Case: Sociedade de Fomento Industrial (P) Ltd Vs. Mormugao Dock Labour Board

notionally employed in the matter of loading the ore by the ocean-going vessel fitted with grab crane. There is nothing in clause 54 which prohibits the Board from recovering such cost of operating the Scheme in this manner. In this context, it may also be mentioned that notional employment of gang workers in connection with loading of ore on ocean-going vessels fitted with grab crane has been recognised in the settlement that was entered into on October 17, 1970 by M/s. V.M. Salgaocar & Brother Pvt. Ltd. wherein it was expressly agreed that whenever gangs are not booked for work the employers shall pay double the levy to the Board chargeable for one gang for each working grab crane. It is, therefore, not possible to accept the contention urged on behalf of the petitioners that it was not permissible for the Board to impose the levy on the basis of notional employment of gang workers although the gang workers were not actually employed in the task of loading iron ore in the vessels fitted with grab cranes. 15. Coming to the other contention based on Article 14 of the Constitution we are in agreement with the view of the High Court that grab-crane fitted vessels cannot be equated with transhippers fitted with grab cranes for the purpose of levy and that there are features which indicate that they cannot be treated at par. In this context, it has to be noted that transhippers employ regular winchmen to operate the grab cranes fitted on the transhippers as their monthly workers are responsible for paying all their dues such as salary, provident fund, and gratuity etc. Ocean-going vessels fitted with grab cranes on the other hand utilise the services of reserve pool workers for operating the grab cranes and the Board has to bear the burden for such workers. Moreover, the owners of transhippers have to engage other staff to operate the transhipper as required under the Merchant Shipping Act and they have to incur expenses for maintaining the said vessel apart from the heavy amount which has been invested in the vessel itself. It can also not be ignored that ever since the introduction of grab cranes for the purpose of loading the ore at Mormugao Port in 1970, the ocean-going vessels fitted with grab cranes have been treated differently from transhippers fitted with grab cranes in the matter of amount payable to the Board. The amount payable by ocean-going vessels fitted with grab cranes is governed by the settlement dated October 17, 1970 while the transhippers are governed by the various agreements of 1977 which have been revised from time to time. Having regard to all these circumstances we are unable to accept the contention urged on behalf of the petitioners that since transhipper as well as the ocean-going vessels fitted with grab cranes both use grab cranes for the purpose of loading the ore they should be treated alike in the matter of imposition of levies by the Board. 16. It has been said that ``no economic measure has yet been devised which is free from all discriminatory impact and that in such a complex arena in which no perfect alternatives exist, the Court does well not to impose too rigorous a standard of criticism, under the equal protection clause reviewing fiscal services. (See: P.M.A. Setty v. State of Karnataka, 1988 Supp(3) SCR 155 at p. 189). The same thought is expressed in San Antonto Independent Schools District v. Rodriguez, speaking through Justice Steward, (1973) 411 U.S.1 at page 41; G.K. Krishanan v. State of Tamil Nadu, (1975) 2 SCR 715 at p. 730. Here we find that, according to the Board, one of the factors contributing to the continuous drain on the finances of the Board is the increased off-take of iron ore since 1979 by vessels fitted with grab cranes because such off-take results in loss of opportunity of employment for the registered dock workers and consequent increase in the burden on the Board for the minimum guaranteed wages and other amounts payable under the Scheme. The Board has made efforts to reduce the strength of registered Dock workers on its roll from 2314 in 1979 to 1148 in June 1983. A substantial number, i.e., 864, of those 1148 workers are gang workers who are denied opportunity of employment on account (of) off-take of iron ore by vessels fitted with grab cranes. Annexure `A to the Rejoinder Affidavit filed on behalf of the petitioners in the High Court could show that prior to the enhancement of the general levy and welfare levy under the impugned circular the charges came to about Rs. 1.48 per wet M/T on and as a result of enhancement of the general levy and welfare levy by the impugned circular the said charges have been increased to about Rs. 2.55 per wet M/Ton, i.e., by about Re. 1/- per wet M/Ton. On the other hand, the cost of manual loading was in the range of Rs. 8.11 to Rs. 11.91 (Annexure 2 to the Affidavit in reply of A. Onkarappa filed on behalf of the Board in the High Court). The expenses for loading through transhippers (as per para 8 of the affidavit in reply filed on behalf of the Board in the High Court which was not disputed by the petitioners in their rejoinder affidavit) come to Rs. 27 to Rs. 33 per tonne. By enhancing the general levy and welfare levy under the impugned circular dated March 19, 1983 the Board, keeping in view the economics of the cost of loading under the various modes, has sought to balance its financial deficit caused on account of increased off-take of ore through ocean-going vessels fitted with grab cranes by enhancing the levies which has led to increase in the cost of loading through vessels fitted with grab cranes. In doing so the Board cannot be said to have acted arbitrarily or unreasonably or having subjected the petitioners to hostile or invidious discrimination.