THE WORKMEN THROUGH THE CONVENER FCI LABOUR FEDERATION versus RAVUTHAR DAWOOD NASEEM on 19 May 2020

SUPREME COURT REPORTS

[2020] 6 S.C.R.

ATHE WORKMEN THROUGH THE CONVENERFCI LABOUR FEDERATION

v.

RAVUTHAR DAWOOD NASEEM

(Contempt Petition (Civil) No. 404 of 2019)

B

(C.A No. 10511 of 2011)

MAY 19, 2020

C[A. M. KHANWILKAR AND DINESH MAHESHWARI, JJ.]

Contempt of Court – When not – Abolition of contract laboursystem – Workers employed at depots of respondent-Corporationas contract labourers sought regularisation – Issue referred foradjudication – Pending references, an understanding arrived atDbetween the parties recorded in minutes of meeting dated.12.04.1996– Industrial Tribunal held the workmen entitled to be regularised –Award affirmed till Supreme Court – Workers regularised underDirect Payment System (DPS) – Contempt petitions filed allegingthat the direction was to regularise the workers in DepartmentalLabour System (DLS) and not in DPS – Held: To constitute civilEcontempt it must be established that disobedience of the order iswilful, deliberate and with full knowledge of consequences flowingtherefrom– In the present case, the issue(s) referred for adjudicationwas merely for regularisation – Corporation operates four systemsof labour, DLS is one such system of engagement – Neither theFrelief in the references was specific for regularisation in DLS onlynor the tribunal, the High Courts or Supreme Court was calledupon to deal with that issue specifically – Petitioners assumed thatDPS commenced only from 01.05.1996, whereas it is in existencefrom 1973 – It is not a new set up created by the Corporationpursuant to the minutes recorded on 12.04.1996 as such –GFurthermore, DLS is now a dying cadre and the policy of theCorporation at the relevant time entailed regularisation of workmenonly under DPS – No case made out for initiating contempt actionagainst the Corporation and its Officers – Industrial Disputes Act,1947 – s.10(1)(d) – Contract Labour (Regulation and Abolition)HAct, 1970 – s.10(1) – Labour Law.

THE WORKMEN THROUGH THE CONVENER FCI LABOUR FEDERATIONv. RAVUTHAR DAWOOD NASEEM

Words & Expressions – Departmentalisation – Meaning of –Explained.

Dismissing the contempt petitions, the Court

Conclusion

HELD: 1.1 To constitute civil contempt, it must beestablished that disobedience of the order is wilful, deliberateand with full knowledge of consequences flowing therefrom. Goingby the plain text, the issue(s) referred to for adjudication wasmerely for regularisation. However, the point-in-issue consideredby the Tribunal coupled with the operative part of the award, itwould at best be a case of directing the respondent Corporationto regularise and departmentalise the concerned workmen, whowere party to the stated References. The Corporation operatesfour systems of labour. The Departmental Labour System is onesuch system of engagement. The other is Direct Payment System(DPS). The third is No-Work-No-Pay System and fourth, the MateSystem. Neither the relief in the References was specific forregularisation in Departmental Labour System only nor theTribunal, the Madras High Court/Kerala High Court or this Courtwas called upon to deal with that issue specifically. The claim setup by the petitioner-Union(s) was simpliciter for regularisationof workmen who were named in the annexure(s) to theReferences. The Tribunal did issue direction to regularise anddepartmentalise those workmen. It is axiomatic thatdepartmentalisation could also be an engagement in aDepartment, which could be a separate part or branch/section ofthe whole Organisation. Departmentalisation is dividing anorganisation into different departments or structuring it in amanner, which perform tasks according to the specialisations inthe organisation. It may include departments such as functional,product, process, geographical locations, customer, divisional,matrix, planning task force etc. As it is indisputable that theCorporation has four systems of labour engagement includingthe Direct Payment System (DPS), the petitioner-Union(s) oughtto have sought specific relief against the Corporation in thatregard. Significantly, the petitioners have assumed that the DirectPayment System (DPS) commenced only from 1.5.1996, whereasit is noticed from the decision of this Court in Workmen of theFood Corporation of India v. M/s. Food Corporation of India that A

BC

DE

FG

H

Athe Direct Payment System (DPS) is in existence from 1973. It isnot a new set up created by the Corporation pursuant to theminutes recorded on 12.4.1996 as such. Concededly, the subjectReferences, as well as, the direction issued by the Tribunal, whichhas been upheld upto this Court is silent about the system inwhich the concerned workers have to be regularised andBdepartmentalised. Notably, the writ petition filed before theKerala High Court for implementation of the stated award alsosought direction to regularise the concerned workmen under theDirect Payment System (DPS). If that be the position, it isunfathomable as to how the respondent Corporation can beCproceeded against for having committed contempt of this Court.[Paras 12-14][658-G-H; 659-A-H; 660-A-C]

Workmen of the Food Corporation of India v. M/s. FoodCorporation of India (1985) 2 SCC 136 : [1985] 2 SCR1065; ESI Corporation v. FCI Workers Union & Ors.DDecision of Supreme Court dated 19.11.2019 in C.A.Nos. 8841-8842/2019 – relied on.

1.2 The issue as to regularisation of the concerned workmenunder particular labour system had not been put in issue beforethe Tribunal and upto Supreme Court. A general direction cameEto be issued to regularise and departmentalise them. Resultantly,the respondents were left with the only option to regularise theconcerned workmen as per the extant applicable policy of theOrganisation, under the Direct Payment System (DPS). No specificdirection was given to the Corporation to regularise theconcerned workmen only in the Departmental Labour System.FFurthermore, the Departmental Labour System is now a dyingcadre and the policy of the Corporation at the relevant timeentailed regularisation of such workmen only under the DirectPayment System (DPS). No contempt action can be initiated onthe basis of general direction to the respondents to regulariseGand departmentalise the concerned workmen. [Paras 17, 23][662-F; 664-F-G]

Ram Kishan v. Tarun Bajaj & Ors. (2014) 16 SCC 204: [2014] 1 SCR 538 – relied on.

