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Attorney(S)
  • M/s. Satish Bakshi, S.K Laik
  • Mr. Anoop Kumar Mehta
Judges
  • R. Banumathi, C.J
  • Shree Chandrashekhar, J.
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Attorney(S)
  • M/s. Satish Bakshi, S.K Laik
  • Mr. Anoop Kumar Mehta
Judges
  • R. Banumathi, C.J
  • Shree Chandrashekhar, J.
Acts
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Smart Summary

Structured Summary of the Opinion (R. Banumathi, C.J.)

Factual and Procedural Background

The sponsoring union (Bihar Colliery Kamgar Union) sought regularization of Sunder Dusadh and twenty-six other persons engaged at the Loyabad Coke Plant of M/s. Bharat Coking Coal Ltd. (BCCL). The union's claim was that these persons had been performing work of a permanent nature under the direct control and supervision of the management, were paid less than prescribed wages under the National Coal Wage Agreement and were being paid via an intermediary who did not control or supervise their work. Conciliation before the Assistant Labour Commissioner (C), Dhanbad, failed, and by order dated 26.3.1992 the Central Government referred the dispute to Central Government Industrial Tribunal No.1, Dhanbad for adjudication on whether the demand for regularization was justified and, if so, what relief the workmen were entitled to.

By the Tribunal's award dated 26.12.2000 the management was directed to regularize the workmen. The Tribunal's key findings were that (i) the management had not produced a registration certificate under the Contract Labour (Regulation & Abolition) Act, 1970 (CLRA Act) and therefore the persons must be held to be the management's workmen (characterizing the arrangement with the Co‑operative Society as a camouflage), and (ii) the management had not produced attendance registers, leading to an adverse inference that the work was of permanent nature and that the workmen had worked for more than 240 days in a calendar year.

The management challenged the award by filing W.P. (L) No. 3015/2001. The learned Single Judge, by order dated 19.7.2013, allowed the writ petition and set aside the award. The workmen appealed that order (the present appeal). The bench heard the appeal and, for reasons discussed below, dismissed the appeal, thereby upholding the Single Judge's order setting aside the Tribunal's award.

Legal Issues Presented

  1. Whether the demand of the sponsoring union for regularization of the 27 persons employed at Loyabad Coke Plant of BCCL was justified.
  2. If the demand for regularization was justified, what relief the workmen were entitled to.
  3. Whether the engagement of these persons through a contractor (and later a Co‑operative Society) was a sham or camouflage by the management to deny employee benefits.
  4. Whether non-compliance with the CLRA Act (non-registration under Section 7 and non-possession of licence under Section 12) can, by itself, lead to deeming the contract labourers as employees of the principal employer (and thereby lead to regularization).
  5. Whether the workmen proved that they had been engaged for more than 240 days in a calendar year so as to shift any onus to the management.

Arguments of the Parties

Appellant (Workmen)'s Arguments

  • The learned Single Judge failed to consider two main facts: (i) violation of the provisions of the CLRA Act and (ii) that engagement through a contractor was merely a camouflage by the management.
  • The management had not produced registration certification and therefore the Tribunal's finding of camouflage should have been sustained.
  • There was sufficient material to show the job was permanent and perennial, controlled and supervised by management officials.
  • A workmen-witness stated that he and others had continuous service and that this was not rebutted by the management; accordingly the Single Judge erred in finding that the workmen had not put in 240 days of continuous service.

