OIL AND NATURAL GAS CORPORATION LTD vs PRESIDENT, OIL FIELD EMPLOYEES ASSOCIATION

OIL AND NATURAL GAS CORPORATION LTD vs PRESIDENT, OIL FIELD EMPLOYEES ASSOCIATION

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 1033 OF 2022

(ARISING OUT OF PETITION FOR SPECIAL LEAVE TO

APPEAL (CIVIL) NO. 9456 OF 2020)

M/S. OIL AND NATURAL GAS

CORPORATION LTD. …..APPELLANT(S)

VERSUS

THE PRESIDENT, OIL FIELD

EMPLOYEES ASSOCIATION & ORS. ….RESPONDENT(S)

J U D G M E N T

ANIRUDDHA BOSE, J.

Leave granted.

2. The appellants before us are Oil and Natural Gas

Corporation Limited (in short “ONGC”), a public sector

undertaking engaged in the business of exploration and

production of oil and gas. In this appeal, they assail a judgment

of the Bombay High Court delivered on 30th January, 2020 in

Writ Petition No. 13015 of 2019 in which the claims of workmen

to be entitled to fixation of pay and other allowances as per an

2

award of the Central Government Industrial Tribunal No. II,

(“Tribunal”) Mumbai has been upheld with certain modification

in the implementation part of that award. The controversy

involved in this proceeding originates from a Direct Action notice

raised by a Union (Oil Field Employees Association represented

by their President-respondent no.1 in the present appeal) on

26th August, 2016. The workmen, whose cause the said Union

were espousing, were engaged by and getting their salaries paid

through different contractors appointed by the ONGC. ONGC’s

stand all along has been that these were contractors’

workmen – and not workmen of ONGC. In fact, ONGC’s case is

that another settlement has been reached with the Unions

representing majority of the contractors’ workmen (over 77%)

and that settlement arrived at on 19th September, 2016 is

binding on all similar workmen including those represented by

the respondent Unions. We shall address this issue later in this

judgment. Earlier, there were three memoranda of

understanding reached in the years 1992, 1995 and 2000

involving ONGC and different Unions representing the contract

workmen working with the ONGC. These memoranda covered

wages, allowances and other facilities to be provided by the

contractors to the “contract labour”. Copies of these memoranda

3

of understanding have been annexed at pages 93, 102 and 113

of the paperbook. The 2000 MoU had lapsed on 31st December,

2007.

3. There had been certain parallel developments on the

industrial front involving ONGC and Unions espousing the

cause of workmen engaged by their contractors, which cast a

shadow on the dispute giving rise to this appeal. Six Unions

representing workmen engaged by contractors had submitted a

charter of 28 demands against ONGC and 57 of their

contractors. This was admitted for conciliation. ONGC wanted

to introduce a Fair Wage Policy (“FWP”) to cover contract

employees. Negotiation in that regard had started among the

parties. A Memorandum of Settlement was signed on 19th

September, 2016 (to which we have already referred) under

which the FWP extended to contract labourers of Western

Offshore Unit, Mumbai was agreed to be implemented at all

work-centers of ONGC. This settlement, according to the

appellants, was in terms of Section 12(3) read with Section

18(3)(d) of the Industrial Disputes Act, 1947 (the Act) and

entailed upward revision of wages as also certain other

measures of social protection including job security. The

signatories to this settlement were contractors’ representatives

4

and representatives of six Unions “In the presence of and

representing principal employers” as also the Conciliation

Officer. The representatives of ONGC signed in the capacity of

representatives of the principal employer. The Tribunal and the

High Court, however, held that the aforesaid arrangement was

not settlement within the meaning of Section 18(3)(d) of the Act

and was not binding on the workmen involved in the subject

dispute. The Tribunal had also referred to certain order of status

quo passed by the High Court to sustain its finding on this

count. We shall however address this issue on merit, testing

the reasoning of the High Court given in the impugned

judgment.

4. The respondent-Oil Field Employees Association (the

actual party-respondent no. 1 is the President of the Oil Field

Employees Association) issued the Direct Action Notice on 26th

August, 2016 to the appellants. This Union was registered in

the year 2014 and claims to represent workmen engaged by

contractors of the ONGC. On 19th September, 2016 itself, one

P.D. Sunny, Conciliation Officer called the appellants and the

first respondent for conciliation of dispute arising out of the

notice for direct action of 26th August, 2016. On 26th September,

2016, a Charter of Demands was submitted before the

5

Conciliation Officer with a copy to the appellants. The main

demand of the respondent no.1 was that wages and service

conditions of the workmen engaged by the contractor should be

at par with the regular employees of ONGC.

5. Thereafter, in course of conciliation proceeding the FWP

was brought on record and the respondent no. 1 questioned the

legitimacy of the FWP. The conciliation records subsequently

were transferred from said P.D. Sunny to one Dr. S. Gunahari,

Conciliation Officer & Regional Labour Commissioner (C),

Mumbai. The latter recorded failure of conciliation and

forwarded the failure report to the Central Government. The

dispute then was referred by the Central Government to the

Tribunal and it was registered as Ref. CGIT No.2/40 of 2017.

