CASE NO.: Appeal (civil) 258 of 1985 PETITIONER: SOCIEDADE DE FORMENTO INDUSTRIAL PVT. LTD. AND ORS. RESPONDENT: MORMUGAO DOCK LABOUR BOARD AND ANR. DATE OF JUDGMENT: 18/01/1995 BENCH: P.B. SAWANT & S.C. AGRAWAL JUDGMENT:
JUDGMENT
1995 (1) SCR 377
The Judgment of the Court was delivered by
S.C. AGRAWAL, J. : These appeals, by special leave, arise out of Writ
Petition No. 60 of 1983 filed by the appellants in C.A. No. 258 of 1985,
hereinafter referred to as ‘the petitioners’, in the High Court of Bombay,
Panaji Bench, Goa, wherein they had challenged the validity of two
circulars dated March 19,1983 issued by the Mormugao Dock Labour Board,
hereinafter referred to as ‘the Board’. By one of those circulars the
general levy payable in respect of handling by grab cranes fitted to ships
with effect from October 30, 1982 was fixed at 400% on the actual
employment of one set of Winch Drivers and on the notional employment of
two gangs per hook (400% for each gang) and welfare levy relating to the
above operation was fixed at 60% of the time rate wages both in respect of
Winch Drivers and in respect of notional employment of two gangs per hook
with effect from October 30, 1982. By the other circular a special levy @
Re. 1/- per tonne was imposed in respect of all cargoes manually handled
from March 14, 1983. By a subsequent circular dated July 14, 1983 it was
clarified that the special levy is to be calculated in respect of cargoes
handled with the help of registered dock workers, whether gang workers or
Winch Drivers. The said circulars were issued in exercise of the powers
conferred by clause 54 of the Mormugao Dock Workers (Regulation of
Employment) Scheme, 1965, hereinafter referred to as ‘the Scheme’ framed by
the Government of India in exercise of the powers conferred on it by the
Dock Workers (Regulation of Employment) Act, 1948 hereinafter referred to
as ‘the Act’.
The Act was enacted with a view to provide for regulating the employment of
dock workers. Section 3 of the Act provides for a Scheme for registration
of dock workers and employers with a view to ensuring greater regularity of
employment and for regulating the employment of dock workers, whether
registered or not, in a port. Such a Scheme, among other provisions, can
provide for securing a minimum pay in respect of periods during which
employment, or full employment, is not available for dock workers to whom
the Scheme applies and who are available for work. Under Section 4 the
power to frame the Scheme has been conferred on the Central Government in
relation to a major port the State Government in relation to any other
port. Section 5A or the Act provides for the establishment of a Dock Labour
Board for a port or a group of ports. Under Section 5-B the Dock Labour
Board has been entrusted with the responsibility for administering the
Scheme for the port for which it has been established. The Board has been
established by the Central Government under Section 5-A of the Act for
Mormugao Port which is a major port. In exercise of the powers conferred by
Section 4(1) read with Section 3 the Scheme has been made by the Central
Government. As indicated in Clause 2 the objects of the Scheme are to
ensure greater regularity of employment for dock workers and to secure that
an adequate number of dock workers is available for the efficient
performance of dock work. The Scheme applies to stevedoring work and cargo
handling from wharf to transit shed and vice-versa and the categories of
stevedore workers covered by the Scheme are (a) gang workers and (b) winch
drivers. The Scheme is only applicable to registered dock workers and
registered employers and it does not apply to any dock worker unless he is
employed or registered for employment as a dock worker. In Clause 3 various
expressions including the expressions ‘daily worker’, ‘dock employer’,
‘monthly worker’, ‘registered dock workers’, ‘registered employer and
‘reserved pool’ have been defined. Sub-Clause (e) of Clause 3 defines a
daily worker to mean a registered dock worker who is not a monthly worker.
