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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 3727 OF 2015

(Arising out of SLP (C) No. 5532 of 2012)

ONGC LTD. ....APPELLANT

VERSUS

PETROLEUM COAL

LABOUR UNION & ORS. ...RESPONDENTS

J U D G M E N T

V. GOPALA GOWDA, J.

Leave granted.

2. The appellant-Corporation has questioned the

correctness of the judgment and order dated 11.08.2011

passed by the High Court of Judicature at Madras

whereby the High Court dismissed the Writ Appeal No.

1006 of 2011 filed by the appellant-Corporation against

the dismissal of their W.P. No. 1846 of 2000

Page 2 2

challenging the award dated 26.05.1999 passed by the

Industrial Tribunal, Tamil Nadu, in I.D. No.66 of 1991,

wherein it was held that non-regularisation of the

concerned workmen in the dispute is not justified and

directed the appellant-Corporation to regularise the

services of the concerned workmen with effect from

14.01.1990, the date on which all of them completed 480

days.

3. The relevant facts are briefly stated hereunder to

appreciate the rival legal contentions urged on behalf

of the parties in this appeal.

The appellant-Corporation is a Public Sector

Undertaking of the Government of India in the name of

Oil and Natural Gas Corporation Limited (hereinafter

referred to as the ‘Corporation’). The Corporation has

a project in the Cauveri Basin, situated in and around

Karaikal, Union Territory of Puducherry and about 1050

employees have been regularly employed by the

Corporation for its project. For the purpose of the

Corporation’s security requirement for the project, it

initially employed the concerned workmen some of whom

are members of the respondent-Union, as security guards

Page 3 3

and security supervisors through contractors. However,

on the notification dated 08.12.1976 issued by the

Government of India under Section 10(1) of the Contract

Labour (Abolition and Regulation) Act, 1970, abolishing

contract labour for watch and ward, dusting and

cleaning jobs in the Corporation, the concerned workmen

were employed as per the settlement arrived at between

the Trade Union and the Management of the Corporation

under Section 18(1) of the Industrial Disputes Act,

1947 (for short ‘the Act’), under which it was agreed

to form a Co-operative Society in the name of ‘Thai

Security Service Priyadarshini Indira Cooperative

Society’ (for short ‘the Co-operative Society’) for the

welfare of such erstwhile contract workmen. The

services were utilised by the Corporation through the

Co-operative Society to meet its requirements and for

the time period for which required, thus dispensing

with intermediary contractors.

4. On 24.11.1982 subject to sanction by the

Government of India, the Corporation passed a

resolution by its policy decision to entrust security

work to the Central Industrial Security Force (CISF) to

Page 4 4

protect their installations. The said resolution was

sanctioned by the President of India on 16.12.1985 for

creation of posts for security coverage of the

Corporation.

5. This decision of the Corporation was challenged by

the Tamilnadu National Industrial and Commercial

Employees Union by filing W.P. No. 9688 of 1987 and

W.P. No. 11964 of 1987 was filed by the Petroleum

Industrial Casual Contract Labour Union before the High

Court of Madras on the ground of breach of settlement

arrived at under Section 18(1) of the Act and prayed

for a consequential direction to absorb the workmen as

regular employees. The workmen obtained an interim

order dated 6.10.1987 restraining the Corporation from

dispensing with the services of the workmen. The

learned single Judge of the High Court upheld the

policy decision of the Corporation even in the absence

of the copy of the policy framed by the Central

Government and dismissed the aforesaid writ petitions

vide order dated 5.1.1988 holding that the workers were

not entitled for regularisation and rejected the

contentions of the workmen in these writ petitions.

Page 5 5

6. On 8.9.1987, the Corporation sent a letter to the

Co-operative Society to withdraw the services of the

security personnel of the Co-operative Society w.e.f.

19.10.1987 after handing over charge of the Corporation

Unit to CISF personnel. An order was passed by the

Director General, CISF, releasing 52 posts with

immediate effect for induction of CISF personnel in the

Corporation.

7. Thereafter, since the induction of the CISF

personnel into security posts of the Corporation was

still awaiting sanction from the Central Government,

the Corporation issued memorandum of appointment

directly to each one of the concerned workmen

appointing them in the posts of ‘Watch and Ward

Security’ on term basis from 13.1.1988 to 29.2.1988 and

also on the condition that the ‘Certified Standing

Orders for Contingent Employees of the Oil and Natural

Gas Commission’ (for short ‘the Certified Standing

Orders’) will not apply to them. The concerned workmen

were paid a monthly salary of approximately Rs.445/-

per month to security guards and Rs.675/- per month to

security supervisors. After completion of the above

Page 6 6

mentioned term, the concerned workmen were continued by

the Corporation in their respective posts as a stop gap

measure without formal written orders. As a result of

which, the concerned workmen who were engaged through

contractors and those who were members of the Co-

operative Society became employees of the Corporation

on temporary basis.

8. Thereafter, the concerned workmen raised an

industrial dispute claiming regularisation of their

services in the Corporation and on 10.10.1991, the

Central Government in exercise of its power under

Section 10 of the Act, 1947 referred the same to the

Industrial Tribunal, Chennai, Tamil Nadu (for short

‘the Tribunal’) to adjudicate the dispute on the

following two questions:

“(i) whether the management of ONGC is

justified in not regularising the workmen in

the instant dispute, and, if not, to what

relief the workmen are entitled to?

(ii) whether the management of ONGC is

justified in not paying equal wages to the

workmen in the instant dispute on par with

that of the regular workmen and, if not, to

what relief the workmen are entitled to?”

9. The reference was taken on file by the Tribunal as

I.D. No.66 of 1991. On 28.04.1993, the Trade Union

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filed a memo stating that question no.(ii) of the

dispute had been settled out of Court and no further

adjudication was required in that regard by the

Tribunal. The Tribunal, adjudicated the industrial

dispute on question no.(i) referred to it on the basis

of facts, circumstances and evidence on record and

passed an award dated 26.05.1999, directing the

Corporation to regularise the services of the concerned

workmen by relying on the legal principles laid down by

this Court in the case of Air India Statutory

Corporation & Ors. v. United Labour Union & Ors.

1

and

further held that the concerned workmen were entitled

for regularisation of their services since they had

completed 480 days of work as required under Tamil Nadu

Industrial Establishments (Conferment of Permanent

Status to Workmen) Act, 1981.

10.Aggrieved by the award passed by the Tribunal, the

Corporation challenged the same by filing W.P. No.1846 of

2000 before the learned single Judge, inter alia,

contending that the Tribunal has erroneously exercised

its jurisdiction and passed an award directing

the Corporation to regularise the services of the concerned

workmen. It was further contended by the Corporation

1 (1997) 9 SCC 377

Page 8 8

that the concerned workmen were originally engaged

through contractors, without following any procedure of

selection and appointment, therefore, their services

cannot be regularised. In support of this contention,

reliance was placed on the decision of this Court in

the case of Secretary, State of Karnataka & Ors. v. Uma

Devi (3) & Ors.

2

.

11.On behalf of the concerned workmen, it was

contended before the single Judge of the High Court

that the dispute falls within the jurisdiction of the

Tribunal under the provisions of the Act and that the

Tribunal had sufficient jurisdiction to adjudicate the

dispute referred to it. It was further contended on

behalf of the concerned workmen that they have been

working on temporary basis from the year 1988 and

continuing their services on temporary basis is an

unfair labour practice on the part of the Corporation.

Therefore, it was contended that the Tribunal was right

in directing the concerned workmen to be regularized

and that the law laid down in the case of Uma Devi

(supra) had no application to cases of industrial

adjudication.

2 (2006) 4 SCC 1

Page 9 9

12. The learned single Judge on appreciation of the

facts, circumstances and the legal contentions urged on

behalf of both the parties held that the dispute

between the parties regarding non-regularisation of the

concerned workmen falls within the scope of industrial

dispute as defined under Section 2(k) of the Act. It is

further held that the concerned workmen are all victims

of unfair labour practice having been employed by the

Corporation for several years on temporary basis and

even though they were not appointed by following the

procedure laid down by the Corporation for recruitment

to such posts, they were entitled for regularisation

and that their appointment cannot be stated to be

illegal. With the above findings, the writ petition was

dismissed on merits by the learned single Judge of the

High Court by its judgment and order dated 04.01.2011.