The reference order was made by the Central Government on

18th September, 2017 in terms of Section 10(2A) (1) (d) of the

Act. The order of reference was in the following terms:-

“Whether the following demands of The President, Oil

Field Employees Association are legal and justified?

1. To have uniform policies for all the

workers irrespective of the contracts in

the establishment of ONGC.

2. To get the MOU renewed with pay

Revisions w.e.f. 1.1.2008.

3. To advise M/s. ONGC Management to

release an advance of Rs.50,000/- per

worker and to adjust it with the arrears

after implementation of the Pay Revisions.

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If not, to what relief the workmen are

entitled to?”

6. ONGC questioned the legality of the order of reference in a

writ petition filed in the High Court of Bombay (registered as

Writ Petition No.5045 of 2018). This writ petition was not

entertained by a Division Bench of the High Court and was

rejected by an Order passed on 29th January, 2019. It was,

inter-alia, held in this order:-

“8) It is further to be noted that in pursuance to the

communication addressed by the Petitioner to the

Chief Labour Commissioner, a Conciliation Officer

vide his notice dated 15th September 2016 kept the

matter for conciliation on 19th September, 2016 at

12:30 hrs. Perusal of the minutes would reveal that

in the said meeting, the representative of the

Petitioner as well as the Respondent No.3 were

directed to do certain compliances. However, it

appears that on same day i.e. 19th September 2016

at 15:00 hrs., settlement was entered into by the

representatives of the certain Union and ONGC and

57 contractors of the ONGC. It is to be noted that

though the said settlement was to be arrived on

the same day,the Petitioner neither informed the

Conciliation Officer in the present proceedings

about such a settlement being arrived at. The

conduct of the Petitioner in not bringing to the

notice of the Conciliation Officer in the present

proceedings, the settlement which was to arrive

within hours with representative of certain Unions

before some other Conciliation Officer, in our

considered view is not a conduct befitting the

employer who is an organ of State and State

within the meaning of Article 12 of the

Constitutionof India.

9) It is further to be noted that though the

Respondent No.3 and the Petitioner have completed

their pleadings before the learned CGIT and though

there were rounds of litigations, which reached upto

this Court arising out of the interlocutory orders, the

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Petitioner has chosen to move this Court for

ad-interim orders only after the matter was kept for

their evidence. We are of the considered view that

having consciously submitted to the jurisdiction of

the learned CGIT, it is not now open for the

Petitionerto complain at such a belated stage that

the reference was not warranted.

10) Apart from that the question as to whether the

settlement arrived at between some of the Unions

at one hand and the Petitioner's contractors on the

other hand is binding on the Respondent No.3 and

intervenors, can be very well looked into by the

learned Tribunal in the proceedings before it.

11) In that view of the matter, we are not inclined

to entertain the present Petition in its extraordinary

jurisdiction under Article 226 of the Constitution of

India. The Writ Petition is therefore rejected.”

7. In the reference, two other Unions participated and were

impleaded as parties therein on the basis of their applications.

These two Unions are Maharashtra Sanghatit Asanghatit

Kamgar Sabha (respondent no.2) and Maharashtra Employees

Union (respondent no.3).

8. The Tribunal by its Order passed on 17th July, 2019 in

substance allowed the claim of the workmen articulated through

the Unions and ordered:-

“1. The reference is allowed.

2. It is declared that the demands of the union

to have uniform policies for all the workers

irrespective of contracts in the

establishment of ONGC and to get the MOU

renewed with pay revision w.e.f. 1.1.2008

are legal & justified.

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3. First party management is directed to enter

into MOU with second party unions with

pay revision w.e.f. 1.1.2008 and implement

the same within 2 months from the date of

order.

4. On renewal of MOU the first party

management is directed to pay arrears

arising out of implementation of MOUs

within 2 months from the date of order

failing which concerned workmen would be

entitled to interest @ 6% per annum on the

arrears and other benefits to which they are

entitled to on implementation of MOU.”

9. The High Court sustained the award in the writ petition

brought by ONGC on substantive issues but partly allowed the

petition challenging the legality thereof, inter-alia, holding:-

“20. Coming now to the reliefs formulated by it,

it is but apparent that the tribunal does not

appear to have applied its mind to individual

revisions that may have to be made. As we

have noted above, there is no infirmity in the

conclusion of the tribunal that wage revisions

had to be on the lines of MbPT settlement for

the relevant period, but then based on related

MbPT settlements, the court had to work out

individual wage revisions for different

categories of workmen, whose cause was

espoused by the second party unions in the

present case. The tribunal, firstly, had to work

out individual revised wage scales and

allowances for workmen at 12 Victoria Dock

and Nhava Supply Base; it, then, had to

formulate reasonable consolidated wages for

workmen other than those working in 12

Victoria Dock and Nhava Supply Base. This the

tribunal appears to have clearly failed to do. It

left it to the parties to work out the individual

revisions. That I am afraid is not possible. It is

one thing to say that the basis of wage revision

is available in a document and quite another to

apply that basis to the individual facts of the

case. For example, it is one thing to say that

workmen other than those working in 12VD

9

and Nhava Supply Base were to be paid wages,

that is, consolidated wages, worked out on the

basis of minimum basic wages of the concerned

categories of MbPT workers plus adjustments

towards allowances, and quite another to

actually provide for and stipulate such

consolidated wages so calculated and adjusted.

