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



The Senior General Manager/Works Manager, Heavy Alloy Penetrator Project, Ministry of Defence, Trichi v/s The Registrar, Central Government Industrial, Tribunal-cum-Labour Court, Chennai & Others


Company & Directors' Information:- M. P. ALLOY PRIVATE LIMITED [Strike Off] CIN = U28111UP1995PTC018405

Company & Directors' Information:- INDIA INDUSTRIAL WORKS PVT LTD [Strike Off] CIN = U51109WB1945PTC012312

Company & Directors' Information:- B D K ALLOY PRIVATE LIMITED [Amalgamated] CIN = U27106KA1973PTC002355

Company & Directors' Information:- R K M INDUSTRIAL WORKS PRIVATE LIMITED [Strike Off] CIN = U17200UP2013PTC060633

Company & Directors' Information:- THE INDIA INDUSTRIAL WORKS LIMITED [Not available for efiling] CIN = U99999MH1942PTC003528

    W.P. No. 20682 of 2009 & M.P. No. 1 of 2009

    Decided On, 05 March 2010

    At, High Court of Judicature at Madras

    By, THE HONOURABLE MR. JUSTICE T.S. SIVAGNANAM

    For the Petitioner : Vivekanandan & M/s. R. Meenakshi ACGSC. For Respondents:Mr.Vijaya Narayanan Senior counsel for R2 to R25 N. Vijayakumar.



Judgment Text

(Prayer : The Writ Petition filed under Article 226 of the Constitution of India for issue of Writ of Certiorari to call for the records pertaining to the order dated 08.05.2009 in ID No.9/2008 on the file of 1st respondent, Hon'ble Central Government Industrial Tribunal-cum-Labour Court, Chennai-6 and quash the same.)


1. By consent the main Writ Petition itself is taken up for disposal. The challenge is to an award passed by the first respondent Industrial Tribunal cum Labour Court in ID No.9/2008 dated 08.05.2009.


2. The Central Government by order dated 15.02.2008, referred the following question to the first respondent for adjudication


"Whether the demand of Sri.S.Amalraj and 23 other workers, as per Annexure, for absorption in the services of the management of M/s.Heavy Alloy Penetrator Project, Trichy, is legal and justified? If yes, to what relief the workmen are entitled to?"


3. The claim of the respondents 2 to 25 are that they have been working as sanitary workers and cleaners with the petitioner organisation since 1988 on contract basis until 1999, their services were utilised for various unskilled works in the petitioner organisation, since their work was perennial in nature they submitted representation on 07.03.1994 to the petitioner for regularization. Since, the petitioner organisation chose to conduct interview the respondents 2 to 25 filed O.A.No.489 of 1997 before the Central Administrative Tribunal, Chennai Bench. The Tribunal by order dated 17.06.1998, allowed the original application and directed the respondents to evolve a scheme for absorption of the contract workers as per their seniority and such absorption to be completed within a period of three months. The petitioner management filed writ petition before this Court in W.P.No.19713/1998, initially interim stay was granted and subsequently the Hon'ble Division Bench of this Court by order dated 07.08.2000 modified the order of interim stay and observed that the stay shall apply only to the commencement of the process of absorption as ordered by the Tribunal and in the mean time, the workers shall continue to work till further directions are granted by this Court on their old working conditions. The writ petition was thereafter taken up for final disposal and the Hon'ble Division Bench by order dated 05.11.2004 hold that it is open to the workman (respondents 2 to 25) to raise before the Labour Court the plea that they were directly employed by the petitioner and the contract was only a contract in name. Accordingly, direction was issued to Government of India to refer the dispute between the petitioner and the respondents 2 to 25 under Section 10 of the Industrial Dispute Act to the appropriate forum for adjudication. Based on such due turn, the matter was referred to the first respondent for adjudication. The first respondent took up the matter on file as I.D.No.9/2008. The respondents workmen filed their claim statement setting out in detail the grounds based on which they would substantiate their claim and prayed for an award to direct the absorption in the services of the petitioner management. The petitioner management resisted their claim by filing a reply statement. It is to be noted that neither the petitioner management nor the respondent workman have let in any oral or documentary evidence before the first respondent. Thereafter, the first respondent took up the matter for adjudication and framed two questions, namely 1) whether the demand of the workman for absorption in the services of the management is legal and justified 2) If not to what relief are entitled. On question No.1 the Tribunal passed an award directing the petitioner management to regularise the services of the workman and extend them all benefits on par with their counter parts of regular labourers already employed in the organisation. On question No.2, the Tribunal directed the petitioner management to commence the process of regularization of the respondents workman into services. Aggrieved by the award, the petitioner management is before this Court by way of the present writ petition.