Anil Ratan Sarkar & Ors. v. Hirak Ghosh & Ors. (2002)H4 SCC 21 : [2002] 2 SCR 346 – distinguished.

THE WORKMEN THROUGH THE CONVENER FCI LABOUR FEDERATIONv. RAVUTHAR DAWOOD NASEEM

Food Corporation of India & Ors. v. West Bengal FoodCorporation of India Workmen’s Union (2018) 9 SCC469 – held inapplicable.

A

State of Bihar & Ors. v. Bihar Secondary TeachersStruggle Committee, Munger & Ors. (2019) 8 SCALE124; Steel Authority of India Ltd. & Ors. v. NationalUnion Waterfront Workers & Ors. (2001) 7 SCC 1 :[2001] 2 Suppl. SCR 343; Dinesh Kumar Gupta v.United India Insurance Company Limited & Ors. (2010)12 SCC 770 : [2010] 13 SCR 599; Bihar StateGovernment Secondary School Teachers Association v.Ashok Kumar Sinha & Ors. (2014) 7 SCC 416 : [2014]7 SCR 371; Dineshan K.K. v. R.K. Singh & Anr. (2014)16 SCC 88 : [2014] 3 SCR 667 – referred to.

B

C

Case Law Reference

INHERENT JURISDICTION: Contempt Petition No. 404 of 2019in Civil Appeal No. 10511 of 2011.

Petition against the non-compliance of the Order dated 20.08.2018passed in Civil Appeal No. 10511 of 2011 by this Hon'ble Court.

G

With

Contempt Petition (Civil) Nos. 508 of 2019, 507 of 2019, 394 of2020, 754 of 2019, 1073 of 2019.

H

ARana Mukherjee, V. Prakash, Colin Gonsalves, Brijender Chahar,Mukul Rohatgi, V. Giri, Sr. Advs., R. R. Kumar, Ms. Kunika Sharma,Swetank Shantanu, C. Paramasivam, R. Ganesh Babu, Rakesh K.Sharma, Sudarsh Menon, Ram Gupta, Ronak Karanpuria, Vishwa PalSingh, Abhay Kumar, Kumar Milind, Vineet Kr. Singh, Kumar Kashyap,Sumit Kumar, Ms. Kumari Supriya, Hemant Kumar, Arumugan, RamBGupta, Advs. for the appearing parties.

The Judgment of the Court was delivered by

A. M. KHANWILKAR, J.

1. I.A. for permission to file the contempt petition(s) is allowed.C

2. These contempt petitions except Contempt Petition (Civil) No.754/2019 emanate from the common judgment and order of this Courtdated 20.8.2018 in Civil Appeal Nos. 10499/2011 and 10511/2011.Contempt Petition (Civil) No. 754/2019, however, arises from a separatejudgment and order of this Court on the same subject matter and dateD(i.e. 20.8.2018) in Civil Appeal No. 7961/2014.

3. The grievance in these petitions is about non-compliance ofdirection given to the respondent-Food Corporation of India[1] to regulariseand departmentalise the concerned workers who had initiated industrialdisputes bearing I.D. No. 39/1992 and I.D. No. 55/1993 before theEIndustrial Tribunal[2], Tamil Nadu, Chennai under Section 10(1)(d) of theIndustrial Disputes Act, 1947[3]. The concerned employees were employedat Depots of the Corporation in the Southern Zone of India including theStates of Kerala, Andhra Pradesh, Karnataka and Tamil Nadu, as daily-rated labour or casual labour through contract labour cooperative societiesor private contractors. They were working in that capacity for quiteFsome time and in some cases, for around 15 to 20 years, and wereperforming similar work as the regular employees of the Corporation.In I.D. No. 39/1992, following issue was referred to for adjudication: - “Whether the action of the management of Food Corporation ofIndia, in denying to regularise 955 contract labourers engagedGby management of Food Corporation of India Godown, Avadithrough TVK Cooperative Society in respect of names as given H

1 For short, “the Corporation”

2 For short, “the Tribunal”

3 For short, “the 1947 Act”

in the Annexure is justified? If not to what relief they are entitledto?”

(emphasis supplied)

In I.D. No. 55/1993, reference was made for adjudication of thefollowing issue: - “Whether the services of workmen employed in different FoodStorage depots in Food Corporation of India in the South wherenotifications have been issued prohibiting engagement of contractlabourers under Section 10(1) of CL (R and A) Act are entitled tobe regularised and if so, from which date?”

During the pendency of these References, an understanding wasarrived at between the parties, as recorded in the Minutes of Meetingdated 12.4.1996, the relevant extract whereof is as under:- “The Charter of demand submitted by the FCI Workers Unionvide their letter dated 12.2.96 was taken do for discussions anddecision taken on each of their demands are recorded as under: -

1. Department allegation of workers and payment of documentalwages to the workers in all FCI depots as recommended upto[sic] the Hon’ble Supreme Court of India, and especially in SouthSons where the Central Government have notified prohibitingemployment of contract labour long before considering the foodhandling work as perennial in nature (both the food-handling workis still being done in all South Depots) by Labour CooperativeSociety as Contractors as well as the Hon’ble High Courts ofKerala and Karnataka have also directed for departmentisationof FCI workers in F.S. Depots. The Union demandeddepartmentalization of labour in all the notified depots on the pleathat there are other notified depots where departmentalisation hasalready been done since 1991. As such, these depots may also beextended the benefit of departmentalisation. After havingprotracted discussions, keeping in view the orders of the Hon’bleKarnataka High Court and the Supreme Court and the schemesubmitted for decision between the Karnataka High Court,following decisions were taken: - A

B

C

G

H

648SUPREME COURT REPORTS

A

B

C

G

H

648SUPREME COURT REPORTS

A(i)It was decided that in all remaining, notified FCIs ownDepots which were running under the LabourCooperative Societies, or otherwise may be broughtunder Direct [sic] Payment System with all the benefitsunder the Direct Payment Scheme w.e.f. 1[st ]May, 1996.

