PETITIONER:
DENA NATH AND ORS.
Vs.
RESPONDENT:
NATIONAL FERTILIZERS LTD. AND ORS.
DATE OF JUDGMENT22/11/1991
BENCH:
YOGESHWAR DAYAL (J)
BENCH:
YOGESHWAR DAYAL (J)
SHETTY, K.J. (J)
CITATION:
1992 AIR 457 1991 SCR Supl. (2) 401
1992 SCC (1) 695 JT 1991 (4) 413
1991 SCALE (2)1081
ACT:
Contract Labour (Regulation and Abolition) Act,
1970—Title, Preamble and Statement of Objects and
Reasons–purpose and scheme of the Act.
Contract Labour (Regulation and Abolition) Act,
1970–Sections 7, 12–Non-Compliance of by Principal Employ-
er and Contractor respectively—Effect—Employees employed
through Contractor whether becomes Principal Employer’s
employees.
Constitution of India, 1950–Article 226–Writ of man-
damns–Question of abolition of contract labour-Government
to decide under section 10 of the Contract Labour (Regula-
tion and Abolition) Act, 1970 and not the High Court in a
writ proceeding.
HEADNOTE:
Following its earlier decision in 1991(1) P.L.R.I. the
High Court held that the principal employer and the Contrac-
tor were liable for prosecution under the Contract Labour
(Regulation and Abolition) Act, 1970, if they made non-
compliance of section 7 and section 12 of the Act, respec-
tively. Further, it was held that the employee employed
through the contractor did not become the employees of the
principal employer.
C.A.No. 2335 of 1991 arose by special leave from the
decision of the High Court. The point involved in other
appeals is common. This Court, on the question, if the
principal employer did not get registration under section 7
of the Act and/or the contractor did not get a licence under
Section 12 of the Act, whether the person so appointed by
the principal employer through the contractor would be
deemed to the direct employees of the principal employer or
not, dismissing the appeals,
HELD:- 1. The long title and the preamble of the Con-
tract Labour (Regulation and Abolition) Act, 1970 show that
it is an Act to regulate the employment of contract labour
in certain establish-
402
ments and to provide for abolition in certain circumstances
and for matters connected therewith. The Statement of Ob-
jects and Reasons mentions that the system of employment of
contract labour has tended itself to various abuses and the
question of its abolition had been under consideration of
the Government for a long time. [405 E]
2. The Contract Labour (Regulation and Abolition) Act
serves two-fold purpose (1) regulations of the conditions of
service of the workers employed by the contractor who is
engaged by a principal employer; and (2) also provides for
the appropriate Government abolishing contract labour alto-
gether, in certain notified processes operation or other
works in any establishment. Neither the Act nor the Rules
framed by the Central Government or by any appropriate
Government provide that upon abolition of contract labour,
the said labour would be directly absorbed by the principal
employer. [407 H-408 A]
3. The Act as can be seen from the Scheme of the Act
merely regulates the employment of contract labour in cer-
tain establishment and provides for its abolition in certain
circumstances. The Act does not provide for total abolition
of contract labour but it provides for abolition by the
appropriate Government in appropriate cases under Section 10
of the Act. [413 H-414 A]
4. In the present case and the other connected Special
Leave Petitions no notification has been issued by the
appropriate Government under Section 10 of the Act. [414 B]
5. It is not for the High Court to inquire into the
question and decide whether the employment of contract
labour in any process, operation or in any other work in any
establishment should be abolished or not. It is a matter for
the decision of the Government after considering the matter,
as required to be considered under Section 10 of the Act.
[414 C-D]
6. In proceedings under Article 226 of the Constitution
merely because contractor or the employer had violated any
provision of the Act or the Rules, the court could not issue
any mandamus for deeming the contract labour as having
become the employees of the principal employer. [414 E]
M/s Gammon India Ltd. and Others v. Union of India,
[1974] 1 SCC 596; Standard Vacuum Refining Co v. Their work-
men, [1960] 2 LLJ 233 (S.C.); F.C.I. Loading and Unloading
Workers Union v. Food Corpora-
403
tion of India 1986 (2) SLR 454 (Karnataka); Food Corporation
of India Workers Union-v. Food Corporation of India and
others. [1990] 61 FLR 253 (Gujarat), referred to.