4. The learned Standing counsel for the petitioner would contend that the Tribunal committed a serious error of law in passing the award. That the Tribunal failed to take into consideration the Judgment of the Hon'ble Supreme Court in the case of Secretary, State of Karnataka Vs. Uma Devi in CA No.3595-3612/1999 with CA Nos.1861-2063/2001, 3849/2001, 3520-3524/2002 and 1968/2006 dated 10.04.2006 and the Tribunal was not justified in passing the award since, the appointment of these workman were not in terms of the relevant rules. Further by relying on the decision of the Hon'ble Supreme Court in the case of Indian Drugs and Pharmaceuticals Ltd Vs. Workmen in C.A.No.4996/2006 dated 16.11.2006, it was contended that temporary, contractual or causal employees appointed dehors the constitutional scheme of public employment have no legitimate right of absorption. That the Court cannot create post, which did not exist and the award of the Labour Court is to the effect of compulsion of creation of post by the petitioner management. The learned standing counsel also placed reliance on the decision of the Hon'ble Supreme Court in Steel Authority of India Ltd. & Ors. etc., Vs. National Union Water Front Workers & Ors. Etc ? (2001) 7 SCC page 1 in support of her contention, contending that there is no requirement of any automatic absorption of the contract employees.


5. Per contra, the learned Senior counsel for the respondents workman placed reliance on the order passed by the Central Administrative Tribunal in O.A.No.489/1997 dated 17.06.1998, the interim order granted by this Court in W.P.No.19713/1998 and the final order passed by this Court in W.P.No.19713/1998 and would contend that all the issues stood settled on and after the order passed by the Hon'ble Division Bench in W.P.No.19713/1998 and the matter relating to as to whether the respondents workman were directly employed by the petitioner management and whether the contract was only sham and nominal was only the subject matter of reference before the Labour Court. The Labour Court on careful consideration of the entire material placed before it came to a conclusion that the respondents workmen are entitled to be regularized in service. The learned Senior counsel would submit that the Labour Court on careful appreciate of the materials on record came to such conclusion and such conclusion, is not perverse or arbitrary and therefore, this Court would not substitute its reason for dislodging the factual findings of the Labour Court and the jurisdiction of this Court in such matters is limited. In support of his contention, the learned Senior counsel placed reliance on the decisions of the Hon'ble Supreme Court in Indian Overseas Bank Vs. I.O.B. Staff Canteen Workers' Union and another - (2000) 4 SCC 245, Steel Authority of India Ltd. & Ors. etc., Vs. National Union Water Front Workers & Ors. Etc -(2001) 7 SCC page 1, Management of Madurantakam Coop. Sugar Mills Ltd. Vs. S.Viswanathan ? (2005) 3 SCC 193 and Management, Chennai Central Co-operative Bank Ltd Vs. The Joint Commissioner of Labour and others ? (2007) 2 CTC 604.


6. I have carefully considered the submissions on either side and perused the materials available on record.


7. In view of the contention raised on the either side, it is first necessary to examine the scope and jurisdiction of this Court under Article 226 of Constitution of India, while examining the correctness of an award passed by the Labour Court or an Industrial Tribunal. This issue is no longer res-integra and settled by the Judgments of the Hon'ble Supreme court as well as this Court. At this stage, I am guided on the decisions of the Hon'ble Supreme Court referred to by the learned Senior counsel for the respondents, in Indian Overseas Bank Vs. I.O.B. Staff Canteen Workers' Union and another - (2000) 4 SCC 245, held as follows:-


