http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 12

CASE NO.:

Appeal (civil) 2675 of 2002

PETITIONER:

MGURNEIACTIEPRALMUCMOBRAPIORATION OF

Vs.

RESPONDENT:

K.V.SHRAMIK SANGH & ORS.

DATE OF JUDGMENT: 12/03/2002

BENCH:

D.P. Mohapatra & Shivaraj V. Patil

JUDGMENT:

Shivaraj V. Patil, J.

Leave granted.

This appeal is filed by the Municipal Corporation of Greater

Mumbai challenging the correctness and validity of the impugned

judgment and order made in the writ petition by the High Court.

The writ petition was filed by a registered trade union called

Kachara Vahatuk Shramik Sangh (hereinafter referred to as `Union'.

It claims to represent 2000 workmen doing the work of lifting,

transporting and dumping of debris, garbage, silt, house gully

material etc., at the various dumping grounds of the Bombay

Municipal Corporation. The appellant herein is the respondent no.

1 in the writ petition (hereinafter referred to as 'Corporation')

and respondent nos. 2-33 are different contractors who had been

entrusted with the above-mentioned work on contract basis.

Respondent no. 34 is the State of Maharashtra and respondent no.

35 is the Contract Labour Board established under the provisions

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

Act). Respondent No. 36 is the Commissioner of Labour for the

State.

In the writ petition, it was emphasized that the nature of

work carried out by the contract labour is perennial; merely

because the Corporation has chosen to employ system of contract

labour for discharging its statutory obligations, the contract

labour does not cease to be workman of the principal employer

the Corporation. According to the writ petitioners (Union), if at

all, contract labour system was to be permitted, it could be done

only in accordance with the provisions of the CLRA Act; an

employer could not be allowed to carry on work through contract

labour unless provisions of the statute were strictly complied

with and that the Corporation was carrying on the work through

contract labour for almost 15 years even without registering

itself as a principal employer, that too through contractors who

were not holding any licence under the CLRA Act. It is the

further case of the Union that it kept on complaining to the

Labour Commissioner about the gross violation of law and the legal

rights of the workmen concerned. The Labour Commissioner, after

investigation into the complaints, addressed letter dated

18.7.1998 to the Chief Secretary of the State recommending

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 12

abolition of the contract labour system observing that Solid Waste

Management Department is one of the sections of the Corporation,

which is in operation for more than hundred years; in this

Department the work of collection, transportation, dumping and

disposal of the garbage, refuse, debris etc. is performed. The

Labour Commissioner also stated in the letter that the Solid Waste

Management Department had applied for registration as principal

employer under the CLRA Act on 17th December, 1996. In the

meanwhile, the writ petition had already been filed, so the said

application was kept in abeyance. He also stated that none of the

contractors had obtained licence under the provisions of the CLRA

Act. He further pointed out that by the letters of 25th October,

1997 and 19th May, 1998, the Union had made representations to the

Chairman of the State Contract Labour Advisory Board requesting

him to advise the State Government to abolish the system of

employment of contract labour in the solid Waste Management

Department of the Corporation. In the letter of the Labour

Commissioner, it is also stated that the work performed by the

workers employed by the contractors is of regular and permanent

nature. In the writ petition, it is also stated that the contract

entered into by the Corporation with the contractors is a sham

arrangement. The workmen concerned with the writ petition are in

law and in fact employees of the Corporation, particularly so,

when the task of sweeping and cleaning roads, gullies and removal

of debris and garbage etc. are the statutory duties to be

performed by the Corporation under Sections 61(C), 365 and 367 of

the Bombay Municipal Corporation Act, 1888 (for short the `Act').