Respondent (Management)'s Arguments

  • Non-registration under the CLRA Act results only in penal consequences; it does not automatically regularize contract labour as employees of the principal employer (reliance on Dena Nath v. National Fertilizer Ltd.).
  • The Tribunal was not justified in presuming that the labour contract system was a camouflage and directing regularization on that presumption.
  • The work was intermittent, casual and temporary in nature; the workmen worked only for short periods (not continuously), particularly in 1986 and 1989, and such intermittent engagement does not amount to regular employment.
  • The Tribunal incorrectly drew adverse inferences for non-production of attendance registers and failed to regard relevant Supreme Court decisions (including Municipal Corporation of Greater Mumbai v. K.V. Shramik Sangh and General Manager, Bengal Nagpur Cotton Mills v. Bharat Lal) that limit the circumstances in which contract labour can be deemed to be direct employees of the principal employer.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Dena Nath v. National Fertilizer Ltd. [(1992) 1 SCC 695] Non-compliance with the CLRA Act (non-registration under Section 7 and non-possession of licence under Section 12) does not result in regularization of contract labour; the statutory consequence is penal prosecution under Sections 23/24 (and related provisions). The Court relied on this decision to hold that the Tribunal was not justified in treating non-registration alone as sufficient to conclude the contract labour system was a sham and to order regularization; the learned Single Judge's reliance on Dena Nath was upheld.
International Airport Authority of India v. International Air Cargo Workers' Union [(2009) 13 SCC 374] Explains the meaning of "control and supervision" in the context of contract labour: primary control lies with the contractor if the contractor pays salary and has the right to regulate employment; the principal employer's control may be secondary. The Court applied this principle to the facts: since the contractor supervised the work and paid salaries, the Tribunal wrongly treated such supervision as making the workers direct employees of the principal employer.
General Manager (OSD), Bengal Nagpur Cotton Mills, Rajnandgaon v. Bharat Lal [(2011) 1 SCC 635] Reiterates principles about control/supervision and conditions in which contract labour may be regarded as employees of the principal employer. The Court cited this decision (along with others) to support the conclusion that the Tribunal's finding of camouflage was erroneous given the evidence that contractor retained primary control and paid wages.
Municipal Corporation, Faridabad v. Durga Prasad [(2008) 5 SCC 171] Establishes that the onus and burden of proof that workmen have worked for 240 days rests upon the workmen and cannot be placed on the management. The Court invoked this principle to hold that the workmen failed to discharge their burden to prove they had worked for 240 days in a calendar year; therefore the Tribunal could not properly presume regular employment.
State of M.P v. Arjunlal Rajak [(2006) 2 SCC 711] Also enunciates the principle that burden of proving 240 days' engagement lies on the workmen. The Court relied on this authority to reinforce that the workmen bore the onus and had not produced adequate evidence for the 240‑day claim.
Manager, RBI, Bangalore v. S. Mani [(2005) 5 SCC 100] Addresses circumstances in which an adverse inference may (or may not) be drawn for non-production of documents; an adverse inference without proper basis or order to produce is improper. The Court held the Tribunal's adverse inference from non-production of attendance registers was erroneous because the Tribunal had not ordered production and the adverse inference ran contrary to the law in S. Mani.
State of Karnataka v. Umadevi (3) [(2006) 4 SCC 1] Holds that the court cannot direct regularization of temporary/contractual employees in violation of Article 14; concept of regularisation is tied to the employee‑employer relationship and constitutional equality. The Court applied Umadevi to observe that merely fulfilling a numerical test (e.g., 240 days) does not automatically entitle regularization; directions for regularization must conform to Article 14 constraints described in Umadevi.
U.P. Power Corporation Ltd. v. Bijli Mazdoor Sangh [(2007) 5 SCC 755] Clarifies that while industrial adjudicators can modify relief, they cannot issue directions inconsistent with the foundational logic of Umadevi regarding regularisation and Article 14. The Court cited this decision to support the proposition that even modification of relief by an adjudicator does not override the constraints against arbitrary regularization identified in Umadevi.
Municipal Corporation of Greater Mumbai v. K.V. Shramik Sangh [(2002) 4 SCC 609] (Cited by respondent counsel) Identified in argument as one of the Supreme Court decisions the respondent relied upon in contesting the Tribunal's conclusion. The opinion records that the respondent relied on this decision (among others) to contend the Tribunal erred; the Court's reasoning, however, focused primarily on the authorities expressly applied above.

