CoramThe Honourable Mr v. S.Arumugam2.K.Dharmalingam3.P. Jayaraman4.R. Matheeswaran5.A. Alagarasan6.The Presiding Officer

IN THE HIGH COURT OF JUDICATURE AT MADRASDated : 2-2-2007CoramThe Honourable Mr.Justice P.SATHASIVAMandThe Honourable Mr.Justice N.PAUL VASANTHAKUMARWrit Appeal No.3570 of 2003The Management of Institute ofRoad Transport Technology, Erode....AppellantVs.1.S.Arumugam2.K.Dharmalingam3.P. Jayaraman4.R. Matheeswaran5.A. Alagarasan6.The Presiding Officer,Labour Court, Salem....RespondentsWrit appeal filed under Clause 15 of the Letters Patent againstthe order of the learned single Judge dated 29.7.2003 inW.P.No.6465of 1998 filed under Article 226 of the Constitution of India toissue a writ of certiorarified Mandamus calling for the records fromthe Respondent relating to I.D.Nos.172/94, 71/95, 73/95, 75/95,34/96, dated 23.8.1996 and quash the same and direct the 2ndrespondent to reinstate the petitioners with continuity of servicebackwages and all other attendant benefits and award costs.For Appellant:Ms. Kala Rameshfor Mr.L.G.SahadevanFor Respondents 1 to 5:Mr.D.HariparanthamanJ U D G M E N TN. PAUL VASANTHAKUMAR, J.This writ appeal is directed against the order in W.P.No.6465of 1998 dated 29.7.2003 allowing the writ petition filed by theworkmen, by setting aside the award of the Labour Court.2.The brief facts necessary for disposal of the writ appealare as follows. https://hcservices.ecourts.gov.in/hcservices/ (a)Respondents 1 to 5 herein along with 15 other persons wereemployed in the appellant management as Security Guards. Theappellant is a Engineering College at Erode, established by theTransport Corporation fully owned by the Government of Tamil Nadu.(b)According to the respondents 1 to 5, they have to do shiftduties and initially they were paid Rs.20/- per shift, which waslater on increased to Rs.25/- per shift and thereafter to Rs.30/-per shift. The wages were calculated and paid by the appellantmanagement directly, depending on the number of shifts in which eachSecurity Guard worked.(c)The case of the respondents 1 to 5 is that at a laterpoint of time, the appellant created documents to show that theSecurity duty was entrusted to the contractors and one of theWorkmen was treated as Contractor, but in fact, the Workmen wereappointed by the appellant and the contract was a mere sham and notgenuine.(d)The respondents were allotted work by the AssistantSecurity Officer of the appellant, whose designation was later onchanged as Junior Security Officer. The said Officers sign thework allotment register and the workmen also have to sign theregister in the signature column. If a workman is posted asSecurity Guard in first shift of the day, he would be posted in thethird shift on the next day and on the third day he will be postedin the second shift. If one security guard is on leave, theAssistant Security Officer or Junior Security Officer would directanother Security Guard to do extra work and the same would berecorded by the said Officer in the said work allocation register.Sometimes, one workman would be compelled to work for more than 16hours per day, which is contrary to the statutory rules of 8 hourswork per day. The workmen were also not given weekly off and theywere also not given festival holidays and if a person works on extrashift, he was given one attendance and no over time payment wasmade.(e)It is also stated that artificial breaks were given at theinstructions of the Principal and even though the workmen weretreated as daily rated workmen, wages were paid once in a month andtheir services were not regularised even though the workmen have putin 5 to 7 years of service and the work is perennial in nature. Thegrievance of the workmen is that due to the non-regularisation, theywere denied basic wages, dearness allowance and other allowances.Some security guards of the then Jeeva Transport Corporation wereposted on deputation for some time and they were paid the basicwages apart from dearness allowances. https://hcservices.ecourts.gov.in/hcservices/ (f)It is the further case of the workmen that in view of theabove said denial of benefits, the Security Guards formed a TradeUnion with registration No.32/94 and after knowing the same, i.e.,formation of Trade Union, the appellant started victimising theworkmen and thereafter denied employment and also gave artificialbreaks until further orders. The same was objected through thelegal advisor of the Trade Union. The Union made a representationon 5.7.1994 to the Inspector of Factories, Erode, and requested himto take action for regularising the services. The workmen, who werenot the members of the Union continued in service. Therefore thematter was brought to the notice of the Labour Officer, Erode,wherein the management filed counter affidavit and contended thatthe respondents 1 to 5 are not employees of the Management and werethe employees of the contractors and that there is no master andservant relationship