It is also stated in the writ petition that the conditions of

service of these workmen are horrible and inasmuch as they are

required to handle corpses of animals, excreta of animals and

human-beings from house gullies and garbage dumps toxic and other

danger material etc. In support of the writ petition, reliance

was placed to the Circular dated 26.4.1985 issued by the Govt. of

Maharashtra relating to Bhangi Mukti (prevention of scavenging),

Circular dated 30.8.1996 issued by the Corporation on the

precautionary measures to be taken while engaging contract labour,

the letter dated 27.11.1996 addressed to the Additional

Commissioner, Corporation, by the then Chairman of the Standing

Committee of the Corporation Shri Hareshwar Patil stating that the

garbage workers were not properly treated; there was no difference

between the permanent workers of the Corporation and the contract

workers; their conditions were really pitiable and steps are to be

taken to improve the situation. Reference is also made to the

letter of the Labour Commissioner dated 18.7.1998 addressed to the

Chief Secretary of the State requesting to recommend the matter to

the State Contract Labour Advisory Board for abolition and

prohibition of the contract labour system. The Minister for

Labour of the State addressed a letter dated 4.2.1999 to the

Commissioner of the Corporation recommending for abolishing the

existing contract system. In the writ petition, the following

reliefs were sought :-

"(a) for a Writ of Mandamus or any other

appropriate Writ, order or direction,

directing the State of Maharashtra and

Contract Labour Board, Bombay Municipal

Corporation to forthwith abolish the

contract labour system in the Solid Waste

Department and for regularization of the

services of all the workmen concerned with

this Petition with retrospective effect

forthwith and to pass appropriate order

forthwith.

(b) for an order directing the Respondent to

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 12

maintain status quo in respect of the

employment of the workmen concerned with

this Petition.

(c) For an order directing the Respondent No. 1

to forthwith absorb all the workmen

concerned with this Petition as regular

and permanent workmen with retrospective

effect from their initial date of work.

(d) For an order directing the Respondent No. 1

to treat all the workmen concerned with

this case on par with the permanent

workmen in terms of wages and all service

conditions....................."

In reply to the writ petition the Corporation in the

affidavit filed on its behalf inter alia submitted that the writ

petition should be dismissed declining to entertaining it under

Article 226 of the Constitution to adjudicate the disputed

questions of facts. Section 61(2) of the Act imposes a statutory

duty on the Corporation for removal of garbage. The Solid Waste

Management Department has employees, mukadams and overseers

engaged in the activity of removal of garbage. For this purpose

the Department uses its own staff and not contract labour. It has

its own vehicles for the purpose of removal of garbage. Because

of insufficiency of vehicles it also hires private vehicles on

contract basis for the removal of garbage; the vehicle owners

supply the vehicles with a driver and cleaner; and only the

Corporation employees are engaged in removal of garbage.

Further, according to the Corporation, under Section 367 of

the Act its Commissioner provides or appoints in proper and

convenient situations public receptacles, depots and places for

the temporary deposit or final disposal of the refuse/debris.

Under Section 368, if the owner or occupier of any trade premises

desires permission to deposit trade refuse, collected daily or

periodically from the premises, temporarily upon any place

appointed by the Commissioner in this behalf, he may, on the

application and on payment of such charges, allow the applicant to

deposit refuse/debris. The Corporation merely provides its

services to those generators of debris like MHADA or private land

owners or builders, who are liable to pay stipulated charges for

the work of disposal of debris performed by the Corporation. For

the purpose of removal of debris the Corporation accepts separate

tenders from the contractors. This work, not being the statutory

responsibility of the Corporation, is not done by its employees.

Copy of the tender submitted by the contractor for removal of

debris and copy of the contract entered into by the Corporation

with the contractors, as per Ex.-5 and 6, clearly show that the

workers engaged in the said activity of removal of debris are not

employees of the Corporation. The allegations that merely paper

arrangements are made by the Corporation to avoid statutory

liabilities and that such contracts are sham and illegal are

denied by the Corporation. It is also stated that the Corporation

has been taking stringent action against the contractors so that

they should comply with the statutory requirements such as Minimum

Wages Act and the contractors are also directed to provide the

labourers with good quality of raincoats with caps, gum boots and

hand gloves etc. It is denied that the Corporation is using the

contract labour as slaves or bonded labour. It is the specific

case of the Corporation that the workers engaged by the

contractors are not its employees

It is further the case of the Corporation that CLRA Act does

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 12

not abolish contract labour as alleged by the Union; the power to

abolish contract labour vests with the appropriate Government and

in this case the appropriate Government is State Government. The

appropriate Government before abolition of contract labour under

Section 10 of the CLRA Act must consult State Board, constituted

under Section 4 of the CLRA Act being an expert body, before

contract labour can be provided. Further, the relevant factors

such as whether the work is incidental or necessary for the

establishment is to be taken into consideration as contemplated

under Section 10 of the CLRA Act. Based on these statements made

in the affidavit the Corporation prayed for dismissal of the writ

petition.

The High Court by its order dated 18.11.1998 in writ

petition No. 2135/98 ordered the Labour Commissioner to

authenticate the list of workmen of the respondent no. 1 - Union.

