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The Management of Oil and Natural v. The Government of India - W.P.No.21407 of 2000  RD-TN 275 (19 April 2002)
IN THE HIGH COURT OF JUDICATURE AT MADRAS
THE HON'BLE MR. JUSTICE K. SAMPATH
W.P.No.21407 of 2000
W.M.P.Nos.31157/2000 and W.M.P.No.19426 of 2001 The Management of Oil and Natural
Gas Corporation Limited- Rep. by
its Regional Director, Southern
Regional Business Centre,
No.8, Gandhi Irwin Road,
Egmore, Chennai – 600 008. ... Petitioner Vs. 1.The Government of India,
Ministry of Labour – Rep.by
its Under Secretary,
Shram Shakti Bhavan,
Rafi Marg, New Delhi – 110 001.
2.The Assistant Labour Commissioner
(C-II), Ministry of Labour,
Shastri Bhavan, Haddows Road,
Chennai – 600 006.
3.O.N.G.C. Madras Port Contract
Employees Union – Rep. by its
4.The Transport and Dock Workers
Union – Rep. by its Secretary,
9.IILine Beach, Chennai – 1. 5.M/s Pandian Transport – Rep. by
its Proprietor, Pandian. ... Respondents For Petitioner : Mr.P. Rathinadurai
For Respondents 1&2 : Mr.N.R. Natarajan,
For Respondent 3 : Mr.K.M. Ramesh
This writ petition is filed under Article 226 of the Constitution for the issue of a certiorari.
By consent the main writ petition itself was taken up and arguments heard.
2.The prayer in the writ petition is for the issue of a certiorari to call for the records relating to the proceedings in Ref.L-30011/37/99-IR(M) on the file of the first respondent and to quash the order dated 17-11-1999 and the corrigendum 0-2000 made therein on the following allegations:
The petitioner is the Management of ONGC. In connection with its operation activities in the off-shore area in and around Chennai in the year 1985, the petitioner had to transport materials and other supplies from on shore to off shore. Th contract for stevedoring, shipping services, loading and unloading of materials and transport of materials by tempo, trucks, vans, trailers, etc. within a radius of 35 kms., from Madras Port and movement of materials by crane, fork lifts, etc. was award ed by calling for tenders from various enterpreneures. The last of such contracts was entered into between the petitioner and the fifth respondent M/s Pandian Transports for a period of one year commencing from 18-9-1994. The contract was terminated wi th effect from 4-1-1995. The fourth respondent union raised demands in respect of wages payable to them. The fifth respondent Transport had entered into a settlement under Section 18(1) of the Industrial Disputes Act on 29-8-1994 with the fourth respon dent. On the termination of the contract between the petitioner and the fifth respondent, the said Union made a demand on the fifth respondent for payment of earned wages for the month of December, 1994 and 3 days in January, 1995, i.e., up to 3.1.1995 in and by their communication dated 2-5-1995. Thereafter, the petitioner received a copy of the communication dated 29-5-1995 by the fourth respondent addressed to the fifth respondent stating that the fifth respondent had paid all the dues to the worker s including the earned wages for the period 10-9-1994 to 3-1-1995, but the PF amount for the period 1-12-1994 to 3-1-1995 remained unpaid. This was however settled by the fifth respondent on 24-5-1996. Thus all the claims of the personnel had been full y settled by 1996. The fourth respondent raised an industrial dispute with respect to revision of wages of the workmen of the fifth respondent. The petitioner was also impleaded as a party. Conciliation proceedings took place. The petitioner took a s tand that there was no privity of contract between the petitioner and the members of the fourth respondent Union. As, according to the petitioner, it had no control over the said contracted work and that the consideration for the said contract was on t he basis of the tonnage of the material lifted and not on the basis of the personnel engaged. The Assistant Labour Commissioner (C) sent his failure of conciliation report on 30-1-1995. Thereafter, on 19-9-1995 the first respondent passed an order spe cifically stating that the dispute was not fit for adjudication as the workmen were never employed by ONGC, but were employed by various contractors and no industrial dispute existed against the petitioner for their employment. This order also has become final.
