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2016 DIGILAW 1663 (GUJ)

Vadilal Industries Limited v. State of Gujarat

2016-08-05

A.J.SHASTRI

body2016
JUDGMENT : A.J. Shastri, J. 1. This petition is filed by the petitioner company for the purpose of challenging the legality and validity of the impugned communication dated 25.1.202 whereby, pursuant to the order dated 12.12.2001, the petitioner - company is asked certain particulars within a period of 7 days so as to assess the authority to take decision on the issue pertaining to labour contract system prevailing in it and therefore, feeling aggrieved by the said action of respondent authority, the petitioner has invoked extraordinary jurisdiction under Articles 226 and 227 of the Constitution of India. 2. Brief facts of the case are that the petitioner is a company incorporated under the Companies Act and it is carrying on the business of manufacturing of candy and various kinds of ice-cream material. To carry out said process of manufacturing of candy, ice-cream packing and for removal of goods from the cold storage, the petitioner - company has engaged the employees. The nature of business of the petitioner - company is such that demands all its products dips in the winter and monsoon season and it raises in crescendo in summer season and the petitioner - company has a wide network for marketing its product throughout the country. The peculiarity of this industry to which the petitioner is belonged to that the ice-cream candy and such other frozen products are in more demand in the summer season and this is not only with the petitioner company but, relates to those manufacturers, who are engaged in the icecream and candy business. On account of this peculiarity of the process of manufacturing and the demand being seasonal, on the basis of contract labour the employees are seasonally employed which system is prevailing since long. 3. On account of this peculiarity of the process of manufacturing and the demand being seasonal, on the basis of contract labour the employees are seasonally employed which system is prevailing since long. 3. It appears that upon noticing the same, respondent No. 1 appointed a committee in the year 1997 consisting of 10 members representing employers, workmen and Commissioner of Labour as ex-officio Secretary to undertake the task by the committee to inquire, the members of the committee had visited the factory of the petitioner - company, recorded the evidence in the form of statement of workers employed in the industry and had ascertained as to whether they are seasonally employed, whether they are adequately paid corresponding to the work being performed and several other issues were examined by the members of the committee so as to ascertain that the workers employed by the petitioner company are exploited or not. After taking into consideration all relevant aspects, an unanimous report came to be submitted by the committee on 11.7.2000 and the committee came to the unanimous conclusion that in the larger interest of production as also the workers, contract labour in the petitioner - industry is not required to be abolished from the following processes, namely, candy production packing, icecream packing and removal of such goods from the cold storage and the said report came to be prepared by the committee on 11.7.2000. 4. A fact is stated by the petitioner that this contract labour system is prevailing in all the manufacturers’ industry dealing in the ice-cream and the candy product and therefore, the committee appointed by the State authority has not recommended to abolish the contract labour system prevailing in the petitioner industry. 5. It appears from the record that on 25.1.2002, a communication came to be received by the petitioner company from Secretary, State Advisory Contract Labour Board, Ahmedabad - respondent No. 2 informing that under Section 10 of the Act, the State Government has asked the Board to examine and advise whether practice of employing contract labour in the petitioner industry is worth to be continued or to abolish and in that context, the petitioner company was directed to furnish the information in proforma. The petitioner company in the background of that fact has found it surprising that within a short span of one and half year, though no material change took place in the working conditions prevailing in the petitioner factory, the pattern of manufacturing and the activity of packaging etc. is not altered and the characteristic of seasonal function of the industry is also not altered, still, however, the authority has taken up the issue of reexamining the contract labour system prevailing in the petitioner industry and for that, the impugned communication dated 25.1.2002 came to be served without actually serving the original letter dated 12.12.2001. It in this background of the fact the present petitioner has approached this Court for quashing and setting the said impugned action of respondent No. 2 authority with incidental reliefs prayed for in the petition. The said relief clause is reproduced hereinbelow: “8(A) Your Lordships may be pleased to admit and allow present petition; (B) Your Lordships may be pleased to issue a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ or order holding