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N.L.C. INDCO SERVE Thozhilalar v. Neyveli Lignite Corporation - WRIT PETITION No.8 of 1996 [2002] RD-TN 312 (15 May 2002)


DATED: 15/05/2002



WRIT PETITION No.8 of 1996


W.M.P.Nos.10 of 1996, 2111 of 1996, 3769 of 1996 and 3771 of 1996

N.L.C. INDCO SERVE Thozhilalar ... Petitioner Uzhiyar Sangam,

Regd.No.6/SAV (Trade Union Act, 1926)

Neyveli, rep. by its President

N. Narayanan.


1. Neyveli Lignite Corporation,

represented by the Chairman,

Neyveli Lignite Corporation,

Neyveli 607 807.

2. The Assistant Labour Commissioner (C),

Shastri Bhavan,

26, Hadows Road,

Madras.600 006.

3. The Managing Director,

N.L.C. Indcoserve,

Old C.M.C. Complex,

(Opposite to Thermal Power Station-I),

Neyveli 607 807.

4. N.L.C. National Workers Union

(INTUC) Registration No.6/SAT

(Neyveli) D.83, Block No.26,

Rajaji Road, Neyveli .1. rep.

by its General Secretary.

5. N.L.C. National Trade Union (NTU),

Regn. No.180/SAT (Neyveli),

South Arcot Vallalar District,

rep. by its General Secretary.

6. N.L.C. Labour & Staff Union

(C.I.T.U.), Regn. No.1803,

Neyveli Lignite Corporation

Ltd., Neyveli, rep. by its

General Secretary.'

7. N.L.C. Amalgamated Labour &

StaffUnion (HMS)

Regd.No.224/SAT, rep. by

its General Secretary,


8. N.L.C. Anna Workers &

Staff Union, Regn. No.3816(ATP),

rep. by its General Secretary,


(R4 to R8 impleaded as per order of

Court dt.1.3.96 in W.M.Ps.2108, 2110

and 2778 of 1996 respectively)

9. N.L.C. Workers Progressive Union,

rep. by its General Secretary,

S. Anadagurunathan,

D-50, Anna Salai,

Block 25, Neyveli.

10. N.L.C. Employees Union, rep.

by its General Secretary,

R. Tamilarasan,

Neyveli.1. ... Respondents. (RR9 and 10 impleaded as per order

of Court dt 21.3.96 in W.M.Ps.

3768 and 3770 of 1996)

Prayer: This Writ Petition under Article 226 of the Constitution of India, has been filed for issue of a Writ of Mandamus as stated therein.

For Petitioners : Mr. R. Singaravelan

For Respondent No.1 : Mr. N.A.K. Sarma

For Respondent No.2: Mr. P. Govindarajan, ACGSC For Respondent No.3: Mr. C.R. Chandrasekaran

For Respondent Nos.4 & 5 : Mr. Umashankar

For Respondent Nos.7 & 8 : Mr. K. Srinivasan

For Respondent Nos.9 and 10 : Mr. A.V. Bharath :O R D E R

The petitioner, a registered Trade Union, has filed this writ petition for issuance of a Writ of Mandamus forbearing the first respondent from absorbing any contract labour or any other employee either permanently or temporarily in the Corporation without following the seniority either as contract labour or directly under the first respondent, with a further prayer for a direction to the first respondent to absorb and regularise the members of the petitioner Union as employees of the first respondent Corporation.

2. It is not disputed that the first respondent is a public sector undertaking. The Corporation is engaging various contractors for undertaking some of the works of the Corporation. While many workers were engaged through such contractors, a Society styled as "N.L.C. Industrial Co-operative Services Society Limited" (in short referred to as N.L.C. INDCO SERVE) was formed. The object of the sopciety is to take and execute various items of work entrusted to it by the Corporation, within its area of operation and to provide employment to its members/workers.

3. It is the claim of the petitioner that nearly 1000 employees and the members of the petitioner Union are also members of the aforesaid society. It is asserted that the aforesaid society must be taken to be a wing of the Corporation and considered as a "State" within the meaning of Article 12 of the Constitution of India.

The petitioner Union after having knowledge of the attempt of the society to regularise its members as employees of the Corporation on the basis of the date of becoming member of the said society, gave a written representation dated 29.06.1994 to the Chief Minister claiming that the persons should be regularised on the basis of their seniority. A further consideration petition dated 24.04.1995 was submitted to the second respondent, viz., the Assistant Labour Commissioner (C), Shastri Bhavan, Madras.6. The said petition was adjourned by the second respondent on a few occasions. Subsequently, the petitioner learnt that respondents 1 and 3 were absorbing the members of the N.L.C. INDCOSERVE and some nonmembers arbitrarily without following any principle and ignoring the principle of seniority. It has been asserted that such action of respondents 1 and 3 is arbitrary, unreasonable and violative of Articles 14 and 16 of the Constitution of India. It is contended that there is no difference between the persons who are employed by the Corporation and the persons employed indirectly through the contract labour system, as both are doing the same duties. On the basis of the aforesaid allegations, prayer has been made for giving direction to the first respondent not to absorb any person without following the principle of seniority.