13.The said judgment and order of the learned single

Judge was challenged by the Corporation by filing Writ

Appeal No. 1006 of 2011 before the Division Bench of

the High Court raising certain questions of law. After

considering the facts, circumstances and nature of the

evidence on record which was placed before the Tribunal

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the same was appreciated by the learned single Judge,

the learned Division Bench of the High Court held that

the appointment of the concerned workmen by the

Corporation cannot be termed as illegal appointment,

but was only an irregular appointment and therefore,

they were entitled for regularisation in their services

having been employed on temporary basis and having

completed more than 240 days in the calendar year

subsequent to 13.1.1988. Therefore, it was held by the

learned Division Bench of the High Court that no

justifiable or reasonable grounds were found for it to

interfere with the judgment and order passed by the

learned single Judge of the High Court. The writ appeal

of the Corporation was dismissed accordingly. Hence,

the Corporation filed this appeal by framing certain

substantial questions of law for consideration of this

Court.

14.It has been contended by Mr. P.P. Rao, the learned

senior counsel for the Corporation that the concerned

workmen have no right to be regularised as they have

been appointed on term basis without following due

procedure as per the Recruitment and Promotion

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Regulations, 1980 of the Oil and Natural Gas

Commission. The direction contained in the award of the

Tribunal to regularise the workmen w.e.f. 1.4.1990 is

contrary to the law declared by the Constitution Bench

of this Court in Secretary, State of Karnataka v. Uma

Devi (supra) having regard to the following aspects of

the case on hand:

a)The appointments of workmen were illegal not

irregular, as they were made without proper

competition among qualified persons

b)The concerned workmen do not possess the

qualifications and training required for

discharging duties as security guards against

attacks by armed gangs or terrorists.

c)They were not working against sanctioned

posts.

d)The sanction obtained subsequently was only

for deployment of members of the CISF.

e)The concerned workmen were, as a stop gap

arrangement, though not qualified but found

physically fit, were employed for a short

period anticipating the posting of CISF

personnel.

f)They were not allowed to continue voluntarily

by the management without intervention of any

mandatory provision of law or orders of

Tribunal and Courts. They could not be

discharged and had to be allowed to continue

only on account of legal compulsion, i.e.

33(1) of the I.D. Act 1947 and the interim

orders of the learned single Judge and the

Division Bench.

g)The management cannot be compelled by judicial

order to regularise the services of

Page 12 12

unqualified and untrained workmen as security

guards for discharging duties which only

qualified and trained members of an organised

armed force could competently discharge.

15.Further, it has been contended by Mr. Rao that in

any event, since the workmen themselves having sought

regularisation only from 1.4.1991, the Tribunal was not

at all justified in directing regularisation with

effect from 1.4.1990 and the High Court also erred in

directing regularisation of workmen with retrospective

effect from 1.4.1990.

16.It is further contended by him that the award of

the Tribunal is unsustainable in law by placing

reliance on Air India Statutory Corporation (supra)

which has been subsequently overruled by the

Constitution Bench in Steel Authority of India Ltd. &

Ors. v. National Union Waterfront Workers & Ors.

3

. In

fact, the concerned workmen were not contract labourers

when the industrial dispute was referred to the

Tribunal for its adjudication.

17.It has been further contended by him that the

courts below have erred in holding that though the

3 (2001) 7 SCC 1

Page 13 13

procedure contemplated in the Certified Standing Orders

of the Corporation was not followed when the workmen

were appointed on temporary basis they are still

entitled for regularisation in their services by the

Corporation. It is further contended by the learned

senior counsel that the very appointment itself having

been illegal, no order of regularisation of the

services of the concerned workmen could be passed by

the Tribunal. The Corporation would term the

appointment of the concerned workmen as illegal

appointment as they were appointed in the said post

either through a contractor or through the Co-operative

Society, without following the procedure contemplated

for selection as per the Recruitment Rules and

appointments were given to the concerned workmen as per

the Certified Standing Orders of the Corporation. In

support of the said contention reliance was placed on

the decision of this Court in the case of Uma Devi

(supra). Further, it has been contended by him that the

law declared in the case of Maharashtra State Road

Transport Corporation & Anr. v. Casteribe Rajya

Parivahan Karamchari Sanghatana

4

was per incuriam as

4 (2009) 8 SCC 556

Page 14 14

the same is inconsistent with the earlier coordinate

Bench decision in U.P. Power Corporation Ltd. & Anr. v.

Bijli Mazdoor Sangh & Ors.

5

wherein it was declared

that the Tribunal cannot give relief to the workmen

which is violative of Article 14 of the Constitution of

India and the concept of regularisation explained in

Uma Devi’s case (supra).

18.Further, it has been contended that the Certified

Standing Orders cannot prevail over Uma Devi’s case or

Article 14 of the Constitution of India; therefore, the

concerned workmen cannot rely upon such orders to seek

regularisation. In any case, the Certified Standing

Orders only confer the right of consideration and

therefore, it is not a vested right for the concerned

workmen for regularisation in their services. The

reliance placed on the Certified Standing Orders by

them is misconceived, hence the award and judgments are

vitiated in law and liable to be set aside by allowing

this appeal.

19.On the other hand, Mr. C.U. Singh, the learned

senior counsel on behalf of the concerned workmen has

5 (2007) 5 SCC 755

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strongly rebutted each one of the above contentions put

forth by Mr. Rao the learned senior counsel on behalf

of Corporation, by erroneously placing reliance on the

right of the Corporation to implement the alleged

“policy decision” to induct the CISF personnel in the

posts of the Corporation inter alia contending that it

is an admitted position that this opening ground taken

by the Corporation was neither canvassed before the

learned single Judge nor the Division Bench of the High

Court. Nonetheless, it is to be noted that while

raising this ground, the Corporation has not placed on

record any document evidencing the so-called “policy

decision” of the Central Government to induct the CISF

personnel in the posts of the Corporation.

20.Mr. Santosh Krishnan, the learned counsel also

appearing for the concerned workmen has contended that

a “policy decision” cannot alter the Certified Standing

Orders of the Corporation except in terms of Section 10

of the Standing Orders Act, 1946. Further, it is urged

by him that the only relevant document on record is the

letter dated 8.9.1987, which states that the “policy

decision” is of the Central Government and not of the

Page 16 16

Corporation. However, the Corporation did not even

amend its Recruitment Rules or Certified Standing

Orders to implement this “policy decision” only to

recruit the CISF personnel for Watch and Ward Services

posts of the Corporation. This has been further

affirmed by the Tribunal in its findings of fact that

the said defence of the Corporation is only a ruse. The

Tribunal has held while answering the question referred

to it in the order of reference that the “policy

decision” taken by the Corporation is a misnomer as the

Corporation may be controlled by the Central

Government, however, by no means does it enjoy the

power or the privilege to make any policy decisions as

understood by the courts below. Merely by

characterising an act or omission as a “policy

decision” does not absolve the Corporation from acting

in accordance with law and regularise the services of

the concerned workmen as regular workmen as per Clause

2(ii) of the Certified Standing Orders of the

Corporation.

21.Further, on the contention of the Corporation that

the Judgment and order dated 5.1.1988 in W.P. Nos. 9688

Page 17 17

of 1987 and 11964 of 1987 forecloses the rights of the

concerned workmen, it is rebutted by the learned senior

counsel on behalf of the concerned workmen that the

said ground was not canvassed either before the learned

single Judge or the Division Bench of the High Court. A

perusal of judgment and order would reveal that none of

the concerned workmen, specifically the answering

respondents were party to the aforesaid proceedings and

the Corporation itself claimed that only “some of the

respondent workmen had filed W.P. No.9688 of 1987 for

absorption”. Further, it is urged by him that assuming

without conceding that judgment and order dated

5.1.1988 in W.P. Nos. 9688 of 1987 and 11964 of 1987

related to regularisation of the concerned workmen, a

crucial fact separates those proceedings from the

present proceedings as the Corporation on 13.1.1988

admittedly ordered in favour of the workmen by

appointing them on “term basis”. As a result of such

appointment orders issued in favour of each one of the

concerned workmen, they became employees of the

Corporation albeit on “term basis”, therefore, the

industrial dispute raised by the concerned workmen

acquired different rights than the challenge in W.P.

