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Code : I Year

LESSO]S.$ : 3 -t?

SCFtrOOL OF BTSTANCE, EI}UCATION

ANDT{K'A UNTVE,tr3SNTY
\/ISAI{HAPATNAM - 53$ OO3
 TTd*EX
Lessom Page No"
S.No.

1. CASE : FACTORIES ACT, f 948 - GCCUPIER

J'K' ENDUSTREES LTT}''
VsGHIEFINSPECToRoFFACToR!E$1996L:.RsG{sC}t
2.GASE:REGAR'DING.woRKER'FAcToRIEsAcT,1948
GHINTAMANRAo,vSSTATEoFM'P.AlR1957,388s.C3
3.GASE:REGARDINGFACToRYANDMANUFAGTUR,ING
PROCESS - FACTORIES ACT, 1948 SEELAM RA"' YS
ADDITIoNALLABoURcoURT-2001(2}I-LR6{76
4.GASE:REGARDINGFACToRYANDMANUFACTURING
PRoGESS.FAGToRIESAc*r,lg4SARDESHIRHBH|WAHD|WALA
vs srATE OF BOMBAY AtR 1962 SC 2s
I
5.CASE:CANTEENWORKER,FAGTORIESAGT'1948
BHARATPETRoLEuMcoR.PoRATIoNLIMITEDVS
10
MUMBAI SHRAMIK SANGH (1998 FLR, 79 SC)

6.GASE:GONTRAGTLABouR(REGULATIoNANDABoLtTIoNi
AcT,IgT0.coNTRAcTLABoURAIRINDIASTATUToRY
GoRP0RATI0NVSMUMBAISHRAMIKSANGHtggT6(76}
12
FLR 237 SC

7.GASE:R'EGARDINGcoNTRAcTLABoUR:THEC0NTR,AGT
LABoURAcT,IgT0GUJAR,ATSTATEELEcTffieITYBoARftVS
(71) FLR 1C2 Se 15
HIND MAZDOOR $ABHA & oTHER$ 1995

8.GASE:REGARDINGCoNTRACTLABCIUR'.THECGNTRACT
LABoURAcT,.!gT0oILANDNATURALGASGoRPoRATI0NVS
17
PETRoLEt,IMEMPLoYEESUNIGNANDoTHERS2003LLR20S

GASE:REGARDINGSHoPsANDESTABLISHMENTS-Tl{EA.P.
SHoPSANDESTABLISI,IMENTSAcT,IgSSP.K.VENK,ATAIAH
VSAPco.oPGENTRALAGRIG|JLTURAI.DEVELoPMENT
20
BANK LTD, 1991 (2) ALT 536
 TNDEX
$"No. l-esson Page No.

i*. CASE : lFlDUsrRrAL DlspurEs Acr, 1g4v - |NDUSTRY

BANGALSRE WATfiR SUPPLY & SEW AGE BOARD VS RAJAPPA
,{ND OTHFRS, 1978 ILLJ 349 23
11. eA$n : RESTtrRDING !ryoRKER " T[-iE !.0" ACT 1947 SHANKAR BHAI
NATF{ALAL PRAJAPAT! VS IUTAIZE PRODUCTS 2OO3 LLR
192 26
12. cA$H : FTHGARBiTG Tl-tE i.s. Acr, 1g4T RANGARAJAN T.K vs
GSVERruMENT OF TAMIL NANU AzuD fiTHfrR$, 2OO3 LLR
563 29
13. Gsr,$E : INDU$TR|AL EtvtpLoyMENT {s.o.) Aer t94s DEpGT
MAITAGEH., ANDHftA $3RAD=S}.I STATE ROAD TRANSFORT
CORFORATION VS MOHD. YUSUF MIYA ETC. (1997 I.I.R 264) 31
14. cAsE : REGARD|NG INDTJSTR|AL EMpLoyMENT
{STANDING
ORDERS) ACT, 1946 |NDIAN O!I- GORPORATION !.TD., '
AND
ANOTF{ER VS ASHOK KUMAR ARORA 1997 LLR 268 33
15. cA$E : TR-&DE UNIONS Acr, 1926 FooD coRpoRATroN
GF !ruilIA STAFF UNION VS FCI ANN OTHERS 1995 ICLR
623 36
t$. CA$E : TRADH UNNONS A*T_ 1gZ$ NATIONA!- HYDRO
ElaeT'ffiic p#wffiR C*Rp*RAT|0N LTn VS
S'-IR! BH&GAVAN AruM *THER$ 2fr01 LLR, 1222
38
lv- eA$f; : REGARDING T+{f; E$i Aer, 1g4B REGtor.{A!_ DlREcroR,
EsI CCftPiliqATION VS FRANCiS DE COSTA ANOTHER 1996
LLR 953 $C 41
 Lesson: 1

FACTORIES ACT, 1948 . OCCUPIER

J.K. lndustries Lt4, etc.,
Vs
The chief lnspector of Factories Boilers & others, etc.,(1996 LLR (sc)
96 )

INTRODUGTION:
: The present case deals with the Question of whether any person otherthan
the director
of the company can be nominated by the board of directors as the 'occupier'
of the factory.
t PRoBLEM :

1' Factories Act, 1948 as amended by Act, No.20 of Section 2(N) clause
Il stating -
occupier of a factory owned by a Company, any one of the directors shall
be deemed
to be occupier with protection irnposed by proviso (ii) Whether reasonable? yes
-
Whether restriction as imposed ultravires of the Constitution of lndia? No.

HELD:

The restriction imposed by proviso (ii) of section of the Act if at all, it may
be called a
restriction, as a direct nexus with the object sought to be achieved and is therefore,
a
reasonable restriction within the meaning of clause (b) of Article 1 g of the Constitution
of lndia. Proviso (ii) of Section (n) of the Factories Act is thus, not ultravlres of
article
(19X1)(g) of the Constitution.

2' Consequences when a company fails to nominate one of its Directors a(occupie-/of
the Factory?.
. HELD:
The inspector of Factories shall be at liberty to proceed against any one of the
directors
: of the company, treating him deemed occupier of the factory, for prosecution
and
punishment in case of any breach of convention of the provisions
of the factories Act or
offences com mitted therein.
3' Nomination of an occupier of a Factory owned by a company - who
should be? Must
be one of its Directors.
HELD:

i' lnthecaseofacompany, which ownsafactory it isonlyone ofthedirectorofthe

companywho can be notified as the occupierof the factoryforthe purpose of
the
Act and the Company cannot nominate any other employee to be occupier
of the
factory.
 ii. Proviso (ii) of Section 2(n) is constitutionally valid and is not intravires the
substantive provision of section 2(n) of the Act;

iii. Proviso (ii)to Section 2(n) is constitutionallyvalid and is not ultra-vires Article 14,
19(1Xg) and2l of the Constitution of lndia;

iv. The case laid down by the High Courts of Bombay, Orissa, Karnataka, Calcutta,
Guwahati and Madras is notthe Correct law and the contraryview expressed by
the High Courts of Allahabad, Madhya Pradesh, Rajasthan and Patna isthe conect
enunciation of law in regard to the ambit and scope of proviso (ii) of Section 2(n)
of the Factories Act.
FACTS:
The Chief lnspector of Factories called upon the petitioners/appellants to file
applications seeking renewal of the registration of licence of their respective factories,
signed byadirectorof thecompanyin hiscapacityastheoccupierof thefactoryand
stated that a nominee of the Board of Directors, otherthan a Director, could not make
such an application as an occupier. The correctness of that direction/opinion has been
put in issues in allthese cases. The petitioners/appellants have also called in question
the constitutional validity of proviso (ii) to section 2(n) of the Factories Act, 1948 as
amended byAct 20of 1987, asviolativeof Article 14,19(1)(9)and 21of the Constitution
of lndia.
PRINCIPLES:
1. ln the case of a company, which owns factory, it is only one of the directors of the
company who can be notified as the occupier of the factory for the purposes of
the Act and the company cannot nominate any other employee to be occupier of
the factory.
2. Whetherthe companyfails to nominate one of its directors as the occupierof the
factory, the lnspector of Factories shall be at liberly to proceed against any one of
the directors of the company, treating him as the deemed occupierof the factory,
for prosecution and punishment in case of any breach or contravention of the
provisions of the act or for offences committed under the Act.
 Lesson : 2
case : Regart[ilii;xii Act' 1e48
[;r"'"s
Vs
STATE OF M.P. AIR 1957; S.C, 388

INTRODUCTION:

This case explains the difference between the 'worker' and an independent contractor.

FACTS OF THE

* Messrs. Brijial Manilal and Company is running afactorywhich manufactures bidis.

Chintaman Rao was the Managing Partner and Kantilal is its active Manager. ln this
factory the process of manufacturing bidis takes prace in two stages:

First Stage:
* ln the first stage, the Management enters into a contract with independent contractors
known as "sattedars" for the supply of Bidis locally. The management supplies Tobacco
and beedi leaves to sattedars. Some of the sattedars have small factories where they
engage coolies and manufacture bidis and others manufacture bidis at their own
residence.