Gian Singh & Others v. F.C.I., 1991(1) PLR 1 (Punjab and
Haryana); The Workmen of Best & Crompton Industries Ltd. v.
The Management of Best & Crompton Engineering Ltd. Madras
and Ors, 1985(1) LLJ 492 (Madras); and United Labour Union
and Others v. Union of india and Others, 1990(60) FLR 686
(Bombay), over ruled.
P. Karunakaran v. The Chief Commercial Superintendent
and Others, 1988(2) LIC 1346 (Kerala) and New Delhi General
Mazdoor Union v. Standing Conference of Public Enterprises
(Scope) & Another, 1991(2) Delhi Lawyer 189, approved.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2355 of
1991.
WITH
Civil Appeal Nos. 2356-66/91, 2366A-69/91, S.L.P.(C)
Nos. 9755/ 91, 9830/91 & 10235-43 of 1991.
From the Judgment and Order dated 27.2.91 of the Punjab
& Haryana High COurt in C.W.P. Nos. 8872/89, 10463,
10462/89, 15085/90, 17092/ 89, 11381/90, 15599/90, 12573/89,
14551/89, 10951/90 and 195 of 1991.
D.S.Tiwatia, Anil Mauriya, A.K.GoeI, Mrs. Sheela Goel
and B.Y.Kulkarni for the Appellants.
G.Ramaswami Attorney General, G.L.Sanghi, Sudhir Walia,
S.Murlidhar and Y.P.Rao for the Respondents.
The Judgment of the Court was delivered by
YOGESHWAR DAYAL, J. These appeals raise a question of
the scope and effect of failure of compliance with Section 7
and/or Section 12 of the Contract Labour (Regulation and
Abolition) Act, 1970 (hereinafter referred to as ‘the Act’).
The question involved is that if the principal employer
does not get registration under Section 7 of the Act and/or
the Contractor does not get a licence under Section 12 of
the Act whether the persons so appointed by the principal
employer through the contract would be deemed to be the
direct employees of the principal employer or not.
404
There is a direct conflict between the decisions of the
High Courts of Punjab, Kerala on the one hand and the deci-
sions of Madras, Bombay, Gujarat and Karnataka High Courts
on the other. The view of the Punjab and Kerala High Courts
is that the only consequence of non-compliance either by the
principal employer of Section 7 of the Act or by the con-
tractor in complying with Section 12 of the Act is that they
are liable for prosecution under the Act; whereas the view
of the High Courts of Madras, Bombay, Gujarat and Karnataka
is that in such a situation the contract labour becomes
directly the employee of the principal employer.
For the sake of convenience we deal with the facts of
Civil Appeal No. 2355 of 1991.
This appeal arises from the decision of a Division Bench
of the Punjab & Haryana High Court dated 27th February, 1991
passed in writ petition No. 8872 of 1989. The Division Bench
while deciding a batch of writ petitions followed its earli-
er decision in the case of Gian Singh & Ors. v.F. CI.,
(1991) PLR 1. (Letters Patent Appeal No. 1215 of 1990) which
has since been reported in 1991 (1) PLR 1. The Division
Bench in the aforesaid case of Gian Singh held that if the
principal employer does not get registration as required
under Section 7 of the Act and/or the Contractor does not
get the licence under section 12 of the Act, the persons who
are appointed by the principal employer through the contrac-
tor, the only consequence is the penal provisions contained
in sections 23 and 24 of the Act and that the principal
employer or contractor can be prosecuted under those sec-
tions, but the Act nowhere provides that such employees
employed through the contractor would become the employee of
the principal employer.
