-1- IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE SIDE JURISDICTION CONTEMPT PETITION NO.189 OF 1998 IN WRIT PETITION NO. 5981 OF 1997 General Employees Association ] a registered Trade Union, ] having its office at Tel ] Rasayan Bhavan, Tilak Road ] Dadar, Mumbai-400014 ]..Petitioners Vs. 1. M/s. Rashtriya Chemicals ] & Fertilizers Ltd. ] having its office at ] Priyadarshini, Eastern ] Express Highway, Mumbai ] 400022 ] ] 2. Shri.D.K.Varma ] Chairman and Managing ] Director, Rastriya ] Chemicals and ] Fertilizers Ltd. ] Priyadarshini, Eastern ] Express Highway, Mumbai ] 400022 ] ] 3. Shri.Sinha ] Managing Director ] (Technical) Rastriya ] Chemicals and Fertilizers] Ltd. Priyadarshini, ] Eastern Express Highway ] Mumbai-400022 ] ] 4. Shri.V.Balsubramanyam ] Executive Director ] (Personal)Rastriya ] Chemicals and Fertilizers] Ltd. Priyadarshini, ] Eastern Express Highway ] Mumbai-400022 ] ] 5. Shri.M.S.Vernekar ] General Manager (P&A) ] Rastriya Chemicals and ] Fertilizers Ltd. ] Thal Alibag, Dist. ] -2- Raigad ]..Respondents .... Shri.Suresh S.Pakale for Petitioner Shri.J.P.Cama with Ms.Swati Deshpande i/b M/s. Bodhanwala & Co. for Respondents .... CORAM : B.H.MARLAPALLE,J. CORAM : B.H.MARLAPALLE,J. CORAM : B.H.MARLAPALLE,J. DATE : FEB. 16, 17 & 18,2005 DATE : FEB. 16, 17 & 18,2005 DATE : FEB. 16, 17 & 18,2005 ORAL JUDGMENT: ORAL JUDGMENT: ORAL JUDGMENT: 1. The Petitioner is a registered Trade Union under the Trade Unions Act, 1926 and represents mainly the contract labours employed under the Respondent no.1. It had filed Writ Petition No. 5981 of 1997 against the respondent no.1 for Abolition of Contract Labour System prevailing under it in respect of the contract workers numbering about 276. It had also prayed for directions not to remove any of these contract workers during the pendency of the main petition. 2. By an order dated 26.2.1998 passed in W.P.No. 5981 of 1997, a Division Bench of this Court issued ad-interim directions against the Respondents no.1 and 2 in the said petition not to terminate the services of the employees described at Exhibit-A to the petition and who may be working as on that date. On 23.3.1998 when Writ Petition No. 5981 of 1997 came up for hearing on admission, another Division Bench granted Rule and disposed of the petition by -3- making Rule absolute in terms of the following order: 1. The respondent no.3 Union of India is directed to refer the question of abolition of contract labour in respect of the work performed by the employees listed in Exhibit-A to the petition. The said reference shall be made within four weeks from today. 2. The Central Advisory Board is directed to hear the representative of parties hereto and submit their report to the Central Government within three months from the date of the reference under clause (1) above. 3. The Central Government is directed to take decision under Section 10 of the Contract Labour (R & A) Act 1970 in respect of the work performed by persons, list in Exhibit-A hereto within four weeks from the date of receipt of the report of the Central Advisory Board. 4. Till the decision is taken as directed above, the respondent nos.1 and 2 shall not remove the persons presently in employment and mentioned in Exhibit-A hereto and shall continue them in employment on the same terms and conditions. However, this restriction shall not apply in case of misconduct, violent conduct or any other similar reasons." 3. It further appears that the Union had moved Writ Petitions Nos. 5979 of 1997, 5983 of 1997 and 5985 of 1997 for the house keeping contract workers and security/watchmen employed on contract basis, whereas W.P.No. 5983 of 1997 had filed for the contract labours employed in Garden. W.P.No. 5981 of 1997 was filed for the contract labours working in civil maintenance department as it appears from the letter -4- dated 12.5.1998 issued by the General Employees Association. By the said letter, it was contended that the Respondent no.1 (THAL Unit) did not pay the wages of contract labour as per the order passed by this Court on 23.3.1998 for the period from February, 1998 to April 1998 in respect of civil maintenance contractors covering 58 contract workmen and from December, 1997 to April, 1998 in respect of another group of 90 contract labour workers. The Union addressed yet another letter on 3.6.1990 and alleged that the order passed by this Court on 23.3.1998, was not complied with in respect of 90 contract workers engaged through Thal Mazdoor Sahakari Sangh Ltd.