5" ^^ ^ ^' y , ..,.,..... "^ .^^.^- ^^^....^-•^ a ^%^.""""^ ^'^.y—-;-; ^ N^ Ar&^^D HIGH COURT OF CHHATTISGARH AT BILASPUR Writ Petition No.3973 pf 2004 PETITIONER: RESPONDENTS: The .General Manager, Larsen & Toubro Ltd. Versus State 6f Chhattisgarh and others PETITIONER: RESPONDENTS: AND Writ Petition No.3333 of 2005 The Chhattisgarh Cement Manufacturers' Association Versus Union of India and others ORDER FOR CONSIDERATION HON'BLE SHRI R.N. CHANDRAKAR. J 3 GLfp^e^L. Sd/- JUDGE f5~-12-2010 Sd/- R.N. Chandrakar Judge ^ POST FOR ORDER ON ^ DECEMBER. 2010 Sd/- Dhirendra Mishra Judge ^^ v^.; HIGH COURT OF CHHATTISGARH AT BILASPUR Writ Petition No.3973 of 2004 PETITIONER: RESPONDENTS: The General Manager, Larsen & Toubro Ltd. (Now de-merged to form "Ultra Tech Cem Co. Ltd."), Hirmi CementWorks, Hirmi, District Raipur Versus 1. 2. 3. 4. 5. State of Chhattisgarh, through the Secretary, Department of Labour, DKS Bhawan, Raipur The Labour Commissioner, Government of Chhattisgarh, Raipur (CG) The President, Industrial Court, Raipur (CG)i The General Secretary, Cement Workers Union, Mazdoor Sabha Bhawan, Nandini Road, Bhilai, District Durg (CG) Union pf India, Through the Secretary, Ministry of Labour, Shram Shakti Bhavan,Rafi Marg, New Delhi AND Writ Petition No.3333 of 2005 PETITIONER: The Chhattisgarh Cement Manufacturers' Association, a Registered- Society, registered with Registrar of Firms and Societies Chhattisgarh, Raipur with its Registered Office at C/o Century Cement 21/4, Civil Lines, Raipur, through president Shri I.M. Sharma Versus RESPONDENTS: 1. 2. 3. Union of India, Through Secretary Labou^ Department, Shram Skati Bhawan, New Delhi State lof M.P. Through Secretary Labour Department Vallabh Bhawan Bhopal State of Chhattisgarh, Through Secretary, Labour Department, DKS Bhawan, Raipur v/ 17 ^^" Present: Shri Guru Krishna Kumar with Shri Anand Sukumar, Shri N.K. Vyas, Shri P.K. Maitra, and Shri Pradeep Saxena, counsel forthe petitioners. Smt. Fouzia Mirza, Assistant Solicitor General for Union of India. Shri Kishore Bhaduri, Additional Advocate General with Shri Yashwant Singh Thakur, Deputy Advocate General and Shri U.N.S. Deo, Govt. Advocate for the State. Shri PK Moitra and Shri KR Nair, counsel for respondent No.4 in WP No.3973/2004. .! Shri Shaitendra Sharma, counsel for the proposed intervener. Division Bench: Hon'ble Shri Dhirendra Mishra & Hon'ble Shri R.N. Chandrakar. JJ. ORDER (Passed on I^''December, 2010) The following order ofthe Court was passed by Dhirendra Mishra, J. 1. The aforesaid writ petitions are being disposed of by this common order as in both these petitions question of law and facts are same. 2. In Writ Petition No.3973/2004, the petitioner has prayed for quashing the order of reference dated 1 1-11-2003 (Annexure-P/1) whereby the State of Chhattisgarh in exercise of powers under Section 51 of the Chhattisgarh Industrial Relations Act, 1960 (No.27 of 1960) (hereinafter referred to as 'the Act of 1960') has referred the dispute between the petitioner and respondent No.4 mentioned in the schedule for arbitration to the Industrial Court, Raipur and has also prayed for quashing of the proceedings before the Industrial Court pn the basis of above reference, whereas in Writ Petition No.3333/2005, the petitioner, an association of the cement manufacturer, has prayed for declaring the action of the State Government whereby the cement industry has been covered under the Act of 1960, as ultra vires and direction to the State to delete the cement industry from the notification dated 31st December, 1960. It has been further prayed that all legal proceedings arising out of reference under Section 51 of the Act of 1960 pending in any Court including the Labour Court, Industrial Court of the Chhattisgarti be declared ultra vires and accordingly, be dropped. ^a it^'-^;' ^ ^"y. Briefly stated facts of the case are that respondent No.4 raised a dispute in respect of the employees of the contraetor engaged by the petitioner company. On failure of conciliation proceeding, respondent No.1 referred the dispute for adjudication under Section 51 (1) of the Act of 1960 to the Industrial Court, Raipur. A preliminary objection was raised by the petitioner before the Industrial Court with respect to the maintainability of reference at the instance of State Government on various grounds. However, the same has been rejected vide order dated 5-10-2002 with cost of Rs.2,000/- to be payable to respondent No.4 with a finding that none of the objections raised by the petitioner can be decided as preliminary objection. The petitioner may take these objections in statement of claim and the same shall be decided along'with other issues on merits and the petitioner has been finally allowed last chance to file statement of claim. SUBMISSIONS BY SHRI GURU KRISHNA KUMAR. ADVOCATE 4. The arguments advanced by learned counsel for the