GODAVARI SUGAR MILLS LTD. v. KEPARGAON TALUKA SAKHAR KAMGAR SABHA, SAKARWADI

Citation: [1961] 3 S.C.R. 342; 1960 INSC 276

Court: Supreme Court of India

Bench: P.B. GAJENDRAGADKAR , K.N. WANCHOO, K.C. DAS GUPTA

Judgment date: 1960-12-16

Case summary

1960 INSC 276. Supreme Court of India judgment dated 1960-12-16. GODAVARI SUGAR MILLS LTD. v. KEPARGAON TALUKA SAKHAR KAMGAR SABHA, SAKARWADI. Read the...

Judgment text

Der: ember 16: 342 SUPREME COURT REPORTS GODAV ARI SUGAR MILLS LTD. v. [1961] KEPARGAON TALUKA SAKHAR KAMGAR SABHA, SAKARWADI (P. B. GAJENDRAGADKAR, K. N. WANCHOO and K. c. DAS GUPTA, JJ. ) Industrial Disptde-System of contract labour-Abolition by Industrial Court-]t te tribunal took the Sakhar Kamg•• view that the question whethP,r the restriction impos- Sabha, Sakarwadi ed was reasonable depended upon the facts of each -- case and therefore was a matter outside its power as a Wanchoo f. court of appeal. It then considered the merits of the matter and came to the conclusion that the approach of the industrial court to the questions raised before it was not correct and therefore it found it difficult to support the award. Eventually it set aside the award and remanded the matter for early hearing in the light of the observations made by it.

Further, it decided that in the interest of justice the entire award should be set aside, even though there was no appeal before it by the unions in most of the cases. The appellant then came to this Court and was granted special leave; a. nd that is how the matter has come up before us. Mr. Pathak ou behalf of the appellant has raised the same two points before us. We shall first deal with the question of jurisdiction. Reliance in this connection is placed on item(6) of Sch. III of the Act, which is in these terms:- "Employment including- (i) reinstatement and recruitment; (ii) unemployment of persorts previously employ- ed in the industry concerned. " It is not in dispute that matters contained in Sch. III are within the jurisdiction of a labour court and an in- dustrial court has no jurisdiction to decide any matter in a reference under s. 73A of the Act which is within the jurisdiction 0£ a labour court. Mr. Pathak con- tends that item (6) of Sch.

III speaks of "employ- ment" and includes in it two matters which might otherwise not have been thought to be included iu it. Therefore, according to him, employment as used in item (6) is wider than the two matters included in it 44 346 SUPREME COURT REPORTS [1961] ~ and the questioh whether contract labour should be Godavari sugar employed or not would be a matter of employment . Uills Ltd. within the meaning of that word in item (6) of Sch. •· III. 'Ve do not think it necessary for purposes of this Hepargaon_ Taluka appeal to consider what \Vould be the ambit of employ- s sbahkhar5I•k•mgadr. ment as used in item (6) of Sch. III. The scheme of • a, a aiwa 1 th A t h. h t d 71 d ' ' _ e c s ows t a un er ss. an 72 the Jurisdiction wanchoo ]. of a labour court and an industrial court is concurrent with respect to any matters which the State Govern- ment may deem fit to refer to them; but under s.

73A reference by a registered union which is a representa- tive of employees and which is also an approved union, caq only be made to an industrial court, subject to the proviso that no such dispute can be referred to an industrial court where under the provisions of the Act it is 'required to be referred to the labour court for its decision. Sec. 78 of the Act provides for jurisdiction of labour courts and matters specified in Sch. II are not within their ordinary jurisdiction. Therefore, when a registered union wishes to refer any matter which is contained in Sch. II of the Act such reference can be made by it only to the industrial court. It follows in consequence that whatever may be the ambit of the word "employment" used in item (6) of Sch. III, if any matter is covered by Sch. II it can only be referred to the industrial court under s .. 73A.