This was obviously for the tribunal to do and

not for the parties to work out. The tribunal

appears to have clearly missed this point. To

that extent, the matter must go back to CGIT

for determination of actual wage

scales/allowances of workmen working in

12VD and Nhava Supply Base (based on MbPT

scales/allowances) as well as other workmen

covered by the reference (for consolidated

wages based on MbPT scales and allowances).

21. The question then is of interim relief to be

granted to these workmen pending

consideration of the matter on remand by

CGIT. It is a matter of fact, and probably a sad

commentary on the times that we live in, that

the last wage revision of these workmen

occurred as far back as in 2000. That wage

revision was applicable only till 31 December

2007 and till date, there has been no further

revision in sight, though at least three revision

periods have gone by. On these facts, this court

is of a considered view that it would be in the

interest of justice to at least direct ONGC to pay

wages to the workmen concerned on the basis

of what was agreed in the settlement of 19

September 2016 minus its condition of

withdrawal of proceedings against ONGC.

These would indeed be minimum wages that

might in any case be payable to the concerned

workmen, that is to say, even if the unions were

wrong in the matter of calculation of wages in

accordance with the particulars submitted with

the statement of claim. If, on the other hand,

they were right that the workmen were entitled

to get wages in accordance with the particulars

submitted by them, these interim revised wages

could then be adjusted against such wages.

22. The writ petition is, accordingly, disposed

of by setting aside the operative order passed

by CGIT and remitting the reference, being

Reference No.CGIT-2/40 of 2017, to CGIT-2,

Mumbai for a fresh decision on (i) individual

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wage scales and (ii) consolidated wages

payable, respectively, to the contract workmen

of ONGC working at (i) 12 Victoria Dock and

Nhava Supply Base and (ii) the other workmen

covered by the reference. It is made clear that

such determination must be in the light of what

has been observed above, in particular that the

wage revision/s of these workmen has/have to

be on the lines of the wage revision/s applicable

to workmen of MbPT, which are placed before

the court (i.e. MbPT settlements applicable for

the periods from 2007 to 2011 and from 2012

to 2016).

23. The tribunal is requested to accord top

priority to this determination and dispose of the

reference as expeditiously as possible and

preferably within a period of eight months from

the date this order is pointed out to the

tribunal. To that end, either party may appear

before the tribunal with notice to the other side

and produce an authenticated copy of this

order. The tribunal may thereupon fix the

schedule of hearings and decide the reference

accordingly.

24. Pending hearing and final disposal of the

reference on remand, interim wages shall be

paid to the concerned workmen by ONGC for

the whole of the period of revision in

accordance with MoS of 19 September 2016

and also prospectively from the month of March

2020.

25. Since the operative part of the award of

CGIT has been set aside, pending criminal

proceedings for non-implementation of the

award shall not be proceeded with.”

10. The workmen, whose cause the three Unions espouse were

those who were inducted by contractors and were getting their

salaries paid through the contractors only. The main claim of

the workmen was for having a uniform policy for all workmen,

irrespective of contracts under which they were engaged in the

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matter of wages and allowances. Last of the memoranda of

understanding signed in the years 1992, 1995 and 2000 was

executed on 29th December, 2000. The wage revision provided

for in the last memorandum of December, 2000 was to operate

till 31st December, 2007. Primarily, signatories to these

memoranda are the appellants-employer and the Unions. The

respective contractors were not signatories to these

memoranda. One of the major characteristics of the terms

contained therein, though not specifically spelt out in the

memoranda themselves, is that the wages and allowances

agreed upon therein were linked to the lines of settlement

signed between Mumbai Port Trust (earlier Bombay Port

Trust) and their workmen. We shall henceforth refer to that

settlement as MbPT Settlement. These memoranda classified

contract employees in two categories, one set working for

Victoria Dock 12 and Nhava Supply base and the other set

working at various other locations including Mumbai and

Uran. There was variance in pay and allowance between these

two categories of workmen. This was in the case of 1992

settlement whereas the 1995 settlement followed similar line

of categorisation, but included workmen engaged in Panvel

12

to Mumbai and Uran. The same form of categorisation was

there in the “2000 Settlement.”

11. Appearing on behalf of the appellants Mr. Cama, learned

senior counsel, has primarily argued on two points. His first

submission has been that the reference itself was not

maintainable as none of the workmen the Unions were

representing or espousing the causes of were employed by the

appellants. He has pointed out the definition of workmen in

Section 2(s) of the Act in this behalf. The other point on which

submission was advanced by him was that the Settlement

arrived at on 19th September, 2016 covered all the employees

of contractors, considering the provisions of Section 18(3)(d).