Page 18 18

9688 and 11964 of 1987. It is further urged that the

above submission can also be seen in the light of the

Certified Standing Orders of the Corporation, wherein

the employees such as the concerned workmen can claim

regularisation once they fulfil 240 days of continuous

service in twelve calendar months and possess minimum

qualification. The concerned workmen were found to have

completed 240 days of work in a calendar year

subsequent to 13.1.1988, therefore, the judgment and

order dated 5.1.1988 in W.P. Nos. 9688 of 1987 and

11964 of 1987 do not bear any relevance to this

litigation as the legal status of the parties stood

modified subsequent to the said judgment. Further, the

judgment rendered by the High Court in W.P. Nos. 9688

of 1987 and 11964 of 1987 without the policy decisions

of the Central Government being produced and examined

in those proceedings, any observation made in that

regard is wholly untenable in law.

22.Further, it is contended by the learned counsel

for the concerned workmen that the Corporation cannot

disclaim the legality of its own Certified Standing

Orders by stating that it cannot prevail over Uma

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Devi’s case (supra) or Article 14 of the Constitution

and that the Standing Orders only confer the right of

consideration and not a vested right for

regularisation. It is contended by him that for the

last 24 years, the Corporation has not considered and

in any case will not consider the concerned workmen for

regularisation to the post of the Corporation if the

same is left to their own discretion. Further, it is

urged by him that failure to honour the Standing Orders

for so many years is what constitutes “unfair trade

practice” on the part of the Corporation in the present

case.

23.Rebutting the contention urged on behalf of the

Corporation that the concerned workmen are not

qualified to be regularized, it has been contended by

the learned senior counsel for the concerned workmen

that the Tribunal has noted that the concerned workmen

are far more qualified than the existing security

personnel of the Corporation and that they are

qualified to be appointed as security guards and

supervisors, except one of them. The learned counsel on

behalf of the concerned workmen contended that the

Page 20 20

Recruitment Rules are not amended prescribing that only

the CISF personnel are qualified for guard work.

24.It is further contended by him that in the case of

Uma Devi(supra), this Court had the occasion to deal

with the issue of “litigious employment”. Admittedly,

the concerned workmen were voluntarily appointed by the

Corporation initially on term basis. It is by virtue of

Section 33 of the Industrial Disputes Act that the

Corporation is prevented from terminating the

employment of the concerned workmen during the pendency

of the industrial dispute. The decision of the Tribunal

was rendered on 26.05.1999 and during the period 1990-

1999, the concerned workmen did not enjoy any litigious

employment but were beneficiaries of a statutorily

mandated protection and the Corporation has the right

under Section 33(i)(a) of the Act to seek permission

from the conciliation officer/Tribunal to remove them

from their services but that has not been done by it.

Therefore, it would be an improper and misleading

contention of the Corporation to describe this scenario

as litigious employment, which contention of it does

not stand for judicial scrutiny of this Court.

Page 21 21

25.We have heard the factual and rival legal

contentions urged by the learned senior counsel on

behalf of both the parties and answer the same as

discussed below.

26.Whether jurisdiction of the Tribunal to direct the

Corporation to regularise the services of the concerned

workmen in the posts is valid and legal?

The Central Government in exercise of its powers

under Section 10 of the Act referred the existing

Industrial Dispute between the concerned workmen and

the Corporation to the Tribunal which rightly

adjudicated point (i) of the dispute (supra) on the

basis of the facts, circumstances and evidence on

record and passed an award dated 26.5.1999 directing

the Corporation that the services of the concerned

workmen should be regularised with effect from the date

on which all of them completed 480 days, subsequent to

their appointment by the memorandum of appointment. The

contention urged on behalf of the Corporation that the

Tribunal has no power to pass such an award compelling

the Corporation to regularise the services of the

concerned workmen is wholly untenable in law. Even if

Page 22 22

we consider the same, the said contention is contrary

to the legal principles laid down by this Court in the

case of Hari Nandan Prasad & Anr. v. Employer I/R To

Management of Food Corporation of India & Anr.

6

,

wherein the decisions in U.P. Power Corporation v.

Bijli Mazdoor Sangh & Ors. and Maharashtra Road

Transport Corporation v. Casteribe Rajya Parivahan

Karamchari Sanghathana and Uma Devi (all referred to

supra) were discussed in detail. The relevant

paragraphs are extracted hereunder:

“25. While accepting the submission of the

appellant therein viz. U.P. Power Corpn., the

Court gave the following reasons: ( U.P. Power

Corpn. Case, SCC pp. 758-59, paras 6-8)

“6. It is true as contended by the learned

counsel for the respondent that the question

as regards the effect of the industrial

adjudicators’ powers was not directly in

issue in Umadevi case. But the foundational

logic in Umadevi case is based on Article 14

of the Constitution of India. Though the

industrial adjudicator can vary the terms of

the contract of the employment, it cannot do

something which is violative of Article 14.

If the case is one which is covered by the

concept of regularisation, the same cannot be

viewed differently.

7.The plea of the learned counsel for the

respondent that at the time the High Court

decided the matter, decision in Umadevi case

was not rendered is really of no consequence.

6 (2014) 7 SCC 190

Page 23 23

There cannot be a case of regularisation

without there being employee-employer

relationship. As noted above the concept of

regularisation is clearly linked with Article

14 of the Constitution. However, if in a case

the fact situation is covered by what is

stated in para 45 of Umadevi case the

industrial adjudicator can modify the relief,

but that does not dilute the observations

made by this Court in Umadevi case about the

regularisation.

8.On facts it is submitted by the learned

counsel for the appellants that Respondent 2

himself admitted that he never worked as a

pump operator, but was engaged as daily

labourer on daily-wage basis. He also did not

possess the requisite qualification. Looked

at from any angle, the direction for

regularisation, as given, could not have been

given in view of what has been stated in

Umadevi case.”

It is clear from the above that the Court

recognized the underlying message contained in

Umadevi case to the effect that regularisation of

a daily-wager, who has not been appointed after

undergoing the proper selection procedure, etc.

is impermissible as it was violative of Article

14 of the Constitution of India and this

principle predicated on Article 14 would apply to

the Industrial Tribunal as well inasmuch as there

cannot be any direction to regularise the

services of a workman in violation of Article 14

of the Constitution. As we would explain

hereinafter, this would mean that the Industrial

Court would not issue a direction for

23regularising the services of a daily-wage

worker in those cases where such regularisation

would tantamount to infringing the provisions of

Article 14 of the Constitution. But for that, it

would not deter the Industrial Tribunals/Labour

Courts from issuing such direction, which the

industrial adjudicators otherwise possess, having

Page 24 24

regard to the provisions of the Industrial

Disputes Act specifically conferring such powers.

This is 24 recognized by the Court even in the

aforesaid judgment.

XXX XXX XXX

30. Detailed reasons are given in support of the

conclusion stating that the MRTU and PULP Act

provides for and empowers the Industrial/Labour

Courts to decide about the unfair labour practice

committed/being committed by any person and to

declare a particular practice to be unfair labour

practice if it so found and also to direct such

person to cease and desist from unfair labour

practice. The provisions contained in Section 30

of the MRTU and PULP Act giving such a power to

the Industrial and Labour Courts vis-à-vis the

ratio of Umadevi are explained by the Court in

the following terms: ( Maharashtra SRTC case , SCC

pp. 573-74, paras 32-33 & 36)

“ 32 . The power given to the Industrial and

Labour Courts under Section 30 is very wide

and the affirmative action mentioned therein

is inclusive and not exhaustive. Employing

badlis, casuals or temporaries and to

continue them as such for years, with the

object of depriving them of the status and

privileges of permanent employees is an

unfair labour practice on the part of the

employer under Item 6 of Schedule IV. Once

such unfair labour practice on the part of

the employer is established in the complaint,

the Industrial and Labour Courts are

empowered to issue preventive as well as

positive direction to an erring employer.

