ORDER
1. The workmen of Seshasayee Paper and Board Limited, represented by the Seshasayee Paper Mill Labour Union, are the petitioners in this writ petition. The second respondent management own the Paper Mills at Erode where it is stated that they have employed about 1800 workmen. About 110 workmen concerned in this writ petition were employed in the work connected with stitching, bundling and loading of paper by one Contractor by name S. Chellasamy, the third respondent herein. According to the petitioner union, these 110 workmen were originally employed by one K. P. Thangal, then by one Velappan and lastly by the said S. Chellasamy. It is the case of the petitioner union that these 110 workmen were really employed by the second respondent management and therefore they were employees of the second respondent management. The affidavit filed in support of the writ petition proceeds to say that the Government of Tamil Nadu have appointed a Committee to go into the question of abolition of contract labour under the Contract Labour (Regulation and Abolition) Act, 1970, herein after called the Contract Labour Act, in the Paper industry. It is the case of the petitioner that the Committee has recommended the abolition of Contract Labour in the matter of stitching, bundling and loading operations in the paper industry. The third respondent seems to have issued notices to all the 110 workmen stating that he had relinquished the contract with the 2nd respondent management and therefore, the services of the 110 workmen were no longer required with effect from 12th August 1979. They were also informed that they would be paid two months wages and also retrenchment compensation. On 12th August 1979, the petitioner-union wrote to the second respondent management demanding employment. Similarly, a letter was addressed to the Labour Officer with a request to take up conciliation. The second respondent took up the stand that there was no employer-employee relationship between the second respondent and the 110 workers. The third respondent also filed a reply before the Labour Officer stating that he had relinquished the contract work and he had offered retrenchment compensation to the workers. The failure report was submitted on 16th September 1980. By an order dated 10th August 1981, the Government declined to refer the dispute on the ground that there was no employer-employee relationship between the said workers and the second respondent management. The writ petition is for the issue of a writ of mandamus to direct the first respondent to reconsider the said order dated 10th August 1981 made in G.O. Ms. No. 1739, Labour and Employment Department.
2. The contention in the writ petition is that the question whether there was employer-employee relationship between the second respondent and the 110 workers was a disputed question of fact and that the same can be decided only by the Tribunal. The first respondent-Government has exceeded its jurisdiction by reaching a final conclusion on that aspect. There is also a plea that even assuming that the 110 workmen were employed only by the third respondent, the Government should have considered whether the retrenchment compensation had been paid in accordance with Section 25-F of the Industrial Disputes Act. There is also reference to the fact that the Provident Fund commissioner had called upon the second respondent to deduct subscription for the said 110 workmen. It is only to obviate the said difficulty the second and third respondents had colluded together and terminated the services of the 110 workmen. Finally it is contended that the work of stitching, bundling and loading of paper is still available in the factory and there is no reason why the workers should not be employed.
3. The second respondent has filed a counter affidavit supporting the order of the Government. The contention of the second respondent is that in the guise of raising a dispute, the petitioner-union is really seeking to have the question of abolition of contract system canvassed and established. Such an attempt is purely outside the jurisdiction of the Industrial disputes Act and comes within the purview of the Contract Labour Act. It is contended that the third respondent had applied for and obtained a licence under the Contract Labour Act and the licence was valid upto 31st July 1980. The Committee appointed by the first respondent Government might have submitted a report, but the same has not yet been accepted by the Government. No notification has been issued under the Contract Labour Act under Section 10 of the Contract labour Act. Regarding the allegation that the principal employer is Commissioner wrote to the second respondent for paying the contribution of the said 110 workmen, it is submitted that the principal employer is entitled to get reimbursement of the contribution from the immediate employer. Therefore, the said letter had nothing to do with the termination of the 110 workmen. The third respondent had relinquished the contract due to ill-health and had closed down his undertaking. In the charter of demands submitted by the union, there was a demand for abolition of the Contract Labour. It is alleged that the petitioner-union had signed a settlement under Section 12(3) of the Industrial Disputes Act in regard to the increase in wages, bonus etc., in respect of the 110 workmen only with the third respondent. Therefore, the petitioner-union has no right to claim that the said 110 workmen were employed by the second respondent.