The Unions have been represented by Mr. Pallav Shishodia,

learned senior counsel and Mr. Shaligram G. Mishra,

respondent no. 1 appearing in person. The stand of the

Unions on the other hand has been that the concerned

workmen were actually employees of the appellants and

before the Tribunal itself, it was their case that their

engagement by the contractor would not by itself make them

contractors’ employees. It is also their stand that the

settlement of 19th September, 2016 could not be treated to be

one under Section 18(3)(d) of the Act to bind the workmen

13

represented by the three Unions in this appeal. First, it has

been contended that the said settlement has not taken final

shape as certain procedural aspects for conclusion thereof is

yet to be taken. It has also been argued on their behalf that

the said settlement related to contractors’ workmen only

whereas the workmen involved in the present proceeding were

not employees of the contractors who had signed the said

settlement. On the other hand, the workers represented by

the Union are working in the establishment of the appellants

for a long period of time and they claimed to be entitled to the

service benefits directly from ONGC.

12. The Tribunal rejected the objection on jurisdictional

ground taken on the point that the concerned workmen were

not employees of the appellants and hence no dispute could

lie with ONGC. The Tribunal has also given the finding that

the FWP could not be treated as fair settlement as it entailed

withdrawal of the proceedings lodged by individual workmen

or Unions. It has been urged on behalf of the respondents that

many of these proceedings were for regularization or

absorption directly into the appellant company, a dispute

which has intricate link with the controversy involved in the

present proceeding. Mr. Cama has asserted that the finding

14

of the High Court on facts was perverse, and, on that count,

he invited interference by this Court in exercise of its

jurisdiction under Article 136 of the Constitution of India. He

has relied on the decisions of this Court in the cases of

Workmen of the Food Corporation of India vs. Food

Corporation of India [(1985) 2 SCC 136], Parimal Chandra

Raha & Ors. vs. Life Insurance Corporation of India and

Ors. [(1995) Supp (2) SCC 611], Indian Petrochemicals

Corporation Ltd. and Anr. vs. Shramik Sena & Ors. [(1996)

6 SCC 439] and Steel Authority of India Ltd. & Ors. vs.

National Union Waterfront Workers & Ors. [(2001) 7 SCC

1] in support of his submission that the workmen of the

contractor would not become the workmen of the principal

employer. He has also cited the case of Secretary, State of

Karnataka & Ors. vs. Uma Devi & Ors. [(2006) 4 SCC 1] to

contend that there could not be backdoor entry of contractors’

employees directly into the establishment of the principal

employer. This genre of cases has been cited mainly in

support of two propositions of law urged on behalf of the

appellants. First is that there must be a jural relationship

brought about by an agreement to establish employeremployee relationship between contractors’ employees and

15

that of the principal employer. Secondly, abolition of contract

labour in certain industries does not result in automatic

absorption of the workmen engaged by them in the concerned

establishment. In the case of Parimal Chandra Raha (supra),

however, it has been held that where there was statutory

requirement of maintaining of canteens and the canteens of

the respondent corporation had become part of the

establishment, the contractors engaged from time to time in

reality were agencies of the corporation and were only a veil

between the corporation and canteen workers. In the case of

Steel Authority of India Limited of 2001 (supra), it has been

held that abolition of contract labour in certain in any part of

an establishment by a notification under Section 10(1) of the

Contract Labour (Regularization and Abolition) Act, 1970

(1970 Act) automatically does not lead to absorption of

contract labour working in those parts directly in the

establishment concerned. The case of Indian

Petrochemicals (supra) mainly follows the ratio laid down in

the case of Parimal Chandra Raha (supra). The proposition

of law laid down in the case of Steel Authority of India

Limited vs. Union of India & Ors. reported in [(2006) 12 SCC

233] is that mutually destructive plea that the employees were

16

of contractor and the principal employer could not be taken.

The ratio of the decision of Uma Devi (supra) also would not

apply in the facts of the present case. Here, the issue is not

of backdoor entry into an establishment but finding out

subsisting status of a set of workmen on the question as to

who is their actual employer. For determination of the fate of

the dispute raised by Unions, adjudication of the former

question becomes inevitable.

13. Mr. Cama has emphasised on the ratio of the case of

Mukand Ltd. vs. Mukand Staff and Officers’

Association [(2004) 10 SCC 460]. In this judgment it has

been held:-

“23. We have already referred to the order of reference

dated 17-2-1993 in paragraph supra. The dispute

referred to by the order of reference is only in respect

of workmen employed by the appellant Company. It

is, therefore, clear that the Tribunal, being a creature

of the reference, cannot adjudicate matters not within

the purview of the dispute actually referred to it by

the order of reference. In the facts and circumstances

of the present case, the Tribunal could not have

adjudicated the issue of salaries of the employees who

are not workmen under the Act nor could it have

covered such employees by its award. Even assuming,

without admitting, that the reference covered the

non-workmen, the Tribunal, acting within its

jurisdiction under the Act, could not have adjudicated

the dispute insofar as it related to the “nonworkmen.”