Court's Reasoning and Analysis

The Court undertook a fact-sensitive analysis and applied the governing legal principles derived from Supreme Court authority to the materials on record.

  1. Nature of the work and contractual arrangements:
    • The Loyabad Coke Plant process includes pushing hot coke to the surface and quenching it; the breeze coke settled in tanks was cleaned by workers engaged by a contractor (Muslim Mian), who supplied his own labour, raised bills and was paid by the management. Later a Co‑operative Society (Kamgar Shramik Sahayog Samitee Ltd.) was formed and given the work order.
    • Work orders relevant to the dispute were dated 28.3.1986 and 20.9.1989; the contractor typically engaged 4–5 casual workers as needed and was paid on the basis of the volume of work executed.
  2. On the Tribunal's finding of "camouflage" based on non-registration under the CLRA Act:
    • The Tribunal had concluded that because the management had not produced a registration certificate under Section 7 and no licence of the Co‑operative Society under the CLRA Act was filed, the arrangement was a camouflage; the Court found that approach legally flawed in light of Dena Nath, which holds that non-registration attracts penal consequences but does not automatically convert contract labour into employees of the principal employer.
    • The Court held the Single Judge was right to reject the Tribunal's reliance on non-registration alone to conclude the contract labour system was sham or camouflage.
  3. On "control and supervision":
    • The Court emphasized that the Tribunal had misconstrued "control and supervision." The evidence showed the contractor supervised the sludge removal, paid the workers, and had the right to regulate employment. The Court relied on the International Airport Authority decision (paras 38–39) to explain that primary supervision and control lie with the contractor where salary is paid by the contractor and the contractor decides assignment and regulation of employment; the principal employer's direction is secondary.
    • Given that the contractor supervised the work and disbursed wages, the Tribunal should not have held the contract labour system to be a sham on the basis of alleged control by the principal employer.
  4. On the question of engagement for more than 240 days:
    • The Tribunal found that all twenty-seven workmen were in regular employment for more than 240 days based on evidence of a single workmen-witness (WW1, Hiralal Paswan).
    • The Court reiterated settled law (Municipal Corporation, Faridabad v. Durga Prasad and State of M.P v. Arjunlal Rajak) that the burden of proving engagement for 240 days lies on the workmen; it cannot be shifted to the management merely by a finding without evidence.
    • Here, the workmen produced only WW1 and documentation indicating work orders (Ext.M-2/1). There was no specific evidence relating to each individual workman confirming engagement for 240 days in a calendar year. Consequently, the workmen failed to discharge the burden.
  5. On the adverse inference from non-production of attendance registers:
    • The Tribunal drew an adverse inference because the management did not produce attendance registers requested by the sponsoring union. The Court found this inference to be erroneous, noting that the Tribunal had not passed any order compelling production of the registers and relied on Manager, RBI v. S. Mani to say adverse inferences without legal basis are improper.
  6. On regularisation and constitutional constraints:
    • The Court noted established law (Umadevi and Bijli Mazdoor Sangh) that the concept of regularisation is tied to Article 14 of the Constitution and that courts cannot direct regularization of temporary/contractual employees in a manner violative of Article 14. Mere proof of work for 240 days cannot, by itself, be the sole ground for regularization.
  7. Overall conclusion of analysis:
    • The Tribunal committed a serious error in concluding that the contract labour system was a sham solely because of non-registration and non-licensing under the CLRA Act.
    • The Tribunal erred in its understanding of "control and supervision" and in drawing adverse inferences without appropriate legal basis or orders for production of documents.
    • The Tribunal's presumption that the workmen had worked for more than 240 days was unsupported by adequate evidence; the work was intermittent and casual in nature, as indicated by the limited work orders and the evidence on record.

Holding and Implications

Core Ruling: The appeal (LPA) is dismissed. The order of the learned Single Judge setting aside the Industrial Tribunal's award dated 26.12.2000 is affirmed.

