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Judgment
The U.P. State Electricity Board hereinafter referred to as the Board has come up to this Court against the award dated 2981995 (Annexure1 to the writ petition) given by the Industrial Tribunal IV, Agra/respondent No. 1.
The facts, in order to decide rival claims travels in a narrow compass. Petitioner, in order to provide security to the residential colony meant for the petitioner''s employees made advertisement requiring some security personnel upon which a contract was given to M/s. Industrial Security Service of Allahabad/respondent No. 3 hereinafter referred to as the I.S.S. In respect to the agreement for providing security staff for the residential colony, an agreement was executed between the petitioner and the I.S.S. on 12th September, 1988. Initially the contract was for a period of six months but thereafter by further agreement dated 7th October, 1989 it was extended for a further period of one year. Both the agreements dated 12th September, 1988 and 7th October, 1989 have been annexed as Annexures2 and 3 to the writ petition. In pursuance of the aforesaid contract, the I.S.S./Contractor, provided its own staff for the purpose of security in the colony area. As stated in para 6 of the writ petition, per requirement the staff uses to increase or decrease per prevailing situation. The workers of the I.S.S. through their Union/respondent No. 2 started raising illegal demands with regard to their service conditions, pay etc., which was against the terms of the agreement entered between the petitioner and the I.S.S. In this respect they also filed a case under the Payment of Wages Act being P.W. Case No. 50 of 1990 in which the Prescribed Authority under the Payment of Wages Act by order dated 2791990 held that I.S.S. is responsible for the payment of wages and the petitioner is not at all responsible for the payment and direction was given to the I.S.S. to pay wages to the workers in question. It has been pleaded by the petitioner that since workers of the Contractor were agitating, the internal security of the colony was being threatened, it was felt that they would not be able to perform their duties and provide security to the colony and its residential members. Accordingly on 1241990 the security committee passed resolution and recommended the industrial security service, to replace their security staff. It is in view of this resolution, I.S.S. by its letter dated 2541990 informed the petitioner that they are withdrawing their security guards and replacing them with new security guards. It has been further stated in para 13 of the writ petition that 25 workers mentioned in the reference order were withdrawn by the I.S.S. and they were sent to other places where I.S.S. had their contract and so far persons mentioned at Serial Nos. 2 to 25 of the reference order are still working with I.S.S. Only one person viz Salig Ram Misra as shown at Serial No. 1 of the reference order contested the matter before the Tribunal and no other person mentioned in the reference order at Serial Nos. 2 to 25 appeared or contested before the Tribunal. The State Government in view of the withdrawal of the security guards, as stated above, on a dispute having been raised in that regard referred the matter for adjudication before the Tribunal. The term of the reference order is to the effect (I) �Whether termination of the 25 workmen from service by the employer w.e.f. 2541990 is improper and invalid ? If the termination is invalid to what relief the workers are entitled to ?� (II) �Whether the workers in question are entitled to be regularised in services of the Board ?�
The Union filed its written statement on 22101991 upon which the petitioner also filed written statement on 17121991. On filing the written statement, Union filed rejoinder upon which the petitioner also filed their rejoinder. On behalf of the petitioner it was pleaded that the workers in reference order are not their employees and there is no master and servant relationship. It was stated that these employees are contract labourers of the Contractor/I.S.S. for which the contract was given vide agreement dated 1291988 and 7101989 and thereafter, the contract itself was terminated on 31st August, 1990. It was further pleaded that the petitioner have not been paying wages to the workers and it was being paid directly by the I.S.S. On behalf of the workers the solitary statement of Salig Ram Misra was given. The Petitioners in support of their pleading examined N.K. Varshney and R.K. Tewari, Executive Engineers. It appears that Industrial Security Service who was the party before the Tribunal did not file any written statement nor appeared at any stage in the proceedings. Upon the pleadings of the parties and the evidence as came before the Tribunal the Award was given by which all the workers were directed to be absorbed as regular staff of the Board on the security side on priority basis. It is this Award dated 2981995 which, made the petitioners aggrieved.
Sri Tarun Agarwal learned Advocate has appeared on behalf the petitioners and Sri D.R. Chaudhary learned Advocate argued the matter on behalf of the respondents. Both the learned Counsel have been heard at length.
