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Himmat Singh And Others v. Ici India Ltd. And Others
Factual and Procedural Background
The appeal arose from an order of a learned Single Judge of the Allahabad High Court that dismissed writ petitions filed by 61 contract labourers. The writ petitions challenged an award of the Presiding Labour Court (II), U.P., Kanpur in Adjudication Case/Arbitration Dispute No. 164 of 1989.
The reference made to the Labour Court asked whether the 61 labourers named in an appendix should be “declared permanent” and, if so, from what date and with what attendant benefits. The Labour Court held that:
- the labourers had no right to be declared permanent employees of the principal employer, Indian Explosives Limited (a urea manufacturer registered under the Contract Labour (Regulation and Abolition) Act, 1970); and
- the labourers did not wish to be declared permanent under their licensed contractor, Abdul Rehman.
The Fertilizer Workers Union had earlier pursued relief before the Labour Commissioner under Rule 25(v)(a) of the U.P. Contract Labour (Regularisation and Abolition) Rules, 1975, seeking parity of service conditions for contract labour. The Commissioner partially allowed that application, and the High Court upheld his decision. While those proceedings were pending, the present dispute was referred for adjudication, ultimately resulting in the Labour Court’s rejection of the claim for permanency—a decision affirmed by the High Court and now challenged before the Supreme Court.
Legal Issues Presented
- Whether the 61 labourers engaged through contractor Abdul Rehman are entitled to be declared permanent employees of Indian Explosives Limited under the U.P. Industrial Disputes Act, 1947 and the Contract Labour (Regulation and Abolition) Act, 1970.
- Whether the labourers, having obtained benefits in earlier proceedings as contract labour, are estopped from asserting a contradictory claim that they are employees of the principal employer.
Arguments of the Parties
Appellants' Arguments
- The High Court adopted a “hyper-technical” approach and failed to give effect to the protective purpose of beneficial labour statutes.
- The similarity of work performed by the appellants and the company’s direct employees warrants their absorption as permanent staff.
Respondents' Arguments
- The Labour Court’s factual findings—that the appellants were intermittent workers paid by a licensed contractor—should not be disturbed.
- The appellants are barred from claiming to be employees of the principal employer after previously asserting that they were contractor’s employees.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Steel Authority of India Ltd. v. Union of India (2006) 12 SCC 233 | A workman (or union) cannot espouse mutually destructive pleas; principles of estoppel, waiver and acquiescence apply even in industrial adjudication. | The Court invoked this decision to hold that the labourers, having earlier claimed status as contractor’s employees, could not now claim to be employees of the principal employer. |
Court's Reasoning and Analysis
The Supreme Court affirmed the High Court’s dismissal, relying on both factual findings and legal principles:
- Factual findings upheld: The Labour Court and High Court had determined that the work performed by the labourers was intermittent, they were paid by the contractor, and they themselves had previously acknowledged contractor status to obtain benefits under Rule 25 of the 1975 Rules.
- Licence and contractual arrangement: Contractor Abdul Rehman held a valid licence under the Contract Labour Act, underscoring that the engagement was legitimately through a contractor rather than by the principal employer.
- Estoppel doctrine: Applying Steel Authority of India Ltd. v. Union of India, the Court reasoned that the appellants were estopped from adopting a “mutually destructive” stance—first claiming contractor status to receive benefits, then asserting principal-employer status to seek permanency.
- No statutory right to absorption: The Court found no provision in the Contract Labour Act or the U.P. Industrial Disputes Act that compelled absorption of these contract labourers in the circumstances presented.
Holding and Implications
Appeal Dismissed.
The dismissal leaves the Labour Court’s award intact: the 61 labourers are not entitled to permanency with Indian Explosives Limited. The decision applies existing principles of estoppel in industrial disputes and does not create a new legal precedent beyond reiterating the ratio in Steel Authority of India Ltd. v. Union of India.
