Food Corporation of India Vs Presiding Officer and Others

Rajiv Narain Raina, J.@mdashThis writ petition has been filed by the Food Corporation of India (in short ''the FCI'') challenging the correctness of the award dated 02.09.2009 (P-15) passed by the Presiding Officer, Central Government Industrial Tribunal-cum-Labour Court, Chandigarh. The learned Tribunal has held that the 30 workmen involved, for whom the dispute was referred for industrial adjudication, have been held entitled to the benefits of the notification dated 29.11.1985 issued by the Labour and Employment Department, Government of Haryana, in exercise of the powers conferred by Section 10(1) of the Contract Labour (Regulation and Abolition) Act, 1970 (in short ''the 1970 Act''). The Governor, after consultation with the State Advisory Contract Labour Board, prohibits employment of contract labour in 22 food storage depots including Rail heads of the FCI (Haryana Region). The notification lists 22 towns/cities in Haryana including the one in question, i.e., Karnal, which falls at serial No. 7. The learned Tribunal has applied the rigorous of this notification prohibiting contract labour. The learned Tribunal has simultaneously granted benefit of an agreement dated 12.04.1991 arrived at between the management of the FCI and the Food Corporation of India Workers'' Union in implementation of 5 notifications including the one promulgated on 29.11.1985 (P-1). In this agreement, the management acceded the demand of the union in introducing departmentalization of labour in the depots including the ones located at Karnal. Clause 12 of the agreement made the settlement dated 12.04.1991 effected from 01.01.1991 in respect of ''notified depots'' falling in Haryana State.

2. The 30 handling workers involved in this reference while engaged through contractors at Karnal in Modern Rice Mills owned and run by the FCI. The Modern Rice Mills was a FCI''s rice shelter and within its complex was located Shed No. 4 as part and parcel of 03 other food storage depots located in Karnal where contract labour was prohibited by the 1985 notification. It is not disputed that Modern Rice Mills was closed in 1996. On closure of the Modern Rice Mills, the contractor labour working in the establishment of the Modern Rice Mills were not terminated but were provided with work of Food Storage Depot in Shed No. 4. The FCI on closure of the Modern Rice Mills continued to treat the 30 workers working in Shed No. 4 as outside the benefits of the notification of 1985 and the agreement/settlement dated 12.04.1991. That is why the dispute arose with regard to the status of the 30 contract workers which came to be referred by the appropriate Government in Industrial Reference No. 23/1999 before the learned Tribunal. The issue which was framed in the reference by the appropriate Government was whether the action of the management of FCI (Haryana Region) in not regularizing the services of the 30 handling workers was just and legal and, if not, to what relief were the workmen be entitled to and from what date.

3. In response to the reference, FCI entered appearance and contested the case by filing written statement. It was submitted that the workmen cannot claim for regularization automatically. The applicants were neither covered by the notification dated 29.11.1985 nor the agreement dated 12.04.1991. These workers were employed by M/s. Karnal Ekta Co-operative Labour and Construction Society Ltd, who deployed them to the Modern Rice Mills and it was the contractor, who had been paying wages to the workmen. On facts, it was pleaded that the Food Storage Depots and the Modern Rice Mills were distinct and separate entities and one cannot be considered at par with the other. After the closure of the mill in 1996, the handling operations in Shed No. 4 continued and were carried out from the Mill premises, therefore, labour operations in Shed No. 4 continued to be operated through an external contractor. The benefit of the notification and the settlement cannot per se be extended to them. However, the notification and settlement/agreement have been duly implemented by the FCI in letter and sprit qua Food Storage Depots in all the 22 notified towns/cities in the State of Haryana.

4. What appears to have weighed in the mind of the FCI in denying benefits of departmentalization to the 30 workmen is that Shed No. 4 in the Modern Rice Mills cannot be taken as a Food Storage Depot. It is worthy of note that the 3 other Food Storage Depots located in Karnal were numbered serially as FSD No. 1 to FSD No. 3 and in the same series, the food storage facilities of Modern Rice Mill was called Shed No. 4.

5. The short question, which was required to be determined by the Tribunal was whether Shed No. 4 was of the same species as the other Food Storage Depots to earn the benefit of prohibitory notification dated 29.11.1985.

6. It could, however, not be seriously disputed that the activity of handling work carried out in Shed No. 4 was similar and identical to the activities performed in FSD Nos. 1 to 3 at Karnal.

7. To resolve the issue, both the sides relied on the notification and the agreement and the due date of applicability viewed from different points of view, pro and contra. The only apparent distinction between FSD No. 1 to 3 and Shed No. 4 is that Modern Rice Mills had a separate contractor. MW 1 M.S. Bhullar, Assistant General Manager, FCI, Noida, was cross-examined in the witness box. He deposed that Food Storage Depot, Karnal, has three sheds. Modern Rice Mills is in the same campus but entry points are different. During the currency of operation of Modern Rice Mills, all the workers were doing loading and unloading work in Shed No. 4. The 30 workmen were doing the work they were doing before closure of Modern Rice Mills. He admitted that the nature of work performed by the labours under contractors at the 4 sites is the same. He, however, deposed that workmen of Shed No. 4 were not allowed to work in Shed Nos. 1, 2 and 3 and vice versa. His deposition was recorded on 30.01.2009.

