{"id":160003,"date":"1995-01-18T00:00:00","date_gmt":"1995-01-17T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/sociedade-de-formento-industrial-vs-mormugao-dock-labour-board-and-anr-on-18-january-1995"},"modified":"2015-08-29T05:33:09","modified_gmt":"2015-08-29T00:03:09","slug":"sociedade-de-formento-industrial-vs-mormugao-dock-labour-board-and-anr-on-18-january-1995","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/sociedade-de-formento-industrial-vs-mormugao-dock-labour-board-and-anr-on-18-january-1995","title":{"rendered":"Sociedade De Formento Industrial … vs Mormugao Dock Labour Board And Anr on 18 January, 1995"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Sociedade De Formento Industrial … vs Mormugao Dock Labour Board And Anr on 18 January, 1995<\/div>\n
Bench: P.B. Sawant, S.C. Agrawal<\/div>\n
           CASE NO.:\nAppeal (civil)  258 of 1985\n\nPETITIONER:\nSOCIEDADE DE FORMENTO INDUSTRIAL PVT. LTD. AND ORS.\n\nRESPONDENT:\nMORMUGAO DOCK LABOUR BOARD AND ANR.\n\nDATE OF JUDGMENT: 18\/01\/1995\n\nBENCH:\nP.B. SAWANT & S.C. AGRAWAL\n\nJUDGMENT:\n<\/pre>\n
JUDGMENT<\/p>\n
1995 (1) SCR 377<\/p>\n
The Judgment of the Court was delivered by<\/p>\n
S.C. AGRAWAL, J. : These appeals, by special leave, arise out of Writ
\nPetition No. 60 of 1983 filed by the appellants in C.A. No. 258 of 1985,
\nhereinafter referred to as ‘the petitioners’, in the High Court of Bombay,
\nPanaji Bench, Goa, wherein they had challenged the validity of two
\ncirculars dated March 19,1983 issued by the Mormugao Dock Labour Board,
\nhereinafter referred to as ‘the Board’. By one of those circulars the
\ngeneral levy payable in respect of handling by grab cranes fitted to ships
\nwith effect from October 30, 1982 was fixed at 400% on the actual
\nemployment of one set of Winch Drivers and on the notional employment of
\ntwo gangs per hook (400% for each gang) and welfare levy relating to the
\nabove operation was fixed at 60% of the time rate wages both in respect of
\nWinch Drivers and in respect of notional employment of two gangs per hook
\nwith effect from October 30, 1982. By the other circular a special levy @
\nRe. 1\/- per tonne was imposed in respect of all cargoes manually handled
\nfrom March 14, 1983. By a subsequent circular dated July 14, 1983 it was
\nclarified that the special levy is to be calculated in respect of cargoes
\nhandled with the help of registered dock workers, whether gang workers or
\nWinch Drivers. The said circulars were issued in exercise of the powers
\nconferred by clause 54 of the Mormugao Dock Workers (Regulation of
\nEmployment) Scheme, 1965, hereinafter referred to as ‘the Scheme’ framed by
\nthe Government of India in exercise of the powers conferred on it by the
\nDock Workers (Regulation of Employment) Act, 1948 hereinafter referred to
\nas ‘the Act’.\n<\/p>\n
The Act was enacted with a view to provide for regulating the employment of
\ndock workers. Section 3 of the Act provides for a Scheme for registration
\nof dock workers and employers with a view to ensuring greater regularity of
\nemployment and for regulating the employment of dock workers, whether
\nregistered or not, in a port. Such a Scheme, among other provisions, can
\nprovide for securing a minimum pay in respect of periods during which
\nemployment, or full employment, is not available for dock workers to whom
\nthe Scheme applies and who are available for work. Under Section 4 the
\npower to frame the Scheme has been conferred on the Central Government in
\nrelation to a major port the State Government in relation to any other
\nport. Section 5A or the Act provides for the establishment of a Dock Labour
\nBoard for a port or a group of ports. Under Section 5-B the Dock Labour
\nBoard has been entrusted with the responsibility for administering the
\nScheme for the port for which it has been established. The Board has been
\nestablished by the Central Government under Section 5-A of the Act for
\nMormugao Port which is a major port. In exercise of the powers conferred by
\nSection 4(1) read with Section 3 the Scheme has been made by the Central
\nGovernment. As indicated in Clause 2 the objects of the Scheme are to
\nensure greater regularity of employment for dock workers and to secure that
\nan adequate number of dock workers is available for the efficient
\nperformance of dock work. The Scheme applies to stevedoring work and cargo
\nhandling from wharf to transit shed and vice-versa and the categories of
\nstevedore workers covered by the Scheme are (a) gang workers and (b) winch
\ndrivers. The Scheme is only applicable to registered dock workers and
\nregistered employers and it does not apply to any dock worker unless he is
\nemployed or registered for employment as a dock worker. In Clause 3 various
\nexpressions including the expressions ‘daily worker’, ‘dock employer’,
\n‘monthly worker’, ‘registered dock workers’, ‘registered employer and
\n‘reserved pool’ have been defined. Sub-Clause (e) of Clause 3 defines a
\ndaily worker to mean a registered dock worker who is not a monthly worker.