17. The learned Single Judge seems to have undertaken an exercise, impermissible for him in exercising writ jurisdiction, by liberally reappreciating the evidence and drawing conclusions of his own on pure questions, of fact, unmindful, though aware fully, that he is not exercising any appellate jurisdiction over the awards passed by a tribunal, presided over by a judicial officer. The findings of fact recorded by a fact-finding authority duly constituted for the purpose and which ordinarily should be considered to have become final, cannot be disturbed for the mere reason of having been based on materials or evidence not sufficient or credible in the opinion of the writ court to warrant those findings, at any rate, as long as they are based upon some material which are relevant for the purpose or even on the ground that there is yet another view which can reasonably and possibly be taken. The Division Bench was not only justified but well merited in its criticism of the order of the learned Single Judge and in ordering restoration of the award of the Tribunal. On being taken through the findings of the Industrial Tribunal as well as the order of the learned Single Judge and the judgment of the Division Bench, we are of the view that the Industrial Tribunal had overwhelming materials which constituted ample and sufficient basis for recording its findings, as it did, and the manner of consideration undertaken, the objectivity of approach adopted and reasonableness of findings recorded seem to be unexceptionable. The only course, therefore, open to the writ Judge was to find out the satisfaction or otherwise of the relevant criteria laid down by this Court, before sustaining the claim of the canteen workmen, on the facts found and recorded by the fact-finding authority and not embark upon an exercise of reassessing the evidence and arriving at findings of one's own, altogether giving a complete go-by even to the facts specifically found by the Tribunal below."


In Management of Madurantakam Coop. Sugar Mills Ltd. Vs. S.Viswanathan ? (2005) 3 SCC 193, held as follows:-


12. Normally, the Labour Court or the Industrial Tribunal, as the case may be, is the final court of facts in these types of disputes, but if a finding of fact is perverse or if the same is not based on legal evidence the High Court exercising a power either under Article 226 or under Article 227 of the Constitution can go into the question of fact decided by the Labour Court or the Tribunal. But before going into such an exercise it is necessary that the writ court must record reasons why it intends reconsidering a finding or fact. In the absence of any such defect in the order of the Labour Court the writ court will not enter into the realm of factual disputes and finding given thereon. A consideration of the impugned order of the learned Single Judge shows that nowhere has he come to the conclusion that the finding of the Labour Court was either perverse or based on no evidence or based on evidence which is not legally acceptable. Learned Single Judge proceeded as if he was sitting in a court of appeal on facts and item after time of evidence recorded in the domestic enquiry as well as before the Labour Court was reconsidered and findings given by the Labour Court were reversed. We find no justification for such an approach by the learned Single Judge which only amounts to substitution of his subjective satisfaction in the place of such satisfaction of the Labour Court.


13. The Division Bench too in appeal, in our opinion, has committed the same error. Maybe, there was some justification, since if it had to allow the appeal, then it had to consider the points on facts decided by the learned Single Judge. In that process it also took up for consideration every bit of evidence that was considered by the Labour Court as well as by the learned Single Judge and disagreed with the finding of the learned Single Judge."


and in Management, Chennai Central Co-operative Bank Ltd Vs. The Joint Commissioner of Labour and others ? (2007) 2 CTC 604, held as follows:-


"14. The power of exercising jurisdiction of the High Courts under Article 226 in Labour matters is considered by the Honourable Supreme Court in the following decisions.


(a) In Apparel Export Promotion Council Vs. A.K.Chopra, 1999(1) SCC 759, in paragraph 16 the Honourable Supreme Court held as follows:


"16. The High Court appears to have overlooked the settled position that in departmental proceedings, the disciplinary authority is the sole judge of facts and in case an appeal is presented to the Appellate Authority, the Appellate Authority has also the power/and jurisdiction to reappreciate the evidence and come to its own conclusion, on facts, being the sole fact-finding authorities. Once findings of fact, based on appreciation of evidence are recorded, the High Court in writ jurisdiction may not normally interfere with those factual findings unless it finds that the recorded findings were based either on no evidence or that the findings were wholly perverse and/or legally untenable........."


(b) In Hari Shankar Sharma V. Artificial Limbs Mfg. Corpn. 2002(1) SCC 337, in paragraph 12 it is held as follows:


"12. ...... After a detailed analysis of the evidence, the Labour Court concluded that the appellants were not the employees of Respondent 1. The finding cannot be termed to be perverse. Given this, it would have been inappropriate for the High Court under Article 226 to reappreciate the evidence and come to a different factual conclusion. The High Court did not do that nor do we propose to do so under Article 136."


(c) In Bharat Heavy Electricals Ltd. V. State of U.P., AIR 2003 SC 3024:2003 (6) SCC 528, in paragraph 13, the Honourable Supreme Court observed thus,


"13. This apart, the finding that the respondent workmen were the employees of the appellant, does not rest merely on the test of control. The other evidence and facts and circumstances of the case were also kept in mind in recording such a finding inlcuding a vital fact that the appellant did not produce the records alleging that they were not available which led to drawing adverse inference against them. It is not possible for us to hold that such concurrent findings recorded by the Labour Court and the High Court that the workmen were to be treated as the employees of the appellant are either perverse or based on no evidence or untenable at all."