4. Counter affidavit has been filed on behalf of respondents 1 and 3

filed counter affidavits. The burden of the Sang in the counter affidavits appears to be that there is a settlement between the Corporation and the Union in accordance with Section 12(3) of the Industrial Disputes act, which has been approved by the conciliation officer and such settlement is binding on all the workmen. Under the settlement, the management of Corporation agreed to absorb INDCOSERVE workers in stages and the first phase was limited to absorption of the following categories of workers in production units:- "(i) Operators with heavy vehicles' licence; (ii) ITI technicians, diploma holders and graduates in engineering;

(iii) Skilled workers, highly skilled workers doing technical jobs without ITI qualification;

(iv) Canteen workers.

It has been further indicated in the counter that the conciliation proceedings initiated on the basis of the application of the petitioner was not attended to by the petitioner and it is argued that if there is failure in respect of the said conciliation proceedings, the petitioner can file appropriate application before the industrial forum. It has been further indicated that absorption covers only the employees under the society and does not cover other contract labour employees. The maintainability of the writ petition has been challenged on the ground that in spite of notice, the petitioner did not furnish the list of the persons stated to be the members of the petitioner union.

5. In course of hearing of the writ petition, the learned counsel for the petitioner had furnished a list of the members of the petitioner Union and the technical objection has become futile.

6. Sections 12(3) and 18(3) of the Industrial Disputes Act being relevant are extracted.

Section 12(3):- If a settlement of the dispute or of any any of the matters in dispute is arrived at in the course of the conciliation proceedings the conciliation officer shall send a report thereof to the appropriate Government or an officer authorised in this behalf by the appropriate Government together with a memorandum of the settlement signed by the parties to the dispute.

Section 18(3):- A settlement arrived at in the course of conciliation proceedings under this Act or an arbitration award in a case where a notification has been issued under sub-Section (3-A) of Section 10-A or an award of a labour Court, Tribunal or National Tribunal which has become enforceable shall be bind ing on--

(a) all parties to the industrial dispute; (b) all other parties summoned to appear in the proceedings as parties to the dispute, unless the Board, arbitrator, Labour Court, Tribunal or National Tribunal, as the case may be, records the opinion that they were so summoned without proper cause; (c) where a party referred to in clause (a) or clause (b) is an employer, his heirs, successors or assigns in respect of the establishment to which the dispute relates;

(d) where a party referred to in clause (a) or clause (b) is composed of workmen, all persons who were employed in the establishment or part of the establishment as the case may be, to which the dispute relates on the date of the dispute and all persons who subsequently become employed in that establishment or part."

7. It has been contended on behalf of the respondents that a settlement was arrived at in course of the conciliation proceedings and in view of Section 18(3) of the Act, such settlement was binding on the parties to the industrial dispute. It has been contended that since the settlement is binding on the petitioner and the workmen and has not been challenged in any manner, the petitioner cannot have any merits in this matters.

8. There is no material on record to indicate that the petitioner had been noticed specifically to appear in the conciliation proceeding which was between the Corporation and the Union of the Employees under the Corporation. The petitioner claims that its members were engaged under various contractors under the contract labour system and as such they were not the workmen under the Corporation within the meaning of the Industrial Disputes Act and since their union had not been specifically summoned such settlement is not binding on them. Moreover, if such a settlement is given effect to, only the persons who had been formally admitted to INDCOSERVE of the co-operative society would be eligible to be absorbed and adoption of such a course would be grossly discriminatory against the employees of the other contractors who had been engaged under the contract labour system. It is submitted that the Corporation being a public sector undertaking is a " State" within the meaning of Article 12 and is expected to act fairly and not in arbitrary manner and it cannot discriminate between an employee and rest and any other employees engaged under any other contractors.