The Labour Commissioner on 9.2.1999 gave his report to the High

Court stating that it was not possible for him to verify the

authenticity of the list of workmen.

However, the High Court allowed the writ petition and made

the following order:-

"(a) The system of employing contract labour

on the work in Solid Waste Management

Department shall be discontinued by the

first Respondent- Corporation with

immediate effect.

(b) 782 contract labourers who have been

identified as working through contractors

on the work of Solid Waste Management

Department shall be absorbed as permanent

employees in the employment of the first

Respondent-Corporation on the appropriate

wage scales and extended all conditions of

service as available to other permanent

employees doing same or similar work in

the employment of the first Respondent-

Corporation.

(c) A Committee comprising of an officer to be

nominated by the Commissioner of Labour,

an officer to be nominated by the

Municipal Commissioner and a

representative of the Petitioner-union,

shall verify the claims of all workmen

other than those whose claims have already

been verified by the Commissioner of

Labour, after taking such evidence as the

said Committee desires.

(d) The said Committee shall make a report to the

Municipal Corporation indicating the

persons who were actually working as

contract labourers in the Solid Waste

Management Department on the date on which

the Writ Petition was filed. Immediately

on receipt of such report, the first

Respondent Corporation shall absorb such

workmen also as permanent workmen in the

Solid Waste Management Department and

extend to them pay and all conditions of

service and benefits as given to other

permanent workmen doing same or similar

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 12

work.

(e) Though, strictly speaking, under the

principles laid down in Air India's case

(supra), the workmen would have to be

absorbed as permanent employees and given

all the benefits from the dates of their

respective employment, as we have found

some difficulty with regard to

identification, we direct that the

absorption into service as permanent

employees and extension of all benefits

shall be done as from the date of the Writ

Petition i.e. from 1st July, 1997."

On behalf of the Corporation it was contended:

(a) That the disputed questions of facts arose for consideration

in the writ petition. Hence the High Court was not right

and justified in adjudicating those disputed questions of

facts exercising jurisdiction under Article 226 of the

Constitution; as held by this Court in various decisions in

matters like this it was for the industrial adjudicator to

decide in appropriate proceedings; even assuming that all

the conditions of contract labour under Section 10 of the

CLRA Act were shown to exist it was for the court to order

abolition of contract labour;

(b) The matter ought to have been left to be decided by the

Government as to abolition of contract labour as laid down

by this Court in BHEL Workers Association, Hardwar and

others vs. Union of India and others [(1985) 1 SCC 630],

Catering Cleaners of Southern Railway vs. Union of India and

others [(1987) 1 SCC 700] and Gujarat Electricity Board,

Thermal Power Station, Ukai, Gujarat vs. Hind Mazdoor Sabha

and others [(1995) 5 SCC 27].

(c) The High Court was also wrong in ordering automatic

abolition of the contract labour on the basis of judgment of

this Court in Air India Statutory Corporation and others vs.

United Labour Union and others [(1997) 9 SCC 377]; the said

judgment now stands overruled by the Constitution Bench

judgment of this Court in Steel Authority of India Ltd. Vs.

National Union Waterfront Workers [(2001) 1 SCC 1].

(d) Neither there was enquiry nor finding was recorded by the

High Court that the labour contracts with the contractor

were sham or camouflage or only device to deprive the worker

of the benefits otherwise available to him; the High Court

has not ordered absorption of the labours on the ground that

the labour contracts were sham or bogus; the High Court

without enquiry and consideration whether such contracts

were sham proceeded to say so on the ground that such labour

contracts were made without complying with the provisions of

the CLRA Act and, therefore, there is automatic absorption.

(e) The Union has not filed cross-objections against the High

Court judgment complaining that the High Court ought to have

recorded a finding that such contracts were sham; further

such investigation as to whether contracts were sham could

be investigated only by an industrial adjudicator as

strongly held by this Court in several cases including in

the reasoned Constitution Bench judgment in SAIL (supra).

On behalf of the Union submissions were made supporting the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 12

impugned judgment and order, contending that

(a) contract labour system may be characterized as sham if the

work is of continuous nature, supervision and control is by

the principal employer, the work is of statutory nature, the

principal employer and the contractor cannot produce any

records such as pay slips, muster roll, attendance cards or

wage registers to show that the workers were actually

employed through a contractor, the workers work in the

establishment of principal employer, neither the principal

employer nor the contractors have obtained licences or

certificates under the CLRA Act, the nature of work is

essential to the work of the establishment, the

establishment rules itself provide that contract labour

shall not be used for perennial work and workers are kept in

bondage.