In the High Court judgment, under appeal, reliance was
placed on behalf of the workmen on the views of the High
Courts of Karnataka, Madras, Gujarat and Bombay in the cases
reported as FCI. Loading and Unloading Workers Union v. Food
Corporation of India (1986) (2) SLR 454, The Workmen of Best
& Crompton Industries Ltd. v. The Management of Best &
Crompton Engineering Ltd., Madras and Ors., (1985) (1) Lid
492; Food Corporation of India Workers Union v. Food Corpo-
ration of India and Others (1990) 61 FLR 253. and United
Labour Union and Others v. Union of India and Others, (1990)
60 FLR 686t but the High Court took the view that it was not
applicable.
To appreciate the correctness of one view or the other.
it will be necessary to go through the object and the scheme
of the Act. The object; of the Act were dealt with by the
Supreme Court in the case of M/s
405
Gammon India Ltd. and Others v. Union of India and Others,
(1974) 1) SCC 596 in paragraph 14 at page 600 as follows:
“The Act was passed to prevent the exploita-
tion of contract labour and also to introduce
better conditions of work. The Act provides
for regulation and abolition of contract la-
bour. 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.
That is why the Act provides for regulated
conditions of work and contemplates progres-
sive abolition to the extent contemplated by
Section 10 of the Act, Section 10 of the Act
deals with abolition while the rest of the Act
deals mainly with regulation. The dominant
idea of Section 10 of the Act is to find out
whether contract labour is necessary for the
industry, trade, business, manufacture or
occupation which is carried on in the estab-
lishment.”
As the long title and the preamble of the Act shows that
it is an Act to regulate the employment of contract labour
in certain establishments and to provide for abolition in
certain circumstances and for matters connected therewith.
The Statement of Objects and Reasons mentions that the
system of employment of contract labour has tended itself to
various abuses and the question of its abolition had been
under consideration of the Government for a long time. The
Planning Commission had made certain recommendations in the
Second Five Year Plan viz. it undertook a study in this
behalf on improvement of service conditions of contract
labour where the abolition was not possible. The general
consensus thereafter was that the contract labour system
should be abolished wherever possible and practicable and
further that in a case where the system could not be abol-
ished altogether, the working conditions of contract labour
should be regulated so as to ensure payment of wages and
provision of essential amenities.
The above objects have been brought into the Act which
was enacted in 1970. Section 2 gives the definition of
various words while section 3 deals with the constitution of
Central Advisory Board and section 4 deals with the consti-
tution of State Advisory Board. These boards are empowered
to constitute various committees as mentioned in section 5.
Chapter III is important and deals with ‘registration’ of
establishment employing contract labour while Chapter IV
deals with ‘licensing’ of
406
contractors employed by these establishments. Section 7
deals with registration of certain establishment notified by
the Government and these establishments are obviously the
principal employers as defined in section 2(g). Section 8
provides for revocation of registration in certain cases and
section 9 deals with the effect of non-registration.
Under Section 9 no principal employer of an establish-
ment, to which the Act applies shall; (a) in case of an
establishment required to be registered under Section 7, but
which has not been registered within the time fixed for the
purpose under that section (b) in the case of an establish-
ment the registration in respect of which has been revoked
under Section 8 employ contract labour in the establishment
after the expiry of the period referred to in clause (a) or
after the revocation of registration referred to in clause
(b), as the case may be. Section 10 deals with the prohibi-
tion of employment of contract labour which reads as fol-
lows:
“10. Prohibition of employment of contract
labour – ( 1 ) Notwithstanding anything con-
tained in this Act, the appropriate Government
may, after consultation with the Central Board
or, as the case may be, a State Board, prohib-
it, 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 establish-
ment, 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 -
.lm18
(a) whether the process, operation
or other work is incidental to, or neces-
sary 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 establish-
ment;
(c) whether it is done ordinarily
through regular workmen in that establish-
ment or an establishment similar theretO;
(d) whether it is sufficient to
employ considerable number of whole time
workmen.”
