Food Corporation of India Workers'' Union vs Food Corporation of India

Kalyamnoy Ganguli, J.—In the instant application under Article 226 of the Constitution of India, the Petitioners, inter alia, pray for a writ in the nature of mandamus commanding the Respondents to rescind, recall, cancel and withdraw the proposed retrenchment notices, a specimen copy of which has been annexed to the petition marked with the letter ''N'' and to command the Food Corporation of India not to dehire the Central Warehousing Corporation godowns at Central Warehousing, Calcutta VIII (Presidency Jute Mills), Rishra; Central Warehouse Calcutta X (Ambica Jute Mills), Central Warehouse Calcutta II (Hanuman-Jutc Mills) and Central Warehouse, Calcutta I (Shyamnagar South Jute Mills) and restraining the Respondents from retrenching the workmen whose names appear in the annexure marked with letter ''A'' and in the alternative commanding the Food Corporation of India to transfer the said workmen to its nearby depots.

The Petitioner No. 1 is a registered trade union seeking to espouse the cause of all sections of workers of the Food Corporation of India and the Petitioner No. 2 is the President of the Petitioner No. 1.

The case of the Petitioners is that the persons whose names appear at Annex. ''A'' of the petition are, in fact, all employees of the Food Corporation of India although the Central Warehousing Corporation and sometimes the State Warehousing Corporations are responsible for the immediate payment of their wages.

The Petitioners state that since the inception of the Food Corporation of India after the enactment of the Food Corporation of India Act, the Food Corporation of India, hereinafter referred to as the F.C.I., has been employing labour at its various godowns and depots to carry out its functions, the primary and basic function being handling of food-grains and food-stuffs. The Petitioners state that such function of handling food-grains and foodstuffs is perennial in nature. The members of the Petitioner No. 1 whose names appear in Annex. ''A'' of the petition are working as SardanMondal/Munsi/Han-dling/ancillary labours of the F.C.I, for more or less 20 years.

It is stated that the F.C.I, carries its functions of handling of food-grains and food-stuffs through three types of godowns. The first category includes the godowns which are owned by the F.C.I., the second category includes godowns which are hired by the F.C.I, and the third category falls in the hired godowns where the F.C.I, bears the cost of labours who are paid wages and other fringe benefits by the F.C.I, but distributed through the supervising agents appointed by the F.C.I, as for instance'' the Central Warehousing Corporation hereinafter referred to the C.W.C. and the State Warehousing Corporation, hereinafter refcred to as the S.W.C.

The workmen whose names appear at Annex. ''A'' of the petition arc employed in the godowns belonging to or hired by the C.W.C. but the said workmen work exclusively for the F.C.I. The C.W.C. is paid some supervising charges by the F.C.I. for looking after the work of such godowns.

Before proceeding further it should be noted that the basic facts of this case are more or less admitted although the interpretation of these facts is in question.

It is asserted in the petition that although the employees concerned are working in the C.W.C. and S.W.C. godowns yet as they work exclusively, for the F.C.I, the real employer. is the F.C.I. and, in fact, the F.C.I. has always taken the responsibility of the said employees including payment of wages, other fringe benefits, bonus and uniforms. The F.C.I. has also paid incentive wages to such workmen. It may also be noted here that the rate of bonus paid by the C.W.C. to its own workmen and the rate of bonus paid to the workers working in the C.W.C. godowns working exclusively for the F.C.I. are different and the F.C.I. invariably reimburses the C.W.C. for payment of such bonus. According to the Petitioners, the C.W.C. merely manages the working of the godowns for which they are paid a supervising charge. In effect, it is stressed that the workmen concerned are the employees of the F.C.I. as the entire responsibility of such workmen are shouldered by the F.C.I. and the C.W.C. merely comes as an intermediary.

Several illustrations and instances have been cited in the petition to drive home the point that the workmen concerned are in reality the employees of the F.C.I. and that the C.W.C. is a mere supervising agent working for a re-muneration for supervising the work of such employees of the F.C.I.

