ONGC LABOUR UNION versus ONGC DEHRADUN & ORS.
[2019] 13 S.C.R. 458, Supreme Court of India, 2019
Outcome: Unknown
Segment: Ratio
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ONGC LABOUR UNION
v.
ONGC DEHRADUN & ORS.
(Civil Appeal No. 8114 of 2019)
OCTOBER 17, 2019
[R. BANUMATHI, A. S. BOPANNA AND
HRISHIKESH ROY, JJ.]
Labour Laws:
Notification issued u/s. 10(1) of CLRA Act –  Prohibiting
employment of contract labour in different categories of work in
ONGC –  Notification challenged by ONGC before High Court –
High Court quashed the Notification –  Appeal to Supreme Court
by ONGC Labour Union (who were not impleaded as party before
High Court) –  Held: High Court judgment was passed without
being apprised of the relevant material and primarily on the basis
of judgment in *SAIL case which was related to 1976 Notification –
The Notification has a direct impact on the workmen of ONGC –
Since the opportunity to be heard was denied to the workmen as the
Labour Union was not impleaded, matter is remitted to High Court
for consideration afresh –  Contract Labour (Regulation and
Abolition) Act, 1970 –  s. 10(1).
Disposing of the appeal and remitting the matter to High
Court, the Court
HELD : The notification issued under s. 10 (1) of Contract
Labour (Regulation and Abolition) Act, 1970, prohibiting contract
labour  would directly impact the workmen in the ONGC but in
the writ petitions filed before the two High Courts, the ONGC
management chose not to array any of the recognised labour
Unions. Hence, the affected contract labourers in the ONGC were
denied the opportunity to participate in the
writ proceedings in
the concerned High Courts. [Para 11] [467-D-E]
2. The impugned judgment indicates that the High Court
had no access to the previous exercise undertaken by the Central
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Government, leading to issuance of the impugned notification
under Section 10(1) of the CLRA Act. The factum of constitution
of the sub-committees prior to the issuance of the impugned
notification and the studies made by the sub-committees and the
nature of their recommendations, were not brought to the notice
of the High Court.  Besides, the Court was made to believe that
the Central Government had not consulted the Labour Advisory
Board.  Thus, wrong inference was drawn on incorrect premises
and the High Court proceeded under the presumptive footing as
if there was non-application of mind by the Central Government.
[Para 12] [467-F-G]
3. The High Court rendered the impugned judgment
primarily on the basis of the *SAIL verdict since none of the
relevant materials for the 1994 notification were produced in the
High Court. Crucially, when the impugned notification was issued,
the Central Government did not have the benefit of the *SAIL
judgment rendered on 30.08.2001 which again related to the 1976
notification. The primary focus of the challenge in the 30.08.2001
*SAIL verdict was to the previous notification (S.O. No.776 (E)
dated 09.12.1976) issued by the Central Government, prohibiting
employment of contract labour in respect of four categories of
works in establishments, inter-alia, of the ONGC.  It was
necessary for the High Court to determine whether the
observations made for the then impugned 09.12.1976 notification
would also apply with all
vigour, to the presently impugned
notification (08.09.1994), issued under Section 10(1) of the CLRA
Act. More particularly, the High Court should have determined
whether the prohibitory notification was preceded by the required
enquiry on contract labour by the Sub-Committee, the nature of
the study by the Sub-Committee, whether the views of the
stakeholders were noticed by the Committee members and the
implications of those, on the decision of the Central Government.
The impugned judgment shows that no material was placed before
the High Court to indicate “……….what inquiry/material was
carried out to meet the requirements provided under sub-section
(2) of Section of the Act, 1970. There is no reference when the Sub-
Committee was constituted and what were its recommendations”.
The Central Government also failed to project that any
ONGC LABOUR UNION v. ONGC DEHRADUN & ORS.
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consultation was made with the Central Advisory Labour Board.
