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The Minimum Wages Act, 1948
The Industrial Disputes Act, 1947
The Societies Registration Act, 1860
Cherootty V. And Ors. vs P.T. Ramanujan And Anr. on 5 September, 2005
Section 12 in The Societies Registration Act, 1860

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Kerala High Court
Hindustan Latex Employees ... vs Trivandrum District Headload And ... on 20 August, 2010

IN THE HIGH COURT OF KERALA AT ERNAKULAM

WP(C).No. 19480 of 2010(H)

1. HINDUSTAN LATEX EMPLOYEES WELFARE

... Petitioner

2. HLL LIFE CARE LIMITED, PEROORKADA,

Vs

1. TRIVANDRUM DISTRICT HEADLOAD AND GENERAL ... Respondent

2. JILLA CHUMATTUTHOZHILALI CONGRESS (INTUC

3. THE CIRCLE INSPECTOR OF POLICE,

4. THE SUB INSPECTOR OF POLICE,

For Petitioner :SRI.P.RAMAKRISHNAN

For Respondent :SRI.N.RAGHURAJ

The Hon'ble MR. Justice K.M.JOSEPH

The Hon'ble MR. Justice M.L.JOSEPH FRANCIS Dated :20/08/2010

O R D E R

K. M. JOSEPH &

M.L. JOSEPH FRANCIS, JJ.

-------------------------------------------------- W.P(C). NO. 19480 OF 2010 H

--------------------------------------------------- Dated this the 20th August, 2010

JUDGMENT

K.M. Joseph, J.

Petitioners have approached this Court seeking the following reliefs:

"a) Issue a writ of mandamus or other appropriate writ or order directing respondents 3 and 4 to provide adequate and effective protection to the petitioners and their workmen for the smooth functioning of their establishment at Re-Sy.No.219 of Pallichal Village, Neyyattinkara Taluk, without let or interference from respondents 1 and 2, their supporters and sympathizers.

b) Hold that the Kerala Headload Workers

Act 1978 will not apply to the petitioners' establishment and that respondents 1 and 2 have no right to claim loading and unloading work under the petitioners."

WPC.19480/2010 H 2

2. Briefly put, the case of the petitioners is as follows: First petitioner is a Society registered under the Travancore Cochin (Literary, Scientific and Charitable Societies) Registration Act (hereinafter called the Act). Second petitioner is a Government of India Enterprise. It is engaged in the manufacture of condoms at its factory at Peroorkada in Thiruvananthapuram District. Ext.P1 is an Agreement dated 18.7.09 as per which the first petitioner agreed to carry out secondary packing of the second petitioner's products at various places taken on lease as well as in the factory premises on required basis. On 17.2.2010, the second petitioner executed a lease deed between the second petitioner and two State Government Companies as per which it took on lease three acres of land belonging to the above Companies for a period of ninetynine years commencing from 17.2.2010. The second petitioner also took on rent three godowns on the basis of Ext.P3 Agreement between it and a State Government Company. It commenced its secondary packing covered by Exts.P2 and P3 WPC.19480/2010 H 3

lease deeds on 2.6.2010 On 9.6.2010, when the raw materials for packing were brought to the premises at Balaramapuram, headload workers under respondents 1 and 2 obstructed the doing of unloading work. Petitioners rely on Ext.P4 Notification issued under the Kerala Headload Workers Act dated 19.5.1981 as per which the Government notified the 20th of May, 1981 as the date on which the Act would come into force in the State of Kerala in respect of all establishments except those establishments owned or controlled by the Central Government. Therefore, the second petitioner filed Ext.P5 complaint. Petitioners have filed Ext.P6 representation also. Eliciting no response, they filed the present Writ Petition.

3. Counter Affidavit has been filed on behalf of respondents 1 and 2, inter alia, stating as follows: First petitioner is not a subsidiary unit of the second petitioner, nor is it under control or supervision of the second respondent. First petitioner has taken out a licence under Section 12 of the Contract Labour (Regulation and Abolition) WPC.19480/2010 H 4