* The bidis that are manufactured are taken to the factories by sattedars (or) by coolies,
where they are sorted and checked by the workers in the factory.
* The selected (or) approved bidis are separately packed in bundles where as the
rejected bidis known as'chlant'are again rebundled bythe sattedars and delivered to
the factory.
:& The Management pays the cost of the manufacture of bidis after deducting the cost of
tobacco supplied to them.
Second Stage:
* The Second stage of the process of manufacturing bidis in the factory is carried out
exclusively by the labourers employed in the factory.
* This stage consists of warming the bidis to give taste, wrapping them in the tissue
paper, labelling and finally bundling them to sell.

* On Dec., lgth 1g52,the lnspector of Factories, M.P. visited the factory at 5.30 p.m. and
found that three of the sattedars and of their employees are delivering bidis to the
company.
 * Thereafterthe Chief lnspector of Factories filed a complaint in the Court, for violation
of Sec.62 and Sec.63 of the Factories Act 1 948, as they failed to maintain register of
adult workers and for allowing the workers to work without making an entry of their
attendance in the register and adult workers.

* The lower Court convicted Chintaman Rao under Sec.92 of the Act and directed them
to pay a fine of Rs.50/- and Rs.25l respectively (General Penalties of offence).

I The contentions of both the parties are as loliows:

(i) The appellant contends that the sattedars are an independent contractors who
undertakes to do a specific job for other persons without submitting themselves to
their control. Therefore he (sattedar) or his employees are not the workers within the
definition of Sec.2(1) of the Act.

(ii) Whereas the state argues that the definition of the 'worker' is comprehen siveenough
to take in all persons who work in a factory whether employed by the employer of the
factory or not.

ISSUES:

* The main issue in this case is whetherthe settedars and theirworkers will come under
Sec.2(l) of the Act or not.

The following are the Sections of the Factories Act, 1948 which are relevant to
above issues:

Sec.2(l):

Worker:- means "a person employed, directlyorthrough anyagency, whetherforwages

or not, in any manufacturing process or in cleaning any part of the machinery or premises
used for manufacturing process or ,n any other kind of work'incidental to or connected with
the manufacturing process or subject of the manufacturing process".
' Sec.62 : Registerof Adult Workers:

The Managerof everyfac"r,y shall maintain a registerof adultworkers, to be available

to the lnspectorat alltimes durii g working hours orwhen anywork is being carried on in the
factory showing:

(a) The name of each adultwciker in the factory.

(b) The nature of his work,

(c) The group if any, in which ne is included,

 (d) Where his group works on shifts, the relay to which he is allottecl and

e) Such other particulars as may be prescribed.

ARGUMENTS:

Chintaman Rao :

was argued on behalf - Chintaman Rao, that the sattedars are independent contractors
It

who don't come underthe control and supervision of the Management. They do not have any
direct relation ship with the Management. Hence, they cannot be entered into the register of
adult workers as claimed by the lnspector of Factories. Due to this reason their names are
not entered into the register and particulars are not mentioned. The sattedars in his case
receive tobacco from the management and supply them with rolled bidis. So, there is no
control of the management and they can manufacture the bidis whereverthey please.

I nspector of Factories :

Every register in the factory must contain the names of adult workers for allowing the
workers to work and making an entry of their attendance in the register of adult workers. No
adult worker shall be required or allowed to work in any factory unless his name and other
pafticulars have been entered in the register of adult workers.

Judgement:
The court held, as theywere notworkers, the non-inclusion of their names in the register
of adult workers and the absence of entries in regard to them in the said register could not
constitute an offence under Sec.92 of the Factories Act.
 Lesson : 3
Case : Regarclingi Factory and Manufacturing Process - Factories Act, 1948
SEELAM RA.i Vs ADDITIONAL LABOUR couRT - 2001 (2) LLR 617

INTRODUGTION:

The present case deals with the Question whether a company rendering computer
services to the customers relating to collection and maintenance of information and to develop
computer software applications to the customer; can be regaded as a 'factory'.

FACTS OF THE GASE

1. This case relates to an appeal filed by the workmen against the dismissal of their writ
appeal bythe honorable high court of Tamil Nadu.

2. A dispute was raised by the workmen against Seelam Raj & company and others,
before the 1 st additional labour court, Chennai against the closure of the data processing
division of the respondettts, rendering the workmen unemployed.

3. Seelam Raj & company was formed in the year 1982 for rendering computer services
to tho customers relating to collection and maintenance of information and to develop
com p ute r software appl ication s fo r the cu stomers'

4. ln march 1983, the second respondent set up a data processing division which undertook
data processing services such as pay rolls, financial accounting and inventory control
related statements.

5. But subsequently there was a decline in the demand for the services of the data
processing division on account of availability of indigenously manufactured computer.

6. ln the year 1989 the division became non-viable and therefore the second respondent
was forced to close down the same.

I . On 4-1-89, 46 persons were employed in the data processing division and they were
informed o-f the decision to close down the unit.

8. On 30-1-89, a notice under Sec2S-FFA of the lndustrial Disputes Act (lD Act), 1947
was sent to the state government, intimating about the closing of data processing
operations on 34-89. Therefore the workmen were terminated.
g. On Oct 89, the software division of the second respondent also was closed and the
services of 71 workmen had been terminated after paying compensation in terms of
the provisions of lD act.
 1 0' The labour court directed for reinstatement
of the workmen with back wages.
11' The 1st and 2nd respondents against the award
of labour court filed a writ petition in
the high court and single judge set aside the
award of the labour court.
12' A writ appealfiled on behalf of the workmen,
the high court upheld the judgement of
the
single judge and dismissed the writ appeal.

13' The workmen filed an appeat in the supreme

court against the high court judgement.
ARGUMENTS:-

1 ' Before the tabour court it was contended

on behalf of the second respondent that it
is
not an estabiishment as defined under sec
25L of the lD Act. Much less a factory as
defined under Sec 2(m) of the Factories Act,
1 94g.

1' Therefore the dispute is not an industrial

dispute under sec 2(a) of the lD Act.
2' Thelabourmurtheldthatthe lDActcoverstheestablishmentof
second respondent
and that itwas a factory thatthe closure
was unjustified and thatthe establishment
of 1"t respondent and the second respondent
are interconnected.
3' The companyfiled a writ petition againstthe judgement
of labourcourt. The single
judge held that an establishment soiely
engaged as electronic data processing
unit though may be a factory yet would be
exempted from the application of labour
law by virtue of explanation ll under sec 2(m)
of the Factories Act and such
establishment cannot be held as factory.

Note:

The laborers went to the Supreme court

against the company demanding wages as
well as to reinstatement. The judgement
is not yet delivered by the court and referred
to a
larger bench.
 Lesson : 4
Case : Regarding Factory and Manufacturing Process - Factories Act, 1948
ARDESHIR H BHIWANDIWALA
VS
STATE OF BOMBAY AIR 1962 SG 29

INTRODUGTION:
Making salt in an open land of 250 aet.:,j r:omes within the definition 'factory' and
-
produces
manufacturing process so the case deais witl-r .n , rq-:ther the owner of the land who
the salt, should obtain a license for manufacturing of salt; underthe Factories Act, or not.
FACTS OF THE CASE
O Salt works extended over an area of about 250 acres
0 The only buildings on this land were temporary shelters for the labour and an
office room
* There were some pucca platforms forfixing the water pump that are required to pump
waterfrom the sea and when not required this pump is kept in the office.
* On the seaside it has bunds in orderto prevent seawaterflooding the salt pans.
ISSUES:
g Whether Salt works comes within the definition of the word "factory" under
Section 2(m)

O Whether the conversion of sea water into salt comes under manufacturing process
under Section 2(k)
g WhetherWadia Mahal Salt works has to obtain a license under Section 6.
ARGUMENTS ON BEHALF OF ARDESHIR. H. BHIWANDIWALA.APPELLANT
* The expression premises in the definition of the word "factory" means "buildings" or
and not "mere open land" s"rce there were no buildings it cannot be called premises,
except the temPorary shet s.

* The expression "premise:, i;icluding precincts" indicates only buildings and buildings
alone can have precincts ,r:d there can be no precincts foropen land.
* Convei'sion of sea water into salt is not a manufacturing process because the work is
canied on by the force of gravity and solar energy which do the necessary work for the
occupi*rs of the salt works to convert sea water into salt and that no human agency is
employed in such conversion.
 ARGUMENTS ON BEHALF OF STATE OF BOMBAY.RESPONDENT

* The word "premises" now come to referto either land or buildings

orto both, depending
on the context. According to wHARToN's LAW LEXrcoN, BLACK
.H. C.LAW
DICTIONARY.

