IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION No 8580 of 1996 with SPECIAL CIVIL APPLICATION No 10116 of 1996 With SPECIAL CIVIL APPLICATION NO.476 OF 1997 For Approval and Signature: Hon'ble MR.JUSTICE M.R.CALLA ============================================================ 1. Whether Reporters of Local Papers may be allowed to see the judgements? 2. To be referred to the Reporter or not? 3. Whether Their Lordships wish to see the fair copy of the judgement? 4. Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? 5. Whether it is to be circulated to the Civil Judge? 1 and 2 Yes 3 to 5 No -------------------------------------------------------------- GUJARAT MAZDOOR SABHA Versus STATE OF GUJARAT -------------------------------------------------------------- Appearance: 1. Special Civil Application No. 8580 of 1996 DR MUKUL SINHA for Petitioner Mr.K.N.Shastri and Mr.D.A.Bambhania, learned Addl.G.P.for the respondent No.1 SINGHI & BUCH ASSO. for Respondent No. 2 2. Special Civil Application No 10116 of 1996 Mr.K.S.Nanavati, senior advocate with SINGHI & BUCH ASSO. for Petitioner Mr.K.N.Shastri and MR DA BAMBHANIA,learned Add.G.P. for Respondent Nos.1 to 3 Mr.B.V.Lathia for respondent No.4 Dr.Mukul Sinha for respondent No.5 Mr. N.R. Shahani for respondent No.6 3. Special Civil Application No.476 of 1997 Mr.N.R. Shahani for the petitioner Mr.K.N.Shastri and Mr.D.A. Bambhania, learned Addl.G.P. for the respondent No.1. Singhi & Buch Asso. for respondent No.2 Mr. Kamal Trivedi for respondent No.3 ------------------------------------------------------ CORAM : MR.JUSTICE M.R.CALLA Date of decision: 06/03/98 COMMON ORAL JUDGEMENT 1. In two out of these three Special Civil Applications challenge is to the Notification dated 18.10.96 issued by the Labour & Employment Department of the Government of Gujarat in exercise of the powers conferred by sub-section (1) of S.10 of the Contract Labour (Regulation and Abolition ) Act, 1970 whereby the system of employment of contract labour in the establishment of the Indian Farmers Fertilizer Co-operative Ltd., Kalol Unit, District - Mehsana ( which will be hereinafter referred to as 'IFFCO') have been abolished in the Processes /operations/works/activities i.e. (1) stacking of filled up urea bags on the platform after manufacturing process is over and pending loading into the railway wagons or trucks, (2) collecting, bagging and standardizing spilled urea and hopper flour etc., (3) handling of spilled material and attending to cleaning of bagging flour, reclaim machines etc., and (4) general cleaning. Gujarat Mazdoor Sabha as well as IFfCO both are aggrieved against this notification dated 18.10.96 and, therefore, Special Civil Application No.8580 of 1996 has been filed by the Gujarat Mazdoor Sabha raising a grievance that the contract labour, which has been abolished for the process/activities of stacking, should also have been abolished in respect of the activity of loading and unloading. IFFCO has filed Special Civil Application No.10116 of 1996 raising the grievance that the reasoning which applies for exclusion of loading and unloading from abolition of contract labour applies to the stacking process/activity also and, therefore, the contract labour in stacking as well as the other 3 activities should not have been abolished. The third Special Civil Application No.476 of 1997 has been filed by Gujarat Mazdoor Panchayat seeking a direction against the IFFCO for absorption of the workers included in Annexure 'C' to this petition in the activities in respect of which the contract labour has been abolished vide aforesaid Notification dated 18.10.96. All these three matters were heard together as the common questions of law are involved based on identical facts and the consequences of the Notification dated 18.10.96 and, therefore they are decided by this common judgment and order. Special Civil Application No.8580 of 1996: The petitioner - Gujarat Mazdoor Sabha has come with the case that in the year 1986 IFFCO Karmachari Sangh had raised an industrial dispute in respect of 86 workmen, who are engaged by IFFCO in the operation of loading and unloading of the urea bags. This reference was adjudicated by the Industrial Tribunal at Ahmedabad as Reference (IT) No.21 of 1987 and the Award was passed on 20.3.91 directing the IFFCO management to treat 56 out of 86 workmen as direct employees of IFFCO and pay them regular wages as are being paid to the direct employees of IFfCO. The Reference with regard to the other 30 workmen was rejected. IFFCO then filed Special Civil Application No.3916 of 1991 challenging the aforesaid Award of the Industrial Tribunal and this Special Civil Application is said to be pending. IFFCO Karmchari Sangh