My photo




Monday, April 20, 2015

we hold that the judgments and orders of both the learned single Judge and Division Bench of the High Court in favour of the concerned workmen are legal and valid. The High Court has rightly dismissed the appeal of the Corporation by affirming the award passed by the Tribunal. Therefore, this appeal must fail and accordingly, the same is dismissed. Since the industrial dispute between the parties has been litigated for the last 25 years, it would be just and proper for this Court to give directions as hereunder: (i) The Corporation is directed to comply with the terms and conditions of the award passed by the Tribunal and regularise the services of the concerned workmen in their posts and compute the back-wages, monetary benefits and other consequential monetary benefits including terminal benefits payable to the concerned workmen on the basis of the periodical revision of pay scales applicable from the date of their entitlement, namely, by regularizing them in their services after their completion of 240 days of service in a calendar year in the Corporation as provided under Clause 2 (ii) of the Certified Standing Orders, within eight weeks from the date of receipt of the copy of this Judgment; (ii) If the Corporation fails to comply with the above given directions, the back-wages shall be paid to the concerned workmen with an interest at the rate of 9% per annum. The Corporation is further directed to submit the compliance report for perusal of this Court after the expiry of the said eight weeks. There shall be no order as to costs.


                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO. 3727 OF 2015
                  (Arising out of SLP (C) No. 5532 of 2012)

             ONGC LTD.                            ....APPELLANT


             LABOUR UNION & ORS.                  ...RESPONDENTS

                               J U D G M E N T


     Leave granted.

  The appellant-Corporation has questioned the correctness of  the  judgment
and order dated 11.08.2011 passed by the High Court of Judicature at  Madras
whereby the High Court dismissed the Writ Appeal No. 1006 of 2011  filed  by
the appellant-Corporation against the dismissal of their W.P.  No.  1846  of
2000 challenging  the  award  dated  26.05.1999  passed  by  the  Industrial
Tribunal, Tamil Nadu, in I.D. No.66 of 1991, wherein it was held  that  non-
regularisation of the concerned workmen in the dispute is not justified  and
directed  the  appellant-Corporation  to  regularise  the  services  of  the
concerned workmen with effect from 14.01.1990, the  date  on  which  all  of
them completed 480 days.

  The relevant facts are briefly stated hereunder to  appreciate  the  rival
legal contentions urged on behalf of the parties in this appeal.

     The  appellant-Corporation  is  a  Public  Sector  Undertaking  of  the
Government of India in the name of Oil and Natural Gas  Corporation  Limited
(hereinafter referred to  as  the  'Corporation').  The  Corporation  has  a
project in the  Cauveri  Basin,  situated  in  and  around  Karaikal,  Union
Territory of  Puducherry  and  about  1050  employees  have  been  regularly
employed by the  Corporation  for  its  project.  For  the  purpose  of  the
Corporation's security requirement for the project,  it  initially  employed
the concerned workmen some of whom are members of the  respondent-Union,  as
security guards and security supervisors through  contractors.  However,  on
the notification dated 08.12.1976 issued by the Government  of  India  under
Section 10(1) of the Contract Labour (Abolition and Regulation)  Act,  1970,
abolishing contract labour for watch and ward, dusting and cleaning jobs  in
the Corporation, the concerned workmen were employed as per  the  settlement
arrived at between the Trade Union and the  Management  of  the  Corporation
under Section 18(1) of the Industrial Disputes Act,  1947  (for  short  'the
Act'), under which it was agreed to form a Co-operative Society in the  name
of 'Thai Security Service Priyadarshini  Indira  Cooperative  Society'  (for
short  'the  Co-operative  Society')  for  the  welfare  of  such  erstwhile
contract workmen. The services were utilised by the Corporation through  the
Co-operative Society to meet its requirements and for the  time  period  for
which required, thus dispensing with intermediary contractors.

  On 24.11.1982  subject  to  sanction  by  the  Government  of  India,  the
Corporation passed a resolution by its policy decision to  entrust  security
work to the Central  Industrial  Security  Force  (CISF)  to  protect  their
installations. The said resolution was sanctioned by the President of  India
on  16.12.1985  for  creation  of  posts  for  security  coverage   of   the

  This decision of the Corporation was challenged by the Tamilnadu  National
Industrial and Commercial Employees Union by filing W.P. No.  9688  of  1987
and W.P. No. 11964 of 1987 was filed  by  the  Petroleum  Industrial  Casual
Contract Labour Union before the High Court  of  Madras  on  the  ground  of
breach of settlement arrived at under Section 18(1) of the  Act  and  prayed
for a consequential direction to absorb the workmen  as  regular  employees.
The workmen obtained  an  interim  order  dated  6.10.1987  restraining  the
Corporation from dispensing with the services of the  workmen.  The  learned
single  Judge  of  the  High  Court  upheld  the  policy  decision  of   the
Corporation even in the absence of the copy of  the  policy  framed  by  the
Central Government and dismissed the aforesaid  writ  petitions  vide  order
dated  5.1.1988  holding  that   the   workers   were   not   entitled   for
regularisation and rejected the contentions of the  workmen  in  these  writ

 On 8.9.1987, the Corporation sent a letter to the Co-operative  Society  to
withdraw the services of the security personnel of the Co-operative  Society
w.e.f. 19.10.1987 after handing over charge of the Corporation Unit to  CISF
personnel. An order was passed by the Director General, CISF,  releasing  52
posts  with  immediate  effect  for  induction  of  CISF  personnel  in  the

  Thereafter, since the induction of the CISF personnel into security  posts
of the Corporation was still awaiting sanction from the Central  Government,
the Corporation issued memorandum of appointment  directly to  each  one  of
the concerned workmen appointing them  in  the  posts  of  'Watch  and  Ward
Security' on term  basis  from  13.1.1988  to  29.2.1988  and  also  on  the
condition that the 'Certified Standing Orders for  Contingent  Employees  of
the Oil and Natural Gas  Commission'  (for  short  'the  Certified  Standing
Orders') will not apply to them. The concerned workmen were paid  a  monthly
salary of approximately Rs.445/- per month to security guards  and  Rs.675/-
per month to security supervisors. After completion of the  above  mentioned
term, the concerned workmen were  continued  by  the  Corporation  in  their
respective posts as a stop gap measure without formal written orders.  As  a
result of which, the concerned workmen who were engaged through  contractors
and those who were members of the Co-operative Society became  employees  of
the Corporation on temporary basis.

 Thereafter, the concerned workmen raised  an  industrial  dispute  claiming
regularisation of their services in the Corporation and on  10.10.1991,  the
Central Government in exercise of its power under Section  10  of  the  Act,
1947 referred the same to the Industrial Tribunal, Chennai, Tamil Nadu  (for
short 'the Tribunal')  to  adjudicate  the  dispute  on  the  following  two
"(i) whether the management of ONGC is justified  in  not  regularising  the
workmen in the instant dispute, and, if not, to what relief the workmen  are
entitled to?
(ii) whether the management of ONGC is  justified in not paying equal  wages
to the workmen in the instant dispute  on  par  with  that  of  the  regular
workmen and, if not, to what relief the workmen are entitled to?"

 The reference was taken on file by the Tribunal as I.D. No.66 of  1991.  On
28.04.1993, the Trade Union filed a memo stating that  question  no.(ii)  of
the dispute had been settled out of Court and no  further  adjudication  was
required in that regard by  the  Tribunal.  The  Tribunal,  adjudicated  the
industrial dispute on question no.(i) referred to it on the basis of  facts,
circumstances and evidence on record and passed an award  dated  26.05.1999,
directing the Corporation  to  regularise  the  services  of  the  concerned
workmen by relying on the legal principles laid down by this  Court  in  the
case of Air India Statutory Corporation & Ors.  v.  United  Labour  Union  &
Ors.[1] and further held  that  the  concerned  workmen  were  entitled  for
regularisation of their services since they had completed 480 days  of  work
as required  under  Tamil  Nadu  Industrial  Establishments  (Conferment  of
Permanent Status to Workmen) Act, 1981.
Aggrieved by the award passed by the Tribunal,  the  Corporation  challenged
the same by filing W.P. No.1846 of 2000 before  the  learned  single  Judge,
inter alia, contending that the Tribunal  has  erroneously  exercised    its
jurisdiction and passed an  award  directing            the  Corporation  to
regularise the services of the concerned workmen. It was  further  contended
by the Corporation    that the concerned  workmen  were  originally  engaged
through contractors, without  following  any  procedure  of
selection and appointment, therefore, their services cannot be  regularised.
In support of this contention, reliance was placed on the decision  of  this
Court in the case of Secretary, State of Karnataka & Ors. v. Uma Devi (3)  &

On behalf of the concerned workmen,  it  was  contended  before  the  single
Judge of the High Court that the dispute falls within  the  jurisdiction  of
the Tribunal under the provisions of the  Act  and  that  the  Tribunal  had
sufficient jurisdiction to adjudicate the dispute referred  to  it.  It  was
further contended on behalf of the concerned workmen  that  they  have  been
working on temporary basis from the year 1988 and continuing their  services
on temporary basis  is  an  unfair  labour  practice  on  the  part  of  the
Corporation. Therefore, it was contended that  the  Tribunal  was  right  in
directing the concerned workmen to be regularized  and  that  the  law  laid
down in the case of  Uma  Devi  (supra)  had  no  application  to  cases  of
industrial adjudication.

