ONGC LABOUR UNION versus ONGC DEHRADUN & ORS. on 17 October 2019

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SUPREME COURT REPORTS

[2019] 13 S.C.R.

ONGC LABOUR UNION

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ONGC DEHRADUN & ORS.

(Civil Appeal No. 8114 of 2019)

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OCTOBER 17, 2019

[R. BANUMATHI, A. S. BOPANNA AND

HRISHIKESH ROY, JJ.]

Labour Laws:

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Notification issued u/s. 10(1) of CLRA Act – Prohibitingemployment of contract labour in different categories of work inONGC – Notification challenged by ONGC before High Court –High Court quashed the Notification – Appeal to Supreme Courtby ONGC Labour Union (who were not impleaded as party beforeDHigh Court) – Held: High Court judgment was passed withoutbeing apprised of the relevant material and primarily on the basisof judgment in *SAIL case which was related to 1976 Notification –The Notification has a direct impact on the workmen of ONGC –Since the opportunity to be heard was denied to the workmen as theLabour Union was not impleaded, matter is remitted to High CourtEfor consideration afresh – Contract Labour (Regulation andAbolition) Act, 1970 – s. 10(1).

Disposing of the appeal and remitting the matter to HighCourt, the Court FHELD : The notification issued under s. 10 (1) of ContractLabour (Regulation and Abolition) Act, 1970, prohibiting contractlabour would directly impact the workmen in the ONGC but inthe writ petitions filed before the two High Courts, the ONGCmanagement chose not to array any of the recognised labourUnions. Hence, the affected contract labourers in the ONGC wereGdenied the opportunity to participate in the writ proceedings inthe concerned High Courts. [Para 11] [467-D-E]

2. The impugned judgment indicates that the High Courthad no access to the previous exercise undertaken by the Central H

Government, leading to issuance of the impugned notificationunder Section 10(1) of the CLRA Act. The factum of constitutionof the sub-committees prior to the issuance of the impugnednotification and the studies made by the sub-committees and thenature of their recommendations, were not brought to the noticeof the High Court. Besides, the Court was made to believe thatthe Central Government had not consulted the Labour AdvisoryBoard. Thus, wrong inference was drawn on incorrect premisesand the High Court proceeded under the presumptive footing asif there was non-application of mind by the Central Government.[Para 12] [467-F-G]

3. The High Court rendered the impugned judgmentprimarily on the basis of the *SAIL verdict since none of therelevant materials for the 1994 notification were produced in theHigh Court. Crucially, when the impugned notification was issued,the Central Government did not have the benefit of the *SAILjudgment rendered on 30.08.2001 which again related to the 1976notification. The primary focus of the challenge in the 30.08.2001*SAIL verdict was to the previous notification (S.O. No.776 (E)dated 09.12.1976) issued by the Central Government, prohibitingemployment of contract labour in respect of four categories ofworks in establishments, inter-alia, of the ONGC. It wasnecessary for the High Court to determine whether theobservations made for the then impugned 09.12.1976 notificationwould also apply with all vigour, to the presently impugnednotification (08.09.1994), issued under Section 10(1) of the CLRAAct. More particularly, the High Court should have determinedwhether the prohibitory notification was preceded by the requiredenquiry on contract labour by the Sub-Committee, the nature ofthe study by the Sub-Committee, whether the views of thestakeholders were noticed by the Committee members and theimplications of those, on the decision of the Central Government.The impugned judgment shows that no material was placed beforethe High Court to indicate “……….what inquiry/material wascarried out to meet the requirements provided under sub-section(2) of Section of the Act, 1970. There is no reference when the Sub-Committee was constituted and what were its recommendations”.The Central Government also failed to project that any AB

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Aconsultation was made with the Central Advisory Labour Board.[Paras 14 and 15] [468-B-H]

4. The High Court’s Judgment was passed without beingapprised of the relevant materials and primarily on the basis ofthe *SAIL judgment which however related to the 1976Bnotification. This has resulted in prejudice for those who, giventhe opportunity, could have apprised the High Court with all factsand the detailed study/discussion by the Sub-Committees,preceding the 08.09.1994 notification. [Para 16] [469-A-B]

5. Therefore, since no opportunity was provided to theCappellant Labour Union in a case, which directly concerns themembers of the ONGC Labour Union and other workman, it wouldbe appropriate to order restoration of the Writ Petition No.1323of 2013 (M/S), in the file of the High Court of Uttarakhand forfresh consideration. The appellant i.e., the ONGC Labour Union– Gujarat is ordered to be impleaded in the restored proceedings.DOther recognized labour Unions within ONGC may also be vitallyinterested and such concerned Labour Unions must also beimpleaded in the High Court. [Para 17] [469-C-E]

*Steel Authority of India Ltd. and Others v. NationalUnion Waterfront Workers and others (2001) 7 SCCE1 : [2001] 2 Suppl. SCR 343 - referred to.