* The expression "premises including precincts" does not necessarily

meaR that the
premises must always have precincts. Even buildings
need not have any precincts.
The word "including" is not a term restricting the meaning
of the word ',premises,, but is
a term which enrarge the scope of the word "prernises,,.

* Even though the sea water is being changed into salt through
solar energy, labourers
are employed for admitting sea water to the reservoirs by working
sluice gates,
sometimes at night, filling crystallized beds, watching the
densityof brine, notto exceed
' the lirlrits, grading, putting into gunny bags.

REFERENCE CASES:

* KENT VS ASTLEy-Slate quarry, open land 400 acres

* NASH VS HOLLINSHEAD-workmen employed to drive

a movable engine, forgrinding
* SEDGWICK VS WATNEY COMBE, REID AND CO.LTD-Bottled
beer, not saleabte
as draught beer carbonic acid gas put into it, filtered and
labeled then delivered.
{. HOARE VS TRUMEM, HANBURY BUXTON AND CO.&LAW
VS GRAHAM-BOIh
these cases refers to washing beer bottles of and adaptation
of beer for sale.
JUDGEMENT:

on the basis of the above arguments and referring the above citied
cases the court
observed that salt work is a factory and are required to be registered
and licensed under
Factories Act.
 Lesson : 5

CASE : CANTEEN WORKER, FACTORIES ACT 1948

BHARAT PETROLEUM CORPORATION LIMITED
Vs
MUMBAI SHRAMIK SANGH {1998 FLR, 79 SC)

INTRODUGTION:

The casse deals with the contract labourwhc al. r employed by M/s Kleenwelthe contractor
for cleaning , sweeping etc at the housingcolony and spotts complex of the Bharat Petroleum
crop Ltd, be entitled to be absorbed as regularworkmen of the corporation.

Facts ofthe case :

1. The contractor i.e, M/S. Kleenwel employed workmen for cleaning, sweeping etc.. in
the housing colony and spods complex of the corporation.

2. A writ was filed by the Mumbai Shramik Sangh, a trade union for abolition of contract
labour in Bharath Petroleum Corporation respondent before the Bombay High Court.

3. Against the orders of the Bonrbay High Court Bharat Petroleum Corporation ltd
preferred an appeal and it is the appellant while Mumbai Shramik Sangh i.e, trade
union Kleenwel i.e, contractor and the union of lndia are the respondents.

lssues :

1 . Whether the notification issued by the Government of lndia dated on 9.1 2.1976 for the
abolition of the contract labour (regulation and abolition) Act, 1970 under section 10(1 )
of the act is applicable to tl':ese workers.

2. Whether the word "in any establishment " in section 10 of the act which deals with the
abolition of contract laboui also includes those contract labour employed at the staff
quarters and sports comF ' x of the corporation.

Arguments:
An gart of Bharat Pe.trt ::. um;
The leai'ned solicitor general, referred Gammon lndia Ltd Vs Union of lndia, case :

l. ln this case it was held that the government of lndia cannot issue notification prohibiting
contract labour exceptwirere the main industrial operation is going on (or) where the

rc
{D
 work is incidentalto (or)necessaryforthe industry
trade , manufacturing process. Thus
the govemment of lndia cannot issue notification prohibiting
contract labour involved in
cleaning, sweeping etc.. at the residential (or) sports
complex of the staff of the petroleum
corporation.

2. Even in the standard vacuLlm case it was held that

the government is having power
only to abolish such contract labour where the industrial
operations are going on and
the other operations incidental (or) necessary there
to.

l. They relied upon,

i. Section 2(b) which defines contract labour.

ii. Section 2(i) which defines work man.

Where the words in connection with the work of an

establishment are used.
They referred the following cases,

1' Bangarore water suppry and sewage Board Vs

Ms Rajappa.
2' J'K Cotton Spinning and Weaving mills company vs Labour
Tribunal.
ln these two cases it was held that the workmen i.e
contract labour who were
working at the residential premises of the staftshould
be treated as workmen.
Judgement:

The supreme court held that,

1' The workmen who were employed by the contractor

M/S. Kleenwel for cleaning,
sweeping etc" in the housing colonyand sports complexof
the corporation were
entitled to the benefits of the notification issued by the
Government of lndia.
Under Section lo(l) of the Act regarding the abolition
of the contract labour and
hence these contract labour should be absorbed
with effect from 1 .2.1gg1 as
permanent employees of the corporation
and they are entifled to all the benefits
which the regurar workmen doing the simirar work gets.

2' section' 10 not only deals with the abolition of contract

labour not at the place
where the industrial operations is carried on (or)
otheroperations necessary (or)
incidental are carried on but also extended to those
contract labour who are
employed at the staff quarters and sports complex
of the coiporation.

It
 Lesson : 6
GoNTRACT LABOUR (REGULATTON AND ABOLTTION) ACT, 1970
(GoNTRACT LABOUR ArR rNDrA STATUTORY CORPORATION
vs MUMBAT SHRAMTK SANGH 1997 6(76) FLR 237 SC)

INTRODUCTION:

The case deals about the contract labour working (earlier) in an organisation would
be absorbed as regular employee at least from the day on which the contract labour system
in the establishment gets abolished.

PROBLEM:

Contract Labour (Regulation and Abolition) Act, 1970, S.2(1)(a) - Contractor Labour -
Abolition of - Consequences - Appropriate Government to abolish contract labour.

FAGTS:

The appellant engaged, as contract labour, the respondent union members, for
sweeping, cleaning, dusting and watching of the buildings owned and occupied by the
appellant. The Contract Labour (Regulation and Abolition) Act, 1970 regulates registration
of the establishments of principle employer, the contractor engaging and supplying the contract
Iabour in every establishment in which 2A or more workmen are employed on any day of the
precedingffirkronths as contract labour. The appellant had obtained on September20,1971,
underthe Act, The
a certificate of registration from Regional Labour Commissioner (Central)
Central Government exercising the power under S.10 of the Act, on the basis of
re@mmendation and in consolation with the central advisory board constituted under S10(1 )
of the Act, issued a notification on December 9, 1976 prohibiting Employment of contract
labour on and from December 9, 1 976 for seeping, cleaning, dusting and watching off buildings
owned or occupied by the establishrnents in respect of which the appropriate government
underthe said Act in the Central Government. However, the said prohibition does not apply
to "outside cleaning and other maintenance operation of multi storeyed buildings where such
cleaning or maintenance cannot be carried out except with specialised experience". lt would
appearthat Regional Labour Commissioner (central) Bombay by letter, dated January 26,
1987 informed the appellant that the State Government is the appropriate Government under
the Act. Therefore, by proceedings date May 22,1973 the Regional Labour Commissioner
(Central) had evoked the registration. ByAmendment Act, 1974 was for sought on statute
book specifying the appellant as one of tlre industries in relation to which the central

12
 government is the appropriate government
and the appellant has been carrying on its business
"by or under its authority" with effect
from A.ugust 21 , 1gB2.The Act was amended bringing
within its ambit the Central Governments as appropriate
Government by Amendment Act, 14
of 1986, with effect from 28 January, 19g6.

Since the appellant did not aboiish the Contract system

and failed to enforce the
notification of the Government of lno'ia, dated December g,1gl6,the
respcndents came to
file writ petitions for direction to the appellant to the
appellant tr: enforce forth with the aforesaid
notification abolishing the contract labour systenr in the
aforesaid services ancl to direct the
appellantto absorb allthe employers doing cleaning, sweeping.
clusting, washing and watching
of the buildings, owned or occupiecl by the appellant -
establishment, with respect from the
respective dates of their joining as contract labour in the
appellant's establishment with all
consequential rights/benefits, monetary or othenvise. The Writ petiticn
was allowed by the
learned single judge on November 16, 1989 directing
that all contract workers be regularised
as employees of the appellantfrom the date of filing
of the Writ petition preceding thereto, on
November 5, 19Bg the Government of lndia referred to the
central Advisory BoarrJ known as
Mohile Committee under S10(1) which recommended to
the Central Governrnent not to abolish
the Contract Labour System in the aforesaid services.
Under the impinged judgenrent dated
April 3, 1992 the learned judges of the Division Bench dismissed
the appeal.
JUDGEMENT:
The three member Bench of the court in R.K. Fanda and
other V. steel Authority of
lndia and others t1964(2) L.L.N.37Bl, is concerned, it is
true that is para S,at page 382 of the
report in the last four lines it is observed while referring to
Deena Nath Case, that ,,neither the
Act northe rulesframed bythe centralGovernmentorbyanyappropriate
Government provide
that upon abolition of the contract labour, the labourers would
be direcly absorber1 bv the
principal employer", but that is not the ratio of the
decision of the said three mernber$ bench"
It has only referred to what Dena Nath case, decided.
lt is also required to be noted that the
question which has been posed for our consideration
is as to what is the fate of erstwhile
contract labour on abolition of contract labour system in the
establishrnent under S.10 of the
Act' Such a question had not come up for consideration before
the court in R.K. panda Case.
Therefore, it could not be urged that the ratio of Dena Nath
case was approved by three
member Bench in R.K' Panda Case. ln the latter case no abolition
was directed by the
appropriate Government underS.10 of theAct. ltwas a case
in which the contract labourers
were claiming to be absorbed directty by the principle
employer without there being any order
under S' 1 0' Consequently the question with which we are
concerned in the present case did
notfallforconsideration of the Bench in R.K Panda Case had the
Bench decided that question
one way or'the other. The judge concurring with Ramaswamy,
J, on the scope an ambit of
S' 10 of the Adand bold that on abolition of Contract labour
System from any establishment
underS'10 of theAct bythe appropriate Govemment, i.e., logicaland
legitimate consequences

13
 of such abolition
thereof will be that erstwhile regulated contract labour covered by the sweep
the employer
forthe concerned activities would be entitled to be treated as direct employees of
to be treated as
on whose establishment they were earlier working and they would be entitled
regular employees at least from the day on which the contract labour system
in the
establishment for the work which they were doing gets abolished.

