Ongc Labour Union vs Ongc Dehradun

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.__8114____OF 2019

(ARISING OUT OF SPECIAL LEAVE PETITION (C) NO. 5805 OF 2019)

ONGC LABOUR UNION APPELLANT(S)

VERSUS

ONGC DEHRADUN & ORS. RESPONDENT(S)

JUDGMENT

Hrishikesh Roy, J.

1. Leave granted.

2. Heard Mr. Colin Gonsalves, Learned Senior Counsel

representing the appellant. Also heard Mr J.P. Cama, learned Senior

Counsel representing Respondent No.1/Writ Petitioner (ONGC). Ms.

Alka Agrawal, the learned counsel is representing the Union of

India.

3. This appeal is filed by the ONGC Labour Union who however

were not impleaded in the Writ Petition No.1323 of 2013, filed by

the ONGC in the High Court of Uttarakhand. The ONGC had Signature Not Verified

challenged the notification dated 08.09.1994 (Annex P6) issued by Digitally signed by MAHABIR SINGH Date: 2019.10.17 16:20:10 IST Reason:

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

Labour (Regulation and Abolition) Act, 1970 (hereinafter referred to 1 as ‘the CLRA Act’) prohibiting employment of contract labour in

different categories of work, in the ONGC. The High Court allowed

the ONGC’s Writ Petition and quashed the 08.09.1994 notification

of the Central Government. Assailing the said verdict, the Labour

Union contends before us that the impugned prohibitory

notification was issued after complying with the provisions of

Section 10 of the CLRA Act, which requires the Central Government

to take into consideration the state of employment of contract

labour in any process, operation or other works of any

establishment. Specifically, the appropriate Government is required

to bear in mind the conditions of work and benefits provided for

the contract labour in the establishment by taking into account

other relevant factors i.e. whether the work is incidental to or

necessary for the industry, if it is perennial in nature, whether it is

ordinarily done through regular workmen in the establishment or

whether it is sufficient to employ considerable number of whole-

time workmen.

3A. The Section 10 of the CLRA Act being relevant is extracted

herein below:-

“10. Prohibition of employment of contract labour –(1) Notwithstanding anything contained in this Act, the appropriate Government may, after consultation with the Central Board or, as the case may be, a State Board, prohibit, by notification in the Official Gazette, employment of contract labour in any process, operation or other work in any establishment.

(2) Before issuing any notification under sub-

section (1) in relation to an establishment, the appropriate Government shall have regard to the conditions of work and benefits provided for the

2 contract labour in that establishment and other relevant factors, such as –

(a) whether the process, operation or other work is incidental to, or necessary for the industry, trade, business, manufacture or occupation that is carried on in the establishment;

(b) whether it is of perennial nature, that is to say, it is of sufficient duration having regard to the nature of industry, trade, business, manufacture or occupation that is carried on in that establishment;

(c) whether it is done ordinarily through regular workmen in that establishment or an establishment similar thereto;

(d) whether it is sufficient to employ considerable number of whole-time workmen.

Explanation. – If a question arises whether any process or operation or other work is of perennial nature, the decision of the appropriate Government thereon shall be final.”

4. Under the impugned notification (08.09.1994) of the Central

Government, employment of contract labour qua 13 categories of

job was prohibited. According to the appellant, i.e. the ONGC

Labour Union, the Government notification for the ONGC was

based on the recommendations of the Sub-Committee constituted

to go into the question of prohibition of employment of contract

labour, in the arena of maintenance and utility installations i.e.

firefighting electrician, plumbers, flower decoration, sullage plants

etc., in the establishments of the ONGC.

5.1 The learned Senior Counsel Mr. Colin Gonsalves for the

appellant argues that when the challenge to the CLRA Act

notification was made, the ONGC should have arrayed the

representative Labour Union whose members are likely to be

impacted by the Court proceeding and since this was not done, the

ONGC Labour Union, had no opportunity before the High Court of

3 Uttarakhand. The learned Senior Counsel refers to the

Communication dated 31.05.1993 (Annexure-P/3) and the report of

the Sub-Committee to point out that the Ministry of Petroleum &

Natural Gas had undertaken the required study on the

establishments of the ONGC, before issuing the impugned

notification (08.09.1994) under the CLRA Act but in the absence of

the Labour Union, the High Court was kept in the dark about the

Sub-Committee’s inspection, deliberations and recommendation to

the Ministry. Thus only one sided projection was made before the

High Court. This by itself according to the Counsel, would warrant

interference with the impugned judgment rendered in absence of

the affected workman.

