AJN 1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION APPEAL (L) NO.510 OF 2008 IN WRIT PETITION (L) NO. 1938 OF 2008 Reliance Energy Limited, Electric House, Santacruz (East), Mumbai – 400 055 ) ) ) .... Appellants Vs. 1. Rashtrawadi Kamgar Sangh, 4 Parekh Industrial Estate, Parekh Nagar, S.V. Road, Kandivali (West), mUMBAI – 400 067. ) ) ) ) 2. Sunita Services, Harihar Singh Chawl, Caves Road, Gumpha Road, Pratap Nagar, Jogeshwari (East), Mumbai – 400 060. ) ) ) ) 3. K.G. Narwade, Presiding Officer In-charge, 12th Labour Court at Mumbai ) ) ) 4. A.V. Deshpande, Member, Industrial Court, Maharashtra at Mumbai. ) ) ) ... Respondents Mr. J.P. Cama i/b K.P. Anilkumar for the appellants. Mr. Arshad Shaikh i/b Mr. V.N. Tayde for respondent 1. Mr. S.K. Talsania i/b A.B. Desai for respondent 2. CORAM : SMT. RANJANA DESAI & AJN 2 K.K. TATED, JJ. DATE ON WHICH THE JUDGMENT IS RESERVED : 24TH OCTOBER, 2008. DATE ON WHICH THE JUDGMENT IS PRONOUNCED : 28TH NOVEMBER, 2008. JUDGMENT :- (Per Smt. Ranjana Desai, J.) 1. Admit. Respondents waive service. By consent of the parties, taken up for hearing forthwith. 2. Before we deal with the merits of the case, we must state that since, here we are concerned with an interim order, we tried to bring about some amicable interim arrangement which could operate during the pendency of the complaint, without prejudice to the rights and contentions of the parties. We were, however, not successful in our efforts and, hence, we have proceeded to hear this appeal finally. 3. The appellants are original petitioners. They are a public limited company engaged in the business of supply of electricity in the suburbs and surrounding areas of Mumbai and Thane District. AJN 3 They shall be referred to as the appellant company for convenience. The appellant company is covered by the provisions of the Bombay Industrial Relations Act, 1946 (for short, “the BIR Act”). Respondent 1 is a union registered under the Trade Unions Act, 1946. It represents 41 workmen with whom we are concerned here. For convenience, we shall refer to them as “the said employees”. Respondent 1 shall be referred to as “the complainant-union”. Respondent 2 is the contractor and shall be so referred to. 4. The complainant-union filed Complaint (ULP) No.72 of 2007 in the XII Labour Court at Bombay against the appellant company alleging unfair labour practice under item 1(a), 1(b), 1(d) and 1(f) of Schedule IV of the Maharashtra Recognition of Trade Unions and Unfair Labour Practices Act, 1971 (for short, MRTU & PULP Act). It would be appropriate to state the case of the complainant-union, the appellant company and the contractor in short. 5. The case of the complainant-union. The said employees are working with the appellant company for the last about 25 years. During 25 years, three contractors AJN 4 were interposed by the appellant company. The contractor is the last of the three. Though the contractors have come and gone, the said employees have continued to work with the appellant company. The said employees are working in the housekeeping department. The work of housekeeping is regular, permanent and of perennial nature. The introduction of the contractors is a ruse or camouflage. The said employees are covered by the definition of the term employee given under section 3(13) of the BIR Act and, therefore, they are the employees of the appellant company alone. On 15/2/2007, the appellant company in collusion with the contractor issued cheques for certain amounts in full and final settlement of their dues. The said employees have not encashed the said cheques. Since the appellant company has decided to shift its activities to Bandra-Kurla Complex, they want to get rid of the said employees. Housekeeping is the integral part of the appellant company's regular activities. Aggrieved by the unfair labour practices of the appellant company and apprehending termination of the services of the said employees, the complainant union filed the instant complaint praying inter alia for a declaration that the appellant company has engaged in unfair labour practices, for a direction restraining it from engaging in unfair labour practices AJN 5 and for a direction to the appellant company to reinstate the said employees with full back wages and continuity of service if their services are terminated. An application for interim relief was filed praying that the appellant company may be directed to maintain status quo in respect of the employment of the said employees. The complaint and the application for interim relief were filed on 23/2/2007. 