(b) Normally the High Court, under Article 226 of the

Constitution, enquire as to whether the contract labour

system is a sham, and direct absorption, but where facts are

by and large undisputed, many years have passed and all the

authorities have recommended the absorption of workers but

the ultimate authority has failed to act for a long time and

it would be an act in futility and waste of time and also

cause injustice to the workers, the High Court could go into

the question and pass orders instead of remanding the

matter.

On behalf of both the sides our attention was drawn to

relevant material on record in support of their respective

contentions.

After the High Court passed the impugned judgment and order,

request was made on behalf of the Corporation for staying the

order to enable it to approach this Court challenging the same.

After hearing both sides, the high Court stayed the order for a

period of six weeks subject to certain conditions in the following

terms:-

"(a) There shall be stay of our order for a period

of six weeks, except the direction pertaining to

the appointment of the Committee and the work to

be done by it as provided in paragraphs (c) and

(d) above.

(b) All 782 workmen who have already been

identified by the Office of the Commissioner of

Labour shall be provided work by the first

Respondent Corporation and paid daily wages of

Rs. 100/- without prejudice to the rights and

contentions of the first Respondent Corporation

and also without prejudice to the rights and

contentions of the concerned workmen.

(c) The first Respondent Corporation is not obliged to

extend any other conditions of service except

safety and sanitary equipments to the concerned

workmen during the period of six weeks from

today."

On 26.10.1999, this Court passed order to maintain status

quo till the matter came up before the Motion Bench. On

5.11.1999, this Court issued notice to the respondents and ordered

to maintain status quo regarding employment of the concerned

employees till further orders.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 12

In view of the order of this Court dated 10.10.2001, the ex-

officio Member Secretary, State Contract labour Advisory Board and

Commissioner of Labour at Mumbai filed additional affidavit on

behalf of respondent no. 35 saying that the Union by its letter

dated 19.5.1998 requested the State Contract Labour Advisory Board

to take up the matter regarding prohibition of contract labour

system prevailing in the Solid Waste Management Department of

Corporation. Pursuant to the direction received from the

Government of Maharashtra dated 9.2.1999, the Board in its meeting

held on 6.3.1999 heard the representatives of the Corporation and

the Union and advised the Corporation to abide by the CLRA Act and

the Minimum Wages Act, 1949 and to provide all facilities to the

contract labourers employed in the Solid Waste Management. It is

further stated that in view of the impugned judgment and due to

the pendency of Special Leave Petition in this Court, the State

Contract Labour Advisory Board has kept the matter in abeyance.

The High Court noticing the duties of the Municipal

Corporation under the Act contained in the various Sections held

that the said provisions imposed statutory duties on the

Corporation to keep the city clean free of garbage, rubbish,

refuse etc. The High Court took the view that if the Corporation

chose to employ some other agency to discharge its obligation, it

could do so provided it is consistent with the applicable legal

provisions; after the enforcement of the CLRA Act under Section 7,

the Corporation being principal employer was compulsorily required

to register itself with the appropriate registering authority and

every contractor was required to obtain a licence under Section 12

of the Act but neither the Corporation nor the contractors

complied with the said provisions in spite of the grievances

voiced by the union repeatedly. The High Court looking to the

letter of the Labour Commissioner dated 18th July, 1998 to the

Chief Secretary of the State recommending abolition of the

contract labour system, letters dated 4th February, 1999, 5th April,

1999 and 10th may, 1999 addressed by the Labour Minister to the

Commissioner of Corporation dealing with the working conditions of

the contract labour and inaction of the Corporation and finally

recommending for abolition of the contract labour system ordered

for absorption of workers directly. During the course of the

argument, the learned Addl. Govt. Pleader was asked as to why the

said Contract Labour Abolition Advisory Board and the State of

Maharashtra should not issue an order prohibiting employment of

contract labour in the Solid Waste Management Department, it was

informed that on account of election code of conduct, decision

could not be taken in the matter. In this view, the High Court

felt that the fate of the workers could not be left hanging on the

sweet mercy of the Corporation and/or the State Government and it

has become the responsibility of the Court to discharge its

constitutional duty to see if the Union was entitled to relief in

law and grant them such relief by then and there itself.

