Judgment :- 1. The petitioner is a Company known as, "Madras Aluminium Company Limited". It is having its factory at Mettur Dam, where it manufactures Aluminium Ingot, Aluminium Wire Rods and Buss Bar. It is a factory registered under the Factories Act. According to the petitioner, under Section 10(1) of the Contract Labour (Regulation & Abolition) Act, 1970, there was no order issued prohibiting employment of contract labour in the petitioner Establishment. Therefore, according to the petitioner, it had entered into a contract with a contractor, through whom the contract labours were engaged for maintenance of sanitary facilities in the factory, guest house and employees' quarters. According to the petitioner, these works do not require employment of direct workmen for full shift hours. Thus, according to the petitioner, the respondents 2 to 6 herein were all employed only as contract labours and not directly employed by the petitioner. 2. While so, according to the petitioner, claiming themselves to be directly employed under the petitioner and also claiming that as per Section 3 of the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act 1981, they have already acquired a permanent status, the respondents 2 to 6 made an application to the competent authority under the said Act, viz., the first respondent herein, for an appropriate order to direct the petitioner Establishment to grant permanent status to the respondents 2 to 6. 3. The first respondent herein, after holding necessary enquiry, by order in N.E. 10287/2002, dated 04.01.2005, found that the respondents 2 to 6 were directly employed by the petitioner Establishment and therefore, they are entitled for permanent status and accordingly, it had issued an order directing the petitioner to confer permanent status for the respondents 2 to 6 herein. Aggrieved over the same, the petitioner has come up before this Court with this Writ Petition. 4. I have heard Mr.V.Karthic, the learned counsel appearing for the petitioner; Mr.R.Rajeswaran, the learned Special Government Pleader appearing for the first respondent; and Mr.S.Vaidyanathan, the learned counsel appearing for the respondents 2 to 6. I have also perused the records carefully. 5. Aggrieved over the same, the petitioner has come up before this Court with this Writ Petition. 4. I have heard Mr.V.Karthic, the learned counsel appearing for the petitioner; Mr.R.Rajeswaran, the learned Special Government Pleader appearing for the first respondent; and Mr.S.Vaidyanathan, the learned counsel appearing for the respondents 2 to 6. I have also perused the records carefully. 5. The learned counsel for the petitioner would submit that it is not within the competence and jurisdiction of the authority under the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act 1981 (hereinafter referred to as "Permanent Status Act"), to examine the question as to whether the contract entered into between the petitioner Establishment and the contractor is sham and nominal or the same is genuine. The learned counsel would further submit that if it is found that the respondents 2 to 6 are only contract labours and that the contract is genuine, then they are not entitled for the benefits of the Permanent Status Act, since, the Permanent Status Act is not applicable to contract labours. The learned counsel would further add that the power of the authority under Section 5 of Permanent Status Act and Rule 6(4) of Permanent Status Rule is very limited and he has got no authority to adjudicate upon the disputed facts as to whether the contract is sham and nominal or genuine and whether the workmen are directly employed by the petitioner or they are only contract labours. The learned counsel would further contend that the power of the authority is very limited only to examine the records including Form-1 as per the Rule, to take evidence in a summary manner and to find out whether the workman concerned had completed 480 days in a period of 24 calendar months in an Establishment and issue appropriate direction. Beyond that, according to the petitioner, the first respondent/competent authority does not have any more power to go into the above complicated questions, which could be resolved only by the adjudicatory authority under the Industrial Disputes Act. In this regard, the learned counsel relies on a judgment of the Honourable Supreme Court in International Airport Authority of India vs. International Air Cargo Workers' Union and Another, reported in 2009 LLR 923 . In this regard, the learned counsel relies on a judgment of the Honourable Supreme Court in International Airport Authority of India vs. International Air Cargo Workers' Union and Another, reported in 2009 LLR 923 . Therefore, according to the learned counsel, in the instant case, the first respondent had exceeded his power by going into the above questions, which are far beyond his competence. Therefore, according to the learned counsel, the impugned order is liable to be set aside. 