between the security guards and the appellantmanagement and therefore the conciliatory efforts failed.Thereafter, the respondents 1 to 5 raised separate IndustrialDisputes in I.D.Nos.172/1994, 71/1995, 73/1995, 75/1995 and 34/1996respectively under Sections 2-A(2) of the Industrial Disputes Act,1947 before the Labour Court, Salem.3.The appellant/management filed counter affidavit statingthat the respondents 1 to 5 are not its workmen and they areemployed by the contractors.4.Two successive principals of the appellant/management wereexamined as MWs-1 and 2. First respondent was examined on the sideof the workmen. Documents were also marked. The Labour Court onanalysis of the evidence and documents placed before it, dismissedthe claim made by the respondents 1 to 5 by a common award dated23.8.1996. The said award was challenged before the learned singleJudge of this Court, raising various grounds.5.The appellant filed counter affidavit in the writ petitionalso and reiterated the contentions raised before the Labour Courtstating that the respondents 1 to 5 were appointed by thecontractors and there is no master and servant relationship betweenthe appellant and the respondents 1 to 5 and therefore the award ofthe Labour Court is proper and the writ petition is liable to bedismissed. The learned single Judge allowed the writ petitionpartly and set aside the award of the Labour Court.6.We have heard the learned counsel appearing for theappellant as well as respondents 1 to 5 and perused the award of theLabour Court, documents filed and the order of the learned singleJudge. 7.The learned single Judge, not satisfied with the award ofthe Labour Court, thought fit to go into the merits of the case https://hcservices.ecourts.gov.in/hcservices/ independently. The learned single Judge after perusing thedocuments found that the respondents 1 to 5 and other workmen wereoriginally appointed by the appellant and thereafter contracts weremade every month with one or two persons agreeing to employ suchpersons and calling upon such persons to engage few others. Insubsequent months, similar contracts in cyclo-styled forms wereexecuted between the management and some other persons. It is alsofound that a person who was being engaged by his contractor asworkman for few months, would suddenly become a contractor for thesubsequent months. The very same persons were being engaged asSecurity Guards and documents were being executed to give colour asif the persons were engaged through the contractor.8.It is also found by the learned single Judge that thedocuments on record as well as the evidence of the two managementwitnesses clearly indicate that directions were being given througha Supervisor regarding the duty of such persons and on someoccasions, those persons were discontinued for few days on the basisof the directions of the authorities. The said aspect clearlyindicate that control is being exercised by the management. Thesaid practice of entrusting the work to the contractor was suddenlyintroduced in the year 1991-1992. The learned single Judge alsofound that the contracts were sham transactions and there wereactual ultimate relationship of employer and employee between theappellant and the workmen and non-pleading of the case before theLabour Court that the contracts were sham transactions, is due tonon-drafting of the papers by the Lawyer, but because of the poordrafting by the workmen or by some other person.9.It was the specific case before the Labour Court that theworkmen were directly appointed under the appellant. The learnedJudge after going through the records, gave a specific finding thatthe contracts were sham transactions and the Labour Court failed toadvert to the said aspect and hence the award of the Labour Court isvitiated. The learned single Judge, on the facts of the casethought fit to shorten the litigation and taking into considerationthe long pendency of the matter, did not remand the matter back tothe Labour Court. The learned single Judge also pointed out thatthe oral evidence indicate that some amount of control was beingexercised over the Security Guards by the Management.10.It is also found from the records that the workmen weredirectly engaged by the management originally and subsequently, theso called contracts were executed to show as if the persons wereengaged through some contractors and found that the respondents 1 to5 were workmen under the appellant College and the so calledcontractor was a mere eye wash. Thus a specific and categoricalfinding was given by the learned single Judge after scrutiny of therecords that the respondents 1 to 5 have been directly engaged and https://hcservices.ecourts.gov.in/hcservices/ subsequently disengaged without following the provisions containedin section 25-F of the Industrial Disputes Act, 1947. The learnedJudge also took note of the fact that the appellant College is beingmanaged by a Society and running certain Educational Institutionsand held that the respondents 1 to 5 are not entitled to getbackwages, which was also agreed to by the respondents whileordering reinstatement. Thus, the learned single Judge confirmed theaward of the Labour Court insofar as payment of ex-gratia ofRs.5,000/- to other workmen and set aside other portion of theaward.11.The power of the High Court to go into the validity of theaward of the Labour Court is well settled in various decisions.