Thereafter, the High Court referring to various decisions cited

and mainly relying on the decision of this Court in Air India case

(supra) and applying the principles stated therein to the present

case and allowed the writ petition granting the reliefs to the

union in terms already stated above.

In a recent Constitution Bench judgment of this Court in

Steel Authority of India Ltd. & Anr. vs. National union Waterfront

Workers & Ors. (2001) 7 SCC 1] Air India case (supra) is

specifically overruled. In the said judgment, after referring the

various decisions of this Court including the decisions cited

before us and on elaborate consideration and analysis, the

Constitution Bench in para 125 of the said judgment, outlined the

conclusions. To the extent they are relevant for the present

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 12

purpose read:-

"o1u2t5l.inedThtehuusp:s-hot of the above discussion is

(1) .....................................

(2) ................................

(3) Neither Section 10 of the CLRA Act nor any

other provision in the Act, whether expressly or

by necessary implication, provides for automatic

absorption of contract labour on issuing a

notification by the appropriate Government

under sub-section (1) of Section 10, prohibiting

employment of contract labour, in any process,

operation or other work in any establishment.

Consequently the principal employer cannot be

required to order absorption of the contract

labour working in the establishment concerned.

(4) We overrule the judgment of this Court in Air

India case prospectively and declare that any

direction issued by any industrial

adjudicator/any court including the High Court,

for absorption of contract labour following the

judgment in Air India case shall hold good and

that the same shall not be set aside, altered or

modified on the basis of this judgment in cases

where such a direction has been given effect to

and it has become final.

(5) On issuance of prohibition notification under

Section 10(1) of the CLRA Act prohibiting

employment of contract labour or otherwise, in

an industrial dispute brought before it by any

contract labour in regard to conditions of

service, the industrial adjudicator will have to

consider the question whether the contractor has

been interposed either on the ground of having

undertaken to produce any given result for the

establishment or for supply of contract labour

for work of the establishment under a genuine

contract or is a mere ruse/camouflage to evade

compliance with various beneficial legislations

so as to deprive the workers of the benefit

thereunder. If the contract is found to be not

genuine but a mere camouflage, the so-called

contract labour will have to be treated as

employees of the principal employer who shall be

directed to regularize the services of the

contract labour in the establishment concerned

subject to the conditions as may be specified by

it for that purpose in the light of para 6

hereunder.

(6) If the contract is found to be genuine and

prohibition notification under Section 10(1) of

the CLRA Act in respect of the establishment

concerned has been issued by the appropriate

Government, prohibiting employment of contract

labour in any process, operation or other work

of any establishment and where in such process,

operation or other work of the establishment the

principal employer intends to employ regular

workmen, he shall give preference to the

erstwhile contract labour, if otherwise found

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 12

suitable and, if necessary, by relaxing the

condition as to maximum age appropriately taking

into consideration the age of the workers at the

time of their initial employment by the

contractor and also relaxing the condition as to

academic qualifications other than technical

qualifications."

Para 126 of the same judgment reads:-

"126. We have used the expression

"industrial adjudicator" by design as

determination of the questions aforementioned

requires enquiry into disputed questions of

facts which cannot conveniently be made by the

High Courts in exercise of jurisdiction under

Article 226 of the Constitution. Therefore, in

such cases the appropriate authority to go into

those issues will be the Industrial

Tribunal/Court whose determination will be

amenable to judicial review."

A Division Bench of the Bombay High Court following the

judgment of this Court in Air India case (supra) had directed the

appellant to absorb the contract labour but the Constitution Bench

judgment in view of the overruling of Air India case (supra) set

aside the judgment of the High Court leaving it open to the

contract labour to seek appropriate relief in terms of the main

judgment as stated in para 136 of the Constitution Bench judgment.

Similar orders were passed as can be seen from paras 137, 140 and

146 of the same judgment dealing with other cases where orders

were passed by the high Court relying on Air India case (supra).

We do not consider it necessary to refer to the decisions

cited by the learned counsel in the light of the authoritative

pronouncement of the Constitution Bench of this Court

aforementioned.

