SAURASHTRA CHEMICALS v. STATE — 1993 DIGILAW 510 (GUJ)

RAVANI, J. ( 1 ) IS it obligatory on the appropriate Government to take decision at a time under Sec. 10 (2) of the Contract Labour (Regulation and Abolition) act, 1970 (the Act for short) regarding prohibition or abolition of contract labour system from all the processes/operations or works in respect of which recommendations may have been made by the Advisory Board ? Is it not open to the appropriate Government to defer its decision as regards abolition of contract labour system in particular process/operation or work to a later stage ? These questions have surfaced for examination and answer in this petition. ( 2 ) PETITIONER No. 1 is a Company incorporated under the appropriate provisions of the Companies Act, 1956 and petitioner No. 2 is a shareholder thereof. Petitioner-Company is engaged in the business of manufacture of heavy chemicals like soda ash, caustic soda and sodium bicarbonate. Its factory is situated at Porbander. By notification dated 25/11/1980 the Government prohibited contract labour in three establishments manufacturing soda ash. These three establishments were Dhrangadhra Chemical Works Ltd. , Dhrangadhra, saurashtra Chemicals, Porbander and Tata Chemicals Ltd. , Mithapur. The processes from which contract labour was abolished by notification dated 25/11/1980 were (1) packing and bagging, (2) cleaning, (3) feeding the hopper and (4) material handling. The aforesaid notification was subjectmatter of various litigations. The Government was from time to time required to reconsider the same, but all the time the Government confirmed the said notification. By notification dated 1/12/1983 the Government prohibited contract labour in general cleaning section of all the three establishments, namely, dhrangadhra Chemicals Works Ltd. , Saurashtra Chemicals and Tata Chemicals ltd. The notification is produced at Annexure h to the petition. It is issued by the Government in exercise of the powers conferred upon it under Sec. 10 of the Contract Labour (Regulation and Abolition) Act, 1970. The petitioner- company has challenged the legality and validity of this notification on various grounds. ( 3 ) IT may be noted that by the earlier notification dated 25/11/1980, contract labour was prohibited and abolished from four different processes in relation to all the three establishments. By the impugned notification dated 1/12/1983 contract labour is prohibited and abolished in the process of general cleaning from all the three establishments. ( 3 ) IT may be noted that by the earlier notification dated 25/11/1980, contract labour was prohibited and abolished from four different processes in relation to all the three establishments. By the impugned notification dated 1/12/1983 contract labour is prohibited and abolished in the process of general cleaning from all the three establishments. However, the present petition challenging the legality and validity of notification dated 1/12/1983, has been filed by only one establishment, i. e. , Saurashtra Chemicals. It is not the case of the petitioner that the process of manufacturing soda ash and other articles manufactured in its factory is in any way different than that carried on in other two establishments. It is also not the case of the petitioner that the petitioners establishment which is also engaged in the manufacture of soda ash and other similar articles is in any way distinct and it is not similar to that of other two establishments. It is not even averred that the case of the petitioners establishment is distinct and it has distinguishing features than other two establishments. It is not brought to our notice that other two etablishments or any one of them have filed petition and challenged the legality and validity of the impugned notification. We hasten to add that this factual position may not have any bearing on the question raised in the petition, but the same is stated as relevant facts in order to show that all the similarly situated establishments manufacturing soda ash have been covered by the impugned notification. ( 4 ) IT is contended that the Advisory Board constituted under the appropriate provisions of the Act and the Rules submitted its report dated 11/08/1980. In the report of the Advisory Board it was recommended that the contract labour system be abolished amongst others from the following processes : (i) packing and bagging (ii) cleaning (iii) feeding the hopper (iv) material handling (v) general cleaning despite such specific recommendation, the Government issued notification dated 25/11/1980 abolishing contract labour from four processes, i. e. , packing and bagging, cleaning, feeding the hopper and materials handling. The Government did not prohibit and abolish the contract labour in the process of general cleaning. The Government did not prohibit and abolish the contract labour in the process of general cleaning. It is argued that without there being any fresh material, by notification dated 1/12/1983 the Government has issued the impugned notification prohibiting contract labour in general cleaning section of all the three establishments. Therefore, it is submitted that without there being fresh material it was not open to the Government to issue impugned notification. ( 5 ) AS a corollary to the aforesaid submission, it is further contended that the Government has in essence reconsidered its earlier decision. Implicit in the submission is that while issuing earlier notification the Government had taken conscious decision not to abolish contract labour in the general cleaning section. On the basis of this assumption, it is submitted that it was not open to the Government to reconsider its earlier decision without adopting the