[Paras 14 and 15] [468-B-H]
4. The High Court’s Judgment was passed without being
apprised of the relevant materials and primarily on the basis of
the *SAIL judgment which however related to the 1976
notification. This  has resulted in prejudice for those who, given
the opportunity, could have apprised the High Court with all facts
and the detailed study/discussion by the Sub-Committees,
preceding the 08.09.1994 notification. [Para 16] [469-A-B]
5. Therefore, since no opportunity was provided to the
appellant Labour Union in a case, which directly concerns the
members of the ONGC Labour Union and other workman, it would
be  appropriate to order restoration of the Writ Petition No.1323
of 2013 (M/S), in the file of the High Court of Uttarakhand for
fresh consideration. The appellant i.e., the ONGC Labour Union
– Gujarat is ordered to be impleaded in the restored proceedings.
Other recognized labour Unions within ONGC may also be vitally
interested and such concerned Labour Unions must also be
impleaded in the High Court. [Para 17] [469-C-E]
*Steel Authority of India Ltd. and Others v. National
Union Waterfront Workers and others (2001) 7 SCC
1 : [2001] 2 Suppl. SCR 343 - referred to.
Case Law Reference
[2001] 2 Suppl. SCR 343
referred to
Para 5.5
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 8114
of 2019.
From the Judgment and Order 15.02.2018 of the
High Court of
Uttarakhand at Nainital in Writ Petition No. 1323 of 2013.
Colin Gonsalves, Sr. Adv., Gunjan Singh, Satya Mitra, Advs. for
the Appellant.
J. P. Cama, Sr. Adv., Akshay Amritanshu, Ankit Kumar Lal,
Ms. Alka Agrawal, Vibhu Shankar Mishra, Raj Bahadur, Advs. for the
Respondents.
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The Judgment of the Court was delivered by
HRISHIKESH ROY, J. 1. Leave granted.
2. Heard Mr. Colin Gonsalves, Learned Senior Counsel
representing the appellant.  Also heard Mr J.P. Cama, learned Senior
Counsel representing Respondent No.1/Writ Petitioner (ONGC). Ms.
Alka Agrawal, the learned counsel is representing the Union of India.
3. This appeal is filed by the ONGC Labour Union who however
were not impleaded in the Writ Petition No.1323 of 2013, filed by the
ONGC in the High Court of Uttarakhand. The ONGC had challenged
the notification dated 08.09.1994 (Annex P6) issued by the Government
of India, under Section 10(1) of the Contract Labour (Regulation
and Abolition) Act, 1970 (hereinafter referred to as ‘the CLRA Act’)
prohibiting employment of contract labour in different categories of work,
in the ONGC. The High Court allowed the ONGC’s Writ Petition and
quashed the 08.09.1994 notification of the Central Government. Assailing
the said verdict, the Labour Union contends before us that the impugned
prohibitory notification was issued after complying with the provisions
of Section 10 of the CLRA Act, which requires the Central Government
to take into consideration the state of employment of contract labour in
any process, operation or other works of any establishment. Specifically,
the appropriate Government is required to bear in mind the conditions of
work and benefits provided for the contract labour in the establishment
by taking into account
other relevant factors i.e. whether the work is
incidental to or necessary for the industry, if it is perennial in nature,
whether it is ordinarily done through regular workmen in the establishment
or whether it is sufficient to employ considerable number of whole-time
workmen.
3A. The Section 10 of the CLRA Act being relevant is extracted
herein below:-
“10. Prohibition of employment of contract labour –(1)
Notwithstanding anything contained in this Act, the appropriate
Government may, after consultation with the Central Board or, as
the case may be, a State Board, prohibit, by notification in the
Official Gazette, employment of contract labour in any process,
operation or other work in any establishment.
(2) Before issuing any notification under sub-section (1) in relation
to an establishment, the appropriate Government shall have regard
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to the conditions of work and benefits provided for the contract
labour in that establishment and other relevant factors, such as –
(a) whether the process, operation or other work is incidental to,
or necessary for the industry, trade, business, manufacture or
occupation that is carried on in the establishment;
(b) whether it is of perennial nature, that is to say, it is of sufficient
duration having regard to the nature of industry, trade, business,
manufacture or occupation that is carried on in that establishment;
(c) whether it is done ordinarily through regular workmen in that
establishment or an establishment similar thereto;
(d) whether it is sufficient to employ considerable number of whole-
time workmen.