\nThe expression ‘monthly worker’ is defined in sub-clause (k) to mean a
\nregistered dock worker who is engaged by a registered employer or a group
\nof such employers on monthly basis under a contract which requires for its
\ntermination at least one month’s notice on either side. A “registered dock
\nworker” is defined in sub-clause (n) to mean a dock worker whose name is
\nfor the time being entered in the register or record. The expression “dock
\nemployer” is defined in sub-clause (f) to mean the person by whom a dock
\nworker is employed or is to be employed and includes a group of dock
\nemployers formed under clause 16(l)(d). Under sub-clause (o) “registered
\nemployer” means a dock employer whose name is for the time entered in the
\nemployers’ register. “Reserve pool” is defined in sub-clause (p) to mean a
\npool of registered dock workers who are available for work, and who are not
\nfor the time being in the employment of a registered employer or a group of
\ndock employers as monthly workers. Clause 32 of the Scheme makes provision
\nfor guaranteed minimum wages in a month and reads as under :\n<\/p>\n
“32. Guaranteed Minimum wages in a month. (1) A worker in the reserve pool
\nregister shall be paid wages at least for fifteen days in a month at the
\nwage rate inclusive of dearness allowance as prescribed by the Board
\nappropriate to the category to which he permanently belongs, even though no
\nwork is found for him for the minimum number of fifteen days in a month.
\nThe days on which work is allotted to the worker shall be counted towards
\nthe fifteen days mentioned above. The guaranteed minimum wages in a month
\nshall be :-\n<\/p>\n
(a) for the number of days for which wages are guaranteed in a month
\nsubject to the condition that the worker attended for work on all days of
\nthe month as directed by the Administrative Body.\n<\/p>\n
(b) proportionate to the number of days on which the worker attended for
\nwork provided he was excused from attendance on all the remaining days of
\nthe month.\n<\/p>\n
(2). Subject to the provisions of sub-clause (1) the minimum number of days
\nin a month for which wages are guaranteed may be fixed by the Board for
\neach year on the basis of the monthly average employment obtained by the
\nworkers in the reserve pool in the lowest categories of stevedore workers
\nduring the preceding year until the minimum number of days reaches 21,
\nprovided the number so fixed shall not, in any case, be less than the
\nnumber in the preceding year.\n<\/p>\n
NOTE : This method of assessing the average employment is detailed in
\nSchedule II.\n<\/p>\n
(3) The minimum number of days for which wages shall be guaranteed under
\nsub-clauses (1) and (2) shall not automatically apply to workers in new
\ncategories that may be registered after the date of enforcement of the
\nscheme. The minimum number of days for which wages shall be guaranteed to
\nthese categories shall be determined under clause 19(2)(e), The annual
\nrefixation of the minimum number of days as under sub-clause (2) shall be
\ndone independently in their case also.\n<\/p>\n
Explanation. – In sub-clauses (1), (2) and (3) of this clause a ‘day’ shall
\nmean a ‘shift’.\n<\/p>\n
In Clause 33 provision has been made for payment of attendance allowance to
\na worker on the reserve pool register who is available for work but for
\nwhom no work is found. Clause 35 makes provision for payment of
\ndisappointment money where a worker in the reserve pool presents himself
\nfor work and for any reason the work for which he has attended cannot
\ncommence or proceed. In that event the worker shall be entitled to full
\ntime rate wages subject to the condition that he is available throughout
\nthe shift and accepts alternative employment if provided. Clause 39 imposes
\ncertain obligations on the registered employers. Under sub-clause (5)(i) it
\nis prescribed that a registered employer shall pay to the Administrative
\nBody in such manner and at such times as the Board may direct the levy
\npayable under clause 54(1) and the gross wages due to daily workers. Clause
\n54 deals with the cost of operating the Scheme and provides as under :\n<\/p>\n
“54. Cost of operating the Scheme. – (1) The cost of operating the Scheme
\nshall be defrayed by payments made by registered employers to the Board,
\nEvery registered employer shall pay to Board such amount by way of levy in
\nrespect of reserve pool workers together with and at the same time as the
\npayment of gross wages due from him under clause 39(5)(i), as the Board
\nmay, from time to time, prescribe by a written notice to registered
\nemployers. If considered necessary, the Board may require any registered