Implications and direct effects:

  • The Tribunal's direction to regularize the twenty-seven workmen is set aside; the workmen are not held to be regular employees of the principal employer on the basis of the findings under challenge.
  • The Court applied existing Supreme Court authorities to conclude that non-registration under the CLRA Act does not automatically lead to regularization, that primary control and payment by the contractor indicate contractor‑employee relationship, and that the onus to prove 240 days' engagement lies upon the workmen.
  • The opinion does not purport to lay down any new law; it applies and reiterates established precedents (as catalogued above) to the facts of this case. No broader novel precedent was announced beyond applying the cited authorities to the facts before the Court.
Show full summary ...

    Their Workmen, Bihar Colliery Kamgar Union v. M/S. Bharat Coking Coal Ltd. & Ano. S

    R. Banumathi, C.J The present appeal is directed against the order dated 19.7.2013 passed in W.P (L) No. 3015/2001, in and by which the learned Single Judge allowed the writ petition, setting aside the award dated 26.12.2000 passed by the Central Government Industrial Tribunal No. 1, Dhanbad, in Reference No. 28/1992.

    2. Brief facts: The sponsoring Union, i.e Bihar Colliery Kamgar Union, had made a demand for regularization of Sunder Dusadh and twenty-six others on the roll of Loyabad Coke Plant of M/s. Bharat Coking Coal Ltd. (BCCL) on the ground that they have been working in the permanent nature of job since long under the direct control and supervision of the Management of Loyabad Coke Plant of BCCL, but they are being paid less wages than the wages prescribed under the National Coal Wage Agreement and the wages are being disbursed in the name of intermediary, which does not control and supervise the work of the concerned persons. On the basis of the demand made by the sponsoring Union, conciliation proceedings took place before the Assistant Labour Commissioner (C), Dhanbad, who submitted failure report. By the order dated 26.3.1992, the Central Government had referred the following dispute for adjudication to the Tribunal:-

    “Whether the demand of the Bihar Colliery Kamgar Union for regularization of Shri Sunder Dusadh and 26 others on the roll of Loyabad Coke Plant of M/s. BCCL is justified? If so, to what relief the workmen are entitled?

    3. By the impugned award dated 26.12.2000, the Tribunal directed the management to regularize the workmen holding that (i) the Management has not filed any registration certificate to show that the management has got its establishment registered for the engagement of contractor as required under the Contract Labour (Regulation and Abolition) Act, 1970 and therefore, it must be held that the concerned persons are the workmen of the Management and the arrangement with the Co-operative Society is nothing but to camouflage the real issue and (ii) the Management has not filed attendance register and therefore, adverse inference to be drawn against the management that the work is of permanent nature, which supports the claim of the workmen that they have been working for more than 240 days in a calendar year.

    4. Being aggrieved by the award passed by the Tribunal, the Management filed W.P (L) No. 3015/2001. Upon consideration of the rival contentions and the materials, learned Single Judge held that the conclusion of the Tribunal that the engagement of the workmen through a contractor was a camouflage, was clearly an erroneous finding in view of the judgment rendered by Hon'ble Supreme Court in the case of Dena Nath v. National Fertilizer Ltd. [(1992) 1 SCC 695, para 22]. Learned Single Judge further held that there is no evidence to show that all the twenty-seven workmen were in the regular employment of the management for a period of 240 days in a calendar year so as to place the onus upon the employer to rebut the same and the Tribunal, without any legal basis or justification, drew an adverse inference against the management for non-production of the attendance register contrary to the law laid down by the Hon'ble Supreme Court.

