Air India Statutory Corporation. Vs. United Labour
Union & Ors [1996] INSC 1400 (6 November 1996)
K. Ramaswamy,
B.L. Hansaria, S.B. Majmudar K. Ramaswamy, J.
ACT:
HEAD NOTE:
THE
6TH DAY OF DECEMBER, 1996.
Present
:
Hon'ble
Mr. Justice K. Ramaswamy Hon'ble Mr. Justice B.L. Hansaria Hon'ble Mr. Justice
S.B. Majmudar Ashok Deasai, Attorney General, T.R. Andhyarujuna, Solicitor
General, P.P. Malhotra, Ms. Indira Jaising, K.K. Singhvi, Sr. Advs., M.D. Sisodia,
K. Swamy, Lalit Bhasin, Ms. Nina Gupta, Ms. Kiran Bhardwaj, Vineet Kr., Ms.
Ethel Pereira, Ms. Ritu Makkar, P.P. Singh, G. Nagesware Reddy, C.V.S. Rao Ms.
Anil Katiyar, Ms. Anita Shenoi, Sanjay Parikh, B.N. Singhvi, Sanjay Singhvi,
Anil K. Gupta, Ms. Pushpa Singhvi, T. Sridharan, P.K. Malhotra, S.R. Bhat, Brig
Bhushan, R.N. Keshwani, and Ms. C. Ramamurthy, and A.K. Sanghi, Advs. with them
for the appearing parties.
The
following Judgments of the Court were delivered" WITH CIVIL APPEAL NOS.
15536-37, 15532-15534 OF 1996 (Arising out of SLP (C) Nos. 7418-19/92 and
12353-55/95)
Leave
granted.
These
appeals by special leave arise form the judgment of the Division Bench of the
Bombay High Court dated April
28, 1992 made in
Appeal No. 146 of 1990 and batch. The facts in appeal arising out of S.L.P.
7417/92, are sufficient to decide the questions of law that have arisen in
these appeals. The appellant initially was a statutory authority under
International Airport Authority of India Act. 1971 (for short, 'IAAI Act') and
on its repeal by the Airports Authority of India Act, 1994 was amalgamated with
National Airport Authority (for short, the 'NAA') under single nomenclature,
namely, IAAI. The IAAI is now reconstituted as a company under Companies Act,
1956.
The
appellants engaged, as contract labour the respondent union's members, for
sweeping, cleaning dusting and watching of the building owned ad occupied by
the appellant. The Contract Labour (Regulation and Abolition) Act, 1970 (for
Short, the 'Act') regulates registration of the establishment of principal
employer, the contractor engaging and supplying the contract labour in every
establishment i which 20 or more workmen are employed o ay day of the preceding
12 months as contract labour. The appellant had obtained on September 20,1971 a certificate of registration form
Regional Labour Commissioner (Central) under the Act. The Central Government,
exercising the power under Section 10 of the Act, on the basis of
recommendation and in consultation with the Central Advisory Board constituted
under Section 10(1) of the Act, issued a notification on December 9,1976
prohibiting "employment of contract labour on and from December 9,1976 for
sweeping, cleaning, dusting and watching of buildings owned or occupied by the
establishment in respect of which the appropriate government under the said act
is the Central Government". However, the said prohibition was not apply to
"outside cleaning and other maintenance operations of multi- storeyed
building where such cleaning or maintenance cannot be carried out expect with specialised
experience." It would appear that Regional Labour Commissioner(Central) Bombay by letter dated January 20,1972 informed the appellant that the
State Government is the appropriate Government under the Act. Therefore, by
proceedings dated May
22, 1973 the Regional Labour
Commissioner (Central) had revoked the registration. By Amendment Act 46 of
1982, the Industrial Disputes Act, 1947 (for short, the 'ID Act') was made
applicable to the appellant and was brought on statute book specifying the appellant
as one of the industries in relation to which the Central Government is the
appropriate Government and the appellant has been carrying on its business
"by or under its authority" with effect form August 21,1982. The Act
was amended bringing within its ambit the Central Government as appropriate
Government by amendment Act 14 of 1986 with effect from January 28,1986.
Since
the appellant did not abolish the contract system and failed to enforce the
notification of the Government of India dated December 9,1976, the respondents
came to file writ petitions for direction to the appellant to enforce forthwith
the aforesaid notification abolishing the contract labour system in the
aforesaid services and to direct the appellant to absorb all the employees doing
cleaning, sweeping, dusting, washing and watching of the building owned or
occupied by the appellant-establishment, with effect from the respective dates
of their joining as contract labour in the appellant's establishment with all
consequential rights/benefits, monetary or otherwise, The writ petition was
allowed by the leaned single judge on November 16,1989 directing that all
contract workers be regularised as employees of the appellant from the date of
filing of the writ petition. Preceding thereto, on November 15, 1989, the Government of India referred to the Central Advisory
Board known as While Committee under section 10(1), which recommended to the
Central Government not to abolish the contract labour system in the aforesaid
services. Under the impugned judgment dated April 3,1992, the learned judges of the Division
Bench dismissed the appeal. Similar was the fate of other appeals. Thus these
appeals by special leave.
Shri Ashok
Desai, the learned Attorney General, Shri Andhyarujina, the learned Solicitor
General, Appearing for Union of India and the appellant respectively, contended
that the term "appropriate Government" under section 2 (1)(a) of the
Act, as on December 9, 1976, was the State Government. The appellant was not
carrying on the business as an agent of the Central Government nor the Central
Government was its principal. This Court, in Heavy Engineering Majdoor Union v.
The State of Bihar & Ors. [(1969) 3 SCR 995 (for
short, the "Heavy Engineering case"], had interpreted the phrase
"the appropriate Government" and held that the Central Government was
not the appropriate Government under the ID Act. The ratio therein was followed
in Hindustan Aeronautics Ltd. v. The Workmen & Ors. [(1975) 4 SCC 679] and Rashtriya
Mill Mazdoor Sangh v. Model Mills Nagpur & Anr. [1984 Supp. SCC 443] and
food Corp. of India Workers' Union v. Food
Corp. Of India & Ors.[(1985) 2 SCC 294], It is thus firmly settled law that
the appropriate Government until the Act was amended with effect from January 28,1986. Therefore, the view of the High
Court that the appropriate Government is the Central Government is not correct
in law. The learned Attorney General Further argued that the interpretation of
this Court in Heavy Engineering case has stood the test of time and the parties
have settled the transaction its basis. It would, therefore, not be correct to
upset that interpretation. The learned Solicitor General contended that the
notification published by the Central Government under Section 10 of the Act on
December 9, 1976 was without jurisdiction. The
Advisory Board independently should consider whether the contract labour in
each of the aforestated services should be abolished taking into consideration
the perennial nature of the work, the requirement of number of employees in the
respective specified services in the establishment of the appellant.
The
Advisory Board had not adverted to the prescribed criteria of Section 10 (2) of
the appellant's establishment. Mohile Committee after detailed examination, had
recommended to the Central Government not to abolish the contract labour system
in the aforesaid services. It was contended that the notification dated December 9, 1976 is without authority of law or, at
any rate, is clearly illegal and so the direction by the High Court to enforce
the offending notification is not correct in law. It was come into force from January 28, 1986, the Central Government being the
appropriate Government, had accepted the recommendation of Mohile Committee of
not abolishing the contract labour system. The notification dated December 9, 1976 no longer remained valid for
enforcement.
The
High Court, therefore was not right in directing the appellant to enforce the
notification. Alternatively, it was contended that even assuming that the notification
is valid and enforceable, it would be effective only from January, 1986.
However, by abolition of contract labour system, the workmen would not
automatically became the employees of the appellant. In Dena Nath and Ors.
[(1992) 1 SCC 695], this court had held that the High Court, in exercise of its
power under Article 226, has o power to direct absorption of the contract labour
as its direct employees. The impugned judgment was expressly disapproved in
Dena Nath's case. Therefore, its legality has been knocked off its bottom. It
was further contended that the Act, on abolition of the contract labour system,
does not envisage to c r ea t e direct relationship between the principal
employer and the contract labour. The erstwhile contract labour have to seek
and obtain industrial award under the ID Act by virtue of which the appellant
would be entitled to satisfy the Industrial Court that there was no need to
absorb all the contract labour but only smaller number is required as regular
employees. On recording finding in that behalf, the industrial court would make
his award which would be enforceable by the workmen. This court in Gujarat
Electricity Board v. Hind Mazdoor Sabha & Ors. [(1995) 5 SCC 27] had
pointed out the lacuna in the act and given directions of the manner in which
the industrial action has to be take on abolition of the contract labour
system. The High Court, therefore, was not right in its direction that the
workmen require to be absorbed in the respective service of the establishment
of the appellant. it is also contented that the appellant, though initially was
a statutory Corporation under the IAAI Act, on its abolition and constitution
as a company, is entitled to regulate its own affairs on business principal and
the direction for absorption would lead to further losses in which it is being
run. The learned Solicitor General has, therefore, submitted a scheme under
which its subsidiary, namely, Air Cargo Corporation would take the workmen ad
absorb them into service, subject to the above regulation. It has to consider
as to how many of the contract labour require to be absorbed. Prescription of
qualification for appointment was necessary; the principle of reservation
adopted by the Central Government requires to be followed; their names require
to be called from Employment Exchange.
The
workmen should be absorbed o the principle of "last come first go"
subject to their fitness, qualifications and probation etc.
Shri
K.K. Singhvi and Mrs. Indira Jai Singh, learned senior counsel and A.K. Gupta,
learned counsel for the respondents, contended that the appellant is an
industry carrying on its business of Air Transport Services. Prior to the IAAI
Act, it was under the control of Civil Aviation Department, Government of
India; after the IAAI Act, the appellant has been carrying on its industry by
or under the authority of the Central Government. The relevant provisions in
the IAAI Act would establish the deep and pervasive control the Central
Government has over the functions of the appellant. Whether the appellant is an
industry carrying on business by, or under the authority of the Central
Government, must be determined keeping in view the language of the statute that
gave birth to the Corporation, and the nature of functions under the IAAI act
and the control the Central Government is exercising over the working of the
industry of the appellant to indicate that right form its inception the
appellant has been carrying on its business, by or under the authority of the
Central Government. Rightly understanding that legal position, the Central
Government had referred the matter to the Central Advisory Board under Section
10(1) of the Act and on the basis of its report had issued the notification
dated December 9,1976 abolishing the contract labour
system in the aforestated services.
Therefore,
it is valid in law. The Bench in Heavy Engineering case narrowly construed the
meaning of the phrase "the appropriate Government" placing reliance
on the common law doctrine of "principle and agent". The public law
interpretation is the appropriate principle of construction of the phrase
"the appropriate Government". In view of internal evidence provided
in the IAAI Act ad the nature of the business carried on by the appellant by or
under the control of the Central Government, the appropriate Government is none
other than the Central Government. In particular, after the development of law
of "other authority" or "instrumentality of the State"
under Article 12 of the Constitution, the ratio in Heavy Engineering case is no
longer good law. In Hindustan Aeronautics Ltd. and Food Corp of India cases, this court had not
independently, laid any legal preposition. Food Corporation of India case was considered with reference
to the regional warehouses of the FCI situated in different States and in this
functional perspective, this court came to the conclusion that the appropriate
Government would be the State Government.
This
Court in Sukhdev Singh & Ors. v. Bhagatram Sardar Singh & Anr. [(1975)
3 SCR 619]; R.D. Shetty v. Airport Authority & Ors. [(1979) 3 SCR 1014];
Managing Director, U.P. Warehousing Corporation & Anr. v. V.N. Vajapayee
[(1980) 2 SCR 733]; Ajay Hasia etc. v. Khalid Mujib Sehravardi & Ors. etc.
[(1981) 2 SCR 79] - wealth of authorities - had held that settled legal
position would lend aid to interpret the phrase "appropriate
Government" in public law interpretation; under the Act the Central
Government is the appropriate Government to take a decision under section 10 of
the Act to abolish the contract labour system. It is further contended that the
central Government, after notifying abolition of contract labour system is
devoid of power under section 10(1) to appoint another Advisory Board to Consider
whether or not to abolish the same contract labour system in the aforesaid
services in the establishments of the appellant. The recommendation of the Mohile
Committee and the resultant second notification were, therefore, without
authority of law. The two Judge Benches in Dena Nath and Gujarat Electricity
Board's cases have not correctly interpreted the law. After abolition of the
contract labour system, if the principle employer omits to abide by the law and
fails to absorb the labour worked in the establishments of the appellant on
regular basis, the workmen have no option but to seek judicial redress under
Article 226 of the Constitution. Judicial Review being the basis feature of the
Constitution, the High Court is to have the notification enforced. The citizen
has a fundamental right to seek redressal of their legal injury by judicial
process to enforce his rights in the proceedings under Article 226. The High
Court, therefore, was right to dwell into the question and to give the impugned
direction in the judgment. The workmen have a fundamental right to life.
Meaningful right to life springs from continued work to earn their livelihood.
The right to employment, therefore, is an integral facet of right to life. When
they were engaged as contract labour and were continuously working in the
establishments of the appellant, to make their right to social and economic
justice meaningful and effective, they are required to be continuously engaged
as contract labour so long as the work is available in the establishment. When
work is of perennial nature and on abolition of contract labour system, they
are entitled, per force, to be absorbed labour system, they are entitled, per
force, to be absorbed on regular basis transposing their erstwhile contractual
status into that of an employer - employee relationship so as to continue to
eke out their livelihood by working under the employer and be entitled to
receive salary prescribed to that post. Thereby, they became entitled to be
absorbed without ay hiatus with effect from the date of abolition. If any
action is needed to be taken thereafter against the employee, it should be only
in accordance with either the statutory rules or the ID Act, if applicable. In
either event, the right to absorption assures to the workmen the right to
livelihood as economic empowerment, right to social justice and right to
dignity of person which are the concomitants of social democracy. These facets
of constitutional rights guaranteed to the workmen as their Fundamental Rights
should be kept in view in interpreting the expression "appropriate
Government enjoined under Section 10(1) of the Act and other regulatory
provisions in relation to the employment of the workmen. Therefore, the view in
Dena Nath's case is not correct is law and requires to be overruled.
There
is no hiatus in the operation of the Act on abolition of the contract labour
system under Section 10.
The
object and purpose of the Act are twofold. As long as the work in an industry
is not perennial, the Act regulates the conditions of the workmen employed
through the contractor registered under the Act. The services of the workmen
are channelised through the contractor. The principle employer is required to
submit the number of workmen needed for employment in its establishment who are
supplied by the contractor, an intermediary; but the primary responsibility
lies upon the principle employer to abide by law; the violation thereof visits
with penal consequences. The Act regulates systematic operation. Wages to the
contract labour should be paid under the direct supervision of the principle
employer. The principle employer is enjoined to compel the contractor to pay
over the wages and on his failure, the principle employer should pay and
recover it from the contractor/intermediary. The principle employer alone is
required to provide safety, health and other amenities to ensure health and
safe working conditions in the establishment of the principle employer.