B(ii)It was also decided that proposal fordepartmentalization will be sent to the governmentby 31[st] July, 1996 and till decision from theGovernment or from the concerned courts Directpayment System will continue.

C(iii)It was agreed that in the other notified depots of FCI wherelabour Cooperative Societies are not functioning, the labourstrength will be assessed on the basis of the formula to beevolved in consultation with FCI Workers Union as the Unionhad mentioned that the formula of assessment of labourbeing adopted by diving the workload i.e. receipt and issueDby 365 is not realistic. The Union suggested that the workloadof receipt and issue as well as all operations performed inthe depot should be taken into account and the same shouldbe divided by 240 days instead of 365. As regards labourCooperative Societies, it was decided that the workersEalready working there during last 3 years and who hadworked for nine out of 12 months in the last year and whosePF deductions are being made will be extended benefit ofDirect Payment System workers. However the actualrequirement of labour for these depots will be assessed asper the norms agreed to with the Union and utilisation ofFsurplus labour including employment elsewhere will beresorted to by the management in consultation with theUnion. Regarding norms, the Union expressed resentmentabout adopting 365 days a year which management agreedto look into and take a final view.

G(iv)As regards notified depots under CWC, separatediscussions will be held for a final decision.

(Action Manager (IR-L)

2. Immediate departmentalisation of all the workers of FCIDepots under Direct Payment System, Guaranteed WagesH

System, No work no pay System and B-Category system.It was agreed that the system as in existence will continue[sic].”

(emphasis supplied)

A list of Depots having Departmental Labour System in March,2000 is annexed as annexure P-3 in the reply affidavit filed by thepetitioner to the counter affidavit of the respondent in Contempt Petition(Civil) No. 404/2019.

4. In I.D. No. 39/1992, after due consideration of the rivalsubmissions, the Tribunal vide award dated 19.12.1997, noted the pointfor its consideration as follows: - “7. The point for our consideration is: whether the action of themanagement of FCI (respondent) in denying to regularise 955contract labourers engaged by the management of FCI godownat Avadi through Thiru VI. Ka. Labour Contract CooperativeSociety is justified.”

After detailed analysis and reference to other decisions betweenthe workmen and the Corporation, the Tribunal came to issue the followingdirection: - “14. In the result award is passed holding that action of therespondent management in denying to regularise the 955 contractlabourers engaged through Thiru. VI. Ka. Cooperative Societyas not justified and the management is directed to regulariseand departmentalise these 955 workmen from the date ofnotification Ex. W 4 with regard to Avadi depot i.e. 28.02.1990with all attendant benefits. No Costs.”

5. Similarly, the Tribunal while disposing of I.D. No. 55/1993 videaward dated 29.7.1998, issued following directions: - “… Therefore, the services of workmen employed in differentfood storage depots of the Food Corporation of India in SouthIndia where notification have been issued prohibiting engagementof contract labour u/s 10(1) of the Contract Labour (Regulationand Abolition) Act, are entitled to be regularised, from the dateof notification concerning each depot. Award passed. No costs”.

A

B

C

D

E

F

G

H

AThe aforementioned awards were subject matter of challengebefore the High Court of Judicature at Madras[4] in Writ Petition Nos.11416/1999 and 12416/1999. The learned single Judge vide judgmentand order dated 14.8.2003, dismissed the writ petitions on the findingthat the awards passed by the Tribunal were just and proper, and thusaffirmed the same.B

A

6. Feeling aggrieved, the Corporation carried the matter beforethe Division Bench of the Madras High Court by way of Writ AppealNos. 3382/2003 and 3383/2003. The Division Bench dismissed the saidwrit appeals vide judgment and order dated 13.12.2006 having agreedwith the conclusion arrived at by the Tribunal in passing awards and theCreasoning of the learned single Judge in confirming the same. TheCorporation filed special leave petitions before this Court, which wereconverted into Civil Appeal Nos. 10499/2011 and 10511/2011. Bothappeals have been dismissed by a common judgment and order dated20.8.2018 upholding the view taken by the Tribunal and the MadrasDHigh Court.

7. Contempt Petition (Civil) No. 754/2019 is in reference to aseparate judgment and order of the same date (i.e. 20.8.2018) passedby this Court in Civil Appeal No. 7961/2014 in respect of writ petitioninstituted by the contempt petitioners (Thrissur Jilla General MazdoorESangh and others) before the High Court of Kerala at Ernakulam[5] beingWrit Petition No. 14786/2013, praying for the following reliefs: - “(i) A writ of mandamus directing the 5[th] respondent to takeeffective steps for implementing Exhibit P1;

(ii) Declare that the DPS workers in the depot of FCI atFMulakunnathukavu, Thrissur, are entitled to be regularised andare entitled to the pay and other service benefits of departmentallabourer…”

The stated writ petition was dismissed by the learned single Judgevide judgment and order dated 4.9.2013 on the finding that there wasGsubstantial compliance of directions issued by the Tribunal. It also notedthat there was no indication in the award that the workers were requiredto be engaged in the godowns in Kerala, departmentally. Feeling aggrieved,the contempt petitioners filed Writ Appeal No. 1746/2013 before the 4 For short, “the Madras High Court”

5 For short, “the Kerala High Court”

H

Kerala High Court, which came to be allowed in terms of the directionsissued in O.P. No. 14360/1999 as affirmed in Writ Appeal No. 2491/2009. The relied upon order in O.P. No. 14360/1999 was passed by theKerala High Court in a petition filed by Head Load Labour Congress forimplementation of the award passed by the Tribunal. The reliefs claimedin the said writ petition read thus: - “a) a writ of mandamus directing the 2[nd] respondent to takeeffective steps for implementing Exhibit P1.

b) hold that all godowns and depots of FCI, especially in Kerala,the workers should be regularised and brought under directpayment system forthwith.”

