* THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY + Writ Petition Nos.1307 of 2000 and 13479 of 2002 % 18.08.2011 W.P.No.1307 of 2000: Between: # Kandrakota Yesu & Ors. …Petitioners and M/s.Oil and Natural Gas Corporation Ltd. & Ors. ..Respondents **** W.P.No.13479 of 2002: Between: Oil & Natural Gas Corporation Ltd. …Petitioner and 1. The Regional Labour Commissioner (Central), Vidya Nagar, Hyderabad & Ors. ….Respondents ! COUNSEL FOR PETITIONER in WP No.1307 of 2000 and 1st respondent in WP No.13479 of 2002: SRI KAKARA VENKATA RAO ^COUNSEL FOR PETITIONERS in WP No.1307 of 2000 and for the respondents/workmen in WP No.13479 of 2002: SRI VEDULA VENKATA RAMANA, SENIOR COUNSEL COUNSEL FOR THE RESPONDENTS/WORKMEN IN WP No.13479 of 2002. < Gist: > Head Note: ? CITATIONS: 1) (1997) 9 SCC 377 2) AIR 2001 SC 3537 = (2001) 7 SCC 1 = 2001 (6) SUPRME 602 3) (2006) 4 SCC 1 4) (2008) 10 SCC 1 5) 2011 (2) Supreme 717 6) 2011 (1) Supreme 633 THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY Writ Petition Nos.1307 of 2000 & 13479 of 2002 (Date:18-08-2011) W.P.No.1307 of 2000:- Between: Kandrakota Yesu and others (Petitioners in W.P.No.1307 of 2000) …Petitioners A n d M/s.Oil and Natural Gas Corporation Limited and others …Respondents *** W.P.No.13479 of 2002:- Between: Oil & Natural Gas Corporation Ltd., …Petitioner A n d The Regional Labour Commissioner © Vidya Nagar, Hyderabad and others …Respondents *** THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY Writ Petition Nos.1307 of 2000 & 13479 of 2002 COMMON ORDER: The issue involved in these two writ petitions relates to absorption of contract workmen employed by M/s.Oil and Natural Gas Corporation Limited (hereinafter referred to as “the corporation”) consequent on the notification under Section 10(1) of the Contract Labour (Regulation and Abolition) Act, 1979 (hereinafter referred to as “the Act”) issued by the Central Government published in the Gazette of India extraordinary on 8.9.1994. 2. A batch of writ petitions being W.P.No.13551, 26676, 26677, 26678 and 27747 of 1997 came to be filed by the Contingent Contract Workers Union and individual workers for their absorption and regularization, consequent on abolition of engaging workmen on contract basis through Contract Labour. The said writ petitions came to be disposed of on 24.9.1998. The relevant portion of the order passed in the above-referred batch of writ petitions needs to be noted and it is thus:- “ The Regional Labour Commissioner (Central), Hyderabad is directed to proceed accordingly to verify the case of the concerned employees, as to whether they belong to or they do not belong to categories, of which the Contract Labour Act abolished vide notification dated 8.9.1994, keeping in view the following guidelines:- I. Separate list shall be prepared by him regarding those (1) appointed prior to 8.9.1994 notification under (a) on prohibited category and (b) on a category not prohibited and (2) those who were appointed after the notification dated 8.9.19094 under (a) on prohibited category and (b) on category not prohibited, and notification, if any, issued subsequently. II. The respondent-Corporation shall make available the records in respect of all those concerned employees and other relevant papers on the basis of which it may be determined as to whether the employees sought to be absorbed in O.N.G.C are covered or not by the categories for which contract labour has been abolished vide notification dated 8.9.1994. III. It will be open for the Regional Labour Commissioner (Central), Hyderabad to follow any procedure for this purpose which he deems fit to arrive at the conclusion and it will also be open for the parties to produce materials before the Regional Labour Commissioner (Central), Hyderabad, in support of their cases in this regard. IV. The Regional Labour Commissioner (Central), Hyderabad shall hear the petitioners as well as O.N.G.C before preparing its final report in this regard and it will be open for both the sides to raise all just and reasonable objections before him. V. The Regional Labour Commissioner (Central), Hyderabad shall sent copy of this report to O.N.G.C as well