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1993 DIGILAW 252 (GUJ)

N. D. D. B. EMPLOYEES UNION v. STATE

1993-06-16

R.A.MEHTA, S.M.SONI

body1993
MEHTA, J. ( 1 ) BOTH these petitions raise identical questions and arise from similar facts. Both these petitions are second round of litigation on a question as to whether the dispute raised by the petitioner-Union can be referred for adjudication under Sec. 10 of the Industrial Disputes Act. The appropriate authority has on both the occasions refused to make the reference. When the reference was earlier refused, the High Court had, in Special Civil Application No. 50 of 1990 and 8443 of 1990 quashed and set aside the orders of refusal to make reference and directed the appropriate Government to reconsider the matter. The judgment in Special civil Application No. 8443 of 1990 is now reported in (N. D. D. B. Employees union v. State) 1991 (1) GLR 410 . The judgment in Special Civil application No. 8443 of 1990 is at Annexure "a" in Special Civil application No. 1669 of 1991. ( 2 ) THE petitioner-Union had raised a demand regarding proper wages to be paid by the respondents. The respondent No. 3 has contended that the employees concerned in the demand are not the employees of this respondent and that they are the employees of the contractors and in absence of any relationship of employer and employee, there is no industrial dispute which could be referred. The petitioner-Union has submitted that having regard to the facts that the employees have been working since number of years continuously and doing the work of perennial nature in the establishment of this respondent and having regard to the nature of the work, continuity of the work, control and supervision over the work, place of the work, furnishing of implements by (he employer and in view of The bogus and paper contract arrangement, the concerned employees are the direct employees of this respondent and this bogus and paper contract arrangement is an unfair labour practice and exploitation of the workmen. Number of authorities have been cited in the submissions made by the petitioner-Union and it is submitted that when the management has disputed these facts, it would be imminently a fit case for adjudication by a judicial forum under the Industrial Disputes Act because it would involve appreciation of oral and documentary evidence, interpretation of legal provisions and application of the legal principles laid down by several Courts and this could be done only by proper adjudication by a judicial forum. ( 3 ) ON The other hand, the managements contended that the workmen have no prima facie case for showing the employer-employee relationship and the Government had, on consideration of all the relevant material and after hearing the parties, come to the conclusion that the workmen were not the workmen of the respondent No. 3, but were the workmen of the contractors and since there was no relationship of employer and employee, it was not an industrial dispute between the employer and employees and, therefore, reference of the dispute has again been refused. ( 4 ) THE impugned order of the Government is a very brief one. Both the sides had made lengthy written submissions, had cited several authorities and produced material. The employer had also produced affidavits. The impugned order though recites that the appropriate Government is convinced on consideration of all the relevant material, the order does not reflect the consideration. ( 5 ) AT the hearing of these petitions, large number of authorities have been cited and the learned Counsels have also taken us through The material produced before the appropriate authority. The written submissions made by the Union run into six typed pages, the written submissions made by the managements run into 16 typed pages alongwith annexures running into 56 pages. The learned Counsels have taken us through all this material and also read the authorities. However, in view of the fact that all the authorities which have been cited before us have been considered by the division Bench of this Court in the case of Gujarat Mazdoor Panchayat v. State of Gujarat and Ors. , 1991 (2) GLH 162 : [ 1991 (2) GLR 1354 ], it is not necessary to refer to all those authorities. In that judgment, after considering 25 judgments including 17 of The Supreme Court, the Division bench referred to the observations of the Supreme Court in the case of Bombay union of Journalists v. State of Bombay, AIR 1964 SC 1617 , more particularly the following observations :"it is true that if the dispute in question raises questions of law, the appropriate government should not purport to reach a final decision on the said questions of law, because that would normally lie within the jurisdiction of the Industrial Tribunal. Similarly, on disputed questions of fact, the appropriate Government cannot purport to reach final conclusions for that egain would be the provirce of the Industrial tribunal. But it would not be possible to accept the plea that the appropriate government is precluded from considering even prina facie the merits of the dispute when it decides the question as to whether its powers to make a reference would be exercised under Sec. 10 (1) read with Sec. 2 (5) or not. If the claim made is patently frivolous, or is clearly belated the appropriate Government may refuse to make a reference. Likewise, if the impact of the claim en the general relation between the employer and the employees in the region is likely to be adverse, the appropriate government may take that into account in deciding whether a reference should be made or not. It must, therefore, be held that a prima facie examination of the merits cannot be said to be foreign to the enquiry which the appropriate Government is entitled to make in dealing with a dispute under Sec. 10 (1 ). " ( 6 ) THUS, the scope of the Government decision would be restricted to a finding as to whether the claim made is patently frivolous clearly belated or if the impact of the claim on the