THE MANAGEMENT SALEM DISTRICT CONSUMERS CO-OPERATIVE WHOLE- SALE STORES LTD. SALEM.9. v. THE INSPECTOR OF LABOUR AUTHORITY
Case at a glance
Provisions considered
Key paragraphs
- Para 77. On the contrary, the first respondent found that theworkmen were directly employed under the supervision of the Management. It also found that the loan account ledger showedthat the workmen were given employment on daily basis and, therefore, they had worked for 480 days of…
- Para 1010. In this context, it is relevant to refer to the recentjudgment of the Supreme Court (vide its judgment dated 16.5.2008),in G.M., O.N.G.C., Shilchar v. O.N.G.C. Contractual WorkersUnion [2008 AIR SCW 3996], wherein it had reviewed the previouscase laws and in paragraphs 11 to 18…
- Para 1111. With reference to actual days of employment and whetherthe workmen were engaged, the credit ledger between the petitionerManagement and various societies clearly shows that there wasemployment for these workmen almost on all the days. Further, theargument of the Management that the workmen are not…
Judgment
IN THE HIGH COURT OF JUDICATURE AT MADRASDated 30..7..2008Coram: The Hon'ble Mr. Justice K.CHANDRUW.P. No. 481 of 2004THE MANAGEMENT SALEM DISTRICT CONSUMERS CO-OPERATIVE WHOLE- SALE STORES LTD. SALEM.9.... PETITIONERS Vs1. THE INSPECTOR OF LABOUR AUTHORITY UNDER T.N. INDUSTRIAL ESTABLISHMENTS (CONFERMENT OF PERMANENT STATUS TO WORKMEN) ACT, 1981 SALEM2. A.ARJUNAN 3. K.CHELLAMUTHU 4. KARUPPANNAN5. S.RAJU S/O.SAMIYAPPA PADAIYACHI.6. P.MARIMUTHU S/O.PERUMAL7. R.GOPAL S/O. RAMASWAMY8. C.KANDASWAMY S/O. CHINNA GOUNDER9. CHINNAIYAN S/O. ILAYAPERUMAL.10. R.ALAGAPPAN S/O. RAMA GOUNDER11. K.RAJU S/O. KANDASWAMY. https://hcservices.ecourts.gov.in/hcservices/
MARIYAPPAN S/O. PACHIYAPPAN.
P.ARJUNAN S/O. PALANIAPPAN14 AYYAHDHURAI S/O. MUTHUSAMY.15 VEERAPIPAN S/O. AYYAMPERUMAL16 A. MANI S/O. ARUMUGAM17 P.ARUMUGAM PALANI GOUNDER.18 R.MURUGESAN S/O. RAJU19 P.MURUGESAN S/O. RAJU20 T. JAYAKODI S/O. THANGAVEL.21 T.ARUMUGAM S/O.THASI.22 MARIYAPPAN S/O. MARIMUTHU23 P.GOPAL S/O.PALANI.24 A.MARIYAPPAN S/O.ARUMUGAM.25 C.SHANMUGAM S/O. CHINNU26 SUNDARAJAN S/O. RASAPPAN @ KANDASAMY27 A.GANESAN S/O. ABIMANYU28 MARIYAPPAN SS/O. KANDAN https://hcservices.ecourts.gov.in/hcservices/ 29 CHINRAJ S/O. THASI.30 KALIYAPPAN S/O. MARIMUTHU31 VENGAN S/O. ARUMUGAM32 AYYADHURAI S/O. KARUPPANNAN33 KARUMALAI S/O. PALANIYAPPAN34 THANGAVELU S/O.MUTHUSAMY .. RESPONDENTSPetition filed under Article 226 of the Constitution of Indiaseeking for issuance of writ of Certiorari calling for the recordsin Na. Ka. No. Aa./3874/2000 on the file of the Inspector of Labour, Authority under Tamil Nadu Industrial Establishments(Conferment of Permanent Status to workmen) Act, 1981, Salem – 7the first respondent and quash the order dated 27.01.2003.For Petitioner: Mr. M.R. RaghavanFor Respondent : No appearanceO R D E RHeard the arguments of the learned counsel for the partiesand have perused the records. 2. The petitioner is the Co-operative Society and it isrunning a District Consumer Co-operative Wholesale Stores Limitedat Salem. They are having five godowns at Salem. Those fivegodowns are grosseries, packing, cosmetics, stationery, LPG, andempty carton stores. For the purpose of loading and unloadingoperation of goods from the godowns, they are engaging manyworkers. However, the wages for these workmen were paid in thename of the second respondent and he was made to appear as if hewas the loading and unloading contractor. But he does not have alicence to be a contractor under the Contract Labour (Regulationand Abolition) Act [for short, 'CARA Act']. Even the petitionerstore, being the principal employer, was not licenced. https://hcservices.ecourts.gov.in/hcservices/