as the employees and such report shall be prepared and communicated by him at the earliest, but in no case later than 31.12.1998. VI. On the basis of the report of the Regional Labour Commissioner (Central), Hyderabad, those employees who are found to be covered by the categories under the notification dated 8.9.1994 shall be taken up for absorption by O.N.G.C having due regard to the requirements of eligibility under the Rules and Regulations of O.N.G.C and appropriate orders shall be passed and served upon concerned employees on or before 31.01.1999. In case the O.N.G.C decides to challenge the report of the Regional Labour Commissioner (Central), Hyderabad, it will be open for the O.N.G.C to indicate in such orders as above, that these orders are subject to the result of such challenge. VII. It will also be open for the concerned employees and the petitioners to challenge the decision of the O.N.G.C on the question of eligibility with reference to service regulations in case any employee found to be covered by the notification dated 8.9.1994 is aggrieved and is denied absorption by O.N.G.C. VIII. As regards the employees who are not found to be covered by the notification dated 8.9.1994 for the purpose of absorption in O.N.G.C on account of abolition of contract labour it will be open for the concerned petitioners or such employees to challenge that part of the report of the Regional Labour Commissioner (Central), Hyderabad in appropriate forum in accordance with law. IX. Till the report is made by the Regional Labour Commissioner (Central), Hyderabad and thereupon the action is taken and appropriate orders are issued by the O.N.G.C with regard to absorption or otherwise, and thereafter for a period of one month, no action shall be taken, till 5.3.1999 and no order shall be passed to the prejudice of the employees who are not absorbed and who are not found to be covered by the notification dated 8.9.1994 or by any subsequent notification by the Regional Labour Commissioner (Central), Hyderabad and their position and status as on today shall be maintained till 5.3.1999 except in cases of misconduct or indiscipline. X. After 5.3.1999 also, if at all services of any employees are sought to be terminated, the same shall not be done except in accordance with law”. 3. The corporation sought for review of the order passed in the aforesaid batch of writ petitions and the said Rev.W.P.M.P.No.39024 of 1998 came to be dismissed on 25.11.1998. 4. Pursuant to the directions given in the above-referred batch of writ petitions, the Regional Labour Commissioner (Central), Hyderabad examined the records and heard the workmen individually and also the corporation and submitted report on 30th December 1998. The recommendations made by the Regional Labour Commissioner (Central), Hyderabad is that the corporation has to take Recruitment and Promotion Regulations of ONGC, 1980 as a yardstick in absorbing the workmen engaged in prohibited categories. The corporation constituted a committee for recommending the absorption of contract workers engaged in prohibited category. The Committee considered the report of the Regional Labour Commissioner (Central), Hyderabad and made the following recommendations:- “(a) The Committee had recommended the posts to which the petitioners are to be absorbed on the lines of the absorption process adopted in the matter of W.P.No.1178/97 and 8020/97. The posts are indicated in Column No.10 of Annexure-II. The Committee also recommends absorption of the petitioners in the pay scale of Rs.2282/- (open ended). (b) Wherever the individual petitioners possess technical qualifications, they were recommended for absorption in technical line. Wherever basic qualification is not available, they were treated as unqualified. (c ) Sl.No.08,58,59 and 101 do not possess the basic qualification of 10th class, but they possess the professional qualification like ITI and Heavy Vehicle Driving Licence. They have been treated as unqualified. However, since they possess the professional qualification required for their respective trades, they may be considered for absorption whenever they are able to obtain the basic