Case Law Reference

[2001] 2 Suppl. SCR 343referred to

Para 5.5

CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 8114

Fof 2019.

From the Judgment and Order 15.02.2018 of the High Court ofUttarakhand at Nainital in Writ Petition No. 1323 of 2013.

Colin Gonsalves, Sr. Adv., Gunjan Singh, Satya Mitra, Advs. forthe Appellant.G

J. P. Cama, Sr. Adv., Akshay Amritanshu, Ankit Kumar Lal,Ms. Alka Agrawal, Vibhu Shankar Mishra, Raj Bahadur, Advs. for theRespondents.

The Judgment of the Court was delivered by HRISHIKESH ROY, J. 1. Leave granted.

2. Heard Mr. Colin Gonsalves, Learned Senior Counselrepresenting the appellant. Also heard Mr J.P. Cama, learned SeniorCounsel representing Respondent No.1/Writ Petitioner (ONGC). Ms.Alka Agrawal, the learned counsel is representing the Union of India.

3. This appeal is filed by the ONGC Labour Union who howeverwere not impleaded in the Writ Petition No.1323 of 2013, filed by theONGC in the High Court of Uttarakhand. The ONGC had challengedthe notification dated 08.09.1994 (Annex P6) issued by the Governmentof India, under Section 10(1) of the Contract Labour (Regulationand Abolition) Act, 1970 (hereinafter referred to as ‘the CLRA Act’)prohibiting employment of contract labour in different categories of work,in the ONGC. The High Court allowed the ONGC’s Writ Petition andquashed the 08.09.1994 notification of the Central Government. Assailingthe said verdict, the Labour Union contends before us that the impugnedprohibitory notification was issued after complying with the provisionsof Section 10 of the CLRA Act, which requires the Central Governmentto take into consideration the state of employment of contract labour inany process, operation or other works of any establishment. Specifically,the appropriate Government is required to bear in mind the conditions ofwork and benefits provided for the contract labour in the establishmentby taking into account other relevant factors i.e. whether the work isincidental to or necessary for the industry, if it is perennial in nature,whether it is ordinarily done through regular workmen in the establishmentor whether it is sufficient to employ considerable number of whole-timeworkmen.

3A. The Section 10 of the CLRA Act being relevant is extractedherein below:- “10. Prohibition of employment of contract labour –(1)Notwithstanding anything contained in this Act, the appropriateGovernment may, after consultation with the Central Board or, asthe case may be, a State Board, prohibit, by notification in theOfficial Gazette, employment of contract labour in any process,operation or other work in any establishment.

(2) Before issuing any notification under sub-section (1) in relationto an establishment, the appropriate Government shall have regard B

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Ato the conditions of work and benefits provided for the contractlabour in that establishment and other relevant factors, such as –

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

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

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

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

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

4. Under the impugned notification (08.09.1994) of the CentralGovernment, employment of contract labour qua 13 categories of jobwas prohibited. According to the appellant, i.e. the ONGC Labour Union,the Government notification for the ONGC was based on therecommendations of the Sub-Committee constituted to go into the questionEof prohibition of employment of contract labour, in the arena ofmaintenance and utility installations i.e. firefighting electrician, plumbers,flower decoration, sullage plants etc., in the establishments of the ONGC.

5.1 The learned Senior Counsel Mr. Colin Gonsalves for theappellant argues that when the challenge to the CLRA Act notificationFwas made, the ONGC should have arrayed the representative LabourUnion whose members are likely to be impacted by the Court proceedingand since this was not done, the ONGC Labour Union, had no opportunitybefore the High Court of Uttarakhand. The learned Senior Counsel refersto the Communication dated 31.05.1993 (Annexure-P/3) and the reportGof the Sub-Committee to point out that the Ministry of Petroleum &Natural Gas had undertaken the required study on the establishments ofthe ONGC, before issuing the impugned notification (08.09.1994) underthe CLRA Act but in the absence of the Labour Union, the High Courtwas kept in the dark about the Sub-Committee’s inspection, deliberationsand recommendation to the Ministry. Thus only one sided projectionH

was made before the High Court. This by itself according to the Counsel,would warrant interference with the impugned judgment rendered inabsence of the affected workman.