Chapter IV deals with the licensing of contractors. Sub
clause (1) of
407
Section 12 states that w.e.f. such date as the appropriate
Government may, by notification in the Gazette, appoint, no
contractor to whom this Act applies shall undertake or
execute any work through the contract labour except under
and in accordance with the licence issued in that behalf by
the Licensing Officer. Sub-clause (2) of Section 12 provides
that subject to the provisions of the Act, a licence in
sub-section (1) may contain such conditions including, in
particular, conditions as to hours of work, fixation of
wages and other essential amenities in respect of the labour
contract as the appropriate Government may deem fit to
impose in accordance with the rules, if any, made under
Section 35 and shall be issued on payment of such fees and
on the deposit of such sum, if any, as security for due
performance of the conditions as may be prescribed. Section
14 provides for revocation, suspension and amendment of the
licences while Section 15 provides for an appeal. Chapter VI
deals with the penalties and procedures. Section 22 deals
with the obstructions. Section 23 deals with contravention
of provisions regarding employment of contract labour and
Sections 24 and 25 deal with other offences and offences by
companies. Chapter VII makes certain miscellaneous provi-
sions and Section 30 provides that laws and agreements
inconsistent with the provisions of the Act shall be void
except where such agreements or contracts or standing orders
afforded more favourable facilities to the employees than
provided under the Act. We shall also refer to Rule 25 of
the Rules which mentions the conditions subject to which
licence could be issued to a contractor under Section 12.
The said rule inter alia provides that a licence issued to a
contractor shall not be transferable, that contractors
cannot employ workmen in excess of the number specified
therein and that rate of wages payable to the workmen shall
be the rate prescribed under the Minimum Wages Act, 1948.
Clause (v)(a) of the Rule 25(2) is important and reads as
follows:
“In cases where the workmen employed by the
contractor perform the same or similar kind of
working as the workmen directly employed by
the principal employer of the establishment,
the wage rates, holidays, hours of work and
other conditions of service of the workmen of
the contractor shall be the same as applicable
to the workmen directly employed by the prin-
cipal employer of the establishment on the
same or similar kind of work.’
Rule 25(2) further provides for accommodation for women
and children and for the times of work of females.
From the above provisions it is clear that the Act
serves two-fold purposes (1) regulation of the conditions of
service of the workers employed by the contractor who is
engaged by a principal employer and; (2)
408
also provides for the appropriate Government abolishing
contract labour altogether, in certain notified processes,
operation or other works in any establishment. Neither the
Act nor the Rules flamed by the Central Government or by any
appropriate Government provide that upon abolition of con-
tract labour, the said labour would be directly absorbed by
the principal employer.
The question arises when the Act does not provide for
such a measure, but contents itself by merely regulating the
conditions of service of the contract labour, can the Court
in proceedings under Article 226 of the Constitution, where
the principal employer or the licence contractor violates
the provisions of Section 9 or 12 respectively, direct that
the contract labour so employed would become directly the
employee of the principal employer.
The view of the Bombay High Court in the case of United
Labour Union and Others v. Union of India (supra) was really
concerned with the appropriate Government for purposes of
notification being issued under Section 10(1) of the Act. It
took the view that the Central Government was the appropri-
ate Government in relation to Air India Corporation but
after analysing the provisions of Section 2(ii)(b),
7,8,12,20,21 and 29 the Bombay High Court took the view—
“The combined effect of these provisions makes
it clear that for a valid employment of con-
tract labour, two conditions must be ful-
filled, viz., (1) every principal employer of
an establishment must be registered and (2)
the contractor must have valid licence. In
other words, the mere registration by the
principal employer or the holding of licence
by contractor alone will not enable the man-
agement to treat the workmen as contract
labour. Whilst considering the provisions of
the Act, it must be kept in mind that this Act
is a piece of beneficial legislation. The aim
of the Act is to regulate conditions of serv-
ice of contract labourers and to abolish
contract labour under certain circumstances.
It is therefore meant for securing proper
conditions of service to under contract la-
bour. It is not the purpose of the Act to
render workmen jobless. The interpretation
which must be given is one which would further
these objects and not one which results in
greater hardship. It must be noted that there
is no provision which states that the rela-
tionship of principal employer and workmen
comes to an end on the abolition of contract
labour. On the contrary as already stated
there is a deemed contract labour only if the
two conditions of registra-
409
tion and licence are fulfilled. In such a case
i.e., where either or both the conditions are
not fulfilled, the necessary implication would
be that the workmen remain workmen of the
principal employer. It must be remembered that
on a failure of the contractor to provide
amenities or to pay wages the principal em-
ployer remains liable for the same. The same
would be the position on a failure by reason
of there being no valid contract labour.
