Chairman Cum Managing Director, Ennore Port Trust (Presently Known As Kamarajar Port Limited) vs V. Manoharan and Ors.

CIVIL APPEAL NOS. 2114-2115 OF 2018 [Arising out of SLP (C) Nos.14441-14442 of 2017]

Chairman Cum Managing Director, Ennore Port Trust (Presently known as Kamarajar Port Limited) .. Appellants

Versus

V. Manoharan And Ors. .. Respondents

WITH

CIVIL APPEAL NOS. 2116-2118 OF 2018 [Arising out of SLP (C) Nos.30359-30361 of 2017]

JUDGMENT

Abhay Manohar Sapre, J.

Signature Not Verified

1) Leave granted. Digitally signed by ANITA MALHOTRA

2) These appeals arise from the final judgment and Date: 2018.02.15 16:52:11 IST Reason:

order dated 05.01.2017 passed by the High Court of

1 Judicature at Madras in W.A. No.1020 of 2016, W.A.

No. 1351/2016 and W.A. No.1378 of 2016 whereby

the Division Bench of the High Court while

reversing/set aside the judgment of the Single Judge

partly allowed the writ appeals and gave certain

directions to the Port Trusts (appellants herein) for

their compliance in favour of the writ petitioners

(respondents herein).

3) In order to appreciate the issues involved in

these appeals, it is necessary to set out the relevant

facts hereinbelow.

4) There are two Port Trusts in Chennai. One is

known as “Chennai Port Trust” and the other is

known as “Ennore Port Trust”, now called “Kamarajar

Port Trust”.

5) Chennai Port is one of the oldest ports in the

country. Amongst several operational activities of

loading, unloading, spillages and clearing of various

2 kinds of the goods, which are undertaken regularly in

the Port, one such activity that is operational on

regular basis is handling of “Coal and Iron Ore”.

6) In order to carry out the loading, unloading,

spillages and clearing the coal and iron ore from the

Iron Ore Handling Plant set up in the Port Trust, the

stakeholders need workers (class IV). Sizeable

numbers of worker are, therefore, involved in doing

this work on regular basis.

7) In 1987, these workers made a demand to

regularize their services in the set up of the Port

Trust. Since their demands were not acceded to,

they (160 or so) filed a writ petition (W.P. No.9011 of

1987) in the High Court at Madras seeking therein a

relief of regularization of their services in the set up

of Chennai Port Trust.

8) The Chennai Port Trust contested the writ

petition and contended that it is not possible to

3 regularize the services of these workers (writ

petitioners) for various reasons in their set up. It was

contended that these workers are not the employees

of the Port Trust and nor there exists any

relationship of employer and employee between them.

It was also contended that it is the contractor, who

engages these workers, and hence they are the

employees of the Contractor but not Port Trust.

9) During pendency of the writ petition, these

workers (writ petitioners) formed one association

called – “Madras Port Spillage Handling Workers

Association” (hereinafter referred to as “the

Association”) and got the Association registered as

Society under the Society Registration Act.

10) The matter was then referred to arbitration

which resulted in passing of an award dated

22.10.1994. The award was published in the

Government of India Gazette on 24.12.1994. The

4 award, inter alia, directed the parties to enter into a

Memorandum of Understanding (MOU) for settlement

of the disputes. Accordingly, the Association and the

Chennai Port Trust entered into a MOU on

02.05.1995. (Annexure-P-1)

11) Clause 1 of MOU provides that subject to

Association following the terms and conditions of

MOU, the Port Trust has agreed to give work of

loading /unloading/spillage/cleaning to the members

of the Association. Clause 2 of the MOU provides that

membership of Association will not exceed the

number of 160 and the membership of Association

will be given only to those persons, who are declared

physically fit with the approval of the Chairman.