Now the question whether contract labour should be abo; lished (on the assumption that contract labour is not in the employ of the mills) immediately raises ques- . tions relating to permanent increase. in the number of persons employed, their. wages including the period and mode of payment, hours of work and rest inter- vals, which are items (2), (9) and (10) of Sch. II. Therefore, a question relating to abolition of contract labour is so inextricably mixed up with the question of permanent increase in the number of persons em- ployed,' their wages, hours. of work and rest intervals that any dispute relating to contract labour would inevitably raise questions covered by Sch. II. There- fore, a disp_ute relating to contract labour if it is to be referred under s. 73A by a registered union can only be referred to an industrial court as it immediately ' ' ' , 3 S. C. R. SUPREME COURT REPORTS 347 raises matters contained in items (2), (9) and (10) of i96o ~ch. II. Mr. Patha~ urges'h?

wever that mat~ers relat- Godov;;-Sugar mg to permanent mcrease m the number of persons Mill. ngar. that in the written-statements of the appellant, these Sabha, Sakarw•d• points were not raised; but the decision of the appel- wa,,choo ]. late tribunal shows that one of the contentions raised before it by the sugar-mills was that the workmen concerned were not employees of the sugar mills. Therefore, as soon as this contention is raised a dis- pute as to permanent incrnase in the number of per- sons employed, their wages, hours of work and rest intervals would immediately arise. It must therefore be held that a question relating to the abolition of conti:act labour inevitably raises a dispute with respect to these three items contained in Sch. II. In the cir- cumstances we are of opinion that the industrial court had jurisdiction to deal with the matter.

In particu- lar, we may point out that in their petitions the unions had raised at least the question as to the per- manent increase in the number of persons employed and that would immediately bring in item (2) of Sch. II. It is true that the question of permanent increase in the number of persons employed, their wages, hours of work and rest intervals would only arise if contract labour is to be abolished; but in our opinion these are matters so inextricably mixed up with the question relating to abolition of contract labour that they must be held to be in dispute as soon as the dis- pute is niised about the abolition of contract labour, (assuming always that the employer does not accept contract labour as part 0f its labour force). The contention about jurisdiction must therefore be rejec- ted. This brings . us to the second contention raised by l\Ir. Pathak. He bases his argument in this behalf on s.

3( 18), which defines an " industrial matter" as meaning any matter relating to employment, work, wagPs, hours of work, privileges, rights or duties of employers or employees, or the mode, terms and 348 SUPREME COURT REPORTS [1961] r960 conditions of employment. Mr. Pathak urges that the G d -. s definition of "industrial matter" contravenes the o a11a1s ugar f d 1 • h t d d A 9( Mills Ltd. un amenta rig t guaran ee un er rt. 1 l)(g), v. when it provides that the mode of employment is also Kepargaon Taluka included within it. Reference is also made to s. 3(17) Sakh•r Kamgar. which defines an "industrial dispute" as any dispute Sabha, Sakarwad• or difference which is connected with any industrial wanchoo J. matter. Mr. Pathak therefore urges that reading the two definitions together the industrial court is given the power to decide disputes as to the mode of employment and that contravenes the fundamental right guaranteed under Art.

19(l)(g), for it enables an industrial court to adjudicate on the mode of employ- ment and thus interfere with the right of the emplo- yer to carry on hiR t. rade as he likes subject to reason- able restrictions. Now assuming that the mode of employment used in s. 3(18) includes such questions as abolition of contract labour, the question would still be whether a provision which enables an indus- trial court to adjudicate on the question whether con- tract labour should or should not be aboli. ,heLI is an unreasonable restriction on the employer's right to carry on his trade. We c:inn•. :·~ see how the fact that power is given to tho industrial court, which is a quasi-judicial trihuw1l to decide whether contract labour shculd be abolished or not wonld m'1ke the definitio;• ,. ;_· "industrial matter" in so far as it refers to t. he m·_ · · of employment, an unrc,1sonab]e restric- tion on the fundamental right of tho employer to carry on 1. rade.