8. It cannot be disputed that geographically all the 4 sheds lie in close proximity to each other.

9. The workers led oral evidence in support of their case showing that no real distinction existed between the four sheds vis-a-vis workers involved in FSD Nos. 1 to 3 and Shed No. 4. On examination of the notification and the agreement which is a settlement arrived at in conciliation proceedings and is, therefore, binding on the parties u/s 18 of the Industrial Disputes Act, 1947, and the oral testimonies of the parties and evidence led before it the learned Tribunal has held that the notification and agreement deserve liberal interpretation. At any rate, Shed No. 4 was found to be part and parcel of Food Storage Depots in a series of sheds numbered by the FCI as FSD Shed No. 1, Shed No. 2, Shed No. 3 and Shed No. 4. The stand of the FCI was not found justified by the learned Tribunal and it proceeded to extend the benefit of the notification and settlement to the 30 workers. The benefit of departmentalization has been granted to the 30 workers w.e.f. 01.01.1991 as envisioned in the settlement. The reference has been answered accordingly.

10. I have heard Mr. O.P. Goyal, learned Senior Counsel appearing for the FCI at considerable length and Mr. Puneet Gupta and Mr. Akshay Bhan the learned counsel appearing for the workers.

11. The principal argument of Mr. Goyal is that the notification prohibiting contract labour runs only in Food Storage Depots and Shed No. 4 cannot be treated as a Food Storage Depot. Shed No. 4 remains separate and distinct before and after closure of Modern Rice Mills. Mr. Goyal does not dispute that Shed 4 facility has not been shut down on closure of Modern Rice Mills and the facility is still used by FCI for storage of food grains and, therefore, the continued need for handling workers whose services have been continued but through a contractor till the present. This Court asked Mr. Goyal that assuming that ''Food Storage Depots'' have not been defined in the notification dated 29.11.1985, is it the case that FCI being a statutory authority has itself defined what a Food Storage Depots means so as to exclude Shed No. 4 from the operation of the notification, he was unable to answer. Therefore, I am inclined to think that the learned Tribunal was not incorrect in applying a liberal construction to the term ''Food Storage Depot'' to include Shed No. 4.

12. There is a key to unlock this mystery in the settlement dated 12.04.1991 itself. Firstly, in the settlement in its opening part, the words ''Food Storage Depots'' have not been used. To the contrary, the word ''depots'' has atone been used. In Clause 1, FCI agreed to introduce departmentalization of labour in the ''depots'' as at Annexure A. In Annexure A, the city name ''Karnal'' is found at serial No. 5. Neither the word ''depots'' nor the noun Karnal has been curtailed by anything set down in the notification. As a matter of fact Clause 7 of the agreement, which is indicative of the broad expanse of the notification dated 29.11.1985 has been worded in such a manner that certain Godowns, which were not specifically covered under the notification would also be given the benefit of departmentalization as a special case. That clause is found at running at page 83 of the paper book. It is settled that a Settlement or agreement arrived at in conciliation proceedings are sacrosanct and of binding nature just as a contract. This Court is of the considered view that Shed No. 4 was at least a ''depot'' with a right of departmentalization of contract labour working there.

13. Mr. Goyal has relied on a Division Bench judgment of the Calcutta High Court in F.M.A. No. 2345 of 2005 titled Food Corporation of India v. Central Government Industrial Tribunal, Asansol and others decided on 25.02.2009. This was a case involving closure of Modern Rice Mills belonging to FCI at Durgapur in West Bengal, where also successive contractors were running loading and handling work. A reference was made by the Government of India for adjudication whether the demand of Durgapur Casual Workers Union for absorption of 49 casual workmen as per list enclosed by the management of FCI, Durgapur, was justified through successive contractors. On the closure of the mill the contract system was terminated and the Rice mill was closed in 1990-91. The workmen were directly employed by the FCI in June 1991 as casual employees on daily wage basis in the Food Storage Depot at Durgapur, for performing the work of sweeping Godown floors, wagons etc. The issue was not similar to the kind presented in this case. There was no notification prohibiting contract labour to do the job of sweeping etc. Even if the job was perennial in nature, the direct engagement by FCI of contract workers was to prevent dislocation in the public distribution system but that may not ipso facto be good conclusion to hold them as direct employees and to accord the benefit of absorption to them. It was in this background that the award of the learned Tribunal directing permanent absorption was held to be not legally sustainable. It is one thing to claim absorption and regularization de hors notification u/s 10(1) of the 1970 Act but it is quite another to establish it for the first time before the learned Tribunal unless there is a finding of unfair labour practice under the 5th Schedule of the Industrial Disputes Act, 1947 having regard to entry 10 thereof, which may give jurisdiction to the learned Tribunal to consider a case of absorption or regularization, if one such is referred. This judgment is of no help to the FCI. 15. Mr. Goyal would next rely upon the decision of the Supreme Court in Secretary, State of Karnataka and Others Vs. Umadevi and Others, . Uma Devi (supra) is an authority on the question of jurisdiction of constitutional courts exercising authority under Article 226 and 32 of the Constitution not to issue directions of absorption, regularization or permanent continuation of temporary, contractual, casual daily wage or adhoc employees unless the recruitment itself was made regular in terms of the Constitutional mandate of Articles 14 and 16. But Uma Devi is not an authority on industrial law where workers may be protected by entry 10 of the 5th Schedule of the Industrial Disputes Act, 1947 while examining a case of unfair labour practice. Uma Devi (supra) has been explained in Maharashtra State Road Transport Corporation and Another Vs. Casteribe Rajya P. Karmchari Sanghatana, which deals with Entry 6 of the MRTU Act and PULP Act operating in Maharashtra under which Entry 6 is in pari materia Entry 10 of the Central Act. In any case, it was not the defence of the FCI before the Industrial Tribunal that the entry of these 30 workers was dehors the constitutional scheme nor was the issue debated before the Court below. This argument cannot be permitted to be raised for the first time in writ jurisdiction as explained in Harjinder Singh Vs. Punjab State Warehousing Corporation, Uma Devi has no application to the facts of this case.

