1

IN THE HIGH COURT OF ANDHRA PRADESH: AMARAVATI

* * * *

W.P. No. 8255 of 2018

Between:

Food Corporation of India Workers Union

Bearing Regd.No.8219 Having Registered Office

at 58/1 Diamond Harbour Road Kolkata 700

023, Represented by its Founder and Genera l

Secretary Mr.G.S.Jena Aged about 87 Years

R/o.58/1 Diamond Harbour Road Kolkata.

.....Petitioner

AND

Food Corporation of India

Statutory Body incorporated by the operation of Food Corporation of

India Act 1964 Represented by its General Manager Having O ffice at

1620 Barakhamba Lane New Delhi-110001 India & others

.....Respondents

DATE OF JUDGMENT PRONOUNCED : 18.06.2024

SUBMITTED FOR APPROVAL

HON'BLE SMT. JUSTICE VENKATA JYOTHIRMAI PRATAPA

1. Whether Reporters of Local Newspapers

may be allowed to see the Judgments ? Yes/No

2. Whether copies of Judgment may be

marked to Law Reporters/Journals ? Yes/No

3. Whether Your Lordships wish to see the

fair copy of the Judgment ? Yes/No

_____________________________________

VENKATA JYOTHIRMAI PRATAPA, J

2

* HON'BLE SMT. JUSTICE VENKATA JYOTHIRMAI PRATAPA

+ W.P. No. 8255 of 2018

% 18.06.2024

Between:

# Food Corporation of India Workers Union

Bearing Regd.No.8219 Having Registered Office

at 58/1 Diamond Harbour Road Kolkata 700

023, Represented by its Founder and General

Secretary Mr.G.S.Jena Aged about 87 Years

R/o.58/1 Diamond Harbour Road Kolkata.

.....Petitioner

AND

$ Food Corporation of India

Statutory Body incorporated by the operation of Food Corporation of

India Act 1964 Represented by its General Manager Having Office at

1620 Barakhamba Lane New Delhi-110001 India & others

.....Respondents

! Counsel for the Petitioner : Sri O.Manohar Reddy, learned

Senior Counsel assisted by Sri Arup

Koushik Karavadi

^ Counsel for the Respondents 1&2 : Sri K.S.Murthy,

Learned Senior Counsel assisted by

Sri O.Udaya Kumar, learned standing

counsel.

Counsel for the respondent No.3 : Sri J.UM.V.Prasad

Dr. Majji Suri Babu, learned

counsel for the Petitioners in I.A.No.4

of 2023

< Gist :

> Head Note:

? Cases Referred:

1. PIL No.84/2014 Nagpur Bench, High Court of Judicature at

Bombay, dated 20.11.2015 para -30

2. WP(C) No35398/2016 & Batch dated 13.01.2017

High Court of Kerala.

3. WP No.18387/2018 & batch dated 15.04.2019 Madras High

Court

4. WP(MD) No.25867 of 2023 and others dated 11.01.2024 Madras

High Court.

5. 2023: AHC:237373-DB

6. (2007) 8 SCC 150

3

APHC010190852018

IN THE HIGH COURT OF ANDHRA

PRADESH AT AMARAVATI

(Special Original Jurisdiction)

[3396]

TUESDAY ,THE EIGHTEENTH DAY OF JUNE

TWO THOUSAND AND TWENTY FOUR

PRESENT

HON’BLE SMT JUSTICE VENKATA JYOTHIRMAI PRATAPA

WRIT PETITION No: 8255/2018

Between:

Food Corporation Of India Workers Union, ...PETITIONER

AND

Food Corporation Of India and Others ...RESPONDENT(S)

Counsel for the Petitioner:

1. ANUP KOUSHIK KARAVADI

Counsel for the Respondent(S):

1. O UDAYA KUMAR

2. J U M V PRASAD (CENTRAL GOVERNMENT COUNSEL)

The Court made the following:

4

HON’BLE SMT. JUSTICE VENKATA JYOTHIRMAI PRATAPA

WRIT PETITION No.8255 of 2018

ORDER:

1. The facts, as projected in the Writ Affidavit, in brief, are;

a. Petitioner is Food Corporation of India Workers‟ Union, which is a

registered Trade Union filed the W.P. on behalf of 751 „Direct Payment

System’

1

workers engaged in the Respondent No.1 for handling

foodgrains in their depots. Respondent No.3 entrusted the Respondent

No.1 with a duty to procure food grains and carry out its movement and

distribution throughout the country by loading and unloading, through

skilled labour. Pursuant to the long-standing demand for absorption and

permanence, a settlement was arrived between the Petitioner Union

and the Respondent No.1 management, vide the Memorandum of

Settlement dated 01.11.1994.

b. A circular dated 05.12.1994 was issued by the Respondent No.1

to recognize the rights of the handling labourers, commonly identified as

DPS. These labourers are posted in various depots/godowns of

respondent No.1 and at various railway sidings for the purpose of

unloading food grain stock and stacking them at the siding godown

before dispatch.

c. Thereafter, Respondent No.1 issued a circular dated 22.07.1996

to the Zonal Manager with certain conditions to improve the labour

1

In short, DPS

5

relations in the institution. One of the conditions involved therein,

claimed to have been implemented/proposed to be implemented was to

transfer the surplus labourers from the DPS pool to another depot

having shortfall to balance the situation.

d. Vide the circular dated 05.11.1997 to the South Zonal Manager,

the Respondent No.1 placed on record the service conditions of the

labourers engaged under DPS system and No Work -No Pay basis.