33 . The provisions of the MRTU and PULP Act

and the powers of the Industrial and Labour

Courts provided therein were not at all under

consideration in Umadevi . As a matter of

fact, the issue like the present one

Page 25 25

pertaining to unfair labour practice was not

at all referred to, considered or decided in

Umadevi . Unfair labour practice on the part

of the employer in engaging employees as

badlis, casuals or temporaries and to

continue them as such for years with the

object of depriving them of the status and

privileges of permanent employees as provided

in Item 6 of Schedule IV and the power of the

Industrial and Labour Courts under Section

30 of the Act did not fall for adjudication

or consideration before the Constitution

Bench.

XXX XXX XXX

36. Umadevi does not denude the Industrial

and Labour Courts of their statutory power

under Section 30 read with Section 32 of the

MRTU and PULP Act to order permanency of the

workers who have been victims of unfair

labour practice on the part of the employer

under Item 6 of Schedule IV where the posts

on which they have been working exist.

Umadevi cannot be held to have overridden

the powers of the Industrial and Labour

Courts in passing appropriate order under

Section 30 of the MRTU and the PULP Act,

once unfair labour practice on the part of

the employer under Item 6 of Schedule IV is

established.”

XXX XXX XXX

33. In this backdrop, the Court in Maharashtra

SRTC case was of the opinion that the direction

of the Industrial Court to accord permanency to

these employees against the posts which were

available, was clearly permissible and within

the powers, statutorily conferred upon the

Industrial/Labour Courts under Section 30(1)( b)

of the MRTU and PULP Act, 1971 which enables the

industrial adjudicator to take affirmative

action against the erring employer and as those

Page 26 26

powers are of wide amplitude abrogating ( sic

including) within their fold a direction to

accord permanency.”

(emphasis laid by this Court)

27.Further, it is very clear from the facts that all the

concerned workmen have got the qualifications required for

their regularisation, except one of them and have been

employed by the Corporation even prior to 1985 in the

posts through various irregular means. The Tribunal has got

every power to adjudicate an industrial dispute and impose

upon the employer new obligations to strike a balance and

secure industrial peace and harmony between the employer

and workmen and ultimately deliver social justice which is

the constitutional mandate as held by the

Constitution Bench of this Court in a catena of cases.

This above said legal principle has been laid

down succinctly by this Court in the case of

The Bharat Bank Ltd., Delhi v. The Employees of the

Bharat Bank Ltd., Delhi & the Bharat Bank Employee’s

Union, Delhi

7

, the relevant paragraph of the said case

is extracted hereunder:

“61.We would not examine the process by which

an Industrial Tribunal comes to its decisions

and I have no hesitation in holding that the

process employed is not judicial process at

7 AIR 1950 SC 188

Page 27 27

all. In settling the disputes between the

employers and the workmen, the function of the

Tribunal is not confined to administration of

justice in accordance with law. It can confer

rights and privileges on either party which it

considers reasonable and proper, though they

may not be within the terms of any existing

agreement. It has not merely to interpret or

give effect to the contractual rights and

obligations of the parties. It can create new

rights and obligations between them which it

considers essential for keeping industrial

peace. An industrial dispute as has been said

on many occasions is nothing but a trial of

strength between the employers on the one hand

and the workmen's organization on the other

and the Industrial Tribunal has got to arrive

at some equitable arrangement for averting

strikes and lock-outs which impede production

of goods and the industrial development of the

country. The Tribunal is not bound by the

rigid rules of law. The process it employees

is rather an extended form of the process of

collective bargaining and is more akin to

administrative than to judicial function. In

describing the true position of an Industrial

Tribunal in dealing with labour disputes, this

Court in Western India Automobile Association

v. Industrial Tribunal, Bombay, and

others[1949] F.C.R. 321 quoted with approval a

passage from Ludwig Teller's well known work

on the subject, where the learned author

observes that

"industrial arbitration may involve the

extension of an existing agreement or

the making of a new one or in general

the creation of new obligations or

modification of old ones, while

commercial arbitration generally

concerns itself with interpretation of

existing obligations and disputes

relating to existing agreements."

Page 28 28

The views expressed in these observations were

adopted in its entirety by this Court. Our

conclusion, therefore, is that an Industrial

Tribunal formed under the Industrial Disputes

Act is not a judicial tribunal and its

determination is not a judicial determination

in the proper sense of these expressions.”

It has been further held by this Court in the case of

Life Insurance Corporation Of India v. D. J. Bahadur &

Ors.

8

, as follows:

“22. The Industrial Disputes Act is a benign

measure, which seeks to pre-empt industrial

tensions, provide the mechanics of dispute

resolutions and set up the necessary

infrastructure, so that the energies of the

partners in production may not be dissipated

in counter-productive battles and the

assurance of industrial justice may create a

climate of goodwill….”

Thus, the powers of an Industrial Tribunal/Labour Court

to adjudicate the industrial dispute on the points of

dispute referred to it by the appropriate government

have been well established by the legal principles laid

down by this Court in a catena of cases referred to

supra. Therefore, the Tribunal has rightly passed an

award directing the Corporation to regularise the

services of the concerned workmen.

8 (1981) 1 SCC 315

Page 29 29

28.Whether the appointment of the concerned workmen

in the services of the Corporation is irregular or

illegal?

In the case on hand, the concerned workmen were

employed by the Corporation initially through

contractors. Thereafter, on issuance of notification

dated 08.12.1976 by the Central Government abolishing

contract labour for the posts of Watch and Ward,

dusting and cleaning jobs in the Corporation under

Section 10(1) of the Contract Labour (Abolition and

Regulation) Act, 1970 , the Corporation and the

concerned workmen arrived at a settlement under Section

18(1) of the Act, wherein a Co-operative Society was

formed in the name of ‘ Thai Security Service

Priyadarshini Indira Cooperative Society’ for their

welfare, thus dispensing with intermediary contractors.

During the pendency of the sanction from the Central

Government of the alleged “Policy decision”, the

concerned workmen were appointed directly from

13.1.1988 to 29.2.1988 and thereafter, they were

employed continuously without written orders by the

Corporation. It is the contention of the learned

Page 30 30

senior counsel on behalf of the Corporation that the

services of the concerned workmen cannot be regularised

as their appointment was originally and initially

through contractors and thereafter, without following

any procedure of selection and appointment as per

the Recruitment Rules and therefore, the same is

illegal by placing reliance on the decision of this

Court in para 43 of Uma Devi case (supra). Further,

this Court in the case of Ajaypal Singh v. Haryana

Warehousing Corporation

9

opined that when a workman is

initially appointed in violation of Articles 14 and 16

of the Constitution of India, then the employer at the

time of re-employment of the retrenched workman cannot

take the plea that the initial appointment was in

violation of the abovementioned provisions. The

relevant paragraph of the Ajaypal Singh case(supra) is

extracted hereunder:

“19. The provisions of Industrial Disputes

Act and the powers of the Industrial and

Labour Courts provided therein were not at

all under consideration in Umadevi's case.

The issue pertaining to unfair labour

practice was neither the subject matter for

decision nor was it decided in Umadevi's

case.”

9 2014(13)SCALE636

Page 31 31

The plea of the Corporation that the reason for not

regularising the concerned workmen under the Certified

Standing Orders of the Corporation is allegedly due to

the fact that the appointment of the concerned workmen

was made without following due procedure under the

Recruitment Rules and that their appointments were

illegal. This plea cannot be accepted by us in view of

the legal principle laid down by this Court in the

above decision, wherein it is clearly laid down that

the Corporation cannot deny the rights of the workmen

by taking the plea that their initial appointment was

contrary to Articles 14 and 16 of the Constitution.