After termination of the contract on 3-1-1995 and settlement of the accounts in respect thereof the petitioner directed the fifth respondent transport to clear certain materials of the petitioner lying in the godown within Madras Harbour pre espect of which the earlier contract was validated for a period of three months with effect from 3-9-1996. In respect of this work, the fifth respondent had entered into a Memorandum of Understanding on 27-6-1996 with the fourth respondent for carrying out the said work on a consolidated sum of Rs.2 lakhs per month without any claim for P.F., bonus, kits, liveries, etc. The said work was completed and the fifth respondent settled the account with the fourth respondent. Long after the termination of t he contract as aforesaid, the personnel engaged by the fifth respondent, who were then members of the fourth respondent Union formed another Union under the name and style of ONGC Madras Port Employees Union, the third respondent herein. The inclusion o f the names of ONGC was illegal and it was not entitled to include the name of ONGC and it had no connection whatsoever with the petitioner. It had been formed with a view to make unlawful demand in an attempt to make illegal enrichment for a few people . The third respondent Union tried to raise an industrial dispute and sent a communication dated 21-8-1997 to the Regional Labour Commissioner, Chennai, stating that the petitioner had without any rhyme or reason terminated the contract with the fifth r espondent itself under which their members were engaged and all of a sudden they had been rendered jobless. The same communication was forwarded to the Assistant Labour Commissioner (C) who held that there was failure of conciliation stating that ONGC e arlier awarded contract for shipping, stevedoring services, etc. on need basis. However, the first respondent passed an order dated 17-11-1999 stating that industrial dispute existed between the petitioner Management and their workmen in respect of whe ther the demand of ONGC Madras Port Contract Employees Union to regularise 42 labours listed in Annexure-A was justified and if so, what relief the workmen were entitled to. This order was subsequently revised in and by a corrigendum dated 13-10-2000 st ating as follows: "In this Ministry's order of even number dated 17-11-1999 in the schedule thereof, the number of contract workmen appearing in second sentence may be read as 54."
This order of the first respondent as amended is challenged in the present writ petition.
3. The main grounds raised by Mr. Rathinadurai, learned Counsel for the writ petitioner, are as follows: The first respondent had not applied its mind before referring the dispute raised by the second respondent for adjudication. According to the second respondent, the services of the members were terminated on 3-1-1995. The order has been pa echanical manner presuming a dispute between the petitioner and its employees, particularly when the first respondent on an earlier occasion, held that the workmen in the reference were not the employees of the petitioner. The first respondent failed to find out whether there existed any relationship between the employer and the employee between the third respondent and the petitioner. It had omitted to note that it had previously on 19-9-1995 found that the workmen were never employed by the petition er and no industrial dispute existed against the petitioner. It had not adverted to the agreement between the petitioner and its contractor, which was a wholesome contract and no element of contract labour was involved. The second respondent had pr ocured the reference illegally and playing fraud on the first respondent by suppressing the material facts with respect to the contract between the third respondent and the fifth respondent evidenced by the Memorandum of Understanding dated 27-6-1996.
4.The learned Counsel in support of his contentions relied on the following judgments:
(1)NEDUNGADI BANK LTD. VS. K.P. MADHAVANKUTTY AND OTHERS (2000(2) SCC 455) and
(2)SECRETARY, INDIAN TEA ASSOCIATION VS. AJIT KUMAR BARAT AND OTHERS (2000(3) SCC 93)
5.The third respondent has filed a counter stating inter alia as follows:
The third respondent is a registered Trade Union representing the contract workmen employed at Madras Harbour for the operation of the writ petitioner. The workmen represented by the said Union were originally members of the fourth responde In 1995 itself the members of the third respondent Union resigned from the fourth respondent Union and during the end of 1996 they formed the third respondent Union. The members of the third respondent Union had been employed for more than 16 years doin g port handling work for the writ petitioner through various contractors like M/s Albert and Co., Sanco Trans Ltd., Pandian Transport, etc. Though the writ petitioner had been changing the contractors frequently, the members of the third respondent Unio n were continued to be employed doing the work of the writ petitioner without any break whatsoever. From 1985 the members of the third respondent Union were covered under the Employees Provident Fund Scheme under the Code Number allotted to the petition er. The work in which they were involved is of a perennial and permanent nature. The petitioner ought to have employed the members of the third respondent Union as direct workmen instead of engaging them through contractors. The engagement of the memb ers of the third respondent Union through intermediary contractors was illegal and unjust. It was also sham and nominal. It was only the officials of the writ petitioner, who directly supervised and extracted work from the members of the third responde nt Union. The contractors had no role to play excepting its name and paying their monthly wages. The erstwhile fourth respondent Union raised an industrial dispute regarding charter of demands and the said conciliation ended in failure on 31-1-1995. T he members of the third respondent Union gave notice of strike and struck work from 4-1-1995. The writ petitioner instead of negotiating and settling the dispute across the table, took the extreme step of terminating the contract itself with M/s Pandian Transport in order to thwart the demand of the third respondent Union. On termination of the contract, the members of the third respondent Union were thrown out of employment and lost even the status of contract workmen. The contract was revalidated w ith M/s Pandian Transport on 30-5-1996 for a period of 3 months and the members of the third respondent Union were again engaged for the said period of 3 months. As they relinquished their membership from the fourth respondent Union, the third responden t Union did not know as to what happened to the industrial dispute raised by the fourth respondent Union regarding charter of demands. The Union raised an industrial dispute regarding regularisation of services of the members of the third respondent Uni on numbering 54 employed in the category of Mazdoors and Supervisors. On failure of conciliation, the Government of India had referred the said industrial dispute for adjudication to the Central Government Industrial Tribunal-cum-Labour Court. The dem and for regularisation of the members of the third respondent Union was perfectly justified. The typographical error was corrected by a subsequent corrigendum. Before the Central Government Industrial Tribunal pleadings were complete in all respects an d the matter was posted for recording oral evidence. The present writ petition came to be filed challenging the reference made as early as 17-11-1999. No explanation is given for the delay in approaching this Court. The petitioner has submitted itself to the jurisdiction of the Central Government Industrial Tribunal. It is therefore estopped from questioning the very reference made to it on all or any of the grounds urged by it. The participation of the writ petitioner before the Tribunal must be d eemed to be acquiescence. The members of the third respondent Union were not aware as to when the Ministry of Labour passed orders declining to refer the industrial dispute for adjudication. In any event, the objection of the writ petitioner about the maintainability of the industrial dispute is baseless and frivolous. The power conferred on the appropriate Government is not a judicial function. It is only administrative in nature as has been held in a catena of the Supreme Court cases. Therefore, for an administrative order there is no question of finality. The Government does not lack the power to make the reference in respect of the same industrial dispute, which it once declined to refer, nor is it necessary that the Government must have s ome fresh material for making a reference after once declined to refer.
6. Besides putting forward the objections raised in the counter, Mr.K.M. Ramesh, learned Counsel for the third respondent, relied on the following two decisions of the Supreme Court: (1) AVON SERVICES 9PRODUCTION AGENCIES0 PVT. LIMITED VS. INDUSTRIAL TRIBUNAL, HARYANA, FARIDABAD AND OTHERS (1979-I LLJ 1) and (1) V. VEERARAJAN AND OTHERS VS. THE GOVERNMENT OF TAMIL NADU AND OTHERS (1987-I LLJ 209).
7. The main contention of the learned Counsel for the petitioner is that respondents 1 and 2 do not exercise any mechanical functions. There should be application of mind and when serious objections had been raised to the reference being ma e ought to have been considered and decision taken. From a reading of the reference made, it would be clear that none of the points raised on behalf of the petitioner had been considered.
8. Per contra, it is the contention of the learned Counsel for the third respondent that the reference made is only an administrative order and there can be no writ petition challenging or questioning the same.
9. In AVON SERVICES 9PRODUCTION AGENCIES) PVT. LIMITED VS. INDUSTRIAL TRIBUNAL, HARYANA, FARIDABAD AND OTHERS (1979-I LLJ 1) it has been held as follows:
"The only requirement for taking action under Section 10(1) of the Industrial Dispute Act is that there must be some material before the Government which would enable the appropriate Government to form an opinion that an industrial dispute exists or is a pprehended. This is an administrative function of the Government as the expression is understood in contradistinction to judicial or quasi-judicial function. Merely because the Government rejects a request for a reference or declines to make a referenc e, it cannot be said that the industrial dispute has ceased to exist, nor could it be said to be a review of any judicial or quasi-judicial order or determination. The industrial dispute may nevertheless continue to remain in existence and if at a subse quent stage the appropriate Government is satisfied that in the interest of industrial peace and for promoting industrial harmony it is desirable to make a reference, the appropriate Government does not lack power to do so under Section 10(1) nor is it p recluded from making a reference on the only ground that on the earlier occasion, it had declined to make the reference. When the Government declines to make a reference, the source of power is neither dried up nor exhausted."