Under these conditions, no enablement is given to the Respondent No.1

to transfer the DPS system labourers without reason and cause.

e. The DPS workers are deprived of the salary, leave etc., which are

given to the departmental labour engaged by the respondent No.1, even

when they discharge the similar work. In addition to the minimum wages

as declared by the Central Government, the DPS workers are

additionally paid certain incentive wages on piece rate depending on the

number of bags that are loaded/unloaded/handled after a particular cut

off mark. Basis of the piece-rate payment is notified and revised by the

respondent No.1 from time to time. Without this additional earning, the

DPS workers would not be able to make a decent living. The

departmental workers have always been segregated in the posting

matters so as to not create conflict with the additional earning being

paid to the DPS workers.

f. To ventilate the grievance of differential treatment, a number of

writ petitions were filed. Hon‟ble Apex Court, vide order dated

6

08.07.2003 granted liberty to the workmen to approach the National

Industrial Tribunal. During the pendency of the matter before the

Tribunal, vide an order dated 27.05.2004 an interim relief in the tune of

additional payment of Rs.50/- per day was granted in addition to the

existing rate. The matters are still pending.

g. The Nagpur Bench of the Hon‟ble Bombay High Court suo moto

took up a Public Interest Litigation

2

concerning large scale payments

made to the departmental workers of the Respondent No.1. Vide order

dated 20.11.2015, the High Court made certain observations on the

payments to such workers. In the S.L.P. filed before the Hon‟ble

Supreme Court, vide an order dated 31.07.2017, it was made clear that

any order passed pursuant to the directions from the High Court‟s order

dated 20.11.2015 could be challenged in appropriate proceedings

before appropriate court and the adjudication thereupon has to be made

uninfluenced by the observations in the High Court‟s order.

h. The respondent No.1 by circular dated 12.07.2016 issued internal

guideline for „implementation of exemption notification dated 06.07.2016

under Section 31 of the Contract Labour (R&B) Act, 1970‟, purportedly

to comply with the directions issued by the Hon‟ble Bombay High Court,

vide order dated 20.11.2015.

i. Thereafter, Respondent No.1 issued the impugned order dated

12.01.2018 directing the Area Managers to collect the choice of place to

2

In short, PIL

7

which the labourer wishes to be transferred by stating its decision to

rationalize by keeping the depots located in certain areas in the State of

Andhra Pradesh and Telangana, under DPS system of labours and

labourers of remaining depots to be transferred to the said depots.

j. Petitioner, vide representation dated 22.01.2018 submitted its

objections to the impugned order. A meeting was held between the

petitioner Union and the respondent No.1 Management on 02.02.2018,

wherein the Petitioner Union objected the implementation of the

impugned order. Without considering the request of the petitioner union,

Respondent No.1 issued tender notice dated 19.02.2018 calling bids for

handling and transport work in Eluru Depot on out sourcing basis. Vide

representation dated 23.02.2018, the petitioner Union placed its

objections and the same is still pending with the respondent No.1.

k. DPS workers are not formally appointed through an appointment

letter and the Guidelines and rules in relation to their service do not

provide any provision for transfer like regular employees. Therefore,

there cannot be any transfers. Circulars dated 22.07.1996 and

12.07.2016 clearly provide that the transfers could be made only in the

event where the labourers are in excess at a given place. The 2007

Assessment concerning the sanctioned strength would show that there

is no such excess.

l. The impugned order was issued consequent to the guidelines

dated 12.07.2016 and consequent to the Judgment dated 20.11.2015.

8

The impugned order is mala fide and aimed at curtailing the livelihood of

the DPS workers represented through the petitioner union. For no valid

reason, the DPS workers cannot be transferred for few depots.

m. Hence, the present W.P. is filed seeking to issue a writ of

Mandamus for the following relief;

“declaring the action of the Respondents to transfer the

Direct Payment System Labourers working with FCI depots

located in the states of Telangana and Andhra Pradesh to 8

depots on the ground of rationalisation as mentioned in the

impugned order bearing No. DPS/4/10/2015-Vol.II dated

12

th

January 2018 to be illegal, arbitrary, contrary to the

applicable guidelines as issued by the Respondent No.1

and agreements entered into between parties and violative

of Articles 14, 19 and 21 of the Constitution of India and

consequently, direct the respondents not to transfer the

members of the Petitioner Union who are engaged by the

Respondent No.1 on Direct Pay System in line of

implementation of circular dated 12

th

January 2018 and to

pass such other order or orders as this Hon’ble Court may

deem fit and proper in the circumstances of the case and in

the interest of justice.”

