Judgment 1. These batch of appeals are preferred by the employers challenging the order passed by the learned single Judge who set aside the notification dated 1.8.2001 by which the notification issued under Section 10(1) of the Contract Labour (Regulation and Abolition) Act, 1970 (for short hereinafter referred to as ‘the Act’) came to be rescinded and also the declaration granted by the learned single Judge that statutory canteens employees are to be regularized by the respective managements according to the terms of his order and the other consequential reliefs which he has granted. 2. As the subject matter of all these appeals and the questions raised and to be considered are one and the same, they are taken up for consideration together and disposed of by this order. 3. For the purpose of convenience, the parties are referred to as they are referred to in the original writ proceedings. For proper appreciation of the legal issues which arise for consideration in these proceedings, the facts in W.P. Nos.28677-78/2001 are briefly stated. The first petitioner is a National Trade Union Centre representing the interest of the working class. The second petitioner is a Trade Union registered under the Trade Unions Act, 1926 and it has a membership in Engineering Industries and general service Establishments. Besides representing the organized workers, they have been assiduously engaged in organizing the unorganized labour. The second petitioner-Union is affiliated to the first petitioner-federation. The third and fourth petitioners are employed in the canteen run and maintained by the respondent-management. The second respondent issued a notification vide No.KAE:6LWA:97 dated 11.4.1997 prohibiting employment of contract labour for industrial canteens in factories employing 250 workers and above in the State of Karnataka exercising the powers conferred under Section 10(1) and (2) of the Act. The said notification came to be issued after considering the unanimous recommendations of the State Contract Labour Advisory Board constituted by the State Government under Section 4 of the Act read with Rule 3 of the Rules and consists of equal number of representatives from the employers-management, trade unions and independent member. 4. More than 700 factories in the State of Karnataka came under the purview and ambit of the notification and were required to abolish contract labour system in their canteens. 4. More than 700 factories in the State of Karnataka came under the purview and ambit of the notification and were required to abolish contract labour system in their canteens. However, some 40 managements being aggrieved by the aforesaid notification, challenged the validity of the same on a number of grounds as stated in W.P.Nos.14083-84/1997 and connected Writ Petitions before this Court. The learned single Judge considering the importance of the issues involved referred the Writ Petitions for consideration before the Division Bench. In the said proceedings the State Government defended the validity of the notification along with the trade unions representing the contract labour. The Division Bench of this Court after considering the rival contentions and all other aspects, dismissed the Writ Petitions by an order dated 30.3.1998. Aggrieved by the said judgment of the Division Bench, some of the employers-management preferred to file a Special Leave Petition (Civil) No.7371/1998 before the Supreme Court. Even before the Supreme Court the State Government stoutly defended the notification. The Hon’ble Supreme Court dismissed the Special Leave Petition by its order dated 2.2.2001. Some of the employers filed Review Petition No.359/2001 which also came to be dismissed on 19.4.2001. Thus, the validity of the notification was upheld and it reached finality. There were no interim orders of stay of the operation of the notification either before the High Court or before the Apex Court. Therefore, the workmen had a vested right to be treated as employees of the principal employer from the date of notification. 5. In spite of the challenge to the notification having failed, the respondents in these proceedings did not implement the notification dated 11.4.1997. Therefore, the second petitioner addressed a letter to them requesting them to implement the notification. When it was not complied with the second petitioner was constrained to initiate appropriate proceedings under Section 23 of the Act. It is thereafter that the employers-management through their association called Karnataka Employers Association submitted a representation to respondent NO.3-Commissioner of Labour in Karnataka, requesting him to initiate measures to withdraw the notification. The said representation was referred to the Contract Labour Advisory Board. It is thereafter that the employers-management through their association called Karnataka Employers Association submitted a representation to respondent NO.3-Commissioner of Labour in Karnataka, requesting him to initiate measures to withdraw the notification. The said representation was referred to the Contract Labour Advisory Board. The State Government ignoring the decision of the Hon’ble Supreme Court upholding the validity of the notification dated 11.4.1997, ignoring its statutory obligation to abolish contract labour system, ignoring its constitutional obligation under Part-IV-Directive Principles of the State policies and disregarding various decisions of the Supreme Court and without authority proceeded to issue notification No.LD 15 LWA 2001 dated 1.8.2001 rescinding the earlier notification dated 11.4.1997. 6. The petitioners and the workmen are all aggrieved by the notification dated 1.8.2001 on various grounds as set out in the Writ Petition. They prayed for issue of a writ of certiorari (a) for quashing the impugned notification dated 1.8.2001, (b) to hold that the contract labourers as in employment of factory canteens are entitled to be treated as employees of principal employers with effect from 11.4.1997 and (c) for other appropriate orders. 7. Statement of objections was filed on behalf of the State. They admit the earlier legal proceedings, the notification under Section 10(1) of the Act and the judgment of the Apex Court upholding the notification. However, they contend that the Supreme Court held that the prohibition of employment of contract labour is a matter of policy of the Government. They could decide whether to prohibit contract labour in an establishment, irrespective of the fact, whether the workmen were engaged in core activity or peripheral activity. The statute requires that the Government has to consult the Advisory Board before issuing any notification. However, the Government is not bound by the advice given by the Advisory Board. The State Government initiated action to implement the said notification. At that point of time, Karnataka Employees Association gave a representation to the Commissioner of Labour, Government of Karnataka requesting the withdrawal of the notification dated 11.4.1997. The substance of their representation was that in the context of the market oriented globalised new economic policy of the Government, the process of de-regulation and de-control had been introduced to facilitate co-ordination of market forces. In the changed situation, industrial establishments have to focus on their core competencies for survival and growth of business for which use of outside specialized services were essential. In the changed situation, industrial establishments have to focus on their core competencies for survival and growth of business for which use of outside specialized services were essential. That focus on peripheral activities such as security, house keeping, gardening, transportation, loading and unloading, food preparation and service will cause immense strain on the establishment, distracting their attention from the core activities. Diversion of business sources to peripheral activities would make the establishment ineffective and inefficient. There was no justification for imposing unproductive work burden on the manufacturing activities which would cause enormous financial strain, especially when there are specialized agencies rendering those services. The expansion of the service sector is given more employment opportunity. The State Government ought to encourage indirect employment in service sector which has great employment potential instead of forcing direct employment potential whose potential is very limited. The establishments should be given the freedom to decide the core areas requiring focus. The measure was retrograde in that it affected employment generation and in the changed circumstances, the local industry would find it impossible to face competition from countries like China and South Asian Countries who are manufacturing quality goods and offering them at considerably lesser prices. It was only in the State of Karnataka that Contract Labour was prohibited, where as in the other States regulatory measures had been taken and that total prohibition would cause shifting of industries from Karnataka to other States. It is not an incentive to new investment. The notification dated 11.4.1997 was not really in the interest of the industrial sector in the State. Similar representations were received by the State Government from various sections. It is on consideration of the aforesaid representation as well as the recommendation of the Advisory Board and after a proper and elaborate consideration of the views expressed by the members of the Advisory Board, the withdrawal notification was issued which is legal and valid. The entire decision making process which preceded the issuance of the impugned notification is in accordance with law. The Advisory Board as well as the State Government have applied their mind, considered the relevant aspects and have been guided by relevant and proper considerations. Taking the decision to withdraw the notification dated 11.4.1997 is a policy decision taken by the State Government. The Advisory Board as well as the State Government have applied their mind, considered the relevant aspects and have been guided by relevant and proper considerations. Taking the decision to withdraw the notification dated 11.4.1997 is a policy decision taken by the State Government. The contract labourers who have been engaged by the contractor have no vested right to be absorbed as employees of the principal employer. No fundamental rights of these employees have been infringed, as such the Writ Petitions filed are not maintainable and liable to be dismissed. 8. The State Government which has the power to issue notification has the power to rescind the same. The claim of the workmen that they have a vested right to be treated as employees of the principal employer is without any merit. The notification dated 11.4.1997 was issued after taking into consideration the conditions existing in the year 1988, the year in which the process was initiated. The Supreme Court upheld the said notification in the month of February 2001. The State Government after taking into consideration the changed circumstances and other relevant aspects reviewed its earlier policy and issued the impugned notification after due consideration and application of mind. 9. The notification dated 11.4.1997, being a conditional legislation does not restrict the statutory discretion vested in the State Government. It is obligatory on the part of the State Government to exercise the discretion vested in it under Section 10 of the Act. Hence, the judgment of the Supreme Court does not come in the way of the State Government taking into consideration and reviewing its earlier policy. The allegations that the State Government was under pressure of the employers, was trying to get out of the obligation imposed in terms of the decision of the Division Bench and the Supreme Court was denied. The averment that the notification dated 11.4.1997 created a valid and legitimate expectation in the mind of the contract labour that they would be absorbed by the principal employer is untenable. The petitioners are contract labourers. They have no vested right to be absorbed by the principal employer once the notification abolishing the contract labour is issued. There is no mandatory obligation on the part of the State Government to abolish contract labour. The discretion is vested in the State Government to issue or not to issue the notification. The petitioners are contract labourers. They have no vested right to be absorbed by the principal employer once the notification abolishing the contract labour is issued. There is no mandatory obligation on the part of the State Government to abolish contract labour. The discretion is vested in the State Government to issue or not to issue the notification. There is no automatic absorption of contract labour on issuing of a notification prohibiting the same, much less that the notification vests such a right in contract labour. The State Government has issued the impugned notification after consultation with the State Board. As held by the Supreme Court, consultation is complete when there is exchange of mutual view points and examination of the relative merits and conditions. This requirement is fulfilled in the present case. 10. The employer has also filed a detailed statement of objections. After reiterating what the State has said in the statement of objections, they contend that the action of the State Government is legal, proper, valid and in the best interest of the industries and workmen in the State of Karnataka. The progress of the State is generally dependent upon the prosperity of the industries. If the existing industries are closed down or new industries are not started in the State of Karnataka, the unemployment rate will increase. Number of jobs in the manufacturing sector are dwindling due to automation, recession, international competition, easy imports and others. The percentage of jobs are increasing in the service sector which includes the industrial canteens. If any restriction is put on the service sector establishments, that will also result in reduction in jobs. Therefore, the service sector establishments should be encouraged without putting any restriction. The action of the State in rescinding the notification dated 11.4.1997 reflects the policy of the Government and it is in accordance with law. 11. The Union Finance Minister in his budget placed before the Parliament in 2001 has laid stress to lift all restrictions on out sourcing of work without any differentiation to core and non-core activities on contract basis. The recently published Economic Survey report clearly states that the contract labour laws as it exists today makes it impossible for genuine small scale entrepreneurs to provide services to industries. The recently published Economic Survey report clearly states that the contract labour laws as it exists today makes it impossible for genuine small scale entrepreneurs to provide services to industries. Over all labour law reforms are urgently needed in the wake of economic liberalization and globalization that has been accepted by the Government of India. The impugned notification is in the interest of Industry and Labour. The measure taken by the State Government cannot be characterized as anti-labour. On the other hand, it is required in the interest of the labour itself. Out sourcing of work will increase employment in the organized sector. Thus, the impugned notification which reflects all these aspects is valid and is to be upheld. 12. In the field of industry today, the running of a canteen both in India and elsewhere is regarded as a business. It is a specialist activity. There are professional caterers who have commissioned spur Kitchens of employing a large trained work force. Canteen services are an important segment of the growing service sector in the country. It is also a specialist business venture. The impugned notification recognizes its existence as an important industry in the service sector. The canteen activity being not a core activity in a manufacturing Organisation, the managements have not been able to develop expertise in this area. It is the expert bodies who can organize such activity properly. When such expert establishments are available, it would be in the interest of the industrial sector to entrust that activity to such establishments. Practical difficulties in running the canteen deserve to be noted. If the cook does not turn up for work suddenly, it will be practically impossible for the managements to make alternate arrangement. Such a situation will lead to industrial relations problems. Whereas the Contractor, who will be having such establishments in more than one factory will be able to quickly re-deploy another cook and prepare the food in time and avert any difficult situation. Throughout Karnataka and in other places, most of the industrial canteens are not run departmentally inasmuch as the provision of canteen facility is only a welfare facility and it is not related to the core activity of the Industry. Some of the workers may not even utilize the facility of canteen and consume food, which they personally bring from their houses. Some of the workers may not even utilize the facility of canteen and consume food, which they personally bring from their houses. The establishment and running of a canteen is, therefore, distinct from the principal, core industrial activity of a factory. Large number of industries, be it large scale, medium scale or small scale are closing down their manufacturing units all over the country including Karnataka, being unable to face competition both from within the country and from abroad. Further due to compulsion of cost effectiveness, a number of industries are reducing the expenses and cutting jobs, as a result in the manufacturing sector jobs have drastically come down. After initiating liberalization, the Government is seriously endeavoring to bring labour law reforms. The Union Finance Minister has mooted the idea of allowing the engagement of contract labour both in core and non-core activities. This is with a view to allow the industries to concentrate on their core-competencies which is required for the survival and growth of the industry. Thereafter, they have traversed all the allegations made in the Writ Petitions para-wise and they prayed that the Writ Petitions be dismissed. 13. The learned single Judge, after considering the rival contentions held that a Government can issue a notification rescinding its earlier notification under Section 10 read with Section 21 of the General Clauses Act but it has to be done in a manner acceptable in law. However, the Government has not taken into consideration the relevant factors, thus affecting the decision making process. They failed to see the earlier proceedings, judicial approval by the highest Court, the object of the Act, impact of Section 10(2), divided opinion, etc., while arriving at a decision. On the other hand, they took into consideration the divided opinion and the discussion the Secretary had with the Chief Minister. That by itself could not be acceptable factor in the decision making process. Law is well settled that if relevant factors are omitted and if irrelevant facts are taken into consideration, the decision making process is said to suffer in terms of the judgment of the Supreme Court. Therefore, he held that the impugned notification runs contrary to the very object of the Act and the said notification requires to be set aside and accordingly he set aside the said notification. 14. Therefore, he held that the impugned notification runs contrary to the very object of the Act and the said notification requires to be set aside and accordingly he set aside the said notification. 14. In so far as the regularization of the contract labour, the learned single Judge held that, the statutory canteens contract workers stand on a different footing compared to other contract labourers. They are entitled for regularization. He held that by quashing the notification dated 1.8.2001, the earlier notification dated 11.4.1997 comes into operation. The effect is that the contract labourers working in statutory canteens are entitled to be regularized by the respective managements in terms of the impugned order. Aggrieved by the said order of the learned single Judge these appeals are filed. 15. Sri. K. Kasturi, learned Senior Counsel appearing for the appellants, assailing the impugned order contended that, when the Government has the power to issue a notification under Section 10 of the Act, in the absence of any specific provision prohibiting rescission of such notification, power to issue notification includes power to rescind the notification issued and therefore the notification issued by the Government, which is impugned in this proceedings is valid and legal, notwithstanding the fact that the said notification was the subject matter of attack before this Court and the Apex Court and both the Courts have up held the notification. The said notification came to be issued in view of the changed circumstances, as made out by these appellants and also in view of the policy decision of the Government. Therefore, when once the Government has taken a conscious decision after following the procedure prescribed in law, this Court in its jurisdiction under Article 226 of the Constitution cannot sit in judgment over the merits of that decision. It is a Policy decision of the Government. Secondly he contended that even if the impugned notification is quashed, it does not follow that the earlier notification stands restored. The finding recorded by the learned Single Judge that consequent to the quashing of the impugned notification, the earlier notification stands restored is contrary to law and contrary to the judgment of the Constitution Bench of the Apex Court. Secondly he contended that even if the impugned notification is quashed, it does not follow that the earlier notification stands restored. The finding recorded by the learned Single Judge that consequent to the quashing of the impugned notification, the earlier notification stands restored is contrary to law and contrary to the judgment of the Constitution Bench of the Apex Court. He further contended that under no circumstances the learned Single Judge could have declared that all workers employed in these canteens would become regular employees of the management by virtue of the notification under Section 10 of the Act. If on the date of issue of notification, the status of these workmen is that of a contract labour, in the first notification issued, no right is conferred on them to make them permanent employees of the factory. The management is prohibited from employing contract labourers. It does not follow that if contract labourers are employed in these canteens, by virtues of the notification, they would become permanent employees. Therefore, neither by virtue of the first notification nor by quashing of the second notification, did they acquire any right to be employed as regular employees in the establishment. They also did not become deemed employees by operation of any fiction of law. On the contrary, in view of the law declared by the Constitution Bench of the Apex Court, it is clear that they cannot claim such status. The learned Single Judge after the judgment of the Constitution Bench could not have issued either declaration or direction to that effect. Therefore, the said declaration and direction runs counter to the judgment of the Apex Court and cannot be sustained. 