The Supreme Court has expressed that,
"at any time" in Section 10(1) will clearly negative the contention that once the Government declines to make a reference the power is under Section 10(1) in respect of the same dispute gets exhausted, Such a construction would denude a very vital power conferred on the government in the interest of industrial peace and harmony and it need not be whittled down by interpretative process."
10. In Coming to that conclusion the Supreme Court relied on its own earlier judgment in WESTERN INDIA MATCH CO. LTD. VS. WESTERN INDIA MATCH CO. WORKERS UNION AND OTHERS (1970-II LLJ 256 = 1970(3) SCR 370) where an identical contention was espect of a reference under Section 4(k) of the U.P. Industrial Disputes Act, which is in pari materia with Section 10(1) of the Act. The Supreme Court in that decision observed as follows: "In the light of the nature of the function of the Government and the object for which the power is conferred on it,it would be difficult to hold that once the Government has refused to refer, it cannot change its mind on a reconsideration of the matter either because new facts have come to light or because it has misunderstood the existing facts or for any other relevant consideration and decide to make the reference. But,where it reconsiders its earlier decision it can make the reference only if the dispute is an industrial one and either exists at that stage or is apprehended. The reference it makes must be with regard to that and no other industrial dispute."
11. The Supreme Court in AVON SERVICES further observed as follows:
"The power to make the reference remains intact and can be exercised if the material and relevant considerations for exercise of power are available; they being the continuous existence of the dispute and the wisdom of referring it in the larger interest of industrial peace and harmony. Refusal to make the reference does not tantamount to saying that the dispute, if at all existed, stands resolved."
12. There is no quarrel over the proposition of the law laid down by the Supreme Court.
13. In V. VEERARAJAN AND OTHERS VS. THE GOVERNMENT OF TAMIL NADU AND OTHERS (1987(I) LLJ 209) it has been held that the appropriate Government cannot decline a reference on irrelevant and extraneous grounds and cannot decide disputed questio nd fact. In that case, the Management declined to provide employment to 7 out of 154 workmen who were found guilty of misconduct or wilful disobedience of lawful orders of suspension, acted subversive of good and proper behaviour within the establishmen t after authorised hours of work without permission, shouting of slogans within the establishment after authorised hours of work without permission, shouting of slogans within the establishment, as these constituted misconduct under the Standing orders. Industrial dispute relating to those 7 workmen who were dismissed was asked to be referred to the Labour Court for adjudication by a State Government. The Government declined to make the reference. The said order of the government was unsuccessfully c hallenged by filing a writ petition and writ appeal. The Supreme Court pending the Civil Appeal set aside the orders of the High Court in the writ petition and appeal and directed the State Government to reconsider the matter without taking into account the earlier reasons given by them. It was held by the Supreme Court "that the Management manufactures and supplies certain items to the Defence Department of the Union of India and there was industrial unrest followed by violence and stoppage of work were not germane and relevant for the purpose of declining to refer the dispute for adjudication. The appropriate Government could not take into account the grounds which were found to be irrelevant by the Court. Equally, if the dispute raised involved disputed question of law or fact, the appropriate Government could not reach final conclusion. The fact that the concerned workmen had accepted their guilt was an irrelevant factor when the case of the worker was that all the workmen who were proceeded against had accepted the guilt. There was no justification for the employer, to discriminat e between 134 workmen who were restored to service and the remaining 20 including the six to whom reemployment was not given. The appropriate Government could not refuse reference on the ground that they had considered the quantum of punishment and the nature of charges framed. The Government was directed to refer the dispute for adjudication by the Labour Court."