5.2 The appellant’s counsel has taken us through the

communication dated 19.10.1994 issued by the Industrial Relations

Department of the ONGC and also the follow up communication

dated 18.06.1996 to point out that a conscious decision was taken

by the ONGC itself to comply with the direction on prohibition of

contract labour but the organizational decision was disregarded

and instead, the ONGC approached the High Court in 2014 to

challenge the long standing notification (08.09.1994), issued under

the CLRA Act.

5.3. In course of his submission Mr. Gonsalves refers to the similar

challenge made by the ONGC in the Andhra Pradesh High Court

and more particularly the counter affidavit filed by the Central 4 Government in the said proceeding. It was averred therein that a

Sub-Committee was constituted by the Central Advisory Contract

Labour Board to study the working of the Contract Labour system

in certain jobs of maintenance and utility at the installations which

were common to the establishments of ONGC and it is evident from

the report of the Sub-Committee that ONGC is being organized on

the basis of the functional business centres with commercial

working relationship, on a common pattern. The affidavit shows

that the Sub-Committee visited various installations of ONGC and

held widespread discussion with the workers’ representatives and

also the management of the Eastern, Western and Southern

Regional Business Centres where the ONGC had major presence in

their operation. More specifically, the counsel submits that the

Sub-Committee members visited the installations of ONGC in

Madras, Jorhat, Dehradun, Baroda, Bombay and it was projected

before the Andhra Pradesh High Court that the Sub-Committee

conducted a thorough study in different organizational set-up in

the ONGC and interacted with the stake holders before submitting

their report. This was preceded by adequate opportunity to the

ONGC management and the workers.

5.4 Highlighting the above, Mr. Gonsalves argues that although

the recommendation of the Sub-Committee or the Board is

advisory in nature, the Sub-Committee had made careful study of

all aspects and made their recommendation. The Central

5 Government in their turn accepted only the unanimous

recommendation of the Sub-Committee for 11 categories. For the

remaining 15 job categories where there was no unanimity, barring

the radio operators and drivers, all others were excluded from the

prohibited categories. According to appellant’s counsel, the fact

that the organizational objective of the ONGC was guided by the

uniform policy with regard to recruitment of man power on regular

basis or through the contract labour system, the situation would

not vary from establishment to establishment, to warrant quashing

of the notification dated 08.09.1994, issued under Section 10(1) of

the CLRA Act.

5.5 Dealing with the judgment in Steel Authority of India Ltd. and

Others vs. National Union Waterfront Workers and others reported

in (2001) 7 SCC 1, the counsel for the appellant argues that the

said judgment pertaining to the earlier notification (09.12.1976)

under Section 10(1) of the CLRA Act, could not have been the basis

for the impugned judgment by the Uttarakhand High Court for the

later notification of 08.09.1994 since the essential backdrop

preceding the two notifications were dissimilar and different. In the

case in hand, since the Writ Petitioner ONGC omitted to place on

record the relevant materials pertaining to the recommendation of

the Sub-committee (now produced in this Court), Mr. Gonsalves

argues that the High Court committed error in reaching a

6 conclusion of non-application of mind by the Central Government,

while issuing the impugned notification.

6.1. Per contra, Mr. J.P. Cama, the learned Senior Counsel

representing the ONGC submits that when prohibition of

employment of contract labour is proposed under the CLRA Act, the

Central Government is required to study the status of employment

of contract labour and the reference for the study must be

establishment specific. According to the counsel, unless an

establishment related exercise is undertaken, the Prohibition

notification under Section 10(1), making it applicable to all ONGC

establishments, across the country, could not have been validly

issued by the Central Government.

6.2 Supporting the High Court’s verdict, learned counsel for the

respondent refers to certain passages in the SAIL (supra) judgment

to contend that an omnibus notification without considering all

factors in each establishment cannot be issued as this would be

contrary to the statutory postulates of Section 10 of the CLRA Act.

6.3 The Senior Counsel for the first respondent argues that the

impugned notification (08.09.1994) prohibiting employment of

contract labour was hastily issued because of the time frame

stipulated by the Bombay High Court in the WP(C) No.2185/1991.

According to Mr. Cama, establishment specific study was not

conducted and hence the decision-making process was vitiated.

7 Moreover, other relevant factors including those mentioned in sub-

section (2) of Section 10 of the CLRA Act were not considered and

the impugned notification itself did not mention in its body, the

compliance with the requirement of Section 10(2) of the CLRA Act.

The learned Senior Counsel projects that the Central Government’s

decision is vitiated by non-application of mind.

6.4. Mr. Cama next submits that for alleged failure to implement

the notification dated 08.09.1994 (stayed by Andhra Pradesh High

Court), the officers of the ONGC were subjected to criminal

summons by the CJM, Dehradun and that is why, the Section 482

Cr.P.C. Petition had to be filed before the Uttarakhand High Court.