29.It is also contended on behalf of the Corporation

that the right to be considered for regularisation by

the Corporation as provided under Clause 2(ii) of the

Certified Standing Orders of the Corporation does not

mean right to regularisation and the discretion to

regularise the workmen is with the Corporation as the

same has to be exercised keeping in mind the interest

of the organization by implementing the alleged “policy

decision” of appointing the CISF personnel to the

security posts. This contention urged on behalf of the

Page 32 32

learned senior counsel for the Corporation cannot be

accepted by us for the reason that even though due

procedure was not followed by the Corporation for the

appointment of the concerned workmen, this does not

disentitle them of their right to seek regularisation

of their services by the Corporation under the

provisions of the Certified Standing Orders , after they

have rendered more than 240 days of service in a

calendar year from the date of the memorandum of

appointment issued to each one of the concerned workmen

in the year 1988. The alleged “policy decision” to

appoint CISF personnel to the security post is on

deputation basis and cannot be called appointment per

se. Whereas, the concerned workmen have acquired their

right to be regularised under the provision of Clause

2(ii) of the ‘Certified Standing Orders for Contingent

Employees of the Oil and Natural Gas Commission ’, which

states thus:

“2. (i) Classification of workmen.

The contingent employees of the Commission

shall hereafter be classified as :-

a)Temporary, and

b)Casual

(ii) A workman who has been on the rolls

Page 33 33

of the Commission and has put in not less

than 180 days of attendance in any period

of 12 consecutive months shall be a

temporary workman, provided that a

temporary workman who has put in not less

than 240 days of attendance in any period

of 12 consecutive months and who possesses

the minimum qualifications prescribed by

Commission may be considered for conversion

as regular employee.

(iii) A workman who is neither

temporary nor regular shall be considered

as casual workman.”

30.The above emphasised portion of Clause 2(ii) of

the Certified Standing Orders states that a temporary

workman who has put in not less than 240 days of

attendance in any calendar period of 12 consecutive

months, which is actually contrary to the provision

under Section 25B(2)a of the Act, which states that a

workman shall be deemed to be in continuous service

under an employer for a period of one year, if the

workman, during a period of twelve calendar months

preceding the date with reference to which calculation

is to be made, has actually worked under the employer

for not less than one hundred and ninety days in the

case of a workman employed below ground in a mine and

two hundred and forty days in any other case. In any

case, it is clear that the concerned workmen have

Page 34 34

clearly completed more than 240 days of services

subsequent to the memorandum of appointment issued by

the Corporation in the year 1988 in a period of twelve

calendar months, therefore, they are entitled for

regularisation of their services into permanent posts

of the Corporation as per the Act as well as the

Certified Standing Orders of the Corporation.

31. It is the contention of the learned senior

counsel on behalf of the Corporation that the policy

decision to induct the CISF for the purpose of

providing security to its projects passed by the

Corporation is an act by the Central Government under

Section 30A of the Oil and Natural Gas Commission Act,

1959 (for short ‘the ONGC Act’), which the Parliament

by way of enactment No.23 of 1977 inserted after

Section 30 of the principle Act. The said provision

states that the Corporation shall be bound by such

directions, including directions regarding reservation

of posts for Scheduled Castes and the Scheduled Tribes,

as the Central Government may from time to time, for

reasons to be recorded in writing, give to the

Corporation in respect of its affairs.

Page 35 35

32.For the Corporation to implement such a provision

which affects the service conditions of its employees,

it is necessary for the Corporation to first modify the

Certified Standing Orders by following the procedure

provided under Section 10 of the Industrial Employment

(Standing Orders) Act, 1946 as the same is a Special

enactment and therefore, prevails over the provisions

under the ONGC Act and Recruitment Rules. The

Corporation undisputedly has not made any such

modification to its Certified Standing Orders by

following the procedure for modification of conditions

of service as per Section 10 of the Industrial

Employment (Standing Orders) Act, 1946. The scope of

the said act has been succinctly laid down by this

Court in the case of The U.P. State Electricity Board &

Anr. v. Hari Shankar Jain & Ors.

10

, upon which decision

the learned senior counsel Mr. C.U. Singh has rightly

placed reliance, the relevant paragraphs of the said

case are extracted hereunder:

6. Let us now examine the various statutory

provisions in their proper context with a view

to resolve the problem before us. First, the

Industrial Employment (Standing Orders) Act,

1946. Before the passing of the Act, conditions

10 (1978) 4 SCC 16

Page 36 36

of service of industrial employees were

invariably ill-defined and were hardly ever

known with even a slight degree of precision to

the employees. There was no uniformity of

conditions of service for employees discharging

identical duties in the same establishment.

Conditions of service were generally ad-hoc and

the result of oral arrangements which left the

employees at the mercy of the employer. With

the growth of the trade union movement and the

right of collective bargaining, employees

started putting forth their demands to end this

sad and confusing state of affairs. Recognising

the rough deal that was being given to workers

by employers who would not define their

conditions of service and the inevitability of

industrial strife in such a situation, the

legislature intervened and enacted the

Industrial Employment (Standing Orders) Act. It

was stated in the statement of objects and

reasons:

“Experience has shown that ‘Standing

Orders’, defining the conditions of

recruitment, discharge, disciplinary

action, holidays, leave etc., go a long

way towards minimising friction between

the management and workers in industrial

undertakings. Discussion on the subject

at the tripartite Indian Labour

Conferences revealed a consensus of

opinion in favour of legislation. The

Bill accordingly seeks to provide for

the framing of ‘Standing Orders’ in all

industrial establishments employing one

hundred and more workers.”

It was, therefore, considered, as stated in the

preamble “expedient to require employers in

industrial establishments to define with

sufficient precision the conditions of

employment under them and to make the said

conditions known to workmen employed by them”.

The scheme of the Act, as amended in 1956 and

as it now stands, requires every employer of an

Page 37 37

industrial establishment as defined in the Act

to submit to the Certifying Officer draft

Standing Orders, that is, “Rules relating to

matters set out in the Schedule”, proposed by

him for adoption in his industrial

establishment. This is mandatory. It has to be

done within six months after the commencement

of the Act. Failure to do so is punishable and

is further made a continuing offence. The draft

Standing Orders are required to cover every

matter set out in the schedule. The Schedule

enumerates the matters to be provided in the

Standing Orders and they include classification

of workmen, shift working, attendance and late

coming, leave and holidays, termination of

employment, suspension or dismissal for

misconduct, means of redress for wronged

workmen etc. Item11 of the Schedule is “Any

other matter which may be prescribed”. By a

notification dated November 17, 1959 the

Government of Uttar Pradesh has prescribed “Age

of superannuation or retirement, rate of

pension or any other facility which the

employer may like to extend or may be agreed

upon between the parties” as a matter requiring

to be provided in the Standing Orders. On

receipt of the draft Standing Orders from the

employee, the Certifying Officer is required to

forward a copy of the same to the trade union

concerned or the workmen inviting them to

prefer objections, if any. Thereafter the

Certifying Officer is required to give a

hearing to the employer and the trade union or

workmen as the case may be and to decide

“whether or not any modification of or addition

to the draft submitted by the employer is

necessary to render the draft Standing Orders

certifiable under the Act”. Standing Orders are

certifiable under the Act only if provision is

made therein for every matter set out in the

schedule, if they are in conformity with the

provisions of the Act and if the Certifying

Officer adjudicates them as fair and

reasonable. The Certifying Officer is invested

with the powers of a civil court for the

Page 38 38

purposes of receiving evidence, administering

oaths, enforcing the attendance of witnesses

etc. etc. The order of the Certifying Officer

is subject to an appeal to the prescribed

Appellate Authority. The Standing Orders as

finally certified are required to be entered in

a register maintained by the Certifying

Officer. The employer is required to

prominently post the Certified Standing Orders

on special boards maintained for that purpose.

This is the broad scheme of the Act. The Act

also provides for exemptions. About that,

later. The Act, as originally enacted,

precluded the Certifying Officer from

adjudicating upon the fairness or

reasonableness of the Draft Standing Orders

submitted by the employer but an amendment

introduced in 1956 now casts a duty upon the

Certifying Officer to adjudicate upon the

fairness or reasonableness of the draft

Standing Orders. The scheme of the Act has been

sufficiently explained by this Court in

Associated Cement Co. Ltd. v.P.D. Vyas3, Rohtak

Hissar District Electricity Supply Co. Ltd. v.

