THE HON’BLE SRI JUSTICE SANJAY KUMAR WRIT PETITION NO.15844 OF 2000 DATED SEPTEMBER, 2011 BETWEEN L.G.Polymers India Private Limited, a Company incorporated under the Companies Act, 1956, having its registered office as well as its factory at R.R.Venkatapuram, Visakhapatnam – 530 029, Represented by its Deputy General Manager – Administration & Commercial. …Petitioner And Government of Andhra Pradesh, Represented by its Special Chief Secretary to the Labour Employment & Factories, (Lab-I) Department, Government Secretariat, Hyderabad and others. …Respondents THE HON’BLE SRI JUSTICE SANJAY KUMAR WRIT PETITION NO.15844 OF 2000 ORDER: The petitioner company is aggrieved by the reference for adjudication as to: ‘Whether the demand of L.G.Polymers Contract Labour Union (CITU), Visakhapatnam, for regularization of seven contract workers, i.e., 1) S.K.Chinna, 2) Manmadha Rao, 3) P.Ramachander Rao, 4) G.Appa Rao, 5) B.Someswara Rao, 6) K.Srinivasa Rao, 7) B.Appala Raju is justified. If not, to what relief the workmen are entitled?’ made by the Government of Andhra Pradesh to the Industrial Tribunal- cum-Labour Court, Visakhapatnam, under Section 10(1)(c) of the Industrial Disputes Act, 1947 (for brevity, ‘the Act of 1947’). This reference was embodied in G.O.Rt.No.967, Labour, Employment, Training & Factories (Lab.I) Department, dated 08.05.2000. The petitioner company prays for declaration of the said G.O. as invalid, inoperative in law and void ab initio. It also seeks a writ of prohibition restraining the Industrial Tribunal-cum-Labour Court, Visakhapatnam, from proceeding further with the adjudication of the matter, taken on file as I.D.No.62 of 2000. This Court, by order dated 29.08.2000, granted interim stay of all further proceedings in the I.D. Despite service of notice, the L.G.Polymers Contract labour Union which espoused the cause of the seven workmen mentioned in the reference did not choose to put in its appearance before this Court. Sri C.R.Sridharan, learned counsel for the petitioner company, contended that the reference by the Government of Andhra Pradesh was not in keeping with the statutory requirements of Section 10(1)(c) of the Act of 1947 and other relevant provisions thereof. He submitted that the petitioner company was engaging contract labour through contractors licensed under Section 12 of the Contract Labour (Regulation and Abolition) Act, 1970 (for brevity, ‘the Act of 1970’) and that there was no prohibition of employment of contract labour in any of its operations, by way of a notification in the Official Gazette under Section 10 of the said Act. He submitted that in the absence of such a prohibition the question of absorbing and regularizing the services of such contract labour in the petitioner company did not arise. He further contended that, given the established fact that there was no ‘master- servant’ relationship between the petitioner company and the contract labour, they would not fall within the ambit of ‘workman’ as defined under Section 2(s) of the Act of 1947; therefore their dispute, if any, would not fall within the ambit of Section 2(k) of the said Act and Section 10 would have no role to play in the matter. It is now well settled that exercise of power by the appropriate Government under Section 10 of the Act of 1947 is an administrative function and the appropriate Government cannot decide thereunder, issues which are essentially amenable to judicial determination. However, before making such a reference, the appropriate Government has to form an opinion in the first instance as to the existence or the apprehension of an Industrial Dispute. The observations of the Supreme Court in SECRETARY, INDIAN TEA ASSOCIATION v. AJIT KUMAR BARAT[1] are apposite: “1. The appropriate Government would not be justified in making a reference under Section 10 of the Act without satisfying itself on the facts and circumstances brought to its notice that an Industrial dispute exists or is apprehended and if such a reference is made it is desirable wherever possible, for the Government to indicate the nature of dispute in the order of reference. 2. The order of the appropriate Government making a reference under Section 10 of the Act is an administrative order and not a judicial or quasi-judicial one and the court, therefore, cannot canvass the order of the reference closely to see if there was any material before the Government to support its conclusion, as if it was a judicial or quasi-judicial order. 3. An order made by the appropriate Government under Section 10 of the Act being an administrative order no lis is involved, as such an order is made on the subjective satisfaction of the Government. 