    5. Being aggrieved by the order passed in the writ petition setting aside the award, the workmen have preferred this appeal. Learned counsel for the appellant contended that learned Single Judge did not take into consideration mainly two facts - (i) the fact relating to violation of the provisions of CLRA Act and (ii) the fact that the engagement of the contractor was merely a camouflage and the learned Single Judge failed to consider the fact that the management has not produced the registration certification and while so learned Single Judge erred in interfering with the findings recorded by the Tribunal. It was contended that there was sufficient material to show that the job is of permanent and perennial in nature and the same was supervised and controlled by the management officials and the workmen-witness has specifically stated that he and other workmen have put in continuous service and the same has not been rebutted by the management/respondent and while so, learned Single Judge erred in finding that the workmen have not put in continuous service of 240 days.

    6. Mr. Anoop Kumar Mehta, learned counsel for the respondent, submitted that if there is no registration certificate under the CLRA Act, the consequence is only penal one and the Tribunal was not justified in raising presumption that the labour contract system was a camouflage and in directing regularization on the presumption that the contract labourers are the employees of the principal employer. Learned counsel further submitted that the Tribunal erroneously held that the contract is sham and camouflage and has not kept in view the decisions of Hon'ble Supreme Court rendered in the case of Municipal Corporation of Greater Mumbai v. K.V Shramik Sangh [(2002) 4 SCC 609] and General Manager, (OSD), Bengal Nagpur Cotton Mills, Rajnandgaon v. Bharat Lal [(2011) 1 SCC 635] and the learned Single Judge rightly set aside the award. It was also submitted that the work is not of permanent nature and that the workmen have only worked for a short period in 1986 and 1989 and since the Tribunal committed an error of law in raising erroneous presumption, learned Single Judge rightly set aside the award and the impugned judgment warrants no interference.

    7. We have carefully considered the submissions of the learned counsel for the parties and perused the materials on record.

    8. Loyabad Coke Plant under Sijua Area of BCCL manufactures Hard Coke and its bye-products by feeding raw coal after crushing into the coke ovens. After the completion of the manufacturing process, the coke in hot condition is pushed from the coke ovens into the surface for the purpose of quenching the same with the help of pumped water and on being watered the same is allowed to flow and settle in the tanks constructed for the purpose. The content of breeze coke settled in the tanks are cleaned by engaging contractor's workers. The workmen have been working in the job of breeze cleaning under a Contractor, Muslim Mian. The contractor used to engage his own men for cleaning of breeze coke settled in the tanks and the contractor used to raise bills and on being passed, the same was disbursed by the contractor. Subsequently, dispute arose between the contractor and the workmen and the concerned persons formed a Co-operative Society and the work order was awarded to the Co-operative Society, namely, Kamgar Shramik Sahayog Samitee Ltd.

    9. The first question to be considered is whether the concerned workmen are really the workmen of the contractor or whether the management has tried to camouflage the issue by branding them as contractor's workers.

    10. For cleaning the breeze coke settled in the tanks, the work orders dated 28.3.1986 and 20.9.1989 were issued. The contractor used to engage his men as per the requirement of casual workers numbering 4 to 5 persons. It is the case of the management that the workmen were engaged only for a short period during 1986 and 1989 and thereafter no work was being performed by the workmen and the work is of intermittent, casual and temporary in nature. The work was awarded to the contractor, who used to raise bills and payment were made on the basis of volume of work executed through cheques in the name of the contractor - Co-operative Society.

    11. The Tribunal held that since the management had not filed any registration certificate under Section 7 of the CLRA Act, 1970 and also no licence of the Co-operative Society under the same Act was filed, the arrangement of the management is a camouflage leading to inference that the concerned persons are the workmen of the management.

    12. Learned counsel for the respondent-management submitted that in the case of Dena Nath & Ors. [(1992) 1 SCC 695], Hon'ble Supreme Court held that the effect of non-compliance of the provisions of CLRA Act of 1970, i.e non-registration of the establishment under Section 7 of the Act and non-possession of licence under Section 12 of the Act would not result in regularization of the concerned workmen, rather it would result in penal consequences - that is, prosecution under Section 23/24 of the CLRA Act, 1970 and therefore, the finding of the Tribunal that the contract labour system is sham or camouflage was an erroneous finding and referring to the findings of the Tribunal that the arrangement of the management is camouflage, learned Single Judge held that the said finding is in clear teeth of the decision rendered by Hon'ble Supreme Court in the case of Dena Nath v. National Fertilizer Ltd. [(1992) 1 SCC 695] and para 22 thereof reads as under:-

