Mahanadi Coalfields Ltd. vs Brajrajnagar Coal Mines Workers Union

2024 INSC 199 REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO(S). 4092-4093/2024 (ARISING OUT OF SLP (C) NO(S). 6370-6371/2024 (ARISING OUT OF SLP (C) DIARY NO. 32072 /2021)

MAHANADI COALFIELDS LTD. …. APPELLANT(S)

VERSUS

BRAJRAJNAGAR COAL MINES WORKERS’ UNION …RESPONDENT(S)

JUDGMENT

PAMIDIGHANTAM SRI NARASIMHA, J.

1. Delay condoned. Leave granted.

2. The Appellant, Mahanadi Coalfields Ltd., a subsidiary of Coal

India Ltd. floated a tender for the transportation of crushed coal

and selected a successful contractor for performance of the

Signature Not Verified agreement for the period 1984 to 1994. The contractor Digitally signed by Indu Marwah Date: 2024.03.12 18:17:00 IST Reason: employed workmen for execution of this contract.

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3. The respondent-union espoused the cause of the workmen who

were engaged by the contractor and sought permanent status

for them. It relied on clauses 11.5.1 and 11.5.2 of the National

Coal Wage Agreement-IV dated 27.07.1989. Under these

clauses, it was agreed that the employer shall not engage

contract labour with respect to jobs which are permanent and

perennial in nature. They also provide that such jobs shall be

executed through regular employees.

4. Following the representation of the respondent-union, the

Assistant Labour Commissioner sent a notice to the appellant

for conciliation. The conciliation process eventually culminated

in a settlement dated 05.04.1997 under Rule 58 of the

Industrial Disputes (Central) Rules, 1957. The relevant portion

of the settlement is as follows:

“The Union has submitted a list of 32 persons said to have been engaged by the contractors and demanded for their regularisation. Alter verification, it was observed, that the following persons are engaged in Bunker for operating Chutes.

SI No. Name of the Person Father’s Name 01. Sri Sadanand Bhoi Keshab 02. Sri Purusottam Dau Govardhan 03. Sri Anta Barik Gadadhar 04. Sri Aditya Nikhandia Cheru 05. Sri Bhabagrahi Pradhan D. Pradhan

2 06. Sri Sudarshan Khandit Masru 07. Sri Ashok Kumar Rout Sitaram 08. Sri Krishna Dau Goverdhan 09, Sri Abhimanyu Kisan Chhala 10. Sri Lakhan Bhoi Keshab 11. Sri Jay Narayan Bhoi Chaitan 12. Sri Sanatan Kisan Ugresan 13. Sri Giridhari Raudia Goverdhan 14. Sri Daitari Pradhan Nira 15. Sri Subram Bag Buchhu 16. Sri Madhu Marai Dasa 17. Sri Fakir Khamari Kartik 18. Sri Sanatan Naik Ram Krishna 19. Sri Sanatan Bhoi Tiharu

Since this operation is of permanent and perennial nature, it was agreed to regularise the above 19 (nineteen) persons as General Mazdoor, Category-I, in the NCWA-V Pay Scale of Rs. 65.40-1.08-85.52.

In respect of other persons, it was contended, that they are engaged in purely casual nature of jobs, which are not prohibited under Contract Labour (R&A) Act, 1970, and accordingly, they are not eligible for regularisation.”

5. In view of the fact that the settlement is confined to only 19

workmen, the Central Government referred the entire dispute

to the Industrial Tribunal under Section 10 (2A)(1)(d) of the

Industrial Disputes Act, 1947, on 20.05.1997 registered as

Dispute Case no. 27/2001 before the Industrial Tribunal,

Rourkela, Odisha. Before the Tribunal, the workmen examined

3 3 witnesses in support of their case and the management

examined 4 witnesses.