Learned Counsel for the petitioners to begin with his submissions plainly narrated certain facts that have been taken up by him as foundation/basis to develop his arguments to point out the errors committed by the Tribunal. According to the learned Counsel, the following facts comes out from the record
(i) There was valid agreement between the petitioner and I.S.S. by which a contract was given for providing internal security in the colony of the Board. The contract was initially for a period of six months and thereafter it was extended for a period of one year vide agreement dated 1291988 and 17101989 and ultimately it was terminated on 31st August, 1990.
(ii) The workers in question were employed directly by I.S.S. and they were issued appointment letters also by I.S.S.
(iii) The workers were being paid their wages directly by the I.S.S. in respect to which the Prescribed Authority under Payment of Wages Act has also passed order on 2791990.
(iv) There was no master and servant relationship between he petitioner and workers in question.
(v) Petitioner have no control over the staff provided by the I.S.S. The workers of the Contractor were under the direct control and supervisions of the Contractor.
(vi) As per requirement, the number of workers used to vary from time to time.
(vii) Petitioners were paying the Contractor on the basis of the work as per agreement.
In view of the aforesaid facts learned Counsel for the petitioner submits that as there was no master and servant relationship between the petitioner and the workers, as there was valid agreement for employment of contract labourer, petitioner cannot be held liable for disengagement, if any, of the workers and the direction for their absorption given by the Tribunal is totally uncalled for. It was further argued that the workers were only providing internal security to the colony and its residential staff as per agreement and as they were not providing any security to the project at the power generating and therefore, the work as was being undertaken by the workers not being connected with either production or to the integral part of the Board functioning, they cannot be held to be workers of petitioner and the direction given by the Tribunal is totally erroneous. It has been argued that the findings of the Tribunal that services of the workers were terminated at the instance of the Board is totally perverse as it is on account of the feeling that the workers may not be able to perform their duty faithfully and provide security to the colony and its residential members, on account of raising of illegal demands and its nonacceptance by the Board, on the resolution of the security committee, it was the I.S.S. who has withdrawn the workers in question and by letter dated 2541990 I.S.S. intimated the petitioner that they are withdrawing their security guards and replacing them with new security guards. Learned Counsel for the petitioner to be precise, in respect to the aforesaid facts have taken the count various clauses of the agreement dated 12th September, 1988. It will be useful to refer to some of the Clauses at this juncture
(3) Scope of Work :
The Contractor shall be responsible for the safety and security of the property of the Board and Board''s employee situated in the colony area.
The Contractor shall assist UPSEB for preventing unauthorised occupation of Board''s property. The residences on vacation shall be taken over by the Contractor for its safe custody till it is not handed over to the other authorised allottee.
Random checking of Incoming and outgoing goods. The guideline for entry and exit in Project Colony Area shall be finalised by the Contractor in consultation with the Security Committee of the Project as to enforce strict security measures.
The Contractor shall arrange to establish his own office for which only building shall be provided by UPSEB. The cost of stationary etc. shall be borne by the Contractor.
The list of the persons deputed from time to time and their particulars shall be submitted to the Engineer of Contract. Contractor shall be responsible to make extraarrangement of staff against those proceedings on leave. In such cases the guards deployed on duty will be required to fulfill all the required condition and he must have the approval of Engineer Incharge. In case no arrangement is made, necessary deductions of wages on per manday basis, will be made from the Contractor''s bill on prorata basis.
All Payment to be staff shall be made by the Contractor.He will be entirely responsible for all fringe benefit and compensation in case of accident, UPSEB will bear no responsibility in this respect and shall remain exonerated.
Under no circumstances the security staff of the Contractor shall be treated to be an employee of the Board.
Any security personnel found negligent in his duties by security committee shall have to be replaced by the Contractor for which no extra liability shall be borne by the UPSEB.
Learned Counsel for the petitioner points out that in view of the aforesaid clauses of the agreement it is clear that petitioners have no direct control over the workers and there has been no relationship of master and servant between the petitioner and workers and the work which was being performed by the workers was not an integral part of the functioning of the Board and, therefore, in view of this fact the decision as has been given by the Tribunal that termination of services of the workers was illegal and they are liable to be regularised in the services of the Board is clearly erroneous. Learned Counsel for the petitioner in support of his submissions has placed reliance on the decision reported in 1996 JT (II) SC, 109 Air India Statutory Corporation etc. v. United Labour Union and others.
