-1- IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION Writ Petition No. 584 of 2008 Bharat Petroleum Corporation Ltd. ) a company incorprorated under the ) companies Act, 1956 having its ) Registered Office at Bharat Bhavan) Ballard Estate, Mumbai 400 038 ) ..Petitioner vs. 1. Petroleum Employees’ Union ) a Union registered under the ) Trade Unions Act, 1926 & having) its office at Rasayan Bhavan ) Tilak Road, Dadar (East), ) Mumbai 400 014 ) 2. Shri Sunil Kashinath Dasade ) of Mumbai, Indian Inhabitant ) residing at Varna Building no. ) 10/319, Lallubhai Compound ) Mankhurd, Mumbai 400 013 ) 3. Shri Raju R.Subbaya, Proprietor) M/s Subash Gardens, having his ) address at Shivam Building No. ) 241D, 2nd floor, Aziz Baug, ) Mahul Road, Chembur, ) Mumbai 400 074 ) 4. Shri C.K.Ramchandran, ) Proprietor, M/s R.R.Enterprises) having his address at Navjeevan) Cooperative Housing Society Ltd) Building No.17/B, Flat No.5, ) R.C.Marg,Chembur, Mumbai-400074) 5. Shri A.A.Lad, Presiding Officer) Central Government Industrial ) Tribunal No.2, having his Court) at Shram Raksha Bhavan, ) Shivshruti Off.Priyadarshi Park) Mumbai ) ..Respondents Mr.J.P.Cama, Sr.Advocate with Mr.R.S.Pai and Ms.Pallavi Dedhia for petitioner. -2- Mr.A.V.Bukhari with Mr.B.J.Sawant and Mr.R.B.Sawant for respondent Nos.1, 3 and 5. Mr.A.D.Shetty for respondent Nos.3 and 4. CORAM: S.C.DHARMADHIKARI J. CORAM: S.C.DHARMADHIKARI J. CORAM: S.C.DHARMADHIKARI J. JUDGMENT RESERVED ON : 24.04.2008. JUDGMENT RESERVED ON : 24.04.2008. JUDGMENT RESERVED ON : 24.04.2008. JUDGMENT DELIVERED ON :20.06.2008. JUDGMENT DELIVERED ON :20.06.2008. JUDGMENT DELIVERED ON :20.06.2008. J U D G M E N T: J U D G M E N T: J U D G M E N T: 1. Rule. Mr.Sawant appearing for respondent nos.1 and 2 waives service. Mr.Ashok Shetty waives service for respondent nos. 3 and 4. Service on respondent no.5 dispensed with. By consent, rule made returnable forthwith and heard. 2. By this petition under Article 226 of the Constitution of India, the petitioners are challenging the Award dated 23rd October, 2007 which has been delivered by the Central Government Industrial Tribunal No.II at Mumbai in Reference No.CGIT-2/34 of 2002. 3. By the impugned Award the CGIT directed as under: " ORDER a) Reference is allowed. -3- b) It is declared that Contractor/Contract is bogus; c) Bharat Petroleum Corporation Ltd., is directed to treat these workmen involved in reference as their employees and give them benefits directly instead of giving through their Contractors. d) Bharat Petroleum Corporation Ltd. is also directed to consider these employees as its permanent employees and give all benefits which are attracted by permanent employees of it along with wages and other benefits. e) No order as to its costs." 4. The petitioners Bharat Petroleum Corporation Ltd. (for short BPCL) being aggrieved and dissatisfied with the above directions and Award have preferred this petition under Article 226 of the Constitution of India challenging the same. The petitioners - BPCL - were impleaded as First Party No.1 to the above reference whereas respondent nos. 3 and 4 along with another party (M/s Heritage Garden) were impleaded as first party nos. 2 to 4. Respondent Nos. 1 and 2 before me along with 23 others were impleaded as second party. -4- 5. It is not in dispute before me that the Government of India, Ministry of Labour by order dated 28th March, 2002 passed in exercise of powers conferred by Clause (d) of sub-section (10) and sub section (2A) of section 10 of the Industrial Disputes Act,1947 made a reference to CGIT, Mumbai for deciding the following issues. "(i) Whether the contract between Bharat Petroleum Corporation Ltd. and the contractor is a sham and bogus one and is a camouflage to deprive the concerned employees of the benefits available to permanent workmen of Bharat Petroleum Corporation Ltd.? (ii) Whether the concerned workmen employed as gardeners should be declared as permanent workmen of the Bharat Petroleum Corporation Ltd.? (iii) What are the wages and consequential benefits to be paid to the concerned employees?" 6. It is necessary to refer to the factual background which led to the making of reference. 7. It is not in dispute before me that a writ petition -5- being Writ Petition No.800 of 1996 was filed by respondent no.1 Union in this Court and it prayed for issuance of a writ, order or direction to Bharat Petroleum and other concerned Government functionaries that the employees represented by the first Union should be treated as workmen/employees of the Petroleum Corporation and be paid wages on par with regular employees. A relief of declaration to the above effect was claimed. The parties to the writ petition were the petitioner-Corporation before me so also the Union of India and the Secretary of the Central Advisory Contract Labour Board and Regional Labour Commissioner. One private party, namely, Modern Farms and Gardens was joined as respondent no.6 to the petition. 