6. But, the learned counsel appearing for the respondents 2 to 6 would vehemently oppose this Writ Petition. According to him, there can be no quarrel that a contract labour is not entitled for permanent status under the "Principal Employer" under the Permanent Status Act. But, at the same time, it falls within the competence and power of the authority under the Permanent Status Act, to examine the question as to whether the contract as it is alleged by the employer is genuine or it is a sham and nominal one. The learned counsel would further contend that apart from the said question, it is well within the powers of the authority under the Permanent Status Act to go into the question as to whether the workmen were directly employed by the Establishment, that too, for more than 480 days in a period of 24 calendar months. The learned counsel would further add that the judgment in International Airport Authority of India case (cited supra) relied on by the learned counsel for the petitioner has got no relevance to the issues involved in the present Writ Petition. Because in that case, the Permanent Status Act had not come up for consideration. According to the learned counsel, it was a case where the Contract Labour (Regulation & Abolition) Act, 1970 (hereinafter referred to as, "Contract Labour Act"), came to be considered. According to the learned counsel, in that case, there is no competent authority to decide, whether the contract alleged by the employer is genuine or not and whether a particular employee is a contract labour or he is directly employed under the employer, because, there was no such competent authority provided under the Contract Labour Act. According to the learned counsel, in that case, there is no competent authority to decide, whether the contract alleged by the employer is genuine or not and whether a particular employee is a contract labour or he is directly employed under the employer, because, there was no such competent authority provided under the Contract Labour Act. According to the learned counsel, in the judgment cited supra, the Hon'ble Supreme Court has held that the said question has to be adjudicated upon only by the Industrial Adjudicatory Authority, viz., the Labour Court or Industrial Tribunal. 7. The learned counsel appearing for the respondents 2 to 6 would, however, rely on a judgment of this Court in Superintending Engineer, Vellore Electricity Distribution Circle, Vellore and others vs. Inspector of Labour, Perambalur and others, reported in 2004 (3) L.L.N. 598. The learned counsel would point out that this judgment deals with the Permanent Status Act. Taking me through the said judgment, the learned counsel would submit that the authority under the Permanent Status Act has got power to go into the above questions, because, there is no prohibition at all for the said authority to go into the said questions. It is his further contention that though, it is true that the Industrial Adjudicatory Authority, viz., the Labour Court or Industrial Tribunal also has got power to examine the above questions, nevertheless, there is no prohibition for the authority under the Permanent Status Act, to examine the said questions. In other words, according to the learned counsel, the workman has got a choice, either to go before the Labour Court/ Industrial Tribunal or before the authority under the Permanent Status Act. The learned counsel would, therefore, submit that as per the judgment of this Court in Superintending Engineer, Vellore Electricity Distribution Circle case (cited supra), the authority under the Permanent Status Act has got enormous powers to go into the above questions and to issue an order ultimately as provided under Rule 6(4) of the Permanent Status Rule, directing the petitioner Establishment to confer permanent status to the respondents 2 to 6. In this case, according to the learned counsel, the respondents 2 to 6 had proved by means of evidence that there was no contract and the contract alleged by the petitioner is sham and nominal and that they were all employed directly by the petitioner. In this case, according to the learned counsel, the respondents 2 to 6 had proved by means of evidence that there was no contract and the contract alleged by the petitioner is sham and nominal and that they were all employed directly by the petitioner. The learned counsel would point out that on appreciating the evidence including the records, the authority has passed the impugned order, which does not require any interference at the hands of this Court. 8. I have considered the above submissions. 9. I have carefully gone through the judgment of the Hon'ble Supreme Court in International Airport Authority of India case (cited supra). As rightly pointed out by the learned counsel for the respondents 2 to 6, in this case, the Permanent Status Act, which is a State Act, had not come up for consideration before the Hon'ble Supreme Court. In that case, the Hon'ble Supreme Court was concerned only with the Contract Labour Act. In that judgment, viz., International Airport Authority of India vs. International Air Cargo Workers' Union and Another, reported in 2009 LLR 923 in paragraph No.20, the Hon'ble Supreme Court has held as follows:- "20. But where there is no abolition of contract labour under section 10 of CLRA Act, but the contract labour contend that the contract between principal employer and contractor is sham and nominal, the remedy is purely under the ID Act. The principles in Gujarat Electricity Board continue to govern the issue. The remedy of the workmen is to approach the industrial adjudicator for an adjudication of their dispute that they are the direct employees of the principal employer and the agreement is sham, nominal and merely a camouflage, even when there is no order under section 10(1) of CLRA Act. The industrial adjudicator can grant the relief