and declaring that the impugned order dated 12.12.2001 bearing No. CLA/10(C)/519/M-3/KH/1331 of the respondent No. 1 State Government to the Respondent No. 2 Board asking for the advise/recommendations regarding prohibition/abolition of contract labour system in (I) process of candy production, (ii) packing, (iii) ice cream packing and (iv) bringing out the material from the cold storage as illegal, unjust, arbitrary, discriminatory, irrational, oppressive and violative of Articles 14 and 19(1)(g). (C) Your Lordship may be pleased to issue a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ or order holding and declaring that the action of the respondent No. 2 Board of initiating and continuing the proceedings/inquiry being reference No. (33)2/02, pursuant to the impugned order dated 12.12.2001 and of not discontinuing and/or dropping the further inquiry/proceedings in connection with reference No. (33)2/02 despite its own order dated 11.7.2000 in reference 33/91 as illegal, unjust, arbitrary, discriminatory, irrational, oppressive and violative of Articles 14 and 19(1)(g). (D) Your Lordship may be pleased to issue of a writ of mandamus or a writ in the nature of mandamus or a writ of certiorari or a writ in the nature of certiorari or any other appropriate writ, order or direction quashing and setting aside the impugned order dated 12.12.2001 and the notice dated 25.1.2002 and also quashing and setting aside the proceedings being reference No. (33)2/02 initiated and continued on the basis and pursuant to the said and impugned order dated 12.12.2001 and notice dated 25.1.2002 and decision of respondent No. 1 contained in letter No. CLA/1080/519/H-3/Kha-1331 dated 12.12.2001 and of the respondent No. 2 in its notice dated 25.1.2002. (E) Your Lordships may be pleased to issue a writ of mandamus or a writ in the nature of mandamus or a writ of certiorari or a writ in the nature of certiorari or any other appropriate writ, order or direction quashing and setting aside the Notice No. CL Board/Ref. (30) 2/02/88 dated 25.1.2002 issued by respondent No. 2 calling upon the petitioner company to furnish the information, details and documents mentioned therein and also the proceeding of reference No. (33)2/02. (F) Your Lordships may be pleased to issue a writ of prohibition or a writ in the nature of prohibition or any other appropriate writ, order or direction permanently restraining the respondents and their officers and agents from proceeding further in the matter/inquiry being reference No. (33)2/02, in any manner, pursuant to and/or on the basis of and/or in connection with/furtherance of the said and impugned order/decision and direction dated 12.12.2001 of the respondent No. 1 and/or 25.1.2002 by the respondent No. 2. (G) Pending hearing and final disposal of present petition, Your Lordships may be pleased to issue appropriate writ, order or direction staying the implementation, operation and execution of the said and impugned order dated 12.12.2001 and notice dated 25.1.2002 and restraining the respondents and their agents from continuing with, in any manner, the subject inquiry/proceedings pursuant to the impugned order dated 12.12.2001 and notice dated 25.1.2002 and to stay the further proceedings in connection with the subject inquiry/matter. (H) Ad interim relief in terms of para may be granted. (I) Costs of this petition may be awarded. (J) Any other and further relief/s as the nature and circumstances of the case may require, be also granted.” 6. (H) Ad interim relief in terms of para may be granted. (I) Costs of this petition may be awarded. (J) Any other and further relief/s as the nature and circumstances of the case may require, be also granted.” 6. At the initial stage, this Court on 18.8.2003 while admitting the petition has granted interim relief in terms of Para.8(G) and since then, the matter is pending for final hearing. Lastly, when it has come up for consideration in the year 2014, this Court was constrained to pass following order on 5.2.2014: “It indeed reflects a sorry state of affairs that in the petition of the year 2003 awaiting for final hearing, the State Government, who has to respond and answer the case of the petitioner, has not filed any affidavit. The matter could have proceeded. However in order to give an opportunity, it is ordered to be posted next on 21st February, 2014, with an observation that State Government may file affidavit-in-reply, if so chooses, on or before 14th February, 2014.” 7. In response thereto, despite the specific order being passed even upto July, 2014, no affidavit came to be filed by the authority which has again constrained the Court to pass the following order on 28.7.2014: “Despite the earlier order passed by the learned Single Judge dated 05/02/2014, State has not filed any affidavit-in-reply. Shri Jaimin Gandhi, learned AGP has requested to grant some more time to file affidavit-in-reply on behalf of the State. Reluctantly and as a last chance, time to file affidavit-in-reply on behalf of the State is granted up to 11/08/2014, failing which right to file affidavit-in-reply on behalf of the State shall be closed. Adjourned.” 