The expression ‘monthly worker’ is defined in sub-clause (k) to mean a
registered dock worker who is engaged by a registered employer or a group
of such employers on monthly basis under a contract which requires for its
termination at least one month’s notice on either side. A “registered dock
worker” is defined in sub-clause (n) to mean a dock worker whose name is
for the time being entered in the register or record. The expression “dock
employer” is defined in sub-clause (f) to mean the person by whom a dock
worker is employed or is to be employed and includes a group of dock
employers formed under clause 16(l)(d). Under sub-clause (o) “registered
employer” means a dock employer whose name is for the time entered in the
employers’ register. “Reserve pool” is defined in sub-clause (p) to mean a
pool of registered dock workers who are available for work, and who are not
for the time being in the employment of a registered employer or a group of
dock employers as monthly workers. Clause 32 of the Scheme makes provision
for guaranteed minimum wages in a month and reads as under :
“32. Guaranteed Minimum wages in a month. (1) A worker in the reserve pool
register shall be paid wages at least for fifteen days in a month at the
wage rate inclusive of dearness allowance as prescribed by the Board
appropriate to the category to which he permanently belongs, even though no
work is found for him for the minimum number of fifteen days in a month.
The days on which work is allotted to the worker shall be counted towards
the fifteen days mentioned above. The guaranteed minimum wages in a month
shall be :-
(a) for the number of days for which wages are guaranteed in a month
subject to the condition that the worker attended for work on all days of
the month as directed by the Administrative Body.
(b) proportionate to the number of days on which the worker attended for
work provided he was excused from attendance on all the remaining days of
the month.
(2). Subject to the provisions of sub-clause (1) the minimum number of days
in a month for which wages are guaranteed may be fixed by the Board for
each year on the basis of the monthly average employment obtained by the
workers in the reserve pool in the lowest categories of stevedore workers
during the preceding year until the minimum number of days reaches 21,
provided the number so fixed shall not, in any case, be less than the
number in the preceding year.
NOTE : This method of assessing the average employment is detailed in
Schedule II.
(3) The minimum number of days for which wages shall be guaranteed under
sub-clauses (1) and (2) shall not automatically apply to workers in new
categories that may be registered after the date of enforcement of the
scheme. The minimum number of days for which wages shall be guaranteed to
these categories shall be determined under clause 19(2)(e), The annual
refixation of the minimum number of days as under sub-clause (2) shall be
done independently in their case also.
Explanation. – In sub-clauses (1), (2) and (3) of this clause a ‘day’ shall
mean a ‘shift’.
In Clause 33 provision has been made for payment of attendance allowance to
a worker on the reserve pool register who is available for work but for
whom no work is found. Clause 35 makes provision for payment of
disappointment money where a worker in the reserve pool presents himself
for work and for any reason the work for which he has attended cannot
commence or proceed. In that event the worker shall be entitled to full
time rate wages subject to the condition that he is available throughout
the shift and accepts alternative employment if provided. Clause 39 imposes
certain obligations on the registered employers. Under sub-clause (5)(i) it
is prescribed that a registered employer shall pay to the Administrative
Body in such manner and at such times as the Board may direct the levy
payable under clause 54(1) and the gross wages due to daily workers. Clause
54 deals with the cost of operating the Scheme and provides as under :
“54. Cost of operating the Scheme. – (1) The cost of operating the Scheme
shall be defrayed by payments made by registered employers to the Board,
Every registered employer shall pay to Board such amount by way of levy in
respect of reserve pool workers together with and at the same time as the
payment of gross wages due from him under clause 39(5)(i), as the Board
may, from time to time, prescribe by a written notice to registered
employers. If considered necessary, the Board may require any registered
employer to pay such amount by way of levy in respect of monthly workers at
such rate as it may determine and the amount payable by way of such levy
shall not be less than such amount as the Board may fix as the minimum
payable by every registered employer.
(2) In determining what payments are to be made by registered employer
under sub-clause (1), the Board may fix different rates of levy for
different categories of work or workers, provided that the levy shall be so
fixed that the same rate of levy will apply to all dock employers who are
in like circumstances.
(3) The Board shall not sanction any levy exceeding hundred per cent of the
estimated total wage bill calculated on the basis of the daily wage rate
without the prior approval of the Central Government.