had also challenged the aforesaid Award with regard to the rejection of the reference in respect of the other 30 employees through Special Civil Application No.2602 of 1992 and the same is also said to be pending. In the year 1984 IFFCO Karmachari Sangh had also moved the appropriate Government for abolition of contract labour system under S.10 of the Act in the operation of the loading and unloading etc. of the urea bags in IFFCO and also for certain other operations. This grievance raised by it was referred as Reference No.3 of 1984 before the State Advisory Board constituted under S.10 of the Act. The State Advisory Board also gave its recommendations to the State Government sometime at the end of the year 1986. It is then stated by the petitioner - Gujarat Mazdoor Sabha that in 1995 the workmen who were concerned with the IFfCO, became members of the Gujarat Mazdoor Sabha and Gujarat Mazdoor Sabha then gave a notice to the Secretary of the Labour & Employment Department on 14.8.95 stating therein that the Advisory Board had concluded the hearing way back in 1986 and it also sent its report to the Government for further action, but these recommendations had not been acted upon. The petitioner - Gujarat Mazdoor Sabha then filed a Special Civil Application No.8686 of 1995 praying for a direction against the Government to decide the application for abolition of contractor labour system within a definite time frame work and the High Court decided this Special Civil Application No.8686 of 1995 on 17.11.95 and the State Government was directed to decide pending Application under S.10 of the Act within a period of 4 weeks from the date of the order being served upon the respondent State of Gujarat. It is only thereafter that the pending Application being Reference No.3 of 1984 was decided and the Notification dated 27.12.95 was issued. IFFCO has then challenged this Notification dated 27.12.95 through Special Civil Application No.423 of 1996 and the Gujarat Mazdoor Sabha - the present petitioner had also challenged the said Notification through Special Civil Application No.3066 of 1996 with regard to the exclusion of the operation of the loading and unloading of urea bags from the prohibited list. Both these Special Civil Applications i.e. Special Civil Application No.423 of 1996 and Special Civil Application No.3066 of 1996 were disposed of by a common consent order dated 1.7.96 directing the State Government to consider afresh the issue of prohibiting contract labour system and the contention of the petitioner - Union in respect of the prohibition of the loading and unloading activities which was excluded by the Government from the prohibited list. Under the Court's order dated 1.7.96, as aforesaid, the Government was directed to decide the matter before 16.9.96 and the IFFCO was directed to continue with the same labour contractor . The time limit was then extended upto 15.12.96 for finalising the decision by the Government and the direction, which had been given to the IFFCO to continue with the same labour contractor was also extended till 31.12.96. The petitioner - Gujarat Mazdoor Sabha then drawn the attention of the Government vide representation dated 9.8.96 to the relevant facts regarding the operation of the loading and unloading of urea bags and pointed out that this activity could not be separated from the activity of stacking of urea bags on the platform and that these activities form the part of a single operation. The petitioner - Union's case is that the IFFCO itself had admitted this fact in their written reply before the Advisory Board. Thereafter, the Notification dated 18.10.96, which has been placed on record as Annexure 'VI', was issued by the Government abolishing the contract labour system in the activities of stacking up the urea bags on the platform, but the same has not been abolished in respect of loading and unloading of the urea bags in the railway wagons and trucks. The petitioner Gujarat Mazdoor Sabha has challenged this Notification dated 18.10.96 insofar as the Notification does not seek to abolish the contract labour system in the activity of loading and unloading and a grievance has also been raised that the petitioner Union was not given any opportunity to be hard before the Advisory Board. The pleadings include (1) Special Civil Application and the documents etc. filed with it, (2) affidavit-in-reply on behalf of respondent No.2 -IFFCO dated 2.12.96 by one Shri K.Bhaskaran, Manager (Personnel and Administration) with documents enclosed therewith, affidavit-in-rejoinder dated 16.12.96 filed by one Shri Chhakkan Khan, a member of the petitioner - Union and an affidavit dated 8.4.97 filed by the President of the petitioner - Union. Special