Bhilwara Dugdh Utpadak Sahakari … vs Vinod Kumar Sharma Dead By Lrs & Ors on 1 September, 2011

                                                                                       REPORTABLE


                           IN THE SUPREME COURT OF INDIA 


                           CIVIL  APPELLATE  JURISDICTION 


                            CIVIL   APPEAL NO.  2585  OF  2006





BHILWARA DUGDH UTPADAK

 SAHAKARI S. LTD.                                                           Appellant (s)


                                          VERSUS


VINOD KUMAR SHARMA DEAD BY 

LRS & ORS.                                                                  Respondent (s)

O R D E R

Heard learned counsel for the appearing parties.

This Appeal has been filed against the impugned judgments dated 23.08.2004 and

dated 21.09.2004 passed by the High Court of Judicature at Rajasthan.

This Appeal reveals the unfortunate state of affairs prevailing in the field of labour

relations in our country.

In order to avoid their liability under various labour statutes employers are very often

resorting to subterfuge by trying to show that their employees are, in fact, the employees

of a contractor. It is high time that this subterfuge must come to an end.

Labour statutes were meant to protect the employees/workmen because it was

realised that the employers and the employees are not on an equal bargaining position.

Hence, protection of employees was required so that they may not be exploited.

However, this new technique of subterfuge has been adopted by some employers in

recent years in order to deny the rights of the workmen under various labour statutes by

showing that the concerned workmen are not their employees but are the

employees/workmen of a contractor, or that they are merely daily wage or short term or

casual employees when in fact they are doing the work of regular employees.

This Court cannot countenance such practices any more. Globalization/liberalization

in the name of growth cannot be at the human cost of exploitation of workers.

The facts of the case are given in the judgment of the High Court dated 23.08.2004

and we are not repeating the same here. It has been clearly stated therein that subterfuge

was resorted to by the appellant to show that the workmen concerned were only workmen

of a contractor. The Labour Court has held that the workmen were the employees of the

appellant and not employees of the contractor. Cogent reasons have been given by the

Labour Court to come to this finding. The Labour Court has held that, in fact, the

concerned workmen were working under the orders of the officers of the appellant, and

were being paid Rs 70/- per day, while the workmen/employees of the contractor were

paid Rs. 56/- per day.

We are of the opinion that the High Court has rightly refused to interfere with this

finding of fact recorded by the Labour court.

The Judgment of this Court in Steel Authority of India vs. National Union Waterfront

Workers (2001) 7 SCC 1 has no application in the present case. In that decision the

question was whether in view of Section 10 of the Contract Labour (Regulation and

Abolition) Act, 1970 the employees of contractors stood automatically absorbed in the

service of the principal employer. Overruling the decision in Air India Statutory

Corporation vs. United Labour Union, (1997) 9 SCC 377 this Court held that they did

not.

In the present case that is not the question at all. Here the finding of fact of the

Labour Court is that the respondents were not the contractor’s employees but were the

employees of the appellant. The SAIL judgment (Supra) applies where the employees

were initially employees of the contractor and later claim to be absorbed in the service of

the principal employer. That judgment was considerating the effect of the notification

under Section 10 of the Act. That is not the case here. Hence, that decision is clearly

distinguishable.

Mr. Puneet Jain, learned counsel for the appellant submitted that the High Court has

wrongly held that the appellant resorted to a subterfuge, when there was no such finding

by the Labour Court. The Labour Court has found that the plea of the employer that the

respondents were employees of a contractor was not correct, and in fact they were the

employees of the appellant. In our opinion, therefore, it is implicit in this finding that

there was subterfuge by the appellant to avoid its liabilities under various labour statutes.

For the reasons given above, there is no infirmity in the impugned judgment of the

High Court. The Appeal is dismissed accordingly. No costs.

……………………………………………J

[MARKANDEY KATJU]

……………………………………………J

[CHANDRAMAULI KR. PRASAD]

NEW DELHI;

SEPTEMBER 01, 2011