16. Sri. Vijayashankar, the learned Senior Counsel appearing for some of the appellants contended that the findings recorded by the learned Single Judge that there is no proper application of mind and relevant factors are not taken into consideration while issuing the impugned Notification is contrary to the material on record. He contended that at the request of these appellants requesting the Government to rescind the earlier Notification, the Government in terms of Section 10(1) of the Act, sought opinion of the State Board. He contended that at the request of these appellants requesting the Government to rescind the earlier Notification, the Government in terms of Section 10(1) of the Act, sought opinion of the State Board. On such request being made each one of the members of the Board expressed their opinion and thereafter as the majority of the members were of the view that the earlier Notification is to be rescinded, they recommended to the Government accordingly. Even at the Government level discussions took place. The concerned Minister was against the rescinding of the Notification. Even the Labour Commissioner was against the rescinding of the earlier Notification. However, the Chief Minister on consideration of all views was of the view that the matter requires consideration and thereafter a conscious decision was taken to rescind the earlier Notification. The discussions and the reasons are found in the proceedings of Advisory Committee and the notes maintained and the records as extracted by the learned Single Judge in his Judgment after looking into the original records of the Government. It clearly demonstrates the application of mind to all the relevant factors and a conscious decision being taken in the interest of the industries and the public at large and therefore he submits that the contention that the relevant factors such as the Judgment of the Apex Court and this Court, the fact that the Notification was upheld after being challenged, is not taken into consideration is erroneous. Secondly, he contended that even if the subsequent Notification rescinding the earlier Notification is held to be illegal, void and quashed, it would not have the effect of reviving the earlier Notification. In support of his contentions he relied on several Judgments of the Apex Court which have categorically held that if an earlier rule is repealed and the said rule is substituted by new rule and the new rule is struck down as unconstitutional or on any other ground it would not result in revival of the earlier rule. What applies to the rules equally applies to the case of Notification though the General Clauses Act specifically applies only to enactments. He also submitted that this Notification is in the nature of a delegated legislation or conditional legislation. What applies to the rules equally applies to the case of Notification though the General Clauses Act specifically applies only to enactments. He also submitted that this Notification is in the nature of a delegated legislation or conditional legislation. In fact in the earlier round of litigation, this Court has held that Section 10(2) of the Act is in the nature of conditional legislation and therefore though the impugned Notification by itself is not a law or a rule, by virtue of the same being issued in pursuance of the power conferred on the State by the State Legislature, it has to be construed as a conditional legislation or delegated legislation. Therefore the General Clauses Act and the aforesaid Judgments apply. In the event if subsequent Notification is quashed, it will not have the effect of reviving the earlier Notification. To that extent the learned Single Judge is wrong and his finding is not supported by any statutory provision or any reasoning. Therefore he submits that the impugned Notification is liable to be quashed. 17. Sri K. Subba Rao, learned Senior Counsel appearing for the respondents submitted that the Act of 1970 is a welfare measure meant for the workmen, in particular, keeping their health in mind, to provide for hygienic and well prepared food. Section 46 of the Factories Act provide for extension of the said benefit to the workmen. Though running of a canteen is not the primary or core function of the employer, certainly it is incidental to the said work and when it is statutorily provided in the Factories Act, the manufacturing activity includes the running of a canteen. When the Government being satisfied about he legal requirement prescribed under Section 10(2) of the Act, passed an order abolishing contract labour, when the said order being given effect to, without experiencing the defects in giving effect to the said order, on a mere representation of the employers, they could not have rescinded the earlier notification prohibiting contract employment in canteens. The power to abolish contract labour is statutorily provided under Section 10(1) of the Act. Once such power is exercised just to achieve a particular object, the Government has no power to rescind the notification as it runs contrary to the object of the Act under which that power is exercised. 18. The power to abolish contract labour is statutorily provided under Section 10(1) of the Act. Once such power is exercised just to achieve a particular object, the Government has no power to rescind the notification as it runs contrary to the object of the Act under which that power is exercised. 18. Sri M.C. Narasimhan, the learned Senior counsel appearing for the respondents contended that the Notification abolishing the contract labour was issued on 11-4-1997. Though the said Notification was challenged before this Court there was no interim order of stay granted by this Court. However, the managements did not obey the said Notification. They continued to employ the contract labour, even after abolition. After the dismissal of the writ petition when the matter was agitated before the Apex Court there was an interim order of stay. However, after the Special Leave Petition came to be dismissed by the Supreme Court instead of obeying the Notification, the management approached the Government. In the meanwhile, the Trade Unions had filed an application before the Government for permission to prosecute the management for resorting to Unfair Labour Practices and not obeying the Notification issued by the Government. It is in this context the Government instead of taking action against the management issued the impugned Notification. Therefore a clear case of malice in law is made out. Therefore contends that the management has defied the law, and therefore they are not entitled to any relief at the hands of this Court. Secondly, he contended that as it is clear from Section 10(2) of the Act, that the perennial nature of employment is the decisive factor which should weigh in the minds of the State to abolish the contract labour in a particular industry. Explanation to the said sub-section makes it clear that if a question arises, if any process or operation or other work is of perennial nature, the decision of the appropriate Government thereon shall be final. Therefore once when the Government is being convinced that the nature of the activity in a canteen or factory is of perennial nature and they have taken a conscious decision to abolish the contract labour in such canteens the said order is final and it cannot be the subject matter of any review. Therefore once when the Government is being convinced that the nature of the activity in a canteen or factory is of perennial nature and they have taken a conscious decision to abolish the contract labour in such canteens the said order is final and it cannot be the subject matter of any review. He further pointed out that this Act has an overriding effect by virtue of Section 30 which contains non-obstante Clause and declares that all bye-laws and agreements inconsistent with this Act would not affect the provisions of this Act. Therefore it is a self contained enactment and invoking the provisions of the General Clauses Act, in the absence of a specific provision for rescinding the Notifications issued under Section 10(1) is not proper and therefore the impugned Notification issued is one without the authority of law and liable to be struck down on that short ground. He also contended that the material on record discloses the question of rescinding of the earlier Notification was discussed in the expert body constituted for the said purpose. It was not a majority decision. At any rate the decision taken cannot be the decision of the Government. It is only persuasive in nature and thereafter the Government has to take a decision. However, the material on record discloses that the concerned Minister, the Labour Secretary were opposed to rescinding the earlier Notification. Therefore there is nothing on record to show the conscious decision taken by the majority. Whether the said decision was supported by any satisfactory material on record? It is arbitrary and rightly the learned Single Judge has set aside the same. He also submitted that it is not correct to say that with the abolition of contract labour, the contract labourers employed by the contractor would not have any right at all. Whether the said decision was supported by any satisfactory material on record? It is arbitrary and rightly the learned Single Judge has set aside the same. He also submitted that it is not correct to say that with the abolition of contract labour, the contract labourers employed by the contractor would not have any right at all. In sub-para (6) of para 125, in the case of SAIL’s case, the Constitution Bench has categorically held that if contract labour is abolished in a particular establishment, if the principal employer intends to employ regular workmen in place of contract labourers who were discharging the functions, he shall give preference to the erstwhile contract labour, if otherwise found suitable and if necessary by relaxing the condition as to maximum age appropriately, taking into consideration the age of the workers at the time of their initial employment by the contractor and also relaxing the condition as to academic qualifications other than technical qualifications. In other words, the erstwhile contract labourers who were working in the establishment, otherwise satisfying the other qualifications, are entitled to be absorbed in the services of the principal employer. Therefore, if such a right is to be taken away by issuing a notification rescinding the contract, it cannot be said that it is not necessary to hear him before the said notification. 19. In view of the aforesaid facts and the rival contentions urged, the points that arise for our consideration in these appeals are as under:- 1) Whether the Government has the power to rescind the earlier notification dated 11.4.1997 which has been upheld by the Apex Court? 2) If it is held that the State has the power, then, whether the said power is exercised in accordance with law? 3) Whether the learned single Judge was justified in declaring that all persons who are employed as contract labourers in statutory canteens would become the employees of the principal employer by virtue of the notification dated 11.4.1997? 4) If the subsequent notification dated 1.8.2001 rescinding the earlier notification dated 11.4.1997 is held to be invalid and set aside would it not have the effect of reviving the earlier notification? POINT No.1-POWER TO RESCIND 20. 4) If the subsequent notification dated 1.8.2001 rescinding the earlier notification dated 11.4.1997 is held to be invalid and set aside would it not have the effect of reviving the earlier notification? POINT No.1-POWER TO RESCIND 20. In order to regulate the employment of contract labourers in certain establishments and to provide for its prohibition in certain circumstances and for matters connected there with, the Parliament enacted Contract Labour (Regulation and Abolition) Act, 1970 by Act No.37 of 1970, by issuing a notification in the official gazette, for short, hereinafter referred to as the ‘Act’. Section 10 of the said Act prohibits employment of contract labour. The said provision reads as under: “10. Prohibition of employment of contract labour.- (1) Notwithstanding anything contained in this Act, the appropriate Government may, after consultation with the Central Board or, as the case may be, a State Board, prohibit, by notification in the Official Gazette, employment of contract labour in any process, operation or other work in any establishment. (2) Before issuing any notification under sub-Section (1) in relation to an establishment, the appropriate Government shall have regard to the conditions of work and benefits provided for the contract labour in that establishment and other relevant factors, such as- (a) whether the process, operating or other work is incidental to, or necessary for the industry, trade, business, manufacture or occupation that is carried on in the establishment; (b) whether it is of perennial nature, that is to say, it is of sufficient duration having regard to the nature of industry, trade, business, manufacture or occupation carried on in that establishment. (c) whether it is done ordinarily through regular workmen in that establishment or an establishment similar thereto; (d) whether it is sufficient to employ considerable number of whole-time workmen. Explanation.- 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.” 21. It is in pursuance of the said provision, the Government of Karnataka issued notification dated 11th April 1997 bearing No.KA-E6LWA 97, which was duly published in the Official Gazette on 11th April 1997, prohibiting employment of contract labour in the canteen (Industrial Canteens) in Factories employing 250 workers and above in the State of Karnataka. It is in pursuance of the said provision, the Government of Karnataka issued notification dated 11th April 1997 bearing No.KA-E6LWA 97, which was duly published in the Official Gazette on 11th April 1997, prohibiting employment of contract labour in the canteen (Industrial Canteens) in Factories employing 250 workers and above in the State of Karnataka. A copy of the said notification is as under: GAZETTE NOTIFICATION Bangalore dated 11-4-1997 LABOUR SECRETARIAT NOTIFICATION No.KA-E 6 LW A 97, Bangalore, dated 11th April 1997 Whereas, the Government had referred the issue of prohibition of employment of Contract Labour in “Canteens (Industrial Canteens)” in Factories in the State of Karnataka to Karnataka State Contract Labour Advisory Board. And whereas the Karnataka State Contract Labour Advisory Board after considering all relevant factors, advised the Government that employment of contract Labour in “Canteen (Industrial Canteens)” in the Factories employing 250 workers and above is to be prohibited. Now, in exercise of the power conferred by sub-section (1) of Section 10 of the Contract Labour (Regulation and Abolition) Act, 1970 (Central Act 37 of 1970) the Government of Karnataka having regard to the conditions of work and benefits provided for the Contract Labour and other relevant factors such as those referred to in clauses (a) to (d) (both inclusive) of sub-section (2) of the said section 10, hereby prohibits with effect from the date of publication of this Notification in the official gazette, employment of Contract Labour in the “Canteen (industrial/Canteens)” in Factories employing 250 workers and above in the State of Karnataka. By Order and in the name of Governor of Karnataka S R Patil Under Secretary to Government Labour Department” 22. The said notification came to be challenged before this Court in W.P.Nos.28677-78/01. On reference by the learned Single Judge, the said writ petition was heard by the Division Bench and by order dated 13.04.2005, the notification was up held. Consequently, the writ petition came to be dismissed. Aggrieved by the said order, the management of all these factories preferred an appeal to the Apex Court. The Supreme Court in the case of BARAT FRITZ WERNER LTD Vs. STATE OF KARNATAKA [ (2001) 4 SCC 498 ], upheld the judgment of this Court and dismissed the appeals. The Apex Court has observed in the said judgment that: “The Factories Act has been enacted to regulate labour in factories. The Supreme Court in the case of BARAT FRITZ WERNER LTD Vs. STATE OF KARNATAKA [ (2001) 4 SCC 498 ], upheld the judgment of this Court and dismissed the appeals. The Apex Court has observed in the said judgment that: “The Factories Act has been enacted to regulate labour in factories. The main object of that is to ensure adequate safety measures and to promote the health and welfare of the workers employed in factories initiating various measures from time to time to ensure that adequate standards of safety, health and welfare and achieved at all work places. In particular, in the context of the need to secure maximum production and productivity an appropriate work culture conducive to the safety, health and happiness of workers has to be evolved in the factories. To achieve these objects more effectively, this enactment has been made. In fact, by amendments to the term ‘worker’ so as to include within its meaning contract labour employed in any manufacturing process, improvement of the provisions in regard to the safety and appointment of safety officers, reduction of the minimum number of women employees have been made. The said enactment was intended for the regulation in such a manner as to benefit the welfare of the workers. Therefore the objective of the Act is to confine the applicability of the Act only to those workers on the premises of the factory as factory workmen and not working in the industry as such. The industry or the establishment which runs the factory is a much larger expression and it includes not merely the workmen in the factory but others also. In that background various provisions have been made in the Factories Act for the welfare of those who work in the factory and it became necessary to limit the number of workers who would be covered by the Factories Act. Therefore the definition of ‘worker’ meant to relate to a factory where a manufacturing process activity is carried on, as otherwise it does not constitute a factory. The definition of “worker” cannot be read outside the context of the factories as defined under the Factories Act. Therefore the definition of ‘worker’ meant to relate to a factory where a manufacturing process activity is carried on, as otherwise it does not constitute a factory. The definition of “worker” cannot be read outside the context of the factories as defined under the Factories Act. But if this definition is applied in the manner suggested by the learned counsel for the petitioners, it would be doubtful whether those in the administration or the accounts department or the stores or other personnel like a Welfare Officer in the establishment which runs the factory can at all be called the employees of the establishment or not. The kind of definition sought to be relied upon by the learned counsel for the petitioners to be read beyond the statute would lead to absurd results. Therefore, we do not think we can subscribe to such a submission. What is to be seen in a case of this nature is the definition as given in the Act. The worker therein is defined in a very broad way. A workman would mean any person employed in or in connection with the work of any establishment whether he is hired with or without the knowledge of the principal employer. We may also notice that even where the Factories Act is not applicable to an establishment but canteen facility is provided as a condition of service, this Court has in several cases examined the question from various angles including the conditions referred to in Section 10 of the Act. If the arguments of the learned counsel were to be accepted, then all those cases where the question of considering a canteen worker as falling within the ambit of worker under the Factories Act would not arise for that enactment is not applicable and would form an officer class of establishments to which the Act would be applicable. That is not the intention of the act at all. This Court having found that it is one of the incidental activities of the establishment, which is necessary for running it, and after ascertaining its perennial or ephemeral nature, done ordinarily through regular workers or otherwise and necessarily employing whole-time employees have all been considered and held that these employees are regular employees of the establishment without reference to the Act. It cannot be disputed that the provision for canteen is a welfare measure and necessarily a requirement to run the same is incidental to the main activity of the establishment particularly when it becomes a condition of service. Viewed from this angle, the suggestion to examine the definition of “worker” in the Factories Act and to find out the necessity to have such worker to run the establishment will be an academic exercise in semantics without any practical effect. Therefore, the argument of Shri Pai that the canteen workmen are not engaged directly as workers in a factory and therefore we should treat such workmen as workers engaged in the industry will not be correct but plainly fallacious.” 23. Thereafter representations were made by the appellants in these cases to the Government of Karnataka bringing to their notice the effect and consequences of giving effect to the notification dated 11.04.1997, which was up held by the Apex Court. Thereafter, after taking into consideration the contentions urged by these appellants and after following the procedure prescribed, the Government of Karnataka issued a notification dated 1st August 2001, which is duly published in the Official Gazette on 04.08.2001 rescinding the notification dated 11.04.1997 with immediate effect. Which reads as under: “LABOUR SECRETARIAT Notification No.LD 15 LWA 2001, Bangalore Dated 1st August, 2001 In exercise of powers conferred by Sub-section (1) of Section 10 of the Contract Labour (Regulation and Abolition) Act, 1970 (Central Act 37 of 1970) read with section 21 of the General Clauses Act, 1987 (Central Act 10 of 1987) the Government of Karnataka hereby rescinds the notification No. KAE 6 LWA 97, dated 11-4-1997 with immediate effect. By order and in the name of the Government of Karnataka B H Umapathy Under Secretary to Government Labour Department” 24. Aggrieved by the said notification, the Trade Unions of all these appellants preferred writ petition before this Court in W.P.Nos.28677-678/012 and other connected matters, challenging the notification and also sought for a declaration that by virtue of the earlier notification and consequent abolition of contract labour in these canteens, persons who are already employed and working in these canteens as contract labourers are deemed to be workers in the factory. The learned Single Judge who heard these matters held that though the Government has the power to issue notification rescinding earlier notification, while issuing the rescinding notification, as they have not referred to the State policy or with regard to the relevant factors in the notification, the said power is not exercised properly. The said power cannot be exercised at the whims and fancies of the Government. The matter is governed by statute and statute provides for the method and manner in which it can be done. Otherwise the Government would be taking an arbitrary decision of rescinding a notification without considering all the relevant factors in terms of the statute. Law is fairly well settled that even in administrative decision, the decision maker has to take note of all relevant factors in the decision making process and not to take irrelevant factors while arriving at a decision. 25. After going through the records made available by the Government showing the process undergone before taking the decision, the learned Single Judge was of the view that though the Court cannot interfere with the policy decisions of the Government, certainly it can interfere with the said order if the decision making process is contrary to the stature or law. In his view, as the procedure prescribed in law has not been complied with, he held that the notification rescinding the earlier notification is vitiated and accordingly he quashed the said notification. Consequently he held that the earlier notification dated 11.04.1997 stood revived and he further granted a declaration that statutory canteen employees are ordered to be regularized by the respective management in terms of his order. However, it was made clear that if there is any factual dispute other than regularisation in respect of statutory canteen employees, then parties have to approach an Industrial Adjudicator by way of conciliation in terms of the Industrial Disputes Act both for regularisation and for other benefits. 