Civil Application No.10116 of 1996 IFFCO, Kalol Unit has has filed this Special Civil Application against the very same Notification dated 18.10.96 raising the grievance that contract labour system should not have been abolished for any of the four activities and further that in any case, the reasoning, on which the loading and unloading has been excluded, equally applies to the activity of stacking of urea bags on the platform and, therefore, there was no justification whatsoever to abolish the contract labour system for the purposes and activities of stacking as also the other three activities included in the impugned Notification dated 18.10.96 and IFFCO has also raised a grievance that hearing was not offered to it. The pleadings in this Special Civil Application includes, (1) Special Civil Application and the documents filed alongwith it,(2) Additional affidavits dated 24.2.97 and 8.4.97 filed by Shri K.Bhaskaran, Manager (P & A) of IFFCO alongwith documents. Special Civil application No.476 of 1997 Gujarat Mazdoor Panchayat has filed this Special Civil application with the prayer for absorption of its 67 workers included in Annexure 'C' in the activities enlisted in the Notification dated 18.10.96 and to treat all these workmen as the direct workmen of IFFCO from the date of their entry in the service etc. as has been prayed in prayer clause (B) and (C) of para 9 of this Special Civil Application. It may be mentioned that on 1.4.97 the prayer made in clause (A) under Para 9 had been given up by the learned counsel Mr. Shahani and rightly so for the obvious reason that this Court can not declare the judgment of any co-ordinate Bench to be ineffective. Prayer made in Clause (D) under para 9 hardly needs any consideration wherein it has been prayed that this matter may be referred to Division Bench in case it is felt that the first prayer is required to be examined. This Court is, therefore, concerned only with regard to the prayers made in clauses (B) and (C) only. The prayers made in clauses (E), (F) and (G) are only with regard to further reliefs deemed just and proper by the court, cost and interim relief respectively. The pleadings in this Special Civil Application include (1) Special Civil Application and the documents filed alongwith it, affidavit-in-reply dated 24.2.97 filed by one Shri K. Bhaskran, Manager (P & A) of IFFCO, affidavit-in-reply dated 12.3.97 filed by one Shri B.D.Dhakan, Proprietor of respondent No.3. Besides the pleadings in the form of petitions and affidavits and the documents, as have been referred to with regard to each of these 3 petitions, the learned counsel for the parties have also referred to certain other papers, which were passed on across the table and the same are also available. 2. From both the sides, the matter has been argued to show as to what is the activity of stacking of the urea bags on the platform before they are loaded into the railway wagons or trucks and what is the activity of loading and unloading. The case of both the sides is the same inasmuch as the petitioner - Union as well as IFFCO have contended that stacking as well as loading and unloading is one composite process. In Para 5 (a) of the Special Civil Application No.8580 of 1996 the petitioner - Union has stated that the operation/work of stacking urea bags on the platform and loading of such urea bags to the wagons/trucks is a single operation and this aspect is clearly admitted by the respondent No.2 i.e. IFFCO in their written statement before the Chairman of the State Advisory Board on 25.5.85. The submission of IFFCO, as was made in para 6 of such written statement under the heading 'Loading of Fertilizer for despatch All over the country' has been reproduced in the following words: "In our factory regular workmen are filling up and stitching the bags and afterwards it is dropped mechanically on the platform from where this bags are loading in the railway wagon or trucks. This loading of urea bags is done by the contractor. Normally wagons or trucks are not available on regular basis. Our plant operation is continuous. If railway wagon and trucks are not available then this filled up bags are stacked at the platform till wagons/trucks are available......" The IFFCO has also stated in para 1.07 of Special Civil Application No.10116 of 1996 that stacking is part of loading activity because it depends on loading. Thus it can be said that the operation of stacking and loading are composite and cannot be separated from each other. In this context, the case of the IFFCO is that the stacking operation on the platform is highly erratic and not of perennial nature. After the urea prills are manufactured they are transferred to the Silo through a conveyor belt