(4) A registered employer shall on demand make a payment to the Board way
of deposit, or provide such of the security for the due payment of the
amount referred to in sub- clause (1.) as the Board may consider necessary.
(5) The Administrative Body shall furnish from time to time to the Board
such statistics and other information as may reasonably be required in
connection with the operation and financing of the Scheme.
(6) If a registered employer fails to make the payment due from him under
sub-clause (1) within the time prescribed by the Administrative Body, the
Administrative Body shall serve a notice on the employer to the effect
that, unless he pays his dues within three days from the date of receipt of
the notice, the supply of registered dock workers to him shall be
suspended. On the expiry of the notice period, the Administrative Body
shall suspend the supply of registered dock workers to a defaulting
employers until he pays his dues.”
Export of iron ore is a major item of export from Mormugao port. The
loading of the ore on the ocean going vessel is being done manually by
conventional method or mechanically. For the purpose of manual loading the
barge carrying the ore conies alongside the vessel which is anchored mid-
stream and the ore is loaded on the vessel normally by two units of winch
drivers and gang workers, each unit being constituted by four winch drivers
and then gang workers per crane and operating by shifts of 8 hours each.
The gang workers manually load the ore from the barge on net slings which
are lifted by the ocean-going vessel’s cranes operated by the unit’s winch
drivers to its holds. Loading is done mechanically by the mechanical ore
handling plant that has been set up at Berth No. 9 at Mormugao port in 1979
as well as by grab cranes. The mechanical ore handling plant can, however,
fully load vessels upto 65,000 DWT only and vessels with larger capacity
are partly loaded at Berth No. 9 by mechanical ore handling plant and
thereafter they are taken to mid-stream where they are loaded to their full
capacity either by a vessel fitted with grab cranes which is called
“transhipper” or by grab cranes fitted on the ocean going vessel itself.
For loading by a transhipper the iron ore is carried to the ocean going
vessel in a barge and the transhipper moves between the barge and the
ocean-going vessel. The ore is removed from the barge by use of grab cranes
fitted to the transhipper and is placed on a conveyor belt and is directly
taken to the holds of the ocean-going vessel by the conveyor belt. Where
the ocean-going vessel itself is fitted with grab crane the barge
containing the ore is brought adjacent to the ocean going vessel and the
grab crane of the vessel lifts the ore from the barge and places it
directly in the hold of the vessel. Both these forms of loading require
only winch drivers to operate the grab crane and they do not require any
gang worker to load the ore because the ore is collected and picked by the
grab crane itself.
Vessels fitted with grab cranes were introduced some time in 1970. The
introduction of the said vessels gave rise to industrial unrest and it was
resolved by a settlement dated October 17, 1970 arrived at under Section
2(p) of the Industrial Disputes Act, 1947 between M/s V.M. Salgaocar &
Bros. Pvt. Ltd. and the workmen employed for stevedoring work at Mormugao
Harbour. The said settlement provided for employment of suitable winchmen
from amongst the reserve pool winchmen as their direct employees. As
regards gang workers, the following provision was made in the said
settlement :
“(a) As regards gang workers, the employers may place requisition for these
workers, if they require, with the Pool Office of the Dock Labour Board.
Gangs booked for work on vessels equipped with grab-cranes, will be given
hazeree on the same basis as given to the winchmen.
(b) Wherever gangs are not booked for work, the employer shall pay double
the levy to the Dock Labour Board chargeable for one gang for each working
grab-crane.”