On the strength of the aforesaid decision of the Apex Court it has been argued that unless the contract labour system is abolished under Section 10 of Contract Labour (Regulation and Abolition) Act, 1970, there being valid agreement between the petitioner and the Contractor, the approach of the Tribunal in treating workers to be direct employee of the Board and thus giving of the award cannot be sustained. In this respect learned Counsel has further placed reliance on 1997 ALJ, 1711 Hari Shanker Sharma and others v. M/s. Artificial Limbs Manufacturing Corporation of India and others and 1997 ALJ 872 M/s. Indian Explosive Ltd. etc. v. State of U.P. and others.
Learned Counsel for the respondent, in response to the aforesaid submissions argued that neither the petitioner nor the Contractor were registered under the provisions of Contract Labour (Regulation and Abolition) Act, 1970 nor the agreement as was between the petitioner and the I.S.S. was genuine and therefore, on the facts of the present case termination of the services of the workers have been rightly held to be illegal and they have been rightly treated to be employees of the petitioner and thus the direction for their absorption has been rightly given. It has been further argued that the findings as has been recorded by the Tribunal having not been proved to be perverse or their being error apparent on the face of the record, no interference is required by this Court. Learned Counsel for the respondent argues that the duty of the workers in question, even as security guards in the colony area will be treated as integral part of the function of the Board and as in a decision reported in 1964 SC 737 M/s. J.K. Cotton Spinning and Weaving Mills Co. Ltd. v. The Labour Appellate Tribunal of India, IIIrd Branch Lucknow and others, the Mali working in the Mill was held to be workmen, the present workers have been rightly treated to be workers of the petitioner. Learned Counsel for the respondents on the strength of the decision reported in 1999 JT (2) SC 435, Secretary Haryana State Electricity Board v. Suresh and others, submits that in the event the Agreement is not registered, under the Act necessary inference has to be drawn that workers are the direct employee of the principal employer.
In the light of the aforesaid pleadings as has come on the record and the arguments as have been advanced across the bar three questions are required to be dealt by this Court
(i) Whether on the facts of the present case the workers in question can be held to be workers of the petitioner?
(ii) Whether in absence of the registration under the provisions of the Act inference can be drawn that the workers happened to be the direct employee of the petitioner ?
(iii) Whether on the facts of the present case, petitioner can be held responsible for termination of the service of the workers ?
In respect to the 1st question, various clauses of the agreement dated 12th September, 1988 as has been quoted in this judgment have material bearing. Reading of the terms and conditions of the contract makes it clear that firstly it was agreed that it is the Contractor who shall be responsible for the safety and security of the property of the Board and Board''s employees situated in the colony area. The other term which comes out, is that all payments to the staff shall be made by the Contractor and he will be entirely responsible for all the benefits etc. to the workmen and under no circumstances the security staff of the Contractor shall be treated to be employee of the Board. It has also been provided in the agreement that if any security personnel found negligent in his duty by the security committee he shall have to be replaced by the Contractor for which no extraliability shall be borne by the UPSEB. The appointment letter has also been issued to the workers by the Indian Security Services. Prima facie the aforesaid contract entered between the I.S.S. and the petitioner was in accordance with the provisions of Contract Labour (Regulation and Abolition) Act, 1970. The petitioners, have specifically pleaded that they are aware that the Contractor has a valid licence under Section 12 of the Act of 1970. The Indian Security Services who is respondent No. 3 before this Court, has neither filed any written statement nor has appeared before the Tribunal and therefore, petitioner cannot be said to be in a position to place before the Tribunal documents in respect to the registration of the I.S.S. In so far the working of the workers in question the Tribunal in para 15 and 16 of the Award has given a clear finding that �security is definitely not the main function of the Board whether it is of the staff, school buses or the property within the campus whether in the residence or the stores. The security of the buildings and property of the employees inside the campus is not the main function of the Board which is an ancillary function because the main function is the generation and supply of the electricity.� In view of the aforesaid findings given by Tribunal itself it can be safely concluded that the workers in question were not discharging any duty which can be said to be the main function of the Board. The terms of the contract vide agreement dated 12th September, 1988 by which the entire control over the workers had been stated to be of the I.S.S. with a special clause under the contract that, under no circumstances members of the security staff of the Contractor shall be treated to be the employee of the Board, will also have to be kept in mind while the matter is reconsidered.
In respect to the second question that on account of non registration an inference has to be drawn that the workers were the direct employee of the petitioner, suffice it to say that so far the Indian Security Services in concerned neither any written statement was filed by it nor any appearance has been put before the Tribunal and, therefore, on account of that situation no adverse inference can be drawn against the petitioner. The argument on behalf of the respondent about the lack of bona fide on the part of the petitioner and the agreement not being genuine also cannot be accepted as no positive evidence has been pointed out by the Tribunal in this respect. In this connection solitary statement of Salig Ram Misra from the side of the respondents goes against the contention of the respondent. He clearly admits that he was employed in I.S.S. on 1691988. It has also been admitted by him that it is the I.S.S. who has issued appointment letter to him for working with the petitioner. The statement as has been given by N.K. Varshney Executive Engineer on behalf of the petitioner clearly states that by inviting tender the contract was given to I.S.S. It appears that the Tribunal has taken into account the fact that petitioner in his written statement and in the affidavit has stated that the Contractor is registered Contractor but nothing has come on the record and it is for that circumstances alone, an inference was drawn that the workers are the direct employee of the petitioner. To my mind the Tribunal has not properly considered various other facts and circumstances which is required for reaching to correct conclusion.
So far the 3rd question that the termination of the workers was at the behest of the petitioner, in fact the security committee vide its resolution has made a request to the I.S.S. to replace the security staff for the reason as has been disclosed in resolution upon which the I.S.S. intimated the petitioner vide letter dated 2541990 that they are withdrawing their security guards and replacing them with new security guards. This action of the petitioner was well within the terms of the Agreement as it was clearly stipulated that on any negligence on the part of security personnel on recommendation of the security committee they will be replaced by the Contractor. The resolution of the security committee has been annexed as Annexure4 to the writ petition which only recommends that I.S.S. may be asked to replace 25 security staff as per enclosed list. There was no direction by the petitioner that their services may be dispensed with. It is in pursuance of that recommendation, I.S.S. intimated the petitioner for replacement of the security staff, with an understanding to the petitioner that they have been sent to other place where the I.S.S. had his contract. Averment in this respect has been made in para 13 of the writ petition. I.S.S. has not chosen to file any counteraffidavit and even in the counteraffidavit filed on behalf of the respondent No. 2 there is specific denial in this respect. In view of this it appears that Tribunal without pointing out any positive evidence or material has wrongly concluded that services of workers was terminated at the command of petitioner. This aspect also requires reconsideration.
The position of law appears to be clear that the Labour Court has no power to abolish the contract labour and it is only appropriate Government who can do so under Section 10 of the Act. In the decision given in Air India Statutory Corporation case (supra) it has been observed �the Court cannot enquire into and decide the question whether employment of contract labour in any process, operation or any other work in establishment should be abolished or nor and it is for the appropriate Government to decide it.� The object and the reason of the Contract Labour (Regulation and Abolition) Act, 1970 specifically provides that �the working conditions of the contract labour should be regulated so as to regulate payment of wages.� The Apex Court in Gujrat Electricity Board Ukai v. Hind Mazdoor Sabha, reported in AIR 1995 SC 1893, after considering the entire law and catena of judgments came to the following conclusions
(i) In view of the provisions of Section 10 of the Act, it is only the appropriate Government which has the authority to abolish genuine labour contract in accordance with the provisions of the said Section. No Court including the Industrial Adjudicator had jurisdiction to do so.
(ii) if the contract is sham are not genuine, the workmen of the socalled Contractor can raise an industrial dispute for declaring that they were always the employees of the principal employer and for claiming the appropriate service conditions. When such dispute is raised, it is not a dispute for abolition of the labour contract and hence the provisions of Section 10 of the Act will not bar either the raising or the adjudication of the dispute. When such dispute is raised, the Industrial Adjudicator has to decide whether the contract is sham or genuine. It is only if the adjudicator comes to the conclusion that the contract is sham, that he will have jurisdiction to adjudicate the dispute. If, however, he comes to the conclusion that the contract is genuine, he may refer the workmen to the appropriate Government for abolition of the contract labour under Section 10 of the Act and keep the dispute pending. However, he can do so if the dispute is espoused by the direct workmen of the principal employer. If the workmen of the principal employer have not espoused the dispute, the adjudicator, after coming to the conclusion that the contract is genuine, has to reject the reference, dispute being not an industrial dispute within the meaning of Section 2 (k) of the ID Act. He will not be competent to give any relief to the workmen of the erstwhile Contractor even if the labour contract is abolished by the appropriate Government under Section 10 of the Act.
(iii) If the labour contract is genuine a composite industrial dispute can still be raised for abolition of the contract labour and their absorption. However, the dispute, will have to be raised invariably by the direct employees of the principal employer. The industrial adjudicator after receipt of the reference of such dispute will have first to direct the workmen to approach the appropriate Government for abolition of the contract labour under Section 10 of the Act and keep the reference pending. If pursuant to such reference, the contract labour is abolished by the appropriate Government, the industrial adjudicator will have to give opportunity to the parties to place the necessary material before him to decide whether the workmen of the erstwhile contract should be directed to be absorbed by the principal employer, how many of them and on what terms. If, however, the contract labour is not abolished, the industrial adjudicator has to reject the reference.
(iv) Even after the contract labour system is abolished the direct employees of the principal employer can raise an industrial dispute for absorption of the exContractor''s workmen and the adjudicator on the material placed before him can decide as to who and how many of the workmen should be absorbed and on what terms.�
The larger Bench in Air India Statutory Corporation case (supra) in para 57 has endorsed the view taken in Gujrat Electricity Board case (supra). Reliance as was placed by the learned Counsel for the respondent on the decision given in Secretary Haryana State Electricity Board case (supra) appears, to be in view of the observation made in that judgment in para 19 in which it has been observed
�It has to be kept in view that this is not a case in which it is found that there was any genuine contract labour system prevailing with the Board. If it was a genuine contract system, then obviously, it had to be abolished as per Section 10 of the Contract Labour (Regulation and Abolition) Act after following the procedure laid down therein. However, on the facts of the present case, it was found by the Labour Court and as confirmed by the High Court that the socalled Contractor Kashmir Singh was a mere name lender and had procured labour for the Board from the open market. He was almost a broker or an agent of the Board for that purpose. The Labour Court also noted that the management witness Shri A.K. Chaudhary also could not tell whether Shri Kashmir Singh was a licensed Contractor or not. That workmen had made a statement that Shri Kashmir Singh was not a licenced Contractor. Under these circumstances, it has to be held that factually there was no genuine contract system prevailing at the relevant time wherein the Board could have acted as only the principal employer and Kashmir Singh as a licenced Contractor employing labour on his own account. It is also pertinent to note that nothing was brought on record to indicate that even the Board at the relevant time, was registered as principal employer under the Contract Labour (Regulation and Abolition) Act. Once the Board was not a principal employer and the socalled Contractor Kashmir Singh was not a licensed Contractor under the Act, the inevitable conclusion that had to be reached was to the effect that the socalled contract system was a mere camouflage, smoke and a screen and disguised in almost a transparent veil which could easily be pierced and the real contractual relationship between the Board, on the one hand, and the employees, on the other, could be clearly visualised.�
It appears in the decision of Secretary Haryana State Electricity Board case (supra) that on behalf of the workmen, there was statement and the evidence that the Contractor was not a licensed Contractor and a clear finding was given on the basis of evidence on record that the contract was not genuine. In the present case no evidence appears to have been referred by the Tribunal for giving a finding that the Contractor was not registered and the contract was not genuine. To my mind the Tribunal has not given a clear finding referable to positive evidence on record in respect to the contract being not genuine and the workers being direct employee of the petitioner. The Tribunal also appears to have drawn an incorrect conclusion that by making recommendation to the I.S.S. to replace the security staff, in the event of termination of their service it is the petitioner who is responsible for the same. In fact in respect to the recommendation as made by the petitioner after the decision of the security committee for replacement of the existing security staff, the I.S.S. has given the petitioner to understand that the existing staff is being replaced and the workers are being adjusted against other contract. In respect to this specific averment of the petitioner, there appears to be no denial on record. All this aspect appears to have not been properly dealt by the Tribunal. The decision as has been relied upon by the respondent in support of the contention that on account of nonregistration of the Contractor an inference has to be drawn against the petitioner, to my mind, in the absence of proper finding by the Tribunal will have no application.
In view of the aforesaid analysis of the facts and law I feel that the Tribunal has not dealt the matter in a correct prospective and there is no clear finding, which may be referable to the positive evidence on the record on all the questions as are involved for adjudicating the claim of the workers. As the adjudication of the rival contention requires giving of specific finding on the question of fact it will be better that the Tribunal is asked to deal with the same and record a specific finding in the light of the materials on record and observations as made in this judgment, as it may not be proper for this Court to record finding on question of fact while exercising powers under writ jurisdiction.
Accordingly this writ petition succeeds and is allowed. The impugned award dated 2881995 (Annexure1 to the writ petition) is hereby quashed and the matter is remitted back to the Tribunal to redecide the same in accordance with law and in the light of the observation as made in this judgment.
Parties are directed to bear their own costs.