petitioners can be summarized as under:- > The cement industry is a controlled industry as declared under Section 2 of the Industries (Development and Regulation) Act, 1951 (for short 'the IDR Act'). The Central Government has exercised control over working of the cement industries, as would be evident from various Wage Board settlements as also from the references made under Section 10-A of the Industrial Dispute Act, 1947 (for short 'the ID Act') for settlement of the dispute between the workmen and the employers (Annexure-P/9 in W.P. No.3333/05). > Notification under Section 1 (3) ^ of the Chhattisgarh Industrial Relations Act (for shorfe 'CGIR Act') including cement industry is • ultra vires, as the cement is a controlled industry. The power of the State Legislature would be curtailed to the extent the field is occupied by the central enactment in respect of industries under Entry 52 of list I. The power of the State Legislature to deal with industries under Entry 24 of List II is subject to the provisions of Entries No.7 and 52 of List I. > Even if the enactment of CGIR Act is traced to Entry 22 of list III, the inclusion ofcement industry is unconstitutional, as the Central Government has^ occupied the field in respect of regulation of labour/ industrial disputes in the ^n cement industry vide notification dated)8-11-1977 issued under Section 2(a)(i) of the ID Act (Annexure-P/3 in W.P. No.3333/05). > By virtue of the said notificatiQn, the Central Government is the proper Government for cement industry under the IDAct under Section 2 (ee) of the ID Act and thus, only the Central Government can make reference of industrial dispute in the cement industry under Section 10 of the ID Act. After the notification dated 8-11-1977, the Presidential Assent obtained in thelyear 1960 to the CGIR Act would not be applicable for the cement industry, as the notification reserves right to deal with industrial/labour dispute in respect of cement industry to the Central Government and the State Legislature cannot deal with the labuor/industrial dispute in the cement industry. > Delegation of powers to the State Qovernment under Section 39 of the ID Act vide notification dated 8-12-1977 does not confer the State Government with the authority to deal with the industrial dispute concerning the cement industry independently. The State Government can refer any such industrial dispute for adjudication only as delegatee of the Central Government. Thus the provisions of the CGIR Act emppwering the State Government to deal with industrial dispute concerning the cement industry is ultra vires. Reliarice is placed in the matter of Ultratech Cement Limited Vs. Srinivas Narayan Rao Moharil . > The delegation under notification i dated 8-12-1977 (Annexure-P/6 in W.P. No.3973/04) is subject to the conditions that the Central Government continues to exercise all the powers under this Act and the rules relating to mines and quarries which form part of the cement industry and relating to the dispute between the employers who are members ^ of the Cement Manufacturers Association, Bombay and their workmen. > By the impugned reference, the issue of abolition of contract labour pursuant to award made in reference under Section 10-A ofthe ID Act has been referred by the State Government to the Tribunal. The subject is within the exclusive authority of the Central Government and the State Government has no power to ideal with the same even under the notification dated 8-12-1977. The Union of India in its counter affidavit has taken a categorical stand that the petitioners' case is legal 'and proper which clearly shows that the Central Government is the proper Government for cement industry. The notification under CGIR act was issued on 31st December, 1960 i.e. 1 (2010)112 BOMLR 872 ^g ?-. 9 subsequent to 17-11-1960 when the Rresidential assent was given to CGIR Act. SUBMISSIONS BY SHRI N.K. VYAS. ADVOCATE 5. Though it is correct that mere declaration of controlled industry under the IDR Act would not be enough to attract the application of Section 2 (a)(i) ofthe ID Act unless the Central Government specifies that for the purpose of Section 2(a)(i), the Central Government is the appropriate Government. In the instant case, the Central Government vide notification dated 8-11- 1977 (Annexure-P/3) has notified itself as appropriate Government in the industry engaged in production of cement. Vide notification dated 8-12- 1977 the Central Government has delegated its powers under Section 39 of the ID Act to the State Government to exercise all powers under the Act. The Central Government being the apprbpriate Government under Section 2(a)(i) of the Act and the State Government being its delegate, the State Government cannot be hetd to be an appropriate Government in relation tocement industry as per the definition under Section 2 (a)(i) of the ID Act and as such, the