17

14. As regards the lack of jurisdiction of the Tribunal to

determine or adjudicate the dispute between the appellants

and the workmen represented by the three Unions, perusal of

the award does not reveal that this point was pressed before

the Tribunal by the employer. We accept that the Tribunal

could not go beyond the disputes that were referred to it, as

held in the case of Mukand Ltd. (supra). But legality of the

order of reference was challenged by ONGC in Writ Petition(C)

No. 5045 of 2018. In the judgment of the Division Bench,

which we have already quoted, it was opined on the aspect of

jurisdiction of the Tribunal, that it was not open for the

petitioner to complain at such a belated stage that the

reference was not warranted. In the judgment of the High

Court under challenge before us, this question was dealt with

and it was held :-

“5. Apropos the first objection of Mr. Talsania, which,

according to him, goes to the root of the matter, it

must be noted at the very outset that the jurisdiction

of the tribunal in the present case to adjudicate the

reference was never questioned by ONGC on the

ground that the workmen represented by the second

party were not ‘workmen’ within the meaning of

section 2(s) of the Act, particularly, because they were

employees of contractors and not of ONGC. If this

issue was not part of the lis before the reference court,

there was no way it could be raised before the writ

court. The issue is, after all, a mixed issue of law and

facts; it would have to be adjudicated first before the

trial court upon foundational pleadings in that behalf

being led before it, before the writ court, in its scrutiny

18

of the order of the trial court, could be asked to go into

it.

6. Mr. Talsania, however, submits that the fact that

these workmen were employees of contractors is not

really in dispute; the reference itself termed them as

workmen engaged through contractors. The question

is not whether the workmen were engaged through

contractors. That may indeed be an apparent

position. The question is whether, by reason of

perennial nature of the work at the premises of the

principal employer, and having regard to the

circumstances bearing on their service and service

conditions, whether the workmen could be said to be

in reality employees of the principal employer despite

the apparent position that they were engaged through

contractors. Indeed, there was a clear statement on

the part of the workmen in the statement of claim of

the second party that they were in fact and in reality

workmen of ONGC and not of the contractors. No

doubt, in its written statement, ONGC contested this

position, and in their rejoinder second party No.2

union reiterated its statement that the contract/s

was/were sham and bogus. It is apparent from the

impugned award of the tribunal, however, that this

issue was not pressed by ONGC at the hearing. The

issue anyway reflected on the jurisdiction of CGIT to

adjudicate the reference and ONGC did not choose to

contest the jurisdiction on the issue. Had the issue

been pressed by ONGC before the reference court, the

second party would have led appropriate evidence in

support of its case in this behalf. It obviously chose

not to do so, because this question was not debated

by ONGC before the reference court. Could the second

party be then visited with the consequence of having

to deal with this issue merely on the basis of the

material available before this court at the stage of a

scrutiny under Articles 226 or 227 of the Constitution

of India. The answer would be an emphatic “no”. The

second party would most certainly be seriously

inconvenienced if it were now required to sustain its

plea in the statement of claim of the workmen being

in reality employees of ONGC, without having had an

opportunity to lead evidence in support of such case

before trial court. For whatever reasons, ONGC found

it worth its while not to contest the jurisdiction of the

tribunal in the reference and this court, sitting as a

writ court, must leave the matter at that and not

scrutinize it any further.”

19

15. On the question of raising issue of lack of jurisdiction

before the Tribunal, the cases of Rattan Lal Sharma vs.

Managing Committee, Dr. Hari Ram (Co-Education) Higher

Secondary School & Ors. [(1993) 4 SCC 10], Secretary to

Govt. of India and Others vs. Shivram Mahadu Gaikwad

[(1995) Supp (3) SCC 231] and Kalyani Sharp India Ltd. vs.

Labour Court No.1, Gwalior & Anr. [(2002) 9 SCC 655] were

relied upon by the appellants. We accept, as a proposition of

law, that if irregularity or illegality committed by a Tribunal

touches upon the jurisdiction to try and determine over a

subject dispute is altogether beyond its purview, that question

would go to the root of the matter and it would be within the

jurisdiction of the superior court to correct such error. In the

case of Kalyani Sharp India Ltd. (supra) raising a plea on

application of law was found permissible at the appellate stage

before this Court, but in that case no fresh investigation of

fact was required. But in the facts of the present case, it is

not the question of inherent lack of jurisdiction on the part of

the Tribunal. The question of jurisdiction, as held by the High

Court was a mixed question of fact and law. Both the cases

of Rattan Lal Sharma(supra) and Kalyani Sharp India Ltd.

(supra) arose out of admitted fact. In the case of Shivram

20

Mahadu Gaikwad (supra) it was the limitation question which

went to the root of the matter. This case arose out of a

proceeding before the Central Administrative Tribunal. Point

was taken before the Tribunal by the Union of India but was

not addressed to in the judgment of the Tribunal. So far as

the present proceeding is concerned, as reflected in the

judgment under appeal, there was a clear statement on the

part of the workmen in the statement of the second party

(Union) before the Tribunal that in fact and reality, the

concerned workmen were employees of ONGC and were not of

the contractors. This was denied by the ONGC but in their

rejoinder the said Union reiterated their stand that the

contracts were sham and bogus. In the award, certain other

reference orders were cited which involved adjudication of the

question as to whether contracts between ONGC’s contractors

and workmen engaged by them were sham and bogus. (Ref.

