Dismissed

Amar Tubes Private Limited v. Shramik Janata Sangh

Bombay HC16 Jun 2014CAL/82/2013

Case brief

AI extract

What is this about?

This Letters Patent Appeal challenged the Industrial Tribunal's award reinstating thirty-one workers and the High Court Single Judge's dismissal of the writ petition. The appellant argued the workers were contract labourers of third parties, not employees. The High Court rejected this, finding the Tribunal correctly identified the contractors as sham entities and the workers as the appellant's emp

What the court decided

AI extract

Amar Tubes Private Limited Vs Shramik Janata Sangh — Writ and Judicial Review | Bombay HC (2014)

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LPA/62/2013

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE JURISDICTION

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LETTERS PATENT APPEAL NO.62 OF 2013 WITH CIVIL APPLICATION NO.82 OF 2013

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Amar Tubes Private Limited, Bhandar and Vitaran Kendra, At and post Dahivali, Taluka Khalapur, Dist. Raigad. ..Appellant

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Versus

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Shramik Janata Sangh, Having address at Haji Habib Building, Naigaum Cross Road, Dadar, Mumbai 400 014. ..Respondent

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Mr.Sauresh S. Pakale i/b Mr. Avinash R. Belge, Advocates for the appellant and Mr. Avinash K. Jalisatgi, Advocate for respondent.

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CORAM : NARESH H.PATIL AND RAVINDRA V. GHUGE, J. Dated : June 16, 2014

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ORAL JUDGMENT: (Per RAVINDRA V.GHUGE,J.) :-

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Heard learned Advocates for the respective parties.

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The appellant, by this Letters Patent Appeal, seeks to

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challenge the order dated 7.4.2013 passed by the learned Single Judge in Writ Petition no.7694 of 2012 and the award dated 22.12.2011 passed by the learned Industrial Tribunal, Thane in

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LPA/62/2013

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Revision (IT) No.24 of 2007.

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The contention of the appellant company is that it had engaged two Contractors, namely, M/s Vivek Enterprises and M/s Trimurti Enterprises for carrying out ancillary works in its industrial establishment at Raigad. The said Contractors were performing the jobs assigned to them. They had engaged 31 workers represented by the respondent - Shramik Janata Sangh. Neither of them had engaged more than 19 workers so as to attract the provisions of the Contract Labour (Regulation and Abolition) Act, 1970 (“CLRA Act”).

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It is contended that the said two Contractors had terminated the services of 31 employees since their contracts with the appellant were terminated. There was no supervision, control or direction of the appellant over these contract labourers. The Contractors used to make monthly payment of wages to the said Contract Labourers. There was no “employer-employee” relationship between the appellant and the said workers.

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It is further submitted by Mr. Pakale, learned Advocate appearing for the appellant that the respondent - Union, who claimed to have represented 31 terminated workmen, raised an industrial dispute under Section 2(k) of the Industrial Disputes Act,

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LPA/62/2013

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1947 (“ID Act”) before the appropriate Government. The said dispute admittedly failed in conciliation. On submission of the failure report by the Conciliation Officer, the appropriate Government referred the dispute to the Industrial Tribunal, Thane, which was registered as Reference (IT) No. 24 of 2007.

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The appellant contends that a false plea was put forth by the respondent stating that the said 31 workmen were the employees of the appellant. That they had completed 240 days in each calendar year when they were with the appellant. That they were terminated by the appellant in violation of Section 25(F),(G),(H) and (N) of the ID Act. That they were working on the core activities of the appellant. Their termination amounted to retrenchment and therefore, they claimed reinstatement with the continuity and full back wages with effect from 1.2.2007 against the appellant.

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The appellant further contends that by its written statement, opposing the reference proceedings, it was claimed that the said workers were not the employees of the appellant and were engaged by the two Contractors referred above. Regular monthly bills for the works assigned to the Contractors were raised and the appellant paid the Contractors directly. The said Contractors

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LPA/62/2013

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thereafter, paid the wages to the contract labourers. Since none of the two Contractors engaged more than 19 contract labourers, neither the appellant nor the said Contractors were under any obligation to comply with the provisions of the CLRA Act. Since the contract with the Contractors came to an end with effect from 1.2.2007, it was the Contractors who terminated their services.

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It is further contended that after recording of oral evidence, the Industrial Tribunal, Thane by its award dated 22.12.2011 allowed the reference and directed the appellant to reinstate 31 workers in their services with continuity and full back wages from 1.2.2007.

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This award was challenged by the appellant by filing Writ Petition No.7694 of 2012. By its order dated 7.1.2013, the learned Single Judge dismissed the said Writ Petition. The appellant, therefore, contends that the learned Single Judge and the Industrial Court have lost sight of the fact that the contract labourers were not the employees of the appellant. There was no “employer-employee” relationship between the appellant and the said workers. The reference was not maintainable before the Tribunal. It had no jurisdiction to decide the “employeremployee” relationship in the said proceedings.

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LPA/62/2013

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It is further submitted that the evidence on record did not support the claim of the said workers. The award is passed on assumptions and presumptions. The learned Single Judge failed to note the perversity and error in the impugned award. The petition filed by the appellant was erroneously dismissed by the learned Single Judge as there was no material on record to support the findings of the Industrial Tribunal. The appellant, therefore, prayed that the appeal be allowed and the order of the learned Single Judge dated 7.1.2013 be quashed and set aside.

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Mr.Jalisatgi, learned Advocate on behalf of the respondentUnion submitted that 31 workmen at issue were working as Turners, Fitters, Welders, Electrician, Operators etc. and were working on the manufacturing activity of the appellant. They joined the respondent - Sangh on 20.12.2007 and demanded that minimum wages be paid, attendance register and wage register be maintained, provisions of the provident fund and various statutory provisions be made applicable and sought other service benefits. Since the said claim was made by the respondent - Union, the appellant became antipathetic towards the respondent and under the spacious plea of alleged termination of the contracts with the two Contractors, terminated the services of the said workers on 1.2.2007.