(d). In workmen of Nilgiri Co-op. Mkt. Society Ltd. Vs. State of T.N., 2004 (3) SCC 514, at page 532:


"50. The question whether the relationship between the parties is one of employer and employee is a pure question of fact and ordinarily the High Court while exercising its power of judicial review shall not interfere therewith unless the finding is manifestly or obviously erroneous or perverse."


(e) In the decision reported in Madurantakam Coop. Sugar Mills Ltd, V. S. Viswanathan, 2005 (3) SCC 193, the Honourable Supreme court in paragraph 12 held thus,


12. Normally, the Labour Court or the Industrial Tribunal, as the case may be, is the final court of facts in these types of disputes, but if a finding of fact is perverse or if the same is not based on legal evidence the High Court exercising a power either under Article 226 or under Article 227 of the Constitution can go into the question of fact decided by the Labour Court or the Tribunal. But before going into such an exercise it is necessary that the writ court must record reasons why it intends reconsidering a finding or fact. In the absence of any such defect in the order of the Labour Court the writ court will not enter into the realm of factual disputes and finding given thereon. A consideration of the impugned order of the learned Single Judge shows that nowhere has he come to the conclusion that the finding of the Labour Court was either perverse or based on no evidence or based on evidence which is not legally acceptable. Learned Single Judge proceeded as if he was sitting in a court of appeal on facts and item after time of evidence recorded in the domestic enquiry as well as before the Labour Court was reconsidered and findings given by the Labour Court were reversed. We find no justification for such an approach by the learned Single Judge which only amounts to substitution of his subjective satisfaction in the place of such satisfaction of the Labour Court.


(f) In Central P&D Inst. Ltd. V. Union of India, 2005 (9) SCC 171, the Honourable Supreme Court held thus,


"6. The finding arrived at by the Tribunal, Single Judge and the Division Bench is that the workperson has put in 240 days during the relevant period hence her services could not have been terminated without taking recourse to the procedure laid down in Chapter 5-A of the Standing Orders. This question being purely a question of fact we do not think that in a petition under Article 136 we would go into this issue unless of course we come to the conclusion that such finding of fact is totally perverse which ground is not available in this case."


8. Thus, the legal principle deducible from the decisions referred above is that this Court is not acting as an appellate authority to the findings of the Industrial Tribunal and the High Court in writ jurisdiction may not normally interfere in such findings of the Labour Court unless the findings are wholly perverse or legally untenable. That this Court would not re-appreciate the evidence to come to a different factual conclusion. Further the question whether the relationship between the parties is one of employer-employee is pure question of fact and ordinarily the High Court while exercising its power of judicial review will not interfere with such finding unless it is manifestly or obviously erroneous or perverse. Bearing these legal principles in mind if the impugned award is examined, it is seen that the Industrial Tribunal has examined the factual issues. It is to be noted once again at this stage that both parties did not lead any oral or documentary evidence before the Tribunal. The Tribunal in its award came to a factual conclusion as regards whether the contract was sham and nominal and it is useful to refer to the relevant portion of the award which reads as follows:-


"9. The case of the petitioner again is that the contract between the LCS and the Respondent is sham and nominal. It can be so when the parties have in contemplation a clandestine relationship in the transactions to be entered between them. Such a hidden understanding is not gatherable by or known by anybody except the parties themselves. Therefore this is a grey area to be proved by the petitioners by letting in some tangible evidence. This has to be gathered from the circumstances. The fact that the work they were attending to is of a perennial nature is a strong circumstance to infer that the work is not separable as one dischargeable by a contract labourer or a regular labourer under the respondent. This is again a circumstance to prove that they were really employed under the respondent and the contract between the respondent and Labour Contract Society is apt to be sham and nominal. Another circumstance is that even after the LCS parted with the respondent, the petitioners worked with the respondent doing the very same work, they were doing. This could be explained away by the respondent saying that they employed the respondent "only" to honour the direction of the High Court but the truth of which has not been brought home him in its entirety. The Respondent has no case that there was no work to be given to them even thereafter. The respondent has not been able to distinguish between the two categories of work done by 10 regular workers recruited by them and that which was being done by the petitioners. On this aspect, they have come with a case which is very vague as anything. In the matter of recruitment of 10 regular posts of workers effected by the respondent, their case is that their work is in relation to the production of defence stores which is their main activity. They do not say what that item of work is. They also do not whisper as to how or by whom they were getting that item of work done prior to the recruitment of the said 10 regular workers which was in the year 1998. Was it a case that before the recruitment of the said 10 regular workers, there was no such work to be attended by any workman? If it had not been so, for discharge of such work were not any of the petitioners employed? Having regard to all these matters, I am led to the conclusion that the Respondent Management has not been sincere in their attitude towards the petitioners to regularize them in service in spite of their having worked for more than 10 years. Therefore, as argued by the learned counsel for the petitioner, the respondent has been always out to deny the legitimate claims of the petitioners by denying them regularization in service which would in turn necessitate them to give enhanced payments to them by way of salaries and other monetary benefits. This is discernibly an unfair labour practice. Another argument canvassed against the petitioners that their entry into employment is through backdoor cannot be sustained for the reason that they came very much under the engagement of respondent Factory through LCS which is a Society registered under law."