Dr. Arijit Pasayat, J.— Challenge in this appeal is to the order passed by a learned Single Judge of the Allahabad High Court dismissing the writ petitions filed by the appellants. Challenge before the High Court was to the order passed by the Presiding Labour Court (II), U.P, Kanpur in adjudication case, Arbitration Dispute No. 164 of 1989.
2. The following question was sent to the Labour Court for decision under Section 4(iv) of the U.P Industrial Disputes Act, 1947 (in short “the State Act”):
“Whether 61 labourers mentioned in the appendix should be declared permanent? If so, then from which date and with what other particulars?”
3. The Labour Court held that 61 labourers connected with the case do not possess the right to be declared permanent under the employer, Respondent 1. So far as the question to be made permanent under the contractor is concerned, it was found that they did not want to be declared permanent under the contractor.
4. Challenge in the writ petition revolved around the question as to the effect of the Contract Labour (Regulation and Abolition) Act, 1970 (in short “the Act”). In the background of the definition of the word “employer” as in Clause (iv) of Section 2(i) of the State Act, Indian Explosive Limited is a manufacturer of urea and is covered under the Act. It is registered under Chapter III of the same Act and has many licensed contractors including one Abdul Rehman (hereinafter referred to as “the contractor”). These licensed contractors engaged many persons to do the work contracted with them. Fertilizer Workers Union (hereinafter referred to as “the Union”) filed an application under Rule 25(v)(a) of the U.P Contract Labour (Regularisation and Abolition) Rules, 1975 (in short “the Rules”) framed under the Act before the Labour Commissioner. This was for the relief that the different persons working under the different licensed contractors are doing work similar to the work assigned to the workmen of the Company and should have similar conditions of service regarding wages, holidays, etc. Proceedings were initiated. In the proceedings under Rule 25 of the Rules, the Labour Commissioner by his order dated 15-12-1984 allowed the application so far as persons engaged by the contractor Rehman were concerned and one more licensed contractor but for rest of the persons application for the Union was dismissed. The order of the Labour Commissioner was upheld by the High Court. During pendency of the proceedings, under Rule 25 disputes were raised by the Union which is the subject-matter of consideration for the benefit of the workmen engaged by the contractor Rehman. As noted above, the Labour Court rejected the application.
5. Mr P.K Jain, learned counsel for the appellants submitted that the High Court's approach is hypertechnical and the benefits intended by various beneficial statutes have not been kept in view.
6. Learned counsel for the respondents on the other hand supported the judgment.
7. A few observations made by the High Court which are relevant need to be noted. It was held by the High Court as follows:
“The Labour Court has held that the petitioners were not working as helpers to the fitters; they were not paid by the Company; and were engaged on contract for intermittent work i.e they did not have regular or permanent work. The work that the petitioners do may be similar to the work of the workmen of the Company, but they are not doing the work that is ordinary part of the industry. This is for reason that they—
•did not have permanent work;
•were engaged in intermittent work; and
•themselves claimed to be workmen of the contractor Rehman in proceedings under Rule 25 of the Labour Contract Act and got benefit under the same.”
8. Similarly, the Labour Court noted that contractor Rehman had applied to the administration for licence under the State Contract Labour Act and considering the nature of the contract licence has been granted to him.
9. In Steel Authority of India Ltd. v. Union of India (2006) 12 SCC 233 it was inter alia held as follows:
“28. The workmen whether before the Labour Court or in writ proceedings were represented by the same union. A trade union registered under the Trade Unions Act is entitled to espouse the cause of the workmen. A definite stand was taken by the employees that they had been working under the contractors. It would, thus, in our opinion, not lie in their mouth to take a contradictory and inconsistent plea that they were also the workmen of the principal employer. To raise such a mutually destructive plea is impermissible in law. Such mutually destructive plea, in our opinion, should not be allowed to be raised even in an industrial adjudication. Common law principles of estoppel, waiver and acquiescence are applicable in an industrial adjudication.”
10. In view of the factual position highlighted above and the ratio of the decision in Steel Authority case (2006) 12 SCC 233 the inevitable result is that the appeal is sans merit, deserves dismissal, which we direct with no order as to costs.
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