sought if it finds that contract between principal employer and the contractor is sham, nominal and merely a camouflage to deny employment benefits to the employer and that there is in fact a direct employment, by applying tests like: who pays the salary; who has the power to remove/dismiss from service or initiate disciplinary action; who can tell the employee the way in which the work should be done, in short who has direction and control over the employee. But where there is no notification under section 10 of the CLRA Act and where it is not proved in the industrial adjudication that the contract was sham/nominal and camouflage, then the question of directing the principal employer to absorb or regularize the services of the contract labour does not arise. The tests that are applied to find out whether a person is an employee or an independent contractor may not automatically apply in finding out whether the contract labour agreement is a sham, nominal and is a mere camouflage." (emphasis supplied) 10. From the above judgment of the Hon'ble Supreme Court, it is very clear that the question, as to whether a contract is sham and nominal, has to be raised only before the authority under the Industrial Disputes Act. As held by the Hon'ble Supreme Court, the principles in Gujarat Electricity Board v. Hind Mazdoor Sabha, JT 1995 (4) SCC 264, holds the field. 11. Let us now turn to the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act 1981. In this Act, there is an authority, who has been vested with certain powers to carryout the purposes of the Act. Section 5 of the Permanent Status Act, deals with the powers and duties of Inspectors, which reads as follows:- "5. Powers and duties of Inspectors. --Subject to any rules made by the Government in this behalf, the Inspector may, within the local limits for which he is appointed, -- (a) enter at all reasonable times and with such assistants, if any, who are persons in the service of the Government or of any local authority as he thinks fit to take with him, any industrial establishment ; (b) make such examination of the industrial establishment and of any registers, records and notices and take on the spot or elsewhere the evidence of such person as he may deem necessary, for carrying out the purposes of this Act; and (c) exercise such other powers as may be necessary for carrying out the purposes of this Act." 12. Similarly, Rule 6(4) of the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Rules, 1981, also gives specific power to the authority concerned to issue orders conferring permanent status to the workman concerned. The said Rule reads as follows:- "6. Maintenance of registers by employers.--(1)... (2) ... (3) ... Similarly, Rule 6(4) of the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Rules, 1981, also gives specific power to the authority concerned to issue orders conferring permanent status to the workman concerned. The said Rule reads as follows:- "6. Maintenance of registers by employers.--(1)... (2) ... (3) ... (4) Any employee who finds his name not entered in the list referred to in sub-rule (2) or finds that the entries have not been made correctly or finds that though entries regarding his service have been made correctly but he has not attested the entries in the register of workmen in Form 1 may make a representation to the Inspector concerned. The Inspector after examining the representation or after making enquiries may issue suitable directions to the employer for the rectification of the register in Form 1 or for the issue of orders conferring permanent status to the workman concerned." 13. In the light of the above powers expressly conferred upon the authority under the Permanent Status Act, now the question is, whether the said power could be stretched to decide the question, as to whether the contract alleged by the Establishment is genuine or sham and nominal. In this regard, the contention of the learned counsel for the respondents 2 to 6 is that in Vellore Electricity Distribution Circle case (cited supra), there is an answer. 14. I have very carefully gone through the said judgment. But, I find that there is no direct answer to the said question. In that case, viz., Superintending Engineer, Vellore Electricity Distribution Circle, Vellore and others vs. Inspector of Labour, Perambalur and others, reported in 2004 (3) L.L.N. 598 in paragraph No. 5, the learned Judge has held as follows:- “5. The learned Additional Solicitor-General took pains to point out that before the third respondent, the status of the workmen was in the nature of contract labourers and the question about their engagement for continuous period of 480 days in 24 calendar months was also in dispute. According to him, in such a situation the said dispute would fall within the scope of the definition of an ''Industrial Dispute'' under Section 2(k) of the Industrial Disputes Act and therefore, such an Industrial dispute could not have been validly adjudicated by the third respondent in his limited jurisdiction. According to him, in such a situation the said dispute would fall within the scope of the definition of an ''Industrial Dispute'' under Section 2(k) of the Industrial Disputes Act and therefore, such an Industrial dispute could not have been validly adjudicated by the third respondent in his limited jurisdiction. According to the learned Additional Solicitor-General, the powers and duties of the third