The learned single Judge on appreciation of  the  facts,  circumstances  and
the legal contentions urged on behalf of both  the  parties  held  that  the
dispute between the parties regarding non-regularisation  of  the  concerned
workmen falls within the  scope  of  industrial  dispute  as  defined  under
Section 2(k) of the Act. It is further held that the concerned  workmen  are
all  victims  of  unfair  labour  practice  having  been  employed  by   the
Corporation for several years on temporary basis and even though  they  were
not appointed by following the procedure laid down by  the  Corporation  for
recruitment to such posts, they were entitled for  regularisation  and  that
their appointment cannot be stated to be illegal. With the  above  findings,
the writ petition was dismissed on merits by the  learned  single  Judge  of
the High Court by its judgment and order dated 04.01.2011.

The said judgment and order of the learned single Judge  was  challenged  by
the Corporation by filing Writ Appeal No. 1006 of 2011 before  the  Division
Bench of the High Court raising certain questions of law. After  considering
the facts, circumstances and nature of the  evidence  on  record  which  was
placed before the Tribunal the same was appreciated by  the  learned  single
Judge,  the  learned  Division  Bench  of  the  High  Court  held  that  the
appointment of the concerned workmen by the Corporation cannot be termed  as
illegal appointment, but was only an irregular  appointment  and  therefore,
they  were  entitled  for  regularisation  in  their  services  having  been
employed on temporary basis and having completed more than 240 days  in  the
calendar year subsequent  to  13.1.1988.  Therefore,  it  was  held  by  the
learned Division Bench of the High Court that no justifiable  or  reasonable
grounds were found for it to interfere with the judgment  and  order  passed
by the learned single Judge of the  High  Court.  The  writ  appeal  of  the
Corporation was dismissed accordingly. Hence,  the  Corporation  filed  this
appeal by framing certain substantial questions of law for consideration  of
this Court.

It has been contended by Mr. P.P. Rao, the learned senior  counsel  for  the
Corporation that the concerned workmen have no right to  be  regularised  as
they have been appointed on term basis without following  due  procedure  as
per the Recruitment and Promotion Regulations, 1980 of the Oil  and  Natural
Gas Commission. The direction contained in the  award  of  the  Tribunal  to
regularise the workmen w.e.f. 1.4.1990 is contrary to the  law  declared  by
the Constitution Bench of this Court in Secretary,  State  of  Karnataka  v.
Uma Devi (supra) having regard to the  following  aspects  of  the  case  on
The appointments of workmen were illegal not irregular, as  they  were  made
without proper competition among qualified persons
The concerned  workmen  do  not  possess  the  qualifications  and  training
required for discharging duties as security guards against attacks by  armed
gangs or terrorists.
They were not working against sanctioned posts.
The sanction obtained subsequently was only for  deployment  of  members  of
the CISF.
The concerned workmen were, as a stop gap arrangement, though not  qualified
but found physically fit, were employed for a short period anticipating  the
posting of CISF personnel.
They were not allowed to continue  voluntarily  by  the  management  without
intervention of any mandatory provision of law or  orders  of  Tribunal  and
Courts. They could not be discharged and had to be allowed to continue  only
on account of legal compulsion, i.e. 33(1) of the  I.D.  Act  1947  and  the
interim orders of the learned single Judge and the Division Bench.
The management cannot be compelled  by  judicial  order  to  regularise  the
services of  unqualified  and  untrained  workmen  as  security  guards  for
discharging duties which only qualified and trained members of an  organised
armed force could competently discharge.

Further, it has been contended by Mr. Rao  that  in  any  event,  since  the
workmen themselves having sought  regularisation  only  from  1.4.1991,  the
Tribunal was not at all justified in directing  regularisation  with  effect
from 1.4.1990 and the High Court also erred in directing  regularisation  of
workmen with retrospective effect from 1.4.1990.

It  is  further  contended  by  him  that  the  award  of  the  Tribunal  is
unsustainable in law by placing reliance on Air India Statutory  Corporation
(supra) which has been subsequently overruled by the Constitution  Bench  in
Steel Authority of India Ltd. & Ors. v. National Union Waterfront Workers  &
Ors.[3]. In fact, the concerned workmen were  not  contract  labourers  when
the industrial dispute was referred to the Tribunal for its adjudication.

It has been further contended by him that the courts  below  have  erred  in
holding that though the procedure contemplated  in  the  Certified  Standing
Orders of the Corporation was not followed when the workmen  were  appointed
on temporary basis they are  still  entitled  for  regularisation  in  their
services by the Corporation. It is further contended by the  learned  senior
counsel that the very appointment itself having been illegal,  no  order  of
regularisation of the services of the concerned workmen could be  passed  by
the Tribunal. The Corporation would term the appointment  of  the  concerned
workmen as illegal appointment as they  were  appointed  in  the  said  post
either through a contractor or through  the  Co-operative  Society,  without
following the procedure contemplated for selection as  per  the  Recruitment
Rules and appointments were given  to  the  concerned  workmen  as  per  the
Certified Standing Orders  of  the  Corporation.  In  support  of  the  said
contention reliance was placed on the decision of this Court in the case  of
Uma Devi (supra). Further, it  has  been  contended  by  him  that  the  law
declared in the case of Maharashtra State Road Transport Corporation &  Anr.
v. Casteribe Rajya Parivahan Karamchari Sanghatana[4] was  per  incuriam  as
the same is inconsistent with the earlier coordinate Bench decision in  U.P.
Power Corporation Ltd. & Anr. v. Bijli Mazdoor Sangh &  Ors.[5]  wherein  it
was declared that the Tribunal cannot give relief to the  workmen  which  is
violative of Article 14 of the Constitution of  India  and  the  concept  of
regularisation explained in Uma Devi's case (supra).

Further, it has been contended that the  Certified  Standing  Orders  cannot
prevail over Uma Devi's case or Article 14 of  the  Constitution  of  India;
therefore, the concerned workmen  cannot  rely  upon  such  orders  to  seek
regularisation. In any case, the Certified Standing Orders only  confer  the
right of consideration and therefore, it is  not  a  vested  right  for  the
concerned workmen for regularisation in their services. The reliance  placed
on the Certified Standing Orders by them is misconceived,  hence  the  award
and judgments are vitiated in law and liable to be  set  aside  by  allowing
this appeal.

On the other hand, Mr. C.U. Singh, the learned senior counsel on  behalf  of
the  concerned  workmen  has  strongly  rebutted  each  one  of  the   above
contentions put forth by Mr. Rao the learned senior  counsel  on  behalf  of
Corporation,  by  erroneously  placing  reliance  on  the   right   of   the
Corporation to implement the alleged "policy decision" to  induct  the  CISF
personnel in the posts of the Corporation inter alia contending that  it  is
an admitted position that this opening ground taken by the  Corporation  was
neither canvassed before the learned single Judge nor the Division Bench  of
the High Court. Nonetheless, it is to  be  noted  that  while  raising  this
ground, the Corporation has not placed on  record  any  document  evidencing
the so-called "policy decision" of the  Central  Government  to  induct  the
CISF personnel in the posts of the Corporation.

Mr. Santosh Krishnan, the learned counsel also appearing for  the  concerned
workmen has contended that a "policy decision" cannot  alter  the  Certified
Standing Orders of the Corporation except in terms  of  Section  10  of  the
Standing Orders Act, 1946. Further,  it  is  urged  by  him  that  the  only
relevant document on record is the letter dated 8.9.1987, which states  that
the  "policy  decision"  is  of  the  Central  Government  and  not  of  the
Corporation. However, the Corporation did not  even  amend  its  Recruitment
Rules or Certified Standing Orders to implement this "policy decision"  only
to recruit the CISF personnel for Watch  and  Ward  Services  posts  of  the
Corporation. This has been further affirmed by the Tribunal in its  findings
of fact that the said defence  of  the  Corporation  is  only  a  ruse.  The
Tribunal has held while answering the question referred to it in  the  order
of reference that the "policy  decision"  taken  by  the  Corporation  is  a
misnomer as the Corporation may be controlled  by  the  Central  Government,
however, by no means does it enjoy the power or the privilege  to  make  any
policy  decisions  as  understood   by   the   courts   below.   Merely   by
characterising an act or omission as a "policy decision"  does  not  absolve
the Corporation from acting  in  accordance  with  law  and  regularise  the
services of the concerned workmen as regular workmen as per Clause 2(ii)  of
the Certified Standing Orders of the Corporation.