It is stated in elucidation of this point that when, in an arbitration proceeding u/s 10A of the Industrial Disputes Act, 1947, an award was published that the management of the godowns dealing with the F.C.I, goods were liable to be given incentive wages to the workmen concerned, the F.C.I. issued a notification which is Annex. ''D'' to the petition, stating that the incentive schemes for handling workers would be applicable to all the workers of the F.C.I. These incentive wages were also paid or in otherwise the award was made applicable also to the workers working for F.C.I. in the godowns managed by C.W.C. and S.W.C. In fact, the management of the C.W.C. and S.W.C. were asked by the F.C.I. to implement the award so far as the F.C.I. workers working in the C.W.C. and S.W.C. godowns were concerned. Another illustration has been given to establish the point that the workers concerned arc really the employees of the F.C.I. and not of C.W.C. or the S.W.C. by referring to an order of reference as contained in Annex. ''E'' to the writ petition in connection with the retrenchment of 887 workers of the F.C.I. working in the C.W.C. and S.W.C. godowns. It will appear from the order of reference which is Annex. ''E'' to the petition that persons sought to be retrenched were employees of the F.C.I. The said reference is still pending adjudication, but it has been stated and stressed in the petition that most of the said retrenched workmen of the C.W.C. and S.W.C. godowns for whom the said reference was made were later reappointed by the F.C.I. in its depots with all due engagements given to them by the F.C.I. From this the Petitioner wants to show that the F.C.I. itself has accepted such workmen working in the C.W.C. and S.W.C. godowns as its own workmen. This aspect of the matter has not been categorically denied by the F.C.I. in its affidavit-in-opposilion.

It is further stated that the F.C.I. also provides the workers working in such C.W.C. and S.W.C. godowns with uniforms as per specification given to F.C.I. departmentalised workers. It may in this connection be noted that other workers, who are working in the same godowns but not for the work of the F.C.I. are not provided with such uniforms by the C.W.C. and S.W.C. authorities. In fact, the C.W.C. in its affi-davit-in-opposition at para. 9 specifically stated that the workmen concerned employed at the godowns of the C.W.C. exclusively for the F.C.I. were paid the same emoluments as the workmen of the F.C.I. and such payments were reimbursed to the C.W.C. by the F.C.I. In para. 13 of the affidavit-in-opposition the C.W.C. has stated that the bonus paid to the present workmen in the godowns of the C.W.C. rented for exclusive use of F.C.I. was at per with bonus to the dcpartmenlalised worker of F.C.I. and it is different from that paid to the employees working for the C.W.C. from this it may be inferred that the C.W.C. pays two kinds of bonus to its employees employed in the same godowns because one set of workmen are employed by the C.W.C. authorities and the other set is treated to have been employed by the F.C.I. itself though through the intermediary of the C.W.C. The same is the case in respect of the workmen working in such C.W.C. and S.W.C. godowns on behalf of the F.C.I. in respect of the payment of variable dearness allowance to such employees. In this connection a reference may be made to Annex. ''G'' of the writ petition. Even ex gratia payments given to such workmen working for F.C.I. in C.W.C. godowns are also determined by the F.C.I, which would appear from Annex. T to the writ petition.

It is further stated in the petition that in the past whenever there was any surplusage of F.C.I. workers in C.W.C. and S.W.C. godowns, the F.C.I. ultimately look the responsibility of those surplus workmen and appointed and/or transferred such workmen in other depots of the F.C.I. In this connection a reference may be made to the memo No. DM/..../L-49/85/2371/4 dated September 6, 1990, whercfrom it will appear that consequent on dehiring the S.W.C. Foreshore Road godown with effect from September 1, 1990, 15 departmentalised workers of S.W.C. Foreshore Road godown were posted to the F.C.I. Nandibagan depot. The said memo, has been annexed to the petition marked with the letter ''J''.