    “22. It is not for the High Court to inquire into the question and decide whether the employment of contract labour in any process, operation or in any other work in any establishment should be abolished or not. It is a matter for the decision of the government after considering the matter, as required to be considered under Section 10 of the Act. The only consequences provided in the Act where either the principal employer or the labour contractor violates the provision of Sections 9(sic 7) and 12 respectively is the penal provision, as envisaged under the Act for which reference may be made to Sections 23 and 25 of the Act. We are thus of the firm view that in proceedings under Article 226 of the Constitution merely because contractor or the employer had violated any provision of the Act or the rules, the Court could not issue any mandamus for deeming the contract labour as having become the employees of the principal employer. We would not like to express any view on the decision of the Karnataka High Court or of the Gujarat High Court (supra) since these decisions are under challenge in this Court, but we would place on record that we do not agree with the aforequoted observations of the Madras High Court about the effect of non-registration of the principal employer or the non-licensing of the labour contractor nor with the view of Bombay High Court in the aforesaid case. We are of the view that the decisions of the Kerala High Court and Delhi High Court are correct and we approve the same.”

    Hon'ble Supreme Court thus categorically held that the effect of non-compliance of the CLRA Act, 1970 and non-possession of licence under Section 12 of the Act would not result in regularization of the concerned workmen, rather it would result in prosecution under Section 23/24 of the CLRA Act. We are of the view that the learned Single Judge has rightly held that merely because of non-registration of the establishment under Section 7 of the CLRA Act and non-possession of licence under Section 12 of the Act, the Tribunal was not right in concluding that the contract labour system is a sham or camouflage.

    13. It is now well settled that if the industrial adjudicator finds the contract between the principal employer and the contractor to be a sham, nominal and merely a camouflage to deny employment benefits to the employee and that there was in fact a direct employment, it can grant relief to the employee by holding that the workman is the direct employee of the principal employer. Two of the well-recognized tests to find out whether the contract labourers are the direct employees of the principal employer are: (i) whether the principal employer pays the salary instead of the contractor; and (ii) whether the principal employer controls and supervises the work of the employee. In this case, the Tribunal answered both the above questions in affirmative and held that the workmen are direct employees of the management. We are of the view that the Tribunal ought to have examined the matter in the light of the above well-settled principles. On careful consideration of the evidence and materials on record, we are of the view that the Industrial Tribunal committed a serious error in arriving at the finding that because of non-registration of establishment under Section 7 of the CLRA Act and non-possession of licence under Section 12 of the said Act, the contract labour system was a sham or camouflage.

    14. In so far as the terms, “control and supervision” are concerned, the Tribunal misconstrued the meaning of the terms, “control and supervision”. As pointed out earlier, the work was awarded to the contractor for removal of sludge from settling tanks, which was supervised by the contractor. The work was awarded to the contractor, who used to raise bills and payments were made on the basis of the volume of work executed. The salary was paid to the workmen by the contractor and removal of sludge from the settling tanks was executed under the control and supervision of the contractor. The right to regulate the employment is with the contractor and the supervision and control lies with the contractor.

    15. The expression “control and supervision” in the context of contract labour was explained by the Hon'ble Supreme Court in the case of International Airport Authority of India v. International Air Cargo Workers' Union, [(2009) 13 SCC 374] in paras 38-39, which read as under:

    “38. … if the contract is for supply of labour, necessarily, the labour supplied by the contractor will work under the directions, supervision and control of the principal employer but that would not make the worker a direct employee of the principal employer, if the salary is paid by a contractor, if the right to regulate the employment is with the contractor, and the ultimate supervision and control lies with the contractor.