qualification of 10th class. (d) The Committee has recommended age relaxation irrespective of the number of years of service the individuals had put in for ONGC in line with 3(e) above. (e) In addition to the recommendations made in the Annexure-II, the Committee also recommends that the petitioners having been declared to be falling under the prohibited category by the Regional Labour Commissioner and accepted by the High Court, those petitioners, who are not possessing minimum qualifications as per MRPR 1980, may be converted into casual labour/contingent labour and may be covered by the Certified Standing Orders for Contingent Employees of ONGC in this regard. (f) In respect of Sl.No.42, the name of the individual is not consistent in all the certificates. In some certificates, the name of the father is indicated while in others the name of the mother is recorded. This requires verification. However, upon verification, if the name on the certificates turns out to be correct and belongs to him, he may be absorbed as Junior Attendant. (g) The Committee observed that some of the petitioners claimed to belong to OBC, however, they could not submit a valid proof. Therefore, their cases were considered in GENERAL category, and if, subsequently, they are able to submit OBC certificates from the competent authority, their status may be changed accordingly. (h) The absorption is recommended on the basis of the order of the Hon’ble High Court of A.P. The effective date of absorption is taken as the date of the Court order, i.e., 24.09.1998, as opined by Shri K.Srinivasa Murthy, panel Advocate, vide his letter dated 31.10.1999, placed at Annexure-III. (i) Inter-se seniority to be fixed based on the length of service rendered with M/s.Gowtami Educated Unemployed Welfare Society for ONGC. (j) The absorption is further subject to medical fitness certificate to be obtained from Dy. Chief Medical Officer, ONGC, Rajahmundry”. 5. The corporation challenged the order passed in W.P.No.26676 of 1997 and batch by filing Writ Appeal Nos.1652, 1653, 1654, 1655 and 1656 of 1999. The said Writ Appeals ended in dismissal on 22.11.1999. The corporation made an attempt to challenge the report of the Regional Joint Commissioner by filing W.P.No.11794 of 1999. The said writ petition came to be dismissed reserving liberty to the corporation to challenge the report only in accordance with the directions given in W.P.No.13551 of 1997 and batch. I deem it appropriate to refer the relevant portion of the order passed in W.P.No.11794 of 1999 and it reads thus:- “ After the judgment was reserved on 1.9.1999, the petitioner filed W.P.M.P.No.20828/1999 seeking the permission of this Court to file the document No.S- 16014/131/97-LW dated 8.7.1999, which was received by the petitioner on 21.7.1999. From reading of the said document, I find that it is an endorsement of the Government of India, Ministry of Labour, directing the Regional Labour Commissioner (Central), A.T.I Campus, Vidyanagar, Hyderabad to duly consider the objections of the Management and dispose of by a speaking reasonable order under the intimation to the Ministry. It is not brought to my notice any provision of law, under which the Government of India could issue such a letter directing the authorities to review its own orders. As contended by the counsel for the respondents, before issuing this proceeding dated 8.7.1999, the authorities have not heard either the Labour Commissioner or the workers/writ petitioners in W.P.No.13551/1997 and batch. In these circumstances, the judgment of this Court passed in W.P.No.13551/1997 and batch as having become final, it is the duty of the parties to the writ petitions to give effect to the said order. As I have already noted above, whatever be the reasons of the alleged illegality in the report of the Joint Commissioner, the petitioner-corporation is entitled to challenge the report only in accordance with the directions of this Court in W.P.No.13551/1997 and batch. Therefore, the said proceedings of the Government of India dated 8.7.1999, shall not come in the way of implementing the order of this Court passed in W.P.No.13551/1997 and batch. Accordingly, this W.P.M.P.No.20828/1999 is hereby disposed of with the above observations. For the above reasons, I do not find any merits in this writ petition and accordingly, it is dismissed. In the circumstances of the case, the parties shall bear their own costs.” 