Insofar as the owners of transhippers are concerned since they were
employing their own winchmen they claimed that they were not required to
register themselves under the Scheme and they were not liable to pay any
levy under the scheme on the ground that the cargo handled by them was
outside the Scheme. A writ petition (W.P. No. 47 of 1971) was filed by M/s
Chowgule & Co. Pvt. Ltd., owners of a transhipper vessel, in the Court of
Judicial Commissioner of Goa wherein it was contended that the owners of
the transhipper were not doing dock work within the meaning of the Scheme
and they were entitled to employ their own labour and they were not
required to pay any levies for the cost of administering the Scheme. The
said writ petition was disposed of by the Judicial Commissioner by his
judgment dated August 19, 1974 whereby the contention that the owners of
the transhipper were outside the Scheme and did not perform dock work was
rejected and it was held that they were liable to pay levy for the
winchmen. It was, however, held that the owners of the transhipper were not
liable to pay notional levy on the basis of gangmen who were not actually
utilised by the said owners. The Board as well as the owners of the
transhipper filed appeals against the said judgment of the Judicial
Commissioner in this Court and the said appeals were disposed of in terms
of an agreement dated July 8, 1977 whereby it was agreed that the owners of
the transhipper shall register themselves as employers within the meaning
of the Scheme with liberty to employ their own workmen on their transhipper
who would be treated as monthly workers under the Scheme and that the owner
of the transhipper would pay a flat rate levy of 7 paise per tonne of cargo
handled though the transhipper which rate of levy would not be changed
except by mutual consent of the parties. It appears that similar agreements
were entered into with other owners of transhipper vessels in 1977. The
rate of levy was revised from 7 paise per tonne to 21 paise per tonne and
in April, 1983 a formula was agreed upon for future revision of the same.
The said levy is composite and all inclusive.
In the course of time the number of ocean going vessels fitted with grab
crane has increased and the volume of Cargo handled by such vessels has
also been increasing from year to year. According to the figures supplied
by the Board the tonnage handled manually in 1969-70 was 65,56,229 which
came down to 11,58,587 in 1982-83. The total tonnage handled by
transhippers/reloading equipment in the year 1969-70 was 2,23,052 and it
went up to 50,09,509 in 1982-83, On account of the use of mechanised
loading of ore in the vessel the requirement of gang workers has been
reduced but there has not been corresponding reduction in the strength of
the workers. The Board, therefore, passed a resolution on October 30,1982
setting up a committee to study the comparative cost upto the point of
landing in handling of ore by various modes and to recommend a scheme for
rationalisation of levy structure for all modes of handling of ore, for
consideration by the Board. At the same time the board decided to increase
the percentage of general levy in respect of handling by grab crane fitted
ships from 200% to 400% and the welfare levy from 30% to 60% The Central
Government gave its approval to the said increase by its order dated March
11, 1983, Thereafter the Board issued the impugned circular dated March 19,
1983 increasing the general levy from 200% to 400% and the welfare levy
from 30% to 60%. Similarly the Board decided to impose a special levy @ Re.
1/- per tonne in respect of all cargo handled manually by the registered
dock workers. The said proposal was approved by the Central Government by
letter dated March 14, 1983 and thereupon the impugned circular dated March
19, 1983 was issued by the Board imposing the special levy @ Re. 1/- per
tonne in respect of all cargo manually handled by the registered dock
workers with effect from March 14, 1983. The said circular was clarified by
the Board by resolution dated July 14, 1983 that the special levy is
authorised to be collected in respect of all cargos handled with the help
of registered dock workers whether gangworkers or winch drivers. The said
clarification was also approved by the Central Government by its letter
dated December 21, 1983.
The committee that was constituted by the Board for rationalization of levy
structure, in its report dated September 30, 1983, has expressed the view
that vessels fitted with grab cranes be classified into two categories
based on the biting capacity and it has recommended that the levy be
charged at Rs. 3.25 per tonne in respect of ore loaded through grab cranes
upto 7 tonnes biting capacity and Rs. 3.75 per tonne in respect of ore
loaded through vessels fitted with grab cranes above 7 tonnes biting
capacity. The Committee also recommended that in case of lumpy ore loaded
through vessels fitted with grab cranes such rates be reduced by 25 paise
per tonne in respect of both the categories. The committee further
recommended that these levy rates be subject to change every year
proportionate to the increase in the levy rates in respect of ore loaded
through winches/cranes with the help of gangworkers and winch drivers.
