CHAIRMAN CUM MANAGING DIRECTOR, ENNORE PORT TRUST (PRESENTLY KNOWN AS KAMARAJAR PORT LIMITED) versus V. MANOHARAN AND ORS. on 15 February 2018

[2018] 2 S.C.R.

ACHAIRMAN CUM MANAGING DIRECTOR,ENNORE PORT TRUST

(PRESENTLY KNOWN AS KAMARAJAR PORT LIMITED)

v.

V. MANOHARAN AND ORS.

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(Civil Appeal Nos. 2114-2115 of 2018)

FEBRUARY 15, 2018

[R. K. AGRAWAL AND ABHAY MANOHAR SAPRE, JJ.]

Constitution of India – Art.226 – Writ petition under,Cinvolving questions of facts – Maintainability of – In Chennai PortTrust, in order to carry out loading, unloading etc. of coal and ironore, numbers of workers were involved – Writ petition filed by theseworkers for regularization of their services – During pendency ofthe writ petition, these workers formed an association – MatterDreferred to arbitration– Arbitral tribunal inter alia, directed the partiesto enter into a Memorandum of Understanding (MOU) for settlementof disputes – Accordingly, Chennai Port Trust and the Associationentered into an MOU– Writ petition filed by some public spiritedpersons inter alia for shifting of activity of Chennai Port Trust tosome other Port so that environmental pollution prevailing in theElocality is considerably reduced, allowed – Accordingly, activitiesfrom Chennai Port Trust shifted to Ennore Port – In the meantime,90 persons again claiming to be workers working on Chennai PortTrust filed writ petition seeking regularization of their services, whichwas dismissed by Single Judge – Division Bench partly allowed theFappeal and gave certain directions to Chennai Port Trust and EnnorePort Trust (appellants) – On appeal, held: Having regard to thenature of controversy raised by respondents and keeping in viewClause 31 of MOU, which provided for referring the case to ArbitralTribunal in the event of any dispute, the writ petition filed byrespondents should not have been tried on merits by Single JudgeGand instead the parties should have been left to take recourse tothe remedy provided in Clause 31 – Even otherwise, the disputesraised in the present case are not the disputes which are capable ofbeing tried in writ jurisdiction and can be tried only by a Tribunal– Parties are relegated to take recourse to the arbitration proceedingHfor adjudicating the disputes – Societies Registration Act, 1860.

Allowing the appeals, the Court

HELD: 1.1 Having regard to the nature of the controversyraised by the writ petitioners (respondents herein) and reliefsought in the writ petitions and keeping in view the clauses ofthe MOU, especially Clause 31, which provides for referring thecase to the Arbitral Tribunal in the event of any dispute arisingbetween the parties in relation to MOU, the writ petition filed bythe respondents herein under Article 226 of the Constitutionshould not have been entertained for being tried on merits bythe Single Judge and instead the parties should have been left totake recourse to the remedy provided in Clause 31 for referringthe case to Arbitral Tribunal for its decision in accordance withlaw. [Para 22][652-D-F]

1.2 A question whether a particular person is in theemployment of any establishment and whether he is entitled toclaim regularization of his services in such establishment (as inthis case Port Trust) and, if so, from which date is essentially aquestion of fact. If such question is disputed by the establishment,then it is required to be decided by a fact-finding body on thebasis of evidence adduced by such person unless the parties donot dispute the facts. If one person is able to prove his case ofregularization qua establishment from a particular date that doesnot necessarily mean that other person’s case is also automaticallyproved alike other person. In other words, every person has toprove his case qua establishment independently by adducingevidence. It is only then such person is entitled to claim suchrelief. [Paras 23-26][652-F-H; 653-A]

1.3 Several questions arise in the case at hand and need tobe answered before considering grant of appropriate relief, if any.These questions when seen in the background facts of the caseare inter-linked with each other and relate to the main activitywhich was being carried in the Chennai Port Trust and now shiftedto Ennore Port Trust largely. The disputes now being raised againrelate to the employment and regularization of the class IVemployees in the set up of Chennai Port Trust. [Para 27][653-B-C]

1.4 The following questions do arise in this case. First,whether the writ petitioners (respondents herein) were/are in BC