State of U.P., and Western India Match Co. Ltd.

v. Workmen. The Industrial Employment (Standing

Orders) Act is thus seen to be an Act specially

designed to define the terms of employment of

workmen in industrial establishments, to give

the workmen a collective voice in defining the

terms of employment and to subject the terms of

employment to the scrutiny of quasi-judicial

authorities by the application of the test of

fairness and reasonableness. It is an Act

giving recognition and form to hard-won and

precious rights of workmen. We have no

hesitation in saying that it is a special Act

expressly and exclusively dealing with the

schedule-enumerated conditions of service of

workmen in industrial establishments.

XXX XXX XXX

Page 39 39

10. We have already shown that the Industrial

Employment (Standing Orders) Act is a special

Act dealing with a specific subject, namely the

conditions of service, enumerated in the

schedule, of workmen in industrial

establishments. It is impossible to conceive

that Parliament sought to abrogate the

provisions of the Industrial Employment

(Standing Orders) Act embodying as they do

hard-won and precious rights of workmen and

prescribing as they do an elaborate procedure,

including a quasi-judicial determination, by a

general, incidental provision like Section

79(c) of the Electricity (Supply) Act. It is

obvious that Parliament did not have before it

the Standing Orders Act when it passed the

Electricity Supply Act and Parliament never

meant that the Standing Orders Act should stand

pro tanto repealed by Section 79( c ) of the

Electricity Supply Act. We are clearly of the

view that the provisions of the Standing Orders

Act must prevail over Section 79( c ) of the

Electricity Supply Act, in regard to matters to

which the Standing Orders Act applies.

XXX XXX XXX

13. Next, we turn to the submission based on

the notification made under Section 13-B of the

Standing Orders Act. Section 13-B reads as

follows:

“ 13-B. Nothing in this Act shall apply to

an industrial establishment in so far as

the workmen employed therein are persons

to whom the Fundamental and Supplementary

Rules, Civil Services (Classification,

Control and Appeal) Rules, Civil Services

(Temporary Service) Rules, Revised Leave

Rules, Civil Service Regulations,

Civilians in Defence Service

(Classification, Control and Appeal)

Rules or the Indian Railway Establishment

Code or any other rules or regulations

Page 40 40

that may be notified in this behalf by

the appropriate Government in the

Official Gazette, apply.”

(emphasis laid by this Court)

33. In view of the legal principles laid down by this

Court in the above said case, the alleged policy

decision taken under Section 30A of the ONGC Act does

not prevail over the Standing Orders Act framed under

the Industrial Employment (Standing Orders) Act, 1946,

which is the Special Enactment. Therefore, the alleged

“policy decision” taken by the Corporation is neither

valid in law nor applicable in the case on hand. The

legal principle laid down in the case of The U.P.

State Electricity Board & Anr. v. Hari Shankar Jain

were reiterated by this Court in the case of Sudhir

Chandra Sarkar v. Tata Iron and Steel Co. Ltd. &

Ors.

11

, wherein it was held thus :

“The Parliament enacted the Industrial

Employment (Standing Orders) Act, 1946 ('1946

Act' for short). The long title of the Act

provides that it was an act to require

employers in industrial establishments formally

to define conditions of employment under them.

The preamble of the Act provides that it is

expedient to require employers in industrial

establishments to define with sufficient

precision the conditions of employment under

them and to make the said conditions known to

workmen employed by them. By Section 3, a duty

11 (1984) 3 SCC 369

Page 41 41

was cast on the employer governed by the Act to

submit to the Certifying Officer draft standing

orders proposed by him for adoption in his

industrial establishment. After going through

the procedure prescribed in the Act, the

Certifying Officer has to certify the draft

standing orders. Section 8 requires the

Certifying Officer to keep a copy of standing

orders as finally certified under the Act in a

register to be maintained for the purpose. Sub-

section 2 of Section 13 imposes a penalty on

employer who does any act in contravention of

the standing orders finally certified under the

Act. The act was a legislative response to the

laissez fairs rule of hire and fire at sweet

will. It was an attempt at imposing a statutory

contract of service between two parties unequal

to negotiate, on the footing of equality. This

was vividly noticed by this Court in Western

India Match Company Ltd. v. Workmen as under:

In the sunny days of the market economy

theory people sincerely believed that

the economic law of demand and supply

in the labour market would settle a

mutually beneficial bargain between the

employer and the workmen. Such a

bargain they took it for granted,

would, secure fair terms and conditions

of employment to the workman. This law

they venerated as natural law. They had

an abiding faith in the verity of this

law. But the experience of the working

of this law over a long period has

belied their faith.

The intendment underlying the Act and the

provisions of the Act enacted to give effect to

the intendment and the scheme of the Act leave

no room for doubt that the Standing Orders

certified under the 1946 Act become part of the

statutory terms and conditions of service

between the employer and his employee and they

govern the relationship between the parties.

Workmen of Messrs Firestone Tyre & Rubber Co.

Page 42 42

of India (P) Ltd. v. Management and Ors.

Workmen in Buckinghan and Carnatic Mills Madras

v. Buckingham and Carnatic Mills and M/s.

Glaxo Laboratories (I) Ltd. v. The Presiding

Officer, Labour Court, Meerut and Ors.”

(emphasis laid by this Court)

34. Further, on the direction of this Court after

concluding the submissions made in this appeal, the

learned counsel on behalf of the Corporation was

directed to submit a copy of the Policy of the

Government of India for the year 1982 along with the

affidavit of the responsible officer of the

Corporation. The learned counsel has accordingly

produced the ‘Government Policies and Guidelines for

Public Sector Enterprises and Perceptions on Public

Sector of PSE Chiefs & the Scope (Vol. I) compiled by

Dr. Raj Nigam’ containing a gist of BPE O.M. No.

2(97)/72-BPE(GM-I) dated 5

th

December, 1972 and BPE O.M.

No. 2(38)/75-BPE(GM-I) dated 17

th

May 1975 in Guideline

Nos. 421 and 422 respectively, as per the direction of

this Court vide order dated 25.03.2015. In this regard,

to examine the tenability of the submission of the

learned senior counsel on behalf of the Corporation the

relevant portion of the above mentioned document is

extracted hereunder to consider the contention urged in

Page 43 43

this regard:

“421. Security Arrangements in Public

Enterprises:

Ministries etc. are aware that a force called

the Central Industrial Security Force has

been constituted under the Ministry of Home

Affairs for the security of industrial

undertakings of the Central Government.

The question of evolving a uniform

procedure in regard to the deployment of the

Force and in providing security arrangements

in the various undertakings has been under

consideration of the Government particularly

with a view to ensuring better coordination

between the I.G.C.I.S.F. and the

administrative Ministries/Public Enterprises.

It has been decided that the following steps

should be taken in this regard:

(i) There should be close

Association between CISF and a Public

Enterprise, right from its inception.

In other words as soon as a new

Enterprise is sanctioned, information

about such sanction should be sent

automatically to the I.G.,C.I.S.F. so

that he can start liaison from the very

outset, with the concerned officials in

the Ministry concerned and the Chief

Executive of the project as soon as he

is appointed.

(ii) No new Enterprise should

appoint its own Watch and Ward Security

staff, even during construction stage

unless a clearance has been obtained

from the I.G.,C.I.S.F. that he is not

in a position to take over the security

functions of the Enterprise from the

very beginning.

(iii) Whenever an investment

decision is cleared at the level of the

Page 44 44

Public Investment Board an intimation

that such a project has been cleared,

should be sent to I.G.,C.I.S.F.

Ministries etc. are to take necessary action

accordingly.

422. Security Arrangements in Public

Enterprises:

The DIG CISF in a recent communication to the

Bureau of Public Enterprises has pointed out

that a number of undertaking have been

employing their own Watch and Ward personnel

without obtaining clearance from CISF Hqrs.,

in contravention of the Guidelines issued vide

BPE O.M. No.2(97)/72-BPE(GM-I) dated 5

th

December, 1972.

It is once again reiterated that it is the

statutory duty not only of the CISF but also

of the Public Sector Undertakings to induct

CISF for better protection and security of the

industrial undertakings.