Further, on the contention of the Corporation that the  Judgment  and  order
dated 5.1.1988 in W.P. Nos. 9688 of 1987 and 11964 of  1987  forecloses  the
rights of the concerned workmen,  it  is  rebutted  by  the  learned  senior
counsel on behalf of the concerned workmen that  the  said  ground  was  not
canvassed either before the learned single Judge or the  Division  Bench  of
the High Court. A perusal of judgment and order would reveal  that  none  of
the concerned workmen, specifically the answering respondents were party  to
the aforesaid proceedings and  the  Corporation  itself  claimed  that  only
"some of  the  respondent  workmen  had  filed  W.P.  No.9688  of  1987  for
absorption". Further, it is urged by him  that  assuming  without  conceding
that judgment and order dated 5.1.1988 in W.P. Nos. 9688 of 1987  and  11964
of 1987 related to regularisation of the concerned workmen, a  crucial  fact
separates those proceedings from the present proceedings as the  Corporation
on 13.1.1988 admittedly ordered in favour of the workmen by appointing  them
on "term basis". As a result of such appointment orders issued in favour  of
each one of the concerned workmen, they became employees of the  Corporation
albeit on "term basis", therefore, the  industrial  dispute  raised  by  the
concerned workmen acquired different rights than the challenge in W.P.  9688
and 11964 of 1987. It is further urged that the above  submission  can  also
be seen in the light of the Certified Standing Orders  of  the  Corporation,
wherein  the  employees  such   as   the   concerned   workmen   can   claim
regularisation once they fulfil 240 days of  continuous  service  in  twelve
calendar months and possess minimum  qualification.  The  concerned  workmen
were found to have completed 240 days of work in a calendar year  subsequent
to 13.1.1988, therefore, the judgment and order dated 5.1.1988 in W.P.  Nos.
9688 of 1987 and 11964 of 1987 do not bear any relevance to this  litigation
as the legal status of the parties stood modified  subsequent  to  the  said
judgment. Further, the judgment rendered by the  High  Court  in  W.P.  Nos.
9688 of 1987 and 11964 of 1987 without the policy decisions of  the  Central
Government  being  produced  and  examined   in   those   proceedings,   any
observation made in that regard is wholly untenable in law.

Further, it is contended by the learned counsel for  the  concerned  workmen
that the Corporation cannot disclaim  the  legality  of  its  own  Certified
Standing Orders by stating that  it cannot  prevail  over  Uma  Devi's  case
(supra) or Article 14 of the Constitution and that the Standing Orders  only
confer  the  right  of  consideration   and   not   a   vested   right   for
regularisation. It is contended by him that  for  the  last  24  years,  the
Corporation has not considered  and  in  any  case  will  not  consider  the
concerned workmen for regularisation to the post of the Corporation  if  the
same is left to their own discretion. Further,  it  is  urged  by  him  that
failure to honour the Standing Orders for so many years is what  constitutes
"unfair trade practice" on the part of the Corporation in the present case.

Rebutting the contention  urged  on  behalf  of  the  Corporation  that  the
concerned  workmen  are  not  qualified  to  be  regularized,  it  has  been
contended by the learned senior counsel for the concerned workmen  that  the
Tribunal has noted that the concerned workmen are far  more  qualified  than
the existing security  personnel  of  the  Corporation  and  that  they  are
qualified to be appointed as security guards and supervisors, except one  of
them. The learned counsel on behalf of the concerned workmen contended  that
the Recruitment Rules  are  not  amended  prescribing  that  only  the  CISF
personnel are qualified for guard work.

It is further contended by him that in the case  of  Uma  Devi(supra),  this
Court had the occasion to deal with the  issue  of  "litigious  employment".
Admittedly,  the  concerned  workmen  were  voluntarily  appointed  by   the
Corporation initially on term basis. It is by virtue of Section  33  of  the
Industrial Disputes Act that the Corporation is prevented  from  terminating
the  employment  of  the  concerned  workmen  during  the  pendency  of  the
industrial dispute. The decision of the Tribunal was rendered on  26.05.1999
and during the period 1990-1999, the concerned workmen  did  not  enjoy  any
litigious employment  but  were  beneficiaries  of  a  statutorily  mandated
protection and the Corporation has the right under Section 33(i)(a)  of  the
Act to seek permission from  the  conciliation  officer/Tribunal  to  remove
them from their services but that has not been done  by  it.  Therefore,  it
would be an  improper  and  misleading  contention  of  the  Corporation  to
describe this scenario as litigious employment, which contention of it  does
not stand for judicial scrutiny of this Court.

We have heard the factual and rival legal contentions urged by  the  learned
senior counsel on behalf  of  both  the  parties  and  answer  the  same  as
discussed below.

Whether  jurisdiction  of  the  Tribunal  to  direct  the   Corporation   to
regularise the services of the concerned workmen in the posts is  valid  and

     The Central Government in exercise of its powers under  Section  10  of
the Act referred the  existing  Industrial  Dispute  between  the  concerned
workmen and the Corporation to the Tribunal which rightly adjudicated  point
(i) of the dispute (supra) on the basis  of  the  facts,  circumstances  and
evidence on record  and  passed  an  award  dated  26.5.1999  directing  the
Corporation  that  the  services  of  the  concerned   workmen   should   be
regularised with effect from the date on which all  of  them  completed  480
days, subsequent to their appointment by the memorandum of appointment.  The
contention urged on behalf of the  Corporation  that  the  Tribunal  has  no
power to pass such an award compelling the  Corporation  to  regularise  the
services of the concerned workmen is wholly untenable in  law.  Even  if  we
consider the same, the said contention is contrary to the  legal  principles
laid down by this Court in the case  of   Hari  Nandan  Prasad   &  Anr.  v.
Employer I/R To Management of Food Corporation of India & Anr.[6],   wherein
 the decisions in  U.P. Power Corporation v. Bijli Mazdoor Sangh & Ors.  and
Maharashtra  Road  Transport  Corporation  v.  Casteribe   Rajya   Parivahan
Karamchari Sanghathana and Uma Devi (all referred to supra)  were  discussed
in detail. The relevant paragraphs are extracted hereunder:

"25. While accepting the submission  of  the  appellant  therein  viz.  U.P.
Power Corpn., the Court gave  the  following  reasons:  (U.P.  Power  Corpn.
Case, SCC pp. 758-59, paras 6-8)

"6. It is true as contended by the learned counsel for the  respondent  that
the question as regards the effect of the  industrial  adjudicators'  powers
was not directly in issue in Umadevi case. But  the  foundational  logic  in
Umadevi case is based on Article 14 of the  Constitution  of  India.  Though
the industrial adjudicator can  vary  the  terms  of  the  contract  of  the
employment, it cannot do something which is violative of Article 14. If  the
case is one which is covered by the  concept  of  regularisation,  the  same
cannot be viewed differently.

7.The plea of the learned counsel for the respondent that at  the  time  the
High Court decided the matter, decision in Umadevi case was not rendered  is
really of no consequence. There cannot  be  a  case  of  [pic]regularisation
without there being  employee-employer  relationship.  As  noted  above  the
concept  of  regularisation  is  clearly  linked  with  Article  14  of  the
Constitution. However, if in a case the fact situation is  covered  by  what
is stated in para 45 of Umadevi case the industrial adjudicator  can  modify
the relief, but that does not dilute the observations made by this Court  in
Umadevi case about the regularisation.

8.On facts it is submitted by the learned counsel for  the  appellants  that
Respondent 2 himself admitted that he never worked as a pump  operator,  but
was engaged as daily labourer on daily-wage basis. He also did  not  possess
the requisite qualification. Looked at from any  angle,  the  direction  for
regularisation, as given, could not have been given  in  view  of  what  has
been stated in Umadevi case."

It is clear from the above that the Court recognized the underlying  message
contained in Umadevi case to the effect  that  regularisation  of  a  daily-
wager, who has not been appointed  after  undergoing  the  proper  selection
procedure, etc. is impermissible as it was violative of Article  14  of  the
Constitution of India and this principle  predicated  on  Article  14  would
apply to the Industrial Tribunal as well inasmuch as  there  cannot  be  any
direction to regularise the services of a workman in  violation  of  Article
14 of the Constitution. As we would explain  hereinafter,  this  would  mean
that the Industrial Court would not issue  a  direction  for  23regularising
the   services  of  a  daily-wage  worker  in   those   cases   where   such
regularisation would tantamount to infringing the provisions of  Article  14
of the Constitution. But  for  that,  it  would  not  deter  the  Industrial
Tribunals/Labour Courts from issuing such direction,  which  the  industrial
adjudicators otherwise possess, having  regard  to  the  provisions  of  the
Industrial  Disputes  Act  specifically  conferring  such  powers.  This  is
24recognized by the Court even in the aforesaid judgment.

  XXX          XXX                XXX

30. Detailed reasons are given in support of  the  conclusion  stating  that
the MRTU and PULP  Act  provides  for  and  empowers  the  Industrial/Labour
Courts to decide about the unfair labour practice committed/being  committed
by any person and to declare a  particular  practice  to  be  unfair  labour
practice if it so found and also to direct such person to cease  and  desist
from unfair labour practice. The provisions contained in Section 30  of  the
MRTU and PULP Act giving such a power to the Industrial  and  Labour  Courts
vis--vis the ratio of Umadevi are explained by the Court in  the  following
terms: (Maharashtra SRTC case, SCC pp. 573-74, paras 32-33 & 36)

"32. The power given to the Industrial and Labour Courts  under  Section  30
is very wide and the affirmative action mentioned therein is  inclusive  and
not exhaustive. Employing badlis, casuals or  temporaries  and  to  continue
them as such for years, with the object of depriving them of the status  and
privileges of permanent employees is an unfair labour practice on  the  part
of the employer under Item  6  of  Schedule  IV.  Once  such  unfair  labour
practice on the part of the employer is established in  the  complaint,  the
Industrial and Labour Courts are empowered to issue preventive  as  well  as
positive direction to an erring employer.