26. From the perusal of Section 10 of the Act it is clear there is no express power under the said provision which empowers the State Government to withdraw, rescind or revoke a notification issued under Section 10(1) of the Act. Similarly, there is no provision in the scheme of the Act providing for such express provision. 26. From the perusal of Section 10 of the Act it is clear there is no express power under the said provision which empowers the State Government to withdraw, rescind or revoke a notification issued under Section 10(1) of the Act. Similarly, there is no provision in the scheme of the Act providing for such express provision. In fact there is no indication of any such power being vested with the Government under any of the provisions of the Act. Therefore, the State Government has invoked Section 21 of the General Clauses Act, 1897 to rescind the earlier notification read with Section 10(1) of the Act. Section 21 of the General Clauses Act reads as under:- “21. Power to issue, to include power to add to, amend, vary or rescind notification, orders, rules or bye-laws.- Where, by any Central Act or Regulations, a power to issue any notifications, orders, rules, or bye-laws is conferred, then that power includes a power, exercisable in the like manner and subject to the like sanction and conditions if any, to add to, amend, vary or rescind any notifications, orders, rules or bye-laws so issued.” 27. Explaining the purport and object of the General Clauses Act in the case of CHIEF INSPECTOR OF MINES AND ANOTHER vs KARAM CHAND THAPAR [AIR 1961 SC 835], the Apex Court held as under:- “12. In attempting to answer this question, it will be profitable to remember that the purpose of the General Clauses Act is to place in one single statute different provisions as regards interpretations of words and legal principles which would otherwise have to be specified separately in many different acts and regulations. Whatever the General Clauses Act says, whether as regard the meanings of words or as regards legal principles, has to be read into every statute to which it applies…..” 28. Whatever the General Clauses Act says, whether as regard the meanings of words or as regards legal principles, has to be read into every statute to which it applies…..” 28. A Full Bench of the Gauhati High Court in the case of GAUHATI TRANSPORT ASSOCIATION AND ANOTHER vs THE STATE OF ASSAM AND OTHERS [AIR 1975 GAU 33] dealing with the power of the Government to issue notification interpreting Section 21 of the General Clauses Act held as under:- “Section 21 of the General Clauses Act, 1897 embodies a rule of construction and the question whether or not it applied to the provisions of a particular statute would depend on the subject-manner, context and the effect of the relevant provisions of the said statute. It would be necessary to examine carefully the scheme of the Act, its object and all its relevant and material provisions before deciding whether by the application of the rule of construction enunciated by S.21, it can be said that the power conferred under that section is vested in the authority by necessary implication. 29. However, it was pointed out relying on a judgment of the Apex Court in the case of STATE OF BIHAR Vs. D.N. GANGULY [ AIR 1958 SC 1018 ] where the Apex Court has held that the rule of construction enunciated by Section 21 of the General Clauses Act in so far as it refers to the power of rescinding or canceling the original order cannot be invoked in respect of the provisions of Section 10(1) of the Industrial Disputes Act. The said finding is based on the following reasoning which is contained in paras 10, 11, 15 and 21 which read as under:- “10. It is clear that the policy of the Act is to secure and preserve good relations between the employers and their workmen and to maintain industrial peace and harmony. It is with this object that S.3 of the act contemplates the establishment of the Works committees whose duty it is to promote measures for securing and preserving amity and good relations between the employers and the workmen. If the Works Committee is unable to settle the disputes arising between the employer and his workmen, conciliation officers and the boards of conciliation offer assistance to the parties to settle their disputes. If the Works Committee is unable to settle the disputes arising between the employer and his workmen, conciliation officers and the boards of conciliation offer assistance to the parties to settle their disputes. Sections 3, 4, 5, 12 and 13 refer to the working of this machinery contemplated by the Act. It is only where the conciliation machinery fails to bring about settlement between the parties that the Act contemplates compulsory adjudication of the industrial disputes by labour courts and tribunals as the last alternative. The appropriate government is authorised to constitute labour courts and tribunals under the subject to the provisions of section 7 and Section 7-A respectively. It is in respect of the compulsory adjudication that under Section 10, the appropriate government is given wide discretion to decide whether or not the dispute between the employer and his employees should be referred to the board, court or tribunal. Section 10(1) (d) provides inter alia that where the appropriate government is of opinion that any industrial dispute exits or is apprehended, it may at any time, by order in writing refer the dispute to a tribunal for adjudication. The condition precedent for the reference to the industrial tribunal is that the appropriate government must be satisfied that an industrial dispute exists or is apprehended. It is not in every case where the parties allege the existence of an industrial dispute that a reference would be made under Section 10(1): it is only where the test of subjective satisfaction of the appropriate government is satisfied that the reference can be made. Thus it is clear that the appropriate government is given an important voice in the matter of permitting industrial dispute to seek adjudication by reference to the industrial tribunal. But once an order in writing is made by the appropriate government referring an industrial dispute to the tribunal for adjudication under Section 10(1), proceedings before the Tribunal are deemed to have commenced and they are deemed to have concluded on the day on which the award made by the tribunal becomes enforceable under Section 17A. This is the effect of S.20(3) of the Act. This provision shows that after the dispute is referred to the tribunal, during the continuance of the reference proceedings, it is the tribunal which is seized of the dispute and which can exercise jurisdiction in respect of it. This is the effect of S.20(3) of the Act. This provision shows that after the dispute is referred to the tribunal, during the continuance of the reference proceedings, it is the tribunal which is seized of the dispute and which can exercise jurisdiction in respect of it. The appropriate government can act in respect of a reference pending adjudication before a tribunal only under section 10(5) of the Act, which authorises it to add other parties to the pending dispute subject to the conditions mentioned in the said provision. It would therefore be reasonable to hold that except for cases falling under Section 10(5) the appropriate government stands outside the reference proceedings, which are under the control and jurisdiction of the tribunal itself. Even after the award is made it is obligatory on the appropriate government under Section 17(1) to publish the said award within a period of thirty days from the date of its receipt by the appropriate government. Sub-section (2) of Section 17 says that subject to the provisions of Section 17A, the award published under sub-s.(1) of section 17 shall be final and shall not be called in question by any court in any manner whatsoever. Section 19(3) provides that an award shall, subject to the other provisions of Section 19, remain in operation for a period of one year from the date on which it becomes enforceable under Section 17A. It is true that Ss. 17A and 19 confer on the appropriate government powers to modify the provisions of the award or limit the period of its operation but it is unnecessary to refer to these provisions in detail. The scheme of the provisions in Chapters III and IV of the Act would thus appear to be to leave the reference proceedings exclusively within the jurisdiction of the tribunals constituted under the Act and to make the awards of such tribunals binding between the parties, subject to the special powers conferred on the appropriate government under Ss.17A and 19. The appropriate government undoubtedly has the initiative in the matter. It is only where it makes an order in writing referring an industrial dispute to the adjudication of the tribunal that the reference proceedings can commence; but the scheme of the relevant provisions would prima facie seem to be inconsistent with any power in the appropriate government to cancel the reference made under Section 10(1). 11. It is only where it makes an order in writing referring an industrial dispute to the adjudication of the tribunal that the reference proceedings can commence; but the scheme of the relevant provisions would prima facie seem to be inconsistent with any power in the appropriate government to cancel the reference made under Section 10(1). 11. The power claimed by the appellant to cancel a reference made under Section 10(1) seems also to be inconsistent with some other provisions of the Act. The proviso to Section 10 lays down that the appropriate government shall refer a dispute relating to the public utility service when a notice under Section 22 has been given, unless it considers that the notice has been frivolously or vexatiously given, or that it would be inexpedient to refer the dispute. This proviso indicates that in regard to a dispute relating to public utility concerns normally the government is expected to refer it for adjudication. In such a case if the government makes the reference it is difficult to appreciate that it would be open to the Government pending the proceedings of the said reference before the Industrial Tribunal to cancel the reference and supersede its original order in that behalf. Section 10, sub-s. (2) deals with the case where the parties to an industrial dispute apply to the appropriate government in the prescribed manner, either jointly or separately, for a reference of the dispute to the appropriate authority, and it provides that in such a case if the appropriate government is satisfied that the persons applying represent the majority of each party it shall make the reference accordingly. In such a case all that the government has to satisfy itself about is the fact that the demand for reference is made by the majority of each party, and once this condition is satisfied, the government is under obligation to refer the dispute for industrial adjudication. It is inconceivable that in such a case the government can claim power to cancel a reference made under Section 10(2). Indeed in the course of his arguments, Dr. Bannerjee fairly conceded that it would be difficult to sustain a claim for an implied power of cancellation in respect of a reference made under S.10(2). 15. It is inconceivable that in such a case the government can claim power to cancel a reference made under Section 10(2). Indeed in the course of his arguments, Dr. Bannerjee fairly conceded that it would be difficult to sustain a claim for an implied power of cancellation in respect of a reference made under S.10(2). 15. Apart from these provisions of the act, on general principles it seems rather difficult to accept the argument that the appropriate government should have an implied power to cancel its own order made under S.10(1). If on the representation made by the employer or his workmen the appropriate government considers the matter fully and reaches the conclusion that an industrial dispute exists or is apprehended and then makes the reference under S.10(1), there appears to be no reason or principle to support the contention that it has an implied power to cancel its order and put an end to the reference proceedings initiated by itself. In dealing with this question it is important to bear in mind that power to cancel its order made under S.10(), which the appellant claims, is an absolute power; it is not as if the power to cancel implies the obligation to make another reference in respect of the dispute in question; it is not as if the exercise of the power is subject to the condition that reasons for cancellation of the order should be set out. If the power claimed by the appellant is conceded to the appropriate government it would be open to the appropriate government to terminate the proceedings before the tribunal at any stage and not to refer the industrial dispute to any other industrial tribunal at all. The discretion given to the appropriate government under S.10(1) in the matter of referring industrial disputes to industrial tribunals is very wide; but it seems the power to cancel which is claimed is wider still; and it is claimed by implication on the strength of S.21 of the General Clauses Act. We have no hesitation in holding that the rule of construction enunciated by S.21 of the General Clauses Act in so far as it refers to the power of rescinding or canceling the original order cannot be invoked in respect of the provisions of S.10(1) of the Industrial Disputes Act. 21. We have no hesitation in holding that the rule of construction enunciated by S.21 of the General Clauses Act in so far as it refers to the power of rescinding or canceling the original order cannot be invoked in respect of the provisions of S.10(1) of the Industrial Disputes Act. 21. The last case to which reference must be made is the decision of Rajamannar C.J. and Venkatarama Aiyyar J. in South India Estate Labour Relations Organization v. State of Madras, (S) AIR 1955 Mad 45 (F). In this case the Madras government had purported to amend the reference made by it under S.10 of the Act and the validity of this amendment was challenged before the court. This objection was repelled on the ground that it would be open to the government to make an independent reference concerning any matter not covered by the previous reference. That it took the form of an amendment to the existing reference and not additional reference is a mere technicality which does not merit any interference in the writ proceedings. The objection was one of form and was without substance. It would thus appear that the question before the Court was whether the appropriate government can amend the reference originally made under S.10 so far as the new matters not covered by the original reference are concerned, and the court held that what the appropriate government could have achieved by making an independent reference, it sought to do by amending the original reference itself. This decision would not assist the appellant because in the present case we are not considering the power of the government to amend, or add to, a reference made under S.10(1). Our present decision is confine to the narrow question as to whether an order of reference made by the appropriate government under S.10(1) can be subsequently cancelled or superseded by it.” 30. Reliance is also placed on the judgment of the Apex Court in the case of LACHMI NARAIN ETC. ETC., Vs. UNION OF INDIA [ AIR 1976 SC 714 ], where it has been held as under:- “59. The power given by S.2 exhausts itself on extension of the enactment; it cannot be exercised repeatedly or subsequently to such extension. It can be exercised only once, simultaneously with the extension of the enactment. This is one dimension of the statutory limits which circumscribe the power. The power given by S.2 exhausts itself on extension of the enactment; it cannot be exercised repeatedly or subsequently to such extension. It can be exercised only once, simultaneously with the extension of the enactment. This is one dimension of the statutory limits which circumscribe the power. The second is that the power cannot be used for a purpose other than that of extension. In the exercise of this power, only such “restrictions and modifications” can be validly engrafted in the enactment sought to be extended, which are necessary to bring it into operation and effect in the Union Territory. “Modifications” which are not necessary for, or ancillary and subservient to the purpose of extension, are not permissible. And, only such “modifications” can be legitimately necessary for such purpose as are required to adjust, adapt and make the enactment suitable to the peculiar local conditions of the Union Territory for carrying it into operation and effect. In the context of the section, the words “restrictions and modifications” do not cover such alterations as involve a change in any essential feature, of the enactment or the legislative policy built into it. This is the third dimension of the limits that circumscribe the power. 60. It is true that the words “such restrictions and modifications as it thinks fit”, if construed literally and in isolation, appear to give unfettered power of amending and modifying the enactment sought to be extended. Such a wide construction must be eschewed lest the very validity of the section becomes vulnerable on account of the vice of excessive delegation. Moreover, such a construction would be repugnant to the context and the context of the section, read as a whole, and the statutory limits and conditions attaching to the exercise of the power. We must, therefore, confine the scope of the words “restrictions and modifications” to alterations of such a character which keep the in built policy, essence and substance of the enactment sought to be extended, intact, and introduce only such peripheral or insubstantial changes which are appropriate and necessary to adapt and adjust it to the local conditions of the Union Territory. The impugned notification, D/-7-12-1957, transgresses the limits which circumscribe the scope and exercise of the power conferred by Section 2 of the Laws Act, at least, in two respects: 61. The impugned notification, D/-7-12-1957, transgresses the limits which circumscribe the scope and exercise of the power conferred by Section 2 of the Laws Act, at least, in two respects: 61. Firstly, the power has not been exercised contemporaneously with the extension or for the purposes of the extension of the Bengal Act to Delhi. The power given by Section 2 of the Laws Act had exhausted itself when the Bengal Act was extended, with some alterations, to Delhi by Notification, dated 28-4-1951. The impugned notification has been issued on 7-12-1957, more than 6½ years after the extension. 62. There is nothing in the opinion of this Court rendered in Re: Delhi Laws Act, 1956 SCR 747 = AIR 1951 SC 332 ) (supra) to support Mr. B. Sen’s contention that the power given by Section 2 could be validly exercised within one year after the extension. What appears in the opinion of Fazl Ali J. at P.850 (of SCR) = (at p.360-361 of AIR) is merely a quotation from the report of the Committee on Minister’s Powers which considered the propriety of the legislative practice of inserting a “removal of Difficulty Clause” in Acts of British Parliament, empowering the executive to modify the Act itself so far as necessary for bringing it into operation. This devise was adversely commented upon. While some critics conceded that this device is “partly a draftsman’s insurance policy in case he has overlooked something” (e.g. Sir Thomas Carr, page 44 of his book “Concerning English Administrative Law”), others frowned upon it, and nick-named it as” “Henry VIII Clause” after the British Monarch who was a notorious personification of absolute despotism. It was in this perspective that the Committee on Minister’s Powers examined this practice and recommended: “….. first, that the adoption of such a clause ought on each occasion when it is on the initiative of the Minister in charge of the Bill, proposed to Parliament to be justified by him up to the essential. It can only be essential for the limited purpose of bringing an Act into operations and it should accordingly be in most precise language restricted to those purely machinery arrangements vitally requisite for that purpose; and the clause should always contain a maximum time-limit of one year after which the power should lapse.” 31. It can only be essential for the limited purpose of bringing an Act into operations and it should accordingly be in most precise language restricted to those purely machinery arrangements vitally requisite for that purpose; and the clause should always contain a maximum time-limit of one year after which the power should lapse.” 31. Yet another judgment on which reliance is placed is the judgment of the Division Bench of this Court in the case of THE TAHSILDAR AND RETURNING OFFICER AGRICULTURAL PRODUCE MARKET COMMITTEE BHALKI Vs. SHIVAJI RAO AND OTHERS [AIR 1976 KA 233], where it was held as under” “4. The general principle of law is that once the process of election is started, the same cannot be interrupted except by an order of Court. The result of the action of the appellant-Tahsildar is to interrupt the process of election after the nominations had been field and accepted. If the principle of Section 21 of the General Clauses Act can be availed of by Returning Officers then it is likely to be seriously abused wherever the persons in authority, find that their candidates are not likely to win on their nominations are not valid. As at present advised we are of the opinion that unless there is an express power conferred by the Statute, the Tahsildar has no power to cancel the notification once he has issued a calendar of events and pursuant to the same, nominations have been filed and accepted.” 32. The Apex Court in the case of STATE OF MADHYA PRADESH vs AJAY SINGH AND OTHERS [ 1993 (1) SCC 302 ] interpreting Section 21 of the General Clauses Act held as under:- 26. It is common ground before us that Section 21 of the General Clauses Act can be invoked only if, and to the extent, if any, the context and the scheme of the Commissions of Inquiry Act so permits. The general power in Section 21 of the General Clauses Act is “to add to, amend, vary or rescind any notifications” etc., In the context of reconstitution of the Commission, the power to fill any vacancy in the office of a member of the Commission is expressly provided in sub-section (3) of Section 3 of the Commissions of Inquiry Act. The general power in Section 21 of the General Clauses Act is “to add to, amend, vary or rescind any notifications” etc., In the context of reconstitution of the Commission, the power to fill any vacancy in the office of a member of the Commission is expressly provided in sub-section (3) of Section 3 of the Commissions of Inquiry Act. Similarly, the power to discontinue the existence of the Commission when it becomes unnecessary can be exercised by issue of a notification in accordance with Section 7 of the Act which results in rescinding the notification issued under Section 3 constituting the Commission. Thus, the power to rescind any notification conferred generally in Section 21 of the General Clauses Act is clearly inapplicable in the scheme of the Commissions of Inquiry Act which expressly provides for the exercise of this power in relation to a Commission constituted under Section 3 of the Act. The only material remaining general powers in Section 21 of the General Clauses Act are the power to “amend” or “vary” any notification. The extent to which the constitution of the Commission can be amended or varied by filling any vacancy in the office of a member as provided in the Commissions of Inquiry Act is also obviously excluded from the purview of Section 21 of the General Clauses Act which cannot be invoked for this purpose. 