Later, the W.P. No.1323/2013 (M/S) was also filed in the same High

Court by the ONGC, to challenge the prohibitory notification issued

under Section 10(1) of the CLRA Act.

7. On the other hand Ms. Alka Agrawal, the learned Counsel for

the Central Government contended that the impugned notification

was issued in accordance with the requirement of Section 10 of the

CLRA Act. Moreover, background study on employment of contract

labour was conducted, relevant reports were received and the

process was finalized only after consultation with the Central

Advisory Contract Labour Board and other stakeholders.

8. The 08.09.1994 notification under Section 10 of the CLRA Act

which abolished the contract labour system in ONGC

8 establishments across the country, was challenged for the first

time in 2003 by the Rajahmundry assets of the ONGC which filed

the Writ Petition No.4460 of 2003 and Writ Petition No.3397 of

2003, in the Andhra Pradesh High Court. Interim order was passed

on 25.03.2003 by the High Court in that proceeding and those

cases are perhaps still pending. Before the Uttarakhand High Court,

the case came to be filed much later in 2013. Even before those

challenges were made, internal circulars were issued within the

ONGC, to comply with the 1994 notification, issued under Section

10 of the CLRA Act.

9. The averred stand in the Central Government’s counter

affidavit filed in the Andhra Pradesh High Court shows that out of

26 categories of work in the ONGC, the Sub-Committee was

unanimous in recommending abolition of Contract Labour in 11

categories of work. However, there was no consensus amongst the

members for the remaining 15 categories. This difference of

opinion was noted and the Central Government then decided to

prohibit contract labour in 11 out of the 26 specified categories of

work, on the basis of the input received from the Sub-Committee.

The relevant portion of averments in the counter affidavit is

extracted herein below for ready reference: -

“............................................................................... ..

Thus it will be seen that out of 26 items of work the Government abolished 11 items of work where the sub-committee recommendation was

9 unanimous and out of the remaining 15 items of works where the sub-committee was not unanimous only the above two categories viz radio operators and drivers were included for prohibition. Hence it is not correct on the part of the petitioner to state that the Govt. did not properly apply its mind over the issue. In reply to the para-7 of the affidavit it is submitted that the report of the sub-committee was signed by three members -2 non-official and 1 ex-officio – where one member was from the employee side and the other from the employers. The report therefore did not lack the necessary balance. The report clearly indicated the areas of disagreement. It is therefore incorrect on the part of the petitioner to state that the report lacked necessary rigour. Moreover, the report is rather an input in the overall process of notifying a decision by the Government. Also the sub-committee have conducted its business as per quorum in accordance with Rule 16(ii) of the CL (R&A) Central Rules, 1971.

................................................................................ ”

10. It was also averred in the said affidavit before the Andhra

Pradesh High Court that the Sub-Committee was not mandatorily

required to visit each and every establishment for their assessment

especially when the operations are common in all projects in

ONGC. The relevant portion of the averments in the counter

affidavit filed by the Union of India reads as under:

“…..The sub-committee in the course of its work obtained information about the installations of ONGC. Also the sub-committee held widespread discussion with the workers’ representatives and the management of Eastern, Western & Southern Regional Business Centres where ONGC had its operations in majority in the course of its examination of the Contract Labour System in certain jobs in ONGC. It visited Madras on 15.10.92 and heard the submissions of the workers’ union…….It also visited installations of ONGC at Ichhapur Drilling site, West Bengal, Gandhar, Ankaleshwar and interacted with the workmen. It also heard the submissions of the workers and the management at Baroda. It also visited the installations in the offshore, Bombay and elicited information both from workmen and management…….It is therefore wrong to suggest

10 that the sub-committee conducted a nominal and superficial enquiry. It is also wrong to suggest that the Govt. of India mechanically issued the impugned notification without proper application of mind and without having regard to the various legal requirements as specified in Section 10(2) of the Contract Labour (Regulation and Abolition) Act, 1970…..”.

11. The Section 10(1) notification prohibiting contract labour as

can be seen, would directly impact the workmen in the ONGC but

most surprisingly, in the writ petitions filed before the two High

Courts, the ONGC management choose not to array any of the

recognised labour Unions. Hence, the affected contract labourers in

the ONGC were denied the opportunity to participate in the writ

proceedings in the concerned High Courts.