8. The petition proceeds on the basis that the Petroleum Corporation is a Government of India undertaking operating through out the country and is incharge of distribution of petroleum products. It is engaged in refining and processing of oil at the refineries located at various places. One such refinery is situated at Mahul, Chamber in Mumbai. It has been pointed out that the said Corporation requires permanent workers in this refinery for the purpose of maintaining gardens and lawns located in the campus. It was contended that these gardens and lawns have to be statutorily maintained by the Petroleum -6- Corporation at the refinery. The gardening work is of permanent and perennial nature. A list of workers was annexed to the petition as Annexure A and it was urged that these workers have been employed for the purpose of maintaining lawns and gardens, by the petitioners, on contract basis. However, they have been employed as such for years together. It was urged that the work is taken and extracted by the Petroleum Corporation. There are entry permits and passes issued to the workers by the Petroleum Corporation. The work is incidental and ancillary to the maintenance of the refinery and its operations by the Petroleum Corporation. The regular employees in the establishment of the Petroleum Corporation have been carrying out this work at different places in India. The work is also being done at the administrative premises, interalia, known as "Petroleum House" in South Mumbai. In the said writ petition, it was also urged that the main activity of Petroleum Corporation is to refine crude oil and to market the same in various parts of the country,. The Petroleum Corporation employs about 2,000 regular workmen at its Refinery at Mahul. The Union stated that the workmen and the employees are engaged for maintenance of Garden and other such activities. The Union urged that the Petroleum Corporation required large number of permanent workers at these places to carry out their regular and day to day -7- work. 9. The Union stated that the Petroleum Corporation has employed about 2000 regular employees in its Refinery who are employed on regular basis who get much more beneficial service conditions than what the contract labour get. There is no job security to the contract workers besides no retirement benefits, leave, medical assistance, travelling, housing etc. 10. The Union further urged that the said work is of perennial and permanent in nature and required to be done all throughout the year without any break and, therefore, it was just and necessary that the Petroleum Corporation ought to have employed the employees whose names are listed in Exhibit A to the said petition on permanent basis. The Union stated and submitted that even in the establishment of the Petroleum Corporation the said work is carried out and attended to by the regularly employed workers. Similarly, the same work is being carried out and attended to in other establishments by employing regularly employed workmen and hence the action of employing these employees on contract basis is unjust, arbitrary, illegal and unconstitutional. The Petroleum Corporation being a State was supposed to act as a model employer. There is no justification for keeping these -8- employees on contract basis for years together. 11. The Union stated that besides employing contract labour through the Respondent No.6, the Petroleum Corporation has been directly employing regular employees to carry out similar work which is being carried out by the employees listed in Exhibit A to the petition. In fact, both the types of employees discharge the same and similar type of work and in fact and in law there is no material difference between them in any way. Both these groups of employees do the similar nature of work, possess same qualifications. There work is supervised, controlled by the Officers of the Petroleum Corporation. Both these groups work in the same establishment under the common supervision, however, the contract labour get much inferior service conditions than what the regular employees get. However, the regularly employed workmen get higher salary than those employed through the contractors. The Union stated that under law, they are entitled to receive the same salary as is the salary paid to the regularly employed employees. Nevertheless the workers regularly employed by the Petroleum Corporation are in receipt of monthly wages of Rs.3500/- to Rs.7,000/- with all other benefits which is sharp in contrast with the contract labour listed at Exhibit A hereto who receive a meagre amount of Rs.1,500/- to Rs.1,800/- per month. -9- The Union stated that a separate seniority list is maintained for the employees employed through the contractors and employees who are directly employed by the Petroleum Corporation on permanent basis. 