R. Gururajan, J.
1. Petitioners in all these petitions are before me challenging the notification bearing No. LD:15:LWA:2001 dtd: 1-8-2001 (Annexure-O).
2. Facts in WP No. 28677-78/2001;
The first and second petitioners are trade unions. Third and the fourth petitioners are employed in the canteen run and maintained by the respondent/management. Petitioners say that the management of the industries preferred employment on contract basis and that would facilitate them to exploit the workmen in terms of cheap labour. The system of contract labour has been considered as a baneful and pernicious system and has kindled the judicial conscience since the workmen would have no security of service and their wages have often been far below the mininum wages prescribed by the State Government. In order to arrest this trend the Central Government enacted the Contract Labour (Regulation and Abolition) Act, 1970 (for short 'the Act'). The primary object of the Act is to abolish the system of contract labour wherever it is possible. Second respondent issued a notification dtd 11-4-1997 prohibiting employment of contract labour in industrial canteen. The said notification was challenged by several managements before this court by way of writ petitions. The matter was referred to a Division Bench. A Division Bench of this Court dismissed the writ petitions in terms of its order dtd 30-9-1998 (reported in ILR 1998 KAR 1897). The management thereafter preferred special leave petitions. They were rejected by the Supreme Court. Review petitions filed against the said rejection order were also dismissed on 19-4-1991. Notification dtd 11-4-1997 became final in terms of these judicial pronouncements. Thereafter, according to the petitioners, several managements did not implement the notification. There were correspondence between the parties in the matter. Complaints were filed before the third respondent for appropriate action against those managements for contravention of the Act. In the meanwhile, the management through their association called Karnataka Employer's Association submitted a representation to respondent No. 3 to initiate measures to withdraw the notification. Matter was referred to the Contract Labour Advisory Board. There was protest by the trade unions with regard to withdrawal of the notification. However the Government has chosen to proceed to withdraw the earlier notification abolishing contract labour, in terms of Annexure-O. Annexure-O is challenged by raising several contentions.
2.1 WP 41091/2001 is filed by MICO Contract Employees Association challenging Annexure-M, and Annexure-O with same are similar facts and grounds.
2.2 WP 41092/2001 is filed by L & T Komatsu Ltd., with similar facts challenging Annexure-K the notification dtd 1-8-2001 with additional prayers and for additional directions.
2.3 WP 15042/2002 is filed by the workmen of MICO Naganathapura Canteen, challenging the very same notifications as in other cases. In addition they want a direction to the management to treat the contract labourers as regular employees and for absorption of their services w.e.f. 11-4-97 with all consequential benefits. Petitioner also refers to the proceedings in terms of the material facts as in the connected writ petitions. However in the present case, an application is filed at Annexure-J to contend that the workmen are put to hardship and difficulties on account of poor wage structure. Application is also filed in terms of Annexure-K. It is stated that the service conditions of the contract workers are miserable and that they are not even paid 25% of wages which are being paid to the regular workmen. With these additional facts, petitioner wants a same or similar direction as in the connected cases.
2.4 WP 5293/2004 is filed by the workmen of BHEL (EDN) Canteen challenging the very same notification. Petitioner states that its members have worked fairly for a long time; that the regular employees are being paid regular pay scales and attached dearness allowance and other allowances. A regular workman working in the canteen gets a minimum gross wages of Rs. 6,000/- to Rs. 6,500/- per month, whereas a contract employee gets wages on daily wages basis at a sum of Rs. 86.50 ps. Wage slips are also produced. In this petition also petitioner refers to the Factories Act and the earlier proceedings. According to the petitioner the notification dtd 1-8-2001 issued by the state is arbitrary, capricious and irrational. A further direction is also sought for as in other cases.
3. Notice was issued and statement of objections have been filed in each one of the cases.
4. Detailed statement of objections is filed in WP No. 26877/2001. Respondent stated that the notification issued by the State Government is legal, proper and just. They also refer to the earlier proceedings. They say that a representation was made in terms of Annexure-R1 emphasising that in the context of market oriented globalised new economic policy the process of de-regulation and decontrol has been pursued to facilitate interface of the market forces and in the changing situation, the industrial establishments have got to focus on their core competencies for survival and business growth. It is essential that they use outside specialised services in the fields in which the outside agencies are specialised. If the industrial establishments will have to focus and themselves manage all peripheral activities, such as security, house keeping, gardening, transportation, loading and unloading, food preparation and services, etc., it will cause strain on the industrial establishments and distract their focus on their core competancies. Developing business resources to manage peripheral activities makes an enterprise cost effective and insufficient. It was urged that world over outsourcing has been the phenomenon and the action taken by the State in abolishing the engagement of contract labour in industrial canteen is a retrograde measure; that such notification has been issued only in Karnataka while all other States have taken regulatory measures protecting the interest of contract labourers working in the canteens, that the said measure acts as a disincentive for new investors in Karnataka, that if the notification is allowed to continue, it may encourage flight of industries from Karnataka to other States. Annexure-R2 is the representation made by the Indo-German Chamber of commerce, Bangalore. Annexure-R3 is an article. Annexure-R4 is an analysis on the activities which are on contractual services. Annexure-R5 is an article by Mr. J.O. Patel, Partner Ajanta Clock Manufacturing Company.
5. Statement of objections is filed by other respondents as well. They also justify the action of the Government.
6. State Government has filed a detailed statement of objections in support of the notification. They also refer to the earlier proceedings. It is stated that after the disposal of the SLP by the Supreme Court, the State Government initiated action to implement the said notification abolishing the contract labour in factory canteens. At that time Karnataka Employees Association gave a representation to the Commissioner of Labour requesting the withdrawal of the notification dtd 11-4-1997. The substance of the representation was that in the context of the market oriented globalised new economic policy of the Government, the process of de-regulation and de-control has been introduced to facilitate the co-ordination of market forces. Government says that similar representation were also received from Hyderabad Karnataka Chamber of Commerce and Industry, Federation of Karnataka Chamber of Commerce and Industry. L & T Komatsu Ltd., etc. After receipt of the representations filed by the employers and the employee, the State Government referred the matter to Karnataka Advisory Board. The Board after elaborate consideration of the views expressed by the members, recommended withdrawal of the notification dtd 11-4-1997. The said recommendation was again considered and the same was accepted by the State Government and a policy decision was taken by the State to issue the notification dtd 1-8-2001. They say that petitioners who have been engaged by the contractor have no vested right to be absorbed as employees of the principal employer, no fundamental rights of the petitioners have been infringed in the matter. They further say that in view of the latest law laid down by the Supreme Court, in the case of SAIL the workmen have no vested right to be absorbed on the abolition of contract labour. The Government would also deny the various other allegations made by the petitioner. Government refers to its powers and contends that withdrawal is proper and legal. Objections statements have been filed by the other employers.
7. An application is filed seeking to implead certain contractors. They have been allowed to come on record. The Contractors have also filed their affidavit supporting the notification and the management in this regard.
8. Contractors would say that the system of contract labour is found viable in every respect. The CLRA Act and Rules made thereunder are intended to regulate and contract system and conditions of service of the contract labour. There are sufficient terms and conditions, to protect and safe guard the interest of the workers engaged by the contractors. This is one of the primary factors for the Government to withdraw the notification.