6. On 23/2/2007 the Labour Court passed the following order: “Heard the learned Advocate for the complainant union and the learned Advocate for the respondent No. 2 too. The status quo as on today stands granted till filing of reply as it is informed across the bar that the enlisted workmen have been as on today in the employment of the respondent No. 2. Issue Show Cause Notice to the Respondents returnable on 22/3/2007.” There is no dispute before us about the fact that when this order was passed learned counsel for the appellant company was present. AJN 6 7. On 19/7/2007, the complainant union filed application for additional interim reliefs on the ground that on 2/4/2007 the appellant company had refused entry, work and wages to the said employees. The complainant union alleged that the services of the said employees have been terminated without following due process of law in breach of status quo order dated 23/2/2007. The complainant union contended that the said employees are the employees of the appellant company only though their wages are routed through the contractor. The complainant union inter alia prayed that the appellant company and/or the contractor may be directed to pay full wages to the said employees every month pending final hearing of the complaint. 8. The case of the appellant company as evident from the affidavits in reply in short is as follows: The contract between the appellant company and the contractor has come to an end by efflux of time after 31/3/2007 and hence the appellant company has ceased to be the principal employer for the said employees on and from 1/4/2007. The AJN 7 determination of the said contract is neither under challenge nor can be challenged in the instant complaint and as such the appellant company cannot be held to be the principal employer. The said employees are paid wages by the contractor and the supervision and control of the work is done by the personnel of the contractor. The appellant company denied that the work of housekeeping is integral part of the regular work of the appellant company. Allegations of unfair labour practices were denied. 9. The contractor resisted the interim application. The case of the contractor as evident from the affidavit of Shri Sahadev Betkar its proprietor is as under: The said employees are employed by the contractor and they have been deployed by the contractor at the premises of the appellant company. The wages and other service conditions of the said employees are determined and administered by the contractor. The contract between the appellant company and the contractor has come to an end by 31/3/2007 by efflux of time and till date the contractor has not terminated the services of the said AJN 8 employees. Prior to the contract coming to an end the contractor had told the said employees to report for work at the other sites where it is having similar contracts. However, the said employees told the contractor to settle their accounts finally as they did not wish to work further. They asked for ex-gratia payments which was also offered by the contractor. However, after accepting the cheques the said employees have approached the court challenging the alleged termination. Contractor's readiness and willingness to give work to the said employees at other sites where the contractor is having similar housekeeping contracts is expressed in the affidavit. 10. The Labour Court by its judgment and order dated 31/3/2008 decided both the applications. The Labour Court held that considering the definition of the term 'employer' given in Section 3 (14)(e) of the BIR Act, the owner of the undertaking is the appellant company and, therefore, it is the principal employer. The Labour Court concluded that the appellant union has committed unfair labour practices against the said employees i.e. work was not provided to them though they were ready to work; that they were removed from the place of work with the help of police and that AJN 9 they were not paid wages. The Labour Court held that balance of convenience is in favour of the employees and they will suffer irreparable loss, if interim relief is not granted in their favour. The Labour Court directed the appellant company and the contractor to jointly or severally pay full wages to the said employees every month till the disposal of the complaint. It directed the appellant company and the contractor to pay jointly or severally full wages of the said employees from 2/4/2007 during the pendency of the complaint. It directed the appellant company and the contractor to jointly or severally reinstate all the said employees. It further directed that, if the work is not provided the appellant company and the contractor shall jointly or severally pay wages to the said employees during the pendency of the case till the final disposal of the complaint. 