general relation between the employer and The employees in the region is likely to be adverse. In The present case, the latter considerations are not attracted at all. The only consideration before the Government was whether the claims made in these cases were patently frivolous and only for this limited purpose, we will examine the merits of the dispute. "patently frivolous dispute" would obviously be a dispute which does not require detailed investigation. In fact, the patentness or The frivolousness of the dispute would mean that the claim is so utterly untenable that it could not stand for a minute and there is no arguable case and there is no case for any consideration whatsoever. In the name of such prima facie examination on merits to find out whether the claim is patently frivolous or not, the Government cannot undertake detailed examination, investigation, appreciation of facts and application of law. It is clearly not the jurisdiction of the Government while exercising administrative powers under Sec. 10 of the Industrial Disputes Act. In the name of such prima facie examination on merits to find out whether the claim is patently frivolous or not, the Government cannot undertake detailed examination, investigation, appreciation of facts and application of law. It is clearly not the jurisdiction of the Government while exercising administrative powers under Sec. 10 of the Industrial Disputes Act. That function of adjudication is that of the Courts and the Tribunals constituted for the purpose. ( 7 ) THE Division Bench in the Gujarat Mazdoor Panchayats case (supra) also referred to the Supreme Court judgment in the case of TELCO convey Drivers Mazdoor Sangh v. State cf Bihar. AIR 1989 SC 1565 . There also, the question was whether the drivers were the workmen of telco or not and whether there was relationship of employer and employees or not. The request for reference of the industrial dispute was rejected by the appropriate authority. The High Court bad remanded the matter and again the authority had refused to refer the industrial dispute. The High court had also rejected the petition of workmen and the workmen carried the matter to the Supreme Court and the Supreme Court allowed the appeal of the workmen and held that the function of the appropriate Government is an administrative function under Sec. 10 (1) and not a judicial or quasijudicial function and that in performing this administrative function, the government cannot delve into the merits of the dispute and take upon itself the determination of the Us which would certainly be in excess of the power conferred on it by Sec. 10 (1) of the Act and held that the government was not justified in deciding the dispute. Following the same, the Division Bench in Gujarat Mazdoor Panchayats case (supra) held that where, as in the instant case, the dispute is whether the persons raising the dispute are workmen of the employer or not, the same cannot be decided by the Government in exercise of its administrative function under sec. 10 (1) of the Act. Following the same, the Division Bench in Gujarat Mazdoor Panchayats case (supra) held that where, as in the instant case, the dispute is whether the persons raising the dispute are workmen of the employer or not, the same cannot be decided by the Government in exercise of its administrative function under sec. 10 (1) of the Act. It was further held that The Government should be very slow to attempt an examination of the demand with a view to declining reference and Courts will always be vigilant whenever the government attempts to usurp the powers of the tribunal for adjudication of valid disputes and that to allow the Government to do so would be to render Sec. 10 and Sec. 12 (5) of the Act nugatory. ( 8 ) IN the case of Gujarat Mazdoor Panchayat (supra) also, the facts were almost similar to the present case. There also, it was alleged that the contractors were mere paper arrangement and were camouflage and it was contended that the reference could not have been rejected on the ground that the workmen and the contractor were not of the respondent company because that was the very question which was required to be decided and adjudicated upon on evidence by the competent Court and this very question was answered by the Government finally and reference was refused and this amounted to putting the cart before the horse and the division Bench accepted that submission. ( 9 ) THE contentions which are raised by the managements in these petitions were also raised and considered in those judgments. ( 9 ) THE contentions which are raised by the managements in these petitions were also raised and considered in those judgments. On behalf of the management, it is submitted that engagement of contract labour is not prohibited by any law and when it is permissible, the contractors employees might be working in the premises of the principal employer, but that does not necessarily mean that they are the direct employees of the principal employer and reliance has been placed on the Division Bench judgment in the case of I. P. C. L. wherein it was observed that even when the workers are engaged by a contractor to do the work of a factory of a management, such workers will be doing the work of production or the maintenance in which the factory is engaged and they would be subject to certain timings, they would be subject to supervision as to the quality of work and they would be subject to direction by the supervisors of the management as to how the work is to be done. None of these would establish a direct relationship and it was observed that the contractor is a make believe requires much more material than what is averred in the petition. In that petition, there was no question of any adjudication by the Government and there was no demand for making the reference of an industrial dispute for adjudication. In a direct petition under Art. 226 of the Constitution of India, in the facts of that case, the Court could not decide the question in favour of the petitioner. Considering