12. The impugned judgment indicates that the High Court had no

access to the previous exercise undertaken by the Central

Government, leading to issuance of the impugned notification

under Section 10(1) of the CLRA Act. It appears that the factum of

constitution of the sub-committees prior to the issuance of the

impugned notification and the studies made by the sub-

committees and the nature of their recommendations, were not

brought to the notice of the learned Judge. Besides the Court was

made to believe that the Central Government had not consulted

the Labour Advisory Board. Thus, wrong inference was drawn on

incorrect premises and the High Court proceeded under the

presumptive footing as if, there was non-application of mind by the

Central Government.

11

13. While the above discussions and the contentions raised by

the respective Counsel might normally merit our consideration, the

denial of opportunity to the appellant or to any other recognized

labour Union in the High Court, persuade us to consider another

option which would be consistent with the principles of natural

justice. The prohibition notification undoubtedly impact the life and

livelihood of the contract labourers, but unfortunately neither the

ONGC labour Union (the appellant herein) or the other recognized

Labour Unions in the ONGC were represented or heard in the High

Court.

14. It is also necessary to point out that the learned Judge

rendered the impugned judgment primarily on the basis of the SAIL

verdict since none of the relevant materials for the 1994

notification were produced in the High Court. Crucially, when the

impugned notification was issued, the Central Government did not

have the benefit of the SAIL judgment rendered on 30.08.2001

which again related to the 1976 notification. Therefore the question

is whether the learned Judge could have founded his decision on

the errors/omissions, noted in SAIL (supra) judgment.

15. The primary focus of the challenge in the 30.08.2001 SAIL

verdict was to the previous notification (S.O. No.776 (E) dated

09.12.1976) issued by the Central Government, prohibiting

employment of contract labour in respect of four categories of

works in establishments, inter-alia, of the ONGC. The said

12 notification was struck down with the finding that the pre-requisites

for issuing the notification were not satisfied. It was also perceived

to be an omnibus notification without reference to the relevant

factors-qua each establishment. But according to us, it was

necessary for the High Court to determine whether the

observations made for the then impugned 09.12.1976 notification

would also apply with all vigour, to the presently impugned

notification (08.09.1994), issued under Section 10(1) of the CLRA

Act. More particularly, the learned Judge should have determined

whether the prohibitory notification was preceded by the required

enquiry on contract labour by the Sub-Committee, the nature of

the study by the Sub-Committee, whether the views of the

stakeholders were noticed by the Committee members and the

implications of those, on the decision of the Central Government.

The impugned judgment shows that no material was placed before

the High Court to indicate “……….what inquiry/material was

carried out to meet the requirements provided under sub-section

(2) of Section of the Act, 1970. There is no reference when the Sub-

Committee was constituted and what were its recommendations” .

The Central Government also failed to project that any consultation

was made with the Central Advisory Labour Board.

16. The afore quoted observation in the judgment under

challenge would suggest that the High Court’s Judgment was

passed without being apprised of the relevant materials and

13 primarily on the basis of the SAIL (supra) judgment which however

related to the 1976 notification. This in our opinion has resulted in

prejudice for those who, given the opportunity, could have

apprised the High Court with all facts and the detailed

study/discussion by the Sub-Committees, preceding the

08.09.1994 notification.

17. In the above circumstances, since no opportunity was

provided to the appellant Union in a case, which directly concerns

the members of the ONGC Labour Union and other workman, we

deem it appropriate to order restoration of the Writ Petition

No.1323 of 2013 (M/S), in the file of the High Court of Uttarakhand

for fresh consideration. The appellant i.e., the ONGC Labour Union

– Gujarat is ordered to be impleaded in the restored proceedings.

As suggested by the appellant’s counsel, other recognized labour

Unions within ONGC such as the ONGC Contractual Worker Union,

Cachar Forward Base, Silchar, Assam – 788026, the ONGC Contract

Employee Union, 15, Sewak Ashram Road, Dehradun, Uttarakhand

– 248001, the ONGC (WOU) Karamchari Sanghatana, 11 High, NBP

GR Heights, Hazira, Mumbai – 394270, the Petroleum Employees

Union, Oil and Natural Gas Corporation Ltd., Godavari Bhavan,

Rajahmundry – 533107 may also be vitally interested and such

concerned Labour Unions must also be impleaded in the High

Court. The respondent-ONGC, Dehradun shall implead all these

labour Unions and serve notice upon them. The respective senior

14 counsel representing the parties have requested for early disposal

of the remanded matter and have offered to argue before the High

Court, without any loss of time. In view of this, the Uttarakhand

High Court is requested to decide the matter expeditiously and

preferably within four months of notice being served on the

respondents in the restored Writ Petition.

18. The appeal is disposed of with the above order.

……………………………J. [R. BANUMATHI]

……………………………J. [A.S. BOPANNA]

……………………………J. [HRISHIKESH ROY]

NEW DELHI OCTOBER 17, 2019

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