Singhvi, J.:— The only question that arises for adjudication in this appeal is whether the Food Corporation of India can employ watchmen as contract labour for its godowns.

2. Succinctly stated, the facts of the case are that the appellant challenged the action of the respondent-Corporation to engage watchmen as contract labour on the ground of violation of S. 10 of the Contract Labour (Regulation and Abolition) Act, 1970 (hereinafter referred to as the Act). The appellant pleaded that in view of the notification, dated 9 December 1976, issued by the Government of India prohibiting engagement of contract labour with effect from March 1, 1977 for sweeping, cleaning, dusting and watching of buildings owned or occupied by establishments in respect of which the appropriate Government under the said Act is the Central Government, the respondent-Corporation cannot engage watchmen as contract labour. The appellant relied on the amendment of the Act made by Amending Act No. 14 of 1986 and urged that in view of the amended definition of the expression appropriate Government, the Central Government will be deemed to be appropriate Government qua the Food Corporation of India and, therefore, the prohibition imposed by it should be enforced against the Corporation.

3. The respondent contested the writ petition and averred that in view of the clarification given by the Government of India vide letter No. 31/27/85-L.S.111, dated May 20, 1987 The notification, dated December 9, 1976, cannot be applied to the establishments of the Corporation.

4. The learned Single Judge accepted the plea of the respondent on the issue of applicability of the notification, dated December 9, 1976, and dismissed the writ petition. Two relevant extracts of the impugned judgment is read as under:

“On a perusal of the above provisions, it is apparent that the Act does not contemplate total abolition of the employment of contract labour. Its purpose is to regulate the employment of contract labour in certain establishments and to provide for its abolition in certain circumstances. It does not apply to every establishment automatically. The provision is an enabling one. It is not unlimited, in its operation. Before exercising this power, the appropriate Government is required to consider the conditions of work and benefits provided for the contract labour in an establishment. It has also to consider various relevant factors as delineated in Sub-cls. (a) to (d). It is after examination of all these relevant factors and after consultation with the Central and State Board that the appropriate Government can prohibit the employment of contract labour in any process, operation or other work in an establishment. Further, it has to do so by issue of a notification. Consideration of factors enumerated in Cl. (2) and consultation with the Board is a condition precedent for the issue of a notification in the Official Gazette.

The mandate of the Parliament is that the appropriate Government must take into consideration all the relevant factors including the existing conditions of work and benefits provided for the contract labour before it can decide to prohibit the employment of contract labour. Has it been done in the present case?

There is not even a bald averment in the petition that the Central Government had examined the conditions of work and benefits provided for the contract labour in any of the regional offices of the Food Corporation of India or that it had considered the factors stipulated in Sub-cls. (a) to (d) of Cl. (2) of S. 10. In spite of the fact that no such averment has been made, it is sought to be contended by the learned counsel for the petitioner that the issue of notification by the Central Government on December 9, 1976 is clear proof of the fact that the provisions of S. 10 had been complied with.

This contention cannot be accepted. Admittedly, at the time of the issue or the notification, the Central Government was not the appropriate Government in respect of the establishments of Food Corporation in the State of Punjab. It was thus not even remotely concerned with the consideration of the matter. Admittedly, the Punjab Government had not decided to abolish the employment of contract labour in the offices of the Food Corporation. In such a situation, it appears clear to me that the notification, dated December 9, 1976, was confined to only those establishments in relation to which the Central Government was the appropriate Government on December 9, 1976. Its operation cannot automatically be extended to those establishments in respect of which the Central Government was not the appropriate Government on the date of issue of the notification. In this situation, it is not surprising that the Ministry of Labour vide letter, dated May 20, 1987, clarified that establishments which were covered by the erstwhile definition of appropriate Government continue to be covered under the Central Government Notification No. 779(E), dated 9 December 1976, and that ‘in regard to establishment like Indian Air-lines, Air India, IAAI, etc., for which the State Government was the appropriate Government prior to the amendment, dated January 29, 1986. Notification No. 779(E), dated December 9, 1976, is not applicable…‘The opinion of the Ministry of Labour was in strict conformity with the provisions of S. 10.

Furthermore, on a perusal of S. 10, it appears that while the appropriate Government has been empowered to prohibit the employment of contract labour by notification in the Official Gazette, the expression used is that “the Government may after consultation with the Central Advisory Board.…” The appropriate Government is not bound to prohibit the employment of contract labour. The provision is an enabling one. However, in Cl. (2), there is a positive mandate. Before issuing the notification, it is incumbent on the Government to consider me relevant factors. It is provided that:

‘the appropriate Government shall have regard to…”

The use of expression ‘may’ in Cl. (1) and ‘shall’ in Cl. (2) indicates that the Legislature clearly intended that the conditions stipulated in Cl. (2) have to be complied with before the Government issues any notification under Cl. (1). Cumulatively, it appears that the requirements embodied in S. 10(2) are of a mandatory nature. Their non-compliance would vitiate a notification.”