This
would clearly indicate the pervasive control the principle employer has over
the contract labour employed through intermediary and regulation of the work by
the workmen during the period of service. On advice by the Board that the work
is of perennial nature etc, and on being satisfied of the conditions specified
under Section 10(2), the appropriate Government takes a decision to abolish the
contract labour and have the decision published by a notification. It results
in abolition of the contract labour. Consequently, the linkage of
intermediary/contractor is removed from the operational structure under the
Act. It creates direct connection between the principle employer and the
workmen. There is no escape route for the principle employer to avoid workmen
because it needs their services and the workmen are not meant to be kept in the
lurch. The words "principal employer" do indicate that the
intermediary/contractor is merely a supplier of labour to the principal
employer. On effacement of the contractor by abolition of the contract labour
system, a direct relationship between the principal employer and the workmen
stands knitted. Thereby the workman becomes an employee of the principal
employer and it relates back to the date of engagement as a contract labour.
The details of the workmen, the requirement of the work force, duration of the
work etc, are regulated under the Act and the Rules. The Act, the Rules and
statutory forms do furnish internal and unimpeachable evidence obviating the
need to have industrial adjudication; much less there arises any dispute. There
is no machinery for workmen under the ID Act to seek any industrial
adjudication. if any industrial adjudication is to be sought, it would be only
by a recognised union in the establishment of the appellants who are unlikely
to espouse their dispute. Therefore, the methodology suggested in Gujarat
Electricity Board's case, by another bench of two Judges, apart from being
unworkable and incongruous, is not correct in law. On abolition of the contract
labour, the principle employer is left with no right but duty to enforce the
notification, absorb the workmen working in the establishment on contract basis
transposing them as its regular employee with all consequential rights and
duties attached to a post on which the workmen working directly under the
appellant was entitled or liable. The Act gave no option to pick and choose the
employees at the whim of the principal employer. The view of the High Court,
therefore, is correct to the extent that the notification should be enforced
with effect from date of abolition, namely, December 9,1976. The subsequent amendment with
effect from January 28,1986 is only a recognition of ad
superimposition of preexisting legal responsibility of the Central Government
as the appropriate Government. It does not come into being only from the date
the amendment came into force. Consequently, the workmen, namely, the members
of the respondent-Union must be declared to be the employees with effect from
the respective dates on which they were discharging their duties in the
respective services of the appellant's establishment either as Sweeper, Duster,
Cleaner, Watchman etc. The view, therefore, of the High Court to the extent
that they should be absorbed with effect from the date of the judgment of the
learned single Judge, is not correct in law. Therefore, to do complete justice,
direction may be given to absorb the workmen with effect from the date
abolition, i.e. December
9, 1976 under Article
142 of the Constitution.
The
respective contentions would give rise to the following questions:
1.
What is the meaning of the word "appropriate Government under Section 2(1)
(a) of the Act,
2.
Whether the view taken in Heavy Engineering case is correct in law?
3.
Whether on abolition the contract labour are entitled to be absorbed; if so,
from what date ?
4.
Whether the High Court under Article 226 has power to direct their absorption;
if so, from what date ?
5.
Whether it is necessary to make a reference under Section 10 of the ID Act for
adjudication of dispute qua absorption of the contract labour?
6.
Whether the view taken by this Court in Dena Nath and Gujarat State Electricity
Board's case is correct in law ?
7.
Whether the workmen have got a right for absorption and, if so, what is the
remedy for enforcement ?
Section
2 (1) (a) of the Act defines "appropriate Government" to mean-
""(1) in relation to an establishment in respect of which the
appropriate Government under the Industrial Disputes Act, 1947 (Act 14 of
1947), is the Central Government, the Central Government;
""(2)
in relation to any other establishment, the Government of the State in which
that other establishment is situated." Prior to the Amendment Act 14 of
1986, the definition was as under :
"2
(1) (a) "Appropriate Government" means- (1) in relation to - (i) any
establishment pertaining to any industry carried on by or under the authority
of the Central Government, or pertaining to any such controlled industry as may
be specified in this behalf by the Central Government, or (ii) any
establishment of any railway, Cantonment Board, Major port, mine or oil-field,
or (iii) any establishment of a banking or insurance company, the Central
Government, (2) in relation to any other establishment the Government of the
State in which that other establishment is situate." Section 2(a)(i) of
the ID Act defines "appropriate Government" thus :"... Unless
there is anything repugnant in the subject or context, "appropriate
Government" means, in relation to any Industrial Disputes concerning any
industry carried on by or under the authority of the Central Government or by a
railway company for concerning any such controlled industry as may be specified
in this behalf by the Central Government..." and India Airlines and Air
India Corporation established under Section 3 of the Air Corporation Act 1953
are enumerated industries under Amendment Act 46 of 1982 which came into force
with effect from 21.8.1984.
In
Heavy Engineering case (supra), industrial dispute was referred under Section
10 of the ID Act by the State Government of Bihar to the Industrial Tribunal
for its adjudication. The competency of the State Government was questioned by
the Mazdoor Union contending that the appropriate government to refer the
dispute was the Central government. The High Court negatived the contention and
had upheld the validity of reference, On appeal, a Bench of two Judges had held
that the words "under authority of" means pursuant to the authority,
such as an agent or a servant's acts under or pursuant to the authority of its
principal or master. The Heavy Engineering Company cannot be said to be carrying
on its business pursuant to the authority of the Central Government. Placing
reliance on common law interpretation, the Bench was of the opinion that the
company derived its powers and functions from its Memorandum ad Articles of
Association. Though the entire share capital was contributed by the Central
Government and all the shares were held by the President and officers of the
Central Government were in-charge of the management, it did not make any
difference. The company and the share holders are distinct entities. The fact
that the President of India and certain officers hold all its shares did not
make the company an agent either of the President or of the Central Government.
The power to decide how the company should function ; the power to appoint Directors
and the power to determine the wages all salaries payable by the company to its
employees, were all derived form the Memorandum of company and Articles of
Association of the Company and not by the reason of the Company being the agent
of the Central Government. The learned judges came to that conclusion on the
basic of concessions and on private law of principal and agent and as regards a
company registered under the Companies Act, on the basic of the power of
internal management. In Hindustan Aeronautics Ltd. case (supra), learned judges
merely followed the ratio of Heavy Engineering case. It further concluded that
the enumeration of certain statutory Corporations in the definition would
indicate that those enumerated Corporations would come within the definition of
the "appropriate Government" without any further discussion. In Rashtriya
Mill Mazdoor Sangh's case, a Bench of three judges, while interpreting Section
32 (iv) of the Payment of Bonus Act, considered the purpose of the expression
"under the authority of any department of the Central Government for
purpose of payment of bonus". The meaning and scope of the expression
"industry carried on by or under the authority of any department of the
Central Government", was examined and it was held that the industrial
undertaking retains its identity, personality and status unchanged though in
its management, the Central Government exercised the power to give a direction
under section 16 and the management is subjected to regulatory control. It is
seen that the above decision was reached in the context in which the payment of
bonus was to be determined and paid to the employees by the department. In Food
Corporation of India's case (supra), a Bench of two
Judges was to consider whether regional office of the Food Corporation of India and the warehouses etc. were an
"establishment" within the meaning of Section 2(i)(e) of the Act and
whether FCI is an industry carried on by or under the authority of the Central
Government.
Following
the aforesaid three decisions, it was held that a bare reading of the
definition under the Act means inter alia any place, any industry, trade,
business, manufacture, warehouse, godown or the place set up by the corporation
where its business is carried on. Though for the purpose of industrial disputes
the Central Government is an appropriate Government in relation to Food
Corporation of India, its establishment at various places is not under the
control of the Government of India. Therefore, appropriate Government under the
Industrial Disputes Act is the state Government.
In
that behalf, the learned Judges, undoubtedly, relied upon Heavy Engineering
case. It would thus be seen that the construction adopted on the phrase
"appropriate Government" under the ID Act was considered with
reference to its functional efficacy. The Heavy Engineering case, as held
earlier, had proceeded on common law principles and the concession by the
counsel.
As
noted, the appellant, to start with, was a statutory authority but pending
appeal in this court, due to change in law and in order to be in tune with open
economy, it became a company registered under the Companies Act. To consider
its sweep on the effect of Heavy Engineering case on the interpretation of the
phrase 'appropriate Government', it would be necessary to recapitulate the
Preamble, Fundamental Rights (Part III) and Directive Principle (Part IV) -
trinity setting out the conscience of the Constitution deriving from the source
"We, the people", a charter to establish an egalitarian social order
in which social and economic justice with dignity of person and equality of
status and opportunity, are assured to every citizen in a socialist democratic Bharat
Republic. The Constitution, the Supreme law heralds to achieve the above goals
under the rule of law. Life of law is not logic but is one of experience,
Constitution provides an enduring instrument, designed to meet the changing
needs of each succeeding generation altering and adjusting the unequal
conditions to pave way for social and economic democracy within the spirit
drawn from the Constitution. So too, the legal redressal within the said
parameters. The words in the Constitution or in an Act are but a framework of
the concept which may change more than words themselves consistent with the
march of law. Constitutional issues require interpretation broadly not by play
of words or without the acceptance of the line of their growth, Preamble of the
Constitution, as its integral part, is people including workmen, harmoniously
blending the details enumerated in the Fundamental Rights and the Directive
Principles. The Act is a social welfare measure to further the general interest
of the community of workmen as opposed to the particular interest of the
individual enterpreneur. It seeks to achieve a public purpose, i.e., regulated
conditions of contract labour and to abolish it when it is found to be of
perennial nature etc. The individual interest can, therefore, no longer stem
the forward flowing tide and must, of necessity, give way to the broader public
purpose of establishing social and economic democracy in which every workmen realises
socio- economic justice assured in the preamble, Articles 14,15 and 21 and the
Directive Principles of the Constitution.
The
founding fathers of the Constitution, cognizant of the reality of life wisely
engrafted the Fundamental Rights and Directive Principles in Chapters III and
IV for a democratic way of life to every one in Bharat Republic, the State
under Article 38 is enjoined strive to promote the welfare of the people by
securing and protecting as effectively as it may, a social order in which
justice, social, economic and political shall inform all the institutions of
the national life and to minimise the inequalities in income and endeavour to
eliminate the inequalities in status, facilities and opportunities, not only
amongst individuals but also amongst groups of people residing in different
areas or engaged in different vocations, Article 39(a) provides that the State
shall direct its policies towards securing the citizens, men and women equally,
the right to an adequate means of livelihood;
clause
(d) provides for equal pay for equal work for both men and women; clause (e)
provides to secure the health and strength of workers. Articles 41 provides
that within the limits of its economic capacity and development, the state
shall make effective provision to secure the right to work as fundamental with
just and human conditions of work by suitable legislation or economic organisation
or in any other way in which the worker shall be assured of living wages,
conditions of work ensuring a decent standard of life and full enjoyment of
leisure and social and cultural opportunities to the workmen. The poor, the
workman and common man can secure and realise economic and social freedom only
through the right to work and right to adequate means of livelihood, to just
and human conditions of work, to a living wage, a decent standard of life. education
and leisure. To them, these are fundamental facets of life.
Article
43A, brought by 42nd Constitution (Amendment) Act, 1976 enjoins upon the State
to secure by suitable legislation or in any other way, the participation of
workers in the management of undertakings, establishments or other organisations
engaged in any industry. Article 46 gives a positive mandate to promote
economic and educational interest of the weaker sections of the people.
Correspondingly,
Article 51A imposes fundamental duties on every citizen to develop the
scientific temper, humanism and to strive towards excellence in all spheres of
individual and collective activity, so that the nation constantly rises to
higher levels of endeavour and achievement. To make these rights meaningful to
workmen and meaningful right to life a reality to workmen, shift of judicial
orientation from private law principles to public law interpretation
harmoniously fusing the interest of the community. Article 39A furnishes beacon
light that justice be done on the basis of equal opportunity and no one be
denied justice by reason of economic or other disabilities. Courts are sentinal
in the quivive of the rights of the people, in particular the poor. The
judicial function of a Court, therefore, in interpreting the Constitution and
the provisions of the Act, requires to build up continuity of socio-economic
empowerment to the poor to sustain equality of opportunity and status and the
law should constantly meet the needs and aspiration of the society in
establishing the egalitarian of the society in establishing the egalitarian social
order.
Therefore,
the concepts engrafted in the statute require interpretation from that
perspectives, without doing violence to the language. Such an interpretation
would elongate the spirit and purpose of the Constitution and make the
aforesaid rights to the workmen a reality lest establishment of an egalitarian
social order would be frustrated and Constitutional goal defeated.
Keeping
this broad spectrum in view, let us consider whether the interpretation given
in Heavy Engineering case is consistent with the scheme and spirit of the
Constitution. In Rajasthan State Electricity Board, Jaipur v. Mohan Lal &
Ors. [(1967) 3 SCR 377, a Constitution Bench, composing the learned judges who
formed the Bench in Heavy Engineering case, considered the issue interpretation
and Bhargava, J. speaking on behalf of the majority, had held that "other
authority" within the meaning of Article 12 of the Constitution need no
necessarily be an authority to perform governmental functions. The expression
'other authority' is wide enough to include within it every authority created
by a statute on which powers are conferred to carry out governmental functions
or the "functions under the control of the Government". It is not
necessary that some of powers conferred be Governmental sovereign function to
carry on commercial activities. Since the State is empowered under Articles 19
(1) (g) and 298 to carry on any trade or business, it was held that Rajasthan
State Electricity Board was "other authority" under Article 12 of the
Constitution. The significance of the observation is that an authority under
the control of the State need not carry on Governmental functions. It can carry
on commercial activities. At this juncture, it is relevant keep at the back of
our mind, which was not brought to the attention of the Bench which decided
Heavy Engineering case, that Article 19(2) of the Constitution grants to the
State, by clause (ii) thereof, monopoly to carry on, by the State or by a
Corporation owned or controlled by the State, any trade, business, industry or
service whether to the execlusion, complete or partial, of citizens or
otherwise. The narrow interpretation strips the State of its monopolistic power
to exclude citizens from the field of any activity, to carry on any trade, business,
industry or service, total or partial.
A
reverse trend which would deflect the constitutional perspective was set in
motion by the same Bench in Praga tools Corporation v. C.V. Imanual [(1969) 3
SCR 773] decided on February 19,1969,24 days prior to the date of decision in
Heavy Engineering case; in which it was held in main that writ under Article
226 would not lie against a company incorporated under Companies Act and the
declaration that dismissal of the workmen was illegal, given by the High Court
was set aside. But the operation of the above ratio was put to stop by the
Constitution Bench decision in Sukhdev Singh & Ors. v. Bhagat Ram & Anr.