According to the committee, there was no difference in the FOB rates in
respect of ore loaded through ship’s gear either through cranes/winches or
grab cranes and that the cost of loading in respect of vessels fitted with
grab cranes was such cheaper then the one through, cranes/winches and,
there-fore, there was much scope for increasing the levy rate in respect of
ore loaded through vessels fitted with grab cranes.
Petitioner No. 1 is a company registered under the Companies Act, 1956 and
is engaged in mining and export of mineral ores particularly iron ore.
Petitioner No, 2 a shareholder and the Managing Director of Petitioner no,
1. Petitioner no. 3 is a partnership firm carrying on the business of
stevedoring in Mormugao Harbour and are engaged by petitioner no. 1 to
handle the loading operations of petitioner no. 1 at Mormugao port. Feeling
aggrieved by the circulars dated March 19, 1983 increasing the general levy
as well as welfare levy and imposing the special levy the petitioners filed
the writ petition giving rise to these appeals. In the said writ petition
they assailed the validity of the impugned circulars mainly on the ground
that the said circulars were violative of the right to equality guarantee
under Article 14 of the Constitution inasmuch as much higher levy has been
imposed in respect of loading of ore done through ocean going vessels
fitted with grab cranes as compared to loading of ore through transhipper
fitted with grab cranes. It was submitted that although grab cranes were
used for loading by both the modes the petitioners were saddled with the
levy in respect of notional wages for gang workers although the services of
the gang worker were not being required for the loading operation through
grab cranes and that while wages of gang worker are not taken into account
in the matter of fixing the levy in respect of loading through transhipper,
the notional wages of the gang workers have been taken into account while
imposing the levy in respect of loading done through going vessels fitted
with grab cranes. The other ground that was urged was that the increase in
the levy has been made applicable with retrospective effect on the basis
that the approval of the Central Govern-ment was obtained ex-post facto and
that such retrospective increase in the levy was not permissible under the
Scheme.
On behalf of the Board it was pointed out that the owners of the
transhipper stand on a different footing from the petitioners inasmuch as
the transhippers are not required to utilise the services of the Board by
requisitioning the supply of dock workers under the agreements arrived
between the transhippers and the Board and that still they pay levy for
handling of ore and that the amount of such levy was originally fixed at 7
paise in 1977 which was increased to 21 paise in September, 1980 and that
now a formula has been evolved with consent whereunder the amount of levy
payable by transhipper-owners conies to about 35 paise per tonne. In this
regard it was also submitted that the owners of transhippers are required
to invest huge capital cost and the same are manned by a staff crew as
required under the Merchant Shipping Act and that the tranship-pers are
made to operate on special conditions imposed on them by the Government of
India and that transhippers are required to have their own set of workers
for operating their cranes and other equipment with the result that they
have to maintain two sets of crew and further the tranship-per owners do
not draw labour from the Board, not even winch driver. In the reply to the
writ petition filed on behalf of the Board it was stated that the Board has
been suffering budgetary deficits since 1979-80. It was pointed out that
one of the factors for the continuous drain on the finances of the Board
has been the increased off-take of iron ore by vessels fitted with grab
cranes. According to the Board in 1979-80 only two small vessels fitted
with grab cranes called at Mormugoa port. In 1980-81 the number of such
vessels was three while in 1981-82 it was five, but in 1982-83 the said
number was 11 and some of them were large vessels and this has resulted in
loss of opportunity of employment for the registered dock workers. It was
submitted that since the Board has to pay amount of minimum guaranteed
wages and other amounts under the Scheme to workers irrespective work being
available or not, the financial burden on the Board has increased. It was
pointed out that efforts have been made since 1979 to reduce the strength
of registered dock workers on the roll of the Board by introducing
voluntary retirement scheme and other schemes and it has been brought own
from 2314 to 1148 (consisting of 864 gang workers and 284 winchmen) and
that the impugned increase in levy was justified and is not unreasonable,
arbitrary or discriminatory.