No. CGIT I 16, 17, 18 and 19/2005) or not and if the said

workmen in reality were ONGC’s workmen only. In the case

of Steel Authority of India of 2001 (supra), it has been laid

down that in cases where plea is raised that a contract is

found to be sham and nominal, a camouflage to suppress the

actual status of a workman vis-à-vis who his employer is, the

21

veil could be pierced to find out the such status. If to this

perspective is added the fact that earlier three MoUs were

entered into directly by ONGC with the Unions representing

contractors’ workmen, this question does not remain a

question of law alone, to be sustained with the aid of the ratio

of the cases of Rattan Lal Sharma (supra), Shivram Mahadu

Gaikwad (supra) and Kalyani Sharp India Ltd. (supra).

Signatories to the earlier MoUs were the appellants and the

Unions and Section 30(2) of the Contract Labour (Regulation

and Abolition) Act, 1970 permits contract labourers to enter

into agreements with principal employers. Thus, by

themselves, the aforesaid MoUs would not establish that the

contract workmen are workmen of the principal employer. But

the circumstances which we have narrated clearly point to the

relationship between the appellants and the workmen

represented by the respondent Unions in that direction. The

stand that the concerned workmen were employees of the

principal employer were not specifically outlined in the

reference, but was implicit therein. In the reference order the

dispute therein was between ONGC and the Union. The

Charter of Demand was also raised against ONGC. The

Tribunal examined the issue and returned its finding which

22

was upheld by the High Court. This was a finding of fact. In

the case of National Engineering Industries Limited vs.

State of Rajasthan & Ors. [(2000) 1 SCC 371] it has been

held that the Industrial Tribunal is the creation of statute and

it cannot go into the question on validity of the reference. That

issue ought to be considered by the High Court, according to

the appellants. So far as the present proceeding is concerned,

the High Court has considered that question and we do not

find any error in the approach of the High Court in deciding

the jurisdiction question against the appellants.

16. Next comes the issue as to whether the settlement of 19th

September, 2016 was binding on the Unions who are before

us as respondents, having regard to the provisions of Section

18(3) (d) of the Act. Section 18 of the Act stipulates:-

“18. Persons on whom settlements and

awards are binding.- (1) A settlement arrived

at by agreement between the employer and

workman otherwise than in the course of

conciliation proceeding shall be binding on

the parties to the agreement.

(2) Subject to the provisions of

sub-section (3), an arbitration award which

has become enforceable shall be binding on

the parties to the agreement who referred the

dispute to arbitration.

(3) A settlement arrived at in the course of

conciliation proceedings under this Act or an

arbitration award in a case where a

notification has been issued under subsection (3A) of section 10A or an award of a

Labour Court, Tribunal or National Tribunal

23

which has become enforceable shall be

binding on—

(a) all parties to the industrial dispute;

(b) all other parties summoned to appear in

the proceedings as parties to the dispute,

unless the Board, arbitrator, Labour Court,

Tribunal or National Tribunal, as the case

may be, records the opinion that they were so

summoned without proper cause;

(c) where a party referred to in clause (a) or

clause (b) is an employer, his heirs,

successors or assigns in respect of the

establishment to which the dispute relates;

(d) where a party referred to in clause (a) or

clause (b) is composed of workmen, all

persons who were employed in the

establishment or part of the establishment,

as the case may be, to which the dispute

relates on the date of the dispute and all

persons who subsequently become employed

in that establishment or part.”

17. In the case of Ramnagar Cane and Sugar Company

Ltd. vs. Jatin Chakravorty & Ors. [(1960) 3 SCR, 968], the

binding nature of a settlement on all persons employed in an

establishment has been explained, having regard to Section

18(3)(d) of the Act. This principle was reaffirmed in the case of

General Manager, Security Paper Mill, Hoshangabad vs.

R.S. Sharma and Others [(1986) 2 SCC 151]. It has been laid

down in the case of Ramnagar Cane and Sugar Company

Ltd. (supra):-

“5. In appreciating the merits of the rival

contentions thus raised in this appeal it is

necessary to bear in mind the scheme of the

Act. It is now well settled that an industrial

dispute can be raised in regard to any matter

24

only when it is sponsored by a body of

workmen acting through a union or otherwise.

When an industrial dispute is thus raised and

is decided either by settlement or by an award

the scope and effect of its operation is

prescribed by Section 18 of the Act. Section

18(1) provides that a settlement arrived at by

agreement between the employer and the

workman otherwise than in the course of

conciliation proceeding shall be binding on the

parties to the agreement; whereas Section

18(3) provides that a settlement arrived at in

the course of conciliation proceedings which

has become enforceable shall be binding on all

the parties specified in clauses (a), (b), (c) and

(d) of sub-section (3). Section 18(3)(d) makes it

clear that, where a party referred to in clauses

(a) or (b) is composed of workmen, all persons

who were employed in the establishment or

part of the establishment, as the case may be,

to which the dispute relates on the date of the

dispute and all persons who subsequently

become employed in that establishment or

part, would be bound by the settlement. In

other words, there can be no doubt that the

settlement arrived at between the appellant

and the Employees' Union during the course

of conciliation proceedings on February 25,

1954, would bind not only the members of the

said Union but all workmen employed in the

establishment of the appellant at that date.