[(1975) 3 SCR 619]. In that behalf, the interpretation given by Mathew, J.
in a
separate but concurrent judgment is of vital significance taking away the State
action from the clutches of moribund common law jurisprudence; it set on foot
forward march under public law interpretation. Mathew, J. had held that the
concept of State had undergone drastic change. It cannot be conceived of simply
as a cohesive machinery yielding the thunderbolt of authority. The State is a
service Corporation. It acts only thorough its instrumentalities or agencies of
natural and juridical person. There is a distinction between State action and
private action. There is nothing strange in the notion of the State acting
through a Corporation and making it an agency or instrumentality of the State
with an advent of the welfare State. The framework of the civil service
administration became increasingly insufficient for handling new tasks which
were often of a specialised and highly technical character. Development of
policy of public administration, through separate Corporations which would
operate largely according to business principles and separately accountable
though under the Memorandum of Association or Articles of Association become
the arm of the Government. Though their employees are not civil servants, it
being a public authority and State Corporation, therefore, is subject to
control of the Government. The public corporation, being a corporation of the
State, is subject to the constitutional limitation as the State itself. The
governing power, wherever located, must be subject to the fundamental
constitutional limitations. The Court, therefore, had laid the test to see
whether the Corporation is an agency or instrumentality of the Government to
carry on business for the benefit of public.
Thus,
the ratio in Praga Tools case, no writ would lie against the Corporation is not
a statutory body, as it is not a authority, it is an instrumentality of the
State.
In
R.D. Shetty v. International Airport Authority of India & Ors. [(1979) 3
SCR 1014], this Court had held that due to expansion of welfare and social
service functions, the State increasingly controls material and economical
resources in the society involving large scale industrial and commercial
activities with their executive functions affecting the lives of the people. It
regulates and dispenses special services and provides large number of benefits.
When the Government deals with the public, it cannot act arbitrarily. Where a
corporation is an instrumentality or agency of the Government, it would be
subject to the same constitutional or public law limitation as the Government.
The limitations of the action by the Government must apply equally when such
action are dealt with by Corporation having instrumentality element with public
and they cannot act arbitrarily, Such a functioning cannot enter into
relationship with any person it likes at its sweet will. Its action must be in
conformity with some principle which meets the test of reason and relevance.
Therefore,
the distinction between a statutory corporation and the company incorporated
under the Companies Act was obliterated.
In
Managing Director, U.P. Warehousing Corpn. v. V.N. Vajpayee [(1980) 2 SCR 773],
Chinnappa Reddy, J. in this separate but concurrent judgment laid down the
relevant principles. The Government establishes and manges large number of
industries and institutions which have become biggest employer and there is no
good reason why the Government should not be bound to observe the equality
clause of the Constitution in a matter of employment and its dealings with its
employees; why the Corporation set up or owned by the Government would not
equally be bound and why instead such Corporation would become citadels of
patronage and arbitrary action. Such a distinction perhaps would mock at the
Constitution and the people; some element of public employment is all that is
necessary to take the employee beyond the reach of rule which denies him the
protection of Articles 14 and 16. Independence and integrity of the employees
in the public sector should be secured as much as the independence and
integrity of the Civil servants. it was, therefore, held that a writ would lie
against the warehousing corporation.
In
Ajay Hasia etc. v. Khalid Mujib Sehravardi & Ors. etc. [(1961) 2 SCR 79], a
Constitution Bench was to consider whether a Society registered under the J
& K Societies Registration Act would be a State under Article 12 of the
Constitution amenable to the reach of the writ jurisdiction. The Constitution
Bench laid the following tests to determine whether the entity is an
instrumentality or agency of the State :
(1) if
the entire share capital of the corporation is held by the Government, it would
go a long way towards indicating that the corporation is an instrumentality or
agency or Government ;
(2) where
the financial assistance of the State is so much as to meet almost entire
expenditure of the corporation being impregnated with governmental character;
(3) it
must also be relevant factor whether the corporation enjoys monopoly status
which is State conferred of State protected;
(4) existence
of deep and pervasive State control may afford an indication that the
corporation is a State agency or instrumentality
(5) if
the functions of the corporation are of public importance and closely related
to governmental functions, it would be a relevant factor in classifying the
corporation as a instrumentality or agency of Government ;
(6) specifically,
if a department of Government is transferred to a corporation, it would be a
strong factor supportive of the inference of the corporation being an
instrumentality or agency of Government. In Delhi Transport Corporation v.
D.T.C. Mazdoor Corpn.[AIR 1991 SC 101], it was held that the State has a deep
and pervasive control over the functioning of the society and, therefore, is an
agency of the state.
In Som
Prakash Rekhi v. Union of India & Ors. [(1981) 2 SCR
111], it was held that the settled position in law is that any authority under
the control of the Government of India comes within the definition of a State. Burmashell
oil Co, was held to be an instrumentality of the State though it was a
Government company. The authority in administrative law is a body having
jurisdiction in certain matters of public nature. Therefore, the ability
conferred upon a person by a law is to alter his case own will directed to that
end. The rights; duties and liabilities or other legal relations, either of
himself or other person must be present to make a person an authority.
When
the person is an agent or functions on behalf of the State, as an
instrumentality, the exericse of the power is public. Sometimes, the test id
formulated by asking whether corporation was formed by or under the statute.
The true test is not how it is founded in legal personality but when it is
created, apart from discharging public function or doing business as the proxy
of the State, whether there is an element of ability in it to effect the
relations by virtue of power vested in it by law. In that case, it was held
that the above tests were satisfied and the company was directed to pay full
pension.
In Manmohan
Singh Jaitla v. Commissioner. Union Territory of Chandigarh & Ors. [(1984)
supp. SCC 540], it was held that an educational institution receiving 952 of
the grant-in-aid from the Government is "other authority" under
Article 12 of the Constitution. It was, therefore, held that the termination of
the service without enquiry was without jurisdiction. Dismissal from service
without enquiry was declared illegal under Article 226. In P.K. Ramachandra Iyer
& Ors. v. Union of India & Ors. [(1984) 2 SCC 141], ICAR, a Society
registered under the Societies Registration Act, was held an adjunct of the
Government of India. Its budged was voted as part of the budget of the Ministry
of Agriculture. It was held that it was the State under Article 12 and was
amenable to jurisdiction under Article 32 of the Constitution. The Project and
Equipment Corporation of India which is subsidiary owned by State Trading
Corporation was held by this Court in A.L. Kalra v. Project and Equipment Corpn.
of India Ltd. [(1984) 3 SCR 316], to be an agency of the Government within the
meaning of Article 12 of the Constitution of India. In Central Inland Water
Transport Corpn. Ltd. & Anr. v. Brojonath Ganguly & Anr. [(1986) 3 SCR
156], a Government Company incorporated under Companies Act was held to be an
instrumentality or agency. In this case, this court construed the Fundamental
rights under Articles 14 to 17, the Director Principle under Article 38,41 and
42, the Preamble of the Constitution and held that the River Steam Navigation
Co. Ltd, was carrying on the same business as the corporation was doing. A
scheme of arrangement was entered into between the corporation and the company.
They were managed by the board of Directors appointed and removable by the
Central Government. It was, therefore, held that it was an agency or
instrumentality of the State under Article 12. In that behalf this court
pointed out that the trade of business activity of the State constitutes public
enterprise; the structural forms in which the Government operates in the field
of public enterprises are many and varied. They may consist of governmental
department, statutory body, statutory corporation of government companies etc.;
immunities and privileges possessed by bodies so set up by the Government under
Article 298 are subject to Fundamental Rights and Directive Principles to
further the State policy. For the purpose of Article 12, the Court must see
necessarily through corporate veil to ascertain behind the veil the face of
instrumentality or agency of the State has assumed the garb of a governmental
company, as defined in Section 3(7) of the Companies Act, it does not follow
thereby that it ceases to be an instrumentality or agency of the State.
Applying the above test, it was held that Inland Water Transport Corporation
was State.
When
its correctness was doubted and its reference to the Constitution Bench was
made in Delhi Transport Corpn. case (supra), while holding that Delhi Road
Transport Authority was an instrumentality of the State, it was held that
employment is not a bounty from the State nor can it survival be at their
mercy. Income is the Foundation of any Fundamental Rights. Work is the sole
source of income. The right to work become as much fundamental as right to
life.
Law as
a social machinery requires to remove the existing imbalances and to further
the progress serving the needs of the Socialist Democratic Republic under the
rule of law.
Prevailing
social conditions and actualities of the life are to be taken into account to
adjudge the dispute and to see whether the interpretation would submerge the
purpose of the Society.
In Lucknow
Development Authority v. M.K. Gupta [(1984) 1 SCC 243], the question was
whether a Government Authority is amenable to the regulation of Consumer
Protection Act. It was held in paragraph 5 and 6 that a Government or a semi-
Government body or local authority are amenable to the Act as much as any other
private body rendering similar service.
This
is a service to the society and they are amenable to public accountability for
health and growth of society, housing construction or building activities, by
private or statutory body rendering service within the meaning of Section 2(0)
of the said Act. In Star Enterprises & Ors. v. C.I.D.C. of Maharashtra Ltd.
[(1990) 3 SCR 280], it was held that the State or its instrumentality entering
into commercial field must act in consonance with the rule of law. In paragraph
10, it was held the judicial review of administrative action has become
expansive and its scope is becoming wider day by day. The traditional
limitations have been vanishing and the sphere of judicial scrutiny is being
expanded, State activity too is becoming fast perversive as the State has
descended into the commercial field and joint public sector undertaking has
grown up. The State action must be justified by judicial review, by opening up
of the public law interpretation. Accordingly, it was held that the action of
company registered under the Companies Act was amenable to judicial review.
In LIC
of India & Anr. v. Consumer Eduction & Research Centre & Ors.
[(1995) 5 SCC 482], it was held that in the contractual field of State action,
the State must act justly, fairly and reasonably in public interest
commensurate with the constitutional conscience and socio- economic justice;
insurance policies of LIC, terms and conditions prescribed therein involve
public element. It was. therefore, held in para 23 at page 498 that every
action of the public authority or the person acting in public interest or any
act that gives rise to public element, should be guided by public power or
action hedged with public element that becomes open to challenge. If it is
shown that the exercise of the power is arbitrary, unjust and unfair, it should
be no answer for the State, its instrumentality, public authority or person
whose acts have the insignia of public element, to say that their actions are
in the field of private law and they are free to prescribe any conditions or
limitations in their actions.
They
must be based on some rational and relevant principles.
It
must not be guided by irrational or irrelevant considerations. Every
administrative decision must be hedged by reasons. At page 501 in para 28 it
was held that though the dispute may fall within the domain of contractual obligation,
it would not relieve the State etc, of its obligation to comply with the basic
requirements of Article
14. To
this extent, the obligation is of public character, invariably in every case,
irrespective of there being any other right or obligation. An additional
contractual obligation cannot divest the claimant of the guarantee under
Article 14 of non-arbitrariness at the hands of the State etc, in any of its
actions.
In
G.B. Mahajan & Ors. v. Jalgaon Municipal Council & Ors. [(1991) 3 SCC
91 at 109, para 38], it was held that in interpretation of the test of
reasonableness in Administrative law, the words "void" and "voidable"
found in private law area are amenable to public law situations and "carry
over with them meanings that may be inapposite in the changed context. Some
such thing has happened to the words 'reasonable' or reasonableness etc."
In Shrisht Dhawan (Smt.) v. M/s. Shaw Brothers [(1992) 1 SCC 534 at 553, para
20] the private law principle of fraud and collusion in section 17 of the Contract
Act was applied to public law remedy and it was held "that fraud in public
law is not the same as fraud in private law. Nor can the ingredient, which has
established fraud and commercial transaction be of assistance in determining
fraud in administrative law. It has been aptly observed in Khwaja vs. Secretary
of State for the Home Department & Ors. [(1983) 1 All. E.R. 765] that it is
dangerous to introduce maxims of common law as to the effect of fraud while
determining fraud in relation to the statutory law". In Khwaja's case
(supra), it was held "despite the wealth of authority on the subject,
there is nowhere to be found in the relevant judgments (perhaps because none
was thought necessary) a definitive exposition of the reasons why a person who
has obtained leave to enter by fraud is an illegal entrant. To say that the
fraud 'vitiates' the leave or that the leave is not 'in accordance with the
Act' is, with respect, to state a conclusion without explaining the steps by
which it is reached. Since we are here concerned with purely statutory law, I
think there are dangers in introducing maxims of the common law as to the
effect of fraud on common law transaction and still greater dangers in seeking
to apply the concepts of 'void and voidable'. In a number of recent cases in
your Lordships' House, it has been pointed out that these transplants from the
field of contract do not readily take root in the field of public law. This is
well illustrated in the judgement of the Court of Appeal in the instant case of
Khawaja [1982] 1 WLR 625 at 630; of [1982] 2 All ER 523, at 527, where
Donaldson LJ spoke of the appellant's leave to enter as being 'voidable ab initio',
which I find, with respect, an impossibly difficult legal category to
comprehend". Thus, the limitations in private law were lifted and public
law interpretation of fraud was enlarged.
It
must be remembered that the Constitution adopted mixed economy and control over
the industry in its establishment, working and production of goods and
services.
After
recent liberalised free economy private and multi- national entrepreneurship
has gained ascendancy and entrenched into wider commercial production and
services, domestic consumption goods and large scale industrial productions.
Even some of the public Corporation are thrown open to the private national and
multi-national investments.
It is
axiomatic, whether or not industry is controlled by Government or public
Corporations by statutory form or administrative clutch or private agents,
juristic persons, Corporation whole or corporation sole, their constitution,
control and working would also be subject to the same constitutional limitation
in the trinity, viz., Preamble, the Fundamental Rights and the Directive
Principles. They throw open an element of public interest in its working.
They
share the burden and shoulder constitutional obligations to provide facilities
and opportunities enjoined in the Directive Principles, the Preamble and the
fundamental rights enshrined in the Constitution. The word 'control',
therefore, requires to be interpreted in the changing commercial scenario
broadly in keeping with the aforesaid constitutional goals and perspectives.
From
the above discussion, the following principles would emerge:
[1]
The constitution of the Corporation or instrumentality or agency or corporation
aggregate or Corporation sole is not of sole material relevance to decide
whether it is by or under the control of the appropriate Government under the
Act.
[2] If
it is a statutory Corporation, it is an instrumentality or agency of the State.
If it is a company owned wholly or partially by a share capital, floated from
public exchequer, it gives indicia that it is controlled by or under the
authority of the appropriate Government.
[3] In
commercial activities carried on by a Corporation established by or under the
control of the appropriate Government having protection under Articles 14 and
19 [2], it is an instrumentality or agency of the State.
[4]
The State is a service Corporation. It acts through its instrumentalities,
agencies or persons natural or juridical.
[5]
The governing power, wherever located, must be subject to the fundamental
constitutional limitations and abide by the principles laid in the Directive
Principles.
[6]
The framework of service regulations made in the appropriate rules or
regulations should be consistent with and subject to the same public law
principles and limitations.
[7]
Though the instrumentality, agency or person conducts commercial activities
according to business principles and are separately accountable under their
appropriate bye-laws or Memorandum of Association, they become the arm of the
Government.