State Government had no competence to issue a notification under Section 51 ofthe Actbf 1960 or Section 10(1) of the ID Act. [ The Central Government has been consistently exercising jurisdiction over cement industry, as would be evident from the constitution of the Wage Board by various resQlutions. The Union of India in its counter affidavit has also taken a categorieal stand that the State has no competence to issue such notification under the Act of 1960, as after issuance of notification in respect of cemgnt industry, the Central Government became appropriate Government. SUBMISSIONS BY SMT. FOUZIA MIRZA. ASSISTANT SOLICITOR GENERAL FOR UOI 6. Supporting the case of the petitioners, it was argued that the Central Government vide notification dated 8-11-1977jhas specified the industry engaged in manufacture/production of cem^nt- as controlled industry under Section 2 of the ID Act, 1947 and the power has been delegated to the State under Section 39 of the ID Act vide notification dated 8-12-1977, ^ however, delegation is subject to condition that the Central Government shall continue to exercise powers under the ID Act. In the light of the above notification, cement industry deserves to be deleted from the list of Industry mentioned in Schedule of the Act of "1960. SUBMISSIONS BY SHRI KISHORE BHADURI. ADDITIONAL ADVOCATE GENERAL 7. The Act of 1960 has been enacted in exercise of powers conferred in Entry 22 List III Schedule VII made under Article 246 with an object to develop good relationship between the employer and the employee. It has obtained assent of the President under Article 254 (2) of the Constitution and thus the State Act being a special act, shall prevail over general law i.e. Industrial Dispute Act and inclusion of cement in Schedule of the Act of1960 is in no way repugnant or contrary to the provisions of the Central Act i.e. IDR Act, 1951 and the ID Act, 1947. List 1 and 2 of Schedule VII do not provide for the field trade unions, industrial and labour dlspute, therefore, reference to the cement and gypsum products in Entry No.35 of the First Schedule of the IDR Act as industry under the control of Union has no correlation whatsoever with the fietd covered at Entry 22 List III ofSSchedule VII. The object of enacting IDR Act is only for regulating the production and development of industry and for consultation with provincial Government in the matters of policies. Thus cement industry is regulated by the Central Government for the purpose of licencing and development. Section 31 specifically provides that there shall be no bar for application of other Acts in relation to the scheduled industry. Under Section 110 of the Act of 1960, the provisions of the ID Act have been made inapplicable to any industry to which the State Act applies except Chapters V-A, V-B, V-C and other provisions with respect to lay off, retrenchment compensation, special provisions relating to lay off, retrenchment or closure in certain establishmehts and unfair labour practices. However, the settlements arrived at under the ID Act in the past have been saved and it has been further provided that the pending case under the ID Act with respect to any industry to which Act of 1960 is applicable shall be disposed of in accordance with the provisions of the Central Act. The State Act has obtained assent of the President under Article 254(2) of the ^2X) (.1 M. Constitution and any provision of the Act of 1960 has not been varied or repealed by any enactment of the Parliament. The argument that by enacting Contract Labour Abolition Act, 1970 (for short 'the Act of 1970') the Parliament has expressly repealed the applicability of the Act of 1960 with regard to the field of the Contract Labour has no relevance to the facts of the present case as the Act of 1960 deals only with regard to the dispute between the employers and the employees and under the definition of the workmen as given in Section 2(13) (a), a person employed by a contractor in execution of the contract with an employer is also a State employee whereas, the Act of 1970 has been enacted to regulate employment of contract labour in certain establishments and to provide for its abotition in certain circumstances and for connected matters. From bare reading of the provisions of the Act of 1970, it would be evident that it does not provide for settlements of the disputes of the employees and the employers. SUBMISSIONS BY SHRI K.R. NAIR. ADVOCATETOR 1NTERVENER CEMENT WORKERS UNION 8. The dispute between the employers and the workers is regarding payment of wages at the rate prescribed by the Cement Wage Board Award 1983 and non-implementation of certain terms of the award. Since the management refused to pay wages at the rate as also refused to implement the provisions relating to abolition of the contract labour in all areas of work except the area like loading, unloading, packing