Act, 1970. The provisions of Ext.P1 Agreement are relied on. The secondary packing operation of the product was being done by the first petitioner earlier at Vattappara, Thiruvananthapuram till it was shifted to Balaramapuram recently. While operations were on at the unit at Vattappara, the first petitioner Society submitted Ext.R1(a) application for registration for getting themselves registered as employer under the Act. It was allowed. The entire loading and unloading and other related works of the first petitioner at Vattappara were being carried out by the registered headload workers under the Nedumangad Sub Office of the Welfare Board. First petitioner cannot turn around and contend that they are not governed by the Act. Even the second petitioner which has got a factory at Akkulam at Kazhakkoottam has got themselves registered as employer under the Act by filing Ext.R1(b) application. It is allotted Number AK/51/09. The headload workers under the Kazhakkoottam Sub Office of the Board are doing the loading and unloading work in the unit of the second petitioner at Akkulam. It is stated that in WPC.19480/2010 H 5

respect of Ambalamukku Unit of the second petitioner also, the loading and unloading and other related works are being done by the workers registered by the Board. The Scheme is applicable to the Balaramapuram Panchayat. Petitioners cannot bye-pass the Rules and the Scheme by taking shelter under Ext.P4. The Trivandrum Spinning Mills which was functioning in the godowns and the appurtenant property which are now taken on lease as per Ext.P2 agreement was registered under the Act. The first petitioner is neither owned or controlled by the Central Government. The averment of obstruction on 09.06.2010 by members of the first and second respondent Unions is factually incorrect. They have only apprised the Officers about the fact that it is covered by the Scheme.

4. A Reply Affidavit is filed by the petitioners, wherein, it is, inter alia, contended as follows:

Secondary packing were being done at various places by taking halls and other vacant spaces on rent. Ext.R1(a) has been submitted in the above context. The rental agreement was WPC.19480/2010 H 6

terminated and the auditorium was vacated on 5.12.2009 (Ext.P7 letter). There is no work at Vattappara now. Second petitioner's factory at Akkulam was situated in Cheruvattoor Village. It is stated that since no loading and unloading workers were appointed in the factory, the services of the local workers had been utilized. The practice was continued and the engagements were being regulated by conciliation settlements. Ext.P8 is produced as the last settlement in this regard. Ext.R1(b) application was submitted only for the purpose of regularising payments made to the headload workers engaged as per Ext.P8 and earlier settlements. It is stated that secondary packing unit of the second petitioner is an establishment owned and controlled by the said petitioner. The first petitioner does not have any unit at Balaramapuram.

5. Petitioners have filed Additional Affidavit producing Ext.P9 which is a copy of the section transfer order issued in respect of seven of the second petitioner's employees. It is the case of the petitioners that they were posted for supervising and WPC.19480/2010 H 7

controlling the packing activities. Ext.P10 purports to be the relevant pages of the ISO 9000 Quality System Manual in respect of supervision and control of secondary packing.

6. Respondents 1 and 2 have filed a Counter Affidavit to the Additional Affidavit. They would say that Exts.P9 and P10 do not substantiate the contentions. It is further stated that loading and unloading of material in the very same establishment were being done by the employees of respondents 1 and 2 who are registered with the Board till recently. Exts.R1 (d)(i) and R1(d)(ii) are produced in this regard. Still further, Affidavits have been filed by the employees mentioned in Ext.P9 wherein they have stated that they have been posted to the secondary packing unit for carrying out various jobs.

7. We heard Shri P. Ramakrishnan, learned counsel for the petitioners and Shri N. Reghuraj, learned counsel appearing for respondents 1 and 2, besides Shri Koshy George, learned counsel appearing for the additional fifth respondent Board. WPC.19480/2010 H 8

8. The parties reiterate their contentions. There is no dispute that the second petitioner is a Government of India Enterprise or that it is engaged in production of male contraceptives. Admittedly, the petitioners have entered into Ext.P1 agreement whereunder the second petitioner has entrusted the secondary packing on the basis of competitive tenders to the first petitioner. Admittedly, the first petitioner is not by itself entitled to the benefit of Ext.P4 Notification to the extent it is inapplicable to establishments owned or controlled by the Central Government. There is no dispute that the first petitioner is carrying on the secondary packing at the premises covered by Exts.P2 and P3 lease deeds. That is to say, the secondary operations are being done at a premises which is possessed by the second petitioner under lease arrangements.

9. The question which really arises for our consideration is, on the aforesaid facts which are undisputed, whether the relief of police protection can be granted against the obstruction by the members of the first and second respondents. One of the WPC.19480/2010 H 9

arguments of respondents 1 and 2 which is adopted by the Board also, is that under Ext.P1 agreement, there is no provision by which it can supervise the operations. The following Clauses in Ext.P1 are relevant and they are extracted below: "2. The specification of the works to be carried out by the Agency is specifically annexed to this agreement as Annexure-I.