[8]
The existence of deep and pervasive State control depends upon the facts and
circumstances in a given situation and in the altered situation it is not the
sole criterion to decide whether the agency or instrumentality or persons is by
or under the control of the appropriate Government.
[9]
Functions of an instrumentality, agency or person are of public importance
following public interest element.
[10]
The instrumentality, agency or person must have an element of authority or
ability to effect the relations with its employees or public by virtue of power
vested in it by law, memorandum of association or bye-laws or articles of
association.
[11]
The instrumentality, agency or person renders an element of public service and
is accountable to health and strength of the workers men and women, adequate
means of livelihood, the security for payment of living wages, reasonable
conditions of word, decent standard of life and opportunity to enjoy full
leisure and social and cultural activities to the workmen.
[12]
Every action of the public authority, agency or instrumentality or the person
acting in public interest or any act that gives rise to public element should
be guided by public interest in exercise of public power or action hedged with
public element and is open to challenge. It must meet the test of
reasonableness, fairness and justness.
[13]
If the exercise of the power is arbitrary, unjust and unfair, and public
authority, instrumentality, agency or the person acting in public interest,
though in the field of private law, is not free to prescribe any
unconstitutional conditions or limitations in their actions.
It
must be based on some rational and relevant principles. It must not be guided
by irrational or irrelevant considerations and all their actions ****** satisfy
the basic law requirements of Article 14. The public law interpretation is the
basic tools of interpretation in that behalf relegating common law principles
to purely private law field.
From
this perspective and on deeper consideration, we are of the considered view
that the two-judge Bench in Heavy Engineering case narrowly interpreted the words
"appropriate Government" on the common law principles which no longer
bear any relevance when it is tested on the anvil of Article 14. It is true
that in Hindustan Machine Tool's R.D. Shetty's and Food Corporation of India cases the ratio of Heavy Engineering
case formed the foundation. In Hindustan Machine Tool's case, there was no
independent consideration except repetition and approval of the ratio in Heavy
Engineering case. It is to reiterate that Heavy Engineering case is based on
concession. In R.B. Shetty's case, the need to dwelve indepth into this aspect
did not arise but reference was make to the premise of private law
interpretation which was relegated to and had given place to constitutional
perspectives of Article 14 which is consistent with the view we have stated
above. In Food Corporation of India's case,
the Bench proceeded primarily on the within the jurisdiction of different State
Governments which led it to conclude that the appropriate Government would be
the State Government.
In the
light of the above principles and discussions, we have no hesitation to hold
that the appropriate Government is the Central Government from the inception of
the Act. The notification published under Section 10 on December 9,1976, therefore, was in exercise of its
power as appropriate Government. So it is valid in law. The learned Solicitor
General is not right in contending that the relevant factors for abolition of
the contract labour system in the establishment of the appellant was not before
the Central Advisory Board before its recommendation to abolish the contact labour
system in the establishment of the appellant. The learned Attorney General has
placed before us the minutes of the Board which do show the unmistakable
material furnished do indicated that the work in all the establishments
including those of the appellants, is of perennial nature satisfying all the
tests engrafted in Section 10(2) of the Act. Accordingly, on finding the work
to be of perennial nature, it had recommended and the Central Government had
considered and accepted the recommendation to abolish the contract labour
system in the aforesaid services. Having abolished it, the Central Government
was denuded of its power under Section 10(1) to again appoint insofar as the
above services of the Mohile Committee to go once over into the self-same
question and the recommendation s of the latter not to abolish the contract labour
system in the above services and the acceptance thereof by the Central
Government are without any legal base and, therefore, non est.
The
next crucial question for consideration is: whether the High Court was right in
directing enforcement of the notification dated December 9,1976 issued by the Central Government ? Before adverting to that
aspect, it is necessary to consider the relevant provisions of the Act.
The
Constitutionality of the Act was challenged in M/s. Gammon India Ltd. &
Ors. v. Union of India & Ors. [(1974) 1 SCC
596] on the touchstone of the Fundamental Rights given by Articles 14.15,19(1)
(g) and of Article 265. The Constitution Bench elaborately considered the
provisions of the Act and had held that the Act in Section 10 empower the
Government to prohibit employment of contract labour. The Government, under
that Section, has to apply its mind to various factors, before publishing the
notification in the official Gazette prohibiting employment of contract labour
in any process, operation or other work in any establishment. The words "
other work in any establishment" were held to be important. The work in
the establishment will be apparent from Section 10 (2) of the Act as incidental
or necessary to the industry, trade, business, manufacture or occupation that
is carried on in the establishment. The Government before notifying prohibition
of contract labour work which is carried on in the establishment, will consider
whether the work is of a perennial nature in that establishment or work is done
ordinarily through regular workmen in that establishment.
The
words "work of an establishment" which are used in defining workmen
as contract labour being employed in connected with the work of an
establishment indicate that the work of the establishment there is the same as
word in the establishment contemplated by Section 10 of the Act. The contractor
under takes to produce a given result for the establishment through contract labour.
He supplies contract labour for any work of the establishment. The entire site
is the establishment and belongs to the principal employer who has a right of
supervision and control; he is the owner of the premises and the end product
and from whom the contract labour receives its payment either directly or
through a contractor. It is the place where the establishment intends to carry
on its business, trade, industry, manufacture, occupation after the
construction is complete. Accordingly, the constutionality of the Act was
upheld.
The
appalling conditions of contract labour who are victims of exploitation have
been engaging the attention of various committees for a long tie and in
furtherance of the recommendations, the Act was enacted to benefit, as a
welfare measures, viz., provisions for canteens rest room, facilities for
supply of drinking water, latrines, urinals, first aid facilities and amenities
for the dignity of human labour, are in larger interests of the community.
Legislature
is the best judge to determine what is needed as the appropriate condition for
employment of contract labour. The legislature is guided by the needs of the
general public in determining the reasonableness of such requirements under the
Act and the rules made thereunder.
Suffice
it would, for the purpose of this case, to concentrate on the definition of
"contract labour" under Section 2(b), "contractor" under
Section 2(c), "establishment" under Section 2(e), "principal
employer" under Section 2 (g), "wages" under Section 2 (h) and
of "workman" under Section 2 (i) Under Section 2 (c),
"contractor" in relation to an establishment, means a person who
undertakes to produce a given result for the establishment, other than a mere
supply of goods or articles of manufacture to such establishment, through
contract labour of who supples contract labour for any work of the
establishment and includes a sub-contractor.
"Establishment",
under Section 2(e), means any office of department of government of a local
authority, or any place where any industry, trade, business, manufacture or
occupation is carried on. "Principal employer", under Section 2(g),
means, in relation to any office or department of the Government or a local
authority, as the case may be may specify in this behalf; and in a factory, it
means the owner or occupier of the factory and where a person has been named as
the manager of the factory under the Factories Act, 1948, the person so named;
in a mine, it means the owner or agent of the mine and where a person has been
named as the manager of the mine, the person so named; and in any other
establishment, any person responsible for the supervision and control of the
establishment, is the principal employer.
"Workman",
under Section 2 (i), means any person employed in or in connection with the
work of any establishment to do any skilled, semi-skilled or unskilled, manual,
supervisory, technical or clerical work for hire or reward, whether the terms
of employment be express or implied, but does not include any such person categorised
in clauses (a) to (e) which are not relevant for the purpose of this case.
Every
principal employer of an establishment under the Act is enjoined under Section
7 to apply for registration and have it registered thereunder. The registration
is subject to the revocation under Section 8 on fulfilment of certain
conditions enumerated therein. The effect of non- registration is enumerated in
Section 9 in the mandatory language that no principal employer shall employ
contract labour in the establishment af ter the specified period.
Section
12 enjoins similar obligations on the contractor for registration, with
mandatory language, that from the appropriate date, no contractor to whom the
Act applies, hall undertake or execute any work through contract labour except
under and in accordance with the licence issued in that behalf by the licensing
officer.
Licence
is grated under Section 13 and revocation, suspension and amendment thereof
have been provided, in Section 14 with which we are not concerned in this case.
The welfare measures mandated in Chapter V be complied with by every
establishment. Under Section 21, every principal employer shall nominate his
representative to be present at the time of disbursement of wages by the
contractor and the contractor should be responsible for payment of wages to
every such workman. Representative of the principal employer should ensure and
certify that wages was paid in the prescribed manner. In case of default
committed by the contractor in paying wages within the prescribed period or for
short payment , the principal employer period or for short payment of wages in
full or the unpaid balance due, as the case may be, to the contract labour
employed by the recover the amount so paid from the contractor either by
deduction form any amount payable to the contractor under any contract or as a
debt payable by the contractor.
Section
10 prohibits employment of contract labour with a non obstante clause. The
appropriate Government, after consultation with the Central Advisory Board or,
as the case may be, State Board Prohibit, by notification published in the
official Gazette, employment of contract labour in any establishment. Before
issue of any such notification, the appropriate Government is enjoined to have
regard to the conditions of work and benefits provided for the contract labour
in the 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 or occupation that is carried on in the
establishment;
(b) whether
it is of perennial nature, that is to say, it is of sufficient duration having
regard to the nature of industry, trade, business, manufacture of occupation
carried on in that establishment;
(c) whether
it is done ordinarily through regular workmen in that establishment or an
establishment similar thereto; and
(d) whether
it is sufficient to employ considerable number of whole-time workmen.
Section
20 makes it mandatory to provide the amenities of welfare and health facilities
enjoined in Sections 16 and 19. The expenses incurred in that behalf may be
recovered, by the principal employer, from the contractor. The penalty for
non-compliance is provide in Sections 23 and 24 of the Act. Offences by
companies are dealt with under Section 25. For the prosecution of non-cognisable
offences, complaint is to be laid with previous sanction of the Inspector in
writing.
Section
27 prescribes limitation for laying prosecution.
Rules
have been prescribed in that behalf for effective enforcement of the Act. Forms
and terms and conditions of licence have been prescribed in Rules 21 to 25.
Chapter V of the Central Rules deals with welfare and health of the contract labour.
Chapter VI deals with payment of wages to the workmen and the manner of payment
has also been provided therein. Form III referred to in Rule 18 (3) envisages,
among others, name and address of the contractor, nature of work in which
contract labour is to be employed on any day, maximum number of contract labour
to be employed on any date, probable duration of employment of contract labour
etc. The licence issued in Form IV under Rule 21(1) indicates the particulars
envisaged in Forms III. Form XIII under Rule 75 requires information as to the
list of workmen employed by the contractor and also to be specified, the name
and surname of the workmen, Sl. No., age and sex, father's/husband's name,
nature of employment, designation, permanent home address of the workmen, date
of commencement of employment, signature/thumb impression of workmen, date of
termination. Certificate of completion of the work has been provided in form XV
as per Rule 77, Forms XVII as per Rule 78 (1) (a) (i) is Register of wages and
provides the particulars, apart from other details, number of days worked,
units of work done, daily-rate of wages/piece rate etc. Register of
wages-cum-Muster Roll is prescribed in Form XVIII referred to in Rule 78 (i)
(a) (i) and requires details in particular as to daily attendance, units
worked, designation/nature of work, total attendance, units of work done,
overtime wages etc.
It
would thus be seen that before the Central or State Advisory Board advises the
appropriate Government under Section 10(1) on the issue whether or not to
abolish the contractor labour system, it has before it all the relevant factual
material and the appropriate Government after the receipt and consideration of
the recommendations and the material and then takes decision.
The
pivotal question for consideration is : on abolition of the contract labour by
publication of a notification in the Gazette under sub-section (1) of Section
10, what would be the consequences ? It is seen that so long as the contract labour
system continues, the principal employer is enjoined to ensure payment of wages
to the contract labour and to provide all other amenities envisaged under the
Act and the Rules including provisions for food, potable water, health and
safety and failure thereof visits with penal consequences.
The
42nd Constitution (Amendment) Act, 1976, brought explicitly in the Preamble
socialist and secular concepts in sovereign democratic republic of Bharat with effect form January 3,1977. The Preamble was held as part of
Constitution in His Holiness Kesavananda Bharati Sripadagalavaru vs. State of Kerala [1973 Supp. SCR 1]. The provisions
of the Constitution including Fundamental Rights are alterable but the result
thereof should be consistent with the basic foundation and the basic structure
of the Constitution. Republican and democratic form of Government, secular
character of the Constitution, separation of powers, dignity and freedom to the
individual are basic features and foundations easily discernible, not only from
the Preamble but the whole scheme of the Constitution.
In
S.R. Bommai vs. Union of India [(1994) 3 SCC 1], it was held that Preamble of
the Constitution is the basic feature. Either prior to 42nd Constitution (Amendmet)
Act, or thereafter, though the word "socialist" was not expressly
brought out separately in the main parts of the Constitution, i.e., in the
Chapters on Fundamental Rights or the Directive Principles, its seed- beds are
right to participation in public offices, right to seek consideration for
appointment to an office or post;
right
to life and right to equality which would amplify the roots of socialism in
democratic form of Government; right to equality of status and of opportunity,
right to equal access to public places and right to freedoms, protective
discrimination, abolition of untouchability, its practice in any form an
constitutional offence, as guaranteed in Part III & IV i.e., Fundamental
Rights and Directive Principles which to every citizen are Fundamental Rights. In
Minerva Mills Ltd. & Ors. vs. Union
of India & Ors. [(1981 (1) SCR 206 = AIR 1980 SC 1789], the Constitution
Bench had held that the Fundamental Rights and the Directive Principles are two
wheels of the chariot in establishing the egalitarian social order. Right to
life enshrined in Article 21 means something more than survival of animal
existence. It would include the right to live with human dignity [vide Francis Coralie
Mullin vs. The Administrator, Union Territory of Delhi & Ors. (AIR 1981 SC
746 para 3); Olga Tellis vs. Bombay Municipal Corporation vs. D.T.C. Mazdoor
Congress [AIR 1991 SC 101 para 223,234 and 259 = (1991) supp. 1 SCC 600]. Right
to means of livelihood and the right to dignity, right to health, right to
potable water, right to pollution free environment and right to life. Social
justice has been held to be Fundamental right in consumer Eduction and Research
Centre vs. Union of India [(1995) 3 SCC 42 = 1995 (1) SCALE 354 at 375]. The
Directive Principles in our Constitution are fore-runners of the U.N.O.
Convention on Right to Development as inalienable human right and every persons
and all people are entitled to participate in, contribute to and enjoy
economic, social cultural and political development in which all human right,
fundamental freedoms would be fully realised. It is the responsibility of the
State as well as the individuals, singly and collectively, for the development
taking into account the need for fuller responsibility for the human rights,
fundamental freedoms as well as the duties to the community which alone can
ensure free and complete fulfilment of the human being. They promote and
protect an appropriate social and economic order in democracy for development.
The State should provide facilities and opportunities to ensure development and
to eliminate all obstacles to development by appropriate economic and social
reforms so as to eradicate all social injustice. These principles are imbedded,
as stated earlier, as integral part of our Constitution in the Directive
Principles. Therefore , the Directive Principles now stand elevated to inelienable
fundamental human rights.