That inevitably means that the respondents

would be bound by the said settlement even

though they may belong to the rival Union. In

order to bind the workmen it is not necessary

to show that the said workmen belong to the

Union which was a party to the dispute before

the conciliator. The whole policy of Section 18

appears to be to give an extended operation to

the settlement arrived at in the course of

conciliation proceedings, and that is the object

with which the four categories of persons

bound by such settlement are specified in

Section 18, sub-section (3). In this connection

we may refer to two recent decisions of this

Court where similar questions under Section

19(6) and Section 33(1)(a) of the Act have been

25

considered. (Vide: Associated Cement

Companies Ltd., Porbandar v. Workmen [ Civil

Appeal No. 404 of 1958 decided on 3.3.1960]

and New India Motors (P.) Ltd. v. K.T. Morris.”

Same proposition of law was reiterated in the case of

Barauni Refinery Pragatisheel Shramik Parishad vs.

Indian Oil Corporation Ltd. [(1991) 1 SCC 4].

18. In the case of ANZ Grindlays Bank Ltd. vs. Union of

India & Ors. [(2005) 12 SCC 738], this Court, while testing a

reference found no subsisting industrial dispute and the

reference was set aside. This authority also does not assist the

appellants in the facts of the present case.

19. Now we shall test the appellants’ arguments on binding

effect of the settlement dated 19th September, 2016 on the

workmen whose cause the respondent Unions are espousing

before us. The High Court dealt with this question in the

following manner:-

“13. That brings us to the question as to whether the

MoS of 19 September 2016, even if it were to be

termed as a settlement in the course of a conciliation

proceeding, could be said to be a fair settlement so

as to bind workmen who were not party to it. The

tribunal, in the present case, has arrived at an

unequivocal finding that the settlement could not be

termed as fair. It, particularly, has taken into

account the fact that the MoS of 19 September 2016

required the workmen concerned to withdraw their

legitimate disputes and complaints on the issues of

regularization, etc. as a condition of settlement. It is

26

important to bear in mind in this behalf that when

the reference was made, there were about 1300

workmen, covered by the earlier MoU 29 December

2000, who were originally sought to be protected as

against about 2000 of total number of contract

employees with ONGC working in Mumbai, Panvel,

Uran and Nhava. The other employees were not

covered by the MoUs executed earlier by ONGC with

the unions. If these other workmen and their

union/s were to agree to a fair wage policy, which is

not on the basis of the earlier MoUs executed

between ONGC and the unions, such policy, on the

basis of such agreement, cannot be termed as a fair

policy for the workmen covered by the earlier MoUs

and whose references or complaints for their

legitimate demands were pending before various

industrial adjudicators. Anyway, on the facts

available before this court, the conclusion of the

Tribunal that the MoS of 19 September 2016 could

not be termed as a fair settlement, particularly, for

the workmen covered by the earlier MoUs, cannot be

termed as perverse. This court cannot bring itself to

hold that no reasonable person could have given any

such finding. The finding is clearly supported by

some evidence; it does take into account all relevant

and germane circumstances and materials; and it

does not consider any non-germane or irrelevant

circumstance or material. It must, in that case, pass

muster as a possible conclusion, which is not

amenable to judicial scrutiny either under Article

226 or 227 of the Constitution of India.”

20. The appellants’ case is that Unions representing above 77

percent of the workmen engaged by the contractors had agreed

to that settlement. In the case of Tata Engineering and

Locomotive Co. Ltd. vs. Their Workmen [(1981) 4 SCC 627],

this Court permitted a settlement to be binding which was

assailed by a set of workmen. In that case, one set of Unions

had entered into a settlement which had been assented to by

564 out of 635 daily-rated workmen. The finding of the Tribunal

27

was that the settlement was not just and fair. This Court,

however, allowed the appeal of the employer and set aside the

award. But this judgment is not an authority for the proposition

that a different set of workmen cannot raise an industrial

dispute claiming to be workmen directly under the principal

employer. Recognition of such right of minority workmen would

be apparent from paragraph 12 of the said report [(1981) 4 SCC

627], which reads:-

“12. There is no quarrel with the argument

addressed to us on behalf of the workers that mere

acquiescence in a settlement or its acceptance by a

worker would not make him a party to the

settlement for the purpose of Section 18 of the Act

[vide Jhagrakhan Collieries (P) Ltd. v. G.C. Agarwal,

Presiding Officer, Central Government Industrial

Tribunal-cum-Labour Court, Jabalpur [(1975) 3 SCC

613 : 1975 SCC (L&S) 63 : AIR 1975 SC 171 : (1975)

2 SCR 873] ]. It is further unquestionable that a

minority union of workers may raise an industrial

dispute even if another union which consists of the

majority of them enters into a settlement with the

employer (vide Tata Chemicals

Ltd. v. Workmen [(1978) 3 SCC 42 : 1978 SCC (L&S)

418 : AIR 1978 SC 828 : (1978) 3 SCR 535] ). But

then here the Company is not raising a plea that the

564 workers became parties to the settlement by

reason of their acquiescence in or acceptance of a

settlement already arrived at or a plea that the

reference is not maintainable because the Telco

Union represents only a minority of workers. On the

other hand the only two contentions raised by the

Company are:

“(i) that the settlement is binding on

all members of the Sanghatana

including the 564 mentioned above

because the Sanghatana was a party

to it, and

(ii) that the reference is liable to be

answered in accordance with the

28

settlement because the same is just

and fair.”