28. The context as well as the scheme of the Commissions of Inquiry Act, 1952 clearly indicate that Section 21 of the General Clauses Act, 1897 cannot be invoked to enlarge the Government’s power to reconstitute the Commission constituted under Section 3 of the Act in a manner other than that expressly provided in the Commissions of Inquiry Act. There being no express power given by the Commissions of Inquiry Act to the appropriate Government to reconstitute the Commission of Inquiry constituted under Section 3 of the Act by replacement or substitution of its sole member and the existence of any such power being negatived by clear implication, no such power can be exercised by the appropriate Government. There being no express power given by the Commissions of Inquiry Act to the appropriate Government to reconstitute the Commission of Inquiry constituted under Section 3 of the Act by replacement or substitution of its sole member and the existence of any such power being negatived by clear implication, no such power can be exercised by the appropriate Government. The scheme of the enactment is that the appropriate Government should have no control over the Commission after its constitution under Section 3 of the Act except for the purpose of filling any vacancy which may have arisen in the office of a member of the Commission apart from winding up the commission by issuance of a notification under Section 7 of the Act if the continued existence of the Commission is considered unnecessary. The vacancy in the office of a member of the Commission may arise for several reasons, including resignation by the member, when the Government’s power to fill the vacancy under Section 3(3) of the Act can be exercised. Even though a case of implied resignation creating an implied vacancy was set up by the State of Madhya Pradesh before the High Court, that stand was rightly abandoned before us by Shri Shanti Bhushan. 29. We have no doubt that the rule of construction embodied in Section 21 of the General Clauses Act cannot apply to the provisions of the Commissions of Inquiry Act, 1952 relating to reconstitution of a Commission constituted thereunder since the subject-matter, context and effect of such provisions are inconsistent with such application. Moreover, the construction made by us best harmonises with the subject of the enactment and the object of the legislation. Restoring public confidence by constituting a Commission of Inquiry to investigate into a “definite matter of public importance” is the purpose of such an exercise. It is, therefore, the prime need that the Commission functions as an independent agency free from any governmental control after its constitution. It follows that after appointment, the tenure of members of the Commission should not be dependent on the will of the Government, to secure their independence. A body not so independent is not likely to enjoy the requisite public confidence and may not attract men of quality and self-respect. In such a situation, the object of the enactment would be frustrated. A body not so independent is not likely to enjoy the requisite public confidence and may not attract men of quality and self-respect. In such a situation, the object of the enactment would be frustrated. This aspect suggests that the construction made by us, apart from harmonizing the provisions of the statute, also promotes the object of the enactment while the construction suggested by the appellant frustrates both.” 33. In the case of Ganguly, the question which arose for consideration before the Apex Court was, when an industrial dispute has been referred to a Tribunal for adjudication by the appropriate Government under Section 10(1)(d) of the Industrial Disputes Act, 1947, can the said Government supersede the said reference pending adjudication before the Tribunal constituted for that purpose. In the said case two references were made by the Government which were pending adjudication before the Tribunal. On receipt of the reference the Tribunal consolidated the two references that was pending before it and it made some progress. It is at that stage the impugned order was passed by which the Government purported to supersede the two earlier notifications, to combine the said two disputes into one dispute, to implead the two sets of workmen involved in the two said disputes together, to add the Bata Masdoor Union to the dispute, and to refer it to the adjudication of the industrial tribunal of Mr. Ali Hassan as the sole member. Strictly speaking, it is not a case of rescinding or revocation of an earlier notification issued. It is a case of superseding the earlier notification and issuing one more notification as aforesaid. In the context of the Industrial Disputes Act, a statutory obligation is cast on the State Government to resolve all industrial disputes amicably at the first instance by referring the matter for conciliation. The resolution of a dispute is a must for preserving industrial peace. If the conciliation fails, then the only mode in which the dispute could be resolved is by referring the said dispute to a Tribunal for adjudication. When such a reference is made the tribunal is seized of the dispute. It has initiated the action in accordance with law. The said dispute has gone beyond the reach of the Government. If the conciliation fails, then the only mode in which the dispute could be resolved is by referring the said dispute to a Tribunal for adjudication. When such a reference is made the tribunal is seized of the dispute. It has initiated the action in accordance with law. The said dispute has gone beyond the reach of the Government. It is in the context of the said enactment and the dispute resolution mechanism which is provided statutorily in the said enactment, the Supreme Court held that, when a reference is made by the Government being satisfied that an industrial dispute exists, the Government is under an obligation to refer the dispute for industrial adjudication. It is inconceivable that in such a case the Government can claim power to cancel a reference made under Section 10(2). In fact, in the course of the argument it was conceded that it would be difficult to sustain a claim for an implied power of cancellation in respect of reference made under S.10(2). Further, it was held. “If on the representation made by the employer or his workmen the appropriate government considers the matter fully and reaches the conclusion that an industrial dispute exists or is apprehended and then makes the reference under S.10(1), there appears to be no reason or principle to support the contention that it has an implied power to cancel its order and put an end to the reference proceedings initiated by itself. In dealing with this question it is important to bear in mind that power to cancel its order made under S.10(1), which the appellant claims, is an absolute power; it is not as if the power to cancel implies the obligation to make another reference in respect of the dispute in question; it is not as if the exercise of the power is subject to the condition that reasons for cancellation of the order should be set out. If the power claimed by the appellant is conceded to the appropriate government it would be open to the appropriate government to terminate the proceedings before the tribunal at any stage and not to refer the industrial dispute to any other industrial tribunal at all. If the power claimed by the appellant is conceded to the appropriate government it would be open to the appropriate government to terminate the proceedings before the tribunal at any stage and not to refer the industrial dispute to any other industrial tribunal at all. The discretion given to the appropriate government under S.10(1) in the matter of referring industrial disputes to industrial tribunals is very wide; but it seems the power to cancel which is claimed is wider still; and it is claimed by implication on the strength of S.21 of the General Clauses Act. We have no hesitation in holding that the rule of construction enunciated by S.21 of the General Clauses Act in so far as it refers to the power of rescinding or canceling the original order cannot be invoked in respect of the provisions of S.10(1) of the Industrial Disputes Act.” Therefore, the declaration of law by the Apex Court is in so far as it refers to the power of rescinding or canceling the original order made under Section 10(1) of the Industrial Disputes Act, the power of revocation of the same under Section 21 of the General Clauses Act cannot be invoked. Therefore, the said judgment has no application to the power exercised under Section 10(1) of the Contract Labour (Regulation and Abolition) Act. 34. In the case of LACHMI NARAIAN, the question that arose for consideration was whether Section 2 of the Part C States (Laws) Act, 1950 empowered the Central Government to extend by notification in the Official Gazette, to any Part C State, or to any part of such State, with such restrictions and modifications as it thinks fit, any enactment which is in force in a Part A State. In exercise of this power, the Central Government by a notification No. SRO 615 dated 28.4.1951 extended to the then Part C State of Delhi, the Bengal Finance (Sales-Tax) Act, 1941. One of the conditions imposed in the said notification was withdrawn by notification dated 1.4.1958. It is the second notification withdrawing the exemption granted in the earlier notification that was challenged. It is in that context it was held that, the power given by Section 2 exhausts itself on extension of the enactment; it cannot be exercised repeatedly or subsequently to such extension. It can be exercised only once, simultaneously with the extension of the enactment. It is in that context it was held that, the power given by Section 2 exhausts itself on extension of the enactment; it cannot be exercised repeatedly or subsequently to such extension. It can be exercised only once, simultaneously with the extension of the enactment. This is one dimension of the statutory limits which circumscribe the power. The second is that the power cannot be used for a purpose other than that of extension. In the exercise of this power, only such “restrictions and modifications” can be validly engrafted in the enactment sought to be extended, which are necessary to bring it into operation and effect in the Union Territory. “Modification” which are not necessary for, or ancillary and subservient to the purpose of extension, are not permissible. And, only such “modifications” can be legitimately necessary for such purpose as are required to adjust, adapt and make the enactment suitable to the peculiar local conditions of the Union Territory for carrying it into operation and effect. In the context of the section, the words “restrictions and modifications” do not cover such alterations as involve a change in any essential feature of the enactment or the legislative policy built into it. This is the third dimension of the limits that circumscribe the power. It was held that the respondents cannot derive any authority or validity from Section 21 of the General Clauses Act, for the notifications withdrawing the exemptions. The source from which the power to amend the Second Schedule comes is Section 6(2) of the Bengal Act and not Section 21 of the General Clauses Act. Section 21 as pointed out by this Court in Gopichand vs Delhi Administration [ AIR 1959 SC 609 ] embodies only a rule of construction and the nature and extent of its application must be governed by the relevant statute which confers the power to issue the notification. The power, therefore, had to be exercised within the limits circumscribed by Section 6(2) and for the purpose for which it was conferred. Therefore, it was held that the notification dated 7.12.1957 purporting to substitute the words “such previous notice as it considers reasonable” for the words “not less than three months notice” in Section 6(2) of the Bengal Act is beyond the powers of the Central Government, conferred on it by Section 2 of the Laws Act. Therefore, it was held that the notification dated 7.12.1957 purporting to substitute the words “such previous notice as it considers reasonable” for the words “not less than three months notice” in Section 6(2) of the Bengal Act is beyond the powers of the Central Government, conferred on it by Section 2 of the Laws Act. In consequence, the notification dated 1.4.1958, 19.9.1959, 29.6.1966 and 31.7.1970 in so far as they withdrew the exemptions from tax in the case of duries, pure silk, country liquor, kirayana articles, etc., without complying with the mandatory requirement of not less than three months’ notice enjoined by Section 6(2) of the Bengal Act, are also invalid and ineffective. Therefore, the power to withdraw the notification was struck down on the ground that Section 21 of the General Clauses Act has no effect because before exercising the power, the statutory requirements prescribed under the Act has not been complied with. As such, the said judgment also has no application to the facts of this case. 35. In the case of SHIVAJI RAO, the Division Bench of this Court was dealing with the power of the Tahsildar to cancel the notification issued for conducting the election to an Agricultural Produce Market Committee. Elections are to be conducted in accordance with the provisions of the statute. The Tahsildar as the returning officer is vested with the power to issue a notification for holding elections. Once the calendar of events is published, it is settled law that the election process cannot be arrested in any manner. In fact the Apex Court time and again has cautioned the Courts from passing interim orders interrupting such election process. It is in that context when the Tahsildar after issuing the calendar of events, in the midst of the process of election issued a notification canceling the election, this Court rightly held that such a power cannot be traced to Section 21 of the General Clauses Act, as otherwise the said power is likely to be seriously abused wherever persons in authority find that their candidates are not likely to win or their nominations or not valid. Having regard to the sanctity attached to an electoral process in a democracy and a country governed by a Constitution and Rule of Law, an authority cannot be permitted to invoke the power to rescind or cancel an election after the process is set in motion, as such a power is not conferred on him under the Act and on the contrary the law is well settled that such an electoral process should not be interrupted by any person. Therefore, the said judgment has no application to the facts of this case. 36. In the case of AJAY SINGH, in pursuance of the power conferred under the provisions of the Commission of Enquiry Act, 1952, a notification came to be issued setting up a Commission of Enquiry consisting of Justice S.T. Ramalingam, a Judge of the Madras High Court to investigate into the affairs of the society and the lottery conducted by it. The enquiry was to be completed within a period of 6 months from the date of issue of the notification. As the enquiry could not be completed within that period, by a notification dated 1.8.1990 the period for completing the inquiry was extended up to 22.8.1991, then by another notification dated 16.8.1991 the period was extended up to 31.3.1992 and then by another notification dated 27.3.1992 the period for completing the enquiry was further extended up to 31.3.1993. When the learned Judge sought for certain facilities though the Government promised to look into the matter, they issued the impugned notification replacing Justice Ramalingam and appointing Justice G.G. Sohani in his place. It is the validity of the second notification when challenged, the Apex Court held that, Section 21 of the General Clauses Act can be invoked only if, and to the extent, if any, the context and the scheme of the Commissions of Inquiry Act so permits. To the extent to which the express provision is made in the enactment. Section 21 cannot be invoked. The general power in Section 21 of the General Clauses Act is ‘to add to, amend, vary or rescind any notifications’ etc., The power to discontinue the existence of the Commission when it becomes unnecessary can be exercised by issue of a notification in accordance with Section 7 of the Act which results in rescinding the notification issued under Section 3 constituting the Commission. Thus, the power to ‘rescind’ any notification conferred generally in Section 21 of the General Clauses Act is clearly inapplicable in the scheme 21 of the General Clauses Act is clearly inapplicable in the scheme of the Commissions of Inquiry Act which expressly provides for the exercise of this power in relation to a Commission constituted under Section 3 of the Act. In the absence of power under the Commissions of Inquiry Act, amendment and variation of the notification issued under Section 3 for the purpose of reconstitution of the Commission in the manner indicated cannot be exercised. Even that power to amend or vary any notification by virtue of Section 21 of the General Clauses Act must be taken as excluded by clear implication in the sphere of reconstitution of the Commission. Moreover, the power to amend or vary cannot include the power to replace or substitute the existing composition of the Commission with an entirely new composition. Thus, the rule of construction embodied in Section 21 of the General Clauses Act cannot apply to the provisions of the Commissions of Inquiry Act, 1952 relating to reconstitution of a Commission constituted thereunder since the subject-matter, context and effect of such provisions are inconsistent with such application. 37. In fact the Apex Court in a recent judgment in the case of SHREE SIDHBALI STEELS LIMITED AND OTHERS vs STATE OF UTTAR PRADESH AND OTHERS 2011 (3) SCC 193 ] interpreting Sections 14 and 21 of the General Clauses Act has held s under:- 37. Section 14 deals with the exercise of a power successively and has no relevance to the question whether the power claimed can at all be conferred. By Section 14 of the General Clauses Act, 1897, any power conferred by any Central enactment maybe exercised from time to time as occasion arises, unless a different intention appears in the Act. There is no different intention in the Electricity (Supply) Act, 1948. Therefore, the power to issue a notification under Section 49 of the Act of 1948, can be exercised from time to time if circumstances so require. 38. Section 21 is based on the principle that power to create includes the power to destroy and also the power to alter what is created. Section 21, amongst other things, specifically deals with power to add to, amend, vary or rescind the notification. 38. Section 21 is based on the principle that power to create includes the power to destroy and also the power to alter what is created. Section 21, amongst other things, specifically deals with power to add to, amend, vary or rescind the notification. The power to rescind a notification is inherent in the power to issue the notification without any limitations or conditions. Section 21 embodies a rule of construction. The nature and extent of its application must be governed by the relevant statute which confers the power to issue the notification, etc., However, there is no manner of doubt that the exercise of power to make subordinate legislation includes the power to rescind the same. This is made clear by Section 21. On that analogy an administrative decision is revocable while a judicial decision is not revocable except in special circumstances. Exercise of power of a subordinate legislation will be prospective and cannot be retrospective unless the statute authorises such an exercise expressly or by necessary implication. 39. The principle laid down in Section 21 is of general application. The power to rescind mentioned in Section 21 is without limitations or conditions. It is not a power so limited as to be exercised only once. The power can be exercised from time to time having regard to the exigency of time. When by a Central Act power is given to the State Government to give some relief by way of concession and/or rebate to newly-established industrial units by a notification, the same can be curtailed and/or withdrawn by issuing another notification under the same provision and such exercise of power cannot be faulted on the ground of promissory estoppel. 40. It would be profitable to remember that the purpose of the General Clauses Act is to place in one single statute different provisions as regards interpretations or words and legal principles which would otherwise have to be specified separately in many different Acts and Regulations. Whatever the General Clauses Act says whether as regards the meaning of words or as regards legal principles, has to be read into every statute to which it applies. Further, power to curtail and/or withdraw the notification issued under Section 49 of the Electricity (Supply) Act, 1948 giving rebate is implied under Section 49 itself on proper interpretation of Section 21 of the General Clauses Act. Further, power to curtail and/or withdraw the notification issued under Section 49 of the Electricity (Supply) Act, 1948 giving rebate is implied under Section 49 itself on proper interpretation of Section 21 of the General Clauses Act. Therefore, this Court is of the firm opinion that, power to curtail and/or withdraw the notification issued under Section 49 of the Electricity (Supply) Act, 1948, grating certain benefits, was available to the respondents. 41. By virtue of Sections 14 and 21 of the General Clauses Act, when a power is conferred on an authority to do a particular act, such power can be exercised from time to time and carries with it the power to withdraw, modify, amend or cancel the notifications earlier issued, to be exercised in the like manner and subject to like conditions, if any, attached with the exercise of the power. It would be too narrow a view to accept that chargeability once fixed cannot be altered. Since the charging provision in the Electricity (Supply) Act, 1948 is subject to the State Government’s power to issue notification under Section 49 of the Act granting rebate, the State Government, in view of Section 21 of the General Clauses Act, can always withdraw, rescind, add to or modify an exemption notification. No industry can claim as of right that the Government should exercise its power under Section 49 and offer rebate and it is for the Government to decide whether the conditions are such that rebate should be granted or not.” 38. From the aforesaid discussion it is clear that Section 21 of the General Clauses Act applies only when in an enactment there is no specific provision providing for what is provided in Section 21 of the Act. In order to find out whether such a provision exists, the scheme of the Act is to be scrutinized. If there is no indication of any such power expressly or by implication then Section 21 of the General Clauses Act has to be read into the said enactment. If an order is passed under a particular statute and if it is given effect to, acted upon, consequential further steps are taken in accordance with law, and third party interests are created, then rescinding or revoking such an order, at that stage, would have serious consequences. If an order is passed under a particular statute and if it is given effect to, acted upon, consequential further steps are taken in accordance with law, and third party interests are created, then rescinding or revoking such an order, at that stage, would have serious consequences. Then in those circumstances it cannot be said that the power to issue notification includes the power to rescind or revoke. In the absence of a specific provision providing for such recession or revocation and an express or implied bar for such recession or revocation, Section 21 of the General Classes Act applies, and such a power is to be read into such enactment. Otherwise, the very object of enacting this piece of legislation becomes redundant. Ultimately the applicability of Section 21 of the Act depends on the scheme of the Act, the nature of power conferred, the object sought to be achieved and the language employed in the said provision. Broadly stated, Section 21 of the Act, applies as a rule, non application is an exception. To exclude the application of the general rule, there must be an exceptional circumstance. Section 21 is based on the principle that power to create includes the power to destroy and also the power to alter what is created. The power to rescind a notification is inherent in the power to issue the notification without any limitations or conditions. Section 21 embodies a rule of construction. The nature and extent of its application must be governed by the relevant statute which confers the power to issue the notification. When a power is conferred on an authority to do a particular act, such power can be exercised from time to time and carries with it the power to withdraw, modify, amend or cancel the notifications earlier issued, to be exercised in the like manner and subject to like conditions, if any, attached with the exercise of the power. This legal position is in no way denuded merely because the notification issued under an enactment was the subject matter of a litigation and the validity of such notification has been upheld by a Court. 