Even
they are justiciable by themselves. Social and economic democracy is the
foundation for stable political democracy.
To
make them a way of life in the Indian polity, law as a social engineer, is to
create just social order, remove the inequalities in social and economic life
and socio-economic disabilities with which people are languishing; and to
require positive opportunities and facilities as individuals and groups of
persons for development of human personality in our civilised democratic set up
so that every individual would strive constantly to rise t higher levels. Dr. Ambedkar,
in his closing speech in the Constituent Assembly on November 25, 1949, had lucidly elucidated the meaning
of social and political democracy. He stated that it means a way of life which recognised
liberty, equality and franternity as the principles of life. They form an
integral union. One cannot divorce from the other; otherwise it would defeat
the very purpose of democracy. Without equality, liberty would produce
supremacy of the few over the many equality without liberty would kill the
initiative to improve the individual`s excellence, political equality without
socio-economic equality would run the rusk of democratic institutions to suffer
a set back. Therefore, for establishment of just social order in which social
and economic democracy would be a way of life inequalities in income should be
removed and every endeavour be made to eliminate inequalities in status through
the rule of law.
"Socialism"
brought into the preamble and its sweep elaborately was considered by this
Court in several judgments. It was held that the meaning of the word
"socialism" in the Preamble of the Constitution was expressly brought
in the Constitution to establish an egalitarian social order through rule of
law as its basis structure. In Minerva Mills Ltd. case, the Constitution Bench
had considered the meaning of the word "socialism" to crystalise a
socialistic state securing to its people socio-economic justice by interplay of
the Fundamental rights and the Directive Principles. In D.S. Nakara & Ors.
v. Union of India [(1983) 2 SCR 165], another Constitution Bench had held that
the democratic socialism achieves socio- economic revolution to end poverty,
ignorance, disease and inequality of opportunity. The basic framework of
socialism was held to provide security from cradle to grave. The less equipped
person shall be assured to decent minimum standard of life to prevent
exploitation in any form, equitable distribution of national cake and to push
the disadvantaged to the upper ladder of life. It was further held that the
Preamble directs the centers of power, the Legislative, Executive and
Judiciary, to strive to shift up from a wholly feudal exploited slave society
to a vibrant, throbbing socialist welfare society which is a long march; but
during the journey to the fulfilment of goal, every State action, whenever
taken, must be directed and must be so interpreted as to take the society
towards that goal. Dr. V.K.R.V Rao, one of the eminent economists of India in
his "Indian Socialism - retrospect and prospect" has stated that
equitable distribution of the income and maximisation of the production is the
object of socialism under the Constitution to solve the problems of umemployment,
low income and mass poverty and to bring about a significant improvement in the
national standard of living. he also stated that to bring about socialism,
deliberate and purposive action on the part of the State, in regard to
production as sell as distribution and the necessary savings, investment, use
of human skills and use of science and technology should be brought about.
Changes in property relations, taxation, public expenditure, education and the
social services are necessary to make a socialist State under the Constitution,
a reality. It must also bring about, apart from distribution of income, full
employment as also increase in the production.
In
State of Karnataka v. Shri Ranganatha Reddy & Anr.
[(1978) 1 SCR 641], a Bench of nine judges of this Court, considering the nationalisation
of the contract carriages, had held that the aim of socialism is the
distribution of the material resources of the community in such a way as to subserve
the commonhood. The principle embodied in Article 39(b) of the Constitution is
one of the essential directives to bring about the distribution of the material
resources. It would give full play to the distributive justice. It fulfills the
basic purpose of re- structuring the economic order. Article 39(b), therefore,
has a social mission. it embraces the entire material resources of the
community. Its task is to distribute such resources. Its goal is to undertake
distribution as best to subserve the common good. In Sanjeev Coke Manufacturing
Co. v. Bharat Cooking Coal Ltd. & Anr. [(1983) 1 SCR 1000], another
Constitution Bench interpreted the word "socialism" and Article 39(b)
of the Constitution and had held that the broad egalitarian principle of
economic justice was implicit in every Directive Principle. The law was
designed to promote broader egalitarian social goals to do economic justice for
all. The object of nationalisation of mining was to distribute nation's
resources. In State of Tamil Nadu etc. v. L. Abu Kavur Bai &
Ors. etc. [(1984) 1 SCR 725], the same interpretation was given by another
Constitution Bench upholding nationalisation of State Carriages and Contract
Carriages (Acquisition) Act. Therefore, all State actions should be such to
make socio-economic democracy with liberty, equality and fraternity, a reality
to all the people through democratic socialism under the rule of law.
In
Consumer Education & Research Centre & Ors. v. Union of India & Ors. [(1995) 3 SCC 42], a Bench of
three Judges (to which one of us, K. Ramaswamy, J., was a member) had to
consider whether right to health of workers in the Asbestos industries is a
fundamental right and whether the management was bound to provide the same? In
that context, considering right to life under Article 21, its meaning, scope
and content, this Court had held that the jurisprudence of personhood or
philosophy of the right to life envisaged under Article 21 enlarges its sweep
to encompass human personality in its full blossom with invigorated health
which is a wealth to the workman to earn his livelihood, to sustain the dignity
of person and to live a life with dignity and equality. The expression
"life" assured in Article 21, does not connote mere animal existence
or continued drudgery through life. It has a much wider meaning which includes
right to livelihood, better standard of living, hygienic conditions in the
workplace and leisure.
Right
to health and medical care to protect health and vigour, while in service or
after retirement, was held a fundamental right of a worker under Article 21,
read with Articles 39(e), 41,43,48 - A and all related constitutional
provisions and fundamental human rights to make the life of the workman
meaningful and purposeful with dignity of person. The right to health of a
worker is an integral facet of meaningful right to life, to have not only a
meaningful existence but also robust health and vigour without which the worker
would lead a life of misery. Lack of health denudes him of his livelihood.
Compelling economic necessity to work in an industry exposed to health hazards,
due to indigence for bread-winning for himself and his dependents, should not
be at the cost of the health and vigour of the workman.
The Preamble
and Article 38 of the Constitution envision social justice as the arch to
ensure life to be meaningful and livable with human dignity. Jurisprudence is
the eye of law giving an insight into the environment of which it is the
expression. It relates the law to the spirit of the time and kames it richer.
Law is the ultimate aim of every civilised society, as a key system in a given
era, to meet the needs and demands of its time. Justice, according to law,
comprehends social urge and commitment. The Constitution commands justice,
liberty, equality and fraternity as supreme values to usher the egalitarian
social, economic and political democracy. Social justice, equality and dignity
of persons are cornerstones of social democracy. The concept of "social justice"
which the Constitution of India engrafted, consists of diverse principles
essential for the orderly growth and development of personality of every
citizen. "Social justice" is thus an integral part of justice in the
generic sense. Justice is the genus, of which social justice is one of its
species.
Social
justice is a dynamic device to mitigate the sufferings of the poor, weak, dalits,
tribals and deprived sections of the society and to elevate them to the level
of equality to live a life with dignity of person. Social justice is not a
simple or single idea of a society but is an essential part of complex social
change to relive the poor etc. From handicaps, penury to ward off distress and
to make their life livable, for greater good of the society at large. In other
words, the aim of social justice is to attain substantial degree of social,
economic and political equality, which is the legitimate expectation and
constitutional goal. Social security, just and humane conditions of work and
leisure to workman are part of his meaningful right to life and to achieve
self-expression of his personality and to enjoy the life with dignity. The
State should provide facility and opportunities to enable them to reach at
least minimum standard of health, economic security and civilised living while
sharing according to their capacity, social and cultural heritage.
In a
developing society like ours, steeped with unbridgeable and ever-widening gaps
of inequality in status and of opportunity, law is a catalyst, rubicon to the
poor etc, to reach the ladder of social justice. What is due cannot be
ascertained by an absolute standard which keeps changing, depending upon the
time, place and circumstance.
The
constitutional concern of social justice as an elastic continuous process is to
accord justice to all sections of the society by providing facilities and
opportunities to remove handicaps and disabilities with which the poor, the
workmen etc, are languishing and to secure dignity of their person. The
Constitution, therefore, mandates the State to accord justice to all members of
the society in all facets of human activity. The concept of social justice embads
equality to flavour and enliven the practical content of life. Social justice
and equality are complementary to each other so that both should maintain their
vitality. Rule of law, therefore, is a potent instrument of social justice to
bring about equality in results. it was accordingly held that right to social
justice and right to health were held to be Fundamental Rights. The management
was directed to provide health insurance during service and at least 15 years
after retirement and periodical tests protecting the health of the workmen.
In LIC
of India & Anr. v. Consumer Education & Research Centre & Ors.
[(1995) 5 SCC 482], considering the Life Insurance Corporation's right to fix
the rates of premium, this court had held that the authorities or private
persons or industry are bound by the directives contained in Part IV and the
Fundamental Rights in Part III and the Preamble of the Constitution. The right
to carry on trade is subject to the directives contained in the Constitution,
the Universal Declaration of Human Rights, European Convention of Social,
Economic and Cultural Rights and the Convention on Right to Development for
Social Economic Justice. Social security is a facet of socio-economic justice
to the people and a means to livelihood. In Murlidhar Dayandeo Kesekar V. Vishwanath
Pandu Barde & Anr.[1995 supp (2) SCC 549] (to which two of us, K. Ramasway,
and B.L. Hansaria JJ., were members), the question arose; whether the
alienation of the lands assigned to Scheduled Tribes was valid in law ? In that
context considering the Preamble, the Directive Principles and the Fundamental
Rights including the right to life, this court had held that economic
empowerment and social justice are Fundamental Rights to the tribes. The basic
aim to the welfare State is the attainment of substantial degree of social,
economic and political equalities and to achieve self-expression in his work as
a citizen, leisure and social justice. The distinguishing characteristic of the
welfare State is the assumption by community acting through the State and as
its responsibilities to provide the means, whereby all its members can reach
minimum standard of economic security, civilised living, capacity to secure
social status and culture to keep good health. The welfare State, therefore,
should take positive measure to assist the community at large to act in
collective responsibility towards its member and should take positive measure
to assist them to achieve the above. It was, therefore, held thus:
"Article
21 of the Constitution assures right to life. To make right to life meaningful
and effective, this court put up expansive interpretation and brought within
its ambit right to education, health, speedy trial, equal wages for equal work
as fundamental rights. Articles 14, 15 and 16 prohibit discrimination and
accord equality. The Preamble to the Constitution as a socialist republic visualises
to remove economic inequalities and to provide facilities and opportunities for
decent standard of living and to protect the economic interest of the weaker
segments of the society, in particular, Scheduled Castes i.e. Dalits and the
Scheduled Tries i.e. Tribes and to protect them from "all forms of
exploitations". Many a day have come and gone after 26.1.1950 but no leaf
is turned in the lives of the poor and the gap between the rich and the poor is
gradually widening on the brink of being unbridgeable.
Providing
adequate means of livelihood for all the citizens and distribution of the
material resources of the community for common welfare, enable the poor, the Dalits
and Tribes to fulfill the basic needs to bring about a fundamental change in
the structure of the Indian society which was divided by erecting impregnable
walls of separation between the people on grounds of caste, sub- caste, creed,
religion, race, language and sex. Equality of opportunity and State thereby
would become the bedrocks for social integration. Economic empowerment thereby
is the foundation of make equality of status, dignity to person and equal
opportunity a truism. The core of the commitment of the Constitution of the
social revolution through rule of law lies in effectuation of the fundamental
right directive principles as supplementary and complementary to each other.
The Preamble, fundamental rights and directive principles - the trinity - are
the conscience of the Constitution.
Political
democracy has to be stable. Socio-economic democracy must take strong roots and
should become a way of life. The State, therefore, is enjoined to provide
adequate means of livelihood to the poor, weaker sections of the society, the Dalits
and Tribes and to distribute material resources of the community to them for
common welfare etc".
It was
accordingly held that right to economic empowerment is a fundamental right. The
alienation of assigned land without permission of competent authority was held
void.
In R. Chandevarappa
and Ors. v. State of Karnataka and Ors. [(1995) 6 SCC 309] (to which two of us,
K. Ramaswamy and B.L. Hansaria, JJ., were members) this Court was to consider
whether the alienation of Government lands allotted to the Scheduled Castes was
in violation of the Constitutional objectives under Article 39(b) and 46. It
was held that economic empowerment to the Dalits, Tribes and the poor as a part
of distributive justice is a Fundamental Right; assignment of the land to them
under Article 39(b) was to provide socio-economic justice to the Scheduled
Castes. The alienation of the land, therefore, was held to be in violation of
the Constitutional objectives. It was held thus:
"In
fact, the cumulative effect of social and economic legislation is to specify
the basic structure.
Moreover,
the social system shapes the wants and aspirations and its citizens come to
have. It determines in part the sort of persons they want to be as well as the
sort of persons they are. Thus an economic system is not only an institutional
device for satisfying existing wants and needs but a way of creating and
fashioning wants in the future. The economic empowerment, therefore, to the
poor, dalits and tribes as an integral constitutional scheme of socio-economic
democracy is a way of life of political democracy.
Economic
empowerment is, therefore, a basic human right and a fundamental right as part
of right to live, equality and of status and dignity to the poor, weaker
sections, dalits and tribes.
The
prohibition from alienation is to effectuate the constitutional policy of
economic empowerment under Article 14, 21, 38, 39 and 46 read with the Preamble
of the Constitution. Accordingly refusal to permit alienation is to effectuate
the constitutional policy. the alienation was declared to be void under
sections 23 of the Contract Act being violative of the constitutional scheme of
economic empowerment of accord equality of status, dignity of persons and
economic empowerment." It was further held that providing adequate means
of livelihood for all the citizens and the distribution of the material
resources of the community for common welfare, enable the poor, the dalits and
the tribes, to fulfill the basic needs to bring about the fundamental change in
the structure of the Indian society. Equality of opportunity and status would
thereby become the bedrocks for social integration. Economic empowerment is,
therefore, a basic human right and fundamental right as apart of right to life
to make political democracy stable. Socio-economic democracy must take strong
route and become a way of life. The state, therefore, is enjoined to provide
adequate means of livelihood to the poor, weaker sections of the society, the dalits
and the tribes and distribute material resources of the community to them for
common welfare. Justice is an attribute of human conduct and rule of law is
indispensable foundation to establish socio-economic justice. The doctrine of
political economy must include interpretation for the public good which is
based on justice that would guide the people when questions of economic and
social policy are under consideration. In Peerless General Finance and
Investment Co. Ltd. & Anr. v. Reserve Bank of India [(1992) 2 SCC 343 at
389 para 55], this court had held that stability of the political democracy hinges
upon socio- economic democracy. Right to development is one of the important
facets of basic human rights. Right to self- interest is inherent in right to
life. Mahatma Gandhiji, the Father of Nation said that "every human being
has a right to live and, therefore, to find the wherewithal to feed himself and
where necessary to clothe and house himself". In D.K. Yadav v. J.M.A.
