The Management of Needle Industries Limited vs The Presiding Officer, Labour Court and Others

T.S. Sivagnanam, J.—The petitioner, the Management of Needle Industries Limited (hereinafter referred to as the ''Management'') has

challenged the common award dated 27.05.2002, passed by the Labour Court, Coimbatore (first respondent) in I.D. Nos. 2 to 6 etc of 1996.

Though the Management has challenged the common award which is in favour of the respondents 5 to 51, the learned counsel for the petitioner

submitted that the writ petition is being pursued only against three respondents namely, respondents 22, 42 & 47 who are the petitioners in I.D.

Nos. 47 of 1996, 63 of 1996 and 68 of 1996 respectively. It is further submitted that in respect of all other workmen/respondents, the matter has

been settled.

By the impugned award, the Labour Court directed the respondent/workmen to be reinstated by the Management with backwages and

continuity of service. Though individual disputes were raised by the respondent/workmen, on a memo filed by the workmen requesting for joint

trial, since the facts are similar, all disputes were heard together and a common award has been passed.

Before going into the facts of the case and the rival contentions it would be necessary to take into consideration the preliminary objection raised

by the learned Senior counsel appearing for the respondent/workmen as regards the maintainability of the writ petition. It is submitted that a single

writ petition is not maintainable against an award pronounced in several disputes, though being a common award and the Management having not

independently challenged each award separately by filing writ petitions, the writ petition at best could be confined only to one of the disputes.

The learned Senior counsel appearing for the respondents 26, 42 and 47 submitted that the writ petitioner has challenged the award, though a

common award in several disputes namely I.D. No. 190/95, 2 to 28, 32, 68, 93 to 95 and 112 of 1996, by a single writ petition the termination of

each worker is a separate cause of action and award in respect of each dispute is a separate cause of action. Therefore, the management should

have filed as many writ petitions as the awards in the respective industrial dispute and a single writ petition can quash only one award in one dispute

and therefore, the awards in the other industrial dispute will be operative and therefore, single writ petition as filed by the writ petitioner is not

maintainable and therefore, the writ petition is liable to be dismissed on that ground. The learned counsel further submitted that the rules framed

under Article 226 of the Constitution of India does not permit the kind of writ petition that the management has filed. It is submitted that Rule 2B of

the rules framed under Article 226 contemplates a situation, where several persons seek permission of the High Court to join in a single writ

petition. Therefore, Rule 2B has no application in the present case. Rule 2A is operates in a different situation, when in the writ petition there are

several respondents and the Court permits suing the class of respondents by permitting the named respondent to be sued in the representative

capacity as representing the entire class and further requires paper publication for the members of the said class to know that they are being sued in

a representing capacity, thus enabling such of those members of the class to file implead applications if they want to be heard in the matter in their

own right and therefore, rule 2A does not have application to the present case. It is further submitted that exercise of jurisdiction under Article 226

is governed by the rules framed by the High Court and the party invoking the jurisdiction are bound by the rules and have to conform to the rules.

In the absence of rules for a situation as the present one, the normal principle of each award has to be challenged by a separate writ petition as

each award in each industrial dispute is a separate cause of action. The learned counsel submitted that when there is no provision for a single

person to challenge a common decision in several cases, the only remedy available to writ petitioner is to challenge the decision in each of the

Industrial dispute and not to file single writ petition.

The learned counsel for the Management submitted that in the affidavit filed in support of the writ petition, the Management have sought

permission of this Court, to file a single writ petition, since the issue between the Management and the respondent/workmen is common and

identical and by permitting them to file a single writ petition, it would avoid multiplicity of litigation and unnecessary burden and it would promote

speedy disposal of the case. In support of his contention, the learned counsel placed reliance on the decision of the Hon''ble Division Bench of this

Court in The Management of EID Parry (India) Ltd. Vs. The Assistant Commissioner of Labour - 1 (Controlling Authority under the Payment of

Gratuity Act ) Madras and forty others, . It is submitted by the learned Senior counsel for the respondent workmen that the decision in

Management of Eid Parry (India) Limited, Ranipet, referred supra, does not support the case of the management, as the said decision has been

distinguished in Management of Rain Bow Dyeing Factory Salem and Others Vs. Industrial Tribunal, High Court Buildings, Madras and Another,

and in the decision reported in 1977 Lab IC 537: AIR 1977 Supreme Court 854 in Radhakrishna Naidu vs. Government of Andhra Pradesh.