8. It appears that it is only after that order having been passed giving last chance, the authority has chosen to file affidavit only on 11.8.2014. During the passage of time, an opportunity was also given to the authority to appraise the Court about the development which took place during the pendency of petition but, nothing comes out in that direction. With the result, it was desirable that since no development is likely to be expected, the matter deserves to be dealt with on the basis of available material on record and hence, the matter is heard finally. 9. Learned counsel, Mr. With the result, it was desirable that since no development is likely to be expected, the matter deserves to be dealt with on the basis of available material on record and hence, the matter is heard finally. 9. Learned counsel, Mr. Kunan Naik appearing on behalf of petitioners has contended that the committee of the Board has examined in detail every aspect pertaining to and relevant to the contract labour system which is prevailing in the petitioner industry. It was brought to the notice of the Court that during the course of the said Reference No. 33 of 1997, the Board consisting of members of the expert body has submitted a detailed report on 11.7.2000 with a specific finding on every issues. It was also contended by learned counsel for the petitioners that while preparing the said report, the committee/Board has granted an opportunity to every concerned including the General Mazdoor Sabha on behalf of the workmen and therefore, it is not that the report is unanimously prepared without considering the respective representatives. Learned counsel for the petitioners has drawn attention of the Court about the conclusions arrived at by the committee and has submitted that the recommendations clearly provide not to prohibit the system which is prevailing in the petitioner industry. A detailed report submitted by the Board/committee in which several issues have been dealt with. The Board has examined the process pertaining to candy production as also the process of packing. In addition thereto, the ice-cream packing work and the work pertaining to the cold storage has also been considered and on each head, the Board found not to recommend to prohibit the system which is prevailing. A fact is worth to be taken note of that in the ice-cream industry, practically every manufacturers are obeying and observing such system which is prevailing in the petitioner company and therefore, learned counsel submitted that when the expert body has specifically opined not to prohibit the system which is prevailing, it would not open for the Government officer to act on the whims and without application of mind or without any cogent reasons to deviate from the recommendations of the expert body. Learned counsel further submitted that under the provisions of the Contract Labour (Regulation and Abolition) Act, 1970 (for short ‘the Act’), the Board is set up in the advisory capacity of the State Government and Section 4 of the Act in which the State Government is constituting such Board called as State Advisory Contract Labour Board. The constitution of Board is spelt out in Section 4 of the Act which reads, thus; “Section 4. State Advisory Board.- (1) The State Government may constitute a Board to be called the State Advisory Contract Labour Board (hereinafter referred to as the State Board) to advise the State Government on such matters arising out of the administration of this Act as may be referred to it and to carry out other functions assigned to its under this Act. (2) The State Board shall consist of – (a) a Chairman to be appointed by the State Government. (b) the Labour Commissioner, ex officio, or in his absence any other nominated by the State Government in this behalf; (c) such number of members, no exceeding eleven but not less than nine, as the State Government may nominate to represent that Government, the industry, the contractors, the workmen and any other interests which, in the opinion of the State Government, ought to be represented on the State Board. (3) The number of persons to be appointed as members from each of the categories specified in sub-section (2), the term of office and other conditions of service of, the procedure to be followed in the discharge of their functions by, and the manner of filling vacancies among, the members of the State Board shall be such as may be prescribed: Provided that the number of members nominated to represent the workmen shall not be less than the number of members nominated to represent the principal employers and the contractors.” 10. Learned counsel for the petitioner has submitted that by virtue of Section 10 which deals with prohibition of employment of contract labour, the appropriate Government may, after consultation with the Central Board or the State Board, prohibit the employment of contract labour in any process in the establishment and before that, relevant factors are to be taken into consideration and therefore, what is envisaged in Section 10 of the Act is that, to arrive at a conclusion to prohibit the employment of contract labour in any establishment, the relevant factors are to be taken into consideration and there must reflect a subjective satisfaction on the issue. Sub-section 2 of Section 10 of the Act is the provision as to whether the relevant factors to be considered while taking decision and therefore, for these factors to be examined, the appropriate Government has constituted the Board and therefore, the recommendations of the Board is of vital importance. Section 10 of the Act worth to be taken note of and therefore, reproduced hereinafter: “Section 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, 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 their 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.” 