Explanation. – If a question arises whether any process or
operation or other work is of perennial nature, the decision of the
appropriate Government thereon shall be final.”
4. Under the impugned notification (08.09.1994) of the Central
Government, employment of contract labour qua 13 categories of job
was prohibited. According to the appellant, i.e. the ONGC Labour Union,
the Government notification for the ONGC was based on the
recommendations of the Sub-Committee constituted to go into the question
of prohibition of employment of contract labour, in the arena of
maintenance and utility installations i.e. firefighting electrician, plumbers,
flower decoration, sullage plants etc., in the establishments of
the ONGC.
5.1 The learned Senior Counsel Mr. Colin Gonsalves for the
appellant argues that when the challenge to the CLRA Act notification
was made, the ONGC should have arrayed the representative Labour
Union whose members are likely to be impacted by the Court proceeding
and since this was not done, the ONGC Labour Union, had no opportunity
before the High Court of Uttarakhand. The learned Senior Counsel refers
to the Communication dated 31.05.1993 (Annexure-P/3) and the report
of the Sub-Committee to point out that the Ministry of Petroleum &
Natural Gas had undertaken the required study on the establishments of
the ONGC, before issuing the impugned notification (08.09.1994) under
the CLRA Act but in the absence of the Labour Union, the High Court
was kept in the dark about the Sub-Committee’s inspection, deliberations
and recommendation to the Ministry. Thus only one sided projection
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was made before the High Court. This by itself according to the Counsel,
would warrant interference with the impugned judgment rendered in
absence of the affected workman.
5.2 The appellant’s counsel has taken us through the
communication dated 19.10.1994 issued by the Industrial Relations
Department of the ONGC and also the follow up communication dated
18.06.1996 to point out that a conscious decision was taken by the ONGC
itself to comply with the direction on prohibition of contract labour but
the organizational decision was disregarded and instead, the ONGC
approached the High Court in 2014 to challenge the long standing
notification (08.09.1994), issued under the CLRA Act.
5.3. In course of his submission Mr. Gonsalves refers to the similar
challenge made by the ONGC in the Andhra Pradesh High Court and
more particularly the counter affidavit filed by the Central Government
in the said proceeding. It was averred therein that a Sub-Committee
was constituted by the Central Advisory Contract Labour Board to study
the working of the Contract Labour system in certain jobs of maintenance
and utility at the installations which were common to the establishments
of ONGC and it is evident from the report of the Sub-Committee that
ONGC is being organized on the basis of the functional business centres
with commercial working relationship, on a common pattern. The affidavit
shows that the Sub-Committee visited various installations of ONGC
and held widespread
discussion with the workers’ representatives and
also the management of the Eastern, Western and Southern Regional
Business Centres where the ONGC had major presence in their operation.
More specifically, the counsel submits that the Sub-Committee members
visited the installations of ONGC in Madras, Jorhat, Dehradun, Baroda,
Bombay and it was projected before the Andhra Pradesh High Court
that the Sub-Committee conducted a thorough study in different
organizational set-up in the ONGC and interacted with the stake holders
before submitting their report. This was preceded by adequate opportunity
to the ONGC management and the workers.
5.4 Highlighting the above, Mr. Gonsalves argues that although
the recommendation of the Sub-Committee or the Board is advisory in
nature, the Sub-Committee had made careful study of all aspects and
made their recommendation. The Central Government in their turn
accepted only the unanimous recommendation of the Sub-Committee
for 11 categories. For the remaining 15 job categories where there was
ONGC LABOUR UNION v. ONGC DEHRADUN & ORS.
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no unanimity, barring the radio operators and drivers, all others were
excluded from the prohibited categories. According to appellant’s counsel,
the fact that the organizational objective of the ONGC was guided by
the uniform policy with regard to recruitment of man power on regular
basis or through the contract labour system, the situation would not vary
from establishment to establishment, to warrant quashing of the
notification dated 08.09.1994, issued under Section 10(1) of the CLRA
Act.