6. The Agency has to carry out the work by engaging their own employees who are having basic qualifications and of good character. The Agency shall effectively supervise and control the work of their employees. The Agency should ensure that the employees engaged by them are not behaving in such a manner affecting the fair name and discipline of the Company. The Agency should ensure that the employees are not representing to any one that they are the employees of HLL Lifecare Limited.

8. The Agency should provide identity cards to their employees as and when they are deputed to works at various places taken as lease as well as inside the premises of the Company. The bio-data of the employees with medical fitness certificate should be given to the Officer of the Company designated, WPC.19480/2010 H 10

before the employees are deputed to work by the agency.

9. The Agency will be responsible for the payment of salary as per the Minimum Wages Act, if applicable to their employees. The details of PF and ESI paid in respect of their employees should be provided to the Company by the Agency along with their bill claiming payment from HLL Lifecare Limited."

The work of secondary packing has to be done by the first petitioner by engaging its own employees having basic qualifications and good character. Therefore, he would contend that it is the first petitioner which alone has the power to effectively supervise and control the works of its employees. It is also clear that the first petitioner has to ensure that its employees should not represent to anyone that they are the employees of the second petitioner. The first petitioner is responsible for the salary under the Minimum Wages Act, if applicable to it. Clause 8 also provides that the first petitioner should provide identity cards to its employees as and when they WPC.19480/2010 H 11

are deputed to works at various places taken on lease as well as inside the premises of the second petitioner. The bio-data of the employees with medical fitness certificate should be given to the Officer of the Company designated before the employees are deputed to work by the Agency.

10. It is their case that the first petitioner who engages the headload workers, is not an Establishment owned or controlled by the Central Government. It is the further case of respondents 1 and 2 that the first petitioner Establishment is a distinct Establishment. Learned counsel for respondents 1 and 2 would also point out the fact that the petitioners have joined together in the Writ Petition and poses the question as to what would be the result if the first petitioner came by itself.

11. Clause 4 of Ext.P1 provides, inter alia, that the rate fixed for each work is inclusive of all the liabilities of the first petitioner, including salary of the employees of the first petitioner and all other statutory requirements, like ESI. WPC.19480/2010 H 12

12. The word "establishment" has been defined under Section 2(j) of the Act which reads as follows: "2(j): "establishment" means an establishment specified in the Schedule and includes the precincts thereof."

The premises where the first petitioner is carrying on the secondary packing, is in the control and possession of the second petitioner vide Exts.P2 and P3 lease agreements.

13. In the Schedule, there are thirteen entries. The entries which appear appropriate to the activities of the petitioners are 5 and 11. They read as follows:

"5. Establishments employing workers for loading or unloading of goods and other operations incidental and connected thereto.

11. Markets (including fish and meat

markets) and factories employing workers, which are not covered by any other entries in this Schedule."

14. There is no case for the petitioners that the Headload Workers Act is not applicable for the reason that it is not an WPC.19480/2010 H 13

establishment within the meaning of the Act. In fact, the very case of the petitioners is that they are exempt as the secondary packing unit of the second petitioner at Balaramapuram is an establishment owned and controlled by the second petitioner. Second petitioner cannot be equated with the Central Government as it is only a Government of India Enterprise and a separate legal entity, being a Corporate Body. "Establishments" in the Schedule are certain physical areas. They may be shops, factories, boat jetties or other areas. If loading or unloading or both are carried on therein, the Act springs into play. But, for Ext.P4 Notification, the factory premises of the second petitioner, would be an establishment to which the Act would have been applicable. If the second petitioner did the secondary packing, undoubtedly, Ext.P4 will come to its rescue. Here, the first petitioner is instead permitted to use the leased premises (whether it amounts to a licence or a further lease in favour of the first petitioner is not clear). Now, if the first petitioner were permitted to carry on some activity WPC.19480/2010 H 14

wholly unconnected with the business of the second petitioner, merely because it is done in premises covered by Exts.P2 and P3, the petitioners could not have availed of the benefits of Ext.P4. But here, in the establishment of the second petitioner, the first petitioner is carrying out the work of secondary packing which is an essential process apparently in the carrying out of the business of the second petitioner. Its work is integrally connected with the second petitioner's activity, namely production and marketing of male contraceptives. In Ext.P4, what is exempted is an establishment owned or controlled by the Central Government. The second petitioner appears to be controlled by the Central Government.