for storage in loose form. The capacity of the Silo is 30,000 M.T. Whenever the wagons/trucks arrive at the loading platform, the loose urea is brought from the Silo through reclaim machine conveyor belt to Hopper situated at Bagging floor located on the first floor. The urea is then packed in bags, each weighing 50 kg. with weighing-cum-bagging machine and stitched with stitching machine. The bags are then dropped mechanically through chutes and received on the platform on the ground floor. Depending upon availability of wagons/trucks, urea is bagged directly and transferred on the platform through the above chute. There are six packers for bagging of urea. These packers are operated as per the need and depending upon the availability of the quantum required for loading of urea in trucks/wagons. The wagons/trucks are then loaded with these bags. The arrival schedule of wagons/trucks is very irregular and erratic. The time schedule differs according to the type of wagons to be loaded as supplied by the Railways either on the Broad Gauge Line or Meter Gauge Line and such time schedule also depends on the capacity of each wagon. In the Factory at Kalol the manufacturing process of the urea plant is continuous and urea is transferred from urea plant to silo. The manufacturing process for production of urea is over as soon as urea product is out of urea plant and, therefore, according to IFFCO the contractor is engaged for loading jobs after the manufacturing process is over and the activity of loading falls outside the purview of manufacturing process. That there is no loading operation during the period of shutdown as well as when wagons/trucks are not available and at that time there is no alternative job for the workers during that period. There are no fixed timings for the availability of Railway wagons and trucks and the stacking operation depends upon loading and unloading operation and the loading and unloading operation can by no stretch of imagination be held to be activities of a perennial nature or activities wherein sufficient work is available to employ permanent employees. On the other hand, the Gujarat Mazdoor Sabha's case is that the manufacturing process of urea is continuous and the IFFCO produces 1200 MT of urea per day through out the 365 days. The urea is packed and stitched in the standard bags and the packed bags weigh 50 Kg. and thus per day 24000 bags of urea is produced. The despatch of the urea bags are done either by railway or trucks to different destinations in the country and the loading work is carried out by around 130 workmen under the so called contract labour system in three shifts round the clock for all the seven days in the week. On an average, each worker is paid around Rs.1300/- per month. Union's case is that each workman has to load/stack 400 to 450 bags per shift. For moving one bag, the workman is paid 17 Ps. The production capacity of IFFCO is 1200 MT of urea per day which is equivalent to 24000 bags per day. IFFCO, however, produces 1450 MT per day i.e. 29000 bags per day. At present IFFCO employs 150 workers for the work of stacking/loading per day spread over three shifts. Bagging and stitching machines ( 8 in number) employ two permanent workmen per machine per shift. The work of bagging and stitching are directly related to the work of stacking and loading since immediately after stitching, the bag is dropped through the chute to be either stacked or loaded. In case the stacking or loading work is stopped, the stitching work also has to be stopped, otherwise the stitched bags, which are dropped at the rate of 11 per minute, jams the chute. Neither of the operations are stopped and cannot be stopped since per day around 24000 to 29000 bags are to be stitched and moved out through the chute. The petitioner - Union having so averred in the affidavit dated 8.4.97 has also given the details with regard to the wagon loading for the months of October, November and December 1995 and it has been stated that in October 1995, 1179359 bags were produced and loaded by trucks or wagons averaging 38043 bags per day as against the production capacity of 24000 bags per day. In the month of November 1995, the average has been given to be 41142 bags per day and in the month of December, 1995 it has been given out as 35998 bags per day. Dr. Sinha has submitted that the actual production is about 10000 bags higher than the production capacity of 24000 bags per day. IFFCO on its side has filed statement showing the shift wise loading of the urea in wagons for the month of January 1995 onwards and from these statements it has been tried to be shown that there are many shifts when there is no loading of urea in the wagon and that how drastically the work card vary. The statement has also been filed by IFFCO to show the details of indents placed for the supply of railway wagons with Railways and the supply thereof to IFFCO by the Railways during the period between 1.4.95 to 31.3.96. 