The above writ petition came to be allowed vide judgment andorder dated 22.9.2009. Feeling aggrieved, the respondent-Corporationhad filed Writ Appeal No. 2491/2009 before the Kerala High Court,which was dismissed vide judgment and order dated 15.2.2010. Againstthe said decision, the Corporation had filed special leave petition beforethis Court, which was converted into Civil Appeal No. 10530/2011 andcame to be dismissed by a common judgment and order dated 20.8.2018of this Court alongwith Civil Appeal No. 7961/2014, referred to above.

8. Despite the dismissal of the appeals and confirmation of theaward passed by the Tribunal including the writ issued by the KeralaHigh Court to implement the award, the respondent Corporation took noinitiative, which prompted the contempt petitioners to approach this Courtfor initiating contempt action against the respondent Corporation and itsofficers.

9. The respondent Corporation would contend that it has alreadyregularised the eligible employees, who were party to the two Referencesmentioned above, under Direct Payment System (DPS) and nothingfurther was required to be done. It is urged that in both the References,the claim was restricted to regularisation of the concerned employeesafter abolition of the contract labour system. There was no prayer forabsorbing the concerned employees under any specific system of regularlabour prevailing in the Corporation. The Corporation has four systemsof labour engagement, namely, (i) Departmental Labour System, (ii) DirectPayment System, (iii) No-Work-No-Pay System and (iv) Mate System.The workmen or the Unions concerned took no steps to amend the A

B

C

D

E

F

G

H

652SUPREME COURT REPORTS

AReference even after the agreement arrived at in the meeting dated12.4.1996 to ask for specific relief of regularisation under a particularsystem. In absence of any specific relief, the respondent regularised theworkers under Direct Payment System (DPS) during pendency of theReferences. The existence of Direct Payment System (DPS) since 1973

is indisputable. It has been noted in the decision of this Court in WorkmenBof the Food Corporation of India vs. M/s. Food Corporation of India[6]and recently in ESI Corporation vs. FCI Workers Union & Ors.[7]. It isalso urged that since 1991, no contract worker has been regularisedunder the Departmental Labour System, although some Direct PaymentSystem (DPS) workers and ‘B category’ workers were brought underCDepartmental Labour System in 1994 and 1997 pursuant to specificawards/Court orders followed by settlements during pendency of appealsfiled by the Corporation. The recent policy guidelines issued by theGovernment of India vide letter dated 11.11.2013 unambiguously predicatethat the contract workers be regularised only under No-Work-No-PaySystem. It is the case of the Corporation that out of 1800 Depots operatedDby the Corporation, more than 1500 Depots were operating under contractlabour system, and provided employment to more than one lakh labour,out of which 50% of the total regular labour is employed under the DirectPayment System (DPS). It has produced the Chart in regard to regularlabour as on 31.12.2019 under three different categories as under: -E

It is not as if only the workmen involved in two References haveGbeen regularised in Direct Payment System (DPS). There are 19427workmen in this system as against 10860 under Departmental LabourSystem. It is urged that the service benefits under the Direct PaymentSystem (DPS) are indicative of the fact that it is a regular engagement 6 (1985) 2 SCC 136H7 Civil Appeal Nos. 8841-8842/2019 decided on 19.11.2019

by the Corporation and not on contract or casual basis. The servicebenefits under the Direct Payment System (DPS) are outlined as follows:- “Service Benefits under DPS:

The main service benefits of the DPS workers are highlighted asunder:

i. DPS workers are governed by the Model standing Orders underIndustrial Employment Standing Orders Act, 1946.

ii.DPS workers are permanent and regular and thus,departmentalised employees of FCI and enjoys security of tenureas superannuation age of a DPS worker is 60 years.

iii. The Legal Heirs of a DPS worker are eligible for CompassionateAppointment on death as per Govt. of India policy circulated videFCI Hqrs. Circular no. 4/2003 dated 04/13.03.2003.

iv. The workers are paid monthly wages directly by the corporationsubject to assured minimum guaranteed wages declared by CentralGovt. Thus, a DPS worker gets higher monthly wages on piecerate basis when volume of work handled by him is high but whenthere is no work or adequate work at the depot during a particularmonth, the DPS workers is assured of minimum guaranteed wages.

v. DPS worker is eligible for paid weekly off, 06 holidays including03 national holidays, 10 sick leave per year (accumulation upto 40days), 15 days “leave without pay” per annum, CPF under FCICPF scheme, Ex-gratie in lieu of Bonus as per the provision ofpayment of Bonus Act.

vi. DPS worker is eligible for productivity linked incentive asdeclared by FCI Hqrs. from time to time.

vii. DPS worker is eligible for OTA admissible as per shops andestablishment act or 1.1 of hourly earnings where exemption fromshops and establishment act has been granted by the appropriateauthority or said act does not apply.

viii. DPS worker is eligible for festival advance as per FCIinstructions applicable from time to time.

ix. DPS worker is eligible for gratuity as per payment of gratuityact, 1972 from the date of notification.

x. DPS worker is eligible for workmen’s compensation as perworkmen’s compensation as per workmen’s compensation act.

A

B

C

D

E

F

G

H

[2020] 6 S.C.R.

Axi. DPS worker is eligible for Benevolent Fund as per the schemeof FCI.

xii. DPS worker is eligible for transfer grant/packing allowanceand joining period on their transfer within and outside region/zoneas per the instructions of the corporation issued from time to time.”