39. In the instant case, in the earlier round of litigation the notification issued by the Government was challenged. The Government defended the notification and the Government was successful throughout. 39. In the instant case, in the earlier round of litigation the notification issued by the Government was challenged. The Government defended the notification and the Government was successful throughout. It is not a case where the notification rescinding the earlier notification is issued because the Government lost the battle in the Court. It is not to undermine the authority of law. It is not to invalidate a judgment rendered by the Court. Therefore, the Government which defended the notification earlier, after it reached finality, on a second thought being convinced that the said notification is not in public interest, rescinded the said notification for good reasons. It cannot be said that it had no power to rescind the contract. It is yet another thing to say that the said power is not properly exercised or it is mala fide exercise of power. But, it would not be a case of want of authority to issue such notification. In fact, the learned single Judge has rightly held that Section 21 of the General Clauses Act empowers the Government to issue a notification rescinding the earlier notification notwithstanding the fact that the earlier notification was upheld by the Apex Court after challenge. Therefore, in the light of the discussions above and the clear enunciation of law by the Apex Court and this Court in various decisions referred to supra, in the facts of this case, in the scheme of the Act, when there is no specific provision empowering the Government to rescind the notification issued under Section 10(1), the notification issued by the Government under Section 10(1) read with Section 21 of the General Clauses Act rescinding the earlier notification issued under Section 10(1) cannot be said to be without the authority of law. As such, the point is held in favour of the employers. POINT No.2-MALICE IN LAW 40. Having held that the Government has the power to rescind the Notification issued under Section 10(1) of the Act the question for consideration is whether the said power has been exercised in accordance with law or is it arbitrary or opposed to the principles of natural justice. It is exercised with malice as contended by the respondents. It was contended that after the challenge to the Notification prohibiting the contract labour failed, the State instead of taking action to implement the said Notification has issued this Notification rescinding the earlier Notification. It is exercised with malice as contended by the respondents. It was contended that after the challenge to the Notification prohibiting the contract labour failed, the State instead of taking action to implement the said Notification has issued this Notification rescinding the earlier Notification. It is a clear case of malice in law. The State which is expected to uphold the rule of law itself is a party to violation of the law and therefore the power exercised is vitiated. It is not in dispute that after issue of a Notification prohibiting the contract labour in a statutory canteen, it was challenged. The State did defend its action before this Court, as well as before the Apex Court. Though it was contended that there was no interim stay of the earlier Notification, the records discloses that learned Single Judge had granted an interim order of stay and the interim order of stay was in force even when the matter was before the Apex Court. Therefore, the earlier Notification could not have been given effect to and at any rate the Government cannot be blamed for such an action as it was obeying the order passed by the Court. The occasion to implement the Notification arose only after the challenge failed in the Supreme Court. Immediately, thereafter the employer made a representation for rescinding the earlier notification. They referred such a representation to the State Advisory Board and after receiving the recommendation, the impugned notification came to be issued. Therefore in this background, it cannot be said that the State deliberately did not implement its own Notification. It is a policy decision. If they take a policy decision to withdraw prohibiting the contract labour in statutory canteens after following the prescribed procedure in law, as they were of the view that the said policy decision was not in the best interest of the workmen, all that is expected of them is to follow the law prescribed and withdraw the said Notification. That is precisely what they have done. Therefore, in the absence of any specific allegations of mala fides against any of the officials, the mere fact that a Notification which was upheld by the Apex Court is withdrawn subsequently would not constitute malice in law so as to vitiate the Notification. Therefore, we do not see any substance in the said contention. 41. Therefore, in the absence of any specific allegations of mala fides against any of the officials, the mere fact that a Notification which was upheld by the Apex Court is withdrawn subsequently would not constitute malice in law so as to vitiate the Notification. Therefore, we do not see any substance in the said contention. 41. In so far as the violation of principles of natural justice is concerned, while issuing the earlier Notification, the views of the representatives of the workmen who were members of the Advisory Board were considered and thereafter before rescinding the notification, the same procedure is followed by the State Advisory Board. The matter was discussed at length. The representatives of the Labour Union clearly and unequivocally expressed their views opposing such withdrawal. However, the Government did not accept their views and proceeded to issue the impugned Notification. Therefore it cannot be said that there has been a violation of principles of natural justice. 42. That lead us to the question whether rescinding of the earlier Notification is in accordance with law or is it vitiated by not taking the relevant factors and not taking note of the earlier legal proceedings as held by the learned Single Judge. It was also contended that when the power to issue Notification includes the power to rescind or revoke the Notification that power is to be exercised in the like manner. While issuing the Notification not only the Government acted on the recommendation of the Advisory Board but also took into consideration the factors which are mentioned in Section 10(2) of the Act whereas at the time of rescinding the earlier Notification they have taken into consideration only the recommendations of the Advisory Board and they have not considered the factors which are mentioned in sub-Section (2) of Section 10 of the Act. Sub-Section (2) of Section 10 of the Act provides that before issuing any Notification under sub-Section (1) in relation to any establishment, the appropriate Government shall have regard for the conditions of work and benefits provided for the contract labour in that establishment and other relevant factors such as- (a) 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; (b) whether it is of perennial nature, that is to say, it is of sufficient duration having regard to the nature of industry, trade, business, manufacture or occupation carried on in that establishment; (c) whether it is done ordinarily through regular workmen in that establishment or an establishment similar thereto; (d) whether it is sufficient to employ considerable number of whole-time workmen.” 43. In fact these are the very factors which the State Advisory Board is expected to take note of before making any recommendation to the Government. All these factors were taken note of by the Government, which was available to the Government also. Merely because in the impugned Notification it is not mentioned, as was mentioned in the earlier Notification, it cannot be said that the Government has not taken into consideration these factors. Now the learned Single Judge has in detail referred to the proceedings before the Advisory Board. He has also looked into the facts which are made available to the Government at the time of hearing. From the aforesaid material on record it is clear that the recommendation of the Advisory Board for withdrawing the earlier Notification was not unanimous. Three members did oppose such a move whereas six persons made a favourable recommendation. That apart, the material on record discloses the Labour Minister was totally opposed to withdrawing the earlier Notification. So also the Labour Commissioner. The Chief Minister was in a fix. Therefore he wanted a consultation. It is after all this exercise that ultimately the Government took a decision to withdraw the earlier Notification. In the light of the aforesaid undisputed, admitted facts, it is not a case where a decision is taken clandestinely, without applying its mind and without considering the relevant factors. The matter has been discussed at length. There was a stiff opposition to the move of the Government. In the light of the aforesaid undisputed, admitted facts, it is not a case where a decision is taken clandestinely, without applying its mind and without considering the relevant factors. The matter has been discussed at length. There was a stiff opposition to the move of the Government. The Chief Minister was forced to consult, and persuade all concerned and ultimately a decision was taken to withdraw the said Notification. Unfortunately, though the learned Judge has stated the law on the point very correctly to the effect that a judicial review is permissible in law only to find out whether the process of decision making was in accordance with law or not and the validity of the decision, the learned Single Judge erred in sitting over the Judgment of the views of the members, the notes which were made in the course of the proceedings and the other material on record as if he is an appellate authority. it is settled law that the High Court cannot sit in appeal over the decision. All that the Court has to look into is whether the decision making process was just and in accordance with law and reasonable. Once the test is passed, the High Court cannot sit in Judgment over the correctness of the decision of the Government. In this context it is necessary to note the settled legal position on the point. In the case of judicial review all the actions of the constitutional authority, such as the State, the court cannot really substitute the decision reached by a fair procedure, by a different decision, only on the ground that the decision which appeals to the Court is a better one. Judicial review is not concerned with the decision but with the decision making process. Generally the Courts do not exercise their power of judicial review and interfere in policy matters of the State unless the policy so formulated either violates the mandate of the Constitution or any statutory provisions or is otherwise actuated by malafides. The Apex Court in the case of RUSTOM CAVASJEE COOPER Vs. UNION OF INDIA reported in 1970 (1) SCC 248 has held that the Court will not sit in appeal to cover the policy of the Parliament for enacting the law. In PREMIUM GRANITE AND OTHER Vs. The Apex Court in the case of RUSTOM CAVASJEE COOPER Vs. UNION OF INDIA reported in 1970 (1) SCC 248 has held that the Court will not sit in appeal to cover the policy of the Parliament for enacting the law. In PREMIUM GRANITE AND OTHER Vs. STATEOF TAMILNADU 1994 (2) SCC 691 it held that it is not the domain of the Court to embark upon the unchartered ocean of public in an exercise to consider as to whether the particular public policy is wise or a better public policy can be evolved. Such exercise must be left to the discretion of the executive and legislative authority as the case may be. Again the case of M.P.OIL EXTRACTION AND ANOTHER Vs. STATE OF M.P. AND OTHERS reported in (1997) 7 SCC 592 “the executive authority of the State must be held to be within its competence to frame a policy for the administration of the State. Unless the policy framed is absolutely capricious and not being informed by any reasons whatsoever, can be clearly held to be arbitrary and founded on mere ipse dixit of the executive functionaries thereby offending Article 14 of the Constitution or such offends other constitutional provisions or comes into conflict with statutory provision, the Court cannot and should not outstep its limit and tinker with the policy decision of the executive functionary of the State.” Again in the case of STATE OF M.P. AND OTHERS VS. NANDLAL JAISWAL AND OTHERS reported in 1986 (4) SCC 566 the Apex Court held that the Court cannot strike down the policy decision taken by the State Government merely because it feels that another policy decision would have been fairer or wiser more scientific or logical. The Court can interfere only if the policy decision is patently arbitrary discriminatory or mala fide. In NARMADA BACHO ANDOLAN vs. UNION OF INDIA reported in (2000) 10 SCC 664 , the Supreme Court held that it is now well settled that the Courts, in the exercise of their jurisdiction, will not transgress into the field of policy decision. Whether to have a infrastructural project or not and what is the type of project to be undertaken and how it has to be executed, are part of policy making process and the Courts are ill-equipped to adjudicate and a policy decision so undertaken. Whether to have a infrastructural project or not and what is the type of project to be undertaken and how it has to be executed, are part of policy making process and the Courts are ill-equipped to adjudicate and a policy decision so undertaken. The Courts no-doubt, has a duty to see that the undertaking of a decision, in law is not violated and people’s fundamental rights are not transgressed upon except to the extent permissible under the Constitution. Therefore, it is clear that the policy is essentially for the State to formulate keeping in mind the need and requirements of the people and the Society at large. The State should be allowed some play in the joints because it has to deal with complex problems which do not admit of solution through any doctrinaire or strait-jacket formula. Therefore in exercise of its power of judicial review the Court should not transgress into the field of policy decision. 44. From the facts of the case it is clear, the process for prohibition of contract labour in statutory canteens was initiated in the year 1988. It has taken nearly a decade to come to a decision. But in the meanwhile, in the year 1991 the country adopted liberalisation policy and it took some time to gain momentum. Now it has become irreversible. In the representation made by the employer, it is clearly mentioned that to day the industrial entrepreneur in the country ahs to compete not only with Indian Companies but also the Companies world over. The liberalisation has thrown open the country’s frontiers. In those circumstances, the entrepreneurs have to achieve excellence in their field. They have to be competitive. It is in this context it was pointed out that they would like to concentrate only on core sectors so that the country would have the benefit of their enterprise. These employers do not possess the requisite expertise in this ancillary areas of running canteens or catering or serving good for their workers. As long as the statutory requirement of providing hygienic food is discharged by the employer, the work force has no complaint in this regard. This obligation of employing permanent labour to run these canteens should not be forced on them. So they requested for re-look of the policy decision of the Government. 45. As long as the statutory requirement of providing hygienic food is discharged by the employer, the work force has no complaint in this regard. This obligation of employing permanent labour to run these canteens should not be forced on them. So they requested for re-look of the policy decision of the Government. 45. The Union Finance Minister in his budget placed before the Parliament in 2001 has laid stress to lift all restrictions on out sourcing of work without any differentiation to core and non-core activities on contract basis. The Union Finance Minister also has mooted the idea of allowing the engagement of contract labour both in core and non-core activities. This is with a view to allow the industries to concentrate on their core-competencies which is required for the survival and growth of the Industry. Large number of industries, be it large scale, medium scale or small scale are closing down their manufacturing units all over the country including Karnataka, being unable to face competition both from within the country and from abroad. Further due to compulsion of cost effectiveness, a number of industries are reducing the expenses and cutting jobs, as a result in the manufacturing sector jobs have drastically come down. The local industry would find it impossible to face competition from countries like China and South Asian Countries who are manufacturing quality goods and offering them at considerably lesser prices. 46. In the field of industry today, the running of a canteen both in India and elsewhere is regarded as a business. It is a specialist activity. There are professional caterers who have commissioned spur Kitchens of employing large trained work force. Canteen services are an important segment of the growing service sector in the country. It is also a specialist business venture. The impugned notification recognizes its existence as an important industry in the service sector. The canteen activity not being a core activity in a manufacturing organization, the managements have not been able to develop expertise in this area. It is the expert bodies who can organize such activity properly. When such expert establishments are available, it would be in the interest of the industrial sector to entrust that activity to such establishments. Practical difficulties in running the canteen deserves to be noted. It is the expert bodies who can organize such activity properly. When such expert establishments are available, it would be in the interest of the industrial sector to entrust that activity to such establishments. Practical difficulties in running the canteen deserves to be noted. If the cook does not turn up for work suddenly, it will be practically impossible for the managements to make alternate arrangement. Such a situation will lead to industrial Relations problems. Whereas the Contractor, who will be having such establishments in more than one factory will be able to quickly re-deploy another cook and prepare the food in time and avert any difficult situation. Some of the workers may not even utilize the facility of canteen and consume food, which they personally bring from their houses. This problem could be looked at from yet another angle. If persons are recruited for running canteens, mostly the work to be turned out by them is in the nature of cooking, cleaning the utensils and plates, serving the food and sweeping the floor. Having regard to the nature of activity involved there is no scope for promotions in the said establishment. Though they may achieve expertise in their respective work, over the years they lose interest. If a cook due to lack of interest and frustration mechanically prepares food and it is not tasty, no action can be taken against him. Disciplinary action is not a solution. Employer is not the person affected. Persons who have to consume food prepared by him are the work force of the industry. The industrial workers need tasty food, variety of food, as they have to consume the food throughout their period of service. It is in those circumstances, it is in their interest that the service is rendered by persons who are temporarily employed, so that they would get better food, at the same time the person who serves food would not get a feeling that he is indispensable. We have seen how sometimes this beneficial provisions, welfare measures, intended to the workers are abused. Whether the canteen is run with the aid of contract labourers or as a permanent establishment, the employer is in no way affected, may be he has to spend little more money but the real persons who would be sufferers is the workmen employed in the main establishment. 47. Whether the canteen is run with the aid of contract labourers or as a permanent establishment, the employer is in no way affected, may be he has to spend little more money but the real persons who would be sufferers is the workmen employed in the main establishment. 47. The Establishment and running of a canteen is, therefore, distinct from the principal, core industrial activity of a factory. This obligation of the employing permanent labour to run these canteens should not be forced on them. It is not an incentive to new investment. The entrepreneurs have to achieve excellence in their field. They have to be competitive. The establishments should be given the freedom to decide the core areas requiring focus. The expansion of the service sector is giving more employment opportunity. The State Government ought to encourage indirect employment in service sector which has great employment potential instead of forcing direct employment potential whose potential is very limited. The recently published Economic Survey report clearly states that the contract labour laws as it exists today makes it impossible for genuine small scale entrepreneurs to provide services to industries. After initiating liberalization, the Government is seriously endeavoring to bring labour law reforms, in the wake of economic liberalization and globalization. 48. In the context of the market oriented globalised new economic policy of the Government, the process of de-regulation and de-control had been introduced to facilitate co-ordination of market forces. In the changed situation industrial establishments have to focus on their core competencies for survival and growth of business for which use of outside specialized services were essential. That focus on peripheral activities such as security, house keeping, gardening, transportation, loading and unloading, food preparation and service will cause immense strain on the establishments distracting their attention from the core activities. Diversion of business sources to peripheral activities would make the establishment ineffective and inefficient. It would result in imposing unproductive work burden on the manufacturing activities which would cause enormous financial strain especially when there are specialized agencies rendering those services. As long as the statutory requirement of providing hygienic food is discharged by the employer, the work force has no complaint in this regard. Ultimately after taking into consideration every one’s views, the Government has taken a policy decision to re-trace its steps and to recall the earlier order prohibiting the contract labour in statutory canteens. 