Mr. Dhanuka, however, submitted that
the Act provides certain penal consequences
for non-registration. He submits that there no
such provision in the Act, the same cannot be
implied. He submits that in the absence of any
such provision the Court cannot give any
direction to that effect. In my view, the
penal provisions are provided to dissuade
employers from attempting to commit a breach
of the provisions of the Act and the Rules
made thereunder. They do not detract from the
position that there can be no deemed contract
labour if the two conditions are not satis-
fied. If the protection or right given by
reason of a deeming provision is not available
then the natural consequence must follow in
addition to the penal consequence, unless
there is a provision to the contrary. As
already stated, in the Act there is no provi-
sion that the services of the workmen, qua the
principal employer, stand terminated on the
contract labour becoming invalid and/or abol-
ished”.
(emphasis supplied)
The question arising before us directly came up for
consideration before a division bench of the Gujarat High
Court in the case of Food Corporation of India Workers Union
v. Food Corporation of India and Others (supra) which ob-
served :-
It is evident that (,i) the principal
employer should obtain a Certificate of Regis-
tration and (ii) the workmen can be employed
on contract labour basis only through licensed
contractor. The Certificate of Registration is
required to be obtained by the principal
employer, issued by the appropriate Government
under the provisions of Section 7 of the Act.
The licence is to be obtained by the contrac-
tors under the provisions of Section 12 of the
Act. The workmen can be employed as contract
labour only through licensed contractor.
Unless both these conditions are complied
with, the provisions of the Contract Labour
(Regulation and Abolition) Act, 1970 would not
be
410
attracted. Both these conditions are required
to be fulfilled, if one wishes to avail of the
provisions of the Act. Even if one of the
conditions is not complied with, the provi-
sions of the Contract Labour (Regulation &
Abolition) Act, 1970 would not be attracted.
Therefore, in a situation wherein either of
these two conditions is not satisfied, the
position would be that a workman employed by
an intermediary would be deemed to have been
employed by the principal employer. In the
result it is declared that during the period
when the two conditions of obtaining registra-
tion under Section 7 by the principal employer
and of holding licence by the contractor are
not complied with and the workmen are employed
by contractor, the workmen can claim to be
direct employees of the principal employer.”
The decision of the Madras High Court in The Workmen of
Best & Crompton Industries Ltd. v. The Management of Best &
Compton Engineering Ltd., Madras and Ors., really arose out
of an award given by the Labour Court in an industrial dis-
pute. The industrial dispute had been raised by the workmen
of the principal employer. They challenged the termination
of service of workmen by the Management as the Management
did not requisition the service of 75 workmen after 16th
October, 1978 on the ground that they were employed by the
licensed contractor. This led to an industrial dispute and
on a reference made of the said industrial dispute, the
Labour Court rejected the contention of the Management and
held that the so called contractor was a mere name-lender
and did not hold licence under the Act and directed the
reinstatement of the workmen with backwages and other bene-
fits. This award of the Labour Court was challenged before
the High Court by the Management by a writ petition. The
learned Single Judge of the Madras High Court took the view
that the conclusion of the Labour Court that the labour
contractor was not early a labour contractor, but lie was
merely acting as a tool in the hands of the Management is
not supported either by the pleadings of the parties or by
the evidence. According to the learned single Judge there
was absolutely nothing to displace the weighty documentary
evidence in favour of the Management and therefore, he
characterised the finding entered by the Labour Court to the
contrary as being perverse and vitiated The division bench
in Letters Patent Appeal reversed this finding of the
learned Single Judge.
The High Court observed at page 497 -
“In order to enable the Management to have the
benefit of the contract labour, the Act has
now legalised the employment of
411
such contract labour, provided the intermedi-
ary contractor holds, a valid licence and
provided the Management also holds a valid
licence as principal employer. This is subject
to the prohibition contemplated under S. 10.
