IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 11.03.2010 CORAM THE HONOURABLE MR.JUSTICE K.CHANDRU W.P.NOs.5198, 9102 and 9103 of 2004 and 17363 of 2009 and WPMP Nos.6035, 8586 OF 2004, 10620 and 10621 of 2004 and M.P.NOS.1 AND 2 OF 2009 MRF United Workers Union. Represented by its General Secretary, Mr.G.Shankar, No.9/174, Sholingar Road, Arakonam-631 001. Vellore District .. Petitioner in W.P.NOs.5198, 9102 and 9103 of 2004 MRF United Workers Union, (Regn.No.1169/VLR) rep. by its General Secretary, Adaullah Street, Sholindar Road, Arakonam Taluk .. Petitioner in W.P.No.17363 of 2009 Vs. 1.The Chief Inspector of Factories, Chepauk, Chennai-600 005. 2.The Inspector of Factories, Vellore. 3.The Commissioner, The Office of Regional Commissioner of Provident Fund, Zonal Office, Royapettah, Chennai-600 014. 4.Employees of State Insurance Corporation represented by its Regional Director Office of the ESI Corporation, 143, Sterling Road, Chennai-600 006. https://hcservices.ecourts.gov.in/hcservices/ 5.The Government of Tamil Nadu, represented by the Secretary, Department of Labour & Employment, Chennai-600 009. 6.The Chairman & Managing Director, MRF Limited, 124 Greams Road, Chennai-600 006. 7.The General Manager, MRF Limited, Itchiputtur Plant, Arakonam-631 003. .. Respondents 1 to 7 in W.P.Nos.5198, 9102 and 9103 of 2004 8.The Superintendent of Police, Vellore District. .. Respondent No.8 in W.P.No.5198 of 2004 1.The Chief Inspector of Factories, Chepauk, Chennai-600 005. 2.The Inspector of Factories, Vellore. 3.The Government of Tamil Nadu, rep. By its Secretary, Department of Labour & Employment Fort St. George, Chennai-600 009. 4.MRF Limited, rep. By the Chairman and Managing Director, 125, Greams Road, Chennai-600 006. 5.The Plant manager, MRF Limited, Ichiputhur Plant, Arakonam-631 003. 6.Chakra Pani, K.S.Venkataraman & co. Pvt. Ltd. No.19, Cenotaph Road, Chennai-18. 7.C.Grishkumar, Vishal Engineering Enterprises, No.6, Mahavishnu Nagar, Tiruthani. 8.B.Mani, Lamis Outsourcing Solutions, 43/395, Indira Gandhi Salai, Rajajipuram, Tiruvallore. 9.T.D.Vijayakumar, Aswini Contract, H.A./9, Avildhar Muniswamy Street, Thiruthani. https://hcservices.ecourts.gov.in/hcservices/ 10.P.Abdul Bashir, General Manager (Projects) P.K.Mohamed & Co., 91, MTH Road, Munnurpet, Chennai-50. 11.P.Senthamarai, Senthamarai Contract, Ichiputhur Village and post, Arakonam Taluk, 12.Mrs.Susi, M.D.Contract, 173, Jothi Nagar, Tiruthani. 13.V.Siva, Siva Contract, 46, Jothi Nagar, Tiruthani. 14.S.Bharanikumar, M.M.Enterprises, 68, Jothisamy Street, Tiruthani. 15.K.Narasimhan, Vijayalakshmi Contract, Pattabiramapuram Village, Tiruthani Taluk. 16.A.Sudhakar, Sudhakar Contract, R.N.Kandigai, Arakonam Taluk, 17.R.Dhananchezhian, Raj Enterprises, 297, MIT TNHB Salai, Arakonam. 18,V.Dhandapani, Yuvan Yuva Shree Contract, 220. Gandhi Road, Arakonam. 19.N.Vasudevan Vasudevan Contract, 1, Gandhi Road, 3rd Lane, Tiruthani. 20.G.Maheswaran, Maheswaran Contract, 96, Muthumariamman Koil Street, Ichiputhur, Arakonam 21.R.Kesavalu Naidu Ram Prasad Contract Thanigaipolur Village and post, Arakonam Taluk. 22.Mrs.Indira, Aishwarya Contract, Arakonam Road, Tiruthani. 23.Prince Koshi St.Mary's Contract, 75-A Chennai Bye-pass Road, Tiruthani. https://hcservices.ecourts.gov.in/hcservices/ 24.K.V.Thomas, K.V.Thomas Caterers, 147, K.K.R.Garden, Madavaram, Chennai-600 006. 25.S.Ganesan, Swamy Security Service Flat D, Dhivya Complex, Block I, Nerkundram West, Vadapalani, Chennai-26. 26.Aishwaryah Constructions, No.132/51A, Village Street, Chennai. 27.SDE Enterprises, C/o MRF Ltd. Ichiputhur, Arakonam. 28.Embashri Engineering, C/o.MRF Ltd. Ichiputhur, Arakonam 29.P.Vasudevan Contract, No.10/22, Nehruji Nagar, 1st Cross, 5th Street, Arakonam. 30.Bharatraj Contrat, Narasimhapuram, Arakonam. 31.Balakrishna Industries, C/o.MRF Ltd. Ichiputhur, Arakonam. 32.Devishree Electrical, C/o.MRF Ltd. Ichiputhur, Arakonam 33.Indian Commerce & Industries Co. Pvt. Ltd. C/o.MRF Ltd. Ichiputhur, Arakonam 34.Welcome Insulation, C/o.MRF Ltd. Ichiputhur, Arakonam 35.Sri Venkateswara Enterprises, C/o.MRF Ltd. Ichiputhur, Arakonam 36.Vijitha Enterprises, C/o.MRF Ltd. Ichiputhur, Arakonam 37.Jothi Engineering, 3, Jothi Illam, Pondicherry. 