49. As long as the statutory requirement of providing hygienic food is discharged by the employer, the work force has no complaint in this regard. Ultimately after taking into consideration every one’s views, the Government has taken a policy decision to re-trace its steps and to recall the earlier order prohibiting the contract labour in statutory canteens. 49. In the earlier round of litigation as is clear from the Judgment of the Apex Court they declined to interfere because it was a policy decision. The said policy decision was taken by the Government after complying with the procedure prescribed under law and when there was no violation of law, the question of Courts interfering with the policy decision did not arise. For the same reasons if on reconsideration, the Government has taken a policy decision after following the procedure prescribed under Section 10(1) and (2) of the Act, the question of this Court sitting in Judgment over the said policy decision as a Court of appeal would not arise. It was contended the circumstances which prevailed at the time of taking-decision is not changed at the time of taking subsequent decision. All the contentions which are urged by the employers in the earlier proceedings are once again urged in these proceedings. There is no change in the circumstances. This change of policy decision is unwarranted. The decision is not taken by the Government on the grounds urged for or against the Notification. The decision is taken by the Government earlier on the recommendation of the Advisory Committee and after taking into consideration the factors which are mentioned in Section 10(2). In a similar manner to rescind the earlier order too they have taken into consideration the recommendations of the Advisory Board and they have also taken into consideration that there was a stiff opposition for withdrawal of the earlier Notification and then they have taken a conscious decision to re-trace the steps in the interest of industry, workmen, the public at large and the country as a whole, to make the Indian industry more competent in the world. Whether it is a wise decision, whether there may be yet another decision or whether it is acceptable to the Court, are the matters which are beyond the pale of judicial review by this Court. Whether it is a wise decision, whether there may be yet another decision or whether it is acceptable to the Court, are the matters which are beyond the pale of judicial review by this Court. In that view of the matter, when the Government of the day has followed the procedure prescribed under law taking into consideration all the relevant factors and wanted to re-trace the steps and differ from the earlier view and make the policy decision not to prohibit contract labour in statutory canteens, it cannot be found fault with. Therefore we do not see any illegality committed by the Government in issuing the second Notification. POINT NO.3 AUTOMATIC ABSORPTION 50. The learned Single Judge has declared that all persons who are employed as contract labourers in statutory canteens would become the employees of the principal employer by virtue of the Notification dated 11-4-1997, as he was setting aside the subsequent Notification rescinding the earlier Notification. In the first place we do not see any prayer in the Writ Petition seeking such a declaration. Secondly, in view of our findings of Point Nos.1 and 2, the question of granting such declaration would not arise as the earlier Notification stands withdrawn. However, it was strenuously canvassed on behalf of respondents that in view of the Judgments of the Apex Court in the case of AIR INDIA, the moment an order came to be passed under Section 10(1) prohibiting the contract labour in statutory canteens, all the contract workers working in such statutory canteens stood absorbed as workers under the principal employer. Though the Constitution Bench of the Apex Court expressly overruled the said declaration made in the said case they have made it prospectively. Further all rights accruing on such contract labours from the date of declaration in Air India’s case till the date of the decision of the Full Bench, cannot be annulled by subsequent notifications. Further they have also declared by their Judgment that contract labours working in the establishments where it is prohibited would have preferential right of appointment in the very same establishment. Further it was contended that the Full Bench Judgment has no application to contract labours working in statutory canteens as is clear from the Judgment itself therefore, this Court has to go into the question and decide the rights of those contract labours. 51. Further it was contended that the Full Bench Judgment has no application to contract labours working in statutory canteens as is clear from the Judgment itself therefore, this Court has to go into the question and decide the rights of those contract labours. 51. The Supreme Court in AIR INDIA STATUTORY CORPORATION vs. UNITED LABOUR UNION reported in AIR 1997 SC 645 . Dealing with the effect of abolition of contract labours under the Act, it was held as under:- “58. …..It is true that we find no express provision in the Act declaring the contract labour working in the establishment of the principal employer in the particular service to be the direct employees of the principal employer. …..The operation of the Act is structured on an inbuilt procedure leaving no escape route. Abolition of contract labour system ensures right to the workmen for regularisation of them as employees in the establishment in which they were hitherto working as contract labour through the contractor. The contractor stands removed from the regulation under the Act and direct relationship of employer and employee is created between the principal employer and workmen, Gujarat Electricity’s (1995 AIR SCW 2942). …. The contractor is an intermediary between the workmen and the principal employer. The moment the contract labour system stands prohibited under Section 10(1), the embargo to continue as a contract labour is put an end to and direct relationship has been provided between the workmen and the principal employer. Thereby, the principal employer directly becomes responsible for taking the services of the workmen hitherto regulated through the contractor. The object of the penal provisions was to prevent the prohibition of the employer to commit breach of the provisions of the Act and put an end to exploitation of the labour and to deter him from acting in violation of the constitutional right of the workmen to his decent standard of life, living, wages, right to health etc., 65. Thus, we hold that though there is no express provision in the Act for absorption of the employees whose contract labour system stood abolished by publication of the notification under Section 10(1) of the Act, in a proper case, the Court as sentinel in the quit vive is required to direct the appropriate authority to act in accordance with law and submit a report to the Court and based thereon proper relief should be granted. 69. 69. …. It has to be kept in view that contract labour system in an establishment is a tripartite system. In between contract workers and the principal employer is the intermediary contract and because of this intermediary the employer is treated as principal employer with various statutory obligations flowing from the Act in connection with regulation of the working conditions of the contract labourers who are brought by the intermediary contractor on the principal’s establishment for the benefit and for the purpose of the principal employer and who do his work on his establishment through the angry of the contractor. When these contract workers carry out the work of the principal which is of a perennial nature and if provisions of Section 10 get attracted and such contract labour system in the establishment gets abolished on fulfillment of the conditions requisite for the purpose, it is obvious that the intermediary contract vanishes and along with him vanishes the term ‘principal employer’. Unless there is a contractor agent there is no principal. Once the contractor intermediary goes the term ‘principal’ also goes with it. Then remains out of this tripartite contractual scenario only tow parties the beneficiaries of the abolition of the erstwhile contract labours 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 these erstwhile contract labourers. It was urged that Section 10 nowhere provides for such a contingency in express term. It is obvious that no such express provision was required to be made as the very concept of abolition of a contract labour system wherein the work of the contract labour is of perennial nature for the establishment and which otherwise would have been done by regular workmen, would posit improvement of the lot of such workmen and not its worsening. Implicit in the provision of Section 10 is the legislative intent that on abolition of contract labour system, the erstwhile contract-workmen would become direct employees of the employer on the whose establishment they were earlier working and were enjoying all the regulatory facilities on that very establishment under Chapter V prior to the abolition of such contract labour system. Implicit in the provision of Section 10 is the legislative intent that on abolition of contract labour system, the erstwhile contract-workmen would become direct employees of the employer on the whose establishment they were earlier working and were enjoying all the regulatory facilities on that very establishment under Chapter V prior to the abolition of such contract labour system. Though the legislature has expressly not mentioned the consequence of such abolition, but the very scheme and ambit of Section 10 of the Act clearly indicates the inherent legislative intent of making the erstwhile contract labourers direct employees of the employer on abolition of the intermediary contractor. It was contended that contractor might have employed a number of workmen who may be in excess of the requirement and, therefore the principal employer on abolition of the contract labour may be burdened with excess workmen. It is difficult to appreciate this connection. This very condition engrafted in Section 10(2) (d) shows that while abolishing contract labour from the given establishment, one of the relevant considerations for the appropriate Government is to ascertain whether it is sufficient to appoint considerable number of whole time workmen.” 52. However, the Constitution Bench of the Supreme Court in the case of STEEL AUTHORITY OF INDIA LTD. & OTHERS Vs. NATIONAL UNION WATER FRONT WORKERS AND OTHERS reported in 2001 (7) SCC 1 expressly overruled the said Judgment prospectively. 53. In Sub-paras 3, 4, 5 and 6 of para-125 it is held as under:- “3. Neither Section 10 of the Contract Labour (Regulation and Abolition) Act nor any other provision in the act, whether expressly or by necessary implication, provide for automatic absorption of contract labour on issuing a Notification by appropriate Government under sub-section (1) of Section 10, prohibiting employment of contract labour, in any process, operation or other work in any establishment. Consequently, the principal employer cannot be required to order absorption of the contract labour working in the concerned establishment. 4. Consequently, the principal employer cannot be required to order absorption of the contract labour working in the concerned establishment. 4. We overrule the judgment of this Court in AIR India’s case (supra) prospectively and declare that any direction issued by any industrial adjudicator/any Court including High Court, for absorption of contract labour following the judgment in Air India’s case (supra), shall hold good and that the same shall not be set aside, altered or modified on the basis of this judgment in cases where such a direction has been given effect to and it has become final”. 5. On issuance of prohibition notification under Section 10(1) of the CLRA Act prohibiting employment of contract labour or otherwise, in an industrial dispute brought before it by any contract labour in regard to conditions of service, the industrial adjudicator will have to consider the question whether the contractor has been interposed either on the ground of having undertaken to produce any given result for the establishment or for supply of contract labour for work of the establishment under a genuine contract or is a mere ruse camouflage or evade compliance of various beneficial legislations so as to deprive the workers of the benefit thereunder. If the contract is found to be not genuine but a mere camouflage, the so-called contract labour will have to be treated as employees of the principal employer who shall be directed to regularize the services of the contract labour in the concerned establishment subject to the conditions as may be specified by it for that purpose in the light of para 6 hereunder. 6. If the contract is found to be genuine and prohibition notification under Section 10(1) of the CLRA Act in respect of the concerned establishment has been issued by the appropriate Government, prohibiting employment of contract labour in any process, operation or other work of any establishment and where in such process, operation or other work of the establishment the principal employer intends to employ regular workmen he shall give preference to the erstwhile contract labour, if otherwise found suitable and, if necessary, by relaxing the condition as to maximum age appropriately taking into consideration the age of the workers at the time of their initial employment by the contractor and also relaxing the condition as to academic qualifications other than technical qualifications.” 53. The Constitution Bench has stated that the Judgment is only prospective. They have not left anybody in doubt. They have expressly stated what is saved and what is not saved. However, regarding the position of contract labourers working in statutory canteens and the statutory liability to maintain the canteen by the principal employer in the establishment is concerned, the Apex Court in the said judgment at paragraphs 114 and 115 have held as under:- “114. In Saraspur Mills case the question was whether the respondents engaged for working in the canteen run by the cooperative society for the appellant Company were the employees of the appellant Mills. The respondents initiated proceedings under Section 79 of the Bombay Industrial Relations Act, 1946 for payment of DA in terms of the award of the Industrial Court. The appellant contested the claim on the ground that the respondents were employees of the cooperative society and not of the appellant. A two-Judge Bench of this Court approached the question from the point of view of statutory liability of the appellant to run the canteen in the factory and having construed the language employed in the definitions of “employee” and “employer” in sub-sections (13) and (14), respectively, of Section 3 of the Act, and the definition of “worker” contained in Section 2(i) of the Factories Act and having referred to Basti Sugar Mill Case held that even though in pursuance of a statutory liability the appellant was to run the canteen in the factory, it was run by the cooperative society, as such the workers in the canteen (the respondents) would be the employees of the appellant. The case falls in Class (iii) mentioned above. 115. In a three Judge Bench decision of this Court in Hussainbhai case the petitioner who was manufacturing ropes entrusted the work to the contractors who 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 challenged the same in the High Court and then in the Supreme Court. 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 challenged 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 paper arrangement, was that the real employer was the management, not the immediate contractor, Speaking for the Court, Justice Krishna Iyer observed thus: (SCC pp.259 & 260, paras 5 and 7). “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 may be astute to avoid the mischief and achieve the purpose of the law and not be mislead 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 adventitious connections cannot ripen into real employment. This case falls in Class (ii) mentioned above.” 54. Relying on the observations made in these two paragraphs it was contended for the workmen that the Constitution Bench has declared that in cases covered under paragraph 106 the contract labour can be treated as contract workmen of the principal employer, they have declared that they stand automatically absorbed in the establishment prohibiting the contract labour. Therefore, all of them have become the employees of the principal employer notwithstanding the fact after such legal effect the said Notification is withdrawn. 55. Per contra, it was contended on behalf of the employer that the questions which arose for consideration before the Constitution Bench are as under:- a) Whether the concept of automatic absorption of contract labour in the establishment of the principal employer but issuance of the abolition Notification, is implied in Section 10 of the CLRA Act? 55. Per contra, it was contended on behalf of the employer that the questions which arose for consideration before the Constitution Bench are as under:- a) Whether the concept of automatic absorption of contract labour in the establishment of the principal employer but issuance of the abolition Notification, is implied in Section 10 of the CLRA Act? b) Whether on a contractor engaging contract labour in connection with the work entrusted to him by the principal employer, the relationship of master and servant between him (the principal employer) and the contract labour, emerges? 56. Therefore the question whether the contract labour employed in statutory canteens automatically gets absorbed in such establishment by issuance of abolition Notification under Section 10(1) of the Contract Labour Regulation Act prohibiting the contract labour in the establishment concerned was not formulated and decided in the said case. 57. Therefore, the questions that arise for our consideration are:- (a) Whether the Judgment of the Constitution Bench applies to the contract labour working in a statutory canteen to which Section 46 of the Factories Act is applicable? (b) If not, what are his rights? 58. In order to answer this question it is necessary to see the Judgments which have directly dealt with these issues. The Bombay Bench of the Labour Appellant Tribunal of India in the case of THE AHMEDABAD MANUFACTURING AND CALICO PRINTING COMPANY LIMITED AND OTHERS vs THEIR WORKMEN [1953 II LLJ 647] held that, where by an enactment a canteen is considered necessary for a mill, the establishment of such a canteen must be regarded as being in the course of or for the purpose of conducting the undertaking within the meaning of Section 3(14)(e) of the Bombay Industrial Relations Act. Hence, the workmen employed in such canteen though run by an independent contractor are employees of the mill. 59. Similarly, the Labour Appellate Tribunal of India in the case of THE ELPHINSTON SPINNING AND WEAVING MILLS COMPANY LIMITED AND SRI S.M. SABLE AND 9 OTHER CLERKS [1953 1 LLJ 752] has held that, the establishment of a grainshop in a textile mill has been statutorily imposed as legislative recognition of an emergency to provide easily available foodgrain to workmen. Similarly, the Labour Appellate Tribunal of India in the case of THE ELPHINSTON SPINNING AND WEAVING MILLS COMPANY LIMITED AND SRI S.M. SABLE AND 9 OTHER CLERKS [1953 1 LLJ 752] has held that, the establishment of a grainshop in a textile mill has been statutorily imposed as legislative recognition of an emergency to provide easily available foodgrain to workmen. What was once an emergency has almost become commonplace with the continued necessity of supplying grain to the workmen from these grainshops and a grainshop today has become a regular feature of a textile mill. It is in effect as much a part of the work of the undertaking as the purchase by the mill for internal distribution of the various items which go towards the running of the mill, like stores, water-supply, fuel, etc., All these would become ordinarily part of the undertaking within the meaning of Section 3. Sub-Cl. 14(e). Where a mill is required by a statute to do something, that becomes “ordinarily part of the undertaking” for the simple reason that the mill may not decline to give effect to the enactment, and so long as that enactment lasts it becomes part of an undertaking. 60. The Apex Court in the case of THE SARASPUR MILLS COMPANY LIMITED vs RAMANLAL CHIMANLAL AND OTHERS [ AIR 1973 SC 2297 ] relying on these judgments held that an employee engaged in a work or operation which was incidentally connected with the main industry was a workman if other requirements of the statute were satisfied and that the in that case were workers. Under the Factories Act it was the duty of the appellant to run and maintain the canteen for the use of its employees. Therefore, the ratio of the decision in THE AHMEDABAD MANUFACTURING AND CALICO PRINTING COMPANY LIMITED’s case would be fully applicable in which the same provisions of the Act were considered. 61. In the case of V.S.T. INDUSTRIES LTD. VS. VST LABOUR UNION reported in 2001 (1) LLJ 470 at para 9 it is observed as under:- “9. Therefore, the ratio of the decision in THE AHMEDABAD MANUFACTURING AND CALICO PRINTING COMPANY LIMITED’s case would be fully applicable in which the same provisions of the Act were considered. 61. In the case of V.S.T. INDUSTRIES LTD. VS. VST LABOUR UNION reported in 2001 (1) LLJ 470 at para 9 it is observed as under:- “9. In the present case, the findings recorded by the learned single Judge on examination of the facts available is that there had been a canteen within the premises of the appellant up to the year 1982 and it is only from 1982 onwards the management of the canteen has been entrusted to a private contractor; that even after change of the contractor, the canteen workers have continued to be the same irrespective of the change in the contractors from time-to-time; that wages were paid to the workmen in the canteen by the management through the contractor; that the appellant has provided the accommodation, furniture, fule, electricity, utensils, etc.; that the management exercises control over the standard in quality, quantity and the rate of the food items supplied to the workmen for whose benefit the canteen is established. Thus, these circumstances, clearly indicate that the appellant has a complete control over the activities in respect of the canteen and the contractor has absolutely no discretion either in regard to the menu, quality and quantity of the food items much less the rate at which the same are supplied, to the workmen. When the management of the appellant exercises such a complete control, the canteen shall be deemed to be run by the management itself. The appellant in any manner cannot controvert these facts.” 