w w w . L a w y e r S e r v i c e s . i n



Hindustan Aeronautics Limited, Represented by its, Bengaluru & Another v/s Peer Bhaktar & Others


Company & Directors' Information:- HINDUSTAN AERONAUTICS LIMITED [Active] CIN = U35301KA1963GOI001622

Company & Directors' Information:- A O G AERONAUTICS PRIVATE LIMITED [Strike Off] CIN = U35303PB1989PTC009681

Company & Directors' Information:- HINDUSTAN CORPORATION PRIVATE LIMITED [Dissolved] CIN = U74900KL1901PTC000424

Company & Directors' Information:- HINDUSTAN LTD. [Active] CIN = U99999MH1917PTC000472

Company & Directors' Information:- HINDUSTAN CORPORATION LIMITED [Dissolved] CIN = U99999MH1949PLC007790

Company & Directors' Information:- AERONAUTICS INDIA LTD. [Strike Off] CIN = U99999DL2000PTC004006

    Writ Appeal Nos. 342-356 of 2019 (S-REG)

    Decided On, 27 September 2019

    At, High Court of Karnataka

    By, THE HONOURABLE MR. CHIEF JUSTICE ABHAY S. OKA & THE HONOURABLE MR. JUSTICE H.T. NARENDRA PRASAD

    For the Appellants: Pradeep S. Sawkar, Advocate. For the Respondents: B.K. Sampath Kumar, Advocate.



Judgment Text

(Prayer: These Writ appeals are filed Under Section 4 of the Karnataka High Court Act, 1961, praying to allow the Appeal, set aside the order dated 20.12.2018 passed by the Learned Single Judge in W.P.Nos.49823-837/2014 and etc.)

FACTS

1. By these appeals, the appellants have taken an exception to the Judgment and Order dated 20th December, 2018 passed by the learned Single Judge in W.P.Nos.49823- 49837/2014 (S-REG), by which, writ petitions filed by the workmen/respondents herein were allowed in part with a direction to the first appellant to absorb the respondents in the employment of the first appellant subject to fulfillment of certain conditions.

2. With a view to appreciate the controversy, a brief reference to the facts of the case is necessary:

(a) The respondents in their writ petitions stated that they were working as contract labourers with the first appellant under various labour contractors. According to the respondents, they were appointed during the years 1974 to 1997. The respondents relied upon a circular issued by the Chief Administrative Manager of the first appellant dated 2nd February 1988, in which it was stated that casual labourers and term contract labourers who have completed more than 240 days of attendance will be considered for absorption. According to the case of the respondents, in a meeting held on 17th June, 1989 between the management of the first appellant and workers' union, an assurance was given that the confirmation of first batch of employees for regularizing their services would be done within few months. The respondents relied upon the office note/circular of 24th March, 1999 issued by the appellant wherein it was recorded that the workmen employed by contractors working with the first appellant will be given regular offers of appointment. As the respondents were not absorbed, they filed writ petitions in this Court, seeking a direction to the appellant to regularize their employment. The said writ petition Nos.8294-96/1998 and other connected matters were disposed of by the order dated 12th January, 2000 by reserving liberty to the petitioners to approach the appellants by making appropriate representation. Accordingly, the representations were submitted by the respondents.

b) It is the case of the respondents that the respondent Nos. 1 to 9 were called by the first appellant for interview for selection to the posts of helpers/messengers/sweepers/waiter, but respondent Nos. 10 to 15 were not even called for interview. On 14th January, 2012 again a representation was made by the respondents to the appellant. The respondents further relied on the memorandum of settlement made before the Conciliation officer on 22nd June, 2009 and 22nd June, 2012 respectively. This settlement was between the workmen as well as casual labourers/term contract labourers represented by employees' association on one hand and the appellants on the other hand. The memorandum provided for increase in the wages. The respondents have pleaded that under the said settlement, the appellant has not considered the prayer of the respondents for regularization of the services of the term contract labour or casual labour. On the contrary, the appellant considered the case of the labourers who had not filed any case. It is alleged that the respondents were working as term contract labour under 1986 batch and their services were not regularized though the services of workmen engaged under various batches in the year 1983 to 1988 were regularized. The respondents are relying on a list of workmen whose employment was regularized and a copy thereof is annexed as Annexure-M to the writ petition.

c) It is stated in the petition that the last of the representations was made by the respondents on 14th January 2012, in response to which, the Senior Manager (HR) of the first appellant had addressed a letter dated 24th July, 2012 to the Chief Manager of the first appellant requesting him to examine the request of the respondents for regularization of their services. As the request was not acceded to, the respondents filed present writ petitions seeking writ of mandamus against the appellants to regularize their services and to grant consequential benefits.