The administrative Ministries may impress

upon the public units under their

administrative control not covered in the

enclosed list (not given here), the need for

the early induction of the CISF force in the

units provide better security arrangements.

The units may be advised to contact IG, CISF,

183 Jor Bagh, New Delhi without any further

delay for finalising the arrangements”

35.Further, the learned counsel on record for the

Corporation has also submitted the Sanction letter for

creation of temporary posts for the security coverage

of ONGC installation by Central Government, the

relevant portion of which is extracted hereunder:

Page 45 45

“To

The Director General,

Central Industrial Security Force,

13-CGO’s Complex,

Lodhi Road,

New Delhi-110003.

Subject:-Creation of temporary posts for the

security coverage of ONGC installations at

Madras, Visakhapatnam and Nursapur & Razole

Area.

With reference to your U.O. No.

29013/6/85-Ind-I dated 31.10.1985.I am

directed to convey the sanction of the

President to the creation of the following

temporary posts for the security coverage of

ONGC Installations at Madras, Vishakapatnam

and Nursapur & Razole Area in the existing pay

scales with usual allowances from the date(s)

and the post(s) are filled in till the 28

th

February,………

………

This issue with the concurrence of Integrated

Finance Division vide their Dy. No.3057/85-

Fin. III (D-I) dated 12.12.1985.

Yours faithfully,

(N.B.Kumar)

Under Secretary to the Government of India”

36.We have perused the above two documents. The above

mentioned sanction letter by the Central Government is

for the creation of temporary posts for the security

coverage of ONGC installation and not to depute CISF

specifically into security posts in the Corporation ,

Page 46 46

therefore, the reliance placed on the same in support

of the contention urged by the learned senior counsel

on behalf of the Corporation is misplaced as the same

is wholly untenable in law as the same is not reflected

in the sanction letter referred to supra. Further, the

above mentioned guidelines cannot be considered to be

the policy of the Central Government as it is not

framed in accordance with the relevant ‘Business

Transaction Rules’ of the Central Government.

Therefore, we are of the considered view that even if

for the sake of argument, the decision to employ the

CISF personnel into security posts of the Corporation

is considered as the policy decision of the

Corporation, the provision under Clause 2(ii) of

Certified Standing Orders surely overrides the policy

decision, as the said clause is not amended by

following the provisions of the Act of 1946 and

therefore, the said argument does not hold water as the

Certified Standing Orders of the Corporation as per the

Judgments of this Court referred to supra and the

principle of law laid down in those cases are aptly

applicable to the fact situation of the concerned

workmen for their regularisation in the security posts

Page 47 47

of the Corporation.

37.As we have already stated that the alleged policy

documents produced by the Corporation as per the

direction of this Court is traceable to Section 30A of

the ONGC Act enacted by the Parliament as per the

contention urged on behalf of the Corporation.

Therefore, the contention that the said Policy is

binding upon the Corporation and the concerned workmen

is wholly untenable in law for more than one reason

which we have stated above. The said document cannot be

said to be the Policy framed by the Central Government

represented by the Ministry of Petroleum and Natural

Gas, which is an independent ministry having the power

to formulate and administer various Central laws

relating to Petroleum and Natural Gas, however, the

same must be executed in the name of the President of

India and shall be authenticated in such a manner as

specified in the relevant ‘Business Transaction Rules’.

In the instant case, the alleged Policy formulated by

the Central Government has not been issued by following

the due procedure as provided under the ‘Business

Transaction Rules’. For this reason also, the said

Page 48 48

document produced by the learned counsel for the

Corporation to justify the alleged Policy being

applicable to the concerned workmen cannot be called as

the policy document passed under Section 30A of the Act

by the Central Government and moreover, the same was

not incorporated by way of an amendment to the

Certified Standing Orders of the Corporation by

following the procedure as provided under Section 10 of

the Industrial Employment (Standing Orders) Act, 1946.

The reliance placed upon these documents by the

Corporation in justification of their claim that the

concerned workmen are not entitled to be regularised in

their services as permanent employees in their posts as

per the award passed by the Tribunal is misplaced and

wholly untenable in law. Therefore, the same cannot be

accepted by this Court. Hence, the said contention is

liable to be rejected and is accordingly rejected.

38.Further, it was contended by the learned senior

counsel that the Certified Standing Orders of the

Corporation do not apply to the concerned workmen to

claim regularisation in their posts as regular

employees as provided under Clause 2(ii) of the

Page 49 49

Certified Standing Orders of the Corporation. The said

contention is wholly untenable in law as the Standing

Orders of the Corporation certainly apply to the

concerned workmen as they have been rendering their

services in the Corporation even prior to the year

1985, being appointed through contractors, the Co-

operative Society and directly thereafter vide

memorandum of appointment in the year 1988 by issuing

appointment orders on different dates during that year

on the condition that the Certified Standing Orders of

the ONGC will not be applicable to them. Such a

condition incorporated in the appointment orders issued

to the concerned workmen is not valid in law and the

same is void for the reason that they are workmen for

the purpose of the Certified Standing Orders and

therefore, the above said condition has to be ignored.

When the concerned workmen were appointed by issuing

the memorandum of appointment to work in the posts of

the Corporation, providing them with monthly salaries,

it cannot arbitrarily and unilaterally state that the

Certified Standing Orders of the Corporation are not

applicable to the concerned workmen. The concerned

workmen cannot be denied their legitimate, statutory

Page 50 50

and fundamental right to be regularised in their posts

as provided under Clause 2 (ii) of the Certified

Standing Orders on the basis of the above said

contention urged on their behalf and also because the

Corporation did not follow the due procedure as

provided under the Appointment and Recruitment Rules

for appointment of the concerned workmen in the

Corporation. The said contention urged by the learned

senior counsel on behalf of the Corporation is an

afterthought to justify their irregular act of

appointing them as temporary workmen and continuing

them as such for a number of years though they are

entitled for regularisation under Clause 2(ii) of the

Standing Orders of the Corporation, which action of it

amounts to an unfair labour practice as defined under

Section 2(ra) of the Act, read with the provisions of

Sections 25T and 25U of the Act, which prohibits such

employment in the Corporation. It would be unjust and

unfair to deny them regularisation in their posts for

the error committed by the Corporation in the procedure

to appoint them in the posts. Further, the Corporation

cannot use the alleged “policy decision” as a veil to

justify its action which included inaction on its part

Page 51 51

in not regularising the concerned workmen in their

services under Clause 2(ii) of the Certified Standing

Orders.

39.In light of the above said discussion and legal

principles laid down by this Court in the cases

referred to supra, we are of the considered view that

the procedure of appointments adopted by the

Corporation with respect to the concerned workmen

initially appointed through contractors, subsequently

through the Co-operative Society, and then vide

memorandum of appointment issued to each one of the

concerned workmen in the year 1988 and thereafter,

continuing them in their services in the posts by the

Corporation without following any procedure as

contended by the learned senior counsel on behalf of

the Corporation whose contention is untenable in law

and their appointment can be said as irregular

appointments but not as illegal as the same was not

objected to by any other Authority of the Corporation

at any point of time. But their appointment in their

posts and continuing them in their services is

definitely cannot be termed as illegal, at best it can

Page 52 52

be called irregular. Therefore, the Certified Standing

Orders of the Corporation by all means apply to the

concerned workmen. The legal contention urged on

behalf of the Corporation that the statutory right

claimed by the concerned workmen under Clause 2(ii) of

the Certified Standing Orders of the Corporation for

regularizing them in their posts as regular employees

after rendering 240 days of service in a calendar is

not an absolute right conferred upon them and their

right is only to consider their claim. This plea of the

learned senior counsel cannot again be accepted by us

for the reason that the Corporation is bound by law to

take its decision to regularise the services of the

concerned workmen as regular employees as provided

under Clause 2(ii) of the Certified Standing Orders

after their completion of 240 days of service in a

calendar year as they have acquired valid statutory

right. This should have been positively considered by

the Corporation and granted the status of regular

employees of the Corporation for the reason that it

cannot act arbitrarily and unreasonably deny the same

especially it being a Corporate Body owned by the

Central Government and an instrumentality of the State

Page 53 53

in terms of Article 12 of the Constitution and

therefore, it is governed by Part III of the

Constitution. The Corporation should exercise its power

fairly and reasonably in accordance with law. This has

not been done by the Corporation as per the law laid

down by this Court in the case of Olga Tellis & Ors. v.