\nemployer to pay such amount by way of levy in respect of monthly workers at
\nsuch rate as it may determine and the amount payable by way of such levy
\nshall not be less than such amount as the Board may fix as the minimum
\npayable by every registered employer.\n<\/p>\n
(2)  In determining what payments are to be made by registered employer
\nunder sub-clause (1), the Board may fix different rates of levy for
\ndifferent categories of work or workers, provided that the levy shall be so
\nfixed that the same rate of levy will apply to all dock employers who are
\nin like circumstances.\n<\/p>\n
(3) The Board shall not sanction any levy exceeding hundred per cent of the
\nestimated total wage bill calculated on the basis of the daily wage rate
\nwithout the prior approval of the Central Government.\n<\/p>\n
(4) A registered employer shall on demand make a payment to the Board way
\nof deposit, or provide such of the security for the due payment of the
\namount referred to in sub- clause (1.) as the Board may consider necessary.\n<\/p>\n
(5) The Administrative Body shall furnish from time to time to the Board
\nsuch statistics and other information as may reasonably be required in
\nconnection with the operation and financing of the Scheme.\n<\/p>\n
(6)  If a registered employer fails to make the payment due from him under
\nsub-clause (1) within the time prescribed by the Administrative Body, the
\nAdministrative Body shall serve a notice on the employer to the effect
\nthat, unless he pays his dues within three days from the date of receipt of
\nthe notice, the supply of registered dock workers to him shall be
\nsuspended. On the expiry of the notice period, the Administrative Body
\nshall suspend the supply of registered dock workers to a defaulting
\nemployers until he pays his dues.”\n<\/p>\n
Export of iron ore is a major item of export from Mormugao port. The
\nloading of the ore on the ocean going vessel is being done manually by
\nconventional method or mechanically. For the purpose of manual loading the
\nbarge carrying the ore conies alongside the vessel which is anchored mid-
\nstream and the ore is loaded on the vessel normally by two units of winch
\ndrivers and gang workers, each unit being constituted by four winch drivers
\nand then gang workers per crane and operating by shifts of 8 hours each.
\nThe gang workers manually load the ore from the barge on net slings which
\nare lifted by the ocean-going vessel’s cranes operated by the unit’s winch
\ndrivers to its holds. Loading is done mechanically by the mechanical ore
\nhandling plant that has been set up at Berth No. 9 at Mormugao port in 1979
\nas well as by grab cranes. The mechanical ore handling plant can, however,
\nfully load vessels upto 65,000 DWT only and vessels with larger capacity
\nare partly loaded at Berth No. 9 by mechanical ore handling plant and
\nthereafter they are taken to mid-stream where they are loaded to their full
\ncapacity either by a vessel fitted with grab cranes which is called
\n“transhipper” or by grab cranes fitted on the ocean going vessel itself.
\nFor loading by a transhipper the iron ore is carried to the ocean going
\nvessel in a barge and the transhipper moves between the barge and the
\nocean-going vessel. The ore is removed from the barge by use of grab cranes
\nfitted to the transhipper and is placed on a conveyor belt and is directly
\ntaken to the holds of the ocean-going vessel by the conveyor belt. Where
\nthe ocean-going vessel itself is fitted with grab crane the barge
\ncontaining the ore is brought adjacent to the ocean going vessel and the
\ngrab crane of the vessel lifts the ore from the barge and places it
\ndirectly in the hold of the vessel. Both these forms of loading require
\nonly winch drivers to operate the grab crane and they do not require any
\ngang worker to load the ore because the ore is collected and picked by the
\ngrab crane itself.\n<\/p>\n
Vessels fitted with grab cranes were introduced some time in 1970. The
\nintroduction of the said vessels gave rise to industrial unrest and it was
\nresolved by a settlement dated October 17, 1970 arrived at under Section
\n2(p) of the Industrial Disputes Act, 1947 between M\/s V.M. Salgaocar &
\nBros. Pvt. Ltd. and the workmen employed for stevedoring work at Mormugao
\nHarbour. The said settlement provided for employment of suitable winchmen
\nfrom amongst the reserve pool winchmen as their direct employees. As
\nregards gang workers, the following provision was made in the said
\nsettlement :\n<\/p>\n
“(a) As regards gang workers, the employers may place requisition for these
\nworkers, if they require, with the Pool Office of the Dock Labour Board.