The High Court has rejected the contention urged on behalf of the
petitioners that the impugned circulars are violative of Article 14 of the
Constitution, The High Court has pointed out that in vessels fitted with
grab cranes the services of the reserve pool winch drivers are required
during the loading operation only where as the owners of the transhippers
use winch drivers employed by them throughout the year as monthly workers
and the liabilities of the Board towards the latter workers are much lower
than the liabilities towards the former and that apart from the liability
for the payment of the dues to the reserve pool workers the Board has also
to incur expenses in order to keep in readiness an adequate number of
reserve pool workers to satisfy the needs of the registered employers as
and when required, even though the services of the reserve pool workers may
be required for only two or three days at a time and, therefore, it could
not be said that grab crane fitted vessels and tranship-pers are equals.
According to the High Court though both use mechanised method for loading
of cargo on the ocean-going vessels the dissimilarities resulting from
different systems of engaging dock workers are so marked, significant and
of such import that make them unequal and a classification distinguishing
them one from another was reasonable and justified. In this context, the
High Court has also mentioned that a registered employer engaging monthly
worker like the transhipper has to pay all the dues such as salary,
provident fund, gratuity, etc. whereas in the case of reserve pool worker
the burden to pay all the dues including disappointment money and the
attendance allowance is borne by the Board and that these two factors have
a direct impact on the cost of operating the scheme and the liability of
the Board. The High Court has also rejected the contention that the levy
which involves imposition in respect of notional employment of gang workers
is unreasonable and arbitrary since no gang worker is employed for handling
cargo in the grab crane fitted vessels. The High Court has pointed out that
use of grab crane method gave cause to unemployment of gang workers in an
increasing proportion and that while under the conventional method the
maximum output of a unit of tour winch drivers and ten gang workers is 300
tonnes of cargo per hook per shift, the cargo handled by grab crane fitted
vessels is on an average 2520 tonnes per grab crane per shift and that this
gives cause to a higher rate of unemployment of dock workers (both winch
drivers and gang workers) from the reserve pool with the consequent
increase in the liabilities of the Board if the grab crane method of
handling cargo is used. The High Court has observed that the responsibility
for such unemployment was impliedly admitted by some users of the grab
crane method of cargo handling inasmuch in the agree-ment that was entered
into on October 17,1970 it was agreed that when-ever gangs are not booked
for work the employer shall pay double the levy to the Board chargeable for
one gang for each working grab crane which implies that the principle of
charging levy on notional employment of gang workers was found to be
reasonable and fair by the trade, labour and the Board. While upholding the
validity of the impugned circulars the High Court has, however, held that
the said increased levy could not be raised with retrospective effect and
can only operate prospectively. In this context, the High Court has pointed
out that in view of Clause 54(3) of the Scheme prior approval of the
Central Government was required before the Board could sanction any levy
exceeding 100% of the estimated total wage bill calculated on the basis of
daily wage rate and that the increase in the levy under the impugned
circular exceeded 100% of the estimated total wage bill and, therefore, the
levy could only be imposed after obtaining the approval of the Central
Government. According to the High Court Clause 54(3) of the Scheme denotes
that the Board cannot fix the levy retrospectively and since the approval
of the Central Government is a condition precedent to the levy and without
it no levy could be imposed the resolu-tion passed by the Board on October
30, 1982 has no value since it has to be preceded by the approval of the
Central Government. The High Court has, therefore, held that the impugned
circular regarding enhancement of the general levy and welfare levy could
not have retrospective effect from October 30, 1982 and it could take
effect only from March 19, 1983. Similarly as regards the special levy the
High Court has observed that the said levy could only take effect from July
14, 1983 the date of the resolution clarifying the matter and not from
March 14, 1983 as communicated by the impugned circular.
Both sides have filed appeals against the judgment of the High Court. C.A,
No. 258/85 has been filed by the petitioners while C.A. No. 541/85 has been
filed by the Board.