38.Guna Electricals, 3/1, Head Post office Road, Arakonam. .. Respondents in W.P.No.17363 of 2009 W.P.No.5198 of 2004 has been preferred under Article 226 of the Constitution of India praying for the issue of a writ of mandamus to direct the Superintendent of Police, 8th respondent to act upon the complaint of the petitioner union dated 28.2.2004 and to remove the unauthorised persons from the factory premises of MRF Limited, Itchiputhur and investigate the practices adopted by the MRF Limited and to take such criminal action as against the offenders. W.P.No.9102 of 2004 has been preferred under Article 226 of the Constitution of India for the issue of a writ of mandamus directing the third respondent to take appropriate action in https://hcservices.ecourts.gov.in/hcservices/ respect of workers, working at Itchiputhur plant in Arakonam under the 7th respondent belonging to 6th respondent with regard to coverage under Provident Fund scheme. W.P.No.9103 of 2004 has been preferred under Article 226 of the Constitution of India for the issue of a writ of mandamus directing the respondents 1, 2 and 5 to inspect and investigate the number of workmen utilized by the 6th and 7th respondents as the contract labour in direct processes and take appropriate steps in law to enforce the provisions of the contract labours Act and Rules in respect of workmen employed in the 7th respondent factory of MRF Limited at Itchiputhur plant and to secure for the workmen, their legitimate right of security of employment in accordance with law. W.P.No.17363 of 2009 has been preferred under Article 226 of the Constitution of India for the issue of a writ of mandamus to direct the respondents 1 to 3 to revoke the registration certificates bearing Nos.RC N.20/NA/96 K.Dis.No.4/2851/07 dated 30.11.07 R.C.No.100/98, K.Dis.N.A/2852/07 dated 30.1.2007 and RC No.101/98 COIS N.A/2853/07 dated 30.11.2007 issued to the principal employer, i.e. respondents 4 and 5 and the licenses issued to the contractors, i.e. respondents 6 to 38 under the provisions of the Contract Labour (Regulation and Abolition) Act, 1970 and the Tamil Nadu Contract Labour (Regulation and Abolition) Rules bearing No.183/2008 dated 29.7.2008,40/02 dated 30.9.2002, 132/06 dated 22.6.06,27/2000 dated 15.4.2002, 28/2002 dated 15.4.2002,159/07 dated 6.8.2007,162/07 dated 29.9.07,160/07 dated 16.8.07,1/97 dated 11.2.97,113/05 dated 30.5.2005,59/2003, dated 2.6.03, 165/08 dated 8.5.2008, 185/2008 dated 29.7.2008,135/06 dated 26.6.2006,158/2007 dated 8.8.2007, 176/2008 dated 3.6.2008,175/08 dated 22.4.2008, 111/05 dated 29.4.2005, 141/2006 dated 11.9.2006, 110/05 dated 29.4.2005,112/05 dated 29.4.2005,161/07 dated 13.9.2007,179/2008 dated 9.7.2008, 87/2004 dated 22.6.2004, 177/08 dated 5.6.2007 which have subsequently been renewed. For Petitioners : Mr.V.Prakash, SC for M/s.Ramapriya Gopalakrishnan, Mr.K.Ramkumar Mr.P.Chandrasekaran Mr.P.Subramanian,AGP -for RR1,2,5 & 8 in WP No.5198/04 Respondents 1,2 & 5 in WP Nos.9102 and 9103/04 and Respondents 1 to 3 in WP No.17363/09 Mr.K.C.Ramalingam (ESI) -for 4th Respondent in WP No.5198/04, 9102 and 9103/2004 M/s. K.Gunasekhar (EPF)- for 3rd Respondent in WP 5198/2004 https://hcservices.ecourts.gov.in/hcservices/ Mr.Sanjay Mohan for M/s.S.Ramasubramaniam & Associates -for Respondents 6 & 7 in WP N.5198/2004 WP Ns.9102 & 9103/04 - and Respondent 4 & 5 in WP 17363/2009 M/s.S.Gunasekhar,ACGSC -for 3rd Respondent in WP 9102 & 9103/2004 Mr.Masilamani,Senior Counsel for M/s. King & Partridge - for Respondents 12,13,15,21,28, 29,30, 31 in WP No.17363/09 Mr.D.Jawahar & DR.Patrick Ryan -for Respondent 14,17,18,22,32,34,37 & 38 in WP No.17363/09 Mr.S.Ravindran for M/s.T.S.Gopalan & Co., -For Respondents 7,9 10,11,16,19,20,23 & 27 in WP N.17363/2009 COMMON ORDER All the four writ petitions were filed by the petitioner Trade Union with registration No.1169/VLR, represented by its General Secretary. These writ petitions were directed to be posted before this court by an order of the Hon'ble the Chief Justice, dated 3.3.2010 on being specially ordered. Hence all these writ petitions were posted before this court. 2.In the first writ petition i.e. W.P.No.5198 of 004, the prayer of the writ petitioner was for a direction to the Superintendent of Police, Vellore District to act upon the complaint of the petitioner Union, dated 28..2004 and also to remove the unauthorised persons found in the factory premises belonging to MRF Limited at Itchiputhur Plant in Arakkonam and to investigate into the practices adopted by the MFR Limited and to take such criminal action as against the offenders. The writ petition was admitted on 5.3.2004. 