33. The provisions  of  the  MRTU  and  PULP  Act  and  the  powers  of  the
Industrial and  Labour  Courts  provided  therein  were  not  at  all  under
consideration in Umadevi. As a matter of fact, the issue  like  the  present
one pertaining to unfair  labour  practice  was  not  at  all  referred  to,
considered or decided in Umadevi. Unfair labour practice on the part of  the
employer in engaging employees as badlis,  casuals  or  temporaries  and  to
continue them as such for years with the object of  depriving  them  of  the
status and privileges of permanent  employees  as  provided  in  Item  6  of
Schedule IV and the power of the Industrial  and  [pic]Labour  Courts  under
Section 30 of the Act did not fall for adjudication or consideration  before
the Constitution Bench.

        XXX      XXX          XXX

36. Umadevi does not denude  the  Industrial  and  Labour  Courts  of  their
statutory power under Section 30 read with Section 32 of the MRTU  and  PULP
Act to order permanency of the workers  who  have  been  victims  of  unfair
labour practice on the part of the employer under  Item  6  of  Schedule  IV
where the posts on which they have been working  exist.  Umadevi  cannot  be
held to have overridden the powers of the Industrial and  Labour  Courts  in
passing appropriate order under Section 30 of the MRTU  and  the  PULP  Act,
once unfair labour practice on the part of the  employer  under  Item  6  of
Schedule IV is established."

           XXX           XXX          XXX

[pic]33. In this backdrop, the Court in Maharashtra SRTC  case  was  of  the
opinion that the direction of the Industrial Court to accord  permanency  to
these  employees  against  the  posts  which  were  available,  was  clearly
permissible  and  within  the  powers,  statutorily   conferred   upon   the
Industrial/Labour Courts under Section 30(1)(b) of the MRTU  and  PULP  Act,
1971 which enables the industrial adjudicator  to  take  affirmative  action
against the erring employer and  as  those  powers  are  of  wide  amplitude
abrogating  (sic  including)  within  their  fold  a  direction  to   accord

                                               (emphasis laid by this Court)

Further, it is very clear from the facts  that  all  the  concerned  workmen
have got the qualifications required for their  regularisation,  except  one
of them and have been employed by the Corporation even  prior  to   1985  in
the posts through various irregular means. The Tribunal has got every  power
to adjudicate an  industrial  dispute  and  impose  upon  the  employer  new
obligations to strike a balance and  secure  industrial  peace  and  harmony
between the employer and  workmen  and  ultimately  deliver  social  justice
which is the constitutional mandate as held by the       Constitution  Bench
of this Court in a catena of cases.  This above  said  legal  principle  has
been  laid            down  succinctly  by  this  Court  in  the   case   of
 The Bharat  Bank  Ltd.,  Delhi  v.  The  Employees  of  the

Bharat Bank Ltd., Delhi &  the Bharat Bank Employee's Union,  Delhi[7],  the
relevant paragraph of the said case is extracted hereunder:
"61.We would not examine the process by which an Industrial  Tribunal  comes
to its decisions and I have  no  hesitation  in  holding  that  the  process
employed is not judicial process at all. In settling  the  disputes  between
the employers and the workmen, the function of the Tribunal is not  confined
to administration of justice in accordance with law. It  can  confer  rights
and privileges on either party which it  considers  reasonable  and  proper,
though they may not be within the terms of any existing  agreement.  It  has
not merely to interpret  or  give  effect  to  the  contractual  rights  and
obligations of the  parties.  It  can  create  new  rights  and  obligations
between them which it considers essential for keeping industrial  peace.  An
industrial dispute as has been said on  many  occasions  is  nothing  but  a
trial of strength between the employers on the one hand  and  the  workmen's
organization on the other and the Industrial Tribunal has got to  arrive  at
some equitable arrangement for averting strikes and lock-outs  which  impede
production of goods and the  industrial  development  of  the  country.  The
Tribunal is not bound by the rigid rules of law. The  process  it  employees
is rather an extended form of the process of collective  bargaining  and  is
more akin to administrative than to judicial  function.  In  describing  the
true position of an Industrial Tribunal in  dealing  with  labour  disputes,
this Court in Western India Automobile Association v.  Industrial  Tribunal,
Bombay, and others[1949] F.C.R. 321 quoted  with  approval  a  passage  from
Ludwig Teller's well known work on the subject,  where  the  learned  author
observes that

"industrial arbitration may involve the extension of an  existing  agreement
or the making of a new one or in general the creation of new obligations  or
modification of old ones, while commercial  arbitration  generally  concerns
itself with interpretation of existing obligations and disputes relating  to
existing agreements."

The views expressed in these observations were adopted in  its  entirety  by
this Court. Our  conclusion,  therefore,  is  that  an  Industrial  Tribunal
formed under the Industrial Disputes Act is not a judicial tribunal and  its
determination is not a judicial determination in the proper sense  of  these

It has been further held by  this  Court  in  the  case  of  Life  Insurance
Corporation Of India v. D. J. Bahadur & Ors.[8], as follows:

"22. The Industrial Disputes Act is a benign measure, which  seeks  to  pre-
empt industrial tensions, provide the mechanics of dispute  resolutions  and
set up the necessary infrastructure, so that the energies  of  the  partners
in production may not be dissipated in counter-productive  battles  and  the
assurance of industrial justice may create a climate of goodwill...."

Thus, the powers of an Industrial Tribunal/Labour Court  to  adjudicate  the
industrial  dispute  on  the  points  of  dispute  referred  to  it  by  the
appropriate government have been well established by  the  legal  principles
laid down by this Court in a catena of cases referred to  supra.  Therefore,
the Tribunal has rightly  passed  an  award  directing  the  Corporation  to
regularise the services of the concerned workmen.

Whether the appointment of the concerned workmen  in  the  services  of  the
Corporation is irregular or illegal?

       In the case on hand, the  concerned  workmen  were  employed  by  the
Corporation  initially  through  contractors.  Thereafter,  on  issuance  of
notification dated 08.12.1976 by the Central Government abolishing  contract
labour for the posts of Watch and Ward, dusting and  cleaning  jobs  in  the
Corporation under Section  10(1)  of  the  Contract  Labour  (Abolition  and
Regulation) Act, 1970, the Corporation and the concerned workmen arrived  at
a settlement under Section 18(1) of the Act, wherein a Co-operative  Society
was formed in the  name  of  'Thai  Security  Service  Priyadarshini  Indira
Cooperative Society' for their welfare, thus  dispensing  with  intermediary
contractors.  During  the  pendency  of  the  sanction  from   the   Central
Government of the alleged "Policy  decision",  the  concerned  workmen  were
appointed directly from 13.1.1988 to 29.2.1988  and  thereafter,  they  were
employed continuously without written orders by the Corporation.  It is  the
contention of the learned senior counsel on behalf of the  Corporation  that
the services of  the  concerned  workmen  cannot  be  regularised  as  their
appointment  was  originally   and   initially   through   contractors   and
thereafter, without following any procedure of selection and appointment  as
per     the Recruitment  Rules  and  therefore,  the  same  is  illegal   by
placing reliance on the decision of this Court in para 43 of Uma  Devi  case
(supra). Further, this  Court  in  the  case  of  Ajaypal  Singh  v. Haryana
Warehousing  Corporation[9]  opined  that  when  a  workman   is   initially
appointed in violation of Articles 14 and 16 of the Constitution  of  India,
then the employer at the time of re-employment  of  the  retrenched  workman
cannot take the plea that the initial appointment was in  violation  of  the
abovementioned provisions. The relevant  paragraph   of  the  Ajaypal  Singh
case(supra) is extracted hereunder:
"19. The provisions of  Industrial  Disputes  Act  and  the  powers  of  the
Industrial and  Labour  Courts  provided  therein  were  not  at  all  under
consideration in Umadevi's case.  The  issue  pertaining  to  unfair  labour
practice was neither the subject matter for decision nor was it  decided  in
Umadevi's case."

The plea of the  Corporation  that  the  reason  for  not  regularising  the
concerned workmen under the Certified Standing Orders of the Corporation  is
allegedly due to the fact that the appointment of the concerned workmen  was
made without following due procedure under the Recruitment  Rules  and  that
their appointments were illegal. This plea cannot be accepted by us in  view
of the legal principle laid down  by  this  Court  in  the  above  decision,
wherein it is clearly laid down that the Corporation cannot deny the  rights
of the workmen by  taking  the  plea  that  their  initial  appointment  was
contrary to Articles 14 and 16 of the Constitution.