The petitioner store has in fact, given certificatesstating that he was a khalasi working in the stores. The wagesfor the loading and unloading operation is fixed by the petitionerstore on piece rate basis and one such circular dated 29.6.1998was filed before the first respondent. The Provident Fundsubscription for nine employees was also paid by the petitioner. Since the workmen were engaged regularly for a long number ofyears, but, on piece rate basis, the respondents 2 to 34 filed apetition before the first respondent authority seeking forpermanency of their service in terms of Section 3 of the Industrial Establishment (Conferment of Permanent Status to Workmen) Act, 1981 [for short, 'Permanent Status Act'], which wasreceived by the first respondent on 23.5.2000.
Notice was ordered and the petitioner Management filed acounter statement dated 03.01.2001 refuting the stand of thecontesting respondents. They took the contention that theprovisions of the Permanent Status Act will not apply as they areneither a shop nor an "establishment" within the meaning of 2(b)of the Tamil Nadu Shops and Establishments Act [for short, 'ShopsAct']. They also contended that the workmen are not theiremployees and they were engaged by the second respondent and theworkmen were also doing similar work in other places. They alsodisputed the number of days worked by them.
Before the authority, documents were filed. They alsorecorded evidence of the contesting respondents who filedaffidavits setting forth the details regarding their employment. On their behalf, the second respondent was examined as a witness, who was cross-examined by the petitioner stores. On behalf ofthe petitioner Management, their Office Manager was examined.
The first respondent statutory authority, on an analysisof materials placed before it, came to the conclusion that thesecond respondent was not a contractor and was a worker on dailywages since 1981. This finding was made on the basis that thecertificate granted by the Special Officer dated 05.6.1995 as wellas the circular dated 29.6.1998 which had fixed the rates of wagesin terms of the items loaded and unloaded. Out of 43 workers, the Management had paid the PF amounts for 9 workers who made theclaim for permanency. No documents were filed to prove that thecontract was given to him in a genuine fashion.
On the contrary, the first respondent found that theworkmen were directly employed under the supervision of the Management. It also found that the loan account ledger showedthat the workmen were given employment on daily basis and, therefore, they had worked for 480 days of work within 24 calendarmonths. He also held that they were not being sponsored by the Employment Exchange was not relevant since they are unskilled https://hcservices.ecourts.gov.in/hcservices/ workmen. Under the provisions of the Employment Exchanges(Compulsory Notification of Vacancies) Act, 1959 [for short,'Employment Exchanges Act'] will not apply. Therefore, rejectingthe contention of the Management, the workers whose names werefound in Schedule I of the impugned order, viz., respondents 2 to34 were directed to be made permanent with effect from the datefound against their names and in respect of 9 workers, the claimwas rejected as per Schedule II.
This Court after perusing the records, finds that thecase filed by the Management is not legal and proper. Since thepetitioner Management had not filed the entire proceedings beforethe first respondent, the records were summoned from the firstrespondent and it was circulated by the Registry.