4. If it appears from the reasons given that the appropriate Government took into account any consideration irrelevant or foreign material, the court may in a given case consider the case for a writ of mandamus. 5. It would, however, be open to a party to show that what was referred by the Government was not an industrial dispute within the meaning of the Act.” The further observations of the Supreme Court are of relevance: “10. Before making a reference under Section 10 of the Act the appropriate Government has to form an opinion whether an employee is a workman and thereafter has to consider as to whether an industrial dispute exists or is apprehended.” Thus, it was necessary for the Government of Andhra Pradesh to first form an opinion as to whether the seven contract labour, whose cause was the subject matter of reference, were ‘workmen’ and thereafter consider whether an ‘Industrial Dispute’ existed or was apprehended. In the light of the established fact that the petitioner company was permitted to engage contract labour through licensed contractors as there was no prohibition with regard to such employment under Section 10 of the Act of 1970, the Government of Andhra Pradesh necessarily had to apply its mind to these facts before venturing to exercise power under Section 10 of the Act of 1947. As pointed out by the Supreme Court in WORKMEN v. FOOD CORPN. OF INDIA[2], engagement of contract labour through licensed contractors would mean that the employer would have nothing to do with the labour force employed by the contractor and in such a situation there would be no privity of contract of employer and workman between the employer and such contract labour. The reference made by the Government of Andhra Pradesh was therefore essentially without foundation. The reference itself suggested that there was no contract of employment between the petitioner company and its contract labour as their cause was being espoused by the Contract Labour Union. Therefore, there was no basis for an assumption that there existed a relationship of ‘employer-workman’. Further, as pointed out by the Supreme Court in WORKMEN OF NILGIRI COOP. MKT. SOCIETY LTD. v. STATE OF T.N.[3], save and except in certain situations, as for example when there existed a provision in the standing orders certified under the Industrial Employment (Standing Orders) Act, 1946 or a memorandum of settlement requiring the employer to employ certain persons, directions ordinarily cannot be issued by the Tribunal directing the employer to give employment. The Supreme Court was however quick to point out that whether a labour contract is a sham or a camouflage is a question which can be gone into by the Tribunal keeping in view the evidence brought on record and having regard to the provisions of the Act of 1970. It is however to be noticed that the claim statement filed by the L.G.Polymers Contract Labour Union before the Industrial Tribunal- cum-Labour Court in I.D.No.62 of 2000, consequent upon the impugned reference, does not indicate that it was the case of the said Union that the employment of contract labour in the petitioner company was a sham or a camouflage. In the absence of such a claim and given the fact that there was no ‘employer-workman’ relationship existing between the petitioner company and the seven contract labour, whose cases were the subject matter of the reference, the very reference was bereft of application of mind by the Government of Andhra Pradesh. The Government of Andhra Pradesh seems to have assumed that it was merely discharging a ‘post-box’ function by routing the dispute for adjudication to the Industrial Tribunal-cum-Labour Court, Visakhapatnam, without independent application of mind. The same is not in keeping with the requirement of Section 10(1)(c) of the Act of 1947. The reference by the Government of Andhra Pradesh in G.O.Rt.No.967 dated 08.05.2000 is accordingly set aside. As the very reference made by the Government of Andhra Pradesh is found to be defective being in violation of the statutory provision, this Court sees no necessity to go into the issue as to whether the Industrial Tribunal-cum-Labour Court, Visakhapatnam, had the jurisdiction to entertain such a dispute and as to whether a writ of prohibition would lie. The issue is left open for consideration in an appropriate case. The Writ Petition is accordingly allowed to the extent of setting aside G.O.Rt.No.967 dated 08.05.2000. I.D.No.62 of 2000 on the file of the Industrial Tribunal-cum-Labour Court, Visakhapatnam, shall stand dismissed in consequence. No order as to costs. ____________________ SANJAY KUMAR, J. _______ SEPTEMBER, 2011. VGSR [1] (2000) 3 SCC 93 [2] 1985 (2) LLJ 4 = (1985) 2 SCC 136 [3] (2004) 3 SCC 514