Clause 2 further provides that preference would be

given to dependants of those who had been employed

and died or became physically unfit, their dependents

would be made member of the Association subject to

5 dependant concerned declared fit by the Medical

Board and whose membership is approved by the

Chairman. Clause 3 deals with allocation of work to

male/female members. Clause 4 further provides

that member will be discontinued from the work on

attaining the age of 58 and in the absence of any

proof of age, the certification issued by the Medical

Board of his/her age would be final. Clause 5

provides that, if any member is found unfit, he would

be discontinued from work once certified by the

Medical Board. Clause 6 provides that all workers

currently working would be deployed for clearing

spillage of Iron Ore. Clauses 7, 8, 11, 12, 13, 20, 21,

22, 28, 29 and 30 provide the manner and mode of

payment including paying other monetary benefits to

the members of the Association whereas Clauses 9,

10, 14, 15, 16, 17, 18, 19, 23, 24, 25, 26 and 27

provide for extending various kinds of facilities and

6 welfare benefits to the members of the Association

and lastly, Clause 31 provides for resolution of

disputes arising between the parties in relation to

MOU through the means of arbitration.

12) This MOU was amended on 31.12.1998

(Annexure P-2). One of the amendments was that

the Association was recognized as “Contractor”

whereas the Chennai Port Trust was declared as

“Principal Employer” under the Contract Labour

(Regulation and Abolition) Act, 1970.

13) In the light of the aforementioned background

facts arising in the case, one writ petition (Public

Interest Litigation) came to be filed in the Madras

High Court (W.P. No.11747/2002) by some

public-spirited persons against the State, Chennai

port Trust and Pollution Board complaining therein

that due to heavy and reckless handling of coal and

iron ore and heavy movement of dusty cargo every

7 day in Chennai Port Trust (handling plant) premises,

the activity is emitting, huge quantity of dust and

several chemical particles in the air are polluting the

entire environment which, according to the writ

petitioners, was harmful to the life of human being

and especially to those, who are residing in the

nearby area of the Port. It was complained that such

activity being hazardous and equally injurious to the

health of human beings, should be stopped forthwith

or, in any case, be regulated in the larger public

interest including considering shifting of activity to

some other Port, if considered feasible and

practicable so that hazards of the environmental

pollution which is prevailing in the locality is

considerably reduced. It is essentially to espouse

this cause, the PIL (writ petition) was filed for

claiming appropriate remedial relief(s) for the benefit

of the larger public good. The State and the Chennai

8 Port Trust contested the writ petition on several

grounds.

14) By order dated 11.05.2011, the High Court

allowed the writ petition and gave five directions to

the Chennai Port Trust and Ennore Port Trust for

ensuring their compliance. These directions are

reproduced hereinbelow:

“(a) All the writ petitions are allowed. However, the prayer in W.P. No.41163 of 2002, with regard to the compensation aspect stands dismissed.

(b) The Government of India, represented by its Secretary, Ministry of Shipping, New Delhi is directed to see distribution of cargoes between Ennore Port and Chennai Port, allotting clean cargoes viz. container, car etc. to Chennai Port and the dusty cargoes like coal, iron ore and all other dusty cargoes to Ennore Port.

(c) Since the coal terminal, iron ore terminal and the single line rail connectivity at Ennore Port are assured to be operational to their full capacity by September, 2011, the Government of India, represented by its Secretary, Ministry of Shipping, New Delhi and the Government of Tamil Nadu, represented by its Chief Secretary are directed to see that all the dusty cargoes like coal, iron ore and all other dusty cargoes

9 should move only to Ennore Port on and from 1.10.2011 and not to Chennai Port. The Chennai Port is also directed to render all its cooperation to the Government of India and the Government of Tamil Nadu in this direction.

(d) With regard to the employees and pensioners of the Chennai Port, the Government of India, the Government of Tamil Nadu, Chennai Port Trust and the Ennore Port Trust are directed to see that not even a single employee is retrenched or otherwise made to lose his livelihood because of the distribution of cargoes between Ennore Port and Chennai Port, as ordered above. For this purpose, since the dusty cargoes are going to be berthed and processed at Ennore Port on and from 1.10.2011, the Ennore Port may treat the employees of the Chennai Port connected to such activities as its employees, including the pensioners. In case of any difficulty, the Government of India, represented by its Secretary, Ministry of Shipping, New Delhi and the Chief Secretary to the Government of Tamil Nadu, shall divide the employees and pensioners, between the Chennai Port and the Ennore Port, proportionate to the income of both the Ports.