5.5 Dealing with the judgment in Steel Authority of India Ltd.
and Others vs. National Union Waterfront Workers and others
reported in (2001) 7 SCC 1, the counsel for the appellant argues that
the said judgment pertaining to the earlier notification (09.12.1976) under
Section 10(1) of the CLRA Act, could not have been the basis for the
impugned judgment by the Uttarakhand High Court for the later
notification of 08.09.1994 since the essential backdrop preceding the
two notifications were dissimilar and different. In the case in hand, since
the Writ Petitioner ONGC omitted to place on record the relevant
materials pertaining to the recommendation of the Sub-committee (now
produced in this Court), Mr. Gonsalves argues that the High Court
committed error in reaching a conclusion of non-application of mind by
the Central Government, while issuing the impugned notification.
6.1. Per contra, Mr. J.P. Cama, the learned Senior Counsel
representing the ONGC submits that when prohibition of employment of
contract labour is proposed under the CLRA Act, the Central Government
is required to study the status of employment of contract labour and the
reference for the study must be establishment specific. According to the
counsel, unless an establishment related exercise is undertaken, the
Prohibition notification under Section 10(1), making it applicable to all
ONGC establishments, across the country, could not have been validly
issued by the Central Government.
6.2 Supporting the High Court’s verdict, learned counsel for the
respondent refers to certain passages in the SAIL (supra) judgment to
contend that an omnibus notification without considering all factors in
each establishment cannot be issued as this would be contrary to the
statutory postulates of Section 10 of the CLRA Act.
6.3 The Senior Counsel for the first respondent argues that the
impugned notification (08.09.1994) prohibiting employment of contract
labour was hastily issued because of the time frame stipulated by the
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Bombay High Court in the WP(C) No.2185/1991. According to Mr.
Cama, establishment specific study was not conducted and hence the
decision-making process was vitiated. Moreover, other relevant factors
including those mentioned in sub-section (2) of Section 10 of the CLRA
Act were not considered and the impugned notification itself did not
mention in its body, the compliance with the requirement of Section
10(2) of the CLRA Act. The learned Senior Counsel projects that the
Central Government’s decision is vitiated by non-application of mind.
6.4. Mr. Cama next submits that for alleged failure to implement
the notification dated 08.09.1994 (stayed by Andhra Pradesh High Court),
the officers of the ONGC were subjected to criminal summons by the
CJM, Dehradun and that is why, the Section 482 Cr.P.C. Petition had to
be filed before the Uttarakhand High Court. Later, the W.P. No.1323/
2013 (M/S) was also filed in the same High Court by the ONGC, to
challenge the prohibitory notification issued under Section 10(1) of the
CLRA Act.
7. On the other hand Ms. Alka Agrawal, the learned Counsel for
the Central Government contended that the impugned notification was
issued in accordance with the requirement of Section 10 of the CLRA
Act. Moreover, background study on employment of contract labour was
conducted, relevant reports were received and the process was finalized
only after consultation with the Central Advisory Contract Labour Board
and other stakeholders.
8.
The 08.09.1994 notification under Section 10 of the CLRA Act
which abolished the contract labour system in ONGC establishments
across the country, was challenged for the first time in 2003 by the
Rajahmundry assets of the ONGC which filed the Writ Petition No.4460
of 2003 and Writ Petition No.3397 of 2003, in the Andhra Pradesh High
Court. Interim order was passed on 25.03.2003 by the High Court in
that proceeding and those cases are perhaps still pending. Before the
Uttarakhand High Court, the case came to be filed much later in 2013.
Even before those challenges were made, internal circulars were issued
within the ONGC, to comply with the 1994 notification, issued under
Section 10 of the CLRA Act.
9. The averred stand in the Central Government’s counter affidavit
filed in the Andhra Pradesh High Court shows that out of 26 categories
of work in the ONGC, the Sub-Committee was unanimous in
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[HRISHIKESH ROY, J.]
