REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 2114-2115 OF 2018 [Arising out of SLP (C) Nos.14441-14442 of 2017]

Chairman Cum Managing Director, Ennore Port Trust (Presently known as Kamarajar  Port Limited)       .. Appellants

Versus

V. Manoharan And Ors.    .. Respondents

WITH

CIVIL APPEAL NOS. 2116-2118 OF 2018 [Arising out of SLP (C) Nos.30359-30361 of 2017]

J U D G M E N T

Abhay Manohar Sapre, J.

1) Leave granted.

2) These appeals arise from the final judgment and

order dated 05.01.2017 passed by the High Court of

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Judicature at Madras in W.A. No.1020 of 2016, W.A.

No. 1351/2016 and W.A. No.1378 of 2016 whereby

the  Division  Bench  of  the  High  Court  while

reversing/set aside the judgment of the Single Judge

partly  allowed  the  writ  appeals  and  gave  certain

directions to the Port Trusts (appellants herein)  for

their  compliance  in  favour  of  the  writ  petitioners

(respondents herein).   

3) In  order  to  appreciate  the  issues  involved  in

these appeals, it is necessary to set out the relevant

facts hereinbelow.

4) There are two Port Trusts in Chennai.  One is

known  as  “Chennai  Port  Trust”  and  the  other  is

known as “Ennore Port Trust”, now called “Kamarajar

Port Trust”.

5) Chennai Port is one of the oldest ports in the

country.  Amongst  several  operational  activities  of

loading, unloading, spillages and clearing of various

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kinds of the goods, which are undertaken regularly in

the  Port,  one  such  activity  that  is  operational  on

regular basis is handling of “Coal and Iron Ore”.  

6) In  order  to  carry  out  the  loading,  unloading,

spillages and clearing the coal and iron ore from the

Iron Ore Handling Plant set up in the Port Trust, the

stakeholders  need  workers  (class  IV).  Sizeable

numbers of worker are, therefore, involved in doing

this work on regular basis.

7) In  1987,  these  workers  made  a  demand  to

regularize  their  services  in  the  set  up  of  the  Port

Trust.   Since  their  demands  were  not  acceded  to,

they (160 or so) filed a writ petition (W.P. No.9011 of

1987) in the High Court at Madras seeking therein a

relief of regularization of their services in the set up

of Chennai Port Trust.  

8) The  Chennai  Port  Trust  contested  the  writ

petition  and  contended  that  it  is  not  possible  to

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regularize  the  services  of  these  workers  (writ

petitioners) for various reasons in their set up.  It was

contended that these workers are not the employees

of  the  Port  Trust  and  nor  there  exists  any

relationship of employer and employee between them.

It was also contended that it is the contractor, who

engages  these  workers,  and  hence  they  are  the

employees of the Contractor but not Port Trust.  

9) During  pendency  of  the  writ  petition,  these

workers  (writ  petitioners)  formed  one  association

called  –  “Madras  Port  Spillage  Handling  Workers

Association”  (hereinafter  referred  to  as  “the

Association”)  and  got  the  Association  registered  as

Society under the Society Registration Act.  

10) The  matter  was  then  referred  to  arbitration

which  resulted  in  passing  of  an  award  dated

22.10.1994.   The  award  was  published  in  the

Government  of  India  Gazette  on  24.12.1994.  The

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award,  inter alia, directed the parties to enter into a

Memorandum of Understanding (MOU) for settlement

of the disputes.  Accordingly, the Association and the

Chennai  Port  Trust  entered  into  a  MOU  on

02.05.1995. (Annexure-P-1)

11) Clause  1  of  MOU  provides  that  subject  to

Association  following  the  terms  and  conditions  of

MOU,  the  Port  Trust  has  agreed  to  give  work  of

loading /unloading/spillage/cleaning to the members

of the Association. Clause 2 of the MOU provides that

membership  of  Association  will  not  exceed  the

number of  160 and the membership of  Association

will be given only to those persons, who are declared

physically  fit  with  the  approval  of  the  Chairman.