Now, we proceed to consider the validity and correctness of

the impugned judgment and order in the light of judgment of the

Constitution Bench in SAIL case (supra). The High Court held that

the work entrusted to the members of the Union continued to be

basically the work of the Corporation itself of perennial nature;

the Corporation has chosen to carry out the work under so-called

system of labour contract without complying with the provisions of

the CLRA Act and as such the labour contract was a camouflage. We

must state here itself that the Union in the writ petition alleged

that the labour contract was sham and the Corporation specifically

denied it in its counter affidavit but the High Court did not go

into this question and did not record a finding that the labour

contract in the present case was sham or a camouflage considering

the material on record; even otherwise this being a serious and

disputed fact in terms of the Constitution Bench judgment

aforementioned, the High court could not have appropriately

adjudicated on the issue exercising jurisdiction under Article 226

of the Constitution. It appears to us that the High Court

proceeded to conclude that the labour contract was not genuine and

the workers of the Union were employees of the Corporation because

the Corporation and the contractors did not comply with the

provisions of the CLRA Act. Conclusion that the contract was sham

or it was only camouflage cannot be arrived at as a matter of law

for non-compliance of the provisions of the CLRA Act but a finding

must be recorded based on evidence particularly when disputed by

an industrial adjudicator as laid down in various decisions of

this Court including the Constitution Bench judgment in SAIL. The

cases on which the High Court placed reliance were the cases where

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 12

finding of fact was recorded by the labour courts on evidence. In

para 34 of the impugned judgment, it is stated :-

"This court is hardly competent to record

evidence or appreciate it in exercise of its

powers under Article 226 of the Constitution.

This Court as well as the Supreme Court have

always taken the view that writ jurisdiction

should not be permitted to be invoked if

disputed questions of facts are involved, is the

submission of the learned counsel. The

submissions are wholly unexceptionable. If the

facts were not clear, we would have hardly

allowed our writ jurisdiction to be invoked.

The material which we have referred to at

several places hereinbefore, is more than

adequate, in our view, to come to the conclusion

we have arrived at."

The material referred to relates to the complaints of the

Union, recommendations of the Labour Commissioner, Labour Minister

and the Labour Contract Advisory Board in regard to abolition of

contract labour under Section 10 of CLRA Act but that material

could not be a foundation or basis to say that the labour contract

was sham, camouflage or a devised to deny the statutory benefits

to the workers. From the judgment under challenge, it is clear

that Air India case (supra) weighed with the High Court which

judgment now stands overruled as already stated above. The High

Court rejected the contention that jurisdiction to abolish the

contract labour system vested with the appropriate Government

under Section 10 of CLRA Act and that power could be exercised

after obtaining advice of the Contract Labour Advisory Board which

in turn had to keep several factors enumerated in clauses (a) to

(d) of Section 10(2) of CLRA Act stating that in the present case

in almost 15 years, there was no registration of principal

employer; none of the contractors ever held a licence under the

Act; the work that was being carried on fell within the parameters

of clauses (a) to (d) of Section 10(2) of the Act and having

regard to what was said by the Chairman, Standing Committee of the

Corporation and the contractors and the recommendation of the

Labour Commissioner to abolish the contract labour system.

Further the Minister for Labour of Govt. of Maharashtra went on to

record in clear terms that the Government had taken a decision to

abolish system of contract labour in the Solid Waste Management

Department of the Corporation, the High Court thought that there

was sufficient material for abolishing the contract labour system.

The High Court drew an inference that the State admitted that all

the requirements were satisfied for acting under Section 10(2) but

because of the election code of conduct it was unable to act and

passed order for absorption of workers saying that it had no

impediment to do so in view of its conclusions. Referring to Air

India case (supra), the High Court observed that the said judgment

suggested that a contract labour system can be said to be genuine

only if it is carried in compliance with the provisions of the

CLRA Act and anything contrary thereto would lead to the

presumption that the purported contract labour system was merely a

devise and sham. In our view, the conclusion of the High Court

that the contract labour system in the present case was sham

cannot be sustained in the light of what is stated above and

particularly when the disputed questions of fact arose for

consideration in the light of rival contentions raised by the

parties. We have detailed them above to say so.

The code of conduct relating to election related to 1998.

The High Court at the time of passing the impugned order could

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 12

have directed the State Government/authority to pass orders within

a given time frame but the High Court took up the task itself.