(TMSS for short) inasmuch as the Management of respondent no.1 had suddenly stopped giving them jobs from 1.6.1998 and they were not allowed to enter the factory premises. It also raised the grievance regarding payment of salary from December, 1997. This Contempt Petition was finally moved on or about 29.6.1998 alleging that (a) after the order dated 23.3.1998 was passed by this Court, the respondents removed 67 employees from service and (b) 90 contract labours were not paid their monthly emoluments. It further alleged that 58 of the contract workmen were removed after the order dated 23.3.1998. 4. In the order dated 28.7.1998 passed in this Petition, it was noted that the contract workers -5- whose names were mentioned in Exhibit-D and numbering 67 were discontinued and 90 contract workers whose names were listed in Exhibit-E, their conditions of service were altered. 5. The respondents filed affidvit-in-reply on or about 31.8.1998 and denied the allegations that there was breach of the order passed by this Court on 23.3.1998 by any one of them in respect of 90 contract workers engaged through TMSS and 67 other contract workers. It specifically stated that the 67 contract workers were not in the employment as on 26.2.1998 or as on 23.3.1998 and infact, they were discontinued much prior to the said dates. So far as the contract workers engaged through TMSS are concerned, it was stated that there was no change in the terms and conditions of their service after the orders were passed by this Court and therefore, the Contempt Petition was required to be dismissed. It further stated that on any given date, TMSS had engaged only 54 workers out of the 90 workers on its roll in the establishment of respondent no.1 and all the 90 workers were not engaged on any given day and this system of rotation was continued from 1.6.1998. It was further pointed out that pursuant to the tenders invited, the respondents had finalised a new agreement with TMSS for a period of one year i.e. from 1.12.1997 to 30.11.1998 and an amount of -6- Rs.12.60 lakhs was already paid to the contractor towards this agreement. The affidavit further stated that the contractor had informed the respondents that the regular wages were being paid to all the concerned contract workers and some of the workers themselves were not willing to attend to their duties. . In response to this reply of the respondents, the Union filed a rejoinder on or about 25.11.1998 and alleged that there was discontinuation of all the contract workers engaged through TMSS and these workers were receiving on an average an amount of Rs.3400/- per month towards their salary in pursuant to the Settlement signed between the contractor and the Union. This Settlement was valid for a period of four years with effect from 1.7.1995, unless terminated by either party giving notice in writing as per the provisions of the Industrial Disputes Act, 1947 and the Rules made thereunder. The respondents filed additional affidavits on 11.1.1999, 1.2.1999 and consequently the Union filed rejoinder on 16.2.1999. The respondents filed yet another additional affidavit on or about 3.3.1999 and elaborately dealt with the issue of payment of wages to the contract workers engaged through TMSS. The respondents contended that towards the contract signed between respondent no.1 and the contractor -7- (TMSS) an amount of Rs.24,65,778/- was already paid to the contractor for payment of wages to the contract workers engaged by it from December, 1997 to November, 1998 and the contractor had from the said amount, disbursed by way of advance to the contract workers an amount of Rs.10,64,000/- while the balance amount of Rs.14,01,778/- was retained by the contractor. In addition, it was contended that even if the contract workers engaged through TMSS were required to be paid as per the purported agreement signed between the Union and the said contractor, the total amount of salary payable for the period from December, 1997 to November, 1998 would come to Rs.21,28,088/- as against the amount of Rs.24,65,778/- paid to the contractor. Thus, the respondents were not guilty of acting in breach of the orders passed by this Court in Writ Petition No. 5981 of 1997 and they had fully discharged their burden regarding payment of wages for the contract workers engaged through that Agency. It has been further stated by the respondents that the contract awarded to TMSS expired towards the end of November, 1998 and it had offered to the same agency its renewal at least for a period of two months but the same was not accepted by the contractor on the ground that the workers engaged by it were not inclined to accept the employment and therefore, the contract was awarded to M/s. Mini Engineering which also failed -8- and therefore finally they engaged M/s.Krishna Enterprises. The new contractor addressed individual letters dated 10.12.1998 to each of the 90 workers to report for work immediately but none of them reported as intimated by the new contractor to the respondent no.1 vide letter dated 16.12.1998. The respondent no.1 Management addressed a letter to the Petitioner-Union on 17.12.1998 informing about the refusal on the part of contract workers earlier engaged through TMSS. It also contended that on 5.1.1999 the respondent-Management again called upon each of these 90 workers to report for duty within three days from the date of receipt of the letter with M/s.Krishna Engineering but none responded. 