11. 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.” 11. It is no doubt true that ultimate decision is to be taken by the appropriate Government and the Board’s function is of a advisory nature. But the very object of constitution of Board and entrusting power to examine the factors to pre-supposes that before taking any action, the Board’s recommendations are worth to be taken note of and to be considered in the right spirit. If that is not being done, the very purpose of constitution of Board and entrustment of power of it to inquiry would be defeated and there may not be left any significance of the report of the Board and therefore, the recommendations of the Board are of vital importance. 12. Now if we revert back to the case on hand, there is a detail report submitted by the Board in Reference No. 33 of 1997 wherein, to arrive at a conclusion not to prohibit the contract labour system prevailing in the petitioner industry, the conclusions are based upon, are examined in detail and are arrived at after granting full opportunity to the respective parties and if we go through the impugned communication which is cryptic in nature, the authority has tried to reopen without any valid reason. So much so that the original communication dated 12.12.2001 has also not been served to the petitioner and straightway, the impugned communication sent to the petitioner industry which at Page-16 of the compilation. A bare reading of the same would make it clear that there is no application of mind at all; there is no justification of any nature as to under which circumstance the Board is required to be directed to consider a fresh and there appears to be no cogent material or the reason which would justify the action of reopening. The issue which has already been examined and recommended by a detailed report and therefore, prima facie it seems that the respondent authority without considering any material acted on the whims and sent the communication which is impugned in the petition. 13. Learned counsel for the petitioners submitted that impugned communication is not reflecting any application of mind nor is reflecting any justifiable reasons and therefore, the action initiated by the authority is invalid. 13. Learned counsel for the petitioners submitted that impugned communication is not reflecting any application of mind nor is reflecting any justifiable reasons and therefore, the action initiated by the authority is invalid. Learned counsel also submitted that the delay which is tried to be attributed is not at all at the instance of the petitioner in any manner as the petitioner industry has fully cooperated the process of examination at the instance of Board and therefore, simply because the authority has received the report late, it cannot be said to be a justifiable act to consider afresh and to receive a fresh opinion and therefore, entire exercise which is tried to be taken is nothing but a clear example of whims of the authority and therefore, requested the Court not to permit such kind of impugned action. Learned counsel has further drawn attention of the Court that by way of specific letters at Pg.54 and 56 of the compilation which reflect a specific protest of the petitioners wherein, it has been mentioned that earlier all these issues have been gone into by the expert body and therefore, there is no justifiable reason to reopen. Even the last request in the form of letter dated 14.11.2002 is also specifically sent to the authority and requested to first decide whether is it open under the circumstance to go for a fresh opinion. However, learned counsel has seriously agitated that there is no attention of whatsoever nature is paid to such protest letters and the requests and straightway, sent the impugned communication. Learned counsel has further drawn attention that the union representative was also very much present at the time when hearing and examination took place by the Board and even said recommendations have not been agitated by the union so far and therefore, the union has acquiesce its right to make any grievance about it in the present petition and therefore, the respondent Union has no locus standi to oppose the petition. It was further contended that it is at the instance of the union’s petition, this Court directed to take steps vide order dated 19.2.2002 and therefore, what has been undertaken by the authority is only on account of union’s insistence and the detailed examination and the report came to be prepared by the Board after granting proper opportunity to the union as well and therefore, under this set of circumstance, when there is no action initiated by the union, it is not open for the respondent - union to agitate any grievance in the present proceeding. However, be that as it may, leaned counsel for the petitioners submitted that if the Board’s recommendations are to be taken so lightly which is the recommendation of expert body then, very purpose of constitution of the Board would be defeated and the industry will be left to the whims and uncontrolled discretion of the appropriate Government and therefore, requested the Court to grant the relief as prayed for in the petition. 