* Author
[2024] 3 S.C.R. 627 : 2024 INSC 199
Mahanadi Coalfields Ltd.
v.
Brajrajnagar Coal Mines Workers’ Union
(Civil Appeal No. 4092-4093 of 2024)
12 March 2024
[Pamidighantam Sri Narasimha* and Sandeep Mehta, JJ.]
Issue for Consideration
Whether the Tribunal was justified in entertaining the reference of
an industrial dispute when a binding settlement under Section 18
(1) read with Section 19(2) and Section 36 of the Industrial Dispute
Act, 1947 was arrived at between the parties.
Headnotes
Industrial Dispute Act, 1947-Section 10 - Reference of disputes;
Section 18 (1) read with Section 19(2) - Settlement binding
on all parties.
32 workers, working continuously for 10 years, sought regularisation
on the basis of Clause 11.5.1 and Clause 11.5.2 of the National
Wage Agreement IV - Settlement arrived between the labour
union and management under Rule 58 of the Industrial Disputes
(Central) Rules, 1957 - 19 workers regularised - 13 workers’ job
described as ‘purely casual’ – Central Government invoked power of
reference to Tribunal - Tribunal found that the (1) 13 workers were
on same footing as regularised workers, granted regularisation (2)
job was perennial in nature (3) management could not establish
distinction - Concurrent findings by High Court in Writ Petition and
Review Petition.
Held: 13 workers entitled to regularisation on parity basis –
Workers entitled to back wages on grounds of wrongful denial of
employment and regularisation – Back wages to be calculated
from the date Tribunal’s decision in reference – Under Article 136
only substantial questions of law can be entertained [Paras 16,
18, 20, 22, 23, 24].
Case Law Cited
J.K. Synthetics Ltd. v. K.P. Agarwal [2007] 2 SCR 60 :
(2007) 2 SCC 433 – referred to.
628 [2024] 3 S.C.R.
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List of Acts
Industrial Dispute Act, 1947; Industrial Disputes (Central) Rules,
1957.
List of Keywords
Settlement; Back Wages; Artificial Distinction; Nature of Job; Same
footing; Reference; Conciliation; Regularisation; Wrongful Denial
of employment.
Case Arising From
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 4092-4093
of 2024
From the Judgment and Order dated 11.01.2017 in WPC No.2002 of
2002 and dated 11.11.2021 in RVWPET No.77 of 2017 of the High
Court of Orissa at Cuttack
Appearances for Parties
Aman Lekhi, Sr. Adv., Soumyajit Pani, Aishwary Bajpai, Siddharth
Jain, Advs. for the Appellant.
Ashok Kumar Panda, Sr. Adv., Tejaswi Kumar Pradhan, Mohan
Prasad Gupta, Manoranjan Paikaray, Shashwat Panda, Advs. for
the Respondent.
Judgment / Order of the Supreme Court
Judgment
Pamidighantam Sri Narasimha, J.
1. Delay condoned. Leave granted.
2. The Appellant, Mahanadi Coalfields Ltd., a subsidiary of Coal India
Ltd. floated a tender for the transportation of crushed coal and
selected a successful contractor for performance of the agreement
for the period 1984 to 1994. The contractor employed workmen for
execution of this contract.
3. The respondent-union espoused the cause of the workmen who were
engaged by the contractor and sought permanent status for them.
It relied on clauses 11.5.1 and 11.5.2 of the National Coal Wage
Agreement-IV dated 27.07.1989. Under these clauses, it was agreed
that the employer shall not engage contract labour with respect to
[2024] 3 S.C.R. 629
Mahanadi Coalfields Ltd. v. Brajrajnagar Coal Mines Workers’ Union
jobs which are permanent and perennial in nature. They also provide
that such jobs shall be executed through regular employees.
4. Following the representation of the respondent-union, the Assistant
Labour Commissioner sent a notice to the appellant for conciliation.
The conciliation process eventually culminated in a settlement dated
05.04.1997 under Rule 58 of the Industrial Disputes (Central) Rules,
1957. The relevant portion of the settlement is as follows:
“The Union has submitted a list of 32 persons said to have
been engaged by the contractors and demanded for their
regularisation. Alter verification, it was observed, that the
following persons are engaged in Bunker for operating
Chutes.
SI
No.