9. Statement of objections is also filed in WP No. 41091/2001. In the statement of objections it is stated that AT Adugodi plant, free food, tea and snacks are provided for nearly 5000 employees cost the respondent company about Rupees Five Crores per annum. The canteen is licenced by the City Corporation and the licence has been renewed. The canteen management is assisted by canteen managing committee which is composed of elected workmen and nominated management representatives as required under the Factories Act. It is stated that respondent No. 1 was one of the first factories in Bangalore to provide free whole some food in the year 1956 itself for all its employees with excellent quality round the clock and of good nutritional value. It is further stated that it is not employing contract labour in providing canteen services such as in the preparation or serving food items, supervision and management. They want the petition to be dismissed.
9A. Statement of objections has been filed in WP No. 41092/2001 reiterating the objections filed in WP 28677-78/2001. However it is further stated that Engineering General Workers Union has entered into settlement with the Contractor regarding wages etc and the settlement is valid till 30-6-2000. Substantial benefits have been extended to the canteen force. They are also covered by ESI, PF etc.
10. In WP 5293/2004 also statement of objections are filed. It is stated therein that BHEL is a public sector undertaking. The contract workmen are under the direct functional and administrative control of the respective contractors. As principal employer, BHEL-EDN is ensuring compliance of various statutes such as contract labour (R & A) Act, Factories, Act, ESI Act, Payment of Wages Act. The petitioners are workmen employed by those contractors and no relationship of employer and workmen exist between BHEL-EDN and the petitioners. It is responsibility of the contractor to maintain its workman. It is also disputed that the contract workers are represented by the petitioner's union. It is stated that the Government ensures timely payment of minimum wages. Various details are provided in the body of the objection statement. It is stated that High Court cannot decide the regularisation issue in terms of the Supreme Court judgment and that such question could not be determined in a writ proceedings and can be determined only by an industrial adjudicator. It is stated that in so far as petitioner is concerned, the appropriate Government is Central Government and not the State Government. They want the petition to be dismissed.
11. All the petitions were heard together since most of the facts and grounds raised are same or similar.
12. Sri M.C. Narasimhan, Learned Senior Counsel for the petitioners would argue that the State Government has committed a serious legal error in rescinding the Government Order. On the earlier orders attaining the finality and after obtaining the orders from the highest Court of land. He refers to me the various material on record to say that the impugned notification runs counter to the provisions of Contract Labour Regulation and Abolition Act and in particular Section 10 of the Act to say that there exists no power at all to rescind the notification. Even otherwise he says that Section 21 of the General Clauses Act is not available to a case like this. Alternatively he says that even if the power is assumed or presumed, the power has to be in terms of Section 10(1) read with Section 10(2) of the Act. He took me through the material on record to say that Section 10(2) has been followed more in principle. In so far as the proceedings are concerned, he would say that the Government has chosen to consider the opinion of the Advisory Board. The opinion is divided. In such circumstances, the Government ought to have rejected the request for rescinding the notification. The object of the Act is to abolish and not to abolish the abolition of the contract labour. Such abolition of abolition according to the Learned Counsel would ruin the very object of the legislation. Government is duty bound to protect the interest of the workmen in terms of the statute and it cannot act contrary to the statute. Regarding contract labour service condition he would say that the condition is deplorable. He further says that the abolition is a must to achieve the object of the Act in terms of Section 10(1) of the Act. Any other decision would be contrary to the intention of the legislature. In sofaras the power under Section 21 is concerned, he would dispute the same. In sofaras regularisation is concerned, Learned Counsel would argue that in terms of the law of the Supreme Court, once contract labour is abolished, as a consequence, the workmen are entitled for regularisation. He says that statutory canteen stands on a different footing. Courts consistently are ruling that the statutory canteen labour are the employees of the principal employer itself and that therefore, there cannot be any difficulty in issuing an alternative direction as sought for by the petitioners.
13. Sri K. Subba Rao, Learned Senior Counsel supports the argument of Sri M.C. Narasimhan, Learned Senior Counsel and would argue that the constitutional goal in terms of Article 43 is negatived by the impugned rescinding order. He would also say that there is clear non application of mind. In so far as the notification is concerned, he would say that the recital in the preamble of the rescinding order would show non-application of mind. He would further say that there can not be any supplementary or supplanting material in terms of the Court ruling. Ultimately he would argue that the Government seems to be sitting in judgment over the judges' judgment and such a course is impermissible.
14. Both the Learned Counsel place before me several case laws in support of their submission.
15. Mr. Vijaya Shankar, learned Senior Counsel appears for management and so also Mr. Kasturi, learned Senior Counsel in connected matters. While countering the argument, Learned Counsel would say that during the pendency of the earlier proceedings Government abolished contract labour in steel industries. They would further say that it was in those changed circumstances, the managements made a representation in the light of the changed circumstances and in terms of the representation. According to them the Government is fully justified in rescinding the notification. Learned Counsel also would say that the State Government has the necessary power of the President in terms of Section 10 of the Act. They would further say that even otherwise, Section 21 of the General Clauses Act would be an answer with regard to the objections so raised by the petitioners.
15.1 In so far as Advisory Board is concerned they would say that it consists of experts and expert opinion is taken note of by the Government in issuing the rescinding notification.
15.2 In so far as Apex Court judgment is concerned, they say that it could not be a bar for exercising the power in terms of the policy decision of the Government in the case on hand. Policy does not come in the way of the Government rescinding the notification. They would remind the Court of its limited jurisdiction in the matter of decision making process. They refer to me the various case laws to say that the Government is fully justified in the given circumstances in issuing the impugned notification.
15.3 In so far as regularisation and absorption of the contract labour in canteens is concerned, they would say that in terms of SAIL's case writ Court cannot decide the regularisation and industrial adjudicator is the only answer in such matters in terms of the Apex Court judgment. They would also say that petitioners are not all aggrieved by the notification and therefore writ petitions are not maintainable at their instance. They refer to me the various judgments, to which I would be adverting to at the time of considering the contention of the parties.
16. Sri K.L.N. Rao, learned Senior Counsel appearing for contractors would argue that contract labourers' interest is fully taken care of by the impugned notification and it cannot be said that the contract labourers are deprived of any benefit in the matter. He also says that Government has every power in terms of the statute in issuing the impugned notification.
17. While replying Sri M.C. Narasimhan and Sri Subba Rao, Learned Counsel would point out that SAIL's case stand on a different footing. They would further say that statutory canteen has a statutory flavour and statutory canteen provides for a right of regularisation and they need not go before the Industrial Adjudicator. They further read to me the SAIL's case and explained to me in support of their submission.
18. Learned Government Pleader has made available to this Court the original file. He has also filed two affidavits in terms of the direction of this Court with regard a meeting fixed by the Minister for industries after the rescinding notification. Learned Government Pleader also would support the stand of the management.