There is no need for us to examine the content
of S.10 in this case. In order to regulate the
employment of contract labour and to provide
for abolition in certain circumstances, the
said Act came to be passed. According to S. 7:
“Provided that the registering officer may
entertain any such application for registra-
tion after expiry of the period fixed in this
behalf, if the registering officer is satis-
fied that the applicant was prevented by
sufficient cause from making the application
in time.
(2) If the application for registration is
complete in all respects, the registering
officer shall register the establishment and
issue to the principal employer of the estab-
lishment a certificate of registration con-
taining such particulars as may be
prescribed”.
Under S.12 of the Act, no contractor to whom this Act
applies, shall undertake or execute any work through con-
tract labour except under and in accordance with a licence
issued in that behalf by the licensing officer. Sub-s.(2) of
S. 12 provides:
“Subject to the provisions of this Act, a
licence under sub-s. (1) may contain such
conditions including in particular conditions
as to hours of work, fixation of wages and
other essential amenities in respect of con-
tract labour as the appropriate Government may
deem fit to impose in accordance with the
rules, if any, made under S.35 and shall be
issued on payment of such fees and on the
deposit of such sum, if any, as security for
the due performance of the conditions as may
be prescribed”.
The combined effect of these two provi-
sions in our view makes it clear that for a
valid employment of-
“(1)Every principal employer of an establish-
ment to which this Act applies shall, within
such period as the appropriate Government may,
by notification in the Official Gazette, fix
in this behalf with respect to establishments
generally or with respect to any class of
them, make an application to the registering
officer in the prescribed manner for registra-
tion of the
412
establishment; contract labour, two conditions
should be satisfied, viz., not only the prin-
cipal employer but also the contractor should
possess the requisite licence. In other words,
the holding of licence by one alone will not
enable the management to treat the workmen as
contract labour.”
The High Court of Kerala in the case of P. Karunakaran
v. The Chief Commercial Superintendent and Others, (1988) 2
L.I.C. 1346 took the same view as was taken by the Punjab &
Haryana High Court in the judgment under appeal. A similar
view was expressed by the Delhi High Court in the case of
New Delhi General Mazdoor Union v. Standing Conference of
Public Enterprises (Scope) & Another, (1991) 2 Delhi Lawyer
189.
The reference to the Labour Court/Industrial Tribunal
could be as to whether it is necessary for the Management to
employ contract labour directly or indirectly; a question
can as well be referred whether the engagement of contract
labour was bona fide or it was a camouflage. In appropriate
cases in industrial adjudication appropriate directions can
be given to the principal employer in this behalf. This
has been the subject matter of decisions by the
Tribunals/Labour Courts and by this Court also. The case of
Standard Vacuum Refining Co. v. Their Workmen 1960 2 LLJ 233
is a case on this point. It was a case where the workmen
employed by an oil refinery demanded that the contract
system of labour adopted by the company for cleaning mainte-
nance of the refinery belonging to the company should be
abolished and the said demand was referred for adjudication.