14
 Lesson : 7
case : Regarding contract Labour:The contract LabourAct, 1g70
GUJARAT STATE ELECTRICITY BOARD
Vs
HIND MAZDOOR SABHA & OTHERS 1995 (71) FLR 102
SC

INTRODUGTION:

The case deals with abolishing contract labour under Sec. '10 of the Contract Labour
Act 1 970.

FACTS OF THE CASE:

1' ln this case the plaintiff is the Board of Gujarat Electricity

Board with runs a thermal
power station that generates and distributes electricity
to the consumers in various
parts of the state.

2' Gujarat Electricity Board deployed through various contractors 1500

skilled and
unskilled labourers to carry out the work of loading and unloading.

3' The contrators exploited the contract labour as a result of which they joined
trade
union & filed a petition in High Court, claiming the privileges provided
to regular
employers of the Board

4' The High Court appointed a Commissionerto look into the matter and
based on the
report, High Court gave the judgement in favour of union treating
the contract labour as
the regularemployees of Gujarat Electricity Board.

5' on other hand the Gujarat Electricity Board filed a petition in Supreme court
against
the order passed bythe High Court. Claiming that except the
appropriate Government
no otherauthority is permitted to abolish contract labour.

ISSUES:

1' Whether the contract labour can claim themselves as the regular employees
of the
Board or not.

2' Whetherthe contract labourcan claim the privileges and service conditions
which the
regular employees are availing.

3. Whetherthe contract is genuine or not genuine

4. The Contract Labour Act 1 970 Sec.1 0 can be applicable to the

dispute or not.

15
5. lt tl're Boarcj bound to consider or obserue contract labour as its regular employees as
perthe order of tribunal and High Court.

ARGUMENTS OF UNION

i. They wantecj the Board to reinstate the Workers whose services were terminated.

2. They even ciaimed that as the contract is ne.rt 5enuine, they have every right to claim
themselves as the reguiarwcrkmen of ti:* Err;;rd.

3. As they are deeined io be ihe worlir;c-, 'l rhe Board, they areen titled to all the
privileges & service conditions whicli th,: i,-. ..;;ar employees of the Board are availing.

ARGUMENTS OF BOARD:

1. AccordingtoSection 10cf Conti"i:ctLaboi;rActnoauthorityotherthantheapproprate

government can abciish contract iai:our-.

2. As the Board has several other plants with in the state, any decision taken against
it may result to heavy financial burden as the workers in other plants would raise the
voice on the same issue.

JUDGEMENT

1 . ,\fter listening to the above case the judgement were so given the Supreme Court has
made it very clearthat tl're dispuie is in no way related to the abolishing of the Contract
!*abour under Sec.10 of Corri.r'act Labour Act 1970 is in no way applicable to this
dispute.

2. Supreme Court in support si ordr:rs given by the High Court given its judgement
saying that the Board has to gc with the order of High Court and absorb the contract
labour as its regular emplcyees as the contract labour is genuine. Therefore the
principle employer is under obligatlcrr to observe the contract labour as regular
employees and they are entitled to all the privileges which the regular employees of
the Board availing.

JUDGEMENT
Judgement was given in t':lrour of workmen. And the board was ordered to reinstate
the workmen whose services wl ";,e terminated

16
 Lesson : 8
case : Regarding contract Labour - The contract Labour
Act, 1970
OIL AND NATURAL GAS CORPORATION
Vs
PETROLEUM EMPLOYEES UNTON AND OTHERS
2OO3 LLR 209

INTRODUGTION:

The case dears regarding aborition of contract Labour.

FACTS OF THE CASE :

s rhe Appellants is a government of lndia undertaking, its

main activity is to explore oil
and natural gas in various parts of the country
and to draw the same from the earth.
s ln the state of Maharashtra its main activity
is offshore drilling foroil at Bombay high
and employs more than 2000 workerc at Bombay
high as well as in otherestablishments
in the state of Maharashtra.

\/ It regularly employs a large number of contract

labours in various departments
A
w Union of lndia issued a notification on septembe
r,lgg4prohibiting contract Iabourfor
various works in the following categories

1. Fire fighting (fire supervisor, fireman, fire technician)

2. Typist

3. Clerks (including accounts clerk)

4. Steno typisVstenographers

5. Data operators

6. Computeroperators.
7. Store keepers.

8. Boileroperators.

9. Attendants/helperslpeon/JO/radio operators.
10' Drivers (whereof driving works is not done by
hiring vehicles on contract but by
vehicles owned by oir and Naturar Gas commission
(oNGC).
o The respondents filed writ petition in the court praying
for a declaration that workers
referred in the list be treated as direct and regular
employees of 9NGC with effect
from their initial appointment.

17
 date
@ They also prayed for absorption as reguiar workmen with effect from the actual
of their entering into the service of ONGC as contract labours"

ISSUES:

Section 10 (1)o{ Contract Labour Act prohibits the employment and automatic
absorption of contract labours as reguiar woi'kman of that organization

ARGU MENT S:

On behalf of APPellants : ONGC:

been employed
{. The learned counselforthe appellants stated thattheworkman had not
bythe appellants at any stage as principle employerand even if theywere employed,
they may have been employed bythe contractors who were engaged by appellants'
is correct it cannot
* lt also stated that even if the statement on behalf of the respondents
to be illegal by
result in automatic absorption as regularworkmen which has been held
(SAIL) Vs
the Supreme court as laid down in the STEEL AUTHORITY OF INDIA LTD'
NATloNAt. UNtoN \,.VATER FRONT WORKERS AND oTHERS
nor any other
* Neither section 10 of the Contract Labour (Regulation & Abolition)Act
provision in the act, whether expressly or by necessary implication provides for
automatic a'osorption of ccntract labour on issuing a notification by appropriate
government under section 1 0(1 ).
that any
* They also overruled the judgment of this court in AIR lndia's case and declare
for absorption
direction issued b5r any industrial adjudicatcr/any court including high court
good and that
of contract labour following the judgment in AIR lncjia's case shall hold
judgment in the
the same shall not be set aside, altered or modified on the basis of this
cases where such a Cirection has been given effect to and it has
become final'

On behalf of Respondents: Petroleum employees union and others

writ petition in the
The respondents along with generalemployees association filed a
workman w'e'f' their
court requesting the appellants to take the workers as regular
initial appointment in the establishment of the appellants.
of the
The learned counsel for the respondents mainly opposed the application
judgments of the suprerne court in the sAlL case on 2 grounds:
the supreme
1 . According to the learned counsel by the judgment in the case of sAlL
court overruled its earlier judgment in the AIR lndia's case prospectively '

have been already

Therefore, the woi'kman represented by the respondents who
cannot be
absorbed and infact given all consequential benefits on that basis
1B
 disturbed .According to the learned counsel the contract
labour has been
absorbed in the pursuance of the judgment of the lebrned
single judge and the
interim orders passes by this court in the present
appeal and therefore the case
of the contract labour represented by the respondents
union are protected by the
direction of ttre supreme court in the SArL case.

2' The learnecj counsel has further stated that any direction
issuet] by the inter alia,
a high court for absorpticn of the ccntract labour shall
hold good and that it shall
not be set aside, altered or modified on the basis of the judgment
in the SA;L
case wltere such directions given affect to and it has
become final.
x The learned counsel further submitted that the appellants
have after the notification
dated Sept' 1994 by which contract labour'*,,as abolished
in the specified category
therein has continued to employthe workman represented
bythe Respondents . This
fact has been strongly denied by the learned counsel
for the appeilants who has stated
that the workman had not been employed by the appellants
at any stage .lf at all they
were employed, they may have been empioyed bythe
contractors who were engaged
by the appellant.