It is also contended on behalf of the  Corporation  that  the  right  to  be
considered for regularisation by the Corporation as  provided  under  Clause
2(ii) of the Certified Standing Orders of  the  Corporation  does  not  mean
right to regularisation and the discretion  to  regularise  the  workmen  is
with the Corporation as the same has to be exercised  keeping  in  mind  the
interest of the organization by implementing the alleged  "policy  decision"
of appointing the CISF personnel to  the  security  posts.  This  contention
urged on behalf of the learned senior counsel for the Corporation cannot  be
accepted by us for the  reason  that  even  though  due  procedure  was  not
followed by the Corporation for the appointment of  the  concerned  workmen,
this does not disentitle them of  their  right  to  seek  regularisation  of
their services by the Corporation under  the  provisions  of  the  Certified
Standing Orders, after they have rendered more than 240 days of  service  in
a calendar year from the date of the memorandum  of  appointment  issued  to
each one of the concerned workmen in the  year  1988.  The  alleged  "policy
decision" to appoint CISF personnel to the security post  is  on  deputation
basis and cannot be  called  appointment  per  se.  Whereas,  the  concerned
workmen have acquired their right to be regularised under the  provision  of
Clause 2(ii) of the 'Certified Standing Orders for Contingent  Employees  of
the Oil and Natural Gas Commission', which states thus:
"2. (i) Classification of workmen.

The contingent employees of the Commission shall hereafter be classified  as

Temporary, and

   (ii) A workman who has been on the rolls of the Commission  and  has  put
in not less than 180 days of attendance in  any  period  of  12  consecutive
months shall be a temporary workman, provided that a temporary  workman  who
has put in not less than  240  days  of  attendance  in  any  period  of  12
consecutive months and who possesses the minimum  qualifications  prescribed
by Commission may be considered for conversion as regular employee.

     (iii)  A  workman  who  is  neither  temporary  nor  regular  shall  be
considered as casual workman."

The above emphasised portion of  Clause  2(ii)  of  the  Certified  Standing
Orders states that a temporary workman who has put  in  not  less  than  240
days of attendance in any calendar period of 12  consecutive  months,  which
is actually contrary to the provision under  Section  25B(2)a  of  the  Act,
which states that a workman shall be deemed  to  be  in  continuous  service
under an employer for a period of one year, if the workman, during a  period
of twelve calendar  months  preceding  the  date  with  reference  to  which
calculation is to be made, has actually worked under the  employer  for  not
less than one hundred and ninety days in the  case  of  a  workman  employed
below ground in a mine and two hundred and forty days in any other case.  In
any case, it is clear that the  concerned  workmen  have  clearly  completed
more than 240 days of services subsequent to the memorandum  of  appointment
issued by the Corporation in the year 1988 in a period  of  twelve  calendar
months, therefore, they are entitled for regularisation  of  their  services
into permanent posts of the Corporation as  per  the  Act  as  well  as  the
Certified Standing Orders of the Corporation.

 It is the contention of  the  learned  senior  counsel  on  behalf  of  the
Corporation that the policy decision to induct the CISF for the  purpose  of
providing security to its projects passed by the Corporation is  an  act  by
the Central Government  under  Section  30A  of  the  Oil  and  Natural  Gas
Commission Act, 1959 (for short 'the ONGC Act'),  which  the  Parliament  by
way of enactment No.23 of 1977 inserted after Section 30  of  the  principle
Act. The said provision states that the Corporation shall be bound  by  such
directions,  including  directions  regarding  reservation  of   posts   for
Scheduled Castes and the Scheduled Tribes, as  the  Central  Government  may
from time to time, for reasons to  be  recorded  in  writing,  give  to  the
Corporation in respect of its affairs.

For the Corporation to implement such a provision which affects the  service
conditions of its employees, it is necessary for the  Corporation  to  first
modify the Certified Standing Orders by  following  the  procedure  provided
under Section 10 of the Industrial Employment (Standing  Orders)  Act,  1946
as the same  is  a  Special  enactment  and  therefore,  prevails  over  the
provisions under  the  ONGC  Act  and  Recruitment  Rules.  The  Corporation
undisputedly has not made any such modification to  its  Certified  Standing
Orders by following the procedure for modification of conditions of  service
as per Section 10 of the Industrial Employment (Standing Orders) Act,  1946.
The scope of the said act has been succinctly laid down  by  this  Court  in
the case of The U.P. State Electricity Board & Anr. v. Hari Shankar  Jain  &
Ors.[10], upon which decision the learned senior counsel Mr. C.U. Singh  has
rightly placed reliance, the  relevant  paragraphs  of  the  said  case  are
extracted hereunder:
6. Let us now examine the  various  statutory  provisions  in  their  proper
context with a view to resolve the problem before us. First, the  Industrial
Employment (Standing Orders) Act, 1946.  Before  the  passing  of  the  Act,
conditions of service of industrial employees  were  invariably  ill-defined
and were hardly ever known with even a slight degree  of  precision  to  the
employees. There was no uniformity of conditions of  service  for  employees
discharging identical  duties  in  the  same  establishment.  Conditions  of
service were generally ad-hoc and the  result  of  oral  arrangements  which
left the employees at the mercy of the employer.  With  the  growth  of  the
trade union movement and  the  right  of  collective  bargaining,  employees
started putting forth their demands to end this sad and confusing  state  of
affairs. Recognising the rough deal that  was  being  given  to  workers  by
employers  who  would  not  define  their  conditions  of  service  and  the
inevitability of industrial strife in  such  a  situation,  the  legislature
intervened and enacted the Industrial Employment (Standing Orders)  Act.  It
was stated in the statement of objects and reasons:

 "Experience has shown  that  'Standing  Orders',  defining  the  conditions
[pic]of recruitment, discharge, disciplinary action, holidays,  leave  etc.,
go a long  way  towards  minimising  friction  between  the  management  and
workers in  industrial  undertakings.  Discussion  on  the  subject  at  the
tripartite Indian Labour Conferences revealed  a  consensus  of  opinion  in
favour of legislation.  The  Bill  accordingly  seeks  to  provide  for  the
framing of 'Standing Orders' in all industrial establishments employing  one
hundred and more workers."

It was, therefore, considered, as  stated  in  the  preamble  "expedient  to
require employers in industrial establishments  to  define  with  sufficient
precision the conditions of employment under  them  and  to  make  the  said
conditions known to workmen employed by them". The scheme  of  the  Act,  as
amended in 1956 and  as  it  now  stands,  requires  every  employer  of  an
industrial establishment as defined in the Act to submit to  the  Certifying
Officer draft Standing Orders, that is, "Rules relating to matters  set  out
in  the  Schedule",  proposed  by  him  for  adoption  in   his   industrial
establishment. This is mandatory. It has to be done within six months  after
the commencement of the Act. Failure to do so is punishable and  is  further
made a continuing offence. The draft Standing Orders are required  to  cover
every matter set out in the schedule. The Schedule  enumerates  the  matters
to be provided in the Standing Orders and  they  include  classification  of
workmen, shift working, attendance and  late  coming,  leave  and  holidays,
termination of employment, suspension or dismissal for misconduct, means  of
redress for wronged workmen etc.  Item11  of  the  Schedule  is  "Any  other
matter which may be prescribed". By a notification dated November  17,  1959
the Government of Uttar Pradesh has prescribed  "Age  of  superannuation  or
retirement, rate of pension or any other facility  which  the  employer  may
like to extend or may be agreed  upon  between  the  parties"  as  a  matter
requiring to be provided in the Standing Orders. On  receipt  of  the  draft
Standing Orders from the employee, the Certifying  Officer  is  required  to
forward a copy of the same to the  trade  union  concerned  or  the  workmen
inviting them to  prefer  objections,  if  any.  Thereafter  the  Certifying
Officer is required to give a hearing to the employer and  the  trade  union
or  workmen  as  the  case  may  be  and  to  decide  "whether  or  not  any
modification of or addition to  the  draft  submitted  by  the  employer  is
necessary to render the draft Standing Orders certifiable  under  the  Act".
Standing Orders are certifiable under the Act  only  if  provision  is  made
therein for every matter set out in the schedule, if they are in  conformity
with the provisions of the Act and if  the  Certifying  Officer  adjudicates
them as fair and reasonable. The Certifying Officer  is  invested  with  the
powers  of  a  civil  court  for  the  purposes   of   receiving   evidence,
administering oaths, enforcing the attendance of  witnesses  etc.  etc.  The
order of the Certifying Officer is subject to an appeal  to  the  prescribed
Appellate Authority. The Standing Orders as finally certified  are  required
to be entered in a  register  maintained  by  the  Certifying  Officer.  The
employer is required to prominently post the Certified  Standing  Orders  on
special boards maintained for that purpose. This is the broad scheme of  the
Act. The Act also provides for  exemptions.  About  that,  later.  The  Act,
[pic]as  originally  enacted,  precluded   the   Certifying   Officer   from
adjudicating upon the fairness  or  reasonableness  of  the  Draft  Standing
Orders submitted by the employer but an amendment  introduced  in  1956  now
casts a duty upon the Certifying Officer to adjudicate upon the fairness  or
reasonableness of the draft Standing Orders. The scheme of the Act has  been
sufficiently explained by this Court in Associated Cement  Co.  Ltd.  v.P.D.
Vyas3, Rohtak Hissar District Electricity Supply Co. Ltd. v. State of  U.P.,
and Western India Match Co.  Ltd.  v.  Workmen.  The  Industrial  Employment
(Standing Orders) Act is thus seen  to  be  an  Act  specially  designed  to
define the terms of employment of workmen in industrial  establishments,  to
give the workmen a collective voice in defining the terms of employment  and
to subject the  terms  of  employment  to  the  scrutiny  of  quasi-judicial
authorities by the application of the test of fairness  and  reasonableness.
It is an Act giving recognition and form to hard-won and precious rights  of
workmen. We have no hesitation in saying that it is a special Act  expressly
and exclusively dealing with the schedule-enumerated conditions  of  service
of workmen in industrial establishments.

