LPA/1416/2006 1/7 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD LETTERS PATENT APPEAL No. 1416 of 2006 In SPECIAL CIVIL APPLICATION No. 16207 of 2006 With CIVIL APPLICATION No. 12895 of 2006 In LETTERS PATENT APPEAL No. 1416 of 2006 For Approval and Signature: HONOURABLE MR.JUSTICE BHAGWATI PRASAD HONOURABLE MR.JUSTICE D.H.WAGHELA ========================================= = 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================= = OIL & NATURAL GAS CORPORATION LTD Versus GUJARAT MAZDOOR SABHA AND OTHERS ========================================= =Appearance : MR AJAY R MEHTA for the Appellant MR RAJESH MANKAD with MR MUKUL SINHA for Respondent No.1 SERVED BY RPAD - (R) for Respondent(s) : 2, RULE SERVED for Respondent(s) : 3 - 10. ========================================= = CORAM : HONOURABLE MR.JUSTICE BHAGWATI PRASAD and HONOURABLE MR.JUSTICE D.H.WAGHELA LPA/1416/2006 2/7 JUDGMENT Date : 17/09/2008 ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE D.H.WAGHELA) 1. The appellant has invoked Clause 15 of the Letters Patent to challenge the oral judgment dated 29.9.2006 of learned Single Judge, whereby the original petition of respondent No.1 herein was allowed and the Union of India was directed to refer the industrial dispute raised by the petitioner, as envisaged by Section 10(1) of the Industrial Disputes Act, 1947. It was further directed that ad-interim order dated 4th August, 2006, by which the appellant was restrained from changing conditions or terminating services of the workmen concerned, shall operate during the subsistence of contract between the appellant and the contractors concerned. 2. The original petitioner, Trade Union of workmen, had, in the original petition, challenged the order dated 29.06.2006 of the Government refusing to refer the dispute as not fit for adjudication on the ground that the workmen in respect of whom dispute was raised were not appointed by the management of the appellant. It was case of the Trade Union that the appellant engaged drivers through Transport Contractors and contracts with the Transport Contractors were sham and bogus and hence demand was raised, inter alia, to treat the workmen concerned as regular, permanent and direct workmen of the appellant. 3. It was argued by learned counsel Mr. Ajay R. Mehta, appearing for the appellant, that the impugned judgment was not sustainable in law in view of the fact that contracts with LPA/1416/2006 3/7 JUDGMENT the Transport Contractors or Travel Agencies were ex-facie providing for transport services to be rendered by contractors and employees or drivers of such contractors had no relationship or privity of contract with the appellant Corporation. He vehemently argued that, in absence of relationship of master and servant between the appellant and the employees of the contractors, there cannot be any question of any industrial dispute among them involving the appellant and hence, the order impugned before the Court in the original petition was legal and proper and ought to have been upheld. The learned counsel relied upon recent judgment of the Supreme Court in ANZ Grindlays Bank Ltd. Vs. Union of India and others [(2005) 12 SCC 738] and laid specific emphasis on the observations therein, as under: "14. Mr. Bhatt, learned Counsel for the second respondent, has submitted that this Court should not interfere with the order of the Central Government making a reference under Section 10 of the Act, as the appellant can ventilate its grievances before the Industrial Tribunal itself and if the decision of the Tribunal goes against the appellant, the same may be challenged in accordance with law. According to learned counsel the writ petition is premature as the appellant has got a remedy before the Tribunal to show that the reference is either bad in law or is uncalled for. We are unable to accept the submission made. It is true that normally a writ petition under Article 226 of the Constitution should not be entertained against an order of the appropriate Government making a LPA/1416/2006 4/7 JUDGMENT reference under Section 10 of the Act, as the parties would get opportunity to lead evidence before the Labour Court or Industrial Tribunal and to show that the claim made is either unfounded or there was no occasion for making a reference. However, this is not a case where the infirmity in the reference can be shown only after evidence has been adduced. In the present case the futility of the reference made by the Central Government can be demonstrated from a bare reading of the terms of the reference and the admitted facts. In such circumstances, the validity of the reference made by the Central Government can be examined in proceedings under Article 226 of the Constitution as no evidence is required to be considered for examining the issue raised." 