11. The appellant company as well as the complainant union challenged the said order by filing revision applications. The appellant company filed an application praying for the stay of the Labour Court's order. The said application was rejected. The appellant company, therefore, challenged the Labour Court's order by filing Writ Petition No. 3116 of 2008. By judgment and order AJN 10 dated 9/7/2008 learned Single Judge of this court disposed of the said writ petition. Learned Single Judge noted that counsel for the parties are agreed that they will not seek adjournment before the Revisional Court with a view to disposing of the complaint within the stipulated time. Learned Single Judge directed the Industrial Court to dispose of the pending revision applications latest by July, 2008. A statement was made on behalf of the complainant union that it shall not proceed with the criminal complaint filed before the Labour Court till the revisions are decided. Learned Single Judge noted that the order was passed in view of the consensus arrived at between the parties. Accordingly Industrial Court decided the revision applications by it's order dated 28/7/2008. Industrial Court concurred with the Labour Court. Industrial Court concluded that the work done by the said employees was ordinarily part of the work of the appellant-company. Industrial Court observed that real intention of the appellant company was to interpose contractors, so as to prevent the said employees from raising the plea of permanency. On a consideration of relevant judgments and relevant provisions of the BIR Act, particularly Section 3(13) and 3 (14) thereof, the Industrial Court concluded that the said employees are workmen and the appellant company is the AJN 11 employer within the meaning of the BIR Act. While dealing with the submission that existence of a valid contract between the contractor and the principal employer is a sine-qua non for invoking Sections 3(13) and 3(14) of the BIR Act and since the contract had come to an end by efflux of time, there was no statutory relationship of employer employee between the appellant company and the said employees and hence the complaint was not tenable, the Industrial Court observed that on the date of filing of the complaint the contract was in existence and hence protection of the MRTU & PULP Act was available to the said employees. They had, therefore, rightly invoked the jurisdiction of the Labour Court. The Industrial Court felt that no interference was necessary with the impugned order. Both the revision applications came to be dismissed. 12. Being aggrieved by the said judgment and order the appellant company preferred Writ Petition (L) No. 1938 of 2008. Learned Single Judge dismissed the said petition. Hence this appeal. 13. We have heard Mr. Cama learned counsel appearing for the appellant company at some length. He submitted that the Labour AJN 12 Court and the Industrial Court have fallen into a serious error in directing the appellant company to reinstate the said employees and pay them wages when the contract between the appellant company and the contractor had come to an end and, therefore, there was no statutory relationship of employer employee between them. Mr. Cama submitted that the said employees are the employees of the contractor. Mr. Cama pointed out that the contractor had made a statement that he had not terminated their services. He had offered them work at the places where he is having contracts but the said employees refused to work. Mr. Cama submitted that learned Single Judge has failed to notice this. Mr. Cama further submitted that though the complainant union had in its application for interim relief prayed that the appellant company may be directed to maintain status quo on 23/2/2007 the Labour Court observed that the said employees have been in the employment of the contractor and hence status quo as on that day stands granted. The status quo order, submitted Mr. Cama, therefore, operates qua the contractor and not the appellant company. 14. Mr. Cama further submitted that the Industrial Court has AJN 13 misconstrued the provisions of section 3(13)(a) and section 3(14) (e) and has not considered the relevant case law cited before it. Mr. Cama submitted that existence of contract between the appellant company and the contractor is an essential ingredient of the definition of the term employer envisaged in section 3(14)(e) of the BIR Act. Since the contract has come to an end the Labour Court could not have entertained the complaint under the MRTU & PULP Act. Whether the contract labourers have become the employees of the principal employer and whether the contract is a mere camouflage can only be decided by the Labour Court and the Industrial Tribunal under the Industrial Disputes Act. In this connection, he relied on R.K. Panda & Ors. v. Steel Authority of India & Ors. (1994) 5 SCC 304. 