3.Pending the writ petition, though one MRF Cycle Tyre Unit Employees Association filed an application in WPMP No.8586 of 2004 to implead itself as 9th respondent, no order was passed in that miscellaneous petition. The petitioner also took out an application for an ad interim direction directing the Superintendent of Police, Vellore to afford police protection to the workmen and members of the petitioner union in their Itchiputhur plant. This Court on 18.3.2004, after hearing both sides, directed the Chief Inspector of Factories (CIF), Chepauk to inspect the Units in the presence of the General Secretary of the petitioner Union and to submit a report on 22.3.2004. Accordingly, a report was filed stating that three factories have obtained licences to employ a maximum number of 2000 https://hcservices.ecourts.gov.in/hcservices/ workers in the Tyre plant, 500 workers in Tube plant and 50 workers in Conveyor Belting plant. The total number of contractors in respect of those three factories were 15 contractors in Tyre Plant, 9 contractors in Tube Plant and 2 contractors in Conveyor Belting Plant. It was also stated that at the time of inspection by the Chief Inspector of Factories, he found that the contract workers were engaged in the work, for which registration certificate was issued. The Register of Contractors in Form No.XII was maintained in all the three factories. It was verified and found to be correct. Form No. XVI, which is a muster roll of all contract workers, was also maintained by the contractors, which was also verified and found to be correct. The Muster Roll under Rule 103 prescribed under the Tamil Nadu Factories Rules, 1950 was also verified. He also found that there was no unauthorised persons working or available inside the factory premises. 4.On notice from this court, 6th and 7th respondents management have filed a counter affidavit, dated 17.3.2004. In the counter affidavit, it was stated that such a writ petition is not maintainable, since the management is a private employer. If at all the Union has any grievance, they should raise an industrial dispute under Section 2(k) of the Industrial Disputes Act, 1947. The factory at Ichiputhur in Arakkonam was started in the year 1972. It engaged in the manufacturing of Passenger Radial tyres, Bias Tyres, two and three wheeler tyres, tubes, flaps and conveyor belt. There are approximately 1267 employees working and are having cordial industrial relations with them. They had engaged various contractors in building construction, civil maintenance, engineering maintenance, security services, boiler maintenance, electrical erection work, gardening, loading and unloading, house keeping and structural erection, etc. They also have registration certificate for employing contract labours. There are no outsiders in the factory. The contractors are licensed and their employees are covered both under the ESI and EPF Act. It is the petitioner union which indulged in violence. The allegation that the workmen engaged by the contractors were doing the same work as that of the permanent employees was denied. Therefore, they sought for dismissal of the writ petition. 5.The petitioner had filed an affidavit, dated 15.4.2004, stating that the report submitted by the Chief Inspector of Factories pursuant to his visit on 19.3.2004 were objected to. The first respondent did not inform the union about his inspection. The General Secretary who was permitted to accompany the officer was taking his lunch around 11.30 a.m. He skipped his lunch and went to the spot. But he was informed that they had already visited the plant. In the meanwhile the Contract labours were sent out from doing production work. The management knowing in advance the visit of the Chief Inspector of Factories had removed the contract workers from the scene. On that day, the production got reduced and that can be seen from that day's electricity consumption. They had also filed a typed set of papers about various objections raised by their union and the https://hcservices.ecourts.gov.in/hcservices/ report sent by the General Secretary to the President of the Union. 