Contents of the Counter Affidavit

3. A counter affidavit was filed by Respondent Nos.1 and 2 denying

all the averments made in the writ affidavit and putting the Petitioner to

strict proof of the same, with the following key averments;

a. The W.P. is not maintainable in law and facts.

b. The impugned order dated 12.01.2018 was issued in obedience

to the order of the Bombay High Court in PIL No.84 of 2014 and the

letter dated 12.07.2016 wherein, certain guidelines for implementation

of exemption Notification dated 06.07.2016 under Section 31 of the

9

Contract Labour (R&A) Act, 1970 issued by Ministry of Labour and

Employment, Government of India. As per point No.3 of the letter dated

12.07.2016, all the 226 notified depots/rail heads are covered by the

notification dated 06.07.2016 and FCIs. With a view to reorganize and

rationalize the deployment of existing departmental/DPS/NWNP system

workers for their gainful utilization by pooling them into fewer depots as

operational requirements so that optimum the number of workers are

deployed for carrying out FCI operations in the most efficient manner.

c. The respondent No.2 issued a Circular dated 22.07.1996 to all

the Zonal Managers placing on record at point No.14 that the Zonal

Manager can transfer the surplus labour from any depot to one region to

any depot of other regions in the same zone under the same labour

system.

d. As per Circular dated 22.07.1996, the General Manager is

empowered to transfer the labour within his region from one depot to

other depots.

e. As per the Memorandum of Settlement with the petitioner Union,

the respondent Corporation is paying salaries to the DPS workers and

the High Court of Bombay in PIL No.84 of 2014 viewed the matter of

giving high salaries to the labours seriously and while disposing of the

PIL observed that the Government of India shall take a decision

regarding abolition of system of departmental labour in a phased

manner or absorbing their services in other establishments as

10

recommended by the High-level Committee. Keeping in view the said

order, the Corporation redeployed the staff in various depots of Andhra

Pradesh region. As regards DPS workers, it is ensured that minimum

wages are received by all the labours in addition to this, DPS workers

are getting higher income through handling operations specially in

procurement season due to additional payment of incentive/OTA.

f. In the meeting, the Corporation called for the petitioner union to

their proposal on or before the first week of April, 2018 to take suitable

action to avoid labour problem but no such proposal was given. To

shorten the work loan at FSD, Eluru, the contract labour were engaged

as and when work is there and for that period only payments will be

made to the contract, whereas, for DPS Labour, whether work is there

or not, they are entitled to get wages.

g. Due to decentralization, the procurement will be carried out by the

State Government and the work of FCI has become very limited. The

labours are sitting idle and the corporation is forced to pay the idle wage

to the DPS labour. To overcome the problem, the corporation has taken

the decision to minimize the depot. Keeping in view the decentralization,

the Corporation has decided to retain some depots under DPS system

for gainful utilization. The proposal of transfer of DPS labour is also to

ensure their decent standard of living as well as to save the nation‟s

money. Therefore, the same is within the rule and in the interest of the

nation.

11

5. A reply affidavit was filed by the Petitioner with the following

key averments;

a. The impugned circular of the Respondent Corporation is to

camouflage exploitation policy of contract labour.

b. The service conditions of the DPS workers are stipulated by the

Minutes of Meeting dated 29.09.1997.

c. The actions of the Respondent Corporation in regard to transfers,

would result in deprivation of permanent workers and multiplicity of

litigation.

d. The impugned circular issued without any notice under Section 9-

A of the Industrial Disputes Act is in gross violation.

e. The decision rendered by the Nagpur Bench of the Hon‟ble

Bombay High Court is concerning DLS labourers of FCI and not DPS

labourers, and the said order is passed without hearing the labour

representatives and is in violation of Section 9A.

f. Transferring DPS workers would be in gross violation of

conditions of services.

Arguments Advanced at the Bar

6. Heard Sri O. Manohar Reddy, learned Senior Counsel

assisted by Sri Arup Koushik Karavadi, learned counsel for the

Petitioner, Sri K.S. Murthy, learned Senior Counsel assisted by

Sri O.Udaya Kumar, learned Standing Counsel appearing for the

Respondent Nos.1 and 2, Sri J.UM.V.Prasad, learned counsel

12

representing the Respondent No.3 and Dr. Majji Suri Babu, learned

counsel for the Petitioners in I.A.No.4 of 2023.

7. Sri O. Manohar Reddy, learned Senior Counsel would

submit that a settlement was arrived, vide Memo of Settlement dated

01.11.1994 between the petitioner and the management of respondent

No.1 and that the DPS labourers are posted in various depots and

godowns for the purpose of unloading foodgrain stock to the siding

godowns. It is also pointed out that a circular has been issued by

Respondent No.1 to the Zonal Manager to improve labour relations with

FCI and one condition therein was to transfer the surplus labourers of

DPS to another depot on shortfall to balance the situation. While stating

so, learned senior counsel would submit that this circular never

authorised the Respondent No.1 to take a general decision of transfer.

Learned counsel further would submit that the Judgment of the High

Court of Bombay is relating to the departmental labour who are regular

employees and it is no way connected to the workers engaged under

DPS. It is contended that the impugned proceedings have been issued

contrary to the MoU and circulars of management issued from time to

time, only if the workers are surplus, they can be transferred. It is stated

that when there are no surplus labour, the question of transfer does not

arise.

8. Learned Senior Counsel further would submit that there are

no service conditions framed for DPS workers and their employment is

13

purely covered by agreements between the Union and the Management

and as per Section 18 of the Industrial Disputes Act, 1947

3

the

settlement between the Union and Management is binding on both the

parties. Learned Senior Counsel would further submit that they have not

challenged the policy decision since the guidelines cannot supersede

the law i.e., agreement between the parties.