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Aemployment of Chennai Port Trust or in the employment of anycontractor and, if so, its basis. Second, whether there ever existedany relationship of employee and employer between them andChennai Port Trust or between them and any contractor and, ifso, its basis. Third, whether the writ petitioners were/are membersof the Association and, if yes, then its effect and if not, then itsBeffect. Fourth, assuming that the writ petitioners are not held tobe the members of the Association as they claimed in the writpetition, whether they (90 in number) are still entitled to claimany relief and, if so, against which Port Trust and of which nature.Fifth, assuming that the writ petitioners are held members of theCAssociation or say eligible members by virtue of theirqualifications prescribed in the MOU, whether they are entitledto claim any relief against any Port Trust and, if so, of which nature.Sixth, if the writ petitioners (whether all or some) are able toprove that they are/were in the employment of Chennai Port Trustand that relationship of employee and employer between themDdoes exist notwithstanding execution of MOU, then whether suchpersons are entitled to claim regularization in the service of PortTrust and, if so, since when and with what benefits or their casesare still governed by MOU as its members and lastly, whateventual reliefs, if any, can be granted to the writ petitioners.E[Paras 28-33][653-D-H; 654-A-B]

1.5 The aforesaid questions could not be decided in thewrit petition but could be adjudicated more effectively by a fact-finding body empowered to record evidence. Since in this caseparties have agreed to refer the matter to the Arbitral TribunalFin the event of any dispute arising between them, it would be inthe interest of justice that the parties are relegated to takerecourse to the arbitration proceeding remedy for adjudicatingthe disputes. To decide the questions arising in the case at hand,recourse to MOU for the purpose of referring the case to arbitration can be taken. Even otherwise, the disputes raisedGherein are not the disputes, which are capable of being triedeffectively in writ jurisdiction and indeed are capable of beingtried only by a Tribunal. [Paras 34-36][654-B-D]

1.6 The writ petitioners and the Port Trusts are grantedliberty to approach the Court for appointment of Arbitral TribunalH

in terms of Clause 31 of MOU for deciding the questions framedby this Court. Parties are also at liberty to appoint the ArbitralTribunal with mutual consent, if they so wish, without takingrecourse to appointment of Arbitral Tribunal through Court. TheArbitral Tribunal once appointed will embark upon the referenceon the questions framed by this Court and would be free to frameany more questions after consultation of the parties/stakeholders,if such questions also arise and need to be decided to give quietusto the long pending disputes. [Paras 39-41][654-G-H; 655-A]

CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 2114-2115 of 2018.

From the Judgment and Order dated 05.01.2017 of the High Courtof Judicature at Madras in WA Nos.1020 and 1378 of 2016respectively WITH

Civil Appeal Nos. 2116-2118 of 2018.

P. S. Narsimha, P. Wilson, V. Prakash, Raju Ramachandran,Sr. Advs, Senthil Jagadeesan, Ms. Shruti Iyer, Ms. Sonakshi Malhan,Ms. Suriti Chowdhary, R. Nedumaran, P. V. Yogeswaran, A. K. Upadhyay,Bhuwan Jayant, Ms. Hansini, S. R. Setia, Anurag Dubey, Ms. AnuSawhney, Ajit Kr. Pathak, Sanchit Maheshwari, Mukesh Jain, Advs. forthe appearing parties.

The Judgment of the Court was delivered by ABHAY MANOHAR SAPRE, J. 1. Leave granted.

2. These appeals arise from the final judgment and order dated05.01.2017 passed by the High Court of Judicature at Madras in W.A.No.1020 of 2016, W.A. No. 1351/2016 and W.A. No.1378 of 2016whereby the Division Bench of the High Court while reversing/set asidethe judgment of the Single Judge partly allowed the writ appeals andgave certain directions to the Port Trusts (appellants herein) for theircompliance in favour of the writ petitioners (respondents herein).

3. In order to appreciate the issues involved in these appeals, it isnecessary to set out the relevant facts hereinbelow.

4. There are two Port Trusts in Chennai. One is known as“Chennai Port Trust” and the other is known as “Ennore Port Trust”,now called “Kamarajar Port Trust”.

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A5. Chennai Port is one of the oldest ports in the country. Amongstseveral operational activities of loading, unloading, spillages and clearingof various kinds of the goods, which are undertaken regularly in thePort, one such activity that is operational on regular basis is handling of“Coal and Iron Ore”.B6. In order to carry out the loading, unloading, spillages and clearing

6. In order to carry out the loading, unloading, spillages and clearingthe coal and iron ore from the Iron Ore Handling Plant set up in the PortTrust, the stakeholders need workers (class IV). Sizeable numbers ofworker are, therefore, involved in doing this work on regular basis.

7. In 1987, these workers made a demand to regularize theirCservices in the set up of the Port Trust. Since their demands were notacceded to, they (160 or so) filed a writ petition (W.P. No.9011 of 1987)in the High Court at Madras seeking therein a relief of regularization oftheir services in the set up of Chennai Port Trust.