5.2 The appellant’s counsel has taken us through thecommunication dated 19.10.1994 issued by the Industrial RelationsDepartment of the ONGC and also the follow up communication dated18.06.1996 to point out that a conscious decision was taken by the ONGCitself to comply with the direction on prohibition of contract labour butthe organizational decision was disregarded and instead, the ONGCapproached the High Court in 2014 to challenge the long standingnotification (08.09.1994), issued under the CLRA Act.

5.3. In course of his submission Mr. Gonsalves refers to the similarchallenge made by the ONGC in the Andhra Pradesh High Court andmore particularly the counter affidavit filed by the Central Governmentin the said proceeding. It was averred therein that a Sub-Committeewas constituted by the Central Advisory Contract Labour Board to studythe working of the Contract Labour system in certain jobs of maintenanceand utility at the installations which were common to the establishmentsof ONGC and it is evident from the report of the Sub-Committee thatONGC is being organized on the basis of the functional business centreswith commercial working relationship, on a common pattern. The affidavitshows that the Sub-Committee visited various installations of ONGCand held widespread discussion with the workers’ representatives andalso the management of the Eastern, Western and Southern RegionalBusiness Centres where the ONGC had major presence in their operation.More specifically, the counsel submits that the Sub-Committee membersvisited the installations of ONGC in Madras, Jorhat, Dehradun, Baroda,Bombay and it was projected before the Andhra Pradesh High Courtthat the Sub-Committee conducted a thorough study in differentorganizational set-up in the ONGC and interacted with the stake holdersbefore submitting their report. This was preceded by adequate opportunityto the ONGC management and the workers.

5.4 Highlighting the above, Mr. Gonsalves argues that althoughthe recommendation of the Sub-Committee or the Board is advisory innature, the Sub-Committee had made careful study of all aspects andmade their recommendation. The Central Government in their turnaccepted only the unanimous recommendation of the Sub-Committeefor 11 categories. For the remaining 15 job categories where there was A

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Ano unanimity, barring the radio operators and drivers, all others wereexcluded from the prohibited categories. According to appellant’s counsel,the fact that the organizational objective of the ONGC was guided bythe uniform policy with regard to recruitment of man power on regularbasis or through the contract labour system, the situation would not varyfrom establishment to establishment, to warrant quashing of theBnotification dated 08.09.1994, issued under Section 10(1) of the CLRAAct.

5.5 Dealing with the judgment in Steel Authority of India Ltd.and Others vs. National Union Waterfront Workers and othersreported in (2001) 7 SCC 1, the counsel for the appellant argues thatCthe said judgment pertaining to the earlier notification (09.12.1976) underSection 10(1) of the CLRA Act, could not have been the basis for theimpugned judgment by the Uttarakhand High Court for the laternotification of 08.09.1994 since the essential backdrop preceding thetwo notifications were dissimilar and different. In the case in hand, sinceDthe Writ Petitioner ONGC omitted to place on record the relevantmaterials pertaining to the recommendation of the Sub-committee (nowproduced in this Court), Mr. Gonsalves argues that the High Courtcommitted error in reaching a conclusion of non-application of mind bythe Central Government, while issuing the impugned notification.

E6.1. Per contra, Mr. J.P. Cama, the learned Senior Counselrepresenting the ONGC submits that when prohibition of employment ofcontract labour is proposed under the CLRA Act, the Central Governmentis required to study the status of employment of contract labour and thereference for the study must be establishment specific. According to thecounsel, unless an establishment related exercise is undertaken, theFProhibition notification under Section 10(1), making it applicable to allONGC establishments, across the country, could not have been validlyissued by the Central Government.

6.2 Supporting the High Court’s verdict, learned counsel for therespondent refers to certain passages in the SAIL (supra) judgment toGcontend that an omnibus notification without considering all factors ineach establishment cannot be issued as this would be contrary to thestatutory postulates of Section 10 of the CLRA Act.

6.3 The Senior Counsel for the first respondent argues that theimpugned notification (08.09.1994) prohibiting employment of contractHlabour was hastily issued because of the time frame stipulated by the Bombay High Court in the WP(C) No.2185/1991. According to Mr.Cama, establishment specific study was not conducted and hence thedecision-making process was vitiated. Moreover, other relevant factorsincluding those mentioned in sub-section (2) of Section 10 of the CLRAAct were not considered and the impugned notification itself did notmention in its body, the compliance with the requirement of Section10(2) of the CLRA Act. The learned Senior Counsel projects that theCentral Government’s decision is vitiated by non-application of mind.