5. Learned Single Judge expressed his disagreement with the judgment of the Bombay High Court in United Labour Union v. Union of India [1990 (1) L.L.N 565], on which relevance was placed by the counsel for the appellant and relied on the decision taken by the Central Government to accept the recommendations made by the committee constituted to study the working of contract labour system in sweeping, cleaning, dusting and watching of buildings owned or occupied by establishments in respect of which the Central Government had become the appropriate Government and observed that in view of the decision of the Central Government the contention of the petitioner on the issue of applicability of notification, dated December 9, 1976, to the establishment of the respondent-Corporation cannot be accepted.

6. In United Labour Union v. Union of India [1990 (1) L.L.N 565] (vide supra), the Bombay High Court considered the same question in relation to the establishments of Corporation constituted under the Air Corporations Act, 1953. After analysing the definition of apropriate Government used in the Act and noticing arious pronouncements of the Apex Court including the one in Food Corporation of India Workers' Union v. Food Corporation of India [1985 (2) L.L.N 30], the Bombay High Court held as under, in Paras. 37 and 38, at page 580:

“37. The notification, dated December 9, 1976, bars contract labour in respect of the work of sweeping, cleaning, ousting or watching in all establishments of which the Central Government was or is the appropriate authority. At the time that the notification was issued, the factors considered by the Central Government obviously would be that the work of sweeping, cleaning, dusting and watching of all establishments under it was incidental to and necessary, that it was of a perennial nature and could ordinarily be performed through regular workmen and that it was sufficient to employ considerable number of people. Thus so long as the notification is in force, contract labour cannot be employed in respect of this work. It is immaterial that the Central Government became the appropriate authority at a later date.

38. Even otherwise it is to be noted that the notification is applicable to all establishment. If that be so then it would be applicable to an establishment the moment that establishment comes within its purview. An analogy may be drawn from the provisions of Companies Act. In respect of Government companies under the powers given under S. 620 of the Companies Act, the Government may issue notifications exempting Government companies … or directing the Government companies, to follow certain procedures. So long as these notifications remain in force, they apply to all Government companies. Merely because a Government company is incorporated subsequently or subsequently becomes a Government company. That this notification is to apply to all establishments is also clear from the fact that no list of establishments has been annexed to the notification. Admittedly, at the time that this notification was issued, the Central Government had a list of the establishments of which it was the appropriate authority. If the intention was to make it applicable only to these establishments, the list of those establishments would have been annexed to the notification. The fact that no such list is annexed indicates that it was to apply not merely to establishments which were then under its authority but also to establishments in respect of which it became the appropriate authority at any time. Sri Lokur was asked whether on or after 1976 and in any case on or after the amendment of the C.L Act any further notification/s had been issued by the Central Government in respect of any establishment. Sri Lokur very fairly stated that so far as he was aware, there was no subsequent notification in respect of any other establishment/s. In my view the fact that no subsequent notifications have been issued also indicate that this notification is to apply to all establishments of which the Central Government becomes the appropriate authority”

The above-mentioned judgment has been upheld by the Apex Court in Air India Statutory Corporation v. United Labour Union [1997 (1) L.L.N 75].

7. Sri Vikas Singh argued that in view of latest pronouncement of the Supreme Court, the judgment under appeal should be set aside and the respondent-Corporation be restrained from engaging watchmen as contract labour. Learned counsel argued that the reasons given by the learned Single Judge for declaring that the notification, dated December 9, 1976, is not applicable to the establishments of the respondent-Corporation should be declared as erroneous. Sri Hemant Kumar relied on the judgment of the Supreme Court in Food Corporation of India Workers, Union v. Food Corporation of India [1985 (2) L.L.N 30] (vide supra), and argued that in view of that decision, the impugned judgment should be upheld.

8. We have thoughtfully considered the respective arguments. The issue that was considered by the two-Judges Bench in Food Corporation of India Workers' Union v. Food Corporation of India [1985 (2) L.L.N 30] (vide supra), was whether the appropriate Government qua the regional office and warehouses of the Food Corporation of India was the State Government or the Central Government. Their Lordships of the Supreme Court referred to the provisions of the Act as well as the Industrial Disputes Act, 1947, and after placing reliance on the observations made in Heavy Engineering Mazdoor Union v. State of Bihar [(1969) 1 SCC 765 : A.I.R 1970 S.C 82], held that the appropriate Government in respect of regional offices and warehouses of Corporation situated in the various States is the concerned State Government and not the Central Government. These decisions have been analysed in Air India Statutory Corporation v. United Labour Union [1997 (1) L.L.N 75] (vide supra), decided by a three-Judges Bench which was called upon to examine the correctness of the decision of the Bombay High Court. Learned Attorney-General and the learned Solicitor-General, who appeared for the Union of India and the Air India Corporation relied on the earlier decisions of the Supreme Court including those rendered in Heavy Engineering Mazdoor Union v. Union of India (vide supra) and Food Corporation of India Workers Union v. Food Corporation of India (vide supra), and the provisions of the Industrial Disputes Act, 1947, and urged that the appropriate Government is the concerned State Government and, therefore, the notification, dated December 9, 1976, cannot be applied to the establishments of the Air India Corporation. The learned Solicitor General also urged that the Central Government was not empowered to issue the notification, dated December 9, 1976.