4. The third respondent has also filed a counter affidavit more or less on the same lines as that of the second respondent. In particular the averment in the affidavit filed in support of the writ petition that the Company Representative or their Supervisory staff exercised control over the third respondent has been emphatically denied. He also referred to the settlement between him and the workmen. It is, stated that during the middle of 1979 his health deteriorated and hence he had to relinquish the contract. The first respondent-Government has also filed a counter affidavit. The averments in the said counter affidavit of the first respondent are on the same lines as that of respondents 2 and 3. It is further added that it is not for the Government to look into the reasons for the closure of the business of the Contractor. Reference is invited to Excel Wear and others v. Union of India and others (1978-II-LLJ-527) and Indian Hume Pipe Company Limited v. Workmen (1969-I-LLJ-242)
5. Mr. N. G. R. Prasad learned counsel for the petitioner-union, cites the judgment in Telco convoy Drivers Mazdoor Sangh and another v. State of Bihar and others (1989-II-LLJ-558) in support of his contention that the appropriate Government cannot adjudicate the dispute on merits. In that case, the dispute was whether the Convoy Drivers are workmen of TELCO and whether the master and servant relationship existed between convoy drivers and TELCO. It was held that the Government cannot decide this issue and reject an application for reference to the Labour Court. The following passage (p. 561) is relied upon :
“Applying the principle laid down by this Court in the above decisions, there can be no doubt that the Government was not justified in deciding the dispute. Where, as in the instant case, the dispute is whether the persons raising the dispute are workmen or not, the same cannot be decided by the Government in exercise of its administrative function under Section 10(1) of the Act.”
But it must be observed that the Supreme Court has also observed as follows in the very same judgment (p. 560) :
“It is true that in considering the question of making a reference under Section 10(1), the Government is entitled to form an opinion as to whether an industrial dispute “exists or is apprehended”, as urged by Mr. Shanti Bhushan.”
The next judgment in Hussainbhai, Calicut v. Alath Factory Thozhilali Union, Calcutta and others (1978-II-LLJ-397) is closer on facts to the present writ petition. In that case also about 29 workmen were employed by Contractors and the owner of the factory pleaded that there was no relationship of master and servant between the factory and the workmen. The Supreme Court pointed out that in the industrial law based on social justice mere contracts are not decisive and a complex of considerations are relevant in deciding the real dispute. In that case, there was a finding that the work done by the workmen formed an integral part of the industry concerned and the law materials were supplied by the management and the factory premises belonged to the management. The equipment belonged to the management and the finished product was taken by the management for its own trade. Several other circumstances were taken note of to come to the conclusion that the workmen were broadly under the control of the management itself. I must, however, point out that there is a world of difference between the facts of that case and the facts of the present case. As already pointed out in this case, the third respondent had taken a licence under the Contract Labour Act and the 110 workmen were admittedly working under him only. There was also a settlement between the third respondent and the workmen. The attempt of the workmen was to see that the system of contract labour was abolished. But unfortunately that cannot be done by way of reference under Section 10 of the Industrial Disputes Act. The Supreme Court in the last quoted decision was certainly not concerned with such a question.
6. The next judgment cited by the learned counsel for the petitioner-union is Workman employed in Associated Rubber Industry Ltd., Bhavnagar v. Associated Rubber Industry Ltd. following passage is relied upon : (pp. 143-144) :
“It is the duty of the Court, in every case where ingenuity is expended to avoid taxing and welfare legislations, to get behind the smoke screen and discover the true state of affairs. The Court is not to be satisfied with form and leave well alone the substance of a transaction.”
The above observation was made in a wholly different context.