The matter being entrusted to a quasi- judioial tribunal would be decided after giving both parties full opportunity of presenting their case aud after considering whether in the circumstances of a particular case the restriction on the mode of employ- ment is a reasonable restriction or not. The tribunal would always go into the reasonableness of the mat- ter ttnd if it comes to the conclusion that the mode of employment desired by labour is not reasonable it will not allow it; it is only when it comes to the con- clusion that the mode uf employment desired by labour in a particular case is a reasonable restriction . l 3 -S. C. R. SUPREME COURT REPORTS 349 that it will insist on that parT. icular mode of employ- '9~' ment bein 0 rr used. Take, for example, the case of con- G d . 5 I b · If Th 'b I 'II I · 0 avari "gar tract a our 1tse . e tn una w1 iave to go mto Mills Ltd: the facts of each case. If it comes to the conclusion v.

that on the facts the employment of contract labour Kepa. gaon Taluka is reasonable and thus doing away with it wonld be Sakh"' Kamg« an unreasonable restriction on the right of the emplo- Sabha, Sakarwadi yer to carry on trade, it will permit contract labour to w. ,:;h~o 1 . be carried on. On the other hand if it comes to the conclusion that employment of contract labonr is un- reasonable in the circumstances of the case before it it will hold that it should be abolished, the reason be- ing that it. s abolition would be a reasonable restriction in the circumstances. Therefore the decision whether the mode of employment in a particular case is a rea- sonable restriction or unreasonable one is in the hands of a quasi-judicial tribunal. In the circumstances it cannot be said that by providing in s. 3(18) that an "industrial matter" includes also the mode of employ- ment, there is any contra. vention of the fundamental right oft. he employer to carry on trade.

If the argu- meBt on behalf of the appellant were to be accepted it wou Id mean that. judicittl and quasi- judicial deci- sions could be unreasonable restrictions on funda- mentn,l rights and this the Constitution does uot envi- sage at all. \Ve are therefore of opinion that this contention n,lso fails. Finally, Mr. Pat. hak draws our atteniion to ss. 3(13) and 3(14) of the Act and submits that the appellant never said that contract labour employed in its mills was not in its employment. Sec. 3(13) defines the word "employee" and includes in it any person em- ployed by a contractor to do any work for him in the execution of a contract wit. h an employer within the meaning of sub-cl. (e) of cl. (14). Sec. 3(14) defines the word "employer" in an inclusive manner and in- cludes "where the owner of any undertaking in the course of or for the purpose of conducting the under- ta.

king contracts with any person for the execution by or under the contractor of the whole or any part of any work which is ordinarily part of the undertaking, the owner of the undertaking". It is urged that in view 350 SUPREME COURT REPORTS [1961] '9 60 of these definitions, the employees of the contractors Godavari St1gar are the employees of the mills and the mills are the Mills Ltd. employers of these employees of the contractors. v. Therefore, Mr. Pathak urges that there is no necessity Kepargaon Taluka of abolishing contract labour and that the industrial Sakhar Kamgar. court may, if it so chooses, give the same wages and Sabha, Sakarwad• hours of work and rest intervals and other terms and wanchoo 1 .

conditions of employment to the employees of the contractors as are provided for comparable direct em- ployees of the appellant and in such circumstances it would not be necessary to abolish the contract system so long as the employees of contractors are to be in the same position as the direct employees of the appellant as to their terms and conditionA of service. This was not however the manner in which the case was contested before the industrial court or the appel- late tribunal. All that we need therefore say is that when the matter goes back before the industrial court as directed by the appellate tribunal, tho industrial court may take this submission of the appellant into account and may consider whether it is necessary to abolish the contract system, provided the appellant is able to assure the industrial court that employees of tha contractors who are deemed to be its employees within the meaning of s. 3(13) and s.

3(14) would have the full benefit of the same terms and conditions of service as its comparable direct employees. . The appeal fails and is hereby dismissed with costs. Appeal dismissed. i ..

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