Clause 2 further provides that preference would be

given to dependants of those who had been employed

and died or became physically unfit, their dependents

would be made member of the Association subject to

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dependant  concerned  declared  fit  by  the  Medical

Board  and  whose  membership  is  approved  by  the

Chairman.  Clause 3 deals with allocation of work to

male/female  members.  Clause  4  further  provides

that member will be discontinued from the work on

attaining  the age of  58 and in the  absence of  any

proof of age, the certification issued by the Medical

Board  of  his/her  age  would  be  final.   Clause  5

provides that, if any member is found unfit, he would

be  discontinued  from  work  once  certified  by  the

Medical  Board.  Clause  6  provides  that  all  workers

currently  working  would  be  deployed  for  clearing

spillage of Iron Ore.  Clauses 7, 8, 11, 12, 13, 20, 21,

22, 28, 29 and 30 provide the manner and mode of

payment including paying other monetary benefits to

the members of the Association whereas Clauses 9,

10, 14, 15, 16, 17, 18, 19, 23, 24, 25, 26 and 27

provide for extending  various kinds of facilities and

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welfare  benefits  to  the  members  of  the  Association

and  lastly,  Clause  31  provides  for  resolution  of

disputes  arising  between  the  parties  in  relation  to

MOU through the means of arbitration.  

12) This  MOU  was  amended  on  31.12.1998

(Annexure P-2).   One of  the amendments was that

the  Association  was  recognized  as  “Contractor”

whereas  the  Chennai  Port  Trust  was  declared  as

“Principal  Employer”  under  the  Contract  Labour

(Regulation and Abolition) Act, 1970.

13) In the light of the aforementioned background

facts  arising  in  the  case,  one  writ  petition  (Public

Interest  Litigation)  came to  be  filed  in  the  Madras

High  Court   (W.P.  No.11747/2002)  by  some

public-spirited  persons  against  the  State,  Chennai

port Trust and Pollution Board complaining therein

that due to heavy and reckless handling of coal and

iron ore and heavy movement of  dusty cargo every

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day in Chennai Port Trust (handling plant) premises,

the  activity  is  emitting,  huge quantity  of  dust  and

several chemical particles in the air are polluting the

entire  environment  which,  according  to  the  writ

petitioners, was harmful to the life of human being

and  especially  to  those,  who  are  residing  in  the

nearby area of the Port.  It was complained that such

activity being hazardous and equally injurious to the

health of human beings, should be stopped forthwith

or,  in  any  case,  be  regulated  in  the  larger  public

interest  including considering shifting of  activity  to

some  other  Port,  if  considered  feasible  and

practicable  so  that  hazards  of  the  environmental

pollution  which  is  prevailing  in  the  locality  is

considerably  reduced.   It  is  essentially  to  espouse

this  cause,  the  PIL  (writ  petition)  was  filed  for

claiming appropriate remedial relief(s) for the benefit

of the larger public good.  The State and the Chennai

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Port  Trust  contested  the  writ  petition  on  several

grounds.    

14) By  order  dated  11.05.2011,  the  High  Court

allowed the writ petition and gave five directions to

the  Chennai  Port  Trust  and Ennore  Port  Trust  for

ensuring  their  compliance.  These  directions  are

reproduced hereinbelow:

“(a)  All  the  writ  petitions  are  allowed. However,  the  prayer  in  W.P.  No.41163  of 2002,  with  regard  to  the  compensation aspect stands dismissed.

(b) The Government of India, represented by its Secretary, Ministry of Shipping, New Delhi is  directed  to  see  distribution  of  cargoes between  Ennore  Port  and  Chennai  Port, allotting clean cargoes viz. container, car etc. to Chennai Port and the dusty cargoes like coal, iron ore and all other dusty cargoes to Ennore Port.

(c) Since the coal terminal, iron ore terminal and  the  single  line  rail  connectivity  at Ennore Port are assured to be operational to their full  capacity by September,  2011,  the Government  of  India,  represented  by  its Secretary,  Ministry  of  Shipping,  New  Delhi and  the  Government  of  Tamil  Nadu, represented  by  its  Chief  Secretary  are directed to see that all the dusty cargoes like coal,  iron  ore  and  all  other  dusty  cargoes

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should move only to Ennore Port on and from 1.10.2011  and  not  to  Chennai  Port.   The Chennai Port is also directed to render all its cooperation to the Government of India and the  Government  of  Tamil  Nadu  in  this direction.

(d)  With  regard  to  the  employees  and pensioners  of  the  Chennai  Port,  the Government  of  India,  the  Government  of Tamil  Nadu,  Chennai  Port  Trust  and  the Ennore  Port  Trust  are  directed  to  see  that not even a single employee is retrenched or otherwise made to lose his livelihood because of the distribution of cargoes between Ennore Port and Chennai Port, as ordered above.  For this  purpose,  since  the  dusty  cargoes  are going to be berthed and processed at Ennore Port on and from 1.10.2011, the Ennore Port may treat the employees of the Chennai Port connected  to  such  activities  as  its employees, including the pensioners.  In case of  any  difficulty,  the  Government  of  India, represented  by  its  Secretary,  Ministry  of Shipping, New Delhi and the Chief Secretary to  the  Government  of  Tamil  Nadu,  shall divide  the  employees  and  pensioners, between  the  Chennai  Port  and  the  Ennore Port, proportionate to the income of both the Ports.