respondent under Section 5 of the Act is limited to the extent of examining the maintenance of registers, records and notices, which cannot be compared to the adjudicatory power vested with the Labour Court or a Tribunal under Sections 11 and 11(A) of the Industrial Disputes Act. According to him, the third respondent as Inspector can only make a spot enquiry and in the event of any defects being noticed in the maintenance of records, he can direct compliance or rectification of such defects and nothing more. By referring to the impugned order of the third respondent, it was further contended that there was absolutely no basic material available for the third respondent to conclude that the concerned workmen had put in more than 480 days in a period of 24 calendar months in order to issue the directions as has been done in the impugned orders.” 15. In paragraph No.39 of the Vellore Electricity Distribution Circle case (cited supra), after referring to the judgment of the Hon'ble Supreme Court inSteel Authority of India Limited vs. National Union Water Front Workers and others, reported in 2001 (4) L.L.N.135, the learned Judge has held as follows:- “39. The contention of the learned Additional Solicitor-General by placing reliance upon paragraph 122(5) of the judgment of the Hon'ble Supreme Court in Steel Authority of India Ltd. case [2001 (4) L.L.N. 135] (vide supra), is concerned, it will have to be held that the said ratio laid down by the Hon'ble Supreme Court are only in the context of the facts involved in that case. The appellants in those cases were faced with the situation where admittedly persons came to be employed as contract labourers in connection with the work of the establishment and by virtue of the said status as contract labourer by carrying out certain works in connection with the work of the establishment when a claim came to be made for absorption as the workmen of the principal employer, the Honourable Supreme Court held in paragraph 122 (5) of the judgment that such a controversy would form part of an issue to be agitated upon as an industrial dispute before the appropriate adjudicatory forum created under the provisions of the Industrial Disputes Act as the same would involve a debate as to whether the contractor had been interposed either on the ground of having undertaken to produce any given result for the establishment or for supply of contract labourer for the work of the establishment under a genuine contract or as a mere ruse / camouflage to evade compliance of various beneficial legislations so as to deprive the workers of the benefits thereunder. In the said context, the Honourable Supreme Court held that if the contract was found to be not genuine, then the so called contract labourer will have to be treated as employees of the employer, and could be directed to regularise the services of the contract labour in the concerned establishment subject to the conditions as may be specified by it for that purpose. In paragraph 123, the Honourable Supreme Court made it clear that such an adjudication would be necessary as determination of the various questions would require an enquiry into the disputed questions of fact, which cannot be conveniently made by the High Courts in exercise of its jurisdiction under Article 226 of the Constitution of India.” 16. Again, in paragraph Nos. 40 and 41 of the said judgment, the learned Judge has held as follows:- “40. In this context, the Hon'ble Supreme Court also took note of the fact that under the provisions of the Contract Labour Regulation and Abolition Act, there is no procedure prescribed or authority constituted to carry out the above said exercise. Therefore, it became necessary to be stated that such controversies could be validly agitated before the appropriate forum created under the Industrial Disputes Act. Therefore, it became necessary to be stated that such controversies could be validly agitated before the appropriate forum created under the Industrial Disputes Act. As rightly submitted by Sri N.G.R.Prasad, learned counsel appearing for some of the workmen, under the provisions of the Act where specific powers have been defined and invested with the Inspector of Labour to carry out the purpose of the enactment viz., to ensure conferment of permanent status in the event of the necessary contingencies being satisfied, it cannot be held that the only remedy available to the workmen concerned is still to move the appropriate adjudicatory forum under the provisions of the Industrial Disputes Act. 41. As far as the order of reference which came to be made at the instance of some other workmen in G.O(T) No.616 of Labour and Employment (A1) Department dated 18 July 2000, through certain unions, whereby the dispute came to be referred in respect of certain other similarly placed workmen, it will have to be stated, that, that by itself cannot be taken to mean, that, that is the only remedy available for adjudicating their rights. At the risk of repetition it will have to be stated that though the petitioner / Board would claim that the workmen covered by the impugned orders were contract labourers, there was no iota of evidence in support of the said claim or so to say that they were contract labours at all. On the other hand, the un-rebutted evidence placed before the Inspector of Labour disclose that the concerned workmen came to be employed by the officials of the petitioner / Board directly