19. After hearing the Learned Counsel for a number of days, I am of the view that the following debatable points would arise for my consideration;
A. History of the Act
B. Object of the Act
C. Rights of the petitioners
D. Approach of the Court
E. Powers under Section 10 of the Act.
F. Powers under Section 21 of the General clauses Act.
G Validity of the impugned order
H. Judicial review with regard to endorsements
I. Permissibility of absorption and regularisation of contract labour
History of the Act
20. The Contract Labour (Regulation and Abolition) Act 1970 for short the Act is a Central Act and it received the accent of the President on 5-9-1990. A reading of objects and reasons would show that question of abolition was under consideration of the Government for a long time. In the second five year plan the planning commissioner made certain recommendations, namely problem of contract labour, progressive abolition of the system and improvement of service conditions of contract labour where the abolition was not possible. The matter was discussed at various meetings of tripartite committees at which the State Governments were also represented and general consensus of opinion was that the system should be abolished wherever possible or practicable and that in cases where this system could not be abolished altogether, the working conditions of contract labour should be regulated so as to ensure payment of wages and provision of essential amenities. In the light of these recommendations the Central Government introduced Contract Labour Regulation and Abolition Act and it became the law w.e.f. 7-9-1970.
Objects of the Act
21. The object of the Act in terms of the preamble is to abolish contract labour wherever it is possible and regulation of contract labour where such abolition is not possible. Chapter 3 deals with registration of establishments employing contract labour. Section 10 deals with prohibition of employment of contract labour. Section 10 has under gone several judicial scrutiny in terms of the several case laws. Courts have considered the object of the Act. The Supreme Court has considered the object of the Act in and also in the subsequent judgment . In both these
judgments, the Supreme Court has disapproved the system of contract labour holding it to be 'archaic' 'primitive' and of 'baneful nature'. These two judgments have been subsequently noticed by the Supreme Court in 1990 Supp SCC 668. The Supreme Court after referring to these judgments has chosen to hold in para 6 that the contract labour system which is nothing but an improved version of bonded labour, is sought to be abolished by the Act. The Act is an important place of social legislation for the welfare of labourers and it has to be liberally construed. The same is noticed in subsequent judgments as well. In fact in these cases itself the Government noticed the object of the Act in terms of the judgment and ruled that the
underlying policy of the Act is to abolish contract labour, wherever possible and practicable, and where it cannot be abolished altogether, the policy of the Act is that the working conditions of the contract labour should be so regulated as to ensure payment of wages and provision of essential amenities. When the judgment of this court was challenged before the Supreme Court, the Supreme Court confirmed the same. Therefore what is clear to this Court is that the main object of the act is to abolish as to regulate contract labour in terms of the statute and in terms of intention of the legislature in the matter.
Approach of the Court
22. It is well settled that in the matter of social welfare legislation, Court has to take note of various constitutional provisions in the matter. Sri K. Subbarao, Learned Senior Counsel argued at great length in this regard. He refers to me various judgments. The Supreme Court had an occasion to consider the scope of Article 39 of the constitution of India in . The Court ruled that right to live to a workman would include right to continue in permanent employment which is not a bounty of the employer nor can its survival be at the volition and mercy of the employer. Income is the foundation to enjoy many fundamental rights and when work is the source of income, the right to work would become as such a fundamental right. Fundamental rights can ill-afford to be consigned to the limb of undefind premises and uncertain application.
22.1 In , this Supreme Court held that the right to life with human dignity enshrined in Article 21 derives its life breath from the directive principles of State Policy and that opportunities and facilities should be provided to the people. In , the Supreme Court rule that the right to livelihood is an important facet of the right to life.
22.2 In the light of Article 39 to 43 of the Constitution of India, this Court has to interpret the social welfare legislation in a meaningful way so as not to deviate the objection of the very legislation. Social welfare legislations have been enacted to provide a meaningful life in terms of Article 21. Meaningful life has to be encouraged by way if pumping the blood and flesh to such social welfare legislation so that it does not become a dead letter depriving the weaker Section the very object of the legislation meant for weaker Sections of society of India. Therefore approach of this Courts has to be in consonance with the social justice principle in terms of the Constitution of India.
22.3 I cannot but notice and cull out the judgment of the Supreme Court in before concluding this point wherein the Supreme Court ruled as under.
"Myriad devices, half-hidden in fold after fold of legal form depending on the degree of concealment needed, the type of industry, the local conditions and the like may be resorted to when labour legislation cases welfare obligations on the real employer, based on Article 38, 39, 42, 43 and 43-A of the Constitution. The Court must be astute to avoid the mischief and achieve the purpose of law and not be misled by the maya of legal appearances."
Right of the petitioners
23. Respondents essentially contend that Petitioners are not affected parties in the matter. The State that by virtue of Annexure-O, their service conditions are not in any way affected. Prima facie, the said argument appears to be effective, but what cannot be forgotten is that repeal notification has its own repercussions in the matter. Along drawn battle for abolition is nullified by annexure-O. Even the notification, in terms of annexure-O would provide for contract labour in industrial canteen. Industrial Canteen is different from canteen. Industrial Canteen is different from Statutory Canteen.
24. To my repeated question as to the management as to why they are keen on withdrawing the earlier notification when the earlier notification does not provide any right to the petitioner, no satisfactory answer was given. The abolition of contract labour has its own consequences and in such a consequence certain rights definitely flow to the employees. Even the label of contract labour is abolished in the light of abolition of contract labour. Therefore it cannot be said that the petitioner as such have no right to maintain these petitions. Even otherwise, this court has to notice that the petitioners being affected by the said notification have a right to maintain these petitions and that therefore no right argument does not appeal to me. If really no right is available to the employees, the employers would not have insisted on this notification being recalled in the subsequent notification.
It is also seen that petitioners are also seeking regularisation rights in the given circumstances and on the basis of several judgments of Courts of law. A reading of the entire petition would show that it cannot be said that the petitioners are foreign to these petitions and they have some interest in the matter. In these circumstances, I am not inclined to throw away the petitions on the ground of no rights in their favour.
Powers under Section 10 of the Act
25. The present set of facts would show that the State Government in terms of its power under Section 10 has chosen to issue a notification on 11-4-1997. In the said notification it is stated that the Karnataka State Central Advisory Board after considering all reports advised that employment of contract labour in industrial canteen has to be prohibited. Thereafter under Section 10(1), the State Government prohibited the contract labour in canteens in factories employing more than 250 labourers. The said notification was challenged unsuccessfully both in this Court as well as in the Supreme Court by the respondents. This Court and Apex Court have granted their seal of approval in terms of judicial pronouncements. Thereafter the employers have chosen to make a representation in the matter of rescinding the notification, on account of various reasons mentioned in detail in their representation. The said representation was made to the Government. The Government constituted an advisory Board in the matter of rescinding the notification. The Advisory Board met on several dates and there was divergence of opinion with regard to rescinding the earlier notification. The employees representative opposed rescinding in the meeting. The Board however, in its wisdom has chosen to advise the Government to rescind the notification. The State Government thereafter has issued the impugned notification. Sri Subba Rao and Sri Narasimhan, Learned Senior Counsel would argue elaborately that the Government has no power at all in terms of Section 10 to rescind the notification. They further say that the power has already been exhausted by the State and it cannot nullify its own decision in the matter. Per contra, Sri Vijaya Shankar and Sri Kasturi, Learned Senior Counsel and other Counsel would oppose the same by saying that necessary power is available under Section 10 of the Act. They refer to various judgments in this regard. Section 10 reads as under.
"10. Prohibition of employment of contract labour. (1) notwithstanding anything contained in this Act, the appropriate Government may, after consultation with the Central Board or, as the case may be, a State Board, prohibit by notification in the official gazette, employment of contract labour in any process, operation or other work in any establishment.