9. In 1985 (2) S.C.C.648 (INDER PAL YADAV AND OTHERS -VS- UNION OF INDIA AND OTHERS) while considering the scheme framed by the Railway administration regarding absorption of casual labour, it was observed as follows:-

"5. The scheme envisages that it would be applicable to casual labour on projects who were in service as on January 1, 1984. The choice of this date does not commend to us, for it is likely to introduce an invidious distinction between similarly situated persons and expose some workmen to arbitrary discrimination flowing from fortuitous court's order. To illustrate, in some matters, the court granted interim stay before the workmen could be retrenched while some others were not so fortunate. Those in respect of whom the court granted interim relief by stay/suspension of the order of retrenchment, they would be treated in service on January 1, 1984 while others who fail to obtain interim relief though similarly situated would be pushed down in the implementation of the scheme. There is another area where discrimination is likely to rear its ugly head. These workmen come from the lowest grade of railway service. They can ill afford to rush to court. Their Federations have hardly been of any assistance. They had individually to collect money and rush to Court which in case of some may be beyond their reach. Therefore, some of the retrenched workmen failed to knock at the doors of the court of justice because these doors do not open unless huge expenses are incurred. Choice in such a situation, even without crystal gazing is between incurring expenses for a litigation with uncertain outcome and hunger from day to day. It is a Hobson's choice. Therefore, those wh o could not come to the court need not be at a comparative disadvantage to those who rushed in here. If they are otherwise similarly situated, they are entitled to similar treatment, if not by anyone else at the hands of this court. (emphasis added) Burdened by all these relevant considerations and keeping in view all the aspects of the matter, we would modify part 5.1(a) by modifying the date from January 1, 1984 to January 1, 1981 . With this modification and consequent rescheduling in absorption from that date onward, the scheme framed by Railway Ministry is accepted and a direction is given that it must be implemented by recasting the stages consistent with the change in the date as herein directed.

6. To avoid violation of Article 14, the scientific and equitable way of implementing the scheme is for the Railway Administration to prepare, a list of project casual labour with reference to each division of each railway and then start absorbing those with the longest service. If in the process any adjustments are necessary, the same must be done. In giving this direction, we are considerably influenced by the statutory recognition of a principle well known in industrial jurisprudence that the men with longest service shall have priority over those who have joined later on. In other words, the principle of last come first go or to reverse it first come last go as enunciated in Section 25-G of the Industrial Disputes Act, 1947 has been accepted. We direct accordingly. (emphasis added) ...

8. The scheme as would stand modified by the directions herein given forms part of this judgment and a copy of it shall be annexed to this judgment."


"The only contention canvassed before Labour Court was that the aforesaid office order did not apply to Bareilly region. It is difficult to appreciate as to how the said office order giving benefit of regularisation to those workmen who had completed service of 240 days in a year could be made available to workmen working in other Divisions and could not be made available only to workmen working in Bareilly region. That would be clearly a discriminatory act on the part of the Board which is a State within the meaning of Article 13 of the Constitution. (emphasis added). Consequently, it must be held that the aforesaid defence put forward by the appellant was wholly misconceived and rightly rejected by the Labour court and the High Court. On this short ground, therefore, this appeal is liable to fail."

10. While there cannot be any dispute that the High Court cannot direct for abolition of the contract labour system under the Contract Labours Regulation Act and the matter has to be decided by the appropriate forum, the High Court under Article 226 of the Constitution of India can examine if there is any discrimination adopted by the Corporation, which is admittedly a "State" within the meaning of Article 12 of the Constitution of India. The prayer in this case is not to abolish the contract labour system and to regularise the workers, but to give a direction to the Corporation not to ignore the question of seniority while making absorption. While considering the question of regular absorption, it is not open to such Corporation to discriminate between the labourers engaged by one contract and labourers engaged by INDCOSERVE merely because the society had been formed. In the eye of the law, the Co-operative Society which engages its members as labourers stands in the same footing as any other contractor. To be more precise, the labourers engaged by some private contractors as well as by the society namely, INDCOSERVE stand on the same footing so far as the corporation is concerned in the matter relating to the absorption and the labourers engaged by other contractors cannot be ignored merely because they are not members of INDCOSERVE and their cases have not sponsored by INDCOSERVE. The persons working under different contractors and indirectly under the corporation were admittedly not 'workmen' under the Corporation and it cannot be said that they were bound by the settlement relied upon by the re spondents.

11. For the aforesaid reasons, I am inclined to allow the writ petition to extent of giving a direction that while considering the question of regular absorption in the categories indicated in the settlement, the case of all the other workers coming within the eligible category should be considered according to the seniority and the case of no workers should be ignored merely because he has not been admitted as a member of INDCOSERVE. It is made clear that the persons who have already been absorbed after stay order was vacated should not be disturbed by this order.

12. In the result, this writ petition is allowed in part. Consequently, W.M.P.Nos.10 of 1996, 2111 of 1996, 3769 of 1996 and 3771 of 199 6 is closed. No costs.

This order shall be given effect to within a period of twelve weeks from the date of communication of the order. 15.05.2002.


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