3. Apart from the submissions, as aforesaid, on behalf of IFFCO reliance has been placed on AIR 1972 SC 1942 ( Vegoils (P) Ltd. v. The Workmen) on the point that if the work for which contract labour is employed is incidental to and closely connected with the main activity of the industry and is of a perennial and permanent nature, then only the abolition of contract labour would be justified and where the facts show that there is a drastic variation in the nature of work that has to be done by the contractor regarding loading and unloading of the wagons and trucks and that in other similar establishments also the work is not done by regular workmen, the work cannot be said to be of permanent or perennial nature and, therefore, direction for the abolition of the contract labour in respect of loading and unloading could not be issued, although in this case, in the ultimate analysis the Court had come to the conclusion that in the establishment carrying business of manufacturing edible oils, soap etc., feeding of hoppers was an essential part of the industry, the work being of perennial nature, could be done by permanent employees and as such the direction to abolish the contract labour was held to be valid. The learned counsel for IFFCO has submitted that from the materials placed on record, it is quite clear that the work of loading and unloading is not a work of perennial nature and that there is a drastic variation in the nature of the work. In this case, the matter came up before the Supreme Court by way of Special Leave directed against the Award passed by the Industrial Tribunal, which has decided upon the demand of abolition of contract system. The Industrial Tribunal had the advantage of coming to the conclusion on the basis of the evidence. In the facts of the present case, what is assailed before this Court is Notification issued by the Government under the provisions of the Act for the purpose of abolition of contract labour and it cannot be said in the facts of the present case that there was no material before the Government to consider as to whether the work of stacking and loading and unloading was a work perennial in nature or not. In the present case, the Union says that contract labour also should have been abolished with regard to the activity of loading and unloading when it was abolished for the purpose of stacking and the IFFCO says that if it is not abolished for loading and unloading why it has been abolished for stacking. 4. On this aspect of the matter, I have considered the material, which has been placed on record by both the sides and the only question to be seen is as to whether the reasoning which applies to stacking shall also apply to the case of loading and unloading or not. It is clearly discernible that the IFFCO is undertaking the manufacturing of the urea and so far as the process of manufacturing urea and the subsequent stacking and the loading and unloading activity are concerned, it is the common case of the parties that it is a composite process. From the data which has been placed on record with regard to the production and further activities, it can be safely said that stacking as well as loading and unloading is a composite process, is a work of perennial nature and it cannot be said to be incidental in the process of manufacturing urea. Besides this, the position has to be examined within the scope of the provisions itself and the Legislature has not left it open to embark upon any inquiry in this regard because it is provided in S.1(5)(b) that if a question arises whether the work performed in an establishment is of intermittent or casual nature, the appropriate Government shall decide that question after consultation with the Central Board or, as the case may be, a State Board, and its decision shall be final. The explanation has been added thereunder which says that for the purpose of this sub-section, work performed in an establishment shall not be deemed to be of an intermittent nature i.e. if it was performed for more than one hundred and twenty days in the preceding twelve months; or if it is of a seasonal character is performed for more than sixty days in a year. Mr. Shahani has placed strong reliance on this contention raised by him with reference to S.1(5)(b) and the explanation added thereunder coupled with the explanation added at the end of S.10 and the explanation below S.10 reads as under:- "If a question arises whether any process or operation or other work is of perennial