12. It was upon these allegations that it was contended that the Petroleum Corporation removed three employees with an intent to pressurise them and other contract workers. The employees who are part of the writ petition are also threatened with similar action and therefore, the writ petition was moved and the above mentioned declaratory and other reliefs were claimed. 13. It is not in dispute that this writ petition was placed before this Court on 8th January, 1997 and following order was passed:- "P.C. Rule, returnable on 17th March, 1997. Respondent No.1 waives service. Respondent No.1 not to terminate the services of the contract workmen mentioned in Exh.A except on the ground of misconduct. It is, however, made clear that it will be open for the Respondent No.1 -10- to engage another contractor subject to condition that the workmen listed in Exh.A are continued." 14. Thereafter, this writ petition appeared for hearing and final disposal before a Division Bench of this Court on 9th October, 2001. The Petroleum Corporation placed reliance upon the decision of the Hon’ble Supreme Court reported in 2001 III CLR page 349 (Steel Authority of India Ltd.and others Vs.National Union Water Front Workers to urge that a writ petition under Article 226 of the Constitution of India is not maintainable for claiming reliefs prayed for in the writ petition no.800 of 1996. The remedy is as directed by Hon’ble Supreme Court in the said decision. Accepting this objection raised by the Petroleum Corporation and Central Government, the Division Bench disposed of the writ petition by following order. "5. Consequently we dispose of the writ petition by the following order. (1) The Appropriate Government i.e. the Central Government (as agreed to by both the learned Senior Counsel is directed to make Reference of the following demand to the Industrial Tribunal for adjudication within two months from today:- (i) Whether the Contract between Bharat Petroleum Corporation Limited and the Contractor is a sham and bogus one and is a camouflage to deprive the concerned employees of the benefits available to permanent workman of Bharat Petroleum Corporation Limited? (ii) Whether the concerned workmen employed as gardeners should be declared as permanent workmen -11- of the Bharat Petroleum Corporation Limited? (iii) What are the wages and consequential benefits to be paid to the concerned employees" 2. The Industrial Tribunal should then decide the reference as expeditiously as possible and in no case later than 31.12.2002. 3. Interim order passed by this Court on 8.1.1997 is ordered to remain operative till the disposal of the Reference by the Industrial Tribunal. No costs." 15. It is in pursuance of the said order and direction that the Appropriate Government made the above reference to the CGIT, Mumbai. 16. After the reference was made directions came to be issued for filing of the statement of claim by Union and supported by the documents, if any. Accordingly, the Union filed the statement of claim. It is stated that it is a Trade Union representing the workmen covered by dispute. It pointed out that the writ petition was filed on behalf of 28 workmen out of which the workman at Sr.No.13 expired in the year 2001 whereas another workman was not allowed to resume duty on account of ill health. It pointed out that the interim order passed by this Court on 8th January, 1987 is operative and, therefore, the claim be taken on record and adjudicated expeditiously. After reiterating the contentions in the writ petition, -12- the claim proceeds on the basis that the management instead of following the fair and proper procedure has introduced the system of engaging and employing the workmen by resorting to such method as would unable the Management not to adhere to and comply with the statutory provision. In other words, the service conditions of the workmen which have to be separately prescribed by the Management are being given a go-bye and the workmen are deprived of the benefits and rights which are made available by various social and welfare legislations. It was urged that the device of appointing the employees as contract labourers needs to be probed by lifting the veil. By this exercise it will be revealed that the concerned persons are permanent employees of the Petroleum Corporation. It was specifically urged in para 7 that the contract between the management and so called contractors are sham and bogus and mere camouflage to deprive the persons concerned of the benefits available as permanent workmen in the skilled category of Management of B.P.C.L. In these circumstances, it was prayed that the Tribunal should declare that the contracts are sham and bogus and that the concerned workmen are permanent workmen of BPCL. They be given all the benefits including allowances and wages as permanent employees