and work of casual nature. The conciliation officers entered into conciliation, however, when no settlement was arrived at, failure report was submitted to the State and accordingly, the State referred the matter to the Industrial Court for construction and interpretation of settlement or award. Reference was made to paras-225 & 226 of the Cement Wage Board Award according to which contract labour system in the cement industry in the country stood abolished from 1960 except in certain areas of work mentioned in the award. The entire endeavour of thepetitioner management in taking technical objection firstly fcefore the Industrial Court and subsequently by filing instant petition is to delay the proceedings before the Industrial Court. Writ Petition No.3973/2004 has been filed against interlocutory order passed in pending reference and as such, the same is not maintainable. ra"~ •a^ Reiterating the arguments advanced by learned counsel for the State, it was argued that the State Act being a special act would prevail over the provisions of the ID Act. In the absence pf anylegislation by the Parliament, the provisions contained in Section 51 of the Act of 1960 for referring any dispute between theemployer and the employee in the cement industry would not become ultra vires. The powers conferred to the Parliament under proviso to Article 254(2) can be exercised by Parliament alone and the same cannot be delegated to any executive authority. The State Government has made reference in exercise of powers conferred under the Act of 1960 in relation to scheduled industry and not as a delegatee of the Central Government under the ID Act. The contention that the issue is of abolition of the contract labour is not correct as the contract labour stood abolished long ago and the dispute is only with respect to non-payment of wages at the Wage Board rate and non-regularization of the contract labour as per the Wage Board Award. The Act of 1970 operates in entirely different field i.e. in the field of regulation and abolition of the contract labour whereas the Act of 1960 regulates theemployer and the employee's relationship and settlement of industrial dispute and there is no repugnancy between provisions of both the acts. The subject matter of the dispute between the petitioner and the workers of the industry with respect to payment of wages at the rate prescribed bythe CementWage Board and non implementation ofthe award and the Payment of Wages Act does not make any distinction between the contract labour and regular employee and the Act of 1970 has no application in such situation. The definition of wages under Section 2 (iia)(vi) of the Payment of Wages Act, 1936 includes any remuneration jpayable under any award or settlement between the parties and the State Government is the appropriate Government under the Payment ofWages Act. 9. We have heard learned counsel for the parties. 10.The petitioners have questioned inclusion of cement industry in notification dated 31st December, 1960 in Schedule appended with the Act of 1960 on the ground that by this action cement industry has been taken out of the fold of the Central Government which is appropriate Government under Section 2(a) of the ID Act and as such ultra vires. Q_2T2- 11.It has been vehemently argued that reference] isinvalid inasmuch as the State was not competent to refer the present dispute for adjudication under Section 51 of the Act of 1960 as the, cement industry has been included at S. No.35 in the First Schedule of the IDR Act, 1951. l2.The Supreme Court in the matter of Bijay Cotton Mills Ltd., Vs. Its Workmen and another , considering the identicalobjection, held that "The fact that textile industry is controlled by the provisions of Industrial (Development and Regulation) Act (1951) would not be enough to attract theapplication of S.2(a)(i). What this latter provision requires is that the specification must be made by the Central Government by reference to, and for the purpose of, the provisions of the Act in order that the Central Government may itself become the appropriate Government qua such industry under S. 2(a) (i)." 13. This view was further reiterated in another judgment of the Supreme Court in the matter of Management of Vishnu Sugar Mills Ltd. Vs.Workmen3. 14.The Act of 1960 was enacted by the State Legislature and it received the assent of the President on 17th November, 1960. This act has been enacted to regulate the relations of employers and the employees, to make the provisions for settlement of industrial dispute in the industries to which the Act is applicable, as is evident from aims and objects of the Act. Under section 110 of the Act of 1960, the provisions of the ID Act have been made inapplicable to any industry to which the State Act applies except Chapter V-A, V-B & V-C and other provisions with respect to lay off, retrenchment compensation, special provisions relating to lay off, retrenchment and closure in certain establishments and unfair labour practices. 