6. By its judgment dated 23.05.2002, the Tribunal allowed the

industrial dispute and directed the regularization of the

remaining 13 workmen. The important findings of the Tribunal

are as follows. At the outset, the Tribunal rejected the

preliminary objection that it had no jurisdiction under the

Contract Labour (Regulation and Abolition Act), 1970 and

proceeded to consider the nature of the work that the 13

workmen were performing. Having considered the matter in

detail, the Tribunal held that the work of removing spillages in

the railway siding, below the bunker and operation of chutes (in

the bunker) are regular and perennial in nature. Having

considered the evidence of the management witnesses, the

Tribunal concluded that the nature of the work is perennial.

Accordingly, the remaining 13 workers were directed to be

regularized in the following terms:

“The evidence is straight and clear that all the 32 persons were attending the same of. The rest 13 persons whose cases have not been regularized were attending the same job, which was being attended by 19 persons whose services has been regularized. So

4 standing on the same footing the cases of the rest 13 persons should not have been ignored on the ground that, they did not deserve to be regularized as reflected in the settlement. In my opinion when 19 persons have been regularized the case of rest 13 persons who were attending the same type of work should have been regularized without any cause. The ground stated in the settlement that they do not deserve, in my opinion does not appears to be a genuine ground to discard the cases of the rest 13 persons. I am not inclined to burden the award by placing all the submissions made on behalf of the parties. It is necessary to refer the evidence of the Witness No. 2 examined on behalf of the 1st Party Management. As per clause 11.5.0 of N.C.W.A. IV the Contract Labourers cannot be engaged for permanent and perennial nature of job. He has further stated that, they had entered to a settlement regarding those 19 persons. His further evidence is that the persons out of 13 were also working in Coal Handling Plant, which is a permanent and perennial in nature. The evidence of the Witness No. 3 of the lst Party Management is that, the work of railway siding is also a regular and perennial in nature for which the 19 persons have been regularized. All the 32 persons were attending the job of removing spillages for railway Biding below the bunker and also the operation of the chutes in the bunker. So in view of such evidence it cannot be said that the rest 13 persons were not attending the job which were being attended by the 19 persons whose services has been regularized. So in my opinion, even if there has been a settlement between the parties regularizing 19 persons the rest of 13 persons has got cause of action to raise the Industrial separate and their case should not have been ignored. In the other words the action of the 1st Party Management in not regularizing the services of the rest 13 persons in accordance was N.C.W.A. IV is illegal and unjustified. Hence, this Issue is answered accordingly.”

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7. Questioning the legality and validity of the Tribunal’s judgment,

the appellant filed a Writ Petition (C) numbered 2002/2002

before the Orissa High Court.

8. The Division Bench of the High Court heard the matter, and by

its judgment, impugned before us, dismissed the writ petition.

The High Court referred to the nature of work performed by the

workmen and affirmed the findings of the Tribunal based on the

evidence of witnesses such as MW3, the personal manager in

the appellant company. The High Court took note of his

evidence that the work on railway sidings was regular and

perennial in nature. He also admitted that it is with respect to

that work for which the 19 workers were regularized. The High

Court also observed that there was no evidence to dispute that

all 32 workers were engaged in removing spillages from railway

sidings and below the bunker, which is in addition to operating

chutes. The High Court, therefore, upheld the view taken by the

Tribunal. The Review Petition bearing No. 77/2017 filed by the

management was also dismissed by the order dated

11.11.2021.

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9. We have heard Mr. Aman Lekhi, learned Senior Counsel

appearing on behalf of the appellant, assisted by Mr. Siddharth

Jain, Mr. Soumyajit Pani and Ms. Aishwary Bajpai, Advocates

and also Mr. Ashok Kumar Panda, learned Senior Counsel for

the respondent-union, assisted by Mr. Tejaswi Kumar Pradhan,

Mr. Mohan Prasad Gupta, Mr. Manoranjan Paikaray and Mr.

Shashwat Panda, Advocates.

10. Submissions of the appellant: Before this court, the appellant

company contends that the Award dated 23.05.2002 is bad in

law. It argues that the settlement was binding on the parties

due to Section 18(1) read with Section 36, Industrial Disputes

Act and it continues to be so by virtue of Section 19(2) of the

Act, since the settlement was never terminated.