Bombay Municipal Corporation and Ors.

12

wherein it was

held as under:-

“40. Just as a mala fide act has no existence

in the eye of law, even so, unreasonableness

vitiates law and procedure alike. It is

therefore essential that the procedure

prescribed by law for depriving a person of his

fundamental right, in this case the right to

life, must conform to the norms of justice and

fairplay. Procedure, which is unjust or unfair

in the circumstances of a case, attracts the

vice of unreasonableness, thereby vitiating the

law which prescribes that procedure and

consequently, the action taken under it. Any

action taken by a public authority which is

invested with statutory powers has, therefore,

to be tested by the application of two

standards: the action must be within the scope

of the authority conferred by law and secondly,

it must be reasonable. If any action, within

the scope of the authority conferred by law, is

found to be unreasonable, it must mean that the

procedure established by law under which that

action is taken is itself unreasonable. The

substance of the law cannot be divorced from

the procedure which it prescribes for, how

reasonable the law is, depends upon how fair is

the procedure prescribed by it. Sir Raymond

Evershed says that, “from the point of view of

12 (1985)3 SCC 545

Page 54 54

the ordinary citizen, it is the procedure that

will most strongly weigh with him. He will tend

to form his judgment of the excellence or

otherwise of the legal system from his personal

knowledge and experience in seeing the legal

machine at work”. Therefore, “He that takes the

procedural sword shall perish with the sword.”

Therefore, the concerned workmen have approached the

Tribunal by raising an industrial dispute regarding the

regularisation of their services in the Corporation.

The same has been properly adjudicated by the Tribunal

based on pleadings, evidence on record and in

accordance with law. Therefore, the same cannot be

found fault with by this Court in this appeal.

40.Further, the contention urged on behalf of the

Corporation that the concerned workmen do not possess

the required qualifications for their respective posts,

in this regard, we have gone through the facts recorded

by the Courts below in comparison with the ‘Recruitment

and Promotion Regulations, 1980 of the Oil and Natural

Gas Commission’ framed and published with previous

approval of the Central Government in exercise of the

powers conferred upon it under Section 32 of the Oil

and Natural Gas Commission Act, 1959, and we are fully

satisfied that all of the concerned workmen barring

Page 55 55

just one of the concerned workmen have all the

qualifications required to be regularised in the

permanent posts of the Corporation as regular

employees.

41.Further, it has been contended by the learned

senior counsel on behalf of the Corporation that in the

absence of any plea taken by the workmen in their claim

statement regarding unfair labour practice being

committed by the Corporation against the concerned

workmen, the learned single Judge and the Division

Bench ought not to have entertained the said plea as it

is a well settled principle of law that such plea must

be pleaded and established by a party who relies before

the Tribunal. In support of the above contention

reliance was placed by him on the decision of this

Court in Siemens Limited & Anr. v. Siemens Employees

Union & Anr.

13

The said contention of the learned senior counsel

on behalf of the Corporation is wholly untenable in law

and the reliance placed on the aforesaid case is

misplaced for the reason that it is an undisputed fact

13 (2011) 9 SCC 775

Page 56 56

that the workmen have been appointed on term basis vide

memorandum of appointment issued to each one of the

concerned workmen in the year 1988 by the Corporation

who continued their services for several years.

Thereafter, they were denied their legitimate right to

be regularised in the permanent posts of the

Corporation. The said fact was duly noted by the High

Court as per the contention urged on behalf of the

Corporation and held on the basis of facts and evidence

on record that the same attracts entry Item No.10 of

Schedule V of the Act, in employing the concerned

workmen as temporary employees against permanent posts

who have been doing perennial nature of work and

continuing them as such for number of years. We affirm

the same as it is a clear case of an unfair labour

practice on the part of the Corporation as defined

under Section 2(ra) of the Act, which is statutorily

prohibited under Section 25T of the Act and the said

action of the Corporation warrants penalty to be

imposed upon it under Section 25U of the Act. In fact,

the said finding of fact has been recorded by both the

learned single Judge and the Division Bench of the High

Court in the impugned judgment on the ground urged on

Page 57 57

behalf of the Corporation. Even if, this Court eschews

the said finding and reason recorded in the impugned

judgment accepting the hyper technical plea urged on

behalf of the Corporation that there is no plea of

unfair labour practice made in the claim statement,

this Court in this appeal cannot interfere with the

award of the Tribunal and the impugned judgment and

order of the High Court for the other reasons assigned

by them for granting relief to the concerned workmen.

Even in the absence of plea of an act of unfair labour

practice committed by the Corporation against the

concerned workmen, the Labour Court/High Court have got

the power to record the finding of fact on the basis of

the record of the conciliation officer to ensure that

there shall be effective adjudication of the industrial

dispute to achieve industrial peace and harmony in the

industry in the larger interest of public, which is the

prime object and intendment of the Industrial Disputes

Act. This principle of law has been well established in

a catena of cases of this Court. In the instant case,

the commission of an unfair labour practice in relation

to the concerned workmen by the Corporation is ex-facie

clear from the facts pleaded by both the parties and

Page 58 58

therefore, the courts have the power to adjudicate the

same effectively to resolve the dispute between the

parties even in the absence of plea with regard to such

an aspect of the case.

42.For the reasons recorded in this judgment, we hold

that the judgments and orders of both the learned

single Judge and Division Bench of the High Court in

favour of the concerned workmen are legal and valid.

The High Court has rightly dismissed the appeal of the

Corporation by affirming the award passed by the

Tribunal.

Therefore, this appeal must fail and accordingly,

the same is dismissed. Since the industrial dispute

between the parties has been litigated for the last 25

years, it would be just and proper for this Court to

give directions as hereunder:

(i) The Corporation is directed to comply

with the terms and conditions of the award

passed by the Tribunal and regularise the

services of the concerned workmen in their

posts and compute the back-wages, monetary

Page 59 59

benefits and other consequential monetary

benefits including terminal benefits payable

to the concerned workmen on the basis of the

periodical revision of pay scales applicable

from the date of their entitlement, namely, by

regularizing them in their services after

their completion of 240 days of service in a

calendar year in the Corporation as provided

under Clause 2 (ii) of the Certified Standing

Orders, within eight weeks from the date of

receipt of the copy of this Judgment;

(ii) If the Corporation fails to comply with

the above given directions, the back-wages

shall be paid to the concerned workmen with an

interest at the rate of 9% per annum. The

Corporation is further directed to submit the

compliance report for perusal of this Court

after the expiry of the said eight weeks.

There shall be no order as to costs.

……………………………………………… J.

[V.GOPALA GOWDA]

……………………………………………… J.

Page 60 60

[C. NAGAPPAN]

New Delhi,

April 17, 2015

Page 61 61

ITEM NO.1A-For Judgment COURT NO.11 SECTION XV

S U P R E M E C O U R T O F I N D I A

RECORD OF PROCEEDINGS

Civil Appeal No(s)........../2015 @ SLP(C) No. 5532/2012

ONGC LTD. Appellant(s)

VERSUS

PETROLEUM COAL LABOUR UNION & ORS. Respondent(s)

Date : 17/04/2015 This matter was called on for pronouncement of

JUDGMENT today.

For Appellant(s)

M/s Arputham Aruna & Co.

For Respondent(s) Mr. V.N. Subramaniam, Adv.

Mr. Satish Kumar,Adv.

Mr. Santosh Krishnan, Adv.

Mrs. Sonam Anand, Adv.

Mr. Deeptakirti Verma,Adv.

Hon'ble Mr. Justice V.Gopala Gowda pronounced the

judgment of the Bench comprising His Lordship and Hon'ble Mr.

Justice C. Nagappan.

Leave granted.

The appeal is dismissed in terms of the signed

Reportable Judgment.

(VINOD KR.JHA) (MALA KUMARI SHARMA)

COURT MASTER COURT MASTER

(Signed Reportable Judgment is placed on the file)