14. Learned counsel, Mr. J.V. Japee appearing on behalf of respondent No. 3 Union has submitted that it is the ultimate authority of the State Government to take a final decision in the matter and it is not for the Board to insist for implementation of its own recommendations. Learned counsel has submitted that the seasonal character of the ice-cream industry is a total misconception and therefore, the Board ought not to have considered that factor while recommending. Learned counsel also submitted that it is ultimately for the Government to take decision and therefore, the petitioners cannot insist that Board’s recommendations are to be given full effect. Learned counsel also submitted that ultimately a decision is arrived at by the State Government not to accept the recommendations and therefore, it cannot be said that petitioners have got any legitimate right to seek relief in extraordinary jurisdiction. Learned counsel has submitted that since the original impugned communication dated 12.12.2001 is not supplied by the State authority, the real reason for decision is not possible to be known and therefore, has not commented upon it and left it to take suitable decision on its own available record. 15. As against this, learned AGP, Mr. Learned counsel has submitted that since the original impugned communication dated 12.12.2001 is not supplied by the State authority, the real reason for decision is not possible to be known and therefore, has not commented upon it and left it to take suitable decision on its own available record. 15. As against this, learned AGP, Mr. Tirthraj Pandya has submitted that essential challenge made by the petitioner is about action of the State Government of not accepting the recommendations and therefore, since ultimate authorities lies with the Government, it is not open for the petitioner - industry to agitate and bring the petition. It was also submitted by learned AGP that the Government has full discretion either to accept or to reject the opinion of the Board and that rejection has already taken place which has attained finality and therefore, it is not open for the petitioners to seek any direction from the Court. Learned AGP has further submitted that in affidavit-in-reply, it has been tried to be explained that on account of late submission of recommendations, a decision was arrived at not to accept the recommendation. 16. Learned AGP is not in a position to explain as to delay which is said to have taken place at whose instance. Learned AGP is also not in a position to project any reason as to why and under which circumstance, the recommendations prepared by the Board has not been accepted and therefore, despite the fact that the officer with the designation of Assistant Commissioner of Labour happened to the Secretary, Board is present with relevant papers but, the papers contained no relevant material nor reasons which are based on such decision making process and therefore, practically the real controversy is as to under which circumstance, a decision is taken not to accept the recommendations is completely missing and therefore, the ground reality is that there is no justifiable material with the authority to substantiate its own decision for not accepting the recommendations of the Board and further, there is no material whatsoever nature which may ultimately support the stand of the Government. Even the affidavits which are filed one on 21.2.2013 and another on 11.8.2014 do not reflect any justification and found to be absolutely laconic. 17. Even the affidavits which are filed one on 21.2.2013 and another on 11.8.2014 do not reflect any justification and found to be absolutely laconic. 17. Therefore, considering this overall set of circumstance prevailing on record of the case on hand, following facts are emerging which are practically not in dispute; “(i) Upon the direction issued by this Court, a detailed examination has taken place on the issue of contract labour system prevailing in petitioner industry by an expert body and that expert body has granted specific opportunity of representation to all concerned affected persons including the union representative. (ii) After granting full opportunity of representation to every affected persons, expert body has come to a positive conclusion that the system which is prevailing in the petitioner industry is not recommended to be prohibited and this information which was granted in the form of report dated 11.7.2000 was sent to the Government on 6.12.2000. The Board while issuing final recommendations has justified its report by coming to a specific conclusion on examination of each and every aspect and the detailed submission of the recommendation is reflected at Pg.26 to 34 of the compilation and therefore, it appears that this expert body has done its uphill task of examining the issue entrusted to it and with proper application of mind and with valid reason, has recommended. (iii) It is not reflecting from