9. Per contra, Sri K.S. Murthy, learned Senior Counsel

appearing for Respondent Nos., 1 and 2 would submit that to procure

food-grains the respondent No.1 for the purpose of loading and

unloading they engaged labour in four types and that the DPS workers

are directly paid by FCI with minimum wages, even if there is no work

on a particular day to ensure that the workers are not put to any

deprivation of any monetary benefit. Learned counsel would further

submit that the Corporation has every right to transfer the DPS workers,

vide the Judgment of High Court of Bombay. It is stated that earlier, the

procurement was entrusted to FCI, but now it is with the State

Government. It is also stated that no mala fides are attributed touching

the impugned proceedings and that the wage and seniority are

protected. Learned Senior Counsel would further state that the policy

based on which, the transfers were proposed are not under challenge

and that by the impugned proceedings, they have given choice to the

employees also. Learned senior counsel further highlighted that the

3

For short, I.D. Act

14

interim order was granted based on the interim order of the High Court

of Calcutta, whereas finally the same stood vacated.

10. Learned Senior Counsel further would submit respondent

No.1 rightly issued the impugned proceedings and that considering the

orders of the High Court of Bombay Bench at Nagpur, Government of

India has issued the Notification dated 06.07.2016 exempting 226

notified depots as per Section 31 of the Contract Labour for

Regularisation and absorption, 1970. Accordingly, 16 depots in Andhra

Pradesh and Telangana State Governments stand de-notified under the

provisions of the Contract Labour Act. In view of the exemption granted,

respondent No.1 issued circular framing guidelines for implementation

of the notification. By virtue of the Circular, Area Manager is competent

to rationalise the exact man power to avoid other payment expenditure

to minimise the expenditure.

11. Learned Senior Counsel further would submit that in the

process of rationalisation, it is proposed to transfer DPS labours from

the remaining depots to eight FCI depots i.e., Pennada, Dhowleswaram,

Gudivada and Chirala, Kazipet, Zammigunta, Miryalaguda, from the

Telangana State. Area managers are informed vide impugned Order

that the FCI has decided to rationalise the DPS system in eight depots

accommodating the workers working in other 16 depots. Learned

senior counsel further would submit that even in case of transfer of such

DPS workers, the High Courts of Allahabad, Mumbai and Madras have

15

not interfered. In the present case, the Area Managers have called for

the option of DPS workers and only the workers who have given their

options regarding their place of choice are to be accommodated in the

respective depots.

12. Learned Senior Counsel finally would submit that when the

transfer is based on the choice of workers to a particular place, and

there cannot be any problem or inconvenience to the workers as it is not

the case of coercive transfer of workers to any depots. He would submit

that the W.P. is misconceived and premature and that the proposal of

respondent No.1 in rationalising the DPS workers is only to the suit the

administrative convenience and to minimise the avoidable expenditure

and that there is every necessity to implement the policy decision.

Accordingly, prays for dismissal of the W.P.

13. I.A.No.4/2023 has been filed by the petitioners, who are DPS

workers (29 workers) of respondent-Corporation seeking to implead

them as respondents in the present writ petition. Dr. Majji Suri Babu,

learned counsel representing the petitioners would submit that the

petitioners were transferred to Telangana State prior to the impugned

order. Subsequent to impugned order, because of the interim

suspension, their request is not considered for transfer. These

petitioners, who are the workers, though support the case of

Respondent No.1 on the policy of rationalisation, in moving the DPS

workers from one place to other. Learned counsel would submit that the

16

Court may pass appropriate orders relating to their impleadment in the

present I.A. With the consent of the learned counsel representing both

the parties, this petition is taken up for hearing, along with the main

W.P.

Point for Determination

14. Having heard the submissions and on perusal of the material on

record, the point that would emerge for determination is:

Whether the DPS workers cannot be transferred and whether

the proposal of transfer vide impugned proceedings is

contrary to the Memorandum of Settlement and Circulars

issued by the FCI from time to time?

Consideration by the Court

15. Instant Writ Petition under Article 226 of the Constitution of India

has been filed by the FCI Workers‟ Union represented by its founder

and General Secretary, seeking to declare the action of the respondents

in transferring the DPS Labourers working with FCI Depots of Andhra

Pradesh and Telangana States in eight depots on the ground of

rationalisation, vide letter through DPS/4/10/2015-Vol-II dated

12.01.2018. Initially an interim stay has been granted in this matter

which is extended until further orders.

16. Needless to say, FCI deployed the labour for handling

operations of food-grain bags at their depots under various systems.

For ready reference, different types of labour systems are given below:

17

i. Departmental Labour System

ii. Direct Payment System

iii. No Work No Pay System

iv. Contract Labour System

17. On the basis of a report published in Times of India newspaper,

the Nagpur Bench of the Bombay High Court took up a suo moto

action,

4

noticing that certain workmen were receiving monthly wages in

the tune of Rs.4 lakhs, whereas some received Rs.10,000/- . After

considering the submissions made, the court directed the Government

of India to consider the request made by FCI as per Section 31 of CL

(R& A) Act, 1970 seeking exemption to some depots so as to enable

them to engage contract labourers to minimise the loss and

unnecessary expenditure. The Bench had also issued a slew of

directions. The relevant portions of the order are;

"30. In that view of the matter, we dispose of the present

Public Interest Litigation by passing the following order:

(i) The Government of India is directed to decide the

representation made by the Food Corporation of India for

grant of exemption under the provisions of Section 31 of the

said Act within a period of one month from today, in the light

of observations made by us hereinabove within a period of

one month from today.