    39. The principal employer only controls and directs the work to be done by a contract labour, when such labour is assigned/allotted/sent to him. But it is the contractor as employer, who chooses whether the worker is to be assigned/allotted to the principal employer or used otherwise. In short, worker being the employee of the contractor, the ultimate supervision and control lies with the contractor as he decides where the employee will work and how long he will work and subject to what conditions. Only when the contractor assigns/sends the worker to work under the principal employer, the worker works under the supervision and control of the principal employer but that is secondary control. The primary control is with the contractor.”

    Same principle was reiterated in (2011) 1 SCC 635 (General Manager, (OSD), Bengal Nagpur Cotton Mills, Rajnandgaon v. Bharat Lal).

    16. Since the work of removal of sludge from the settling tanks was supervised by the contractor and salary also disbursed by the contractor, the Tribunal ought not to have held that the contract labour system was sham or camouflage and learned Single Judge rightly held that the findings of the Tribunal that the engagement of the workmen through the contractor was a camouflage, was erroneous and the conclusion is clearly erroneous in view of the decisions rendered in the cases of Dena Nath v. National Fertilizer Ltd. [(1992) 1 SCC 695] and General Manager, (OSD), Bengal Nagpur Cotton Mills, Rajnandgaon v. Bharat Lal [(2011) 1 SCC 635].

    17. So far as the second issue relating to engagement of work for more than 240 days under the management of respondent-BCCL is concerned, the Tribunal arrived at a finding that all twenty-seven workmen were in regular employment of the management for a period of more than 240 days in a calendar year. This finding is based upon the evidence of workmen-witness, WW1, Hiralal Paswan.

    18. It is the case of the management that the work is of casual and intermittent in nature and at no point of time, all the workmen were required to do the job. According to the management, the job of removal of sludge from settling tanks was done intermittently and the contractor used to engage his own men as per the requirement of casual worker numbering four to five persons. It is for the workmen to show that they were engaged for more than 240 days in a particular calendar year. In the case of Municipal Corporation, Municipal Corporation, Faridabad v. Durga Prasad. [(2008) 5 SCC 171], Hon'ble Supreme Court held that onus and burden of proof that the workmen have worked for 240 days is upon the workmen and it cannot be placed on the management and the same was enunciated in the case of State of M.P v. Arjunlal Rajak [(2006) 2 SCC 711].

    19. The appellant examined only one person, WW1, Hiralal Paswan, who deposed that he was working for the Co-operative Society and performed the work of cleaning breeze settled in the tanks. The register, allotment of work, was marked as Ext.W1 In the present case, apart from the evidence of WW1, there is no evidence brought on record in respect of each individual workmen regarding their engagement for a particular period that they have worked for 240 days in a calendar year and Ext.M-2/1 is only the work order issued to the contractor. The workmen have not discharged their burden cast upon them to prove that all twenty-seven workmen have worked on a regular basis for a period of 240 days in a calendar year.

    20. Before the Tribunal, the sponsoring Union filed an application to direct the management to produce the attendance register of the concerned persons. Since the management did not produce the attendance register, the Tribunal drew the adverse inference against the management that the management has withheld the same because if the attendance register had been produced then the claim of the concerned persons of having worked for more than 240 days would have been clearly established. Such an inference drawn by the Tribunal is erroneous in the light of the decision of Hon'ble Supreme Court rendered in the case of Manager, RBI, Bangalore v. S. Mani [(2005) 5 SCC 100].