\nGangs booked for work on vessels equipped with grab-cranes, will be given
\nhazeree on the same basis as given to the winchmen.\n<\/p>\n
(b) Wherever gangs are not booked for work, the employer shall pay double
\nthe levy to the Dock Labour Board chargeable for one gang for each working
\ngrab-crane.”\n<\/p>\n
Insofar as the owners of transhippers are concerned since they were
\nemploying their own winchmen they claimed that they were not required to
\nregister themselves under the Scheme and they were not liable to pay any
\nlevy under the scheme on the ground that the cargo handled by them was
\noutside the Scheme. A writ petition (W.P. No. 47 of 1971) was filed by M\/s
\nChowgule & Co. Pvt. Ltd., owners of a transhipper vessel, in the Court of
\nJudicial Commissioner of Goa wherein it was contended that the owners of
\nthe transhipper were not doing dock work within the meaning of the Scheme
\nand they were entitled to employ their own labour and they were not
\nrequired to pay any levies for the cost of administering the Scheme. The
\nsaid writ petition was disposed of by the Judicial Commissioner by his
\njudgment dated August 19, 1974 whereby the contention that the owners of
\nthe transhipper were outside the Scheme and did not perform dock work was
\nrejected and it was held that they were liable to pay levy for the
\nwinchmen. It was, however, held that the owners of the transhipper were not
\nliable to pay notional levy on the basis of gangmen who were not actually
\nutilised by the said owners. The Board as well as the owners of the
\ntranshipper filed appeals against the said judgment of the Judicial
\nCommissioner in this Court and the said appeals were disposed of in terms
\nof an agreement dated July 8, 1977 whereby it was agreed that the owners of
\nthe transhipper shall register themselves as employers within the meaning
\nof the Scheme with liberty to employ their own workmen on their transhipper
\nwho would be treated as monthly workers under the Scheme and that the owner
\nof the transhipper would pay a flat rate levy of 7 paise per tonne of cargo
\nhandled though the transhipper which rate of levy would not be changed
\nexcept by mutual consent of the parties. It appears that similar agreements
\nwere entered into with other owners of transhipper vessels in 1977. The
\nrate of levy was revised from 7 paise per tonne to 21 paise per tonne and
\nin April, 1983 a formula was agreed upon for future revision of the same.
\nThe said levy is composite and all inclusive.\n<\/p>\n
In the course of time the number of ocean going vessels fitted with grab
\ncrane has increased and the volume of Cargo handled by such vessels has
\nalso been increasing from year to year. According to the figures supplied
\nby the Board the tonnage handled manually in 1969-70 was 65,56,229 which
\ncame down to 11,58,587 in 1982-83. The total tonnage handled by
\ntranshippers\/reloading equipment in the year 1969-70 was 2,23,052 and it
\nwent up to 50,09,509 in 1982-83, On account of the use of mechanised
\nloading of ore in the vessel the requirement of gang workers has been
\nreduced but there has not been corresponding reduction in the strength of
\nthe workers. The Board, therefore, passed a resolution on October 30,1982
\nsetting up a committee to study the comparative cost upto the point of
\nlanding in handling of ore by various modes and to recommend a scheme for
\nrationalisation of levy structure for all modes of handling of ore, for
\nconsideration by the Board. At the same time the board decided to increase
\nthe percentage of general levy in respect of handling by grab crane fitted
\nships from 200% to 400% and the welfare levy from 30% to 60% The Central
\nGovernment gave its approval to the said increase by its order dated March
\n11, 1983, Thereafter the Board issued the impugned circular dated March 19,
\n1983 increasing the general levy from 200% to 400% and the welfare levy
\nfrom 30% to 60%. Similarly the Board decided to impose a special levy @ Re.
\n1\/- per tonne in respect of all cargo handled manually by the registered
\ndock workers. The said proposal was approved by the Central Government by
\nletter dated March 14, 1983 and thereupon the impugned circular dated March
\n19, 1983 was issued by the Board imposing the special levy @ Re. 1\/- per
\ntonne in respect of all cargo manually handled by the registered dock
\nworkers with effect from March 14, 1983. The said circular was clarified by
\nthe Board by resolution dated July 14, 1983 that the special levy is
\nauthorised to be collected in respect of all cargos handled with the help
\nof registered dock workers whether gangworkers or winch drivers. The said
\nclarification was also approved by the Central Government by its letter
\ndated December 21, 1983.\n<\/p>\n
The committee that was constituted by the Board for rationalization of levy
\nstructure, in its report dated September 30, 1983, has expressed the view
\nthat vessels fitted with grab cranes be classified into two categories
\nbased on the biting capacity and it has recommended that the levy be
\ncharged at Rs. 3.25 per tonne in respect of ore loaded through grab cranes
\nupto 7 tonnes biting capacity and Rs. 3.75 per tonne in respect of ore
\nloaded through vessels fitted with grab cranes above 7 tonnes biting
\ncapacity. The Committee also recommended that in case of lumpy ore loaded
\nthrough vessels fitted with grab cranes such rates be reduced by 25 paise
\nper tonne in respect of both the categories. The committee further
\nrecommended that these levy rates be subject to change every year
\nproportionate to the increase in the levy rates in respect of ore loaded
\nthrough winches\/cranes with the help of gangworkers and winch drivers.