3. The first appellant has filed a counter statement to the writ petition, raising issues of maintainability of the writ petitions and delay. It was contended that the employment of the respondents cannot be regularized, inasmuch as, they are the casual employees employed by the contractors of the appellants. A preliminary objection was also raised that before invoking the remedy under Articles-226 and 227 of the Constitution of India, the respondents have not exhausted alternative and efficacious remedy available to them under the Industrial Disputes Act, 1947 (for short 'the I.D. Act').

4. The learned Single Judge formulated only one point for consideration: "whether the respondents are entitled for the regularization of their services by the first appellant in accordance with law?".

The learned Single Judge, by the impugned order, accepted the case of the respondents after holding that the service contracts relied by the first appellant were sham and scam. The learned Single Judge, therefore, proceeded to direct the first appellant to absorb the respondents, subject to condition that they were not disqualified for appointment at the time of their respective initial appointments.

SUMMARY OF SUBMISSIONS:

5. The learned counsel appearing for the appellants has taken us through the documents on record and the findings recorded by the learned Single Judge. At the outset, he submitted that the writ petitions ought not to have been entertained by the learned Single Judge. He relied upon the decision of the Constitution Bench of the Apex Court in the case of Steel Authority of India Ltd., and others -vs- National Union Waterfront workers and others ((2001) 7 SCC 1). He submitted that the Apex Court held that when the contention of the workers is that the so-called contract is not genuine but is a sham and camouflage to hide the reality, Section-10 of the Contract Labour (Regulation and Abolition) Act, 1970 (for short 'the said Act 1970') would not apply and in such a case, the workmen can raise an industrial dispute for claiming relief that they should be deemed to be the employees of the principal employer. It was further held that the Court or the industrial adjudicator would have jurisdiction to entertain such dispute and grant necessary relief. He submitted that apart from the fact that there is no pleading at all in the writ petition to the effect that the contracts are not genuine but the same are sham and bogus, the issue whether a contract is sham and/or bogus is a factual issue involving disputed questions of fact. The said allegation can be established only by adducing evidence and, therefore, the said issue could not have been decided by the learned Single Judge in writ jurisdiction under Article 226 of the Constitution of India. It was also urged that there was a gross/inordinate delay on the part of the respondents in approaching the Court. He submitted that the learned Single Judge has committed an error in following the extraordinary procedure of calling/summoning for the production of service contracts records before him, perusing the said contracts and deciding the disputed factual questions in writ jurisdiction. He submitted that the writ petitions also suffer from gross delay and latches. He pointed out that there was no reason for the learned Single Judge to entertain the writ petitions and the respondents ought to have been relegated to the alternative remedy available to them under the I.D. Act. He pointed out that the reliance placed by the respondents on the alleged circular dated 2nd February, 1988 (Annexure-A) is a misplaced one, inasmuch as, the same deals with the casual labour and term contract labour. He submitted that the case of the respondents will not fall in these categories. He submitted that there is no pleading in the writ petition that the contracts were sham and bogus. He invited our attention to the order dated 12th January, 2000 passed in writ petition Nos.8294-96 of 1998 and 34916-26 of 1997 and pointed out that the said writ petitions were disposed of reserving liberty to the petitioners therein to make a representation to the concerned authorities. Accordingly, the representations were made and by specific communications issued by the first appellant, the respondents were informed that the representations were considered and rejected as long as back in the year 2000. He pointed out that in paragraph-12(a) of the writ petition filed by the respondents, a specific reliance has been placed on the aforesaid order/communications dated 12th January 2000 and it is contended that the appellants did not comply with the said order dated 12th January 2000 and continued to promise the respondents that they would regularize their services. He also drew the attention of the Court to the averments made in the said paragraph, in which, reliance was placed on the representations made in the year 2009 and 2012 and the writ petition was filed by the respondents in the year 2014. Thus, he submitted that the writ petitions filed by the respondents suffer from gross delay and latches.