      XXX           XXX            XXX

10. We have already shown that the Industrial Employment  (Standing  Orders)
Act is a special Act dealing with a specific subject, namely the  conditions
of  service,  enumerated  in  the  schedule,  of   workmen   in   industrial
establishments. It is impossible  to  conceive  that  Parliament  sought  to
abrogate the provisions of the Industrial Employment (Standing  Orders)  Act
embodying  as  they  do  hard-won  and  precious  rights  of   workmen   and
prescribing as they do an elaborate procedure,  including  a  quasi-judicial
determination, by a general, incidental provision like Section 79(c) of  the
Electricity (Supply) Act. It is obvious that Parliament did not have  before
it the Standing Orders Act when it passed the  Electricity  Supply  Act  and
Parliament never meant that the Standing Orders Act should stand  pro  tanto
repealed by Section 79(c) of the Electricity Supply Act. We are  clearly  of
the view that the provisions of the Standing Orders Act  must  prevail  over
Section 79(c) of the Electricity Supply Act, in regard to matters  to  which
the Standing Orders Act applies.

    XXX           XXX              XXX

13. Next, we turn to the submission based on  the  notification  made  under
Section 13-B of the Standing Orders Act. Section 13-B reads as follows:

"13-B. Nothing in this Act shall apply to an industrial establishment in  so
far as the workmen employed therein are persons to whom the Fundamental  and
Supplementary Rules, Civil Services  (Classification,  Control  and  Appeal)
Rules, Civil Services (Temporary Service) Rules, Revised Leave Rules,  Civil
Service Regulations, Civilians in Defence Service  (Classification,  Control
and Appeal) Rules or the Indian Railway  Establishment  Code  or  any  other
rules or regulations that may be notified in this behalf by the  appropriate
Government in the Official Gazette, apply."
                                               (emphasis laid by this Court)

33.  In view of the legal principles laid down by this Court  in  the  above
said case, the alleged policy decision taken under Section 30A of  the  ONGC
Act does  not  prevail  over  the  Standing  Orders  Act  framed  under  the
Industrial Employment (Standing Orders) Act,  1946,  which  is  the  Special
Enactment.  Therefore,  the  alleged  "policy   decision"   taken   by   the
Corporation is neither valid in law nor applicable in the case on hand.  The
legal principle laid down in the case of  The U.P. State  Electricity  Board
& Anr. v. Hari Shankar Jain were reiterated by this Court  in  the  case  of
Sudhir Chandra Sarkar v. Tata Iron and Steel Co. Ltd.  &  Ors.[11],  wherein
it was held thus:
"The Parliament enacted the Industrial  Employment  (Standing  Orders)  Act,
1946 ('1946 Act' for short). The long title of the Act provides that it  was
an act to require employers in industrial establishments formally to  define
conditions of employment under them. The preamble of the Act  provides  that
it is expedient to require employers in industrial establishments to  define
with sufficient precision the conditions of employment  under  them  and  to
make the said conditions known to workmen employed by them. By Section 3,  a
duty was cast on  the  employer  governed  by  the  Act  to  submit  to  the
Certifying Officer draft standing orders proposed by  him  for  adoption  in
his industrial establishment. After going through the  procedure  prescribed
in the Act, the  Certifying  Officer  has  to  certify  the  draft  standing
orders.  Section 8 requires  the  Certifying  Officer  to  keep  a  copy  of
standing orders as finally certified under the  Act  in  a  register  to  be
maintained for the purpose. Sub-section 2 of  Section 13 imposes  a  penalty
on employer who does  any  act  in  contravention  of  the  standing  orders
finally certified under the Act. The act was a legislative response  to  the
laissez fairs rule of hire and fire at sweet will.  It  was  an  attempt  at
imposing a statutory contract of service  between  two  parties  unequal  to
negotiate, on the footing of equality. This  was  vividly  noticed  by  this
Court in Western India Match Company Ltd. v. Workmen  as under:
In the sunny days of the market economy  theory  people  sincerely  believed
that the economic law of demand  and  supply  in  the  labour  market  would
settle a mutually beneficial bargain between the employer and  the  workmen.
Such a bargain they took it  for  granted,  would,  secure  fair  terms  and
conditions of employment to the workman. This law they venerated as  natural
law. They had  an  abiding  faith  in  the  verity  of  this  law.  But  the
experience of the working of this law over a long period  has  belied  their

The intendment underlying the Act and the provisions of the Act  enacted  to
give effect to the intendment and the scheme of the Act leave  no  room  for
doubt that the Standing Orders certified under the 1946 Act become  part  of
the statutory terms and conditions of service between the employer  and  his
employee and they govern the relationship between the  parties.  Workmen  of
Messrs Firestone Tyre & Rubber Co. of India (P) Ltd. v. Management and  Ors.
Workmen in Buckinghan and Carnatic Mills Madras v. Buckingham  and  Carnatic
Mills  and M/s.  Glaxo  Laboratories  (I)  Ltd.  v. The  Presiding  Officer,
Labour Court, Meerut and Ors."
                                  (emphasis laid by this Court)

34.   Further,  on  the  direction  of  this  Court  after  concluding   the
submissions made in this appeal,  the  learned  counsel  on  behalf  of  the
Corporation was directed to submit a copy of the Policy  of  the  Government
of India for the year 1982 along  with  the  affidavit  of  the  responsible
officer of the Corporation. The learned  counsel  has  accordingly  produced
the 'Government Policies and Guidelines for Public  Sector  Enterprises  and
Perceptions on Public Sector of PSE Chiefs & the Scope (Vol. I) compiled  by
Dr. Raj Nigam' containing a gist of BPE O.M.  No.  2(97)/72-BPE(GM-I)  dated
5th December, 1972 and BPE O.M. No. 2(38)/75-BPE(GM-I) dated 17th  May  1975
in Guideline Nos. 421 and 422 respectively, as per  the  direction  of  this
Court  vide  order  dated  25.03.2015.  In  this  regard,  to  examine   the
tenability of the submission of the learned senior counsel on behalf of  the
Corporation  the  relevant  portion  of  the  above  mentioned  document  is
extracted hereunder to consider the contention urged in this regard:
"421. Security Arrangements in Public Enterprises:
Ministries etc. are  aware  that  a  force  called  the  Central  Industrial
Security Force has been constituted under the Ministry of Home  Affairs  for
the security of industrial undertakings of the Central Government.

   The question of evolving a uniform procedure in regard to the  deployment
of  the  Force  and  in  providing  security  arrangements  in  the  various
undertakings has been under consideration  of  the  Government  particularly
with a view to ensuring better coordination  between  the  I.G.C.I.S.F.  and
the administrative Ministries/Public Enterprises. It has been  decided  that
the following steps should be taken in this regard:

   There should be close Association between CISF and a  Public  Enterprise,
right from its inception. In other words as soon  as  a  new  Enterprise  is
sanctioned, information about such sanction should be sent automatically  to
the I.G.,C.I.S.F. so that he can start liaison from the  very  outset,  with
the concerned officials in the Ministry concerned and  the  Chief  Executive
of the project as soon as he is appointed.

   No new Enterprise should appoint its own Watch and Ward  Security  staff,
even during construction stage unless a clearance  has  been  obtained  from
the I.G.,C.I.S.F. that he is not in a position to  take  over  the  security
functions of the Enterprise from the very beginning.

    Whenever an investment decision is cleared at the level  of  the  Public
Investment Board an intimation that such a project has been cleared,  should
be sent to I.G.,C.I.S.F.

Ministries etc. are to take necessary action accordingly.

422. Security Arrangements in Public Enterprises:
The DIG CISF in a recent communication to the Bureau of  Public  Enterprises
has pointed out that a number of undertaking have been employing  their  own
Watch and Ward personnel without obtaining clearance  from  CISF  Hqrs.,  in
contravention of the Guidelines issued vide BPE  O.M.  No.2(97)/72-BPE(GM-I)
dated 5th December, 1972.

   It is once again reiterated that it is the statutory  duty  not  only  of
the CISF but also of the Public  Sector  Undertakings  to  induct  CISF  for
better protection and security of the industrial undertakings.