We will first take up C.A. No, 258/85 filed by the petitioners. In this
appeal the learned counsel has confined his challenge to the enhancement of
the general levy from 200% to 400% and welfare levy from 30% to 60%. The
learned counsel for the petitioners has assailed the imposition based on
the notional employment of gang workers. It has been urged that such an
imposition is ultra vires clause 54 of the Scheme inasmuch as the said
clause, on a true construction, does not authorise levy on notional employ-
ment basis. The other ground that has been urged to assail the levy is
based on Article 14 of the Constitution and it has been contended that
there is no real or substantial difference between owners of transhipper
and the petitioners so as to justify their being classified into separate
categories and that the said classification has no nexus to the object of
the levy which is to meet the social costs incurred by the Board for
reserve pool gang workers. The said consideration for imposing the levy
applies to both the modes for loading, i,e,, through transhippers fitted
with grab cranes and ocean going vessels fitted with grab cranes yet the
notional levy is imposed exclusively in respect of loading through ocean
going vessels fitting with grab cranes.
As regards the first contention urged by the learned counsel for the
petitioners based on clause 54 of the Scheme it is necessary to bear in
mind that the object of the Scheme, as set out in clause 2(1), is to ensure
greater regularity of employment for dock workers and to secure that an
adequate number of dock workers is available for the efficient performance
of dock work. The Scheme seeks to achieve these twin objects by maintaining
a reserve pool of registered dock workers who are available for work and a
worker in the reserve pool is guaranteed minimum wages in a month under
clause 32 as well as attendance allowance under clause 33 and disappoint-
ment money under clause 35. Clause 54(1) empowers the Board to recover from
registered employers the cost of operating the Scheme. Since the Scheme
applies to gang workers the cost of operating the Scheme includes the
payments made to gang workers under the various clauses of the Scheme.
Normally a gang consists of four winchmen and 10 gang workers to operate a
crane per shift. For operating the grab crane only winchmen are required
and gang workers are not required. But insofar as the Board is concerned it
has to keep gang workers on its Rolls and to pay their minimum wages and
other allowances payable under the Scheme to the gang workers in the
reserve pool. Since the wages and allowances payable to the workmen under
the Scheme form part of the cost of operating the Scheme it would be
permissible for the Board to recover the said cost by way of levy by
treating the gang workers as notionally employed in the matter of loading
the ore by the ocean going vessel fitted with grab crane. There is nothing
in clause 54 which prohibits the Board from recovering such cost of
operating the Scheme in this manner. In this context, it may also be
mentioned that notional employment of gang workers in connection with
loading of ore on ocean going vessels fitted with grab crane has been
recognised in the settlement that was entered into on October 17,1970 by
M/s V.M. Salgaocar & Brother Pvt. Ltd. wherein it was expressly agreed that
whenever gangs are not booked for work the employer shall pay double the
levy to the Board chargeable for one gang for each working grab crane. It
is, therefore, not possible to accept the contention urged on behalf of the
petitioners that it was not permissible for the Board to impose the levy on
the basis of notional employment of gang workers although the gang workers
were not actually employed in the task of loading iron ore in the vessels
fitted with grab cranes.
Coming to the other contention based on Article 14 of the Constitution we
are in agreement with the view of the High Court that grab crane fitted
vessels cannot be equated with transhippers fitted with grab cranes for the
purpose of levy and that there are features which indicate that they cannot
treated at par. In this context, it has to be noted that transhippers
employ regular winchmen to operate the grab cranes fitted on the tranship-
per as their monthly workers and are responsible for paying all their dues
such as salary, provident fund, gratuity, etc. Ocean going vessels fitted
with grab cranes on the other hand utilise the services of reserve pool
workers for operating the grab cranes and the Board has to bear the burden
for such workers. Moreover, the owners of transhippers have to engage other
staff to operate the transhipper as required under the Merchant Shipping
Act and they have to incur expenses for maintaining the said vessel apart
from the heavy amount which has been invested in the vessel itself. It can
also not be ignored that ever since the introduction of grab cranes for the
purpose of loading the ore at Mormugoa port in 1970, the ocean going
vessels fitted with grab cranes have been treated differently from
transhippers fitted with grab cranes in the matter of amount payable to the
Board. The amount payable by ocean going vessels fitted with grab cranes is
governed by the settlement dated October 17, 1970 while the transhippers
are governed by the various agreements of 1977 which have been revised from
time to time. Having regard to all these circumstances we are unable to
accept the contention urged on behalf of the petitioners that since
transhipper as well as the ocean going vessels fitted with grab cranes both
use grab cranes for the purpose of loading the ore they should be treated
alike in the matter of imposition of levies by the Board.