It is seen from the records that the Management was notlicenced to engage any contract labour and the so-calledcontractor was also not having any licence. Prima facie, itshows that the alleged contract was sham and nominal. In anyevent, the so-called contractor (second respondent) himself wasexamined as a witness for the workmen and in the cross-examination, the Management could not elicit any favourableanswer. It was pointed out that the wages are paid in lump sumto the second respondent which was to be divided among all theworkers. On the contrary, the revision of rates by the Managementas well as the Service Certificate given by the second respondentclearly shows that the workmen were directly employed under thesupervision of the petitioner. Apart from that, even the Provident Fund contributions were made by the employer in the nameof 9 workmen and the certificates for having collected money fromvarious societies towards loading and unloading charges were alsoproduced.
In this context, it is relevant to refer to the recentjudgment of the Supreme Court (vide its judgment dated 16.5.2008),in G.M., O.N.G.C., Shilchar v. O.N.G.C. Contractual WorkersUnion [2008 AIR SCW 3996], wherein it had reviewed the previouscase laws and in paragraphs 11 to 18, the Court held as follows:-Para 11:"It will be seen therefore that each case has to beexamined to a very large extent on its specificfacts, and a universal yardstick should not beattempted. Para 12:In the instant case, on a consideration of materialproduced before it, the Tribunal came to thefollowing conclusions: (1) That there existed a relationship of masterand servant. https://hcservices.ecourts.gov.in/hcservices/ (2) That there was no contractor appointed by ONGC.(3)That the ONGC used to supervise and allot works to individual workers. (4) That the ONGC took disciplinary action and called for explanations from the workers.
(5) The workers were paid wages though they did not attend their duties due to CacharBandh and due to flood. (6) The wages were paid direct to the workersby the ONGC and the acquaintance roll wasprepared by the Management to make payment to the workmen".Para 13:It has also been observed that even the ONGC hadadmitted that since 1988, there was no licensedcontractor and that the wages were being paidthrough one of the leaders of the Union and onesuch contractor, Manik has been named. TheTribunal then opined that it appeared from therecord that Manik himself was a workman and not acontractor as he too was shown in the acquaintanceroll to have received wages. We find that thereal issue was as to the status of the workmen asemployees of the ONGC or of the contractor, and ithaving been found that the workmen were theemployees of the ONGC they would ipso-facto beentitled to all benefits available in thatcapacity, and the issue of regularization would, therefore, pale into insignificance.
We find thatin this situation, the Industrial Tribunal and the Division Bench of the High Court were justified inlifting the veil in order to determine as to thenature of employment in the light of the judgmentsquoted above. We, therefore, find that the ratio ofthe judgment in Uma Devi's case (supra) would notbe applicable and that the facts of Pandey's caseare on the contrary more akin to the facts of thepresent one. Para 14:We are therefore of the opinion that in the lightof the aforesaid observations, Mr. Dave'sargument that the workmen being on a contractual, were not entitled to any relief, cannot be acceptedand the large number of judgments cited by Mr. https://hcservices.ecourts.gov.in/hcservices/ Dave, on this aspect, cannot be applied to thefacts of the case. Para 15:We have also considered Mr. Dave's argument withregard to the nature of the reference. We re-produce the reference as made: "Whether the demand of the ONGC`Contractual Workers' Union, Silchar onthe management of ONGC, Cachar Project, Silchar forregularization of the services of the contractualworkers is justified.
If so, what relief are theworkmen concerned entitled to?"Para 16:It is true that the underlined portion of thereference prima facie does give the impression thatit pre-supposes that the workmen were contractualemployees and the only dispute was with regard tothe regularization of their services. It isequally true that the reference appears to havebeen rather loosely worded but as observed by the Industrial Tribunal and the Division Bench, bothparties were aware of the real issues involved inthe light of the protracted litigation and theefforts made during conciliation proceedings. The Division Bench has, thus, rightly observed thatit was open to the Industrial Tribunal to havelifted the veil so as to determine the nature ofthe employment and the dispute between the partiesand for that purpose to look into the pleadings andevidence produced before it. Para 17:In Delhi Cloth & General Mils Co.