4. Learned counsel Mr. Rajesh Mankad, appearing with Dr. Mukul Sinha, submitted that the contracts between the appellant and the Transport Contractors or Travel Agencies were alleged to be bogus and it is nowhere admitted by the Union that the contracts were genuine. In such circumstances, dispute among the parties raises questions of disputed facts and they could only be resolved after taking evidence by the appropriate forum. In that context, learned counsel relied upon judgment of the Apex Court in Nitin Kumar Nathalal Joshi and others Vs Oil and Natural Gas Corporation Ltd. and others [AIR 2002 SC 1444], wherein after reference to para 107 of the Constitution Bench judgment in Steel Authority of India, it was observed by Their Lordships that, matters where the contract was found to be a sham or nominal, may not indeed LPA/1416/2006 5/7 JUDGMENT be cases related to abolition of contract labour but such matters were to be considered by the Industrial Court/ Labour Court if reference ultimately reaches before that forum. 5. Relying upon judgment in Telco Convoy Drivers Mazdoor Sangh and another Vs State of Bihar and others [AIR 1989 SC 1565], it was submitted that, in the context of identical arguments of the employer, the Supreme Court observed as under: "13. Attractive though the contention is, we regret, we are unable to accept the same. It is now well settled that, while exercising power under Section 10(1) of the Act, the function of the appropriate Government is an administrative function and not a judicial or quasi judicial function, and that in performing this administrative function the Government cannot delve into the merits of the dispute and take upon itself the determination of the lis, which would certainly be in excess of the power conferred on it by Section 10 of the Act. See Ram Avtar Sharma v. State of Haryana, (1985) 3 SCR 686 : (AIR 1985 SC 915); M.P. Irrigation Karamchari Sangh v. State of M.P., (1985) 2 SCR 1019: (AIR 1985 SC 860); Shambu Nath Goyal v. Bank of Baroda, Jullundur, (1978) 2 SCR 793: (AIR 1978 SC 1088). 14. Applying the principle laid down by this Court in the above decisions, there can be no doubt that the Government was not justified in deciding the LPA/1416/2006 6/7 JUDGMENT dispute. Where, as in the instant case, the dispute is whether the person raising the dispute are workmen or not, the same cannot be decided by the Government in exercise of its administrative function under Section 10(1) of the Act. As has been held in M.P. Irrigation Karamchari Sangh's case (supra), there may be exceptional cases in which the State Government may, on a proper examination of the demand, come to a conclusion that the demands are either perverse or frivolous and do not merit a reference. Further, the Government should be very slow to attempt an examination of the demand with a view to declining reference and Courts will always be vigilant whenever the Government attempts to usurp the powers of the Tribunal for adjudication of the valid disputes, and that to allow the Government to do so would be to render Section 10 and Section 12(5) of the Act nugatory." 6. In view of the above settled legal positions and the questions of disputed facts raised by parties, it appears to be beyond jurisdiction of the appropriate Government to declare that the workmen concerned were not appointed by the management of the ONGC and refuse to refer the dispute as not fit for adjudication. Accordingly, we do not find any reason to interfere with the impugned judgment. Learned Counsel Mr. Mehta, however, expressed apprehension that due to impugned judgment, the interim order is directed to operate during subsistence of the contract between the appellant and the contractors concerned and it may create LPA/1416/2006 7/7 JUDGMENT complications as the appellant would keep on entering into fresh contracts with different contractors who might be employing their own workmen and over which the appellant may not have any control. We, therefore, clarify that ad- interim order dated 4th August, 2006 shall operate during the subsistence of the contracts which were in force and operating on the date of the impugned judgment and the protection of the said interim order shall cease as and when the term of those contracts between the appellant and the contractors joined as party respondents in the original petition shall expire. The appeal is dismissed with that clarification and with no order as to cost. Notice discharged. ORDER IN THE CIVIL APPLICATION : In view of the judgment passed in Letters Patent Appeal No.1416 of 2006, the civil application for stay does not survive and is disposed. Rule is discharged. Interim relief stands vacated. (BHAGWATI PRASAD, J.) (D.H.WAGHELA, J.) omkar