(ii) The Government of India shall decide the issue regarding

de-notification of the depots of the Food Corporation of India,

in respect of which notification is issued u/s. 10 of the said

4

P.I.L.No.84/2014 Nagpur Bench, High Court of Judicature at Bombay. Para 30 dated

20.11.2015

18

Act, within a period of six months from today, in the light of

observations made by us hereinabove and the report of

M/s.Deloitt Consultancy and the report of High Level

Committee appointed by the Government of India itself.

(iii) We clarify that the respondent/Food Corporation of India

would be entitled to transfer the services of departmental

labourers from one depot to another subject to protecting

their salary and all other service conditions.

(iv) We also clarify that the respondent/Corporation would be

at liberty to implement its policy of change in the Scheme of

incentives.

(v) The Government of India shall also take a decision

regarding abolition of system of departmental labourers in a

phased manner or absorbing their services in other

establishments as recommended by the High Level

Committee."

(emphasis supplied)

18. In pursuance and in compliance of the directions issued by the

High Court of Bombay, Nagpur Bench, the Government of India

granted exemption to FCI to engage contract labourers wherever

necessary. Now because of the exemption, FCI can engage contract

labour in any of their depots according to their necessity. Of course, this

exemption is not a permanent one and it is only to meet the

administrative exigencies for a particular period of time. It is represented

that from to time, the Government of India has been pleased to exempt

Section 31 of CL (R& A) Act, 1970 to FCI to engage Contract labourers.

19. It is not out of place to mention that in S.L.P. preferred against the

order of the Bombay High Court, the Supreme Court vide an order

19

dated 31.07.2017, while holding that there are no grounds to interfere

with the same, made it clear that any order passed pursuant to the

directions from the High Court‟s order dated 20.11.2015 could be

challenged in appropriate proceedings, before appropriate court and the

adjudication thereupon has to be made uninfluenced by observations in

the High Court‟s order.

20. At this juncture, it is relevant to refer to the contention presented

by the petitioner that the judgment of the Nagpur Bench of the Hon‟ble

Bombay High Court does not deal with the aspect of the transfers

concerning DPS workers. It is beneficial to extract the para-27, which

reads thus;

"27. We also fail to understand as to why the departmental

labourers should not be transferred from one depot to

another depot. As could be seen from the judgment of the

Apex Court in the case of Food Corporation of India Worker's

Union Vs. Food Corporation of India and others (Writ Petition

(Civil) No.222 of 1984, dated 20th July, 1990) reported in

1990-II-LLN-664/1990 (Supp) SCC 296, it was the contention

of the said Corporation that there cannot be similar wages at

different depots since services of the departmental labourers

were not transferable. The said contention has been rejected

by Their Lordships of the Apex Court. By now it is a settled

principle of law that transfer is an incidence of service. When

wages and all other service conditions of departmental

labourers working at different depots are identical, we see no

reason as to why their services could not be transferred from

one depot to another. As has been submitted by the

20

Corporation, 1594 departmental labourers are getting salary

without any work; whereas at some of the depots, there is

huge deficiency of labourers.”

(emphasis supplied)

21. No doubt, the judgment of the High Court of Bombay,

Nagpur Bench is relating to the departmental labourers, who are regular

employees of FCI. The fact remains that though the labourers working

under DPS, are not regular departmental workers and for all purposes

their relation with the Corporation is permanent in nature. It is an

undisputed fact that irrespective of the availability of the work, FCI has

to pay minimum wages to DPS workers.

22. On this point, it is beneficial to refer to the decision

rendered by the learned Single Judge of the Kerala High Court in FCI

Workers Union and others v. Food Corporation Of India and

others.

5

“6. In so far as the first contention raised by the petitioners,

apparently, it is footed on Bombay High Court judgment aswell

as to nature of engagement. This Court is of the view that the

Bombay High Court did not deal with any issue relating to the

transfer. The observation made in paragraph 27 of Bombay

High Court judgment as to the transfer of departmental labourer

obviously with reference to maximise utilisation of departmental

labourer to minimise the loss by transferring them to a depot

where there is man power shortage. In fact in order to minimise

the loss, the Bombay High Court directed the Union of India to

consider the request of the FCI for de-notification. Now the

action taken to transfer is a consequential act to streamline their

5

High Court of Kerala W.P.(C)No.35398/2016 and batch ---dated 13.01.2017

21

business. Therefore, the only question is whether the DPS

workers can be transferred or not. In fact this issue is covered

against the petitioners by the judgment of the Division Bench of

this Court in W.A No.376 of 2003. In paragraph 11 and 12 of the

judgment of the Division Bench, it was held as follows:

"11. On behalf of the appellants it has been contended that if

transfers are ordered, the workmen would find it difficult to shift

to new places of posting. Being poor, they will not be able to

afford accommodation or to look after their families.

12. The difficulty of the workmen may be genuine. Though no

details in this behalf have been furnished in the pleadings, yet,

their anguish can be imagined. However, even if it is assumed

that there is some difficulty, the only way for the Corporation

would be to terminate the services of the workmen who are

surplus. If this were to be done, the hardship will be even more.