that judgment, the Division Bench in the case of Gujarat Mazdoor Panchayat observed that the High Court could not go into disputed question of fact and the material filed before the Court in that case fell short of establishing the case of the workmen to the effect that they were direct employees of the establishment and that judgment cannot be of any avail at the present stage when the only question is whether the dispute is required to be referred or not. Under Sec. 10, once it is clear that the Government has no power of adjudication, there is no question as to whether the government has taken The right decision on merits or not. Under Sec. 10, once it is clear that the Government has no power of adjudication, there is no question as to whether the government has taken The right decision on merits or not. Once the government has no jurisdiction to adjudicate, the Government cannot refuse to make the reference on the ground that in its opinion, meaning thereby in its adjudication, relationship of master and servant is not established. ( 10 ) IN Telco case (supra), the Supreme Court had observed that the formation of opinion as to whether an industrial dispute exists or is apprehended is not the same thing as to adjudicate the dispute itself on its merits and, therefore, when the Government held that the Convoy Drivers were not the workmen and reference could not be made, the Supreme Court held that the dispute had been decided by the Government "which is undoubtedly not permissible". ( 11 ) THE Division Bench also further relied on the observations of the supreme Court in Telco case in para 14 wherein the Supreme Court had observed that there may be exceptional oases wherein the Government may refuse to refer industrial dispute on the ground that the demands are either perverse or frivolous and the Government should be very slow to attempt an examination of the demand with a view to declining reference and courts will always be vigilant whenever the Government attempts to usurp the powers of the Tribunal for adjudication of the valid disputes. ( 12 ) IN the present case, we find that highly contested and disputed questions of fact and law were raised. It was contended that the work which the employees have been doing was being done by these employees since number of years. This was the work of the principal employer. During all these years, the workers and the principal employer have remained the same even though the contractors have come and gone and changed. It is also contended that there was direct control and supervision of the work of the principal employer. It was also contended that the contract arrangement was a mere paper and bogus arrangement and number of judgments were cited in support of this contention. It is also contended that there was direct control and supervision of the work of the principal employer. It was also contended that the contract arrangement was a mere paper and bogus arrangement and number of judgments were cited in support of this contention. It was also submitted that it was not the function of the Government to under take any investigation, appreciation of facts and law and the matter was required to be referred for adjudication to the Courts or tribunals. ( 13 ) ON the other hand, the management had produced lot of evidence and also affidavits of contractors and others and submitted that the establishment was registered under the Contract Labour (Regulation and abolition) Act and that the contractors were also licensed contractors. The contentions raised by the petitioner-Union were denied and number of authorities were cited in support of their case. Both the rival contentions clearly indicate that there was a highly contested and disputed question which required adjudication by the judicial authority. By no stretch of imagination, the Government can say that the claim made was patently frivolous. The very fact that both the sides had taken considerable pains to make lengthy submissions clearly showed that there was a serious dispute, triable issue and arguable case and the Government could not have under any circumstances, come to the conclusion that there was no case or no prima facie case. In fact, such a conclusion of the Government can be said to be unreasonable and perverse. ( 14 ) THE learned Counsel for the management submitted that the High court had in the earlier round directed the Government to pass appropriate orders in conformity with Sees. 12 (5) and 10 (1) of the Industrial Disputes act after ascertaining prima facie whether the relationship of employer and employees exists between the respondent management and the petitioners. It is further contended that on consideration of the material produced before it, the competent authority had prima facie formed an opinion that there was absence of employer-employee relationship and hence the dispute was not the industrial dispute. Hence, the reference is refused. It is further submitted that the High Court cannot sit in appeal over the said order nor can it consider the propriety or satisfactory character of the reasons assigned by the competent authority because the authority had, on consideration of the relevant material, formed its opinion. Hence, the reference is refused. It is further submitted that the High Court cannot sit in appeal over the said order nor can it consider the propriety or satisfactory character of the reasons assigned by the competent authority because the authority had, on consideration of the relevant material, formed its opinion. There is no merit in these submissions. In the name of prima facie opinion, The Government has clearly usurped the role of a Tribunal and drawn its conclusion; that also in a most perfunctory and highly unsatisfactory manner. Such conclusion cannot stand for a moment. Ordinarily, the dispute between the parties would directly go to the Courts for adjudication. However, regarding industrial disputes, a special forum is created for adjudicial by specialist judicial forum. The adjudication by such judicial