Name of the Person Father’s
Name
01. Sri Sadanand Bhoi Keshab
02. Sri Purusottam Dau Govardhan
03. Sri Anta Barik Gadadhar
04. Sri Aditya Nikhandia Cheru
05. Sri Bhabagrahi Pradhan D. Pradhan
06. Sri Sudarshan Khandit Masru
07. Sri Ashok Kumar Rout Sitaram
08. Sri Krishna Dau Goverdhan
09, Sri Abhimanyu Kisan Chhala
10. Sri Lakhan Bhoi Keshab
11. Sri Jay Narayan Bhoi Chaitan
12. Sri Sanatan Kisan Ugresan
13. Sri Giridhari Raudia Goverdhan
14. Sri Daitari Pradhan Nira
15. Sri Subram Bag Buchhu
16. Sri Madhu Marai Dasa
17. Sri Fakir Khamari Kartik
18. Sri Sanatan Naik Ram Krishna
19. Sri Sanatan Bhoi Tiharu
Since this operation is of permanent and
perennial nature, it was agreed to regularise
the above 19 (nineteen) persons as General
630 [2024] 3 S.C.R.
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Mazdoor, Category-I, in the NCWA-V Pay Scale
of Rs. 65.40-1.08-85.52.
In respect of other persons, it was contended,
that they are engaged in purely casual nature
of jobs, which are not prohibited under Contract
Labour (R&A) Act, 1970, and accordingly, they
are not eligible for regularisation.”
5. In view of the fact that the settlement is confined to only 19 workmen,
the Central Government referred the entire dispute to the Industrial
Tribunal under Section 10 (2A)(1)(d) of the Industrial Disputes Act,
1947, on 20.05.1997 registered as Dispute Case no. 27/2001 before
the Industrial Tribunal, Rourkela, Odisha. Before the Tribunal, the
workmen examined 3 witnesses in support of their case and the
management examined 4 witnesses.
6. By its judgment dated 23.05.2002, the Tribunal allowed the industrial
dispute and directed the regularization of the remaining 13 workmen.
The important findings of the Tribunal are as follows. At the outset, the
Tribunal rejected the preliminary objection that it had no jurisdiction
under the Contract Labour (Regulation and Abolition Act), 1970 and
proceeded to consider the nature of the work that the 13 workmen
were performing. Having considered the matter in detail, the Tribunal
held that the work of removing spillages in the railway siding, below
the bunker and operation of chutes (in the bunker) are regular
and perennial in nature. Having considered the evidence of the
management witnesses, the Tribunal concluded that the nature of
the work is perennial. Accordingly, the remaining 13 workers were
directed to be regularized in the following terms:
“The evidence is straight and clear that all the 32 persons
were attending the same of. The rest 13 persons whose
cases have not been regularized were attending the same
job, which was being attended by 19 persons whose services
has been regularized. So standing on the same footing the
cases of the rest 13 persons should not have been ignored
on the ground that, they did not deserve to be regularized as
reflected in the settlement. In my opinion when 19 persons
have been regularized the case of rest 13 persons who
were attending the same type of work should have been
regularized without any cause. The ground stated in the
[2024] 3 S.C.R. 631
Mahanadi Coalfields Ltd. v. Brajrajnagar Coal Mines Workers’ Union
settlement that they do not deserve, in my opinion does not
appears to be a genuine ground to discard the cases of the
rest 13 persons. I am not inclined to burden the award by
placing all the submissions made on behalf of the parties.
It is necessary to refer the evidence of the Witness No. 2
examined on behalf of the 1st Party Management. As per
clause 11.5.0 of N.C.W.A. IV the Contract Labourers cannot
be engaged for permanent and perennial nature of job. He
has further stated that, they had entered to a settlement
regarding those 19 persons. His further evidence is that the
persons out of 13 were also working in Coal Handling Plant,
which is a permanent and perennial in nature. The evidence
of the Witness No. 3 of the 1st Party Management is that,
the work of railway siding is also a regular and perennial in
nature for which the 19 persons have been regularized. All
the 32 persons were attending the job of removing spillages
for railway Biding below the bunker and also the operation
of the chutes in the bunker. So in view of such evidence it
cannot be said that the rest 13 persons were not attending
the job which were being attended by the 19 persons whose
services has been regularized. So in my opinion, even if
there has been a settlement between the parties regularizing
19 persons the rest of 13 persons has got cause of action
to raise the Industrial separate and their case should not
have been ignored. In the other words the action of the 1st
Party Management in not regularizing the services of the
rest 13 persons in accordance was N.C.W.A. IV is illegal
and unjustified. Hence, this Issue is answered accordingly.”
7. Questioning the legality and validity of the Tribunal’s judgment, the
appellant filed a Writ Petition (C) numbered 2002/2002 before the
Orissa High Court.
8. The Division Bench of the High Court heard the matter, and by its
judgment, impugned before us, dismissed the writ petition. The High
Court referred to the nature of work performed by the workmen
and affirmed the findings of the Tribunal based on the evidence of
witnesses such as MW3, the personal manager in the appellant
company. The High Court took note of his evidence that the work on
railway sidings was regular and perennial in nature. He also admitted
that it is with respect to that work for which the 19 workers were
632 [2024] 3 S.C.R.