It was found that the work for which the contract was given
is incidental to the manufacturing process and is necessary
for it and of a perennial nature which must be done every
day and in these circumstances the Industrial Tribunal
directed the Company to abolish the contract system of
labour with effect from a particular date and to have the
said work done through workmen engaged by itself. This
direction was given in view of the fact that the work was of
a permanent nature and the labour employed through contrac-
tor was receiving much less wages than the unskilled workmen
of the company and they were not having any other benefits
and amenities like provident fund, gratuity, bonus, privi-
lege leave etc. On the award of the Industrial Tribunal the
Supreme Court gave the finding that it was an industrial
dispute as defined under Section 20c) of the Industrial
Disputes Act. In dealing with the question whether the
Tribunal was justified in giving the directions for abolish-
ing the contract system the Supreme Court noted that indus-
trial adjudication generally does not encourage employment
of contract labour in modern times and it would be necessary
to examine the merits of the dispute apart from gen-
413
eral consideration that contract labour should not be
encouraged; and that n any case the decision should rest not
merely on theoretical or abstract objections to contract
labour but also on the terms and conditions of the contract
labour and the grievance made by the workmen thereof. On
facts the Supreme Court observed:
“It may be accepted that the contractor in the
present case is an independent person and the
system is genuine and there is no question of
the company carrying on this work itself and
camouflaging it as if it was done through
contractors in order to pay less to the work-
men. But the fact that the contract in this
case is a bona fide contract would not neces-
sarily mean that it should not be touched by
the industrial tribunals. If the contract had
been mala fide and a cloak for suppressing the
fact that the workmen were really the workmen
of the company, the tribunal would have been
justified in ordering the company to take over
the entire body of workmen and treat it as its
own workmen. But because the contract in this
case was bona fide, the tribunal has not
ordered the company to take over the entire
body of workmen. It has left to it to decide
for itself how many workmen it should employ
and on what terms and has merely directed that
when selection is being made preference should
be given to the workmen employed by the
present contractor.”
The Supreme Court also noticed that the industrial
dispute was confined to the cleaning maintenance of the
plant; the work was incidental to manufacturing process and
the work is necessary for it and was of a perennial nature
which must be done every day and such work is generally done
by workmen in the regular employment of the employer and
there would be no difficulty in having regular workmen for
this kind of work. It noted that the matter would be differ-
ent if the work done was of an intermittent or temporary
nature or was so little that it would not be possible to
employ full-time workmen for the purpose.
It would be noticed that after the aforesaid observa-
tions of the Supreme Court in the case of Standard Vacuum
Refining Company (supra) the Parliament while giving power
to the appropriate Government to prohibit employment of
contract labour in any process or operation or other work in
any establishment gave the guidelines in clauses (a),(b),(c)
and (d) of sub-section (2) of Section 10, as noticed earli-
er, and guidelines are practically based on the guidelines
given to the Tribunals in the aforesaid case of Standard
Vacuum Refining Coral)any by this court. The Act as can
414
be seen from the scheme of the Act merely regulates the
employment of contract labour in certain establishment and
provides for its abolition in certain circumstances. The Act
does not provide for total abolition of contract labour but
it provides for abolition by the appropriate Government in
appropriate cases under Section 10 of the Act.
In the present case and the other connected Special
Leave Petitions no notification has been issued by the
appropriate Government under Section 10 of the Act vis-a-vis
the type of establishment with which we are concerned.
It is not for the High Court to inquire into the ques-
tion and decide whether the employment of contract labour in
any process, operation or in any other work in any estab-
lishment should be abolished or not. It is a matter for the
decision of the Government after considering the matter, as
required to be considered under Section 10 of the Act. The
only consequences provided in the Act where either the
principal employer or the labour contractor violates the
provision of Sections 9 and 12 respectively is the penal
provision, as envisaged under the Act for which reference
may be made to Sections 23 and 25 of the Act. We are thus of
the firm view that in proceedings under Article 226 of the
Constitution merely because contractor or the employer had
violated any provision of the Act or the rules, the Court
could not issue any mandamus for deeming the contract labour
as having become the employees of the principal employer. We
would not like to express any view on the decision of the
Karnataka High Court or of the Gujarat High Court (supra)
since these decisions are under challenge in this court, but
we would place on record that we do not agree with the
aforequoted observations of the Madras High Court about the
effect of non-registration of.the principal employer or the
non-licensing of the labour contractor nor with the view of
Bombay High Court in the aforesaid case. We are of the view
that the decisions of the Kerala High Court and Delhi High
Court are correct and we approve the same.
In the result C.A.2355 of 1991 fails and is dismissed
and in view of the observations in C.A. 2355 of 1991,
C.A.Nos.2356-66/91, 2366A-69/91 and S.L.P.(C) Nos. 9755/91,
9830/91 & 10235-43/91 are also hereby dismissed. In the
circumstances of the case, parties are left to bear their
own costs of the present proceedings.
V.P.R. Appeals dis-
missed
415