(e)  With  regard  to  the  traders,  like  the impleaded respondents 6 to 8 also, both the Chennai  Port  and  the  Ennore  Port  are directed to protect their rights and interest, in accordance with law.”

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15) Since the offending activity was largely shifted

from  Chennai  Port  Trust  to  Ennore  Port  Trust  in

terms of directions of  the High Court,  the Chennai

Port Trust on 15.10.2012 resolved to terminate the

MOU.  On  06.12.2012,  the  Association  was

accordingly informed about the termination.  

16) In the meantime, 90 persons again woke up and

claiming to be the workers working on the Chennai

Port Trust filed a writ petition (W.P. 33614 of 2012)

and sought regularization of their services in the set

up of the Chennai Port Trust.  Their main case was

that since all the writ petitioners (90) were working

for the last more than 2 decades with the Chennai

Port  Trust  as  Class  IV  employees,  their  services

should be regularized in the set up of Chennai Port

Trust.  In support of this relief, the writ petitioners

produced certain evidence.

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17) The  Chennai  Port  Trust  contested  the  writ

petition,  inter alia, again contending that there was

no  relationship  of  employee  and  employer  between

the writ petitioners and the Chennai Port Trust and,

therefore, the writ petitioners are not entitled to claim

any relief much less the relief of regularization in the

services of Chennai Port Trust.

18) The  Single  Judge,  by  order  22.07.2016,

dismissed the writ petition holding that there did not

exist  any  relationship  of  employer  and  employee

between  the  parties  and  hence  no  relief  can  be

granted  to  the  writ  petitioners  much  less  the  one

claimed in the writ petition.  The writ petitioners felt

aggrieved  and  filed  writ  appeal  before  the  Division

Bench of the High Court.  

19) By impugned order,  the Division Bench partly

allowed the writ appeal and gave certain directions to

the  Port  Trusts(appellants  herein)  for  their

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compliance  in  favour  of  the  writ  petitioners

(respondents herein) which has given rise to filing of

these  appeals  by  way  of  special  leave  by  the  Port

Trusts before this Court.

20) Heard Mr. P.S. Narsimha, Mr. P. Wilson, learned

senior counsel for the appellants and Mr. V. Prakash,

Mr. Raju Ramachandran, learned senior counsel for

the respondents.

21) Having heard the learned counsel for the parties

and  on  perusal  of  the  record  of  the  case,  we  are

inclined to allow the appeals in part with directions

mentioned hereinbelow.

22) In our considered opinion, having regard to the

nature  of  the  controversy  raised  by  the  writ

petitioners (respondents herein) and relief sought in

the  writ  petitions  out  of  which these appeals  arise

and  keeping  in  view  the  clauses  of  the  MOU,

especially Clause 31, which provides for referring the

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case  to  the  Arbitral  Tribunal  in  the  event  of  any

dispute  arising  between  the  parties  in  relation  to

MOU,  the  writ  petition  filed  by  the  respondents

herein under Article 226 of the Constitution should

not have been entertained for being tried on merits

by the Single Judge and instead the parties should

have  been  left  to  take  recourse  to  the  remedy

provided  in  Clause  31  for  referring  the  case  to

Arbitral Tribunal for its decision in accordance with

law.  

23) In our considered opinion, a question whether a

particular  person  is  in  the  employment  of  any

establishment  and  whether  he  is  entitled  to  claim

regularization of his services in such establishment

(as in this case Port Trust) and, if so, from which date

is essentially a question of fact.  

24) If  such  question  is  disputed  by  the

establishment, then it is required to be decided by a

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fact-finding body on the basis of evidence adduced by

such person unless the parties  do not  dispute the

facts.  

25) If  one  person  is  able  to  prove  his  case  of

regularization  qua establishment  from  a  particular

date  that  does  not  necessarily  mean  that  other

person’s case is also automatically proved alike other

person.  

26) In other words, every person has to prove his

case  qua establishment  independently  by  adducing

evidence.  It is only then such person is entitled to

claim such relief.

27) In  our  considered  opinion,  several  questions

arise in the case at hand and need to be answered

before considering grant of appropriate relief, if any.

These questions when we see the background facts of

the  case  set  out  above  are  inter-linked  with  each

other and relate to the main activity which was being

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carried in the Chennai Port Trust and now shifted to

Ennore Port Trust largely.  The disputes now being

raised  again  relate  to  the  employment  and

regularization of the class IV employees in the set up

of  Chennai  Port  Trust.   Indeed,  to  settle  this

controversy for all time to come, the stakeholders had

in  past  executed MOU providing  therein the  entire

machinery to safeguard the rights and obligation of

parties concerned, which are detailed above. But due

to several intervening factors, it did not seem to have

worked smoothly.