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regularized. The High Court also observed that there was no evidence
to dispute that all 32 workers were engaged in removing spillages
from railway sidings and below the bunker, which is in addition to
operating chutes. The High Court, therefore, upheld the view taken
by the Tribunal. The Review Petition bearing No. 77/2017 filed by
the management was also dismissed by the order dated 11.11.2021.
9. We have heard Mr. Aman Lekhi, learned Senior Counsel appearing
on behalf of the appellant, assisted by Mr. Siddharth Jain, Mr.
Soumyajit Pani and Ms. Aishwary Bajpai, Advocates and also Mr.
Ashok Kumar Panda, learned Senior Counsel for the respondentunion, assisted by Mr. Tejaswi Kumar Pradhan, Mr. Mohan Prasad
Gupta, Mr. Manoranjan Paikaray and Mr. Shashwat Panda, Advocates.
10. Submissions of the appellant: Before this court, the appellant
company contends that the Award dated 23.05.2002 is bad in law. It
argues that the settlement was binding on the parties due to Section
18(1) read with Section 36, Industrial Disputes Act and it continues
to be so by virtue of Section 19(2) of the Act, since the settlement
was never terminated.
10.1 The settlement was reached after verification of the nature of
works performed. It was found that 19 workers were performing
perennial and permanent work and the work of the remaining
13 workers was ‘casual’ in nature.
10.2 There was no provision to regularize such workers under the
NCWA-IV. The only provision under which regularization could
be claimed would be Section 25F of the Industrial Disputes
Act, but the said provision applies only to workers who worked
under the direct supervision of the company for a certain period
and wrongfully stopped thereafter. In the present case, as the
workmen worked under the supervision of a contractor and not
the appellant, Section 25F will have no application.
10.3 Lastly, it is contended that the Tribunal had wrongly directed
the appellant to disburse backwages to the 13 workers. This
is contrary to the settled principle that grant of backwages can
never be automatic or a natural consequence of regularization.
The workers seeking regularization and backwages have an
onus to show that they are not gainfully employed. For this,
the appellant relied on J.K. Synthetics Ltd. v. K.P. Agrawal &
anr. reported as (2007) 2 SCC 433 to support this contention.
[2024] 3 S.C.R. 633
Mahanadi Coalfields Ltd. v. Brajrajnagar Coal Mines Workers’ Union
11. Submissions of the respondent-union: The respondent-union
submitted that all 32 workers were engaged in works of a similar
nature. They assert that the list in the industrial reference dated
20.05.1997 shows that workers were arbitrarily deprived of
regularization, wherein certain workers from the bunker and the
plant were left out of the settlement without any reason. It is also
argued that the work in the railway siding was perennial and regular
in nature, similar to the works in the bunker.
11.1 To support its contentions, the respondent-union relies on the
evidence of MW3 and MW4, who were the personal manager
and the project officer in the appellant company, respectively.
While MW3 categorically admitted that the removal of spilled
coal from the railway siding, the bunker and the Coal Handling
Plant is regular and perennial in nature, MW4 stated that all 32
workers were engaged similarly. It is therefore submitted that
their evidence proves that the 13 workers actively participated
in tasks deemed regular and perennial.
11.2 Since there was no resolution of the claim of regularization
of similarly placed workers, they have the right to pursue the
remedy under the Industrial Disputes Act, 1947. It is submitted
that Rule 58 of the Industrial Dispute (Central) Rules, 1957
under which the settlement occurred, nowhere poses a legal
obstruction to the remedy.
11.3 It is finally submitted that the 13 workmen suffered for no fault
of theirs and an order of regularization must naturally lead to
grant of consequential backwages.
12. Analysis and findings: Having heard the parties in detail, we are
of the opinion that the present appeals can be disposed of for the
following reasons.
13. At the outset, the appellant objected to the Tribunal entertaining
the industrial dispute passing of the award on the ground that a
settlement under S. 18(1) read with S. 36 of the Industrial Disputes
Act is binding on all the parties under S. 19(2) of the Act. This is
the substantive part of the submission on behalf of the appellant.
The facts of this case, as they unfold, leading to the arrival of the
settlement, followed by the reference to the Industrial Tribunal, and
then the award, are necessary for our consideration.
634 [2024] 3 S.C.R.
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14. At the first place, all the 32 workmen commenced their work
through the contractor from 1984 and continued till 1994. In 1994,
the respondent-union espoused the cause of all the 32 workers
and the Asst. Labour Commissioner took up the entire cause. This
culminated in the settlement dated 05.04.1997, relied upon by the
appellant.
15. To appreciate the submission that the settlement is the last word
and that the Tribunal could not have entertained the reference or
passed the Award, the following facts become crucial.
16. The settlement itself talks about the claim of the 32 workers raised
by the respondent-union. It then talks about the contention of the
management that others are engaged in ‘purely casual’ nature of jobs.