6.In the meanwhile, the petitioner union filed W.P.Nos.9102 and 9103 of 2004. Both the writ petitions were admitted on 5.4.2004. In the first writ petition, the petitioner union prayed for a direction to the third respondent Regional Commissioner of Provident Fund to take an appropriate action in respect of workers working in the Itchiputhur plant and to cover them under the PF Scheme. Pending the writ petition, a direction was sought for to give details of workmen who are employed in the factory and whose services were utilized by the management with regard to their coverage under the Provident Fund Act. In that petition, only notice was ordered. 7.In W.P.No.9103 of 2004, the prayer was to direct the respondents, i.e. the Chief Inspector of Factories, Inspector of Factories and the Government to inspect and investigate the number of workmen utilized by the respondents as contract labours in direct processes and to take appropriate steps to enforce the provisions of the Contract Labour (Regulation and Abolition) Act, 1970 (for short CLRA Act) and to secure for them their legitimate right of employment in accordance with law. Pending the said writ petition, an interim injunction was sought for restraining the management from deploying contract labours in direct manufacturing process and from engaging them in any other process other than for which the management had obtained registration under Section 7 of the CLRA Act, in which also only notice was ordered. 8.In the said two writ petitions, on behalf of the management, two counter affidavits, dated 10.10.2009 were filed. In the first counter affidavit, the management had stated that in the year 2004, there were 1267 permanent workers in the tyre plant. They are having 26 contractors, who are licensed under the provisions of the Act. The workmen of the contractors were also allowed to us the canteen facility. They are covered by the ESI Act. In the second counter affidavit, it was denied that the contract workers are engaged in direct process. The Chief Inspector of Factories who visited the factory found that the allegation made by the union was not correct. 9.On behalf of the PF Department, a counter affidavit was filed by the Assistant Provident Fund Commissioner (Legal), dated 2.5.2005. It was claimed that there cannot be any discrimination between the workers engaged directly and those who are engaged by the contractors. In both the cases, they are covered by the PF Act. As soon as the petitioner union sent its representation, appropriate actions have been taken and the said representation was under their consideration. Since the management had obtained an interim stay in W.P.No.6062 of 2004, further proceedings will be initiated after the disposal of the said writ petition. 10.It was thereafter, the petitioner union filed the fourth https://hcservices.ecourts.gov.in/hcservices/ writ petition being W.P.No.17363 of 2009, seeking for a direction to revoke the registration certificate issued under CLRA Act to the management and also to revoke the licenses granted to the contractors for engaging contract labours. The contractors were impleaded as respondents 6 to 38. Various licenses issued in favour of the contractors were also enclosed in the typed set filed along with the writ petition. 11.When the matter came up on 26.8.2009, notice was directed to be issued to the respondents privately. Accordingly, notices were issued. Pending the writ petition, the petitioner filed two miscellaneous petitions. One is for restraining the management in engaging contract labours at their Itchiputhur plant except in process where valid certificate of registration is issued to the Principal employer and valid licenses are available with the contractors and to act strictly in accordance with the CLRA Act. In the second miscellaneous petition, the petitioner sought for an assistance of an independent person to report to this court as to the number of contract labours engaged at their Itchiputhur plant. 12.On notice being received privately, the respondents have filed counter affidavits. Most of the contractors have also filed counter affidavits denying the allegations made by the union. 