IN THE HIGH COURT OF JUDICATURE AT MADRAS DATE: 11-09-2008 CORAM THE HONOURABLE MR.JUSTICE M.JAICHANDREN Writ Petition No.1870 of 2002 United Labour Federation (Regn. No.2657/CNI) represented by its General Secretary K.Nithiyanantham No.149, Thambu Chetty Street, IV Floor, C.J.Complex, Chennai-600 001. .. Petitioner. Versus 1.Steel Authority of India Limited., represented by its Chairman,, and Managing Director, ISPAT Bhavan, Lodi Road, New Delhi-100 003. 2.Regional Manager, Steel Authority of India Ltd., ISPAT Bhavan No.2, Kodambakkam High Road, Chennai-600 034. 3.M.Devarajulu 4.Life Insurance Corporation of India P& G.S.Department, LIC Building, III Floor, 102, Anna Salai, Chennai-600 002. .. Respondents. Prayer: Writ petition filed under Article 226 of Constitution of India, to issue a writ of Mandamus directing the fourth Respondent herein (LIC) to forthwith honour the commitment vide Policy No.404088 dated 15.12.1994 by duly paying the amount of Gratuity payable under the Group Insurance Scheme to the beneficiaries whose names are listed out in the Annexure in this petition and who are members of the petitioner Union by depositing the relevant amounts to the credit of the petitioner herein and permitting the petitioner to draw the amounts. https://hcservices.ecourts.gov.in/hcservices/ For Petitioner : Mr.V.Prakash For Respondents : Mr.Sanjay Mohan (R1 & R2) Mr.K.R.Vijayakumar (R3) Mr.M.B.Raghavan (R4) O R D E R Heard the learned counsel appearing for the petitioner and the learned counsel appearing for the respondents. 2. This writ petition has been filed by the Union Labour Federation, stating that the earlier writ petition in W.P.No.14282 of 2000, had been filed by the petitioner Federation before this Court, seeking the abolition of Contract Labour system in the Yard at Sathankadu of Steel Authority of India Limited. The said writ petition had been dismissed by this Court. A writ appeal had also been filed against the said order of dismissal. While so, the members of the petitioner federation had filed applications for payment of gratuity before the Controlling Authority, Chennai, under the Payment of Gratuity Act, 1972. During the pendency of the said application, the third respondent Contractor had insured the workers with the life Insurance Corporation of India, the fourth respondent herein, under Policy No.404088, dated 15.12.1994. Thus, the workers have been covered by a scheme of Insurance and they are the beneficiaries of the Scheme. In spite of the insurance scheme, the third respondent contractor had paid gratuity to the families of certain deceased workers less than what was due to them. Therefore, the third respondent contractor and the fourth respondent Corporation are liable to pay the gratuity amounts due to the families of the members of the petitioner Federation, in accordance with the insurance scheme, under Policy No.404088, dated 15.12.94. In such circumstances, the above writ petition has been filed by the petitioner Federation, under Article 226 of the Constitution of India. 3. In the counter affidavit filed on behalf of the first and second respondents it has been stated that the first and second respondents are not the necessary parties in the above writ petition. The first and second respondents have no privity of contract with the petitioner Federation. There is no employer employee relationship between the petitioner Federation and the first and second respondents. It has been stated that the third respondent had made certain arrangements with the Life Insurance Corporation of India, the fourth respondent herein, for the purpose of payment of gratuity to the contract workers employed by the third respondent contractors. The first and second respondents have no role in the disbursement of gratuity to the members of the petitioner Federation. Therefore, the first and second respondents are not responsible or liable to comply with any of the requirements relating to payment of gratuity to the members of the petitioner Federation. https://hcservices.ecourts.gov.in/hcservices/ 4. In the counter affidavit filed on behalf of the third respondent, it has been stated that his contract with the first and second respondents had come to an end, on 30.6.2001. The third respondent had paid the gratuity due to the contract workers, as per the provisions of the Payment of Gratuity Act, 1972. He had further stated that he is ready and willing to pay the contract workers, who are eligible for the gratuity, in accordance with the provisions of the Payment of the Gratuity Act, 1972. The petitioner Federation had failed in its attempt before the controlling authority for the payment of an enhanced amount of gratuity to the contract workers. The insurance policy, which was taken by the third respondent with the fourth respondent, is a contract between the third and fourth respondents and there is no privity of contract or right for the petitioner Federation to claim the amounts under the insurance scheme, except those which are due to the members of the petitioner Federation, in accordance with the provisions of the Payment of Gratuity Act, 1972. The insurance policy taken by the third respondent is to cover the risk and liability that may arise, with regard to the Payment of Gratuity to be made to the contract labourers. However, the members of the Federation who are said to be contract labourers have no right to claim the benefits from the said scheme. 5. In view of the averments made on behalf of the petitioner Federation, as well as the respondents, it is clear that the insurance policy taken by the contractor from the Life Insurance Corporation of India is to cover the risks and liabilities that may arise during the course of his business, with regard to the payment of gratuity to the contract workers. The Group Gratuity Cash Accumalation Master Policy No.404088, taken on 15.12.1994, cover all eligible employees. However, the members of the petitioner federation are not eligible for the benefits accruing from the said policy. There is no privity of contract between the members of the petitioner federation and the Life Insurance Corporation of India. Therefore, there is no liability on the part of the contractor or the Life Insurance Corporation of India to pay to the contract workers or to their families, the benefits arising out of the policy. The contract workers would be eligible only to the gratuity amounts due to them, in accordance with the provisions of the Payment of Gratuity Act, 1972. The members of the petitioner Federation has not shown sufficient cause or reason for this Court to grant the reliefs prayed for in the writ petition. It has not been shown by the petitioner federation as to how they are eligible for payment of gratuity more than what has been prescribed under the provisions of Payment of Gratuity Act, 1972. It is open to the contractor concerned to opt for any policy that may be conducive to his requirements in order to cover the risks and liabilities that may arise in the course of his business. One such policy is the Group Gratuity Cash Accumulation Master Policy, which the contractor has taken with the Life Insurance Corporation of India. Therefore, the contract is only between the contractor, who has taken the policy with the Life Insurance of Corporation of India. Such a contract will not have any binding https://hcservices.ecourts.gov.in/hcservices/ effect, either on the Steel Authority of India Limited or the contract labourers. Once the requirements of the Payment of Gratuity Act, 1972, are satisfied, the contract labourers or their families can have no further claim over the benefits that may accrue to the contractor, under the insurance policy. In such circumstances, the writ petition deserves to be dismissed. Hence, it is dismissed. No costs. Sd/- Asst. Registrar /True Copy/ Sub Asst. Registrar csh To 1. The Chairman,, Steel Authority of India Limited., and Managing Director, ISPAT Bhavan, Lodi Road, New Delhi-100 003. 2.Regional Manager, Steel Authority of India Ltd., ISPAT Bhavan No.2, Kodambakkam High Road, Chennai-600 034. 3.Life Insurance Corporation of India P& G.S.Department, LIC Building, III Floor, 102, Anna Salai, Chennai-600 002. 1 C.C. to Mr.M.B.Gopalan, Advocate, SR.No.52001 Writ Petition No.1870 of 2002 LA [CO] RB 30/10/2008 https://hcservices.ecourts.gov.in/hcservices/