9. In the light of these arguments, their Lordships formulated the following issues, in Para. 9, at pages 86 of 1997 (1) L.L.N:

“(1) What is the meaning of the word ‘appropriate Government’ under S. 2(1)(a) of the Act?

(2) Whether the view taken in Heavy Engineering case (vide supra), is correct in law?

(3) Whether on abolition the contract labour are entitled to be absorbed; if so, from what date?

(4) Whether the High Court under Art. 226 has power to direct their absorption; if so, from what date?

(5) Whether it is necessary to make a reference under S. 10 of the I.D Act for adjudication of dispute qua absorption of the contract labour?

(6) Whether the view taken by this Court in Dena Nath case [1992 (1) L.L.N 53] and Gujarat State Electricity Board case [1995 (2) L.L.N 59], is correct law?

(7) Whether the workmen have got a right for absorption and, if so, what is the remedy for enforcement?”

Their Lordships then analysed the definition of appropriate Government as it stood prior to the coming into force of the Amending Act No. 14 of 1986 as well as the amended definition along with the definition of the said term contained in S. 2(a)(i) of the Industrial Disputes Act, 1947, and various decisions including the one on which Sri Hemant Kumar has placed reliance and then held, in Para. 29, at page 95 of 1997 (1) L.L.N:

In the light of the above principles and discussions, we have no hesitation to hold that the appropriate Government is the Central Government from the inception of the Act. The notification published under S. 10 on December 9, 1976 therefore, was in exercise of its power as appropriate Government. So it is valid in law. The learned Solicitor-General is not right in contending that the relevant factors for abolition of the contract labour system in the establishment of the appellant was not before the Central Advisory Board, before its recommendation to abolish the contract labour system in the establishment of the appellant. The learned Attorney-General has placed before us the minutes of the Board which to show the unmistakable material furnished do indicate that the work in all the establishments including those of the appellants, is of perennial nature satisfying all the tests engrafted in S. 10(2) of the Act. Accordingly, on finding the work to be of perennial nature, it had recommended and the Central Government had considered and accepted the recommendation to abolish the contract labour system in the aforesaid services. Having abolished it, the Central Government was denuded of its power under S. 10(1) to again appoint in so far as the above services of the Mohile Committee to go once over into the self-same question and the recommendations of the latter not to abolish the contract labour system in the above services and the acceptance thereof by the Central Government are without any legal base and, therefore, non est.”

10. While commenting upon the two decisions referred to hereinabove, the three-Judges Bench observed, in Para 28, at page 95 of 1997 (1) L.L.N:

“From this perspective and on deeper consideration, we are of the considered view that the two-Judge Bench in Heavy Engineering case (vide supra), narrowly interpreted the words ‘appropriate Government’ on the common law principle which no longer bear any relevance when is tested on the anvil of Art. 14. It is true that in Hindustan Machine Tools, Ramana Dayaram Shetty [1981 (1) L.L.N 270] and Food Corporation of India [1985 (2) L.L.N 30] (vide supra), cases, the ratio of Heavy Engineering case formed the foundation. In Hindustan Machine Took case (vide supra), there was no independent consideration except repetition and approval of the ratio in Heavy Engineering case. It is to reiterate that Heavy Engineering case, is based on concession. In Ramana Dayaram Shetty case (vide supra), the need to delve in depth into this aspect did not arise but reference was made to the premise of private law interpretation which was relegated to and had given place to constitutional perspectives of Art. 14 which is consistent with the view we have stated above. In Food Corporation of India case (vide supra), the Bench proceeded primarily on the premise that warehouses of the Corporation are situated within the jurisdiction of different State Governments which led it to conclude that the appropriate Government would be the State Government.”

11. After recording the above mentioned conclusions. Their Lordships examined the correctness of the directions given by Bombay High Court for enforcement of the notification, dated 9 December 1976, qua the establishment of the Corporation and upheld the same.

12. In view of the judgment of the Supreme Court in Air India Statutory Corporation case [1997 (1) L.L.N 75] (vide supra), approving decision of the Bombay High Court, which has direct bearing on the case of the appellant, the impugned order of the learned Single Judge in which he dissented from the decision of the Bombay High Court cannot be regarded as laying down correct law. In or opinion, the interpretation given by the Apex Court to the definition of appropriate Government is also sufficient to upset the impugned judgment.

13. In the result, we allow the appeal and set aside the order of the learned Single Judge. Consequently the writ petition filed by the appellant is accepted and the respondent-Corporation is directed to give effect to the notification, dated 9 December 1976, while making employment in its establishment. As a logical corollary, the respondent is restrained from employing watchman for its godowns as contract labour.