62. The Apex Court in the case of G.B. PANT UNIVERSITY OF AGRICULTURE & TECHNOLOGY, NAINITAL VS. STATE OF UTTAR PRADESH & OTHERS reported in 2000-II LLJ 281 at paras 10 & 14 it is held as under: 10. Admittedly, Cafeteria employees need succor for livelihood-would they continue to remain half fed and half clad as long as they live-is this the society that we feel proud of: Is this the guarantee provided by the founding fathers of our Constitution or is this the concept of socialism which they conceived? None of the answers can possibly be in the affirmative. None of the answers can possibly be in the affirmative. The situation is rather awesome and deplorable-the University by compulsion directs students to be residents of hostel with a definite ban on having food from outside agencies excepting under special circumstances and the provider of food, namely the staff of the Cafeteria ought not be treated as an employee of the University-whose employees they are if we may ask and we think it would not be impertinent on our part to ask the same-is it the consumer of food? Since when the consumer of food becomes the employer? These are the questions which remain unanswered. The society shall have to thrive. The society shall have to prosper and this prosperity can only come in the event of there being a wider vision for total social good and benefit. It is not bestowing any favour to anybody but it is a mandatory obligation to see that the society thrives. The deprivation of the weaker section had for long, but time has now come to cry halt and it is for the law Courts to rise up to the occasion and grant relief to a seeker of a just cause and just grievance. Economic justice is not a mere legal jargon but in the new millennium, it is obligation for all to confer this economic justice to a seeker. Society is to remain, social justice is the order and economic justice is the rule of the day. Narrow pedantic approach to statutory documents no longer survives. The principle of corporate jurisprudence is now being imbibed on to industrial jurisprudence and there is a long catena of cases in regard thereto–the law thus is not in a state of fluidity since the situation is more or less settled. As regards interpretation widest possible amplitude shall have to be offered in the matter of interpretation of statutory documents under industrial jurisprudence. The draconian concept is no longer available. Justice-social and economic, as noticed above ought to be made available with utmost expedition so that the socialistic pattern of the society as dreamt of by the founding fathers can thrive and have its foundation so that the future generation do not live in the dark and cry for social economic justice. 14. In a faint attempt Mr. Justice-social and economic, as noticed above ought to be made available with utmost expedition so that the socialistic pattern of the society as dreamt of by the founding fathers can thrive and have its foundation so that the future generation do not live in the dark and cry for social economic justice. 14. In a faint attempt Mr. Trivedi wanted to introduce a pragmatic approach to the problem and contended that the law Courts should consider the matter from difference angels applying practical experience and factual contexts before arriving at the solution. It has been contended that the financial implications would be rather much too heavy on the University to be borne by it and unless State assistance is made available, it would a well neigh impossibility to meet the burden, we are, however, unable to record our concurrence thereto. Pragmatism does not necessarily be deprivation of the legitimate claims of the weaker sections of the society. The submission, if we may say with respect, is totally misplaced and does not warrant any further discussion thereon. 63. The Apex Court in the case of UNION OF INDIA VS. M. ASLAM AND OTHERS reported in AIR 2001 SC 526 held as under:- …If the Canteen Stores Department forms a part of the Ministry of Defence and if their funds form a part of the Consolidated Fund of India and it is the said Canteen Stores Department which provides fund as well as different article through the retail outlets of Unit-Run Canteens then the employees who discharge the duties of salesmen in such retail outlets must be held to be employees under the Government. The officers of the Defence Services have all pervasive control over the Unit-Run Canteens as well as the employees serving therein. Regular set of Rules have been framed determining the service conditions of the employees in Unit-Run Canteens. The finding of articles are provided by Canteen Stores Department which itself is a part of the Ministry of Defence. The report of a Committee of Subordinate Legislation went into detail the working conditions of the employees engaged in the Unit-run Canteens and categorically came to the conclusion that these employees are recruited, controlled and supervised by the Rules and Regulations made by the Defence Services although these have been given the name of Executive Instructions. The report of a Committee of Subordinate Legislation went into detail the working conditions of the employees engaged in the Unit-run Canteens and categorically came to the conclusion that these employees are recruited, controlled and supervised by the Rules and Regulations made by the Defence Services although these have been given the name of Executive Instructions. The said Committee came to the conclusion that for all intent and purposes the employees in the Unit-Run Canteens are Government employees and should be treated as such. In the aforesaid premises, we are of the considered opinion that the status of the employees in the Unit-Run Canteens must be held to be that of a Government employee and consequently the Central Administrative Tribunal would have the jurisdiction to entertain applications by such employees under the provisions of Administrative Tribunals Act. … …we have come to the conclusion about the status of the employees serving in Unit-Run canteens to be that of Government servants, but that by itself ipso facto would not entitle them to get all the service benefits as is available to the regular Government servant or even their counter-parts serving in the CSD Canteens. It would necessarily depend upon the nature of duty discharged by them as well as on the Rules and Regulations and Administrative Instructions issued by the employer. We have come across a set of administrative instructions issued by the competent authority governing the service conditions of the employees of such Unit Run Canteens. In this view of the matter, the direction of the Tribunal that the employees of the Unit-Run Canteens should be given all the benefits including the retrial benefits of regular Government servants cannot be sustained and we accordingly, set aside that part of the direction. We, however, hold that these employees of the Unit-Run Canteens will draw at the minimum of the regular scale of pay available to their counter-parts in the CSDI and, we further direct the Ministry of Defence, Union of India to determine the service conditions of the employees in the Unit-Run Canteens at an earlier date, preferably within six months from the date of this judgment. This appeal is accordingly disposed of with the aforesaid direction and observation.” 64. The Apex Court in the Steel Authority of India’s case (supra) after going through the aforesaid decisions, at para 106 has observed as under:- “106. This appeal is accordingly disposed of with the aforesaid direction and observation.” 64. The Apex Court in the Steel Authority of India’s case (supra) after going through the aforesaid decisions, at para 106 has observed as under:- “106. We have gone through the decisions of this Court in VST Industries case [ 2001 (1) SCC 298 ], G.B. Pant University case [ 2000 (7) SCC 109 ] and M. Aslam case [ 2001 (1) SCC 720 ]. All of them relate to statutory liability to maintain the canteen by the principal employer in the factory/establishment. That is why in those cases, as in Saraspur Mills case [ 1974 (3) SCC 66 ] the contract labour working in the canteen were treated as workers of the principal employer. These cases stand on a different footing and it is not possible to deduce from them the broad principle of law that on the contract labour system being abolished under sub-section (1) of Section 10 of the CLRA Act the contract labour working in the establishment of the principal employer have to be absorbed as regular employees of the establishment”. 65. Therefore, as held by the Apex Court it is not possible to deduce from the aforesaid judgments of the Apex Court that on the contract labour system being abolished under Sub-section (1) of Section 10 of the Act, the contract labour working in the establishment of the principal employer have to be absorbed as regular employee of the establishment. 66. The Supreme Court in the case of STATE OF KARNATAKA VS. K.G.S.T. WELFARE ASSOCIATION AND OTHERS after referring to the aforesaid Judgments held as under:- “34. We have referred to the aforementioned decisions in order to show that in each of the aforementioned cases the industrial adjudicator was required to apply the relevant tests laid down by this Court in the fact situation obtaining therein. Most of the cases referred to herein before were considered by this Court in the peculiar facts and circumstances obtaining therein and, thus, it is event not proper for the industrial adjudicator to apply the ratio of one decision to the exclusion of other without considering the facts and circumstances involved therein. Most of the cases referred to herein before were considered by this Court in the peculiar facts and circumstances obtaining therein and, thus, it is event not proper for the industrial adjudicator to apply the ratio of one decision to the exclusion of other without considering the facts and circumstances involved therein. The law, however, does not appear to be settled as to whether even in a case where the employer is required to run and maintain a canteen in terms of the provisions of the statute, the employees of the canteen would automatically beheld to be the workers of the principal employer for all intent and purport and not for the purpose of the Factories Act alone. We, however, are not concerned with the said question in this matter and refrain ourselves from making any observation in respect thereof.” 67. That is precisely the question which we are called upon to decide in the case i.e., whether even in a case where employer is required to run and maintain a canteen in terms of the provisions of the Factories Act, the contract labour working in the statutory canteen would automatically be held to be the workers of the principal employers for all intent and purpose. 68. In order to decide what are the rights which are conferred on a workmen as defined under the Factories Act it is necessary to notice the object and reasons for enacting the said legislation. 69. The Bill which was enacted as the present Factories Act, LXIII of 1948, contained the following Statement of Objects and Reasons: “The existing law relating to regulation of labour employed in Factories in India is embodied in the Factories Act, 1934. Experience of the working of the Act has revealed a number of defects and weaknesses, which hamper effective administration. Although the Act has been amended in certain respects in a piecemeal fashion whenever some particular aspects of labour, safety or welfare assumed urgent importance, the general framework has remained unchanged. The provisions for the safety, health and welfare of workers are generally found to be inadequate and unsatisfactory and even such protection as is provided does not extend to the large mass of workers employed in work places not covered by the Act. The provisions for the safety, health and welfare of workers are generally found to be inadequate and unsatisfactory and even such protection as is provided does not extend to the large mass of workers employed in work places not covered by the Act. In view of the large and growing industrial activities in the country, a radical overhauling of the Factories law was essentially called for and could not be delayed. The proposed legislation differs materially from the existing law in several respects. Some of the important features are herein mentioned. Under the definition of ‘Factory’ in the Act of 1934, several undertakings are excluded from its scope but it is essential that important basic provisions relating to health, working hours, holidays, lighting and ventilation should be extended to all workplaces in view of the unsatisfactory state of affairs prevailing in unregulated factories. Further, the distinction between the seasonal and perennial factories which has little justification has done away with. The minimum age of employment for children has been raised from 12 to 13 years and their working hours reduced from 5 to 4½ with powers to Provincial Governments to prescribe even a higher minimum age for employment in hazardous undertakings. The present Act is very general in character and leaves too much to the rule making powers of Provincial Governments. While some of them do have rules of varying stringency, the position on the whole is not quite satisfactory. This defect is sought to be remedied by laying down clearly in the Bill itself the minimum requirements regarding health, (cleanliness, ventilation and temperature, dangerous dusts and fumes, lighting and control of glare etc.) safety (eye protection control of explosive and inflammable dusts, etc.), and general welfare of workers (washing facilities, first-aid, canteens, shelter rooms, crèches, etc.,) amplified where necessary, by rules and regulations to be prescribed by the Provincial Governments. Further the present Act leaves important and complex points to the discretion of inspectors placing heavy responsibility on them. In view of the specialized, and hazardous nature of processes employed in the factories, it is too much to expect Inspectors to possess an expert knowledge of all these matters. The detailed provisions contained in the Bill will go a long way in lightening their burden. In view of the specialized, and hazardous nature of processes employed in the factories, it is too much to expect Inspectors to possess an expert knowledge of all these matters. The detailed provisions contained in the Bill will go a long way in lightening their burden. Some difficulties experienced in the administration of the Act especially relating to ‘Hours’ of employment, holidays with pay etc., have been met by making the provisions more definite and clearer. The penalty clauses have also been made in the Bill empowering Provincial Governments to require that every factory should be registered and should take a licence for working to be renewed at periodical intervals. Provincial Governments are further being empowered to require that before a new factory is constructed or any extensions are made to an existing one, the plan, designs and specifications of the proposed construction should received their prior approval. It is expected that the Bill when enacted into law will considerably advance the condition of workers in factories. The substantial changes made in the existing law are also indicated in the notes on clauses. Opportunity has been taken to arrange the existing law and to revise expressions, where necessary” 70. A bird’s eye view of the said Act makes it clear that it provides for inspecting the staff, provisions relating to health, safety, the provisions relating to hazardous processes, welfare of the workmen, working hours of adults, employment of young persons, annual leave with wages, special provisions, penalties and procedures and other statutory requirements. It is a welfare measure of the working force. Section 46 of the said Act provided for establishment of canteens. Section 46 of the Factories Act, 1948, reads as under:- “46. Canteens-(1) The State Government may make rules requiring that in any specified factory wherein more than two hundred and fifty workers are ordinarily employed a canteen or canteens shall be provided and maintained by the occupier for the use of the workers. Section 46 of the Factories Act, 1948, reads as under:- “46. Canteens-(1) The State Government may make rules requiring that in any specified factory wherein more than two hundred and fifty workers are ordinarily employed a canteen or canteens shall be provided and maintained by the occupier for the use of the workers. (2) Without prejudice to the generality of the foregoing power, such rules may provide for- (a) the date by which such canteen shall be provided; (b) the standards in respect of construction, accommodation, furniture and other equipment of the canteen; (c) the foodstuffs to be served therein and the charges which may be made thereof; (d) the constitution of a managing committee for the canteen and representation of the workers in the management of the canteen; (e) the delegation to the Chief Inspector, subject to such conditions as may be [(dd) the items of expenditure in the running of the canteen which are not to be taken into account in fixing the cost of foodstuffs and which shall be borne by the employer;] prescribed, of the power to make rules under clause (c).” 71. Though the definition of factory under the Act apply to premises “(i) whereon ten or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power, or is ordinarily carried on, or (ii) whereon twenty or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power, or is ordinarily so carried on -…” the obligation on the employer to provide a canteen as contemplated under Section 46 apply only to specific factory wherein more than 250 workers are ordinarily employed. In the other words, in respect of factories where less than 250 workers were employed statutory rules imposed on the employer is to provide canteens for those workers. 72. In this background, it is necessary to see the objects and reasons behind the enactment of the Contract Labour (Regulation and Abolition) Act, 1970 which reads as under:- “The system of employment of contract labour lends itself to various abuses. The question of its abolition has been under the consideration of Government for a long time. 72. In this background, it is necessary to see the objects and reasons behind the enactment of the Contract Labour (Regulation and Abolition) Act, 1970 which reads as under:- “The system of employment of contract labour lends itself to various abuses. The question of its abolition has been under the consideration of Government for a long time. In the Second Five-Year Plan, the Planning Commission made certain recommendations, namely, undertaking of studies to ascertain the extent of problem of contract labour, progressive abolition of system and improvement of service conditions of contract labour where the abolition was not possible. The matters was discussed at various meetings, of Tripartite Committees at which the State Government were also represented and the general consensus of opinion was that the system should be abolished wherever possible and practicable and that in cases where this system could not be abolished altogether, the working conditions of contract labour should be regulated so as to ensure payment of wages and provision of essential amenities. The proposed Bill aims at the abolition of contract labour in respect of such categories as may be notified by the appropriate Government in the light of certain criteria that have been laid down, and at regulating the service conditions of contract labour where abolition is not possible. The Bill provides for the setting up of Advisory Boards of tripartite character, representing various interests, to advise the Central and State Governments in administering the legislation and registration of establishments and contractors. Under the Scheme of the Bill, the provision and maintenance of certain basic welfare amenities for contract labour, like drinking water and first aid facilities, and in certain cases rest-rooms and canteens, have been made obligatory. Provisions have also been made to guard against defaults in the matter of wage payment”. 73. More importantly the Act makes it obligatory on the employer to provide canteen facilities where 100 and more contract labourers are employed by a contractor. In other words, the object of this enactment is to protect the interest of these contract labourers in so far as providing them hygienic food, health, rest and other welfare measures. 74. By Act 94/1976, the provisions of the Factories Act came to be amended. “The main object of the Factories Act, 1948 was to ensure adequate safety measures and to promote health and welfare of the workers employed in factories. 74. By Act 94/1976, the provisions of the Factories Act came to be amended. “The main object of the Factories Act, 1948 was to ensure adequate safety measures and to promote health and welfare of the workers employed in factories. The Government therefore has initiated various measures from time to time to ensure that adequate standards of safety, health and welfare are achieved at all work places. In particular in the context of the need to secure maximum production and productivity, an appropriate work culture conducive to safety, health and happiness of workers has to be evolved in the factories. To achieve these objectives more effectively it became necessary to amend the Factories Act. The amendments proposed to be made in the Act relate to: 1) The modification of the definition of the term ‘worker’ so as to include within its meaning, contract labour employed in any manufacturing process; 2) Improvement of the provisions in regard to safety and appointment of Safety Officers, 3) Reduction of the minimum number of women employees, for the purpose of providing crèches by employers from fifty to thirty and 4) provisions for inquiry in every case of a fatal accident.” 75. It is in this background we have to appreciate the aforesaid Judgments rendered. In the case AHMEDABAD MANUFACTURING & CALICO PRINTING PRESS case while interpreting similar provisions contained in the Bombay Industrial Relations Act, it was held that the an employee engaged in a work or operation which was incidentally connected with the main industry was a workman if other requirements of the statute were satisfied and that the malis in that case were employees of the mill. Similarly in THE ELPHINSTON SPINNING AND WEAVING MILLS COMPANY LIMITED’ case it was held that, the establishment of a grainshop in a textile mill has been statutorily imposed it was held that the workmen employed by a contractor is a workmen under the Act. Similarly inSARASPUR MILL’s case also it was held that an employee entrusts any work or operation which was incidentally connected with the main industry or the workmen if other requirements of the statute were specified and that the mallis in the case were workers. 76. Similarly inSARASPUR MILL’s case also it was held that an employee entrusts any work or operation which was incidentally connected with the main industry or the workmen if other requirements of the statute were specified and that the mallis in the case were workers. 76. It is in this context it is necessary to notice that after referring to all these Judgments the Three Judges Bench of the Supreme Court in the case of INDIAN PETROCHEMICALS CORPORATION LIMITED AND ANOTHER vs SHRAMIK SENA AND OTHERS reported in 1999 II LLJ 696 specifically dealing with the question whether the employees of a statutory canteens though are workmen for the purpose of Factories Act to be treated as workmen in the shop has held as under:- “22. If the argument of the workmen in regard to the interpretation of Raha’s case is to be accepted then the same would run counter to the law laid down by a larger Bench of this Court in Khan’s case (supra). On this point similar is the view of another three-Judge Bench of this Court in the case, of Employers in relation to the Management of Reserve Bank of India v. Workmen (1996-II LLJ-42) (SC). Therefore, following the judgment of this Court in the cases of Khan and R.B.I.