(a)In the decision reported in 1980-I LLJ 137 (Gujarat SteelTubes Ltd. v. G.S.T.Mazdoor Sabha), in para 73, the HonourableSupreme Court held thus,"73.Once we assume that the jurisdictionof the Arbitrator to enquire into the allegedmisconduct was exercised, was there any groundunder Art.226 of the Constitution to demolishthat holding ? Every wrong order cannot berighted merely because it is wrong. It can bequashed only if it is vitiated by thefundamental flaws of gross miscarriage ofjustice, absence of legal evidence, perversemisreading of facts, serious errors of law onthe face of the order, jurisdictional failureand the like."(b)The same was the view taken in the decision reported in(1982) 1 SCC 143 (J.D.Jain v. Management of State Bank of India),wherein in para 11 the Honourable Supreme Court held as follows,"11.In an application for a writ ofcertiorari under Article 226 of the Constitutionfor quashing an award of an Industrial Tribunal,the jurisdiction of the High Court is limited.It can quash the award, inter alia, when theTribunal has committed an error of law apparenton the face of the record or when the finding offacts of the Tribunal is perverse. ......."(c)In the decision reported in (2005) 3 SCC 193 (MadurantakamCoop. Sugar Mills Ltd. v. S. Viswanathan)"12. Normally, the Labour Court or theIndustrial Tribunal, as the case may be, is thefinal court of facts in these types of disputes,but if a finding of fact is perverse or if thesame is not based on legal evidence the HighCourt exercising a power either under Article https://hcservices.ecourts.gov.in/hcservices/ 226 or under Article 227 of the Constitution cango into the question of fact decided by theLabour Court or the Tribunal. But before goinginto such an exercise it is necessary that thewrit court must record reasons why it intendsreconsidering a finding of fact. ...."(d)A Full Bench of the Rajasthan High Court in the decisionreported in 1998 (3) LLN 549 (R.S.R.T. Corporation v. Gopal Singh),in para 29(c) held as follows,"29 (c) On the third question referred toas to whether this Court in exercise ofsupervisory writ jurisdiction under Arts.226 and227 of the Constitution where a petition isfiled seeking a relief by way of quashing ofaward given by the Labour Court, Tribunal orNational Tribunal under S.11A of the IndustrialDisputes Act has limited jurisdiction todemolish the impugned award or not whereaccording to the High Court such award ispalpably erroneous and whether in such case itcan substitute its own order in place of onemade by such Labour Court, Tribunal or NationalTribunal, the law is indeed clear. As a generalrule, the High Court would not interfere unlessthe order of the Labour Court, Tribunal orNational Tribunal is perverse or not based onany evidence or grossly illegal or based on acomplete misconception of law or that noreasonable man would come to the conclusion towhich the Labour Court, Tribunal or NationalTribunal has arrived at. There is no hard andfast rule that it has always to send the matterback to the Labour Court, Tribunal or NationalTribunal for appropriate adjudication and forpassing appropriate punishment in accordancewith law, but in order to avoid delayed justiceand for vindication of speedy and appropriaterelief, the High Court may in some casesincorporate its own findings which it may appearto be just and proper but that should not befollowed as a general rule but more as anexception."(e)A Division Bench of this Court in the decision reported in1990-I LLJ 298 (Management of M.F.L. v. Presiding Officer, IAdditional Labour Court, Madras and others) in para 6 held asfollows, https://hcservices.ecourts.gov.in/hcservices/ "6.The second point urged by Mr.SanjayMohan, learned counsel for the management, isthat the learned single Judge, while exercisingwrit jurisdiction, ought not to have interferedwith the discretion exercised by the LabourCourt under Section 11-A of the Act andexercised that discretion himself. This is anerroneous thinking about the powers of thisCourt in writ jurisdiction. What the LabourCourt should do and when there is an omission onthe part of it to do that, this Court, inexercise of the powers under Article 226 of theConstitution of India, can certainly do. Thisis a proposition which has been countenanced bypronouncements of Courts, including of thehighest in the land. In Gujarat Steel TubesLtd. v. Gujarat Steel Tubes Mazdoor Sabha (1980-I LLJ 137) the Supreme Court did countenance theproposition that what the Labour Court may inits discretion