J UDGEMENT

The court thus resolved the conflici of the opinion on

the said questions holding that
neitherthe act northe rules framed bythe central government
or by any appropriate government
provided that upon abclition of the contract !abour,
the iabourers wourid be directly absorbed
by the principle employer

19
 Lesson : 9
Gase : Regarding Shops and Establishments - The A.P. Shops
and Establishments Act, 1988
P.K. VENKATAIAH
Vs
Ap coop CENTRAL AGRTCULTURAL DEVELOPMENT BANK Ltd 1991 (2) ALT 536

INTRODUGTION: .:

The case deals with violation of principies of NaturalJustice in conducting disciplinary

enquiry and can high court entertain writ under rrrticle 226 of lndian Constitution. The High
court allowed the writ petition holding the enquiry officer guilty of violation of principles of
naturaljustice as laid in Rule 20 of Shops and Establishment Act.

Facts of the Case:

1. The petitionerwas an accountant of co-operative Bank and the Managing Director of

the Bank issued a charge (sheet) memo to the petitioner on 1-6-1983.

2. The Enquiry officer tE Ol fixed the date of enquiry on 30-B-1983 but the petitioner on
the ground of illness sought postponement or adjournment submitting a medical
certificate.

3. E.O. considering the absence of the petitioner submitted enquiry repofi as exparte on
26-12-1983.

4. The committee of the Bank thought the petitionerwas denied opportunity to present
his case.

5. The manager asked for adjournment stating that he is busy and a fresh date was
fixed on 18-7-1986.
' 6. Though the E.O. received telegram of the petitioner seeking adjournment the E.O.
got

him Expartee and the same reportwas submitted to the Bank.

T. The Bank ordered that the oetitioner to be retired compulsorily and recover certain
amount (2797 with interes't).

B. Against this order the p,eiitioner filed a writ order under An 226 of the lndian
Constitr.ltion in the A.P High Court.

20
 lssues:
1. Whether a writ could be issued if there is violation of a statute or statutory rule by an
authority, Rule 20 of A.P. Shops Establishments Act.

2. Whether a writ could be issued against persons inciuding public authorities and e'ren
against a co-operative society.

Arguments:
1. Petitioner contended that the rules deaiing 'with oiscipiinar,, pi"oceedings as per the
provisions of Shops and Establishnrents Act and its ruies are applicable to employees
of co-operative societies violation of rules reiating to principles of Naturaljustice and
non consideration of or past conciuct is sufficient to issue writ to a society under Art
226 of the Indian constitution.

2. The respondents counsel argued that as per the judgement of the Division Bench of
High Court in the case of V.Narsingha Rao (Vs) Prudential Co-operative Urban Bank
where it was held that the bye-laws of the society could not be the subject matter of writ
petition so far there was no breech of record by employee.

Judgernent :

1. ln this case the court proceeded on the basis that petitioner questioned violation of
Bye-laws and not entitled to relief in view of judgement of Supreme Court in the
Co-operative Central Bank (Vs) industrial Tribunal Hyderabad {2 supra) obviously the
provision of Shops and Establishment Act and rules there uncjer were not brought to
the notice of the Judges. Hence the court held that there is not only violation of
Bye-laws, but also violation of Rule 2a of Shops and Establishrnent Rules including
Sec47(2) of New Act.
It is also Stated that past conduct has to be taken into consideration and a notice
under Rule 22 of Shops and Establishments Act is to be given. The same is not having
been issued it argued that the order is liable to be set aside. Both were not followed
in this case and as such it was held that it is a fit case under Aft226 of the lndian
Constitution.

3. The point related to alternative remedy' Sec46 of A.P Shops and Establishments Act
provides right of appeal to Assistant Commissioner of Labour and further appeal to
Labour Court for violation of principles of Natural Justice. The aggrieved party without
exhausting the alternative remedy can approach directly High court. As per decisions
of Supreme Court in :

21
 A.V.Venkateshwaran Babu Ram

(vs) (vs)

R.S. Wardlnvani Zilla Parishads

4. Narsingha Rao Vs Prudential co-op Urban Bank, the judges observed if certain
conditionswerefoilowedawritcouldbeissuedevenagainstco-operativesociety.
"State" Art 12 of
Since a co-operative soiiety falls within the meaning of word
(Vs)P'Gattaiah
Constitution of lndia' ltWas decitjed as per judgement in IDL chemicals
person,
that a co-op society could be a person and writ could he issued against a
provided statutory obligations of public nature are violated.

supreme court in case of Anandhi Mukta sabgum TrustVs V.R. Rudani held
thatthe
words any personalauthority used in Afi.226 notonly confines to statutory
authorities
in this case' ln
but cover any person or body performing public duty. This was followed
lies against
the present case judges ccnsidered on the above cited case and held a writ
A'P
co-operative Bank which is a society for enforcing Rule 20 of Rules made under
of Natural
Shops & Establishments Act further held that E.O. was guilty of violation
Justice principle as laid in Rule 20 of shops & Establishments Act and did
not

considered the Past conduct'

6. Writ petition was allowed and the impugned order of punishment as well as enquiry
were quashed.

o,-)
LL
 Lesson : 10
INDUSTRIAL DISPUTES ACT, 1s47 - |NDUSTRY
BANGLORE WATER SUppLy &
SEWAGE BOARD VS A. RA"'APPAAND OTHERS
,1I78ILLJ 349

INTRODUCTION:

The present case relates to the difinition of industry

under lndustrial Disputes Act 1g4T.
FACTS OF THE GASE:

Rajappa and another person were employed as drivers

in the said board. The board
terminated the services of these two employees. These
two employees contested their
termination on the ground that theyware employed in
the board which is an industry and their
termination was illegal.

section 2fi) of the lndustrial Disputes Act, 1947 defines

industry to mean any business,
trade, undertaking, manufacture or calling of employers
and includes any calling, service,
employment, handicraft or industrial occupation or avocation
of workmen. on the question as
to what falls within and what fails outside the statutory
concepts of ,,rndustry,,.
JUDGEMENT:
"lndustry" as defined in the sbu -
section has a wide import
a' Where there (i) systematic activity, (ii) organised by cooperation
between
employer and employee (the direct and substantial element
is chimerical) (iii) for
the production and/or distribution of goods and services calculated to
satisfy
human wants and wishes (not spiritual or religions
but inclusive of material things
or services geared to celestrial bliss) prima facie, there is
an industry in the
enterprise.
b' Absence of profit motive or gainful objective is irrelevant,
be the venture in the
public, joint, private or other sector.

c' The true focus is functional and the decisive test is the
nature of the activitywith
speciaremphasis on the emproyer- employee rerations.
d' lf the organisation is a trade or business it does
not cease to be one because of
philanthropy a nimating the u ndertakinq.
a' lhe consequences are (i) profession, (ii) clubs, (iii) educational
institutions
(iv) co-operatives (v) Research institutes, (vi)
Charitable prolects and (vii) Other
kindred adventures, if they fulfil the triple tests, cannot
be exempted from the
scope of section 2O.
 b. A restricted category of professions clubs, cooperatives and even gurukulas and
little reseai-ch laboratories may qualify for exemption if, in simple ventures,
substantially and going by the dominant nature criterion substantially, on
employees are entertained, but in minimal matters marginalemployees are hired
without clesti"oying the non employee chri'acter cf the unit'

lf in a pious or aitruistic missicn. mafly eri: rioy themselves, face orfor small honoria
or like return, mainly Crar,nln b-\'sh,,,,' :' n the purpose of cause such as lawyers
volunteering to run a free le.qti t , '; clinic or doctors service in their spare
hours in a free medicai cenirc r',i..' ;,iosworkiflg atthe bidding of the ltoliness,
divinity or like central personality ir ;,r ,i i,r.ie services are supplieci free or at nominal
cost and those who serve are nct engaged for remuneration or on the basis of
master and servant relatior :i;::i1,, thetr ihe institution is not an industry even if stray
servants manual ortechnirai are hired. Such eleemosynary or like undertakings
alone are exempted - not othei" generosity, Compassion, development passiort
or project.

4 a. Where a complex activities some of which quality for exemption and other not,
involves employees on the total ul':,lertaking, some of whom are notworkmen as
.ii--]ire departments are not productive or goods
in the university of Delhi ca,.:.:' i-i,
and services if isolatecl. r:.,,,rn then the predominant nature of the senvices and
the integrated nature of t;.:= r:epadrnents as explained in the corporation of Nagput'
Case will be the true tesi. l-he whoie undertaking will be industry although those
who are not workmen by definiticn may not benefit by the status.

b. Sovering functions strictly ;-t :i:rr"stood alonr: qualify for exei-nption, not the welfare
activities oreconomic a,Jricr.tiure.c i.:nclefiaken by Government or Statutory bodies.