8. The Chennai Port Trust contested the writ petition andDcontended that it is not possible to regularize the services of these workers(writ petitioners) for various reasons in their set up. It was contendedthat these workers are not the employees of the Port Trust and nor thereexists any relationship of employer and employee between them. It wasalso contended that it is the contractor, who engages these workers, andhence they are the employees of the Contractor but not Port Trust.E

9. During pendency of the writ petition, these workers (writpetitioners) formed one association called – “Madras Port SpillageHandling Workers Association” (hereinafter referred to as “theAssociation”) and got the Association registered as Society under theSociety Registration Act.F

10. The matter was then referred to arbitration which resulted inpassing of an award dated 22.10.1994. The award was published in theGovernment of India Gazette on 24.12.1994. The award, inter alia,directed the parties to enter into a Memorandum of Understanding(MOU) for settlement of the disputes. Accordingly, the Association andGthe Chennai Port Trust entered into a MOU on 02.05.1995. (Annexure-P-1)

11. Clause 1 of MOU provides that subject to Association followingthe terms and conditions of MOU, the Port Trust has agreed to givework of loading /unloading/spillage/cleaning to the members of the H

Association. Clause 2 of the MOU provides that membership ofAssociation will not exceed the number of 160 and the membership ofAssociation will be given only to those persons, who are declaredphysically fit with the approval of the Chairman. Clause 2 further providesthat preference would be given to dependants of those who had beenemployed and died or became physically unfit, their dependents wouldbe made member of the Association subject to dependant concerneddeclared fit by the Medical Board and whose membership is approvedby the Chairman. Clause 3 deals with allocation of work to male/femalemembers. Clause 4 further provides that member will be discontinuedfrom the work on attaining the age of 58 and in the absence of any proofof age, the certification issued by the Medical Board of his/her age wouldbe final. Clause 5 provides that, if any member is found unfit, he wouldbe discontinued from work once certified by the Medical Board. Clause6 provides that all workers currently working would be deployed forclearing spillage of Iron Ore. Clauses 7, 8, 11, 12, 13, 20, 21, 22, 28, 29and 30 provide the manner and mode of payment including paying othermonetary benefits to the members of the Association whereas Clauses9, 10, 14, 15, 16, 17, 18, 19, 23, 24, 25, 26 and 27 provide for extendingvarious kinds of facilities and welfare benefits to the members of theAssociation and lastly, Clause 31 provides for resolution of disputes arisingbetween the parties in relation to MOU through the means of arbitration.

12. This MOU was amended on 31.12.1998 (Annexure P-2). Oneof the amendments was that the Association was recognized as“Contractor” whereas the Chennai Port Trust was declared as “PrincipalEmployer” under the Contract Labour (Regulation and Abolition) Act,1970.

13. In the light of the aforementioned background facts arising inthe case, one writ petition (Public Interest Litigation) came to be filed inthe Madras High Court (W.P. No.11747/2002) by some public-spiritedpersons against the State, Chennai port Trust and Pollution Boardcomplaining therein that due to heavy and reckless handling of coal andiron ore and heavy movement of dusty cargo every day in Chennai PortTrust (handling plant) premises, the activity is emitting, huge quantity ofdust and several chemical particles in the air are polluting the entireenvironment which, according to the writ petitioners, was harmful to thelife of human being and especially to those, who are residing in the nearbyarea of the Port. It was complained that such activity being hazardous A

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Aand equally injurious to the health of human beings, should be stoppedforthwith or, in any case, be regulated in the larger public interest includingconsidering shifting of activity to some other Port, if considered feasibleand practicable so that hazards of the environmental pollution which isprevailing in the locality is considerably reduced. It is essentially toespouse this cause, the PIL (writ petition) was filed for claimingBappropriate remedial relief(s) for the benefit of the larger public good.The State and the Chennai Port Trust contested the writ petition onseveral grounds.

14. By order dated 11.05.2011, the High Court allowed the writpetition and gave five directions to the Chennai Port Trust and EnnoreCPort Trust for ensuring their compliance. These directions are reproducedhereinbelow:

“(a) All the writ petitions are allowed. However, the prayerin W.P. No.41163 of 2002, with regard to the compensationaspect stands dismissed.D

(b) The Government of India, represented by its Secretary,Ministry of Shipping, New Delhi is directed to seedistribution of cargoes between Ennore Port and ChennaiPort, allotting clean cargoes viz. container, car etc. toChennai Port and the dusty cargoes like coal, iron ore andEall other dusty cargoes to Ennore Port.