28) In  our  considered  opinion,  the  following

questions do arise in this case.  

29) First, whether the writ petitioners (respondents

herein)  were/are  in  employment  of  Chennai  Port

Trust or in the employment of any contractor and, if

so, its basis.  Second, whether there ever existed any

relationship of  employee and employer between the

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writ petitioners and Chennai Port Trust or between

the writ petitioners and any contractor and, if so, its

basis.

30) Third,  whether  the  writ  petitioners  were/are

members of the Association and, if yes, then its effect

and if not, then its effect.  

31) Fourth, assuming that the writ petitioners are

not held to be the members of the Association as they

now claim in the writ petition (see ground (e) in the

writ  petition  at  page  125-126),  whether  the  writ

petitioners (90 in number) are still entitled to claim

any relief and, if so, against which Port Trust and of

which nature.  

32) Fifth,  assuming  that  the  writ  petitioners  are

held members of the Association or let us say eligible

members by virtue of their qualifications prescribed

in the MOU, whether they are entitled to claim any

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relief  against  any  Port  Trust  and,  if  so,  of  which

nature.

33) Sixth,  If  the  writ  petitioners  (whether  all  or

some)  are  able  to  prove  that  they  are/were  in  the

employment  of  Chennai  Port  Trust  and  that

relationship of employee and employer between them

does exist  notwithstanding execution of  MOU, then

whether  such  persons  are  entitled  to  claim

regularization in the service of Port Trust and, if so,

since when and with what benefits or their cases are

still  governed  by  MOU as  its  members  and  lastly,

what eventual reliefs, if any,  can be granted to the

writ petitioners.

34) In our view, the aforesaid questions could not

be  decided  in  the  writ  petition  but  could  be

adjudicated  more  effectively  by  a  fact-finding  body

empowered to record evidence.

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35) Since in this case parties have agreed to refer

the matter to the Arbitral Tribunal in the event of any

dispute arising between them, we are of the view that

it would be in the interest of justice that the parties

are  relegated  to  take  recourse  to  the  arbitration

proceeding remedy for adjudicating the disputes.

36) We are of the view that to decide the questions

arising in the case at hand, recourse to MOU for the

purpose of  referring the case  to  arbitration can be

taken.  As  observed  supra,  even  otherwise,  the

disputes raised herein are not  the  disputes,  which

are  capable  of  being  tried  effectively  in  writ

jurisdiction  and  indeed  are  capable  of  being  tried

only by a Tribunal.

37) Once the disputes are  referred to  the Arbitral

Tribunal,  the  writ  petitioners  and  the  Port  Trusts

would be at liberty to raise all the issues on facts/law

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in support of  their respective contentions including

adducing evidence (oral and documentary).

38) In  view  of  the  foregoing  discussion,  we  are

unable to sustain the impugned order, which in the

facts of this case should not have been passed.  

39) As  a  consequence,  we  allow  the  appeals,  set

aside the impugned judgments of the Division Bench

and the Single Judge, dismiss the writ petition out of

which these  appeals  arise  and grant  liberty  to  the

writ petitioners and the Port Trusts to approach the

Court for appointment of Arbitral Tribunal in terms

of  Clause  31  of  MOU  for  deciding  the  questions

framed by this Court supra.  

40) Parties are also at liberty to appoint the Arbitral

Tribunal  with  mutual  consent,  if  they  so  wish,

without  taking  recourse  to  appointment  of  Arbitral

Tribunal through Court.  

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41) The  Arbitral  Tribunal  once  appointed  will

embark upon the reference on the questions framed

by this Court and would be free to frame any more

questions  after  consultation  of  the

parties/stakeholders, if such questions also arise and

need to be decided to give quietus to the long pending

disputes.

42) The Arbitral Tribunal will afford full opportunity

to all the parties (stakeholders) concerned to file their

response/statements and lead evidence in support of

their  respective  stands  and  then  pass  a  reasoned

award  in  accordance  with  law on  the  basis  of  the

evidence adduced by the parties (oral/documentary)

uninfluenced  by  any  observations  made  by  Single

Judge and the Division Bench.  

43) Since the case is  old and concerning about a

large number of workers, efforts be made to complete

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the proceedings within six months from the date of

appointment of Arbitral Tribunal.   

………………………………..J (R.K. AGRAWAL)

          ..………………………………J.    (ABHAY MANOHAR SAPRE)

New Delhi, February 15, 2018

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