6.4. Mr. Cama next submits that for alleged failure to implementthe notification dated 08.09.1994 (stayed by Andhra Pradesh High Court),the officers of the ONGC were subjected to criminal summons by theCJM, Dehradun and that is why, the Section 482 Cr.P.C. Petition had tobe filed before the Uttarakhand High Court. Later, the W.P. No.1323/2013 (M/S) was also filed in the same High Court by the ONGC, tochallenge the prohibitory notification issued under Section 10(1) of theCLRA Act.

7. On the other hand Ms. Alka Agrawal, the learned Counsel forthe Central Government contended that the impugned notification wasissued in accordance with the requirement of Section 10 of the CLRAAct. Moreover, background study on employment of contract labour wasconducted, relevant reports were received and the process was finalizedonly after consultation with the Central Advisory Contract Labour Boardand other stakeholders.

8. The 08.09.1994 notification under Section 10 of the CLRA Actwhich abolished the contract labour system in ONGC establishmentsacross the country, was challenged for the first time in 2003 by theRajahmundry assets of the ONGC which filed the Writ Petition No.4460of 2003 and Writ Petition No.3397 of 2003, in the Andhra Pradesh HighCourt. Interim order was passed on 25.03.2003 by the High Court inthat proceeding and those cases are perhaps still pending. Before theUttarakhand High Court, the case came to be filed much later in 2013.Even before those challenges were made, internal circulars were issuedwithin the ONGC, to comply with the 1994 notification, issued underSection 10 of the CLRA Act.

9. The averred stand in the Central Government’s counter affidavitfiled in the Andhra Pradesh High Court shows that out of 26 categoriesof work in the ONGC, the Sub-Committee was unanimous in A

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Arecommending abolition of Contract Labour in 11 categories of work.However, there was no consensus amongst the members for the remaining15 categories. This difference of opinion was noted and the CentralGovernment then decided to prohibit contract labour in 11 out of the 26specified categories of work, on the basis of the input received from theSub-Committee. The relevant portion of averments in the counter affidavitBis extracted herein below for ready reference: - “.................................................................................

Thus it will be seen that out of 26 items of work the Governmentabolished 11 items of work where the sub-committeeCrecommendation was unanimous and out of the remaining 15 itemsof works where the sub-committee was not unanimous only theabove two categories viz radio operators and drivers were includedfor prohibition. Hence it is not correct on the part of the petitionerto state that the Govt. did not properly apply its mind over theissue. In reply to the para-7 of the affidavit it is submitted that theDreport of the sub-committee was signed by three members -2non-official and 1 ex-officio – where one member was from theemployee side and the other from the employers. The reporttherefore did not lack the necessary balance. The report clearlyindicated the areas of disagreement. It is therefore incorrect onEthe part of the petitioner to state that the report lacked necessaryrigour. Moreover, the report is rather an input in the overall processof notifying a decision by the Government. Also the sub-committeehave conducted its business as per quorum in accordance withRule 16(ii) of the CL (R&A) Central Rules, 1971.

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10. It was also averred in the said affidavit before the AndhraPradesh High Court that the Sub-Committee was not mandatorily requiredto visit each and every establishment for their assessment especiallywhen the operations are common in all projects in ONGC. The relevantGportion of the averments in the counter affidavit filed by the Union ofIndia reads as under:

“…..The sub-committee in the course of its work obtainedinformation about the installations of ONGC. Also the sub-committee held widespread discussion with the workers’representatives and the management of Eastern, Western &

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Southern Regional Business Centres where ONGC had itsoperations in majority in the course of its examination of theContract Labour System in certain jobs in ONGC. It visited Madrason 15.10.92 and heard the submissions of the workers’union…….It also visited installations of ONGC at Ichhapur Drillingsite, West Bengal, Gandhar, Ankaleshwar and interacted with theworkmen. It also heard the submissions of the workers and themanagement at Baroda. It also visited the installations in theoffshore, Bombay and elicited information both from workmenand management…….It is therefore wrong to suggest that thesub-committee conducted a nominal and superficial enquiry. It isalso wrong to suggest that the Govt. of India mechanically issuedthe impugned notification without proper application of mind andwithout having regard to the various legal requirements as specifiedin Section 10(2) of the Contract Labour (Regulation and Abolition)Act, 1970…..”.

11. The Section 10(1) notification prohibiting contract labour ascan be seen, would directly impact the workmen in the ONGC but mostsurprisingly, in the writ petitions filed before the two High Courts, theONGC management choose not to array any of the recognised labourUnions. Hence, the affected contract labourers in the ONGC were deniedthe opportunity to participate in the writ proceedings in the concernedHigh Courts.