    The administrative Ministries may impress upon the  public  units  under
their administrative control not covered in the  enclosed  list  (not  given
here), the need for the early induction of  the  CISF  force  in  the  units
provide better security arrangements. The units may be  advised  to  contact
IG, CISF, 183 Jor Bagh, New Delhi without any further delay  for  finalising
the arrangements"

Further, the  learned  counsel  on  record  for  the  Corporation  has  also
submitted the Sanction letter  for  creation  of  temporary  posts  for  the
security coverage of ONGC installation by Central Government,  the  relevant
portion of which is extracted hereunder:

The Director General,
Central Industrial Security Force,
13-CGO's Complex,
Lodhi Road,
New Delhi-110003.

Subject:-Creation of temporary posts  for  the  security  coverage  of  ONGC
installations at Madras, Visakhapatnam and Nursapur & Razole Area.

     With reference to your U.O. No. 29013/6/85-Ind-I dated 31.10.1985.I  am
directed  to  convey  the  sanction  of   the

President to the creation of the following temporary posts for the  security
coverage of ONGC Installations  at  Madras,  Vishakapatnam  and  Nursapur  &
Razole Area in the existing  pay  scales  with  usual  allowances  from  the
date(s) and the post(s) are filled in till the  28th February,.........

This issue with the concurrence of Integrated Finance  Division  vide  their
Dy. No.3057/85-Fin. III (D-I) dated 12.12.1985.
                                                           Yours faithfully,
                                 Under Secretary to the Government of India"

We have perused the  above  two  documents.  The  above  mentioned  sanction
letter by the Central Government is for the creation of temporary posts  for
the  security  coverage  of  ONGC  installation  and  not  to  depute   CISF
specifically  into  security  posts  in  the  Corporation,  therefore,   the
reliance placed on the same in  support  of  the  contention  urged  by  the
learned senior counsel on behalf of the  Corporation  is  misplaced  as  the
same is wholly untenable in  law  as  the  same  is  not  reflected  in  the
sanction letter referred to supra. Further, the above  mentioned  guidelines
cannot be considered to be the policy of the Central  Government  as  it  is
not framed in accordance with the relevant 'Business Transaction  Rules'  of
the Central Government. Therefore, we are of the considered view  that  even
if for the sake of argument, the decision to employ the CISF personnel  into
security posts of the Corporation is considered as the  policy  decision  of
the Corporation, the provision under  Clause  2(ii)  of  Certified  Standing
Orders surely overrides the policy decision,  as  the  said  clause  is  not
amended by following the provisions of the Act of 1946  and  therefore,  the
said argument does not hold water as the Certified Standing  Orders  of  the
Corporation as per the Judgments of this Court referred  to  supra  and  the
principle of law laid down in those cases are aptly applicable to  the  fact
situation of the concerned workmen for their regularisation in the  security
posts of the Corporation.

As we have already stated that the alleged policy documents produced by  the
Corporation as per the direction of this Court is traceable to  Section  30A
of the ONGC Act enacted by the Parliament as per  the  contention  urged  on
behalf of the Corporation. Therefore, the contention that  the  said  Policy
is binding  upon  the  Corporation  and  the  concerned  workmen  is  wholly
untenable in law for more than one reason which we have  stated  above.  The
said document cannot be  said  to  be  the  Policy  framed  by  the  Central
Government represented by the Ministry of Petroleum and Natural  Gas,  which
is an independent ministry having the  power  to  formulate  and  administer
various Central laws relating to Petroleum and  Natural  Gas,  however,  the
same must be executed in the name of the President of  India  and  shall  be
authenticated in such a  manner  as  specified  in  the  relevant  'Business
Transaction Rules'. In the instant case, the alleged  Policy  formulated  by
the Central Government has not been issued by following  the  due  procedure
as provided under the 'Business Transaction Rules'. For  this  reason  also,
the said document produced by the learned counsel  for  the  Corporation  to
justify the alleged Policy being applicable to the concerned workmen  cannot
be called as the policy document passed under Section 30A of the Act by  the
Central Government and moreover, the same was not incorporated by way of  an
amendment to the Certified Standing Orders of the Corporation  by  following
the procedure as provided under Section  10  of  the  Industrial  Employment
(Standing Orders) Act, 1946.

      The reliance  placed  upon  these  documents  by  the  Corporation  in
justification of their claim that the concerned workmen are not entitled  to
be regularised in their services as permanent employees in  their  posts  as
per the award passed by the Tribunal is misplaced and  wholly  untenable  in
law. Therefore, the same cannot be accepted by this Court. Hence,  the  said
contention is liable to be rejected and is accordingly rejected.

Further, it was contended by the learned senior counsel that  the  Certified
Standing Orders of the Corporation do not apply to the concerned workmen  to
claim regularisation in their posts as regular employees as  provided  under
Clause 2(ii) of the Certified Standing Orders of the Corporation.  The  said
contention is wholly  untenable  in  law  as  the  Standing  Orders  of  the
Corporation certainly apply to the  concerned  workmen  as  they  have  been
rendering their services in the Corporation even prior  to  the  year  1985,
being appointed through contractors, the Co-operative Society  and  directly
thereafter vide memorandum of  appointment  in  the  year  1988  by  issuing
appointment orders on different dates during  that  year  on  the  condition
that the Certified Standing Orders of the ONGC will  not  be  applicable  to
them. Such a condition incorporated in the appointment orders issued to  the
concerned workmen is not valid in law and the same is void  for  the  reason
that they are workmen for the purpose of the Certified Standing  Orders  and
therefore, the above said condition has to be ignored.  When  the  concerned
workmen were appointed by issuing the memorandum of appointment to  work  in
the posts of the Corporation,  providing  them  with  monthly  salaries,  it
cannot arbitrarily  and  unilaterally  state  that  the  Certified  Standing
Orders of the Corporation are not applicable to the concerned  workmen.  The
concerned  workmen  cannot  be  denied  their  legitimate,   statutory   and
fundamental right to be regularised in their posts as provided under  Clause
2 (ii) of the Certified Standing Orders on  the  basis  of  the  above  said
contention urged on their behalf and also because the  Corporation  did  not
follow the due procedure as provided under the Appointment  and  Recruitment
Rules for appointment of the concerned workmen in the Corporation. The  said
contention   urged  by  the  learned  senior  counsel  on  behalf   of   the
Corporation is an afterthought to justify their irregular act of  appointing
them as temporary workmen and continuing them as such for a number of  years
though they are entitled  for  regularisation  under  Clause  2(ii)  of  the
Standing Orders of the Corporation,  which  action  of  it   amounts  to  an
unfair labour practice as defined under Section 2(ra) of the Act, read  with
the provisions of Sections 25T and 25U of  the  Act,  which  prohibits  such
employment in the Corporation. It would be unjust and unfair  to  deny  them
regularisation in their posts for the error committed by the Corporation  in
the procedure to appoint them in the posts. Further, the Corporation  cannot
use the alleged "policy decision" as a veil  to  justify  its  action  which
included inaction on its part in not regularising the concerned  workmen  in
their services under Clause 2(ii) of the Certified Standing Orders.

In light of the above said discussion and  legal  principles  laid  down  by
this Court in the cases referred to supra, we are  of  the  considered  view
that the procedure of appointments adopted by the Corporation  with  respect
to  the  concerned  workmen   initially   appointed   through   contractors,
subsequently through the Co-operative Society, and then  vide memorandum  of
appointment issued to each one of the concerned workmen  in  the  year  1988
and thereafter, continuing them in  their  services  in  the  posts  by  the
Corporation without following any procedure as  contended  by   the  learned
senior counsel on behalf of the Corporation whose  contention  is  untenable
in law and their appointment can be said as irregular appointments  but  not
as illegal as the same was not objected  to by any other  Authority  of  the
Corporation at any point of time. But their appointment in their  posts  and
continuing them  in  their  services  is  definitely  cannot  be  termed  as
illegal, at best it  can  be  called  irregular.  Therefore,  the  Certified
Standing Orders of the Corporation by  all  means  apply  to  the  concerned
workmen.  The legal contention urged on behalf of the Corporation  that  the
statutory right claimed by the concerned workmen under Clause 2(ii)  of  the
Certified Standing Orders of the Corporation for regularizing them in  their
posts as regular  employees  after  rendering  240  days  of  service  in  a
calendar is not an absolute right conferred upon them  and  their  right  is
only to consider their claim.  This  plea  of  the  learned  senior  counsel
cannot again be accepted by us for the reason that the Corporation is  bound
by law to take its decision to regularise  the  services  of  the  concerned
workmen  as  regular  employees  as  provided  under  Clause  2(ii)  of  the
Certified Standing Orders after their completion of 240 days of  service  in
a calendar year as they have acquired valid  statutory  right.  This  should
have been positively considered by the Corporation and  granted  the  status
of regular employees of the Corporation for the reason that  it  cannot  act
arbitrarily and unreasonably deny the same especially it being  a  Corporate
Body owned by the Central Government and an instrumentality of the State  in
terms of Article 12 of the Constitution and therefore,  it  is  governed  by
Part III of the Constitution. The  Corporation  should  exercise  its  power
fairly and reasonably in accordance with law. This has not been done by  the
Corporation as per the law laid down by this  Court  in  the  case  of  Olga
Tellis & Ors. v. Bombay Municipal Corporation and Ors.[12]  wherein  it  was
held as under:-