14. Mr. Goyal would then rely o Indian Drugs and Pharmaceuticals Ltd. Vs. Workman, Indian Drugs and Pharmaceuticals Ltd., , which deals with public employment in Government companies which are instrumentalities of State. Creation of posts, appointment to posts, regularization, fixing of pay scales, continuation in service, promotion etc. is in the domain of State policy and these issues cannot be decided on the basis of sympathy or emotion and it would be not be proper for Courts to step into the this sphere accept in an exceptional case. On the strength of this decision Mr. Goyal urges that absorption and regularization are not within the domain of judicial review. There cannot be any dispute as to the fundamental principles of service jurisprudence laid down in this decision but I fail to see how it helps the Corporation tied by the notification u/s 10 of the 1970 Act and in the act of the FCI itself in signing up the settlement/agreement for departmentalization of its contract labour. In the same strain he refers to State of Madhya Pradesh and Another Vs. Dharam Bir, and Hindustan Aeronautics Ltd. Vs. Dan Bahadur Singh and Others,

15. Mr. Akshay Bhan and Mr. Puneet Gupta, have contended that the scope of judicial review of awards of industrial tribunals and scope of interference is limited to perversity and patent illegality. They rely on the judgment in G.M. ONGC, Shilchar Vs. ONGC Contractual Workers Union, , to submit that the High Court has authority to inquire as to whether a finding arrived at by the industrial tribunal is based on evidence, and to correct apparent errors on the face of record or findings arrived at contrary to law or facts but interference in such cases is limited.

16. The learned Tribunal has examined and appreciated evidence on record in arriving at its decision. It would not be proper for this Court to reappraise evidence and come to a different conclusion. In the present case, the reference itself was with respect to regularization and, therefore, the learned Tribunal need not have gone into any ancillary question with respect to presence of a contractor. FCI in this case, could not be permitted to lift the yoke of the notification prohibiting contract labour and making the 30 workers indirect employees especially in a case where their engagement was continued in Shed No. 4 for 17 years.

17. In the main and to sum up, I would support the award of the Tribunal of two basic counts. Firstly, the notification u/s 10 dated 29.11.1985 prohibits contract labour in the Food Storage Depots at Karnal and elsewhere. Food Storage Depot has not been defined. It is, however, not an expression of art. It only means a place where food is stored. In relation to the FCI it means a place where food is stored for handling and distribution of food grains to run the Public Distribution System in the country and its equitable spreading over a sub continent to feed millions of mouths for which the Corporation has been created by an Act of Parliament. Secondly, the words ''Food Storage Depot'' have not been employed in the settlement arrived at in conciliation proceedings between the petitioner and the FCI Workers'' Union that espoused the cause of the 30 workers who were members of the trade union. In the agreement, the word ''depots'' has been used with a view to introduce departmentalization of labour in the depots without further sub classification. Therefore, ''Food Storage Depots'' and ''depots'' appear in their plain meaning to be one and the same thing. Resultantly, Shed No. 4 where 30 workers toiled is held to be an integral part of a series of Food Storage Depots serially numbered by the FCI in Karnal all lying in close proximity to FSD Nos. 1, 2, 3. If this was not the case there would have been no compulsion or necessity at the time when Modern Rice Mills was functioning for the FCI to have numbered the depot attached to the Mill or to have called it Shed No. 4 in a series of Food Storage Depots. Therefore, there is no merit in the submissions put forth by Mr. Goyal on behalf of the Corporation. Consequently, this writ fails and is dismissed. The award is ordered to be implemented forthwith and the service and financial benefits arising out of the settlement be given to the 30 workers w.e.f., 01.01.1991 without delay.