15. Even though a part of the activities to be carried on by the second petitioner in its establishment is permitted to be carried on by the first petitioner, it may not cease to be an establishment under control of the Central Government. We must bear in mind the object of the exclusionary part of Ext.P4 Notification which is to free the activities carried on in the WPC.19480/2010 H 15

establishment of a Central Government Enterprise from the trammels of the law of headload work prevalent in the State of Kerala. We must notice that in the Notification, an exemption is granted in respect of an Establishment. It does not specifically refer to the word "Employer". The work done by the first petitioner is secondary packing which is work part and parcel of the work of the second petitioner and that too carried on in the Establishment under control of the second petitioner, admittedly a Central Government Enterprise. In such circumstances, we would think that the petitioners cannot be denied the benefit of the exemption granted in favour of Establishments owned or controlled by the Central Government as postulated in Ext.P4 Notification.

16. The further question which arises is whether by virtue of the conduct of the petitioners they have waived their rights. "Waiver" can be by conduct or by express contract. The Apex Court in Krishna Baghadur v. Purna Theatre And Others (2004 (8) SCC 229) was dealing with the question whether a WPC.19480/2010 H 16

retrenchment under the Industrial Disputes Act, in contravention of Section 25 F(b) would be rendered void ab initio. The Court proceeded to lay down, inter alia, as follows: "9. The principle of waiver although is

akin to the principle of estoppel; the difference between the two, however, is that whereas estoppel is not a cause of action; it is a rule of evidence; waiver is contractual and may

constitute a cause of action; it is an agreement between the parties and a party fully knowing of its rights has agreed not to assert a right for a consideration.

10. A right can be waived by the party for whose benefit certain requirements or conditions had been provided for by a statute subject to the condition that no public interest is involved therein. Whenever waiver is pleaded, it is for the party pleading the same to show that an agreement waiving the right in consideration of some compromise came into being. Statutory right, however, may also be waived by his conduct."

WPC.19480/2010 H 17

17. In John v. Varghese (1951 KLT 281), a Division Bench of the Travancore - Cochin High Court, noting the conduct of the decree holder in accepting payment by cheque in question, held that he had waived his right to avail of the benefit of the default of three consecutive instalments. In Cherootty V v. P.T. Ramanujan (2006 (1) KLT 283) a Division Bench of this Court was dealing with a case arising from out of the closure of a factory. A settlement was arrived at between the Unions and the Management under which certain amounts were payable. The majority of the workmen accepted it. However, individual workmen took up the matter before the Labour Court invoking the provisions of Section 33 C(2) of the Industrial Disputes Act. The Court, inter alia, held as follows:

"We may hasten to add, looking at Ext.P1

settlement and looking at the conduct of the authorities, Ext.P1 settlement is a final adjudication of rights of parties. As we have already indicated, none of the unions have approached Labour Court or this Court challenging the settlement. Majority of the WPC.19480/2010 H 18

workmen also accepted the settlement as a final adjudication of their rights, Individual workmen have also not disputed the settlement all these years. Consequently, in our view, there is a complete waiver of statutory rights by the workmen."

18. In Volume 16, Halsbury's Laws (4th Edn.), the term Waiver has been described in the following words: "Waiver is the abandonment of a right in

such a way that the other party is entitled to plead the abandonment by way of confession and

avoidance if the right is thereafter asserted, and is either express or implied from conduct. It may sometimes resemble a form of election, and sometimes be based on ordinary principle, although, unlike estoppel, waiver must always be an intentional act with knowledge. A person who is entitled to rely on a stipulation, existing for his benefit alone, in a contract or of a statutory provision, may waive it, and allow the contract or transaction to proceed as though the stipulation or provision did not exist. Waiver of this kind WPC.19480/2010 H 19

depends upon consent, and the fact that the other party has acted on it is sufficient consideration. Where the waiver is not express, it may be implied from conduct which is inconsistent with the continuance of the right, without need for writing or for consideration moving from, or detriment to, the party who benefits by the waiver; but mere acts of indulgence will not amount to waiver; nor can a party benefit from the waiver unless he has altered his position in reliance on it. The waiver may be terminated by reasonable but not necessarily formal notice unless the party who benefits by the waiver cannot resume his position, or termination would cause injustice to him.