10.1 The settlement was reached after verification of the nature of

works performed. It was found that 19 workers were

performing perennial and permanent work and the work of the

remaining 13 workers was ‘casual’ in nature.

10.2 There was no provision to regularize such workers under the

NCWA-IV. The only provision under which regularization could

be claimed would be Section 25F of the Industrial Disputes

7 Act, but the said provision applies only to workers who worked

under the direct supervision of the company for a certain

period and wrongfully stopped thereafter. In the present case,

as the workmen worked under the supervision of a contractor

and not the appellant, Section 25F will have no application.

10.3 Lastly, it is contended that the Tribunal had wrongly directed

the appellant to disburse backwages to the 13 workers. This is

contrary to the settled principle that grant of backwages can

never be automatic or a natural consequence of regularization.

The workers seeking regularization and backwages have an

onus to show that they are not gainfully employed. For this,

the appellant relied on J.K. Synthetics Ltd. v. K.P. Agrawal

& anr. reported as (2007) 2 SCC 433 to support this

contention.

11. Submissions of the respondent-union: The respondent-

union submitted that all 32 workers were engaged in works of

a similar nature. They assert that the list in the industrial

reference dated 20.05.1997 shows that workers were arbitrarily

deprived of regularization, wherein certain workers from the

bunker and the plant were left out of the settlement without any

8 reason. It is also argued that the work in the railway siding was

perennial and regular in nature, similar to the works in the

bunker.

11.1 To support its contentions, the respondent-union relies on the

evidence of MW3 and MW4, who were the personal manager and

the project officer in the appellant company, respectively. While

MW3 categorically admitted that the removal of spilled coal from

the railway siding, the bunker and the Coal Handling Plant is

regular and perennial in nature, MW4 stated that all 32 workers

were engaged similarly. It is therefore submitted that their

evidence proves that the 13 workers actively participated in

tasks deemed regular and perennial.

11.2 Since there was no resolution of the claim of regularization of

similarly placed workers, they have the right to pursue the

remedy under the Industrial Disputes Act, 1947. It is submitted

that Rule 58 of the Industrial Dispute (Central) Rules, 1957

under which the settlement occurred, nowhere poses a legal

obstruction to the remedy.

9 11.3 It is finally submitted that the 13 workmen suffered for no fault

of theirs and an order of regularization must naturally lead to

grant of consequential backwages.

12. Analysis and findings: Having heard the parties in detail, we

are of the opinion that the present appeals can be disposed of

for the following reasons.

13. At the outset, the appellant objected to the Tribunal

entertaining the industrial dispute passing of the award on the

ground that a settlement under S. 18(1) read with S. 36 of the

Industrial Disputes Act is binding on all the parties under S.

19(2) of the Act. This is the substantive part of the submission

on behalf of the appellant. The facts of this case, as they unfold,

leading to the arrival of the settlement, followed by the reference

to the Industrial Tribunal, and then the award, are necessary

for our consideration.

14. At the first place, all the 32 workmen commenced their work

through the contractor from 1984 and continued till 1994. In

1994, the respondent-union espoused the cause of all the 32

workers and the Asst. Labour Commissioner took up the entire

10 cause. This culminated in the settlement dated 05.04.1997,

relied upon by the appellant.

15. To appreciate the submission that the settlement is the last

word and that the Tribunal could not have entertained the

reference or passed the Award, the following facts become

crucial.

16. The settlement itself talks about the claim of the 32 workers

raised by the respondent-union. It then talks about the

contention of the management that others are engaged in

‘purely casual’ nature of jobs. In the very next sentence, it

agreed to regularize 19 contractors. It is important to note that,

being conscious of the fact that the settlement provides for the

regularization of 19 out of the 32 workmen, the Government

invoked the power of reference to refer the matter to the

Tribunal to adjudicate the interest of all the 32 workers. The

Tribunal was naturally bound by the reference to consider the

claim of all the 32 workers.

17. Despite the fact that there was a settlement with respect to

some of the workmen, the Tribunal was tasked to examine the

entire reference and give independent findings on the issue.

11 Thus, the Tribunal was justified in giving its award on the

reference made by the central government. This answers the

objection raised by the appellant about the jurisdiction of the

Tribunal.