6. Though initially the instant contempt petition was moved for two sets of contract workers i.e. one set of the workers whose names are listed in Exhibit-D and other set of workers whose names are listed in Exhibit-E. From the first set of 67 contract workers, admittedly, the issue remained only regarding 61 workers. The Management had taken a specific stand in W.P.No.5981 of 1997 that even these workers were not in the employment through any contractor as on 26.2.1998 or 23.3.1998. It appears that the stand of the Management regarding these 61 workers, was in dispute including the issue regarding subsequent discontinuation of the 90 workers engaged -9- through TMSS. 7. This Contempt Petition came to be disposed of by an order dated 9.3.1999 in terms of the following directions: (i) Respondent No.1 to apply to the Division Bench for clarification/modification of the order dated 23.3.1998 passed in Writ Petition No.5181 of 1997 within a period of two weeks from today. (ii) Respondent No.1 shall file an undertaking in this Court undertaking therein to deposit in this Court an amount of Rs.30 lakhs within a period of six weeks from today. It is clarified that respondent no.1 shall be at liberty to apply to the Division Bench either for an order not requiring to deposit any amount of requiring it them to deposit a lesser amount or for extension of time limit for depositing the amount. It is directed that in case Respondent no.1 does not get any order from the Division Bench in this regard, Respondent no.1 shall deposit the amount of Rs.30 lakhs in this Court on or before expiry of the afore referred period. The Addl. Registrar (Judicial) shall permit the Petitioner-Union to withdraw that amount to be paid to the workers involved. It is clarified that Respondent no.1 is at liberty to move the Division Bench for any orders in relation to the terms and security on which the amount is permitted to be withdrawn by the Petitioner-Union. (iii) The 90 workers who according to the petitioners are not presently being given employment shall report for duty at the gate of respondent no.1’s factory at Thal on 15.3.1999 at 8 O’clock in the morning. Of these 90 workers reporting respondent no. 1 -10- shall offer employment to 54 of these 90 workers and on the same day Respondent no.1 shall also prepare a calender indicating as to how these 90 workers are to be given employment by rotation. Shri.Sawant, Assistant Labour Commissioner, is appointed as Commissioner. He is directed to remain present at the above referred place on 15.3.1999 at 8 O’clock in the morning and in his presence the Petitioners will be given employment and the roster has to be worked out. It is clarified that this is without prejudice to the rights and contentions of both the parties and this is being made as a workable arrangement to operate till the Division Bench makes further orders. The learned Counsel for respondent no.1 states that the 90 workers shall be employed by them through the contractor. This is permitted to be done without prejudice to the contentions of the petitioner that they are to be directly employed by Respondent no.1. (iv) Cost of the Commissioner is quantified at Rs.5000/- to be paid by the Petitioners directly. (v) The Contempt Petition stands disposed of." . The respondents deposited an amount of Rs.30 lakhs and 90 workers reported for work on 15.3.1999 and they continued to be employed on the daily wages of Rs.75/-. 8. Civil Application No.2573 of 1999 came to be moved in Writ Petition No. 5981 of 1997, pursuant to the order dated 9.3.1999 passed while disposing of the instant Contempt Petition, by the respondent -11- no.1. By an order dated 5.9.2000 the Division Bench (Coram: A.P.Shah and V.C.Daga, JJ.) with the consent of both the parties, referred the following issues to the Deputy Chief Labour Commissioner, Mumbai for adjudication within a period of three months. The amount of Rs.30 lakhs deposited was directed to be invested with Nationalised Bank in fixed deposits. ISSUES ISSUES ISSUES I. Whether 61 workers entered through different contractors for civil and maintenance work, were in the employment on the date of the order of the Division Bench dated 23.3.1998 ? II. Whether the above 61 workers offered to work after 23.3.1998 and they were denied work by the Company or they refused to report to work as contended by the Company? III. Whether the terms and conditions of the 90 workers engaged through Thal Mazdoor Sahakari Sangh Ltd. were varied after 23.3.1998? IV. Whether 90 workers in question were engaged simultaneously or they were given work on rotation basis? 