procedure under Sec. 10 of the Act. ( 6 ) LET us examine the submission. Sec. 10 of the Act empowers the government to prohibit employment of contract labour in any process, operation or other work in any establishment. Before issuing notification the government is required to take into consideration the conditions of work and benefits provided for the contract labour in that establishment. In addition to this factor, the Government is also required to take other relevant factors into consideration, such as - (i) whether the process, operation or other work is incidental to, or necessary for the industry, trade, business, manufacture or occupation that is carried on in the establishment; (ii) whether the process is of perennial nature; (iii) whether it is done ordinarily through regular workmen in that establishment; (iv) whether it is sufficient to employ considerable number of whole-time workmen. Mere reading of the provision makes it clear that it is not obligatory upon the Government to take decision with regard to different processes at a time. ( 7 ) ON examining the scheme of the Act and Preamble to the Act, it becomes evident that the object of the Act is to regulate the employment of contract labour in certain establishment and to provide for abolition in certain circumstances and for matters connected therewith. ( 7 ) ON examining the scheme of the Act and Preamble to the Act, it becomes evident that the object of the Act is to regulate the employment of contract labour in certain establishment and to provide for abolition in certain circumstances and for matters connected therewith. As observed by the Supreme Court in the case of Gammon India Ltd. v. Union of India, reported in AIR 1974 SC 960 , (para 14), the Act provides for regulated conditions of work and contemplates progressive abolition to the extent contemplated by Sec. 10 of the Act. Section 10 of the Act deals with abolition while the rest of the Act deals mainly with regulation. Analysing the provisions of Sec. 10 of the Act, it is evident that the appropriate government has power to prohibit employment of contract labour in any process or operation or other work in any establishment. Before issuing any notification prohibiting contract labour, the appropriate Government has to consult the Central Board or the State Board as the case may be. Before issuing any notification under sub-sec. (1) of Sec. 10 prohibiting employment of contract labour, the appropriate Government is bound to have regard not only to the conditions of work and benefits provided for the contract labour in a particular establishment, but also other relevant factors enumerated in clauses (a) to (d) of sub-sec. (2) of Sec. 10 of the Act. These factors are as follows : (i) whether the process, operation or other work is incidental or necessary for the industry, trade, business or manufacture or occupation that is carried on in the establishment; (ii) whether the process is of perennial nature; (iii) whether it is done ordinarily through regular workmen in that establishment; (iv) whether it is sufficient to employ considerable number of whole-time workmen. Thus, analysing the provisions of Sec. 10 of the Act all that is required by the appropriate Government is to consult the Advisory Board and take into consideration the aforesaid factors as well as the conditions of work and the benefits provided for contract labour in the establishment. Once the government undertakes the aforesaid exercise, the requirements of Sec. 10 of the Act are complied with. ( 8 ) IT may be noted that the powers exercised by the Government under sec. 10 of the Act are essentially procedural in nature. They are again quasilegislative. Once the government undertakes the aforesaid exercise, the requirements of Sec. 10 of the Act are complied with. ( 8 ) IT may be noted that the powers exercised by the Government under sec. 10 of the Act are essentially procedural in nature. They are again quasilegislative. Therefore, it is not necessary that there should be strict compliance of the requirements of the provisions of Sec. 10 (2) of the Act. If there is sufficient compliance with the provisions of Sec. 10 (2) of the Act, the action taken by the Government under the provisions of Sec. 10 cannot be invalidated. ( 9 ) WE make it clear that in the instant case, there is strict compliance with the provisions of Sec. 10 of the Act. This is so because the government has consulted the Advisory Board. It has taken into consideration the conditions of work and the benefits provided for contract labour in the establishment concerned. It has also taken into consideration other factors, namely, whether the process is incidental to or necessary for the establishment concerned, whether it is of perennial nature, whether it is done ordinarily through regular workmen and whether it is sufficient to employ considerable number of whole-time work force. Even if it is assumed that there is some irregularity or some procedural lapse, then also, the notification cannot be invalidated. The Act is an important piece of legislation for the welfare of labourers and has to be liberally construed. (See Sanker Mukherjee v. Union of India, reported in AIR 1990 SC 532 , para 6 ). Again it may be noted that the expression "shall have regard to" occurring in sub-sec. (2) of Sec. 10 obliges the Government to consider as relevant material to which it must have regard. Thus, the factors narrated in sub-sec. (2) of Sec. 10 arc merely a guide and not a fetter on the powers of the Government (See State of Karnataka v. Shri Ranganatha reddy. 