assessee
587D G 14 The insurance was on reinstatement basis which meant that the property was to be restored to the condition in which it was before the fire
The insurance company paid the amount for the restoration of the machinery which had to be on the basis of its value at the time of the fire
The machinery in question was purchased in the year 1957 and the fire broke  out on
August 11 1966
Taking into considera tion the ordinary course of events it was legitimate to presume that the cast of machinery had gone up during the intervening period and the assured and therefore the assessee was entitled to recover on the basis of the 579 increased value of the machinery
584H 585A B Halsbury s Lawsof England Fourth Edition Vol
25 re ferred to
21 The capital gains is attracted by transfer and not merely by extinguishment of right howsoever brought about
The transfer may be effected by various modes and one of the modes is the extinguishment of right on transfer of the asset itself or on account of the transfer of the right or rights in it
The extinguishment of right or rights must in any case be on account of its or their transfer in order to attract the provisions of Section 45 which speaks about capital gains arising out of transfer of asset and not on account of extinguishment of right by itself
583G H 584A If extinguishment of right or rights is not due to transfer and is on account of the destruction or loss of the asset it is not a transfer and does not attract the provi sions of section 45 which relate to transfer and not to mere extinguishment of right but to one by transfer
Hence an extinguishment of right not brought about by transfer is outside the purview ors
584A B Whatever the mode by which a transfer is brought about the existence of the asset during the process of transfer is a pre condition
Unless the asset exists in fact there cannot be a transfer of it
583E Transfer presumes both the existence of the asset and of the transferee to whom it is transferred
584C 22 When an asset is destroyed there is no question of transferring it to others
The destruction or loss of the asset no doubt brings
about the destruction of the right of the owner or possessor of the asset in it
But it is not on account of transfer
It is on account of the disappear ance of the asset
The extinguishment of right in the asset on account of extinguishment of asset itself is not a trans fer of the right but its destruction
By no stretch of imagination the destruction of the right on account of the destruction of the asset can be equated with the extinguish ment of right on account of its transfer
583E G 31 Although the definition of transfer in Section 247 of the Act is inclusive and therefore extends to events and transactions which may not otherwise be trans fer according to its ordinary popular and natural sense yet it also mentions such transactions as 580 sale exchange etc
to which the word transfer would properly apply in its popular and natural import
Since those associated words and expressions imply the existence of the asset and of the transferee according to the rule of noscitur a sociis the expression extinguishment of any rights therein would take colour from the said associated words and expressions and will have to be restricted to the sense analogous to them
585C E If the legislature intended to extend the definition to any extinguishment of right it would not have included the obvious instances of transfer viz sale exchange etc
Hence the expression extinguishment of any rights therein will have to be confined to the extinguishment of rights on account of transfer and cannot be extended to mean any extinguishment of right independent of or otherwise than on account of transfer
585E F 32 The High Court was not correct in reading the expression  extinguishment of any rights in the assets as any extinguishment of right whether it resulted in or was on account of transfer nor was it right in assuming that for transfer within the meaning of Section 45 the asset need not exist
It erred in ignoring the basic postulate that Section 45 does not relate to extinguishment of right but to transfer
Having concentrated its attention on the words extinguishment of right rather than on transfer the High Court misdirected itself and proceeded on the basis that every extinguishment of right whether by way of trans fer or not is attracted by Section 45
585F G 584B Commissioner of Income Tax vs Madurai Mills Co Ltd and Commissioner of Income Tax vs Mohanbhai Pamabhai  referred to
Whether the lendee company had insured assessee s machinery as bailees or as agents of the assessee would make no difference
The insurance policy contained the  rein statement clause requiring the insurer to pay the cost of the machinery as on the date of the fire
587G H 588A 5
In an insurance policy with the reinstatement clause the insurer is bound to pay the cost of the insured property as on the date of destruction of loss and it matters very little if the amount so paid by the insurance company is invested for purchasing the destroyed asset or for any other purpose
588A B C Leo Macho do vs Commissioner of Income Tax  approved
581 Income tax Commissioner vs
JK Cotton Spinning  Weaving Mills Co Ltd  disapproved