6. The corporation taking into consideration the report submitted by the committee absorbed the contract labour who have possessed the requisite qualifications as prescribed in the Modified Recruitment & Promotion Regulations, 1980 (MRPR, 1980) . With regard to contract workers, who do not possess the requisite qualifications have been taken as casual labour under the proceeding dated 6.11.1999 communicated to the contract labour individually. The individuals, who have been absorbed as casual labour, are:- “STATEMENT SHOWING THE PETITIONER ELIGIBILITY POSTS IN ONGC LTD. Name of the Petitioner QUALIFICATIONS Post Eligible as p e r recruitment and promotion regulations 1980 of ONGC. ACADAMIC TECH. As per recruitment and promotion regulations-1980 of ONGC. K.YESU VIII CLASS HMV LICENCE VIII PASS AND RELEVANT EXPERIENCE ASSISTANT OPERATOR (HEAVY EQUIPMENT) S.N.MEERA SAHEB IX CLASS ,, ,, ,, S.S.SALEEM IX CLASS ,, ,, ,, R.SAHADEVUDU IX CLASS NIL VIII PASS ATTENDANT GD-III G.N.MANESWARA RAO VIII CLASS I.T.I FITTER VIII PASS ,, CH.SUBRAHMANYAM IX CLASS NIL VIII PASS ,, K.D.SRINIVASA RAO IX CLASS NIL VIII PASS ,, K.SRIRAMULU IX CLASS NIL VIII PASS ,, M.SATYANARAYANA IX CLASS NIL VIII PASS ,, D.APPA RAO IX CLASS NIL VIII PASS ,, S.JAGANNADHAM IX CLASS NIL VIII PASS ,, G.S.S.KALYAN IX CLASS NIL VIII PASS ,, CH.SURYA PRAKASHA RAO IX CLASS NIL NIL VIII PASS ,, G.PARAMANANDAM IX CLASS NIL VIII PASS ,, J.SATYANANDAM IX CLASS NIL VIII PASS ,, CH.V.V.SATYANARAYANA VIII CLASS NIL VIII PASS ,, B.SATYANRAYANA IX CLASS NIL VIII PASS ,, V.SATYANARAYANA IX CLASS NIL VIII PASS ,, G.VENKATESWARA RAO IX CLASS NIL VIII PASS ,, V.KAMALA DEVI VIII CLASS NIL VIII PASS ,, K.V.V.S.NARAYANA MURTHY IX CLASS NIL VIII PASS ,, Y.LAKSHMANA RAO IX CLASS NIL VIII PASS ,, V.BABURAO VIII CLASS NIL VIII PASS ,, G.V.V.SATYANARAYANA IX CLASS NIL VIII PASS ,, N.DEVA KUMAR IX CLASS NIL VIII PASS ,, K.PAPA RAO IX CLASS NIL VIII PASS ,, S.KRISHNA RAO IX CLASS NIL VIII PASS ,, G.SRINIVASA KUMAR IX CLASS NIL VIII PASS ,, S.SATYANARAYANA IX CLASS NIL VIII PASS ,, K.GARATA RAJU VIII CLASS NIL VIII PASS ,, G.TRINIDHA RAO IX CLASS NIL VIII PASS ,, K.PURUSHOTHAM IX CLASS NIL VIII PASS ,, M.RAJA RAO VI CLASS NIL LITERATE MALI GD-III K.GOPI VII CLASS NIL LITERATE MALI G-III 7. These thirty-four individuals filed Writ Petition No.1307 of 2000 assailing the action of the corporation in appointing them as casual labour instead of absorbing them to the posts of Assistant Operator, Attendant Grade-III and Mali Grade-III by applying the Recruitment and Promotion Regulations of 1980. According to them, their right to get absorbed crystallised as on 8.9.1994 or on the date of their initial appointment as contract labour. Therefore, they were to be considered for absorption in accordance with the Recruitment & Promotion Regulations, 1980 and not Modified Recruitment & Promotion Regulations, 1980. As per the 1980 regulations, VIII pass and relevant experience is sufficient for appointment to the category of Assistant Operator (Heavy Equipment) or Attendant Gr.III and a literate is eligible to be appointed as Mali Grade.III. These categories are far superior to the category of casual labour. 8. The corporation filed Writ Petition No.13479 of 2002 questioning the very report dated 30.12.1998 of the Regional Labour Commissioner (Central), Hyderabad. 