Even in departments aischarging functions, if Lhere are units which are industries
and they are substantially severable then they can be considered to come within
section 2(1).

d. Constitutional and c i,npetently enacted legislative provisions maywill remove

from the scope of tl- ,: \ct cateEories which otherwise may be covered thereby.

a. Notwithstanding th ,revious classes, sovereign functions, strictly understood,

(alone) qualify for exemption, not the welfare activities or economic adventures
undertaken by government or statutory bodies..

24
 b. Even in departments discharging sovereign
functions, if .there are units which
are industries and they are substantially severable,
then they can be considered
to come within section 2fi).

c. constitutional and competently enacted legislative provisions

may well remove
from the scope of the Act categories which
otherwise may be covered thereby.
The above decision of the supreme court rendered
by seven judges has
exhaustively discussed the scope of "industry,,as
defined in sectio n2oof the
lndustrial Disputes Act, 1 947 .lthas overruled
the following decisions mainly on
the ground that the results of these decisions
was to cut down the scope of
"industry''.

1. safdarjung Hospital, New Delhi- lt is entirely a charitable

institution carrying on
work of training, research and treatment and,
therefore, the Hospital is not
an industry.

2. solicitor's case - Learned profession must be excluded

not an industry.
3. Gymkhana crub Emproyees union - Non - proprietary
members, crubs with
multifarious activities providing a venue for
sports and games 6nd facilities for
recreation, entertainment and for catering of
food and refreshment was not
an industry.

4. The university of Delhi - Motive (work) of

education carried on by institutions like
Delhi university is not an industry.

5. Dhamarjgiri Hospital- is not an industry.

6. Rabindranath sen - services rendered by Physicians,

counsels, and solicitors
based on their individual skill and experience
do not satisfy the description of
industry and therefore need to be kept outside
the scope of the
expression "industry',.

7. cricket club of lndia - Activity of cricket club of

lndia is not industry. lt is members
self - service institution.

25
 Lesson: 11

Gase : Regarding Worker - The l.D. Act 1947

SHANKAR BHAI NATHALAL PRAJAPATI
Vs
MAIZE PRODUGTS 2OO3 LLR 192

INTRODUCTION:

The case highlights whetherthe petitione: could be terminated from service without '
giving an opportunityto present his case; which a,;iounts to violation of the principle of Natural
Justice and whetherthe petitionerwhowas a'supervisor'covered bythe definition of 'worker'
under Sec 2 (s) of the l.D' Act 1947 .

FACTS :

t The petitionerwas working as a shift chemist in the respondent company since 1981 .

The said designation was subsequently changed as starch technician.

* The respondent served on the petitioner a notice, dated 12 June 1996 calling upon
him to show cause why his services should not be terminated.

* Before the petitioner could reply to the said notice, the respondent company terminated
him from service by a telegraphic intimation.

{< According to the respondent, the petitioner a responsible officer, was sleeping in the
department during working hours and that amount to committing breach of the service
conditions.

* Bytaking the petitioner salary into consideration the labour court decided the issue in
favourof the respondent arid the labourcourt issued the award, dated 9th November,
2001 holding that the petitioner was not covered under sbction 2(s) of the acl
* Being aggrieved by the sairj award of the Iabour court petitioryer has filed the present
petition undel arts226 &L,7 of the constitution of lndia'

!SSUES:

I Who is aworkman?

* Does the term " supervisor" comes under the definition of workman. Definition of a
workman:- Sec 2 (S) under l.D. Act.

Workman" means any person (including an apprentice) employed in any industry to

"

do any manual, unskilled, skilir;d, technical operational, clerical (or) supervisory work for hire
 (or) reward' whetherthe terms
of employment be expressed (or) implied,
and forthe purposes
of any proceedings underthis act
in relation to an industrial drsput",
,r"to", any such person
who has been dismissed, discharged
(or) retrenched in connection with (or)
as a consequence
of' that dispute' orwhose dismissal,
discharge, (or) retrenchment had led
to that dispute, but
does not include any such person:_

* Who is subject to the Air Force Act, 1g50

(x Lv of 1950), orthe ArmyAct,

1g50
(xlvl of 1 950) of the Navy Act, .l g57
(Lxii of t957) or

* who is employed in the police service

oras an officer orthe employee of a person;
or
* who is emproyed mainry in a manageriar
or administrative capacity; or
* who being employed in a supervisory capacity
draws wages exceeding one thousand
six hundred rupees per month or
exercises, either by the nature of the
duties attached
to the office or by reason of the powers
rested in him; functions mainly of a
managerial
nature".

SUPERVISOR:

The word 'supervisor' means a person

who oversees the work of others. person
can'be said to be a supervisor if there
A
are persons working under him, overwhose
work he
has to keep a watch.

Yes' the term " supervisot'' comes

under the definition of worker, if his salary
does notexceed Rs. 1600/_.

ARGUMENTS ON BEHALF OF RESPONDENT

* According to the respondent since

the petitioner was a responsible officer,
it was a
very Serious matter that he was
steeping in the department during working
hours and
that amounted to committing breach
of the Service conditions.
* The respondent has contended thatconsidering
the factthatthe petitionerwas employed
in the respondent company as
supervisor and that he was carrying
out functions in the
' ' nature of supervision over his sub-ordinates,
"workman,'as given in Sec
he would not *r" ,iderthe definition of
2 (s) of the Act.
* As the petitioner himself has submitted
that he was working as supervisor in the
respondent company and the work
he was required to do was of supervisory
nature.
 ARGUMENTS ON BEHALF OF APPELLANTS: (SHANKAR BHAI NATHALAL
PRAJAPATI):

* According to the petitioner, before he could reply to the said notice the respondent.
Company terminated him from service by giving a telegraphic intimation.

* lt is submitted that by looking at the nature of the work which has been described
above he was doing purely technical work and in the process, he might have done
some incidental supervision on the working of his subordinates'

JUDGEMENT:

* Labour court has committed grave error in throwing out the reference at the threshold
by holding that the petitioner is not a workman
petition,
* The award of thetribunaltherefore, deservesto be quashed and set aside this
is therefore, required to be allowed.

* The court said that he is a workman according sec 2(s) of l.D. Act.

28
 Lesson : 12
Case :
Regarding The l.D. Act, 1g4T
RANGARNAN T.K
Vs
GOVERNMENT OF TAMIL NADU AND OTHERS
2OO3 LLR 563

INTRODUGTION:

This case highlights the issue of 'strike'underthe

lndustrial Disputes Act 1g47.The
court observed that govemment employees have
neither a counstitutional nor a legal right to
resort to strike.

FACTS OF THE GASE:

t The Tami! Nadu Government terminated about

two lakhs of employees who resorted
to strike forgetting theirdemands comptied
with, bythe government.
lt was challenged before the High court of Madras byfiling writ petition underArticles
' 2261227 of the constitution.

The leamed single judge by interim orderdirected

' and dismissal of employees without conducting
the state govemment that suspension
any enquiry be kept in abeyance until
furtherorderand such emproyees be directed
to resume duty.
t rhis interim order was challengedby the state government by filing writ petition
on
behalf of government employees, wdt petition
were filed challenging the validity of the
Tamil Nadu Essential Services Maintenance
Act,2002 and also the Tamil Nadu
ordinance No.3 of 2003.

c rhe division bench of the High court set aside the

interim order and arrived at the
conclusion that without exhausting the alternative
remedy of approaching the
administrative tribunar, writ petitions were
not maintainabre.
ltwas pointed out to the court that the total
' ladies and only 165 male andT female personnel
detentions were 2211 ,out of which 74 were
have so far been released on bail.
The arrestees were mainly cterks and subordinate
' that those who were arrested and rodged jairs
staff. Therefore, the court, directed
in be rereased on bair.
ISSUE:

t whether the government employee has a legal/statutory

right to go for strike.
What is strike:
persons employed
According to sec 2(g) strike means, "cessation of work by a bodyof
under a common
in any industry acting in combination or a concerted refusal or refusal
so employed to continue to
understanding of any number of persons who are or have been
work orto accePt emPloYment.

It is clearly mentioned in law that the employees have

no fundamental right to resort to
Master General' central
strike. This was proved in the "Radhey shayam sharma Vs. Post
of the government went on
circle, Nagpu/',. The employees of post and telegraph department
in the departmentalenquiry penaltywas imposed upon
them.
strike,
to strike and all that the
According to Article 1g(lXa) there is no Fundamental Right
court has specifically observed
ordinance provided was with respectto any iflegar strike. The
present day situation'
that for just or unjust cause, strike cannot be justified in the

ARGUMENTS OF THE CASE:

Arguments on behatf of ResPondent:

government failed to look
The argument on behalf of the respondent was that after the
is the only weapon and as a
into their demands they went on for strike. They say that strike
rast resort in the hands of emproyees for achieving their
demands from the government, they

went on strike.