It seems that, in general, where one party has, by his words or conduct, made to the other a promise or assurance which was intended to affect the legal relations between them and to be acted on accordingly, then, once the other party has taken him at his word and acted on it, so as to alter his position, the party who gave the promise or assurance cannot afterwards be allowed to revert to the previous legal relationship as if no such promise or assurance had been made by him, WPC.19480/2010 H 20

but he must accept their legal relations subject to the qualification which he has himself so introduced, even though it is not supported in point of law by any consideration."

In Vol.45 Halsbury's Laws (4th Edn.), Waiver is referred to as follows:

"Waiver is the abandonment of a right, and thus is a defence against its subsequent enforcement. Waiver may be express or, where there is knowledge of the right, may be implied from conduct which is inconsistent with the continuance of the right. A mere statement of an intention not to insist on a right does not suffice in the absence of consideration; but a deliberate election not to insist on full rights, although made without first obtaining full disclosure of material facts, and to come to a settlement on that basis, will be binding."

19. As far as Ext.R5(a) application is concerned, the case of the petitioner is as follows:

The secondary packing operations have been done at various places by taking halls and other vacant places on rent for about an year. In view of the short term rental basis, the Society WPC.19480/2010 H 21

had to take the assistance of the headload workers. It is their case that the rental agreement was subsequently terminated and vacated on 5.12.2009. As far as Ext.R5(b) is concerned, it is an application submitted by the second petitioner in respect of Aakkulam Factory. The case of the petitioners is as follows: The Factory commenced operation in 1992. There were no loading and unloading workers appointed when operations commenced. The services of local workers were utilised. The practice had continued and the matter came to be regulated by conciliation settlements between the trade unions and the second petitioner. Ext.P8 is the latest conciliation settlement. Ext.R1 (b) application for registration was submitted only for regularising payments as per Ext.P8 and earlier settlements. As per Clause 24 of the Scheme, payments to the headload workers have to be made through the Committee and it was in the said circumstances that Ext.R1(b) is submitted. Ext.R5(b) corresponds to Ext.R1(b), while Ext.R1(a) corresponds to Ext.R5(a). Ext.R1(d) series appear to be vouchers, all issued in WPC.19480/2010 H 22

the month of May, 2010 which are produced to evidence that the works were being done by the first and second respondents.

20. Shri P. Ramakrishnan, learned counsel would reiterate his stand. He would also submit that as far as the secondary packing operations carried out in premises covered by Exts.P2 and P3 at Balaramapuram, the petitioners have never engaged members of the first and second respondents. He would submit that there is no waiver or acquiesce.

21. It is no doubt true that the first petitioner has applied for, vide Ext.R1(a) in respect of leased out premises at Vattappara and registered workers were being engaged. But, can it be said that there is a waiver of the right for ever ? Apparently, it was a shortlived affair spanning a year and we cannot overlook the circumstances in which the registered workers were being engaged. We are of the view that merely because Ext.R1(a) application was made by the first petitioner, or that registered headload workers were engaged, it cannot mean that they have agreed to never assert their right to avail of WPC.19480/2010 H 23

the benefit under Ext.P4 Notification. As far as Ext.R5(b) is concerned, it may be true that the second petitioner applied for registration with the Board in respect of its Aakkulam Factory. We are called upon to decide the right in respect of the petitioners in respect of the Factory premises at Balaramapuram. Moreover, we cannot ignore the case of the petitioners based on the circumstances which led to the registered headload workers being employed in respect of the Factory at Aakkulam. We are of the view that the conduct of the second petitioner cannot itself lead us to the conclusion that the second petitioner has waived its right under Ext.P4 Notification in respect of the Balaramapuram Factory. No doubt, some vouchers are produced. We do not think that any of these should result in the second petitioner losing their right available under the Notification. We cannot hold that the second petitioner has abandoned its right under Ext.P4. The right may in fact arise from time to time. In this case, it has arisen with respect to its operations in Balaramapuram. We cannot hold that the second WPC.19480/2010 H 24

petitioner by its acts or conduct or agreement, abandoned its right and lose the right available to it by virtue of Ext.P4. Accordingly, we allow the Writ Petition and direct respondents 3 and 4 to provide adequate protection to the petitioners and their workmen for the smooth functioning of their Establishment at Resurvey No.219 of Pallichal Village, Neyyattinkara Taluk, without obstruction or interference from members of respondents 1 and 2.

Sd/=

K.M. JOSEPH,

JUDGE

Sd/=

M.L. JOSEPH FRANCIS,

JUDGE

kbk.

//True copy//

PS to Judge