(e) With regard to the traders, like the impleaded respondents 6 to 8 also, both the Chennai Port and the Ennore Port are directed to protect their rights and interest, in accordance with law.”

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15) Since the offending activity was largely shifted

from Chennai Port Trust to Ennore Port Trust in

terms of directions of the High Court, the Chennai

Port Trust on 15.10.2012 resolved to terminate the

MOU. On 06.12.2012, the Association was

accordingly informed about the termination.

16) In the meantime, 90 persons again woke up and

claiming to be the workers working on the Chennai

Port Trust filed a writ petition (W.P. 33614 of 2012)

and sought regularization of their services in the set

up of the Chennai Port Trust. Their main case was

that since all the writ petitioners (90) were working

for the last more than 2 decades with the Chennai

Port Trust as Class IV employees, their services

should be regularized in the set up of Chennai Port

Trust. In support of this relief, the writ petitioners

produced certain evidence.

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17) The Chennai Port Trust contested the writ

petition, inter alia, again contending that there was

no relationship of employee and employer between

the writ petitioners and the Chennai Port Trust and,

therefore, the writ petitioners are not entitled to claim

any relief much less the relief of regularization in the

services of Chennai Port Trust.

18) The Single Judge, by order 22.07.2016,

dismissed the writ petition holding that there did not

exist any relationship of employer and employee

between the parties and hence no relief can be

granted to the writ petitioners much less the one

claimed in the writ petition. The writ petitioners felt

aggrieved and filed writ appeal before the Division

Bench of the High Court.

19) By impugned order, the Division Bench partly

allowed the writ appeal and gave certain directions to

the Port Trusts(appellants herein) for their

12 compliance in favour of the writ petitioners

(respondents herein) which has given rise to filing of

these appeals by way of special leave by the Port

Trusts before this Court.

20) Heard Mr. P.S. Narsimha, Mr. P. Wilson, learned

senior counsel for the appellants and Mr. V. Prakash,

Mr. Raju Ramachandran, learned senior counsel for

the respondents.

21) Having heard the learned counsel for the parties

and on perusal of the record of the case, we are

inclined to allow the appeals in part with directions

mentioned hereinbelow.

22) In our considered opinion, having regard to the

nature of the controversy raised by the writ

petitioners (respondents herein) and relief sought in

the writ petitions out of which these appeals arise

and keeping in view the clauses of the MOU,

especially Clause 31, which provides for referring the

13 case to the Arbitral Tribunal in the event of any

dispute arising between the parties in relation to

MOU, the writ petition filed by the respondents

herein under Article 226 of the Constitution should

not have been entertained for being tried on merits

by the Single Judge and instead the parties should

have been left to take recourse to the remedy

provided in Clause 31 for referring the case to

Arbitral Tribunal for its decision in accordance with

law.

23) In our considered opinion, a question whether a

particular person is in the employment of any

establishment and whether he is entitled to claim

regularization of his services in such establishment

(as in this case Port Trust) and, if so, from which date

is essentially a question of fact.

24) If such question is disputed by the

establishment, then it is required to be decided by a

14 fact-finding body on the basis of evidence adduced by

such person unless the parties do not dispute the

facts.

25) If one person is able to prove his case of

regularization qua establishment from a particular

date that does not necessarily mean that other

person’s case is also automatically proved alike other

person.

26) In other words, every person has to prove his

case qua establishment independently by adducing

evidence. It is only then such person is entitled to

claim such relief.

27) In our considered opinion, several questions

arise in the case at hand and need to be answered

before considering grant of appropriate relief, if any.

These questions when we see the background facts of

the case set out above are inter-linked with each

other and relate to the main activity which was being

15 carried in the Chennai Port Trust and now shifted to

Ennore Port Trust largely. The disputes now being

raised again relate to the employment and

regularization of the class IV employees in the set up

of Chennai Port Trust. Indeed, to settle this

controversy for all time to come, the stakeholders had

in past executed MOU providing therein the entire

machinery to safeguard the rights and obligation of

parties concerned, which are detailed above. But due

to several intervening factors, it did not seem to have

worked smoothly.