BFurther, the Corporation has now been advised to declare theDepartmental Labour System as a dying cadre. The same has been sonotified by the Government of India recently on 3.1.2020 in light ofrecommendation made by the High-Level Committee constituted by theGovernment of India in August, 2014. Additionally, it was necessitatedCbecause of the directions given by the High Court of Judicature at Bombay,Bench at Nagpur in a suo moto registered PIL No. 84/2014 vide judgmentand order dated 20.11.2015, which has been confirmed by thisCourt vide judgment and order dated 31.7.2017 passed in SLP(C)No. 19218/2016 and connected matters. The respondent has placedreliance on State of Bihar & Ors. vs. Bihar Secondary TeachersDStruggle Committee, Munger & Ors.[8], wherein it has been held thatwhen administration adopts an integrated policy and if by process ofjudicial intervention, any directions are issued, it could create tremendousimbalance and cause great strain on budgetary resources. As a matterof fact, the Constitution Bench of this Court in Steel Authority of IndiaELtd. & Ors. vs. National Union Waterfront Workers & Ors.[9]has heldthat the contract labour need not be absorbed after abolition of contractlabour system. Be that as it may, the Corporation is not a profit-makingorganisation. It has been established under the provisions of the FoodCorporations Act, 1964 and its primary duty is to undertake purchase,storage, movement, transport, distribution and sale of food grains andFother food stuff. It is an agency to implement food policy of theGovernment of India, which envisages protection of farmers by ensuringremunerative price (Minimum Support Price) for their produce andsimultaneously safeguarding the interests of poor consumers by providingthem food grains at highly subsidised rates under National Food SecurityGAct, 2013 and other welfare schemes. The food subsidy of more thanRs.1.50 lakh crore per annum is extended. It is stated that if all theregular workers in the Corporation are brought under the DepartmentalLabour System, there will be recurring liability on public exchequer to 8 (2019) 8 SCALE 124H9 (2001) 7 SCC 1 (Constitution Bench)

the tune of Rs.3,000 crore per annum and if arrears are also given witheffect from 2003, there will be additional financial burden of more thanRs.40,000 crore. It is urged that the issue regarding the parity of wagesbetween the employees under the Direct Payment System (DPS) andthose working under the Departmental Labour System is pendingadjudication in I.D. No. 1/2003 before the National Industrial Tribunal,Mumbai. Finally, it is urged that in absence of any clear directions inReference proceedings, as per the extant policy, the respondent couldhave regularised the concerned workers only under the Direct PaymentSystem (DPS) existing since 1973 as part of its organisational structure.It is, therefore, urged that it is certainly not a case of disobedience, muchless wilful or deliberate disobedience of the order passed by this Court.Reliance is placed on Dinesh Kumar Gupta vs. United India InsuranceCompany Limited & Ors.[10], Bihar State Government SecondarySchool Teachers Association vs. Ashok Kumar Sinha & Ors.[11]andDineshan K.K. vs. R.K. Singh & Anr.[12]. The respondents pray thatthe show cause notice(s) be discharged.

10. The petitioners, however, submit that the direction given bythe Tribunal and upheld by the Madras High Court including by thisCourt is unambiguous. It mandates the respondent Corporation toregularise the concerned workers in the Departmental Labour System,as has been done in other cases adverted to by the Tribunal and theMadras High Court in the respective award/judgment. The petitionersassert that the Direct Payment System (DPS) was implemented on1.5.1996, whereas the dispute had been raised by the workers Union/workers in 1992 and 1993. The relief granted by the Tribunal relatesback to the date of initiation of Reference proceedings and at that time,in all other cases, regularisation of contract workers after abolition ofcontract labour system, was done under the Departmental Labour system.The regularisation of workers under the Direct Payment System (DPS)would be denial of their claim for being regularised under the DepartmentalLabour system. If such argument of the respondent Corporation was tobe acceded to and that too in contempt proceedings, it would be re-writing the award of the Tribunal which had become final until this Court.For, the Tribunal in its award dated 19.12.1997 in I.D. No. 39/1992 hadclearly directed the respondent Corporation to regularise and 10 (2010) 12 SCC 770 (paragraph 17)

11 (2014) 7 SCC 416 (paragraph 24)

12 (2014) 16 SCC 88 (paragraphs 14 and 15)

AB

C

D

E

F

G

H

Adepartmentalise the concerned workers with effect from the date ofnotification of abolition of contract labour system. It is too late in the dayfor the Corporation to contend to the contrary. It is urged that there arematerial differences between the service conditions under theDepartmental Labour System and the Direct Payment System (DPS).The petitioners have relied on the decision of this Court in FoodBCorporation of India & Ors. vs. West Bengal Food Corporation ofIndia Workmen’s Union[13] and the order passed in contempt petition[14]in that matter, to urge that the Corporation was directed to regularise theconcerned workers under the Departmental Labour system. Accordingto the petitioners, the Corporation is under obligation to extend sameCrelief to these petitioners and implement the direction given by the Tribunaland upheld by the High Court, as well as, this Court, to regularise anddepartmentalise the concerned workers under the Departmental Laboursystem only. Reliance is placed on Anil Ratan Sarkar & Ors. vs.Hirak Ghosh & Ors.[15] to contend that the Corporation cannot be permitted to raise a new plea, so as to frustrate the decision of theDTribunal and more particularly, of this Court, even after dismissal of theappeal preferred by the respondent.

11. We have heard Mr. Rana Mukherjee, learned senior counselfor the petitioners in Contempt Petition (Civil) Nos. 508/2019 and 507/2019, Mr. V. Prakash, learned senior counsel for the petitioners inEContempt Petition (Civil) No……………./2020 (@ Diary No. 13740/2019), Mr. Colin Gonsalves, learned senior counsel for the petitioners inContempt Petition (Civil) No. 754/2019, Mr. Brijender Chahar, learnedsenior counsel for the petitioners in Contempt Petition (Civil) Nos. 404/2019 and 1073/2019, Mr. Mukul Rohatgi, learned senior counsel for the Frespondents in Contempt Petition (Civil) No. 754/2019, Mr. V. Giri, learnedsenior counsel for the respondents in Contempt Petition (Civil) No. 404/2019 and Mr. Sudarsh Menon, learned counsel for the applicant in I.A.No. 167580/2019 in Contempt Petition (Civil) No. 404/2019.

