MAHANADI COALFIELDS LTD. versus BRAJRAJNAGAR COAL MINES WORKERS’ UNION
[2024] 3 S.C.R. 627, Supreme Court of India, 2024
Outcome: Unknown
Segment: Issues
* Author
[2024] 3 S.C.R. 627 : 2024 INSC 199
Mahanadi Coalfields Ltd. 
v. 
Brajrajnagar Coal Mines Workers’ Union 
(Civil Appeal No. 4092-4093 of 2024)
12 March 2024
[Pamidighantam Sri Narasimha* and Sandeep Mehta, JJ.]
Issue for Consideration
Whether the Tribunal was justified in entertaining the reference of 
an industrial dispute when a binding settlement under Section 18 
(1) read with Section 19(2) and Section 36 of the Industrial Dispute 
Act, 1947 was arrived at between the parties.
Headnotes
Industrial Dispute Act, 1947-Section 10 - Reference of disputes; 
Section 18 (1) read with Section 19(2) - Settlement binding 
on all parties. 
32 workers, working continuously for 10 years, sought regularisation 
on the basis of Clause 11.5.1 and Clause 11.5.2 of the National 
Wage Agreement IV - Settlement arrived between the labour 
union and management under Rule 58 of the Industrial Disputes 
(Central) Rules, 1957 - 19 workers regularised - 13 workers’ job 
described as ‘purely casual’ – Central Government invoked power of 
reference to Tribunal - Tribunal found that the (1) 13 workers were 
on same footing as regularised workers, granted regularisation (2) 
job was perennial in nature (3) management could not establish 
distinction - Concurrent findings by High Court in Writ Petition and 
Review Petition. 
Held: 13 workers entitled to regularisation on parity basis – 
Workers entitled to back wages on grounds of wrongful denial of 
employment and regularisation – Back wages
to be calculated 
from the date Tribunal’s decision in reference – Under Article 136 
only substantial questions of law can be entertained [Paras 16, 
18, 20, 22, 23, 24]. 
Case Law Cited
J.K. Synthetics Ltd. v. K.P. Agarwal [2007] 2 SCR 60 : 
(2007) 2 SCC 433 – referred to.
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List of Acts
Industrial Dispute Act, 1947; Industrial Disputes (Central) Rules, 
1957.
List of Keywords
Settlement; Back Wages; Artificial Distinction; Nature of Job; Same 
footing; Reference; Conciliation; Regularisation; Wrongful Denial 
of employment.
Case Arising From
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 4092-4093 
of 2024
From the Judgment and Order dated 11.01.2017 in WPC No.2002 of 
2002 and dated 11.11.2021 in RVWPET No.77 of 2017 of the High 
Court of Orissa at Cuttack
Appearances for Parties
Aman Lekhi, Sr. Adv., Soumyajit Pani, Aishwary Bajpai, Siddharth 
Jain, Advs. for the Appellant.
Ashok Kumar Panda, Sr. Adv., Tejaswi Kumar Pradhan, Mohan 
Prasad Gupta, Manoranjan Paikaray, Shashwat Panda, Advs. for 
the Respondent.
Judgment / Order of the Supreme Court
Judgment
Pamidighantam Sri Narasimha, J.
1.	
Delay condoned. Leave granted.
2.	
The Appellant, Mahanadi Coalfields Ltd., a subsidiary of Coal India 
Ltd. floated a tender for the transportation of crushed coal and 
selected a successful contractor for performance of the agreement 
for the period 1984 to 1994. The contractor employed workmen for 
execution of this contract.
3.	
The respondent-union espoused the cause of the workmen who were 
engaged by the contractor and sought permanent status for them. 
It relied on clauses 11.5.1 and 11.5.2 of the National Coal Wage 
Agreement-IV dated 27.07.1989. Under these clauses, it was agreed 
that the
employer shall not engage contract labour with respect to
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629
Mahanadi Coalfields Ltd. v. Brajrajnagar Coal Mines Workers’ Union 
jobs which are permanent and perennial in nature. They also provide 
that such jobs shall be executed through regular employees.