15. Mr. Cama further submitted that in the judgment of this Court in State of Bombay v. The Maharashtra Sugar Mills Limited, AIR (38) 1951 Bombay 68, this court has elucidated the concept of statutory employee in relation to the BIR Act. He referred to the judgment of the Supreme Court in Steel Authority of India Ltd. & Ors. v. National Union Water Front Workers & Ors. etc. etc. AJN 14 2001 III CLR 349 and pointed out that in that case the Supreme Court has clarified that decision in Maharashtra Sugar Mills Limited (supra) cannot be read as holding that when a contractor engages contract labourer in connection with the work of the principal employer, the relationship of master and servant is created between the principal employer and the contract labour. The Supreme Court has answered the issue “whether on a contractor engaging contract labour in connection with the work entrusted to him by a principal employer the relationship of master and servant between the principal employer and the contract labour emerges” in the negative. 16. Mr. Cama submitted that the appellant company has denied that the work of housekeeping is integral part of its regular work. He referred to Full Bench decision of this court in Tukaram Mandhare v. Raymond Woollen Mills Ltd. 2005 (4) LLN 1039, where the Full Bench has held that if the complaint fails to disclose the jurisdictional fact that the “work being ordinarily part of the undertaking” in relation to the work which was entrusted to the workman of the contractor, the workman must get established the AJN 15 employer employee relationship by adopting appropriate proceedings before the appropriate forum under the BIR Act and it is only after the status of workman or employee is established in appropriate Forum that a complaint would lie under the provisions of the MRTU & PULP Act. Mr. Cama submitted that therefore while dealing with the instant complaint the Industrial Court could not have decided whether housekeeping was ordinarily the work of the appellant company. These issues must be first decided by adopting appropriate proceedings before the appropriate forum. 17. Mr. Cama submitted that the Labour Court as well as the Industrial Court have granted final relief in the interim relief application which they could not have done. He submitted that learned Single Judge has also observed that the Labour Court has virtually granted final relief to the said employees but has wrongly condoned this by observing that the relief has been granted because there was a breach of status quo order. Mr. Cama submitted that it is amply clear that status quo was operating against the contractor. There is no privity of contract between the appellant company and the said employees and therefore learned Single Judge has proceeded on a wrong premise. In this AJN 16 connection, Mr. Cama relied on the judgment of the Supreme Court in Bank of Maharashtra v. Race Shipping and Transport Company Private Limited and Anr. (1995) 3 SCC 257 and judgment of this court in Ichalkaranji Municipal Council v. Raju Bandu Taral & Ors. 1999 1 CLR 1257. 18. Mr. Cama further submitted that the Industrial Court could not have concluded that the contract was a camouflage. This question cannot be determined by the Labour Court or the Industrial Court constituted under the MRTU & PULP Act. In this connection, he relied on the Supreme Court's judgment in Cipla Limited v. Maharashtra General Kamgar Union & Ors. 2001 1 CLR 754. Mr. Cama submitted that the contractor has offered work to the said employees but they have refused to accept the offer. It was wrong to hold that balance of convenience tilts in their favour. Mr. Cama submitted that reliefs granted by courts must be logical and tenable and courts must not be guided by misplaced sympathy. In this connection, he relied on the Supreme Court's judgment in Kerala Solvent Extractions Limited v. Unnikrishnan 1994 1 CLR 820. Mr. Cama submitted that in the circumstances, the impugned AJN 17 judgment and order deserves to be set aside. 19. We must also mention that Mr. Cama has tendered in this court copy of complaint (ULP) No.1269 of 1997 filed by Bombay Suburban Electric Workers Union against BSES Limited being the employer, against the contractor herein and against one Kumar who is also stated to be a contractor alleging unfair labour practice. This complaint was dismissed by the Industrial Court on 2/5/2001 on the ground that the complainant has alleged that the contract is sham and bogus and hence in view of Cipla judgment (supra), the Complaint is not maintainable. Mr. Cama submitted that the said employees were concerned with the said complaint and hence, it is not open for them to file this complaint. We cannot take cognizance of the said complaint filed in this court at this stage. It is not clear whether the parties are same. This argument of Mr. Cama, therefore, cannot be considered. 