12. Before we proceed to analyse the stand taken by the parties,Git is apposite to advert to the exposition of this Court in Ram Kishan vs.Tarun Bajaj & Ors.[16], wherein the Court has delineated the contours 13 (2018) 9 SCC 469

14 Contempt Petition (Civil) No. 809/2018H15 (2002) 4 SCC 21 (paragraphs 20 to 22)

for initiating civil contempt action. In paragraphs 11, 12 and 15 of thereported decision, the Court observed thus: -

“11. The contempt jurisdiction conferred on to the law courtspower to punish an offender for his wilful disobedience/contumacious conduct or obstruction to the majesty of law, forthe reason that respect and authority commanded by the courtsof law are the greatest guarantee to an ordinary citizen that hisrights shall be protected and the entire democratic fabric of thesociety will crumble down if the respect of the judiciary isundermined. Undoubtedly, the contempt jurisdiction is apowerful weapon in the hands of the courts of law but thatby itself operates as a string of caution and unless, thus,otherwise satisfied beyond reasonable doubt, it wouldneither be fair nor reasonable for the law courts to exercisejurisdiction under the Act. The proceedings are quasi-criminal in nature, and therefore, standard of proof requiredin these proceedings is beyond all reasonable doubt. Itwould rather be hazardous to impose sentence for contempton the authorities in exercise of the contempt jurisdictionon mere probabilities. (Vide V.G. Nigam v. Kedar Nath Gupta,(1992) 4 SCC 697, Chhotu Ram v. Urvashi Gulati, (2001) 7 SCC530, Anil Ratan Sarkar v. Hirak Ghosh, (2002) 4 SCC 21, Bankof Baroda v. Sadruddin Hasan Daya, (2004) 1 SCC360, Sahdeo v. State of U.P., (2010) 3 SCC 705 and NationalFertilizers Ltd. v. Tuncay Alankus, (2013) 9 SCC 600.

12. Thus, in order to punish a contemnor, it has to beestablished that disobedience of the order is “wilful”. Theword “wilful” introduces a mental element and hence,requires looking into the mind of a person/contemnor bygauging his actions, which is an indication of one’s state ofmind. “Wilful” means knowingly intentional, conscious,calculated and deliberate with full knowledge ofconsequences flowing therefrom. It excludes casual, accidental,bona fide or unintentional acts or genuine inability. Wilful actsdoes not encompass involuntarily or negligent actions. The acthas to be done with a “bad purpose or without justifiable excuseor stubbornly, obstinately or perversely”. Wilful act is to be A

B

C

D

E

F

G

H

Adistinguished from an act done carelessly, thoughtlessly, heedlesslyor inadvertently. It does not include any act done negligently orinvoluntarily. The deliberate conduct of a person means that heknows what he is doing and intends to do the same. Therefore,there has to be a calculated action with evil motive on hispart. Even if there is a disobedience of an order, but suchBdisobedience is the result of some compellingcircumstances under which it was not possible for thecontemnor to comply with the order, the contemnor cannotbe punished. “Committal or sequestration will not beordered unless contempt involves a degree of default orCmisconduct.” (Vide S. Sundaram Pillai v. V.R. Pattabiraman,(1985) 1 SCC 591, Rakapalli Raja Ram GopalaRao v. Naragani Govinda Sehararao, (1989) 4 SCC 255, NiazMohammad v. State of Haryana, (1994) 6 SCC 332, ChordiaAutomobiles v. S. Moosa, (2000) 3 SCC 282, Ashok PaperKamgar Union v. Dharam Godha, (2003) 11 SCC 1, State ofDOrissa v. Mohd. Illiyas, (2006) 1 SCC 275 and Uniworth TextilesLtd. v. CCE, (2013) 9 SCC 753.

xxx

xxxxxx

15. It is well-settled principle of law that if twoEinterpretations are possible, and if the action is notcontumacious, a contempt proceeding would not bemaintainable. The effect and purport of the order is to be takeninto consideration and the same must be read in its entirety.Therefore, the element of willingness is an indispensablerequirement to bring home the charge within the meaning of theFAct. [See Sushila Raje Holkar v. Anil Kak, (2008) 14 SCC 392and Three Cheers Entertainment (P) Ltd. v. CESC Ltd., (2008)16 SCC 592.”

GSuffice it to observe that to constitute civil contempt, it must beestablished that disobedience of the order is wilful, deliberate and withfull knowledge of consequences flowing therefrom. For reaching thatconclusion, it is essential to notice the scope of References before theTribunal and direction issued therein, which has been affirmed upto thisCourt. Going by the plain text, the issue(s) referred to for adjudication H

(reproduced in paragraph 3 above) is merely for regularisation. However,the point-in-issue considered by the Tribunal coupled with the operativepart of the award (which has been reproduced in the earlier part of thisjudgment), it would at best be a case of directing the respondentCorporation to regularise and departmentalise the concerned workmen,who were party to the stated References.

13. As noted earlier, the Corporation operates four systems oflabour. The Departmental Labour System is one such system ofengagement. The other is Direct Payment System (DPS). The third isNo-Work-No-Pay System and fourth, the Mate System. Neither therelief in the References was specific for regularisation in DepartmentalLabour System only nor the Tribunal, the Madras High Court/KeralaHigh Court or this Court was called upon to deal with that issue specifically.The claim set up by the petitioner-Union(s) was simpliciter forregularisation of workmen who were named in the annexure(s) to theReferences. The Tribunal did issue direction to regularise anddepartmentalise those workmen. It is axiomatic that departmentalisationcould also be an engagement in a Department, which could be a separatepart or branch/section of the whole Organisation. Departmentalisationis dividing an organisation into different departments or structuring it in amanner, which perform tasks according to the specialisations in theorganisation. It may include departments such as functional, product,process, geographical locations, customer, divisional, matrix, planning taskforce etc.