9. C.Vijay Kumar, Deputy Chief Legal Advisor of ONGC, K.G. Project, Rajahmundry, has sworn to the affidavit filed in support of the Writ Petition No.13479 of 2002. The grounds set out in the affidavit to challenge the report of the Regional Labour Commissioner (Central), Hyderabad, are: a) The report of the Regional Labour Commissioner (Central), Hyderabad, is incorrect and illegal and in violation of the principles of natural justice as the same had been prepared and submitted on the basis of an one-sided enquiry conducted behind the back of the petitioner. b) The procedure adopted by the Regional Labour Commissioner (Central), Hyderabad, for conducting the verification is contrary to the principles of natural justice and the directions given by this Hon’ble Court in the earlier batch of writ petitions being W.P.No.13551 of 1997 and batch. The Regional Labour Commissioner (Central), Hyderabad, received one-sided version as given by the workmen about the nature of their work and without verifying the same with the Corporation’s records had made classification of the workers as if they are all working in prohibited categories of works which is an error apparent on the face of record. c) The Regional Labour Commissioner (Central), Hyderabad, prepared the report without giving sufficient opportunity to the Corporation. d) The report of the Regional Labour Commissioner (Central), Hyderabad, is contrary to the findings and directions given by this Court in W.P.No.13551 of 1997 and batch, dated 24.09.1998. e) The Regional Labour Commissioner (Central), Hyderabad, has not verified any record before making classification of the workmen. f) The Regional Labour Commissioner (Central), Hyderabad, exceeded his jurisdiction and committed error in recording a finding on issues which do not formed part of the reference. g) The Regional Labour Commissioner (Central), Hyderabad, committed error in recording a finding with regard to the workers such as Generator Operators, Telephone Mechanics etc. as workers covered by the categories in the notification dated 08.09.1994. h) The findings recorded by the Regional Labour Commissioner (Central), Hyderabad, are contrary to the statements submitted by the workmen themselves in their Bio-Data filed along with the writ petitions in W.P.No.13551 of 1997 and batch. In a nutshell, the plea of the Corporation is that the workmen are not entitled for absorption in any post and the Regional Labour Commissioner (Central), Hyderabad, exceeded the scope of his enquiry and therefore, the report dated 30.12.1998 submitted by the Regional Labour Commissioner (Central), Hyderabad, is erroneous, illegal and void and therefore, liable to be set aside. 10. Heard Sri Kakara Venkata Rao, learned counsel appearing for the Corporation; Sri Vedula Venkata Ramana, learned Senior Counsel appearing for the workmen, who have been absorbed as casual labour and Sri J.Kanakaiah, learned counsel appearing for the workmen, who have been considered and absorbed in their respective posts as per their eligibility as recommended by the Committee for absorption in terms of the report submitted by the Regional Labour Commissioner (Central), Hyderabad. 11. Learned counsel appearing for the Corporation submits that earlier writ petitions, being W.P.No.13551 of 1997 and batch, came to be disposed off keeping in view the proposition of law laid down in Air India Statutory Corporation v. United Labour Union[1], and as the proposition of law laid down in the said decision is no more good law in view of the subsequent judgment of the Supreme Court in Steel Authority of India Ltd. v. National Union Water Front Workers[2], the contract labour consequent on the issuance of notification, dated 08.09.1994, has no vested right to seek absorption. He would also contend that the Corporation considered the claims of the workmen basing on the directions issued by this Court in earlier writ petitions being W.P.No.13551 of 1997 and batch and that the report of the Regional Labour Commissioner (Central), Hyderabad can not be given effect, in view of the subsequent decision of the Supreme Court in Steel Authority of India case and that there is no obligation on the part of the Corporation to absorb the contract labour in categories wherein contract labour system has been abolished by virtue of notification, dated 08.09.1994. Much emphasis has been laid by the learned counsel on para.122 of the judgment in Steel Authority of India Ltd. case (2nd supra), which reads as hereunder: “122. The upshot of the above discussion is outlined thus : (1)(a) Before 28/01/1986, the determination of the question whether Central Government or the State Government, is the appropriate Government in relation to an establishment, will