Industries Ltd. [(1993) 3 SCC 259], the question was whether the workman for
absence in service for 7 days can be removed without an enquiry. In that
context a bench of three judges had held thus:
"Article
21 clubs life with liberty, dignity of person with means of livelihood without
which the glorious contents of dignity of person would be reduced to animal
existence. When right to life is interpreted in the light of the colour and
content of procedure established by law must be in conformity with the minimum
fairness and processual justice, it would relieve legislative callousness
despising opportunity of being heard and fair opportunities of defence. Article
14 has pervasive processual potency and versatile quality, equalitarian in its
soul and allergic to discriminatory dictates. Equality is the antithesis of
arbitrariness".
In Dalmia
Cement (Bharat) Ltd. & Anr. vs. Union of India & Ors. etc. [JT 1996 (4)
SC 555], a Bench of three judges (to which one of us, K. Ramaswamy, J., was a
member) was to consider the constitutionality of Jute Packing Material Act,
1987. The law was made to protect the agriculturists cultivating jute and jute
products. In that context if was held thus:
"thus
agriculturists have fundamental rights to social justice and economic
empowerment.
The
Preamble of the Constitution is the epitome of the basic structure built in the
Constitution guaranteeing justice - social, economic and political - equality
of status and of opportunity with dignity of person and fraternity.
To
establish an egalitarian social order, the trinity, the Preamble, the
Fundamental Rights in Part III and Directive Principles of State Policy (for
short, 'Directives') in Chapter IV of the Constitution delineated the
socio-economic justice. The word justice envision in the Preamble is used in
broad spectrum to harmonise individual right with the general welfare of the
society. The Constitution is the supreme law. The purpose of law is realisation
of justice whose content and scope vary depending upon the prevailing social
environment. Every social and economic change causes change in the law. In a
democracy governed by rule of law, it is not possible to change the legal basis
of socio- economic life of the community without bringing about corresponding
change in the law. In interpretation of the Constitution and the law, endeavour
needs to be made to harmonise the individual interest with the paramount
interest of the community keeping pace with the realities of every changing
social and economic life of the community envisaged in the Constitution.
Justice in the Preamble implies equality consistent with the competing demands
between distributive justice with those of cumulative justice. Justice aims to
promote the general well-being of the community as well as individual's
excellence. The principal end of society is to protect the enjoyment of the
rights of the individuals subject to social order, well- being and morality.
Establishment of priorities of liberties is a political judgment.
Law is
the foundation on which the potential of the society stands.
Law is
an instrument for society stands. Law is an instrument for social change as also
defender for social change.
Social
justice is the comprehensive form to remove social imbalances by law harmonising
the rival claims or the interests of different groups and/or sections in the
social structure or individuals by means of which alone it would be possible to
build up a welfare State. The idea of economic justice is to make equality of
status meaningful and the life worth living at its best removing inequality of
opportunity and of status - social, economic and political.
Law is
the ultimate aim of every civilised society, as a key system in a given era, to
meet the needs and demands of its time. Justice, according to law, comprehends
social urge and commitment.
Justice,
liberty, equality and fraternity are supreme constitutional values to establish
the egalitarian social, economic and political democracy, Social justice,
equality and dignity of person are cornerstones of social democracy. Social justice
consist of diverse principles essential for the orderly growth and development
of personality of every citizen.
Justice
is its facet, a dynamic device to mitigate the sufferings of the disadvantaged
and to eliminate handicaps so as to elevate them to the level of equality to
live life with dignity of person. Social justice is not a simple or single idea
of a society but it an essential part of complex social change to relieve the
poor etc. From handicaps, penury, to ward the off from distress and to make
their lives livable for greater good of the society at large. Social justice,
therefore, gives substantial degree of social, economic and political equality,
which is the constitutional right of every citizen. In para 19, it was further
elaborated that social justice is one of the disciplines of justice which
relates to the society. What is due cannot be ascertained by absolute standard
which keeps changing depending upon the time, place and circumstances.
The
constitutional concern of social justice, as an elastic continuous process, is
to transform and accord justice to all sections of the society by providing
facilities and opportunities to remove handicaps and disabilities with which
the poor etc, are languishing. It aims to secure dignity of their person. It is
the duty of the State of accord justice to all members of the society in all facts
of human activity. The concept of social justice embeds equality to flavour and
enlivens practical content of life. Social justice and equality are
complementary to each other so that both should maintain their vitality. Rule
of law, therefore, is a potent instrument of social justice to bring about
equality in result.
Social
and economic justice in the context of our Indian Constitution must, therefore,
be understood in a comprehensive sense go remove every inequality to all
citizens in social as well as economic activities and in every part of life.
Economic justice means the abolition of those economic conditions which
ultimately result in the inequality of economic values between men. It means to
establish a democratic way of life built upon socio-economic structure of the
society to make the rule of law dynamic.
The
Fundamental Rights and the Directive are, therefore, harmoniously be
interpreted to make the law a social engineer to provide flesh and blood to the
dry bones of law. The Directives would serve the Court as a beacon light to
interpretation. Fundamental Rights are rightful means to the end, viz., Social
and economic justices provided in the Directives and the Preamble. The
Fundamental Rights and the Directives establish the trinity of equality,
liberty and fraternity in an egalitarian social order and prevent exploitation.
Social
justice, therefore, forms the basis of progressive stability in the society and
human progress.
Economic
justice means abolishing such economic conditions which remove the inequality
of economic value between man and man, concentration of wealth and means of
production in the hands of a few and are detrimental to the vast.
Law,
therefore, must seek to serve as a flexible instrument of socio- economic
adjustment to bring about peaceful socio-economic revolution under rule of law.
The Constitution, the fundamental supreme lex distributes the sovereign power
between the Executive, the Legislature and the Judiciary. The Court, therefore,
must strive to give harmonious interpretation to propel forward march and
progress towards establishing an egalitarian social order." The validity
of the Act was accordingly upheld.
It is
already seen that in D.T.C's case (supra), this Court had held that right to
life to a workman would include right to continue in permanent employment which
is not a bounty of the employer nor can its survival be at the volition and
mercy of the employer. Income is the foundation to enjoy many Fundamental right
and when work is the source of income, the right to work would become as such a
fundamental right. Fundamental Right can ill-afford to be consigned to the
limbo of undefined premises and uncertain application. In Bandhu Mukti Morcha
vs. Union of India [(1984) 3 SCC 161], this Court had held that the right to
life with human dignity enshrined in Article 21 derives its life breath from
the Directive Principles of State Policy and that opportunities and facilities
should be provided to the people. In Olga Tellis's case, this court had held
that the right to livelihood is an important facet of the right to life .
Deprivation of the means of livelihood would denude the life itself. In C.E.S.C
Ltd. & Ors. vs. S.C. Bose & Ors. [(1992) 1 SCC 441], it was held that
the right to social and economic justice is a fundamental right. Right to
health of a worker is a fundamental right. The right to live with human dignity
at least with minimum sustenance and shelter and all those rights and aspects
of life which would o to make a man's life complete and worth living, would
form part of the right to life. Enjoyment of life and its attainment - social,
cultural and intellectual - without which life cannot be meaningful, would
embrace the protection and preservation of life guaranteed by Article 21. In
life Insurances Corporation case, a Bench of two Judge had held that right to
economic equality is a fundamental right. In Dalmia Cement Bharat Ltd. case,
right to economic justice was held to be a fundamental right.
Right
to shelter was held to be a fundamental right in Olga Tellis's case; P.G. Gupta
vs. State of Gujarat & ors, [(1995) Supp.(2) SCC
182]; M/s. Shantisar Builders vs. Narayan Khimlal Totame & Ors. [(1990) 1
SCC 520]; Chameli Singh & ors. vs. State of U.P. & Anr. [(1996) 2 SCC
549] etc.
It
would, thus, be seen that all essential facilities and opportunities to the
poor people are fundamental means to development, to live with minimum
comforts, food, shelter, clothing and health. Due to economic constraints,
though right to work was not declared as a fundamental right, right to work of
workman, lower class, middle class and poor people is means to development and
source to earn livelihood. thought, right to employment cannot, as a right, be
claimed but after the appointment to a post or an office, be it under the
State, its agency instrumentality, jurisdic person or private interpreneur it
is required to be dealt with as per public element and to act in public
interest assuring equality, which is a genus of Article 14 and all other
concomitant rights emanating therefrom are species to make their right to life
and dignity of person real and meaningful. The democracy offers to everyone as
doer, an exerter and developer and enjoyer of his human capacities, as stated
by Justice K.K. Mathew, in his "The Right to Equality and Property under
the Indian Constitution" at page 47-48. These exercises of human capacity
require access to the material resources and also continuous and sufficient
intake of material means to maintain human energy. Lack of access to the material
resources is an impediment to the development of human personality. This
impediment, as a lack of access to means of labour, if we take labour i its
broadest sense of human resources, requires removal only under the rule of law.
To the workmen, right to employment is the property, source of livelihood and
dignity of person an means of enjoy life, health and leisure. Equality, as a
principle of justice, governs leisure, the distribution of material resources
including right to employment. Private property ownership has always required
special justifications and qualifications to reconcile the institution with the
public interest. It requires to thrive and, at the same time, be responsive to
social weal and welfare. St. Thomas Acquinas, in his "Selected Political
Writings" (1948 Edn.) at page 169, has stated that the private rights and
public needs are to be balanced to meet the public interest "the common
possession of things is to be attributed to natural law, not in the sense that
natural law decrees that all things are to be held in common and that there is
to be no private possession, but in the sense that there is no distinction of
property on the grounds of natural law, but only by human agreement, and this
pertains to positive law, as we have already shown. Thus, private property is
not opposed to natural law, but is an addition to it, devised by human reasons.
If, however, there is such urgent and evident necessity that there is clearly
an immediate need to necessary sustenance, if, for example, a person is in
immediate danger of physical privation, and there is no other way of satisfying
his need, then he may take what is necessary from another person's goods,
either openly or by stealth. Nor is this strictly speaking fraud or
robbery." Property is a social institution based upon an economic need in
a society organised through division of labour, as propounded by Dean Rosco
Pound in his "An Introduction to Philosophy of law" (1954 Edn.) page
125, at 129. M.R. Cohen in his "Property and Sovereignty" [13 Cornell
Law Quarterly page 8 at 12 had stated that " the principle of freedom of
personality certainly cannot justify a legal order wherein a few can, by virtue
of their legal monopoly over necessities, compel others to work under degrading
and brutalizing condition." If there is no property or of one does not
derive fruits and means of one's labour, no one would have any incentive to labour
in the broader sense, Social progress receives set back without equality of
status, fraternity would not be maximised.
Edward
Kent in his "Property, Power and Authority", Prof. Herald Laski in
his "Congress Socialist" dated April 11, 1936, had stated that
"those who know the normal life of the poor will realise enough that
without economic security, liberty is not worth living". Brooklyn Law
Review page 541 at 547 has stated that "In modern translation, public
officers and others who promulgate polices designed to increase unemployment or
to deny or diminish benefits to the poor are accountable for the consequences
to free human personality." It would, thus, be clear that in a socialist
democracy governed by the rule of law, private property, right of the citizen
for development and his right to employment and his entitlement for employment
to the labour, would all harmoneously be blended to serve larger social
interest and public purpose.
Mahatma
Gandhiji, the Father of the Nation, in his book "Socialism of my
concept", has said thus:
"To
a people famishing and idle, the only acceptable form in which God can dare
appear is work and promise of food as wages. God created man to work for his
food, and said that those who ate without work were thieves. Eighty per cent of
India are compulsory thieves half the
year. Is it any wonder if India has
become one vast prison?" Again, he stressed:
No one
has ever suggested that grinding pauperism can lead to anything else than moral
degradation. Every human being has a right to live and, therefore, to find the
wherewithal to feed himself and, where necessary, to clothe and society the
securing of one's livelihood should be, and is found to be the easiest thing in
the world. Indeed, the test of orderliness in a country is not the number of
millionaires it owns, but the absence of starvation among its masses.
Working
for economic equality means abolishing the eternal conflict between capital and
labour. it means the levelling down of the few rich in whose hands is
concentrated the bulk of the nations's wealth on the one hand, and the levelling
up of the semi-staved, naked millions of the other. A non-violent system of
Government is clearly an impossibility so long as the wide gulf between the
rich and the hungry millions persists. The contrast between the palaces of new Delhi and the miserable hovels of the
poor labouring class nearby, cannot last tone day in free India in which the poor will enjoy the
same power as the richest in the land. A violent and bloody revolution is a
certainty one day, unless there is voluntary abdication of riches and the power
that riches give a sharing them for the common good".
Pandit
Jawahar Lal Nehru, the architect of social and economic planned democracy, in
this "Independence and After That" (Collection of Speeches 1946-49)
Publication Division, Government of India 1949 Edn, at page 28, had stated that
social equality in the widest sense and equality of opportunity for every one,
every man and woman must have the opportunity to develop to the best of his or
her ability.
However,
Merit must come from ability and hard work and not because of cast of birth or
riches. Social equality would develop the sense of fraternity among the members
of a social groups where each would consider the other as his equal, no higher
or lower. A society, which does not treat each of its members as equals,
forfeits its right to being called a democracy. All are equal partners in the
freedom.
Every
one of our ninety four hundred million people must have equal right to
opportunities and blessings that freedom of India has to offer. To bring freedom in a comprehensive sense to the common
man, material resources and opportunity for appointment be made available to
secure socio-economic empowerment which would ensure justice and fullness of
life to workmen, i.e., every man and woman. In "Beyond Justice" by
Agnes Heller at page 80, the distribution of material goods, he had stated on
distributive justice thus:
"The
distribution of material goods had always been of concern in images and
theories of justice, but, even when the issue was given the highest importances,
it was subjected to and understood within a general theory of justice, and
addressed within the framework of a complete socio-political concept of
justice. As we have seen, in the prophetic concept of justice the misery of the
poor called for dividne retribution, since alleviating misery was believed to
be a matter not of optional charity but of moral duty, To neglect this duty was
to sin, to breach the divine laws. Plato proposed the abolition of private
property for the caste of guardians in order to make the Republic as a whole
just.
Aristotle,
who coined the term 'distributive justice', recommended a relative equality of
wealth - neither too much nor too little, but 'medium wealth' - as a condition
of the good life of the good citizen and the good city.
Even Roussseau.,
the most egalitarian philosopher in respect of distribution, subjected the
solution of this problems to the general patterns of an socio- political
concept of justice.
Locke
did not completely break with this longstanding tradition either.
As we
have seen, he contributed to the emergence of the concept' retributive justice'
rather than 'distributive justice. However, he had already presented a
sophisticated theory legitimizing inequality in property owner ship, a theory
deriving property from work. I have mentioned that Locke did not support the
idea 'to each according to his entitlement', for he but 'entitlement' into the
'to each category, whereas the 'according to category was defined by 'work'
(mixing work and nature).
