HIGH COURT OF CHHATnSGrARH, BILASPUR S.B: HON'BLESHRIMANINDRAMOHANSHRIVASTAVA.J. -Ss- :10 PETITIONER RES»OND@!CTS Writ^etitidttNo. 1659/2006 General Manager (Now Vice President) The Associafed Cement C6;npanies Limited^ t\/ .Versus- '";1;" . , ' ! • : ; State ofChhattisgarh SB Ors; ORDER €'"; "•'w /3S POST QN 22- MARCH, 2011 Sd/- M.M. Shrivastava Judge Siii."' \ HIGH COURT OF CHHATTISGARH : BILASPUR S.B.: HON'BLE SHRI MANINDRA MOHAN SHRIVASTAVA. J. PETITIONER RESPONDENTS Writ Petition No. 1659/2006 General Manager (Now Vice President) The Associated Ceraent Companies Limited Versus State of Chhattisgarh 85 Ors. Petition under Article 226/227 ofthe Constitution oflndia Appearance: Mr. Rana Mukherjee with Mr. Bharat Goyal, Mr. Goutam Bhaduri and Mr. N.K. Vyas, counsel for the petitioner. Mr. Kishore Bhaduri, Addl. Advocate General with Mr. V.V.S Murthy, Dy. Adv. General and Mr. Satish Gupta, Govt. Advocate for the State. Ms. Sudha Bhardwaj, counsel for respondent No.S/Union. Mr. Rahul Jha, counsel for the intervenors. ORDER (Passed on _2^.03.2011) 1. By this petition under Article 226/227 of the Constitution of India, the petitioner has assailed legality and validity of : (i) order of reference dated 12.6.2000 (Annexure P-1) in respect of 574 employees of 16 contractors under Section 51 ofthe Madhya Pradesh Industrial Relations Act, 1960 (hereinafter referred to as "the M.P.I.R. Act") made by the StateofM.P. -2- (ii) order of amendment by the State of Chhattisgarh dated 20th June, 2001 (Annexure P-2), amending terms of reference dated 12.6.2000, by which the word contractor has been deleted. (iii) award dated 28.2.2006 passed by the Industrial Court, Raipur in Reference No.6/MPIR/2000, directing the petitioner to regularize with all the benefits, all workers as per list attached and pay all monitory and other benefits of regular employees w.e.f. 12.6.2000 and further directed that those who have resigned or taken V.R.S. under compulsion should be reinstated immediately with continuity of servlce and fuU back- wages and further that 50% of accrued arrears be paid to all the workers within a period of one month from the date ofaward and remaining 50% within 6 months. 2. The factual matrix giving rise to instant petition, as adumbrated in the petition, are : • the Associated Cements Companies Limited, amongst number of cement plants, has established one such cement plant at Jamul, District-Durg. It is the case of the petitioner that the petitioner, a cement manufacturer, engaged many contractors for different jobs, not connected with manufacturing jobs. The Jamul Cements Works of Associated Cements Companies Ltd. through its Vice President has been registered with Assistant Labour Commissioner (Central) as principal employer under Section 7 of the Contract Labour (Regulation and Abolition) Act, 1970 (for short "the C.L.R.A. Acf) and a certificate of /? ' /;- '~4 '-\ i! te...:,—' ' *^, K .^' //' ^ 'Si&s--5'^1 -3- *^..'s'csesSyy registration was issued on 4.12.1986 (Annexure P-5). The Assistant Labour Commissioner (Central), who has been designated as Licensing OfHcer under the C.L.R.A. Act, granted licence to contractors under Section 12 of the C.L.R.A. Act. in respect of workers working in the cement plant of the petitioner, the then Govt. of Madhya Pradesh made a reference of a dispute between workers engaged by the contractors of the petitioner represented by Pragatisheel Cement Shramik Sangh, Bhilai (for short "the Union"} and General Manager, A.C.C., Jamul, Durg, on 12.6.2000 (Annexure P-1), enclosing therewith a list of 574 workers said to be casual workers, workers of the contractors, employees of transporter, enlisted separately. Upon receipt of reference, the Industrial Court, Raipur Bench issued notices to the parties. The respondent-Union sought adjournment on various dates, seeking time to file its statement of claim. In the meantime, the Govt. of Chhattisgarh passed an order on 20th June, 2001 (Annexure P-2), amending the terms of reference by deleting the word "contractor". On 26.12.2001, the respondent- Union filed its statement of claim (Annexure P-6) along with an application for urgent hearing. On 27.8.2002, the petitioner, the second party in the reference, filed its written statement (Annexure P-7) to the statement of claim. -4- '-^.s^i^ the petitioner in its written statement, raised preliminary objection to the very maintainability of the reference. The objection taken by the petitioner related to the very competence of the State Govt. to make reference, on the ground that as the cement industry is declared as 'controlled industry', the Central Govt. is the appropriate Govt. for reference of any dispute for adjudication to any Court or Tribunal under the provision of the Industrial Disputes Act, 1947 (hereinafter referred to as "the I.D.Acf}. The maintainability of the reference and the jurisdiction of the Tribunal to adjudicate the dispute referred, was also