1977 (4) SCC 471 wherein the expression "shall have regard to" has been explained ). ( 10 ) IT is not the case of the petitioner that there is no compliance with the provisions of Sec. 10 of the Act. It is contended on behalf of the petitioner that all that was done previously by the Government should have been done again afresh. ( 10 ) IT is not the case of the petitioner that there is no compliance with the provisions of Sec. 10 of the Act. It is contended on behalf of the petitioner that all that was done previously by the Government should have been done again afresh. In their submission, the decision to abolish the contract labour in different processes could not have been taken piecemeal. The submission cannot be accepted. Such is not the scheme of the Act nor any such obligation is cast upon the appropriate Government under the provisions of the Act to take decision at a time. The scheme of the Act contemplates continuous review and reconsideration of the administration of the Act. This is evident from the provisions of Secs. 3 and 4 of the Act which provide for Central Advisory Board and State advisory Board. These Boards are required to be constituted to advise the appropriate Government on such matters arising out of the administration of the Act as may be referred to it and to carry out other functions assigned to it under the Act. By Sec. 5 of the Act, the Board is empowered to constitute committees for such purpose or purposes as it may think fit. Provisions of Sec. 10 of the Act also indicated that the appropriate Government is required to keep constant watch over the administration of the Act and review and if necessary reconsider its decision from time to time. This becomes evident from the provisions of sub-sec. (2) which requires the appropriate Government to take into consideration the conditions of work and benefits provided for the contract labour in the establishment concerned. It also requires the Government to take into consideration other relevant factors mentioned in clauses (a) to (d) of sub-sec. (2 ). The Explanation to Sec. 10 (2) provides that if a question arises whether any process or operation or other work is of perennial nature, the decision of the appropriate Government thereon shall be final. Thus, the act does not cast any obligation upon the Government to take decision to prohibit or abolish the contract labour system in all processes or works in relation to which recommendation might have been made by the Board at a time. Thus, the act does not cast any obligation upon the Government to take decision to prohibit or abolish the contract labour system in all processes or works in relation to which recommendation might have been made by the Board at a time. The Government may prohibit or abolish the contract labour system in some of the processes or works or operations at a particular stage and defer the prohibition or abolition of contract labour in another process or work at a different stage. It would all depend upon the situation in the establishment concerned and the industry and the economy as a whole. There is no obligation on the Government to accept all the recommendations at a time. All that is necessary for the Government is to consult the Advisory board and take into consideration the factors mentioned in Sec. 10 (2) of the Act. This has been done by the appropriate Government in the instant case. Therefore, the submission that there should have been fresh material before the Government when the Government issued impugned notification has no merits and the same is hereby rejected. ( 11 ) THE incidental submission made is, as stated above, on the basis of the erroneous assumption that the Government had taken a conscious decision not to abolish contract labour from general cleaning section. No such decision has been ever taken by the Government. All that has been done by the Government was to abolish contract labour system from four processes mentioned hereinabove. At that stage, the Government did not think it proper to abolish contract labour from the general cleaning process. At a later stage, if the Government thought it fit that the time had become ripe to abolish contract labour from general cleaning section also, the Government may take the decision separately. As stated hereinabove, it is not the requirement of the Act or the Rules that such decision could and should have been taken only simultaneously and such power could have been exercised once and for all and not piecemeal. ( 12 ) THE contention that Sec. 10 of the Act does not empower the government to issue successive notifications on the basis of same material has no merits. On the basis of the same material, the Government may issue different notifications abolishing contract labour in one after another process. The Government, as indicated hereinabove, may take decision stagewise. ( 12 ) THE contention that Sec. 10 of the Act does not empower the government to issue successive notifications on the basis of same material has no merits. On the basis of the same material, the Government may issue different notifications abolishing contract labour in one after another process. The Government, as indicated hereinabove, may take decision stagewise. This is so because the exercise of power under Sec. 10 of the Act is a part of continuous process of constant supervision as regards the administration of the Act and the rules framed thereunder. It is not possible to read any such fetter on the powers of the appropriate Government as it is sought to be contended. ( 13 ) IT is contended that the Advisory Board has made recommendation without applying mind and without making detailed inquiry. The submission is made contrary to the facts The Board had appointed a committee of two members for investigation of the conditions of the workmen in all the three establishments. The petitioners establishment was visited by the Committee