7. On the other hand, the following judgments are more directly on the point :- In Philips Workers Union, Thane v. State of Maharashtra and another (1987-II-LLJ-91), 20 workers employed through contractors to maintain gardens to whom the provisions of the Contract Labour Act applied, sought a reference under Section 10 of the Industrial Disputes Act on the ground that they are employees on the Muster-Roll of the company itself. The Government declined to make a reference of the dispute. The High Court of Bombay approved the order of the Government in the following words : (p. 92).
“The 2nd respondent’s establishment employs more than 20 workmen as contract labour. The said Act, therefore, is applicable to the 2nd respondent and it is for the 1st respondent to prohibit such employment. It was accordingly, right in declining a reference under the Industrial Disputes Act for the reason that the demand was regulated by the said Act.”
8. To the same effect is the judgment in P. Karunakaran v. Chief Commercial Superintendent, Southern Railway and others (1989-I-LLJ-8). In this case, a contractor was running a vegetarian refreshment room at Kottayam Railway Station as a licensee from the Southern Railway. He had employed 30 workers. The licence having expired on 31st July 1987, there was a proposal to grant the licence to another suitable contractor. Thereupon, the workers approached the High Court under Article 226 of the Constitution of India for the issue of a writ of mandumus to direct the Southern Railway and the Union Government to abolish the Contract labour and to absorb the workers in regular service of the Southern Railway. Though a question of reference under Section 10 of the Industrial Disputes Act did not arise in that case, the Court considered the impact of the Contract Labour Act and held as follows (p. 13) :
“As none of the facts for taking a decision in this behalf have been placed before us in this case, we are not placed in the same position as the Supreme Court was placed when it rendered the decision in the case referred to above, pertaining to contract labour working in cleaning catering establishments and cars of the Southern Railway. We have, therefore, no hesitation in taking the view that the appellant cannot claim any relief on the basis of the decision of the Supreme Court.”
9. Lastly, it is argued by Mr. Venkataramarr, learned counsel for the second respondent, that even if Section 10 of the Contract Labour Act is applicable, it will not follow that all the workers are liable to be absorbed by the company. In this connection, he has cited A. P. Dairy Development Cooperation Federation, Hyderabad v. K. Ramulu and others (1989-II-LLJ-312). That was a case where a direction was sought for to the Government of Andhra Pradesh to initiate action under Section 10 of the Contract Labour Act and also to absorb the writ petitioners as regular employees after giving due weight to their service The following observations are relied upon (p. 317).
“Neither the Act nor the rules provide that upon the abolition of the contract labour the said labour should be directly absorbed by the principal employer. Nor is there any provision that pending decision upon an application under Section 10 by workers, the said workers should continue to be engaged at the instance of the principal employer, by any contractor engaged by such principal employer.”
10. Having given my anxious thought to the rival submissions made by the learned counsel for the respective parties, I am inclined to taken the view that in spite of the recent trend to permit all industrial disputes to be referred to the appropriate Tribunal or Labour Court, the court cannot be blind to the real issues involved in a case. Even the Supreme court of India in Telco Convoy Drivers Mazdoor Sangh and another v. State of Bihar and others (supra) relied on by the counsel for the petitioner has clearly laid down that the Government is entitled to form an opinion as to whether an industrial dispute “exists or is apprehended”. In this case, the report of the Labour Officer dated 16th September 1980 and the report of the Commissioner of Labour dated 21st June 1981 are uniformly to the effect that 110 workmen were only employed by the third respondent-contract, who held a licence under the said Contract Labour Act. What is more, there is the averment that petitioner-union itself has entered into a settlement with the third respondent contractor under Section 12(3) of the Industrial Disputes Act in respect of the 110 workmen. Therefore, it will be too much to turn-round now any say that the 110 workmen are employees of the second respondent management. It may be that the petitioner-union can seek a reference against the third respondent-contractor. But the impugned Government Order is certainly valid when it says that there is no employer-employee relationship between the workers and the second respondent management. The petitioner union did not make any argument that the dispute can at least be referred as against the third respondent. In as much as there is no such argument, I have no other alternative except to dismiss the writ petition. Accordingly, the writ petition is dismissed. There will be no order as to costs.