of BPCL. The statement of claim is dated 30th May, 2002 and copy thereof was served on B.P.C.L. -13- 17. In pursuance of the notice, written statement has been filed before the Tribunal by BPCL. It raised several preliminary objections. One of the objections raised was that the employees are being employed by the contractors. BPCL has entered into agreements with the concerned contractors for providing contract labours. The persons have been working under the control and supervision of the contractors. There is no relationship of employer - employee or master and servant between the Corporation and contract labourers. Further, only one contractor is mentioned in the memo of the writ petition and joined as party respondent but there are other contractors and their names were mentioned in para 1(a) of the written statement. In such circumstances, it was prayed that the reference be rejected. It should be rejected because the concerned employees are working under the supervision and control of the contractors who have powers to initiate disciplinary action against them. Further, their wages are paid by the contractors. 18. Elaborating this aspect, in the main paras, it was urged by BPCL that it had entered into a comprehensive contract with the contractor M/s Modern Farms and Gardens to maintain the gardens and trees in the refinery at Mahul, Mumbai. BPCL stated that the activities require -14- specialised knowledge of gardening. It is a specific branch which is aware of planting of trees, maintenance and upkeep of plants by using the required quantity of Manure, Fertilizer, pesticides etc. The specialised knowledge regarding horticulture is possessed by the contractors and they employ their men and utilise tools. Therefore, by the tools and materials supplied by the contractors the concerned persons are working at the gardens. Initially the contractor was appointed for a period commencing from 1st July, 1995 to 30th June, 1996. The contract was extended from 1st July, 1996 to 31st August, 1997. In the mean time, the writ petition was filed by the Union. However, as per the applicable rules, tenders have to be invited by BPCL for the contract work. The BPCL invited fresh tenders and engaged the following contractors:- 1. M/s Subhash Garden from 1.9.1997 to 31.8.1999 2. Heritage Gardens from 1.9.1999 to 31.8.2000 3. M/s Subhash Gardens from 1.9.2000 to 31.8.2001 4. M/s R.R.Enterprises from 1.9.2001 to 31.8.2002 19. These contractors have allowed the concerned workers -15- to work on account of the interim order passed by this Court. There is a genuine contract and all the contractors have obtained necessary licences under the Contract Labour (Regulation and Abolition) Act, 1970. Thus, these contracts are not sham and bogus as alleged by the Union but are genuine and made in accordance with law. In these circumstances, it denied all the contentions in the statement of claim to the contrary and urged that there is no question of issuing any declaration that the contracts were sham and bogus. Consequently, no relief can be granted in favour of the workmen and reference be rejected. This written statement was filed on 20th June, 2002. 20. The Record and Procedings reveal that the respondent No.1 Union filed a rejoinder and at page 3 thereof they urged that the concerned workmen were selected by the Management. The contractors changed but the same set of workmen have been attending the work. They have been working under the direct supervision of the Management. Thus, the services are fully controlled by the Management. A reference was made to the terms of the contract. The rejoinder is filed on 18th July, 2002. After the written statement was filed, the Roznama maintained by the Tribunal indicates that the matter was posted for filing of the written statement by the contractor M/s Modern -16- Farms and Gardens. Thereafter an application was made by M/s R.R.Enterprises urging that it should be substituted as a party in place of the old contractor. That application was allowed on 1st August, 2002 and the newly added party was directed to file the written statement. Thereafter M/s R.R.Enterprises filed the appearance of its Advocate and vakalatnama. Thereafter, the matter was adjourned for framing of issues and they came to be framed on 28th August, 2002. 21. Thereafter on 12th September, 2002 an application was filed by the Union to implead all the contractors as parties to the reference. The application (Exh.17) was taken on file and thereafter opportunity was given to all concerned to file their reply. After the replies were filed the Tribunal passed the order on said application allowing the same and permitting joinder of the contractors, in addition to the Management. 