But
Locke never claimed that entitlement was the main issue, let alone the only
issue of justice.
Humane
is undoubtedly the founding father of that branch of socio - political justice
now called 'distributive'. He even claimed that property and property alone is
the subject matter of justice. He asserted too that retribution (negative
sanctions) in the suspension of justice for the sake of social utility: 'When
any man, vein in political society, renders himself by his crimes, obnoxious of
the public, he is punished by the law in his goods and person; that is, the
ordinary rules of justice are, with regard to him suspended for a moment.
Humane
also deduced justice from 'public utility'. Inequality in property ownership is
just because it is useful. We can imagine two cases - and extreme cases- where
property (inequality in property ownership) qua justice loses its social
usefulness: the situation of absolute abundance and the situation of absolute
scarcity. In the former, property is useless, redundant because, if all needs
can be satisfied, we are beyond justice. In the latter situation property rules
are violable, thus justice must be be suspended. Yet we live in a situation of
limited abundance (or limited scarcity).
This
is Humane the concept 'justice' reduces to the idea 'to reach according to his
property entitlement'; all other uses of the notion 'justice' are seen as
relating to the 'suspension of justice' ) although the term 'equity' can remain
relevant in these other contexts). Humane, an extremely sincere man, did not
shirk from facing proposal alien to his own. He stated, nature is so liberal to
mankind, that. were all her presents equally divided among the species, and
improved by art and industry, every individual would enjoy all the necessaries,
and even most of the comforts of life. It must also be confessed, that,
wherever we depart from this equality, we rob the poor of more satisfaction
than we add to the rich." Justice K.K. Mathew in his "Democracy
Equality and Freedom" at page 55 has, therefore, stated that the singlemost
important problem in constitutional law for years to come in this court will be
how to implement the Directive Principles and at the same time give full play
to the Fundamental Right. It is only by implementing the Directive Principle
that distributive justice will be achieved in the society. Justice, as
Aristotle said, "is the bond of men in society" and "States
without justice" are, as St. Augustine
said, "robber-bands".
In Keshvanand
Bharti's case, Jaganmohan Reddy, J. had held that "what is emplicit in the
Constitution is that there is a duty one the courts to interpret the
Constitution and the laws to further the Directive Principles which under
Article 37 are fundamental in the governance of the country". The majority
had held in favour of the way for the implementation of the Directive
Principles under rule of law. Justice Palekar, in particular had laid emphasis
on social and economic justice to make fundamental Rights a reality.
Coming
to the meaning of "regulation" under the Act, in Blacks law Dictionary
(sixth edition) at page 1286 the word "regulation" is defined as
"the act of regulating; a rule or order prescribed for management or
government; a regulating principle; a precept. Rule or order prescribed by
superior or competent authority relating to action of those under its
control". In Corpus Juris Secunderon (Vol.76) at page 612, the power to
regulate carries with it full power or the thing subject to regulation and in
the absence of restrictive words, the power must be regarded as plenary or the
interest of public. it has been held to contemplate or employ the continued
existence of the subject matter. In "Craise on Statute Law" (7th
Edition) at page 258, it is stated that if the legislation enables something to
be done, it gives power at the same time "by necessary implication, to do
everything which is indispensable for the purpose of carrying out the purposes
in view". In D.K.V. Prasada Rao & Ors. vs. The Government of Andhra
Pradesh represented by its secretary, Home
Department Secretariat Buildings, Andhra Pradesh Hyderabad & Anr.
[(1983) 2 AWR 344 - AIR 1984 AP], a Division Bench of the Andhra Pradesh High
Court, (to which one of us, K. Ramaswamy, J., was a member) had to consider the
question elaborately whether the power to regulate cinematograph Act and Andhra
Pradesh Cinematograph Regulation would include power to fix rates of admission
under the cinema/theaters. Though there was no specific power under the Act or
the Regulation to fix rates of admission, it was held at page 360 that "power
to regulate would include power to fix the rate of admission into the
cinema/theaters". Lord Justice hale of England about three centuries ago
in his treatise "De Portibus Moris" reported in Harg law tracts 78
had stated that "when the private property is affected with a public
interest, it ceases to be "juris privati" only and it becomes clothed
with a public interest when used in a manner to make it of public consequence
and affect the community at large; and so using it, the owner grants to the public
an interest in that use, and must submit to be controlled by the public for
common good". This Statement was quoted with approval by the Supreme court
of United States of America in 1876 in leading judgment, munn vs the people of
Illinois [94 US 115].
Justice
whaite dealing with question whether the legislature can fix the rates for
storage of grains in private warehouses by a statue of 1871 when its
interpretation had come up for consideration of right to property and its
enjoyment and of the public interest, it was held that "under such
circumstances it is difficult to see why, if the common carrier or the miller,
or the ferrymen or the innkeeper or the wharfinger or the baker, or the cartmen,
or the chakney-coachman, pursues a public employment and exercise "a sort
of public office," these plaintiffs in error do not. They stand, to use
again the language of their counsel, in the very "gateway of
commerce," and take toll from all who pass. Their business "most
certainly tends to be a common charge and has become a thing of public interest
and use." Therein, there is a specific observation which is apposite to
the facts in this case. It was held that the statute simply extends the law so
as to meet this new development of commercial progress.
There
is no attempt to compel the owners to grant the public an interest in their
property, but the Act declares their obligations, if they use it in the
particular manner. It is immaterial whether the plaintiffs therein had built
their warehouses and established their business before the regulation was made.
It was held that after, the regulation has come into force, they are enjoined
to abide by the regulation to carry on the business. This Court had approved
the ratio in Prasadrao's case; when it was followed by Karnataka High Court
against which an appeal came to be filed and the power to regulate rates of
admission into cinema/theaters was upheld by this court.
In
Horatio J. Olcott vs. County Board of Supervisors of Fond Du Lac County [21 L.
Ed. 382 at 388], the Supreme Court of united states of America had held that
whether the railroad is a private or a public one, the ownership thereof is not
material that the owners may be private company but they are compellable to
permit the public to use their works in the manner in which such work can be
used. In John D. Graham, Commissioner, Department of Public Welfare, State of
Arizona vs. Carmen Richardson etc. [29 L.Ed. 2nd 534], the question was whether
the respondent alien in Arizona will be denied of welfare benefits offending
14th Amendment to the American Constitution. Interpreting 14th Amendment, the
Supreme court of united
states of America had
held that the word "person" in the context of welfare measures
encompasses lawfully resident aliens as well as citizen of the United States and both citizen and alien are
entitled to the equal protection of the laws of the state in which they reside.
The power to deny the welfare benefit was negated by judicial pronouncement. In
Grace Marsh vs. State of Alabama [90 L.Ed. 265], when the appellant
was distributing pamphlets in privately owned colony, be was convicted of the
offence of trespass on albama Statute. On writ of certiorary, the Supreme Court
of United States of America deciding the right to pass and repass and the right
of freedom of expression and equality under 14th amendment, had held by
majority that the corporate's right to control the inhabitants of the colony is
subject to regulation but the ownership does not always mean absolute
denomination.
The
more an owner, for his advantage, opens up his property in use by public in
general, the more do his right become circumscribed by statutory and
constitutional rights of those who use it. The conviction was in violation of Ist
and 14th Amendment. In Republic Aviation Corporation vs. National Labour
Relations Board [324 US 793 = 89 L.Ed. 1372], the owner of
privately held bridges, ferries, turnpikes and railroads etc. may operate them
as freely as a farmer does his farm, but when it operated privately to benefit
the public, their operation is essentially a public function. It was subject to
State regulation. The Supreme court, therefore, had held that when the rights
of the private owners and the constitutional rights requires interpretation,
the balance has to be struck and the court would, mindful of the Fact that the
right to exercise liberties safeguarded by the Constitution lies at the
foundation of free government by free men, in all cases weigh the circumstances
and appraise the reasons in support of the regulations of the rights etc. It
was accordingly held that for interpretation of the rights, it is but the duty
of the Court to weigh the balance and to consider the case in the dropback. In Georgia Railroad & Banking Co. vs. James M. Smith [128 US 377 = 32 L.Ed. 174], it was held that in the absence
of any provision in the charter, legislature has power to prescribe rates when
the property is put to public use and the statue was held to be constitutional.
German Aliance Insurance Co. vs. IKL Lews [58 L.Ed. 1011 = 233 US 387], per
majority it was held that a business may be as far as affected with a public
interest as to permit legislative regulation of its rates and charges, although
no public trust is imposed upon the property and although public way not have a
legal right to demand and receive service.
It is
true that in Dena Nath's case, a Bench of two judges was to consider the
question whether or not the persons appointed as contract labour in violation
of section 7 and 12 of the Act should be deemed to be direct employees of the
principal employer. The Bench on literal consideration of the provisions, had
concluded that the act merely regulates condition s of service of the workmen
employed by a contractor and engaged by the principal employer. On abolition of
such contract labour altogether by the appropriate Government nether the Act
nor the rules provide that labour should be directly absorbed by the principal
employer. It was, therefore, concluded that the High Court exercising the power
under Article 226 of the Constitution cannot give direction for absorption.
True, Court cannot enquire into and decide the question whether employment of
contract labour in any process operation or any other work in establishment
should be abolished or not and it is for the appropriate Government to decide
it. The Act does not provide total abolition of the contract labour system
under the Act. The Act regulates contract labour system to prevent exploitation
of the contract labour. The Preamble of the Act furnishes the key to its scope
and operation. The Act regulates not only employment of contract labour in the
establishment covered under the act and its abolition in certain circumstances
covered under section 10 (2) but also "matters connection therewith".
The phrase "matters connected therewith" gives clue to the intention
of the Act. WE have already examined in detain the operation of the provisions
of the Act obviating the need to reiterate the same once over. The enforcement
of the provisions to establish canteen in every establishment under Section 16
is to supply food to the workmen at the subsidised rates as it is a right to
food, a basic human right. Similarly, the provision in Section 17 to provide
rest rooms to the workmen is a right to leisure enshrined in Article 43 of the
Constitution. Supply of wholesome drinking water, establishment of latrine and
urinals as enjoined under Section 18 are part of basic human right to health
assured under Article 39 and right to just and human conditions of work assured
under Article 42. All of them are fundamental human rights to the workmen and
are facets of right to life guaranteed under Article 21. When the principal
employer is enjoined to ensure those rights and payment of wages while the
contract labour system is under regulation, the question arises whether after
abolition of the contract labour system that workmen should be left in a lurch
denuding them of the means of livelihood and the enjoyment of the basic
fundamental rights provided while the contract labour system is regulated under
the Act? The Advisory Committee constituted under section 10(1) requires to
consider whether the process, operation and other work is incidental to or
necessary for the industry,, trade, business, manufacture or occupation that is
carried on in the establishment, whether it is of perennial nature, that is to
say, whether it is substantive duration having regard to the nature of
industry, trade, business, manufacture or occupation carried on in that
establishment, whether it is done ordinarily through regular workmen in the
establishment or an establishment similar thereto, whether it is sufficient to
employ considerable number of whole time workmen. Upon consideration of these
facts and recommendation for abolition was made by the advisory Board, the
appropriate Government examines the question and takes a decision in that
behalf. The explanation to Section 10 (2) provides that when any process or
operation or other work is of perennial nature, the decision of the appropriate
Government thereon shall be final. It would thus give indication that on the
abolition of the contract labour system by publication of the notification in
the official Gazette, the necessary concomitant is that the whole time workmen
are required for carrying on the process, operation or other work being done in
the industry, trade, business, manufacture or occupation in that establishment.
When the condition of the work which is of perennial nature etc., as envisaged
in sub-section (2) of Section 10, thus are satisfied, the continuance of
contract labour stands prohibited and abolished. The concomitant result would
be that source of regular employment became open.
What
would be the consequence that ensure from abolition is the question? It is true
that we find no express provision in the Act declaring the contract labour
working in the establishment of the principal employer in the particular
service to be the direct employees of the principal employer. Does the Act
intend to deny the workmen to continue to work under the Act or does it intend
to denude him of the benefit or permanent employment and if so, what would be
the remedy available to him. The phrase "matters connected therewith"
in the Preamble would furnish the consequence of abolition of contract labour.
In this behalf, the Gujarat Electricity Board case, attempted, by
interpretation, to fill in the gap but it also fell shout of full play and got
beset with insurmountable difficulties in its working which were not brought to
the attention of the Bench. With due respect, such scheme is not within the
spirit of the Act. As seen, the object is to regulate the contract labour so
long as the contract labour is not perennial. The labour is required to be paid
the prescribed wages and are provided with other welfare benefits envisaged
under the Act under direct supervision of the principal employer. The violation
visits with penal consequences.
Similarly,
when the appropriate Government finds that the employment is of perennial
nature etc, contract system stand abolished, thereby, it intended that if the
workmen were performing the duties of the post which were found to be of
perennial nature on par with regular service, they also require to be regularised.
The Act did not intend to denude them of their sources of livelihood and means
of development, throwing them out from employment. as held earlier, it is a
socio-economic welfare legislation. Right to socio-economic justice and
empowerment are constitutional rights. right to means of livelihood is also
constitutional right. Right to facilities and opportunities are only part of
and means of livelihood and resultant right to life, leaving them in the lurch
since prior to abolition, they had the work and thereby earned livelihood. The
Division Bench in Dena Nath's case has taken too narrow a view on technical
consideration without keeping at the back of the mind the constitutional
animations and the spirit of the provisions and the object which the Act seeks
to achieve.
The
operation so the Act is structured on an unbuilt procedure leaving no escape
route. Abolition of contract labour system ensures right to the workmen for regularisation
of them as employees in the establishment in which they were hitherto working
as contract labour through the contractor. The contractor stands removed from
the regulation under the Act and direct relationship of "employer and
employee" is created between the principal employer and workmen. Gujarat
Electricity's case, being of the co-ordinate Bench, appears to have softened
the rough edges of Dena Nath's radio. The object of the Act is to prevent
exploitation of labour. Section 7 and section 12 enjoin the principal employer
and the contractor to register under the Act, to supply the number of labour
required by the principal employer through the contractor; to regulate their
payment of wages and conditions of serve and to provide welfare amenities,
during subsistance of the contract labour. The failure to get the principal
employer and the contractor registered under the Act visits with penal
consequences under the Act. The object, thereby, is to ensure continuity of
work to the workmen in strict compliance of law. The conditions of the labour
are not left at the whim and fancy of the principal employer. He is bound under
the Act to regulate and ensure payment of the full wages, and also to provide
all the amenities enjoined under Section 16 to 19 of the Act and the rules made
there under.
On
abolition of contract labour, the intermediary, i.e., contractor, is removed
from the field and direct linkage between labour and principal employer is
established.
Thereby,
the principal employer's obligation to absorb them arises. The right of the
employee for absorption gets ripened and fructified. If the interpretation in
Dena Nath's case is given acceptance, it would be an open field for the
principal employer to freely flout the provisions of the Act and engage workmen
in defiance of the Act and adopt the principle of hire and fire making it
possible to exploit the appalling conditions in which the workmen are placed.