28) In our considered opinion, the following

questions do arise in this case.

29) First, whether the writ petitioners (respondents

herein) were/are in employment of Chennai Port

Trust or in the employment of any contractor and, if

so, its basis. Second, whether there ever existed any

relationship of employee and employer between the

16 writ petitioners and Chennai Port Trust or between

the writ petitioners and any contractor and, if so, its

basis.

30) Third, whether the writ petitioners were/are

members of the Association and, if yes, then its effect

and if not, then its effect.

31) Fourth, assuming that the writ petitioners are

not held to be the members of the Association as they

now claim in the writ petition (see ground (e) in the

writ petition at page 125-126), whether the writ

petitioners (90 in number) are still entitled to claim

any relief and, if so, against which Port Trust and of

which nature.

32) Fifth, assuming that the writ petitioners are

held members of the Association or let us say eligible

members by virtue of their qualifications prescribed

in the MOU, whether they are entitled to claim any

17 relief against any Port Trust and, if so, of which

nature.

33) Sixth, If the writ petitioners (whether all or

some) are able to prove that they are/were in the

employment of Chennai Port Trust and that

relationship of employee and employer between them

does exist notwithstanding execution of MOU, then

whether such persons are entitled to claim

regularization in the service of Port Trust and, if so,

since when and with what benefits or their cases are

still governed by MOU as its members and lastly,

what eventual reliefs, if any, can be granted to the

writ petitioners.

34) In our view, the aforesaid questions could not

be decided in the writ petition but could be

adjudicated more effectively by a fact-finding body

empowered to record evidence.

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35) Since in this case parties have agreed to refer

the matter to the Arbitral Tribunal in the event of any

dispute arising between them, we are of the view that

it would be in the interest of justice that the parties

are relegated to take recourse to the arbitration

proceeding remedy for adjudicating the disputes.

36) We are of the view that to decide the questions

arising in the case at hand, recourse to MOU for the

purpose of referring the case to arbitration can be

taken. As observed supra, even otherwise, the

disputes raised herein are not the disputes, which

are capable of being tried effectively in writ

jurisdiction and indeed are capable of being tried

only by a Tribunal.

37) Once the disputes are referred to the Arbitral

Tribunal, the writ petitioners and the Port Trusts

would be at liberty to raise all the issues on facts/law

19 in support of their respective contentions including

adducing evidence (oral and documentary).

38) In view of the foregoing discussion, we are

unable to sustain the impugned order, which in the

facts of this case should not have been passed.

39) As a consequence, we allow the appeals, set

aside the impugned judgments of the Division Bench

and the Single Judge, dismiss the writ petition out of

which these appeals arise and grant liberty to the

writ petitioners and the Port Trusts to approach the

Court for appointment of Arbitral Tribunal in terms

of Clause 31 of MOU for deciding the questions

framed by this Court supra.

40) Parties are also at liberty to appoint the Arbitral

Tribunal with mutual consent, if they so wish,

without taking recourse to appointment of Arbitral

Tribunal through Court.

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41) The Arbitral Tribunal once appointed will

embark upon the reference on the questions framed

by this Court and would be free to frame any more

questions after consultation of the

parties/stakeholders, if such questions also arise and

need to be decided to give quietus to the long pending

disputes.

42) The Arbitral Tribunal will afford full opportunity

to all the parties (stakeholders) concerned to file their

response/statements and lead evidence in support of

their respective stands and then pass a reasoned

award in accordance with law on the basis of the

evidence adduced by the parties (oral/documentary)

uninfluenced by any observations made by Single

Judge and the Division Bench.

43) Since the case is old and concerning about a

large number of workers, efforts be made to complete

21 the proceedings within six months from the date of

appointment of Arbitral Tribunal.

………………………………..J (R.K. AGRAWAL)

..………………………………J. (ABHAY MANOHAR SAPRE)

New Delhi, February 15, 2018

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