It is to promote the interests of the workmen that the

Corporation appears to have decided to adjust them at different

places. In case they do not wish to accept the offer, the

Corporation may be forced to stop employing them for their

daily work. In such situation, the workmen shall be rendered

jobless. It appears that the report of the Corporation was to

promote the interest of the workmen. In doing so, it did not

violate any protection which may have been guaranteed under

the Circular June 14, 1996.”

In the light of the binding judgment as above, I need not

further probe regarding the legality of the transfer of DPS

workers.”

(emphasis supplied)

23. It is an admitted fact that no transfer has been done so far but the

union attacked the impugned proceedings when a Circular has been

issued directing the authorities to obtain an option from the DPS

22

workers for their transfer to eight places which are identified to continue

DPS workers from 16 stations, which are de-notified under Section 31

of the Contract Labour (Regulation & Abolition) Act, 1970.

6

24. It is necessary to keep in mind that now this Court is dealing with

a challenge on the proposal of transfer relating to workers under DPS.

There is no dispute about the fact that the workers under this system

are paid piece rates on ASOR percentage basis in case of contracts.

Gang workers are paid actual amount of ASOR percentage for the

quantum of work done or the minimum guaranteed wage. It will be

revised by the Government of India after every six months.

25. The workers under DPS have been given the benefits of CPF in

addition to ex-gratia/PL/Gratuity/Workmen compensation/ paid weekly

off/notional holidays/sick leave/Medial first aid. ASOR percentage of

piece rate wages are being revised on 01.04 and 1.10 of every year

proportion to the increase in minimum daily wages. The DPS workers

scheme introduced pursuant to a settlement between the Union and

management of FCI in the year 1996. The labour under this system will

be directly paid by FCI. It is pertinent to mention here that even if there

is no work on a particular day, DPS workers are ensured with minimum

wages.

26. As referred to supra, apart from the statutory benefits, they are

also given service benefits. This Scheme also would ensure minimum

6

For short, CL (R& A) Act, 1970

23

wages to the workers. Pursuance to notification issued by the

Government of India dated 06.07.2016, 16 FCI depots in the combined

State of Andhra Pradesh were de-notified. Now these 16 depots can

engage contract labour to meet their necessity on a particular day. Out

of 8 depots, four depots are situated in the State of Andhra Pradesh and

four depots are situated in the State of Telangana working under DPS.

When these 8 FCI depots are not de-notified, FCI has to transfer the

workers from the remaining 16 depots which are de-notified by the

Government of India.

27. The main plank of challenge by the Petitioner against the

proposal of transfer of DPS workers is on the following grounds:

a. It is contrary to the Memorandum of Settlement and Circulars

issued by the Headquarters from time to time. Hence, general decision

of transfer cannot be taken into consideration.

b. The employment of DPS workers is covered purely by an

agreement, since no service conditions are framed for the DPS labour.

28. On the other hand, FCI contends that in the light of the

decision of the Government of India to de-notify certain depots under

Section 31 of CL (R&A) Act to minimise the loss and unnecessary

expenditure only to protect the interest of the corporation to save them

from huge demurrages for causing delay in unloading the products from

railway wagons, they have taken a decision to rationalise the issue. It

24

was further argued that viewed from any angle, it will not cause any

impediment or hurdle to the interest of DPS labour.

29. It is essential to refer to certain decisions of various High

Courts concerning the transfer of DPS workers in FCI, which are relied

on by the learned counsel for the Respondent.

30. In V.M. Madhusoodhanan v. Food Corporation Of India

and others

7

, a learned Single Judge of the Madras High Court dealt

with a batch of Writ Petitions impugning transfer orders. Reliance was

placed by the learned counsel for the Respondents on this. Petitioners

therein, who were working under the DPS with the FCI, contended that

their service conditions are not similar to that of the regular employees

as they are not appointed in a sanctioned post in regular time scale of

pay, therefore they cannot be treated on par with the regular employees

to effect transfers to far away depots. The High Court refused to

interfere with the transfer proceedings but has given a slew of

directions. The relevant paras from the judgment are as follows;

“18.Considering the arguments, this Court is of an opinion

that as per the submission made by the learned counsel

for the petitioners, the Standing orders as applicable to the

regular employees may not be applicable to the labourers

working under Direct Payment System. In this regard, it is

relevant to refer the provisions of the Industrial

Employment (Standing Orders) Central Rules 1946. The

Rules provide Model Standing orders, which is to be

7

Madras High Court --- W.P.No.18387/2018 and batch, dated 15.04.2019

25

followed in the absence of any approved Standing orders

in respect of the labourers working in various

establishments. As per the Model Standing order

contemplated in the above Rules, “A workman may be

transferred according to exigencies of work from one shop

or department to another or from one station to another or

from one establishment to another under the same

employer: Provided that the wages, grade, continuity of

service and other conditions of service of the workman are

not adversely affected by such transfer.”

19.It is emphatically contemplated under the provisions of

the Rules. There is no impediment for the management

to transfer a labour from one Station to another Station

or one Depot to another Depot. However, the

protection in respect of wages, grade, continuity of

service and other conditions of services, are to be

protected. Thus, transfer is permissible. However, on

transfer, the Direct Payment Labourers are protected

in respect of their salary and all other service

conditions.”