14. In SECRETARY, INDIAN TEA ASSOCIATION VS. AJIT KUMAR BARAT AND OTHERS (2000(3) SCC 93) the following have been held to be the prerequisites for making a reference under Section 10 of the Industrial Disputes Act:
(i) Forming an opinion as to whether the employee concerned ``was a workman, and
(ii)considering as to whether an industrial dispute existed or was apprehended.
Before taking a decision for making or not making the reference, the State government rightly should advert to the question as to whether the employee concerned was a workman. In that case, it was held that the Government had rightly adverted to the que stion. It was further observed in that decision as follows:
"The appropriate Government refusing to make, after deciding that the employee concerned was not a workman, was held to be an administrative order and where it had been made after taking into consideration the salary and allowances drawn by the employee concerned at the relevant time and the nature of his work, and without taking into consideration any irrelevant matter, it could not be faulted."
In that case, it was found that the order had been made after taking into consideration the salary and allowances drawn by the employee concerned at the relevant time and the nature of his work and without taking into consideration any irrelevant matter. The appropriate Government refused to make a reference. The High Court interfered with the direction to the State Government to make a reference and it was set aside. It was further held that,
"the order or reference under Section 10(1) was an administrative order involving no lis and it was made on subjective satisfaction of the government and therefore, unlike judicial or quasi-judicial order, it could not be examined by the High Court close ly to see if there was any material before the Government to support the conclusion."
15. In NEDUNGADI BANK LTD. VS. K.P. MADHAVANKUTTY AND OTHERS (2000(2) SCC 455) it has been held that, "power of reference under Section 10 of the Industrial Disputes Act should be exercised reasonably and in a rational manner and not in a mechanical fashion. In spite of absence of a statutory limitation period, such power cannot be exercised to revise s ettled matters or to refer stale disputes. As to when a dispute become stale, would depend upon the facts and circumstances of each case."
In that case, the workman was dismissed after lawfully and properly conducting the disciplinary proceedings. His dismissal was upheld in appeal and the benefits legally due to him were paid. Seven long years thereafter, he raised a dispute against his dismissal on the ground that two other employees dismissed in similar situation were reinstated. Reference of the said dispute by the Government at that stage and upheld by a Division Bench of the Kerala High Court was held to be bad by the Supreme Court both on the grounds of delay as well as non-existence of an industrial dispute, particularly when the circumstances under which the said two employees were dismissed and reinstated were not specified. It was further held in that decision that reference of dispute under Section 10 of the I ndustrial Disputes Act without taking into consideration the statutory requirements or travelling outside it, is subject to judicial review, limited though it might be, because it is an administrative order. A High Court can exercise its powers under A rticle 226 of the Constitution to consider the question of the very jurisdiction of the Labour court. The Supreme Court followed its earlier decision in NATIONAL ENGINEERING INDUSTRIES LTD. VS. STATE OF RAJASTHAN (2000(1) SCC 371 = JT (1999)9 SC) wherei n it was held that, "the High Court has jurisdiction to entertain a writ petition where there is an allegation that there is no industrial dispute and none apprehended which could be the subject matter of reference for adjudication to the Industrial Tribunal under Section 1 0 of the Act. It is a question of jurisdiction of the Industrial Tribunal, which could be examined by the High Court in its writ jurisdiction. It is the existence of the Industrial Tribunal (sic dispute) which would clothe the appropriate Government wi th power to make the reference and the Industrial Tribunal to adjudicate it. If there is no industrial dispute in existence or apprehended the appropriate Government lacks power to make any reference."