questioned, inter alia on grounds that the amendment of the original reference dated 12.6.2000 vide order dated 20.6.2001 had the effect of changing the very nature of reference which was not permissible and was illegal and further that such an amendment was without any conciliation and without there being any satisfaction recorded as to whether any industrial dispute existed or not. The other objection to the maintainability of the petition related to non-joineder of contractors and that the Union is not a recognized union or representative union for the cement industry and therefore not authorized to represent the workers of the cement industry under the provision of the Madhya Pradesh Industrial Relation Act, 1960 {now Chhattisgarh Industrial Relation Act, 1960). -5- Further objection was taken that the Union has not been authorized by all the persons/workers mentioned in the list attached wifh the statement of claim and that the Union has not come with clean hands 'and has played fraud by raising a false claim in the name of those employees who have already been regularized and have not authorized the Union and those who have already resigned after full and Enal settlement of their claim and that number of persons were either not employed or resigned or have taken their final dues and none of them has specifically authorized the Union to raise a dispute in respect of their claims. Another objection was taken to the effect that the State Govt. made a reference to the Tribunal to examine the justiflcation for regularization of contact labours with the petitioner, the second party, which, in essence, is an enquiry into the aspect of abolition of contract labour system, which is beyond its jurisdiction. On 30th October, 2002, the Industrial Court framed as many as 10 issues. Vide its order dated 23.9.2004, the Industrial Court over-ruled preliminary objection raised by the petitioner, which led to Bling of Writ Petition No.668/05 by the petitioner before this Court, challenging legality and validity of order of reference dated 12.6.2000, order of amendment dated 20th June, 2001 and order dated 23.9.2004 rejecting preliminary objections. -6- '^ .—"~L'./ '^,. ''i^.^':/ ''^scy LJ'l-^I53rt-^ Respondent-Union filed a Case No.l61/MPIR Act/2001 against Associated Cement Companies Ltd. and M/s. Dawda Brothers before the Labour Court, Durg in respect of 71 workers said to be employed by M/s. Dawda Brothers, whose transport contract was terminated by the petitioner and M/s. Dawda Brothers had issued notices of retrenchment. That case was finally decided vide order dated 8.5.2003. Against the said order, an appeal in respect of two workers M/s. Makbool Ali and Kulwant Singh was filed by the Union, registered as Appeal No.l4/MPIR ACT/2003. This appeal was directed to be connected with Reference Case, observing that common question as to whether they are contract employees or the employees of the principal employer are involved. The parties before the Industrial Court adduced oral and documentary evidence. Finally, vide order dated 28.2.2006 (Annexure P-3), the impugned award has been passed by the Tribunal, which is under challenge in this petition. It is relevant to note that on the date the award was passed, Writ Petition No.668/05 filed by the petitioner was pending. In the light of subsequent developments, the petitioner sought withdrawal of the said writ petition, with liberty to raise all the grounds in the petition arising out of the final order. Vide order dated 22.3.2006, the petitioner was permitted to withdraw the petition with liberty sought therein. -7- 3. The submissions made by learned counsel for the petitioner, to assail the correctness and validity of the order of reference dated 12.6.2000, order amending reference dated 20th June, 2001 and award dated 28.2.2006 are as below: (i) The reference made in the present case under the M.P.I.R. Act is without jurisdiction and authority of law and incompetent in the light of provisions of Industries (Development and Regulation) Act, 1951 (for short "the I.D.R.Acf') read with notification dated 8.11.1977 issued by the Central Govt. under the I.D.R. Act. Learned counsel for the petitioner vehemently submitted that the I.D.R. Act has been enacted by the Parliament in exercise of its legislative power under Entry 52 of list I of Seventh Schedule of the Constitution of India and the cement industry has been declared to be a controlled industry under Secfion 2 of the I.D.R. Act. Therefore, the provision of State legislation i.e. M.P.I.R. Act / C.G.I.R. Act, 1960 will have no application in respect of adjudication of dispute in respect of an industrial dispute involving cement industiy. He submitted that in the matters relating to industrial dispute of the workers of a cement industiy, the State legislation in the form of M.P.I.R. Act has no application at all because declaration of cement industry as 'controlled industa-y' is not