This of course has been sought to be countered by the F.C.I. by staling that such transfers were made not with the concurrence of the competent authority. But the fact remains that these workmen were withdrawn from the S.W.C. godowns and were posted at F.C.I. Even the letter of appointment on compassionate grounds and appointments to the next of kin to the workers working on F.C.I. work for C.W.C. godowns were given by F.C.I. and the C.W.C. had no manner of control over such appointments. A specimen copy of such appointment letter has also been annexed to the petition marked with the letter ''K''. It has been further feebly sought to be contended by the F.C.I, that it instructed to C.W.C. that appointment letters issued by the C.W.C. should not mention that these appointments were made on behalf of the F.C.I., but the fact remains that even after such instructions, in such letters of appointment the C.W.C. invariably stated that such appointments were made on behalf of the F.C.I.

Both F.C.I. and C.W.C. have filed affidavits-in-oppo-sition in the matter, the C.W.C. in its affidavit-in-opposition first of all contends that the writ petition is not maintainable, inter alia, inasmuch as this involves certain disputed questions of fact which cannot be resolved in the writ petition. I am afraid this is not correct inasmuch as the facts are not disputed at all but the inference to be drawn from such facts are the points in issue in the writ petition. In fact, Mr. P.S. Sengupta appearing for the Petitioners urged before this Court that even if the matter is referred to the Industrial Tribunal for resolving the dispute on evidence, the Petitioners will not be able to produce any evidence other than those annexed to the writ petition. These are all documentary evidences which can neither by supplimented nor supplanted by any oral evidence to the contrary and relegating the case to an Industrial Tribunal will only result in undue delay as there is nothing to be decided on oral evidence before the Industrial Tribunal.

The C.W.C. in para. 6 of its affidavit-in-opposition has fairly and honestly staled that the godowns referred to in the writ petition were rented by the C.W.C. at the specific request of F.C.I. exclusively for the purpose of storage of the goods of F.C.I. and that the emoluments of the workmen working in such godowns were reimbursed by the F.C.I. to C.W.C. and it is only when the F.C.I. decided to dehire the godowns in question, that the C.W.C. was obliged to issue the petrenchment notices impugned in the writ petition. It is stated by the C.W.C. that the retrenchment compensation was provided by the F.C.I. It is further admitted in para. 8 of the said affidavit-in-opposition of the C.W.C. that the amounts paid to the workmen working in the C.W.C. godowns exclusively for the F.C.I. arc realised by the C.W.C. from F.C.I. and that the workmen working in the C.W.C. godowns exclusively for the F.C.I. arc paid the same emoluments as the workmen of F.C.I. It is further admitted that in case of retrenchment of workmen working in the C.W.C. godowns for the purpose of F.C.I. the workmen Were paid retrenchment benefits in effect by the F.C.I. The C.W.C. has also admitted that the bonus paid to the workmen in such godowns of C.W.C. rented for the exclusive use of F.C.I. was at par with the bonus paid to the departmentalised workers of F.C.I. and it is different from that paid to the employees employed directly by the C.W.C. It is further stated in para. 19 of the affidavit-in-opposition of the C.W.C. that the impugned retrenchment notices had to be issued because the F.C.I. decided to dehirc the godowns in question and that the F.C.I. has also agreed to pay the retrenchment compensation in respect of such workmen to be retrenched by the C.W.C.

The affidavit-in-opposition filed by the C.W.C. strengthens the case of the Petitioners that the workmen concerned are in reality the workmen of F.C.I. and C.W.C. merely acts as an intermediary and is nothing but a thin layer of insulation between the workmen concerned and the F.C.I. and that for preserving such layer of insulation the C.W.C. is paid some supervising charges.

The F.C.I. has also filed, as already stated, an affidavit-in-opposition. The first point taken by the F.C.I. is the maintainability of the writ petition on the ground of absence of any employer-employee relationship between the workmen concerned as listed in Annex. ''A'' of the petition and the F.C.I. because of the existence of the aforesaid layer of insulation. The F.C.I. also slates that the. matter involves disputed questions of fact which cannot be resolved in a writ petition but should be referred to the appropriate forum under the provisions of the Industrial Disputes Act. The F.C.I. further claims that a policy decision of the F.C.I. cannot be challenged in a writ application.

