Bench Sr.No v. The Oil Natural Gas Corp Ltd, Rajahmundry & Ors.

Judgment

(per Hon’ble Sri Justice Challa Gunaranjan) All these three writ appeals preferred under Clause 15 of the Letters Patent since assail the order, dated 19.09.2016, W.P.No.31608 of 2016, the same are heard together and disposed of by this common judgment.

2. W.A.No.1422 of 2016 has been preferred by ONGC Limited (“ONGC”) dissatisfied by the portion of the order to the extent it was directed to pay two times of wages towards compensation for the subject period. W.A.No.977 of 2017 has been preferred by ONGC Krishna Godavari Contract Workers Union (“Union”) to the extent of reducing the compensation from five times of differential wages to two times for the default in payment of wages to its members. W.A.No.978 of 2017 has been preferred by M/s.Gurbani Security Private Limited (“Contractor”), to the extent whereby the payment of compensation of two times of differential wages has been directed to be recovered from it upon discharging the liability by ONGC.

3. Brief facts of the case are as stated below: (a) ONGC by way of service agreement, dated 21.10.2010, entrusted the contract of loss prevention and safety services for its Rajahmundry asset. The duration of contract was from 08.08.2010 3 HCJ & CGR, J. W.A.Nos.978 of 2017; 1422 of 2016; & 977 of 2018 to 07.08.2013. Under the agreement, the Contractor was required to supply trained, experienced and competent personnel undertaking specified and assigned jobs at various locations. The same also included supply of personnel for the duties of watch and ward, in effect, the Contractor was mandated to supply semi-skilled and skilled personnel for respective positions. The contract also envisaged the commercial terms on account of the wages payable to aforesaid personnel. As per special conditions of contract, the Contractor at its own costs was required to be in compliance with the provisions of the Minimum Wages Act, 1948 (for short, “the M.W. Act”), and the Contract Labour (Regulation and Abolition) Act, 1970, (for short, “the C.L. (R&A) Act”) besides various other Laws relevant on the subject. The contract has also envisaged that in case the Contractor commits any default in timely payment of wages or fails to discharge its obligations emanating from aforesaid enactments, ONGC, as principal employer, would make good the default or breach and shall recover the amounts paid, if any, from the Contractor by deducting in its invoices. (b) A claim petition came to be preferred by about 208 employees working as Security Guards and Security Supervisors through their Union alleging short payment of the minimum wages 4 HCJ & CGR, J. W.A.Nos.978 of 2017; 1422 of 2016; & 977 of 2018 for the period from 01.10.2011 to 31.03.2013, which culminated into enquiry before the Authority under the Minimum Wages Act,1948, Hyderabad (for short, “the Authority”). ONGC, as opposite party No.1, contested the claim on the grounds that the rates of minimum wages prescribed by the State Government would have no application to it as it was governed by the rates those determined by the Central Government, being appropriate Government and further that under the service agreement, any revision of pay over and above agreed under the contract has to be discharged by the Contractor (Opposite Party No.2). The Authority, while negativing the stand pleaded by ONGC, vide order, dated 10.10.2013, directed ONGC to pay the minimum wages as determined therein. (c) Yet again, another complaint came to be made by the remaining Security Guards/Security Supervisors, who were not paid minimum wages for aforesaid period and the same came to be allowed by order, dated 20.01.2014, following the earlier order. ONGC had complied with aforesaid orders. The Union had later come up with another claim for subsequent period i.e., from

01.04.2013 to 07.08.2013. In this application, it has been claimed that as ONGC has paid the revised wages in terms of the earlier orders, it was expected that even for subsequent period, the revised 5 HCJ & CGR, J. W.A.Nos.978 of 2017; 1422 of 2016; & 977 of 2018 wages would be paid, however, there has been deliberate default. That being so, during the pendency of the proceedings, ONGC paid the differential wages. However, the Authority, having found that there was deliberate default in payment of wages, by its order, dated 27.07.2016, awarded compensation of five times of the differential wages and directed ONGC to pay the same. Assailing the same, ONGC preferred W.P.No.31608 of 2016.

4. The learned Single Judge allowed the writ petition in-part by reducing the compensation from five times to two times of differential wages and further, petitioner-ONGC was permitted to recover the said amount from the Contractor. Being dissatisfied with the said order, all the three parties preferred present writ appeals, as mentioned supra.

Heard Mr.D.S. Sivadarshan, learned counsel for the ONGC and Mr.C.Sumon, learned counsel for the Union. None appeared for the Contractor.

6. Learned counsel the ONGC raised following contentions: (i) Since there is no employer and employee relationship between ONGC and the service personnel deployed to work at its 6 HCJ & CGR, J. W.A.Nos.978 of 2017; 1422 of 2016; & 977 of 2018 Rajahmundry asset through the Contractor, it would not qualify to be an employer within the meaning of Section 20 of the M.W. Act, therefore, the impugned order passed by the Authority directing ONGC to pay compensation is without jurisdiction; (ii) ONGC is liable only to the extent of payment of wages, in the event there is breach at the instance of Contractor, in view of Section 21 of the C.L.(R&A) Act, and that the wages as envisaged under the said provision do not encompass within itself any sort of penalty or compensation; (iii) Claim for minimum wages though is a statutory right guaranteed under the statute, awarding of compensation in terms of Section 20 of the M.W. Act is not automatic and since the same being in the nature of penalty, the Authority ought to have given specific reasons while imposing five times of differential wages as compensation; and (iv) To buttress the contention that there is no employer and employee relationship between the ONGC and service personnel, and the test one should apply to discern whether such relationship exists or not, reliance has been placed on the following judgments: 7 HCJ & CGR, J. W.A.Nos.978 of 2017; 1422 of 2016; & 977 of 2018 (i) Balwant Rai Saluja v. Air India Ltd.1; (ii) International Airport Authority of India v. International Air Cargo Workers Union2; (iii) Hindustan Steelworks Construction Ltd. v. Commissioner of Labour3. (v) With regard to liability of principal employer, qua the compensation under Section 20 of the M.W.Act, learned counsel has placed reliance on the judgment of the Orissa High Court in Industrial Security & Allied Services v. Labour Enforcement Officer (C), Bhubaneswar4.

7. Opposing aforesaid submissions, learned counsel for the Union supported the order of learned Single Judge to the extent of fastening the liability of compensation on ONGC, however, he contended that learned Single Judge ought not to have interfered with the well-reasoned order of the Authority, which determined the compensation of five times of differential wages. He further contended that ONGC had committed default not once, but on multiple times, which is very much evident from the orders, dated

10.10.2013, 20.01.2014 and 27.07.2016 passed by the Authority; in that view of the same, the Authority was absolutely justified in