(2) Before issuing any notification under Sub-section (1) in relation to an establishment, the appropriate government shall have regard to the conditions of work and benefits provided for the contract labour in that establishment and other relevant factors, such as-
(a) Whether the process, operation or other work is incidental to, or necessary for the industry, trade, business, manufacture or occupation that is carried on in the establishment;
(b) Whether it is of perennial nature, that is to say, it is of sufficient duration having regard to the nature of industry, trade, business, manufacture or occupation carried on in that establishment;
(c) Whether it is done ordinarily though regular workman in that establishment or an establishment similar thereto;
(d) whether it is sufficient to employ considerable number of whole-time workmen."
Explanation.- If a question arises whether any process or operation or after work is of perennial nature, the decision of the appropriate Government thereon shall be final.
25.1 Before I take upon the merits in terms of Section 10 of the Act Let me see the case laws cited by the parties in support of their respective submissions.
25.2 is a judgment of the Supreme Court with regard to the power under Section 10 of the ID Act. The Court was considering a notification issued under Section 10 and the courts was also considering as to whether the Government has the power to cancel the notification in terms of the power available under Section 10(1) of the Act. While considering this aspect of the matter, the Court noticed in the said judgment that there is already an adjudication process available and that cannot be questioned in terms of the judgment. It was in those circumstances, the court ruled that Section 10 does not provide for cancellation or supercision of judgment. This judgment is not applicable to the facts of this case.
25.3 AIR 1976 SC 741 is a judgment of the Supreme Court. In para 83 the Supreme Court has ruled that the power has to be exercised within the limit prescribed under Section 6(2) and for the purpose for which it was conferred.
25.4 AIR 1976(1) KLJ 273 is a judgment rendered under the Karnataka Agricultural produce market (Regulation) Act, 1966. The Court was considering the election dispute and in that view of the matter the Court ruled that Section 21 cannot be availed of. This judgment is factually and legally not applicable to the present set of circumstances.
26. Per contra, the management has placed before me, various judgments to contend that Section 10 provides for withdrawal of the notification.
26.1 AIR 1962 SC 1078 is a constitution Bench judgment and Court was considering the repeal powers in the said judgment. The Court noticed in para 14 as under:
"There is no doubt that the general principle is that the power of a legislative body to repeal a law is co-extensive with its power to enact such a law."
26.2 Similarly the Supreme Court ruled in that there is no real distinction between repeal and amendment. Amendment is, in fact, a wider term and it includes abrogation or deletion of a provision in an existing statute. If the amendment of an existing law is small, the Act professes to amend, if it extensive, it repeals a law and re-enacts it. An amendment of substantial law is not retrospective unless expressly laid down or by necessary implication inferred.
26.3 is a judgment of the Supreme Court. The Supreme Court in para 13 ruled as under;
"The constitution has the power to invalidate the laws made by Parliament and the State Legislatures transgressing the Constitutional limitations. Where an act made by a State Legislature is invalidated by the Courts on the ground that the State Legislature was not competent to enact it, the State Legislature cannot enact a law declaring that the judgment of the Court shall not operate, it cannot overrule or annul the decision of the Court. But this does not mean that the other legislature which is competent to enact that law cannot enact that law. It can. Similarly, it is open to a legislature to alter the basis of the judgment as pointed by this Court in ."
26.4 From these judgments what is clear to me is that Section 10 does not by itself provide for any power to cancel, rescind or modify or revise a notification issued under Section 10(1) of the Act. The question that remains to be answered as to whether a notification issued under Section 10 has to be in force for all the time to come or can it be cancelled, rescinded, modified or revised in the event of a new policy, changed circumstances etc? This question has been considered at a later stage. At this stage I must notice the contention of availability of power under Section 21 of the Act.
Scope of Section 21 of the General Clauses Act
27. Let me see the very Section itself for proper understanding of the said provision. The said section reads as under:
"21. Power to issue to include power to add to, amend, vary or rescind notifications, orders, rules or bye-laws-Where by any (Central Act) or regulation, a power to issue (notifications), orders, rules or bye-laws is conferred, then that power includes a power, exercisable in the like manner and subject to the like sanction and conditions (if any), to add, to amend, vary or rescind any (notifications), order rules or bye-laws so (issued).
27.1 Courts had occasion to look into Section 21 in the matter of power available under that Section. The workman strongly rely on various judgments.
27.2 AIR 2000(4) 124 is again a judgment with regard to Manipur Panchayati Raj Act. The High Court noticed that Section 21 of the General Clauses Act cannot be of any help to the facts of the case.
27.3 Per contra, respondents rely on and in the said case the Supreme Court has considered the object of Section 21. It has ruled as under:
"The purpose of the General Clauses Act is to place in once single statute different provisions as regards interpretations of words and legal principles which would otherwise have to be specified separately in many different acts and regulations. Whatever the General Clauses Act says whether as regards the meaning of words or as regards legal principles, has to be read into every statute to which it applies."
27.4 From a reading of these judgments and Section 21 what is clear to this court is that a power to issue includes the power to add, vary etc., that power in terms of Section 21 includes a power exercised in a like manner and subject to the like sanction to Act, Amend, vary or rescind a notification, order or rule, however the supreme court in (referred to above) has cautioned that such power has to be exercised in a like manner and that has to be exercised carefully taking into consideration all aspects of the matter including the necessary ingredient Section 10 itself. Hence, in my view Government can issue a notification rejecting its earlier notification under Section 10 read with Section 21 of the Act but it has to be done in a manner acceptable in law.
Validity of the impugned order/Merits of the Matter
Merits of the Matter / Validity / Judicial Review
28. To consider the merits of the matter certain admitted facts are required to be noticed by this Court. State Government constituted an Advisory Board in the matter of abolition of contract labour. The Board after elaborate consideration of the views expressed by the members recommended abolition of contract labour in canteens. The said recommendation was again considered and the same was accepted by the State Government and a policy decision was taken by the State to issue the notification dtd 11-4-1997 prohibiting contract labour in canteens in factories employing more than 250 labourers. The said notification was challenged by several managements up to the Supreme Court and the Supreme Court upheld the prohibitory order. After the judgment of the Supreme Court, the workman made a claim with regard to absorption and with regard to implementation of the order by way of several letters in terms of annexure-E series. Subsequently, the employers also made a representation seeking to rescind or recall the notification dtd 11-4-1997. They state that if the notification is allowed to continue their business interest would suffer and also the economy of the State. They also state that the industries would move out of Karnataka on account of this notification. The Government thereafter constituted an advisory Board in the matter of rescinding the notification. The Advisory Board met on several dates and there was divergence of opinion with regard to rescinding. The employees representative opposed rescinding. The Board however, in its wisdom has chosen to advise the Government to rescind the notification. The State Government thereafter has issued the impugned notification dtd 1-8-2001 in terms of the power under Section 10 read with Section 21 of the Act rescinding the earlier notification dtd 11-4-1997.
28.1 At this stage, I must also notice the two serious arguments advanced by the parties. The management repeatedly reminded me that a writ Court is not to interfare in a decision and it can utmost go into the question of decision making process in terms of the various case laws. They would also argue that upholding of the notification in terms of judicial pronouncements did not come in the way of the Government rescinding the notification. Per contra, Learned Counsel for the workman would argue that a well considered judicial order upholding the notification is nullified by the present notification. According to them virtually the judgment of the Supreme Court is set at naught. I must also notice a contention of the management that a policy decision has been taken and that policy decision cannot be a subject matter of judicial review. Let me see the submission of the Learned Counsel in the light of the material available on record.
28.2 is another judgment cited by the management. The Court also noticed in para 46 as under,-
"46. It is evident from the above that it is neither within the domain of the Courts nor the scope of the judicial review to embark upon an enquiry as to whether a particular public policy is wise or whether better public policy can be evolved. Nor are our courts inclined to strike down a policy at the behest of a petitioner merely because it has been urged that a different policy would have been fairer or wiser or more scientific or more logical."
28.3 The Supreme Court further noticed that the wisdom and advisability of economic policies are ordinarily not amenable to judicial review unless it can be demonstrated that the policy is contrary to any statutory provision or the constitution.
29. Per contra, , was pressed into service in this regard by the Learned Counsel for the employees wherein it was held that the Government or legislature has power to evolve its new fiscal policy in public interest which includes its power to withdraw the old policy. Court would not bind the Government to its previous policy by invoking the doctrine of legitimate expectation unless it is proved that the change in policy is vitiated by mala fides or abuse of power.
29.1 was relied on to say that the present withdrawal is not a policy decision. AIR 1999 SC 799 is pressed into service to say that a judicial review cannot be rendered in effective by executive fiat.
29.2 In this connection it is also necessary to refer to AIR 1998 KAR 1897 (earlier contract labour case). This Court has noticed the scope of judicial review. In para 35 this Court has ruled as under:
"35. We also agree with the submission of Mr. Vijaya Shankar that in the case of conditional legislation the scope of judicial review is limited. Sufficiency or otherwise of the reasons cannot be gone into. While examining its validity the object of the Act has to be kept in mind. In case the notification is issued keeping in view the parameters laid down in Section 10 after taking in to consideration the relevant factors mentioned therein, then the scope of judicial review would be restricted to its procedural aspect only. Judicial review is not an appeal from a decision but a review of the manner in which the decision was made."
29.3 From these decisions it is clear to me that decision making process can be subjected to judicial review but not the decision by itself. The procedural aspect can be considered by Courts if a case is made out by the parties assailing that process.
29.4 In this connection it is necessary to notice the following factors;
(i) Admittedly this notification has been issued subsequent to the judgment of the Supreme Court approving the earlier prohibitory notification. Various grounds which are raised in the representation were also raised in same or similar fashion. These objections have been negatived by this Court and also by the Supreme Court to a certain extent. It is also to be noticed at this stage that even the withdrawal of prohibitory orders in steel industries case was also noticed by the Apex Court while rendering the decision. Unfortunately, these relevant material have not been properly adverted to by the respondents in the decision making process. It is to be noticed that when the earlier notification was challenged, a Division Bench of this Court noticed the proceedings of the State Advisory Board and after noticing the original records has ruled as under-
"In the present case, the State Government has placed before us proceedings of the Board report and the papers including the government file. We have perused the file and are satisfied that the relevant factors in Section 10(2) were present in the case which lead the government to issue the notification under Section 10 abolishing the contract labour in establishments having 250 or more employees. We have examined each relevant factor mentioned in Section 10(2) separately and individually while dealing with the statement of facts,"
After noticing these aspects of the matter, this Court accepted the notification issued by the State Government. When this decision was challenged before the Supreme Court, the Supreme Court in has ruled as under,-
"17. The High Court in the course of its judgment considered similar contentions raised before it. After referring to the objections of the Act and the decisions of the Court in Royal hatcheries Pvt. Ltd. v. State of AP , and Gammon India Ltd., (Air 1974
SC 961 : 1974 Lab IC 707 the High Court held that the policy of the Act was to abolish contract labour wherever possible and where it cannot be altogether-abolish, the policy of the Act is to regulate the working of the conditions of the contract labour to ensure payment of wages and essential amenities. While opining as to whether contract labour has to be abolished or not the consideration that has to be had to the fact as to whether contract labour is necessary for the industry, trade, business, manufacture or occupation which is carried on in the establishment. The High Court further held that the Government before taking the decision to issue the notification did bear in mind the necessary factors in this regard. The High Court referred to the nature of the composition of the Advisory Board., various deliberations of the meetings of the Advisory Board and files of the Government relating to the decision taken to abolish the contract labour. After a detailed discussion in the course of its noting, the Government decided to abolish the contract labour from canteens in establishments employing 250 or more employees. All facts that had been raised by various groups of persons have been taken note of apart from requirements of the statute and thereafter a decision has been taken by the Government. The High Court noticed that the running of the canteen is of perennial nature and the canteen is provided pursuant to the mandatory requirement of the Factories Act where there are more than 250 workers. The canteen having been established pursuant to the requirement of Sec 46 of the Factories Act the same would be incidental and connected with the work of the establishment. The fact that maintaining is not part of the core or competency of the industry is irrelevant for deciding the question whether the contract labour should be abolished or not. On this basis, the High court decided against the petitioners."
(underlining is mine).
Thereafter the Supreme Court put its judicial seal of approval. The employers moved the Government to rescind the notification and the Government has now accepted the same in the light of the Advisory Board proceedings.
30. While issuing the impugned notification, the Government has not even referred to the State Policy or with regard to the relevant factors in the notification. It is a withdrawal simpliciter by the Government in exercise of its power under Section 10 read with 21 of the General Clauses Act. Though the Government has power in terms of Section 10 read with Section 21 of the Act, to rescind a notification. But the said power cannot be at the whims and fancies of the Government. The matter is governed by statute and statute provides for a method and manner in which it can be done. There is a reason behind this. Otherwise, the Government would be taking an arbitrary decision of rescinding a notification without considering all the relevant factors in terms of statute. Law is fairly well settled that even in administrative decision, the decision maker has to take note of all relevant factors in the decision making process and not to take irrelevant factors while arriving at a decision.
31. Let me now see the decision making process in terms of the original file made available to me.
31.1 It is seen from the material on record that on receipt of the representation made by the employers, the State Government constituted an Advisory Committee. The representation forms the foundation for rescinding the notification. Let me first see the representation submitted by the Karnataka Employers Association. In the representation it is stated that in the context of market oriented globalised new economic policy the process of de-regulation and decontrol has been pursued to facilitate interface of the market forces and in the changing situation, the industrial establishments have got to focus on their core competencies for survival and business growth. It is essential that they use outside specialised services in the fields in which the outside agencies are specialised. If all the industrial establishments will have to focus and themselves manage all peripheral activities, such as security, house keeping, gardening, transportation, loading and unloading, food preparation and services, etc., it will cause strain on the industrial establishments and distract their focus on their core competancies. Developing business resources to manage peripheral activities makes an enterprise cost effective and inefficient. It was urged that world over outsourcing has been the phenomenon and the action taken by the state in abolishing the engagement of contract labour in industrial canteen is a retrograde measure, that such notification has been issued only in Karnataka while all other States have taken regulatory measures protecting the interest of contract labourers working in the canteens; that the said measure acts as a disincentive for new investors in Karnataka, that if the notification is allowed to continue, it may encourage flight of industries from Karnataka to other States. The Indian Industry has also made a similar representation. Similar submissions have been made by similar industries.
32. At this stage, I must notice that this very argument of core industry etc., was raised by the petitioners in the earlier proceedings and the Apex Court said that no factual foundation was laid down in the petition to show that they are incurring losses in running these canteens and therefore intermediary has become necessary. This Court in ILR 1998 KAR 1897 ruled that running of a canteen is not only of perennial nature but also mandatory requirement of the Factories Act where there are more than 250 workers. The canteen having been established pursuent to the requirement of Section 46 of the Factories Act the same would be incidental and connected with the work of the establishment. The fact that maintaining is not part of the core or competancy of the industry is irrelevant for deciding the question whether the contract labour should be abolished or not. This judgment has been approved by the Supreme Court and therefore the very plea of core industry etc., may not be available to the management in subsequent proceedings that too after their failure to persuade the Court in earlier litigation. Even otherwise a reading of the representation would show that it is general in character. Even otherwise if the object of the Act is to abolish contract labour, practical difficulties cannot come in the way of the Government issuing notification under the Act. Even otherwise, that can not be a reason for rescinding the judicially approved notification by the apex Court by the Government particularly when this very submission to a certain extent were made before the authorities and failed in the earlier proceedings.
33. It is seen from these petitions that the said request is in the light of the Government withdrawing the notification in steel industry. In fact the Government's intention of withdrawing the notification in steel industry was noticed by the Division Bench as well as by the Supreme Court and after noticing Supreme Court rule as under;
"The consideration for issue or cancellation of notifications in regard to steel re-rolling mills have no bearing on the issue on hand as in the present case prohibition is only with respect to contract labour in canteens maintained pursuant to Section 46 of the Factories Act and the principles applicable in regard to the two issues are entirely different."
In fact this was one of the reasons mentioned in the representation filed by the employers. Therefore the representation of the employers does not seem to have any weight, particularly, in the light of their losing the battle right up to the Apex Court and in the light of consideration of their pleas (employers) in the earlier proceedings in particular withdrawal of steel industries notification.
Procedure / merits of the notification
34. On receipt of the representation, the Government referred the matter to a Committee and the committee held the proceedings and there was divergence of opinion. It is not an unanimous decision of the Board. It is also to be noticed that except the representation and the proceedings of the committee, no other material was available to the Government with regard to rescinding the notification. The Government has also not seriously applied its mind in the matter. As I mentioned earlier, the power under Section 10(1) is subject to Section 10(2) of the Act, various relevant facts in terms of Section 10(2) has not either been considered or referred to by the Government. The decision maker has failed to consider the relevant factors in terms of the statute. Therefore decision making process suffers from want of consideration of relevant factors in terms of Section 10(2) of the Act. At this stage, I must also notice that in a democratic set up judiciary plays a very vital role. The judgments rendered by Courts have to be accepted and acted upon in the interest of rule of law. When the Government has taken 10 long years to abolish the contract labour and the said abolition was upheld by the Supreme Court after considering the relevant considerations, then the Government was duty bound to consider all this material as well while issuing the rescinding notification. This is another relevant consideration which has not been properly noticed by the Government while arriving at its decision. The decision maker did not consider the binding judgment of the Supreme Court with regard to contract labour.
35. It is also to be seen that the object of the Act as I mentioned earlier is to abolish contract labour. That statutory object has not been kept in view while rescinding the notification. This is another relevant consideration that has been omitted by the decision maker in the process of decision making of rescinding the notification.
36. I must also notice a serious argument of Sri Narasimhan, Learned Senior Counsel that the Contract Labour Act provides for State Advisory Board in terms of Section 4. The said Board consists of Chairman and Labour Commissioner and such other persons not exceeding 11 but not less than 9. In the case on hand, there is divergence of opinion. Repeatedly Sri Vijaya Shankar and Sri Kasturi argued before me that an expert body has given an opinion and that opinion cannot be brushed aside by this court. File does not reflect any expertise with reference to contract labour. No details are available with regard to expertise in the matter. Firstly, I must notice that it is divided opinion and secondly, even then the opinion has to be in addition to complying with Section 10. In fact in the earlier proceedings, this Court has accepted the earlier notification in the light of collection of various material by the decision makers in the course of decision making process for the purpose of prohibition. No such material is collected nor any subsequent development is shown. No change is also seen in terms of the proceedings. This is also a factor that goes in favour of the workman.
37. I also see from the proceedings that several representations have been made to the Chief Minister, Industries Minister and the labour Commissioner.
38. From the original file made available to me in Note 7 it is seen that the secretary has chosen to say that recommendations may be accepted and the same may be informed to the Employers Association. It is further seen that a brief gist of the representation was sent to the Labour Commissioner and the Hon'ble Chief Minister for their perusal. From Note 17 Former Minister for Finance and Labour Sri. Siddaramaiah appealed not to withdraw the notification. From Note 18 it is seen that the principal secretary to Government has requested the Labour department to look into the representation and take a decision. He has also mentioned that we are in a process of dismantling various controls and slowly moving towards deregulation of business environment. At this juncture, such a notification would dampen the spirit of business investors community'. It is seen from Note 20 that the Labour Commissioner was of the view that it is not desirable to withdraw the notification. It also seen that no legislative decision has been taken. Thereafter it is seen that subject was referred to the Hon'ble Chief Minister. The Hon'ble Chief Minister opined as under.
"This might open the Pandora's box, as it is, the manufacturing sector is going through a rough patch. Hence we better take a realistic view. Please discuss"
A reading of the entire proceedings would show that the decision maker has not taken into consideration the various relevant material including the object, while taking a decision. I am clear in my mind that the object of the Act, Apex Court ruling and other relevant material were not taken into consideration by the decision maker. I am not sitting in over decision but I can look into the process in terms of the law declared by the Apex Court. When there is no factual or legal consideration of the relevant factors in terms of the object of the Act by the decision maker, the said decision in my view cannot be a decision in terms of the law.
38.1 It is further interesting to note that the principal secretary sends addresses the Commerce and Industries department on 27-2-2001 and 27-6-2001 and the Advisory Board meeting was held on 9-7-2001 and the impugned notification was issued on 1-8-2001. Admittedly a notification has been issued on 1-8-2001 and the meeting notice has been issued on 3-8-2001. On seeing this predicament, I directed the Government to file an affidavit explaining this matter.
38.2 Two affidavits were filed. One by Smt. Vatsala Watsa and one by Sri. B.P. Srinivas, Joint Director, Technical Cell.
38.3 Smt. Vatsala, Principal Secretary to Government, Department of Labour would say that on receipt of the report of Advisory Board, the matter was sent to the Hon'ble Minister for Labour with a request to approve for withdrawal of the notification. The Ministry of Labour after its approval for withdrawal, sent the file to the office of the Hon'ble Chief Minister for approval. On approval of the Hon'ble Chief Minister the matter was forwarded to the office of the Principal Secretary to Government, Department of Labour and as the secretary was away in Delhi, the Under Secretary to Government issued the notification on 1-8-2001.
38.4 Sri B.P. Srinivas, Joint Director, Technical Cell would say that on receipt of numerous representations from the various industries for withdrawal of the notification, forwarded the same to the Principal Secretary to Government, Department of Commerce and Industries for convening a meeting of Hon'ble Minister for Large and Medium Scale Industries together with the Hon'ble Minister for Labour. A meeting notice dtd 3-8-2001 was issued fixing up the meeting on 8-8-2001. In the meantime, it came to the notice of Department of Commerce and Industries that the labour department has already issued a notification dtd 1-8-2001 rescinding the notification dtd 11-4-1997 which was the subject matter of the meeting. Hence the meeting scheduled on 8-8-2001 stood cancelled.
39. In terms of my order two affidavits are filed and those affidavits to a certain extent explained the position but however, what is clear to this Court is that the said notification has been issued in a great hurry even without proper material and without proper consultation in terms of the material available on file.
40. Several judgments of this Court have been pressed into service with regard to judicial review by petitioners.
41. It was also argued before me that the Government has taken a policy decision to rescind the notification dtd 19-11-1997. Policy decision cannot run counter to a statute unless the said statute is amended or repealed in terms of the so-called policy decision. Therefore the policy decision argument does not appeal to me.
42. From the above referred discussions what is clear to me is that relevant factors have not been taken into consideration by the decision maker thus affecting the decision making process. The decision maker failed to see the earlier proceedings, judicial approval by Highest Court, object of the Act, impact of Section 10(2), divided opinion etc, while arriving at a decision. On the other and, it has taken into consideration the divided opinion and the discussion the Secretary had with the Chief Minister. That by itself could not be an acceptable factor in the decision making process. Law is well settled that if relevant factors are omitted and if irrelevant factors are taken into consideration, the decision making process said to suffer interms of the Judgment of the Supreme Court reported in ILR 2002 KAR 3475.
43. In these circumstances, I have no hesitation in holding that the present notification runs counter to the very object of the Act and the said notification requires to be set aside by this Court.
44. Before concluding, this issue I must notice an argument of Sri Subba Rao, Learned Senior Counsel refers to the
Supreme Court has rules as under.
"When a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to Court on account of a challenge, get validated by additional grounds later brought out."
45. In the light of this judgment what the learned counsel would sy is that the notification has to go since it does not even refer to any of the proceedings and that therefore it is unsustainable. His further submission is that there cannot be any supplementing in a matter like this. But what cannot be forgotten by this Court is that though the notification is silent still Court can look into as to whether on the day when the decision was taken, the relevant material was available to the decision maker or not. If that is available, this argument of the learned counsel has to be rejected.
46. The second prayer is with regard to regularisation. Petitioners-workmen want a direction to the respondents to treat the contract labour working in canteens as employees of the principal employer w.e.f. 11-4-1997. Elaborate arguments have been advanced for and against. Several case laws were pressed into service.
46.1 In 1999 (2) LLJ 696 the Supreme Court has ruled in para 26 as under;
"26. Considering these factors cumulatively in addition to the fact that the canteen in the establishment of the management is a statutory canteen, we are of the opinion that in the instant case, the respondent-workmen are in fact the workmen of the appellant-management."
46.2 Andhra Pradesh High Court in 2001 (1) LLJ 1270 has noticed the issue of regularisation of services. Writ petitions were filed with regard to regularisation of statutory canteen contract labour. The Court in para 20 has ruled as under;
"Though the High Court could not issue any mandamus for treating the contract labour as having become employees of the principal employer, and the appropriate government had not abolished contract labour by notification under Section 10 of the Contract Labour (Regulations and Abolition Act), still when the employer had established and maintained, as in this case, canteens in discharge of the statutory obligation under Section 46 of the Factories Act, 1948 there was an obligation on the respondents to treat the workers in those statutory canteens as being part of the establishment."
46.3 is again a judgment of the Supreme Court wherein the after noticing the SAIL's case ruled that the principal employer has statutory duty to provide canteen for its workmen. In discharge of such statutory obligation, principal employer availed the services of a contractor. Such contract labourers would indeed be the employees of the principal employer and that such cases do not relate to or depend upon abolition of contract labour. They would be entitled to regularisation of services and salary at par with regular employees.
46.4 In 2003(3) LLJ 847, The Supreme Court has ruled as under;
"Wherein discharge of statutory obligation of maintaining a canteen in an establishment, the principal employer availed of the services of a contractor, as did the appellant company while maintaining a canteen in discharge of Rules 65 to 71 of AP Factories Rules 1950, the Courts had held that contract labour would indeed be the employees of the principal employer. Such cases did not relate to or depend upon the abolition of contract labour."
47. As against these judgments the employers would rely on various judgments. They essentially rely on a constitution Bench judgment of the Supreme Court in 2001 (2) LLJ 1087 (SAI Case).... The
47.1 The Supreme Court after noticing the various judgments has chosen to hold as under;
"119. The upshot of the above discussion is outlined thus;
(3) Neither Section 10 of the CLRA Act nor any other provision in the Act, whether exprelly or by necessary implication, provides for automatic absorption of contract labour on issuing a notification by appropriate Government under Sub-section (1) of Section 10 prohibiting employment of contract labour, in any process, operation or other work in any establishment. Consequently, the principal employer cannot be required to order absorption of the contract labour working in the concerned establishment.
(4) We overrule the judgment of this Court in Air India's case (supra) prospectively and declare that any direction issued by any industrial adjudicator/any Court including High Court, for absorption or contract labour following the judgment in Air India's case, shall hold good and that the same shall not be set aside., altered or modified on the basis of this judgment in cases where such a direction has been given effect to any it has become final.
(5) On issuance of prohibition notification under Section 10(1) of the CLRA Act prohibiting employment of contract labour or otherwise, in an industrial dispute brought before it by any contract labour in regard to conditions of service, the industrial adjudicator will have to consider the question whether the contractor has been interposed either on the ground of having undertaken to produce any given result for the establishment or for supply of contract labour for work of the establishment under a genuine contract or is a mere ruse camouflage to evade compliance of various beneficial legislations so as to deprive the workers of the benefit thereunder. If the contract is found to be nor genuine but a mere camouflage, the so called contract labour will have to be treated as employees of the principal employer who shall be directed to regularise the services of the contract labour in the concerned establishment subject to the conditions as may be specified for that purpose in the light of para 6 hereunder;
(6)If the contract is found to be genuine and prohibition notification under Section 10(1) of the CLRA Act in respect of the concerned establishment has been issued by the appropriate government, prohibiting employment of contract labour in any process, operation or other work of any establishment and where in such process, operation or other work of the establishment the principal employer intends to employ regular workmen he shall give preference to the erstwhile contract labour, if otherwise found suitable and, if necessary, by relaxing the condition as to maximum age appropriately taking into consideration the age of the workers at the time of the initial employment by the contractor and also relaxing the condition as to academic qualifications other than technical qualifications."
47.3 In 2004 (1) LLJ 227, wherein the Supreme Court after noticing the Steel Authority of India's case ruled that the reliance placed by the petitioners on the 'control' test to determine the relationship of employer and employee though important was not however to be taken as the sole test. The Supreme Court further observed that the question whether employment through a contractor was genuine or a camouflage was one of fact and had to be raised and proved before an industrial adjudicator. That was not a case of statutory canteen workmen.
47.4 Repeatedly, these judgments were read to me by the Learned Counsel for the respondents to say that even if this Court comes to a conclusion that the notification is bad, then the relief of regularisation has to be before an Industrial Adjudicator. Let me see as to whether the SAIL's case specifically excludes statutory canteen employees in the matter of regularisation. Let me also see the facts in SAIL's case.
47.5 It is seen from para 3 of the said judgment (SAI case) that the Government issued a notification under Section 10 prohibiting employment of contract labour. The notification was kept under abeyance. First respondent union filed a writ petition before the Calcutta High Court and the Court set aside the abeyance notification and directed that the contract labour be absorbed and regularised from the date of the notification. It was not a case of statutory canteen. However, in the course of arguments, abolition of canteen labour in terms of the judgment was also cited before the Supreme Court. In para 105 the Court noticed that beneficial legislation needs to be construed liberally in favour of the class for whose benefit it is intended, does not extend to reading in the provisions of the Act what the legislature has not provided whether expressly or by necessary implication, or substituting remedy or benefits for that provided by the legislature. Thereafter the Court rules that it is difficult to accept that parliament intended absorption of contract labour on issue of abolition under Section 10(1) of the CLRA Act. The Court noticed Saraspur Mills case and ruled that the management in those cases were under statutory liability to maintain a canteen and that is why the contract labour working in the canteen were treated as workers of the principal employer. These cases stand on a different footing and it is not possible to deduce from them the broad principle of law that on contract labour system being abolished under Sub-section (1) of Section 10 of the CLRA Act the contract labour working in the establishment of the principal employer have to be absorbed as regular employees of the establishment. The Court was not strictly considering statutory canteen in that case. On the other hand, the Court noticed regularisation in statutory canteen cases. Therefore the finding given in para 119 has to be understood in the given circumstances with regard to non statutory canteen employees. This becomes clear in the light of subsequent judgment rendered by the Supreme Court.
47.6 In fact in the case of NTPC Ltd., , the Court ruled that canteens in the established management is a statutory canteen. After SAIL's case, the Supreme Court considered the case of statutory canteen in 2003 SCC 384 held as under;
"A catena of decisions of Supreme Court make it aptly clear that where in discharge of a statutory obligation of maintaining a canteen in an establishement the principal employer availed the services of a contractor the contract labour would indeed be the employees of the principal employer. Consequently, it is too late in the day for the appellant which had an obligation under the Factories Act, 1948 to to run the canteen to contend to the contrary. So far as the case on hand is concerned, the Division Bench has chosen to leave liberty to the appellant to consider the claims of the workers as to whether they satisfy the requirements and whether they are otherwise unfit for confirmation."
47.7 Therefore in the light of various decisions including the subsequent decisions rendered after considering the SAIL's case would show that statutory canteen contract workers stand on a different footing compared to other contract labour. They are entitled for regularisation. At this stage, I must notice that the earlier notification prohibited contract labour in industrial canteens and subsequently the same has been withdrawn. The petitioners are therefore entitled for declaration only to the extent of statutory canteen maintained by the employers. The prayer for regularisation has to be granted in the light of various decisions, A writ of declaration has to be issued that statutory canteen workers are to be regularised by respective managements in terms of the law governing such matters. However, where there is dispute with regard to statutory canteen or with regard to any other service condition of that labour than contract labour regularisation has to be done by an Industrial Adjudicator depending upon the facts of each case.
48. This Court places on record the affective assistance rendered by every one of the Counsel, in understanding and delivering this judgment. Contact Labour Regulation and Abolition Act is a social werlfare legislation. Courts have gone to the extent of saying that the encouragement to contract labour could be 'slave labour'. The State Government took ten long years to abolish the contract labour in industrial canteens after collecting several materials. They were challenged unsuccessfully before this Court and before the Apex Court by the very respondents and the Government supported the notification in the earlier proceedings. After the proceedings have come to an end, the government despite there being no factual foundation or legal foundation has chosen to abolish the abolition. This Court cannot but notice that immediately after the judgment of the Supreme Court, the Government has chosen to withdraw the judicially approved notification. Government must be careful in not giving an impression that it can veto judgments judiciary has its own role to play in the democratic set up in terms of the Constitution of this country. Even before the ink in terms of the judgment of the Apex Court judgment could dry, the Government hurriedly without any material, contrary to the statutory object has chosen to go back to the so called archaic system in terms of its own submission in the earlier proceedings. Industrial democracy need industrial peace and harmony. There has to be a consistent stand in such matters unless grave circumstances or grave emergency warrants a differing view. It is hoped that the Government would avoid such hasty decision and see that the industrial peace and harmony is maintained and the goal of fruitful life or meaningful life in terms of Article 21, 39 to 43 is achieved by the State.
49. Learned Counsel for the management repeatedly argued before me that even in the event of this Court setting aside the present notification, the earlier notification, would not spring up in terms of the case laws. Let me see whether this argument is sustainable.
49.1 Learned Counsel for the management relies on
wherein the Supreme Court ruled that even according to the common law doctrine, the repeal of the repealing enactment would not revive the original Act if the second repealing enactment manifests an intention to the contrary.
49.2 Similarly in the Supreme Court would say that where a substituted statutory rule is held invalid, the old rule does not get revived. Once the old rule has been substituted by the new rule, it ceases to exist and it does not automatically gets revived when the new rule is held to be invalid.
49.3 These two judgments have no application to the facts of this case. In the Court was considering repeal of the repealing enactment. While so doing they say that the the repeal of the repealing enactment would not revive the original Act if the second repealing enactment manifests an intention to the contrary. The facts of that case stand on a different footing.
49.4 Similarly the second case was with regard to substitution of new rule. Substituting stands on a different footing than the withdrawal/ rescinding notification.
49.5 Once the rescinding notification is held to be bad in law, it ceases to be in force in the eye of law. Consequently, in the light of the rescinding order getting a go by, the original order comes into effect. It can be compared to a cloud in the sky. If the cloud of repealing goes, then the sky of 1997 is clear. It can not be said that the said notification does not come to life at once again. Hence the earlier notification gets revived and gets life in the light of the setting aside of the repealing notification.
50. In the normal circumstances, I would not have imposed costs. Facts of the case would show that the workmen were struggling for a long time to get the contract system abolished and they have to face two legal battle to retain that notification. Thereafter the present notification has been issued thereby nullifying a long drawn battle for more than 12 years. In these circumstances and on the facts of this case, I deem it proper to award costs at the rate of Rs. 1,000/- on each one of the respondents payable to the petitioners.
W.P. No. 5293/2004
51. In so far as this petition is concerned, it is admitted before me that present notification is not applicable to the facts of this case. Hence the prayer to quash the notification cannot be granted. In so far as regularisation is concerned, it is governed in terms of the directions contained in other cases.
The main prayer is not available to the petitioners. Relief:
52. Writ petitions are allowed with costs in terms of para 50 of this order.
52.1 Annexure-O dtd 1-8-2001 is set aside. Consequently, the earlier notification Annexure-A dtd 11-4-1997 comes into operation.
52.2 A writ of declaration is granted declaring that statutory canteen employees are ordered to be regularised by the respective managements in terms of this order. However if there is any factual dispute other than regularisation in respect of statutory canteen employees then parties are to approach an Industrial Adjudicator through conciliation in accordance with law.
52.3 In the event of an establishment maintaining non statutory canteen then in such cases, the canteen contract labour are to approach the Industrial Adjudicator by way of conciliation in terms of the ID ACT both for regularisation and for other benefits.
52.4 It is further ordered and directed that any direction issued by any industrial adjudicator or any Court for regularisation or for any other matter touching upon the service conditions of canteen contract labour shall hold good and that the same shall not be set aside, altered or modified on the basis of this judgment in cases where such direction has been effect or has become final.