He also relied upon an un-reported recent decision of the Apex Court rendered in the case of Bharat Heavy Electricals Limited -vs- Mahendra Prasad Jakhmola & others (Civil Appeal Nos.1799-1800/2019 Dt.20.02.2019).

He invited our attention to various paragraphs of the impugned judgment and submitted that the learned Single Judge has not at all appreciated the contentions based on delay and latches. He would therefore, submit that the impugned order is illegal and deserves to be interfered with.

6. The learned counsel appearing for the respondents relied upon a decision of a division Bench of this Court dated 23rd May 2012 rendered in the case of The Areonautical Development Agency and others -vs- Smt. Nanjamma and others (Writ Appeal No.2571/2005 Dt.23.05.2012). He also relied on another decision of the division Bench of this Court dated 07th January, 2015, rendered in the case of the Management of National Aerospace Laboratories -vs- Engineering and General Workers Union and another (Writ Appeal No.9974/2006 Dt.07.01.2015). He submitted that the division Benches have referred to the decision of the Apex Court in the case of Steel Authority of India (supra). He also relied upon a decision of the Apex Court in the case of State of West Bengal and others -vs- Committee for Protection of Democratic Rights West Bengal and others (AIR 2010 Supreme Court 1476) and pointed out the scope of judicial review laid down therein. He invited our attention to a document dated 12th April, 2017 addressed by the Deputy General Manager (Engg. Services) which is at page-454 of the paper book and pointed out a list of similarly placed workers whose services were regularized by the first appellant. He invited our attention to the counter statement filed by the appellants. He invited our attention to various paragraphs of the impugned decision of the learned Single Judge and submitted that the learned Single Judge has not only relied on the circular dated 2nd February 1988 produced at Annexure-A, but also the fact that the appellants have regularized the services of some of the workmen of 1983-1986 batches and that the respondents who are of 1986 batch cannot be treated separately or differently. He submitted that it was a promise made by the appellants to regularize the services of the respondents as well. He submitted that the respondents-1 to 9 were in fact interviewed by the appellants. He pointed out that the learned Single Judge had called for the agreements executed by the appellants with the contractors and the impugned judgment/order shows that each and every contract entered into between the appellants and the contractors was examined considered by the learned Single Judge. He pointed out that in paragraph-36 of the impugned judgment, the learned Single Judge has noted that the Court has perused the volumes of contracts for the period between 2008-09 till 2015- 16 and observed that not a Single contractor has enclosed the list of his employees and no material is placed on record by the appellants to demonstrate any employer-employee relationship between the contractors and the respondents. He also invited our attention to paragraph-37 of the impugned judgment which holds that though dozens of contractors have been engaged by the appellant, different contractors have contrived to employ the same set of employees, which gives a picture that the labourers of the contractors are actually identified by the appellants. He pointed out that the findings recorded by the learned Single Judge in paragraph-38 of the impugned order shows that the Court had invited the attention of the appellants to the facts that the same set of workers have been appointed and continued as contract labourers year after year under different contractors which would only go to prove that the service of contracts are sham and scam. Even thereafter, no material was placed by the appellants to show that the contracts were neither sham nor scam. He also pointed out the finding recorded by the Single Judge in paragraph-43 of the impugned order to the effect that despite the insistence by the Court to place on record the terms and conditions of employment between the contractor and the respondents or the persons similarly placed, no efforts has been made by the appellants to comply with the same. He submitted that the finding that the contracts were sham and bogus has been recorded after the appellants were called upon to produced the contracts agreements and after the parties were allowed to produce documents. He submitted that the appellants have never objected to the course adopted by learned Single Judge as regards summoning of the contract documents and recording the factual conclusions. He urged that the appellants were aware of the fact that the learned Single Judge was considering the issue of the nature of contracts. He submitted that there is no bar on a writ Court doing such exercise of going through the contracts and recording its findings on the same. He submitted that the writ Court is not precluded from recording findings on the basis of the documents available on record and as such, the findings recorded in the impugned judgment and order are based on the perusal and consideration of the admitted documents by the learned Single Judge and therefore, no fault can be found with the impugned judgment. He urged that the discretion exercised by the learned Single Judge should not be interfered with.