In the very next sentence, it agreed to regularize 19 contractors. It is
important to note that, being conscious of the fact that the settlement
provides for the regularization of 19 out of the 32 workmen, the
Government invoked the power of reference to refer the matter to
the Tribunal to adjudicate the interest of all the 32 workers. The
Tribunal was naturally bound by the reference to consider the claim
of all the 32 workers.
17. Despite the fact that there was a settlement with respect to some
of the workmen, the Tribunal was tasked to examine the entire
reference and give independent findings on the issue. Thus, the
Tribunal was justified in giving its award on the reference made by
the central government. This answers the objection raised by the
appellant about the jurisdiction of the Tribunal.
18. We are also conscious of the fact that the jurisdiction that we exercise
is under Article 136 of the Constitution. The findings of fact arrived
at by the Tribunal are unassailable. We are also of the opinion that
the High Court has correctly rejected the writ petition filed against
the award. Apart from the concurrent findings of fact, we see no
substantial question of law in these appeals.
19. Even otherwise, the present case is not one where this court would
exercise its discretion. What appeals to us is that the 32 workers who
entered the service of the appellant in 1984, continued uninterruptedly
till 1994, when the respondent-union sought their permanence. In the
settlement arrived in 1997, the stand of the appellant with respect
to the 13 workers is as follows:
[2024] 3 S.C.R. 635
Mahanadi Coalfields Ltd. v. Brajrajnagar Coal Mines Workers’ Union
“In respect of other persons, it was contended that they
are engaged in purely casual nature of jobs which are
not prohibited under Contract Labour (R&A) Act, 1970
and accordingly, they are not eligible for regularisation.”
20. It is proved that the remaining workers stand on the same footing as
the regularized employees, and they were wrongly not made part of
the settlement. This is established by the Tribunal, by examining the
nature of work undertaken by the first set of 19 workmen and that of
the other 13 workmen. It also examined Shri Arun Ch. Hota (WW3),
the Deputy General Manager (MW2), Mr. Udayshankar Gonelal, the
Personal Manager (MW3) and Shri S. Agarwal, the Project Officer
(MW4). The Tribunal finally came to the conclusion that the nature
of the duties performed by the 13 workmen are perennial in nature.
The appellant has failed to establish any distinction between the two
sets of workers. The Tribunal was, therefore, justified in answering
the reference and returning the finding that they hold the same status
as the regularized employees.
21. We are also not impressed with the artificial distinction which the
appellant sought to bring about between the 19 workers who were
regularized and the 13 workers who were left out. The evidence on
record discloses that, of the total 32 workmen, 19 workers worked in
the bunker, 6 worked in the Coal Handling Plant, and 7 worked on
the railway siding. However, of the 19 workers who were regularized,
16 worked in the bunker, and 3 worked in the Coal Handling Plant.
However, 3 workers from the same bunker, 3 workers from the same
Coal Handling Plant and again 7 workers from the same railway
siding were not regularized. A tabulated representation of the above
description is as follows:
Site of work No. of
workers who
executed
works
No. of
workers
who were
regularized
No. of
workers not
regularized
Bunker 19 16 3
Coal Handling Plant 6 3 3
Railway Siding 7 - 7
Total: 32 19 13
636 [2024] 3 S.C.R.
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22. The above-referred facts speak for themselves, and that is the
reason why the Tribunal has come to a conclusion that the denial
of regularization of the 13 workmen is wholly unjustified. As stated
previously, we do not find any grounds in the artificial distinction
asserted by the appellant. However, as the case was argued at length
we thought it appropriate to give reasons for rejecting the appeals.
What we have referred to hereinabove are all findings of fact by the
Tribunal as affirmed by the High Court. In view of the concurrent
findings of fact on the issue of nature of work, the continuing nature
of work, continuous working of the workmen, we are of the opinion
that there is no merit in the appeals filed by the appellant.
23. This is a case of wrongful denial of employment and regularization,
for no fault of the workmen and therefore, there will be no order
restricting their wages.
24. With respect to payment of backwages, we are of the opinion that
the workmen will be entitled to backwages as observed by the
Industrial Tribunal. However, taking into account, the long-drawn
litigation affecting the workmen as well as the appellant in equal
measure and taking into account the public interest, we confine the
backwages to be calculated from the decision of the Tribunal dated
23.05.2002. This is the only modification in the order of the Tribunal,
and as was affirmed by the judgment of the High Court.
25. For the reasons stated above, the appeals arising out of the final
judgment and order of the High Court in W.P. (C) No. 2002/2002
and order in Review Petition No. 77/2017 are dismissed with the
direction that the concerned workmen shall be entitled to backwages
with effect from 23.05.2002. There shall be no order as to costs.
Headnotes prepared by: Result of the case:
Aishani Narain, Hony. Associate Editor Appeals dismissed
(Verified by: Madhavi Divan, Sr. Advocate) with directions