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]6. Insofar as the owners of transhippers are concerned since they were employing their own winchmen they claimed that they were not required to register themselves under the Scheme and they were not liable to pay any levy under the scheme on the ground that the cargo handled by them was outside the Scheme. A writ petition (W.P.No. 47 of 1971) was filed by M/s. ChowguleCo. Pvt. Ltd., owners of a transhipper vessel, in the Court of Judicial Commissioner of Goa wherein it was contended that the owners of the transhipper were not doing dock work within the meaning of the Scheme and they were entitled to employ their own labour and they were not required to pay any levies for the cost of administering the Scheme. The said writ petition was disposed of by the Judicial Commissioner by his judgment dated August 19, 1974 whereby the contention that the owners of the transhipper were outside the Scheme and did not perform dock work was rejected and it was held that they were liable to pay levy for the winchmen. It was, however, held that the owners of the transhipper were not liable to pay notional levy on the basis of gangmen who were not actually utilised by the said owners. The Board as well as the owners of the transhipper filed appeals against the said judgment of the Judicial Commissioner in this Court and the said appeals were disposed of in terms of an agreement dated July 8, 1977 whereby it was agreed that the owners of the transhipper shall register themselves as employers within the meaning of the Scheme with liberty to employ their own workmen on their transhipper who would be treated as monthly workers under the Scheme and that the owners of the transhipper would pay a flat rate levy of 7 paise per tonne of cargo handled through the transhipper which rate of levy would not be changed except by mutual consent of the parties. It appears that similar agreements were entered into with other owners of transhipper vessels in 1977. The rate of levy was revised from 7 paise per tonne to 21 paise per tonne and in April 1983 a formula was agreed upon for future revision of the same. The said levy is composite and allthe same time the Board decided to increase the percentage of general levy in respect of handling by grab crane fitted ships from 200% to 400% and the welfare levy from 30% to 60%. The Central Government gave its approval to the said increase by its order dated March 11,1983. Thereafter the Board issued the impugned circular dated March 19, 1983 increasing the general levy from 200% to 400% and the welfare levy from 30% to 60%. Similarly the Board decided to impose a special levy @ Re. 1/per tonne in respect of all cargo handled manually by the registered dock workers. The said proposal was approved by the Central Government by letter dated March 14, 1983 and thereupon the impugned circular dated March, 19, 1983 was issued by the Board imposing the special levy @ Re. 1/per tonne in respect of all cargos manually handled by the registered dock workers with effect from March 14, 1983. The said circular was clarified by the Board by resolution dated July 14, 1983 that the special levy is authorised to be collected in respect of all cargos handled with the help of registered dock workers whether gang workers or winch drivers. The said clarification was also approved by the Central Government by its letter dated December 21, 1983.As regards the first contention urged by the learned counsel for the petitioners based on clause 54 of the Scheme it is necessary to bear in mind that the object of the Scheme as set out in clause 2(1) is to ensure greater regularity of employment for dock workers and to secure that an adequate number of dock workers is available for the efficient performance of dock work. The Scheme seeks to achieve these twin objects by maintaining a reserve pool of registered dock workers who are available for work and a worker in the reserve pool is guaranteed minimum wages in a month under clause 32 as well as attendance allowance under clause 33 and disappointment money under clause 35. Clause 54(1) empowers the Board to recover from registered employers the cost of operating the Scheme. Since the Scheme applies to gang workers the cost of operating the Scheme includes that payments made to gang workers under the various clauses of the Scheme. Normally a gang consists of four winchmen and 10 gang workers to operate a crane per shift. For operating the grab crane only winchmen are required and gang workers are not required. But insofar as the Board is concerned it has to keep gang workers on its rolls and to pay their minimum wages and other allowances payable under the Scheme to the gang workers in the reserve pool. Since the wages and allowances payable to the workmen under the Scheme form part of the cost of operating the Scheme it would be permissible for the Board to recover the said cost by way of levy by treating the gang workers as notionally employed in the matter of loading the ore by thevessel fitted with grab crane. There is nothing in clause 54 which prohibits the Board from recovering such cost of operating the Scheme in this manner.Coming to the other contention based on Article 14 of the Constitution we are in agreement with the view of the High Court thatfitted vessels cannot be equated with transhippers fitted with grab cranes for the purpose of levy and that there are features which indicate that they cannot be treated at par. In this context, it has to be noted that transhippers employ regular winchmen to operate the grab cranes fitted on the transhippers as their monthly workers are responsible for paying all their dues such as salary, provident fund, and gratuityregard to all these circumstances we are unable to accept the contention urged on behalf of the petitioners that since transhipper as well as thevessels fitted with grab cranes both use grab cranes for the purpose of loading the ore they should be treated alike in the matter of imposition of levies by theenhancing the general levy and welfare levy under the impugned circular dated March 19, 1983 the Board, keeping in view the economics of the cost of loading under the various modes, has sought to balance its financial deficit caused on account of increasedof ore throughvessels fitted with grab cranes by enhancing the levies which has led to increase in the cost of loading throughvessels fitted with grab cranes.In doing so the Board cannot be said to have acted arbitrarily or unreasonably or having subjected the petitioners to hostile or invidiousHigh Court has held that the circular dated March 19, 1983 regarding increase in the general levy and welfare levy from 200% to 400% and 30% to 60% respectively could only operate from the date of such circular and could not be made operative with effect from October 30, 1982, the date of passing of the resolution, for the reason that prior approval of the Central Government was required in view of clause 54(3) of the Scheme and the proposal made by the Board in its resolution dated October 30, 1982 was approved by the Central Government only on March 14, 1983. We do not find any infirmity in this approach of the High Court. Similarly as regards circular dated March 19, 1983 for imposition of special levy the High Court has rightly held that the said circular could not have retrospective effect.