forum carries weight, it gives its judgment after a proper trial where both the parties have ample opportunity to lead the evidence and test the evidence of the other side and the submissions on questions of law and fact and after interpreting the law, the judicial forum, by a detailed and reasoned order, gives its judgment and a dissatisfied party has further judicial remedies available in accordance with law. It is such conclusion arrived at in such open and satisfactory manner which really resolves the industrial disputes and it is only such satisfactory resolution of industrial dispute which would really bring industrial peace. If workmen have a grievance or dispute and such dispute is closed at the threshold by an administrative authority in the name of prima fade opinion, the very purpose of Industrial Disputes Act to bring industrial peace would be frustrated. By making a reference, the Government is not prejudicing any party. All contentions that may be available to the party can be raised and can be decided in a judicial forum in judicial manner. If there is a case for reference, i. e. , if a bona file dispute arises, if there arguable case or a triable issue, the government should not try to reach to any conclusion. As observed by the supreme Court, only when the claim made by the workman is patently frivolous which would be a highly exceptional case, in such case, when it is said to be patently false and frivolous, it will not require any argument much less lengthy argument. As observed by the supreme Court, only when the claim made by the workman is patently frivolous which would be a highly exceptional case, in such case, when it is said to be patently false and frivolous, it will not require any argument much less lengthy argument. Such a conclusion can be reached summarily almost in no time and without a detailed inquiry. In the present case, the very fact that both the parties had detailed submissions to make, large number of authorities to cite clearly indicate that there was a strong prima facie case made out by the employees for making the reference of the industrial dispute. ( 15 ) THE learned Counsel for the N. D. D. B. Management submitted that there were four categories of the workmen involved in the case. The first category consists of 15 employees who are employed by the contractor running messes at Farmers and Trainees Hostel of the Board. It was submitted that the Board has nothing to do with these employees directly. In respect of the second and third category of employees, it was submitted that the Board has nothing to do with them also and it was submitted that there is a BOHO club (It is mentioned that BOHO stands for Brains of Highest Orders) which is a voluntary body set up by the officers and employees of the Board for cleaning and maintaining the area around the Club premises and staff quarters occupied by its members. It is also submitted that as far as the cafeteria activity of the Club is concerned, the employees are direct employees of the BOHO club and the Board is not concerned with them and the appointments are made either by BOHO Club or by the contractor. The fourth category is of one employee Umedbhai Chaturbhai and it is stated that he is not employed either by the Board or by its contractor. ( 16 ) ON the other hand, the petitioners have submitted that these contracts are mere paper arrangement and really it is the Board which is the direct employer and these contracts are camouflage. It is submitted that the observation of the Supreme Court regarding control and supervision, the nature of the work, permanency of the work, continuity of employment inspite of the change of contractors and other circumstances will show that there was a direct relationship of master and servant. It is submitted that the observation of the Supreme Court regarding control and supervision, the nature of the work, permanency of the work, continuity of employment inspite of the change of contractors and other circumstances will show that there was a direct relationship of master and servant. The petitioners also submitted that BOHO Club is a mere mechanism or instrumentality of N. D. D. B. itself. It is not a legal person; it is not registered under any statute. The scheme of the Club clearly shows that its President, Secretary, Treasurer and the Executive Committee all are appointed by the Board and every member contributes a nominal amount of Rs. 5. 00 only and the entire finance comes from the Board and virtually it is the Board and its high officers are appointed by the Board which shows that the contract arrangement is a mere paper arrangement and a camouflage and once the identity of BOHO Club is seen, it is nothing but a Board itself and the employees would be the employees of N. D. D. B. It is thus, submitted that once the veil is lifted and the reality is seen, the direct relationship would be established. There is some force in the contentions raised by the petitioner-Union. However, it would not be proper for this Court to make any observation one way or the other that may prejudice the hearing at the trial before the judicial forum, but it must be stated that this was not the case where the Government could reasonably and honestly form an opinion that there was no prima facie case for making the reference. ( 17 ) THE learned Counsel for the management has also submitted that whether there was sufficient and proper material before the Government is not a question which is open to judicial review. Here, the question is whether the Government had any jurisdiction whatsoever to usurp the power of the Tribunal and come to any final conclusion, especially when there was a prima facie case for making a reference. In view of the fact that clear and strong prima facie case has been made out, the Government cannot assume adjudication power and label it as a prima facie opinion and shut out the judicial review of such decision. That would be travesty of justice and contrary to all the provisions and spirit of the Industrial disputes Act. In view of the fact that clear and strong prima facie case has been made out, the Government cannot assume adjudication power and label it as a prima facie opinion and shut out the judicial review of such decision. That would be travesty of justice and contrary to all the provisions and spirit of the Industrial disputes Act. ( 18 ) THE learned Counsels have also drawn our attention to the cases where the Courts had upheld the decisions of making reference when it was found that a teacher was not a workman and a foreman, supervisor drawing salary of more than Rs. 500. 