\nAccording to the committee, there was no difference in the FOB rates in
\nrespect of ore loaded through ship’s gear either through cranes\/winches or
\ngrab cranes and that the cost of loading in respect of vessels fitted with
\ngrab cranes was such cheaper then the one through, cranes\/winches and,
\nthere-fore, there was much scope for increasing the levy rate in respect of
\nore loaded through vessels fitted with grab cranes.\n<\/p>\n
Petitioner No. 1 is a company registered under the Companies Act, 1956 and
\nis engaged in mining and export of mineral ores particularly iron ore.
\nPetitioner No, 2 a shareholder and the Managing Director of Petitioner no,\n<\/p>\n
1. Petitioner no. 3 is a partnership firm carrying on the business of
\nstevedoring in Mormugao Harbour and are engaged by petitioner no. 1 to
\nhandle the loading operations of petitioner no. 1 at Mormugao port. Feeling
\naggrieved by the circulars dated March 19, 1983 increasing the general levy
\nas well as welfare levy and imposing the special levy the petitioners filed
\nthe writ petition giving rise to these appeals. In the said writ petition
\nthey assailed the validity of the impugned circulars mainly on the ground
\nthat the said circulars were violative of the right to equality guarantee
\nunder Article 14 of the Constitution inasmuch as much higher levy has been
\nimposed in respect of loading of ore done through ocean going vessels
\nfitted with grab cranes as compared to loading of ore through transhipper
\nfitted with grab cranes. It was submitted that although grab cranes were
\nused for loading by both the modes the petitioners were saddled with the
\nlevy in respect of notional wages for gang workers although the services of
\nthe gang worker were not being required for the loading operation through
\ngrab cranes and that while wages of gang worker are not taken into account
\nin the matter of fixing the levy in respect of loading through transhipper,
\nthe notional wages of the gang workers have been taken into account while
\nimposing the levy in respect of loading done through going vessels fitted
\nwith grab cranes. The other ground that was urged was that the increase in
\nthe levy has been made applicable with retrospective effect on the basis
\nthat the approval of the Central Govern-ment was obtained ex-post facto and
\nthat such retrospective increase in the levy was not permissible under the
\nScheme.\n<\/p>\n
On behalf of the Board it was pointed out that the owners of the
\ntranshipper stand on a different footing from the petitioners inasmuch as
\nthe transhippers are not required to utilise the services of the Board by
\nrequisitioning the supply of dock workers under the agreements arrived
\nbetween the transhippers and the Board and that still they pay levy for
\nhandling of ore and that the amount of such levy was originally fixed at 7
\npaise in 1977 which was increased to 21 paise in September, 1980 and that
\nnow a formula has been evolved with consent whereunder the amount of levy
\npayable by transhipper-owners conies to about 35 paise per tonne. In this
\nregard it was also submitted that the owners of transhippers are required
\nto invest huge capital cost and the same are manned by a staff crew as
\nrequired under the Merchant Shipping Act and that the tranship-pers are
\nmade to operate on special conditions imposed on them by the Government of
\nIndia and that transhippers are required to have their own set of workers
\nfor operating their cranes and other equipment with the result that they
\nhave to maintain two sets of crew and further the tranship-per owners do
\nnot draw labour from the Board, not even winch driver. In the reply to the
\nwrit petition filed on behalf of the Board it was stated that the Board has
\nbeen suffering budgetary deficits since 1979-80. It was pointed out that
\none of the factors for the continuous drain on the finances of the Board
\nhas been the increased off-take of iron ore by vessels fitted with grab
\ncranes. According to the Board in 1979-80 only two small vessels fitted
\nwith grab cranes called at Mormugoa port. In 1980-81 the number of such
\nvessels was three while in 1981-82 it was five, but in 1982-83 the said
\nnumber was 11 and some of them were large vessels and this has resulted in
\nloss of opportunity of employment for the registered dock workers. It was
\nsubmitted that since the Board has to pay amount of minimum guaranteed
\nwages and other amounts under the Scheme to workers irrespective work being
\navailable or not, the financial burden on the Board has increased. It was
\npointed out that efforts have been made since 1979 to reduce the strength
\nof registered dock workers on the roll of the Board by introducing
\nvoluntary retirement scheme and other schemes and it has been brought own
\nfrom 2314 to 1148 (consisting of 864 gang workers and 284 winchmen) and
\nthat the impugned increase in levy was justified and is not unreasonable,
\narbitrary or discriminatory.\n<\/p>\n
The High Court has rejected the contention urged on behalf of the
\npetitioners that the impugned circulars are violative of Article 14 of the
\nConstitution, The High Court has pointed out that in vessels fitted with
\ngrab cranes the services of the reserve pool winch drivers are required
\nduring the loading operation only where as the owners of the transhippers
\nuse winch drivers employed by them throughout the year as monthly workers
\nand the liabilities of the Board towards the latter workers are much lower
\nthan the liabilities towards the former and that apart from the liability
\nfor the payment of the dues to the reserve pool workers the Board has also
\nto incur expenses in order to keep in readiness an adequate number of
\nreserve pool workers to satisfy the needs of the registered employers as
\nand when required, even though the services of the reserve pool workers may
\nbe required for only two or three days at a time and, therefore, it could
\nnot be said that grab crane fitted vessels and tranship-pers are equals.