13.On behalf of the management (MRF Factory), a counter affidavit, dated 22.10.2009 was filed. In that counter affidavit, they had claimed that there are about 1400 permanent employees as on date. Upto the year 2008, there were 32 contractors and 59 contracts. In the year 2009, number of contractors were increased to 43 having 74 contracts. The names of contractors and the license in which maximum number of workers they can employ as well as number of workers engaged by the contractors were set out in paragraph 8 of the counter affidavit. Apart from repeating previous averments in the previous affidavits, they had stated that they are going strictly by the provisions of the CLRA Act. It was also stated that the ESI Act is also extended to the workmen. It was further claimed that a settlement was reached with the recognised union under Section 18(1) of the I.D. Act on 9.5.2009. Out of 1400 workers, 955 workers have accepted the terms of settlement. The grievance projected by the union cannot be entertained under Article 226 of the Constitution of India. 14.In the counter affidavit filed on behalf of the Chief Inspector of Factories and Inspector of Factories, Vellore, it was claimed that the Deputy Chief Inspector of Factories, I Division, Vellore visited the factory on 27.6.2009. It was claimed that the contract workers are engaged in the work which are stipulated in the registration certificate and the contract licenses. The instances of contract labours engaged in manufacturing process were not noticed. These facts were notified to the union. But the union has filed the present writ petition. It was also claimed that since contractors were having https://hcservices.ecourts.gov.in/hcservices/ valid licenses and the Principal Employer was having certificate of registration, any revocation can be done only under Section 8 of the CLRA Act and that too if it is proved that those certificates were obtained by misrepresentation or suppression of any material facts. Since it was not brought to the knowledge of the Inspector of Factories, the power under Section 8 was not invoked. 15.It was also claimed that the Government has not issued any prohibitory order under Section 10(1) of the CLRA Act prohibiting employment of contract labours. In the absence of any express prohibition of engagement of contract labours by the Government, the Inspector of Factories cannot suo motu stop the workmen engaged by the contractors. It was also stated that the Contract labours were allowed to be engaged on valid licence given by the department and certain errors found in the licences cannot be magnified. The department was satisfied that the contract workers are employed in accordance with the provisions of the Factories Act, 1948. The minimum wages are paid to them. The department had not noticed any violation of sanction of employment in terms of certificate of registration and licence. No offence has been brought to the notice for launching prosecution under CLRA Act. The renewal of licences have been done in conformity with the provisions of Section 7(2) of the CLRA Act. The other allegations made by the union were also denied. With reference to the mistakes found in some of the licences, the same was sought to be explained in paragraph 7 of the counter affidavit, which is as follows: "7....All the relevant details such as nature of work, period of work and the maximum number of workmen to be engaged by each contractor are captured in the annexure to Form 1. It cannot be said that the license is not in accordance with the requirements of the Tamilnadu Contract Labour Rules just because the nature of work revealed in the Certificate of Registration is not reflected in the License issued by 2nd respondent whereas item 2 of the License was not properly printed. Hence, the 2nd Respondent had made it a practice to super-scribe by hand on top of the License the nature of work for which license is granted. It is possible that by oversight a few licenses may not have this detail. But it is respectfully submitted that the validity of the license cannot be faulted just because a particular detail viz. Nature of work, which is available in Form 1 (Application for License) Form 2 (Certificate of Registration) Form IV (Application for License) is not reflected in Form VI (License) in a very few cases. " 16.Each of the contractor have filed counter affidavits https://hcservices.ecourts.gov.in/hcservices/ denying the allegations made against them. They have also stated that filing of a writ petition was a clear abuse of process of court. Hence the writ petition is not maintainable. 