do, the High Court too can, underArticle 226, if facts compel it to do so. InVasanti M.Shab v. All India Handloom Fabrics Co-Operative Society Ltd (1986-I-LLJ 69), a Benchof the High Court of Gujarat was inclined toconsider the relevant facts for the purpose offinding out the propriety of the punishment,even though the Labour Court has not done so.This position has been taken note of by one ofus (Nainar Sundaram, J.) in National CarbonCompany, Madras v. Labour Court, Madras andanother (1986) I LLN 405. Hence, we could notfind any substance in this line of argument onthe part of the learned counsel for themanagement. In the said circumstances,W.A.No.1058 of 1983 deserves dismissal."12.The decision cited by the learned counsel for therespondents 1 to 5 reported in (2003) 6 SCC 528 (Bharat HeavyElectricals Ltd. v. State of U.P.) fully supports the case of therespondents 1 to 5, wherein in paragraphs 12 and 13, the HonourableSupreme Court held thus,"12. The learned counsel for the appellantwanted to take support from the ConstitutionBench judgment of this Court in Steel Authorityof India Ltd. v. National Union WaterfrontWorkers. For that purpose, he took us throughparas 107 to 116. In the said judgment, theprovisions of the Contract Labour (Regulationand Abolition) Act, 1970 came up for https://hcservices.ecourts.gov.in/hcservices/ consideration and interpretation. After detailedanalysis of the provisions and consideration ofvarious decisions, in para 107 contract labourswere classified in three categories. In paras108-16, the issue whether on a contractorengaging contract labour in connection with thework entrusted to him by a principal employer,the relationship of master and servant betweenhim (the principal employer) and the contractlabour emerges. An extreme stand was taken bylearned Senior Counsel in that case that theengagement of contract labour by the contractorin any work of or in connection with the work ofan establishment, the relationship of master andservant is created between the principalemployer and the contract labour. In dealingwith the said contention, various earlier casesdecided by this Court were referred to includingthe case of Hussainbhai. The extreme contentionwas rejected. From the perusal of paras 107-16,it is clear whether a workman is an employee ofthe principal employer or not depends on thefacts and circumstances of a given case. Thecase of Hussainbhai1 is neither dissented fromnor diluted. On the other hand, it is held thatthe said case is covered by clause (ii) of para107 which reads: (SCC p. 56)107. ... (ii) where the contract was foundto be a sham and nominal, rather acamouflage, in which case the contractlabour working in the establishment of theprincipal employer were held, in fact andin reality, the employees of the principalemployer himself. Indeed, such cases do notrelate to abolition of contract labour butpresent instances wherein the Court piercedthe veil and declared the correct positionas a fact at the stage after employment ofcontract labour stood prohibited;13. This apart, the finding that therespondent workmen were the employees of theappellant, does not rest merely on the test ofcontrol. The other evidence and facts andcircumstances of the case were also kept in mindin recording such a finding including a vitalfact that the appellant did not produce therecords alleging that they were not availablewhich led to drawing adverse inference against https://hcservices.ecourts.gov.in/hcservices/ them. It is not possible for us to hold thatsuch concurrent findings recorded by the LabourCourt and the High Court that the workmen wereto be treated as the employees of the appellantare either perverse or based on no evidence oruntenable at all."13.From the decisions referred above, we are of the view thatthe learned single Judge is justified in analysing the oral anddocumentary evidence to arrive at the just decision to avertmiscarriage of justice.14.We are in entire agreement with the findings of thelearned single Judge and we are also of the view that the allegedcontract is only sham and not genuine. Hence we are not inclined tointerfere with the said factual findings of the learned singleJudge. As held by the learned single Judge, the appellantinstitution is maintained by the Society, which also runs othereducational institutions and therefore accommodating the respondents1 to 5 as Security Guards will not cause any hardship to theappellant. Therefore, we direct the appellant to reinstate therespondents 1 to 5 as ordered by the learned single Judge within onemonth from today.15.There is no merit in the writ appeal and consequently thesame is dismissed No cost.Sd/-Asst. Registrar./true copy/Sub Asst. Registrar.vrTo1. The Presiding Officer, Labour Court, Salem.2. The Management of Institute of Road Transport Technology, Erode.1 cc to Mr.D. Hariparanthaman, Advocate, Sr,. 65082 ccs to Mr.L.G. Sahadevan, Advocate, Sr. 6131W.A.No.3570 of 2003 TS (CO)kk 8/2