00 were not workmen. In both these cases, no question was raised and considered as to whether the Government could usurp the power of the Tribunal. In fact, in the case of a foreman, it is not shown that there was any dispute about the supervisory character and the amount of salary. ( 19 ) IT is also submitted that in the year 1981, the Union had moved the appropriate Government under Sec. 10 of the Contract labour (Regulation and Abolition) Act, 1970 for prohibiting contract system in all sectors of N. D. D. B. and the Government had prohibited in the sector of sanitation and not prohibited in other fields. It is, therefore, submitted that the workmen are now estopped from contending that the contract in question is camouflage or not genuine. It is not possible to uphold this contention. It is open to the workman to raise a dispute on one aspect and merely because at one stage, it is raised in that respect only, that will not estop him from raising it on another aspect. This question has also been squarely answered by the Division Bench in the case of gujarat Mazdoor Panchayat (supra ). When the employer contends that there is a genuine contract system, the workman will be entitled to seek abolition of that system without admitting that it is a genuine system, but on the assumption that even if it is a genuine system, it should be abolished. When the workmen have gone to that forum, there is no question of their impliedly admitting that the contract system was a genuine system. When the workmen have gone to that forum, there is no question of their impliedly admitting that the contract system was a genuine system. Having regard to the provisions of Sec. 10 of the Contract Labour (Regulation and Abolition) Act, 1970, it is clear that the Government can prohibit contract labour in a given sector of an establishment, but when it does not prohibit, there is no notification under Sec. 10. There is no decision communicated to any party. In fact, the Government can take the decision without any application from any party. The Government acts on the report of the Advisory Board. That report is not given to any party. The Government is also not bound to act strictly in accordance with the report. In these circumstances, merely because the Government has chosen to prohibit contract labour system in sanitation only, it cannot lead to any conclusion that the dispute in respect of the prevailance of contract labour system, irrespective of it genuineness, cannot be a subject-matter of industrial dispute. The authority under Sec. 10 cannot go into the question of genuineness of the contract arrangement and cannot adjudicate on such industrial dispute. Therefore, this contention also does not help the management in any way. ( 20 ) IT is also submitted that the fourth category of employee employed by BOHO Club is no longer in service because BOHO Club has closed its cafeteria activity and as a result, his services were terminated and there was some litigation initiated by the workman against BOHO Club and not against N. D. D. B. This aspect cannot be said to be conclusive. It would be one of the aspects which would be considered at the time of adjudication. . ( 21 ) ALMOST similar and parallel contentions are raised in the other petition wherein respondent No. 3 is the Institute of Rural Management. Originally, it was a part of N. D. D. B. and at some stage, it has appeared as an independent and separate body. There also, the management has also produced affidavits and documents. The authority has passed verbatim same order on the same day in both the matters, and in both the matters the impugned orders are required to be quashed and set aside. There also, the management has also produced affidavits and documents. The authority has passed verbatim same order on the same day in both the matters, and in both the matters the impugned orders are required to be quashed and set aside. ( 22 ) IT was then contended that the High Court cannot direct the reference of the dispute to be made and it can only direct reconsideration. In these cases, once that exercise was done and the Government was directed to reconsider the issue, the Government has in total disregard of the observations made in the earlier judgment, adjudicated upon the issue and that also in highly perfunctory manner not showing application of mind and merely confirmed its conclusions earlier reached. Almost four years have passed after the demands are raised. In similar circumstances, the High court and the Supreme Court in the cases cited above have issued directions for making reference instead of directing reconsideration by the government. Following the same, we also direct the reference of the industrial dispute to be made by the Government. ( 23 ) IN the result, both these petitions are allowed and the impugned orders refusing to make reference are quashed and set aside and the respondents are directed to refer the demands to the appropriate forum under the Industrial Disputes Act within two months from today and such forum shall decide the dispute preferably within six months from the date of the reference. During the pendency of these petitions, status quo was directed to be maintained. That interim relief to continue till the reference is decided and award is published. Rule is made absolute accordingly. The respondent No. 3 in each of these petitions to pay costs to the petitioners quantified at Rs. 2000. 00 (Rs. Two thousand only ). .