(c) Since the coal terminal, iron ore terminal and the singleline rail connectivity at Ennore Port are assured to beoperational to their full capacity by September, 2011, theGovernment of India, represented by its Secretary, MinistryFof Shipping, New Delhi and the Government of Tamil Nadu,represented by its Chief Secretary are directed to see thatall the dusty cargoes like coal, iron ore and all other dustycargoes should move only to Ennore Port on and from1.10.2011 and not to Chennai Port. The Chennai Port isGalso directed to render all its cooperation to the Governmentof India and the Government of Tamil Nadu in this direction.

(d) With regard to the employees and pensioners of theChennai Port, the Government of India, the Governmentof Tamil Nadu, Chennai Port Trust and the Ennore PortTrust are directed to see that not even a single employee H

V. MANOHARAN AND ORS. [ABHAY MANOHAR SAPRE, J.]

is retrenched or otherwise made to lose his livelihoodbecause of the distribution of cargoes between Ennore Portand Chennai Port, as ordered above. For this purpose,since the dusty cargoes are going to be berthed andprocessed at Ennore Port on and from 1.10.2011, theEnnore Port may treat the employees of the Chennai Portconnected to such activities as its employees, including thepensioners. In case of any difficulty, the Government ofIndia, represented by its Secretary, Ministry of Shipping,New Delhi and the Chief Secretary to the Government ofTamil Nadu, shall divide the employees and pensioners,between the Chennai Port and the Ennore Port,proportionate to the income of both the Ports.

(e) With regard to the traders, like the impleadedrespondents 6 to 8 also, both the Chennai Port and theEnnore Port are directed to protect their rights and interest,in accordance with law.”

15. Since the offending activity was largely shifted from ChennaiPort Trust to Ennore Port Trust in terms of directions of the High Court,the Chennai Port Trust on 15.10.2012 resolved to terminate the MOU.On 06.12.2012, the Association was accordingly informed about thetermination.

16. In the meantime, 90 persons again woke up and claiming to bethe workers working on the Chennai Port Trust filed a writ petition (W.P.33614 of 2012) and sought regularization of their services in the set upof the Chennai Port Trust. Their main case was that since all the writpetitioners (90) were working for the last more than 2 decades with theChennai Port Trust as Class IV employees, their services should beregularized in the set up of Chennai Port Trust. In support of this relief,the writ petitioners produced certain evidence.

17. The Chennai Port Trust contested the writ petition, inter alia,again contending that there was no relationship of employee and employerbetween the writ petitioners and the Chennai Port Trust and, therefore,the writ petitioners are not entitled to claim any relief much less therelief of regularization in the services of Chennai Port Trust.

18. The Single Judge, by order 22.07.2016, dismissed the writpetition holding that there did not exist any relationship of employer and A

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Aemployee between the parties and hence no relief can be granted to thewrit petitioners much less the one claimed in the writ petition. The writpetitioners felt aggrieved and filed writ appeal before the Division Benchof the High Court.

19. By impugned order, the Division Bench partly allowed theBwrit appeal and gave certain directions to the Port Trusts(appellantsherein) for their compliance in favour of the writ petitioners (respondentsherein) which has given rise to filing of these appeals by way of specialleave by the Port Trusts before this Court.

20. Heard Mr. P.S. Narsimha, Mr. P. Wilson, learned senior counselfor the appellants and Mr. V. Prakash, Mr. Raju Ramachandran, learnedCsenior counsel for the respondents.

21. Having heard the learned counsel for the parties and on perusalof the record of the case, we are inclined to allow the appeals in partwith directions mentioned hereinbelow.

22. In our considered opinion, having regard to the nature of theDcontroversy raised by the writ petitioners (respondents herein) and reliefsought in the writ petitions out of which these appeals arise and keepingin view the clauses of the MOU, especially Clause 31, which providesfor referring the case to the Arbitral Tribunal in the event of any disputearising between the parties in relation to MOU, the writ petition filed byEthe respondents herein under Article 226 of the Constitution should nothave been entertained for being tried on merits by the Single Judge andinstead the parties should have been left to take recourse to the remedyprovided in Clause 31 for referring the case to Arbitral Tribunal for itsdecision in accordance with law.F23. In our considered opinion, a question whether a particularperson is in the employment of any establishment and whether he isentitled to claim regularization of his services in such establishment (asin this case Port Trust) and, if so, from which date is essentially a questionof fact.

24. If such question is disputed by the establishment, then it isGrequired to be decided by a fact-finding body on the basis of evidenceadduced by such person unless the parties do not dispute the facts.

25. If one person is able to prove his case of regularization quaestablishment from a particular date that does not necessarily mean thatother person’s case is also automatically proved alike other person.H

26. In other words, every person has to prove his case quaestablishment independently by adducing evidence. It is only then suchperson is entitled to claim such relief.