17.The petitioner union has filed an additional typed set containing representations sent by the union dated 2.1.2010 and 29.1.2010 and a reply sent by the Deputy Chief Inspector of Factories, Vellore, dated 11.2.2010. In that letter, the department requested the union to furnish the names of workers' representative in order to conduct further inspection in the factory. 18.The petitioner union itself has also produced a copy of communication sent by the Deputy Chief Inspector of Factories, dated 23.7.2009. In that he had informed the union that when an inspection was made in those three factories, the workers were engaged in the following process, i.e. transporting the manufacturing parts from one place to other, cleaning work and storing work. Only the number of the workers specified in the registration certificate and the licenses issued to the contractors alone were found working. During inspection, no workers who are not covered by the registration certificate or by the contract licences were found working. Only permanent workers are working in the direct processes. In the complaint sent by the union, they have not given the names of contract workers and the machines in which they are working. If on further inspections, any contractors are found violating the license terms, they will be duly attended to. 19.Mr.V.Prakash, learned Senior Counsel appearing for the petitioner union submitted that in a writ petition under Article 226 of the Constitution of India, this court has got ample powers to decide whether the Principal employer was registered in terms of Section 7 and whether the contractors are having valid licences under Section 12. It is one thing to state that on paper, the establishment has registration and some of the contractors were having licenses. It is other thing to see that whether the workers who are covered by the licenses are working only in the area for which licenses were issued or that some contractors are using licenses to smuggle the workers to work in places other than for which they were licensed. He also submitted that when they issued certificate under Section 7 and licenses under Section 12, there must be an application of mind before the grant of such certificate of registration or licenses, as the case may be. 20.The learned Senior Counsel refers to Rules 17 and 18 of the Tamil Nadu Contract Labour Rules, 1975 read with Form V. There is aim and purpose in prescribing the rules, was to mention the maximum number of workers to be employed as contract labours and type of business carried on including particulars which may be relevant to the employment of the contract labours. If these particulars are not found in the Form of license, then the very purpose for regulating the contract labours for which the Act has been enacted will be lost. He further submitted https://hcservices.ecourts.gov.in/hcservices/ that it is under Form VI, licenses were granted. Any amendment of the license is to be separately made as per Rule 28. The renewal has to be made under Rule 29. The annexure to the rule contains several clauses to be filled up by the licensing officer. The renewal is granted by merely making an endorsement after noting the renewal fee. In some of the licenses, the nature of work in which they were engaged was not mentioned. It was also stated that under Rule 19, if application for registration is not complete in all respects, the registering officer shall require the principal employer to amend the application. If he fails to do so, the registering officer should reject the application. Similarly, under Rule 23, the licensing officer can make an enquiry to satisfy himself about the eligibility of the application for license. Such an exercise was not granted. 21.It was further stated that under Rule 25(2)(v), the workman employed by the contractor if he performs the same or similar kind of work as that of workman directly employed by the principal employer, then they should enjoy the same service conditions. The registering officer can make a decision in this regard. Any aggrieved party must file an appeal to the Commissioner for Labour. In other case, the rates of wage, holidays, hours of work and conditions of service of the workmen of the contractor can be specified by the Commissioner for Labour. The department