9. The Deputy Chief Labour Commissioner submitted his report on 29.1.2001 and the operative portion of the said report read thus: Q.1 Whether 61 workers engaged through different contractors for civil and maintenance work were in the employment -12- on the date of order of Division Bench dated 23.3.1998? Ans: Yes. Q.2 Whether the above 61 workers offered to work after 23.3.1998 and they were denied work by the Company or they refused to report work as contended by the Company? Ans: The Company was not able to produce any evidence as if they have offered the work to these workmen and the workmen refused to work. In the absence of such evidence, I accept that these workers offered to work after first order of the High Court dated 26.2.1998 and 23.3.1998. Q.3 Whether the terms and conditions of the 90 workers entered through Thal Mazdoor Sahakari Sangh were varied after 23.3.1998? Ans: Yes Q.4 Whether 90 workers in question were engaged simultaneously or they were given work on rotation basis? Ans: The Company was not able to show any tangible evidence regarding the introduction in rotation system. Prior to the orders of the Honourable High Court in the year 1998, in the absence of such evidence, these workmen are treated as employed simultaneously instead of on rotation system. 10. Civil Application No. 2573 of 1999 came up for hearing before this Court and it was rejected vide order dated 11.2.2002 passed by the Division Bench (Coram : R.M.Lodha and S.A.Bobade, JJ.). While the Division Bench came heavily on the applicant-Management, it criticized the findings of the Deputy Chief Labour Commissioner with equal -13- force. It did not appreciate the action of the respondent-Management in seeking declarations as set out in the application. It further held that there was no ambiguity in the order passed in Writ Petition No. 5981 of 1997 on 23.3.1998 and therefore, there was no occasion for referring any issues for adjudication to the Deputy Labour Commissioner. The report of the Deputy Labour Commissioner submitted on 29.1.12001, was also rejected. As the said conclusions suffered from various infirmities and more particularly, the aspects which were not called for, were gone into by the Deputy Chief Labour Commissioner. The Division Bench further held that the findings recorded by the Deputy Chief Labour Commissioner, were without any reliable evidence. Regarding 61 workmen, the Division Bench noted that as a matter of fact, the said issue had been under serious dispute between the Management which was consistently saying that the said workmen were not in the employment on 23.3.1998. Thus, the findings of the Deputy Chief Labour Commissioner on all the four issues came to be set aside. 11. Civil Application No. 39 of 2002, came to be moved in the instant Contempt Petition for its restoration consequent to the order passed by the Division Bench in Civil Application No. 2573 of 1999 in Writ Petition No. 5981 of 1997. By an order -14- dated 27.6.2002, this Contempt Petition was restored. The amount of Rs.30 lakhs deposited by the respondents, was directed to be continued in the fixed deposits and the parties were granted liberty to take out an appropriate proceedings in this petition for suitable orders in relation to the said amount. . Consequently, this Contempt Petition is required to be decided on merits. 12. Before proceeding further to deal with the petition on merits, it is pertinent to note that the issue of discontinuation of 61 contract workers listed in Exhibit-D has not been contested seriously and only the issue which is pressed during the course of final arguments in this petition, was regarding the arrears of payment in respect of 90 workers engaged through TMSS and more so because, after the Central Government issued Notification dated 9.1.2001 and made a reference under Section 10(1) of the Contract Labour (Regulation and Abolition) Act, 1970 (for short ‘Contract Labour Act’), almost all the contract labours covered by W.P.No. 5981 of 1997 have been reemployed. 