depend, in view of the definition of the expression "appropriate Government" as stood in the CLRA Act, on the answer to a further question, is the industry under consideration carried on by or under the authority of the Central Government or does it pertain to any specified controlled industry; or the establishment of any railway, cantonment board, major port, mine or oilfield or the establishment of banking or insurance company? If the answer is in the affirmative, the Central Government will be the appropriate Government; otherwise in relation to any other establishment the Government of the State in which the establishment was situated, would be the appropriate Government. (b) After the said date in view of the new definition of that expression, the answer, to the question referred to above, has to be found in Cl. (a) of S.2 of the Industrial Disputes Act; if (i) the concerned Central Government company / undertaking or any undertaking is included therein eo nomin, or (ii) any industry is carried on (a) by or under the authority of the Central Government or, (b) by railway company; or (c) by specified controlled industry, then the Central Government will be the appropriate Government otherwise in relation to any other establishment, the Government of the State in which that other establishment is situated; will be the appropriate Government. 2(a) A Notification under S.10(1) of the CLRA Act prohibiting employment of contract labour in any process, operation or other work in any establishment has to be issued by the appropriate Government : (1)after consulting with the Central Advisory Board or the State Advisory Board, as the case may be, and (2) having regard to (i)conditions of work and benefits provided for the contract labour in the establishment in question; and (ii)other relevant factors including those mentioned in sub-section (2) of S.10 (b)inasmuch as the impugned notification issued by the Central Government on 9/12/1976 does not satisfy the aforesaid requirements of S.10, it is quashed but we do so prospectively i.e. from the date of this judgment and subject to the clarification that on the basis of this judgment no order passes or no action taken giving effect to the said Notification on or before the date of this judgment, shall be called in question in any Tribunal or Court including a High Court if it has otherwise attained finality and/or it has been implemented. (3) Neither S. 10 of the CLRA Act nor any other provision in the Act, whether expressly or by necessary implication, provides for automatic absorption of contract labour on issuing a notification by appropriate Government under sub-section (1) of S. 10 prohibiting employment of contract labour, in any process, operation or other work in any establishment. Consequently the principal employer cannot be required to order absorption of the contract labour working in the concerned establishment. (4) We overrule the judgment of this Court in Air India's case (supra) prospectively and declare that any direction issued by any industrial adjudicator/any Court including High Court, for absorption of contact labour following the judgment in Air India's case (supra), shall hold good and that the same shall not be set aside, altered or modified on the basis of this judgment in cases where such a direction has been given effect to and it has become final.(1997 AIR SCW 430 : AIR 1997 SC 645 : 1997 LabIC 365) (5) On issuance of prohibition notification under S. 10(1) of the CLRA Act prohibiting employment of contract labour or otherwise, in an industrial dispute brought before it by any contract labour in regard to conditions of service, the industrial adjudicator will have to consider the question whether the contractor has been interposed either on the ground of having undertaken to produce any given result for the establishment or for supply of contract labour for work of the establishment under a genuine contract or is a mere ruse/camouflage to evade compliance of various beneficial legislations so as to deprive the workers of the benefit thereunder. If the contract is found to be genuine but a mere camouflage, the so-called contract labour will