It is seen that the Management had filed W.M.P. No. 3662 of 2003, wherein prayer has been made to permit the Management to file a single

writ petition against the common award. Taking into consideration that the writ petition has been admitted by this Court on 04.02.2003, and the

same was heard finally, ends of justice would be met, if the Management is permitted to file a single writ petition challenging the common award

subject to payment of separate Court fee for each one of the 47 Industrial Disputes. For the reason that the pleadings in the claim petitions in all the

Industrial disputes were identical except for the dates of appointments of the respective workmen. The counter statement filed in the Industrial

Disputes were also identical, the Industrial Disputes were heard together, presumably with consent of both parties, common evidence was

adduced and documents marked and ultimately a common award was passed, which is impugned in this writ petition. The case of the workmen is

largely based on the evidence of Mr. Stephen Daniel (WW-15), who was a respondent in the claim petition. Therefore, in the peculiar

circumstances of the case and taking note of the conduct of parties, the petitioner should be permitted to file a single writ petition, subject to

payment of separate court fee for each of the 47 Industrial Disputes which were subject matter of the common award. Accordingly, the preliminary

objection raised by the learned counsel for the respondent/workmen is answered taking note of the facts of the case and conduct of parties.

Therefore, no further adjudication is required on this point.

The pleadings in all these cases are identical, it would suffice to take note of the pleadings in I.D. No. 63 of 1996, filed by the respondent

number 42 in this writ petition.

The respondent/workmen raised the industrial dispute alleging that she was illegally terminated from service by the petitioner Management from

15.12.1993 through its intermediary, the fourth respondent.

The respondent/workman raised an industrial dispute before the Labour Officer, Coonoor u/s 2A of the Industrial Disputes Act (I.D. Act). The

conciliation ended in failure vide report dated 27.02.1995 and the workman moved Labour Court by filing a claim petitions u/s 2-A(2) of the I.D.

Act.

In the claim petition, it was contended that the Management is involved in the production of sewing needles, surgical needles, safety pins,

knitting pins, hooks, buttons etc., and more than 1600 employees are being employed by the Management in the various units run by it. The

Management has formed several units in different names and under such garb has denied the statutory benefits to its female workers numbering

The names of such Units owned by the Management have been stated to be as follows:-

Evergreen Enterprises

Universal Enterprises

Grindwell Enterprises

Quality Printers

Pack all Products

Knitwell Industries

V.J.V. Works

Nazareth Enterprises

Seldeen Wire Products

Bob Enterprises

It was further stated that the workmen were initially employed by the Management directly, subsequently transferred by the Management and

were asked to work in the aforesaid units created by the Management which form part of its industrial establishment from 1988 onwards

continuously without any break in the aforesaid Units. The workmen were engaged in the aforesaid units during various spells and their services

were continuous from the year 1986. All the aforesaid units are within the premises of the petitioner Management and the machinery and other

materials required for the manufacturing activity belong to the Management and the process involving the manufacture of hand sewing needles,

surgical needles, knitting pins, safety pins, hooks, buttons etc., which is the manufacturing activity of the Management is being carried on in all the

aforesaid units and the workman was involved in such manufacturing activity of the management. The workman was engaged on piece rate basis

and her wages were paid at the end of every month which comes to Rs. 600/- per month on an average. The workman was involved in the

process of the manufacturing activity of the Management viz., inspection, packing, sticking, patching, cording, labelling, hopping, knobbing etc., It

is submitted that the aforesaid activity is of permanent nature and integral to the manufacturing activity of the Management. It is further stated that

the second respondent herein was an employee of the Management and the Management created a sham transaction as if he is a contractor while

he continued to be employee of the Management and receiving salary. It is further submitted that the third respondent herein is also employee in the

Management and using him the Management created a sham company called Packall Products and Knitwell Industries at its Cliff House premises.

The said two units were renamed as Seldeen Wire Products using the fourth respondent who is the Vice President of the petitioner Management. It

is further stated that there are more than 500 female workmen employed all the aforesaid units are under the control, supervision, management,

ownership of the petitioner Management and the financing is done by the petitioner Management and the petitioner Management owns all the units

and machineries and without the petitioner all the aforesaid units have no independent existence. It is stated that the third respondent herein by

communication dated 13.06.1992, informed the Inspector of Factories that Packall Products and Knitwell Industries have been closed down and

thereafter, the respondent/workmen was engaged in Seldeen Wire Products through the fourth respondent, another intermediary. That the

respondents 3 & 4 have not complied with the condition precedent laid down under the I.D. Act and in any event there is no real closure.

Therefore, it is contended all the aforesaid units form part of the industrial establishment of the petitioner Management and the alleged contract

between the petitioner and the respondents 2 to 4 is not a genuine contract and it is a sham transaction as the respondents 2 to 4 are paid

employees of the petitioner Management and they have been used by the petitioner Management to deny the statutory status, benefits as a

permanent workmen of the petitioner Management. It is further stated that before retrenching the workmen, the procedure laid down u/s 25N of

the I.D. Act was not followed and therefore, the termination is void abinitio. It is further submitted that poverty and ignorance of about 600 female

workers were exploited for nearly two decades and the plea that two industries have been closed down is untenable, since those units form part of

the petitioner Management and all its activities are being carried on with the very same machinery by engaging new hands and the

respondent/workmen were also engaged with similarly placed female workmen till 15.12.1993. With the above pleadings, the workmen sought for

relief of reinstatement, backwages, continuity of service and other attendant benefits.

Counter statement was filed by the petitioner Management through its Director and General Manager, stating that they never employed the

respondent/workmen and therefore, there was no illegal termination and the petitioner Management does not have any intermediary and it does not

own any other unit other than the factories run by it and the names of the units mentioned in the claim petition have their own licences and

registration number and functioning independently and there is no privity of relationship between the petitioner Management and the employees,

who might have been employed by the individual units mentioned by the respondent/workmen. It is further submitted that the premises have been

given on rent to various factories and just because it is within the premises of the petitioner Management it does not mean that the units belong to

Needle Industries. It was therefore submitted that the question of reinstatement with backwages does not arise.

On behalf of the workmen 14 of them examined themselves as WW-1 to WW-14, Mr. S. Stephen Daniel, the second respondent herein was

examined as WW-15. On the side of the workmen 120 exhibits were marked as W1 to W120. On behalf of the petitioner Management, the

fourth respondent Mrs. Grace Charles was examined as MW-1 and 59 exhibits were marked as M1 to M59. The Labour Court marked 8 court

Exhibits as C1 to C8. The Labour Court framed three questions for consideration, namely,

(i)Whether there is a relationship of employer and employee between the Workman and the Management?

(ii)Whether the Management is the benami of the other management or are they the contractors of the management?

(iii)What are the reliefs that the respondents/Workmen are entitled for?

The Labour Court by the impugned award accepted the case of the workmen, held that the units which were run by the respondents 2 to 4

were units of the petitioner Management and the contractual arrangement is benami and the workmen having worked for 240 days, they could not

have been terminated and there is violation of Section 25F of the I.D. Act and that the respondents 2 to 4 were employees of Needle Industries

and the Labour Court concluded that the case of the workmen that they were initially employed in the petitioner Management and subsequently,

moved to the other units which were benami units and therefore, the petitioner Management was liable to reinstate the workmen with backwages,

continuity of service and all other attendant benefits.

Mr. Sanjay Mohan, learned counsel appearing for the petitioner Management submitted that u/s 2A of the I.D. Act, the Labour Court has no

jurisdiction to go into the question as to whether a contract system was justified or not or whether the same was sham or genuine and who was the

real employer. It is further submitted that if the employees of the contractor claim that the contract was sham, they have to raise a dispute for a

declaration that the contract was sham and without doing so, they cannot raise a dispute u/s 2A and claim that they are employees of the petitioner

Management. The learned counsel further submitted that the Labour Court exceeded its jurisdiction and scope of an application u/s 2A of the Act

by converting such dispute into one u/s 2(k) read with Section 10 of the I.D. Act. It is further submitted that mere non-compliance of Contract

Labour (Regulation and Abolition) Act does not make it a sham contract. On facts, the learned counsel submitted that there was no prohibition in

the petitioner Management for an employee to do business while in employment and the workmen were never employed by the petitioner

Management and the documents filed by the parties show that the workmen joined M/s. Seldeen Wire Products after settling their claims with their

previous employers and M/s. Seldeen is a private limited company and the attendance register, W-16, would show that most of the workmen

were on the rolls of the said company. It is further submitted that the Labour Court erroneously shifted the burden of proof on the petitioner

Management when the onus was on the workmen. Further, it is submitted that the Labour Court did not assign any reasons, as to how the

documents which were filed on the side of the workmen establish that the other units were sham companies and in a single line observed that all the

documents established the case of the workmen. In support of the said contention, the learned counsel placed reliance on the decision of the

Hon''ble Supreme Court in Municipal Corporation of Greater Bombay Vs. K.V. Shramik Sangh and Others, and the decision of the Hon''ble Mr.

Justice K. Chandru in V. Kesavan and Another vs. The Presiding Officer, W.P. Nos. 35842 & 35843 of 2007, dated 05.06.2012. Therefore, it

is submitted that an award rendered without looking into the documents, is a perverse award and liable to be interfered by this Court by exercising

its jurisdiction under Article 226 of the Constitution. In support of the said contention, the learned counsel placed reliance on the decision of the

Hon''ble Supreme Court in Shama Prashant Raje Vs. Ganpatrao and Others, and the decision of the Hon''ble Division Bench of this Court in

Madura Coats Ltd. Vs. Presiding Officer, Principal, Labour Court and Another, which was rendered by following the said decision. As regards

the jurisdiction of the Labour Court much reliance was placed on the decision of the Hon''ble Supreme Court in Bharat Heavy Electricals Ltd. Vs.

Anil and Others, . It is further submitted that the Labour Court failed to take into consideration the licences granted by various statutory authorities,

the lease agreements, contracts, balance sheets, muster roll etc., which were filed by the fourth respondent and marked as Management Exhibits,

which clearly establish that those units are independent entities. The learned counsel submitted that the Labour Court erroneously placed reliance

on two awards passed in I.D., No. 78 of 1996, dated 22.12.1998 and I.D. No. 69 etc., of 1996, dated 05.11.1999 and submitted that those

awards did not relate to any dispute as in the present case, as it related to transfer of an employee and in the other case where the workmen

claimed to be employee of the petitioner which was denied by the Management and such award was erroneously referred by the Labour Court in

the impugned award. The learned counsel made elaborate reference to all the Exhibits, copies of which were filed in three volumes and submitted

that cumulatively the documents filed by the workmen such as W-4, 5, 10, 47, etc., clearly establish that the workmen were employed by the

second respondent.

On the question relating to employer-employee relationship, the learned counsel submitted were if it is alleged that there was camouflage

through mode of contractor it is essentially a question of fact to be determined based on several factors. In support of the said contention, the

learned counsel placed reliance on the law laid down by the Hon''ble Supreme Court in International Airport Authority of India Vs. International

Air Cargo Workers'' Union and Another, and Ram Singh and Others Vs. Union Territory, Chandigarh and Others, .

Mr. V. Prakash, the learned Senior counsel for the workmen by referring to Section 2A of the I.D. Act submitted that where any employer

discharges, dismisses retrenches or terminates the services of a workman, any dispute or difference between the workman and his employer

connected with or arising out of such dismissal or termination shall be deemed to be an industrial dispute and the provision is wide enough to cover

all disputes and therefore, the Labour Court while dealing with a dispute raised u/s 2A, for the purpose of identification of the employer can

consider whether the contract was sham and the amendment to Section 2A of the I.D. Act came into effect from 01.12.1965, and the purpose is

to give complete remedy and the Court should adopt the Hyden''s rule of interpretation, which is to compel to cure a mischief, advance the relief

and suppress the mischief. The learned counsel by referring the decision in the Bharat Heavy Electricals case, referred supra, submitted that it was

a reference case and the facts were entirely different and while deciding the said case, the Hon''ble Supreme Court rendered the judgment which

cannot be applied to the facts of the cases on hand. It is further submitted that the decision in W.P. No. 35842 & 35843 of 2007, dated

05.07.2012, relied on by the learned counsel for the petitioner Management is yet to attain a finality and in the said case, the finding of fact was

against the workmen. The learned counsel made elaborate reference to the averments in the claim statement and to the award of the Labour Court

in particular to paragraph 13. The learned counsel further submitted that this Court under Article 226 cannot convert itself into a Court of appeal

and can only make a overview to examine whether the award was reasonable or perverse and would not interfere with the question of fact and

sufficiency of evidence is no ground to interfere with the award. In support of the said contention, the learned counsel placed reliance of the

decision of this Court in Management in The Management of Bata India Limited and Hosur Bata Employees Union Vs. The Presiding Officer

Industrial Tribunal and The Workmen rep. by Podhu Seyalalar Hosur Bata Employees Union, .

The learned counsel further submitted that the cumulative effect of the documents filed by the management has been considered by the Labour

Court and finding rendered thereon. Even in the written submissions filed by the petitioner Management, the petitioner Management has admitted

that Mrs. Grace Charles, is an employee of Needle Industry. The argument that such employment does not prohibit the said employee to be an

independent contractor is liable to be rejected, when the manner of the business and such independent business was not projected in the first place.

The learned counsel referred to Rule 39 of the Tamilnadu Industrial Dispute Rules 1958, and submitted that the Labour Court is empowered to

admit or accept any evidence at any stage and in any manner, which in equity and good conscious it things fit and the petitioner Management did

not convey any objection, when the documents were marked by the workmen through the first respondent herein and which were entertained as

workmen exhibits. It is therefore submitted that a wholesome reading of the impugned award will show that the Labour Court has considered the

stand of the writ petitioner that it is not an employer and rejected the same, following the decision in Hussainbai Calicut vs. Alath Factory Thozhilali

Union, Calicut and Ors., reported in 1978 I LLJ 397 . It is submitted that in the case of Steel Authority of India Ltd. and Others etc. etc. Vs.

National Union Water Front Workers and Others etc. etc., , the Hon''ble Supreme Court has quoted with approval the aforesaid decision of the

Court and examined the jurisdiction of the Industrial Adjudication.

It is further contended that the observation of the Hon''ble Supreme Court in case of Bharat Heavy Electricals Limited, referred supra, relating

to Section 2A should be seen in the background of the reference made by the Government extracted above and the jurisdiction being confined to

the points referred to for adjudication and matters incidental thereto in view of Section 10(4) of the I.D. Act. Therefore, the learned counsel

submitted that the decision in the case of BHEL, is not an authority for the proposition that in a reference u/s 2A(2) of the I.D. Act relating to an

industrial dispute u/s 2A of the I.D. Act, the identity of the true employer who is a party to the present industrial dispute and who denies an

employer-employee relationship cannot be gone into. Therefore, in the decision relied on by the writ petitioner in the case of Bharat Heavy

Electricals Limited, referred supra, the reference was by the Government and a narrower reference, whereas in the present case, it is a deemed

reference u/s 2(A)(2), which includes ""any dispute/difference connected with or arising out of such dispute/difference to have been referred. It is

therefore submitted that as per the cardinal rule of interpretation when the employer-employee relationship is disputed, the said difference/dispute

arises out of a dispute relating to termination that is also deemed to be an industrial dispute. With the above submissions, the learned counsel

prayed for sustaining the award and submitted that only three of the women workmen are still contesting the case of the Management and the

others due to various reasons had accepted settlements.

I have elaborately heard the learned counsels appearing for the parties and carefully perused the materials placed on record.

The facts of the case has been narrated extensively in the preceding paragraphs. The primary defence of the petitioner Management is that

there is no employer-employee relationship between them and the respondent workmen, employed by independent contractors, who were

employees of the petitioner Management and as per the Rules of the Management, there is no prohibition for its employees to parallely carry on

business in their individual capacity. The Labour Court in the impugned award went into the question and by placing heavy reliance on the

deposition of Mr. S. Stephen Daniel (WW-15) held that the alleged contract said to have been entered into is a sham document and intended to

deny the benefits of the Labour Welfare Legislation to the workmen. It is relevant to note that the said Mr. S. Stephen Daniel was an employee of

the petitioner Management. The learned counsel for the petitioner submitted that the dispute was raised u/s 2A(2) of the I.D. Act and that the

Labour Court while considering a dispute u/s 2A of the I.D. Act cannot go into the question as to whether the contract was sham or genuine

contract and who was the real employer. It is the further submission of the learned counsel that the Labour Court by doing such exercise exceeded

its jurisdiction. In support of such contention, the learned counsel referred to the decision of the Hon''ble Supreme Court in the case of Municipal

Corporation of Greater Mumbai, referred supra. The said decision, arose out of a proceedings under the Contract Labour (Regulation &

Abolition) Act, 1970, wherein a writ petition was filed before the High Court by the workmen, who were engaged in the work of lifting,

transporting, etc., were contract labourers and the work carried out by them was perennial and the labour contract was camouflaged and the High

Court proceeded to conclude the labour contract was not genuine and the workers were employees of the Municipal Corporation of Greater

Mumbai. While considering the said case, it was observed that the conclusion that the contract was sham or it was only camouflage cannot be

arrived at as a matter of law for non-compliance of the provisions of the Act, but a finding must be recorded based on the evidence particularly

when disputed by an industrial adjudicator as laid down in various decisions of the Supreme Court including the decision of the Constitution Bench

in Steel Authority of India Ltd. and Others etc. etc. Vs. National Union Water Front Workers and Others etc. etc., .

Before I consider the effect of the said decision of the Hon''ble Supreme Court on the facts of this case, it would be first necessary to note the

jurisdiction of the Labour Court/Tribunal to adjudicate upon an industrial dispute. Under the provisions of the Industrial Disputes Act, the Labour

Court has full powers to adjudicate all matters, which are in dispute between the employer and workmen and give adequate relief in Workmen Vs.

Williamson Magor and Co. Ltd. and Another, , the Hon''ble Supreme Court held the industrial tribunals intended to adjudicate industrial disputes

between the management and workmen, settle them, and pass effective awards in such a way that industrial peace between the employers and the

employees may be maintained so that there can be more production to benefit all concerned. For the above purpose, the industrial tribunals, as far

as practicable, should not be constrained by the formal rules of law and should avoid inability to arrive at an effective award to meet justice in a

particular dispute.

Even much earlier the Hon''ble First Bench of this Court in A.R. Verma & Anr., vs. The Mettur Industries Ltd., [1961 vol 4 L.W. 803]

discussed the scope and jurisdiction of the Labour Court/Industrial Tribunal and held thus:

... When a dispute between a workman and his employer regarding the termination of his services has developed into an industrial dispute,

sponsored and supported by the concerned labour union, the matter is no longer confined to the limits of contractual rights but other considerations

having a larger bearing upon industrial relations and industrial peace come into play. The principle of the industrial law in providing for adjudications

of labour disputes is obviously to conserve and promote just and equitable relations between employers and employees and secure industrial peace

through the process of collective bargaining, negotiation, conciliation or adjudication of such disputes. In our view, it is inherent in the nature of

things, therefore, that settlement of such disputes is above the realm of merely adjudging contractual rights as between an individual employee and

his employer with reference to particular terms and conditions of employment. An industrial dispute raised by a group of employees arrayed as a

union, by reason of the collective force and exigencies of conserving equitable relations and industrial peace, opens up a wider field beyond

individual contractual relations and may involve the question whether even though an action on the part of the management may be within the

contractual power, it is an unfair labour practice, victimisation, mala fide or otherwise improper from the stand point of just and equitable labour

relationship. The jurisdiction of a Labour Court or an Industrial Tribunal to which such a dispute is referred for adjudication, should necessarily

extend and include a power to investigate and adjudicate upon such questions, unfettered by consideration based on contractual rights as between

a particular workman and his employer. It is her that the nature and scope of the jurisdiction of the Labour Court or the Industrial Tribunal

adjudicating upon industrial disputes differ from those of the civil Courts, which can only decide strictly confining themselves to the contractual

terms and conditions

It is true that the Tribunal cannot grant relief which is not claimed by the workmen nor will it have jurisdiction to award relief in excess of the

demand of workmen. Therefore, the endeavour of the Labour Court while adjudicating the dispute would be to find out the exact dispute between

the parties, adjudicate the same and grant appropriate relief. Bearing the above legal principle in mind, if the facts of the instant case are examined,

the respondent workmen in their claim petition before the Labour Court raised a specific plea that they are the employees of the petitioner

Management and they have been show to be employees of the various other companies/concerns, which are functioning within the same area or

campus and the petitioner Management and the so called licences have been obtained in the names of employees of the petitioner Management.

There is no denying the fact that the Directors of the 10 different concerns/enterprises are all employees of the petitioner Management. Therefore,

while adjudicating the dispute, a duty was cast upon the Labour Court to first ascertain, who is actual employer of the respondent workmen in

order to adjudicate the claim made by the workmen for reinstatement and backwages in the petitioner Management. In such peculiar facts, it can

hardly be stated that the Labour Court would not have jurisdiction to examine this question with a view to adjudicate the matter and pass an

award. Mr. S. Stephen Daniel, WW-15 was an erstwhile employee of the petitioner Management, he was a Director of one of the concerns,

which is said to have employed the respondent workmen, the case of the Management was the concerns, which were established by the

respondents 2 to 4 herein, were independent entities, they had separate licences and they were supplying materials to the petitioner Management.

However, in the individual dispute, Mr. S. Stephen Daniel chose to depose on behalf of the workmen. Through the said witness, the workmen had

marked 70 documents, which were not objected to by the petitioner Management. The Labour Court based on the documents marked through

WW-15, concluded that the contracts said to have been entered into by Mr. S. Stephen Daniel, Mr. A. D''souza, and Mrs. Grace Charles, are

sham contracts and the petitioner Management was the real employer of the respondent workmen.

The learned counsel for the petitioner would contend that the units under the Management of the Mr. S. Stephen Daniel, Mr. A. D''souza, and

Mrs. Grace Charles are independent entities and the Labour Court did not consider that separate factory licence was issued in favour of these

concerns and though several documents were exhibited to establish the same, the Labour Court did not consider the same and made a sweeping

statement and rejected their contention. Mr. Stephen Daniel, WW-15, took a specific stand that the documents, agreements, licenses were all

made as per the instructions of the petitioner Management and they were under the full control in order to create an impression that the respondent

workmen were not the workmen of the petitioner Management, the averments in the counter statement were supported with the documents, which

were accepted by the Labour Court. The Labour Court in doing so observed that though such documents were produced, it was not established

that they were true. The said S. Stephen Daniel, WW-15 took a specific stand that he was an employee of the petitioner Management and worked

from 1978 to June 1989 and received salary from the petitioner Management till he resigned and he has acted as per the directions and instructions

of the first respondent. Further, it was the specific case that during services of WW-15 with the petitioner Management nobody was permitted to

take any decision over the affairs of the individual units and it was a bogus paper arrangement made with a malafide intention to exploit the poor

female workers. Further, he stated that Mrs. Grace Charles, Mr. J.N. Charles and others are only paper owners of the units and the real owner of

the above units is the petitioner Management. In support of his stand, several documents were produced to show that the pattern of movement of

the workmen from one concern to another closure of a concern and shifting unblock the workers to another concern and all functioning the in the

same campus.

In the counter filed to the claim petition by the petitioner Management, it has been stated that just because the individual units are within the

premises of Needle Industries in does not mean that units belong to Needle Industries. Having taken such a stand, the onus was on the

Management to prove that those individual units, which are situated within the factory precincts of the petitioner Management are still independent

units and the persons in-charge, namely, Mr. S. Stephen Daniel, Mr. A. D''souza, and Mrs. Grace Charles were independent entities with full

power of Management of the affairs of the concern, they had right to employ workmen and remove them from service fix their pay and allowances

and such other matters. Therefore, it is not a case, where the Labour Court wholly shifted the burden of proof on the petitioner Management,

rather the workmen having prima facie established their case based on the oral evidence, more particularly that of WW-15 and the documents

marked through that witness shifted the burden of proof on the petitioner Management. It is an admitted case that the Management did not object

to any of the documents, which were marked through WW-15.

If that be the case, the burden of proof lies on the petitioner Management to prove that de hors all these facts those 10 units were independent

entities and the petitioner Management had absolutely no control over its affairs and activities. Unless, this aspect had been proved to the

satisfaction of the Labour Court by the petitioner Management, there can be no error attributed to the award of the Labour Court holding that the

contract are not genuine transaction.

The further case of the petitioner Management is that though the Mr. S. Stephen Daniel, Mr. A. D''souza, and Mrs. Grace Charles were full

time employees of the petitioner Management, they were entitled to run their own business. This Court can take the Judicial notice to the fact that

in the standard terms and conditions of employment a prudent employer will impose a condition that during the course of employment, the

employee shall not either directly or indirectly engaged himself in any other employment business or other avocation. Certain Managements have

also placed an embargo on employee to continue to do same nature of work after their resignation or retirement for a specified period of time by

accepting an employment with their competitor or a person in the same line of business. In such circumstances, it is rather surprising to note that the

three persons, who are employees of the petitioner Management were running independent units with full power of Management within the

premises of the petitioner Management. There is no evidence to show under what circumstances the S. Stephen Daniel (WW-15) was a Director

of the one of the concern in which the respondent workmen were employed and on his resignation from the petitioner Management, the said

concern itself is stated to have been dissolved and the workmen have enmass shifted to other units, where it is alleged to be managed by Mrs.

Grace Charles. If really S. Stephen Daniel was an independent owner/Director of the said concern, the question of dissolving such concern or

making it a non-entity on his resignation from the petitioner company is beyond ones comprehension.

In such circumstances, this Court is convinced that the findings of the Labour Court as regards the burden of proof was fully justified. It is

pertinent to note that the Exhibits W-51 to W104, were marked through WW-15, namely, Mr. S. Stephen Daniel and the Labour Court recorded

a finding that the Management did not raise any objection when such documents were marked through the said witness. On a cumulative

consideration of those documents, the Labour Court came to the conclusion that the arrangement made by the petitioner Management is to

camouflage the true state of affairs. The learned counsel would submit that whatever documents were produced by WW-15 could at best be

applicable to the concern/entity, which was under the control of Mr. S. Stephen Daniel, but on that score, the Labour Court could not have

negatived, the other contracts, which were entered into between the other concerns managed by Mr. A. D''souza, and Mrs. Grace Charles and

others.

In my view, such plea cannot be valid one, since the Management or those two persons and others, who were stated to be independent

persons, did not come forward with a specific case that they were an independent entity in spite of Mrs. Grace Charles having been employed in a

superior managerial position in the petitioner Management. Therefore, this Court would opine that the findings rendered by the Labour Court

cannot be termed to be a perverse findings or that the Tribunal committed a manifest error or misconstrued certain documents and passed the

award. In view of such finding, the decisions relied on by the learned counsel for the petitioner in the cases of Shama Prashant Raje v. Ganpatrao

and Madura Coats Ltd., vs. Presiding Officer, referred supra, does not render any assistance to the case of the petitioner Management.

The learned counsel appearing for the petitioner had placed reliance on the decision of the Hon''ble Supreme Court in the case of Bharat

Heavy Electricals Limited, referred supra, in support of his contention that the Labour Court cannot examine the issue as to who is the true

employer in a dispute raised u/s 2A of the I.D. Act. The said case arose under the provisions of the Uttra Pradesh Industrial Disputes Act, 1947,

and an employee raised a dispute stating that there was a principal employer, one K.P. Singh was a contractor under whom they were working as

the contract labour and his services were unlawfully terminated and the contractor should be asked to take them back in service with full back

wages. Ultimately, the matter was referred to the Labour Court by way of reference u/s 4A of the U.P. I.D. Act and the terms of reference was

whether the termination of the services of the employee was justified and to what relief the employee entitled to? On behalf of the workman, it was

contended that the employee was an employee of the BHEL through its contractor and BHEL was the real employer and a camouflage was

created as if, the employee was an employee of the contractor and not BHEL. The Hon''ble Supreme Court taking note of the reference, which

was made to the Labour Court held that section 2A, does not cover every type of dispute between an individual and his employer.

In the facts and circumstances of the said case, the Hon''ble Supreme Court rendered such a finding and whereas the case on hand is the

reference u/s 2A(2) and the Labour Court in order to determine as to what relief the workmen were entitled, the Labour Court had to necessary to

go into the question of employer-employee relationship. More particularly, the workmen had discharged the initial burden cast upon them by

examining WW-15 and marking several documents through the said witness. In the absence of any objections raised by the Management for the

evidence of WW-15, or the document marked through him, the petitioner Management would be precluded to now contend that the Labour Court

had no jurisdiction to adjudicate into the question as to who is the true employer. In fact, no such objection appears to have been raised before the

Labour Court to state that in a dispute raised u/s 2A(2), the Court cannot go into the question and find out as to who is the real employer and the

party should be directed to raise a separate dispute. Having not done so before the Labour Court, it appears to be a case, where the petitioner

Management accepted the scope and jurisdiction of the Labour Court and proceeded to contest the matter on merits. The learned counsel for the

petitioner submitted that the finding of the Labour Court that non-compliance of the provisions of the Contract Labour Act would automatically

lead to the inference that the contract was sham, is an incorrect and perverse finding. It is true that mere non-compliance of the provisions of the

Contract Labour Act would not by itself make a contract sham, yet in the facts of the present case, the Labour Court was constrained to render

such a finding on cumulative consideration of Exhibits W51 to W104. Admittedly, the Management did not object of these documents nor its

veracity. In such a scenario, the non-compliance of the Contract Labour Act is an indicative factor that the contract is sham. Therefore, on facts it

cannot be stated that such a finding of the Labour Court was perverse. Hence, for all the above reasons, the petitioner Management has not made

out any grounds to interfere with the award passed by the Labour Court, accordingly, the writ petition fails and is dismissed. As ordered supra, the

petitioner Management is directed to pay separate Court fee for each one of the 47 Industrial Disputes before obtaining the certified Copy of this

order. W.M.P. No. 3662 of 2003 is accordingly disposed of. No costs.