27. In our considered opinion, several questions arise in the caseat hand and need to be answered before considering grant of appropriaterelief, if any. These questions when we see the background facts of thecase set out above are inter-linked with each other and relate to themain activity which was being carried in the Chennai Port Trust andnow shifted to Ennore Port Trust largely. The disputes now being raisedagain relate to the employment and regularization of the class IVemployees in the set up of Chennai Port Trust. Indeed, to settle thiscontroversy for all time to come, the stakeholders had in past executedMOU providing therein the entire machinery to safeguard the rights andobligation of parties concerned, which are detailed above. But due toseveral intervening factors, it did not seem to have worked smoothly.

28. In our considered opinion, the following questions do arise inthis case.

29. First, whether the writ petitioners (respondents herein) were/are in employment of Chennai Port Trust or in the employment of anycontractor and, if so, its basis. Second, whether there ever existed anyrelationship of employee and employer between the writ petitioners andChennai Port Trust or between the writ petitioners and any contractorand, if so, its basis.

30. Third, whether the writ petitioners were/are members of theAssociation and, if yes, then its effect and if not, then its effect.

31. Fourth, assuming that the writ petitioners are not held to bethe members of the Association as they now claim in the writ petition(see ground (e) in the writ petition at page 125-126), whether the writpetitioners (90 in number) are still entitled to claim any relief and, if so,against which Port Trust and of which nature.

32. Fifth, assuming that the writ petitioners are held members ofthe Association or let us say eligible members by virtue of theirqualifications prescribed in the MOU, whether they are entitled to claimany relief against any Port Trust and, if so, of which nature.

33. Sixth, If the writ petitioners (whether all or some) are able toprove that they are/were in the employment of Chennai Port Trust and A

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Athat relationship of employee and employer between them does existnotwithstanding execution of MOU, then whether such persons are entitledto claim regularization in the service of Port Trust and, if so, since whenand with what benefits or their cases are still governed by MOU as itsmembers and lastly, what eventual reliefs, if any, can be granted to thewrit petitioners.B

34. In our view, the aforesaid questions could not be decided inthe writ petition but could be adjudicated more effectively by a fact-finding body empowered to record evidence.

35. Since in this case parties have agreed to refer the matter toCthe Arbitral Tribunal in the event of any dispute arising between them,we are of the view that it would be in the interest of justice that theparties are relegated to take recourse to the arbitration proceeding remedyfor adjudicating the disputes.

36. We are of the view that to decide the questions arising in theDcase at hand, recourse to MOU for the purpose of referring the case toarbitration can be taken. As observed supra, even otherwise, the disputesraised herein are not the disputes, which are capable of being triedeffectively in writ jurisdiction and indeed are capable of being tried onlyby a Tribunal.

E37. Once the disputes are referred to the Arbitral Tribunal, thewrit petitioners and the Port Trusts would be at liberty to raise all theissues on facts/law in support of their respective contentions includingadducing evidence (oral and documentary).

38. In view of the foregoing discussion, we are unable to sustainthe impugned order, which in the facts of this case should not have beenFpassed.

39. As a consequence, we allow the appeals, set aside the impugnedjudgments of the Division Bench and the Single Judge, dismiss the writpetition out of which these appeals arise and grant liberty to the writpetitioners and the Port Trusts to approach the Court for appointment ofGArbitral Tribunal in terms of Clause 31 of MOU for deciding the questionsframed by this Court supra.

40. Parties are also at liberty to appoint the Arbitral Tribunal withmutual consent, if they so wish, without taking recourse to appointmentof Arbitral Tribunal through Court.H

CHAIRMAN CUM MANAGING DIRECTOR, ENNORE PORT TRUST v.V. MANOHARAN AND ORS. [ABHAY MANOHAR SAPRE, J.]

41. The Arbitral Tribunal once appointed will embark upon thereference on the questions framed by this Court and would be free toframe any more questions after consultation of the parties/stakeholders,if such questions also arise and need to be decided to give quietus to thelong pending disputes.

42. The Arbitral Tribunal will afford full opportunity to all the parties(stakeholders) concerned to file their response/statements and leadevidence in support of their respective stands and then pass a reasonedaward in accordance with law on the basis of the evidence adduced bythe parties (oral/documentary) uninfluenced by any observations madeby Single Judge and the Division Bench.

43. Since the case is old and concerning about a large number ofworkers, efforts be made to complete the proceedings within six monthsfrom the date of appointment of Arbitral Tribunal.

Divya Pandey

Appeals allowed.

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