a parliamentaiy legislation referable to an entry contained in list- I and c! f{ (<i not list - III of the Seventh Schedule of the Constitution of India. He further submits that the Central Govt. has been specified to be appropriate Govt. for the cement industry for the purposes of the I.D.Act vide nottfication No. S.O. 757 (e) dated 8.11.1977. Vide another notiiication dated 8.12.1977, issued in exercise of power conferred under Section 39 of the I.D.Act, the Central Govt. has delegated its power to the State Govt. and therefore the State Govt. had competence to refer an industrial dispute Eind therefore jurisdiction competence of the State Govt. to refer an industrial dispute pertaining to cement industry for adjudication in the Industrial Court could be derived only under the provisions of the I.D. Act and not under a State legislation such as the M.P.I.R.Act. He further submitted that though the M.P.I.R. Act received Presidential assent on 17.11.1960, the same did not contain cement industry as the scheduled industry and it was only by notification dated 31.12.1960 that the cement industry was added as a scheduled industry. He therefore submits that as the very inclusion of the cement industry as scheduled industry was subsequent to Presidential assent, such an inclusion, in the absence of Presidential assent, is not protected by the provision contained in Article 254 (2) of the Constitution of India. He further ^ t. -^ •-^ \ -9- <^ .,'/ ^ K ''' !:c:!^ '^Ssat^ submits that the order dated 16.12.2010 of a Division Bench of this Court in W.P. No.3973/04 does not lay down correct law being contrary to, inasmuch as the notification dated 31.12.1960 amending schedule to the M.P.I.R. Act subsequent to the Presidential assent and its effect was not noticed and further that it is contrary to the law laid down in the case of Workinen of Bagalkot UdyogJ-united V^^^aealkot_Udyog Ltd. fis Ors.1. National Thermal Power Corporation & Ors. Vs. Badri Singh Thakur SB Ors.2. He therefore, contends that Schedule to the M.P.I.R Act including cement as a scheduled industry is repugnant and in direct conflict with the I.D.R. Act. In support of his submissions made, learned counsel for the petitioner placed reliance on the decision in the case of M.P. Shikshak Congress & Ors. Vs. R.P.F. Commissioner. Jabalpur SB Ors.3. Thirumuruga_ Kirupananda Varivar Thavathiru Sundara Swamigal Medical Educational & Charitable Trust Vs. State of TamU Nadu & Ors.4, Yovan. India Ceinents Emplovees Union St Another_Vs. Manaeement of India Cements Ltd. & Ors.5 , Associated Cement Company Ltd. Vs. State of M.P. & Ors. [judgment of High Court of M.P. in W.P. 1 (2001) I LLJ 75 2 (2008) 9 SCC 377 3 (1999) 1 SCC396 < AIR 1996 SC 2384 s (1994) 1 SCC 572 -10- No.2982/93) and Ultratech Cement Limited Vs. Srinivas Narayan Rao Moharil6. (ii) The reference made is not competent, inasmuch as it pertains to the issue of legality and validity of employment of contract workers by the petitioner that is required to be adjudicated in the light of provision and under the aegis of the C.L.R.A. Act, a central enactment, providing altogether separate and independent procedure for regulation or abolition of contract labour. The contention advanced by learned counsel for the petitioner is that subsequent to the enactment of the I.D.R.Act by the Parliament, the issue of regulation and/or abolition of contract labour in any industry is governed exclusively by the provision of the I.D.R.Act and therefore any dispute pertaining to employment of contract labour in any industry is liable tp be decided only under the C.L.R.A. Act and neither under the I.D. Act nor under similar State enacta-nent such as the Act of M.P.I.R. Act. Reliance is placed on the judgment of Supreme Court in the case of General Manaeer. (OSD) Bengal Naepur Cotton MUls, Rajnandeaon Vs. Bharat Lal SB another7, Steel Authoritv of India Ltd. Vs. Union of India 8s 62010(1)CLR656 7(2011) 1 SCC635 ^'^'x"1'^ fcyi •'^-^/ -11- Ors.8 85 International Airport Authoritv Of India Vs. International Air Careo Workers' Union and another9. (iii) The reference made by the Govt. vide its order dated 12.6.2000 is in excess of authority and untenable in law, as contract labour do not come within the purview of definition of employee provided under Section 2 (13) of the M.P.I.R. Act and therefore no reference could be made in respect of any dispute as between the principal employer and the contract laobur. It is further submitted that the Industrial Court has no jurisdiction to decide an issue whether in a given establishment, contract labour system is required to be abolished, nor the Tribunal is conferred with any authority to direct absorption of such contract labours with the principal employer. In his submission, the reference dated 12.6.2000, in substance, requires the Tribunal to go into and decide the aforesaid issue. In support of his submission, learned counsel for the petitioner placed reliance on the decision in the case of Ctwalior Tanks and Vessels Ltd. Vs. G.T.B. Shramik Coneress and another10. Badri Singh Thakur (supra) and also on the decision in the case of General Manager, Rajnadgaon (supra). 