4.	
Following the representation of the respondent-union, the Assistant 
Labour Commissioner sent a notice to the appellant for conciliation. 
The conciliation process eventually culminated in a settlement dated 
05.04.1997 under Rule 58 of the Industrial Disputes (Central) Rules, 
1957. The relevant portion of the settlement is as follows: 
“The Union has submitted a list of 32 persons said to have 
been engaged by the contractors and demanded for their 
regularisation. Alter verification, it was observed, that the 
following persons are engaged in Bunker for operating 
Chutes.
SI 
No.
Name of the Person
Father’s 
Name
01.
Sri Sadanand Bhoi
Keshab
02.
Sri Purusottam Dau
Govardhan
03.
Sri Anta Barik
Gadadhar
04.
Sri Aditya Nikhandia
Cheru
05.
Sri Bhabagrahi Pradhan
D. Pradhan
06.
Sri Sudarshan Khandit
Masru
07.
Sri Ashok Kumar Rout
Sitaram
08.
Sri Krishna Dau
Goverdhan
09,
Sri Abhimanyu Kisan
Chhala
10.
Sri Lakhan Bhoi
Keshab
11.
Sri Jay Narayan Bhoi
Chaitan
12.
Sri Sanatan Kisan
Ugresan
13.
Sri Giridhari Raudia
Goverdhan
14.
Sri Daitari Pradhan
Nira
15.
Sri Subram Bag
Buchhu
16.
Sri Madhu Marai
Dasa
17.
Sri Fakir Khamari
Kartik
18.
Sri Sanatan Naik
Ram Krishna
19.
Sri Sanatan Bhoi
Tiharu
Since this operation is of permanent and 
perennial nature, it was
agreed to regularise 
the above 19 (nineteen) persons as General
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Mazdoor, Category-I, in the NCWA-V Pay Scale 
of Rs. 65.40-1.08-85.52. 
In respect of other persons, it was contended, 
that they are engaged in purely casual nature 
of jobs, which are not prohibited under Contract 
Labour (R&A) Act, 1970, and accordingly, they 
are not eligible for regularisation.”
5.	
In view of the fact that the settlement is confined to only 19 workmen, 
the Central Government referred the entire dispute to the Industrial 
Tribunal under Section 10 (2A)(1)(d) of the Industrial Disputes Act, 
1947, on 20.05.1997 registered as Dispute Case no. 27/2001 before 
the Industrial Tribunal, Rourkela, Odisha. Before the Tribunal, the 
workmen examined 3 witnesses in support of their case and the 
management examined 4 witnesses. 
6.	
By its judgment dated 23.05.2002, the Tribunal allowed the industrial 
dispute and directed the regularization of the remaining 13 workmen. 
The important findings of the Tribunal are as follows. At the outset, the 
Tribunal rejected the preliminary objection that it had no jurisdiction 
under the Contract Labour (Regulation and Abolition Act), 1970 and 
proceeded to consider the nature of the work that the 13 workmen 
were performing. Having considered the matter in detail, the Tribunal 
held that the work of removing spillages in the railway siding, below 
the bunker and operation of chutes (in the bunker) are regular 
and perennial in nature. Having considered the evidence of the
management witnesses, the Tribunal concluded that the nature of 
the work is perennial. Accordingly, the remaining 13 workers were 
directed to be regularized in the following terms:
“The evidence is straight and clear that all the 32 persons 
were attending the same of. The rest 13 persons whose 
cases have not been regularized were attending the same 
job, which was being attended by 19 persons whose services 
has been regularized. So standing on the same footing the 
cases of the rest 13 persons should not have been ignored 
on the ground that, they did not deserve to be regularized as 
reflected in the settlement. In my opinion when 19 persons 
have been regularized the case of rest 13 persons who 
were attending the same type of work should have been 
regularized without any cause. The ground stated in the
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Mahanadi Coalfields Ltd. v. Brajrajnagar Coal Mines Workers’ Union 
settlement that they do not deserve, in my opinion does not 
appears to be a genuine ground to discard the cases of the 
rest 13 persons. I am not inclined to burden the award by 
placing all the submissions made on behalf of the parties. 
It is necessary to refer the evidence of the Witness No. 2 
examined on behalf of the 1st Party Management. As per 
clause 11.5.0 of N.C.W.A. IV the Contract Labourers cannot 
be engaged for permanent and perennial nature of job. He 
has further stated that, they had entered to a settlement 
regarding those 19 persons. His further evidence is that the 
persons out of 13 were also working in Coal Handling Plant, 
which is a permanent and perennial in nature. The evidence 
of the Witness No. 3 of the 1st Party Management is that, 
the work of railway siding is also a regular and perennial in 
nature for which the 19 persons have been regularized. All 
the 32 persons were attending the job of removing spillages 
for railway Biding below the bunker and also the operation 
of the chutes in the bunker. So in view of such evidence it 
cannot be said that the rest 13 persons were not attending 
the job which were being attended by the 19 persons whose 
services has been regularized. So in my opinion, even if 
there has been a settlement between the parties regularizing 
19 persons the rest of 13 persons has got cause of action 
to raise the Industrial
separate and their case should not 
have been ignored. In the other words the action of the 1st 
Party Management in not regularizing the services of the 
rest 13 persons in accordance was N.C.W.A. IV is illegal 
and unjustified. Hence, this Issue is answered accordingly.”
7.	
Questioning the legality and validity of the Tribunal’s judgment, the 
appellant filed a Writ Petition (C) numbered 2002/2002 before the 
Orissa High Court. 
8.	
The Division Bench of the High Court heard the matter, and by its 
judgment, impugned before us, dismissed the writ petition. The High 
Court referred to the nature of work performed by the workmen 
and affirmed the findings of the Tribunal based on the evidence of 
witnesses such as MW3, the personal manager in the appellant 
company. The High Court took note of his evidence that the work on 
railway sidings was regular and perennial in nature. He also admitted 
that it is with respect to that work for which the 19 workers were
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regularized. The High Court also observed that there was no evidence 
to dispute that all 32 workers were engaged in removing spillages 
from railway sidings and below the bunker, which is in addition to 
operating chutes. The High Court, therefore, upheld the view taken 
by the Tribunal. The Review Petition bearing No. 77/2017 filed by 
the management was also dismissed by the order dated 11.11.2021.
9.	
We have heard Mr. Aman Lekhi, learned Senior Counsel appearing 
on behalf of the appellant, assisted by Mr. Siddharth Jain, Mr. 
Soumyajit Pani and Ms. Aishwary Bajpai, Advocates and also Mr. 
Ashok Kumar Panda, learned Senior Counsel for the respondent-
union, assisted by Mr. Tejaswi Kumar Pradhan, Mr. Mohan Prasad 
Gupta, Mr. Manoranjan Paikaray and Mr. Shashwat Panda, Advocates. 
10.	 Submissions of the appellant: Before this court, the appellant 
company contends that the Award dated 23.05.2002 is bad in law. It 
argues that the settlement was binding on the parties due to Section 
18(1) read with Section 36, Industrial Disputes Act and it continues 
to be so by virtue of Section 19(2) of the Act, since the settlement 
was never terminated.
10.1	The settlement was reached after verification of the nature of 
works performed. It was found that 19 workers were performing 
perennial and permanent work and the work of the remaining 
13 workers was ‘casual’ in nature.
10.2	There was no provision to regularize such workers
under the 
NCWA-IV. The only provision under which regularization could 
be claimed would be Section 25F of the Industrial Disputes 
Act, but the said provision applies only to workers who worked 
under the direct supervision of the company for a certain period 
and wrongfully stopped thereafter. In the present case, as the 
workmen worked under the supervision of a contractor and not 
the appellant, Section 25F will have no application. 
10.3	Lastly, it is contended that the Tribunal had wrongly directed 
the appellant to disburse backwages to the 13 workers. This 
is contrary to the settled principle that grant of backwages can 
never be automatic or a natural consequence of regularization. 
The workers seeking regularization and backwages have an 
onus to show that they are not gainfully employed. For this, 
the appellant relied on J.K. Synthetics Ltd. v. K.P. Agrawal & 
anr. reported as (2007) 2 SCC 433 to support this contention.
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Mahanadi Coalfields Ltd. v. Brajrajnagar Coal Mines Workers’ Union 
11.	 Submissions of the respondent-union: The respondent-union 
submitted that all 32 workers were engaged in works of a similar 
nature. They assert that the list in the industrial reference dated 
20.05.1997 shows that workers were arbitrarily deprived of 
regularization, wherein certain workers from the bunker and the 
plant were left out of the settlement without any reason. It is also 
argued that the work in the railway siding was perennial and regular 
in nature, similar to the works in the bunker. 
11.1	To support its contentions, the respondent-union relies on the 
evidence of MW3 and MW4, who were the personal manager 
and the project officer in the appellant company, respectively. 
While MW3 categorically admitted that the removal of spilled 
coal from the railway siding, the bunker and the Coal Handling 
Plant is regular and perennial in nature, MW4 stated that all 32 
workers were engaged similarly. It is therefore submitted that 
their evidence proves that the 13 workers actively participated 
in tasks deemed regular and perennial.
11.2	Since there was no resolution of the claim of regularization 
of similarly placed workers, they have the right to pursue the 
remedy under the Industrial Disputes Act, 1947. It is submitted 
that Rule 58 of the Industrial Dispute (Central) Rules, 1957 
under which the settlement occurred, nowhere poses a legal 
obstruction to the remedy.
11.3	It is finally submitted that the 13 workmen suffered for no fault 
of theirs and an order of regularization must naturally lead to 
grant of consequential backwages.	
12.	 Analysis and findings: Having heard the parties in detail, we are 
of the opinion that the present appeals can be disposed of for the 
following reasons. 
13.	 At the outset, the appellant objected to the Tribunal entertaining 
the industrial dispute passing of the award on the ground that a 
settlement under S. 18(1) read with S. 36 of the Industrial Disputes 
Act is binding on all the parties under S. 19(2) of the Act. This is 
the substantive part of the submission on behalf of the appellant. 
The facts of this case, as they unfold, leading to the arrival of the 
settlement, followed by the reference to the Industrial Tribunal, and 
then the award, are necessary for our consideration.
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14.	 At the first place, all the 32 workmen commenced their work 
through the contractor from 1984 and continued till 1994. In 1994, 
the respondent-union espoused the cause of all the 32 workers 
and the Asst. Labour Commissioner took up the entire cause. This 
culminated in the settlement dated 05.04.1997, relied upon by the 
appellant. 
15.	 To appreciate the submission that the settlement is the last word 
and that the Tribunal could not have entertained the reference or 
passed the Award, the following facts become crucial. 
16.	 The settlement itself talks about the claim of the 32 workers raised 
by the respondent-union. It then talks about the contention of the 
management that others are engaged in ‘purely casual’ nature of jobs. 
In the very next sentence, it agreed to regularize 19 contractors. It is 
important to note that, being conscious of the fact that the settlement 
provides for the regularization of 19 out of the 32 workmen, the 
Government invoked the power of reference to refer the matter to 
the Tribunal to adjudicate the interest of all the 32 workers. The 
Tribunal was naturally bound by the reference to consider the claim 
of all the 32 workers. 
17.	 Despite the fact that there was a settlement with respect to some 
of the workmen, the Tribunal was tasked to examine the entire 
reference and give independent findings on the issue. Thus, the 
Tribunal was justified in giving its award on the
reference made by 
the central government. This answers the objection raised by the 
appellant about the jurisdiction of the Tribunal.
18.	 We are also conscious of the fact that the jurisdiction that we exercise 
is under Article 136 of the Constitution. The findings of fact arrived 
at by the Tribunal are unassailable. We are also of the opinion that 
the High Court has correctly rejected the writ petition filed against 
the award. Apart from the concurrent findings of fact, we see no 
substantial question of law in these appeals. 
19.	 Even otherwise, the present case is not one where this court would 
exercise its discretion. What appeals to us is that the 32 workers who 
entered the service of the appellant in 1984, continued uninterruptedly 
till 1994, when the respondent-union sought their permanence. In the 
settlement arrived in 1997, the stand of the appellant with respect 
to the 13 workers is as follows:
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Mahanadi Coalfields Ltd. v. Brajrajnagar Coal Mines Workers’ Union 
“In respect of other persons, it was contended that they 
are engaged in purely casual nature of jobs which are 
not prohibited under Contract Labour (R&A) Act, 1970 
and accordingly, they are not eligible for regularisation.”
20.	 It is proved that the remaining workers stand on the same footing as 
the regularized employees, and they were wrongly not made part of 
the settlement. This is established by the Tribunal, by examining the 
nature of work undertaken by the first set of 19 workmen and that of 
the other 13 workmen. It also examined Shri Arun Ch. Hota (WW3), 
the Deputy General Manager (MW2), Mr. Udayshankar Gonelal, the 
Personal Manager (MW3) and Shri S. Agarwal, the Project Officer 
(MW4). The Tribunal finally came to the conclusion that the nature 
of the duties performed by the 13 workmen are perennial in nature. 
The appellant has failed to establish any distinction between the two 
sets of workers. The Tribunal was, therefore, justified in answering 
the reference and returning the finding that they hold the same status 
as the regularized employees.
21.	 We are also not impressed with the artificial distinction which the 
appellant sought to bring about between the 19 workers who were 
regularized and the 13 workers who were left out. The evidence on 
record discloses that, of the total 32 workmen, 19 workers worked in 
the bunker, 6 worked in the Coal Handling Plant,
and 7 worked on 
the railway siding. However, of the 19 workers who were regularized, 
16 worked in the bunker, and 3 worked in the Coal Handling Plant. 
However, 3 workers from the same bunker, 3 workers from the same 
Coal Handling Plant and again 7 workers from the same railway 
siding were not regularized. A tabulated representation of the above 
description is as follows:
Site of work
No. of 
workers who 
executed 
works
No. of 
workers 
who were 
regularized
No. of 
workers not 
regularized
Bunker
19
16
3
Coal Handling Plant 6
3
3
Railway Siding
7
-
7
Total:
32
19
13
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22.	 The above-referred facts speak for themselves, and that is the 
reason why the Tribunal has come to a conclusion that the denial 
of regularization of the 13 workmen is wholly unjustified. As stated 
previously, we do not find any grounds in the artificial distinction 
asserted by the appellant. However, as the case was argued at length 
we thought it appropriate to give reasons for rejecting the appeals. 
What we have referred to hereinabove are all findings of fact by the 
Tribunal as affirmed by the High Court. In view of the concurrent 
findings of fact on the issue of nature of work, the continuing nature 
of work, continuous working of the workmen, we are of the opinion 
that there is no merit in the appeals filed by the appellant. 
23.	 This is a case of wrongful denial of employment and regularization, 
for no fault of the workmen and therefore, there will be no order 
restricting their wages. 
24.	 With respect to payment of backwages, we are of the opinion that 
the workmen will be entitled to backwages as observed by the 
Industrial Tribunal. However, taking into account, the long-drawn 
litigation affecting the workmen as well as the appellant in equal 
measure and taking into account the public interest, we confine the 
backwages to be calculated from the decision of the Tribunal dated 
23.05.2002. This is the only modification in the order of the Tribunal, 
and as was affirmed by the judgment of the High
Court.
25.	 For the reasons stated above, the appeals arising out of the final 
judgment and order of the High Court in W.P. (C) No. 2002/2002 
and order in Review Petition No. 77/2017 are dismissed with the 
direction that the concerned workmen shall be entitled to backwages 
with effect from 23.05.2002. There shall be no order as to costs.
Headnotes prepared by: 
Result of the case: 
Aishani Narain, Hony. Associate Editor
Appeals dismissed 
(Verified by: Madhavi Divan, Sr. Advocate)
with directions