    21. It is pertinent to note that the Tribunal has not passed any order for production of any attendance register by the management. As rightly pointed out by the learned Single Judge that without any legal basis or justification the Tribunal drew adverse inference against the management for non-production of the attendance register contrary to the law laid down by Hon'ble Supreme Court. As discussed earlier, it is for the workmen to prove that they were in the regular employment of the management for a period of more than 240 days in a calendar year. The evidence of the sole witness of WW1 cannot, prima facie, establish that all twenty-seven workmen were in regular employment of the management for a period of 240 days in a calendar year so as to place the onus upon the management to rebut the same. It is admitted by the appellant-workmen that only two work orders were issued by the management of the respondent-BCCL. The very fact that the appellant-workmen worked only under those two work orders itself is an indication that the work performed by the workmen was not of permanent and perennial in nature. In view of the evidence brought on record, we affirm that the work performed by all twenty-seven workmen was not of permanent and perennial nature but was intermittent in nature and the workmen were engaged through the contractor and they never worked under the direct control and supervision of the respondent-management and they were engaged only through the contractor. Referring various decisions, learned Single Judge rightly held that the Tribunal arrived at an erroneous conclusion that the workmen were engaged on regular basis for a period of 240 days in a calendar year.

    22. Looked at from any angle, direction of regularization could not have been issued by the Tribunal. It is well settled that merely because the workman has worked for 240 days, it would not entitle the workman for regularization of his service. The “concept of 240 days” has been evolved with reference to Section 25F of the Industrial Disputes Act and it has been held by the Hon'ble Supreme Court that merely working of “240 days” in a calendar year cannot be the sole ground for regularization of the service of the workman. Also, as per the decision of Hon'ble Supreme Court in State of Karnataka v. Umadevi (3) [(2006) 4 SCC 1), the court cannot issue direction for regularization of temporary or casual employees and the contractual employees in violation of Article 14 and the constitutional scheme. In the case of U.P Power Corporation Ltd. v. Bijli Mazdoor Sangh [(2007) 5 SCC 755], Hon'ble Supreme Court held that even though the Industrial adjudicator can modify the relief, but that does not dilute the observations of the Hon'ble Supreme Court in Umadevi(3) case [(2006) 4 SCC 1] about the regularisation. In paras 6 and 7 of the above decision, [(2007) 5 SCC 755], Hon'ble Supreme Court held as under:-

    “6. It is true as contended by learned counsel for the respondent that the question as regards the effect of the industrial adjudicators' powers was not directly in issue in Umadevi (3) case [(2006) 4 SCC 1]. But the foundational logic in Umadevi (3) case [(2006) 4 SCC 1] is based on Article 14 of the Constitution of India. Though the industrial adjudicator can vary the terms of the contract of the employment, it cannot do something which is violative of Article 14. If the case is one which is covered by the concept of regularisation, the same cannot be viewed differently.

    7. The plea of learned counsel for the respondent that at the time the High Court decided the matter, decision in Umadevi (3) case [(2006) 4 SCC 1] was not rendered is really of no consequence. There cannot be a case for regularisation without there being employee-employer relationship. As noted above the concept of regularisation is clearly linked with Article 14 of the Constitution. However, if in a case the fact situation is covered by what is stated in para 45 of Umadevi (3) case [(2006) 4 SCC 1] the industrial adjudicator can modify the relief, but that does not dilute the observations made by this Court in Umadevi (3) case [(2006) 4 SCC 1] about the regularisation.”

    23. In conclusion, the Tribunal committed serious error of law in holding that the contract labour system is a sham or camouflage merely because of non-registration of the establishment under Section 7 of the CLRA Act and non-possession of licence under Section 12 of the Act. The Tribunal also erred in raising the presumption that the workmen have worked for more than 240 days, which is not based on any evidence or scientific calculation. Since the Tribunal committed a serious error of law and misconstrued the meaning of the terms, “control and supervision”, learned Single Judge rightly held that the conclusion of the Tribunal is erroneous in the teeth of the decisions rendered in the cases of Dena Nath v. National Fertilizer Ltd. [(1992) 1 SCC 695] and General Manager, (OSD), Bengal Nagpur Cotton Mills, Rajnandgaon v. Bharat Lal [(2011) 1 SCC 635]. We do not find any infirmity in the order of the learned Single Judge setting aside the award passed by the Tribunal and this LPA is liable to be dismissed.

    24. In the result, LPA is dismissed.

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