13. Prayer clause (a) of this petition which consists of the substantial relief sought for, reads -15- as under: (a) This Honourable Court be pleased to send notice to the respondent no.1 and its officers as to why contempt proceedings be not initiated against them for flouting the orders dated 26.2.1998 and 23.3.1998 passed by this Honourable Court in W.P.No. 5981 of 1997 and thereafter they be punished under the process of the Contempt of Courts Act, with further direction to take the employees whose names are enlisted to Exhibit-D in service and pay them their regular emoluments from 1.2.1998 and continue to pay to them regularly and further direct the respondents to pay unpaid salary to the employees whose names are listed in Exhibit-E to the petition and further pay them their monthly salary from December, 1997 and regularly from month to month". . As at present, the petition survives for the following reliefs from the above reliefs. (a) Punishing the respondents under the Contempt of Courts Act for breach of the order passed on 23.3.1998 by this Court, (b) Payment of unpaid salary to the employees whose names are listed in Exhibit-E and (c) Payment of arrears of salary from December, 1997. 14. It is alleged by the Petitioner-Union that till the month of December, 1997 these 90 contract workers were being paid by TMSS their monthly salary as per the agreement and it was coming to about Rs.3400/-. -16- However, suddenly from the month of January/February, 1998 the contractors started paying only an advance amount. Initially, the said advance amount was Rs.4000/- per month and it was subsequently reduced to Rs.2000/- per month for each worker and finally, they were all discontinued. They remained unemployed till they reported back on 15.3.1999 pursuant to the order passed by this Court on 9.3.1999 and even thereafter they were paid wages at the rate of Rs. 75/- per day. Thus, the Union claims the difference in the payment of salary from December, 1997 onwards in respect of 90 workers. The Management on the other hand, has consistently stated that it has discharged its obligation regarding payment of wages by disbursing the amount to the contractor and an amount of Rs.24,65,778/- was paid to TMSS for the period from December, 1997 to November, 1998 and in any case, the issue of recovery of backwages or difference in wages or unpaid wages either proved partly or fully, cannot be agitated in a contempt petition. The Management further urged that there was a rotation system followed by TMSS and in the contract entered with the contractor on 29.11.1997, the exact number of contract workers was not determined and the same was the case regarding the rates of wages to each such worker. The payment of wages was the responsibility of the contractor and the respondents were required to continue to employ -17- them on the same terms and conditions provided they were in employment as contract workers as on 26.2.1998 or 23.3.1998. Once it had placed before this Court prima facie proof that an amount of Rs.24,65,778/- was paid to the contractor, the respondents could not be hauled up for contempt within the meaning of Section 2(b) of the Contempt of Courts Act, 1971 on account of the alleged failure to maintain the same terms and conditions of employment including payment of salary, urged the respondents. 15. Mr.Pakale, the learned counsel for the Petitioner-Union in his exhaustive arguments, reiterated the stand of the Petitioner-Union taken in this Contempt Petition and submitted that the welfare of the workmen was not in seeking to punish any of the respondents for contempt but infact, the main thrust of the petitioner was for recovery of wages or the arrears thereof. He further submitted that if the workers made out a case that the contractor failed to pay them the wages at the agreed rates (as per the agreement referred to hereinabove), it was entirely the responsibility of the Management to discharge that burden and failure to do so, was certainly contemptuous. It was urged that the alleged rate of Rs.75/- per day was the creation of the Management and there was no tangible proof to accept such rate of wages. On the contrary, the -18- settlement between the contractor and the Petitioner-Union was in operation for the relevant period and till the month of November, 1997 the workers were being paid their salary as per the said Agreement. The workers were working for the respondents and in their premises and therefore, it was their responsibility set out under the Contract Labour Act to pay the contract workers their wages if the contractor had failed to do so and more particularly when the order passed by this Court on 23.3.1998 directed to employ these workers on the same terms and conditions till the reference was made by the Central Government under the Contract Labour Act. 16. Section 21 of the Contract Labour Act, deals with the responsibility for payment of wages and it reads as under: 21. Responsibility for payment of wages: 21. Responsibility for payment of wages: 21. Responsibility for payment of wages: (1) A contractor shall be responsible for payment of wages to each worker employed by him as contract labour and such wages shall be paid before the expiry of such period as may be prescribed. (2) Every principal employer shall nominate a representative duly