Arguments on behalf of APPellant:

Fundamental Right on part
The argument of Tamil Nadu Government is that there is no
it causes disturbance to the work
of the employees to go on a strike in any situation because
of the organisation.and inturn to the society. There is
no legal/statutory rightto go strike' So
absence from duty'
they terminated the employees as it amount to unauthorised

JUDGEMENT:
that there is no Fundamental
From the above contentions, the supreme court observed
disturbances to the organisation
Right to go on ptrike by govemment emproyees which causes
as wellas to the societY.

30
 DEPOT MANAGER, AI{DHRA PRADESH
STATE ROAD TRAIISPORT CORPORATION

Vs
MoHp. yysyf
MtyA ErC. (1ee7 LLR 264)
rNpusTRhL EMpLoyMENT (S.O.) ACT
1e46

INTRODUGTION:

ln the present case the main issue

was when departmental inquirywas initiated
against
the defendant for his Act of misconduct
a simultaneous
criminal proceedings can be launched
against him by the police forthe same
Act of misconduct in a criminal court
or not.
FACTS OF THE CASE:

1' on september 15, 1995 while driving the corporate

vehicle (Double Decker) near
Gandhi Hospital, Hyderabad, Md.
Yusif Miya made an accident and due
to lack of
anticipation a cyclist was died.

2' consequently action was initiated misconduct

and enquiry was ordered under regulation
of the emproyees conduct rures 1g63,
bythe Depot Manager.
3' Police also launched prosecution
foran offence punishable undersection
307, part ll,
IPC against the offender.

4' Police filed a writ petition in High

court for stay of Departmental proceedings.
5' single 'iudge stayed the proceedings
and on appeal, the division bench
confirmed
the same.

lssue of the case:

. whether Disciplinary Proceedings stayed

by the.High court was justified or
not.
eiounrterur
On the part of Respondent:

1' High court argued by saying that if

Departmental proceedings are not
stayed then it
will have an affect on criminal proceedings.

On the part of Appellant:

1 ' lt was contended that High court was not right in discharging stay
of the departmentat
proceedings because in criminalcase,
the question is culpability (deseeming
blame)
of rash and negligent driving where
as in departmental enquiry the misconduct
relates
31
 to his failure to anticipate the accident and prevention thereof by his conduct and so
there would be no bias in conducting the departmental enquiry.

2. There is no legal barfor both the proceedings to go on simultaneously. The objective

of disciplinary proceedings are not really to punish the culprit but to keep the
of
administration machinery settled by not losing its reputation. Whereas the objective
prevention
criminal proceedings is whetherthe offences registered against him, under
of Corruption Act established upon him or not'

3. The purpose of Departmental enquiny anij ciminal prosecution are of two different
a duty (public)'
aspect criminal prosecution is launched for and offence in violation of

Departmental enquiry is to maintain discipline in the service. So, disciplinary

proceedings are conducted and completed as early as possible'

JUDGEMENT:

ln this case it is observed that departmental enquiry is independent of

the charge framed

against the driver under lndian Penal Code. Under these circumstances
the High Court was

not rightfor staying the proceedings.

32
 case : Regarding lndustrial Employment (standing orders)Act,
1946
lndian Oil Gorporation Ltd., and Another
Vs
Ashok Kumar Arora lggl LLR 26g

INTRODUCTION:

The case is regarding misappropriating medical reambursement

amount by Mr. Ashok
Kumar and in such a case whether dismissar injustifiable
or not.
FACTS OF THE CASE:

E lndian oil corporation (loc) is incorporated under the companies Act 1g56 and
carrying its business of selling petrol and petroleum products
at various places in lndia
having its registered office at Bombay.
E Ashok Kumar Arora joined as a junior stenographer in the corporation, later promoted
to Sr. Stenographer.

x Corporation came to know that some of its employees

were presenting false medical
bills and getting thereimbursed from the corporation.

Its A vigilance enquiry was held by the office of chairman

of the corpbration which
unearthed a racket of its ernployees claiming reimbursements
on presenting false
medical bills.
rEr According to the report of enquiry the principal man
behind the racket is
Ashok KumarArora
a corporation afterobtaining approval of its chairman lodged
F.l.R- of forgery against ail
the employees who obtained medical reimbursement by
false bills. The company
proceeded against them as perthe conduct,
disciplinary and appeal rules of loC.
E Charle sheet was filed in the court of Metropolitan Magistrate against
Ashok Kumar
Arora' As a result he was arrested and detained in the police
custody for over
48 hours.

E Ashok KumarArora was suspended from date of arrestfrom

corporation.
x He was convjcted on two counts that is under
Sec 420, Sec 471 of lpc and sentenced
him to undergo R fbrtwo years and pay a fine of Rs.500/-
in default of payment of fine
to undergo further imprisonment for a period of 3
months.
 E, Aggrieved by the order Ashok Kumar Arora preferred an appeal and filed a case in
Faridabad sessions court and court ordered that he was not guilty.

x lndian Oil Corporation then filed a case in Punjab and Haryana High court where the
court declared that Ashok Kumar Arora was not guilty.

x Since Ashok KumarArora was acquitted bythe criminal court, he filed a writ petition
thatthe orderof dismissalwas illegal and not sustainable, so he should be reinstated
and pays back allwages.

x ln pursuance of the direction of High court, corporation reinstated. Later lndian Oil
Corporation conducted a departmental enquiry against Ashok Kumar Arora.

x lndian Oil Corporation dismissed Ashok KumarArora from service on the report and
he prefened an appeal to lndian Oil Corporation authority but rpp""iwas cancelled.

E, Aggrieved bythe dismissal, Ashok KumarArora filed a case in the High Court and the
court ordered for reinstatement from the date of dismissal including payment of all the
back wages.

x On the basis of the reinstatement lndian OilCorporation filed a specialleave petition

before the Supreme Court.

ISSUE OF THE CASE:

E, Whetherthe Dismissal of Ashok KumarArora illegal and not sustainable.

x Whetherthe High court can act as appellant authority against the orders of the discipline
authority.

it Ashok Kumar Arora approached the High court without exhausting remedies available
under lD Act 1947 ,and in^such case whetherthe High court is having any jurisdiction?

ARGUMENTS: APPELLANT:
. x The enquiry officer on appraisal of the materials before him held that a racket of
employees were actively involved in presenting false medical bills and getting
reimbursement from the corporation which resulted in monetary loss and the principal
man behind the racket is Ashok KumarArora. The corporation dismissed Ashok Kumar
Arora from the service of the corporation with immediate effect.

rB High court had committed a serious jurisdiction errorwhile interfering with the orderof
Disciplinary Authority. The High court couldn't have re-appreciated the evidence
adduced by the parties during domestic enquiry and interfered with the findings
recorded by the enquiry officer and affirmed by the Disciplinary Authority.
E( The jurisdiction of the High court in such cases is very limited for instance where it was
found that the domestic enquiry is vitiated because of non observance of principles of
naturaljustice;findings are based on no evidence.

ARGUMENTS: RESPONDANTS
E As Ashok KumarArora was acquitted from allthe charges bythe Add. Sessions Judge,
Faridabad criminal court and challenged the corporation in Punjab and Haryana High
court that his orderof dismissalwas illegal and not sustainable.

rF Ashok Kumar Arora appeared as a person and tried to justify the orders passed by
the High court. He submitted that the enquiry officer had totally misconstrued the materials
on record and enoneouslyfound him guiltyof the charges leveled,against him. He also
submitted that there is patent discrimination while awarding him dismissal where other
employees vuere let off on minor punishment. The order passed by Disciplinary Authority
was discriminatory and the High court had not committed any error while ordering
reinstatement.
)x The High court compared the case of Ashok KumarArora with otheremployees who
have beerr awarded a lesser penalty Disciplinary Authority in awarding punishment
violating of Article 14 of the constitution.

REFERENGE CASES:
,B STATE OF ANDHRA PRADESH VS S SREE RAMA RAO (1964) 3 SCR 25
(ArR 196s SC 1723).

E SENGARA SINGH VS STATE OF PUNJAB (1983) 3 SERV LR 685 (AlR 1984

sc 1499).

JUDGEMENT:

The impugned orders given by the High Court was reviewed and by observing the
enquiry report given by the Enquiry Officer, the Supreme Court found that Ashok Kumar Arora
was the main culprit and was responsible for making all others to get medical reimbursement
by submitting the bills. Hence the order passed by the Disciplinary Authority regarding the
dismissal from the service is sustainable. Thus the High court was wrong in interpreting with
the orcier passed by Disciplinary Authority and orders were quashed and set aside.

35
 Lesson : 15
Case : Trade Unions Act, 1926
FOOD CORPORATION OF INDIA STAFF UNION
Vs
FCI AND OTHERS 2336 (NL) of 1985; 1995 IGLR 623

INTRODUGTION:

The case is regarding conducting elections fcrthetrade unions as pertheTrade Unions

Act, 1926.