12. The impugned judgment indicates that the High Court had noaccess to the previous exercise undertaken by the Central Government,leading to issuance of the impugned notification under Section 10(1) ofthe CLRA Act. It appears that the factum of constitution of the sub-committees prior to the issuance of the impugned notification and thestudies made by the sub-committees and the nature of theirrecommendations, were not brought to the notice of the learned Judge.Besides the Court was made to believe that the Central Governmenthad not consulted the Labour Advisory Board. Thus, wrong inferencewas drawn on incorrect premises and the High Court proceeded underthe presumptive footing as if, there was non-application of mind by theCentral Government.

13. While the above discussions and the contentions raised by therespective Counsel might normally merit our consideration, the denial ofopportunity to the appellant or to any other recognized labour Union in A

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Athe High Court, persuade us to consider another option which would beconsistent with the principles of natural justice. The prohibition notificationundoubtedly impact the life and livelihood of the contract labourers, butunfortunately neither the ONGC labour Union (the appellant herein)or the other recognized Labour Unions in the ONGC were representedor heard in the High Court.B

14. It is also necessary to point out that the learned Judge renderedthe impugned judgment primarily on the basis of the SAIL verdict sincenone of the relevant materials for the 1994 notification were produced inthe High Court. Crucially, when the impugned notification was issued,the Central Government did not have the benefit of the SAIL judgmentCrendered on 30.08.2001 which again related to the 1976 notification.Therefore the question is whether the learned Judge could have foundedhis decision on the errors/omissions, noted in SAIL (supra) judgment.

15. The primary focus of the challenge in the 30.08.2001 SAILverdict was to the previous notification (S.O. No.776 (E) datedD09.12.1976) issued by the Central Government, prohibiting employmentof contract labour in respect of four categories of works in establishments,inter-alia, of the ONGC. The said notification was struck down withthe finding that the pre-requisites for issuing the notification were notsatisfied. It was also perceived to be an omnibus notification withoutEreference to the relevant factors-qua each establishment. But accordingto us, it was necessary for the High Court to determine whether theobservations made for the then impugned 09.12.1976 notification wouldalso apply with all vigour, to the presently impugned notification(08.09.1994), issued under Section 10(1) of the CLRA Act. Moreparticularly, the learned Judge should have determined whether theFprohibitory notification was preceded by the required enquiry on contractlabour by the Sub-Committee, the nature of the study by the Sub-Committee, whether the views of the stakeholders were noticed by theCommittee members and the implications of those, on the decision ofthe Central Government. The impugned judgment shows that no materialGwas placed before the High Court to indicate “……….what inquiry/material was carried out to meet the requirements provided undersub-section (2) of Section of the Act, 1970. There is no referencewhen the Sub-Committee was constituted and what were itsrecommendations”. The Central Government also failed to project thatany consultation was made with the Central Advisory Labour Board.H

16. The afore quoted observation in the judgment under challengewould suggest that the High Court’s Judgment was passed without beingapprised of the relevant materials and primarily on the basis of the SAIL(supra) judgment which however related to the 1976 notification. This inour opinion has resulted in prejudice for those who, given the opportunity,could have apprised the High Court with all facts and the detailed study/discussion by the Sub-Committees, preceding the 08.09.1994 notification.

17. In the above circumstances, since no opportunity was providedto the appellant Union in a case, which directly concerns the membersof the ONGC Labour Union and other workman, we deem itappropriate to order restoration of the Writ Petition No.1323 of 2013(M/S), in the file of the High Court of Uttarakhand for fresh consideration.The appellant i.e., the ONGC Labour Union – Gujarat is ordered to beimpleaded in the restored proceedings. As suggested by the appellant’scounsel, other recognized labour Unions within ONGC such as the ONGCContractual Worker Union, Cachar Forward Base, Silchar, Assam –788026, the ONGC Contract Employee Union, 15, Sewak AshramRoad, Dehradun, Uttarakhand – 248001, the ONGC (WOU) KaramchariSanghatana, 11 High, NBP GR Heights, Hazira, Mumbai – 394270, thePetroleum Employees Union, Oil and Natural Gas Corporation Ltd.,Godavari Bhavan, Rajahmundry – 533107 may also be vitally interestedand such concerned Labour Unions must also be impleaded in the HighCourt. The respondent-ONGC, Dehradun shall implead all these labourUnions and serve notice upon them. The respective senior counselrepresenting the parties have requested for early disposal of the remandedmatter and have offered to argue before the High Court, without anyloss of time. In view of this, the Uttarakhand High Court is requested todecide the matter expeditiously and preferably within four months ofnotice being served on the respondents in the restored Writ Petition.

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

Kalpana K. Tripathy

Appeal disposed of andmatter remitted to High Court.

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