14. As it is indisputable that the Corporation has four systems oflabour engagement including the Direct Payment System (DPS), thepetitioner-Union(s) ought to have sought specific relief against theCorporation in that regard. Significantly, the petitioners have assumedthat the Direct Payment System (DPS) commenced only from 1.5.1996,whereas it is noticed from the decision of this Court in Workmen of theFood Corporation of India (supra) that the Direct Payment System(DPS) is in existence from 1973. It is not a new set up created by theCorporation pursuant to the minutes recorded on 12.4.1996 as such.Concededly, the subject References, as well as, the direction issued bythe Tribunal, which has been upheld upto this Court is silent about thesystem in which the concerned workers have to be regularised anddepartmentalised. It is incomprehensible as to how it would be a case ofdisobedience, much less wilful disobedience, so as to entail in contemptuous A

B

D

E

F

G

H

Aconduct of the concerned officers of the Corporation especially whenthe eligible enlisted workers have already been regularised under theDirect Payment System (DPS) as per the applicable policy of 1991.Notably, the writ petition filed before the Kerala High Court forimplementation of the stated award also sought direction (reproduced inparagraph 7 above) to regularise the concerned workmen under theBDirect Payment System (DPS). If that be the position, it is unfathomableas to how the respondent Corporation can be proceeded against forhaving committed contempt of this Court.

15. The argument of the petitioners, however, is that the awardspassed by the Tribunal, as well as, the judgments of the Madras HighCCourt/Kerala High Court and this Court may have to be read as a wholeand if so read, it would only mean that the direction given to the respondentCorporation was to regularise and departmentalise all the concernedworkmen on the same terms as done in other cases referred to in theconcerned judgment. To buttress this submission, reliance is placed on

Dthe award of the Tribunal, dated 19.12.1997, wherein reference is madeto cases of regularisation in 1991 and as back as in 1982. In the reliedupon cases, the Tribunal did not advert to the policy of the respondentCorporation to engage the concerned employees after abolition of thecontract labour system only under the Direct Payment System (DPS)and which was being strictly adhered to since 1991. Pertinently, thereEwas specific direction by the Tribunal/Court in those cases to regularisethe concerned workmen under the Departmental Labour System, whichis not so in the present case.

16. Indeed, the award dated 19.12.1997 makes extensive referenceto the previous judgment of the Kerala High Court. In that decision,Fwhile issuing direction to the Corporation, it was made clear that theabsorption of the concerned workmen would be governed exclusivelyby the terms and conditions prescribed by the Corporation for its ownregular employees and the Corporation shall have all the rights such asretrenchment. It was further directed that the process of absorptionGmust be in accordance with the provisions of concerned labour andindustrial law. Be that as it may, in the present case, neither any discussionis noticed about the efficacy of policy of the Corporation effective since1991 regarding regularising the concerned workmen after abolition ofcontract labour system only under the Direct Payment System (DPS)nor a clear direction has been given by the Tribunal to the respondentH

Corporation to regularise the concerned workmen only under theDepartmental Labour System. Similarly, the learned single Judge hasmerely upheld the direction as given by the Tribunal. Indeed, theimpression gathered from the discussion in the judgment of the learnedsingle Judge does indicate that the Corporation being an instrumentalityof the State cannot be heard to discriminate between its differentemployees working at different Depots. As noted earlier, it is not as ifthe workmen involved in subject References alone were being consideredfor regularisation in the Direct Payment System (DPS). There are 19427others who have been so appointed and working as on 31.12.2019.Moreover, those who were working as contract labour engaged throughcooperative societies or private contractors came to be regularised inthe Direct Payment System (DPS) as per the policy of 1991. The factremains that even the learned single Judge had not issued specificdirection to the respondent Corporation to regularise the concernedworkmen under the Departmental Labour System and not under theDirect Payment System (DPS) as such. Similarly, the Division Benchproceeded to consider the matter as to whether the direction issued bythe Tribunal is acceptable and whether the learned single Judge wasright in affirming the said direction. In examining that question, theDivision Bench, amongst others, noted as follows: -

“21. As rightly pointed out by the learned Judge, except thegodowns/depots in Tamil Nadu, the Labourers engaged in similarcapacity in other parts of the country have been departmentalisedor regularised. As a matter of fact, even in this State, in respect ofEgmore and port godowns of FCI, the workers have beendepartmentalised. We already mentioned that Notifications of theGovernment of India regularising/departmentalising the workers’issue in respect of other States, were placed before the Tribunal.As rightly pointed out by the learned Judge, inasmuch as FCI is aCorporation having transactions throughout India, when it thoughtfit to regularise the workers in some parts of India, particularly inNorth, they are not justified in denying such benefits to theworkmen in the State. Inasmuch as the main argument on theside of the appellant was projected for remanding the case to theTribunal as if the materials placed before it were not considered,in the light of the evidence let in before the Tribunal in the form ofvarious orders/Notifications by the Government of India, existenceof more work in all the godowns, Food Storage Depots of FCI

AB

C

D

E

F

G

H

Aand of the fact that all those acceptable materials were correctlyappreciated by the Tribunal, we are of the view that there is nocase for remand. As rightly pointed out by the learned Judgeas well as correctly observed by the Tribunal, the FCI,which is a wing of Government of India, should be a modelemployer, more particularly, when they are having plentyBof continuous work and are in need of more work Force,we are satisfied that both the Unions are justified in theirdemand for regularisation and for departmentalisation.

22. Under these circumstances, we are in entire agreementwith the conclusion arrived at by the Industrial Tribunal inCpassing award and the reasoning of the learned single Judgein confirming the same. Consequently, both the WritAppeals fail and are, accordingly, dismissed. No costs.…”

DIt is thus seen that even the Division Bench did not issue anyspecific direction to the respondent Corporation to regularise theconcerned workmen under the Departmental Labour system and not todo so under the Direct Payment System (DPS) as per the policy of1991. This Court has merely affirmed the view taken by the Tribunaland the Madras High Court. More importantly, the Departmental LabourESystem has since been notified as a dying cadre.