the record that why the report was sent to the Government late. Certainly, it appears that delay might not have been of the petitioner industry because ultimately the report was in the hands of Board and further, the Board was constituted by the appropriate Government i.e. respondent State authority and therefore, from the two affidavits which are filed, the delay on the contrary appears to be on part of either Board or the Government to deal with the issue and therefore, said delay appears to be of no prejudice to other party by virtue of which second time reference is to be made. (iv) The report was submitted way back in December, 2000. But then it appears that neither the State Government nor the union has raised any serious grievances. Of course, after almost unreasonable period, the authority has opined to reexamination and it is emerging from the record that for this reexamination, no valid reason muchless even reason is reflected. (iv) The report was submitted way back in December, 2000. But then it appears that neither the State Government nor the union has raised any serious grievances. Of course, after almost unreasonable period, the authority has opined to reexamination and it is emerging from the record that for this reexamination, no valid reason muchless even reason is reflected. It also emerges from the record that to arrive at this decision straightway to re-inquire or to make a second reference, no opportunity is given to the petitioners. On the contrary, the petitioners’ protest letters which are submitted have not been dealt with at all. (v) The material on record reflects that Board is not functioning regularly. During the passage of time, it has been dismantle and it has again been reconstituted and again derailed and therefore, it appears that even after making second reference, no fruitful results likely to come. The manner in which the affidavit is filed after more than a period of 10 years and that too, in such a casual manner would clearly indicate as to how serious the State authority in this peculiar circumstance. It appears that just for the sake of making second reference, the impugned communication appears to have been issued. (vi) The detailed examination of the Board on each of the issue clearly reflects that the Board is satisfied not to prohibit the contract labour in the petitioner industry and it appears that each factor as contemplated under Section 10 of the Act has been examined in detail to arrive at a decision and therefore, the State Government cannot ignore and brush aside such detailed examination and the recommendations submitted to it. It also appears from the record that in icecream industry, every manufacturer dealing in the activity is following this pattern of employment of contract labour as the same is of seasonal nature and this aspect which has been highlighted by the learned counsel for the petitioners has neither been opposed nor reflected to have been dealt with in two affidavits and therefore, it seems that every manufacturer is dealing with such kind of pattern of employment.” 18. From the aforesaid set of circumstance, it appears to this Court that there is no justifiable reason of any nature with the State authority to make a second reference in the form of impugned communication dated 25.1.2002. From the aforesaid set of circumstance, it appears to this Court that there is no justifiable reason of any nature with the State authority to make a second reference in the form of impugned communication dated 25.1.2002. There appears to be no valid reason to take such decision and the decision suffers from the vice of principle of natural justice and when the reasons are not reflected at all of any nature in an action which certainly can be violative of principles of natural justice. There appears to be clear non application of mind reflecting in the impugned action and therefore, in the opinion of this Court such impugned action is not worth to be continued in the eye of law. Same is required to be quashed and set aside. If the recommendations are allowed to be dealt with by the State authority like this then, very purpose of constitution of Board the very purpose of entrustment of examination to the Board would be defeated and therefore, by a stroke of pen without assigning any reason, without giving any opportunity to the industry, the authority cannot brush aside the recommendations which are already available on the file like this and therefore, the impugned communication dated 25.1.2002 is hereby quashed and set aside. The present petition is allowed. Rule is made absolute to the aforesaid extent. 19. However, as broad consensus arrived at between the learned counsel representing the respective sides that if in future the Government wants to examine the issue related to contract labour system in the petitioner industry, it is left open for the appropriate Government to examine after following procedure and the statutory requirement and on the basis of fresh material and to this, learned counsel for the petitioners has no objection and ensure to cooperate said process. Therefore, while disposing of the petition, a liberty is kept open to the respondent authority to initiate appropriate step on the basis of fresh material to inquire into, if found necessary.