22. Thereafter, newly added parties filed their appearance and written statements. Additional issues were framed after joinder of other parties on 5th February, 2003. It appears that some attempts were made for settlement but after the same failed directions were issued for filing of the affidavit in lieu of examination in chief by the Union. -17- 23. Accordingly affidavit of respondent no.2 (Sunil K.Dasade) was filed on behalf of himself and 23 other employees by the first respondent Union. He reiterated the contents of the Writ Petition and statement of claim. He has stated that the contracts between the Management and so called contractors are sham and bogus. They are mere camouflage to deprive the concerned employees of the benefits available to the persons’ working workmen in the skilled category. Therefore, the workmen concerned who are employed as gardeners must be granted wages and consequential benefits attached to the post of permanent workmen employed in skilled category by BPCL. 24. He was cross examined by the petitioner and in his cross examination he was asked about his experience. He was asked about his authority to depose on behalf of other employees. He has admitted that from 1995 he is working with the Modern Farm and Gardens, Mumbai. He worked till 1997 with the said contractor. He stated that the said contractor was paying his salary during the above period. They were giving provident fund facility and bonus also. Thereafter, he joined Heritage Gardens and M/s R.R.Enterprises. A suggestion was given to him that the petitioner is engaged in refinery and processing of crude oil and, therefore, does not employ anybody as Gardener, -18- directly for gardening work. However, this suggestion is denied. He was specifically given a suggestion that the workmen concerned are employees of the contractors who specialised in gardening work but that suggestion was denied. Another suggestion was given to him that he is not an employee of BPCL which was also denied. 25. Thereafter the contractor’s Advocate cross examined the said Sunil. He admitted that he is a Member of the Union called Mathadi Kamgar Sena. The cross examination in para 10 reads thus: "10. I am member of Mathadi Kamgar Sena. It is true that said dispute is referred by Petroleum Employees Union and not by Mathadi Kamgar Sena of which I am a member. It is not true that these 23 employees were engaged by Contractors. Payment was made by the contractor. Even bonus was paid by the Contractor. ESIC and PF was being contributed by the Contractor. It is true that I worked with Subhash Garden from 1.9.97 to 31.8.1999 and 1.9.2000 to 31.8.2001 and with M/s Heritage Garden from 1.9.1999 to 31.8.2000. It is true that I worked with R.R.Enterprises from 1.9.2001 till today. I am working with R.R.Enterprises even till today on the basis of High Court order. Not true to say that contractor was supervising our work. Mr.D.G.Bansal the Dy. Manager of the Company was supervising our work. One Mr.Rohidas Raut who is one of the workmen was actually supervising our work and the above fellow Mr.Bansal was asking work which was to be done on a particular day. Not true to say that our was work was being supervised by the Contractor." 26. This was the oral evidence on behalf of the Union and -19- workmen. As far as BPCL is concerned, it examined the Chief Manager (Employees Relations) Sujata N.Chogale. This witness in her examination in chief reiterated the contents of the written statement and in para 5 and 6 stated thus: "5. I say that the contract labour involved in the above reference are doing the job of gardening under the supervision of Contractors engaged by the Corporation from time to time. The details of the contractors engaged by the Corporation after inviting tenders and their period of engagement is as under: Sr.No. Name of the Contractor Period of the contract. 1. Modern Farms & Gardens 1.7.1995 to 30.6.1996 2. M/s Subhash Gardens 1.9.1997 to 31.8.1999. 3. Heritage Gardens 1.9.1999 to 31.8.2000 4. M/s Subhash Gardens 1.9.2000 to 31.8.2001 5. M/s R.R.Enterprise 1.9.2000 to 31.12.2005 6. M/s Subhash Gardens Since 01.01.2006 6. I say that as per the terms of the contract, the Contractors were required to maintain the garden and trees at the Refinery of the Corporation situated at Mahul. The contract also involve maintenance of garden, planting of trees, plants, etc. as and when required and doing every thing as required for the purpose of maintenance of the garden. The said activity requires specialised knowledge in as much as gardening requires use of various kind of manures, fertilizers, pesticides, fungicides, landscaping and such other specialised knowledge as regards horticulture. I say that the contract also requires the tools, tankers and plants, such as lawn movers, rollers, sickles, knives, scissors etc. for horticultural jobs be -20- provided by the contractor. I say that it is also provided in the contract that Contractors shall be required to maintain minimum stock of materials required for horticultural