The first point raised by the F.C.I. regarding the employer-employee relationship amounts to begging the question as that is the subject-matter of the writ petition itself and that is the only substantive point in the writ petition. I have already quoted that there arc no disputed questions of fact but only disputed questions of inferences to be drawn from admitted facts.

The F.C.I. concentrated its attack on the question of employer-employee relationship and cited a large number of decisions on this aspect of the matter but in my opinion it is not even necessary to refer to the said cases. The ratios of the said decisions are well-known and well-respected, but these decisions become relevant only when the question arises as between two parties in an action relating to their inter se relationship. Here the case is entirely different. Here it is not a case whether in between two parlies the question arises as to whether the second party is the employee of the first party or is an independent contractor agreeing to produce a given result in exchange of the remuneration promised by the first party and whether the first parly has not only the control over the promised result of the work to be done, but the first party has control over the manner in which such work is to be done. These are time-tested propositions of law and in their own field they are invulnerable and I respectfully agree with the decisions cited by Dr. Tapas K. Banerjce appearing for the F.C.I. But the question here is altogether a different one. Here in the instant case, there arc three parlies, the F.C.I., the C.W.C. and the workmen whose names appear at Annex. ''A''. The third dimension present in the instant case is conspicuous by its absence in all the cases cited by Dr. Tapas K. Banerjce appearing for the F.C.I. The admitted position of fact is that the F.C.I. requests the C.W.C. to hire certain godowns and to employ workmen exclusively for the handling and storing works for the F.C.I. Here the C.W.C. merely acts as an agent of F.C.I. and looks after the works of the F.C.I. for which it gets a supervising charge. It may be reiterated that all the incidences of the work are borne by F.C.I. The matter now boils down to the question of law as to whether the thin layer of insulation between the F.C.I. and the workmen concerned should be allowed to stand in the way of treating the workmen as the workmen of F.C.I. These are the days of lifting of veails and if we lift such veail of C.W.C., F.C.I. and the workmen concerned arc tete-a-lele. If that be so it must of necessity be concluded that the workmen concerned are workmen of F.C.I. and the C.W.C. merely acts as a catalytic agent, though for a remuneration.

In this case a reference to the case of Hussainbhai, Calicut Vs. The Alath Factory Thezhilali Union, Kozhikode and Others, is veiy material, where the ''clicking of theory was propounded. Paragraph 3 of the said judgment reads as follows:

Who is an employee, in Labour Law ? That is the short, die-hard question raised here but covered by this Court''s earlier decisions. Like the High Court, we give short shirft to the contention that the patitioner has entered into agreements with intermediate contractors who had hired the Respondent Union''s workmen and so no direct employer-employee vinculum juris existed between the Petitioner and the workmen.

Paragraph 4 of the said judgment states as follows:

This argument is impeccable in laissez faire economic ''red in tooth and claw'' and under the Contract Act rooted in English Common Law. But the human gap of a century yawns between this strict doctrine and industrial jurisprudence. The source and strength of the industrial branch of Third World Jurisprudence is social justice proclaimed in the Preamble to the Constitution. This Court in Mangalore Ganesh Beedi Works and Others Vs. Union of India (UOI) and Others, , has raised on British and American rulings to hold that mere contracts are not decisive and the complex of considerations relevant to the relationship is different. Indian justice beyond Atlantic liberalism has a rule of law which runs to the paid of the rule of life. And life, in conditions of proverty aplenty, is livelihood, and livelihood is work with wages. Raw societal realities, not finespun legal niceties, not competitive market economics but complex protective principles, shape the law when the weaker, working class sector needs succour for livelihood through labour. The conceptual confusion between the clasical law of contracts and the special branch of law sensitive to exploitative situations accounts for the submission that the High Court is in error in its holding against the Petitioner.