CONSIDERATION OF SUBMISSIONS

7. We have given careful consideration to the submissions made by the learned counsel. It will be necessary to make a reference to the averments made in the writ petition filed by the respondents. In the first paragraph itself, the respondents have categorically stated that they are working as contract labourers with appellants under various labour contractors and the year of joining the services varies between 1974 to1997. Reliance is placed on the circular dated 2nd February 1988 (Annexure-A). On careful perusal of the said circular, it is seen that the subject of the said circular is "Engagement of Casual Labour/Term Contract Labour". It specifically refers to casual labourers/term contract labourers who have completed more than 240 days of attendance and who are to be considered for absorption. Firstly we must note that the said circular does not relate to the persons employed by the contractors engaged by the appellants and it only deals with the casual labour or the term contract labour engaged by the appellants. Even the proceedings of the meeting dated 17th June, 1989 (Annexure-B) shows that the subject for discussion was regarding casual labour as well as contract labour and there was no reference to the labour employed by a contractor of the appellant. The confidential note dated 7th November, 1997 (Annexure-C) has nothing to do with conferring permanency on the employees engaged by the contractors of the appellants.

8. It is necessary to refer to the averments made in paragraph-6 of the writ petition wherein a specific reliance is placed on the order dated 12th January, 2000 passed in writ petition Nos. 8294-96/1998 and 34916-26/1997, in which the prayer was made to regularize the employment of the respondents. The said writ petitions were disposed of by the order dated 12th January, 2000. Paragraphs-2 to 4 of the said order reads thus:

"2. Petitioners in these petitions claim that they are working as contract labourers in the respondent organization. It is their case before this Court that they are working in the respondent organization from the last two decades. Their grievance before this Court is that the respondent organization though had agreed for regularizing and absorbing their services as permanent employees against regular vacancies, has not taken any steps to regularize their services. Therefore they are before this Court for appropriate directions.

3. Petitioners have not produced any material before this Court even to suggest that they have approached the respondents seeking the relief sought in these writ petitions. In my view, at the first instance, petitioners should approach the respondent authorities by making appropriate representation requesting them to regularize their service and also to pay the salary on par with the regularly appointed employees. If for any reason that request of the petitioners is not considered by the respondents within a reasonable time or had been rejected, then only a cause of action would arise for the petitioners to approach this Court.

4. In that view of the matter, without expressing any opinion on the merits or demerits of the petitioner's case, these writ petitions are disposed off reserving liberty to the petitioners to approach the respondent-authorities by making appropriate representation requesting them to regularize their services and also to pay salary on par with the other regularly employed persons within two months from today. It is needless to say that if such representation is made by the petitioners within the time granted by this Court, the respondent authorities shall consider the same in accordance with law as expeditiously as possible at any rate within three months thereafter. All the other contentions of both the parties are left open. Ordered accordingly."