(Supra), we hold that the workmen to a statutory canteen would be the workmen of the establishment for the purpose of the Factories Act only and not for all other purposes.” Underlining by us 77. On this point similar is the view of another Three Judges Bench of the Apex Court in the case EMPLOYERS IN RELATION TO THE MANAGEMENT OF RESERVE BANK OF INDIA V. WORKMEN reported (1996-II LLJ-42) (SC) where it is held as under:- “24. Now we have to examine the reasons which persuaded the Tribunal in this case to hold that the instant case falls within the ratio laid down by this Court in M.M.R. Khan’s case (supra). In all the three different categories of canteens-canteens run by the Implementation Committee (Canteen Committee), Co-operative Societies and Contractors-the Bank was making grants by way of subsidy at 95% of the cost incurred by the canteens for payment of salary, P.F. contribution, gratuity, Uniform etc., besides providing fuel, water, fixtures, utensils, furniture, electricity, premises etc., free of charge. In all the three different categories of canteens-canteens run by the Implementation Committee (Canteen Committee), Co-operative Societies and Contractors-the Bank was making grants by way of subsidy at 95% of the cost incurred by the canteens for payment of salary, P.F. contribution, gratuity, Uniform etc., besides providing fuel, water, fixtures, utensils, furniture, electricity, premises etc., free of charge. We will take up the individual facts highlighted by the Tribunal in respect of the different categories of canteens. When the question between the employees in relation to Reserve Bank of India and their class III workmen came up before Justice Sri Dinghe on a reference, on an earlier occasion, the Bank had submitted that adequate canteen facilities are available to the employees of the Bank and that the Bank has provided facilities in this regard. Regarding the canteen run by the Implementation Committee (Canteen Committee), out of the 12 representatives 3 of them are from the bank-the Currency Officer, Personnel Officer and the Officer from the Personal Policy Department. The Currency Officer is always the Chairman of the Canteen Committee. The Bank relieved four employees who are in the Committee, two for full day and two for half day to supervise the day to day affairs of the canteen. The committee cannot increase the strength of the canteen employees without the permission of the bank. The rates of the eatables also cannot be revised without the consent of the Manager. They cannot effect any wage revision without the approval of the Bank. The Bank is also reimbursing the expenses incurred over the periodical medical check up of the employees attached to the kitchen and counters. In these circumstances, the Tribunal held that the case clearly falls within the ratio laid down by this Court in M.M.R. Khan’s case (supra), since the Bank exercises ”remote Control” which is as effective as any. As against the above aspects, the fact remains that according to the Bank it has only a limited role to play regarding the functioning of the committee and does not have any control whatsoever on the employees engaged by the committee so far as taking of disciplinary action against any particular employee is concerned. As against the above aspects, the fact remains that according to the Bank it has only a limited role to play regarding the functioning of the committee and does not have any control whatsoever on the employees engaged by the committee so far as taking of disciplinary action against any particular employee is concerned. The Bank has further brought out in cross-examination of the employees’ representative that the recruitment of the workers for the canteens is made by the Canteen Committee, and the attendance record as well as the sanctioning of leave to the workers is done by the committee. It was also brought out in evidence that the only role played by the Bank in the running of the canteen was the nomination of the three members to the committee. It is common ground that the canteen run by the Implementation Committee (Canteen Committee) is not under any legal obligation as well as the case in M.M.R. Khan’s case (supra). Moreover, there is no right in the Bank to supervise and control the work done by the persons employed in the committee nor has the Bank any right to direct the manner in which the work shall be done by various persons. The Bank has absolutely to right to take any disciplinary action or to direct any canteen employee to do a particular work. Even according to the Tribunal, the Bank exercises only a remote control. We are of the view that in the absence of any obligation statutory or otherwise regarding the running of a canteen by the Bank and the details relating hereto similar to Factories Act, or the Railway Establishment Manual and in the absence of any effective or direct control in Bank to supervise and control the work done by various persons, the workers in the canteen run by the Implementation Committee (Canteen Committee) cannot come within the ratio laid down by this Court in M.M.R. Khan’s case (supra). 25. We shall now take up the case of canteens run by the Co-operative Societies. Apart from subsidy, and other matters provided free of charge like water, electricity premises, furniture, etc., the Tribunal has adverted to the fact that the licence renewal charges paid by the committee are reimbursed by the Bank. 25. We shall now take up the case of canteens run by the Co-operative Societies. Apart from subsidy, and other matters provided free of charge like water, electricity premises, furniture, etc., the Tribunal has adverted to the fact that the licence renewal charges paid by the committee are reimbursed by the Bank. Neither the strength of the workmen employed, nor the wages can be revised without the prior sanction of the Bank and so these canteens are non-statutory recognised canteens, and there is direct control exercised by the bank in the form of nominating the representative of the Bank. Here again none of the peculiar aspects adverted to by this Court in M.M.R. Khan’s case (supra) regarding the non-statutory recognised canteens are present. The mere fact that the Bank nominates its representative to the committee or reimburses the licence renewal charges will not in any way provide any direct control. 26. We will not take up the matter regarding the non-statutory non-recognised canteens. In dealing with this matter, the Tribunal has referred to the various aspects stressed in paragraph 38 of the judgment in M.M.R. Khan’s case (supra) that the workmen there are not railway servants. The Tribunal has adverted to the agreement executed between the Bank and the Contractor which, according to it, will show that the distinguishing features mentioned in M.M.R. Khan’s case (supra) are not present in this case. It may be so. That leads us to no positive conclusion regarding the matter at issue. As per the agreement the Bank has detailed the subsidy and other facilities afforded by it to run the canteen and has also stipulated certain conditions necessary for conducting the canteen in a good hygienic and efficient manner like insistence of the quality of food, supply of food engagement of experienced persons etc., Such conduct cannot in any manner point out any obligation in the bank to provide “canteen” as wrongly assumed by the Tribunal. Since the distinguishing features mentioned in M.M.R. Khan’s case (supra) are not present in this case, the Tribunal by a negative process was inclined to hold that though the canteens may be non-statutory and non-recognised in nature, they ‘could be said to be’ non-statutory recognised ones and so they will be entitled to get all the benefits like the recognised canteens. This is a wrong approach to the issue. This is a wrong approach to the issue. We have already held that non-statutory recognised canteens in the instant case are not similar to the non-statutory recognised canteens considered in M.M.R. Khan’s case (supra). If the workers in the non-statutory recognised canteens themselves cannot be considered to be workmen under the Bank, by the same token, the workers employed by the contractors, even if they are considered to be non-statutory recognised canteens as held by the Tribunal, will not be entitled to get any benefit. It is only by holding that the canteens run by contractors are similar, to non-statutory recognised canteens, the Tribunal has given the same benefit as was given to the workmen in the recognised canteens. It should also be noted that the various factors noticed in paragraph 38 of the judgment in M.M.R. Khan’s case (supra) were adverted to by this Court to deny the plea that the canteen workers “are not railway servants” in the context of the various provisions contained in the Railway Establishment Manual and other documents. The said decision rested on its own facts. 27. We, therefore, hold that the assumption made by the Tribunal that the instant case clearly falls within the ratio laid down by this Court in M.M.R. Khan’s case (supra), is totally unjustified and incorrect. On the facts this case, in the absence of any statutory or other legal obligation and in the absence of any right in the Bank to supervise and control the work or the details thereof in any manner regarding the canteen workers employed in the three types of canteens, it cannot be said that the relationship of master and servant existed between the bank and the various persons employed in three types of canteens. 166 persons mentioned in the list attached to the reference are not workmen of the Reserve Bank of India and that they are not comparable to employees employed in the officers lounge. Therefore, the demand for regularisation is unsustainable and they are not entitled to any relief. We old that the award passed by the Tribunal is factually and legally unsustainable.” 78. Therefore, the demand for regularisation is unsustainable and they are not entitled to any relief. We old that the award passed by the Tribunal is factually and legally unsustainable.” 78. The main object behind the Factories Act is to provide for safety, health, working hours, holidays, lighting and ventilation, general welfare of the workers such as working facilities, first aid, canteens, shelter rooms, crèches, etc., Under the Act, in factories wherein more than 250 workers are ordinarily employed, providing a canteen is made mandatory which should be made by the occupier for the use of the workers. Therefore, these welfare provisions were available only to the workers employed by the employer. If such an employer had employed contract labourers also he was under no obligation to extend the benefit conferred on the workers under the Factories Act. Though such contract labourers are the employees of the contractors while performing functions inside the factory, when workers employed by the employer were enjoying the aforesaid benefits, the said benefit was denied to these contract labourers solely on the ground that they were not employed by the employer but by the contractor. It was unjust, inhuman. Therefore, by Act 94/1976 the Factories Act came to be amended modifying the definition of the worker so as to include within its definition the contract labour employed in any manufacturing process. By including the contract labourer in the definition of the ‘worker’ under the Factories Act all the benefits which were conferred under the Factories Act on regular workers were extended to the contract labourers. In other words all the welfare measures stipulated in the Factories Act were extended to the contract labourers also. 79. Thus by the aforesaid amendment in the definition of worker under the Factories Act the persons employed directly or by say through any agency including the contractor was given the status of a worker under the Act. Therefore, the main object of this amendment is to abolish the discrimination between a worker under the Factories Act and the worker under the provisions of the Act. Welfare measures contemplated under the Factories Act has to be extended to the contract labour. Therefore after 1976 in law no distinction can be made between a regular worker and a contract labour. Both are put on par and both are entitled to the benefits flowing from the provisions of the Factories Act. 80. Welfare measures contemplated under the Factories Act has to be extended to the contract labour. Therefore after 1976 in law no distinction can be made between a regular worker and a contract labour. Both are put on par and both are entitled to the benefits flowing from the provisions of the Factories Act. 80. The Factories Act do not deal with appointment of workers, fixation of payscale, promotion, etc., in respect of the regular workers. They are governed by various other statutes. Therefore, the contract labourer who is also a worker under the Factories Act is not entitled to any of these service conditions as the Factories Act do not deal with the same. After noticing the discrimination between the contract labourers and the regular workers employed in an industry, the Parliament thought it fit to enact Contract Labour (Regulation and Abolition) Act, 1970. The opinion was that the system of contract labour should be abolished wherever possible and practicable. In cases where this system could not be abolished altogether, the working conditions of contract labour should be regulated so as to ensure payment of wages and provision of essential amenities. Under the scheme of the Act, the provision and maintenance of certain basic welfare amenities for contract labour, like drinking water and first aid facilities, and in certain cases rest-rooms and canteens, were made obligatory. Provisions are also made to guard against defaults in the matter of wage payment. Under the Act it is made obligatory on the employer to provide canteen facilities where 100 and more contract labourers are employed by a contractor. Therefore again the object with which the Act was passed was not to regularize the services of contract labourers employed in an industry. By virtue of Section 10 of the Act, if the Government feels that the contract labour should be abolished in any industry, they have the power to do so. The said power could be exercised by issue of a notification. If it is not possible to abolish contract labour, then those contract labourers should be given all the benefits under the Act. Thus, the contract labourers who are working in an establishment to which the Factories Act applies where more than 250 workers are employed they are conferred the benefits under the Factories Act. If it is not possible to abolish contract labour, then those contract labourers should be given all the benefits under the Act. Thus, the contract labourers who are working in an establishment to which the Factories Act applies where more than 250 workers are employed they are conferred the benefits under the Factories Act. It is only those contract labourers who do not fall within the definition of worker under the Factories Act are benefited by this Act. Even under this Act, if the contractor employs more than 100 contract labourers, an obligation is cast on him to provide the facility of a canteen. Therefore, the object with which the Factories Act as well as the Act was passed by the Parliament was to provide welfare measure, a proper condition in which they can work and to see that there is no discrimination between them. It was not in the contemplation at the Parliament while passing this Act to abolish the system of contract labour and declare that those contract labourers are permanent employees of the employer and confer such consequential benefits flowing from such declaration. 81. By abolition of such contract labour, therefore he acquires no special right. Even without such abolition, he had all the right under the Act. Therefore continuation of the contract labour in statutory canteens or abolition of such an employment did not affect the interest of such contract labour. It is also clear from Section 30 of the Contract Labour Act which reads as under:- “The effect of laws and agreements inconsistent with this Act-(1) The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law or in terms of any agreement or contract of service, or in any standing orders applicable to the establishment whether made before or after the commencement of this Act. Provided that where under any such agreement, contract of service or standing orders the contract labour employed in the establishment are entitled to benefits in respect of any matter which are more favourable to them than those to which they would be entitled under this Act, the contract labour shall continue to be entitled to the more favourable benefits in respect of that matter, notwithstanding that they receive benefits in respect of other matters under this Act. (2) Nothing contained in this Act shall be construed as precluding any such contract labour from entering into an agreement with the principal Employer or the contractor, as the case may be, for granting them rights or privileges in respect of any matter which are more favourable to them than those to which they would be entitled under this Act.” 82. Therefore, the intention of the legislature is very clear. The intention is to extend all the benefits flowing under the Factories Act to a contract labour employed in statutory canteens. The order passed under Section 10(1) of the Act prohibiting employment of contract labour in statutory canteens will have no effect. In so far as the contract labour is concerned his rights are also governed under the provisions of the Factories Act. It is a right which is vested in him under law. The order passed under Section 10(1) of the Act shall not have the effect of divesting such statutory right. At the same time he is not entitled to more than what the law gives. Neither the Factories Act nor the Act provide for automatic absorption of contract labour under Section 10(1) of the Act. Therefore seen from any angle even though the Constitution Bench held that the contract labourers employed in statutory canteens stand on a different footing, on a careful examination of the provisions of the Factories Act, the Act and the reasoning adopted by the Constitution Bench that there is no automatic absorption, the declaration of law by the Apex Court in our view equally applies to the contract labourers employed in the statutory canteens. 83. It is in this context, we have to appreciate the judgment rendered by the Apex Court in Air India’s case. It was held that, legislature has expressly not mentioned the consequence of such abolition, but the very scheme and ambit of Section 10 of the Act clearly indicates the inherent legislative intent of making the erstwhile contract labourers direct employees of the employer on abolition of the intermediary contractor. This interpretation placed by the Apex Court did not find favour with the Constitution Bench of the Supreme Court in the case of Steel Authority of India. This interpretation placed by the Apex Court did not find favour with the Constitution Bench of the Supreme Court in the case of Steel Authority of India. They emphatically declared in the said case that neither Section 10 of the Contract Labour (Regulation and Abolition) Act nor any other provision in the Act, whether expressly or by necessary implication, provide for automatic absorption of contract labour on issuing a notification by appropriate Government under sub-section (1) of Section 10, prohibiting employment of contract labour, in any process, operation or other work in any establishment. Consequently, the principal employer cannot be required to order absorption of the contract labour working in the concerned establishment. Therefore, they expressly overruled the judgment of the Apex Court of Air India’s case prospectively. Therefore, the law as it stands today, Section 10 of the Act do not confer any vested right in any contract labourer the right for automatic absorption in any establishment where he is working under a notification under Section 10(1) of the Act being issued prohibiting employment of contract labour. The employer is under no obligation to absorb such contract labour in his establishment. 84. After the Supreme Court in Air India’s case declared that the consequences of abolition of contract labour would make the erstwhile contract labour direct employee of the employer, that became the law of the land, till the Constitution Bench expressly over-ruled the said judgment. In obedience to the said law declared by the Apex Court, if any employer had given effect to such declaration and absorbed these contract labourers in their establishment or if any industrial adjudicator or any Court including the High Court following the aforesaid judgment of the Apex Court has issued directions for absorption of such contract labourers, the Constitution Bench made it clear that such actions hold good notwithstanding their over-ruling the judgment in Air India’s case. Such orders and directions which have been given effect to and has become final would stand. In other words, the benefit confirmed on a contract labourer by any such direction, declarations or absorption should not be revoked. Therefore, the over-ruling of the judgment in Air India’s case was only prospective. It did not affect the vested rights accrued to the parties prior to its judgment. In other words, the benefit confirmed on a contract labourer by any such direction, declarations or absorption should not be revoked. Therefore, the over-ruling of the judgment in Air India’s case was only prospective. It did not affect the vested rights accrued to the parties prior to its judgment. Further the Supreme Court also made it clear after the issue of a notification under Section 10(1) prohibiting employment of a contract labour in any establishment the principal employer has to employ regular worker to do the work which these contract labourers were performing. In such circumstances they issued a direction to the principal employer to the effect, that, he shall give preference to the erstwhile contract labour, if otherwise found suitable and, if necessary, by relaxing the condition as to maximum, age appropriately taking into consideration the age of the workers at the time of their initial employment by their contract and also relaxing their condition as to academic qualification other than technical qualification. These directions make it very clear that such contract labourers who were working earlier before the notification did not become regular employees by virtue of abolition of contact labour. The intention behind this prospective over-ruling and the aforesaid direction issued for giving preference to the contract labourers in the event of principal employer recruiting worker only shows the concern the Apex Court had in respect of these workmen. Beyond that, it could not confer any such right which the Parliament did not intend to confer on such workmen. 85. In the instant case, the Notification issued abolishing the contract labour has been withdrawn. The said Notification we are declaring as valid and upholding the same. There is no right conferred on such contract labours demanding automatic absorption of such statutory canteens. The learned Single Judge was not justified in granting such declaration and therefore the said declaration granted by the learned Single Judge is liable to be set aside. POINT NO.4 86. It was contended on behalf of the employers that even if the second Notification is set aside, that will not have the effect of reviving the earlier Notification. In support of the said contentions, several Judgments were relied upon. In view of the fact that we have upheld the second Notification that question does not arise for consideration and therefore we decline to answer the said point. In support of the said contentions, several Judgments were relied upon. In view of the fact that we have upheld the second Notification that question does not arise for consideration and therefore we decline to answer the said point. Hence, we pass the following Order: 1) The Writ Appeals are allowed. 2) The order passed by the learned Single Judge setting aside the Notification dated 1-8-2001 is set aside and the Notification is upheld, the declaration granted by the learned Single Judge is also hereby set aside. Writ Petition is dismissed. 3) We make it very clear whatever rights the contract labours possess under the provisions of the Factories Act are intact. The Notification rescinding the earlier Notification in no way affects their rights. 4) Parties to bear their own costs.