and by making payment of salary also after extracting the work from the concerned workmen. Therefore, I am unable to countenance the submissions made on behalf of the petitioner/Board that the only forum available for the concerned workmen is to move the Industrial Tribunal created under the provisions of the Industrial Disputes Act and not by resorting to an application before the appropriate Inspector of Labour constituted under the provisions of the Act.” (Emphasis supplied) 17. A reading of the above judgment would make it very clear that this Court has not examined the question, as to whether the authority under the Permanent Status Act can go into the complicated question, as to whether the contract alleged by the Establishment is genuine or sham and nominal. A reading of the above judgment would make it very clear that this Court has not examined the question, as to whether the authority under the Permanent Status Act can go into the complicated question, as to whether the contract alleged by the Establishment is genuine or sham and nominal. Again, as has been seen in paragraph No. 41 of the said judgment, in that case, though the Establishment claimed that the workmen covered were contract labours, there was no iota of evidence in support of the said claim so as to say that they were not contract labours at all. According to the said judgment, the unrebutted evidence placed before the Inspector of Labour disclosed that the concerned workmen came to be employed by the officials of the petitioner/Board directly and by making payment of salary also after extracting the work. It was in those factual position, the learned Judge took the view that the Authority was well within its power to issue an order, directing conferment of permanent status to workmen. 18. This Court is informed that the judgment in Vellore Electricity Distribution Circle case (cited supra)was confirmed by the Division Bench also. In the said judgment, it has not been clearly held as to whether in a case where there is evidence, which is either rebutted or if it remains unrebutted, whether the authority concerned can still examine as to whether the contract is sham and nominal and when there is an adjudication required to resolve these issues, whether the authority has got power. 19. In this regard, the learned counsel for the petitioner would take me through Section 5(b) of the Permanent Status Act, which empowers the authority to make such examination of the industrial establishment and of any registers, records and notices and take on the spot or elsewhere the evidence of such person as he may deem necessary, for carrying out the purposes of this Act. This provision does not clearly indicate as to whether the adverse party has to be given an opportunity of cross-examining the person whose evidence is recorded by the authority. This provision does not clearly indicate as to whether the adverse party has to be given an opportunity of cross-examining the person whose evidence is recorded by the authority. The said Section also does not clearly spell out as to whether the authority will have to afford opportunity to the adverse party to lead evidence and whether ultimately the authority has got power to appreciate the evidence and to give a finding so as to issue an order, after enquiry, under Rule 6(4) of the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Rules, 1981. In my considered opinion, the learned counsel is right in his submissions in this regard. 20. Per contra, if the same issue is raised before an Industrial Adjudicator, viz., Labour Court or Industrial Tribunal, then, the issue can be adjudicated upon by the said authority. Therefore, in my considered opinion, it is doubtful as to whether the authority under the Permanent Status Act has got power to resolve the above disputed questions by adjudicating upon the same as it is done by the Industrial Tribunal/ Labour Court. 21. In my considered opinion, the legal questions raised in this Writ Petition are very important and any answer to these questions may have a greater impact on the industrial side and therefore, I deem it appropriate to refer the following questions to a Division Bench for answer : i. Whether the authority under the Permanent Status Act has got power to go into the question, as to whether the contract alleged by the Establishment is genuine or the same is sham and nominal ? ii. Whether the authority under the Permanent Status Act has got adjudicatory power to adjudicate upon the issue as to whether the workmen are directly employed by the Establishment or whether only as contract labours under the Contractor ? iii. Whether the authority under the Permanent Status Act has got adjudicatory power, so as to afford opportunity to adverse party, while recording evidence for the purpose of cross-examination and also letting in evidence? iv. Whether the powers conferred upon the Industrial Tribunal / Labour Court to adjudicate upon the above issues is a bar for the authority under the Permanent Status Act, to go into the above issues ? 22. iv. Whether the powers conferred upon the Industrial Tribunal / Labour Court to adjudicate upon the above issues is a bar for the authority under the Permanent Status Act, to go into the above issues ? 22. The registry is directed to place these papers before My Lord The Hon’ble The Acting Chief Justice, to consider to refer the above questions to the Division Bench to answer.