8 (2006) 12 SCC 233 9 (2009) 13 SCC 374 i° 1999 (I) MPLSR 393 1 '^, '"^-.fiy -12- (iv) Even assuming, though not admitting, that the initially reference made vide order dated 12.6.2000 (Annexure P- 1) was competent under the law, the reference having once aiade, the State of Chhattisgarh had no authority to amend the reference vide its order dated 20th June 2001 (Annexure P-2). Learned counsel for the petitioner vehemently contended and made elaborate submission on this aspect. It has been argued that the reference as was originally made vide order dated 12.6.2000 was in respect of a dispute as befrween the labours of the contractors and the petitioner as principal employer. However, vide impugned amendment, the very nature, texture and tenor of the original reference has been materially altered and in substance, by way of impugned amendment, altogether new terms of reference has been brought into existence for adjudication by the Industrial Court. In his submission, the amendment has the effect of superseding or withdrawing the original reference made vide order dated 12.6.2000, inasmuch as in the original reference, the workers were stated to be a contract labours, whereas, upon amendment, now the terms of reference required the Tribunal to examine whether those workers were actually the employees of the petitioner and in that sense, enquiry as to whether the arrangement of contract labour was sham and bogus 9 !•:.v -13- one. He submits that omission ofthe work "conta-act" vide impugned amendment dated 20th June, 2006, in fact, amounts to pre-judging the issue by the State Govt., which was beyond its competence and authority under the provision of Section 51 of the M.P.I.R Act. Learned counsel for the petitioner heavily relied upon the judgment of Supreme Court in the case ofState ofBihar Vs. D. N. Ganeuli SB Ors. 11 to submit that the aforesaid decision authoritatively lays down that once a reference has been made, no amendment is permissible. He submits that the law laid down by the Supreme Court in the aforesaid judgment has been considered and followed in various decision by different High Courts, namely Dalmia Dadri Cement Ltd. Vs. State of Punjab (1967 (1) LLJ 222}, Abdul Rahiman Kunju M., Chandanathope, Quilon Vs. State of Kerala and Ors. (1998 (II) LLJ 908) & Workers of Thambi Motor Service Vs. Thambi Motor Service, Salem, and another {AIR 1963 Madras 163}. The process of conciliation, is a sine qua non for making reference because where a statute prescribe a particular thing to be done in particular manner, the same has to be done in that manner or not at all. Reliance has been placed on the decision in the case of "fflKl958 SC 1018 -14- Bhavnagar Universitv Vs. Palitana Sugar MU1 (P) Ltd. &0rs.12. (v) Even assuming without conceding that the reference made under the M.P.I.R. Act was maintainable, the pre- requisites for making such reference were not present in the case and therefore, the reference did not satisfy the requirement of mandatory provision contained in the Act. He submitted that the reference order purports to state the subjective determination of the State Govt. regarding existence of an industrial dispute, not Ukely to be settled by means other than adjudication by an Industrial Court. However, the order does not disclose which factors led the Govt. to fhe aforesaid conclusion and whether the Govt. took into consideration of relevant facts before arriving at the said conclusion. Learned counsel of the petitioner argued fhat it was obligatory for the Govt., even while arriving at subjective satisfaction, to disclose the reasons for arriving at the conclusion, which is absent in the order of reference. The order of reference, therefore, does not satisfy the test of reasonableness. He further submits that it was only when specific objection was raised by the petitioner before the Tribunal and thereafter before this Court, that an attempt has been made, that too not by the Govt. but by the Union- " (2003) 2 SCC 1 11 ^•'"S'-i"J-v:3S^.. /y\-<^ '^ y-f ^. "%. 1 %&";- ^i i' i!^ '^yy ~~Ss..^i!!S"'' -15- (vi) respondent No.3 to justify the order of reference by narrating events relating to certain circumstances which according to them led to the making of reference. Further submission is that the validity of the order of reference is to be judged from the reasons stated therein and the affidavit in support of the said order of reference could not be looked into, to find out reasons to justify the order. Reliance has been placed in the cases of Swadeshi Cotton Mills Vs. Union ofjndia", N. Kannadasan, Vs. Aiov Khose & Ors.i4. M.A. Rasheed & Ors. Vs. State of Kerala15, Mohinder Sineh Gill and another Vs. Chief Election Commissioner. New Delhi & Ors.16, Chandra Singh SsJOis. Vs. State of Raiasthan and anotheriT & Hindustan Petroleum Corporation Ltd. Vs. Darius Shapur Chenai 8s Ors.18. The respondent-Union had no locus standi to espouse the cause of other 574 contract labours. Referring to the deposition of Mr. Anoop Singh (P.W.