THE WORKMEN THROUGH THE CONVENER FCI LABOUR FEDERATION versus RAVUTHAR DAWOOD NASEEM
[2020] 6 S.C.R. 642, Supreme Court of India, 2020
Outcome: Dismissed (Dismissed)
Segment: Issues
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THE WORKMEN THROUGH THE CONVENER
FCI LABOUR FEDERATION
v.
RAVUTHAR DAWOOD NASEEM
(Contempt Petition (Civil) No. 404 of 2019)
In
(C.A No. 10511 of 2011)
MAY 19, 2020
[A. M. KHANWILKAR AND DINESH MAHESHWARI, JJ.]
Contempt of Court – When not – Abolition of contract labour
system – Workers employed at depots of respondent-Corporation
as contract labourers sought regularisation – Issue referred for
adjudication – Pending references, an understanding arrived at
between the parties recorded in minutes of meeting dated.12.04.1996
– Industrial Tribunal held the workmen entitled to be regularised –
Award affirmed till Supreme Court – Workers regularised under
Direct Payment System (DPS) – Contempt petitions filed alleging
that the direction was to regularise the workers in Departmental
Labour System (DLS) and not in DPS – Held: To constitute civil
contempt it must be established that disobedience of the order is
wilful, deliberate and with full knowledge of consequences flowing
therefrom– In the present case, the issue(s) referred for adjudication
was merely for regularisation – Corporation operates four systems
of labour, DLS is one such system of engagement – Neither the
relief in the references was specific for regularisation in DLS only
nor the tribunal, the High Courts or Supreme Court was called
upon to deal with that issue specifically – Petitioners assumed that
DPS commenced only from 01.05.1996, whereas it is in
existence
from 1973 – It is not a new set up created by the Corporation
pursuant to the minutes recorded on 12.04.1996 as such –
Furthermore, DLS is now a dying cadre and the policy of the
Corporation at the relevant time entailed regularisation of workmen
only under DPS – No case made out for initiating contempt action
against the Corporation and its Officers – Industrial Disputes Act,
1947 – s.10(1)(d) – Contract Labour (Regulation and Abolition)
Act, 1970 – s.10(1) – Labour Law.
[2020] 6 S.C.R. 642
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Words & Expressions – Departmentalisation – Meaning of –
Explained.
Dismissing the contempt petitions, the Court
HELD: 1.1 To constitute civil contempt, it must be
established that disobedience of the order is wilful, deliberate
and with full knowledge of consequences flowing therefrom. Going
by the plain text, the issue(s) referred to for adjudication was
merely for regularisation. However, the point-in-issue considered
by the Tribunal coupled with the operative part of the award, it
would at best be a case of directing the respondent Corporation
to regularise and departmentalise the concerned workmen, who
were party to the stated References. The Corporation operates
four systems of labour. The Departmental Labour System is one
such system of engagement. The other is Direct Payment System
(DPS). The third is No-Work-No-Pay System and fourth, the Mate
System. Neither the relief in the References was specific for
regularisation in Departmental Labour System only nor the
Tribunal, the Madras High Court/Kerala High Court or this Court
was called upon to deal with that issue specifically. The claim set
up by the petitioner-Union(s) was simpliciter for regularisation
of workmen who were named in the annexure(s) to the
References. The Tribunal did issue direction to regularise and
departmentalise those workmen. It is axiomatic that
departmentalisation could also be an engagement in a
Department, which could be a separate part or branch/section of
the whole
Organisation. Departmentalisation is dividing an
organisation into different departments or structuring it in a
manner, which perform tasks according to the specialisations in
the organisation. It may include departments such as functional,
product, process, geographical locations, customer, divisional,
matrix, planning task force etc. As it is indisputable that the
Corporation has four systems of labour engagement including
the Direct Payment System (DPS), the petitioner-Union(s) ought
to have sought specific relief against the Corporation in that
regard. Significantly, the petitioners have assumed that the Direct
Payment System (DPS) commenced only from 1.5.1996, whereas
it is noticed from the decision of this Court in Workmen of the
Food Corporation of India v. M/s. Food Corporation of India that
THE WORKMEN THROUGH THE CONVENER FCI LABOUR FEDERATION
v. RAVUTHAR DAWOOD NASEEM
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the Direct Payment System (DPS) is in existence from 1973. It is
not a new set up created by the Corporation pursuant to the
minutes recorded on 12.4.1996 as such.  Concededly, the subject
References, as well as, the direction issued by the Tribunal, which
has been upheld upto this Court is silent about the system in
which the concerned workers have to be regularised and
departmentalised. Notably, the writ petition filed before the
Kerala High Court for implementation of the stated award also
sought direction to regularise the concerned workmen under the
Direct Payment System (DPS). If that be the position, it is
unfathomable as to how the respondent Corporation can be
proceeded against for having committed contempt of this Court.
[Paras 12-14][658-G-H; 659-A-H; 660-A-C]
Workmen of the Food Corporation of India v. M/s. Food
Corporation of India (1985) 2 SCC 136 : [1985] 2 SCR
1065; ESI Corporation v. FCI Workers Union & Ors.
Decision of Supreme Court dated 19.11.2019 in C.A.
Nos. 8841-8842/2019 – relied on.
1.2 The issue as to regularisation of the concerned workmen
under particular labour system had not been put in issue before
the Tribunal and upto Supreme Court. A general direction came
to be issued to regularise and departmentalise them. Resultantly,
the respondents were left with the only option to regularise the
concerned workmen as per the extant applicable policy of the
Organisation, under the Direct Payment
System (DPS). No specific
direction was given to the Corporation to regularise the
concerned workmen only in the Departmental Labour System.
Furthermore, the Departmental Labour System is now a dying
cadre and the policy of the Corporation at the relevant time
entailed regularisation of such workmen only under the Direct
Payment System (DPS). No contempt action can be initiated on
the basis of general direction to the respondents to regularise
and departmentalise the concerned workmen. [Paras 17, 23][662-
F; 664-F-G]
Ram Kishan v. Tarun Bajaj & Ors. (2014) 16 SCC 204
: [2014] 1 SCR 538 – relied on.
Anil Ratan Sarkar & Ors. v. Hirak Ghosh & Ors. (2002)
4 SCC 21 : [2002] 2 SCR 346 – distinguished.
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Food Corporation of India & Ors. v. West Bengal Food
Corporation of India Workmen’s Union (2018) 9 SCC
469 – held inapplicable.
State of Bihar & Ors. v. Bihar Secondary Teachers
Struggle Committee, Munger & Ors. (2019) 8 SCALE
124; Steel Authority of India Ltd. & Ors. v. National
Union Waterfront Workers & Ors. (2001) 7 SCC 1 :
[2001] 2 Suppl. SCR 343; Dinesh Kumar Gupta v.
United India Insurance Company Limited & Ors. (2010)
12 SCC 770 : [2010] 13 SCR 599; Bihar State
Government Secondary School Teachers Association v.
Ashok Kumar Sinha & Ors. (2014) 7 SCC 416 : [2014]
7 SCR 371; Dineshan K.K. v. R.K. Singh & Anr. (2014)
16 SCC 88 : [2014] 3 SCR 667 – referred to.
Case Law Reference
[1985] 2 SCR 1065
relied on
Para 9
(2019) 8 SCALE 124
referred to
Para 9
[2001] 2 Suppl. SCR 343
referred to
Para 9
[2010] 13 SCR 599
referred to
Para 9
[2014] 7 SCR 371
referred to
Para 9
[2014] 3 SCR 667
referred to
Para 9
(2018) 9 SCC 469
held inapplicable
Para 10
[2002] 2 SCR 346
distinguished
Para 10
[2014] 1 SCR 538
relied on
Para 12
INHERENT JURISDICTION: Contempt Petition No. 404 of 2019
in Civil Appeal No. 10511 of 2011.
Petition against the non-compliance of the Order dated 20.08.2018
passed in Civil Appeal No. 10511 of 2011 by this Hon'ble Court.
With
Contempt Petition (Civil) Nos. 508 of 2019, 507 of 2019, 394 of
2020, 754 of 2019, 1073 of 2019.
THE WORKMEN THROUGH THE CONVENER FCI LABOUR FEDERATION
v. RAVUTHAR DAWOOD NASEEM
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Rana Mukherjee, V. Prakash, Colin Gonsalves, Brijender Chahar,
Mukul Rohatgi, V. Giri, Sr. Advs., R. R. Kumar, Ms. Kunika Sharma,
Swetank Shantanu, C. Paramasivam, R. Ganesh Babu, Rakesh K.
Sharma, Sudarsh Menon, Ram Gupta, Ronak Karanpuria, Vishwa Pal
Singh, Abhay Kumar, Kumar Milind, Vineet Kr. Singh, Kumar Kashyap,
Sumit Kumar, Ms. Kumari Supriya, Hemant Kumar,  Arumugan, Ram
Gupta, Advs. for the appearing parties.
The Judgment of the Court was delivered by
A. M. KHANWILKAR, J.
1. I.A. for permission to file the contempt petition(s) is allowed.
2. These contempt petitions except Contempt Petition (Civil) No.
754/2019 emanate from the common judgment and order of this Court
dated 20.8.2018 in Civil Appeal Nos. 10499/2011 and 10511/2011.
Contempt Petition (Civil) No. 754/2019, however, arises from a separate
judgment and order of this Court on the same subject matter and date
(i.e. 20.8.2018) in Civil Appeal No. 7961/2014.
3. The grievance in these petitions is about non-compliance of
direction given to the respondent-Food Corporation of India1 to regularise
and departmentalise the concerned workers who had initiated industrial
disputes bearing I.D. No. 39/1992 and I.D. No. 55/1993 before the
Industrial Tribunal2, Tamil Nadu, Chennai under Section 10(1)(d) of the
Industrial Disputes Act, 19473.  The concerned employees were employed
at Depots of the Corporation in the Southern Zone of India including the
States of
Kerala, Andhra Pradesh, Karnataka and Tamil Nadu, as daily-
rated labour or casual labour through contract labour cooperative societies
or private contractors. They were working in that capacity for quite
some time and in some cases, for around 15 to 20 years, and were
performing similar work as the regular employees of the Corporation.
In I.D. No. 39/1992, following issue was referred to for adjudication: -
“Whether the action of the management of Food Corporation of
India, in denying to regularise 955 contract labourers engaged
by management of Food Corporation of India Godown, Avadi
through TVK Cooperative Society in respect of names as given
1 For short, “the Corporation”
2 For short, “the Tribunal”
3 For short, “the 1947 Act”
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in the Annexure is justified?  If not to what relief they are entitled
to?”
(emphasis supplied)
In I.D. No. 55/1993, reference was made for adjudication of the
following issue: -
“Whether the services of workmen employed in different Food
Storage depots in Food Corporation of India in the South where
notifications have been issued prohibiting engagement of contract
labourers under Section 10(1) of CL (R and A) Act are entitled to
be regularised and if so, from which date?”
(emphasis supplied)
During the pendency of these References, an understanding was
arrived at between the parties, as recorded in the Minutes of Meeting
dated 12.4.1996, the relevant extract whereof is as under:-
“The Charter of demand submitted by the FCI Workers Union
vide their letter dated 12.2.96 was taken do for discussions and
decision taken on each of their demands are recorded as under: -
1. Department allegation of workers and payment of documental
wages to the workers in all FCI depots as recommended upto
[sic] the Hon’ble Supreme Court of India, and especially in South
Sons where the Central Government have notified prohibiting
employment of contract labour long before considering the food
handling work as perennial in nature (both the food-handling work
is still being done in all South Depots) by Labour Cooperative
Society as Contractors as well as the Hon’ble High Courts of
Kerala and Karnataka have also directed for departmentisation
of FCI workers in F.S. Depots. The
Union demanded
departmentalization of labour in all the notified depots on the plea
that there are other notified depots where departmentalisation has
already been done since 1991.  As such, these depots may also be
extended the benefit of departmentalisation.  After having
protracted discussions, keeping in view the orders of the Hon’ble
Karnataka High Court and the Supreme Court and the scheme
submitted for decision between the Karnataka High Court,
following decisions were taken: -
THE WORKMEN THROUGH THE CONVENER FCI LABOUR FEDERATION
v. RAVUTHAR DAWOOD NASEEM [A. M. KHANWILKAR, J.]
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(i)
It was decided that in all remaining, notified FCIs own
Depots which were running under the Labour
Cooperative Societies, or otherwise may be brought
under Direct [sic] Payment System with all the benefits
under the Direct Payment Scheme w.e.f. 1st May, 1996.
(ii)
It 
was 
also 
decided 
that 
proposal 
for
departmentalization will be sent to the government
by 31st July, 1996 and till decision from the
Government or from the concerned courts Direct
payment System will continue.
(iii)
It was agreed that in the other notified depots of FCI where
labour Cooperative Societies are not functioning, the labour
strength will be assessed on the basis of the formula to be
evolved in consultation with FCI Workers Union as the Union
had mentioned that the formula of assessment of labour
being adopted by diving the workload i.e. receipt and issue
by 365 is not realistic. The Union suggested that the workload
of receipt and issue as well as all operations performed in
the depot should be taken into account and the same should
be divided by 240 days instead of 365.  As regards labour
Cooperative Societies, it was decided that the workers
already working there during last 3 years and who had
worked for nine out of 12 months in the last year and whose
PF deductions are being made will be extended benefit of
Direct Payment System workers. However the actual
requirement of labour for these depots will be assessed as
per the norms
agreed to with the Union and utilisation of
surplus labour including employment elsewhere will be
resorted to by the management in consultation with the
Union.  Regarding norms, the Union expressed resentment
about adopting 365 days a year which management agreed
to look into and take a final view.
(iv)
As regards notified depots under CWC, separate
discussions will be held for a final decision.
(Action Manager (IR-L)
2. Immediate departmentalisation of all the workers of FCI
Depots under Direct Payment System, Guaranteed Wages
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System, No work no pay System and B-Category system.
It was agreed that the system as in existence will continue
[sic].”
(emphasis supplied)
A list of Depots having Departmental Labour System in March,
2000 is annexed as annexure P-3 in the reply affidavit filed by the
petitioner to the counter affidavit of the respondent in Contempt Petition
(Civil) No. 404/2019.
4. In I.D. No. 39/1992, after due consideration of the rival
submissions, the Tribunal vide award dated 19.12.1997, noted the point
for its consideration as follows: -
“7. The point for our consideration is: whether the action of the
management of FCI (respondent) in denying to regularise 955
contract labourers engaged by the management of FCI godown
at Avadi through Thiru VI. Ka. Labour Contract Cooperative
Society is justified.”
After detailed analysis and reference to other decisions between
the workmen and the Corporation, the Tribunal came to issue the following
direction: -
“14. In the result award is passed holding that action of the
respondent management in denying to regularise the 955 contract
labourers engaged through Thiru. VI. Ka. Cooperative Society
as not justified and the management is directed to regularise
and departmentalise these 955 workmen from the date of
notification Ex. W 4 with regard to Avadi depot i.e. 28.02.1990
with all attendant benefits.  No Costs.”
(emphasis supplied)
5. Similarly, the Tribunal while disposing of I.D. No. 55/1993 vide
award dated 29.7.1998,
issued following directions: -
“… Therefore, the services of workmen employed in different
food storage depots of the Food Corporation of India in South
India where notification have been issued prohibiting engagement
of contract labour u/s 10(1) of the Contract Labour (Regulation
and Abolition) Act, are entitled to be regularised, from the date
of notification concerning each depot.  Award passed. No costs”.
(emphasis supplied)
THE WORKMEN THROUGH THE CONVENER FCI LABOUR FEDERATION
v. RAVUTHAR DAWOOD NASEEM [A. M. KHANWILKAR, J.]
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The aforementioned awards were subject matter of challenge
before the High Court of Judicature at Madras4 in Writ Petition Nos.
11416/1999 and 12416/1999. The learned single Judge vide judgment
and order dated 14.8.2003, dismissed the writ petitions on the finding
that the awards passed by the Tribunal were just and proper, and thus
affirmed the same.
6. Feeling aggrieved, the Corporation carried the matter before
the Division Bench of the Madras High Court by way of Writ Appeal
Nos. 3382/2003 and 3383/2003. The Division Bench dismissed the said
writ appeals vide judgment and order dated 13.12.2006 having agreed
with the conclusion arrived at by the Tribunal in passing awards and the
reasoning of the learned single Judge in confirming the same. The
Corporation filed special leave petitions before this Court, which were
converted into Civil Appeal Nos. 10499/2011 and 10511/2011. Both
appeals have been dismissed by a common judgment and order dated
20.8.2018 upholding the view taken by the Tribunal and the Madras
High Court.
7. Contempt Petition (Civil) No. 754/2019 is in reference to a
separate judgment and order of the same date (i.e. 20.8.2018) passed
by this Court in Civil Appeal No. 7961/2014 in respect of writ petition
instituted by the contempt petitioners (Thrissur Jilla General Mazdoor
Sangh and others) before the High Court of Kerala at Ernakulam5 being
Writ Petition No. 14786/2013, praying for the following
reliefs: -
“(i) A writ of mandamus directing the 5th respondent to take
effective steps for implementing Exhibit P1;
(ii) Declare that the DPS workers in the depot of FCI at
Mulakunnathukavu, Thrissur, are entitled to be regularised and
are entitled to the pay and other service benefits of departmental
labourer…”
The stated writ petition was dismissed by the learned single Judge
vide judgment and order dated 4.9.2013 on the finding that there was
substantial compliance of directions issued by the Tribunal. It also noted
that there was no indication in the award that the workers were required
to be engaged in the godowns in Kerala, departmentally. Feeling aggrieved,
the contempt petitioners filed Writ Appeal No. 1746/2013 before the
4 For short, “the Madras High Court”
5 For short, “the Kerala High Court”
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Kerala High Court, which came to be allowed in terms of the directions
issued in O.P. No. 14360/1999 as affirmed in Writ Appeal No. 2491/
2009. The relied upon order in O.P. No. 14360/1999 was passed by the
Kerala High Court in a petition filed by Head Load Labour Congress for
implementation of the award passed by the Tribunal.  The reliefs claimed
in the said writ petition read thus: -
“a) a writ of mandamus directing the 2nd respondent to take
effective steps for implementing Exhibit P1.
b) hold that all godowns and depots of FCI, especially in Kerala,
the workers should be regularised and brought under direct
payment system forthwith.”
(emphasis supplied)
The above writ petition came to be allowed vide judgment and
order dated 22.9.2009. Feeling aggrieved, the respondent-Corporation
had filed Writ Appeal No. 2491/2009 before the Kerala High Court,
which was dismissed vide judgment and order dated 15.2.2010. Against
the said decision, the Corporation had filed special leave petition before
this Court, which was converted into Civil Appeal No. 10530/2011 and
came to be dismissed by a common judgment and order dated 20.8.2018
of this Court alongwith Civil Appeal No. 7961/2014, referred to above.
8. Despite the dismissal of the appeals and confirmation of the
award passed by the Tribunal including the writ issued by the Kerala
High Court to implement the award, the respondent Corporation took no
initiative, which prompted the contempt petitioners to
approach this Court
for initiating contempt action against the respondent Corporation and its
officers.
9. The respondent Corporation would contend that it has already
regularised the eligible employees, who were party to the two References
mentioned above, under Direct Payment System (DPS) and nothing
further was required to be done. It is urged that in both the References,
the claim was restricted to regularisation of the concerned employees
after abolition of the contract labour system. There was no prayer for
absorbing the concerned employees under any specific system of regular
labour prevailing in the Corporation. The Corporation has four systems
of labour engagement, namely, (i) Departmental Labour System, (ii) Direct
Payment System, (iii) No-Work-No-Pay System and (iv) Mate System.
The workmen or the Unions concerned took no steps to amend the
THE WORKMEN THROUGH THE CONVENER FCI LABOUR FEDERATION
v. RAVUTHAR DAWOOD NASEEM [A. M. KHANWILKAR, J.]
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Reference even after the agreement arrived at in the meeting dated
12.4.1996 to ask for specific relief of regularisation under a particular
system. In absence of any specific relief, the respondent regularised the
workers under Direct Payment System (DPS) during pendency of the
References. The existence of Direct Payment System (DPS) since 1973
is indisputable. It has been noted in the decision of this Court in Workmen
of the Food Corporation of India vs. M/s. Food Corporation of India6
and recently in ESI Corporation vs. FCI Workers Union & Ors.7. It is
also urged that since 1991, no contract worker has been regularised
under the Departmental Labour System, although some Direct Payment
System (DPS) workers and ‘B category’ workers were brought under
Departmental Labour System in 1994 and 1997 pursuant to specific
awards/Court orders followed by settlements during pendency of appeals
filed by the Corporation. The recent policy guidelines issued by the
Government of India vide letter dated 11.11.2013 unambiguously predicate
that the contract workers be regularised only under No-Work-No-Pay
System. It is the case of the Corporation that out of 1800 Depots operated
by the Corporation, more than 1500 Depots were operating under contract
labour system, and provided employment to more than one lakh labour,
out of which 50% of the total regular labour is employed under the Direct
Payment System (DPS). It has produced the
Chart in regard to regular
labour as on 31.12.2019 under three different categories as under: -
Labour Type 
Number of Depots 
Men in Position 
Departmental Labour System 
(DLS) 
56 
10860 
Direct 
Payment 
System 
(DPS) 
155 
19427 
No Work No Pay (NWNP) 
85 
6427 
Total 
295 
36714 
(emphasis supplied)
It is not as if only the workmen involved in two References have
been regularised in Direct Payment System (DPS). There are 19427
workmen in this system as against 10860 under Departmental Labour
System. It is urged that the service benefits under the Direct Payment
System (DPS) are indicative of the fact that it is a regular engagement
6 (1985) 2 SCC 136
7 Civil Appeal Nos. 8841-8842/2019 decided on 19.11.2019
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by the Corporation and not on contract or casual basis. The service
benefits under the Direct Payment System (DPS) are outlined as follows:-
“Service Benefits under DPS:
The main service benefits of the DPS workers are highlighted as
under:
i. DPS workers are governed by the Model standing Orders under
Industrial Employment Standing Orders Act, 1946.
ii.DPS workers are permanent and regular and thus,
departmentalised employees of FCI and enjoys security of tenure
as superannuation age of a DPS worker is 60 years.
iii. The Legal Heirs of a DPS worker are eligible for Compassionate
Appointment on death as per Govt. of India policy circulated vide
FCI Hqrs. Circular no. 4/2003 dated 04/13.03.2003.
iv. The workers are paid monthly wages directly by the corporation
subject to assured minimum guaranteed wages declared by Central
Govt.  Thus, a DPS worker gets higher monthly wages on piece
rate basis when volume of work handled by him is high but when
there is no work or adequate work at the depot during a particular
month, the DPS workers is assured of minimum guaranteed wages.
v. DPS worker is eligible for paid weekly off, 06 holidays including
03 national holidays, 10 sick leave per year (accumulation upto 40
days), 15 days “leave without pay” per annum, CPF under FCI
CPF scheme, Ex-gratie in lieu of Bonus as per the provision of
payment of Bonus Act.
vi. DPS worker is eligible for productivity linked incentive as
declared by FCI Hqrs. from time to time.
vii.
DPS worker is eligible for OTA admissible as per shops and
establishment act or 1.1 of hourly earnings where exemption from
shops and establishment act has been granted by the appropriate
authority or said act does not apply.
viii. DPS worker is eligible for festival advance as per FCI
instructions applicable from time to time.
ix. DPS worker is eligible for gratuity as per payment of gratuity
act, 1972 from the date of notification.
x. DPS worker is eligible for workmen’s compensation as per
workmen’s compensation as per workmen’s compensation act.
THE WORKMEN THROUGH THE CONVENER FCI LABOUR FEDERATION
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xi. DPS worker is eligible for Benevolent Fund as per the scheme
of FCI.
xii. DPS worker is eligible for transfer grant/packing allowance
and joining period on their transfer within and outside region/zone
as per the instructions of the corporation issued from time to time.”
Further, the Corporation has now been advised to declare the
Departmental Labour System as a dying cadre. The same has been so
notified by the Government of India recently on 3.1.2020 in light of
recommendation made by the High-Level Committee constituted by the
Government of India in August, 2014.  Additionally, it was necessitated
because of the directions given by the High Court of Judicature at Bombay,
Bench at Nagpur in a suo moto registered PIL No. 84/2014 vide judgment
and order dated 20.11.2015, which has been confirmed by this
Court vide judgment and order dated 31.7.2017 passed in SLP(C)
No. 19218/2016 and connected matters. The respondent has placed
reliance on State of Bihar & Ors. vs. Bihar Secondary Teachers
Struggle Committee, Munger & Ors.8, wherein it has been held that
when administration adopts an integrated policy and if by process of
judicial intervention, any directions are issued, it could create tremendous
imbalance and cause great strain on budgetary resources.  As a matter
of fact, the Constitution Bench of this Court in Steel Authority of India
Ltd. & Ors. vs. National Union Waterfront Workers & Ors.9 has held
that the
contract labour need not be absorbed after abolition of contract
labour system. Be that as it may, the Corporation is not a profit-making
organisation. It has been established under the provisions of the Food
Corporations Act, 1964 and its primary duty is to undertake purchase,
storage, movement, transport, distribution and sale of food grains and
other food stuff. It is an agency to implement food policy of the
Government of India, which envisages protection of farmers by ensuring
remunerative price (Minimum Support Price) for their produce and
simultaneously safeguarding the interests of poor consumers by providing
them food grains at highly subsidised rates under National Food Security
Act, 2013 and other welfare schemes. The food subsidy of more than
Rs.1.50 lakh crore per annum is extended. It is stated that if all the
regular workers in the Corporation are brought under the Departmental
Labour System, there will be recurring liability on public exchequer to
8 (2019) 8 SCALE 124
9 (2001) 7 SCC 1 (Constitution Bench)
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the tune of Rs.3,000 crore per annum and if arrears are also given with
effect from 2003, there will be additional financial burden of more than
Rs.40,000 crore. It is urged that the issue regarding the parity of wages
between the employees under the Direct Payment System (DPS) and
those working under the Departmental Labour System is pending
adjudication in I.D. No. 1/2003 before the National Industrial Tribunal,
Mumbai. Finally, it is urged that in absence of any clear directions in
Reference proceedings, as per the extant policy, the respondent could
have regularised the concerned workers only under the Direct Payment
System (DPS) existing since 1973 as part of its organisational structure.
It is, therefore, urged that it is certainly not a case of disobedience, much
less wilful or deliberate disobedience of the order passed by this Court.
Reliance is placed on Dinesh Kumar Gupta vs. United India Insurance
Company Limited & Ors.10, Bihar State Government Secondary
School Teachers Association vs. Ashok Kumar Sinha & Ors.11and
Dineshan K.K. vs. R.K. Singh & Anr.12. The respondents pray that
the show cause notice(s) be discharged.
10. The petitioners, however, submit that the direction given by
the Tribunal and upheld by the Madras High Court including by this
Court is unambiguous. It mandates the respondent Corporation to
regularise the concerned workers in the Departmental Labour System,
as has been done in other cases adverted to by the Tribunal and
the
Madras High Court in the respective award/judgment. The petitioners
assert that the Direct Payment System (DPS) was implemented on
1.5.1996, whereas the dispute had been raised by the workers Union/
workers in 1992 and 1993. The relief granted by the Tribunal relates
back to the date of initiation of Reference proceedings and at that time,
in all other cases, regularisation of contract workers after abolition of
contract labour system, was done under the Departmental Labour system.
The regularisation of workers under the Direct Payment System (DPS)
would be denial of their claim for being regularised under the Departmental
Labour system. If such argument of the respondent Corporation was to
be acceded to and that too in contempt proceedings, it would be re-
writing the award of the Tribunal which had become final until this Court.
For, the Tribunal in its award dated 19.12.1997 in I.D. No. 39/1992 had
clearly directed the respondent Corporation to regularise and
10 (2010) 12 SCC 770 (paragraph 17)
11 (2014) 7 SCC 416 (paragraph 24)
12 (2014) 16 SCC 88 (paragraphs 14 and 15)
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departmentalise the concerned workers with effect from the date of
notification of abolition of contract labour system. It is too late in the day
for the Corporation to contend to the contrary. It is urged that there are
material differences between the service conditions under the
Departmental Labour System and the Direct Payment System (DPS).
The petitioners have relied on the decision of this Court in Food
Corporation of India & Ors. vs. West Bengal Food Corporation of
India Workmen’s Union13 and the order passed in contempt petition14
in that matter, to urge that the Corporation was directed to regularise the
concerned workers under the Departmental Labour system. According
to the petitioners, the Corporation is under obligation to extend same
relief to these petitioners and implement the direction given by the Tribunal
and upheld by the High Court, as well as, this Court, to regularise and
departmentalise the concerned workers under the Departmental Labour
system only.  Reliance is placed on Anil Ratan Sarkar & Ors. vs.
Hirak Ghosh & Ors.15 to contend that the Corporation cannot be
permitted to raise a new plea, so as to frustrate the decision of the
Tribunal and more particularly, of this Court, even after dismissal of the
appeal preferred by the respondent.
11. We have heard Mr. Rana Mukherjee, learned senior counsel
for the petitioners in Contempt Petition (Civil) Nos. 508/2019 and 507/
2019, Mr. V. Prakash,
learned senior counsel for the petitioners in
Contempt Petition (Civil) No……………./2020 (@ Diary No. 13740/
2019), Mr. Colin Gonsalves, learned senior counsel for the petitioners in
Contempt Petition (Civil) No. 754/2019, Mr. Brijender Chahar, learned
senior counsel for the petitioners in Contempt Petition (Civil) Nos. 404/
2019 and 1073/2019, Mr. Mukul Rohatgi, learned senior counsel for the
respondents in Contempt Petition (Civil) No. 754/2019, Mr. V. Giri, learned
senior counsel for the respondents in Contempt Petition (Civil) No. 404/
2019 and Mr. Sudarsh Menon, learned counsel for the applicant in I.A.
No. 167580/2019 in Contempt Petition (Civil) No. 404/2019.
12. Before we proceed to analyse the stand taken by the parties,
it is apposite to advert to the exposition of this Court in Ram Kishan vs.
Tarun Bajaj & Ors.16, wherein the Court has delineated the contours
13 (2018) 9 SCC 469
14 Contempt Petition (Civil) No. 809/2018
15 (2002) 4 SCC 21 (paragraphs 20 to 22)
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for initiating civil contempt action. In paragraphs 11, 12 and 15 of the
reported decision, the Court observed thus: -
“11. The contempt jurisdiction conferred on to the law courts
power to punish an offender for his wilful disobedience/
contumacious conduct or obstruction to the majesty of law, for
the reason that respect and authority commanded by the courts
of law are the greatest guarantee to an ordinary citizen that his
rights shall be protected and the entire democratic fabric of the
society will crumble down if the respect of the judiciary is
undermined. Undoubtedly, the contempt jurisdiction is a
powerful weapon in the hands of the courts of law but that
by itself operates as a string of caution and unless, thus,
otherwise satisfied beyond reasonable doubt, it would
neither be fair nor reasonable for the law courts to exercise
jurisdiction under the Act. The proceedings are quasi-
criminal in nature, and therefore, standard of proof required
in these proceedings is beyond all reasonable doubt. It
would rather be hazardous to impose sentence for contempt
on the authorities in exercise of the contempt jurisdiction
on mere probabilities. (Vide V.G. Nigam v. Kedar Nath Gupta,
(1992) 4 SCC 697, Chhotu Ram v. Urvashi Gulati, (2001) 7 SCC
530, Anil Ratan Sarkar v. Hirak Ghosh, (2002) 4 SCC 21, Bank
of Baroda v. Sadruddin Hasan Daya, (2004) 1 SCC
360, Sahdeo v. State of U.P., (2010) 3 SCC 705 and National
Fertilizers Ltd. v. Tuncay Alankus, (2013) 9 SCC
600.
12. Thus, in order to punish a contemnor, it has to be
established that disobedience of the order is “wilful”. The
word “wilful” introduces a mental element and hence,
requires looking into the mind of a person/contemnor by
gauging his actions, which is an indication of one’s state of
mind. “Wilful” means knowingly intentional, conscious,
calculated and deliberate with full knowledge of
consequences flowing therefrom. It excludes casual, accidental,
bona fide or unintentional acts or genuine inability. Wilful acts
does not encompass involuntarily or negligent actions. The act
has to be done with a “bad purpose or without justifiable excuse
or stubbornly, obstinately or perversely”. Wilful act is to be
16 (2014) 16 SCC 204
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distinguished from an act done carelessly, thoughtlessly, heedlessly
or inadvertently. It does not include any act done negligently or
involuntarily. The deliberate conduct of a person means that he
knows what he is doing and intends to do the same. Therefore,
there has to be a calculated action with evil motive on his
part. Even if there is a disobedience of an order, but such
disobedience is the result of some compelling
circumstances under which it was not possible for the
contemnor to comply with the order, the contemnor cannot
be punished. “Committal or sequestration will not be
ordered unless contempt involves a degree of default or
misconduct.” (Vide S. Sundaram Pillai v.  V.R. Pattabiraman,
(1985) 1 SCC 591, Rakapalli Raja Ram Gopala
Rao v. Naragani Govinda Sehararao, (1989) 4 SCC 255, Niaz
Mohammad v. State of Haryana, (1994) 6 SCC 332, Chordia
Automobiles v. S. Moosa, (2000) 3 SCC 282, Ashok Paper
Kamgar Union v. Dharam Godha, (2003) 11 SCC 1, State of
Orissa v. Mohd. Illiyas, (2006) 1 SCC 275 and Uniworth Textiles
Ltd. v. CCE, (2013) 9 SCC 753.
xxx
xxx
xxx
15. It is well-settled principle of law that if two
interpretations are possible, and if the action is not
contumacious, a contempt proceeding would not be
maintainable. The effect and purport of the order is to be taken
into consideration and the same must be read in its entirety.
Therefore, the element of willingness is an indispensable
requirement to
bring home the charge within the meaning of the
Act. [See Sushila Raje Holkar v. Anil Kak, (2008) 14 SCC 392
and Three Cheers Entertainment (P) Ltd. v. CESC Ltd., (2008)
16 SCC 592.”
(emphasis supplied)
Suffice it to observe that to constitute civil contempt, it must be
established that disobedience of the order is wilful, deliberate and with
full knowledge of consequences flowing therefrom. For reaching that
conclusion, it is essential to notice the scope of References before the
Tribunal and direction issued therein, which has been affirmed upto this
Court. Going by the plain text, the issue(s) referred to for adjudication
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(reproduced in paragraph 3 above) is merely for regularisation. However,
the point-in-issue considered by the Tribunal coupled with the operative
part of the award (which has been reproduced in the earlier part of this
judgment), it would at best be a case of directing the respondent
Corporation to regularise and departmentalise the concerned workmen,
who were party to the stated References.
13. As noted earlier, the Corporation operates four systems of
labour. The Departmental Labour System is one such system of
engagement. The other is Direct Payment System (DPS). The third is
No-Work-No-Pay System and fourth, the Mate System. Neither the
relief in the References was specific for regularisation in Departmental
Labour System only nor the Tribunal, the Madras High Court/Kerala
High Court or this Court was called upon to deal with that issue specifically.
The claim set up by the petitioner-Union(s) was simpliciter for
regularisation of workmen who were named in the annexure(s) to the
References. The Tribunal did issue direction to regularise and
departmentalise those workmen. It is axiomatic that departmentalisation
could also be an engagement in a Department, which could be a separate
part or branch/section of the whole Organisation. Departmentalisation
is dividing an organisation into different departments or structuring it in a
manner, which perform tasks according to the specialisations in the
organisation. It may include departments such as
functional, product,
process, geographical locations, customer, divisional, matrix, planning task
force etc.
14. As it is indisputable that the Corporation has four systems of
labour engagement including the Direct Payment System (DPS), the
petitioner-Union(s) ought to have sought specific relief against the
Corporation in that regard. Significantly, the petitioners have assumed
that the Direct Payment System (DPS) commenced only from 1.5.1996,
whereas it is noticed from the decision of this Court in Workmen of the
Food Corporation of India (supra) that the Direct Payment System
(DPS) is in existence from 1973. It is not a new set up created by the
Corporation pursuant to the minutes recorded on 12.4.1996 as such.
Concededly, the subject References, as well as, the direction issued by
the Tribunal, which has been upheld upto this Court is silent about the
system in which the concerned workers have to be regularised and
departmentalised. It is incomprehensible as to how it would be a case of
disobedience, much less wilful disobedience, so as to entail in contemptuous
THE WORKMEN THROUGH THE CONVENER FCI LABOUR FEDERATION
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conduct of the concerned officers of the Corporation especially when
the eligible enlisted workers have already been regularised under the
Direct Payment System (DPS) as per the applicable policy of 1991.
Notably, the writ petition filed before the Kerala High Court for
implementation of the stated award also sought direction (reproduced in
paragraph 7 above) to regularise the concerned workmen under the
Direct Payment System (DPS). If that be the position, it is unfathomable
as to how the respondent Corporation can be proceeded against for
having committed contempt of this Court.
15. The argument of the petitioners, however, is that the awards
passed by the Tribunal, as well as, the judgments of the Madras High
Court/Kerala High Court and this Court may have to be read as a whole
and if so read, it would only mean that the direction given to the respondent
Corporation was to regularise and departmentalise all the concerned
workmen on the same terms as done in other cases referred to in the
concerned judgment. To buttress this submission, reliance is placed on
the award of the Tribunal, dated 19.12.1997, wherein reference is made
to cases of regularisation in 1991 and as back as in 1982. In the relied
upon cases, the Tribunal did not advert to the policy of the respondent
Corporation to engage the concerned employees after abolition of the
contract labour system only under the Direct Payment System (DPS)
and which was
being strictly adhered to since 1991. Pertinently, there
was specific direction by the Tribunal/Court in those cases to regularise
the concerned workmen under the Departmental Labour System, which
is not so in the present case.
16. Indeed, the award dated 19.12.1997 makes extensive reference
to the previous judgment of the Kerala High Court. In that decision,
while issuing direction to the Corporation, it was made clear that the
absorption of the concerned workmen would be governed exclusively
by the terms and conditions prescribed by the Corporation for its own
regular employees and the Corporation shall have all the rights such as
retrenchment. It was further directed that the process of absorption
must be in accordance with the provisions of concerned labour and
industrial law.  Be that as it may, in the present case, neither any discussion
is noticed about the efficacy of policy of the Corporation effective since
1991 regarding regularising the concerned workmen after abolition of
contract labour system only under the Direct Payment System (DPS)
nor a clear direction has been given by the Tribunal to the respondent
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Corporation to regularise the concerned workmen only under the
Departmental Labour System.  Similarly, the learned single Judge has
merely upheld the direction as given by the Tribunal. Indeed, the
impression gathered from the discussion in the judgment of the learned
single Judge does indicate that the Corporation being an instrumentality
of the State cannot be heard to discriminate between its different
employees working at different Depots. As noted earlier, it is not as if
the workmen involved in subject References alone were being considered
for regularisation in the Direct Payment System (DPS). There are 19427
others who have been so appointed and working as on 31.12.2019.
Moreover, those who were working as contract labour engaged through
cooperative societies or private contractors came to be regularised in
the Direct Payment System (DPS) as per the policy of 1991. The fact
remains that even the learned single Judge had not issued specific
direction to the respondent Corporation to regularise the concerned
workmen under the Departmental Labour System and not under the
Direct Payment System (DPS) as such. Similarly, the Division Bench
proceeded to consider the matter as to whether the direction issued by
the Tribunal is acceptable and whether the learned single Judge was
right in affirming the said direction.  In examining that question, the
Division Bench, amongst others, noted as follows: -
“21. As rightly pointed out by the learned Judge, except
the
godowns/depots in Tamil Nadu, the Labourers engaged in similar
capacity in other parts of the country have been departmentalised
or regularised. As a matter of fact, even in this State, in respect of
Egmore and port godowns of FCI, the workers have been
departmentalised. We already mentioned that Notifications of the
Government of India regularising/departmentalising the workers’
issue in respect of other States, were placed before the Tribunal.
As rightly pointed out by the learned Judge, inasmuch as FCI is a
Corporation having transactions throughout India, when it thought
fit to regularise the workers in some parts of India, particularly in
North, they are not justified in denying such benefits to the
workmen in the State. Inasmuch as the main argument on the
side of the appellant was projected for remanding the case to the
Tribunal as if the materials placed before it were not considered,
in the light of the evidence let in before the Tribunal in the form of
various orders/Notifications by the Government of India, existence
of more work in all the godowns, Food Storage Depots of FCI
THE WORKMEN THROUGH THE CONVENER FCI LABOUR FEDERATION
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and of the fact that all those acceptable materials were correctly
appreciated by the Tribunal, we are of the view that there is no
case for remand. As rightly pointed out by the learned Judge
as well as correctly observed by the Tribunal, the FCI,
which is a wing of Government of India, should be a model
employer, more particularly, when they are having plenty
of continuous work and are in need of more work Force,
we are satisfied that both the Unions are justified in their
demand for regularisation and for departmentalisation.
22. Under these circumstances, we are in entire agreement
with the conclusion arrived at by the Industrial Tribunal in
passing award and the reasoning of the learned single Judge
in confirming the same. Consequently, both the Writ
Appeals fail and are, accordingly, dismissed. No costs.…”
(emphasis supplied)
It is thus seen that even the Division Bench did not issue any
specific direction to the respondent Corporation to regularise the
concerned workmen under the Departmental Labour system and not to
do so under the Direct Payment System (DPS) as per the policy of
1991. This Court has merely affirmed the view taken by the Tribunal
and the Madras High Court. More importantly, the Departmental Labour
System has since been notified as a dying cadre.
17. To put it differently, the issue as to regularisation of the
concerned workmen under particular labour system had not been put in
issue before the
Tribunal and upto this Court. A general direction came
to be issued to regularise and departmentalise them. Resultantly, the
respondents were left with the only option to regularise the concerned
workmen as per the extant applicable policy of the Organisation, under
the Direct Payment System (DPS).
18. Reverting to the decision of the Kerala High Court in Writ
Petition No. 14360/1999 filed for directing implementation of the award
in question, the relief claimed was to regularise the concerned workmen
under the “Direct Payment System (DPS)” forthwith. That relief was
already acceded to by the Corporation in the minutes recorded between
the parties dated 12.4.1996. For that reason, the Corporation did not
participate in the Reference proceedings in I.D. No. 39/1992 and allowed
the I.D. No. 55/1993 to proceed ex-parte. Indeed, the Corporation assailed
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the awards upto this Court on the basic issue of right and entitlement of
the concerned workmen to be regularised. The fact whether regularisation
should be under the Departmental Labour System or the Direct Payment
System (DPS) was not put in issue at any stage including the appeal
decided by this Court. The Corporation having lost on the basic issue of
regularisation was obliged to give effect to the award as per its extant
policy in that regard in force since 1991.
19. Notably, the relief granted by the Division Bench of the Kerala
High Court in Writ Appeal No. 2491/2010 was only for regularisation in
the Direct Payment System (DPS) as prayed in the writ petition. In the
subsequent writ petition filed before the Kerala High Court being Writ
Petition No. 14786/2013, against which the appeal came to this Court
being Civil Appeal No. 7961/2014, the relief claimed was for regularisation
and to give all other service benefits of Departmental Labour system.
This writ petition was dismissed by the learned single Judge on the finding
that the award in question was already substantially complied with.  When
the matter went up to the Division Bench by way of writ appeal being
Writ Appeal No. 1746/2013, the same was disposed of as per the direction
issued in the earlier writ petition being O.P. No. 14360/1999 and Writ
Appeal No. 2491/2009 referred to above. The relief granted in these
proceedings was, therefore, only regarding regularisation in the Direct
Payment
System (DPS). If that be so, we fail to understand as to how
the writ petitioner(s) therein could ask for relief different than
regularisation under the Direct Payment System (DPS).
20. Reliance was placed by the petitioners on the dictum in
paragraph 23 of the judgment dated 20.8.2018 in Civil Appeal Nos. 10499/
2011 and 10511/2011, which reads thus: -
“23. It was then brought to our notice that similar industrial
reference alike the one in the present case was also made in
relation to the FCI Branch at West Bengal and the said reference
was answered in favour of workers’ Union. The matter was then
taken to the High Court unsuccessfully and then carried to this
Court at the instance of the FCI in Civil Appeal No. 7452 of 2008
and the appeal was dismissed on 20.07.2017 resulting in upholding
the award of the Industrial Tribunal.  It was stated that the FCI
then implemented the award, as is clear from the notice on
05.10.2017, in favour of the concerned workers. Be that as it
may, since we have upheld the impugned order in this case
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on the facts arising in the case at hand, we need not place
reliance on any other matter, which was not before the High
Court.”
(emphasis supplied)
21. The petitioners have adverted only to the opening part of this
paragraph. The crucial part, in our opinion is, the latter (highlighted) part,
wherein the Court has made it clear that the judgment relied upon was
not being taken into account for deciding the appeal.
22. In West Bengal Food Corporation of India Workmen’s
Union (supra) involving a case arising from the proceedings and order
dated 8.3.2001 passed by the High Court of Calcutta in C.R. No. 5498
(W) of 1991, which is extracted in the order passed by this Court, dated
20.7.2017, the Court opined that order in the said case had directed the
respondents to frame a scheme or to find ways and means to absorb the
concerned workmen. That direction can have no bearing on determination
of the matters at hand, being contempt petitions. For the same reason,
the subsequent orders passed in contempt petition in the said appeal will
have no bearing on the present case. For, these petitions will have to be
decided strictly on the basis of the awards passed in the References in
question and the judgment of the Madras High Court/Kerala High Court
and this Court, being contempt action.
23. In the present case, as noticed earlier, no specific direction
has been given to the Corporation to regularise the concerned workmen
only
in the Departmental Labour System. Furthermore, the Departmental
Labour System is now a dying cadre and the policy of the Corporation at
the relevant time entailed regularisation of such workmen only under the
Direct Payment System (DPS). Thus understood, no contempt action
can be initiated on the basis of general direction to the respondents to
regularise and departmentalise the concerned workmen. For, it is not
possible to hold that intrinsic in the general direction was to ordain the
respondents to regularise and departmentalise the concerned workmen
under the Departmental Labour System in the teeth of the extant policy
of the Corporation in force since 1991 regarding regularisation against
Direct Payment System (DPS).
24. Reverting to the decision of this Court in Anil Ratan Sarkar
(supra), it was a case in which crystal-clear direction was given to the
management to treat the concerned employees at par with another set
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of specified employees. Further, despite six rounds of litigation, the
management kept on taking defence of its bona fide understanding of
the situation, which came to be deprecated. Had it been a case of clear
direction by the Tribunal, the High Court or this Court, and an attempt
was made to interpret, or so to say, misinterpret, such direction, to
regularise the employees concerned under the Departmental Labour
System, and if such direction was not to be complied with by the
respondent Corporation, the situation could have been viewed differently
- being a contempt action. In the present case, it is not a moonshine
defence as was the finding recorded in the reported decision.
25. Suffice it to observe that no case for initiating contempt action
against the respondent Corporation and its officers has been made out.
We need not, therefore, analyse any other aspect of the matter, which
would require rewriting of the judgments on the basis of which this
contempt action has been instituted. That cannot be countenanced in
contempt proceedings.
26. Accordingly, these petitions fail and are dismissed.  Show cause
notices stand discharged. Pending interlocutory applications, if any, shall
stand disposed of.
Divya Pandey
Contempt Petitions dismissed.
THE WORKMEN THROUGH THE CONVENER FCI LABOUR FEDERATION
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