18. We are also conscious of the fact that the jurisdiction that we

exercise is under Article 136 of the Constitution. The findings

of fact arrived at by the Tribunal are unassailable. We are also

of the opinion that the High Court has correctly rejected the writ

petition filed against the award. Apart from the concurrent

findings of fact, we see no substantial question of law in these

appeals.

19. Even otherwise, the present case is not one where this court

would exercise its discretion. What appeals to us is that the 32

workers who entered the service of the appellant in 1984,

continued uninterruptedly till 1994, when the respondent-

union sought their permanence. In the settlement arrived in

1997, the stand of the appellant with respect to the 13 workers

is as follows:

“In respect of other persons, it was contended that they are engaged in purely casual nature of jobs which are not prohibited under Contract Labour (R&A) Act, 1970 12 and accordingly, they are not eligible for regularisation.”

20. It is proved that the remaining workers stand on the same

footing as the regularized employees, and they were wrongly not

made part of the settlement. This is established by the Tribunal,

by examining the nature of work undertaken by the first set of

19 workmen and that of the other 13 workmen. It also examined

Shri Arun Ch. Hota (WW3), the Deputy General Manager (MW2),

Mr. Udayshankar Gonelal, the Personal Manager (MW3) and

Shri S. Agarwal, the Project Officer (MW4). The Tribunal finally

came to the conclusion that the nature of the duties performed

by the 13 workmen are perennial in nature. The appellant has

failed to establish any distinction between the two sets of

workers. The Tribunal was, therefore, justified in answering the

reference and returning the finding that they hold the same

status as the regularized employees.

21. We are also not impressed with the artificial distinction which

the appellant sought to bring about between the 19 workers

who were regularized and the 13 workers who were left out. The

evidence on record discloses that, of the total 32 workmen, 19

13 workers worked in the bunker, 6 worked in the Coal Handling

Plant, and 7 worked on the railway siding. However, of the 19

workers who were regularized, 16 worked in the bunker, and 3

worked in the Coal Handling Plant. However, 3 workers from

the same bunker, 3 workers from the same Coal Handling Plant

and again 7 workers from the same railway siding were not

regularized. A tabulated representation of the above description

is as follows:

Site of work No. of No. of No. of workers workers workers who who were not executed regularized regularized works Bunker 19 16 3 Coal Handling 6 3 3 Plant Railway Siding 7 - 7 Total: 32 19 13

22. The above-referred facts speak for themselves, and that is the

reason why the Tribunal has come to a conclusion that the

denial of regularization of the 13 workmen is wholly unjustified.

As stated previously, we do not find any grounds in the artificial

distinction asserted by the appellant. However, as the case was

argued at length we thought it appropriate to give reasons for 14 rejecting the appeals. What we have referred to hereinabove are

all findings of fact by the Tribunal as affirmed by the High

Court. In view of the concurrent findings of fact on the issue of

nature of work, the continuing nature of work, continuous

working of the workmen, we are of the opinion that there is no

merit in the appeals filed by the appellant.

23. This is a case of wrongful denial of employment and

regularization, for no fault of the workmen and therefore, there

will be no order restricting their wages.

24. With respect to payment of backwages, we are of the opinion

that the workmen will be entitled to backwages as observed by

the Industrial Tribunal. However, taking into account, the long-

drawn litigation affecting the workmen as well as the appellant

in equal measure and taking into account the public interest,

we confine the backwages to be calculated from the decision of

the Tribunal dated 23.05.2002. This is the only modification in

the order of the Tribunal, and as was affirmed by the judgment

of the High Court.

25. For the reasons stated above, the appeals arising out of the final

judgment and order of the High Court in W.P. (C) No.

15 2002/2002 and order in Review Petition No. 77/2017 are

dismissed with the direction that the concerned workmen shall

be entitled to backwages with effect from 23.05.2002. There

shall be no order as to costs.

……………………………………….J. [Pamidighantam Sri Narasimha]

……………………………………….J. [Sandeep Mehta]

New Delhi.

March 12, 2024.

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