(emphasis supplied)

31. Learned Standing Counsel appearing for the Respondent

also relied on the decision rendered by a learned Single Judge of the

Madurai Bench of the Madras High Court in U. Sivamoorthy and

others v. Union of India and others,

8

wherein the issue of en bloc

transfer of the DPS employees was involved. The relevant portion of the

judgment reads as follows;

8

W.P.(MD) No.25867 of 2023 and batch, dated 11.01.2024, Madras High Court

26

“13.The learned Senior Counse l appearing for the

respondents had contended that the existing DPS labourers

at Tuticorin Food Corporation of India are not adequate to

handle the goods. Therefore, necessarily we have to

engage contract labourers. It will not be in the interest of

industrial peace to mix-up the contract labourers with DPS

workers. Therefore, they have chosen to transfer the DPS

employees en bloc to other needy depots. Therefore, it is

clear that the decision to transfer the existing DPS workers

at Tuticorin to a different depot has been taken due to

administrative exigency.

14.This Court is an agreement with the contention of the

learned Senior Counsel appearing for the respondent

Corporation, that in case DPS workers mix-up with the

contract workers, the industrial peace in the depot would get

affected. That apart, three learned Single Judges of this

Court have already taken a view that the Food Corporation of

India is entitled to effect transfer insofar as the DPS

employees are concerned. The en bloc transfer of DPS

employees from Tuticorin depot will clearly fortify the

contentions of the learned Senior Counsel appearing for the

respondents that the said decision has been taken due to

administrative exigency and considering the fact that the

industrial peace need to be protected at Tuticorin Depot.”

(emphasis supplied)

32. On the other hand, learned Senior Counsel appearing for

the Petitioners would submit that the judgment referred supra was

27

passed on the point of adequacy and that the present case is

distinguishable.

33. In Pawan Kumar and Others v. Union of India and

others

9

, a Division Bench of the Allahabad High Court has held as

follows;

“39. The prayer no.(iii) is for quashing of the order dated

30.10.2021 for En-bloc transfer of departmental labours from

Hapur Depot to Chanderi Kanpur Depot of the Food

Corporation of India.

Identical issue had earlier been cropped wherein En -bloc

transfer of employees from Naini Depot, Allahabad to

Manduwadih, Varanasi Depot of Food Corporation of India

was made and the same was challenged in Writ Petition

No.38560 of 2016 (Bhartiya Khadya Nigam Mazdoor Sangh

and 40 others vs. F.C.I. through its Chairman and three

others) before this Court, which was dismissed vide order

dated 26.09.2016. Hence, the impugned order dated

30.10.2021 being identical order, which has already been

upheld by the learned Single Judge of this Court and the order

passed by the learned Single Judge has not been challenged.

Hence, there is no reason for this Court to take a contrary view

or pass any order stopping the transfer to be made.

These transfers are made in administrative exigencies and no

Court should ever interfere with the transfer order until and

unless it is proved that the same has been made malafidely.

9

2023:AHC:237373-DB

28

Therefore, the prayer no.(iii) made in the writ petition cannot

be accorded.”

(emphasis supplied)

34. The conclusion that can be arrived on a bare reference to

the decisions referred supra is that the DPS labourers can be

transferred. Learned Senior Counsel for the Petitioner would contend

that it is not the situation in the instant case, in the light of the

Memorandum of Settlement and Circulars.

35. A reference to the Memorandum of Settlement dated

15.06.1994 relating to DPS labourer does not indicate anything relating

to their transfer. This Memorandum would only discuss about the

representation of SORs and guaranteed wages.

36. Coming to the instructions received from the Headquarters

to the Zonal Managers relating to Labour relations in FCI, it is

mentioned that the Headquarter has taken some steps to normalise

labour relations in FCI. Out of such steps, No.4 is relevant to this case

and it reads infra:

“4. Surplus labour from a depot should be transferred to

another depot under same labour system in the same district

by concerned Distt. Manager to meet shortfall of labour in a

particular depot. Similarly, transfer of surplus labour of any

depot of a Distt. To another depot of other Distt. within same

Region but under same labour system, will be done by SRM

concerned. The Zonal Manager will transfer the surplus

29

labour from any depot to one Region to any depot of other

Region in same Zone under same labour system.”

37. Coming to the guidelines dated 12.07.2018, with reference to a

policy decision, which has been taken by FCI for the rationalisation of

the labour system to minimise the loss and unnecessary expenditure,

for ready reference, it is essential to extract the following;

“v) The objective of rationalization of the labour strength is to

curtail the cost of incentive wages, therefore the pooling

should be done in such a manner that output per day of a

handling labour will remain ordinarily between 135-150 bags

on the peak day of loading/unloading of rakes.

vi) All the FCI workers currently working in CWC and SWC

godowns/hired depots/ Railheads need to be pooled in to

FCI's own depots and contract labour be deployed in their

place in case godowns are to be retained.

vi) As per existing instructions, workers under Departmental

and DPS category on their transfer by FCI, in the interest of

administration are entitled to get weightage of seniority at the

new place. It has been decided that till further order, Seniority

position of group of the workers of the gang transferred from

one depot to other, will not be disturbed and separate identity

of such workers will be maintained in the incoming depot so

that it does not jeopardize promotional avenues of the

workers already working in such depots.

viii) The surplus workers of one Region can be adjusted in

the depots of other regions of the Zone.

ix) In case option is given by the surplus workers of a Region

for transfer to the other Regions within the Zone the same

should be carefully considered by Zone and shifting them to

30

shortfall depots may be adhered under intimation to IR-L

division of FCI Hqrs.

x) Individual depot should have single labour system and in

no case labour of more than one system be engaged in one

depot.”