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recommending abolition of Contract Labour in 11 categories of work.
However, there was no consensus amongst the members for the remaining
15 categories. This difference of opinion was noted and the Central
Government then decided to prohibit contract labour in 11 out of the 26
specified categories of work, on the basis of the input received from the
Sub-Committee. The relevant portion of averments in the counter affidavit
is extracted herein below for ready reference: -
“.................................................................................
Thus it will be seen that out of 26 items of work the Government
abolished 11 items of work where the sub-committee
recommendation was unanimous and out of the remaining 15 items
of works where the sub-committee was not unanimous only the
above two categories viz radio operators and drivers were included
for prohibition. Hence it is not correct on the part of the petitioner
to state that the Govt. did not properly apply its mind over the
issue. In reply to the para-7 of the affidavit it is submitted that the
report of the sub-committee was signed by three members -2
non-official and 1 ex-officio – where one member was from the
employee side and the other from the employers. The report
therefore did not lack the necessary balance. The report clearly
indicated the areas of disagreement. It is therefore incorrect on
the part of the petitioner to state that the report
lacked necessary
rigour. Moreover, the report is rather an input in the overall process
of notifying a decision by the Government. Also the sub-committee
have conducted its business as per quorum in accordance with
Rule 16(ii) of the CL (R&A) Central Rules, 1971.
................................................................................”
10. It was also averred in the said affidavit before the Andhra
Pradesh High Court that the Sub-Committee was not mandatorily required
to visit each and every establishment for their assessment especially
when the operations are common in all projects in ONGC.  The relevant
portion of the averments in the counter affidavit filed by the Union of
India reads as under:
“…..The sub-committee in the course of its work obtained
information about the installations of ONGC.  Also the sub-
committee held widespread discussion with the workers’
representatives and the management of Eastern, Western &
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Southern Regional Business Centres where ONGC had its
operations in majority in the course of its examination of the
Contract Labour System in certain jobs in ONGC.  It visited Madras
on 15.10.92 and heard the submissions of the workers’
union…….It also visited installations of ONGC at Ichhapur Drilling
site, West Bengal, Gandhar, Ankaleshwar and interacted with the
workmen.  It also heard the submissions of the workers and the
management at Baroda.  It also visited the installations in the
offshore, Bombay and elicited information both from workmen
and management…….It is therefore wrong to suggest that the
sub-committee conducted a nominal and superficial enquiry.  It is
also wrong to suggest that the Govt. of India mechanically issued
the impugned notification without proper application of mind and
without having regard to the various legal requirements as specified
in Section 10(2) of the Contract Labour (Regulation and Abolition)
Act, 1970…..”.
11. The Section 10(1) notification prohibiting contract labour as
can be seen, would directly impact the workmen in the ONGC but most
surprisingly, in the writ petitions filed before the two High Courts, the
ONGC management choose not to array any of the recognised labour
Unions. Hence, the affected contract labourers in the ONGC were denied
the opportunity to participate in the writ proceedings in the concerned
High Courts.
12. The impugned judgment indicates that the High Court had no
access to the previous
exercise undertaken by the Central Government,
leading to issuance of the impugned notification under Section 10(1) of
the CLRA Act.  It appears that the factum of constitution of the sub-
committees prior to the issuance of the impugned notification and the
studies made by the sub-committees and the nature of their
recommendations, were not brought to the notice of the learned Judge.
Besides the Court was made to believe that the Central Government
had not consulted the Labour Advisory Board.  Thus, wrong inference
was drawn on incorrect premises and the High Court proceeded under
the presumptive footing as if, there was non-application of mind by the
Central Government.
13. While the above discussions and the contentions raised by the
respective Counsel might normally merit our consideration, the denial of
opportunity to the appellant or to any other recognized labour Union in
ONGC LABOUR UNION v. ONGC DEHRADUN & ORS.
[HRISHIKESH ROY, J.]