Thereafter, communications dated 28th April, 2000 and 21st March, 2002 (Annexure-F1 to F6) were issued by the appellants to the respondents by which, the respondents were informed that the representations made by them on the basis of the said order dated 12th January 2000 cannot be accepted and the regularization of their services cannot be granted. The writ petitions were filed in the year 2014 relying upon representations belatedly made in the year 2009 and 2012. The respondents have relied upon the annexures G1 to G9 which, according to them, show that the respondents 1 to 9 were called for interview. We have carefully perused the said letters at Annexure-G1 to G9. The first paragraph of the said letters itself records that the cases of the said persons/respondents have been considered for appointment in HAL on compassionate ground. This shows that they were not called for interview for regularization of their services. The assertions made by the respondents in paragraph-9 of the writ petition allege that the appellants had assured the respondents that they will be regularized in future. The respondents relied upon the assurance given by the appellants to regularize their employment. It is contended that the appellants regularized the services of the workmen employed under various batches of the year 1983 to 1989. It is urged that all other workmen who were employed in the year 1986, except the respondents were regularized, though they were not called for interview. The prayer made in the writ petition itself is for regularization of the services of the respondents. There is no prayer made that by holding the contracts as sham and bogus, it be held that the respondents are the employees of the first appellant. The effect of the finding that the contracts are sham and scam will be that the respondents will be direct employees of the appellants. Regularization is a completely separate issue. Merely because such a declaration is granted, the respondents are not automatically entitled to regularization.

9. Now coming to the impugned judgment and order passed by the learned Single Judge, in paragraph-9 of the impugned judgment, the learned Single Judge framed only one point for consideration which reads thus:

"Whether the petitioners are entitled for the regularization of their services by the First Respondent in accordance with law?"

10. In paragraph-13, the learned Single Judge has relied upon the circular dated 2nd February, 1988 (Annexure-A). We have already noted that the said annexure-A has no application to the grievances of the respondents, inasmuch as, it is applicable only to the persons who were directly employed by the appellants as casual labour and term contract labour. However, in paragraph-18, the learned Single Judge has recorded a finding that the respondents are working as casual labourers with the appellants for more than 240 days in a calendar year. At this juncture, it is necessary to again refer to the averments made in the first paragraph of the writ petition filed by the respondents wherein they accepted that they were working as Contract labourers under various labour contractors. It is not at all their case that they were appointed as casual labour or term contract labour by the appellants. In paragraph-22, the learned Single Judge has observed that the first appellant has considered some of the respondents eligible for regularization by their act of calling them for interview and by regularizing similarly placed casual labourers from earlier batches. We have already referred to the letters produced at Annexure-G1 to G9 which clearly indicate that the cases of respondents- 1 to 9 were considered for compassionate appointments and not for regularization, as the said letter clearly refers to the fact that their case for compassionate appointment will be considered. In paragraph-24 of the impugned judgment and order, the learned Single Judge has referred to the submission made by the counsel for the appellants that the respondents were never treated as regular employees at any point of time. In paragraph-25, the learned Single Judge, while referring to the decision of the Apex Court in the case of Steel Authority of India (supra), observed thus:

"There is an obligation on this Court to examine and determine the real nature of the contractual relationship between the parties in dispute. The Hon'ble Supreme Court in SAIL Vs. National Union Waterfront Workers, (2001) 7 SCC 1, has held that the crucial test is to determine whether the nature of the contractual relationship between the parties that is juristically introduced, is a genuine one or a sham contract. It must be noted that employers and their organizations and indeed all parties to labour litigation keep close watch on the evolving jurisprudence and tailor legal agreement and paper contracts accordingly to suit the purpose of finding the cheapest and most exploitable labour with honourable exceptions as we have seen in the case of the railway management xxxx."

(underline supplied)

11. The observations made by the learned Single Judge in the above paragraphs show that the learned Single Judge went into the factual question as to what is the real nature of contractual relationship and the question whether the contracts entered into between the appellants and the contractors were sham and bogus contracts. We must note here that as noted earlier, in paragraph-1 of the writ petition itself, the respondents themselves accepted that they were working as contract labourers under various labour contractors and the respondents did not plead that such contracts were sham or bogus. Notwithstanding the fact that there was no such pleading at all in the writ petitions filed by the respondents, the learned Single Judge seems to have gone into factual controversy as to whether the contracts entered into between the appellants and the various labour contractors were sham and bogus. On this aspect, it is necessary to refer to the constitution bench decision of the Apex Court, in the case of Steel Authority of India (supra) wherein the Apex Court referred to the provisions of the Contract Labour (Regulation and Abolition) Act, 1970 (for short, 'the said Act of 1970'). The dictum laid down by the Apex Court, in paragraph Nos 101 to 105 of the said decision is relevant for our purpose which reads thus:

"101. In Assn. of Chemical Workers v. A.L. Alaspurkar a three-Judge Bench of this Court declined to go into the correctness of the pronouncement in Dena Nath case that automatic absorption does not follow on prohibition of contract labour but directed the principal employer to consider the contract labour, by giving them preference, in appointment.

102. In Gujarat Electricity Board case a two-Judge Bench of this Court has held that if there is a genuine labour contract between the principal employer and the contractor, the authority to abolish the contract labour vests in the appropriate Government and not in any court including industrial adjudicator. If the appropriate Government abolishes the contract labour system in respect of an establishment, the industrial adjudicator would, after giving opportunity to the parties to place material before it, decide whether the workmen be absorbed by the principal employer, if so, how many of them and on what terms, but if the appropriate Government declines to abolish the contract labour the industrial adjudicator has to reject the reference. If, however, the so-called contract is not genuine but is sham and camouflage to hide the reality, Section 10 would not apply and the workmen can raise an industrial dispute for relief that they should be deemed to be the employees of the principal employer. The court or the industrial adjudicator would have jurisdiction to entertain such a dispute and grant necessary relief.

103. While this was the state of law in regard to the contract labour, the issue of automatic absorption of the contract labour came up before a Bench of three learned Judges of this Court in Air India case. The Court held : (1) though there is no express provision in the CLRA Act for absorption of the contract labour when engagement of contract labour stood prohibited on publication of the notification under Section 10(1) of the Act, from that moment the principal employer cannot continue contract labour and direct relationship gets established between the workmen and the principal employer; (2) the Act did not intend to denude the contract labour of their source of livelihood and means of development by throwing them out from employment; and (3) in a proper case the Court as sentinel on the qui vive is required to direct the appropriate authority to submit a report and if the finding is that the workmen were engaged in violation of the provisions of the Act or were continued as contract labour despite prohibition of the contract labour under Section 10(1), the High Court has a constitutional duty to enforce the law and grant them appropriate relief of absorption in the employment of the principal employer. Justice Majmudar, in his concurring judgment, put it on the ground that when on the fulfillment of the requisite conditions, the contract labour is abolished under Section 10 (1), the intermediary contractor vanishes and along with him vanishes the term "principal employer" and once the intermediary contractor goes the term "principal" also goes with it; out of the tripartite contractual scenario, only two parties remain, the beneficiaries of the abolition of the erstwhile contract labour system, i.e. the workmen on the one hand and the employer on the other, who is no longer their principal employer but necessarily becomes a direct employer for erstwhile contract labourers. The learned Judge also held that in the provision of Section 10 there is implicit legislative intent that on abolition of the contract labour system, the erstwhile contract workmen would become direct employees of the employer in whose establishment they were earlier working and were enjoying all the regulatory facilities under Chapter V in that very establishment. In regard to the judgment in Gujarat Electricity Boards case to which he was a party, the learned Judge observed that he wholly agreed with Justice Ramaswamy's view that the scheme envisaged by Gujarat Electricity Board case was not workable and to that extent the said judgment could not be given effect to.

104. For reasons we have given above, with due respect to the learned Judges, we are unable to agree with their reasoning or conclusions.

105. The principle that a beneficial legislation needs to be construed liberally in favour of the class for whose benefit it is intended, does not extend to reading in the provisions of the Act what the legislature has not provided whether expressly or by necessary implication, or substituting remedy or benefits for that provided by the legislature. We have already noticed above the intendment of the CLRA Act that it regulates the conditions of service of the contract labour and authorizes in Section 10(1) prohibition of contract labour system by the appropriate Government on consideration of factors enumerated in sub- section (2) of Section 10 of the Act among other relevant factors. But, the presence of some or all those factors, in our view, provides no ground for absorption of contract labour on issuing notification under sub-section (1) of Section 10. Admittedly, when the concept of automatic absorption of contract labour as a consequence of issuing notification under Section 10(1) by the appropriate Government, is not alluded to either in Section 10 or at any other place in the Act and the consequence of violation of Sections 7 and 12 of the CLRA Act is explicitly provided in Sections 23 and 25 of the CLRA Act, it is not for the High Courts or this Court to read in some unspecified remedy in Section 10 or substitute for penal consequences specified in Sections 23 and 25 a different sequel, be it absorption of contract labour in the establishment of principal employer or a lesser or a harsher punishment. Such an interpretation of the provisions of the statute will be far beyond the principle of ironing out the creases and the scope of interpretative legislation and as such, clearly impermissible. We have already held above, on consideration of various aspects, that it is difficult to accept that the Parliament intended absorption of contract labour on issue of abolition notification under Section 10(1) of CLRA Act."

(underline supplied)

12. We must note here that Section-10 of the said Act of 1970 deals with the power vesting in the appropriate government to abolish the contract labour and not in any Court including industrial adjudicator. The law laid down by the Apex Court in the case of Steel Authority of India (supra) can be summarized as under:

(a) It is very difficult to accept that the Legislature intended absorption of contract labourers on issuing abolition notification under Section 10 (1) of the said Act of 1970;

(b) If the so-called contract is not genuine but is a sham and camouflage to hide the reality, Section 10 of the said Act, 1970 would not apply;

(c) In a case where the contract is not genuine but it is a sham and camouflage, the workmen can raise an industrial dispute for relief that they should be deemed to be the employees of the principal employer and that the Court or the industrial adjudicator would have jurisdiction to entertain such a dispute and grant necessary relief; and

(d) If the contract is found to be sham and camouflage, it can be held that the contract labourers employed by the principal employer would become the employee of the principal employer himself.

13. In paragraphs 36 and 37 of the impugned judgment, the learned Single Judge had dealt with the contracts placed on record and observed that the contractors have not enclosed the list of his employees annexed to the contracts and that the appellants have also not placed on record any material to show that there was an employer-employee relationship between the contractor and the respondents. Further, it was observed that though dozens of contractors have been engaged by the appellants, the contractors have contrived to employ the same set of employees. The observations made by the learned Single Judge in paragraph-37 are based on the contention raised for the first time during the course of the hearing that so- called labour contracts or service contracts are a sham and a scam. In paragraph 38, the learned Single Judge records that notwithstanding the said strong observations made during the course of hearing, no material is placed on record by the appellants to dispel the notion that the service contracts are neither a sham nor a scam. This observation puts a negative burden on the appellants. In paragraph-43, the learned Single Judge has reiterated his finding that the contracts under which the respondents were appointed by the contractors are sham contracts. In paragraph 45 it has been observed that it is the specific case of the respondents that statutory contributions are paid by the appellants. In paragraph-50, the learned Single Judge has held that the respondents were under a direct employment of the appellant between 2014 and 2016. We find that no such case was made out by the respondents in writ petitions. On careful perusal of the averments made in the writ petitions filed by the respondents, we must note that it was not at all the case of the respondents that between the year 2014 and 2016, they were direct employees of the appellants. On the contrary, their contention is that though the services of the contract labourers of 1983-84 and 1985-86 batches were regularized, the services of the respondents were not regularized. In fact, the only substantive prayer made in the writ petition is to issue a writ of mandamus, directing the appellants to regularize the services of the respondents. As stated earlier, there was neither a specific pleading that so- called contracts are not genuine but is a sham, bogus and camouflage to hide the reality nor there was a prayer for declaration made that the respondents were employees of the appellants.

14. In the earlier writ petitions filed by the respondents in W.P.Nos.8294-96/1998, the order dated 12th January, 2000 passed by this Court shows that the grievance of the respondents was that their services were not being regularized by the appellants. In paragraph-15 of the counter statement filed by the appellants, a specific contention was raised that the respondents are engaged by the contractors for specific work and there is no relationship of employer and employee between the respondents and the appellants and that the appellants never assured the respondents that their service will be regularized. Therefore, the question of regularization of their services does not arise at all.

15. We have carefully perused the rejoinder filed by the respondents. In paragraph-1 of the rejoinder, the specific contention raised by the respondents was that their demand for regularization of their services has not been complied with by the appellants. In paragraph 2 of the rejoinder, it is again reiterated that certain contract employees of the 1983-1984 batches were regularized. Even in the rejoinder, the respondents have clearly stated that their prayer was for regularization of their services.

16. Unless it is established that the respondents herein were directly engaged by the appellants as Casual Labour or Term Contract Labour, there is no question of considering their prayer for regularization. In fact, while communicating rejection of representations made by the respondents, on the basis of the order dated 12th January, 2000 passed in the earlier writ petitions, the appellants have specifically referred/stated that the respondents were employed by the contractors and they were not engaged directly by the appellants. We must note here that the respondents have accepted that they have been appointed by the contractors, as averred in paragraph No.1 of the writ petition. Unless the respondents establish that said contracts were sham, bogus and camouflage executed with a view to hide the reality, they cannot establish that in reality, they were the employees of the appellants. Even assuming that in the writ petition it was pleaded that the said contracts were sham, bogus and camouflage to hide the reality, by merely referring to the contracts and documents, a finding of fact could not

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have been arrived at holding that the said contracts were sham or scam. For that purpose, a full-fledged enquiry is necessary by recording of oral and documentary evidence. It required examination of the witnesses. That is why the Apex Court, in the case of Steel Authority of India (supra) had held that in such a case, industrial dispute is required to be raised by the workmen and the adjudication will be made by the Industrial Court or industrial adjudicator. Apart from that, there is absolutely no pleading in the writ petition that the contracts were sham, bogus and camouflage to hide the reality. Moreover, even in the earlier writ petitions, on which reliance is placed by the respondents, such a contention was not raised by the respondents before this Court, as it is clear from the order dated 12th January, 2000. 17. The reliance placed by the learned counsel appearing for the respondents on the decisions of the division Bench of this Court, in the case of the Aeronautical Development Agency (supra) and the Management of National Aerospace Laboratories (supra) will not help the respondents, as the said decisions do not lay down any law and they are rendered in the facts of a given case. Moreover, in the present case, the main issue is whether the contracts are sham, bogus and camouflage which appears to have been canvassed for the first time only during the course of oral submissions made before the learned Single Judge and there was no such pleading by the respondents-workmen. Even assuming that such issue has been raised during the course of the arguments and the appellants did not object to it, as observed earlier, such an issue cannot be decided solely on the basis of the perusal of the documents and it is required to be decided after evaluation of the oral and documentary evidence that may be adduced during a full-fledged enquiry by the Court or the industrial adjudicator who have jurisdiction to entertain such a dispute. Therefore, this issue can be decided only the Court or the industrial adjudicator who have jurisdiction to entertain such a dispute under I.D. Act and grant necessary relief, as held by the Apex Court in the case of Steel Authority of India (supra). Therefore, it is very difficult for this Court to sustain the findings of the learned Single Judge and the directions issued by the learned Single judge to the first appellant to absorb the services of the respondents who were not disqualified at the time of initial appointment. 18. It is true that way back in the year 2000, the claim of the respondents for regularization of their services was denied by the appellants. However, considering the fact that the respondents are in the employment for a considerably for a long time, we propose to protect those respondents who have not reached the age of superannuation so that those respondents can raise industrial dispute and adjudication can be made on the disputed question whether the contracts were sham, bogus and camouflage. Therefore, though we are inclined to set aside the impugned judgment and order, we propose to protect the interests of such respondents for a reasonable time. 19. Accordingly, we pass the following order: (i) The impugned judgment and order dated 20th December, 2018 passed by the learned Single Judge in Writ Petition Nos.49823-49837 of 2014 is hereby set aside and the writ petition Nos. 49823-49837 of 2014 stand dismissed. There shall be no order as to the costs; (ii) The appellants shall ensure that the employment of those respondents who have not yet reached the age of superannuation shall not be disturbed for a period of six months from today, to enable the respondents to raise an industrial dispute; (iii) We make it clear that we have not made adjudication on the question whether the so-called contracts are not genuine but are sham and camouflage made with a view to hide the reality, inasmuch as, the said issue will have to be decided by the appropriate authority dealing with the industrial dispute, which may be raised by the respondents; (iv) The appeals are allowed with the above terms.
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