It has been said that “no economic measure has yet been devised which is
free from all discriminatory impact and that in such a complex arena in
which no perfect alternatives exist, the court does well not to impose too
rigorous a standard of criticism, under the equal protection clause,
reviewing fiscal services”. (See P.M.A. Setty v. State of Karnataka, (1988]
Supp 3 SCR 155 at p. 189). The same thought is expressed in San Antonio
Independent School District v. Bodrigues speaking through Justice Stewart,
411 U.S. 1 at page 41; G.K. Krishnan v. The State of Tamil Nadu & Anr.,
[1975] 2 SCR 715 at p. 730. Here we find that, according to the Board, one
of the factors contributing to the continuous drain on the finances of the
Board is the increased off-take of iron ore since 1979 by vessels fitted
with grab cranes because such off-take results in loss of opportunity of
employment for the registered dock workers and consequent increase in the
burden on the Board for the minimum guaranteed wages and other amounts
payable under the scheme. The Board has made efforts to reduce the strength
of registered Dock Workers on its roll from 2314 in 1148 in June 1983. A
substantial number, i.e., 864, of those 1148 workers are gang workers who
are denied opportunity of employment on account of take of iron ore by
vessels fitted with grab cranes. Annexure ‘A’ to the Rejoinder Affidavit
filed on behalf of the petitioners in the High Court would show that prior
to the enhancement of the general levy and welfare levy under the impugned
circular the charges came to about Rs. 1.48 per wet M/ton and as a result
of enhancement of the general levy and welfare levy by the impugned
circular the said charges have been increased to about Rs. 2.55 per wet
M/Ton, i.e., by about Re. 1 per wet M/Ton. On the other hand, the cost of
manual loading was in the range of Rs. 8.11 to Rs. 11.91 (Annexure 2 to the
Affidavit in reply of A, Onkarappa filed on behalf of the Board in the High
Court). The expenses for loading through transhipper (as per para 8 of the
affidavit in reply filed on behalf of the Board in the High Court which was
not disputed by the petitioners in their rejoinder affidavit) come to Rs.
27 to Rs. 33 per tonne. By enhancing the general levy and welfare levy
under the impugned circular the Board, keeping in view the economics of the
cost of loading under the various modes, has sought to balance its
financial deficit caused on account of increased off take of ore through
ocean going vessels fitted with grab cranes by enhancing the levies which
has led to increase in the cost of loading through vessels fitted with grab
cranes. In doing so the Board cannot be said to have acted arbitrarily or
unreasonably or having subjected the petitioners to hostile or invidious
discrimination. The impugned cir-cular cannot, therefore, be held to be
violative of the right guaranteed under Article 14 of the Constitution.
C.A. No. 258 of 1985 filed by the petitioners must, therefore, fail and has
to be dismissed.
C.A. No. 541 of 1985 filed by the Board is confined to the question whether
the enhancement of the levies under the impugned circulars could be
Operative from October 30, 1982 the date of the passing of the resolution
by the Board. The High Court has held that the circular dated March 19,
1983 regarding increase in the general levy and welfare levy from 200% to
400% and 30% to 60% respectively could only operate from the date of such
circular and could not be made operative with effect from October 30, 1982,
the date of passing of the resolution, for the reason that prior approval
of the Central Government was required in view of clause 54(3) of the
Scheme and the proposal made by the Board in its resolution dated October
30, 1982 was approved by the Central Government only on March 11, 1983. We
do not find any infirmity in this approach of the High Court. Similarly as
regards circular dated March 19, 1983 for imposition of special levy the
High Court has rightly held that the said circular could not have
retrospective effect. The said appeal must also, therefore, be dismissed.
In the result, both the appeals (C.A. No. 258/85 and 541/85) are dismissed
but in the circumstances there will be no order as to costs.