15.The main arguments advanced by learned 'counsel fbr the petitioners against inclusion of cement industry in the list of industry mentioned in the schedule of the Act of 1960 is that the Central Government vide notification dated 8-11-1977 has specified the industry engaged in E AIR 1960 Supreme Court 692 ^ AIR 1960 Supreme Court 812 10 • -^^ '^1^t^ manufacture/production of cement as controlled industry under sub-clause (ii) of clause (a) of Section 2 of the ID Act, 1947 and thus by virtue of the above notification and in view of Section 2 (a)(i) of the ID Act, the Central Government become appropriate Government for the cement industry and the provisions of the Act of 1960 are not applicable to cement industry. The notification dated 8-12-1977 whereby the Central Government in exercise of powers conferred under Section 39 of the ID Act has directed that the power exercisable by it under that Act and the Rules made thereunder shall, in relation to the cement industry, be exercised also by all the State Governments is only delegation of power under Section 39 of the Act and the State Government can refer any such industrial dispute for adjudication only as a delegatee ofthe Central Government. 16.The above two notifications came into consideration before the Supreme Court in the matter of Shri Yovan, India Cements Employees Union and another Vs. Management of India Cements Lfd. and others . The Hon'ble Supreme Court, referring both the above notifications in its judgment, held that the Central and the State Governments are appropriate Government under the Act and the notification of Tamil Nadu Government under Section 10(1)(c) ofthe ID Act, 1947 was held to be valid notification. 17.1n the matter of Workmen of Bagalkot Udyog Ltd. Vs. Bagalkot Udyog Ltd. and others5 {W.A. Nos.3286/1997 combined with W.A. Nos.3444- 47/1997, dated20th June, 2000}, the only issue before the Karnataka High Court was - whether the State Government can claim to be appropriate Government in respect of the cement industry within the meaning of Section 2(1 )(a) of the Act of 1970 entitling it to exercise;powers under Section 10 of the said Act prohibiting employment of contract labour in the said industry. Referring to above two notifications issued by the Central Government under Section 2(a) of the ID Act, it was held that the State Government cannot be held to be an appropriate Government in relation to cement industry and quashing of the notification issued by the State Government under Section 10(1) of the Act was upheld. ; , 4 AIR 1994 SUPREME COURT 558 5 2001 LLJ621(Kar) 11 ^:'iY-\ 18.1n the matter of Ultra Tech Cement Ltd., >/js. Shrinivas Narayanrao Moharil6, a complaint was filed under the provisions of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act before the Labour Court. The employer filed an application for dismissal of complaint on the ground that the petitioner is a controlled industry as contemplated under Section 2 (ee) of the ID Act, 1947 and the appropriate Government is the Central Government and hence, the provisions of the Mlaharashtra Act are not applicable. The petitioner filed a writ petition against rejection of his application for dismissal. Learned Single Judge of the High Court, relying upon the decisjon of the Karnataka High Court in the matter of Bagalkot Udyog Ltd. and others (Supra) and distinguishing the judgment of the Supreme Court in Shri Yovan, India Cements Employees Union (Supra) on facts, held that the State Government while acting as appropriate Government discharges the role as an agent 6f Central Government and hence for the purpose of Section 2(3), it cannot be said that for cement industry, State Government is appropriate Govemment and accordingly, the complaint instituted by the respondent before the Labour Court was dismissed. 19. In the matter of U.P. Electric Supply Co. Ltd. Vs. R.K. Shukla and Anr. Etc. , the issue before the Supreme Court was - whether in determining the matters relating to the award of retrenchment compensation, the provisions of the Industrial Disputes Act, 1947 would be applicable or U.P. Industrial Disputes Act, 1947 shall apply. The Hon'ble Supreme Court observed that legislation in respect of Trade Unions, Industrial and Labour Disputes falls within Entry 22 of the Concurrent List and both the State and the Union are competent to legislate in respect of that field of legislation. Since the relevant provisions of the two Acts on the matter in controversy in these groups of appeal are not materially different and are substantially the same, the question is acadeinic and by virtue of Section 6-R(2), the provisions of the U.P. Industrial Disputes Act prima facie apply in the matters of lay-off and retrenchment. 6 2010 LLR 577 7(1970)1SCR507 12 ^L^