21. In the case of ITC Ltd. Workers’ Welfare Association &

Anr. vs. Management of ITC Ltd. & Anr. [(2002) 3 SSC 411],

it has been, inter-alia, held:-

“14. In answering the reference the industrial

adjudicator has to keep in the forefront of his mind the

settlement reached under Section 12(3) of the

Industrial Disputes Act. Once it is found that the terms

of the settlement operate in respect of the dispute

raised before it, it is not upon to the Industrial Tribunal

to ignore the settlement or even belittle its effect by

applying its mind independent of the settlement unless

the settlement is found to be contrary to the mandatory

provisions of the Act or unless it is found that there is

non-conformance to the norms by which the

settlement could be subjected to limited judicial

scrutiny….”

22. In the instant case we do not find the settlement of 19th

September, 2016 to be one which would be binding on the

minority Union. That was a settlement essentially between

the contractors and workmen engaged by the former. The

appellants were only consenting parties to the settlement.

This position of the appellants is apparent from the

description of the parties to the said settlement, which

records:-

“MEMORANDUM OF SETTLEMENT ARRIVED AT

UNDER SECTION 12(3) OF THE INDUSTRIAL

DISPUTES ACT, 1947 BEFORE SHRI B.B.

BHATNAGAR, CONCILIATION OFFICER & DY.

CLC(C), AS A RESULT OF AND IN THE COURSE OF

29

CONCILIATION PROCEEDINGS HELD ON

19.09.2016 AND SIGNED BY THE CONTRACTORS,

EMPLOYERS OF CONTRACT WORKERS DEPLOYED

FOR PERFORMANCE OF CONTRACTS IN ONGC

LIMITED, WESTERN OFFSHORE UNIT MUMBAI

INCLUDING PANVEL, URAN AND NHAVA, AND

CONTRACT WORKERS REPRESENTED THROUGH

TRANSPORT & DOCK WORKERS UNION-MUMBAI,

ONGC (BOP) KARMACHARI SANGHATANA

PETROLEUM EMPLOYEES UNION, GENERAL

EMPLOYEES ASSOCIATION, ONGC GENERAL

KAMGAR SANGHATANA AND NHAVA SHEVA PORT

& GENERAL WORKERS UNION, AS MENTIONED

BELOW OVER CHARTER OF DEMANDS,

INCLUDING REVISION OF WAGES AND OTHER

SERVICE CONDITIONS OF CONTRACT WORKERS

IN WESTERN OFFSHORE UNIT.”

23. The dispute out of which the present appeal arises

relates to the question as to whether the workmen engaged by

the contractors would be entitled to pay at par with other

workmen of the employer and demand to that effect was

raised with the appellants only. The respondent Unions

claimed to be, in reality, employees of ONGC and the demand

was raised upon the latter, and not on their contractors. The

nature of their demand was thus different particularly as

regards the status of the workmen, i.e., their claim to be

workmen of ONGC. Thus, the settlement of 19th September,

2016, in which the employers were the contractors cannot

bind the subject-dispute, where the appellants have been

found to be the employer on the basis of materials considered

30

by the High Court. Their engagement by the contractors

cannot be the sole basis for determining their status as

workmen of contractors.

24. For these reasons, we accept the High Court’s

affirmation of Tribunal’s finding that the settlement of 19th

September, 2016 did not bind the workmen whose cause the

respondent Unions are espousing. The finding of the Tribunal

that the settlement involving implementation of the FWP was

not just and fair, which finding has been sustained by the

High Court is essentially a finding on facts based on

appreciation of evidence. We are of the opinion that such

finding is not tainted by any element of perversity. The ratio

of the decision in the case of ITC Ltd. Workers’ Welfare

Association (supra) would not apply in the facts of the

present case.

25. Having held so, we would not like to interfere with the relief

directed to be given by the High Court. The scope of jurisdiction

of the Industrial Court is wide and in appropriate cases it has

the jurisdiction even to make a contract. In our opinion, the

directives issued by the Tribunal, as modified by the High Court

are reasonable and cannot be termed as perverse. In the case of

Steel Authority of India of 2006 (supra), referring to the

31

Contract Labour (Regulation & Abolition) Act, 1970 it was

opined:-

“20. The 1970 Act is a complete code by itself. It not

only provides for regulation of contract labour but

also abolition thereof. Relationship of employer and

employee is essentially a question of fact.

Determination of the said question would depend

upon a large number of factors. Ordinarily, a writ

court would not go into such a question.”

So far as the judgment under appeal is concerned, the High

Court has taken a similar approach and we do not intend to take

a different view. The principle of limited interference would

apply to a proceeding of this nature under the 1947 Act.

26. The appeal is accordingly dismissed and the impugned

judgment is sustained. Interim order, if any, shall stand

dissolved.

27. Other applications, if any, stand disposed of.

28. There shall be no order as to costs.

……........................J.

(L. NAGESWARA RAO)

……........................J.

(ANIRUDDHA BOSE)

NEW DELHI;

FEBRUARY 04, 2022

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले