Case: BHARAT HEAVY ELECTRICALS LTD Vs. MAHENDRA PRASAD JAKHMOLA

2. The brief facts necessary to decide these appeals are as follows:3. By Reference Order dated 09.11.2004 under Section 4(k) of the Uttar Pradesh Industrial Disputes Act, 1947, the following dispute was referred to the Labour Court:Whether termination of services of workman Shri Mahendra Prasad Jakhmola, s/o Late Shri Vachaspati Jakhmola, Helper by the employer, w.e.f. 13.11.2001, is justified and/or as per law? If not, what benefit/relief the concerned workman is entitled for and with what other details?4. Similar Reference Orders were made in 63 other cases.5. Pleadings were filed before the Labour Court at Haridwar and evidence was led on behalf of the appellant as well as by the workmen. By an Award dated 01.11.2009, the Labour Court held, referring to a notification, which is, notification dated 24.04.1990 under the Contract Labour (Regulation and Abolition) Act, 1970 (hereinafter referred to as 1970 Act), that the said notification, on application to the appellant, would show that the workmen were not deployed to do the work mentioned in the notification. It was further held that based on documentary evidence in the form of gate passes, the workmen, who were otherwise employed by a contractor, were directly employed by the appellant. It was also held to have been fairly conceded by the employers representative that supervision, superintendence and administrative control of all these workmen were with the appellant. It was also held that under the extended definition of employer in the Uttar Pradesh Industrial Disputes Act, 1947, even if the workmen are regarded as workmen of a contractor, they would yet be workmen of the appellant as the appellant was within the extended definition of employer under the Act. This being the case, it was held that all such workers, being 64 in number, were entitled to be reinstated with immediate effect but without backwages. From this Labour Award, a review petition was filed by the appellant, in which it was clearly stated that no such concession, as recorded by the Labour Court, was made before it. Further, notification dated 24.04.1990 had no application as Bharat Heavy Electricals Ltd. (BHEL) was exempted therefrom and, therefore, to apply this notification to the facts of this case was also wrong. On 18.05.2011, this review was dismissed by the Labour Court holding:Considering the above noted discussion, as made in award dated 01.11.2009, I find force in the argument of opposite part-2 that as far as notification dated 24.04.1990 is concerned, this court has already considered and has given its verdict on this notification and now on review application no contrary inference can be drawn by this court as prayed by the applicant. As far as Notification dated 23.07.2010 (supra) is concerned, this notification was not issued by Government when award was passed. As such, this notification cannot be said applicable at that time and no benefit of later issued notification dated 23.07.2010 can be given to applicant. Moreover, if applicant was exempted vide notification on dated 24.04.1990, in such a case what was the necessity to issue the second notification dated 23.07.2010 (supra) for exemption of contract labour.On perusal of all the documents and legal preposition of law laid down by Apex Court in Uttar Pradesh State Roadway Transport Corporation vs. Imtiaz Hussain (supra). I am in agreement with the Opposite Party-2 that except arithmetical or clerical errors, the order which was passed by the court on merit, cannot be changed, amended or altered. As far as case in hand is concerned no clerical or arithmetical mistake is involved. As such, application A-2 is liable to be rejected.6. A writ petition was filed, being W.P. No. 1021/2011, against the aforesaid orders. This writ petition was dismissed by the first impugned order dated 24.04.2014 in which the High Court recorded that undisputedly all petitioners, i.e., workmen, were performing the duties which were identical with those of regular employees. Therefore, it can be said that they were under the command, control, management of the BHEL and, concomitantly, the contractor has absolutely no control over the workmen in performing such duties. It was, therefore, held that the alleged contract with the contractor was sham and, consequently, the Labour Court Award was correct in law and was upheld. Against this order, a special leave petition was filed which was disposed of as follows: -In the impugned order the High Court records, Undisputedly, all the petitioners, herein, were performing the skilled/unskilled duties with the regularly appointed staff of BHEL in BHEL Factory Premises and were reporting on duties along with regular employees to perform identical duties and had been working for fixed hours along with regular employees of BHEL.Mr. Sudhir Chandra, learned senior counsel for the petitioner submits that the above position was seriously disputed and the High Court has wrongly recorded Undisputedly.If that be so, the course open to the petitioner is to approach the High Court seeking review of the impugned order. The submission cannot be entertained for the first time by this Court having regard to the statement of fact recorded in the impugned order.We observe that if review applications are filed within two weeks, the same will not be dismissed on the ground of delay.Since special leave petitions are not being entertained on the above ground, liberty is granted to the petitioner to challenge the impugned order, in case, review applications are dismissed by the High Court.Special leave petitions are disposed of.7. The appellant, then filed a review petition before the High Court, which disposed of the review stating:BHEL has submitted written statement before the learned Labour Court. Paragraph 3 thereof reads as under:3.The workman concerned in the dispute Sri Mahendra Prasad Jakhmola was never engaged by BHEL Haridwar and he was not their employee and they were not his employers. It appears that he might have been engaged and employed by the contractor Sri Madan Lal who also has been made party as employer in the Industrial Dispute under reference.Plain reading of paragraph 3 of the written statement would go to suggest that even BHEL is not sure as to whether workmen were supplied by the contractor or were engaged by the BHEL. That being so, even if there was any Contract Labour Agreement between the BHEL and Madan Lal, alleged contractor, same seems to be sham transaction and camouflage.Not only this, the BHEL/employer-I has not placed on record any material to demonstrate that under the alleged Labour Contract Agreement payment was ever made in favour of Madan Lal/alleged contractor for supplying labourers/workmen in question; no material is available on the record to say what was the period of supplying the labourers under the contract.In view of the above discussion, I do not find any good or valid reason to review the judgment under review. Consequently, all the review applications fail and are hereby dismissed.

Court's reasoning:
10. Having heard learned counsel for both the sides, it is important, first, to advert to the Award of the Labour Court. The said Award sets down the notification dated 24.04.1990 that was issued under the 1970 Act. A reading of the aforesaid notification makes it clear that the appellant, insofar as their UP operations are concerned, in Haridwar, in particular, are exempted from the aforesaid notification. Despite this, however, the Labour Court went on to apply the said notification, which would clearly be perverse. In addition, though Ms. Jain stated that documentary evidence was filed, yet the Labour Court based its finding on direct relationship between the parties only on the gate passes being issued by the appellant, and on a concession made by the appellants representative.What is clear from the evidence that was led by the parties is that the aforesaid gate passes were issued, as has been stated by the appellants witness, only at the request of the contractor for the sake of safety and also from the administrative point of view. The idea was security, as otherwise any person could enter the precincts of the factory. This evidence was missed by the Labour Court when it arrived at a conclusion that a direct relationship ought to be inferred from this fact alone. Further, as has been correctly pointed out by Shri Sudhir Chandra, the appellant has, not only in the first review, but also in the writ petition filed, taken the plea that no such concession was ever made. Moreover, quite apart from this plea and the counter plea of Ms. Jain that the person who has made such concession should have stated that he did not do so, concessions on mixed questions of fact and law cannot decide cases as the evidence as a whole has to be weighed and inferences drawn therefrom.14. A look at this provision together with the judgment in Basti Sugar Mills Ltd. vs. Ram Ujagar and Ors. [(1964) (2) SCR 838) relied upon by Ms. Jain, would show that in order that section 2(i)(iv) apply, evidence must be led to show that the work performed by contract labour is a work which is ordinarily part of the industry of BHEL. We find, on the facts of the present case, that no such evidence has, in fact, been led. Consequently, this finding is also a finding directly applying a provision of law without any factual foundation for the same.15. This being the case, it is clear that the Labour Court has arrived at a conclusion which no reasonable person could possibly arrive at and ought, therefore, to have been set aside. Apart from the Labour Court dismissing a review from its own order, we find that the High Court, in the first impugned judgment dated 24.04.2014, has also arrived at findings which are contrary to the evidence taken on record. First and foremost, it could not have said that undisputedly, the labour that was employed through contractors were performing identical duties as regular employees and that, therefore, without any evidence, it can be said that they were under the control, management and guidance of BHEL. Secondly, when it said that alleged contracts that were awarded in favour of contractors and how many labourers, in what type of work etc. were asked for, were not furnished, is also directly contrary to the evidence led on behalf of the BHEL, in which such documents were specifically provided. Thus, Shri Naveen Luniyal, in his evidence-in-chief, had pointed out:Thus, we entered into contract of workers with the contractors which are document No. 8 and 9 of the above list and the same are marked Exhibit E-6 and E- 7 respectively. The period of contract used to be extended for the completion of assignment in case the work was not completing in time or the same was being extended. The concerned workman filed writs before Honble Delhi HighCourt seeking their regularization while impleading BHEL as a party and it was ordered by the court that you may prefer your suit for regularization before C.G.I.T.There is no master employer and servant relationship of the workers with BHEL and BHEL was also not making any payment of salary to them as the workers were in the service of the contractor. Thus, there does not arise any question of giving them employment.The workers were being issued gate passes at the request of the contractor, for the sake of safety and also from administrative point of view, it was specifically bearing the mention that they are the workers of the contractors. Any worker cannot enter in the workplace if such gate passes are not issued. CISF takes care of the safety in our organisation.16. Equally, the review judgment apart from being cryptic, draws an unsustainable conclusion after setting out paragraph 3 of the written statement of BHEL in the Labour Court. What was stated by BHEL in paragraph 3 was that the workmen were only engaged by the contractor and were not their employees. The written statement then goes on to be speculative in stating that it appears that a workman might have been engaged as an employee by a particular contractor. A plain reading of this written statement would certainly not suggest that BHEL is not sure as to whether workmen were or were not supplied by a contractor, or engaged by BHEL. What is clear from the written statement is that BHEL has denied that the workmen were engaged by BHEL or that the workmen were BHELs workmen. From this to conclude that the transaction seems to be sham, is again wholly incorrect. Apart from this, it is also incorrect to state that BHEL has not placed on record any material to demonstrate that under the alleged labour contract, payment was ever made in favour of Madan Lal, the alleged contractor. It has been correctly pointed out by learned counsel appearing on behalf of BHEL that in the very first sentence of the cross examination of the workmen, before the labour court, the workmen admitted that payments of their wages were made by four contractors including Shri Madan Lal. Also, the fact that Madan Lal was paid under the agreement with BHEL was never disputed. Indeed, Ms. Jains argument that Madan Lal only derived a 10 per cent profit from the agreement with him presupposes payment to Madan Lal by BHEL under the agreement with him. This finding again is wholly incorrect.19. From this judgment, it is clear that test No. 1 is not met on the facts of this case as the contractor pays the workmen their wages. Secondly, the principal employer cannot be said to control and supervise the work of the employee merely because he directs the workmen of the contractor what to do after the contractor assigns/ allots the employee to the principal employer. This is precisely what paragraph 12 explains as being supervision and control of the principal employer that is secondary in nature, as such control is exercised only after such workman has been assigned to the principal employer to do a particular work.20. We may hasten to add that this view of the law has been reiterated in Balwant Rai Saluja and Another vs. Air India Limited and Others [2014 (9) SCC 407 ], as follows:65. Thus, it can be concluded that the relevant factors to be taken into consideration to establish an employer-employee relationship would include, inter alia:(i) who appoints the workers;(ii) who pays the salary/remuneration;(iii) who has the authority to dismiss;(iv) who can take disciplinary action;(v) whether there is continuity of service; and(vi) extent of control and supervision i.e. whether there exists complete control and supervision.As regards extent of control and supervision, we have already taken note of the observations in Bengal Nagpur Cotton Mills case [(2011) 1 SCC 635] , International Airport Authority of India case [2009 13 SCC 374 ] and Nalco case [(2014) 6 SCC 756] .21. However, Ms. Jain has pointed out that contractors were frequently changed, as a result of which, it can be inferred that the workmen are direct employees of BHEL. There is no such finding of the Labour Court or any reference to the same by the High Court. Consequently, this argument made for the first time in this Court together with judgments that support the same, is of no consequence.There is no doubt that the law laid down by these judgments is unexceptionable. We may only state that these judgments have no application to the facts of the present case. The Labour Courts Award being perverse ought to have been set aside in exercise of jurisdiction under Article 226.When it is found that the findings of the Labour Court are perverse, it is difficult to accede to this argument. Equally, the argument that the so-called employer has not complied with the Labour Courts Award, despite there being no stay, is an argument that must be rejected. In that a contempt petition could always have been moved on behalf of the workmen for implementation. No such thing has been done in the present case.24. The argument that the contractor, in the facts of the present case, gets only a 10 per cent profit and nothing more, is again an argument that needs to be rejected in view of the clear and unequivocal evidence that has been led in this case. The workmen have themselves admitted that there is no appointment letter, provident fund number or wage slip from BHEL insofar as they are concerned. Apart from this, it is also clear from the evidence led on behalf of BHEL, that no wages were ever been paid to them by BHEL as they were in the service of the contractor. Further, it was also specifically pointed out that the names of 29 workers were on the basis of a List provided by the contractor in a bid that was made consequent to a tender notice by BHEL.25. Ms. Asha Jains reliance upon the judgment in Steel Authority of India Ltd. And Others [(2001) 7 SCC 1] is also misplaced. There is nothing on facts to show that the contract labour that is engaged, even de hors a prohibition notification, is in the facts of this case sham.