17. To put it differently, the issue as to regularisation of theconcerned workmen under particular labour system had not been put inissue before the Tribunal and upto this Court. A general direction cameto be issued to regularise and departmentalise them. Resultantly, theFrespondents were left with the only option to regularise the concernedworkmen as per the extant applicable policy of the Organisation, underthe Direct Payment System (DPS).

18. Reverting to the decision of the Kerala High Court in WritPetition No. 14360/1999 filed for directing implementation of the awardGin question, the relief claimed was to regularise the concerned workmenunder the “Direct Payment System (DPS)” forthwith. That relief wasalready acceded to by the Corporation in the minutes recorded betweenthe parties dated 12.4.1996. For that reason, the Corporation did notparticipate in the Reference proceedings in I.D. No. 39/1992 and allowedthe I.D. No. 55/1993 to proceed ex-parte. Indeed, the Corporation assailedH

the awards upto this Court on the basic issue of right and entitlement ofthe concerned workmen to be regularised. The fact whether regularisationshould be under the Departmental Labour System or the Direct PaymentSystem (DPS) was not put in issue at any stage including the appealdecided by this Court. The Corporation having lost on the basic issue ofregularisation was obliged to give effect to the award as per its extantpolicy in that regard in force since 1991.

19. Notably, the relief granted by the Division Bench of the KeralaHigh Court in Writ Appeal No. 2491/2010 was only for regularisation inthe Direct Payment System (DPS) as prayed in the writ petition. In thesubsequent writ petition filed before the Kerala High Court being WritPetition No. 14786/2013, against which the appeal came to this Courtbeing Civil Appeal No. 7961/2014, the relief claimed was for regularisationand to give all other service benefits of Departmental Labour system.This writ petition was dismissed by the learned single Judge on the findingthat the award in question was already substantially complied with. Whenthe matter went up to the Division Bench by way of writ appeal beingWrit Appeal No. 1746/2013, the same was disposed of as per the directionissued in the earlier writ petition being O.P. No. 14360/1999 and WritAppeal No. 2491/2009 referred to above. The relief granted in theseproceedings was, therefore, only regarding regularisation in the DirectPayment System (DPS). If that be so, we fail to understand as to howthe writ petitioner(s) therein could ask for relief different thanregularisation under the Direct Payment System (DPS).

20. Reliance was placed by the petitioners on the dictum inparagraph 23 of the judgment dated 20.8.2018 in Civil Appeal Nos. 10499/2011 and 10511/2011, which reads thus: - “23. It was then brought to our notice that similar industrialreference alike the one in the present case was also made inrelation to the FCI Branch at West Bengal and the said referencewas answered in favour of workers’ Union. The matter was thentaken to the High Court unsuccessfully and then carried to thisCourt at the instance of the FCI in Civil Appeal No. 7452 of 2008and the appeal was dismissed on 20.07.2017 resulting in upholdingthe award of the Industrial Tribunal. It was stated that the FCIthen implemented the award, as is clear from the notice on05.10.2017, in favour of the concerned workers. Be that as itmay, since we have upheld the impugned order in this case A

B

C

D

F

G

H

Aon the facts arising in the case at hand, we need not placereliance on any other matter, which was not before the HighCourt.”

21. The petitioners have adverted only to the opening part of thisBparagraph. The crucial part, in our opinion is, the latter (highlighted) part,wherein the Court has made it clear that the judgment relied upon wasnot being taken into account for deciding the appeal.

22. In West Bengal Food Corporation of India Workmen’sUnion (supra) involving a case arising from the proceedings and orderCdated 8.3.2001 passed by the High Court of Calcutta in C.R. No. 5498(W) of 1991, which is extracted in the order passed by this Court, dated20.7.2017, the Court opined that order in the said case had directed therespondents to frame a scheme or to find ways and means to absorb theconcerned workmen. That direction can have no bearing on determinationDof the matters at hand, being contempt petitions. For the same reason,the subsequent orders passed in contempt petition in the said appeal willhave no bearing on the present case. For, these petitions will have to bedecided strictly on the basis of the awards passed in the References inquestion and the judgment of the Madras High Court/Kerala High Courtand this Court, being contempt action.E

23. In the present case, as noticed earlier, no specific directionhas been given to the Corporation to regularise the concerned workmenonly in the Departmental Labour System. Furthermore, the DepartmentalLabour System is now a dying cadre and the policy of the Corporation atthe relevant time entailed regularisation of such workmen only under theFDirect Payment System (DPS). Thus understood, no contempt actioncan be initiated on the basis of general direction to the respondents toregularise and departmentalise the concerned workmen. For, it is notpossible to hold that intrinsic in the general direction was to ordain therespondents to regularise and departmentalise the concerned workmenGunder the Departmental Labour System in the teeth of the extant policyof the Corporation in force since 1991 regarding regularisation againstDirect Payment System (DPS).

24. Reverting to the decision of this Court in Anil Ratan Sarkar(supra), it was a case in which crystal-clear direction was given to themanagement to treat the concerned employees at par with another setH

of specified employees. Further, despite six rounds of litigation, themanagement kept on taking defence of its bona fide understanding ofthe situation, which came to be deprecated. Had it been a case of cleardirection by the Tribunal, the High Court or this Court, and an attemptwas made to interpret, or so to say, misinterpret, such direction, toregularise the employees concerned under the Departmental LabourSystem, and if such direction was not to be complied with by therespondent Corporation, the situation could have been viewed differently- being a contempt action. In the present case, it is not a moonshinedefence as was the finding recorded in the reported decision.

25. Suffice it to observe that no case for initiating contempt actionagainst the respondent Corporation and its officers has been made out.We need not, therefore, analyse any other aspect of the matter, whichwould require rewriting of the judgments on the basis of which thiscontempt action has been instituted. That cannot be countenanced incontempt proceedings.

26. Accordingly, these petitions fail and are dismissed. Show causenotices stand discharged. Pending interlocutory applications, if any, shallstand disposed of.

Divya Pandey

Contempt Petitions dismissed.

A

B

C

D

E

F

G

H