IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION CIVIL APPELLATE JURISDICTION CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 5046 OF 2000 WRIT PETITION NO. 5046 OF 2000 WRIT PETITION NO. 5046 OF 2000 Karantikari Suraksha Rakshak Sanghatana .. Petitioner V/s State of Maharashtra & Ors. .. Respondents Mr.Sanjay Singhavi with Ms.Jane Cox and Ms.Tanu Mehta Tiwari for the petitioner. Mr.A.A. Kumbhakoni, Associate Advocate General with Mr.P.M. Mokashi, A.G.P. and Mr.N.P. Deshpande, A.G.P. for Respondent No.1. Mrs.Lata Desai for Respondent No.2. Mr.R.D. Suvarna for Respondent No.3. ------ W I T H WRIT PETITION NO. 5231 OF 1999 WRIT PETITION NO. 5231 OF 1999 WRIT PETITION NO. 5231 OF 1999 Maharashtra Rajya Suraksha Raksha & General Kamgar Union .. Petitioners V/s State of Maharashtra & Ors. .. Respondents Mr.S.S. Pakale with Ms.Ranjana Todankar and Ms.Sonali for the Petitioners. Mr.A.A. Kumbhakoni, Associate Advocate General with Mr.P.M. Mokashi, A.G.P. and Mr.N.P. Deshpande, A.G.P. for Respondents No.1 and 2. Mrs.Lata Desai with Ms.Pallavi Divekar for Respondent No.3. Mr.C.U. Singh for Respondent No.4. Mr.R.D. Suvarna for Respondents No.6 to 26, 28, 29 and - 2 - 31. Mr.P.G. Karande for the Intervenors. Mr.K.S. Bapat for the Intervenors. ----- WRIT PETITION NO.5040 OF 2000 WRIT PETITION NO.5040 OF 2000 WRIT PETITION NO.5040 OF 2000 Laxman Gopal Bhosale & Ors. .. Petitioners V/s State of Maharashtra & Ors. .. Respondents Mr.Prakash Mahadik for the Petitioners (absent). Mr.A.A. Kumbhakoni, Associate Advocate General with Mr.P.M. Mokashi, A.G.P. and Mr.N.P. Deshpande, A.G.P. for Respondents No.1 and 2. Mrs.Lata Desai with Ms.Pallavi Divekar for Respondent No.3. ---- CORAM : H.L. GOKHALE & CORAM : H.L. GOKHALE & CORAM : H.L. GOKHALE & J.H. BHATIA, JJ. J.H. BHATIA, JJ. J.H. BHATIA, JJ. DATE OF RESERVING THE JUDGMENT : 7TH JULY 2006 DATE OF RESERVING THE JUDGMENT : 7TH JULY 2006 DATE OF RESERVING THE JUDGMENT : 7TH JULY 2006 DATE OF PRONOUNCING THE JUDGMENT: 10TH OCTOBER 2006 DATE OF PRONOUNCING THE JUDGMENT: 10TH OCTOBER 2006 DATE OF PRONOUNCING THE JUDGMENT: 10TH OCTOBER 2006 JUDGMENT JUDGMENT JUDGMENT: (Per H.L. Gokhale, J.) 1. These three Writ Petitions are filed by three different Trade Unions but all of them pray that the Maharashtra Private Security Guards (Regulation of Employment and Welfare) (Amendment) Act, 1996 be declared to be illegal and unconstitutional and be struck down. - 3 - 2. The main submissions of the petitioners - Trade Unions to put in a nutshell are twofold. (i) The first submission is that under the Maharashtra Private Security Guards (Regulation of Employment and Welfare) (Amendment) Act, 1981 ("the said Act" for short), as it stood prior to this amendment and as it was interpreted by the Courts, the agencies or the contractors were not permitted to provide the Security Guards and that the employment of the Security Guards who were not the direct employees of the factories or establishments, had to be provided only by the Board constituted under the said Act. It is their contention that this amending Act brings back and permits the agencies or the contractors to provide the Security Guards. The amendment is sought to be challenged as being a retrograde piece of legislation and violative of Articles 14 and 21 of the Constitution of India apart from being contrary to the directive principles contained in Articles 38, 39, 41, 42, 43 and 46 of the Constitution of India. (ii). It is their further contention that the amending Act is repugnant to the provisions contained in the Contract Labour (Regulation and Abolition) Act, 1970. This Act is an earlier law made by the Parliament and it occupies the same field and since no assent of the President of India has been obtained to this amending Act, the same be declared as unconstitutional on the - 4 - touchstone of Article 254(2) of the Constitution of India. 3. Since the validity of this amending Act of the State is challenged, the State of Maharashtra is joined as the principal respondent to these three Petitions. The Security Guards Board constituted under Section 6 of the said Act is also joined as a respondent. Some of the contracting agencies and the principal employers are joined as additional respondents. The State Government has filed the Affidavits in reply to these Petitions. Submissions advanced on behalf of the petitioners, the State Government as well as the principal employers and the contracting agencies as also some of the interveners such as particular principal employers and contracting agencies have all been heard through their Counsel. 4. Before we examine the submissions of the various parties, we may advert to the salient features of the said Act. This Act known as "The Maharashtra Private Security Guards (Regulation of Employment and Welfare) Act, 1981" was passed by the legislature of the State of Maharashtra, principally for regulating the employment of private Security Guards employed in factories and establishments in the State and for providing better terms and conditions of employment and welfare through the Board established for that purpose. That is the - 5 - declared object of this Act as per its preamble. This Board is constituted under Section 6 of this Act and is a body corporate. The State Government is supposed to prepare a scheme for ensuring regular employment of the Security Guards for the matters which have been mentioned in Section 3 of this Act. The Board is made responsible for administering the above scheme under Section 8 of this Act. The scheme gives detailed provisions with respect to the registration of the Security Guards and regulating their recruitment and registration of the Guards and the principal employers and about the maintenance of the registers etc. The concepts of agency, employer, principal employer and Security Guards are defined under the said Act. Under Sections 19, 20 and 21 of the said Act, certain responsibilities are cast on the principal employers under the Workmen’s Compensation Act, 1923, Payment of Wages Act, 1936 and the Maternity Benefits Act, 1961. Section 23 of the said Act provides for exemptions to the Security Guards employed by the agencies, if the Security Guards are on the whole receiving not less favourable benefits than those under the said Act or the scheme. The main controversy in these Petitions is with respect to the (a) amendments to the above-referred definitions and (b) to Sections 19, 20, 21 and 23 of the said Act, which are claimed to be retrograde amendments. - 6 - 5.(i) Much prior to the passing of this State Act of 1981, the Contract Labour (Regulation and Abolition) Act, 1970 was passed by the Parliament. This Act has two main objectives viz. (i) to prohibit the employment of contract labour in certain situations and (ii) to regulate working conditions of the contract labour wherever such employment is not prohibited. (ii). Thus, Section 10 of this Act provides that an appropriate Government may, after consultation with Central Board or the State Board, as the case may be, constituted under the Act, prohibit the employment of contract labour in any process, operation or other work in any establishment. Sub-section (2) of Section 10 lays down the relevant factors which are to be considered before issuing any such notification. It includes factors such as (a) as to whether the process or operation is incidental or necessary to the particular industry or establishment, (b) whether it is of a perennial nature, (c) whether it is done ordinarily through regular workmen in its establishment, (d) whether it is sufficient to employ a considerable number of whole time workmen. (iii). Wherever there is no such prohibition of employment of contract labour, the contractor concerned has to obtain a licence under Section 12 of the said - 7 - Act. He has to abide by the welfare and health measures which include canteens, rest rooms, drinking water, urinals, first aid facilities, etc. as provided under Chapter-V of the said Act. If these amenities are not provided by the contractor, the liability gets transferred to the principal employer under Section 20 of the said Act and similarly in the case of non-payment or short payment of wages by the contract, the principal employer is made liable under Section 21(4) of the Act. 6. Thus, this Act was concerned with the welfare of labour including conditions of work which is item No.24 in the concurrent list (List-3) of the Seventh Schedule to the Constitution of India. When the Maharashtra Private Security Guards (Regulation of Employment and Welfare) Act, 1981 was passed by the State Legislature, it sought to regulate the employment of private Security Guards employed in factories and establishments through the mechanism of the Security Guards Board. It also sought to make better provisions for their conditions and terms of employment and welfare. The Security Guards engaged on the contract basis are a species of contract labour and, therefore, since the field was occupied by the above Central Act to some extent after passing of this Act the assent of the President was obtained and that is how it came to be enforced from 24th September 1981. It is contended that the amending - 8 - Act reduces the rights of the Security Guards and, therefore, President’s assent was once again required and in the absence thereof, the amending Act is unconstitutional under Article 254(2) of the Constitution of India. 7. The provisions of the unamended Act and its application came to be challenged earlier by a few Security Agencies. By a judgment rendered by a learned Single Judge (P.B. Sawant, J., as he then was in this Court), the Act was held to be a valid piece of legislation. The said judgment was delivered in the case of M/s.Tradesvel Security Services Pvt. Ltd. vs. M/s.Tradesvel Security Services Pvt. Ltd. vs. M/s.Tradesvel Security Services Pvt. Ltd. vs. State of Maharashtra reported in LXXXIV 1982 BLR 608 State of Maharashtra reported in LXXXIV 1982 BLR 608 State of Maharashtra reported in LXXXIV 1982 BLR 608. The contention of the petitioners is that under this judgment the Security Agencies could obtain an exemption by way of a one time exercise only when this Act came into force. According to them the exemption could be availed of only at the initial stage and not once the Act became applicable to the factory or to the establishment (as seen on pages 657 and 658 of the above-referred Law Report). It is their further contention that under the said judgment once this Act comes into application, there is no scope for exemption to the agencies. Besides, according to them, only the Security Guards can obtain the exemption but not the agencies. This position is stated to have been changed - 9 - by the amending Act. It is, therefore, that they are criticizing the amendments to the relevant definitions and the amendment to Section 23 of the said Act as retrograde amendments. They equally criticize the amendments to Sections 19, 20 and 21 of the said Act. To understand this submission, we will have a close look at the judgment of the learned Single Judge and the subsequent judgment of the Apex Court which is the other relevant judgment in this behalf viz. in the case of Security Guards Board for Greater Bombay & Thana Distt. Security Guards Board for Greater Bombay & Thana Distt. Security Guards Board for Greater Bombay & Thana Distt. etc. vs. Security and Personnel Service Pvt. Ltd. & etc. vs. Security and Personnel Service Pvt. Ltd. & etc. vs. Security and Personnel Service Pvt. Ltd. & ors. reported in AIR 1987 SC 1370 ors. reported in AIR 1987 SC 1370 ors. reported in AIR 1987 SC 1370. Before we do that, however, we may just note as to what were the provisions prior to amendment and what is the change brought about by the amendment. 8. The statement of objects and reasons of the amending Act states that the definitions and the provision of Section 23 of the Act were ambiguous and, therefore, the Government of Maharashtra has, with a view to leave no room for any doubt or ambiguity and to explicitly establish the co-relationship of the Security Guards with the agencies who directly employ them, decided to amend Section 23 and some of the sections of this Act. The relevant definitions definitions definitions prior to the amending Act read as follows:- - 10 - " 2(1) "agency" or "agent" "agency" or "agent" "agency" or "agent", in relation to a Security Guard, means an individual or body of individuals or a body Corporate, who undertakes to execute any security work or watch and ward work for any factory or establishment by engaging such Security Guard on hire or otherwise, or who supplies such Security Guards either in groups or as an individual, and includes a sub-agency or a sub-agent." " 2(3) "employer" 2(3) "employer" 2(3) "employer", in relation to a Security Guard engaged by or through an agency or agent, means the principal employer and in relation to any other Security Guard, the person who has ultimate control over the affairs of the factory or establishment and includes any other person to whom the affairs of such factory or establishment are entrusted, whether such person is called an Agent, Manager or by any other name prevailing in the factory or establishment." " 2(8) "principal employer" 2(8) "principal employer" 2(8) "principal employer" means an employer who has engaged Security Guards through an agency or agent." " 2(10) "Security Guard" or "private Security 2(10) "Security Guard" or "private Security 2(10) "Security Guard" or "private Security Guard" means a person who is engaged or is to be engaged through any agency or an agent, whether for wages or not, to do security work or watch - 11 - and ward work in any factory or establishment and, includes any person, not employed by any employer or agency or agent, but working with the permission of, or under an agreement with, the employer or agency or agent, but does not include the members of any employer’s family or any person who is a direct and regular employee of the principal employer." 9. These definitions have been substituted by the amended definitions. They read as follows:- "(1) "agency or agent", "agency or agent", "agency or agent", in relation to a Security Guard, means an individual or body of individuals or a body corporate, who or which employs Security Guards in his or its employment on wages and undertakes to execute any security work or watch and ward work on contract, for any factory or establishment by engaging the Security Guards in his or its employment, but does not include a sub-agency or sub-agent or the Board;" "(3) "employer" "employer" "employer" in relation to a Security Guard in the direct employment of an agency or agent and deployed in a factory or establishment through such agency or agent, means such agency - 12 - or agent;" "(8) "principal employer" "principal employer" "principal employer" in relation to any class or classes of Security Guards deployed in a factory or establishment by the agency or agent or Board, means the person who has ultimate control over the affairs of the factory or establishment and includes any other person to whom the affairs of such factory or establishment are entrusted whether such person is called Authorised Representative, Manager or by any other name prevailing in the factory or establishment;" "(10) "Security Guard" or "Private Security "Security Guard" or "Private Security "Security Guard" or "Private Security Guard" Guard" Guard" means a person who is engaged through any agency or agent or Board to do security work or watch and ward work in any factory or establishment but does not include the members of any principal employer’s family or any person who is a direct employee of the principal employer;" 10.(i). Prior to the amendment, Section 23 providing for exemptions read as follows:- " 23. Exemptions - 23. Exemptions - 23. Exemptions - - 13 - The State Government may, after consulting the Advisory Committee, by notification in the Official Gazette, and subject to such conditions and for such period as may be specified in the notification, exempt from the operation of all or any of the provisions of this Act or any Scheme made thereunder, all or any class or classes of Security Guards employed in any factory or establishment or in any class or classes of factories or establishments, if in the opinion of the State Government, all such Security Guards or such class or classes of Security Guards are in the enjoyment of benefits, which are on the whole not less favourable to such Security Guards than the benefits provided by or under this Act or any Scheme made thereunder. Provided that before any such notification is issued, the State Government shall publish a notice of its intention to issue such notification, and invite objections and suggestions in respect thereto and no such notification shall be issued until the objections and suggestions have been considered and a period of one month has elapsed from the date of first publication of the notice in the - 14 - Official Gazette: Provided further that, the State Government may, by notification in the Official Gazette, at any time, for reasons to be specified, rescind the aforesaid notification." (ii). By the amending Act (a) after the word "employed", the words "by the agency or agent as may be specified in the notification and deployed" have come to be added; (b) the first proviso has come to be deleted and (c) in the second proviso the words "Provided further that" have been substituted by the words "Provided that". (iii). Consequently now, Section 23 reads as follows:- " 23. Exemptions.- 23. Exemptions.- 23. Exemptions.- The State Government may, after consulting the Advisory Committee, by notification in the Official Gazette, and subject to such conditions and for such period as may be specified in the notification, exempt from the operation of all or any of the provisions of this Act or any Scheme made thereunder, all or any class or classes of Security Guards employed by the agency or agent as may be specified in the notification and - 15 - deployed in any factory or establishment or in any class or classes of factories or establishment, if in the opinion of the State Government, all such Security Guards or such class or classes of Security Guards are in the enjoyment of benefits, which are on the whole not less favourable to such Security Guards than the benefits provided by or under this Act or any Scheme made thereunder. Provided that, the State Government may, by notification in the Official Gazette, at any time, for reasons to be specified, rescind the aforesaid notification." 11. As far as Sections 19, 20 and 21 of the said Act Sections 19, 20 and 21 of the said Act Sections 19, 20 and 21 of the said Act are concerned, it has come to be clarified that the principal employer shall be liable in certain circumstances. In these three sections, the word "employer" appearing on the second occasion in the body of section has come to be substituted by the word "principal employer". These three sections after the amendment read as follows:- " 19. Application of Workmen’s Compensation Act 19. Application of Workmen’s Compensation Act 19. Application of Workmen’s Compensation Act to Security Guards.