\nAccording to the High Court though both use mechanised method for loading
\nof cargo on the ocean-going vessels the dissimilarities resulting from
\ndifferent systems of engaging dock workers are so marked, significant and
\nof such import that make them unequal and a classification distinguishing
\nthem one from another was reasonable and justified. In this context, the
\nHigh Court has also mentioned that a registered employer engaging monthly
\nworker like the transhipper has to pay all the dues such as salary,
\nprovident fund, gratuity, etc. whereas in the case of reserve pool worker
\nthe burden to pay all the dues including disappointment money and the
\nattendance allowance is borne by the Board and that these two factors have
\na direct impact on the cost of operating the scheme and the liability of
\nthe Board. The High Court has also rejected the contention that the levy
\nwhich involves imposition in respect of notional employment of gang workers
\nis unreasonable and arbitrary since no gang worker is employed for handling
\ncargo in the grab crane fitted vessels. The High Court has pointed out that
\nuse of grab crane method gave cause to unemployment of gang workers in an
\nincreasing proportion and that while under the conventional method the
\nmaximum output of a unit of tour winch drivers and ten gang workers is 300
\ntonnes of cargo per hook per shift, the cargo handled by grab crane fitted
\nvessels is on an average 2520 tonnes per grab crane per shift and that this
\ngives cause to a higher rate of unemployment of dock workers (both winch
\ndrivers and gang workers) from the reserve pool with the consequent
\nincrease in the liabilities of the Board if the grab crane method of
\nhandling cargo is used. The High Court has observed that the responsibility
\nfor such unemployment was impliedly admitted by some users of the grab
\ncrane method of cargo handling inasmuch in the agree-ment that was entered
\ninto on October 17,1970 it was agreed that when-ever gangs are not booked
\nfor work the employer shall pay double the levy to the Board chargeable for
\none gang for each working grab crane which implies that the principle of
\ncharging levy on notional employment of gang workers was found to be
\nreasonable and fair by the trade, labour and the Board. While upholding the
\nvalidity of the impugned circulars the High Court has, however, held that
\nthe said increased levy could not be raised with retrospective effect and
\ncan only operate prospectively. In this context, the High Court has pointed
\nout that in view of Clause 54(3) of the Scheme prior approval of the
\nCentral Government was required before the Board could sanction any levy
\nexceeding 100% of the estimated total wage bill calculated on the basis of
\ndaily wage rate and that the increase in the levy under the impugned
\ncircular exceeded 100% of the estimated total wage bill and, therefore, the
\nlevy could only be imposed after obtaining the approval of the Central
\nGovernment. According to the High Court Clause 54(3) of the Scheme denotes
\nthat the Board cannot fix the levy retrospectively and since the approval
\nof the Central Government is a condition precedent to the levy and without
\nit no levy could be imposed the resolu-tion passed by the Board on October
\n30, 1982 has no value since it has to be preceded by the approval of the
\nCentral Government. The High Court has, therefore, held that the impugned
\ncircular regarding enhancement of the general levy and welfare levy could
\nnot have retrospective effect from October 30, 1982 and it could take
\neffect only from March 19, 1983. Similarly as regards the special levy the
\nHigh Court has observed that the said levy could only take effect from July
\n14, 1983 the date of the resolution clarifying the matter and not from
\nMarch 14, 1983 as communicated by the impugned circular.\n<\/p>\n
Both sides have filed appeals against the judgment of the High Court. C.A,
\nNo. 258\/85 has been filed by the petitioners while C.A. No. 541\/85 has been
\nfiled by the Board.\n<\/p>\n
We will first take up C.A. No, 258\/85 filed by the petitioners. In this
\nappeal the learned counsel has confined his challenge to the enhancement of
\nthe general levy from 200% to 400% and welfare levy from 30% to 60%. The
\nlearned counsel for the petitioners has assailed the imposition based on
\nthe notional employment of gang workers. It has been urged that such an
\nimposition is ultra vires clause 54 of the Scheme inasmuch as the said
\nclause, on a true construction, does not authorise levy on notional employ-
\nment basis. The other ground that has been urged to assail the levy is
\nbased on Article 14 of the Constitution and it has been contended that
\nthere is no real or substantial difference between owners of transhipper
\nand the petitioners so as to justify their being classified into separate
\ncategories and that the said classification has no nexus to the object of
\nthe levy which is to meet the social costs incurred by the Board for