Paragraph 5 of the said judgment reads as follows:

The true test may, with brevity, be indicated once again. Where a worker or group of workers labours to produce goods or services and these goods or services are for the business of another, that other is, in fact, the employer. He has economic control over the workers'' subsistence, skill and continued employment. If he, for any reason chokes off, the worker is, virtually, laid off. The presence of intermediate contractors with whom alone the workers have immediate or direct relationship ex contractu is of no consequence when, on lifting the veil or looking at the conspectus of factors governing employment, we discern the naked truth, though draped in different perfect paper arrangement, that the real employer is the Management, not the immediate contractor. 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 must be astute to avoid the mischief and achieve the purpose of the law and not be mislead by the maya of legal appearances.

Paragraph 6 of the said judgment states as follows:

If the livelihood of the workmen substantially depends on labour rendered to produce goods and services for the benefit and satisfaction of an enterprise, the absence of direct relationship or the presence of dubious intermediaries or the make-believe trappings of detrachment from the management cannot snap the real-life bound: The story may vary but the inference defies ingenuity. The liability cannot be shaken of.

The ratio of the said judgment marches down to posterity with divine honours and once for all does away with the finer niceties of law where human starvation looms large because of the existence of legal innovation improvised by intellectual trend in the earth to deprive the unread and the unfed.

Considering all the aspects of the case and applying the ratio of the decision in the case of Hussain Bhai (Supra) I am of the opinion that the persons whose names appear at Annex. ''A'' of the petition arc employees of F.C.I, and the F.C.I. is responsible for their destiny.

A second question has been raised in the write petition, namely that the retrenchment notices impugned in the petition are not made in accordance with the provisions of Sections 25G and 25N of the Industrial Disputes Act, 1947. It is averred that the principle of ''last come first go'', as enunciated in Section 25G of the Act, has not been complied with, and from that point of view the impugned orders cannot be sustained in law. It has further been stated in the petition that the provisions of Section 25N, which are the conditions precedent to retrechment of workmen, have not been complied with. There seems to be substantial force behind thc contentions raised by the Petitioners. The Respondents in their feeble attempt to counter this have slated that as the F.C.I. is not a ''factory", the said provisions do not apply to it. This seems to be the strangest submission made by the Respondents at bay. Neither Section 25G nor Section 25N is confined to factories but these apply to all industrial establishments of certain magnitude and now under the extended definition of industry it cannot be argued by any stretch of imagination that the godowns concerned are not industries or that no industrial activities are carried or. there. I refrain with some effort from referring to the celebrated case of Bangalore Water Supply and Scwerage Board v. A. Rajappa AIR 1078 S.C. 548 which has now because a legend in the legal firmament of this country.

For the reasons stated above the impugned orders of retrenchment issued in respect of the workmen working in the C.W.C. godowns of the F.C.I. as detailed in Annex. ''A'' to the petition arc hereby set aside. Liberty, however, is given to the Respondents to proceed in accordance with law. The F.C.I. is directed to evolve a scheme to absorb the workmen concerned in their other godowns as far as practicable and if retrenchment becomes inevitable then the F.C.I. is directed to comply strictly with the provisions of Section 25G and 25N of the Industrial Disputes Act, 1947, before issuing the notices for retrenchment of any of such workmen.

The workmen whose names appear it Annex. ''A'' of the petition are to be paid all their emoluments from the date when the orders of retrenchment become effective minus any sums already received by them as retrenchment compensation according to the existing system of payment till such time as a final decision is arrived at in the light of the observations made hereinbefore. These payments arc to be made within four weeks from the date of communication of this order.

Summing up I hold that the workmen whose names appear at Annex. ''A'' to the writ petition are workmen of the F.C.I. and the retrenchment notices issued by the C.W.C. are set aside with the directions to the F.C.I. as indicated hereinabove.

In the facts and circumstances of this case, there will be no order as to costs.

After this judgment was delivered, a prayer for stay of operation of this judgment was made by the F.C.I. As 4 weeks'' time has already been given to them to act in terms of this judgment, the question of granting further stay does not arise, and, as such, the prayer is rejected.

All parties shall act on a signed copy of the operative part of this judgment upon usual undertaking.