- to Security Guards.- to Security Guards.- The provisions of the Workmen’s Compensation Act, 1923, and the rules - 16 - made thereunder, shall mutatis mutandis apply to the registered Security Guards employed in any factory or establishment; and for that purpose they shall be deemed to be workmen within the meaning of that Act; and in relation to such workmen, employer shall mean where a Board makes payment of wages to any such workmen, the Board, and in any other case, the 2[principal employer] as defined in this Act." (2. These words were substituted for the word "employer" by Mah. Ord.4 of 1996 and subsequently by Mah. 28 of 1996, s.10.) " 20. Application of Payment of Wages Act to 20. Application of Payment of Wages Act to 20. Application of Payment of Wages Act to Security Guards.- Security Guards.- Security Guards.- (1) Notwithstanding anything contained in the Payment of Wages Act, 1936 (IV of 1936) (hereinafter referred to in this section as "the said Act"), the State Government may, by notification in the Official Gazette, direct that all or any of the provisions of the said Act and the rules made thereunder shall apply to all or any class of registered Security Guards employed in any factory or establishment, with the modification that in relation to registered Security Guards, employer shall mean, where a Board makes payment of wages to any such - 17 - Guards, the Board and in any other case, the 1[principal employer] as defined in this Act; and on such application of the provisions of the said Act, an Inspector appointed under this Act shall be deemed to be the Inspector for the purpose of the enforcement of such provisions of the said Act within the local limits of his jurisdiction. (2) The State Government may, only if the Advisory Committee so advises, by a like notification, cancel or vary any notification issued under sub-section (1). (1. These words were substituted for the word "employers", ibid. s.11.) " 21. Application of Maternity Benefit Act to 21. Application of Maternity Benefit Act to 21. Application of Maternity Benefit Act to Women Security Guards.- Women Security Guards.- Women Security Guards.- Notwithstanding anything contained in the Maternity Benefit Act, 1961 (53 of 1961) (hereinafter referred to in this section "the said Act"), the State Government may, by notification in the Official Gazette, direct that all or any of the provisions of the said Act and the rules made thereunder shall apply to registered Women Security Guards employed in any factory or establishment; and - 18 - for that purpose, they shall be deemed to be women within the meaning of the said Act; and in relation to such women, employer shall mean, where a Board makes payment of wages to such women, the Board, and in any other case, 2[principal employer] as defined in this Act; and on such application of the provisions of the said Act, an Inspector appointed under this Act shall be deemed to be the Inspector for the purpose of enforcement of such provisions of the said Act within the local limits of his jurisdiction." (2. These words were substituted were substituted for the word "employer", by Mah.Ord. 4 of 1996 and subsequently by Mah.28 of 1996, s.12.) 12. Much reliance has been placed on the judgment in the case of M/s. Tradesvel Security Services Pvt. Ltd. M/s. Tradesvel Security Services Pvt. Ltd. M/s. Tradesvel Security Services Pvt. Ltd. v. State of Maharashtra (supra) v. State of Maharashtra (supra) v. State of Maharashtra (supra) which was decided on 2nd November 1982. The provisions of this Act of 1981 and the Scheme thereunder (as it then stood) came to be challenged by the employers and the agencies which supplied security guards on contract basis. Ten different grounds were raised on behalf of the Petitioners which can be seen on pages 644 and 645 of - 19 - the law report. These grounds included the alleged violation of Articles 14 and 19(1)(g), that there will be a total stoppage of business of the agencies, that there was no rational connection with the object sought to be attained, that it was an excessive provision and also that it was not permissible for the State to totally prohibit the activities of the agencies. 13. The learned Single Judge first referred to the circumstances in which the Act was passed. He noted that some 250 agencies were operating earlier in Greater Bombay and Thane Districts prior to the State Government promulgating the Ordinance on 28th June