\nreserve pool gang workers. The said consideration for imposing the levy
\napplies to both the modes for loading, i,e,, through transhippers fitted
\nwith grab cranes and ocean going vessels fitted with grab cranes yet the
\nnotional levy is imposed exclusively in respect of loading through ocean
\ngoing vessels fitting with grab cranes.\n<\/p>\n
As regards the first contention urged by the learned counsel for the
\npetitioners based on clause 54 of the Scheme it is necessary to bear in
\nmind that the object of the Scheme, as set out in clause 2(1), is to ensure
\ngreater regularity of employment for dock workers and to secure that an
\nadequate number of dock workers is available for the efficient performance
\nof dock work. The Scheme seeks to achieve these twin objects by maintaining
\na reserve pool of registered dock workers who are available for work and a
\nworker in the reserve pool is guaranteed minimum wages in a month under
\nclause 32 as well as attendance allowance under clause 33 and disappoint-
\nment money under clause 35. Clause 54(1) empowers the Board to recover from
\nregistered employers the cost of operating the Scheme. Since the Scheme
\napplies to gang workers the cost of operating the Scheme includes the
\npayments made to gang workers under the various clauses of the Scheme.
\nNormally a gang consists of four winchmen and 10 gang workers to operate a
\ncrane per shift. For operating the grab crane only winchmen are required
\nand gang workers are not required. But insofar as the Board is concerned it
\nhas to keep gang workers on its Rolls and to pay their minimum wages and
\nother allowances payable under the Scheme to the gang workers in the
\nreserve pool. Since the wages and allowances payable to the workmen under
\nthe Scheme form part of the cost of operating the Scheme it would be
\npermissible for the Board to recover the said cost by way of levy by
\ntreating the gang workers as notionally employed in the matter of loading
\nthe ore by the ocean going vessel fitted with grab crane. There is nothing
\nin clause 54 which prohibits the Board from recovering such cost of
\noperating the Scheme in this manner. In this context, it may also be
\nmentioned that notional employment of gang workers in connection with
\nloading of ore on ocean going vessels fitted with grab crane has been
\nrecognised in the settlement that was entered into on October 17,1970 by
\nM\/s V.M. Salgaocar & Brother Pvt. Ltd. wherein it was expressly agreed that
\nwhenever gangs are not booked for work the employer shall pay double the
\nlevy to the Board chargeable for one gang for each working grab crane. It
\nis, therefore, not possible to accept the contention urged on behalf of the
\npetitioners that it was not permissible for the Board to impose the levy on
\nthe basis of notional employment of gang workers although the gang workers
\nwere not actually employed in the task of loading iron ore in the vessels
\nfitted with grab cranes.\n<\/p>\n
Coming to the other contention based on Article 14 of the Constitution we
\nare in agreement with the view of the High Court that grab crane fitted
\nvessels cannot be equated with transhippers fitted with grab cranes for the
\npurpose of levy and that there are features which indicate that they cannot
\ntreated at par. In this context, it has to be noted that transhippers
\nemploy regular winchmen to operate the grab cranes fitted on the tranship-
\nper as their monthly workers and are responsible for paying all their dues
\nsuch as salary, provident fund, gratuity, etc. Ocean going vessels fitted
\nwith grab cranes on the other hand utilise the services of reserve pool
\nworkers for operating the grab cranes and the Board has to bear the burden
\nfor such workers. Moreover, the owners of transhippers have to engage other
\nstaff to operate the transhipper as required under the Merchant Shipping
\nAct and they have to incur expenses for maintaining the said vessel apart
\nfrom the heavy amount which has been invested in the vessel itself. It can
\nalso not be ignored that ever since the introduction of grab cranes for the
\npurpose of loading the ore at Mormugoa port in 1970, the ocean going
\nvessels fitted with grab cranes have been treated differently from
\ntranshippers fitted with grab cranes in the matter of amount payable to the
\nBoard. The amount payable by ocean going vessels fitted with grab cranes is
\ngoverned by the settlement dated October 17, 1970 while the transhippers
\nare governed by the various agreements of 1977 which have been revised from
\ntime to time. Having regard to all these circumstances we are unable to
\naccept the contention urged on behalf of the petitioners that since
\ntranshipper as well as the ocean going vessels fitted with grab cranes both
\nuse grab cranes for the purpose of loading the ore they should be treated
\nalike in the matter of imposition of levies by the Board.\n<\/p>\n
It has been said that “no economic measure has yet been devised which is
\nfree from all discriminatory impact and that in such a complex arena in