20. Mr. Shaikh learned counsel for the complainant-union submitted that the appellants have challenged interim order passed by the Labour Court, confirmed by the Industrial Court and further AJN 18 confirmed by learned Single Judge in his jurisdiction under Article 226 of the Constitution of India. Mr. Shaikh submitted that it is well settled that while exercising its jurisdiction under Articles 226 and 227, the High Court does not re-appreciate the evidence. Only a patent error which does not require lengthy arguments is amenable to certiorari jurisdiction and if two options on the same material are reasonably possible the finding arrived one way or the other cannot be called a patent error. In this connection, he relied on Ranjeet Singh v. Ravi Prakash, (2004) 3 SCC 682. He also relied on the judgment of the Supreme Court in ONGC Limited v. Sendhabhai Vastram Patel & Ors. (2005) 6 SCC 454 where the Supreme Court has held that the High Court and the Supreme Court while exercising their equity jurisdiction under Articles 226 and 32 of the Constitution as also Article 136 thereof may not strike down even a wrong order only because it will be lawful to do so. A discretionary relief may be refused to be extended in a given case although the court may find the same to be justified in law. Mr. Shaikh submitted that the present case needs to be examined in the light of the above judgments. He submitted that this court in it's writ jurisdiction and in a consequent appeal arising out order AJN 19 passed in writ jurisdiction should not interfere with interim orders. Mr. Shaikh also referred to the Supreme Court's judgment in The Premier Automobiles Limited v. Kamlakar Shantaram Wadke & Ors., AIR 1975 SC 2238, where the Supreme Court has held that while deciding industrial dispute, the industrial adjudicator can create new contracts, lay new industrial policy for industrial peace, order reinstatement of dismissed workmen which ordinarily a civil court could not do. 21. Mr. Shaikh relied on the judgment of this court in Maharashtra Sugar Mills Limited (supra), which is affirmed by the Supreme Court. He submitted that the said judgment is still a good law and is not set aside by the Supreme Court in its judgment in Steel Authority' s case (supra). He submitted that in Steel Authority's case (supra), the Supreme Court was considering the provisions of Contract Labour (Regulations and Abolitions) Act, 1970 and not of the BIR Act and, hence, reliance placed on the said judgment by the appellant company is misplaced. Mr. Shaikh also relied on the Full Bench decision of this court in Tukaram Mandhare's case (supra) in support of the contention that a AJN 20 complaint under the MRTU & PULP Act by an employee as defined under section 3(13) of the BIR Act is maintainable although no direct relationship of employer-employee exists between him and the employer. He also relied on the Supreme Court's judgment in Hindustan Lever Limited v. Ashok Kate, 1995 11 CLR 823 SC where the Supreme Court has held that one of the purposes for which the MRTU & PULP Act has been enacted is to prevent an unfair labour practice from taking place and the court seized of a complaint under item 1 of Schedule IV of the MRTU & PULP Act can prevent such unfair labour practices by passing interim orders with a view to preventing such alleged unfair labour practices from getting fructified. Mr. Shaikh submitted that the Labour Court and the Industrial Court, therefore, cannot be faulted for passing the instant interim order which is confirmed by learned Single Judge. Mr. Shaikh submitted that the said employees have been working with the appellant company for the last about 23 years. Balance of convenience also tilts in their favour and, therefore, this court should not interfere with the impugned order. 22. Mr. Talsania learned counsel appearing for the contractor AJN 21 reiterated the contractor's stand taken in the affidavit filed in the Labour Court. He submitted that the said employees continue to be in the service of the contractor. The contractor has not terminated their services and the contractor is ready to give work to them at other sites. He submitted that the contract between the contractor and the appellant company has come to an end by efflux of time by 31/3/2007. Mr. Talsania relied on the judgment of learned Single Judge of this court in Sonal Garments v. Trimbak Karve, 2003 (1) LLN 91 where learned Single Judge has held that whenever employer offers to reinstate workman at any stage of the dispute and the same is not accepted by the workman without prejudice to his rights, the workman will not be