"40. Just as a mala fide act has no existence in the eye of  law,  even  so,
unreasonableness  vitiates  law  and  procedure  alike.  It   is   therefore
essential that the procedure prescribed by law for  depriving  a  person  of
his fundamental right, in this case the right to life, must conform  to  the
norms of justice and fairplay. Procedure, which is unjust or unfair  in  the
circumstances of a case, attracts  the  vice  of  unreasonableness,  thereby
vitiating the law which prescribes  that  procedure  and  consequently,  the
action taken under it. Any action taken  by  a  public  authority  which  is
invested  with  statutory  powers  has,  therefore,  to  be  tested  by  the
application of two standards: the action must be within  the  scope  of  the
authority conferred by law and secondly,  it  must  be  reasonable.  If  any
action, within the scope of the authority conferred by law, is found  to  be
unreasonable, it must mean that  the  procedure  established  by  law  under
which that action is taken is itself unreasonable. The substance of the  law
cannot be divorced from [pic]the procedure  which  it  prescribes  for,  how
reasonable the law is, depends upon how fair is the procedure prescribed  by
it. Sir Raymond Evershed says that, "from the point of view of the  ordinary
citizen, it is the procedure that will most  strongly  weigh  with  him.  He
will tend to form his judgment of the excellence or otherwise of  the  legal
system from his personal  knowledge  and  experience  in  seeing  the  legal
machine at work". Therefore, "He  that  takes  the  procedural  sword  shall
perish with the sword."

Therefore, the concerned workmen have approached the Tribunal by raising  an
industrial dispute regarding the regularisation of  their  services  in  the
Corporation. The same has been properly adjudicated by  the  Tribunal  based
on pleadings, evidence on record and in accordance with law. Therefore,  the
same cannot be found fault with by this Court in this appeal.

Further, the  contention  urged  on  behalf  of  the  Corporation  that  the
concerned workmen do not  possess  the  required  qualifications  for  their
respective posts, in this regard, we have gone through  the  facts  recorded
by the Courts below  in  comparison  with  the  'Recruitment  and  Promotion
Regulations, 1980  of  the  Oil  and  Natural  Gas  Commission'  framed  and
published with previous approval of the Central Government  in  exercise  of
the powers conferred upon it under Section 32 of the  Oil  and  Natural  Gas
Commission Act, 1959, and we are fully satisfied that all of  the  concerned
workmen  barring  just  one  of  the  concerned   workmen   have   all   the
qualifications required to be regularised in  the  permanent  posts  of  the
Corporation as regular employees.

Further, it has been contended by the learned senior counsel  on  behalf  of
the Corporation that in the absence of any plea  taken  by  the  workmen  in
their claim statement regarding unfair labour practice  being  committed  by
the Corporation against the concerned workmen, the learned single Judge  and
the Division Bench ought not to have entertained the said plea as  it  is  a
well  settled  principle  of  law  that  such  plea  must  be  pleaded   and
established by a party who relies before the Tribunal.  In  support  of  the
above contention reliance was placed by him on the decision  of  this  Court
in Siemens Limited & Anr. v. Siemens Employees Union & Anr.[13]

    The said contention of the learned  senior  counsel  on  behalf  of  the
Corporation is wholly untenable in  law  and  the  reliance  placed  on  the
aforesaid case is misplaced for the reason that it  is  an  undisputed  fact
that the workmen have been  appointed  on  term  basis  vide  memorandum  of
appointment issued to each one of the concerned workmen in the year 1988  by
the Corporation who continued their services for several years.  Thereafter,
they were denied their legitimate right to be regularised in  the  permanent
posts of the Corporation. The said fact was duly noted by the High Court  as
per the contention urged on behalf of the Corporation and held on the  basis
of facts and evidence on record that the same attracts entry Item  No.10  of
Schedule V of the Act, in  employing  the  concerned  workmen  as  temporary
employees against permanent posts who have been doing  perennial  nature  of
work and continuing them as such for number of years. We affirm the same  as
it is a clear case  of  an  unfair  labour  practice  on  the  part  of  the
Corporation as defined under Section 2(ra) of the Act, which is  statutorily
prohibited under Section  25T  of  the  Act  and  the  said  action  of  the
Corporation warrants penalty to be imposed upon it under Section 25U of  the
Act. In fact, the said finding  of  fact  has  been  recorded  by  both  the
learned single Judge and the  Division  Bench  of  the  High  Court  in  the
impugned judgment on the ground urged on behalf  of  the  Corporation.  Even
if, this Court eschews the said finding and reason recorded in the  impugned
judgment  accepting  the  hyper  technical  plea  urged  on  behalf  of  the
Corporation that there is no plea of unfair  labour  practice  made  in  the
claim statement, this Court in this appeal cannot interfere with  the  award
of the Tribunal and the impugned judgment and order of the  High  Court  for
the other reasons assigned by them for  granting  relief  to  the  concerned
workmen. Even in the absence of plea of an act  of  unfair  labour  practice
committed by the Corporation  against  the  concerned  workmen,  the  Labour
Court/High Court have got the power to record the finding  of  fact  on  the
basis of the record of the conciliation officer to ensure that  there  shall
be effective adjudication of the industrial dispute  to  achieve  industrial
peace and harmony in the industry in the larger interest  of  public,  which
is the prime object and intendment of  the  Industrial  Disputes  Act.  This
principle of law has been well established in a  catena  of  cases  of  this
Court.  In the instant case, the commission of an unfair labour practice  in
relation to the concerned workmen by the Corporation is ex-facie clear  from
the facts pleaded by both the parties and therefore,  the  courts  have  the
power to adjudicate the same effectively to resolve the dispute between  the
parties even in the absence of plea with regard to such  an  aspect  of  the

For the reasons recorded in this judgment, we hold that  the  judgments  and
orders of both the learned single Judge  and  Division  Bench  of  the  High
Court in favour of the concerned workmen  are  legal  and  valid.  The  High
Court has rightly dismissed the appeal of the Corporation by  affirming  the
award passed by the Tribunal.

      Therefore,  this  appeal  must  fail  and  accordingly,  the  same  is
dismissed. Since  the  industrial  dispute  between  the  parties  has  been
litigated for the last 25 years, it would be just and proper for this  Court
to give directions as hereunder:

(i)  The Corporation is directed to comply with the terms and conditions  of
the award passed  by  the  Tribunal  and  regularise  the  services  of  the
concerned workmen in  their  posts  and  compute  the  back-wages,  monetary
benefits  and  other  consequential  monetary  benefits  including  terminal
benefits payable to the concerned workmen on the  basis  of  the  periodical
revision of pay scales  applicable  from  the  date  of  their  entitlement,
namely, by regularizing them in their services  after  their  completion  of
240 days of service in a calendar year in the Corporation as provided  under
Clause 2 (ii) of the Certified Standing Orders, within eight weeks from  the
date of receipt of the copy of this Judgment;

(ii)  If the Corporation fails to comply with the  above  given  directions,
the back-wages shall be paid to the concerned workmen with  an  interest  at
the rate of 9% per annum. The Corporation is further directed to submit  the
compliance report for perusal of this Court after the  expiry  of  the  said
eight weeks. There shall be no order as to costs.

                                 [V.GOPALA GOWDA]

                                 [C. NAGAPPAN]

New Delhi,
April 17, 2015

ITEM NO.1A-For Judgment      COURT NO.11               SECTION XV

               S U P R E M E  C O U R T  O F  I N D I A
                       RECORD OF PROCEEDINGS

Civil Appeal  No(s)........../2015 @ SLP(C) No.  5532/2012

ONGC LTD.                                          Appellant(s)


PETROLEUM COAL LABOUR UNION & ORS.                 Respondent(s)

Date : 17/04/2015 This matter was called on for pronouncement of JUDGMENT

For Appellant(s)
                     M/s Arputham Aruna & Co.

For Respondent(s)       Mr. V.N. Subramaniam, Adv.
                     Mr. Satish Kumar,Adv.

                        Mr. Santosh Krishnan, Adv.
                        Mrs. Sonam Anand, Adv.
                     Mr. Deeptakirti Verma,Adv.

            Hon'ble Mr. Justice V.Gopala Gowda pronounced  the  judgment  of
the Bench comprising His Lordship  and  Hon'ble  Mr.  Justice  C.  Nagappan.

            Leave granted.
            The appeal is  dismissed  in  terms  of  the  signed  Reportable

    (VINOD KR.JHA)                              (MALA KUMARI SHARMA)
      COURT MASTER                                COURT MASTER
            (Signed Reportable Judgment is placed on the file)

[1]    (1997) 9 SCC 377
[2]    (2006) 4 SCC 1
[3]    (2001) 7 SCC 1
[4]    (2009) 8 SCC 556
[5]    (2007) 5 SCC 755
[6]    (2014) 7 SCC 190
[7]    AIR 1950 SC 188
[8]    (1981) 1 SCC 315
[9]    2014(13)SCALE636
[10]   (1978) 4 SCC 16
[11]   (1984) 3 SCC 369
[12]   (1985)3 SCC  545
[13]   (2011) 9 SCC 775

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.