FACTS:
1. Four unions representing the workers have agreed to follow the secret ballot system
for assessing the representative character of trade unions.
for
2. A difference of opinion among trade unions regarding the procedure to be followed
conducting the secret ballot system.
way of secret
3. lt is agreed by parties that the relative strength of all the eligible unions by
(CLC),
ballot be determined under the over all supervision of Chief Labour Commission
the
and hewillnotifythe officer- Returning Officerwho shallconductthe electionswith
assistance of FCl.

4. The CLC shall fix the month of election while the returning officer shall fix the actual
date of election.
list of
S. The retuming officer shall require the FCI to furnish sufficient number of copies of
employees governed by the FCI regulations, the FCI shall display the voters list on
to
notice board and other conspicuous places and shall also supply copies there of
each of the unions for raising objections if any'

6. The u'nionswillfile the objection to the R.O. within the stipulated period and decision of
the R.O. shallbe final.

The FCt shall make necessar) r fr?r$effients to hold the secret ballot

1. Bywide publicity as to the j,;tes of election by informing unions and affixing notices on
the notice board for inforr :ltionof all the workers.

Z. print requisite number rif ballot papers in the proforma prescribed by C.L.C.
incorporating therein the names of participating unions in alphabetic order after
ascertaining different symbols to respective union'

36
 The ballot papers should be prepared in proforma prescribed by CLC in Hindi or English
and other regional language.

4. Set up requisite number of stations and booths : provide ballot boxes with
requisite stationery.

5. The returning officer shall nominate presiding officerto reach of the polling station with
requisite number of polling assistants to conduct the election in any impartial manner.

The election schedule indicating the dates for of nominations, scrutiny of

nomination papers, withdrawals of nomination.

7. The trade unions in order to participate in the elections, they must have registered
under the Trade Unions Act 1926 atleast for one year with a valid registration at the
time of filing nominations.

8. The Presiding Officer shall allow only one representative to present at each polling
station. Atthe end of the polling, the Presiding Officershallfurnish detailed ballots and
after close of the polling, the ballot boxes will be opened and after close of the polling,
the ballot boxeswill be opened and counted bythe Retuming Officer in the presence of
the representatives of each union. The representatives of contesting unions may be
allowed to file applications for recounting of votes. The results of voting shall be declared
onthebasisofthevalidvotespolledinfavourofeachunion. Areportofitshallbesent
to the Chief Labour Commissioner. The union that obtains the highest number of votes
shall be given recognition by the F.C.l for a period of five years.

Judgement:
The court after laying down he procedure for conduct of elections, directed the FCI and
Chief Labour Commissioner to follow the above said procedure to hold the elections and this
may be done before 30-4-1995.

37
 Lesson : 16
INDUSTRIAL EMPLOYMENT STANDING ORDERS ACT 1946,
NATIONAL HYDRO ELECTRIC POWER CORPORATION UTD

SHRI BHAGAVAN ANDV;THERS 2OOl LLR 1222

INTRODUCTION:

The case is about transferring an emploire* from one project to another, and whether it
is legalor not dccording to lndustrial Employffl€i ri standing orders Act 1946.

FACTS:

The respondent Shiva prakash initially joined services of National Hydro Electric Power
Corporation Ltd, Faridabad, as attendant Grade-3 on 03/06/1982. Later he was
promoted to various position in which he rendered his services till 1998. ln 1998 by
an orderdated 0510112000 he was transferred from E&M division, corporate office, to
the project of ltanagar.

2. Shri Bhagavan is anotherrespondentwho joined the service of corporation as attendant

Grade-1 in 1981 in accordance with an appointment letterdated 1510411981 and after
rendering his services in various positions he was transferred to the proiect dated
on 05/01/2000.
The orders of transferwas challenged on the ground thattheywere transferred contrary
to the settlement entered into betu;een the corporation and its employees union and
the Modelstanding Orders framed underthe lndustrial Employment (standing orders)
Act-1946.
4. Shivaprakash & Shribhavagan made an appeal in the Punjab & Haryana High court.
5. The high courtwas of the viewthat the corporate office and the project constitute different
units for purposes of seniorlf ,as disclosed from the relevant rules. lt has also interpreted
thatthe letters of appointfl ,,,flt have to be read in consonance with the rules and if so
done, thetransfers under, :l-allenge cannot be upheld.
6. The National Hydro Eleci i,., Power Corporation Ltd made an appeal in the Supreme
Court against the common orders dated 0110812000 of the Punjab & Haryana
High Court

38
 ISSUES:

1' whether employees of any public

undertaking have any legal right
to be posted forever
at any one particular place.

2' whether the court or the tribunals

can interfere with transfer orders
routine unless the order as a matter of
of the transfer is shown to be
a matafied exercise of power?
3' whether seniority rules interdicts
any transfer of the employees
prolect to anyone
from one office or
of the otheras long as the seniority
of such an employee is protected?.
ARGUMENTS:

On behalf of appellant:

l' lt was contented that the

appeal alleged malafied and
they
appealed and afterdrawing
the necessary transfer allowance
and other allowance for
of transfer. - ' -' giving
v' "' , effect to the order

2' lt is further observed that the

transfer was said to be consistent
with the terms and
conditions embodied in the
letterof appointment.
3' lt was also argued that the
transfer being an incident of
service, no exception could be
taken to the impugned orders of transfer.
4' lt was argued that the assumption
made by the high court on the
alleged grievance of
loss of seniority is unwarranted
having regard to the fact that
the project to which the
respondents were transferred being new,
no such grievance courd have
countenanced. been

On behalf of respondent,,

1' lt was contended on behalf

of the respondent that as per
the seniority rules, which
came into force w'E'F 0110611976,
the corporate office and the project
different units forthe purpose constituted
of seniority and so the transferfrom
one unit to other unit
could not have been made without
consent orthe emproyee concerned
determinant in respect of his to his
rights of seniority.
2' lt is further atleged in the appeal
that the terms & conditions
embodied in the letter of
appointment shall not be considered
for the reason that the letters
have to be read in consonance of appointment
with the rules and if so done
the transferc underchallenge
cannot be upheld.

3' lt is repeatedly argued that

the right of the emproyees
in respect of their seniority
be adversely affected by the wourd
impugned transfer.
JUDGEIT -,.1T:
sides,
After consideration of the arguments and submissions of leamed counsel on both
employee of
the Supreme Court has interpreted its judgement that no government servant or
place since
public undertaking has any legal right to be posted forever at anyone particular
but a condition
transfer of a particular employee from one place to another is not only an incident
of service.

Unless an orderof transfer is shown to be an outcome of malafied exercise

of power
or the
or stated to be in violation of statutory provision prohibiting any such transfers the court
tribunals cannot interfere with such order as a matter of routine and also the
project

undertaken to which the respondent have been transferred is itself a new one
and

therefore no question of prohibiting seniority rules'

40
 Lesson: 17
CASE : REGARDTNG THE ESt ACT, 1g4g
Regional Director, ESI Gorporation
Vs
Franeis De Gosta and another

INTRODUCT!ON:

The case deals with accidents and whether the particular

accident comes under the
purview of ESi Act. or nor.

FACTS:

& Francis De Costa the first respondent herein met rarith an

accident on June 26,1911
while he was on his way to his piace of employment on
a bicycle and he was hit by a
lorry belonging to his employer.

S The accident occurred at the place which was about one

kilometer away to the north of
the Factory.

6 Accidenttook place at4.15 p.m. lt has been stated thatthe dutyshiftof

the respondent
would commence at4.30 p.m.

0 Francis De Costa claimed compensation/orthe injury caused

due to accident.
ISSUE :

o whetheithe injurythatoccuned can betermed as employment injury.

S whetherthat accident can be treated as accident arising out of and iri the course of
employment.

G Whetherthere is any casual connection between the accident and the

employment.
ARGUMENTS

On tsehalf of Francis De Costa:

s He argued that bicycle was brought bytaking loan from

the Employer.
s According to Sec 51(c) Accident occurred while traveling
on the employer's transport.
G The bicycle was bought by taking a loan from the employer
so it is deemed to be
employees vehicle.

41
On Behalf of ESI CorPoration:
place at4.15 p'm' So
S Employee has to report to duty at 4.30 p.m but the accident took
it cannot be considered as the employment injury'

s There is no casualconnection between the accident and the employment' .

suffered the
0 Employee cannot be entitled for compensation because the employee
of employment'
injury as a member of the general public and not in the course
it is owned by the
S The cycle owned by the employee is not employer's vehicle but
emPloYee himself.
public transport he is
S When a workman is on a public road or a public place or on a
of his employment,
there as anyothermemberof the publicand is notthere in the course
unless the very nature of his employment makes necessary
for him to be there'

JUDGEMENT:
course of
The supreme Court decided thatthe accident must arise out of and in ihe
by the employee was
employment. But in this case it cannot be said that the injury suffered
causedby an accident arising out of and inthecourseof employment. sotheemployee
will not be comPensated.

42