9. The decision in the case of Secretary, State of Karnataka Vs. Uma Devi referred to by the learned Senior counsel appearing for the petitioner cannot be pressed into service in the present case as this is the case of an Industrial adjudication. It is relevant to note that the dispute regarding the employment of the respondents stood settled after the Hon'ble Division Bench of this Court disposed of writ petition in W.P.No.19713/1998, dated 05.11.2004, the only issue which was referred for a adjudication before the first respondent was as to whether the contract which was relied on by the management was sham and nominal. Therefore, the decision rendered by the Hon'ble Supreme Court in the case of Secretary, State of Karnataka Vs. Uma Devi does not render any assistance to the grounds raised by the petitioner.


10. It is to be noted that the society which is said to have entered into the agreement is not a different entity but is a society formed with the very same workman and each one of them who are all members of the society would be given employment. Thus with the available material on record, the Tribunal came to a conclusion that the contract is sham and nominal and they are entitled for regularization. Thus, it is clear that such an award based on the reasoning mentioned above cannot be termed to be either manifestly erroneous or perverse to be interfered by this Court under Article 226 of the Constitution of India. Therefore, on the first question as regards the jurisdiction of this Court, is answered against the petitioner by holding that the finding of fact is neither perverse or manifestly erroneous and does not call for interference.


11. Both the learned counsel appearing for the petitioner as well as the learned Senior counsel appearing for the respondents placed reliance on the decision of the Hon'ble Supreme Court in the case of Steel Authority of India Ltd. & Ors. etc, paragraph 111 of the said Judgment would be relevant for the purpose of this case, which reads as follows:-


"111. In a three-Judge Bench decision of this Court in Hussainbhai's case (supra), the petitioner who was manufacturing ropes entrusted the work to the contractors w

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ho engaged their own workers. When, after some time, the workers were not engaged, they raised an industrial dispute that they were denied employment. On reference of that dispute by the State Government, they succeeded in obtaining an award against the petitioner who unsuccessfully challenge the same in the High Court and then in the Supreme Court. On examining various factors and applying the effective control test, this court held that though there was no direct relationship between the petitioner and the respondent yet on lifting the veil and looking at the conspectus of factors governing employment, the naked truth, though draped in different perfect arragement, was that the real employer was the management not the immediate contractor. Speaking for the Court, Justice Krishna Iyer observed thus:- "Myriad devices, half-hidden in fold after fold of legal form depending on the degree of concealment needed. The type of industry, the local conditions and the like may be resorted to when labour legislation casts welfare obligations on the real employer, based on Articles 38, 39,42,43 and 43-A of the Constitution. The Court must be astute to avoid the mischief and achieve the purpose of the law and not be misled by the Maya of legal appearances.............. Of course, if there is total dissociation in fact between the disowning management and the aggrieved workmen, the employment is, in substance and in real-life terms, by another. The management's adventious connections cannot ripen into real employment.. This case falls in class (ii) mentioned above." 12. Thus as per the law laid down the procedure to be applied is the "effective control test" to ascertain the relationship of the parties as to whether there was an employer-employee relationship. This test has been applied by the Tribunal and by lifting the veil and perusing the facts of the case, the Tribunal realised that the contract relied on by the management is a sham document and there exists an employer-employee relationship. Therefore, no error could be stated to have been committed by the Industrial Tribunal in passing the award. 13. Hence for all the above reasons, I find no good grounds to interfere with the award passed by the first respondent Tribunal and the reasons assigned by the Tribunal for coming to such conclusion. Accordingly, the writ petition fails and it is dismissed. The petitioner management is directed to implement the award within a period of two months from the date of receipt of a copy of this order. No costs. Consequently, connected miscellaneous petition is closed.
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