Ltd. vs. Theworkmen & Others AIR 1967 SC 469, this is what the Court had to say: "In our opinion, the Tribunal must, inany event, look to the pleadings of theparties to find out the exact nature of thedispute, because in most cases the orderof reference is so cryptic that it isimpossible to cull out therefrom thevarious points about which the partieswere at variance leading to the trouble. Inthis case, the order of reference wasbased on the report of the ConciliationOfficer and it was certainly open to the Management to show that the disputewhich had been referred was not anindustrial dispute at all so as to attractjurisdiction under the Industrial https://hcservices.ecourts.gov.in/hcservices/ Disputes Act. But the parties cannot beallowed to go a stage further and contendthat the foundation of the disputementioned in the order of reference wasnon-existent and that the true disputewas something else".Para 18:The pleadings in the present matter would show thatthe core issue before the Tribunal was with regardto the status of the employees as employees of theONGC or of the contractor and that it was thisissue simpliciter on which the parties went totrial.
Mr. Dave's argument with regard to thedecision of the Tribunal being beyond thereference, is to our mind, and in thecircumstances, hyper technical. In thisbackground, we feel that the judgments cited by Mr.Dave pertaining to regularization of contractlabour are not applicable to the facts of thecase. "
With reference to actual days of employment and whetherthe workmen were engaged, the credit ledger between the petitionerManagement and various societies clearly shows that there wasemployment for these workmen almost on all the days. Further, theargument of the Management that the workmen are not sponsoredthrough Employment Exchange and, therefore, they have no right ofemployment, cannot be accepted because under the EmploymentExchanges Act, unskilled office workers were exempted from thepurview of the Act. This position of law has been clarified bythis Court in School Committee, Tilak Vidyalaya Higher SecondarySchool, Kallakurichi v. District Educational Officer, Tirunelveli [1991 TLNJ 1]. The Management was not able to showthat there are circulars issued by the State Government to fill upeven these vacancies through Employment Exchanges. Therefore, reliance placed by the Management on the judgment of the DivisionBench in L. Justine and another v.
Registrar of Co-operativeSocieties, Chennai [2002 (4) CTC 385] as confirmed by the SupremeCourt in A.Umarani v. Registrar, Co-operative Societies andothers [2004 (7) SCC 112] will have no application to the factsand circumstances of the case. 12. The further contention that the petitioner Society isnot covered by the provisions of the Permanent Status Act cannotbe accepted for the simple reason that the Co-operative Societieshave got exemption from the Shops Act only from few provisionswhich itself will show that the Act will otherwise apply to them. Once it is an establishment within the meaning of Section 2(6) ofthe Shops Act, then by virtue of Section 3 of the Permanent StatusAct, the said Act will apply since the petitioner Managementadmittedly engaged more than 20 workers. This Court, under https://hcservices.ecourts.gov.in/hcservices/ Article 226 of the Constitution, cannot interfere with the findingof fact by the first respondent.
13. In the light of the above, the impugned order does notsuffer from any infirmity or illegality. Therefore, the writpetition will stand dismissed. However, there will be no orderas to costs.gri Sd/- Assistant Registrar / True Copy / Sub. Assistant Registrar ToTHE INSPECTOR OF LABOUR AUTHORITY UNDER T.N. INDUSTRIAL ESTABLISHMENTS (CONFERMENT OF PERMANENT STATUS TO WORKMEN) ACT, 1981SALEM1 Cc To Mr.M.R.Raghavan, Advocate, SR.41470 1 cc to the Government Pleader, SR.41522rb (co)dv/7.8. Order in W.P. No. 481 of 2004
Questions this judgment answers
Which statutory provisions did this judgment involve?
Constitution of India — art. 226; Contract Labour (Regulationand Abolition) Act; theIndustrial Establishment (Conferment of Permanent Status toWorkmen) Act, 1981 — s. 3; Permanent Status Act; Tamil Nadu Shops and Establishments Act; Vacancies Act, 1959.
Which court decided this case, and when?
Madras High Court, on 30 Jul 2008. The bench was K CHANDRU.
Precedent status how later indexed judgments have treated this case
No known negative treatment found in the Courts & Cases corpus.
This is a result about the indexed corpus, not a finding that the judgment remains good law. Coverage may be incomplete.