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the High Court, persuade us to consider another option which would be
consistent with the principles of natural justice. The prohibition notification
undoubtedly impact the life and livelihood of the contract labourers, but
unfortunately neither the ONGC labour Union (the appellant herein)
or the other recognized Labour Unions in the ONGC were represented
or heard in the High Court.
14. It is also necessary to point out that the learned Judge rendered
the impugned judgment primarily on the basis of the SAIL verdict since
none of the relevant materials for the 1994 notification were produced in
the High Court. Crucially, when the impugned notification was issued,
the Central Government did not have the benefit of the SAIL judgment
rendered on 30.08.2001 which again related to the 1976 notification.
Therefore the question is whether the learned Judge could have founded
his decision on the errors/omissions, noted in SAIL (supra) judgment.
15. The primary focus of the challenge in the 30.08.2001 SAIL
verdict was to the previous notification (S.O. No.776 (E) dated
09.12.1976) issued by the Central Government, prohibiting employment
of contract labour in respect of four categories of works in establishments,
inter-alia, of the ONGC. The said notification was struck down with
the finding that the pre-requisites for issuing the notification were not
satisfied. It was also perceived to be an omnibus notification without
reference to the relevant factors-qua each establishment. But according
to us, it was necessary for the High Court to determine whether the
observations made for the then impugned 09.12.1976 notification would
also apply with all vigour, to the presently impugned notification
(08.09.1994), issued under Section 10(1) of the CLRA Act. More
particularly, the learned Judge should have determined whether the
prohibitory notification was preceded by the required enquiry on contract
labour by the Sub-Committee, the nature of the study by the Sub-
Committee, whether the views of the stakeholders were noticed by the
Committee members and the implications of those, on the decision of
the Central Government. The impugned judgment shows that no material
was placed before the High Court to indicate “……….what inquiry/
material was carried out to meet the requirements provided under
sub-section (2) of Section of the Act, 1970. There is no reference
when the Sub-Committee was constituted and what were its
recommendations”. The Central Government also failed to project that
any consultation was made with the Central Advisory Labour Board.
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16. The afore quoted observation in the judgment under challenge
would suggest that the High Court’s Judgment was passed without being
apprised of the relevant materials and primarily on the basis of the SAIL
(supra) judgment which however related to the 1976 notification. This in
our opinion has resulted in prejudice for those who, given the opportunity,
could have apprised the High Court with all facts and the detailed study/
discussion by the Sub-Committees, preceding the 08.09.1994 notification.
17. In the above circumstances, since no opportunity was provided
to the appellant Union in a case, which directly concerns the members
of the ONGC Labour Union and other workman, we deem it
appropriate to order restoration of the Writ Petition No.1323 of 2013
(M/S), in the file of the High Court of Uttarakhand for fresh consideration.
The appellant i.e., the ONGC Labour Union – Gujarat is ordered to be
impleaded in the restored proceedings.  As suggested by the appellant’s
counsel, other recognized labour Unions within ONGC such as the ONGC
Contractual Worker Union, Cachar Forward Base, Silchar, Assam –
788026, the ONGC Contract Employee Union, 15, Sewak Ashram
Road, Dehradun, Uttarakhand – 248001, the ONGC (WOU) Karamchari
Sanghatana, 11 High, NBP GR Heights, Hazira, Mumbai – 394270, the
Petroleum Employees Union, Oil and Natural Gas Corporation Ltd.,
Godavari Bhavan, Rajahmundry – 533107 may also be vitally interested
and such concerned Labour Unions must
also be impleaded in the High
Court.  The respondent-ONGC, Dehradun shall implead all these labour
Unions and serve notice upon them.  The respective senior counsel
representing the parties have requested for early disposal of the remanded
matter and have offered to argue before the High Court, without any
loss of time.   In view of this, the Uttarakhand High Court is requested to
decide the matter expeditiously and preferably within four months of
notice being served on the respondents in the restored Writ Petition.
18. The appeal is disposed of with the above order.
Kalpana K. Tripathy
Appeal disposed of and
matter remitted to High Court.
ONGC LABOUR UNION v. ONGC DEHRADUN & ORS.
[HRISHIKESH ROY, J.]