\nwhich no perfect alternatives exist, the court does well not to impose too
\nrigorous a standard of criticism, under the equal protection clause,
\nreviewing fiscal services”. (See P.M.A. Setty v. State of Karnataka, (1988]
\nSupp 3 SCR 155 at p. 189). The same thought is expressed in San Antonio
\nIndependent School District v. Bodrigues speaking through Justice Stewart,
\n411 U.S. 1 at page 41; G.K. Krishnan v. The State of Tamil Nadu & Anr.,<\/a>
\n[1975] 2 SCR 715 at p. 730. Here we find that, according to the Board, one
\nof the factors contributing to the continuous drain on the finances of the
\nBoard is the increased off-take of iron ore since 1979 by vessels fitted
\nwith grab cranes because such off-take results in loss of opportunity of
\nemployment for the registered dock workers and consequent increase in the
\nburden on the Board for the minimum guaranteed wages and other amounts
\npayable under the scheme. The Board has made efforts to reduce the strength
\nof registered Dock Workers on its roll from 2314 in 1148 in June 1983. A
\nsubstantial number, i.e., 864, of those 1148 workers are gang workers who
\nare denied opportunity of employment on account of take of iron ore by
\nvessels fitted with grab cranes. Annexure ‘A’ to the Rejoinder Affidavit
\nfiled on behalf of the petitioners in the High Court would show that prior
\nto the enhancement of the general levy and welfare levy under the impugned
\ncircular the charges came to about Rs. 1.48 per wet M\/ton and as a result
\nof enhancement of the general levy and welfare levy by the impugned
\ncircular the said charges have been increased to about Rs. 2.55 per wet
\nM\/Ton, i.e., by about Re. 1 per wet M\/Ton. On the other hand, the cost of
\nmanual loading was in the range of Rs. 8.11 to Rs. 11.91 (Annexure 2 to the
\nAffidavit in reply of A, Onkarappa filed on behalf of the Board in the High
\nCourt). The expenses for loading through transhipper (as per para 8 of the
\naffidavit in reply filed on behalf of the Board in the High Court which was
\nnot disputed by the petitioners in their rejoinder affidavit) come to Rs.
\n27 to Rs. 33 per tonne. By enhancing the general levy and welfare levy
\nunder the impugned circular the Board, keeping in view the economics of the
\ncost of loading under the various modes, has sought to balance its
\nfinancial deficit caused on account of increased off take of ore through
\nocean going vessels fitted with grab cranes by enhancing the levies which
\nhas led to increase in the cost of loading through vessels fitted with grab
\ncranes. In doing so the Board cannot be said to have acted arbitrarily or
\nunreasonably or having subjected the petitioners to hostile or invidious
\ndiscrimination. The impugned cir-cular cannot, therefore, be held to be
\nviolative of the right guaranteed under Article 14 of the Constitution.
\nC.A. No. 258 of 1985 filed by the petitioners must, therefore, fail and has
\nto be dismissed.\n<\/p>\n
C.A. No. 541 of 1985 filed by the Board is confined to the question whether
\nthe enhancement of the levies under the impugned circulars could be
\nOperative from October 30, 1982 the date of the passing of the resolution
\nby the Board. The High Court has held that the circular dated March 19,
\n1983 regarding increase in the general levy and welfare levy from 200% to
\n400% and 30% to 60% respectively could only operate from the date of such
\ncircular and could not be made operative with effect from October 30, 1982,
\nthe date of passing of the resolution, for the reason that prior approval
\nof the Central Government was required in view of clause 54(3) of the
\nScheme and the proposal made by the Board in its resolution dated October
\n30, 1982 was approved by the Central Government only on March 11, 1983. We
\ndo not find any infirmity in this approach of the High Court. Similarly as
\nregards circular dated March 19, 1983 for imposition of special levy the
\nHigh Court has rightly held that the said circular could not have
\nretrospective effect. The said appeal must also, therefore, be dismissed.\n<\/p>\n
In the result, both the appeals (C.A. No. 258\/85 and 541\/85) are dismissed
\nbut in the circumstances there will be no order as to costs.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Sociedade De Formento Industrial … vs Mormugao Dock Labour Board And Anr on 18 January, 1995 Bench: P.B. Sawant, S.C. Agrawal 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 […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-160003","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nSociedade De Formento Industrial ... vs Mormugao Dock Labour Board And Anr on 18 January, 1995 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/sociedade-de-formento-industrial-vs-mormugao-dock-labour-board-and-anr-on-18-january-1995\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Sociedade De Formento Industrial ... vs Mormugao Dock Labour Board And Anr on 18 January, 1995 - 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