16. Bearing the above principles in mind, if we have a look at the facts leading to the writ petition, it would appear as follows: On 29-8-1994 there was a Memorandum of Settlement under Section 18(1) of the Industrial Disputes Act between M/s Pandian Transport, the fifth respondent herein, and its labourers represented by the Union General Secretary, Joint Secretary ommittee Members. It was agreed that all demands of the Union and the workmen had been fully discussed and the Union had decided to drop all the demands other than were referred to in the agreement. The Union had also agreed not to indulge in any strik e during the currency of the settlement and not to raise any fresh demands. The agreement was to be in force with effect from 10-8-1994 to 28-2-1996. On the same day there was a Memorandum of Settlement under Section 18(1) of the Industrial Disputes Act between both the respondents and its supervisory staff. On 28-9-1994 there was a contract entered into between the writ petitioner and the fifth respondent. That related to rem oval of certain materials of the petitioner lying in the godown within the Madras Harbour precincts, in respect of which the earlier contract was validated for a period of three months with effect from 3-9-1996. There was a Memorandum of Understanding e ntered into on 27-5-1996 between the fourth and the fifth respondents for carrying out the said work on a consolidated sum of Rs.2 lakhs without any claim towards PPF, PF, bonus, kits, liveries, etc. It would appear that the fifth respondent executed t he work and settled the account with the fourth respondent Union. In the meantime, the fourth respondent raised an industrial dispute with respect to revision of wages for the workmen of the fifth respondent also impleading the petitioner. Conciliation proceedings were held. The petitioner participated and stated that it had absolutely no privity of contract with the members of the fourth respondent Union, that the contract between the petitioner and the fifth respondent was a wholesome contract with respect to stevedoring, shipping services, loading and unloading of materials, transport of materials, etc. The petitioner had no control over the said contract work. The consideration for the said contract on the basis of the tonnage of the material lifted and not on the personnel engaged. The Assistant Labour Commissioner sent his report on 30-1-1995. On 19.9.1995 the first respondent passed an order stating that the dispute was not fit for adjudication, as the workmen were not employed by ONGC, but were employed by various contractors. No industrial disputes existed against the petitioner being the employer and the members of the fourth respondent Union. This, according to the petitioner's Counsel, became final in 1995. On 21-5-1996 the fo urth respondent addressed a letter to the fifth respondent that all dues had been settled except the provident fund from December, 1994 to 3-1-1995. The amount claimed was also paid by the fifth respondent. There was a Memorandum of Understanding enter ed into between the fourth and the fifth respondents on 7-5-1996. This, as already noted, related to the balance work left.
17. It would appear that on 21-8-1997 the third respondent herein addressed a letter to the Regional Labour Commissioner, Shastri Bhavan, Madras, stating that the petitioner had terminated the contract with the fifth respondent under which t spondent's members were engaged and that all of a sudden, they had been rendered jobless. The communication was forwarded to the second respondent herein. The petitioner made its objections by communication dated 25-2-1997 stating that earlier the four th respondent raised a dispute, which was conciliated by the second respondent and it ended in failure on 31.5.1995. The second respondent sent his failure report. The first respondent, however, passed the impugned order dated 17-11-1999 stating that i ndustrial disputes existed between the management of the petitioner and its workmen in respect of whether the demand of ONGC Madras Port Contract Employees Union for regularisation of 42 contract labourers listed in Annexure-A is justified and if so to w hat relief the workmen are entitled to and a corrigendum was issued on 13-10-2000 giving the number of workmen as 54 instead of 42.
18. The elaborate objections filed by the writ petitioner on 21-11-1997 appear not to have been considered at all by the first respondent. May be it is an administrative order, but there should be some indication that there was application ore passing the order that the objections raised had indeed been taken into consideration by the first respondent before referring the dispute under Section 10(1) of the Act. It had been specifically stated that the petitioner was never the direct emplo yer at any point of time, which was accepted earlier on the same set of facts. It cannot be said that some new facts were brought to the notice of the first respondent, or that there was some other relevant consideration for referring the matter under Section 10(1) of the Act. The power by the first respondent does not appear to have been exercised reasonably and in a rational manner. The existence of an industrial dispute alone will clothe the appropriate Government with power to make a reference a nd the Industrial Tribunal to adjudicate it.
19. In my view, the first respondent has not taken this aspect into consideration while deciding the question for reference. The writ petition will stand allowed. The order of reference shall stand set aside. The matter is remitted to the ondent for consideration afresh in the light of the observations contained in this order. The stay petition in W.M.P.No.31157/2000 and the vacate stay petition in W.M.P.No.19426/2001 are closed. There will be no order as to costs.
19-4-2002 Index: Yes
1.The Under Secretary,
Government of India,
Ministry of Labour,
Shram Shakti Bhavan,
New Delhi – 110 001.
2.The Assistant Labour Commissioner
(C-II), Ministry of Labour,
Chennai – 600 006.
K. SAMPATH, J.
W.P.No.21407 of 2000
W.M.P.Nos.31157/2000 & 19426/2001
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