-9) examined on behalf of respondent No.S-Union, it was submitted that the said witness admitted before the Industrial Court that he had neither submitted the list of members of respondentNo.S-Union, nor had he submitted any list "(1981) 1 SCC664 »(2009) 7SCC 1 15 (1974) 2 SCC 687 16 (1978) 1 SCC 405 " (2003) 6 SCC 545 " (2005) 7 SCC 627 -16- showing which employee had been in continuous service with the petitioner for 6 months. It is further submitted that in the absence of any cogent and documentary evidence, the Industrial Court grossly erred in relying upon the statement of Mr. Anoop Singh, more so, when in the Writ Petition No.668/05 filed earlier before this Court, the return filed by fhe Union was supported by affidavit of some other person claimihg to be Organizing Secretary of the Union. Therefore, in the absence of documentary evidence in that regard, the respondent No.-3-Union was not entitled to represent the cause of the stated workers as a Representative Union in violation of the provision contained under Section 27 of the M.P.I.R. Act. Reliance has been placed on the decision in the case of Duncans Industries Ltd. Kanpur Vs. Presidine Officer & Anr. 19 . (vii) The reference and impugned order both are bad in law for non-joinder of necessary parties, inasmuch as in the list of 574 workers attached with the order of reference, the workers are stated to be in the establishment of the petitioner through 16 contractors, but those contoractors were not made party, despite specific objection in that regard raised by the petitioner. It is also submitted that the reference made by the Govt. related to causes of l-2010 (125) FLR 1061 £-^» -17- action of different categories of workmen and therefore such a dispute and a composite reference is not maintainable under the law. * (viii) That the award is grossly perverse on account of finding recorded by the Industrial Court which is not only contrary to the oral and docunientary evidence and material on record, but also based on incorrect and improper appreciation of settled legal position. Learned counsel for the petitioner made elaborate submission in this regard by referring to the discussion and findings contained in the impugned award. He submitted that even though there was clear evidence on record, which was neifher denied nor disputed by those individual workman nor even by the witnesses of respondent No.-3- Union, that large number of eniployees were either regularized or had resigned, their dispute settled in other proceedings taken accepted VRS and huge amounts of ex-gratia payments made, the Tribunal proceeded to pass an award directing regularization and reinstatement, which is highly perverse. He argued that the Tribunal adopted a fallacious approach and even though there was no legally admissible evidence on record, merely on conjectures and surmises, it assumed, without any basis, that the all workers stated in fhe list attached with the order of reference, were entitled to be regularized or re- /'^-^ ^ \'.'^;.:' ••' .<v -18- instated. Learned counsel for the petitioner submitted that the Tribunal allowed deletion of the name of as many as 459 workmen on the ground of death, withdrawal from case by the reason of settlement of accounts under VRS etc. and without there being any dispute raised by those individual workers, whose names were deleted, and without there being any dispute framed with regard to the legality of such settlement under VRS etc., the Tribunal acted with gross perversity and exceeded its jurisdiction in passing the impugned award in respect of those 574 workers. He submits that following glaring material, not materially disputed by the respondent-Union, was on record: (a) 41 workers were regularized (b) 52 workers had resigned. (c) Cases of 70 workers of M/s. Davda Brothers were settled by the Labour Court. (d) Large number of employees, during the pendency of the proceedings before the Industrial Court, accepted VRS. Therefore the award of the Industrial Court directing regularization of large number of employees, ignoring aforesaid material evidence on record led by the petitioner, which was not substantially controverted by the Union, renders the award liable to be set aside, being highly perverse. -19- It is also submitted that the Industrial Court acted with gross perversely in coming to the conclusion regarding existence of relationship of employ.er and employee and that the contract labour arrangements were sham and bogus, without appreciating that the burden of proof was on the Union to establish, which the Union utteriy failed, as only 8 workmen were examined and from their evidence and the