It may also be noticed that the High Court by its order

dated 18th November 1998 directed the Labour Commissioner to verify

the authenticity of the list of workmen claiming to be the members

of the Union. After investigation, the Labour Commissioner made

three reports to the High Court on 9th February 1999, 23rd April

1999 and 12th June, 1999. In the report of 9th February, 1999, the

Labour Commissioner pointed out that the work of investigation of

the authenticity of the members of the Union could not be carried

out as the contractors did not maintain any record. In the said

report, it is stated that :

"In these circumstances mentioned above, it has

not been possible for the Commissioner of Labour

to verify the authenticity of the list of

workmen claiming to be members of Kachara

Vahatuk Shramik Sangh."

The Labour Commissioner suggested that in the absence of any

record of contract labourers maintained by the principal

employer/contractors, the list of the workers as submitted by the

Union may be considered as valid list. In the said list, the

Labour Commissioner had mentioned that about 2000 workmen had been

working since last 15 years as contract labourers. In the report

of 23rd April, 1999, after giving the details of the work carried

by him, the Labour Commissioner says "that the Government Labour

Officers designated by him had interrogated the contract labourers

present in the Ward in the morning and filled up 1172 forms after

interrogating 1172 workers. It was also noticed that merely 219

workers' names were in the list and remaining 953 workers' names

were not found in the list of that Ward."

In the report dated 12th June, 1999, the Labour Commissioner

has also indicated that out of 1540 workmen listed out in the writ

petition, he had been able to identify 541 workers. Similarly,

out of the 607 contract labourers whose names were annexed to the

list exhibited to the Chamber Summons No. 31 of 1991 in Writ

Petition No. 1027 of 1997, he had been able to identify 138

workers. Thus, he pointed out that, out of the total 2147 workers

whose names were put forward by the Union, the Government Labour

Officers were able to identify 947 workers while actually working

on the dates of the visits of the Government Labour Officers on

20th and 21st May, 1999.

The Corporation has disputed as to the number of workers

under the contract labour system and their authenticity and the

period of their work etc. Merely because the records are not

maintained by the contractors, it may not be appropriate to accept

the list of workers given by the Union. Even from the reliefs

granted by the High Court already extracted above, it is clear

that 782 contract labourers were identified as working through

contracts; a direction was given to constitute a committee to

verify the claims of all workmen other than already verified and

to make a report to the Corporation indicating the presence who

were working actually as the contract labourers in the Solid Waste

Management Department on the date on which the writ petition was

filed. Further, immediately on receipt of such report, the

Corporation shall absorb such workmen as the permanent workmen.

These directions themselves indicate as to the disputed questions

that arose for consideration

The High Court having said earlier although the power of

abolishing the contract labour system vested in the Government

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 12 of 12

because of delay in doing so, there was no impediment to pass such

an order itself. In para 45 of the judgment, the High Court

states thus:-

"We are inclined to direct that the workmen

required for work in the Solid Waste Management

Department should not fall within the purview of

the Contract labour (Regulation & Abolition)

Act, 1970 at all, but that they should be

absorbed as direct employees of the Bombay

Municipal Corporation."

This direction cannot be sustained not being consistent with

the judgment of the Constitution Bench in SAIL case (supra).

As laid down in the Constitution Bench judgment, absorption

of contract labourers cannot be automatic and it is not for the

court to give such direction. Appropriate course to be adopted is

as indicated in para 125 of the said judgment in this regard. Thus

having considered all aspects, we are of the view that the

impugned judgment and order cannot be upheld.

In the result, for the reasons stated and discussion made

above, the impugned judgment and order are set aside leaving it

open to the Union to seek remedies available in terms of para 125

of the judgment of the Constitution Bench in SAIL aforementioned

before the State Government or the Industrial Adjudicator as the

case may be. In case, the Union moves the appropriate Government

or the Industrial Adjudicator within four weeks from today, they

shall consider the same and pass appropriate orders within a

period of six months. The order to maintain status quo regarding

the employment of the contract labourers to the extent indicated

was passed in the writ petition on 20.4.1998 and even after

disposal of the writ petition, the High Court stayed the order for

a limited period and further this Court passed order to maintain

the status quo on 26.10.1999 which is continuing. In these

circumstances, the order of status quo shall continue for a period

of six months. We also make it clear that this order does not

prevent the State Government to proceed in accordance with law in

the matter of abolition of contract labour system. The appeal is

allowed accordingly in the above terms. No costs.

.......................J.

[D.P. Mohapatra]

.......................J.

[Shivaraj V. Patil]

March 12, 2002.