The object of the Act, thereby gets rudely shattered and the object of the Act
easily defeated. Statutory obligations of holding valid licence by the
principal employer under Section 7 and by the contract under Section 12 is to
ensure compliance of the law. Dena Nath's ratio falls foul of the
constitutional goals of the trinity; they are free launchers to exploit the
workmen. The contractor is an intermediary between the workmen and the
principal employer. The moment the contract labour system stands prohibited
under Section 10(1), the embargo to continue as a contract labour is put an end
to and direct relationship has been provided between the workmen and the
principal employer. Thereby, the principal employer directly becomes responsible
for taking the services of the workmen hitherto regulated through the
contractor. The object of the penal provisions was to prevent the prohibition
of the employer to commit breach of the provisions of the act and to put an end
to exploitation of the labour and to deter him from acting in violation of
constitutional right of the workmen to his decent standard of life, living,
wages, right to health etc.
The
founding fathers placed no limitation or fetters on the power of the High Court
under Article 226 of the Constitution except self-imposed limitations. The arm
of the Court is long enough to reach injustice wherever it is found. The Court
as reach injustice wherever it is found.
The
court as sentinal in the qui vive is to mete out justice in given facts. On
finding that either the workmen were engaged in violation of the provisions of
the Act or were continued as contract labour, despite prohibition of the
contract labour under Section 10(1), the High Court has, by judicial review as
the basic structure, constitutional duty to enforce the law by appropriate
directions. The right to judicial review is no a basic structure of the
Constitution by catena of decisions of this Court starting from Indira Gandhi
vs. Raj Narayan [AIR 1975 SC 2299] and Bommai's case. It would, therefore, be
necessary that instead of leaving the workmen in the lurch, the Court would
properly mould the relief and grant the same in accordance with law.
The
public law remedy given by 'Article 226 of the Constitution is to issue not only
the prerogative writs provided therein but also any order or direction to
enforce any of the fundamental rights and "for any other purpose".
The
distinction between public law and private law remedy by judicial adjudication
gradually marginalished and became obliterated. In L.I.C. v. Escort Ltd. &
Ors. [(1986) 1 SCC 264 at 344]. this Court in paragraph 102 and pointed out
that the difficulty will lie in demarcating the frontier between the public law
domain and the private law field. The question must be decided in each case
with reference to the particular action, the activity in which the State or the
instrumentality of the State is engaged when performing the action, the public
law or private law character of the question and the host of other relevant
circumstances.
Therein,
the question was whether the management of LIC should record reasons for
accepting the purchase of the shares? It was in that fact situation that his
court held that there was no need to state reasons when the management of the shareholders
buy resolution reached the decision.
This
court equally pointed out in other cases that when the State's power as
economic power and economic entrepreneur and allocator of economic benefits is
subject to the limitations of fundamental rights, a private Corporation under
the functional control of the State engaged in an activity hazardous to the
health and safety of the community, is imbued with public interest which the
State ultimately proposes to regulate exclusively on its industrial policy. It
would also be subject to the same limitation as held in M.C. Mehta & Ors.
v. Union of India & Ors.[(1987) 1 SCC
395].
The
legal right of an individual may be founded upon a contract or a statue or an
instrument having the force of law. For a public law remedy enforceable under
Article 226 of the Constitution, the action of the authority need to fall in
the realm of public law-be it a legislative act of the State, an executive act
of the State or an instrumentality or a person or authority imbued with public
law element. The question requires to be determined in each case. However, it
may not be possible to generalise the nature of the action which would come
either under public law remedy or private law field nor is it desirable to give
exhaustive list of such actions. As held by this Court in Calcutta Gas Co. Ltd.
v. State of West Bengal [Air 1961 SC 1044, para 5] that if the legal right of a
Manager of company is denuded on the basis of recommendation by the Board of
Management of the company, it would give him right to enforce his right by
filling a writ petition under Article 226 of the Constitution. In Mulchand v.
State of M.P. [AIR 1968 SC 1218], this court had held that even though the
contract was void due to non-compliance of Article 229, still direction could
be given for payment of the amount on the doctrine of restitution under Section
70 of the Act, since the had derived benefit under the void contract. The same
view was reiterated in State of West Bengal v. V.K. Mandal & SOrs. [AIR 1962 SC 779 of 789] and in
New Marine Coal Co. Ltd, v. Union of India [(1964) 2 SCR 859]. In Gujarat State Financial Corporation. v. Lotus Hotel [(1983) 3 SCC 370], a
direction was issued a to release loan to the respondent to comply with the
contractual obligation by applying the doctrine of promissory estoppel. In Mahabir
Auto Store v. Indian Oil Corporation. [(1990) 3 SCC 752], contractual
obligation were enforced under public law remedy of Article 226 against the
instrumentality of the State. In Shreelekha Vidyarthi v. State of U.P. [(1991)
1 SCC 212] contractual obligations were enforced when public law element was
involved, Same Judicial approach is adopted in other jurisdictions, namely, the
House of Lords in Gillic v.
West
Norfolk and Wisbech Area health Authority [(1986) AC 112] wherein the House of
Lords held that though the claim of the plaintiff was negatived but on the
anvil of power of judicial review, it was held that the public law content of
the claim was so great as to make her case an exception to the general rule.
Similarly in Dr. Roy v. Kensinstone and Chelsea Family Practioners Committee
[(1992) IAC 624], the House of Lords reiterated that though a matter of private
law is enforceable by ordinary actions, a court also is free from the
constraints of judicial review and that public law remedy is available when the
remuneration of Dr. Roy was sought to be curtailed. In L.I.C. v. Consumer
Education and Research Centre & Ors. [(1995) 5 SCC 482], this court held
that each case may be examined on its facts and circumstances to find out the
nature and scope of the controversy. The distinction between public law and
private law remedy has now become thin and practically obliterated.
In
write petitions filed under Article 32 of the Constitution of India, the
petitioners, in R.K. Panda vs. Steel Authority of India & Ors. [(1994) 5
SCC 304], contended that they had been working in Rourkela plant of the Steel
authority of India for period ranging between 10 and 20 years as contract labour.
The employment was of perennial nature. The non-regularisation defeated their
right to a job. The change of contractors under the terms of the agreement will
not have any effect o their continuing as a contract labour of the predecessor
contractors. The respondent contended that due to modernisation of the
industry, the contract labour are likely to be retrenched.
The
were prepared to allow the contract labour to retire on voluntary basis or to
be absorbed for local employment. A Bench of three judges of this court had
held that the contract labour were continuing the employment of the respondent
for last 10 years, in spite of change of contractors, and hence they were
directed to b e absorbed as regular employees. On such absorption, their inter
se seniority be determined, department or job-wise, on the basis of continuous
employment; regular wags will be payable only for the period subsequent to
absorption and not for the period prior thereto. Such of those contract labour
is respect of whom the rate of wages have not been fixed, the minimum, rate of
wages would be payable to such workmen of the wages of the regular employees.
The establishment was further directed to pay the wages. If the staff is found
in excess of the requirement, the direction for regularisation would not stand
in their way to reached the workmen in accordance with law. If there arises any
dispute as regards the identification of the contract labour to be absorbed,
the Chief Labour Commissioner, Central Government, on evidence, would go into
that question. The retrenched employees shall also be entitled to the benefit
of the decision. The 10 years period mentioned by the Court would count to
calculate retrenchment benefits. This also of there being no report by the
Advisory Board under section 10(2) and no prohibition under section 10(1), the
Act was enforced and this Court directed to absorb them within the guidelines
laid down in the judgment. This ratio also is an authority for the proposition
that the jurisdiction of the court under Article 32, pari materia with Article
226 which is much a wider than Article 32 " for any other purpose"
under which suitable directions are required to have given based on factual
background. Therein the need to examine the correctness of Dena Nath's radio
did not arise nor is it a case of abolition of contract labour. So, its
reference appears to be as a statement if laying the law in Dena Nath's case.
Prior
to the Act came into force, in The standard- Vacuum Refining Co. of India vs.
Its Workmen & Ors. [(1960 3 SCR 466], a Bench of three judges of this court
had held that the contract labour, on reference under section 10 of the ID Act
was required to be regularised, after the industrial disputes was adjudicated,
under section 2(k) of the ID Act. Since workmen had substantial interest in the
dispute, it was held that the direction issued b the Tribunal that the contract
labour should be abolished was held just in the circumstances of the case and
should be abolished was held just in the circumstances of the case\and should
to be interfered with. In other words, this court upheld the jurisdiction of
Tribunal after deciding the dispute as an industrial dispute and gage direction
to abolish the contract labour. The Power of the Court is not fettered by the
absence of any statutory prohibition.
In
Security Guards Board for Greater Bombay and Thane District vs. Security &
Personnel Service Pvt. Ltd. & Ors. [(1987) 3 SCC 413], the question as
regards absorption of security guards employed in any factory or establishment
etc. under Maharashtra Private Security Guards (Regulation of Employment and
welfare) Act, 1981 had come up for consideration. It was held that the
exemption under Section 23 is in regard to the security guards employed in the
factory or establishment or in any class or classes of fabricating factory's
establishment. The co-relationship of the security guards of classes of
security guards who may be exempted for the operation of the Act is with the
factory or establishment sin which they work and not with agency or agent
through and by whom they were employed. In other words., the ratio of that case
is that it is not material as to through which contractor the employee came to
be appointed or such labour came to be engaged in the establishment concerned.
The direct relationship would emerge after the abolition of the contract labour.
In Sankar Mukherjee & Ors. vs. Union of India & Ors. [ AIR 1990 SC
532], the State Government exercising the power under Section 10 of the Act
prohibited employment of contract labour in cleaning and stacking and other
allied jobs in the brick department. Loading and unloading of bricks from
wagons and trucks was not abolished. Writ petition under Article 32 of the
Constitution of India was filed. A Bench of three judges of this court had held
that the act requires to be construed liberally so as to effectuate the object
of the act. The bricks transportation to the factory, loading and unloading are
continuous process; therefore, all the jobs are incidental to or allied to each
other. All the workmen performing these jobs were to be treated alike.
Loading
and unlading job and the other jobs were of perennial nature. There fore, there
was no justification to exclude the job of loading and unloading of bricks from
wagons and trucks from the purview of the notification dated February 9, 1980.
Thus, this Court had given direction to abolish the contract labour system and
to absorb the employees working in loading and unloading the bricks which is of
perennial nature. In National Federation of Railway Porters, Vendors &
Bearers vs. Union of India & Ors. [(1995) 3 SCC
152], a Bench of two judges to which one of us (K. Ramaswamy, J.) was a member,
was to consider whether the Railway Parcel Porters working in the different
railway stations were contract labour for several years, when they filed write
petition, the Central Assistant Labour commissioner was directed to enquire and
find out whether the job is of a permanent and perennial nature and whether the
petitioners were working for a long period. On receipt of the report, with
findings in favour of favour of workers, the Bench had directed the Railway
Administration to Regularise them into the service. This case also is an
authority for the proposition that in an appropriate case the Court can give
suitable directions to the competent authority, namely, central labour
Commissioner to enquire and submit a report. The perennial nature of the work
and other related aspect are required to be complied with before directions are
given under of Section 10(1) and 10(2) of the Act. On receipt of the report,
the Court could mould the relief in an appropriate manner to meet the given
situation.
In Praga
Tools case, this Court held that mandamus may be issued to enforce duties and
positive obligation of a public nature even though the persons or the
authorities are not public officials or authorities. The same view was laid in Anadi
Mukta v. V.R. Rudani [(1989) 2 SCC 691] and Unni Krishna v. State of A.P. [(1993) 1 SCC 645]. In Comptroller & Auditor
General of India v. K.S. Jagannathan [(1986) 2 SCC
679], this court held that a mandamus would be issued to implement Directive
Principles when Government have adopted them. They are under public obligations
to give preferential treatment implementing the rule of reservation under
Articles 14 and 16 (1) and (4) of the Constitution. In L.I.C. case, directions
were issued to frame policies accessible to common man.
Thus,
we hold that though there is no express provision in the Act for absorption of
the employees whose contract labour system stood abolished by publication of
the notification under section 10 (1) of the Act, in a proper case, the court
as sentinal in the qui vive is required to direct the appropriate authority to
act in accordance with law and submit a report to the court and based thereon
proper relief should be granted.
It is
true that learned counsel for the appellant had given alternative proposal, but
after going through its contents, were are of the view that the proposal would
defeat, more often than not, the purpose of the Act and keep the workmen at the
whim of the establishment. The request of the learned Solicitor General that
the management may be left with that discretion so as to absorb the workmen
cannot be accepted. In this behalf, it is necessary to recapitulate that on
abolition of the contract labour system, by necessary implication, the
principal employer is under statutory obligation to absorb the contract labour.
The linkage between the contractor and the employee stood snapped and direct relationship
stood restored between principal employer and the contract labour as its
employees.
Considered
from this perspective, all the workmen in the respective services working on
contract labour are required to be absorbed in the establishment of the appellant.
Though there exists no specific scale of pay to be paid as regular employees,
it is for the establishment to take such steps as are necessary to prescribe
scale of pay like class 'D' employees. There is no impediment in the way of the
appellants to absorb them in the last grade, namely, grade IV employees on
regular basis. It is seen that the criteria to abolish the contract labour
system is the duration of the work, the number of employees working on the job
etc. That would be the indicia to absorb the employees on regular basis. It is
seen that the criteria to abolish the contract labour system is the duration of
the work, the number of employes working on the job etc. That would be the
indicia to absorb the employees on regular basis in the respective services in
the establishment. Therefore, the date of engagement will be the criteria to
determine their inter se seniority. In case, there would be any need for
retrenchment of any excess staff, necessarily, the principle of "last
come, first go" should be applied subject to his reappointment as and when
the vacancy arises. Therefore, there is no impediment in the way of the
appellants to adopt the above procedure. The award proceedings as suggested in
Gujarat Electricity Board case are beset with several incongruities and
obstacles in the way of the contract labour for immediate absorption. Since,
the contract labour gets into the service of the principal employer, the Union of the existing employees may not espouse their
cause for reference under section 10 of the ID Act. The workmen, who no
abolition of contract labour system have no right to seek reference under
section of 10 of ID Act. Moreover, the workmen immediately are kept out of job
to endlessly keep waiting for award and thereafter resulting in further
litigation and delay in enforcement. The management would always keep them at
by for absorption. it would be difficult for them to work out their right.
Moreover, it is a trade and time-consuming process and years would role by.
Without wages, they cannot keep fighting the litigation endlessly.
The
right and remedy would be a teasing illusion and would be rendered otiose and
practically compelling the workman at the mercy of the principal employer.
Considered from this pragmatic perspective, with due respect to the learned
judges, the remedy valuable assistance given by all the learned counsel in the
appeals.
The
appeals are accordingly dismissed, but in the circumstances, without costs.
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