on 14/06/1978 and on 15/06/1978. The Committee submitted a detailed report to the Board. As stated in the report, there were 34 (thirty-four) departments in the petitioners establishment. Total work force of directly employed workmen was 175, while there were 24 contractors who engaged 1874 contract labourers. The Committee did say that the payment of wages to the contract labour was satisfactory, i. e. , it was at par with the regular workmen. This has got to be so because the licence issued under Sec. 12 (2) of the Act provides that the conditions mentioned therein should be complied with by the principal employer and the contractor. Rule 25 of the Rules mentions the conditions subject to which the licence should be issued to a contractor. Clause (v) (a) of Rule 25 (2) inter alia provides that in cases where the workmen employed by the contractor perform the same or similar kind of work as the workmen directly employed by the principal employer of the establishment, the wage rates, holidays, hours of work and other conditions of service of the workmen of the contractor shall be the same as applicable to the workmen directly employed by the principal employer of the establishment on the same or similar kind of work. The Committee did take into consideration the entire working of the establishment. The Committee did take into consideration the entire working of the establishment. This report has been taken into consideration by the board. ( 14 ) THE Board visited the establishment on 25/05/1980. After taking into consideration the representation made by the establishment its workers and all other relevant aspects, the Board recommended as regards general cleaning section in its report dated 11/08/1980 as follows :"item No. 8 of the Proforma-General cleaning: this work can also be effectively done by direct labour as we see no reason why contract labour should be continued. It is a work of perennial nature connected directly with the activities of the establishments. In our opinion the contract labour should be abolished so far as this type of work is concerned. "the aforesaid details clearly show that the Committee as well as the Board did make necessary investigation. The Board made its recommendation after examining all the relevant aspects. Therefore, the contention that the Board has made recommendation without application of mind has no merits. ( 15 ) IT would be interesting to note, in fairness to the petitioner, that either in the petition, or before this Court the petitioners have not submitted that the findings arrived at by the Advisory Board and the recommendations made are in any way erroneous or incorrect. It is not the case of the petitioner-Company that the process of general cleaning in its establishment is not that of perennial nature. It is not even argued before this Court that general cleaning work, in respect of which, by the impugned notification, contract labour is abolished, is not perennial. We fail to understand, when factually it is not even possible for the petitioner to contend that the work in which contract labour is abolished is not of perennial nature, how and on what basis the legality and validity of the impugned notification can be challenged. ( 16 ) IT was submitted that the Sub-Committee appointed by the Board could not have been appointed by the Board and the Board had no power to appoint such Committee. The contention has to be stated only for the purpose of being rejected. Section 5 of the Act specifically empowers the Board to constitute such Committees and for such purpose or purposes as it may think fit. The contention has to be stated only for the purpose of being rejected. Section 5 of the Act specifically empowers the Board to constitute such Committees and for such purpose or purposes as it may think fit. In view of this specific provision in the Act, this contention fails and it is not required to be elaborately dealt with. ( 17 ) IT is contended that all the establishments in heavy chemical industry have not been covered by the impugned notification; that in the heavy chemical industry there are other big industries such as Gujarat state Fertilizer Corporation, Gujarat Narmada Fertilizer Corporation, Indian petrochemicals Ltd. , Indian Farmers and Fertilizers Co-operative Ltd. It is the contention of the petitioner that the aforesaid establishments and some other establishments are engaged in the manufacture of one or the other heavy chemical and yet these establishments have not been covered and contract labour has not been abolished in these establishments. Therefore, it is submitted that the petitioners establishment has been picked up and chosen by the Government for abolishing contract labour. The contention cannot be accepted for the simple reason that petitioners establishment and other establishments such as G. S. F. C. , G. N. F. C. , I. P. C. L. , I. F. F. C. O. , etc. are not comparable. It is not stated even in the petition that the petitioners establishment and G. S. F. C. , G. N. F. C. , I. F. F. C. O. , and I. P. C. L. are similarly situated. Therefore, there is no question of hostile discrimination in the case of the petitioner. Be it noted that by the impugned notification three establishments have been covered. All these three establishments are engaged in the manufacture of soda ash. It is not shown by the petitioner that any other establishment manufacturing soda ash in the State has been left out. Therefore, the challenge to the notification on the ground of discrimination has no merit and the same is hereby rejected. ( 18 ) IT is contended that before constitution of the Board heavy chemical industry and particularly soda ash industry has not been consulted. While constituting the Board it is not