38. Learned Senior Counsel for the Petitioner would submit that the

Circular issued on 22.07.1996 would disclose surplus labour from one

depot to another depot should be transferred under the same labour

system, in case of any short fall, in a particular depot, but now, it is

proposed to transfer DPS workers as a general policy, disregarding the

surplus or short fall. This Court does not find any force in the said

contention for the reason that the purpose and object of rationalisation

is very clear in the light of the exemption obtained to avoid the loss and

unnecessary expenditure, the proposal of transfer is being made. Such

being the case, it cannot be said that the proposal of transfer itself is in

violation of the Memorandum of Settlement and consequent circulars.

FCI would ensure minimum wages to the workers under DPS even after

transfer.

39. The impugned proceedings are vivid to the effect that the option

does not disentitled DPS workers for their transfer benefits, seniority

and promotional avenues will be protected. FCI ensures wages,

incentives, service benefits and statutory benefits also. The only reason

for the proposal for rationalisation appears to be earlier the procurement

of the essential commodities lies with FCI, and now it is being taken

31

care of by the State government. As such, FCI would not get much work

to engage the labour under DPS. The reason being, on any particular

day, depending on the demand and necessity, if FCI engages contract

labour for that day, they need not pay anything except the wages on

that particular day. But now, when all depots of FCI are maintaining

DPS labour, even without extracting any work from them, FCI has to

pay minimum wages apart from the service benefits. In that view of the

matter, this Court is of the considered opinion that the proposal of

transfer is not contrary to the settlement and the Circulars issued by FCI

from time to time.

40. Furthermore, I.A.No.4 of 2023 has been filed by 29 Petitioners

urging this Court to vacate the stay order since they want transfer. It is

stated that because of the stay order, FCI could not attend their request

and no transfer has been made so far and no worker has approached

the Court expressing their difficulty to move from one place to another,

contrary to it, the workers approached the Court seeking vacation of the

interim order of stay granted against the impugned proceedings.

41. As rightly observed by the High Court of Kerala, which is referred

to supra, the only recourse left to the corporation is to termination of the

service of the workmen, who are surplus. If it is done, the workers will

have to face more hardship than in case of a transfer. The proposal of

transfer appears to be keeping in mind, the interest of the workers

under DPS and to avoid this situation, where, they shall remain jobless.

32

42. Coming to the question of hardship to the workers because of

rationalisation, as stated supra, they are assured with minimum

guaranteed wages even if there is no work on any day, they will be paid

according to the actual quantum of work done. Even if there is no work

to be done, they will be paid Minimum guaranteed wages. The fact

remains that they are not the regular employees till this time and the

FCI has to see the DPS workers cannot be deprived of any monetary

benefits in the light of their transfer from one depot and another depot.

Furthermore, no challenge is made in the present petition against the

policy decision of transfer for the purpose of rationalisation as rightly put

by the learned Senior Counsel for the respondents. It is in fact, a

premature one impugning the proposal of transfer.

43. The Hon‟ble Apex Court in Mohd. Masood Ahmad v. State of

U.P. and others,

10

outlined the scope of interference that can be

exercised by this Court in the matters concerning transfers as follows;

"7.........Following the aforesaid principles laid down by

the Supreme Court, the Allahabad High Court in Vijay Pal

Singh v. State of U.P, (1997) 3 ESC 1668, and Onkar

Nath Tiwari v. Chief Engineer, Minor Irrigation Dept.,

(1997) 3 ESC 1866, has held that the principle of law laid

down in the aforesaid decisions is that an order of

transfer is a part of the service conditions of an employee

which should not be interfered with ordinarily by a court of

law in exercise of its discretionary jurisdiction under

Article 226 unless the court finds that either the order is

10

(2007) 8 SCC 150

33

mala fide or that the service rules prohibit such transfer,

or that the authorities who issued the orders, were not

competent to pass the orders.”

(emphasis supplied)

44. Thus, the interference of this Court in the course of a

transfer can only be in cases, where it is clothed by mala fide, in

violation of the service rules or when passed by incompetent authority.

Basing on the discussion supra, it is clear that transfer of DPS workers

is not beyond the authority. Moreover, in the present case, no worker

has been transferred to any place against their will and wish. Therefore,

as far as the impugned order, this Court is not inclined to interfere with

the same. In that view, the Writ Petition is devoid of merits and is liable

to be dismissed. Accordingly Point Answered.

45. Be that as it may, this Court is of the view that in case of

any real personal difficulty, opportunity has to be given to the DPS

worker to represent the same and FCI should consider such cases,

subject to the genuineness of the objection, as per the governing rules.

46. With the above observations, the Writ Petition is dismissed.

No order as to costs.

As a sequel, pending Interlocutory Applications, if any, shall stand

closed.

JUSTICE VENKATA JYOTHIRMAI PRATAPA

18.06.2024

Mjl/*

LR copy to be marked

34

HON’BLE SMT. JUSTICE VENKATA JYOTHIRMAI PRATAPA

Writ Petition No. 8255 of 2018

18.06.2024

Mjl/*