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LPA/62/2013

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It was further submitted that the said two Contractors were sham and bogus. The appellant had never taken up the plea before the Conciliation Officer in the Conciliation proceedings that the second party workmen were contract labourers and that there was no “employer-employee” relationship between them and the appellant. No documents were produced before the Conciliation Officer. In short, the respondent submits that the appellant had never raised this issue before the Conciliation Officer.

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It is further submitted that there was no agreement / contract between the appellant and the alleged two Contractors. Permanent Account Number (PAN) under the Income Tax Act was one and the same for both the Contractors. It is unconscionable that two legal entities could have a single PAN under the Income Tax Act. No Supervisor was appointed by either of them to monitor, supervise and control the said workers. All the workers were working under the supervision and control of the appellant.

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The respondent has further submitted that the oral and documentary evidence on record clearly indicated that forged and fictitious documents were prepared and produced. The two Contractors were father and son. The oral evidence brought on

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LPA/62/2013

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record could not support the case of the appellant. The Contractors had admitted that they had not given any salary slips, identity cards, attendance cards or leave cards to any of the workmen. When a single PAN was being used, two Contractors could not have raised different bills in the name of their establishment and the appellant could not have made the payments to said two Contractors by following the rule of Tax Deducted at Source (TDS). The alleged proprietor of M/s Vivek Enterprises Mr. Vivek Baliram Patil, is the son of proprietor of M/s Trimurti Enterprises - Mr. Baliram Parshuram Patil, which sufficiently exposed his case in his cross-examination.

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It was, therefore, submitted that the Industrial Tribunal has based its conclusions on the oral and documentary evidence on record and which conclusions are supported with cogent reasons. He has, therefore, prayed that the LPA be dismissed.

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We have heard the respective sides, have gone through the order of the learned Single Judge and the Writ Petition and LPA paper book.

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It is now trite law in view of the judgment of the Honourable Supreme Court in the case of Vividh Kamgar Sabha Vs. Kalyani

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LPA/62/2013

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Steels Ltd (2001 AIR SCW 170) and Cipla Ltd. Vs. Maharashtra General Kamgar Union (2001 AIR SCW 929) that the dispute as regards “employer-employee” relationship between the alleged Contractor, labourers and the principal employer has to be gone into under the ID Act.

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18. Paragraph No.5 of the judgment in the case of Vividh Kamgar Sabha Vs. Kalyani (supra) reads as under:-

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“5. The provisions of MRTU & PULP Act can only be enforced by persons who admittedly are workmen. If there is dispute as to whether the employees are employees of the Company, then that dispute must first be got resolved by raising a dispute before the appropriate forum. It is only after the status as a workmen is established in an appropriate Forum that a complaint could be made under the provisions of MRTU & PULP Act.”

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Paragraph No. 8 of the judgment in the case of Cipla Ltd. (supra) reads as under:-

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“8. But one thing is clear - if the employees are working under a Contract Labour (Regulation & Abolition) Act then it is clear that the labour Court or the industrial adjudicating authorities cannot have any jurisdiction to deal with the matter as it falls within the province of an appropriate

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Government to abolish the same. If the case put forth by the workmen is that they have been directly employed by the appellant - company but the contract itself is a camouflage and, therefore, needs to be adjudicated is a matter which can be gone into by appropriate industrial tribunal or labour Court. Such question cannot be examined by the labour Court or the industrial Court constituted under the Act. The object of the enactment is, amongst other aspects, enforcing provisions relating to unfair labour practices. If that is so, unless it is undisputed or indisputable that there is employer-employee relationship between the parties, the question of unfair practice cannot be inquired into at all. The respondent union came to the Labour Court with a complaint that the workmen are engaged by the appellant through the contractor and though that is ostensible relationship the true relationship is one of master and servant between the appellant and the workmen in question. By this process, workmen repudiate their relationship with the contractor under whom they are employed but claim relationship of an employee under the appellant. That exercise of repudiation of the contract with one and establishment of a legal relationship with another can be done only in a regular industrial tribunal/Court under the I.D.Act.”

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As such, the Industrial Tribunal or the Labour Court can go into the aspect of “employer-employee” relationship in reference proceedings as such a dispute can be raised under the scheme of ID Act.

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We find that the appellant had not raised this defence of the second party workmen being contract labourers, before the Conciliation Officer. The learned Advocate for the appellant could not point out that the defence of no “employer-employee” relationship was taken in the conciliation proceedings.

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We are, however, of the view that this would not prevent the appellant from taking up the said plea before the Industrial Tribunal in the reference proceedings. The fact that the appellant did not challenge the order of reference passed by the appropriate Government, would not preclude the appellant from raising the above plea in defence through its Written Statement before the Industrial Tribunal. All disputed and contentious issues squarely in relation to the terms of reference before the Industrial Tribunal can be raised by the rival parties through their statement of claim and written statement.

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We, nevertheless find that the Industrial Tribunal has arrived at a conclusion that the two Contractors as claimed by the appellant, were sham and bogus. Their supervision, control and direction over the work of the alleged contract labourers could not

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be proved by the appellant. No application for adding the Contractors as party was moved by the appellant either before the

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Conciliation Officer or before the Industrial Tribunal.

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The conclusions of the Industrial Tribunal are based upon the oral and documentary evidence placed before it. The said conclusions are findings on facts. The learned Single Judge, in our view has correctly appreciated these aspects of the case and has passed a reasoned order, which we do not find to be erroneous, much less perverse.

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