necessary that each and every establishment or each specific industry may be consulted. No provision is made as regards consultation in the Act. ( 18 ) IT is contended that before constitution of the Board heavy chemical industry and particularly soda ash industry has not been consulted. While constituting the Board it is not necessary that each and every establishment or each specific industry may be consulted. No provision is made as regards consultation in the Act. In Rule 3 of the rules framed by the State Government it is inter alia stated that the industry shall be consulted before nominating the representative of the industry and the contractor on the Board. However, if the names of the representatives of the industry and that of the contractors are called for from different organisations and associations, in our opinion that would be sufficient compliance with the provisions of the Rules. Be it noted that this provision of consultation is made in the rules and not in the Act. Again, as we have decided in our decision dated 18th and 19/10/1993 in Special Civil Application No. 3754 of 1985, 2512 of 1985 and 8851 of 1989, this is merely directory requirement. This is not a mandatory requirement. Therefore, if there is substantial compliance with this aspect, the constitution of the Board cannot be invalidated on such grounds. ( 19 ) IT is contended that there was no representation of the heavy chemical industry and similarly there was no representation of the contractors engaged in the heavy chemical industry. Therefore, the constitution of the Board is not in accordance with law, and hence the report submitted by such Board could not have been taken into consideration by the Government. This very contention was raised before the board itself. The Board has dealt with this contention in para 12 of its report. After referring to the objection and the provisions of the Act, it is stated in the report as follows :we are in respectful agreement with the observations made by the Board. ( 20 ) THIS very point was raised in Special Civil Application Nos. 5568 of 1983, 5857 of 1983 and 282 of 1984 decided on 27/10/1993. Therein, in para 15 of the decision, we have, inter alia, observed to the effect that the provisions of Secs. 3 and 4 of the Act do not contemplate a rotating Board. It contemplates a Board which would remain in office for a specified period. 5568 of 1983, 5857 of 1983 and 282 of 1984 decided on 27/10/1993. Therein, in para 15 of the decision, we have, inter alia, observed to the effect that the provisions of Secs. 3 and 4 of the Act do not contemplate a rotating Board. It contemplates a Board which would remain in office for a specified period. The function of the Board is to advise the appropriate Government on such matters arising out of the administration of the Act. Thus, the Act contemplates that the Board would be a continuous body, which may advise the Government as and when some questions crop up in the administration of the Act. The Board is also required to render advise to the Government on questions that may be referred to it. Thus, the function of the Board is to advise the government in the administration of the Act and particularly on the question that may be referred to it. The Act does not contemplate a separate advisory Board for a specific industry and specified establishments. For the aforesaid reasons, the contention that the constitution of the Board was illegal as there was no representation of the heavy chemical industry and as there was no consultation with the petitioners establishment has no merits and the contention is hereby rejected. . ( 21 ) IT is contended that the Government has not afforded an opportunity of being beard before issuing the notification. In the instant case, it was much more necessary because the Government did not think it proper to abolish contract labour in general cleaning section. The Government after receipt of the report dated 11/08/1980 abolished contract labour system only from four processes or operation of works, and did not consider it proper to abolish contract labour from general cleaning section. This is evident when the Government issued notification dated 25/11/1980 covering only four processes/operations and excluded general cleaning section, while prohibiting and abolishing contract labour. Therefore, it is submitted that if the Government wanted to reconsider its decision then it was incumbent upon the Government to afford an opportunity of being heard to the petitioner. ( 22 ) AS indicated earlier, there is erroneous assumption in this submission. The Government never took specific decision not to abolish contract labour in general cleaning section of the establishments concerned. ( 22 ) AS indicated earlier, there is erroneous assumption in this submission. The Government never took specific decision not to abolish contract labour in general cleaning section of the establishments concerned. All that was done by the Government was to abolish contract labour in four processes out of several processes and operations recommended by the Board. It was open to the Government Rto take decision stagewise. ( 23 ) WE have already indicated that the powers of the Government While taking action under Sec. 10 of the Act are quasi-legislative. While exercising these powers, it is not necessary to afford an opportunity of being heard to the parties. This is elaborately discussed in our decision dated 27-10- 1993 in Special Civil Application No. 5568 of 1983 and companion matters. We are not repeating the same. For the same reasons this contention is also rejected. ( 24 ) NO other contention is raised. There is no substance in the petition. Hence rejected. Rule discharged with no order as to costs. .